Fox News Article

http://www.myfoxdc.com/dpp/news/special_report/fox-5-investigates-short-sales-stick-homeowners-with-debt-111711

Many people are blindly hiring realtors or attorneys that are simply not qualified to offer them proper guidance or a comprehensive solution to their mortgage problem. This article clearly outlines the risks associated with not hiring a team that can mitigate the debt. The core to the solution is your representation must understand the recovery side of lending and have the experience to complete the short sale properly so all of the benefit can inure to the client. It does not make sense to close on a short sale transaction and not meet all the objectives that are important to the client. Having clients end up in bankruptcy after a short sale as a result of the lender coming after them is a sign of misguided and incompetent representation. This makes no sense and unfortunately if you do not do it properly and have all the legacy issues wrapped up before closing you cannot go back and change the terms. As you can see, all of the people that ended up in bankruptcy in this article have learned a valuable lesson and this could have all been prevented.

It bothers me that that article notes that one of the realtors stated that she informed the homeowners of the risk If the homeowners do not understand the business it’s frankly like trying to teach your dog algebra. All they hear is bla bla bla. The realtor earned a commission when the contract settled but the clients were sacrificed. This is bad business and any realtor that does not care to protect their client by getting a qualified team involved is doing their client a disservice. If realtors are expecting to perpetuate their business on the basis of happy customers and referrals they must keep their clients out of bankruptcy. If you need expert help to do this then put together a team. Please don’t try it alone and subject your clients to what has occurred in this Fox article.

I don’t want to come across as though I am picking on realtors. That would not be fair. I want to share one other shocking example of a case gone bad with a lousy attorney. I just found out today that a client of ours from 2010 went out and hired a bankruptcy attorney to help him with his short sale. We previously had successfully completed an out of state investor short sale for this client. He didn’t come back to us because we represented his partner’s legal connection and he and his partner were at odds with one another over financial dealings. Instead he hired a bankruptcy attorney that promised him the world. The attorney apparently said he didn’t need to make payments an they he would be able to stay in the property another year etc. The property was a 900K property that he owned 1.4 million on with no way out. A short sale with proper debt mitigation would have solved this individual’s problem and allowed him to move on with no legacy risk. Unfortunately the attorney that represented him had limited knowledge of the lender recovery process and did not make proper filing in time. The end result is a client that paid money to an attorney and finds himself in a state of shock that his lender just foreclosed on his home.

I just listened to his sad story this morning. He wishes he would have come back to us. Give me a break! If you do not complete the short sale properly your only solution will be bankruptcy. He acknowledged that we warned him of this but though his was safe. Unfortunately he admits he was dead wrong. There are a lot of unqualified attorneys that will take your money and tell you “No Problem”. When you hear this you should get another opinion. This particular client will now be forced to seek bankruptcy protection. I want you to know that this could have all been avoided. If you are interested in a loan modification that can keep you in your home or a short sale solution, come visit our site a www.thenegotiatedsolution.com before making a rash decision. If you would like to confidentially discuss your situation simply call our office direct at 703 319 TSSN to set up a free appointment. We will talk with you! Whatever you decide please INVESTIGATE or you will be sorry you hired an idiot whether it be a realtor or an attorney or both. Your problem can be solved. Prevention is the key. Prevent the bad stuff and solve the problem so you can live to fight another day.

Blogging from the front line of the housing crisis. GHunter

If you ask this question to Congress or the current administration the answer will be up for the real estate market. Everything is going to be fine…just keep paying your mortgage. Call your local realtor and “buy buy buy” a house is the mantra. In their mind there is no better time than the present. Let’s get serious and be real. The current state of housing needs a historical comparison for you to really understand how to proceed. I am going to provide this to you. If you call a local realtor they are not necessarily going to be in a position to communicate this to you. Many of them need to sell you a house regardless of the market conditions and many of them were probably home watching Big Bird and the Sesame Street Gang in the early 1990’s.

