Stop Michigan Foreclosure

Today I’m going to give all of the blog readers out there a tidbit of useful advice: Don’t trust your Michigan short sale to just anyone. I’ll tell you why…

Short sales are hard to do! They take a lot of frustrating phone calls, countless hours of your time, some serious negotiation ability, and some on-your-toes critical thinking skills. Not everyone has the time, patience, or skill to close a short sale deal.

Today I did a search on the local MLS to see exactly how many active short sale listings there are out there. The answer is a whopping 1,083! Just in the southwest Michigan area! I then did a search to see how many short sales sold in the last six months: a mere 200. Shocking!

I suppose that due to our much higher than average closing success rate (about 80%) it’s easy for us to forget how many people out there are struggling with their short sales. Many sellers are either trying to do them by themselves, or are using a possibly uninformed, unqualified REALTOR®. Sure, there are REALTORS® out there who are seasoned pros at this (many work with us!), but many aren’t very qualified. They try hard to sells houses and most are good at it. If they are working on a short sale, chances are they are trying their hardest to get it to go through. But all the trying in the world cannot make something work if you simply don’t know how or have the refined skills. We work with several great REALTORS® to try to make sure the house not only gets sold, but also gets an approved short sale. Have you watched Joel’s video on how to determine if your REALTOR® is qualified to do a short sale?

So before you trust your short sale to just anyone, give it some thought. Hopefully you’ll realize that our FREE, confidential services may be a great opportunity for you. Remember, Michigan short sales are all we do!

Holly

I’ve recently learned of an interesting bit of folklore that has been circling around the real estate world for years. The legend says that if you bury a little statue of Saint Joseph in your yard, your home will sell swiftly. You then give thanks to the tiny St. Joseph by digging him up and placing him on the mantel of your new home.

Where did this tale come from, you ask? According to www.StJosephStatue.com, an online purveyor of all of your plastic (and pewter, if you’re feelin’ fancy!) St. Joseph needs, this tradition has been around quite some time. “The solemn tradition of burying St. Joseph in the earth began hundreds of years ago in Europe. During those times, an order of nuns prayed to St. Joseph (the patron saint of the family and household needs) when they needed more lands for convents. The Sisters were encouraged to bury their St. Joseph medals in the ground.”

Now, I am not a skeptic. If this 4” St. Joseph can sell my house quickly in Michigan’s tough market, I’ll buy him a posh little dollhouse to live out his golden years. But if you’re looking for a surefire way to sell your house, I’d try pricing it at fair market value. Easier said than done, though. Ever since housing values took a dramatic dip, many people owe much more than their homes are worth. This is where a short sale comes in handy, and this is where we step in! We can negotiate with the bank to accept an amount closer to what your house is worth, rather than what you owe on it. If you’re facing a Michigan foreclosure, want to sell your house, and want to find out if a short sale is right for you, give Emily a call. She’s ever so sweet, so don’t be nervous! Oh, and let’s bury a St. Joseph statue just for good measure…

Holly

(The “Authentic” St. Joseph Home Sale Kit – $7.95)

Well, it’s a new year, which means that there is bound to be tons of reflection on the year past. There will be lists abound – Best movies of 2009, best dressed of 2009, and of course, highest foreclosure rates of 2009! Here’s the breakdown, courtesy of cnbc.com:

10. Hawaii – 1 in 330

9.   Georgia – 1 in 305

8.   Illinois – 1 in 294

7.   Michigan – 1 in 225

6.   Utah – 1 in 200

5.   California – 1 in 165

4.   Idaho – 1 in 159

3.   Florida – 1 in 158

2.   Arizona – 1 in 132

1.   Nevada – 1 in 94

Put down those cards, ladies and gentlemen – I think Las Vegas has run out of luck!  I wouldn’t press my luck at Michigan’s casinos, either… we’re sitting (not so) pretty at number seven with 1 in 255 households losing their houses to foreclosure. And even more homeowners are facing foreclosure or heading that way by being behind on their mortgage payments. One piece of good news for the New Year is that if you’re facing foreclosure, we may have a permanent solution for you in the form of a short sale. If you know that you can no longer afford the house, and are ready to sell it, give Emily a call or email now.  If you wait much longer, we may have to tell you we can’t help.

