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You are currently browsing the Stop Michigan Foreclosure weblog archives for November, 2009.

The Upside of a Deficiency

From the REALTORS® we work with to the sellers we help, all seem to want to know if we take on their case and negotiate their short sale, whether or not they’ll owe a deficiency.

Of course, we can’t guarantee (no one can) that your lender(s) will agree to settle the accounts.  That is, not ask for any further payments.  Some lenders ask without fail while others will never ask.  What we can guarantee is that we will exhaust our resources and knowledge to prevent you from having to pay anything more; we want you to be able to walk away owing nothing.

Unfortunately that doesn’t always happen.

But the good news is a deficiency (usually what’s called a “promissory note”) can actually be a positive thing.  Chances are good that if you need a short sale, you are behind on your payments, and that’s had a bad effect on your credit.

A promissory note is an extended, low interest or interest-free, unsecured loan.  It is an excellent and easy way to repair your damaged credit.  Also if you find yourself facing another financial hardship and not able to make payments, there is no collateral on the loan.  This means there is no property – houses, cars, boats – on which the lender can foreclose or repossess.

We work hard to keep you out of these situations, although at times it may be unavoidable.  If you have any questions about short sales or deficiencies or promissory notes, feel free to give us a call – we’d be glad to answer any questions or find a way to help you.

Melissa

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More Testimonials – I Can’t Keep Caught Up!

I’ve been having a hard time keeping up with all of the testimonials we’ve got coming in.  Over the last 3-4 weeks I think we’ve had about 5 short sale closings, and over the next 3-4 weeks we’re looking at about 7 short sale closings. 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!


“… there were no secrets and everything was toally disclosed …”
“… we were excused of about $80,000 in debt …”

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Richard & Diana, Holland, Michigan


Working with an impossible situation my real estate agent brought in Joel and his team. With my wife passing away I lost not only a great partner but a third of my income. My parents were living there and had no monies to help with mortgage. Joel and his main person Emily did a very professional very very good job under some extreme circumstances and sold the property. They saved me over $106,000 in debt. Working with Emily and Joel was about as easy as it could get. Always up front about everything and always very friendly. I would highly recommend them for any situation that may arise.

Bob, Grandville, Michigan


Joel

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Housing Rebound?

Recently, there was an article on a popular website that postulated there are 10 cities in the US which are experiencing housing price rebounds. I’m not an expert on the national real estate climate, and I can’t speak to the state of other markets, but here in Michigan, I can safely say that housing prices are not rising.

The author of the article theorized that when prices hit their lowest, the only place they can go is up. I understand his point completely, but I would argue there is an alternative: stagnancy.

Due to the vast amount of variable rate mortgages and bad loans written in the last decade, coupled with the recession, people are still losing houses to Michigan foreclosures. This means that there are a lot of bank-owned properties priced low to sell quickly. This is affecting and lowering property values in all types of neighborhoods and areas.

The good news is that houses are still being purchased, due to low interest rates and first time home buyer tax credits. These are positives, but the negatives remain, and probably will continue to do so for several years.

Property values are low, and many people owe more than the house is actually worth. For some people, it’s an inconvenience if they can still afford to make their payments, and it is always advised that they do so. For those who cannot make their payments, there’s a lot of information on this website about the options available; or you may give us a call.

Melissa

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Trying To Sell? You’re Not Crazy

When you tell people you’re trying to sell your house, do they act like you’re crazy? I constantly hear people say “You’re never going to sell in this economy” or “You’re never going to get what your house is worth.” Both of these statements can be very untrue.

First, let’s look at reasons why people are selling right now. While some people are able to “ride out” the housing crisis in hopes that their equity will soon return, others are not so fortunate. You may have taken a pay-cut, or lost your job altogether which has left you unable to pay your bills. You may have had a death or illness in the family. You may have been forced to relocate for work or for other reasons and cannot afford to pay for two residences. All of these are hardships, which can make selling the house difficult – but we can help.

The reason that most people cannot sell their houses is that they need to price it high to pay off their mortgage (and in many cases, their second mortgage equity loans). This debt is often more than the house is worth, and people are unwilling to pay that inflated price. This is where a short sale can come in very handy. With a short sale, we will negotiate with the bank to accept an amount that’s less than what you own. Buyers are much more willing to pay the amount that a house is worth, and with the extension of the Homebuyer Tax Credit, buyers are getting more motivated. This greatly increases your chances of selling! Heck, half of our cases have buyers already!

