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

I took two weeks off.  It’s time to get on a roll again so please humor me.

 

Sorry, but the false hope is getting agonizing.  Today the talk of the town is a new plan to help save half of the expected 5 million homeowners facing foreclosure.  Oh boy, college professors have Obama’s ear.  The plan is basically outlined as a loan modification with some principle reduction and a “silent second trust” for appreciation recapture by the lender in the future.  I don’t want to conger the displeasure of the crowd, but wasn’t Barney Frank sucking on that pop-sickle with his July 2007 save the world legislation?  Here it is, just another rendition.

 

A ‘targeted” distressed homeowner will have their loan modified and up to 20% of the principle eliminated so they can afford to stay in their home.  This means that the terms of the remaining 80% would have to genuinely be affordable so the homeowner could actually stay in their home. I am hopeful the college professors have defined how long the homeowners will be able to stay in their homes.  An additional day, a week, or maybe we will get lucky and it will be a truly long term solution so we can help the people. The jury is still out on this.  I just can’t wait to see the outcome.  

 

Here is the fundamental problem.  The real people in charge of lending (Jamie Diamond, CEO JPM Chase, etc) in our economy don’t like the plan because it incentivizes delinquency.  Why should they agree to write down principle?  That is their position and I think it is a good one.  Most of the people that would require a principle write down won’t have enough income to qualify for the proposed affordable solution on the remaining 80%.  How can I make such a statement?  I see it every day at our company.  People that have lost their jobs, their savings, and face owing the lender in many cases twice as much as the home is currently worth are in a state of panic.  Do we really want to convince ourselves that a government blank check or another fancy bailout with university professors on board will save these people?  In addition to saving these people, let’s also add in save the housing market and the whole world.  Let’s just throw money at people and create an economy where nobody can lose. Sorry, not realistic in my book. 

 

People in this situation need to let the property go to foreclosure and walk away or do something much more constructive and learn how they can benefit with a Short Sale.  The lenders can recycle the deadbeats with a foreclosure proceeding.  Everyone also has the right to investigate a real estate short sale solution to see if the rewards of providing the lender a solution have real merit.  What is wrong with fixing your own problem without the government and renting for a year or two? 

 

Wait until January.  If you think your lender is a patsy you better think again.  Get on board with a short sale and provide your lender a solution.  In January the race car has fresh rubber and it will be full throttle to foreclosure on the part of the big lenders.  Just watch.  They are going to hit the accelerator and kick the machine into high gear foreclosing on homes. 

 

The “Machine” made billions in the good times and collectively they are going to plow through the rubble (you) now with the government billions shoring up their capital.  What does that mean for you?  Whether you are overexposed, made a bad decision and just want out, or really have an affordability issue, this is your chance to learn about a Short Sale.

 

Why do I constantly preach the Real Estate Short Sale Solution?  Simply because people thank me personally every week.  It’s a wonderful free market solution. 

 

Take a moment out and read the blog on loan modifications.  Specifically look for my client that got the shaft last summer from his lender and shaken down for 10K only to have his payment raised from $4500 to $5500.  Now that was hard love.  Guess what?  I told him to shut the hell up and get on board.  Literally, after three weeks of griping I had to get his attention.  I made it clear to him that he needed to constructively focus on a solution and get off his rants and anger.  It’s a happy ending and revenge is at hand.  This gentleman and his family walked away from $210,000 last Friday.  The house is sold and someone else has a new home to be proud of.  There are no strings attached.  The residual mortgage debt was forgiven.  It wasn’t easy, although it took a complete four months, but that is what we do.  If you are in trouble get on board and educate yourself.  That is all I ask.  Avoid foreclosure with the Real Estate Short Sale Solution and The Negotiated Solution.  Go for the Free Market Solution where both you and your lender win and lose false hope and government baloney. Do it for yourself and your family.  Battle against the “Machine” and win! Blogging from the front line of the housing crisis.

 

GHunter

It is now headline news that 56% of past Loan Modifications are in “re-default”. I am not even sure that is a proper word. Can you imagine more than half of all Loan Modifications are going into default again and the homeowner is once again facing affordability issues and foreclosure? Now, lets all be honest. If this was sixth grade and the lenders were to get a report card for achievement they would all be getting an “F” for complete failure. Of course, I am sure in a perfect world the lenders would be asking to be graded on a curve against other lenders so they don’t appear to be a bunch of complete losers. The lenders have failed miserably. Should we call Congress for another bill or should we seek a free market solution?

The fact of the matter is that Loan Modifications and general workouts are by design established to keep homeowners in their homes so the lender can then avoid the costly burden of a foreclosure. Foreclosures cost lender lots of money. The lenders have not felt enough pain if they are not willing to modify eligible loans to a point of affordability that will provide the homeowner a long term solution. Why tell someone you are going to reduce their payment $300 per month after the arm loan just took it up $1200 per month? This makes absolutely no sense.