Where are we in this crisis? Let’s travel back to 1990-94 to the Savings & Loan Crisis and draw a parallel as it pertains to markets. In the early 90’s we had a massive crisis with the banks. Banks were taken over left and right and the loans and properties all ended up in a big bin called the RTC or Resolution Trust Corp. The government cut construction lines to builders in spite of their contractual obligations. If Uncle Sam took your bank over your contacts were null and void and your loan was now due in full. It was a real “like it or lump it” event with the government. I witnessed this with my own eyes and had real clients that lost millions. If asked to reflect back on individual government acts that I witnessed I would have to say that I saw communism at work in America. To draw a parallel to today’s crisis what did I really witness?

It’s simple. Today the crisis in real estate and mortgages is being managed by the government. The process is being drawn out over time. Back in the early 90’s the government took a different approach. They saw the risk to the economy and they took aggressive action to address the problem. They were determined to force the market to clear and deal with the problem banks and properties quickly. Chicken Little did come in the early 90’s and I saw properties, both commercial and residential along with unfinished communities and land, going for fire sale prices of ten –fifteen cents on the dollar. The government was in charge and on a mission. The market was being forced to clear by the government. The weak banks were being dissolved by the RTC and the properties were being forced into stronger hands. It was extreme but a very healthy process. This is much different that we have today.

What do we have today? We have a managed crisis. We are four years into the crisis with no end in site. Supply and demand is way out of whack. There are millions of homeowners underwater and thousands of homes in REO vaults within the banks and GSE’s. Makes you want to run out and buy a house doesn’t it. On top of that demand is being hurt by tight lending parameters. The banks are scared to lend. Can you blame them? The market is stagnating and prices are slowly sagging. This is what happens when the market does not clear. Why would a lender want to lend on a property that may end up underwater or as a foreclosure or short sale 18 months out? On this note, I just spoke with a 2010 client this morning that mentioned that the people that bought his house are now seeking a short sale. The risk is high and it is unwise to trust an artificially government supported market. The government wants the banks to lend but if they do not allow the market to clear and become healthy they are creating a derivative level of risk in my opinion. Its not self serving and I don’t understand why or who benefits.

Let me give you another example of the government’s wishes so you don’t think I am making a political argument to serve my self interest.

Let’s look at the new HARP refinance program. This is an add on to the old one in the past two years that is now going to encourage people to refinance regardless of the loan to value. If you owe 300% more on your property then current value, but it meets the general criteria and you have a job, then you can lower the cost of your debt burden. Sounds great doesn’t it? What about all the mortgage debt that the homeowner has well above current market value? How long it is going to take for someone to see that they will never get out of this debt burden? The debt has to be dealt with or the market will not be healthy. The government wants to keep people in the clutches of moral character and keep them in the homes paying regardless of the debt. This is the exact opposite of the S & L Crisis of the 1990’s. We have had many recent inquiries from potential new clients for short sale’s that have gone through the previous HARP program only to say “how the hell am I ever going to get out of this”

The effect on real estate values will be a draw out gradual sagging of values. People in denial will be able to stay in denial. The neighbor renting across the street paying $1500 in rent will face off against the homeowner with the same house paying twice as much with several hundred in personally debt liability over their heads. The cycle will continue until the debt is dealt with.

I believe the government belief is that once the economy gains better traction that the housing market will get pulled up in a vacuum. This is flawed and I do not believe this can happened due to the extreme levels of debt. Although it is equally flawed to forgive trillions of debt for homeowners across the board because this would wipe out your secondary mortgage market investor base, the current do nothing manage the crisis is also unhealthy. The only answer is to reflect back on history and force the market to clear. Drive the delinquent properties to workout with short sales or foreclosures and put them in stronger hands. The S & L Crisis took four years but the pain wasn’t that bad. The longer we wait for the ultimate clearing of the debt the harder and more painful it is going to be.

Having said all of this, I think you would be foolish to go out and buy a property today. Watch the headlines for unemployment and assess the mortgage lending climate. These will be early clues for a potential turn to the positive. Let the watershed moment occur when the market is forced to clear by virtue of the thousands of underwater owners capitulating their over price debt burden properties. This will overwhelm the government’s management strategy and move us closer to a healthy real estate market down the road.

