Stop Michigan 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

Often, when homeowners find themselves in financial hardships, they may look first to housing counseling agencies or mortgage brokers to formulate a workout plan or renegotiate the terms or their loan (as well they should turn there first). But because of the large number of families in similar situations, these alternatives have become flooded with requests.

In response, more private mortgage insurance (PMI) companies have begun offering programs to keep their clients out of foreclosure. Obtainment of private mortgage insurance (not to be confused with homeowner’s insurance) is a requirement on every loan on which there has been less than 20% down payment. The policies are in place to protect the lender if the homeowner stops making payments. Some PMI companies have begun to reach out to homeowners in order to assist in avoiding foreclosure; however, there are often stringent requirements to qualify for the programs being offered.

For example, one program offers to cover delinquent payments with an interest-free loan but requires the applicant to prove the delinquency is temporary and requires the regular monthly mortgage payments continue to be made. Another program is only available to homeowners who have owned their house for fewer than three years.

It’s no wonder far less than 10% of workouts are approved with these strict criteria.

If you are in default or financial hardship, rest assured, you’re not alone, especially if you are facing a Michigan foreclosure. You have only to turn on your television or radio to hear about the many others in similar circumstances, but let me encourage you to research the information out there for yourself to find out what options are available to you because no one else besides you can really choose which option will suit your unique situation.

Of course Emil (“Mom”) is always available to you at no charge to help you narrow your options on focus you on solutions with the best chance of working. Give her a call today.

Melissa

As I’m writing this blog, I’m on hold with one of the lenders so I can continue my short sale negotiation for a family we are working with (both the husband and wife lost their job within 2 weeks). It occurred to me that most people like you don’t have either the time or the patience, between work, kids, and home life, to deal with their lenders.

Whether you’re trying to modify the terms of your loans, do a refinance, negotiate a short sale or discuss their options for a workout when you find yourself behind on their payments facing a Michigan foreclosure. Hold times routinely surpass 15 or 20 minutes. Navigating through the maze of various Customer Service, Collections, and Mortgage Servicing departments can be time-consuming, frustrating, and impractical for almost everyone!

Here’s the good news, though: that’s what our team does. We keep up-to-date, exhaustive records of phone, fax, and email information to streamline our time spent in contact with lenders, yet there are still many times that we end up on a lender phone call for 45-60 minutes. This is the nature of the business, the way the lenders systems are structured (very poorly I might add). If you’ve tried talking to your lender and have had trouble negotiating a short sale with them, let me tell you, I feel your pain. If you’re at the end of your rope with your lender or would prefer not even to start the climb on your own, give Emily (“Mom”) a call, and let us do what we do best.

Melissa

Sometimes I come across and article that expresses thoughts better than I ever could.  Here is such an article – a must read for all you distressed owners still hoping a government program will bail you out to avoid a Michigan foreclosure. Take the time you were going to spend reading this blog and read this article – the opinions expressed are those of the writer alone.

Ann

We are busier than we have ever been: starting with new families, offers coming in like crazy, short sale approvals rolling in and lots of closings.

In fact, we have offers on half the houses we are working with. Don’t let the pessimistic press make you think the sky is falling and nothing good is happening out there. Buyers are buying houses. Lenders are giving loans. Lenders are accepting discounts (short sales). We know because we see it every day – in fact our work days are getting longer because so much buying, discounting and closing is going on. No time to write more – have to get back to work.

No matter how busy we are, we are not too busy to talk to you. Talking to Michigan homeowners facing foreclosure is always our first priority – give Emily a call today.

… this of course is said with a strong Scottish ascent.

Now, if you’re an original Star Trek fan, this needs no explanation. For those that aren’t, here’s a short one: Captain Kirk would frequently get his ship and/or crew in such situations that he’d need his chief engineer (Mr. Scott – “Scotty”) to bail him out. He’d have to do things like re-start the engines in 5 minutes (a normal 60 minute process) or get the Enterprise to run at warp 12 (normal top speed is warp 8). More than one time, after this request, Scotty would reply “I Can Not Change The Laws Of Physics Captain!”

