People in the media are many times automatically given credibility on subject matter. The question is should you listen and follow their advice? This is a key question as it pertains to your mortgage if you are currently underwater on your house because mortgage debt is a big hammer if not mitigated properly.

 

The article and ongoing debate attempts to bridge commercial mortgage responsibility with residential and throw in the moral conflict.  It is obviously debated for showmanship by two very nice people who do not have a clue as to the current contract laws under which many of you signed up for your residential mortgage.  Everybody is doing it is does not make it credible or good advice. This is the kind of advice people follow and end up in bankruptcy. It gets better. Then the bankruptcy attorney takes your money and you go away feeling like you have a real solution.  This happens time after time until one discovers that there are major long term negative consequences and associations with your decision to take the path of bankruptcy. 

 

Given this scenario, what is the next question I used to ask my loan applicants since 1987 when I was in the mortgage business and could not provide them a loan based on their bankruptcy decision?  I would ask them in a frank manner where their bankruptcy attorney was now.  They would always say that they gave money and the attorney was out of the picture.

 

Humor me for a moment and then follow the link to this article. This is great.  I am going to put myself in the chair of the debate and change the subject matter just a bit to present an analogy to make my point further with the same credibility on the new subject as I see with the current debate participants.  Let’s talk about your heart condition or someone you know that has a heart condition. Here we go:

 

My name is George. Did you know I know a little bit about everything?  Your heart is bothering you.  Go get another one or buy one of those medical implants. Yeah, go throw one in. Why not everybody is doing it?  What are you waiting for?  Having you hear of all the success stories?  I hear they work great.  What else do you need me to weigh in on as an expert?   I am getting some great media coverage and I may not be there for your follow up questions as they relate to pertinent issues.  Did I tell you I love Yahoo and I am getting some great media exposure?

 

Have you ever heard of the 30/30 guarantee when buying a used car?  Thirty feet or thirty seconds whichever comes first.  This is what you are going to get with listening to the foolish advice in this article or any idiot that tells you to just throw in a new heart. There are consequences.  Just like a replacement heart you dam well better have a plan and know what the hell you are doing and what the laws are or you are screwed.  The question to the debate is going to be is it good business to Walk Away?

 

The Yahoo article heading and link just below it:

It’s Okay To Walk Away: Let’s End the “Morality” Double-Standard on Mortgage Defaults

http://finance.yahoo.com/tech-ticker/it%27s-okay-to-walk-away-let%27s-end-the-%22morality%22-double-standard-on-mortgage-defaults-535365.html?tickers=mac,vno,spg,xhb,vnq,tol,len&sec=topStories&pos=8&asset=&ccode=

 

What happens to you in a deficiency state when you walk away from the mortgage as advised in this debate and on many other media platforms?  Let me kindly run the movie for you.  It’s just like Ground Hog Day but without the laughs and pop corn.  I briefly commented on this article on Yahoo but here is an expanded version. 

 

You walk away form the mortgage. The article and debate implies…Hey it’s just like a commercial loan right. Look at all the companies walking away from these. This is the way we roll in America. Obama is in charge and you signed up for free money with no accountability right? Right on!  Forget about the contract law and let’s change the law.  Get on board and Walk Away…because everybody is doing it? 

 

Advice like this is termed “bread crumbs” by my team.  We save people from the mortgage crisis with successful well planned Short Sales.  You must have a comprehensive plan to address Credit, the property, asset preservation, and mitigation of any unpaid mortgage debt.  Does still sound like a bread crumb when compared to the Yahoo debate? 

 

To the point, hypothetically today you walk away form the mortgage/(s) and follow the media advice.  Soon thereafter, depending on your level of delinquency, acceleration begins. What the hell is acceleration?  It’s part of the lenders legal right of recovery mandated by state law to take back the property.  We are not at the point where the lender starts up the truck and runs over your family financially and you begin considering not sending your kids to college. That comes later and I will yell at you and insult you if this thought ever enters the equation.  Acceleration leads to full blown foreclosure whereby you begin getting letters and demands until you receive the actual foreclosure sale date. There will be a definitive time and date on the court house steps.  Of course you may ignore this because the “walk away” advice or other bread crumbs you gathered where so convincing.  I hope this is not the case for you.

 

Now let’s assume the lender forecloses on your property.  We are now moving to the point where they are going to press you financially and you will have a clear view of the contracts you signed and your personal liability. Anyone that signed the mortgage note in a deficiency state is personally liable.  If you own the property but have not signed the note you are ok. Don’t confuse ownership on the property deed with who signed the mortgage note.

 

All foreclosure processes are mandated by protocol established by the laws of the state where the property resides.  Once the foreclosure occurs the lender will begin the process that will allow them to present their deficiency to the judge or magistrate of the court.  This usually takes approximately thirty days.  The court will grant a deficiency judgment against you for a big number.  This judgment will then show up on your credit report following your social security number for 20 years in Virginia as an example. Again, this judgment will only be placed on people that have executed the mortgage note.  This is no different from losing a court case where you are the defendant and the judge rules for the plaintiff. Please do not think for a moment that you will have your day in court to plead poor little homeowner in front of the judge. You will not. The deficiency judgment will be granted in deficiency states based on the mortgage note.  You are personally liable in these states and its will be automatic.  Hello Virginia is for lovers and Maryland. 

 

Once the judgment is in place the lender has the discretion to come after you or sell the rights of this debt.  Somebody is going to look to recover the money.  It’s now an opportunity.  First the lender will seek to garnish your wages in many cases and come before your groceries.  Once you discover this you will freak out and realize the advice you followed was very bad.  This will push you to an attorney much like the sweet sounds of siren songs on the beach.  Get out your credit card Bankruptcy is sweet justice. Then you are in short a deadbeat for a very long time and I am done. Figure it out yet?