There are recent voices saying that there is a 50% chance that FHA will need a bailout. This is an example of the derivative level of risk that is being piled on that I am talking about. It’s going to get a lot worse if the crisis continues to be managed. Let it happen and then go shopping for a property you want to own. The people that followed this plan in the S & L Crisis made out so be patient. Properties are still overpriced and if you’re smart you won’t get taken by the siren songs of the realtors and the government. It’s not ok. Housing has structural problems that are not being fixed with Obama’s band-aid. That’s the problem and my solution is let the market clear.

Yes, I am advocating kicking the people out of their homes and foreclosure or workout of the debt through short sale. It’s inevitable. True capitalism has winners and losers. That is what makes our country so great. A loser today can learn from their mistakes and be ambitious so they can be a winner tomorrow. A managed crisis will not provide this opportunity in my opinion and this process is important for the financial health and prosperity for every one of us.

As a parting thought, if you’re stuck underwater in a property get educated or contact my team for a short sale at www.thengotiatedsolution.com . Avoid foreclosure and mitigate the debt with a short sale. Drop kick the bad situation and start over without the unnecessary step of going broke in the process. Good Luck.

Blogging from the front line of the housing crisis.

GHunter

“You have shown me the manure now show me the pony”. I believe this was a favorite saying of Ronald Regan. The manure is clearly visible with just a glance at the state of the current mortgage/housing environment. This is what a non free market approach looks like. It’s a managed crisis. Now it’s time for me to introduce to you the pony.

Welcome Mr. President Obama. That’s right. If you voted for him well then you have to own it for now. He is loaded with manure. Today the announcement of a new mortgage program is in the offing. Am I supposed to be impressed or should I play stupid like most people and jump for joy over progress? Is it a new program or just a tweak of an old failed program? I can’t wait! Sorry, the word is already out. It’s the old HAMP refy program whereby the appraisal is no longer required.

This is going to entice people stuck significantly underwater on homes to stay in denial and continue to manage the debt service and do nothing about the problem. As Americans should we really care if the property is underwater fifty percent or more? Should you really do the right thing and just keep paying the mortgage, the taxes, the insurance, and all the upkeep on a property that you may never see the light of day on? It’s a question that you have to ask yourself.

Managing the crisis is good for the big lenders and the government. I have blogged on this issue many times in the past. Dragging out the crisis allows for earnings of the companies to cushion the blow and it also allows the real estate markets to gradually deflate. Unfortunately a solution without a free market fix will also resemble the banking system of Japan form the late 1980’s. Japan’s markets have been stagnant for years because the problem was “managed” much like our housing crisis is being handled today. Go look at a chart of Japan’s stock market from 1987 to date and tell me I am wrong.

The homeowners are going to seek to achieve a reduction in debt service but they will still be personally liable for debt that way exceeds the home value. You can call the new refinance process a reaffirmation of the debt as well. This will have other legal ramifications that will aid the lenders and the government. Should I say Beware or maybe just that this is another way Obama is going to show you some love baby! The end result for the tax payer will be more contingent liability for the GSE’s to shoulder as the underwater properties are refinanced.

To help clarify this issue further we cannot mark time and we must consider the consequences of a further real estate market decline of 15-20% over the next couple years. There is clearly a supply and demand imbalance in our RE market. We all see this. What is the reaction going to be when further home value erosion pushes the folks excited about carrying the debt to the true realization that they can never get out from under it?

This is already happening with past HAMP refinance applicants. The phone has been ringing and all you have to do is listen to your customer. They will tell the story. We have had many people over the past several months call that have stated that they went through a HAMP refinance. The overriding message has been that they now want to do a short sale because even with the reduced payment from the refy they see no way out of their predicament. A recent client in his thirty’s told me he wanted to get married and start a family and didn’t want this baggage with him when he turns forty. Again, it’s a personal choice of how to solve the problem.

Personally I would love it if everybody signed up for a refinance and paid the debt to eternity. My investments would rise and well who cares. The reality is that a managed problem can only be managed for so long. I would caution anyone that is underwater on a property to do their homework. Consider a short sale. We welcome you to visit our site and check out our free video at www.thenegotiatedsolution.com .

Expert attorney let solutions with permanence do exist.

Blogging from the front line of the housing crisis.

GHunter

The economy doesn’t look so bad when you look at the auto figures. In July auto sales also did quite well. What does this tell you given the gloom that has overcome the housing market?