What does this have to do with Michigan foreclosures? Here’s a story…

Yesterday I talked to a gal in Kalamazoo convinced she would find an answer to her problem – she just needed to talk to enough people. Now I’m all for that. Every person she talks to will have a different twist on the situation, and offer different suggestions. I certainly don’t know everything! The problem is, she wanted it all. She wanted to keep her house, her cars, all of the stuff she bought on credit cards, but make most of the debt go away.

Let’s just focus on the house. She had a “normal” (before she got behind) house payment of $1500 a month. She got behind because of health issues and a job loss (normal reasons that cause this – which is why so many people are losing their houses to foreclosure in Michigan. She wanted to keep her house, and have a payment of $800 a month. I did the math – she’d have to refinance at a rate of about 1.5% in order to get this done. There’s two problems with this plan.

1) If she had perfect credit today (which she doesn’t since she’s 120 days late on her mortgage), the best 30 year fixed interest rate loan I’ve seen is a around 6%. But of course because of her credit, no one will finance her – at any interest rate.

2) You can’t get caught up by slowing down. Here’s the analogy: If you’re in a row boat with a small leak (a mortgage payment), as long as you keep bailing the water out (making your normal monthly payment), you’re OK – you won’t sink. If you stop bailing for a period of time (lose your job and can’t pay), and want to not sink, you have to bail faster (start making bigger payments). She wanted a way to plug the hole (get rid of her mortgage payment but keep the house), but of course, you can’t change the laws of physics.

I felt bad when I hung up – I tried to help and explain there were other options besides the eventual Michigan foreclosure that was bound to happen. But, she was just so focused on the belief that someone would have an answer, there was nothing I could do. She’s going to have her head in the sand for 4 more weeks until the foreclosure sale at which point it could be too late for me to help.

The moral to the story? Realize that no one, not even Scotty, can change the laws of physics (or finances)!

Emily

To be successful, every Short Sale should be a partnership in which each member of the team takes their responsibility seriously. When we work with a seller facing a Michigan foreclosure, this is what the team responsibilities look like.

Realtor® – markets house and finds buyers.

[GLHS] Great Lakes Home Solutions, Inc (us) – negotiates the Short Sale with the foreclosing lenders, handles all communications with the lenders.

Seller (you) – maintains house for showings, cooperates with showings, stays in communication with GLHS & notifies GLHS of any changes in their situation such as moving, notices from the bank, inability to pay utilities, etc.

One of the reasons our Short Sale acceptance is 8 times the national average of 10% (we are close to 80%) is that we insist that you take responsibility for your part. After all, we are investing time and resources to resolve your situation without charging you, the Realtors®  or the buyer. What better way to show your gratitude than to shoulder your load. Yes, we understand you have a hardship and life is not great right now. We are trying to get you back to better times as quickly as possible. We will be much more successful when we work as a team.

Some examples of good teammates and not good teammates.

Not So Good Teammates

• Refuses or limits showings because of pets, work/sleep hours, children, company, etc. (Realize in today’s market, if a buyer can’t see the house when they want to, they probably won’t be back. They have far more homes available to them then you have buyers available to you).
• Moves without telling us, turning off utilities and leaving house vulnerable to damage from freezing pipes, vandalism, etc. or repossession by lender (yes, they can repossess if they deem the house abandoned. We can prevent this but we have to know it is vacant).
• Does not return our phone calls in a timely manner possibly preventing us from getting critical information needed to complete the Short Sale or update you on a critical development.

Good Teammates

• Makes sure house is clean and de-cluttered for showings, looking and smelling nice.
• Leaves for showings so the buyer can look in privacy and start to feel like they can make the house their home.
• Reports any phone calls, letters, postings from the lenders to us immediately.
• Maintains an attitude of gratitude realizing that they have no other options and we are working harder than anyone to help them.

