Stop Michigan Foreclosure

When To Consider A Short Sale

People who are facing a Michigan Foreclosure frequently ask me how they should know if a short sale is their best option. That’s an easy answer. When you’ve tried everything else possible, and nothing has worked out (and your expenses exceed your income), THEN, you try a short sale. It’s a last-ditch effort when the only other alternative is foreclosure.

What else is there to try? Well, there’s a loan modification, forbearance plan, repayment plan, refinancing, private loan, getting a roommate to share expenses and even selling it to a friend or family member (not using a short sale). I put together a handy reference for REALTORS® defining these options and giving pros and cons. I included it at the end of this blog for you!

I always tell people to use a short sale as their last option before foreclosure. It doesn’t cost anything to do a short sale with us, we keep everything confidential and we won’t put you in a worse situation so you’re not losing anything if you try. Of course, your situation is unique and you have questions so give me a call and let me explain your options to you and help you figure out what is right for you.

Definitions, Pros and Cons.
1. Repayment Plan: Your lender may give you a fixed amount of time to repay the amount you are behind, plus any late fees, by adding a portion to your regular monthly payment. This may be an option if you only missed a few payments and had adequate income to make regular monthly payments again.

2. Forbearance: Your lender may agree to suspend your payments for a period of time. At the end of this time, you will resume your regular monthly payments, and you may be required to either make one lump sum payment or additional partial payments. This may be a good option if you have a temporary reduction in income and are now able to make regular payments plus lump sum or partial payments.

3. Loan Modification: Your lender may agree to reduce your interest rate, extend the term of the loan, or add missed payments to the loan balance. This may be a suitable option if the terms meet your needs and financial abilities.

4. Deed in Lieu of Foreclosure (voluntary foreclosure): You voluntarily transfer title to the lender. The lender has the option of canceling the remainder of the debt, but we’ve never seen this. But you will lose any equity in the house and may have to pay taxes on the debt forgiven (if any).

The above is referenced from this Michigan Web Resource

5. Refinance: May only be an option if you actually have equity in the house and/or one spouse was not on the original loan and is able to refinance into their name alone.

If you need help sorting through all of this, or simply realize a short sale is for you and want an immediate offer and someone to negotiate the short sale at no charge, give me a call.

Emily

If There Was No Such Thing As A Short Sale….

I had a lady call me the other day and say” “I need to do a Short Sale”.

“Ok” I said, “Tell me about your situation”.

She proceeded to tell me her story and ended with “I will be making a payment to the bank this month so they don’t foreclose”.

Wait a minute, I thought, we won’t do a short sale if you are still making payments because we are setting ourselves and you up for failure. Why? Because if you’ve got income to make payments, your income exceeds your expenses, and the chances of your lender agreeing to a short sale are very slim.

So, I had a question for her, and this is the same question you need to ask yourself: “If there was no such thing as a short sale, and the only option was to stay current or have a Michigan foreclosure, which would you do?” If your answer is “keep making payments”, well, then keep making payments.

If you are like a lot of distressed sellers in Michigan who have had a financial hardship (job loss, divorce, disability, death, etc) the obvious answer is you have no choice but to face a Michigan Foreclosure. These are the people we are best equipped to help with a short sale. While we are sorry that you have had a hardship, we are ready to help you focus on a better future. We will do this without charging you anything and we keep everything confidential. Yes, there are such things as short sales and we have the best team in Michigan to help you navigate through them (since 2005). Give us a call today.

Ann

Short Sale Q&A’s from My Friends& Family

The other day my Mom asked me a strange question: “So, how exactly does a short sale work?” I guess the question wasn’t that strange, since most people don’t know the answer. But the thing is, I’ve been working here for over a year now, and I’ve explained the process to her about a dozen times.

I explained it when my cousin and her fiancé tried (unsuccessfully) to buy a short sale property. I explained it when my Uncle was contemplating a short sale on his house (he’s underwater, like so many other Michigan sellers). I also explained it when my grandparent’s neighbor sold her house on a short sale. I guess the thing about short sales is that THEY’RE CONFUSING, and unless you spend every day dealing with short sales, you’re probably going to have lots of questions throughout the entire process.

One of the best things about us here at Great Lakes Home Solutions, Inc. is that we have answers, and lots of them! Joel (our President) is the only state certified short sale instructor in the entire state who negotiates short sales full time. This sort of makes him the short sale guru around these parts. You rarely hear anyone say “I don’t know” around here (and when you do, it’s followed by “and I’ll find out!”).

You’ve got questions? We’re more than happy to share our answers with you. If you have a hardship, are facing a Michigan foreclosure, and would like some friendly answers, give Emily a call. She’s a wealth of information about all things foreclosure and short sale!

Holly

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

How To Choose Who To Negotiate Your Short Sale

If you owe more than your house is worth, and are behind on your payments, and you realize you can no longer keep the house, you have made one important decision –getting out from under the burden the house is creating for you. However, you have several more decisions to make!

How are you going to get out from under the burden of the house when you owe more than it is worth? The easy answer is that you may be a good candidate for a short sale. A short sale is when your lender agrees to take a discount on what is owed on the house so it can sell. It involves negotiations with the bank and lots of paperwork. Most sellers are already overwhelmed and seek a third party to handle this for them. Who should you trust? Here are two real life options.

Some REALTORS® will offer to do short sales for you. Their process can range from:

• REALTOR® #1 whom I talked to yesterday who simply sent in a Authorization to speak to the bank. Now this agent is just waiting for the bank to tell her what to do. She has done a few short sales and has been successful on some of them with little experience and even less training.
• REALTROR® #2 handles about 25 short sales for her whole office. This is on top of being a full time REALTOR. Her approach is to spend one full day a week to work on all the files, calling all the lenders, or doing whatever is needed to happen next.

