Sometimes Change Is Good

The history of homeownership has shortened from the 30-year mortgage model to the 3 to 5-year spell before the homeowner moves.  More change has come with the Short Sale trend, but that change is not necessarily all bad. A Short Sale is when the lender agrees to accept less than the mortgage amount owed. Would you rather have the full amount owed or just the change?  Your lender feels the same way, but in a situation where the house is worth less than what you owe, a Short Sale may be a way for the lender to get at least some return on the property, and allows you to get out from underneath a roof that is crushing you in mortgage debt. If you are facing home foreclosure, a Short Sale could be a welcome change of scenery on your financial future.  While even with a Short Sale you have to leave your credit on the altar for sacrifice, generally you can recover faster than if your credit report has “foreclosure” stamped on it. Seek competent legal counsel if you are served a foreclosure lawsuit in the midst of a Short Sale negotiation, so the legal aspect may be addressed, […] Read More

Win-Win-Win Short Sale

A Short Sale is not for every homeowner, it depends on the homeowner’s personal and financial circumstances and goals.  However, for a homeowner facing foreclosure on an upside down property, a Short Sale can create a win-win-win situation. A Short Sale happens when the lender agrees to accept less than the mortgage balance, and a Short Sale can benefit three entities:  the homeowner, the lender, and the neighborhood.  The homeowner gets out of a house he cannot afford, and he can start to rebuild his credit.  The bank receives more than they would otherwise in a foreclosure or REO (Real Estate Owned) sale.  The neighborhood gets a new owner faster—instead of leaving the house vacant for months—which helps maintain property value in the area. (Also the transaction stays local, benefitting the local economy—the vendors involved in the completion of the sale.  So really a win-win-win-win situation.) A Short Sale will not stop a foreclosure.   Just because you are in negotiations with your lender for a Short Sale does not mean you are “safe” from foreclosure.  Your lender’s legal department and financial department are two separate entities.  They do not necessarily communicate or coordinate.  The lender may be working with […] Read More

Vanilla Ice Capades & Short Sales

Vanilla Ice has a long rap sheet—as a recording artist and in criminal arrests.  His latest caper was Break Dancing and Entering to steal furniture and other items from the house next door. Abandoned, foreclosed homes are a problem in South Florida.  The City of St. Petersburg has recently proposed to ask a judge to force some 400 such properties to auction. On the other coast, Mr. Ice (a.k.a. Robert Van Winkle) addressed the issue with a different strategy.  In the Palm Beach area, he was hosting a home renovation show, with a little Break Dancing and Entering on the side.  He went from Do-It-Yourself to Help-Yourself-to-the-Neighboring-Property, and was charged with burglary and grand theft of the foreclosed, abandoned house next to the one he was fixing up. A short sale might not keep Vanilla Ice from entering your home—some even like his recordings—but short sales do help prevent homes from sitting abandoned. A Short Sale is when the lender agrees to accept less than the mortgage amount owed.  Though the lender does not get the full payoff of the mortgage, at least they receive some income from the property; generally they get more from a short sale than a […] Read More

Length of Your Patience

The length of a Compact Disc is set at seventy-five minutes so that you can listen to the entirely of Beethoven’s Ninth Symphony uninterrupted.  Too bad you cannot get through a short sale in that time. The biggest problem with a short sale is taking a patience pill, and then retaking it.  A Foreclosure Defense gives you time to allow an alternative outcome to happen (without the interruption of a foreclosure). Short Sales take time, and in the meantime litigation moves forward.  Even if you are in negotiations with your lender, their legal department is proceeding with the foreclosure lawsuit against you.  It is a race to see which happens first. Foreclosure Defense is not going to give you a free house.  However, time is a side effect of a Foreclosure Defense, and that could be just the element you need to allow for a short sale to go through before the litigation can be completed.  While you are waiting for a short sale, a Foreclosure Defense asks the lender to prove their case—to show they have the authority to foreclose and to verify their information on your file. You cannot launch a legal defense just for the sake of […] Read More

Short Sale & Reverse Mortgage

A Short Sale does not usually happen quickly and you do not have to drive backwards to get a Reverse Mortgage.  Both are strategies to deal with mortgage debt, but which has the best benefit depends on your situation (and if you qualify). A Short Sale is when the lender agrees to accept less than a full payoff of the mortgage balance.  The lender gets a smaller amount than what is owed, but generally more than if the lender finished the foreclosure and sold the property themselves.  The homeowner typically sacrifices his credit on the altar of getting the short sale done, but usually a Short Sale is not as bad on a credit score as a completed foreclosure lawsuit (or Bankruptcy). A Short Sale is often best for the universe when a borrower cannot pay his mortgage—the bank receives more than they would otherwise in foreclosure, the homeowner gets out of a house he cannot afford and can start to rebuild his credit, and the neighborhood gets a new owner faster—instead of leaving the house vacant for months—which helps maintain property value in the area.  Also the transaction stays local, benefitting the local economy—the vendors involved in the completion […] Read More