 

Don’t walk away from the mortgage.  We will help you with all the critical items mentioned as part of our plan above.  Why is credit so important?  You need a job, promotions, security clearances, large purchases like a car, a rental house to keep the rain off you.  Should you just hire a realtor?  They are in many cases qualified to sell your house but they are NOT qualified to represent you with financial negotiations?  If they were then their Brokers Errors & Omissions Insurance Policy would cover this.  It does not, just ask them. This issue is also covered in past blogs on our site at www.thenegotiatedsolution.com   A realtor can only help you sell the house. They are not responsible for you and they cannot give you legal, tax, credit or personal liability advice.  Many attorneys that do not have experience mitigating property issues in the current environment are in the same boat. They mean well and will bill you hourly but they should not be representing you.  We take care of the whole equation as expert negotiators with lending recovery experience, licensed attorneys, and a licensed real estate broker on our team. We are also qualified to provide Tax and Liability advice in house.  Beware and ask questions.

 

 

Avoid foreclosure with a plan and a properly executed Real Estate Short Sale from a competent team that can offer you a comprehensive solution with a stellar track record of success.  Don’t settle for a paper pusher or a realtor that says “No Problem, sit tight, we will take care of you”.  Anytime I have heard “No Problem” that means one is coming.

 

Come visit our site, blog, and free video to investigate your options.  The decision you make today will determine where you and your family are with this problem one to two years out.

 

Blogging from the front line of the housing crisis.

 

GHunter,

On Wednesday June 29^th I had the pleasure of a short afternoon break where I turned on CNBC to catch up on the mystery of the markets and all the wonderful news the world has to deliver.  Low and behold what was the first thing I saw?  A man and a woman from Congress talking their talk on the box discussing the process of trying to work out the new financial reform bill.  The Congressman then defiantly stated that Fannie Mae had “NOTHING TO DO” with causing the housing and financial crisis.  Right about then smoke started to steam out of my head.  Can you believe this baloney?

 

For the record lets drill down on Fannie Mae and Freddie Mac with a mortgage insiders view so we can separate the political posturing by the lying idiots in Congress from the facts.  Both of these institutions were in fact publically traded companies.  They were considered Blue Chips with a 2 billion dollar credit line and a “quasi” government guarantee.  They had a government guarantee alright.  The government i.e. the master IDIOT Bernard Frank commanded that Fannie and Freddie make non prudent loans to people that couldn’t qualify for loans.  Barney boy went on the record on Fox News a few years back with this quote “we are going to roll the dice with Fannie Mae to expand home ownership in America”.  He sure did a good job.  Of course now he claims that no one should blame him for the housing crisis.  I agree completely.  We put everybody in homes with bogus mortgages they didn’t qualify for under the false pretense of integrity and goodwill provided by the blue chip stalwarts of Fannie and Freddie and now they are completely insolvent and we have a total bust.

 

Let’s drill down a bit more.  Fannie and Freddie both had DU & LP.  There were automated underwriting modules whereby the loan company would put in perspective borrower employment and income criteria to obtain a loan decision.  Nobody new who controlled the infamous “BLACK BOX” the programmed the variables of the great decision making module.  It was bigger than the scam “The Wizard of Oz” had going. No one dared to question the dispositions when the great automated underwriting modules spit out approvals.  No one except me and normal Americans that know to cross the four lane highway at the overpass.

 

If you had a job and good credit you were pretty much approved. How do you justify approvals based on credit and loan to value with a 67% debt to income ratio?  Don’t question the black box was the mantra.  It’s approved so you look the other way and fund the loan.  Who cared?  Nobody.  The question now is who was the secret programmer to the Black Box?  Was it the great Franklin Raines homeboy extraordinaire CEO of Fannie that lost 11 billion but still got a huge severance because he was a minority or was it Barney and Club? 

 

You make the call but all I see is lies and deceit.  Fannie did not cause the financial crisis in housing.  I completely agree.  It wasn’t the gun that killed the innocent victim.  It was the bullet that came out of the gun.  Fannie and Freddie were the silver bullet enablers that helped devastate the housing market.  They were not the only culprits but both of these agencies were the front runners for years that lead the secondary mortgage guidelines.  As the agencies got more aggressive so went the secondary players. 

 

Where are we now?  Millions of Americans that wanted a home are stuck in a down draft of deflation completely underwater on their homes.  Now the government and all the pundants want them to do the right thing.  My question to you given how crooked the system and the players are is what is the right thing?  Should you go broke or save your family with a Short Sale thereby putting the hot proverbial poker up the rear-end of the government and all the greedy investors that are stuck holding your underwater mortgage. HMMMMM…..  I say the latter.  If you are not given a level playing field in my opinion it’s live by the sword and die by the sword.  Don’t let the lies and pressure of moral character sabatosh your finances and overall well being. 

 

Come see me at www.thenegotiatedsolution.com for the solution. Don’t go broke in the process. If you are underwater on your home and angry that you are stuck in this mess it may be time to fight.  Don’t listen to the lies and the bogus government posturing supported by the failed programs.  Loan Modifications are lies and a means of the lenders shaking you down.  Stop & Avoid Foreclosure and get out of this mess with a Short Sale.  The lenders are preying upon the people in their efforts to try to maximize recovery. Nobody is looking after your interests.  You owe them all the money and they own you until they don’t.  When you are looking to save your family and general well being ask your lender and your Congressman for respect and help with your house that is severely underwater.  When you get the answer make the determination if you need an accountant of a team of hired guns?  Sleep well. 

 

Blogging from the front line of the housing crisis.

 

GHunter

Many people owe more on their homes than they are currently worth before estimated selling expenses.  The common theme is that maybe the market will radically recover and everything will be alright.  Sounds great to me but let’s look at a couple statistics and see if we can gain some more clarity on the situation.

 

The Federal Reserve has been buying MBS pools or otherwise termed Mortgage Backed Securities in the open market over the past year.  By the end of March the Fed will be on target to own 1.25 Trillion in MBS pools on their balance sheet.  This program is targeted to end with the Fed no longer making such purchases on March 31^st 2010.  According to PIMCO Alliance, The Monster Bond Manager of the decade, the Fed’s holding represent 25% of the total MBS market.  The objective of the Feds MBS program was to stabilize the market and pull the spreads in so rates would stay low and support the housing market.  This program has been successful but one must also understand that this has manipulated a market that was designed to be free floating.  The natural forces of supply and demand must reassert themselves.   With the absence of the Fed as a major buyer of MBS securities this will happen at some point and rates for home mortgages to the consumer will likely rise. 