Car makers see big September sales gains.

SAN FRANCISCO (MarketWatch) — A sketchy economy didn’t stop more new car buyers from taking the plunge in September, with early indications showing double-digit improvements in vehicle sales across the industry.

What is going on?  Why such a dichotomy?  People are buying cars and they are also going on vacation.  Although many people are stuck underwater on homes they are not putting their lives on hold or sacrificing enjoyment with the children over the housing crisis.  The key here that we have seen with our short sale clients is that they have chosen in many cases not to make the mortgage payments on the properties where they are stuck.  They have concluded it’s a bad investment that needs to be worked out but they are not willing to continue to throw good money down the proverbial rat hole.  Instead they are buying cars and yes, going on vacation to places like Disney World.

When you consider the percentage of income that is no longer going to pay for the underwater home or investment property, you can see that it is very easy for people to splurge on a new vehicle.  We have seen this as the trend over the past year.  Many of our clients will ask us about this very point right out of the gate in preliminary discussions over strategy.

Where does this lead us as it relates to the housing crisis?  The bottom line is the lenders are going to end up absorbing the majority of the losses either through foreclosure or short sale negotiations for the properties that are severely underwater with debt. There is no way the consumer can pay off the debt given many properties have declined in value more that fifty percent since 2007.

Debt has clearly consumed our housing market.  Four years into the crisis and there is no end in site.  If you are in a similar situation of a property map out a solution and solve the problem by the end of 2012.  Please visit www.thenegotiatedsolution.com .  Stop or Avoid foreclosure with a Real Estate Short Sale. Expert Attorney Negotiations!  Maybe we can help you with a comprehensive strategy that allows you to solve your personal housing crisis and buy yourself a brand new car without foreclosure or more residual debt.

Blogging from the front line of the housing crisis.

GHunter

If your in anyway surprised by the general disposition of the housing market they you missed your 8:30 am Economics 101 course.  It was ok to miss the class but you had to read the basics in the book.  If you missed the class and missed out on “Supply vs. Demand” then you need to read this blog.  I won’t criticize you.  I didn’t make many of those early classes but I did read the book.

Check out this link along the way. Robert Shiller says housing is harder to predict than the weather. Sorry Robby, I am going to make a prediction with pretty much pinpoint accuracy on the housing market. Read on!

Title-Shiller: Housing Could Fall Another 25% But It’s Harder to Predict Than The Weather.

http://finance.yahoo.com/blogs/daily-ticker/shiller-housing-could-fall-another-25-harder-predict-112122844.html?sec=topStories&pos=8&asset=&ccode=

Where is housing going? Down! Why? Too much supply and limited demand adversely affected by high unemployment and tight credit issuance.

If you are thinking about buying a house right now you need to really negotiate on price so you have a margin of safety. Let me know how these statistics from Freddie Mac’s May report make you feel.

The report was thirty pages long cover to cover. Now I was too lazy to read it myself because the message is the same over and over again. We are in a crisis.  However, my partner and head legal counsel Lawrence Tucker, being the attorney he is, read it word for word.  He shocked me with a summary that really got my attention. 

Freddie Mac apparently has 153K homes on the market as REO listed for sale nationwide. At first this doesn’t sound so bad.  For those not familiar, REO’s are properties listed for sale that have already been foreclosed on by the lenders.  When you continue in the report Freddie noted that the 153K figure only represented 12% of current REO inventory.  Now it gets chilling because that leaves 88% more just hanging around on the shelves.  What about Fannie Mae’s inventory, the FHA, the VA program, and the entire private mortgage market.  Now add in the approx. 11-14 million homes that people are underwater on.  Do you still want to run out and buy a house hoping that prices are going to rebound. You know there is a realtor just salivating to tell you things are going to get better real soon. 

The current inventory of REO’s is close to four years based on normal annual sales rates.  These numbers don’t have to be that accurate as long as you are clear on the trend.  There are a tremendous number of homes in the channel that need to be disposed of or otherwise put in stronger hands.  The US government is now the largest owner of residential real estate in the country by virtue of its sponsorship of Fannie and Freddie.  How about a Shout Out to our best bud democrat Barney Frank! Thanks pal for rolling the dice with the GSE’s (FNMA & FREDDIE Mac).

