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Giant Pool of Money

…And So It Began

Back in May of 2008, NPR aired an episode of This American Life entitled “The Giant Pool of Money,” which aimed to inform listeners of how the housing crisis started. Now, I’m not actually going to get into what the “giant pool of money” is, but you can listen to the entire episode here.

In the beginning of the episode, one of the show’s hosts brings up a situation involving a man named Clarence. Clarence had been working 3 part time jobs and was pulling in about $45,000 a year when he came across some rough times and needed some cash. Lucky for him, his lender let him borrow $540,000 against his house – and they did this without even verifying his income! Let’s put this into perspective. Spread out over 30 years, and at 6% interest (a near best case scenario) Clarence would be making monthly payments of around $3,250 a month. Now, let’s look at his income. Clarence makes $45,000 a year. Even if just 10% of Clarence’s paycheck went to taxes, he would only end up with $3,375 a month take home pay. That would leave him with $125 a month for EVERYTHING else – food, clothes, utilities, medical bills – everything. Obviously, Clarence was doomed to default on his loan from the very start.

The question then is this: why would a lender offer to loan an individual this much money? Well, I’m going to briefly explain that right now.

A few years ago, mortgage backed securities became the hot new investment. In short, this is how it works: First, a mortgage broker gives a person or persons a loan, then turns around and sells it to a small mortgage company, who then sells it to an investment firm. These mortgages are then chopped up, bundled together, broken down into shares, and sold to investors as mortgage backed securities. These investments were considered low risk, and were generating a lot of profit for the purchasers, which of course made them very desirable. In fact, they started to become so hot that pretty soon brokers and investment firms were running out of mortgages to sell! That’s when the lending restrictions started to loosen up, and continued to loosen until all you had to do state your income and assets and the bank would take your word on it and hand over a shiny new loan. Verification? Not necessary!

And so it went for a few years – people were being given money that they wouldn’t be able to pay back. During this time house prices kept increasing and many people stayed afloat by taking out home equity loans on their homes. Then… the bubble burst.

I’ll continue on in my next blog about the bursting bubble, but this is really where we come in. Many of you have been the victim of predatory lending, including being talked into borrowing more than you needed or taking on adjustable rate mortgages (ARM) without knowing the ramifications of either. Chances are, you’ve also been affected by the extreme decrease in home values. On top of those, you may have additional burdens that are forcing you to default on your mortgage (loss of a job, divorce, forced to relocation, disability, etc).

Call us – we can help. We will never ask you for any money, never ask you to make any repairs, we will keep all of your information confidential, and we will work harder than anyone else to permanently solve your Michigan foreclosure.

Holly

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No Hardship, No Short Sale?

I just spoke with a Betty who, for many reasons, desperately wanted to move. She and her husband spoke to a Realtor® and found out that their house was worth well less than they currently owe so they called to speak to me about a short sale.

Unfortunately, we were not able to help them. Why? Because even though their house was undervalued ($120k), and therefore impossible to sell at a high enough price to pay off the mortgage ($150k), they could still afford to make their payments. They simply wanted to move into a different house.

A short sale only comes into play when you can’t make your payments because of a financial hardship (disability, divorce, loss of job, relocation, etc.) and a Michigan foreclosure is imminent. So what was my advice? If you can keep making your payments, do so and hope the market picks up eventually to a point where you can sell it and pay off the mortgage in full.

If you have questions about whether or not you qualify for a short sale, please give me a call. I’d be glad to discuss your options with you.

Emily

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2 More Houses – Another $225,000 of Debt Wiped Out

Last week, we closed on two different houses and my team made $225,000 of debt disappear between both of them. How is this done? This is done with a short sale. Don’t know what a short sale is? Well you can search this blog to learn more, or just give us a call. We’re really good at them though based on all of the testimonials you’ll find here and here. And here’s two more!

 


 

“When Great Lakes Home Solutions Inc. approached me, I had gone through a divorce and was left with a house that I couldn’t make payments on.  The debt load was $204,000.  As a single Mom, there was no way I could finance this amount.  I exhausted all options. When Great Lakes Home Solutions Inc. contacted me, I was at my wits end.  My house had been listed for several months and nothing was happening.  The mortgage company was getting more aggressive. I just didn’t know what to do.  I met with Great Lakes Home Solutions Inc. and we discussed my options with what they could do for me.  They approached the bank and came to an agreement of a short sale of $101,000.   The bank accepted – what a relief!! When buyers came along who were interested things came to a close quickly.  I had $103,000 of debt wiped out because of their help.  I can now breathe. I would definitely refer anyone having issues with their house payment to Great Lakes Home Solutions Inc.”