 

An additional point to focus on will be not just the current lot of MBS securities on the Feds balance sheet but what will happen when the fed actually decides to dispose of them to natural buyers in the MBS market.  This will again point to supply and demand and rates will be reflected accordingly. The MBS program has been a successful program for the government that was administered by the Federal Reserve.

 

Let’s drill down on rates and how they affect your house price.  Supply is the amount of housing inventory in the market. This figure also includes the so called “shadow inventory” that I will touch on in a moment.  Demand encompasses prospective buyers of the inventory that can actually obtain financing or a means of buying the properties.  As the back drop in mortgage rates lose the artificial support from the Fed MBS program, the Federal tax incentives due to expire in April, and other housing programs, what happens?  Rates go up and less of the demand pool of perspective buyers can afford houses.  Let’s hold this thought for a minute to talk more about the inventory issue.

 

The inventory issue is also being artificially manipulated in the current environment.  It is estimated that currently there are 645,800 housing units nationwide at some point in the default process with lenders.  This figure has recently been rising up 4.6% since January and is expected to approach 733,000 units by April.  Lenders have been holding back the flow of these properties on the market so as not to over load and already fragile market.  At some point the flood gates will have to open.  Lenders will need to either recover these properties through Foreclosure or cooperate with Short Sales Solutions.  Statistically the figure of this so called “Shadow Inventory” represents 1 in 5 homes nationally.  Put a different way, of the 8 million people currently late on their mortgages or foreclosure, this represents 15% of all people with mortgages.  Ask yourself this question.  How many people own homes that are significantly underwater on a debt to equity basis that are not delinquent and reflected in the current statistics?  Now you see the direction of home prices with a bit more clarity.

 

Now I don’t know how accurate these statistics are but I do know that the trend does not support a vibrant housing market that will suddenly reverse and put the masses of people significantly underwater on their homes back to even.  Having said this, where is your home value going.  The answer is definitively “DOWN”.

 

Let’s look at the government radar screen and see how well they play the game.  The government’s job is to promote stability and preach that all is well.  Remember the movie “Animal House” when the town was being wrecked by the frat boys and the one dressed as a policeman said “be calm, all is well”.  Excuse the humor but that is where I see the governments roll at this time. 

 

The Obama Administration needs to pump the people with hope and the prophecy of better times ahead.  They are doing a great job.  There is talk of a sixth government program to once again promote Short Sale cooperation among lenders.  This is something I am going to blog on separately that was noted in the Washington Post last week.  My question to you is why didn’t the first five programs work?  They were all failure to a large degree but that is ok.  They were failures for you but they were big winners for your government.  All the government has to do is drag out the problem on the linear time line so the markets can recover.  Whatever it takes to stretch this crisis out over the next several years thereby allowing the banks to mitigate their losses the people controlling the levers win.  Who loses?

 

The people that lose are the ones that owe the debt to the lenders and have not taken up a solution to their own problem.  You need to be wary of the Loan Modification process.  Lenders are targeting people in this process.  It’s a great means of legal recovery for the lenders.  They are taking people to the cleaners.  It’s also great for the government because it drags out the problem so all the people in trouble don’t impact the fragile real estate market all at once. 

 

With all of this in mind let me give you a real life sample of reality.  Example:  Yes you recently spoke with me as a customer and you told me about your lovely townhouse in Vienna Virginia.  You owe 800K to the lenders but the home is only worth 700K.  In addition your failed loan modification has you still paying $6,000 per month to the lender but yet your neighbor is renting the unit literally next door for $2,850 per month.  Who is stuck here?  This customer was actually a repeat customer where we successfully negotiated three separate investment property Short Sales since the first quarter of 2008.  Over 1 million dollars was forgiven with no further recourse and that was terrific but the customer never thought they would be in this position with their primary residence.  Additionally the customer thought things would get better.  Where are you today?  The advice in 2009 was for this customer to Short Sale the townhouse and move across the street and rent.  This is what they again face today.  It’s clearly a personal choice and we don’t ever want to talk someone out of their house.  However, $6,000 in monthly payments is killing this family so a choice now has to be made or they will be foreclosed on in 2010

 

If you question what I am saying please don’t take my word for it.  Do some research into all the failed government programs since the summer of 2007.  Also ask yourself why we are going on program number six.  What are you going to be thinking when we are trumping up how great program number eleven is going to be?  This is hard love to say the least.  Your house value is going to continue to decline and the government is artificially supporting the real estate market so BEWARE.

 

What you should be doing right now is assessing your personal situation and weighing your options.  Go to our site at www.thenegotiatedsolution.com and sign up for our free video to investigate the Real Estate Short Sale.  If you are looking for help we are here to serve. We are not “Paper Pushers”.  We are two Warlocks driven by Passion and a small Band of Brothers working to help the family unit get the most out of a Short Sale and keep it Fair.  We are Aggressive and at times Reckless, but we have an awesome team that represents you.  Address your problem sooner rather than later.  Doing nothing is not a solution.  When in doubt rage against the machine!

 

Blogging from the front line of the housing crisis.

 

GHunter

What a great question.  Recently a lender pushed a distressed homeowner a bit too far and it appears the negotiations strayed off course.  At first glance it appears a homeowner was having problems with his lender and related problems with the taxing authority that was also jeopardizing his business.  It also appears that the lender was using the taxing authority issue to further leverage their position.  At the end of the day the homeowner couldn’t take anymore, so after he failed trying to constructively work through the issues regarding his home with his lender, he destructively solved the issue quite contently with a bulldozer.  The headline should have been “Homeowner Round 3 delivers astounding TKO to lender”

 

Here are the links:

 

http://www.myfoxla.com/dpps/news/dpgoh-man-bulldozes-home-to-send-bank-message-fc-20100222_6196364

 

video:

http://www.youtube.com/watch?v=R2_5y79gOaM&feature=player_embedded

<http://www.youtube.com/watch?v=R2_5y79gOaM&feature=player_embedded>

 

 

Wow!  What would Thomas Jefferson have made of this?  Wasn’t he one of our founding fathers that help write our Constitution?  After all, our country is built on freedom and the freewill of men.  This is a great moment if you are in tune with what is really going on between lenders and homeowners in the midst of this housing crisis.  Lenders in many cases are preying on homeowners and pushing them to limits that can cause them to break.  I don’t want to get into all the negatives we have seen but I do want to shout out to the lenders the message of this incident.