Holly

I would like you all to close your eyes while I take you on a magical journey. The year is 1985 – you’re 6 years old (probably not but just go with it). It’s Saturday morning and you’re all warm and cozy in your He-Man jammies. You have a giant bowl of sugar-laden cereal in front of you. Your sister is still sleeping, and the TV is all yours. Life is good. You flip on the tube and lo and behold, your favorite cartoon is on – Voltron!

GLHS-TRON

“All right, Holly, what does this have to do with Short Sales?” you ask. Everything! For we, your trusty Great Lakes Home Solutions staff, fly robot lions and fight crime. Okay, not exactly, (except for maybe Joel – not sure what his plane looks like) but individually we have unique powers. Joel has super human problem solving powers. Ann has the uncanny ability to coordinate with REALTORS® on a daily basis. Emily has magical people powers. Melissa has top secret negotiation powers. And I have the most magical superpower of all – the power to process loads of boring paperwork without losing my mind. (Just kidding about it being the best superpower!) Now, all of these are great powers to have, and alone we are strong, but together is where we really shine! With our powers combined, we become GLHS-TRON, a giant, powerful, bank-crushing, people-helping, REALTOR®-organizing, phone-calling, paper-pushing, negotiation machine!

Okay, so maybe I’m stretching the truth a little bit, but the idea of it is true. Alone, we are skilled in different areas. Together, we get short sales done for families like yours. Do you have a hardship? Have you realized that you can no longer afford to keep the house? Do you want to avoid foreclosure? We can help. Give Emily a call at 269-685-5921. She’ll fly her lion jet right over and assess your situation.

Holly

p.s. From Joel – Holly is also the most creative of all of us (as you can tell from all of her Blogs!) – what an awesome addition she’s been to our team!

Over the last few years, many families (including mine) financed their houses with an adjustable rate mortgage or as I like to call it, the ARM of Sorrow (okay… I just made that up.) If you fall into this category, people may ask you why you would take on a mortgage you might not be able to afford after the interest rate increased. There are a few reasons you might have done this. The main reason is that you were probably under the impression (influenced by your lender) that you could refinance at a lower rate before your ARM adjusted. At the time you purchased the house, you might not have qualified for a conventional, low interest mortgage for several reasons (one being less than perfect credit, which may improve over time.) Then the time comes to refinance your mortgage – and you can’t! Why? There are many reasons:

1. Your house is no longer worth what you owe on it. You bought the house for $150,000 in 2005, and now it is only worth $125,000. There is no longer enough equity to get a loan for $150,000 – but of course, you still owe that much.
2. Your house is no longer worth what you owe on it because you pulled out some equity that was once there, but isn’t anymore. For whatever reason (pay off other debts, buy a car at a low interest rate, make home improvements) you might have taken out an equity loan or line of credit on the house. If you bought the house for $150,000 and took out a $20,000 equity loan, this brings the total amount owed up to $170,000. If the house is worth less than $170,000 (which is likely due to the rampant decline in property values) no bank will refinance it..
3. You no longer make as much as you used to. Unemployment rates across Michigan (and many other states) are astronomical, and there’s a chance that it’s affecting your line of work. You may have had your hours reduced, taken a pay cut, or have lost your job altogether. Because of this, there’s a good chance that the banks do not like the amount of debt you have in relation to how much money you make (called “debt to income ratio”), and will not refinance your mortgage.
4. Life happened. Maybe you had an illness or death in your family. Maybe your car was involved in an accident, and you had to get a new one in order to get to work. Maybe there was an urgent and major repair that needed to be done to the house. Sometimes, no amount of scrimping and saving can get you back on track.
5. You didn’t know the facts. Maybe you, like many of our sellers, weren’t completely informed about what was going to happen. Many of our sellers didn’t know just how high their interest rates were going to skyrocket once their ARMs adjusted. Increasing a $150,000 mortgage from 6% to 11% adds an additional $530 a month to a house payment!

