Archive for the 'Just "My" Opinion' Category
The Early Bird Catches the Worm
December 3rd, 2011 categories: Ask the "Specialist", For Buyers, Just "My" Opinion
When Buying Foreclosures I often tell buyers ” The Early Bird Catches the Worm”. Buying foreclosures like any transaction can be frustrating or rewarding depending on how you go about your business. My advise to buyers is to not be afraid to write an offer because you want your offer in front of the Asset Manager before others are being considered. Next, do not get discouraged if your first offer was not accepted. Asset managers will negotiate with you and it is up to you how you negotiate but if persistant you will be successful.
In my experience working with buyers and buyer agents they tend to not understand the process of buying foreclosures and get stubborn and in the end they loose.
In the end its all about your attitude and what you bring to the table when negotiating with Asset Managers and foreclosure properties.
If you get your offer in first, continue to negotiate, and keep your emotions in balance then you will be successful. If not then ” If you Dont Succeed Try and Try Again”
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Bank Proverb We All Should Be Reminded About..
November 5th, 2011 categories: Bank Owned, Just "My" Opinion
A Banker is a fellow who lends you his umbrella when the sun is shining but wants it back when it begings to rain
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Somethings Brewing with The Banks but it is not likely to be ready for Halloween
October 29th, 2011 categories: Ask the "Specialist", For Sellers, Just "My" Opinion, Loan Modification
Looks like something is brewing with the banks but it is not likely to be ready for Holloween. Huffington News reported Banks ( BOA, Chase, Citi Mortgage, Wells) just to name a few are thinking about Principal reductions to help homeowners. Resisting this concept of Principal reduction is Fannie Mae and Freddie Mac.
Its kind of scary the banks are actually thinking logically here with a program that might actually help the housing market. As a realtor involved in the distressed market I have been consistent with my feelings that the only way to solve the houseing crisis is too look at the whole picture.
I support this concept of Principal reduction as I feel it is a WIN WIN WIN situation for all homeowners whether you are in distress or not. If principal reduction is done properly then the housing crisis will begin to correct itself.
First Principal reductions should not be automatic. It should be based on current market values. Anyone could be eligible to refinance their home at the current market value with one stipulation. The amount reduced is not forgiven but just a forebearance until the property is sold. So inother words homeowners will become equity partners with the bank on the forebearance amount of the new loan and will share in the future benefits when sold. This is a paper transaction so banks show no loss on their books and preserve their capital requirements, continue to get stream of payments on the new loan, and can start lending on new loans. Win for Banks.
For the homeowner it is also a win. Those who are struggling will now be able to afford a new mortgage since it is based on Principal reduction, lower interest rates, and longer terms thus keeping mortgage payments affordable. This is what is needed to keep people in their homes. Win for Struggling homeowners.
Finally those homeowners not struggling will also benefit by this because as more homeowners struggling are able to refinance and keep their homes less homes will be foreclosed and home values will begin to stabalize. This is a Win for homeowners in general.
I wish Fannie Mae and Freddie Mac would embrace this Principal Reduction Plan and see it as a way to stabalize the housing market.
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The Lost Art of Caring in a Real Estate Transaction
December 20th, 2010 categories: For Buyers, For Sellers, Just "My" Opinion
CARE
Webster’s Definition : noun 1. the work of caring for or attending to someone or something 2. Judiciousness in avoiding harm or danger 3. An anxious feeling. 4. A cause for feeling concern. 5. Attention and Management implying responsibility for safety. 6. Activity involved in maintaining something in good working order. verb 1. Feel concern or interest.2. Provide care for. 3. Prefer or wish to do something. 4.Be in charge of, act on, or dispose of. 5. Be concerned with.
An Acrostic Poem for the word Care:
Contscientious AcoountableResourcefulExceptional.
Over the last 3 years I have been involved working with homeowners, lenders, buyers, attorneys, asset managers, investors, in the distressed real estate market. The more I work in this market the more I see the biggest hurdle as the lack of caring .
It is because we have lost sight of caring for others that we are in the mess we are in. We have also lost sight of the process of caring or making people care. I strongly believe we have to make people accountable for their actions, bring back the human element which is caring for others into the process or we are all going to be lost for ever.
When working in the distressed real estate market ther tends to be a void one feels. There is no sense of feeling good about a transaction because someones gain is someones loss. This void is compounded by the lack of caring expressed by others in the transaction.
