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Deed in Lieu of Foreclosure – Seriously?

Deed in Lieu of Foreclosure – Seriously?

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

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Watch Oprah Lately?

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

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Clogged Foreclosure Pipeline

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

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Octomom Facing Foreclosure

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

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“They Broke Into The House & Changed The Locks!”

“They Broke Into The House & Changed The Locks!”

Yes, that’s exactly how the first part of this conversation with one of our new sellers went. The rest of the story is unbelievable, but we managed to turn it into a good ending (so far). But first, a little education for you so you can understand this story…

Redemption period – what’s that? A redemption period is a number of days or months after a foreclosure auction during which time you may redeem the property. At the auction, the house is sold back to your lender (most of the time) – by redeeming, you are claiming the property back so it’s yours again. Michigan is one of only 10 states that boasts a redemption period – ours is generally six months.

Sounds pretty good right? Here’s the catch: the amount owed must be paid in full during those six months (plus interest & attorney fees), so, if you were to receive a large monetary gift, or win the lottery, you might be able to redeem the house.

Or, you could sell it.

Thing is, every seller in Michigan has redemption rights (unless he or she chooses to sign a deed in lieu of foreclosure with the lender which gives up those rights). That is something no business, individual, or entity can take away from you – you are protected by Michigan law.

So our new seller was in this very situation; unfortunately, a local business that wishes to attain her house sooner rather than later (they don’t want to wait out the six months), seems to have aggressively pursued their goal by unethical means. The property was broken into and they tried to bully her – for lack of a better term – into foregoing her right to redeem the house herself. They were likely playing the odds she would not know her rights or contact a third party. Sad to say there are people out there who prey upon those in financial hardship.

The good news (because we taught her how to deal with these bullies) is she’s now exercising those rights and intends to redeem the house.

I just wanted to take a few moments to stress how important it is for you as a seller in foreclosure-ridden Michigan to know your options and more importantly your rights – both in prosperity and hardship.

If you’re faced with a similar situation (or anything else related to Michigan foreclosure for that matter), give us a call – we’re all happy to help!

Melissa

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A Negotiator’s New Year’s Resolutions

As 2009 came to an end and 2010 begins to roll in, many people are thinking back on the last 12 months and making new year’s resolutions – changes they’d like in make in the following year. While it’s always a good thing to be striving for self-improvement in any area of your life, often these resolutions are difficult to stick to, whether it be a goal to lose weight, eat healthier, or work harder for a promotion.

I like to think of the self-improvement goals I make as reaffirmations or renewals, instead of resolutions. Each year I strive to recommit to personal and professional goals – most of which are ongoing. For example, I may reaffirm my commitment to being a better friend, partner, employee, or to focus on improving my health and giving back to my community.

This year I’d like to share my professional reaffirmations. I’m recommitting to all of our sellers in foreclosure to do all I can – to exhaust all options – in helping them out of their situation. I’m recommitting to all of our REALTORS to do my part in keeping them informed and doing all I can to help each transaction go smoothly. In short, I’m reaffirming my commitment to you to help get you back to better times, whatever that may entail.

I’m looking forward to new challenges and opportunities in the next year, and I wish all of you a happy, safe, and fulfilling 2010.

Melissa

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Patience of Saints

This week we got an email from “Jeff”. Our team was negotiating a short sale for Jeff when his financial situation changed for the better. He decided to attempt a loan modification with his lenders and cancel the short sale (despite the 6% success rate).

Jeff had been having some trouble getting through to someone who could help him or tell him anything definite about his options, so he decided to contact us in the hopes that we could help point in him the right direction.

I was able to quickly tell him which department to call and what to tell that department when he did call. After he’d tried the number I gave him, his email back to me read, “I don’t know how you guys can handle talking to banks day in and day out. I get so frustrated, mainly because I get absolutely nowhere when I call. And this was after you gave me the right number to call and told me exactly what to say! You guys must have the patience of saints…”

I’ve never thought of myself as particularly saintly, but I got to thinking about what he’d written. Many lenders are so huge and have so many departments that navigating through the maze of their phone system is difficult for me, and I’ve been doing this for three and a half years! I can’t even imagine what it must be like to have to figure that out as a first time caller.