There are companies who specialize in short sale negotiations. The process I am most familiar with looks like this:

• There are two full time negotiators on staff with a combined experience of 10 years negotiating short sales. Yes they are trained, but more importantly is the 10 years of real-life experience.
• The lender for every case is routinely called at least twice per week, often daily when negotiations are particularly critical.
• At the start of the negotiation, a package is sent to the lender that routinely is over 40 pages of everything that the lender is likely to need to expedite the review.
• A Case Manager is assigned to each case to provide updates to the seller and answer all questions.

You may have guessed that the last scenario is us! We take great pride in what we do and what we have accomplished (success about 80% of the time vs. the national average of 10%). We do not charge the seller facing the Michigan Foreclosure any fees, and we keep all information confidential. Give us a call to find out if a short sale is right for you and if we are the right company to help you get your short sale approved so you can get back to better times. I already know who you will decide to pick to negotiate your short sale.

Ann

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

I overheard a statistic today that 12% of all Real Estate Sales are now Short Sales. The commentator went on to say that it would probably be more except that Short Sales take Stamina. Stamina for the buyer to hang in there, Stamina for the seller facing foreclosure to hang in there, Stamina for the negotiator and REALTORS® to keep working on the Short Sale.

Well I have Good News for you if you are a seller facing a Michigan Foreclosure. Our team has Stamina! I have seen Emily work 8 hours in the office then go home and take calls from new referrals and existing sellers in the evenings and weekends. I have seen Melissa sit on hold for 45 minutes or more to talk to a lender about a case. And then she hangs up and calls another one and goes through it again. I have seen Holly call extension after extension at a lender or attorney office until she finds someone who can answer a question or help us move a file forward. And I have seen Joel work tirelessly from 6:00am until sometimes 8:00pm or later  to do whatever he can to get a deal to close.

One of our 4 promises is that we will work harder than anyone to help you get back to better times and that is the Stamina in action. Our track record speaks for itself. The Stamina pays off in terms of results. We have techniques to keep the buyers motivated and we have methods to help the seller deal with the lender. Give us a call and let us put our Stamina to work for you.

Ann

This article “Meltdown 101: What is a Short Sale of a Home?” does a pretty good job of answering commonly asked questions about short sales. If you are facing a Michigan foreclosure or know someone who is, this information will help educate you on “short sales” which are one of the most useful, and often misunderstood tools available to help get a homeowner back to better times.

I want to zero in on the last 2 questions in the article.

Why is the process so complicated and why does it take so long? The writer does a good job of naming the common pitfalls with short sales. These errors are made by inexperienced homeowners and REALTORS® trying to do a short sale with no training. Trust me, with more than 10years experience and 100s of short sale approvals, our negotiators know the right paperwork to submit and who to submit it to so your short sale gets attention and is not kicked back or neglected. Plus, they follow up unrelentlessly.

And talk about being educated about short sales.  Joel, our President and lead negotiator/closer as the only State of Michigan Approved continuing education course for REALTORS® that’s taught by a full time short sale negotiator.  REALTORS® are coming to him to learn from “The Master” on how to get close to our 80% success rate (vs. the 10% national average).

What should I do if I am interested in a short sale? That’s easy – call us. We do nothing but short sales. We have a trained and dedicated staff waiting to help you evaluate your options and negotiate your short sale if that is the right answer for you.

While this article gave you the 101 basics of short sales, our team has a graduate degree in short sales and we are ready to work for you. Give us a call today.

Ann

If you have an FHA loan that is in default, you may have heard that the federal government launched a program in August to help you since other government programs excluded FHA loans.

Before you get your hopes up, read this article.  It boldly says this program will only help 45,000 of the approx. 850,000 FHA loans that are in default. Those odds are not very good that the program can help you (about 5%). This “success rate” is about the same as lenders helping borrowers on their own (without the government’s help) through the lenders’ own “loan modification” programs.

Fortunately for you, the odds that we can help you if you are facing a Michigan Foreclosure (regardless of the type of loan) are much higher. Still, we cannot help everyone and the earlier you call us in the foreclosure process, the better the chances we can help you. Give our team a call and see what we can do to help you get back to better times.

Ann

There’s been a lot in the press lately about banks accepting short sales but still requiring all or part of the balance to be paid by the seller. Let’s talk about that and what we do to help avoid that from happening.

When a short sale has been negotiated and approved, there will always be a difference between the amount approved by the bank to release the lien against the property, and the principal balance that was originally owed. Most of the time, that amount, called the “deficiency”, will either be charged off by the bank and they will issue a 1099 IRS form showing the deficiency as income to the seller. Usually, a good accountant will be able to balance that amount out at the end of the year, so that the seller ends up paying nothing out of pocket. This scenario is, of course, ideal.

However, in certain circumstances – usually in the case of a second mortgage – the seller may be asked to sign a promissory note for the deficiency. The amount on the note may be the balance due minus the fee paid to release the lien (which is usually $1,000-$5,000), it may be a percentage of the balance, or it may just be an amount determined by the bank based on your assets, income & expenses.

The way we structure our cases here at Great Lakes Home Solutions, Inc. allows us to negotiate with the bank to have the account in question “settled” (almost all the time). Settled means that there is no amount due from the seller at closing and no promissory note to be paid by the seller in the form of installments for a specified length of time. We exhaust every resource and explore each alternative to avoid this type of situation, which allows the seller to start fresh with a clean slate.

This is more of a complex topic regarding short sales. For further explanation, give us a call and we will answer all of your questions so you can make the best choice. Bottom line is of course the alternative of a Michigan foreclosure is going to be much worse.

See my next article to find out more about what happens when a note is unavoidable.

Melissa