Loan Modifications are simple and could be rationed out in scale if the lenders would determine who is categorically eligible and establish the new payments based on a pre-determined level of gross income. As an example, your new PITI payment for you house is now reset to 35% of your gross income for the next three years and it will adjust 8.0% per year for two consecutive years after that. You can make this stuff up. Just make it possible for the person that owes 100-300K+ more on their home, and wants to stay, to actually stay. The alternative is a Short Sale or Foreclosure or more lies and sleepless nights begging your lender for help. I don’t like the word beggar because it sound so helpless. I prefer the word “taker”.

As a ‘taker”, I am an advocate of the free market solution with a Short Sale. We will charge you much more money if you force us to help you with a Loan Modification. The Short Sale exposes the incentives for your lender to cooperation and the disincentives if they don’t. It effectively levels the playing field so both parties can win. The problem with a Short Sale is you! You are the whole problem. You got yourself into a bad situation or a bad decision and you have to continue making payments you clearly cannot afford and your ego is on the line. Every single day of the week I hear the nonsense over why my lender just won’t forgive 200-300K and let me stay in the home. It doesn’t work that way dummy! Most of you have great jobs and made stupid decisions. Without the free market solution you are stuck. If you want to be a sucker then go to sleep thinking your lender has your best interest at heart. I am sure they will modify your loan so you are happy.

The statistics don’t lie. 56% are in “re-default” and guess what…90% of Loan Modifications don’t provide affordable loan term solutions for homeowners. Do you still want a Loan Modification? Call up Sheila Blair, Head of the FDIC. Ask her what she thinks of modifications and how conscientious the lenders have been to the people. If anyone knows it is certainly the Head of the FDIC. Also ask her how many calls she is getting on behalf of “The Negotiated Solution” complaining about homeowners unhappy with the free market solution. That phone has been the quiet one.

The sooner you wake up and realize you have to find a fair way to negotiate with your lender, and that you owe all the money, the sooner you will find your way to the Short Sale. You can get out of the bad situation, get the debt forgiven, and move to the house across the street for half the money in the majority of scenarios. Now that is what I can a Modification. You have to have a plan to succeed. Capitalism does not reward failure. Why are you allowing your lender to hold all the cards as miserably as they have performed? Just a thought.

In my opinion, the best Short Sale clients are those that have already been beaten by there lenders. These people are frankly indifferent. They know the cunning niceties from the collection department were just part of the game. You lender does love you and they will take every nickel from you as long as you let them. Once you catch on, well…, then you will have to deal with your lender’s B team and they are not so nice. The answer is the free market solution of a Short Sale to Stop Foreclosure, Avoid it altogether and to address significant affordability issues.

GHunter

The Plan: 3 Key Elements:

• Credit Strategy (2 part)

A) Day 1 Credit Strategy: How to make the right decision regarding the mortgage payment (If you ask your realtor what you should do with the December 1 payment, please keep an eye on them because they are going to cringe, and they don’t know nor do they ethically or from a liability standpoint want that question). Learn the mechanics of the lien structure, the legalities of the situation, and the logic as it pertains to how future lenders will look at you when considering you for a new loan. You will make the right decision for yourself that night and you will not second guess it. That is the empowering beauty of it. Fact and logic enable you to cut through the emotion of the decision.

B) Life After the Short Sale: How to mend your credit and navigate your way back to a new mortgage in 12-24 months. This is critical to understand and focus on from the beginning. How are you going to be in a position to recover or are you going to have to wait six years before you can get a new loan.

• The Short Sale

How to get out from under the burden of the home
without allowing it wrecking you financially.

Here is an excerpt from part of my seminars to realtors. Do you see yourself anywhere in this below?

Here is what your clients do to themselves with no
solution for the impending mortgage problem:

1. Run up credit cards to pay the mortgage.
2. Borrow money from family members to pay the
mortgage.
3. Hardship withdraws from retirement accounts.
4. Advances from employers.
5. Utilize other loans or home equity lines to pay the
mortgage.

When all of their resources are depleted and there is still
no solution to the impending problem, people find
themselves in real trouble. Do you want to help your
client be in a position to buy again in the short to
intermediate term or do you just want to get them out
from under the home and earn a commission? It’s a
personal choice. Repeat business and referrals may
depend on your chosen course of action.

• The Mortgage Deficiency

How to address the deficiency and quantify your personal liability as it pertains to your current mortgages. Right now you are personally liable based on the mortgage note you signed at settlement when you purchased your home. There is a way to mitigate it and be free from the burden.

Why do you need a plan? You can’t minimize the adverse affects on your credit and overall financial profile without one.

My advice to anyone facing a mortgage problem, look for credible advice and don’t rely on your buddy or some tid bit of free hearsay for a solution. Lots of people honestly do not know what the hell they are doing. Be careful and take care of business and your family.

GHunter