Is the word Caring a lost art in the distressed real estate transaction? I hope not and I hope we realize this collectively as a group because I do care…
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Fewer Owners Under Water.. Fact or Crap
December 16th, 2010 categories: Just "My" Opinion
I just received an email linking me to an article by RIS Real Estate article which stated that fewer home owners are underwater in their mortgages. This at first sounded like good news but then it went on to qualify that news by saying that this is more likely not the cause of an improved real estate market but because there are more homeowners loosing their home to foreclosure.
I had to stop and think about that for a moment… Is this news at all? and if it is news what is it actually saying? As I see it there are fewer home owners because of foreclosure so of course there would be fewer homeowners underwater. This is like reporting the obvious.
Now if homes are being foreclosed the negative equity in these homes is actually being transfered from the homeowner to the bank and investor and I say is this news? No because if you have been in the business the last year we can see what prices homes have dropped because of the number of foreclosures.
I think this article is a bunch of crap not fact… What do you think.
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TRULIA and ZILLOW Questions and Answers…
November 23rd, 2010 categories: For Buyers, For Sellers, Just "My" Opinion
During the past couple of months I have been monitoring and answering Real Estate Question posted on Trulia and Zillow. I think people ask some good questions and are seeking clarity about local Real Estate Markets and want expert advise from realtors.
I am going to share some of their questions and print my answer to them:
Trulia Question
“Short Sale vs Foreclosure: Can we actually owe the bank money in a Foreclosure? Can someone tell me how a foreclosure can demand money from us, and how we can avoid this in either a short sale or a foreclosure?”
Answer:
What you seem to be eluding to is a “deficiency judgement” after a short sale or foreclosure. The deficiency amount is the difference between the amount owed on your mortgage and the amount the lender receives in a short sale. The lender can require you to sign a “note” for the remaining balance. This “note” is unsecurred.
A 1099 is something different. A 1099 is often sent to the seller after closing and is also on the deficiency amount owned to the lender. You would have to report the deficiency amount as part of you income for tax purposes.
When doing short sales we always try to get the lender to forgive the seller on their debt. I have yet to come across a situation where they required the seller to sign a note. If that does happen the lender can guarnish wages to collect the defiency amount but then you have the right to file for bancruptcy as a way to protect you from ever having to pay this deficiency.
“Foreclosure and retirement. We have 2 homes. A primary home in Chicago with no equity and losing value and a short term rental in Florida.”
Answer:
Why have you not considered a short sale for both your primary residence and your investment property. You would be better off doing a short sale than let them both go into foreclosure.
Short sales can be done for both primary and investment properties. If a short sale is not accepted then try to negotiate a Deed-in-lieu of foreclosure for both properties.
You should consult with an attorney and tax consultant to protect you against any and all future claims against you since you are looking to retire in the next couple of years.
Zillow Questions:
“Some foreclosures seem quite hight in price for what the house has are banks willing to negotiate price or closing fees?”
Answer:
When banks finally put the property on the market as an REO it has been through an internal evaluation process with a Broker Price Opinion (BPO) done by a Realtor or an Appraisal from a certified appraiser.
Often the investor of the loan is the person who agrees to a certain “Net” dollar amount they want at closing and often these BPO’s are manipulated to reach that “Net” dollar amount and thus the reason why so many REO’s tend to be listed high.
But remember buyers set the price by writing offers on properties. If nobody writes an offer prices will come down.
REO’s want offers and often prices are reduced every 30 days if no offers are received.
My only advise is do not over pay for something and not every deal is a good deal.
LET THE BUYER BE WARE.. STILL HOLDS TRUE IN TODAY’s MARKET..
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The Blame Game in Real Estate.. When will it End?
October 11th, 2010 categories: Just "My" Opinion
I think it is about time to stop pointing the finger and blaming each other for the housing market crisis we are in at this present time.
Pointing fingers does not find solutions. It only perpetuates the problem.
The Truth is we are All to Blame. Homeowners took on too much debt, Investors leveraged too much money, and Lenders took on
too much Risk. Now that we know the Truth how can we solve the problem?
Here are some simple solutions:
- Home owners should reduce the amount of debt they owe and live within their means. This means reducing the amount of credit cards we own and use, pay with cash when we have a chance.
- Investors should Leverage less and make sure the investment has a positive cash Flow
- Banks should take on less Risk, get out of owning Real Estate and do what they do best and that is lend money.