More Than One Way to Deal with Home Foreclosure

My brother, Stephen, and I have a radio show on News Talk 1240 AM WFOY…that is what it used to be called.  Last year, the station switched to FM broadcasting and now has an FM number which is primarily used.  But the old AM number still works and I like it better.  There is more than one way to listen, just like there is more than one way to deal with home foreclosure. There are many choices when it comes to home foreclosure, and it depends on where you are in the process, what your situation is, and what your goals are as far as which strategy will bring you the best benefit.  Some of the strategies include: Refinance Forbearance Short Sale Mortgage Modification Reverse Mortgage Hardest Hit Fund (And sometimes) Bankruptcy  Talk to your lender.  See if you can make a deal with your loan servicer.  If you do receive foreclosure papers, seek competent legal counsel to discuss your choices and which will bring you the best benefit.   The radio show is called “Land Title Talk” and it airs the first and third Thursdays of the month at 8:00 a.m. on WFOY 1240 News on the AM dial.  […] Read More

What is a Short Sale & Why Would You Want One?

Once upon a time there was a man who lived under very heavy negative equity.  The man had been sick and in the hospital unable to work.  When he returned home, the eaves of his mortgage balance hung way out over the property value of his house, and his lost wages and new medical bills mounted against him.  His home was upside down in value, and very uncomfortable to live in as he struggled to make payments on the mortgage loan. One day his friend asked, “Why do you not short sell your place?” and the man replied:  “I would never sell myself short!” and he went on his dreary way, toiling mightily to make his payments. Next, the man’s neighbor came to him, suggesting the same thing, but the neighbor was met with a similar response. Finally the man’s mother came to visit, and she saw what a terrible time he was having making payments on a mortgage loan that greatly exceeded the property value.  His mother said to him, “Sonny, you need to short sell this place and buy one you can afford.” “Why would I short sell myself?” he asked. “Not yourself,” she replied, “short sell your […] Read More

Mother Hubbard’s Short Sale

Once upon a time, Old Mother Hubbard was going to have to move.  She went to her cupboard to fetch her poor dog a bone and found there was none, and also realized she had the cabinets packed full of negative equity in her house.  Widowed and living on a limited income, she could not make the mortgage payments and she owed more than her house was worth. She could have simply walked away from her house, taking her dog with her, and leaving the property vacant and unkept, or let the bank foreclose, which would very likely have the same effect.  But instead, Mother Hubbard decided to short sell her house. Mrs. Hubbard washed the windows and kept the lawn, just like you would with any house you were trying to sell.  She cleaned the bathroom and swept the floors, and had all the minor repairs done so that her house would sell quickly and for the best price—which would give the bank a faster return at the highest amount. As with any other home sale, Mrs. Hubbard was able to remain living in the property and caring for it until the purchase occurred, at which time she and […] Read More

Steps to a Short Sale

Often a Short Sale is best for the universe.  I like to say that because I think it is true in many foreclosure cases.  However, getting a Short Sale is not easy. Step One:  Distress.  The most recent numbers on Zillow from the first quarter of 2013 show that about half of Duval and Clay County real estate is underwater in value, and roughly a third of St. Johns and Flagler County properties are in the same submerged boat.  Thus there is plenty of negative equity in the area—meaning property owners owe more on their mortgages than the real estate is worth.  Distress comes easy to those people. Step Two:  Talk your lender into accepting a lesser amount than the mortgage balance.  Sometimes just talking to your lender is difficult—waiting through the on-hold message, or even opening the discussion of a Short Sale before you have missed a few payments.  Then it takes time—time to find a buyer, time to find a number that both the buyer and the lender will agree to. Misstep:  Foreclosure Lawsuit in the midst of your Short Sale negotiation.  A Short Sale will NOT stop a Foreclosure.  No matter how close you are to a […] Read More

Charmed Life–Not!

A ‘short sale’ does not mean the buyer is a Leprechaun.  It means the lender agrees to accept less than the mortgage balance.  The lender gets a smaller amount than what is owed, but generally more than if the property went into foreclosure.  You are not going to find a pot of gold from a short sale, but you may come out with more credit than you would at the end of a foreclosure rainbow. Just because you are facing foreclosure does not mean you are out of options, and a short sale may be one of them, depending on your circumstances.  You can count on your lucky charms to avoid foreclosure, or you can talk to a defense attorney about how to best address it. Read More