This past week I took a special course in Short Sales and Foreclosures from the creator of the course Frank Serio. Frank is a Broker owner of his own real estate firm in Deleware and has been in the real estate business for 26 years. He is also the President-elect for the Council of Residential Specialists (CRS).

To put it succintly, I was blown away by the incredible content of the couse as presented by Frank Serio! Hence the purpose of my blog, to try to present some of the info I received to help you to either avoid a bank foreclosure or to understand how to work thrugh it, if it has happened to you or you find yourself in this situation.

Here are some strategies to avoid foreclosure:

Be proactive about the problem when the first warning signs appear. Not only does this reduce the stres of not knowing what is going to happen, but it makes it easier for the creditors to work out a plan.

Contact your lender when you become aware that you have a problem. The last thing that a lender wants is to foreclose on the property. Financial institutions lose a significant amount of money by foreclosing on a property ($50,000+/-). Foreclosure is a lose/lose for the lender and the homeowner. It is important to be honest and forthright with your discussions and be prepared to discuss the reasons for your problems.

Read the mail! Not knowing does not solve the problem, it just delays the final result. By not reading the mail, a person avoids the opportunity to get help before it is too late.

Contact a HUD approved housing counselor or call a REALTOR for advice. Call 1-800-569-4287 to find a nearby counselor, or go to www.HUD.gov

Priortize your spending by paying for the necessities of life first. Always pay the house payment and health payment first.

Look for ways to generate cash. Sell those items that have value but are not used or needed, or seek a part-time job to get through the crisis. Not only does this reduce the emotional and financial stress, but it provides evidence to the lender that the borrower is proactively seeing a way to remedy a bad situation.

Don’t get scammed by a private “foreclosure prevention specialist,” instead go to www.HUD.gov to obtain valid information about foreclosure prevention.

Make an appointment with a REALTOR to discuss the problem and to get their advice.

A factor in getting our economy back up an running is to get many of the componets of the real estate industry back to work.  One aspect of this is the buying of distressed or foreclosed properties, rehabing them and putting them back on the market!  I talked in an earlier blog about the benefits to the market by having this process in place.

Up until today, there was a 90-day Seasoning Rule which meant it could not sell until after 90-days from the day the investor had purchased it.  There were some legitimate reasons for this but it also hampered the ability for investors to make a profit.

Apparently HUD saw the advantages and realized that removing this restriction would help speed up the recovery process.  this would be especially helpful in communities where the foreclosure activity is high.

HUD Secretary, Shaun Donovan, announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed or distressed properties.  This is part of President Obama’s commitment to addressing these types of properties.  Secretary Donovan announced there would be $2 billion in Neighborhood Stabilization Program grants to local communities and non-profit housing developers to combat the effects of vacant and abandoned homes.

This is all good news at a time when it will be well positioned to have a huge impact on the real estate industry as it surges forward!  My hat goes off to HUD Secretary Shaun Donovan for his efforts on our behalf!

This house which was just purchased by investors will be back on the market in two weeks because of this new action by FHA.

Outside Things to do around your Home in the Fall

I was talking to my daughter about their home the other day, and in the course of the conversation she asked me to remind her of the things they should be doing to their home in the fall. As I thought about the different things to do, it dawned on me that other people might also be interested in being reminded of these things.

Here we go with the outside first-

One of the first things that come to mind is the gutters. They will keep your basement dry if you will keep them clean of leaves and branches! As the leaves start falling it may be necessary to clean them 3 or 4 times before the snow flies. I know this is a lot, but they need to be kept clear of leaves when it starts to freeze and snow falls.

Second, cut down all the stalky dead plants, this will prepare the gardens for new growth in the spring and also keep the mice from making winter nests under it.

Next, walk around your house with a caulk-gun and look for areas where the caulk has dried up or fallen out. This will keep the cold drafts from seeping into your warm cozy home in the winter months and the bees from making nests in the summer months.

The fourth thing to do is walk around your house again but this time with a paint scraper and look at your window sills or wood areas where the paint is peeling. Scrap the peeling paint, sand the area, paint a primer over the bare wood, and then paint with finish paint. This will prevent the snow from decaying the wood over the course of the winter months.

Now you are ready for the winter winds and snow! Ugh! Well, at least the house is!
For a complete list use this link.

Federal Bailout—Helping Banks? or Homeowners?

We have all been reading and hearing about the bail out programs for the banking industry. The numbers are staggering of the billions of dollars appropriated by the government for this relief!

Those of us in real estate know how this developed and how the banking industry created their own problem by lowering the standards for getting a loan, especially for the investors.

Today thousands of homeowners are upside-down with their mortgages. This means they owe more on the loan than the property is worth. When this happened, the investors walked away from the properties, leaving them vacant. I remember hearing from a Realtor in Las Vegas after the crash that there were over 10,000 homes vacant that had never been lived in. Wow! Can you picture that?

However, a homeowner who is living in their home with their family, has no choice but to stay and stick it out. So along comes the government, spending yours and my tax dollars to bail out the banking industry. Many of us were naïve in thinking that the plan would include the individual homeowners who at no fault of their own was put in a bad situation.

This all hit home to me yesterday when I met with a homeowner who had lost her income because of the economy and had been struggling for the past 10 months to keep her head above water.

She had not made a mortgage payment since August, but had tried to contact the bank to talk to someone who could offer some advice or help. No luck! Months had gone by and suddenly she gets a letter saying they are going to help her! Wow, really??

Tell me if this is helping her, they sent her a document to sign within 5 days which was a new mortgage document. Here are the terms, they were adding $12,000 in late charges and attorney’s fees to her mortgage balance, then charging her 7% when the going rate is 5% and then amortizing the remaining loan over 40 years!

Doesn’t it make you mad? It does me! What is this money, yours and my tax money, being used for if not for people who have been affected by the downfall of the economy? I would like you to join me in contacting your representatives and senators and ask then why aren’t the American people being helped! Thanks, if we each do what we can, it will make a difference!

Sell Before Buying??

I was reading the Saturday morning real estate section from our local paper and the lead article was about move-up or scale-down buyers. The two agents interviewed both felt that they should sell first before they made an offer on another house. The problem I had with this article was not the position the agents had but the reasons they gave for doing so.

There are many areas in our marketplace where the purchase offer with a contingency of selling a house will not make any difference and will not affect the selling price that is negotiated. This is because the sellers are so glad to see an offer that they will readily accept one even with a contingency.

Unless a neighborhood has a shortage of inventory and is in high demand, most sellers, if properly advised by their agents, will accept a contingent offer. In our area, the listing does not have to be changed to reflect a contingent offer and no one knows it has an offer on it except the seller, that buyer and the agents.

This way, the odds are in the seller’s favor, because now there are two houses on the market and if either one of them gets an offer, the seller is good.

So why wouldn’t a buyer make a contingent offer? Yes, there is the possibility that another offer could come into the picture and they would have to do a bridge loan to keep their offer or they would lose it. But generally, if they price their house properly, de-clutter it, and then stage it, the house will sell fairly quickly. To wait until you have sold your home, to then start looking, you may not find something suitable and you will have to move twice, first into temporary rental housing and then into your next house. This would far out weigh the cost of carrying two mortgages for a few months.