 

It’s all about “Respect”.  If you come into the equation and forget the primary premise of your business model you put yourself at extreme risk.  What is immediately factored into a lenders business model?  The model assumes that the business will be conducted in a fair and equitable manner.  The model incorporates risk but does not provide allowances for extreme risk that is provoked.  This is what we have here with the homeowner taking matters into his own hands and leveling the house.

 

The homeowner tried constructively to negotiate and even provide a solution for the property in the form of a short sale with a real buyer for his home.  The lender took the position that they held all the cards and demanded that the homeowner conform to their demands.  The lender clearly pushed the homeowner too far.  When the homeowner threatened to level the house that should have been a clear indication that they needed to adjust their tactics and regroup. This could have been avoided without question.  The lender was ignorant and they forgot about respect.

 

Trust me from experience on this one.  If you’re a lender and you lend $100 with the expectation of gaining 5-6 dollars in interest each year on your principle, with a couple discount points up front and a targeted net interest margin, you have not factored in the bulldozer effect.  There are enough errors and normal losses running a lending operation that the last thing you want is to push a borrower to rent a bulldozer and make good on such a threat.

 

If you’re a lender reading this we have to be fair and ask another question.  Are the homeowners solely to blame for the housing crisis?  If you think it was just the fault of the homeowners you weren’t seeing what I was seeing first hand.  Let’s face it, the lenders and the Pigs on Wall Street made a killing as real estate ran up.  They helped create a monster that with the aid of the current deflation is trapping homeowners significantly underwater with oceans of legacy debt from a cycle that ran out of control. Now the lenders want to recover as much money as they can on the way down.  They clearly do not care about the homeowners in many instances.  They just want to maximize recovery.  They have forgotten about the customer relationship and respect.  Do you want further proof of this?  The government just announced a significant extension to yet another housing program. The government is artificially supporting the housing market. The longer we can drag out the problem the easier it will be for the lenders to recover and for the overall economy to also bounce back.  The thing that is most unfortunate is that in the interim the lenders are preying on distressed homeowners with a multitude of practices.  The government has saved the free markets and the financial system.  The lenders have recapitalized with TARP and private capital.  It’s now game on for maximum recovery. Do you think Obama is worried about the homeowners or more about where he is going to get his next cheese burger and fries?

 

This is why the lender pushed the homeowner in the bulldozer example when they rejected his 170K contract to solve his housing problem.  They got greedy and took the position that he must conform to their wishes.  This action, although not openly condoned by the masses, places this homeowner in the hero category for many that suffer in despair with failed loan modifications etc.

 

What are the lenders saying to prevent such action?  They say things, and I quote, like this: “I hear that they are criminally prosecuting people that do such things”.  Now I thought that the guy that bulldozed his house was a bit extreme but that is not what got me irritated.  The quote from the lender is what pissed me off.  I have a client issue with a lender that occurred recently and it came down to an unfair incident and the question of what a particular client may be capable of if we don’t constructively work through the issues.  A key representative at the lender made that exact quote.  To me this is cowardly.  This is a way to intimidate conformance when you as the lender have forgotten how to respect the borrowers and mitigate through a recovery cycle in real estate.  Why not just scare the people so we can take their money, kick them out, blame them for the housing crisis, and get the collateral back in pristine condition. 

 

Sorry fellows but that is not the way it works.  Here is how I see it with the bulldozer or the sledge hammer or flooding the house etc.  As long as you do not light the house on fire or do anything that would endanger the welfare of others, in my opinion, there is no criminality.  It’s all civil baby. That means lender you better treat the borrowers with respect and avoid such extreme outcomes or you are going to be spending legal dollars with your henchmen and hit the wall with zero recovery when they laugh their way to the protection of bankruptcy.

 

Am I as an ex-lender being fair to the poor lenders?  Your listening to a guy who created and then ran a forty state wholesale mortgage division.  It wasn’t about delivering the loans to Wall Street and getting paid with no strings attached.  We had all kinds of problems.  I remember one where a guy openly admitted to mortgage fraud when we confronted him through our servicing department.  He knew he was at risk depending on how our bank wanted to pursue the issue.  He arranged a family member to buy the property and our servicing department told him to get lost.  He found his way back to me with a solution that mitigated the majority of the loss we were forecasting so I gave it the green light.  I didn’t want to be the boss man and disrespect a guy who was trying to do the right thing.  It’s all about cooperation and respect.  In the end the lender loses much less and we move on as a business.  I just don’t understand where respect got lost in the equation, but it has.

 

How would I have handled the bulldozer situation after negotiations had failed?  First for the record, I do want to say that I love Caterpillar.  I personally would have rented a much bigger Kitty Cat and had a news crew on the schedule.  I would have also not told the lender.  If I were to a point where they were taking my house, putting my belongings on the curb, and tying up my livelihood with my business, I would have gone out of my way to be more polite.  I would have gone to the local Hallmark store and gotten a nice card for the bank president.  I would have then taken a picture of the house after I flattened it with the mighty American made Caterpillar and then scripted the following note for personal delivery:

 

Dear Mr. Bank President,

 

I have tried to do my best to constructively solve the situation that I am currently immersed in and I have failed.  I wish I could have done more to solve this problem in a mutually beneficial manner and conform to your wishes, but respectfully your persistence and demands were more than I was able to handle.  I am now also faced with losing my livelihood.  As a last request I am asking for a little compassion in the form of a small advance.  I need enough money to buy a couple gallons of Elmers Glue.  Since you wouldn’t work with me and I am losing my business too I thought it would be a good idea if I focused my ambition on a new trade.  I would like to use this situation and the time you have graciously granted me as a positive opportunity to become a puzzle master.  I have enclosed a picture of my house that I just bulldozed so you can encourage me.  After you made it clear you were large, in charge, and completely inflexible with the negotiations I decided I had no other choice but to conform to your demands.  Between now and the time you foreclose on the property I am going to work diligently on putting each splinter of the house back together with the glue.  I want you to know that I am a novice at this puzzle master stuff but I thought it would make your day.  Enjoy the picture.  Sincerely, Your Loyal Customer.