If you are one of the many people who are facing a Michigan foreclosure because of an “ARM of Sorrow” and have realized that you can no longer keep the house, give Emily a call at 269-685-5921. We can help you out. We take a very complicated task – getting your bank to accept less money than you owe – and we make it very simple for you. Of course, it’s still hard on us, but that’s our job… and we’re good at it!

Holly

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

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

As soon as I started working here I noticed something very interesting. Our clients come in for their meetings with Emily to start the short sale process, and they sometimes look a little down. It’s completely understandable. They’ve been struggling to keep up with their house payments – sometimes for months, and sometimes for years. They may have tried to work out a modification with their mortgage company, only to have wasted hours on the phone, gathering and faxing documents, and getting told that they do not qualify for one reason or another. They’ve realized that they’re fighting an uphill battle, and that they need to sell to stop a Michigan Foreclosure.

So they meet with Emily, and when they come back out into the lobby… they’re smiling and laughing and joking around! It’s amazing! I don’t know what happens in there, but Emily knows how to cast some sort of happy spell on our clients. I think that what’s really happening is while talking to Emily they start feeling a heavy burden lift off their shoulders. They’re no longer alone. We’re going to help them. Heck, we’re going to do most of the work. Sure, we might bug them for some paperwork every once in a while, but I think it’s a small price to pay in exchange for Melissa’s relentless negotiating powers, Ann’s special way with REALTORS®, Emily’s answers to all of your questions (and magical happiness potion), and Joel’s amazing problem solving and coordinating skills.

So if you’re feeling overwhelmed and facing a Michigan Foreclosure, give us a call. We will never ask you for any money or to make any repairs on the house. We will keep everything confidential. We will never put you in a worse position and we will work harder than anyone else to give you a permanent solution to foreclosure. Give Emily a call today, and see for yourself!

Holly

Okay, so from around 2003 to 2005, houses were increasing in value. Income, however, was staying about the same, or rising at a much lower rate. In the past, individuals or families were buying houses that cost around 2 or 3 times their annual income. During this time, however, people were buying houses around 4 times their annual income. To put it into perspective, families with an $80,000 income that were buying $160,000 houses were now buying $320,000 houses – and paying a mortgage payment twice as high. Income being the same, where did they get the money to make their mortgage payment, you ask? Well… due to the increase in the value of these houses, people were able to take the equity in their houses and borrow against it, in the form of an equity loan or equity line of credit. They could then take this money and use it to make their mortgage payment. Crazy vicious cycle, huh?

Obviously, this wasn’t going to last forever, and housing values started decreasing around October of 2006 – the bubble had burst. People were no longer able to borrow against their houses to make their payments, and they started defaulting on their loans. As more people defaulted, more houses came on the market. With no buyers for these houses, prices were forced down even further, and people began to see themselves upside down – owing more money than their house was worth.

The investors, who before couldn’t get enough of the mortgage backed securities (see Part 1 of my blog), no matter how risky, quickly tightened their restrictions. Now they wanted safe investments. The problem was that the small mortgage companies had already made quite a few high-risk loans that they now could not sell – and they made them with money borrowed from large banks. Since they could not sell these mortgages, they had no choice but to default on their own loan, causing the company to go out of business, and people to lose jobs. So now… everyone was losing. The large banks were losing the money that the mortgage company had borrowed, the investment companies were losing their returns, the mortgage company lost, well, everything, and the families lost their houses. Even the government was losing money – they had to lend it to the large banks in order to keep the economy afloat.

If you, like many others, are facing a Michigan foreclosure due to the bubble bursting, or because of a hardship, give us a call. We will never ask you for any money, we will keep everything confidential, we will never ask you to make any repairs on your house, and we will absolutely never put you in a worse position than a foreclosure.

Holly