|
|
|
|
|
|
|
Selling in today’s market is a challenge. And the experience you have will greatly depend on the amount of equity you have in your home. If you purchased your home long enough ago, and avoided the temptation to refinance during the real estate bubble, congratulations! Your home can be sold in the traditional manner, and your main concern will be to get the most the market will bear for the property, while saving as much as possible in the closing costs of the transaction. Call me at 714-925-1599 for an evaluation of your property and let me show you what I can do to make sure you maximize the return for your sale. I can make your experience a pleasant one!
If you’re in trouble, and you suddenly find yourself unable to make the payments and worried about foreclosure, you should act quickly to resolve the issues. It is always better for a homeowner to develop an exit strategy before the bank devises one for you. Leasing may be an alternative. If your house is “underwater,” (the value minus closing costs will not pay off the mortgage), you’re certainly not alone! If you are unable to make the mortgage payments, you may want to consider holding on to your property until values have appreciated and then sell. If you need to move, it may make sense for you to lease your home for some period of time until you can sell without getting hurt. I can help you calculate your property's cash flow, which will help you make an informed decision.
What about a Loan Modification? This video from a year ago explains
why banks have no interest in modifying loans, except to pay lip service to
the government to make it seem like they are trying to utilize the
government programs. It's because banks can actually PROFIT from a short
sale. If you've already tried and failed at a loan mod, you may want to skip down to Cash for Keys, so as to avoid a recurring nightmare. If you would like to continue living in your home, a loan modification might seem the most sensible alternative. Unfortunately, the government's own statistics show that less than 20% of those who applied for a “loan mod” ever received a proper modification. That would involve a government program which is designed to incentivize banks through government payouts. Rental properties don't qualify. And waiting for a loan mod to be granted, while going through month after month of late or partial payments, is certainly damaging to your credit. Here's what is happening almost every time to those who apply for a loan mod. You may have already heard several versions of this from multiple sources - people you know who've tried it. You apply for a loan modification. The bank loses your documentation a few times and it seems like it takes forever for your application to even show up in their system. Then they ask you to redo it because the information is old by then. It takes longer for the new submission to show up. To qualify, the numbers in your financial documents need to fall into the "strike zone," so that after a modification you would be spending 31% of your income on the mortgage, and still provide a return agreeable to the investor on your loan. After what seems like an eternity, they may say that you don't qualify for MHA (Making Home Affordable), but may qualify for their own "in-house" program, and ask you to resubmit everything all over again into that program. Upon receiving your updated information, they may even bounce you back to the MHA department. Meanwhile, don't be surprised if they send you a form letter making sure you're aware of the fees and penalties they're charging you for being late on your payments. If you skipped a few months to be considered for a loan mod and have been making regular payments ever since, you're still charged the late penalty each month because you're not completely up to date. If you miraculously achieve an approval, you are put on to a three month "trial plan" to make sure you can make the new lower payment. After that length of time, they routinely deny your permanent loan mod without giving a reason, or saying that it's because you are now too late on your payments to participate in the program. You had to be 3-4 months late on your payments before they would consider modifying your loan. Now you're even farther behind because you made lower payments for another three months during the "trial." The bank sends you a certified letter saying you have to catch up on the loan or lose the house. This is now impossible for you because you're so far behind and you lose the house to foreclosure. In formerly high-appreciation areas, such as southern California, owners are fathoms underwater. Principal-reduction is a myth. So, even if you were to win the lottery and get a loan mod, you will still have a negative equity position in your house. Even if you somehow kept a good FICO score (or were able to repair your credit in a couple of years), getting another loan within your lifetime may be impossible if you have a negative net worth because your house is valued much less than you owe. How about Cash for Keys? This is another myth. I’ve never heard of a case where a bank agreed to cash-for-keys, even though it would seem to cost the bank less than a foreclosure. What if I get Foreclosed? A foreclosure is a certainty if you can’t afford the house and you do nothing. You may also get foreclosed while waiting for a loan mod or a short sale that takes forever. It is not the end of the world, but depending on the type of loan and occupancy, the lender may sue you to recover the difference between your mortgage balance and the proceeds from the foreclosure. This is called a deficiency judgment. A foreclosure stays on your credit report for seven years. If you're facing foreclosure, you have nothing to lose by trying a short sale. Why don't I just file for bankruptcy? Bankruptcy is generally your final alternative, after everything else has failed. When you file bankruptcy, you must list all of the debts you are seeking protection from, so it is wise to wait as long as possible so you can list everything possible. Bankruptcy can stay on your credit report for 10 years, and it is not as easy to qualify for bankruptcy as it used to be. Many who do file for bankruptcy wind up on a repayment plan instead of wiping their slate clean of debt. Short Sale Tales. Most homeowners have their short sales negotiated by agents who take the do-it-yourself approach. And by now, you have probably heard several short sale horror stories. I’ll just touch on some of the complaints expressed most often.
Short sales may have tax and credit implications and, in some cases, may also result in a deficiency judgment. The standard short sale addendum urges the seller to seek legal and tax advice from competent professionals, however, relatively few sellers actually do. If I handle your short sale, I will not take the do-it-myself approach to negotiate on your behalf with your lender. My time is better spent providing you and your home with the highest level of marketing possible. At First Team your negotiations will be conducted by our seasoned, DRE-approved staff with a proven track record of success. The impact of a short sale on your credit will be much less than a foreclosure. It makes good sense to attempt the short sale, rather than to walk away from the property. Call me for an appointment.
If you’re in trouble with your real estate and need to get your life back, call me at 714-925-1599 for a free consultation before it’s too late. If you have already suffered a short sale, foreclosure or bankruptcy, I can point you in a direction that will allow you to create future wealth that is protected from judgments. Let's talk! Call me direct at (714) 925-1599. |
