Archive for the ‘Bad Loans’ Category

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Show me the money – from contract to close on a home…

July 16, 2013

In today’s real estate world…financing is critical. It is often the difference between deal or no deal. So, how do you make it work? There are a number of factors to consider:

1. Is the buyer’s lender local and reputable?
2. Has the buyer been pre-APPROVED?
3. Is there a significant down payment?
4. Will the house appraise?

Without a yes answer to the above questions, your contract could be in jeopardy. It is always important to work with a lender who properly qualifies prospects, No ambiguous language allowed on that pre-approval letter (look for the “out” clauses”)! Make sure you actually talk to the lender and find out the specifics on the borrower. Is the buyer putting down some funds…money talks in this market and deals are done when the buyer has contributed to the bottom line. Finally, is the home priced right? In today’s market…we don’t want to be a part of the problem. We have to be problem solvers!

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Short Sales Get Shorter: New Deadlines to go into Effect

March 16, 2012

As part of a settlement with state attorneys general, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.

Here are some of the new requirements for servicers under the settlement:

·     1.   Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.

·      2.  Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.

·      3. Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale.

·      4.  Servicers are also required to form an internal group to review all short sale requests.

·     5.    Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests.
Violations can carry fines of up to $1 million and $5 million for repeat offenses.

“If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That’s not a bad deal.”

Source: Realtor Magazine

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STOP massive sale of foreclosed homes.

December 16, 2011

There is a simple way to address our current housing crisis – the sale of distressed properties could be easily slowed or stopped with ONE SIMPLE STEP. Banks need to write down the loans on homes that are underwater and allow good borrowers to refinance at today’s lower interest rates.

The most distressing things for most homeowners is that their homes are so UNDERVALUED that they will NEVER see a time when their home will be worth what they owe on it. It’s a reality and it is discouraging. Banks can start to turn the economy and housing around by going to people who are not in distress and beginning the process of re-evaluating value and re-negotiating outstanding balances to make home ownership attractive. To ignore this is fact is going to result in increased defaults and more short sales and foreclosures. It’s going to happen!

Recently, Moody’s released the following statement on the sale of foreclosed homes: They found that on average, a foreclosed property will be valued about 18 percent lower than average home prices, and will be subject to an additional sales discount of about 15 percent.

The banking industry is creating the depreciation of home values when they are personally responsible for the sale of homes at 30% less than fair market rate resulting in the downturn in value on surrounding homes. Banks are making a bad situation worse. I am shocked that no one seems to address this issue in the media or in Congress.

Who wins? Investors. Who loses? Everyone else – especially the American public.

If this fact is true then why not reduce the principal balance on underwater loans by 30% thereby rewarding homeowners who choose to stay in their homes and pay their mortgages. Does anyone really think that people are going to pay their loans out of a sense of obligation and responsibility? Seriously? I predict a mass exodus as people figure out that they are better off renting and getting out from a debt they can never actually pay off and for which their home will never be worth.

Let’s get serious about solutions to real estate and the housing crisis. Do I think this is going to happen? Hell, no. We have a government that is ineffective and impotent and a banking industry getting rich on investments. The American public continues to struggle with no one reaching out a helping hand. Is there anyone out there who can make a stand for the people?

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Real Estate Ruins –

April 21, 2011

 

Real Estate in Ruins

As I was driving through a luxurious Orlando neighborhood recently, I noticed a number of homes that were obviously in foreclosure. The signs were everywhere including the overgrown lawns, the newspapers piled in the driveway and the general look of decay.

It dawned on me that without proper love and care – the earth has a way of reclaiming what it once lost. The house was covered in vines which were starting to smother the home. It was at once appalling and then again, mesmerizing. I guess the old adage “it’s not nice to fool “Mother Nature” really can come true. You can lay down all the bricks and mortar that you need to make a mansion or a modest home but left untended, Mother Nature is going to take it back and do so with a vengeance.

So goes the state of real estate. Real estate in the US is in ruins! No one is tending the real estate market and no banks, politicians or even news anchors seem to be alarmed. Banks have just disclosed that they wrote one-third (1/3) fewer loans the first quarter of this year than in the past. That is an ASTOUNDING fact. While is sounds wonderful to have a 4.45% interest rate, it is meaningless if no bank is giving out loans. It’s catastrophic. Right now we live in a world full of smoke and mirrors. It’s all fake advertising. It’s all for naught.

Banks are getting richer and bank CEO’s are reaping huge profits but not on real estate. Our country must stand up for a call to action for loans to be written to credit-worthy customers. We are in the weeds and we are going to be in a hole so deep it will take decade(s) to recovery.

