Stop Michigan Foreclosure

Wanting It All? Need A Reality Check?

As I was talking to sellers facing a Michigan foreclosure this week, I realized that one of the toughest realizations a distressed seller needs to come to grips with is that they cannot have it all.

Just like you can’t eat everything you want and expect to maintain a healthy weight. Or go out drinking all night and expect to feel like you can run a marathon the next day. In the same way, if you have had a financial hardship which has caused you to get behind on your house payments, you cannot expect to stay in the house for long without the bank taking some action.

People seem surprised when the bank refuses to work with them or begins the Michigan foreclosure process. This is going to happen. After all they are losing money and looking for a solution to their problem. People seem surprised when they call the bank to work something out and they get transferred around, have to wait for long period of times, or even send in paperwork that gets lost. This is a reality of the large financial institution you are dealing with. They have hundreds of thousands of distressed sellers to deal with. It is not going to be like calling to ask your local bank how much money is in your account where you can get an immediate and clear answer (wouldn’t THAT be nice)!

Fortunately, while we cannot help you to “have your cake and eat it too” we can help you navigate the financial maze toward a solution. Give us a call and tell Emily “I need a reality check” and let her help you realize what you can have. You can salvage your credit. You can get a fresh start. You can find a solution without paying any fees or getting yourself into a worse situation. Call Emily and find out how not wanting it all actually brings peace of mind and a fresh start.

Ann

FHA “Short Refi” To The Rescue?

On March 26, 2010 the Department of Housing and Urban Development along with the Treasury Department, in all their infinite wisdom, announced a new FHA refinance plan.  The goal of this plan was to help homeowners who are current on their payments but owe more than their house is worth – in a nutshell, they’re upside-down.

What? But how is that possible? One of the major components of doing a refinance is the appraisal. Without the appraisal proving the home’s worth, there IS no refinance. FHA is telling us they will take a $150,000 loan on a home that is worth $120,000, owned by an individual who is current on his or her payments, and put them into a new FHA loan for only $120,000. But what happens to that $30,000? Where does it go?

The catch – and it’s a very big catch – is that the current lender must agree to forgive at least 10% of the principal balance. What lender would do that? Why would they ever agree to this on a loan that is current? It just doesn’t make sense to me, how about to you? Actually, it apparently doesn’t make sense to HUD either. HUD is the department that insurances FHA loans and this new program they created is not available to FHA borrowers. So HUD is essentially saying “it’s OK for other lenders to reduce the principal balance to do this refi, but we won’t do it for our own loans”. Wow!

Which is why I believe it will fail. The thought process behind the plan was well-intentioned; they were trying to help borrowers stay in their houses while avoiding more foreclosures. The housing market is hemorrhaging money, and from their point of view, something had to be done, even if it’s not really feasible. Now, to be fair, there are incentives, I’m sure, to lenders who agree to this. But most will refuse. It’s letting go of hundreds of thousands of dollars without even a protest and with no financial hardship from the borrower. You and I both know that confrontation and collecting are second (if not first) nature to the banks, and they will not give up their money without a fight.

Thanks, but no thanks, HUD.

Interested in real solutions to your Michigan Foreclosure?  Call us for a cash offer and free short sale negotiation.

Melissa

Pros and Cons of All Your Options When Facing a Michigan Foreclosure

If you’re facing a Michigan foreclosure, there are many reasons why you may be feeling overwhelmed right now. For one, you most likely have a hardship that is making it impossible to meet your financial obligations. You also might be overloaded with information. While it’s important to be informed, too much of a good thing can be confusing. In an attempt to make the big picture much easier to take in, I’ve created a table that shows the options you have when it comes to foreclosure, and the pros and cons of each.

While we can’t help you with bankruptcies, modifications, or deeds-in-lieu, we can help you tremendously if you think that a short sale is right for you. We’ll even take some of the pain away from the cons – we’ll do all of the talking to the bank, and do all of the confusing paperwork for you (we’ve done it so many times that it’s not even confusing anymore!) If you’re not sure which option is best for you, give Emily a call. She’d be more than happy to discuss your options with you, and help you decide which is best.

Holly

Soon-To-Be-Approved Michigan Short Sale Declined – Why The Bank Foreclosed Instead

I read a story recently about a Michigan house seller who was behind on her payments and knew she couldn’t keep up; she knew she had to sell the house. Apparently, she contacted a REALTOR® and put her house on the market, intending to do a short sale. They struggled to find a buyer, but after some time, some of the seller’s relatives decided to purchase the house. Their offer was submitted to the bank.

The whole process seemed to be going smoothly, moving toward approval and closing, when the bank asked who was buying the house. She, having nothing to hide, told them the buyer was a relative of hers. Well, they closed the file right then and there and foreclosed on the house.