The problem the market has is not just the inventory.  The millions of homeowners that are underwater on homes are slowing coming around to the distinction that they made a bad investment.  We are getting calls even from people that have recently gone through government sponsored above equity refinances and loan modifications.  Some have been in the loan modifications for two years. Others have completed up to three separate loan modifications over the past several years. What is the message?   The message is help!  I don’t have a way out.  I am stuck.  Where do these properties end up?

These properties will come to market through additional REO’s as people give up and walk away or through more short sales. The magnitude of supply will create a pile on effect. This is going to take years to work through the system and in the interim principles of Economics 101 will apply.  Prices of supply will gradually levitate down to reach a level of congruence with demand.  If your over exposed to real estate what should you do?

The sooner someone in this position faces the mirror and accepts that they have made a bad investment and seek a fair permanent solution the better off they will be.  Welcome to renter-ship in your underwater property with full ownership responsibility. Hey, hot water heater or AC broken? Get our your check book!  Your lender could care less. You legally owe them the money. 

Why do I tie this in with the Freddie Mac statistics?  I want to be clear that sitting on the fence hoping for the market to come back and save you is futile.  It’s not going to happen. Shiller can’t predict the weather but I can.  You are in the eye of the worst storm in real estate in our lives.  You need to seek shelter.

Throw on some cold water and get a move on with a Short Sale.  Don’t be an idiot and get suckered into a loan modification.  Rather call someone you know and trust and ask them how great the loan mod was.  You will get the answer.  With the proper legal representation and mitigation team it is feasible for you to get out from under a property and preserve the majority of your credit, remaining assets, and mitigate the unpaid mortgage debt.  This also has the lender paying the majority if not all of the general selling expenses.

Now, what do you want to do?  Do you want to wait for the market to save you and go for loan mod number two or do you want a permanent solution?  It’s a hard decision because you are scared and insecure. You don’t know the laws. You have no idea of the capacity of your lender to pursue you or even remotely what their recovery strategy will entail.  Your independent realtor friends talk like they are experts.  They are experts on earning a commission regardless of which way real estate values go.  Watch out for the realtors that are property flippers evangelizing a solution for your predicament.

Given all of this you choose to do nothing.  That is not a solution. Educate yourself.  Avoid foreclosure or stop an existing foreclosure proceeding with a real estate short sale.  Do not allow a property to go to foreclosure if it can be avoided.  We welcome you to come visit our site at www.thenegotiatedsolution.com and watch our free video.  It runs approx. two hours but it is guaranteed to fill many voids that are causing you sleepless nights and help you make a decision. Good Luck!

Blogging from the front line of the real estate crisis.

GHunter

Here is a quick snapshot from Robert Shiller.  Shiller was the canary in the mine in 2007 when everybody implied he was a Yale scholar and should shut up.  He was spot on and has been extremely credible on the subject of housing.

Mar 29, 2011

Case-Shiller: Home Price Double-Dip Materializing

The January S&P/Case Shiller Home Price Indices , released by Standard & Poor’s this morning, show further deceleration in the growth rates of home prices in most of the cities in the survey. The indices, which are billed by S&P as the leading measure of U.S. home prices, are constructed to track the price path of typical single-family homes in a number of metropolitan statistical areas (MSAs). The study uses matched price pairs of individual houses to construct a 20-City Composite Index…

The 2010 artificial stimulus revolving around the tax credits for home buyers swiftly came and went.  It had the exact same effect on the housing market that the liquid form of Miracle Grow has on your plants.  Fast and furious results but if you don’t continue with the juice your back to the original trajectory you started with.  As that relates to housing the path for values is down.

The governmental programs to help homeowners are being scaled back and discontinued.  Your only real conscientious and credible advocate for lenders helping homeowners is Sheila Bair, Head of the FDIC.  Sheila is moving on in a couple months. She is no dummy.  I am sure she has had it with this mess.  It’s a political nightmare.  Where does this leave you if you are a homeowner stuck in an underwater home?