Now, we know that people are having a hard time right now. Michigan foreclosure and unemployment rates are astronomical. We can take a lot of stress off of your shoulders, though. You do not have to negotiate a short sale with your bank yourself – we do it for you! We can even set you up with an experienced REALTOR®, all at absolutely no cost to you. We want to help you, and we’re good at what we do. If you’re facing a Michigan foreclosure, and could benefit by doing a short sale, give Emily a call.

Holly

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It Takes Stamina

I overheard a statistic today that 12% of all Real Estate Sales are now Short Sales. The commentator went on to say that it would probably be more except that Short Sales take Stamina. Stamina for the buyer to hang in there, Stamina for the seller facing foreclosure to hang in there, Stamina for the negotiator and REALTORS® to keep working on the Short Sale.

Well I have Good News for you if you are a seller facing a Michigan Foreclosure. Our team has Stamina! I have seen Emily work 8 hours in the office then go home and take calls from new referrals and existing sellers in the evenings and weekends. I have seen Melissa sit on hold for 45 minutes or more to talk to a lender about a case. And then she hangs up and calls another one and goes through it again. I have seen Holly call extension after extension at a lender or attorney office until she finds someone who can answer a question or help us move a file forward. And I have seen Joel work tirelessly from 6:00am until sometimes 8:00pm or later  to do whatever he can to get a deal to close.

One of our 4 promises is that we will work harder than anyone to help you get back to better times and that is the Stamina in action. Our track record speaks for itself. The Stamina pays off in terms of results. We have techniques to keep the buyers motivated and we have methods to help the seller deal with the lender. Give us a call and let us put our Stamina to work for you.

Ann

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Customer Service Rep at Bank Facing Foreclosure?

The other day I was on the phone, making my daily call to one of the biggest lenders in the country, when the conversation I was having took an unusual turn (after 37 minutes on hold of course). The Customer Service Rep who was helping me – I’ll call her “Jane” – was doing her best to answer my questions about a short sale we were negotiating on an FHA loan. She began to ask me questions about the various programs and options available. This isn’t unusual as I spend a lot of time educating the people at the banks about various options/programs available. She eventually revealed to me that she herself had an FHA loan on her house…and that she was over three months behind on her payments. Yikes!

I was shocked to hear that Jane, who worked for a major lender, had so little idea where to turn for help on her own house! She told me she had been approach by a company in her state that had offered their (somewhat ambiguous) services for a fee…of $3,200 upfront. To me, this begs the question: if a person is nearly four months behind on their mortgage payment, how is this person supposed to come up with $3,200?

I suggested, instead of agreeing to fork over several thousand dollars to this company, that since she had an FHA loan, she contact the Department of Housing and Urban Development (HUD).. I told Jane they would be able to either assist her themselves, or direct her to a business or non-profit organization in her area that would not charge her an upfront fee. I even gave her the number for HUD. Jane thanked me profusely and told me she had no idea there were people out there who wouldn’t charge her to help her.

If you are facing a Michigan foreclosure, don’t let someone tell you that assistance costs $3,200. It doesn’t (and it never will cost a dime with us). Learn your options! This blog and our website are full of information and suggestions. You can also call us anytime.

Melissa

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The Choices Facing a Family in Foreclosure

We belong to two national short sale mastermind groups with members from across the country. This helps us stay up to date on techniques and industry changes involved with working short sales. (Quick review – a short sale is getting the bank to accept less than the balance owed to sell a house). Jeff Watson, an attorney who consults with one of these groups recently published a paper designed to assist Investors, REALTORS®, title companies and others who help sellers with Short Sales. A section of this article succinctly described the four choices facing a family in foreclosure. I found this educational and interesting and decided to share the information here.