 

With all the housing issues up in the air, who is keeping an eye on the homeowner to see if they are being treated fairly?  Nobody, the government will slap the lenders on the hand just like they did with the failed 75 billion dollar loan modification program. Three percent of the homeowners or 30,000 out of a projected one million applicants got a short term to intermediate term loan modification fix.  Oh well, they got a slap on the hand in the media and it’s on to another program we are going to come up with.  Burry it and pump out the false hope has been the strategy.  What should you do?  Educate yourself for free at www.thenegotiatedsolution.com on a Real Estate Short Sale Solution.  It’s free and if nothing else you need to know your options and understand what is going on so you don’t get caught up with the crooks or beat down by the lenders.  Good luck and if all else fails please humor me and remember to rent the biggest bulldozer.

 

GHunter

 

Blogging from the front line of the housing crisis.

It’s time to blog.  You don’t have to go far for inspiration.  The most recent issue of Forbes Magazine on page 30 dated May 11^th, 2009 says it all.

 

Do you remember the movie Moses with Charleston Heston?  Of course you do.  It was awesome and it was so long it had to have an intermission in the 1970’s when I first saw it.

 

Moses called on to Ramsey and said “Let my people go”.  Then he quietly communicated to Ramsey that he was going to kick his bald skinning white butt out of that fancy pharos suit if he didn’t comply.  That is precisely why Ramsey let Moses go and he later parted the Red Sea and all the rest of the story.  Ramsey was no fool because Moses was a force to be reckoned with.  Moses’s people made it across the sea and are clearly a tough and very respectable group when it comes to capitalism and the pursue of the almighty dollar. 

 

Yes I am having some fun with this.  I need you to look at the family picture in Forbes Magazine that is backed by the Stanford University endowment.  They buy loans from banks and the FDIC on the cheap and come after deadbeat homeowners for the money.  I am going to quote you two sections of the article as follows to emphasize my point:  Article direct link:

 

http://www.forbes.com/forbes/2009/0511/030-fdic-foreclosure-stanford-collection-agent.html

 

Quote #1 from Forbes that I recommend each and every one of you visit Forbes and read:

 

{They make at least three attempts to negotiate before commencing any litigation.  But there are limits.  He will, he says, throw an old lady out of her house if she is missing payments while driving a new Ferrari. He has assembled a national army of cheap lawyers, for which he is now paying $300,000 per month in fees.  “Our first line is to try to work something out”, Says James Hrebenar. “if they do not pay, and we have to foreclose, we do what we have to do.”}

 

Quote #2

 

{Then there is the $49,000 loan made by a Bank of America unit to a Great Neck, NY jeweler who gave his personal guarantee.  “I offered him $12,000, that is all my clients can afford”, says the jewelers lawyer, whose offer is under consideration.  “They’re unreasonable-in simple terms, ballbusters”.

 

Now what is the point of all this nonsense?  Yes they are in fact some of Moses people. They are blood thirsty capitalists (“ball busters”) and they are buying the rights to the debt that unsuspecting homeowners like you can not pay.  There are some very strong incentives to squeeze blood from a stone when you are a capitalist.  Buy the paper for 50 cents and recover 67 cents with you comfortably eating breakfast at Denny’s, or recover 72 cents with you eating spam and sleeping on the curb.  How is the recovery going to work out for you?

 

Prevent this and avoid having to deal with capitalists like the ones depicted in the Forbes article by signing on to The Real Estate Short Sale.  These people don’t look very intimidating, but they own the rights to your unpaid debt, and you are a sissy and they will scare you with their “cheap” attorneys to capitulate more often then not.  What do I say?  I say get out in front of them and provide your lenders a solution in the form of a well planned short sale.  Avoid foreclosure and bleed the lenders like the greedy pigs they are with a solution that they cannot afford to pass up.  This is prevention in the purest form.

 

To be fair I must disclose that a short sale solution can be a lengthy and difficult process in the current environment and I have a slight advantage with my team.  We posture as ex-lenders and licensed attorneys thereby allowing us to convincingly show the lenders the staircase to “Lender Hell” if necessary, and illustrate to them the incentives of cooperation.  Sounds so eloquent doesn’t it?  Sometimes it’s bees with honey and other times its cooperation or the crowbar. 

 

My last point that I always try to make to my clients is to remember the past.  In the early 1990’s during the Savings & Loan Crisis many banks failed and there was a significant amount of debt owed floating around.  The smart people negotiated and the stupid people fled in denial only to have to face one of Moses people.

 

Go to Forbes and read this article and look at the people.  Again, they are not intimidating.  They are capitalists and they are looking for you if you look at all like an opportunity.  I say good for them.  If you are stupid enough not to take advantage of a short sale in this environment or too lazy not to investigate the subject at www.thenegotiatedsolution.com then you may deserve what you get (Free Trial still offered).

 

Why am I so harsh with this last statement?  I am purposely being harsh because people without a plan that have a family to care for can become destitute.  I took on a new client last week in this situation and I am not happy about it.  This one is a freebie and this family is really in trouble.  If this gentleman would have listened to my advice, that was completely free six months ago, he wouldn’t be where he is today.  This is upsetting to me so I am here to light a fire under all those willing to listen.

 

Protect your family, yourself, your emotional well being and don’t get in the crosshairs of Moses or any of his buddies.

 

Blogging from the front line of the housing crisis.

 

GHunter.

This is a nagging subject that simply will not go away.  Since yesterday afternoon I have had three separate realtors force horror stories on me about other realtors that allegedly do not know what they are doing with Short Sales.  You have to listen so I often find comedy along the way as the stories unfold.