As real estate goes – so goes the economy. As an example, I had a client with a two-year old foreclosure BUT $100,000 down payment on a $200,000 house and I could NOT get him a loan. Why? Because the lenders said his foreclosure had to be past three years. 50% down is almost unheard of and yet we could not get this buyer a loan.

PLEASE, please won’t someone get serious about the condition of our economy and realize that without loans and without buyers – we have no real estate? The effect is deep and sinks to the core of all business. No real estate builders, no real estate materials (bricks, shingles, asphalt, etc.), no handymen, no appliances, no furniture…I could go on and on. The lack of sales is affecting everyone and it is affecting you whether you understand this or not.

Let’s get back to business. Let’s sell some homes. Won’t someone make a stand?

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What’s behind door number ??????????????

February 1, 2011

There was a popular game show once that gave contestants the option to pick door number one, two or three to gamble on attaining a prize. Sometimes it was a car and sometimes it was a donkey. It was all about a game of chance and whether the contestant would win a grand prize or a booby prize.

Well…welcome to real estate in 2011. We have options but some are grand and some are not so grand. It all depends on what we are going to pick.

Through one door is the road to recovery with lenders writing loans, revamped credit scoring system and someone realizing that trying to negotiate settlement on loans is better than foreclosing on half of American homeowners?

Yet another door is this constant tease of do we foreclose or not because the court system has reacted in a crazy manner to the even more INSANE behavior of attorneys in the foreclosure process. We are witnessing – for the first time in recent history – the complete and absolute breakdown of our judicial system and the ethics of the legal profession. Insanity reigns.

Finally we have the banks. I could write a massive epistle on the sins of our lending institutions. From a real estate perspective, it seems no one knows what they are doing when it comes to banking. Even bankers are in a flux with the Mortgage Banking Association strategically defaulted on their own office building. No one in the news seems to discuss this very much. Oh the irony! In other words, the main organization that represents the banking industry walked away from their debt rather than repay their own bank loan.

I don’t know which door to pick because I don’t know if we have a sane person left running the (a) our country, (b) banks or (c) Wall Street. From my perspective, it all looks like a booby prize right now behind doors one, two or three. Won’t someone prove me wrong?

http://online.wsj.com/article/SB10001424052748704829704575049111428912890.html

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The “EYE” of the foreclosure storm

September 26, 2009

As a native Floridian, I know a lot about hurricanes and the one thing I know – Expect the unexpected.

Hurricanes are somewhat predictable. As the hurricane blows through you have destruction followed by a peaceful, tranquil lull where the sun may even reappear and you will walk outside your secured dwellings to survey the damage. It’s called the “eye” of the storm. For a short while, during which the eye passes over land – nothing happens and it is as if there is no storm. That’s where we are right now in FORECLOSURES. We are in the eye of the storm.

The federal government, banks and agents are all predicting we have hit bottom and personally, I think we have. But NO ONE is talking about the fact that the eye of the storm is upon us and a second wave of SERIOUS FORECLOSURES are about to hit the market. We are talking about people who once made a good living, bought an expensive home and are now underwater.

As a real estate agent, I see the forecast CLEARLY yet no one in Congress seems to understand the urgency of working to help homeowners – massive FORECLOSURES are forecasted. Congress needs to help homeowners negotiate the short sale process  or there will be a lot of homes foreclosed. In addition, there are so many people out of work, across all economic categories, that without a job – homes are lost. It’s just that simple.

Health care reform is important – but it is NOT as important as fixing our economy. With no jobs, massive foreclosures and people running out of savings – we are in crisis mode but because we are sitting in the eye of the storm – we don’t see what is coming on the horizon and it’s ugly.

WAKE UP WASHINGTON and start working on the economy and keeping people in their homes. The eye is upon us and the storm approaches.

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Rent is not a four letter word

August 22, 2009

In today’s marketplace, the one thing I am now seeing more and more often is qualified renters looking for executive level homes.

Why? Because they have lost their homes due to foreclosure. That’s right…these are great tenants who, in good times, were paying up to $10,000 per month in mortgage payments but due to circumstances, they are now displaced and need a rental home. They have high standards though and while willing to downsize…they still want a respectable, executive type home for around $2,000 to $3,000 per month. They can afford it.

The Wall Street Journal recently published an article entitled “The New American Dream: Renting”  and it was very accurate in reporting that with 1 in 355 home currently in foreclosure – these owners need to move into a rental home.

If you are an investor or if you have a vacant home – it’s time to think about renting and making a profit on your home for a few years while the market fluctuates. No one knows what the future holds – it’s still a mystery – but one thing is certain…there is a demand for rental housing and you have great quality tenants now available to rent your properties. Call me if you want more information.

 http://online.wsj.com/article/SB10001424052970204409904574350432677038184.html