See there, your responsibilities on this team really aren’t that hard when you consider we take the burden of all dealings with the lenders off your back, plus answer all your questions about options and what is happening. I guarantee that we will work harder than anyone else on this team or any other to get your situation resolved.

Ready to join the team? We’re ready to have you! Give us a call today and join a winning team!

Ann

As the real estate market declines with the rest of the economy, more and more families like yours find themselves facing foreclosure. The Michigan foreclosure process is a very complex and expensive process for lenders; in an attempt to stem of the flow of funds lost during foreclosure, many lenders say they are offering solutions, usually in the form of a loan modification or a plan to repay the amount past due (in arrears).

I just wanted to take a moment to talk a little bit about repayment plans. Often the plans offered by lenders require a considerable amount of money due immediately (we’re talking thousands of dollars). Most homeowners find themselves in a default situation because of a financial hardship, resulting in a loss of liquid assets, or cash on hand. This makes a large initial payment all but impossible.

Also, most repayment plans consist of fractionalizing the amount in arrears, and adding that smaller amount onto the monthly payments. For example, if a your mortgage payment is $1000/month, and your are two months behind, the amount in arrears would be $2000, plus any penalties or late fees. A lender may then offer a repayment plan that requires $200 down initially, adding $200 to the payments for the next nine months, making those payments now $1200.

If you are in a temporary financial hardship, this may be a viable solution. However, if you find yourself in an ongoing hardship, this option is likely not be feasible.

If you find yourself in a similar situation, give us a call to discuss what your other options may be at this point to get you back to better times as fast as possible.

Melissa

OK, I’m getting a little frustrated. I coach a lot of people on how to deal with their lender to enable to keep their house. Yes, we charge nothing for this, so I get to vent a little so I’ll share my frustrations.

When you’re talking to these guys (the lenders) you’ve got to realize that you’re negotiating to keep your home! Act like it – be passionate! Keep bugging them until you get a commitment, or keep asking for a supervisor (or their boss, and their boss) until you find someone that will work with you to keep your home.

Remember, it’s just a job to these people, and if they want to leave at 5pm (or mail you a package), most will leave and lose your stuff by the next day. You need to take charge – period!

I’ll let you know what’s reasonable for the lenders to expect (as for as $$, paperwork, etc.) – you’ve simply got to keep following up. Do NOT sit around waiting for them to call you back, or waiting for mail or a fax. Actually, NEVER let them mail anything – it takes way too long. Have them fax it. Don’t have a fax? Someone that you know has one, or bite the bullet and have them send it to Kinko’s. Each day (and hour) that ticks by brings you that much closer to losing your house – take control!

Some people are upset with me because I won’t jump on the phone and negotiate for them (on occasions I have). Here’s my theory, if you’re passionate, you’ll do a much better job than I will because I’ll coach you. Some families have hired firms to negotiate for them. What a waste of money – don’t bother. They seldom are more success than you can be, plus, even if they offer your money back if they fail, everyone I’ve talk to that has tried them can not get their money back.

OK, I think I’m done venting now.

Emily

At first glance, modifying your current mortgage seems like a quick and easy fix for your current financial problems and avoiding a Michigan foreclosure. Unfortunately, as you can read in this article it’s not as easy as you would think.

There are a number of factors that play into modifying your mortgage. The number one show-stopper that I hear from homeowners who have tried a loan modification and have turned down is their lack of income. While it may seem that more and more mortgage companies are willing to modify mortgages, they’re still not going to help you out if you don’t have sufficient income.  Plus, as previously reported, nearly six out of ten troubled borrowers who are able to negotiate loan modifications re-default after eight months.

If you can’t make your mortgage payments and feel like there is no way out of your situation, call me immediately. You do have a choice.

Emily