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FHA Loan in Default? Read This!

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

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What’s All This About Promissory Notes?

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

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Back from Cleveland

I don’t have a lot of time to BLOG today.  Ann and I just got back from another one of our Short Sale mastermind meetings.  Over 2 days in Cleveland.  We were hanging out with the country’s best short sale negotiations teams.  It was yet another excellent opportunity to learn from each other, get even better at what we do, so we can help more Michigan families who are facing foreclosure stop them dead in their tracks.  Some of what we picked up included:

  • More “back door” numbers at some of the major lenders (Countywide aka Bank of America, Citi Financial, HSBC, Homecomings and more).
  • Changes on how most lenders want to see their short sale packages presented to speed the process
  • The top 5 secrets to get lenders to realize the true market value of houses in today’s’ market
  • How to structure our 5-member team to become more efficient.

All of this information will allow us to more rapidly get short sales approved for you!  Call us and we’ll put our newly found knowledge to work for you today!

Joel

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Short Sale or Bankruptcy?

Many families are struggling with this question when facing a Michigan foreclosure. Remember, I’m not an attorney, so I can’t advise you which is best for you and your family.

I have ask a simple question to help you decide on your own what direction to start in:

“If it weren’t for the foreclosure, would you still consider the bankruptcy?”

More often than not the answer will be “well, no”.

I suggest you consider trying to sell the house on a short sale. If we’re all successful with working with you on this, and we stop the foreclosure and save you from putting a bankruptcy on your credit, why not give it a try? Also consider that filing for bankruptcy could cost you thousands of dollars while working a short sale with us won’t cost you a dime.

If you are seriously considering a bankruptcy, before meeting with a bankruptcy attorney, be sure to write out these questions and ask them all at your first meeting.

Give me a call and I’d be glad to discuss your options with you!

Emily

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Can I Stay In The House After A Short Sale?

I often have sellers ask me if they can purchase the house back from the buyer after a short sale. I really wish you could, but unfortunately, you can’t.

One of the stipulations from your lender is that you can’t benefit from the short sale. Staying in the house after a short sale, regardless of who buys it, would constitute a benefit to you. Whether through a land contract, lease/option or lease – we don’t want you committing loan fraud by going against your lenders short sale requirements.

There are plenty of other benefits from the short sale that you can receive: saving your credit from a Michigan foreclosure and keeping the mortgage company from coming after you for the foreclosure deficiency are the two biggest ones.

If you want to find out if it your best option, give me a call. You can reach me at 269-685-5921.

Emily

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Join the Winning Team!

To be successful, every Short Sale should be a partnership in which each member of the team takes their responsibility seriously. When we work with a seller facing a Michigan foreclosure, this is what the team responsibilities look like.

Realtor® – markets house and finds buyers.

[GLHS] Great Lakes Home Solutions, Inc (us) – negotiates the Short Sale with the foreclosing lenders, handles all communications with the lenders.

Seller (you) – maintains house for showings, cooperates with showings, stays in communication with GLHS & notifies GLHS of any changes in their situation such as moving, notices from the bank, inability to pay utilities, etc.

One of the reasons our Short Sale acceptance is 8 times the national average of 10% (we are close to 80%) is that we insist that you take responsibility for your part. After all, we are investing time and resources to resolve your situation without charging you, the Realtors®  or the buyer. What better way to show your gratitude than to shoulder your load. Yes, we understand you have a hardship and life is not great right now. We are trying to get you back to better times as quickly as possible. We will be much more successful when we work as a team.

Some examples of good teammates and not good teammates.

Not So Good Teammates

  • Refuses or limits showings because of pets, work/sleep hours, children, company, etc. (Realize in today’s market, if a buyer can’t see the house when they want to, they probably won’t be back. They have far more homes available to them then you have buyers available to you).
  • Moves without telling us, turning off utilities and leaving house vulnerable to damage from freezing pipes, vandalism, etc. or repossession by lender (yes, they can repossess if they deem the house abandoned. We can prevent this but we have to know it is vacant).
  • Does not return our phone calls in a timely manner possibly preventing us from getting critical information needed to complete the Short Sale or update you on a critical development.