 

Early this afternoon I was speaking with a very aggressive young realtor in his twenties.  I have personally worked with this individual very successfully over the past year.  We got to talking and somehow he got on an open rant about the incompetence of the old guard of realtors.  I said with humor, “The Blowhards, I mean Dinosaurs”, yes exactly he replied.  He told me he was sick of the bossy old timers proclaiming they know what they are doing and watching them walk unsuspecting homeowners to foreclosure.  Now I started to tune in to what he was saying.  He went on to tell me how they simply don’t know how to price the properties and they just want to put the listings in the MLS and get paid.  I have heard this many times before and witnessed it myself.  He told me he was a nice guy the first year or so he was in the business but that now he was out for blood.  His illustration was that he would get up for work and put his hockey suit on and plow through the realtors.  I related to his “my way or the highway attitude”.  He is sick of the incompetence, excuses and general lack of care for the business.  As we shared stories just from yesterday, it once again became clear that his point was that the old times either needed to get up to speed to properly represent the distressed homeowners, or they needed to take a back seat and let the twenty to forty year old bull dogs handle the short sales.

 

It’s comical that with each of these calls regarding stories of discontent are directed at realtors by another realtor.  Recently I have had realtors on our full service cases that have failed to follow our protocol and we buzzed them accordingly.  They hate to have “big brother” checking to be sure they do their job.  After all pricing a property is not complete by just dumping a listing in the MLS.  There is a two part process that we require as part of our program.  There is also a pricing model and means of keeping the property on the market that reflects the best interest of the seller.  Not all realtors like new things.  Many are control freaks and think they know everything.  This is true even as they fail clients and walk them to foreclosure. You would think they would want to keep an open mind and learn so they can earn referrals from helping people avoid foreclosure.

 

Recently there has been a flurry of realtors that have signed up for a class that apparently  issues them a certification as a distressed property expert.  I have had at least ten of them tell me in the last week that the only reason they took the class was for the certification.  I told one of them I thought this was completely ridicules when he proposed completely ratifying and locking up one of our listings with a low ball contract.  He got upset.  In the end he was more upset with himself when I threw it in his face that he was an expert after the course and where the hell was the clue telling him how to keep the property on the market. Oh yeah, I gave that to him and it didn’t come from the idiot handbook associated with his new certification that will gather dust in the glove compartment.  He listened and we are ok so I am not going to imply that he is just another idiot trying to make a buck selling real estate in Florida.   

 

At the end of the day I have to listen to realtors that proclaim they are the experts and that all the others are idiots.  That was a funny excerpt conversational rant from a guy in his late thirties yesterday morning.  He was the expert and all the other realtors were just idiots.  The stories never stop.  I would like everyone to be aware that these are unprecedented times in real estate and the realtors have lost control with short sales.  Realtors in general are more apt to unintentionally walk you to foreclosure than outline a real plan for you and your family.  You must educate yourself and be careful.  I am telling you point blank that realtors, and hundreds of them, are proclaiming that the real estate industry is rife with incompetence.  Listen to me so you have the time to benefit from a short sale and not have your property inadvertently sit on the market while the window of opportunity closes.

 

This is precisely why we monitor all the realtors assigned to our client’s properties.  We keep tabs on the pricing, activity, and follow up.  If somebody is a slacking off it doesn’t mean we move to get them replaced.  It means we light a fire under them so we can help the homeowner win.  Avoiding Foreclosure with successful Short Sales is a team effort. Until the realtors wise up they are creating liability for themselves and wasting too much time calling each other out on the basis of expertise.  

 

Soon we will be adding a new strategy supplement to the Resources Section of our site titled Realtor Risk Factors.  The problem is getting so bad that our attorneys have decided that it is time to elaborate on the risk associated with the distressed homeowner’s failure, and their ultimate financial demise.  Right now the realtors think they are insulated and that it’s not their problem if representation does not work out.  On an individual case basis they may be correct for the time being.  However, after listening and blogging on the unfortunate consequences of failure and the part the realtors have played over the past year, one may start to see of vision of the next big opportunity.  Maybe it will be a class action suit against the realtors.  I say this will all seriousness.  The realtors and their brokers think they are insulated.  What they do not know is that even their Errors & Emissions Policies do not cover them representing the distressed homeowners in Short Sale negotiations.  Wake up call.  Let’s call it the fine print.  Given what is going on this is a big mess just waiting to happen.  We will be adding the risk factor strategy supplement to our Premium Course Upgrade very soon.

 

In the meantime, the Dinosaurs roam free and the stories will continue.  It is up to you if you are a distressed homeowner dealing with a decision in this awful housing crisis to not count on the realtor for everything.  Understand the risk that the Dinosaurs may only be good at listing your property but not much else.  If you look at their picture and it looks like in was taken in 1990 you may want to ask what qualifies them to help you short sale your property.  I would also ask to speak with happy customers where they were directly involved and successfully completed a short sale.  Happy customers are very key.  I have lots of happy customers.  When you ask for them and the realtor attempts to ignore you, with a short sale, you better show them the door or you may be a risk.  A Short Sale to Stop and/or Avoid Foreclosure is not a rookie’s or an old timer’s game.   You need a plan.  Please join our two hour video free trail at www.thenegotiatedsolution.com . 

 

Blogging from the front line of the housing crisis.

 

GHunter

I have read article upon article in major publications and I listen to the people get advice from the pundits on CNBC.  Why are so many people so lost and distraught over the housing crisis?  I can tell you that I probably don’t need to mention that there is an awful lot of misinformation on potential solutions circling and a lot of people are very confused.

 

Here is a link to a recent Washington Post article titled “House Trap” http://www.washingtonpost.com/wp-dyn/content/article/2009/03/07/AR2009030700172.html

 

This article is representative to exactly what I am talking about.  The article focuses on people that are underwater on their homes.  Many people are finding out that they simply do not qualify for any government programs.  Even the folks with FNMA loans that exceed 105% Loan to Value may find they are also stuck.  People are facing the decision of default and subsequent foreclosure.  Others in the article are listed as going to bankruptcy as a solution.  Lastly, professed experts are suggesting people hoard cash so they can pay down the loans if they go the rout of a short sale. Why is the real solution hardly ever represented or even mentioned?  I don’t have the exact answer but I am somewhat sickened that so many people are prey to the housing crisis.  Families are being hurt and so many pundits and Wharton Professors and the likes can’t provide credible guidance towards a real solution.  The answer is that this is your problem and, if you are in trouble, nobody really cares a rat’s tail about you.  What is the incentive for them to take on your troubles?  Frankly there is none.