Why? Because short sales must be an “arm’s length transaction” meaning the seller must have no relationship to the buyer or undisclosed agreements with the buyer. What these banks are concerned about is the seller moving back into the house or receiving cash or other perks on the side – something the banks consider to be the seller profiting from the sale.

Essentially, if the bank is taking a loss of tens of thousands of dollars on the short sale, they want to know that the former borrower is not benefitting or profiting while the bank is losing money.

This is just one example of all sorts of little rules, procedures, and policies that may be tough to figure out when you’re dealing with a short sale. Now if the REALTOR® had been property educated to in turn educate the seller, a foreclosure probably could have been avoided by waiting for a different buyer. if you are facing a Michigan foreclosure and need to sell your house in this manner and don’t want to have to deal with any of these hidden issues or obstacles, give us a call.  We know them all and we’ll do our best to help you out.

Melissa

What Bank Leaders Know That You May Not Know

According to this article from CNBC one of the nation’s biggest banks, Bank of America, is making it easier than ever before to do Short Sales (where the bank accepts a discount on what is owed so the house can sell). Why? According to the article, it is because they see the need for short sales growing and it is less expensive for them to do a Short Sale than to take a house back at the end of the foreclosure process as a bank owned property. Duh! They also point out that few homeowners qualify for the government’s Home Affordable Modification Program (HAMP). Duh again!

This is nothing new to us. We have been pointing these things out for years. The good news for sellers facing a Michigan Foreclosure is that what could be one of their best options is becoming more accepted and hopefully easier to do. We still recommend that a short sale be your last option, and it may not be the best option for everyone. Still, we have been able to help a lot of people over the last 5+ years get back to better times through a short sale.

If you are behind on your house payments because of a financial hardship (job loss, divorce, medical situation, death, etc) give us a call and let us see what option is right for you. We never charge a dime, we keep all your information confidential, and we won’t do anything to put you in a worse position. See how the new thinking among bank leaders can help you get back to better times.

Ann

Deed in Lieu of Foreclosure – Seriously?

In the last few months here in Michigan, we noticed a growing trend with lenders. In the case of defaulted loans, they seem to be aggressively pursuing the sellers in an effort to get them to sign a deed-in-lieu of foreclosure. Seems like they might be trying to by-pass the new government programs, they’re getting tired of waiting out the Michigan six redemption period, or maybe they’re just trying to protect the property to recoup their losses in a quick resale situation. Whatever the reason, deeds-in-lieu are increasing in popularity around here.

Now at first a deed-in-lieu might sound appealing. Your lender might offer you a few thousand dollars to vacate and clean up the house and sign the house over to them. After all, you’ve missed a few payments and you’re pretty sure you can’t afford to keep it no matter what sort of payment plan they present to you. They’re offering to take care of the house for you AND give you some cash to move. Sounds pretty good right? Almost too good to be true? Well that’s because it is – it IS too good to be true, in most cases.

A deed-in-lieu is just legalese for a voluntary foreclosure. And on your credit report, it shows up as the same thing. Foreclosures can stay on your record for up to 15 years! This means it will inhibit your buying a new home or any other major purchase for a decade and a half. Even worse is that this deed-in-lieu will likely NOT waive your responsibility to pay back the full balance of the loan. So they expect you to hand over the keys, and then still pay them tens of thousands of dollars in the years to come?

Now that measly thousand dollars isn’t looking so good is it? Not when you think of the long-term effects.

If you’re not quite ready to agree to such a permanent outcome and want to know what other options might be available to you when you are facing a Michigan Foreclosure, including some that won’t further damage your credit or leaving you owing the bank tens of thousands long after you’ve left the house, give Emily a call today.

Melissa

Clogged Foreclosure Pipeline

At first glance, the housing market coupled with the foreclosure rate may seem to be improving, which initially may appear to be an upswing in the economy. In actuality, that is far from accurate.

The sad truth of the matter is the rate of new foreclosures is only slowing because foreclosing lenders are so swamped with the properties already active in foreclosure that they simply don’t have the time or resources to keep up. It used to be you could estimate that a foreclosure sale would take place in 4-6 months after the loan went into a defaulted status, or in other words, a payment was missed. Now, that timeframe is closer to 8-10 months. I read a statistic the other day that claimed between 20-25% of loans that have been delinquent for a year have not yet entered foreclosure status. A year – pretty crazy, right?

For those of us not in the lending business, this cloud has a silver lining: we have time now. A few years ago, you had to scramble to get your documentation into your lender in the hopes of possibly getting the foreclosure sale postponed so you get the chance to have your voice heard. Now we have more time to secure workouts and to close short sales. This allows for a far greater chance for sellers in financial hardship to find long-term relief. To get started, call Emily today!

Melissa

Bank Burgles Bird While Current On Payments

I just read an article in the Pittsburgh Post-Gazette about a woman who had her home foreclosed on by Bank of America. No big surprises there, since foreclosure rates are through the roof – but this story has a twist. Angela Ianelli of Hampton, PA wasn’t late on her payments. Oops!