Whether you are stuck in a primary residence with more mortgage debt than you can handled or simply have too many properties and need to prudently reduce your exposure to the fragile real estate market, you need a permanent solution.  Maybe you are behind on your payments or close to making that decision and worried about foreclosure.  Regardless you need to focus on a solution.  I mean a real solution with permanence as opposed to a fake loan modification or some other form of lender bait.

One last notation, I blogged in 2008 and 2009 that a time would eventually arrive whereby the government would no longer be singing songs of empathy for distressed homeowners.  Once the financial crisis moved to a more manageable level the focus would be on the general economy and jobs.  This is occurring in slow motion.  Now the focus is changing to the homeowner that signed up for the mortgages taking their own responsibility. If you don’t see this open your eyes or get out your checkbook.

You made a bad investment.  Many folks are finally phasing out of the denial phase and have found themselves deep in anger.  Especially after they have been manipulated and outright hosed by their lenders through the loan modification process.  You are no good to me and my team for a short sale until you phase into “indifference”.  When you get here we can really help you.  Come visit our free 2 hour video at www.thenegotiatedsolution.com and see for yourself.  Educate yourself.  A Short Sale must be handled correctly.  It’s about your credit, assets, tax and personal liability, and getting rid of the property as opposed to just getting rid of the property.  Don’t be fooled by a slick talking realtor. 

Always remember you signed the mortgage note(s).  You are personally liable for the debt.  Your lender is not your buddy and the business opportunity to collect the debt will be owned by somebody.  This is America.  One mans downfall is another’s opportunity.  There is a solution.  Stop and avoid foreclosure or just plain get out of too many properties.  You are a victim of the housing crisis and mortgage mess.  We all are victims whether we like it or not.  Do not go broke or pass on taking your kids to Disney World.  Rage against the machine!  I will help you get there.  I promise.  Fair and permanent solutions are available.

Housing Roller Coaster is going down…hold on tight.. and if your are smart you can enjoy the ride.

Blogging from the front line of the housing crisis.

GHunter

Second wave of housing bust hammers more cities

Cities that held up during the housing bust are hammered by second wave of falling prices

http://finance.yahoo.com/news/Second-wave-of-housing-bust-apf-411171723.html?x=0&sec=topStories&pos=2&asset=&ccode=

Don’t say I didn’t tell you.  I have been preaching this in my blog and to customers and realtors until I am blue in the face.  Many realtors tell me, “but the inventory levels are tight”.  Yeah, and there aren’t problem properties just waiting to be dumped on the market by the banks.  Foreclosures and short sales clearly have an adverse affect on current market resale values.

Once again, what about the millions of homeowners that are underwater on their mortgages?  When the people wake up and either decide to walk away or work it out with a short sale this poses a considerable threat to the real estate market and the over all economic recovery.  Mort Zuckerman (the billionaire) stated this recently as the single most dangerous issue affecting the prospects for a continued recovery.

When push comes to shove you can be sure that people are going to dump their houses when they see no end in sight. Think about this.  What if you were at the retirement age and you were stuck in a property that you have owned for years but found yourself underwater due to your primary mortgage and a piled on home equity line.  Now you’re a couple hundred thousand underwater as a result of a past refinance and the expansion of the home equity line when values were good. Deflation has now cut your value in half, your income is going to drop drastically in a few years and you see little in the way of a solution.  What is somebody going to do?  Before we get to that question, doing nothing may simply no longer be a viable option.  I am not an estate attorney but I would assume that if you die and your lender puts a claim on your estate for the excess debt your kids may get short changed.  Same holds true if you get hit by a Mac truck.  Do you put it to your lender or to your kids?  Savor that one for awhile.

Regardless of your situation this is why it is important to constructively address the problem with a Real Estate Short Sale now.  Real Estate is illiquid and the cycles are long. Wait until you see where this one ends up.  This mess is only getting started.  Some very experience people already had this in the forecast as early as 2005.  The late Sir John Templeton said, “Real Estate is in a bubble and prices are going down down down”. He then advised, “wait until values drop 90% and then buy buy buy”.  I have noted this on three occasions in the last two years in my blog.  I have also shared this with friends and associates there were in denial and even more stuck in high priced homes than in 2009.  They all implied that Templeton was an old guy that lost his marbles. How would you like to own a couple beach rental houses that are just beautiful that you bought at 2007 prices, improved and leveraged to the hilt?  I know several people in this predicament and they are in big trouble today.  The smart ones will seek professional help with a short sale so they can have all the mortgage debt forgiven (mitigated) and find a constructive way to avoid foreclosure or file bankruptcy.