 

Let’s look at the details of the newest government programs and find the real positive that can help you if you are in trouble with a property.  The general program highlights were touched on in a recent blog dated March 4^th.  Now that many of the details are out you should recognize that it is time to take action and simply review your credible options.  Here are your extreme options:

 

1)      Do nothing. Continue to make what payments you can on the property and eventually go into default and suffer the ramifications of a foreclosure.  I term the time surrounding the inaction to the date of foreclosure as the “waffling period”.  This is the period where you waffle and dissipate assets with no real means of a solution.

2)      Pay everything to make your lender whole.  This is almost never financially feasible but it needs to be noted as an option.  If you want to empty out every assets including your retirement and your children’s college fund to make the lender whole regardless of the selling price and associated expenses you have that option.  This is just plain stupid but it is an option for those caught in the good moral character and willing to sacrifice all for their lender.

 

Both of these options are at extreme ends of the spectrum and make little sense for anyone.

 

What are the more realistic options?

 

1)      Bankruptcy.  Be a quitter and bail into the refuge of bankruptcy.  There is a significant price for this and we don’t recommend it but you can certainly take this path.  I can’t stop you from jumping off a tall building either so it’s all about what makes sense to you and personal choice.  Attorneys will take your money to help you do this just about every day of the week.

2)      Government program.  Seek the assistance of a governmental program to help you stay in your home.  Many of you will find out that based on your gainful employment and income that you simply do not qualify for any program.  It will soon become clear to you that you are ultimately responsible for the adverse financial effects of being stuck upside down with a property. 

3)      Loan modification.  See what you can accomplish with a loan modification.  You will save a couple hundred bucks per month that will be tacked onto the back of your mortgage note and you will find out where you stand with your lender.  You will not be able to stay in your home and have all the debt forgiven by your lender.  It is best I tell you this so you don’t sweat sleepless nights over the details.  There is a very high probability that you will not be satisfied with the results of this option. A big problem here is you need to have a job to qualify in the majority of cases. 

4)      Deed in Lieu.  You can hand the keys over to your lender and dump your problem in their lap.  This again is something we do not recommend given it has many of the same ramifications of a foreclosure.

5)      Short Sale. This is the only option where you can achieve a fair and level playing field with your lender and obtain significant forgiven mortgage debt.  Think of it like rebooting your computer when it is completely stuck.  When it comes back on you get a fresh start.  I am not going to go into too much detail because I have been promoting this on the blog since September and the course is on our site a www.thenegotiatedsolution.com .  Investigate when you have the time for more details.

 

The real positive is that most of the details on the governmental programs since the Spring of 2008 are out in the open. We now have much more clarity.  Now is the time for you to evaluate a real solution to your problem by a simple process of elimination.  Stop with the denial and the false hope. If you have a good job, but you have significant paper losses on real estate, you are not going to get a free ride from the government.  My recommendation is for you to sit with your family and pass your own legislation to the housing crisis today.  Name it “My Personal Financial Freedom Act”.  From the great halls of your kitchen you can objectively determine where you are and where your collective objectives lie.  If you are really having difficulty and want to stay in your current home at all costs the most realistic options are government program or loan modifications.  I am not endorsing these options nor do I think you will be happy with them but this is where to start if you must. If you otherwise like to outsmart your lender and mitigate the majority of this housing crisis from your credit and finances for years to come, by providing your lender a solution with real substance, then you need to follow me down the free market road of “The Real Estate Short Sale”.  Stop foreclosure and/or Avoid Foreclosure all together with a well planned short sale.

 

Denial and good moral character are ok as long as your eventually address the problem and don’t allow it to completely ruin you financially.  Take your time if you so choose but investigate credible options towards a solution or conversely pay the missed cost of opportunity.    The blog is free and we have a No Risk 7 Day Free Trial for The Negotiated Solution.  Its free so don’t be a fool.  The papers and the pundits are not helping the people. Legislate today from your kitchen and win!

 

Blogging from the front line of the housing crisis.

 

GHunter

On Tuesday evening (2-3-09) I caught an episode of Carmen On The Money on CNBC.  Carmen runs a great show and there is no doubt this lady is a class act with her heart and soul in the right place.  She clearly wants to help and inform people every step of the way.  I like her very much!

 

The first segment of the Tuesday show touched on Real Estate Short Sales.  There were three experts on the bench to assist Carmen with the call in line.  One was the credit guy that is frequently on the show, the second was a financial manager, and the third was a highly ranked financial planner with special certificates of education and accomplishment.  All three experts are accomplished people, and I don’t want to disrespect them, but we are talking about Short Sales and people are at risk.

 

One of the callers was a lady from Florida name Cathy.  She is 52 years old and she has already lost one half of the value of her home and most of her saving trying to maintain the mortgage payments.  She owes significantly more to her lenders then her Florida home is worth.  Most of the homes on her street are in foreclosure or have already been forecloses.  In addition, she has lost her job and there are no jobs in her state.  She is going to have to move out of state to find employment.  The only real asset Cathy had left was her retirement account with just over 125K.  The question to Carmen and the bench was “What should I do about the house and the mortgage”.  How would you answer this and what would you do?

 

The collective reasoning from the bench was a suggestive act of futility.  They recommended that Cathy do whatever she could to save her credit rating.   With no other resources that meant Cathy should sell the house and make up the difference by emptying out her retirement account.  The emphasis was on saving the credit profile.  Is this the right advice for Cathy?  Is this the right advice for you?

 

Absolutely not!  This is blatantly the WRONG advice for Cathy.  Carmen, shame on you!  We can teach you a credit strategy.  Credit is a journey and you will recover.  However, once the retirement money is gone, it’s gone, and you have no last resort funds.  To put things into more perspective, the lenders can’t even get at your retirement money through bankruptcy.  Why would you give it to them voluntarily.  The lenders will eat the residual mortgage debt with a short sale.  Don’t think for one moment if you are in Cathy’s situation that the advice from the show is your only option.  Wrong!