Good Teammates

  • Makes sure house is clean and de-cluttered for showings, looking and smelling nice.
  • Leaves for showings so the buyer can look in privacy and start to feel like they can make the house their home.
  • Reports any phone calls, letters, postings from the lenders to us immediately.
  • Maintains an attitude of gratitude realizing that they have no other options and we are working harder than anyone to help them.

See there, your responsibilities on this team really aren’t that hard when you consider we take the burden of all dealings with the lenders off your back, plus answer all your questions about options and what is happening. I guarantee that we will work harder than anyone else on this team or any other to get your situation resolved.

Ready to join the team? We’re ready to have you! Give us a call today and join a winning team!

Ann

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It’s Your Short Sale… Is Your Realtor Qualified?

Who better to answer this question about how qualified your Realtor is to negotiate your short sale besides Michigan’s premiere Short Sale Negotiator and Trainer?

Joel will teach you the exact questions to ask so you can learn your Realtor’s chances of helping you with your short sale so you can avoid a Michigan foreclosure.

Check out the video on this page.

Joel

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Upside Down House, Don’t Panic Yet

We found this refreshing article which should strike a cord with most Michigan homeowners.

The author is basically saying that even though most people owe more on their home than it is worth in today’s market that is no reason to panic. The best thing to do if you don’t need to sell your home right now is to not sell it. All markets move in a cycles. Eventually, home values will rise so that homeowners are no longer upside down. That is the time to sell.

Unfortunately, this market correction is not going to happen in weeks or months but more likely will take many years. Also unfortunately, many people who are having a hardship today due to a loss of income, divorce, disability or other misfortune, do not have time to wait for the market to correct. They need to act today if they can no longer afford the house payments in order to avoid the damage of a Michigan foreclosure.

That is where our team comes in because we only work in upside down markets! If you have to sell now due to a hardship, we can work with your lender to negotiate a discount on what you owe so the house can sell (a short sale). Give Emily a call today to find out how we can help!

Ann

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Introducing Melissa

We have a new team member that we are excited to introduce to you! Melissa “Bank Bully” Arp. You’ve probably noticed that we added her to our team photo a couple weeks ago.

Why do most short sales fail? One of the main reasons is lack of persistent, consistent follow up with your lender. This is where Melissa excels. Melissa joins our team with over two years experience negotiating short sales and is a great complement to Joel (our “Closer” and “Fix It” guy).

With this one-two punch, lenders won’t have a chance, and your chance of a successful short sale will go up dramatically.

Meet Melissa and learn more about what she brings to our team by watching this video.

Stay tuned to her “insider’s insight” she’ll be sharing in future BLOG entries.

Joel

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Do You Have A Plan B?

So you are behind on your house payments and think you have it handled. That’s great!

What is your plan B?

We talk to lots of people every week who thought they had it handled, until the lender denied their workout or Mom & Dad didn’t come through with all the money they promised to loan to them, or the settlement got delayed by months.

Life happens. That’s why you need a plan B.

If you are facing a Michigan foreclosure, you don’t have a lot of time to feel sorry for yourself, depressed, angry, and distracted by all that has gone ‘wrong’ in your life.

I once read an article by Dan Kennedy, a very successful marketing consultant.  His philosophy for life is “Expect the best, insure against the worst (by having a plan B), respond creatively to everything in between.”

We are many people’s plan B. If you can’t keep the house, your next best option, heck your only option, may be to get out from under it by selling it. That is where we can help. Even if you owe more than it is worth, we can help.  That’s what short sales are all about – and we’re simply the best there is in Michigan.

Give us a call and let us help you with plan B today.

Ann

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