The article says that Ms. Ianelli came home one day to find herself locked out of the house by Snyder Property Services, a “property preservation” company. When she finally got in, what she found was not pretty. Her carpets and furniture had been damaged, her water and electrical lines had been cut, and her home had been winterized. Worst of all, her parrot, Luke, was M.I.A. Now, this one hits close to home. I have two birds of my own, and would be devastated if they were taken from me! (Though, I can image the culprit would be trying to give them back pretty quickly – not everyone can handle the incessant squawking.)

When Ms. Ianelli tried to contact Bank of America, they did what they do best – gave her the ‘ol runaround. It wasn’t until a week later that they admitted their mistake. Only then did they tell her where she could find her parrot – a mere two hours away. Ms. Ianelli has since hired a lawyer, and I’m sure this story is far from over.

Unfortunately, this is an often occurrence, only it usually isn’t a mistake. Millions of families are behind on their mortgages, and the banks are taking action. They want their money, and they’re ruthless about it. If you’ve realized that you can no longer afford to stay in your house and are facing a Michigan foreclosure, give Emily a call. You have better options than letting the bank’s henchman raid your home!

Holly

Deficiency Judgments

Recently, there was an article posted on a major news website about how mortgage lenders are pursuing homeowners after foreclosure. It seems that with the downturn in the housing market, more and more lenders are choosing to pursue their former customers for additional money after the foreclosure and repossession, most likely in an attempt to recoup their substantial losses amid the recent foreclosure epidemic.

Many homeowners may be under the impression that after a foreclosure, deed-in-lieu, or even a short sale, they’re done – the debt is gone – and the only issue with which they now have to contend is the damage to their credit. On the contrary, it is possible (and entirely probable) that lenders pursue deficiency judgments, which may result in wages being garnished or even time spent in jail if that money is not repaid.

Pretty scary, huh?

Who is looking out and actually reading those short sale approval letters and explaining them to you?  I’m sorry to say that most REALTORS are not because they don’t understnad the difference between a total account settlement and simply a lien release.  It’s certainly not obvious when reading these short sale approval letters.

Our company always fights for a settlement (no deficiency balance), but I’ve been seeing this more frequently, unfortunately. Lenders are refusing to waive their legal right to pursue for any deficiency. We, of course, always want to help our sellers start over with as clean a slate as possible. We can’t promise this will happen – we can’t promise you’ll walk away with no additional debt. We CAN promise, though, that we will do our best to that end, that we’ll exhaust all options to keep you safe from any pursuit by your lender.

If you’re facing foreclosure and the scenario I described may fit your situation, feel free to give us a call. We’ll see what we can do to help you get back to better times.

Melissa

Is There A “Soft” Exit From Foreclosure?

I came across this article which talks about lenders attempting to find softer exits other than foreclosure for distressed borrowers.

I had to ask myself, “softer exit for whom”? My thinking is that a truly soft exit is one where someone lands on their feet and gets moving to better times faster. Who is landing on their feet with these “soft exits”? Although the article does not say it, I have to believe that the lender is looking out for their best interests (don’t they always?) and not necessarily you. I believe it is the lender who is benefiting from the soft exit.

For example, the article discusses how Citigroup will allow a distressed borrowers to stay in the house for up to 6 months before turning over the keys. However, you’d have to:

• Not qualify or be declined for other workout programs
• Keep the property in good condition
• Pay for utilities
• In most cases, pay for taxes, Insurance and HOA fees

This may be a good option for some. However, most of the sellers we talk to who can no longer afford the house, also cannot afford taxes, insurance and making needed repairs. The advantage to the lender is that they get you motivated to take care of the house, making it easier for the lender to resell the house when they eventually get it back. Also consider that in states like Michigan, you already have a redemption period during which you are legally allowed to live in the house after the foreclosures sale so the bank isn’t really granting anything that is not already the your legal right (for Michigan).

It would be a good idea for you to find out how accepting this proposal is going to your credit (assuming that’s part of your goal). It could show as a voluntary foreclosure, not to mention the 6+ months of missed payment all which will only harm your credit. This definitely will not help you land on your feet and able to start over.

I would like to suggest that a “softer” exit for you if you’re facing a Michigan foreclosure – a short sale. This can help to salvage your credit making it much easier to land on your feet. The article mentions common pitfalls when you try to do a short sale yourself or you use an inexperience Realtor or other person to do the short sale. However, when you use an experienced negotiator like us, these so called pitfalls are just issues that we are aware of and have successful plans to deal with or avoid completely.

Put our professional expertise to work and let us help you make a soft exit from a problem situation and get back to better times. Give Emily a call today to discuss your options and for free, confidential advise about your situation.

Ann