  1. Remain in the property as a “squatter” until the foreclosure process is over and eviction occurs. This allows the family to stay in the property as long as possible for a low cost. It also results in poor credit for the next 7+ years and the likelihood of the lender pursuing them for the balance of the loan, attorney fees, late fees, back payments, etc – UGLY!
  2. List the house for an amount of money to pay all mortgages, liens, taxes, closing costs, etc. and pray that some buyer will come along willing to pay that price. This usually results in the family living in the property with unrealistic expectations because the property never sells and is ultimately foreclosed.
  3. (Often recommended by many REALTORS® who do not understand the complexities of short sales): The seller lists the property seeking a short sale buyer and hope that the buyer has the patience and endurance to wait the long process as the seller or their REALTOR® negotiate with all lien holders to get the short sale approved. The result is the buyer often gets frustrated and the REALTOR® and/or seller are not trained or equipped to handle the negotiations with the lenders. Only 10% of REALTORS® successfully complete short sales because of the simple fact that very few have been trained and know how to successfully negotiate a short sale.
  4. Seller list the property seeking a short sale and work with a competent and knowledgeable real estate investor or negotiation company where the company assumes the responsibility for negotiating the short sale for which they have been trained and have the experience to do. The investor/company is knowledgeable about the entire short sale process and they understand the key steps in the negotiation process.

We are such a company that is highly trained and experienced working short sales. We have handled 100’s of short sale cases and have a success rate over almost 80% when a suitable buyer is found.
If you are facing a Michigan foreclosure and you aren’t sure which option is right, give us a call and we will help you sort through your options. We know there is a lot of confusing and misleading information out there and we are prepared to help you find the option right for you. If option 4 looks like the best and right option for you, give our team a call and put our strengths to work for you.
Ann

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Making Home Affordable – Do You Qualify?

You’ve probably been hearing a lot of talk about President Obama’s Making Home Affordable Plan, but aren’t sure if you qualify or not. Unfortunately, chances are high that you don’t – rigid restrictions set in place and the newness of it all (coupled with bad communication and poor customer service – just my opinion) are making it hard to people to get the help they need. I’ve been mulling around the Making Home Affordable website for a few days, and here’s what I’ve found.

If you are current on your loan, you could qualify for a Home Affordable Refinance. By current, they don’t mean that you are caught up with your payments. If you have been over 30 days late in the last year, you are not considered current (crazy, I know). So let’s say you are current by their standards. In order to refinance, your loan must be backed by Fannie Mae or Freddie Mac. This very quickly makes about half of all families ineligible. Another stipulation is that your first mortgage cannot be more than 125% of the value of your house. For example, if your mortgage is $150,000 your house cannot be worth less than $120,000. This is a huge problem for most families in Michigan due to the rapid decline in house values. Sill eligible? Let’s keep going. While refinancing from an adjustable rate or balloon payment to a fixed rate is definitely an improvement in the long run, the problem lies in the fact that your mortgage payment may not go down with a Home Affordable Refinance. This means that if after the refinance, you still do not have the ability to make your payments, a refinance is not for you.

If your mortgage is not backed by Freddie Mac or Fannie Mae, there is another option out there – the Home Affordable Modification. With this option, if you are behind on your payments may qualify for the program. The main problem with the modification is that only the first mortgage can be modified. In order to qualify, your first mortgage payment has to be more than 31% of your gross monthly income. That is, if your family is making $35,000 a year, your first mortgage payment must exceed $904 a month. That seems extremely high to me. Push that income up to $50,000 and your payment has to exceed $1,290! Many times it is not the first mortgage that is causing problems for individuals – it’s the pesky equity loan or second mortgage. Remember, that 31% rule isn’t taking these into consideration. Add another $250 onto that, and your $1,290 payment goes up to a whopping $1,540. Another reason many people have fallen behind on their mortgages is because they have income properties that didn’t quite work out, or were affected by the housing crisis. If you don’t live in the house, you are not eligible for a Home Affordable Modification.

So, you meet the stringent requirements for either a the Refinance or Modification programs? Now comes the fun part! You get to call your mortgage company and ask for one of these options. The Making Home Affordable website tells you to “be patient” because these programs are newly implemented, and it might be a while before all applications can be processed. According to CNN.com, only 6% of eligible families have actually been helped so far. I’ll give you another reason to be patient: Most Banks Are Slow. I know – I’ve been working for them and with them for the last two and a half years. They lose your paperwork, they don’t contact you (except to collect money), and there is poor communication within. You’ll get customer service representatives giving you the wrong information or passing you off to someone else. Be prepared for some serious aggravation and time loss.

If you are one of the majority of people who don’t qualify for these programs or simply don’t have the patients required, and want to avoid a Michigan foreclosure, give us a call. We will never ask you for any money, or to do any repairs to the house. We promise that we will never put you in a worse situation, and that we will work harder than anyone else to give you a permanent foreclosure solution. We also promise to keep everything confidential. Give Emily a call at 269-385-5921 – we look forward to hearing from you!

Holly

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