If you find yourself needing a short sale and don’t have the patience of a saint, give us a call, and let us handle the navigation of your lender’s phone system…and the short sale for you.

Melissa

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The Upside of a Deficiency

From the REALTORS® we work with to the sellers we help, all seem to want to know if we take on their case and negotiate their short sale, whether or not they’ll owe a deficiency.

Of course, we can’t guarantee (no one can) that your lender(s) will agree to settle the accounts.  That is, not ask for any further payments.  Some lenders ask without fail while others will never ask.  What we can guarantee is that we will exhaust our resources and knowledge to prevent you from having to pay anything more; we want you to be able to walk away owing nothing.

Unfortunately that doesn’t always happen.

But the good news is a deficiency (usually what’s called a “promissory note”) can actually be a positive thing.  Chances are good that if you need a short sale, you are behind on your payments, and that’s had a bad effect on your credit.

A promissory note is an extended, low interest or interest-free, unsecured loan.  It is an excellent and easy way to repair your damaged credit.  Also if you find yourself facing another financial hardship and not able to make payments, there is no collateral on the loan.  This means there is no property – houses, cars, boats – on which the lender can foreclose or repossess.

We work hard to keep you out of these situations, although at times it may be unavoidable.  If you have any questions about short sales or deficiencies or promissory notes, feel free to give us a call – we’d be glad to answer any questions or find a way to help you.

Melissa

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Housing Rebound?

Recently, there was an article on a popular website that postulated there are 10 cities in the US which are experiencing housing price rebounds. I’m not an expert on the national real estate climate, and I can’t speak to the state of other markets, but here in Michigan, I can safely say that housing prices are not rising.

The author of the article theorized that when prices hit their lowest, the only place they can go is up. I understand his point completely, but I would argue there is an alternative: stagnancy.

Due to the vast amount of variable rate mortgages and bad loans written in the last decade, coupled with the recession, people are still losing houses to Michigan foreclosures. This means that there are a lot of bank-owned properties priced low to sell quickly. This is affecting and lowering property values in all types of neighborhoods and areas.

The good news is that houses are still being purchased, due to low interest rates and first time home buyer tax credits. These are positives, but the negatives remain, and probably will continue to do so for several years.

Property values are low, and many people owe more than the house is actually worth. For some people, it’s an inconvenience if they can still afford to make their payments, and it is always advised that they do so. For those who cannot make their payments, there’s a lot of information on this website about the options available; or you may give us a call.

Melissa

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Customer Service Rep at Bank Facing Foreclosure?

The other day I was on the phone, making my daily call to one of the biggest lenders in the country, when the conversation I was having took an unusual turn (after 37 minutes on hold of course). The Customer Service Rep who was helping me – I’ll call her “Jane” – was doing her best to answer my questions about a short sale we were negotiating on an FHA loan. She began to ask me questions about the various programs and options available. This isn’t unusual as I spend a lot of time educating the people at the banks about various options/programs available. She eventually revealed to me that she herself had an FHA loan on her house…and that she was over three months behind on her payments. Yikes!

I was shocked to hear that Jane, who worked for a major lender, had so little idea where to turn for help on her own house! She told me she had been approach by a company in her state that had offered their (somewhat ambiguous) services for a fee…of $3,200 upfront. To me, this begs the question: if a person is nearly four months behind on their mortgage payment, how is this person supposed to come up with $3,200?

I suggested, instead of agreeing to fork over several thousand dollars to this company, that since she had an FHA loan, she contact the Department of Housing and Urban Development (HUD).. I told Jane they would be able to either assist her themselves, or direct her to a business or non-profit organization in her area that would not charge her an upfront fee. I even gave her the number for HUD. Jane thanked me profusely and told me she had no idea there were people out there who wouldn’t charge her to help her.

If you are facing a Michigan foreclosure, don’t let someone tell you that assistance costs $3,200. It doesn’t (and it never will cost a dime with us). Learn your options! This blog and our website are full of information and suggestions. You can also call us anytime.

Melissa

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