Stop Michigan Foreclosure

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

Where Are Michiganders Moving To?

This is possibly one of the coolest websites I’ve seen regarding relocation.

Now I’ve known that people were leaving Michigan, but I never knew where they were going, until now. I’m assuming that most are leaving for employment; especially since Michigan has such a high unemployment rate right now.

The question I have is, what are these people doing with their houses when they move? A few may be able to still afford their payment on their Michigan house and/or want to keep it and that is great. My guess is that most houses are going back to the banks because the family can no longer afford to make the house payment, especially if they are now making a house payment somewhere else.

That is unless we’re able to step in and help the family with a short sale (negotiation with their lender to accept less than what is owed) and providing a cash offer. I’m sure they’d much rather have the home sold than foreclosed upon. If you or someone you know is behind on their house payment, owe more than the house is worth and are facing a Michigan foreclosure, give us a call. We will not put you in a worse situation and there is never a fee.

Emily

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

This Bailout Is For Families (Not Banks)!

There is a slight upside to living in a state with one of the highest foreclosure rates in the country. Michigan was one of ten states chosen to receive part of $2.1 billion in order to combat rising foreclosure rates. Our hefty $154.5 million (chump change compared to California’s $699 million and Florida’s $418 million) portion will ideally help about 16,000 struggling families in three different ways according to this article.

1. The state plans to use some of these funds to help unemployed families make their house payments, giving them a subsidy of up to $750 a month for up to a year.

2. For those families who are lucky enough to find a new job, and are able to once again make their payments, they state will dole out up to $5,000 to help them with their back payments.

3. If the lending bank agrees to match the payment, up to $10,000 could go to paying down your mortgage principle.

The downside to this is that while some people facing a Michigan Foreclosure will get the help they need, there will inevitably be many families left struggling to stay afloat. We here at Great Lakes Home Solutions can’t offer you a government bail out, but we may be able to help in other, more permanent ways. If you have a hardship and can no longer afford your payments, give Emily a call. She’ll help you choose the right option for you.

Holly

Watch Oprah Lately?

For those of you who watch the Oprah Winfrey Show, this story may be familiar: A family from Lee’s Summit, Missouri, went on the talk show to discuss their financial struggles and impending foreclosure. Also a guest on the show was Will I. Am, a member of the hip-hop group The Black-Eyed Peas. It seems Will I. Am was so touched by the family’s story that he announced on the show that he was going to pay off the mortgage of the Lee’s Summit family, which was over $240,000 worth of debt.

We should all be so lucky, no?

The fact is, (according to the RealtyTrac® “trend center”), there are over 2 million homeowners all over the United States in the same situation. Unfortunately, there are not enough Will I. Am’s to help them all out, which means they will need to find alternative solutions for themselves. Now, we at Great Lakes Home Solutions don’t promise to pay off your mortgage so you never have to worry about it again, but we will do what we can to help point you in the right direction toward the solution that will be right for you. And if that direction is a short sale, there’s a pretty good chance we can make sure your lender never comes after you again.

Give us a call and let’s see what we can do to help.

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

Married And Never Lived With Spouse

A few days ago I was driving in my car, flipping through the radio stations, and stopped on a talk radio show which caught my attention. The woman on the line was asking the show’s host, Dave Ramsey, for some financial advice. She had been married almost a year, but had never lived with her husband, who had to relocate to a different city, because she could not sell her house. She had purchased the house back in 2007, right before she met her soon-to-be husband, and right before the housing bubble burst. She now found herself to be underwater – her house was worth less than she owed on it. She wanted to know if he thought that she was better off doing a short sale, or trying to get a $10,000 loan to make up for the difference when she sold the house. I found Dave Ramsey’s advice to be obnoxious. “Who cares!” he exclaimed. He went on to hassle the woman about having lost a year of marriage “which you can’t put a price on…” His advice was to do anything, whatever it took, to get rid of the house and move in with her husband.

I really wish that instead of going off on a rant, he would have asked the woman more specific questions about her circumstance. Was the couple able to continue making two house payments (or a house payment and a rent payment)? Would she even qualify for a (more than likely) unsecured loan for the $10,000 difference? Had she consulted REALTORS® to be sure that she was only $10,000 underwater, and not more?

