FORECLOSURE MYTHS: WHAT'S TRUTH?

Although there are a number of programs available to help homeowners who have defaulted on their mortgages keep their home, the large amount of misinformation tends to result in troubled homeowners failing to contact their lender until it is too late.

• Some homeowners believe, incorrectly, that contacting their lender early in the process will draw attention to their situation and result in a quicker foreclosure. In reality, contacting the lender or servicer is an important first step, and the sooner, the better. Contacting the lender provides the homeowner with an opportunity to explain their situation and the steps necessary to deal with it.


• It is a common misconception that missing one mortgage payment will lead to foreclosure. However, the foreclosure process doesn't begin until payments are 90 days delinquent. Lenders generally have a financial interest in keeping homeowners in their homes, so making contact as early as possible could help lenders modify terms of the mortgage or devise a repayment plan.


• Once homeowners are behind on their mortgage payments, it becomes challenging to dig out of the hole. Some homeowners try to solve this by depeleting their savings or dipping into their retirement accounts to become current on the loan. Most financial experts advise against this.


• Delinquent homeowners may think they should stop making mortgage payments to get their lender's attention, which often isn't the case. When possible, homeowners should stay current on their mortgage payments and continue to contact their lender on a regular basis.


• Homeowners who have applied for assistance or loan modification programs in the past and were turned down are advised to reapply. Program parameters are constantly changing, so the rules might have been liberalized since the last time the borrower sought help.


• A number of free, government-sponsored housing services are available through the Dept. of Housing and Urban Development (HUD). A list of HUD-approved agencies can be found at http://www.hud.gov (Read the full story http://lat.ms/ihLJTs

Don't hesitate to contact me if you have questions about foreclosure and whether or not a short sale could help your situation. I am a Certified Distressed Property Expert and have had a lot of experience helping homeowners in these situations!

Americans Say Home Ownership Still a Great Investment!

Seventy-five percent of Americans say that “owning a home is the best long-term investment they can make and is worth the risk of ups and downs in the housing market,” according to a new survey of 2,000 bipartisan voters by the National Association of Home Builders. And I concur!

Despite their situation — whether underwater on their home or even renters — the survey found Americans to be optimistic about home ownership. Eighty-one percent of those who own their homes outright, 76 percent with mortgages, 67 percent of renters, and 65 percent who have underwater mortgages cited home ownership as the “best long-term investment.”

When survey respondents were asked whether they’d recommend buying a home to a friend or family member just starting out, 80 percent of Americans said “yes.” Even home owners currently underwater — those who owe more on their mortgage than their home is currently worth — overwhelmingly (78 percent) said they would recommend home ownership to family or friends starting out.

More buyers are coming up through the pipeline too. The survey found that 73 percent of those surveyed who do not own a home said their goal is eventually to buy one.

The NAHB survey also found:

▪ 58 percent of Americans oppose eliminating the mortgage-interest deduction and 63 percent oppose lowering it. What’s more, 57 percent of those surveyed say they are less likely to support a candidate for Congress who wanted to eliminate the mortgage-interest deduction.

▪ Respondents were split on about requiring a 20 percent down payment to purchase a home: 49 percent were in favor and 49 percent opposed it. However, mortgage holders and renters aged 18 to 54 were more opposed to it: 58 percent of younger mortgage holders and 59 percent of younger renters opposed adding a 20 percent down payment requirement.

Source: “The Cook Report: The Home Front,” National Journal (June 2, 2011)

And Speaking of Scams ...

...an old scam is making a come back.

Most of us homeowners have had our mortgage servicer changed. We get the letter telling us where to send our house payments from now on. Well, con artists have found a way to hijack a payment or two!

First comes the letter from a fictitious company that says it has begun servicing your loan. You get your new "account number," along with coupons for your mortgage payments. Unfortunately, by the time you figure out your loan has not really changed servicers, you are already out a payment or two!

So how do you know the difference between a real transfer of mortgage servicers and a con?

