Housing Crisis

Educating Homeowners On The Current Housing Crisis…

What’s going on right now in our countrywith so many homes going into foreclosure is due to outrageous loans made to almost anyone who could cause a mirror to fog up.  In different parts of the country, many lenders even committed fraud by placing higher value on homes than they were worth, simply to inflate the amount of the loan needed by the homeowner, which in turn would boost their own profits.

The fear of the U.S. subprime mortgage market have triggered a global credit crunch, playing havoc with Wall Street stock portfolios and dragging down global markets.  In case you are not familiar with the term, subprime loans are offered at higher interest rates, and usually on adjustable terms, to Americans who have poor credit rating and might otherwise be denied loans. But as interest rates have risen, so do those adjustable payments, leaving many homeowners stretched beyond their means. You or someone you know may be facing this right now.

How To Do Short Sales

How to execute a short sale properly?

I am going to share with you the secrets that my company uses to get successful results.  In efforts to short sale a property successfully you need to do the following:

• One needs to explain to the seller that they are getting out of a terrible situation, and that a short sale will get rid of any negative debt they may have.
• One needs to market this property to buyers  who are looking for good deals in this type of market

• One needs to explain to lenders that they will make more money via a short sale as oppose to an auction

The buyer will want to make sure that they are getting this property at the lowest possible value and that this value will be approved by lenders.  In this case the seller receives no cash yet rids their debt, so all parties involved are winners.

There are a couple of things to consider as a buyer in a short sale transaction:

• You want to find a buyer that is under water with their home loan.
• You want to make sure there are no judgments against the property.
• As a buyer you want to make sure that the seller is cooperative, because without their cooperation you will be facing a difficult transaction.
• The price you are paying for this property will gain you instant equity.
• As the buyer you should make sure that the seller is facing a true hardship

To sum this all up you need to find a homeowner who is in foreclosure or will be, and line up the right buyer, then you negotiate with the bank to accept the offer in on the property.

Contributing Factors of the Recession

What Caused This Recession?

Of course, the banks contributed by making mortgages far too easy to acquire, and exercising little to no scrutiny over loan applicants, which led to bad mortgages running rampant.  It is easy to understand how this could happen when you take into account that charging applicants high fees, high pre-payment penalties, and the maximum allowable interest rates was all part of the lenders scheme to make as much money as possible from so many borrowers.

Further fueling this real estate frenzy were people, without any of the guidance, speculating in real estate. They saw home prices appreciating and decided to jump in for a quick buck.   With certain markets driving prices up tens of thousands per quarter, these inexperienced would buy new homes during pre-construction and even put together financing for sight unseen real estate purchases-all with the intent of selling before they ever had to make their first mortgage payment.

Banks would make poor loans and then sell these loans to other financial institutions and investors for profit.  Can you see how the incentive was to keep making more loans as fast as possible?  Risky mortgages were bundled into securities and sold on Wall Street.  Big funds, obsessed with getting a higher rateof return, ignored the risks.  These factors, followed by a lack of attention by the Federal Reserve, resulted in the creation of a “perfect storm”- and when the storm finally hit, it was an economic tsunami.

Getting a Notice of Default

I spent the next 3 hours calming my neighbors down, and explaining to them what options they have and how a  Notice of Default does not mean they are being foreclosed on.  It makes me feel good that they phoned me and understand what is going on.  Believe me when I say, I understand that these are unstable times, and to receive a NOD could feel like the end of the world.

I assured them that in their particular situation a short sale would be their best bet.  They have been my neighbors for the past 3 years so the trust was already there.   So here we go with yet another short sale…I have helped find my neighbors a property to lease that is equivelant in size at a fraction of the cost! I’m tired and need some rest as this is the 48th short sale my team and I are currently working on.  Give me a ring if you need any personal advice or help on your property, there will be no BS coming from me, nor do I charge for any of my services.  Until my next blog, I wish all of you the best.

To Borrow Money or Not? That Is the Question

Are you debating whether or not you should borrow money?

Lets be real, owing money to anyone sucks.  If I never needed another penny from a person again,  I can swear that I would not take it.  It doesn’t matter if you are borrowing from friends, family, or even the banks, no matter who it is you want to stay debt free.  I understand times are tough right now and people are continuously looking to obtain some funds to pay off their debt, but this will be considered revolving debt as they are just borrowing from somewhere else and eventually needing to pay that off as well.

Owing people money can change your relationship in a negative way, and I have seen this time and time again.  No matter what, you should always try to avoid borrowing money from family and friends.  If you have ever lent money out, then you know exactly how it feels for the other person. With the new year coming around, let’s do our best to stay debt free.

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