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Tips to Sell from the Media – Really? Let’s Get Real!

Tips to Sell from the Media – Really? Let’s Get Real!

I recently read an online article listing some of the reasons people cannot sell their houses and providing some suggestions to that end. Here are a few examples:

  • You haven’t picked the right REALTOR®.
  • You need to get an appraisal so that you’ll know what a buyer’s lender will approve.
  • You need to get comparative list prices (or “comps”) which include foreclosure listings so you know at what price houses are actually selling in your neighborhood.
  • The house needs to be attractive and have “curb appeal”.
  • The house needs to be “staged”. This means you would hire someone to analyze and address any cosmetic or décor problems that are preventing your house from being aesthetically pleasing to potential buyers.
  • You need to make sure the house doesn’t need any work.

Now, many of these tips are good and useful. You want to have an agent who is reputable and dedicated. As for the appraisal and “comp” tips, I could not agree more; a house is only worth what someone is willing to pay for it, regardless of debt or perceived sentimental value. And, of course someone is more likely to offer on a house that is attractive and to pass on one that is not. Again, these are good ideas, but more than half of them require spending money, and who in this economy has the hundreds, if not thousands of dollars to spend on these recommendations?

My point is that although I agree with the thoughts and intentions in this list, for many families here in Michigan, needing a short sale to avoid a foreclosure, these suggestions are simply not feasible or affordable. If you are struggling to sell your house, call us – we’ll see what sort of practical solution we can help you find.

Melissa

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How To Get The House Market To Work For You vs. Against You

How To Get The House Market To Work For You vs. Against You

Some of you may have read or heard on the news about the investigations into the foreclosure processes of several of the largest mortgage servicers. The investigators are looking into the validity and accuracy of the foreclosures that have taken place over the last few months and years. Apparently, there are suspicions that shortcuts were taken by the servicers that had millions of defaulted loans. The problem is that the servicers were unprepared for the volume of defaulted loans to deal with, and they were scrambling to address the defaults in bulk instead of reviewing each situation individually. Due to the investigation, some of the servicers have halted any further foreclosure proceedings (many of these have started the proceedings back up).

What does that mean for you? Well, if you are currently in default, it could mean you will be able to stay in the house for a little longer. But for sellers who need to sell now or who will need to sell in the next few years, it could be bad news.

The result of servicers’ decision to suspend foreclosures will simply delay the inevitable. These foreclosures will happen eventually, and the distressed properties will need to be sold. This action is just keeping distressed houses on the market longer. So, if all these houses were on the market in a smaller amount of time, prices would be extraordinarily low, but for less time. It’s essentially just biting the bullet and getting this price decline over more quickly. Maybe in this scenario, we could see price increases in the next two years; whereas with the current developments, it could be five or six years before the market picks back up.

If you’re a victim of the current declining market or foresee difficulties in selling your house in the near future, give us a call today. We’ll see how we can help you make the market work for you instead of against you.

Melissa

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Bank of America Deficiencies

Bank of America Deficiencies

One of the questions we are most frequently asked by our sellers pertains to the deficiency after the sale is completed – the balance remaining after the bank agrees to a discounted payoff. For instance, if you owe $200,000 and your bank agrees to accept $150,000 to sell the house, what happens to the other $50,000? This is a question to which many people want the answer, and probably you too, right? Going into a short sale, one of the biggest issues in your mind is whether or not you’ll be able to walk away and start over when it’s all said and done.

Most first mortgage holders will agree to waive the deficiency or forgive the debt, so you can just walk away. Many junior mortgage holders will not make any such agreement, but that’s another blog… One of the biggest lenders in the United States, Bank of America, has historically – and notoriously – refused to waive the deficiency in writing, choosing instead to decide what they will do with it after closing. Whether they would forgive the debt or pursue you was an uncertainty. That changed last week.

Jack Schakett, Senior Vice President for Credit and Loss Mitigation Strategies at Bank of America, reportedly said that if you cannot afford the payments and can prove that you have few or no assets, the deficiency will be waived. So if a financial hardship put you behind on your payments, you will most likely be “free to go”. If it is determined that you do have assets, a fee will be set for you to pay at closing. For instance, if the house being sold was a rental, and you had other assets, they might ask you to pay a lump sum or sign a promissory note. It might be the same if you were moving for new employment.

This is huge. This takes all the mystery and guesswork out of the transaction. Either way, the borrower knows upfront what is being accepted or required, which, I think we can all agree, is a step in the right direction for Bank of America. Finally! All that being said, we received a Bank of America short sale approval letter yesterday, and the same old ambiguous language is still in there.