 

It’s ok.  Times are very different.  Carmen and the bench do not completely understand short sales.  The market doesn’t understand short sales.  We are clearly in the midst of the 100 Year Storm.  Cathy 52 was very resistant to the advice and for good reason.  What should Cathy do?  Follow your heart.  Don’t end up destitute.  A Short Sale with a plan and even a small bit of continuity results in forgiven mortgage debt.  Cathy’s gut was telling her not to let go of the retirement money.  Right On! 

 

The Short Sale is the weapon of choice.  I have a client where we are now completing a third transaction for over a six month period.  The grand total is ….are you ready for this… approx. 950K in forgiven residual mortgage debt.  This does not include unpaid interest that was also forgiven.  What was the cost?  The client had to collectively bring approx. $6,700 dollars to the closing tables across all three transactions in total and sign a $20,000 note.  The third transaction is set to close this month.  Who’s the expert now?   How would you rate a professional baseball player that went 3 for 3?  Are we talking Grand Slam Home Run or just and average player?  This is what we do.  Go to my home page at www.thenegotiatedsolution.com and scroll down to the very bottom and click on the label for “About”.  Read the very last line.  This is my gift to you. 

 

The “Armies Of The Dead” from “Return Of The King” are attacking the lenders nationwide.  The market is in a total state of chaos and you are at risk.  Take my gift, use it wisely, and join the onslaught.  Wield the sword with the bounty of forgiven mortgage debt, dignity, and closure. 

 

Blogging from the front line of the housing crisis and taking no prisoners. 

 

GHunter

The first article is basic but very down to earth so people can understand.  There are many benefits of a short sale as outlined in our blog and program at www.thenegotiatedsolution.com .  On average our clients get between 100K-300K forgiven with no further recourse.  It’s a process to address a complex problem but the Real Estate Short Sale Solution is the only way you can obtain forgiven mortgage debt.  Loan Modifications only move the money around to the back of the mortgage note.  There is no debt forgiveness with modifications. 

 

Here is the first article:

 

http://articles.moneycentral.msn.com/Banking/HomebuyingGuide/UseAShortSaleToEscapeForeclosure.aspx?page=1

 

The second article from the New York Times exposes the risks to people that are primarily seeking help with Loan Modifications.  There are a lot of unscrupulous people that are always looking to prey on the general public.  Our blog at blog.thenegotiatedsolution.com will save you a lot of headaches and help you set realistic expectations with loan modification.

 

Here is the second article:

 

This is a tough article from the New York Times.
http://www.nytimes.com/2009/01/15/us/15mortgage.html?th&emc=th

 

The word for the wise is to be careful and do your homework.  Blogging from the front line of the housing crisis.

 

GHunter

Everybody from the 70’s remembers the 6 Million Dollar Man. He had a bionic arm, leg, eye and ear.  The best part was when he made a bad decision he had a team of experts to put him back together again.  How nice would it be to be the 6 Million Dollar Man in this housing crisis?  There would be no such thing as a bad decision and no lenders would be messing with you.  Let me use this as a segway to reality.

 

I want to tell you a real story from November of the $46,000 Dollar Man.  This is a real man who got himself into big financial trouble with his mortgage lenders.  He has a house that is worth approximately $250,000 less than what he owes to both his lenders.  He has tried to sell the property for the last six months with a local realtor.  His last contract just died and he is in somewhat of a quandary.  Where is his team to rescue him?  Oh, that was Steve Austin from the television program.  This is real life.

 

The young man being depicted in this article has no plan and has spent no time trying to educate himself.  He has spent five complete months attempting to consummate a Real Estate Short Sale with his lenders and his realtor and thus far has failed.  The realtor called us after the last contract died and asked our group to call their client to see if we could help him in any way.  I personally took the call and found the client to be very belligerent, angry and unwilling to invest a dime to help himself. 

 

Why am I calling him the $46,000 Man?  He is not famous or on television.  Actually, the $46,000 is exactly what we would have saved him from the start four months prior to our conversation if he would have reached out for some help.  We would have saved him borrowing 16K from family and credit cards to pay the mortgage that he clearly could not afford.  This is going to wreck him financially if he allows it to continue.  We would have also saved him a $30,000 note that his first trust lender was demanding as part of the solution.  The total adds up to $46,000. 

 

Now it gets better.  When we spoke in November the second contract on his property had just died and his realtor was fed up with him.  The $46,000 Man told me, yes but the lender doesn’t know that the contract has died.  He vowed to continue paying the mortgage and dissipating assets from whatever source he could manage until he completed his short sale.

 

I asked him how much time he had spent worrying and losing sleep over this issue with his mortgage problem.  He aggregated it over many months.  I asked him if he was willing to spent $249.00 and a solid 2.5 hours with a course as a start with the option to upgrade to a full service plan and get credit for the cost of the course.  I also told him the course had a 10 day money back guarantee.  I am sure you can figure out his answer.

 

I don’t want to talk up my own book, but I do want to give everyone an prime example of a person that has no plan and is really doing harm to himself.  The realtor is eventually going to drop him and he will find himself deeper in debt.  The message here is to “Work Smart and Not Hard”.  Educate yourself with Real Estate Short Sales.  The merit can be found on our blog at www.thenegotiatedsolution.com  Don’t be belligerent and be a fool.  Your realtor is there to help you but they don’t necessarily have the skill set beyond selling the property and they are not responsible for your financial welfare.  In addition, they didn’t sign up to be your physiologist either.  You are responsible for your own plan and it is your housing/mortgage problem.

 

Unlike the 6 Million Dollar Man from the television show, the $46,000 Man is going to end up wrecking himself financially and there will be no team of experts to put him back on the map if he stays on his current course.

 

The short sale, done properly, with a financial blueprint and a proper plan that includes credit strategy, the short sale, and loss mitigation, is the only free market solution where you can effectively level the playing field with your lenders and truly win.  The government programs, the loan modifications, and all the other hype sound great but it will not yield the same results.

 

Blogging from the front line of the housing crisis.

 

GHunter