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

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

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

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

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

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

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

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

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

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