If you find yourself in need of a short sale cash offer and someone to negotiate with your lenders, give us a call to see if we can provide both of those to you.

Melissa

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Getting Tight, or Foreclosure Red Flag?

Getting Tight, or Foreclosure Red Flag?

How often do we turn on the news and hear about the recession? It seems everyone is struggling financially these days – to some degree, at least. Many of us have friends or family whose lives have been turned upside down by the economy. But how do we know if what we’re facing in our own situations is just an indicator of the belt-tightening we all seem to need to do, or if it’s a true foreclosure red flag?

Here are just a few things to look for when analyzing your own situation:

  • Substantial decrease in monthly income – some examples might be layoff, unemployment, illness, injury, or divorce.
  • Substantial increase in monthly expenses – maybe you have an adjustable rate mortgage now costing you more each month, medical bills, the birth of a child, or caring for a family member.
  • Living outside your means – this should be an easy one, but for many of us it’s hard to give up the things we had and could afford when the economy was better.
  • Being able to only make minimum payments on credit cards – this means instead of reducing your debt, you’re in fact increasing it, which is a recipe for disaster when it comes to your long-term financial health.
  • Having to decide which bills to pay because you can’t afford them all – if you’re in this situation, you aren’t just a potential candidate for foreclosure, you’re likely facing it. It’s just a matter of time.
  • “Robbing Peter to Pay Paul” – if you’re using your credit cards to make other credit card payments, or to make the house payment, look out! Almost as bad is robbing from yourself by pulling money out of your IRA or 401(k) to make these payments.

If any of these scenarios accurately describe your financial health, and you know you’re struggling to keep your head above water, give us a call today. We’ll see how we can help get you back to better times.

Melissa

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FHA “Short Refi” To The Rescue?

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

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Can You Believe They Didn’t Call Me?!?

Can You Believe They Didn’t Call Me?!?

Isn’t it funny how little we really know the people in our lives sometimes? Or how little time we spend really taking an interest? In the last month I’ve talked with two different friends who have gone through the foreclosure process – sheriff’s sale, repossession, the whole bit. You know what they both said to me? I wish I would’ve known there were other ways to get out of my situation.

Well HELLO! I’m the one who spends the majority of the time on the phone with lenders at Great Lakes Home Solutions negotiating the short sales for our team!

In the first instance, the foreclosure happened before we were acquainted, but in the second instance, the foreclosure happened only a few months ago. Hearing that made me feel awful, like I’d failed this person. You see, we don’t have the sort of friendship wherein we talk about work. That was my reason for not knowing – it won’t be an excuse going forward. I realized that we at GLHS have an answer, a possible solution to the foreclosure problem so many people in Michigan are experiencing. So often I think we wait for the phone to ring, but do we have a responsibility to get our message out? When it comes to people I know personally, yes, without a doubt, I have a responsibility to at least offer a solution. It’s my duty as a friend or acquaintance to offer this life preserver to someone who’s drowning financially.

If you’re someone who’s looking for answers or know someone who might, give us a call today. Give us the chance to offer our life preserver and to get our message out so we can get them back to better times faster.

Melissa

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Can Your Attic Stop Your Michigan Foreclosure?

Can Your Attic Stop Your Michigan Foreclosure?

I recently read a story online detailing how Superman (yes, the comic book superhero) helped save a family in foreclosure. Yes, really!

This particular family (who wish to remain anonymous), having been in default for quite a while and anticipating foreclosure followed by eviction, had begun packing up their belongings. During the move preparation, they discovered a box in their attic, long forgotten, full of comic books that had belonged to another family member. Inside the box, they found Action Comic #1, which, for all of you who – like me – aren’t comic book aficionados, is a very rare comic book. It is the debut of Superman, and it is in fact the most valuable of its kind. Experts estimated its worth at a quarter of a million dollars – a sum large enough to bail the family out, allowing them to keep the house.

Unfortunately, most moving situations aren’t as serendipitous – most people cannot count on something like this happening. No Superman swoops in to save the house. If you’re in a similar situation and need a more practical, realistic solution rather than hoping for a superhero, give us a call today.

Melissa

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Ah Government Programs…

Ah Government Programs…

I think most of us can agree that the government’s intentions are always good, and when they take the time to become experts in the problem, they usually end up helping. I think most of us would also agree that they are not experts in a situation, they more often than not “muddy the waters” of that situation.