There are also many people with investment properties that are rented. The properties may be underwater but as long as the rent is coming in regularly the owners can afford to do nothing (denial). The fundamental issue here is that with a jobless recovery and such a high real unemployment rate (17-18%) the tenants most offer feel wage pressure or lose their jobs outright.  This happens all the time and clients call in a state of panic.  Did anyone think for a moment that the economic crisis didn’t affect everyone?  The tenants got it just as bad.

Something else I would like to add.  A statistic just came out stating that is was cheaper to buy than rent.  Wow!  Such a positive spin was put on that news flash by the media.  Let’s all run out and buy.  Has anyone ever heard of a discounting mechanism and efficient market theory?  It appears the market knows that real estate is going to continue to decline.  The numbers don’t lie. The market has priced it accordingly.

Debt issuance got way out of hand in the last cycle and we are still in the bust stage.  Let’s use the analogy “the eye of the storm”.  Unless you are going to pay your lender in full now is a very good time to investigate a solution.  A short sale is my favorite, because done properly there are significant benefits. A Loan Modification may be a delay tactic or a simple means of avoiding foreclosure temporarily.  At the end of the day you want to get out from under the property with as much of your credit and assets intact.  You need an expert team to accomplish this.  We welcome you to investigate this on our site at www.thenegotiatedsolution.com

Conversely, if you call me or email me in total panic because you hired a realtor or a paper-pusher vs. a professional team that actually mitigate the debt then you get what you signed up for.  Here is the body of today’s email from a poor sole that should frankly sue his realtor:

EMAIL:

hello George, 

Thanks for the note. Actually we are in the process of a short sale again now. 

Our process has been a challenge due to the fact that the condo association had a law suit and we lost our buyer from it because the banks did not lend because of it. 

Presently, the suit has now been taken care of and we are now in a new contract with boa just providing a counter offer. 

Wells has filed a judgment against us 60,000. 

We owe the condo assoc from non payment of 6 month 4000.

there are more details to this but we are still in a very bad position. 

My wife does not want to file for bankruptcy because of her job clearance and afraid it will ruin our future. 

Meanwhile, everything that keeps delaying our processes the bills, fees. Attorneys fees are building up and I am afraid to say that there maybe no way out of this situation. 

If you think you can help. Please give me a ring. 

My response:

Mike,

Your problems begin and end with your choice to stick with your current realtor.  I am sorry to hear you are in such a mess of a situation.  If you recall I suggested you dump the realtor last year and hire us to fix the problem for you.  If you already go hit with a judgment there is little we can do for you. Good Luck.  George

This is what happens all the time.  They hired a realtor and ended up stuck. The realtors are clueless and only have their eye on the sales commission.  I am not saying they are not nice people.  I am directly implying that they do not have the experience or the team to negotiate, guide and protect you to a constructive solution with lenders.  If you want to end up here go hire a realtor.  For everybody that ends up here I say “you owe the debt until you don’t”.  If you think I am picking on realtors you can ask why this guy already has a judgment for 60,000 slapped on him from Wells Fargo with an ongoing short sale. What a treat. Where is his understanding of credit or any strategy or basic guidance to help protect his wife’s employment?  Not available from realtors. To the point, this realtor is completely incompetent and the guy is still stuck in the process. His excuse last year was that the realtor was a nice person.  I am sure she still is. Maybe by being exposed to this communication I can convince just one person to take a different path.

All of this can be avoided.  First recognize that real estate is going to continue to decline and maybe in excess of twenty percent over the next 18 months.  Secondly, make a decision that you want a solution and act.  The situation of being stuck underwater with properties is everywhere.  Real constructive solutions are available. We have a 2 hour video at www.thenegotiatedsolution.com , a blog http://blog.thenegotiatedsolution.com ,and one on one consultations that are absolutely free.  You just have to be ready.  I am hoping the headline and article link help.

Blogging from the front line of the housing crisis.

GHunter

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