Yes, in certain circumstances, it may be your best option to take out a loan to pay off the difference in the house value and your mortgage amount. In other situations, especially where there is a financial hardship, you may want to explore other options. If you would like to avoid a Michigan foreclosure, give Emily a call. She’s been through this before, and can let you know what your options are. And, if your best option is a short sale, the good news is that we can help!

Holly

Celebrity Foreclosure

I always stress in my blog posts that if you’re going through a Michigan foreclosure, you’re not alone. I’ve realized that saying that doesn’t really help, though, if you don’t actually know anyone else in your shoes. So this post is for those of you who still feel alone in their Michigan foreclosure situation. Foreclosure can happen to anyone – even the rich and famous.

You might think that if you have all the money in the world you could do just about anything – including stopping the bank from foreclosing. This is not always true, though, because the same things that cause you, the average person, to default on your mortgage also happen to celebrities.

Divorce: Victoria Gotti, daughter of mobster John Gotti, purchased her Long Island house in 1989 for $175,000. She now owes $650,000 and reports say that she hasn’t made a payment in quite a while. Apparently, she has not been able to afford the house since her divorce. This is quite common. Two people can afford a mortgage, but when they split, it is often unreasonable for one person to keep the house. The logical answer would be to sell the house, but when you owe more than it’s worth, you’ll have to bring cash to closing (which most people can’t do.)

Gotti Mansion

Job Loss: Adam “Pacman” Jones of NFL fame went into mortgage default when he was suspended from playing without pay. When you bought your house, you probably weren’t expecting a recession (I know I wasn’t!) which means you probably weren’t thinking about job security. Unfortunately, the economic climate got stormy and many people are left without employment.

Adam "Pacman" Jones Humble Abode

Failed Businesses: In 2005, ABC built a brand new, $450,000 house for the Harper Family on their show “Extreme Home Makeover.” The house was given to them at no cost. The family, however, took out all of the equity to fund a construction business that ultimately failed. They were unable to pay back the equity loan, and the house went into foreclosure. We turn again to the financial crisis, which is making it hard for many businesses to stay afloat.

Harper Family’s Extreme Makeover House

Death: Veronica Hearst defaulted on the mortgage of her 52 room mansion after the death of her husband, Randolph Hearst (successor of publishing giant Hearst Corporation.) The death of a loved one is hard enough to deal with without also having to deal with foreclosure.

Villa Venezio – Veronica Hearst’s House

Disability: Ed McMahon defaulted on the loan of his $4.8 million dollar house in 2006, when the 85 year old fell and broke his neck. He was unable to work, and therefore could not come up with the princely payments.

Ed McMahon’s House

If you are facing a hardship, such as the ones listed above, and have realized that you can no longer afford to keep the house, give Emily a call at (269) 685-5921. We help people facing difficult times every day, and are well versed in letting you know what your options are. If your best option is a short sale, we’ll do everything in our power to make it as painless as possible.

Holly

Octomom Facing Foreclosure

Many of us may have heard of the pseudo-celebrity dubbed “Octomom” (her real name is Nadya Suleman). Octomom gained notoriety a year or two ago when she gave birth to octuplets, increasing the number of her children to 14; she had previously given birth to sextuplets.

If you follow celebrity news, you may have heard that Nadya Suleman is facing foreclosure.  Now, in some ways, hers is a very different situation than that of most homeowners – her income is derived mostly from publicity, interviews, and public appearances, whereas the rest of us have far more traditional jobs. Also, her mortgage is reportedly held privately, so she has no huge conglomerate bank to deal with.

In spite of these differences, she is a mother trying to provide for her children, and in that way, she has something in common with many sellers facing a Michigan foreclosure. My point is this: if foreclosure can happen to those who are famous – or infamous – it can happen to anyone. No one is immune to this “Michigan foreclosure epidemic”. If you are facing a Michigan foreclosure, you are certainly not alone. But you do have options. Give us a call to discuss how we can help you get back to better times.

Melissa

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