If we all work together on this we would be a lot better off than we are now. Lets try to end the Blame Game and call it a tie and find some Real Solutions to the Housing Market.
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FIVE STAGES OF GRIEF REVISITED
September 16th, 2010 categories: Just "My" Opinion
One of my most successful Blog Articles for Active Rain was 5 Stages of Grief in a Short Sale. In that blog I compared the Five Stages of Grief a terminal ill patient goes through when informed of their life threatening illness. In that blog article I said sellers in Short Sales seem to go through these same stages.
I would like to expand on this and now say I think Banks go through these same stages. Let’s review the stages and you will see what I mean. The five stages are:
- Denial
- Anger
- Depression
- Bargaining
- Acceptance
Stage1 Denial: Those who have been doing Short Sales for a while must wonder why banks are taking so long to approve Short Sales. Did you ever think it might be because they are in Denial. Think about it for a minute. The banks have one value for the asset and they get a offer much less.
Stage 2 Anger: Banks seem to be angry about alot of things and are out to get even with most everybody. Their anger is directed at the President, The Treasury, The Fed, The Press, New Financial Regulation, New Capital Requirements, Credit Card Reform, Number of Loan Defaults, on and on all the way to the homeowner who is being blamed for the problem the banks have created from their own greed… In this instance I do not agree that GREED IS GOOD.. Nor is Anger in this situation. It just seems to perpetuate the problem.
Stage 3 Depression: This is the stage where most Short Sales sit in limbo. The bank is so depressed about the number of people in default and the diffference between the Banks Asset Values on their books and the real Market Value of these properties they just can’t seem to get out of their deep depression to do what is in their best interest and that is selling the asset to a new buyer. By the way most Short Sales that end up in Foreclosure is because the Banks cannot get beyond these first 3 steps.
Stage 4 Bargaining: This is the most critical stage of a Short Sale. This is where a Bank has all of the informatiion they need to make a decision inother words a “Complete Short Sale Package”. The bank looks at the Seller Information, the Hardship letter, the HUD-1, the remaining balance on the loan, the buyers offer and proof of funds and determines the NET dollar amount they are willing to accept.
Stage 5 Acceptance: This is when the banks give the “Final Approval For a Short Sale”. This is when the banks come to the realization that the Short Sale is in their best interest and can move on to another deal
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Is it Time to Reform Fannie Mae and Freddie Mac?
July 28th, 2010 categories: Just "My" Opinion
Fannie Mae was created in response to the Great Depression when the economy made it difficult for homeowners to meet mortgage terms. Fannie Mae purchased and securitized FHA and VA mortgages to inject liquidity into the mortgage market.
The problem we are faced with today is not that different from the Great Depression with one exception and that is the amount of debt both Fannie Mae and Freddie Mac own.
Together, Fannie Mae and Freddie Mac own more than $5 trillion U.S. mortgages which is almost half of the total $12 U.S. mortgages.
The amount of debt Fannie Mae and Freddie Mac own is not sustainable for the Federal Government, the U.S. economy, or individual tax payers.
That is why the Financial Regulation Bill did not discuss reforming Fannie Mae and Freddie Mac at this time.
In the near future, we will need to address reforming Fannie Mae and Freddie Mac. But how do we do this.
In my opinion, we need to have a healthy secondary mortgage market. One that is assuming limited risk to investors.
We need money to flow from Banks to homeowners, from Investors to Banks back to homeowners again.
I think this can be done without the government involved.
We just need better oversight and confidence in our rating system so investors can purchase mortgage backed securities based on the merit of the mortgage itself not in the bubble of the housing market.
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FRIENDS AND NEIGHBORS
July 26th, 2010 categories: Just "My" Opinion
Last night I watched Friends and Neighbors with Ann Curry of MSNBC Dateline. I was saddened by how many people in SE Ohio are homeless and barely surviving.
The number of people loosing their homes is staggering and the numbers keep growing everyday.
I say we need to come up with a different plan a different strategy that thinks outside the box.
I say nobody should be homeless when there vacant homes in foreclosure needing families to live in them.
I think the banks should not only let people move into these foreclosed homes but they should also pay them to live there.
These people need jobs and there are plenty of odd jobs to go around when dealing with foreclosed homes. Pay these people to mow the lawn, take out the garbage, fix up the homes, and preserve the asset for the bank.
Lets solve this problem together.
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