• Under the law, your current servicer is required to send a "goodbye" letter notifying you that your payments should be sent to a new company as of a certain date.
• A week or two later, the law says you should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment, which includes a breakdown among principal, interest, and escrow. This package is also likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
• Both the goodbye and welcome letter should include the original mortgage loan number. if either letter does not, or if the information included in one doesn't match what's in the other, you should call your original servicer to inquire.
• If you receive only one letter, be extra cautious. Even if everything appears to be standard procedure, you are still advised to call the first company's toll-free number just to be sure!

SELLERS! Don't Get Scammed!

Misfortune seems to bring out the good in most people; however, there are always some out there who wish to turn someone's misfortune into good for themselves alone!

A new study by CoreLogic shows banks and distressed home sellers will lose more than $375 million this year by selling undervalued houses to third-party buyers, which generally result in a quick sell and profit and tend to be fraudulent sales.

According to law enforcement and banking industry experts, the fraud works like this: Investor groups partner with local real estate agents whose job is to spot borrowers in financial distress and persuade the homeowners to sell to investors in a short sale at a low price. Then, the agent contacts the bank with the investors'
short-sale offer. So far so good. At least it appears so!

Meanwhile, the agent finds a buyer who wants to purchase the property for a higher price than that which the investor buyer is paying for the property, but the agent never presents this offer to the bank, nor does he tell the homeowner about this buyer. This new buyer knows nothing about the investor. To back up the investors' low offer - the only offer the bank is aware of - the agent produces an appraisal that confirms the low valuation. The bank then approves the sale and the investment group purchases the property. After the closing, the investors then sell the house to the other buyer at a higher price. The agent and investors then split the profits. The original homeowner never knows what hits them!

How do you keep this from happening to you? Or your friends who may be considering selling their home "short" in order to keep from foreclosure? Use a REALTOR you can trust. One who has experience in Distressed Property Sales. One who is looking out for the best interest of the seller.

I have had many years of experience in foreclosures, pre-foreclosures and short sales, on both the buyer side and the seller side. I am a Certified Distressed Property Expert. And most importantly, I can be trusted. Call me with any questions you have about your property - what it is worth, should you short sell or foreclose? Can you get a loan remodification? What options do you have? I would be glad to help you!

Home Improvements That Add Value

We are often asked what home improvements are cost effective. In these economic times, the answer to that is more important than ever!

Homeowners concerned with making home improvements that will pay off when it’s time to sell the property, should consider the following tips.

1. The first improvement/repair homeowners should consider are those that impact the home’s basic structures and systems. Potential home buyers generally do not want to face expensive repairs, and if items such as the foundation, roof, air conditioning, water heater, or other basic structure need to be fixed, the property will be considered a fixer-upper and its market price
will be discounted accordingly. It is very hard for homeowners to swallow that their home would be sold as a fixer-upper, but that is the nature of the buyer today! And it is, what it is! We can't stress home maintenance enough! It is your home's biggest selling point.

2. Some minor replacements will produce big results for minimal cost. Replacing and coordinating bathroom and kitchen hardware and fixtures are generally inexpensive, but tend to make a big difference. The same can be said for getting rid of dated finishes, such as old wallpaper, paneling and brass light fixtures.

3. Kitchens, bathrooms and master bedrooms sell homes everywhere in the country. And here in San Diego, a well kept yard/patio/balcony is a huge selling point, as well. Minor remodeling and fine tuning of these three or four areas of your home will pay off when it comes time to sell.

Homeowners who don’t know when or even if they will be able to sell their home are advised to choose home improvement projects carefully. Unless the home is located in an upscale neighborhood and the property already is immaculate, owners can skip expensive upgrades and
focus on the fundamentals.

Call me if you have any questions regarding a proposed project, even if you are not ready to sell. I would be happy to offer you my expert opinion based on showing hundreds of buyers hundreds of homes! Happy DIY'ing!