Karen, Cedar Springs

 


 

“The minute Great Lakes came on board the ball started rolling much faster than it had earlier. Within weeks of signing on my house was sold with very little work on my end. I travel a lot and at times makes it hard for me to perform a lot of the functions that go into selling a house. The staff was knowledgeable and well organized. The original debt was $260,000. Settled at $138,000, which in turn wiped out $122,000 and saved me on foreclosure.”

 Adam, Grand Rapids

 


 

Joel

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Quick Office Tour & Team Intro

We just recorded this short tour of our new office and intruction to our team.  Check it out!

Joel

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Facing a Michigan Foreclosure? You Are Not Alone (in more ways than 1)!

If you are facing a Michigan Foreclosure, you are not alone for 2 reasons.

The first is the mere fact that 1 in 74 houses in Michigan are facing foreclosure. This situation does not seem to be getting better if you look at the trends in this article. The main culprit continues to be unemployment and houses losing value so people who want to sell can’t because they owe more than their house is worth in today’s market.

That’s where we come in. We are the second reason you are not alone. If you have had a hardship (like job loss) that is not changing anytime soon and you need to sell your house in this horrible housing market and economy, we can work with your bank to negotiate a discount (or short sale) so your house can sell and you can move on to better times. Give Emily a call today and don’t face foreclosure alone anymore.

Ann

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Walk Away From a Mountain of Agony

Within the last week, we closed on two different houses and my team made over $220,000 of debt disappear between both of them. How is this done? This is done with a short sale. Don’t know what a short sale is? Well you can search this blog to learn more, or just give us a call. We’re really good at them though, based on all of the testimonials you’ll find here and here. Oh, and here’s two more!


“… we had absolutely no hope, assumed we’d have to file bankruptcy, didn’t know how we’d work through a divorce…”
“… to be able to walk away from a mountain of agony …”

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Steve & Kelly, Kalamazoo, Michigan


I had the opportunity for Great Lakes Home Solutions to help me through my difficult time of facing foreclosure on my house. They were always in constant communication with me and helped make things a bit easier to face. My original debt on the house was $128,000 and they wiped out $78,000 that was owed after settling for $50,000. I am very much impressed with this company and can’t thank them enough for all their help and support.

Diane, Kalamazoo


Joel

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Why Put Off the Inevitable?

I tend to put unpleasant things off. I know that isn’t so unusual – who likes to go to the doctor, or do their taxes, or have a root canal, etc? But we all know that putting things off isn’t always the best thing to do. Take the new Michigan foreclosure laws. Now I am not an attorney, and I haven’t read all the points of the new law but my understanding is that lenders are now required to give borrowers 90 days to attempt a work out if the borrower meets certain criteria.

Is this better?

Sure, if you are facing a Michigan Foreclosure and your hardship is over and you have a chance to successfully do a Work Out.
If your hardship isn’t over and especially if you don’t have income, you will not be able to successfully do a Work Out. Remember the old saying that doing the same thing, the same way, over and over will not lead to different results.

Why put off the inevitable foreclosure? Let’s use those extra 90 days to successfully complete a short sale. Call us today and let us help you get back to better times faster.

Ann

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A Foreclosure Blog About A Foreclosure Blog

Today I went on a search for some fodder to inspire a new blog, and what I found was, well, a blog. “Love in the Time of Foreclosure” is a blog written by a California couple going through a foreclosure. One would think that something based around such a somber situation would be sort of dark and depressing, but it isn’t!

The hardship that they are facing is that Steph is a playwright who hasn’t had any income in five years and Bob, the sole breadwinner, lost his job. They have since been working temp and contract positions, but still do not pull in enough money to pay their mortgage. Their house, which they sunk a lot of money into, is not worth the amount they owe (very common nowadays, especially in Michigan) so selling is out of the question for them.

The great thing about this couple is that they are trying really hard to save themselves from having their house foreclosed on and are open to possibilities. They set up meetings with their mortgage company, inquire about all of the loan modification programs they find out about, and eventually negotiate a short sale. (Though the foreclosure/short sale is behind them, they are still blogging.)

It’s really too bad that they don’t live in Michigan because we could have taken a lot of stress out of their lives by doing the short sale for them. The good news is that if you live in Michigan, we may be able to help you. We keep it pretty easy, too – there is absolutely no fee of any kind and we never ask you to make improvements to your house. Give us a call and you’ll see!

Holly

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