Approximately 1.24 million homeowners facing financial hardship enrolled in government aid programs to keep or sell their homes. An estimated 340,000 have received permanent assistance and are meeting the terms of their modified loan. That’s less than 3%.

Now, I’m sure that the current administration had the best of intentions; they saw a crisis and felt the need to intervene. That’s all well and good, but many people see it as an imposition, an intrusion into an industry by a group of people who don’t fully grasp the nature of that industry. Think of it this way – it’s sort of like a doctor observing a growing epidemic and deciding something needs to be done. So he takes it upon himself to instruct scientists and pharmaceutical companies how to create a pill to cure the epidemic. The scientists and pharmaceutical companies would understandably be frustrated with the doctor because he would be pushing his ideas about something he really doesn’t understand.

Now imagine if the doctor could pass a law forcing the manufacture of his pill. The results could be unproductive, if not outright disastrous.

For those of us who work with borrowers in need of assistance, these “help for homeowners” programs are frustrating and an obstacle to hurdle. Frankly, it’s almost a joke due to their appalling ineffectiveness. Again, these programs have worked for less than 3% of homeowners in default.

If you’ve tried to take advantage of one of these programs with your lender, and you are finding yourself in the 97% who can’t get results, maybe a Michigan short sale is the right option for you. Give Emily a call today to find out.

Melissa

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Who Makes The Best Clean-Up Crew for the Michigan Foreclosure Crises?

Who Makes The Best Clean-Up Crew for the Michigan Foreclosure Crises?

Some of you will have heard of the famous (or infamous, whichever way your social or political opinions lean) documentary filmmaker, Michael Moore. His most recent film is about of the state of the US economy; it’s called Capitalism: A Love Story. Now, please understand, I’m not particularly political, and I’m certainly not espousing his views. In this blog, I’m simply commenting on a part early in the film that could easily be misconstrued.

Michael Moore interviews a real estate agent in the state of Florida who buys foreclosed homes for pennies on the dollar – he is unspecific about the method he uses to purchase these homes – he refers to himself and people in his line of work as “vultures”. He even went so far as to name his business after the bird of prey.

The word “vulture” evokes less than ideal images in the minds of most people. In relation to a person or business, it makes us think of greediness, corruption, and unscrupulousness. Being in the foreclosure and short sale end of the real estate profession myself, I’ll admit, the metaphor made me uncomfortable and defensive.

Instead of vultures, I think investors are the clean-up crew. One might argue in a certain light, the two might be seen as synonyms, but I would say they are here not to prey on the unfortunate but to help clean up the mess caused by irresponsible lending, bad loans, and a whole myriad of factors that caused the economy to be what it is today. They’re not here because they want to profit from anyone’s hardship; they simply saw a need and strive daily to meet that need.

If you are one of the many homeowners who has this need because you are facing a Michigan Foreclosures, don’t hesitate to call us and we’d be happy to try to help you get things “cleaned up” so you can move on.

Melissa

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Who Would Choose a Michigan Foreclosure?

Who Would Choose a Michigan Foreclosure? Choose a Michigan foreclosure? Who would do that? Sounds crazy, right?

Well, more and more Michiganders can barely afford their mortgages along with other bills, so they are voluntarily defaulting on their payments in order to get a better standard of living back for themselves. These families have a variety of reasons for doing so; for instance, their lender wouldn’t do a workout plan, they needed to put some money back into the family business, or they want to be able to work part-time and still live in their home. Whatever the reason, these “Strategic Defaults” are never advised. Although it might seem like a way to “stick it to the man”, default and foreclosure should be a last resort. They shouldn’t be viewed as a financial break.

Many families outside of Michigan are also doing the same thing. Most other states require a judicial foreclosure, which means the foreclosure must go through the court system. They might hire an attorney to keep their case tied up in court for months or even years before any action can be taken by the lender, just so they can have some extra cash. This is not the case in Michigan; the foreclosure process here is much simpler and only requires a lender to file with the county in which the property is located.

Bottom line, if you can afford to make your payments, the legal, ethical thing to do is to keep making them, even if it is difficult. It’s been said that the right thing to do is usually the hardest thing to do. However, many people have experienced legitimate financial hardship and significant setbacks. If you honestly cannot afford to make your payments, and you’re headed for a Michigan foreclosure anyway, maybe a short sale is the right option for you. Give us a call today and we’ll help you figure that out.

Melissa

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