If the Speaker of the House, Pelosi, would do the same caliber of work as she does being a grandmother of five, and if Congress would take a time out from the partisanship we would have a chance to address the problem.

Do you know what the real problem is after all the hype of the credit market seizures and floundering banks? The real problem at the end of the day is the excessive housing inventory. Yes there may be many other issues in between but this one shows the door to the future and ultimately to a recovery. Harry Homeowner and Friends are the ones that will be buying up the housing inventory one by one over the next several years. If money market accounts are breaking the buck, and the stock market is eviscerating their savings and 401K’s before their eyes, the chances of the inventory level improving at some point is nil.

Yesterday our Full Service at The Negotiated Solution had a contract for a moderately priced condo in excellent conditional fall out. The buyer was due to close in five days but after seeing the S & P 500 drop 8.9% and the Dow plunge 770 points he panicked and called his financial advisor. The advisor said not to buy anything in this market regardless of how much you like the property. Now you see the problem. It’s a confidence issue.

Perception is becoming reality on Main Street even if it is just fear based and not reality. If people don’t feel comfortable that their money is safe in their bank, and they are scared to death of financial loss or job loss, we have a massive problem in housing with no cure.

The government is on the right track but we don’t need perfection at this time. We need anything and everything that will constructively restore order and bring down the credit spreads so banks will lend again.

Please write your Congressman and tell them it time to get on board for the middle class and to stop preaching false hope and partisanship. This is a time for action and nothing else. Properly laying the foundation to address the excessive housing inventory is the end game.

GHunter

The full brunt of the housing crisis and mortgage meltdown are upon us. Many are obsessing over their problems and anxiously waiting to see if Uncle Sam will come to their rescue with a new program that makes all their troubles disappear. Don’t count on it.

If I may, let me put all the partisan politics and tap dancing for photo ops on the part of Congress aside for you and tell you where you stand. The government is going to save the free market without question. However, you as the distress homeowner are on your own.

Let’s telegraph back to the governance issues a few years back involving Fannie Mae and Franklin Raines as the CEO. Didn’t we find out abruptly that 11 billion dollars was missing or was that flat our fraud? Your Congress didn’t really want to investigate the full extent of the problem then because their meddling would have been exposed. In fact, a full investigation at that time would have completely exposed the lack of prudent underwriting guidelines and excessive risk being assumed by the entities. This would have averted a good portion of the major systemic credit issues we now face.

It is much more advantageous for Congress to posture as the appalled after giving the good Treasury Secretary Paulson the “Bazooka” and then watching him expeditiously use it after Morgan Stanley investigated and determined the Fannie Mae capital structure was a house of cards. As a lender delivering loans to Wall Street, it was obvious in the 3rd & 4th quarters of 2005 that we were heading for potential disaster.

Now I ask you to consider who is going to have the individual homeowner’s best interest at the forefront, you or the government? I think the answer is pretty clear as we see great companies get hurt and Congress point fingers and claim to represent us as our gallant saviors. Congress and the specific regulatory leadership should be ashamed and collectively impeached for being out to lunch.

Take care of your family and find your own solution. You don’t need any new legislation or unusual favors to benefit with a Short Sale Solution today.

If you are one of the affected homeowners you can choose to be a Sheep or a Wolf. The two are only separated by knowledge as it pertains to this crisis. Learn the ways of the Wolf and Win!

Elizabeth,

Thank you for mentioning me and providing a site link in the Sunday business section.

I have two items that I would like to address. One is the credit side issue where you feel a short sale and foreclosure are congruently bad, the other is Short Sale vs. Foreclosure.

Credit and score:

As quoted in your article, a short sale and a foreclosure equally adversely affect your credit. By definition in the eyes of a credit agency’s score rating and a lender without any mentioned context you are absolutely correct. Score rating is short term phenomena and credit profile is a journey. However, as soon as the view point shifts into the context of the homeowner requesting a new loan (the journey) with a benefit of a plan you are absolutely incorrect. Our solution provides a “Day 1” credit strategy and “Life After the Short Sale”, how to mend your credit and navigate your way back to a new mortgage in as little as 12-24 months plan.

Short Sale vs. Foreclosure:

You obviously were not swayed in any way by our conversation last Thursday so I am not going to spar with you in an attempt to change your mind. However, I would like to give you a real life example of another successful transaction that I just got approved. I am going to outline the proposal and then explain the alternative the homeowner/borrower faced without the benefit of the short sale. Please keep in mind that the financial incentive was gone and the homeowner wanted out. Regardless of your view that the lenders should modify terms and everything will be fine, most people are looking for a way out. Please also understand that we provide a definitive solution for the lenders involved that exposes the incentives for them to avoid foreclosure and do not simply ask them what they will do for our clients.

1) Successful Short Sale proposal: Ironically Last Thursday afternoon after our call I completed another short sale proposal with a major lender. The borrower was gainfully employed with Fannie Mae but did not have the approx. $100,000 after home selling expenses to pay the lender. This was another homeowner that was not financially destitute but has a real affordability problem with the home .The property was sold for $305,000 and lender agreed to accept our proposal with no further recourse on the forgiven $100,000 in mortgage debt. Our program helped obtain a contract in this market within the first 30 days. Our proposal allowed the homeowner to get out from under the financial burden of the home and also walk away from a significant sum of unpaid mortgage debt. Foreclosure was averted and the majority of the borrower’s credit was saved with the implementation of our credit plan. The forward liability has been quantified and in this real life example it is zero. This is now merely a speed bump in this individual’s journey and future financial history.

2) Foreclosure: Alternatively, let’s assume this borrower advocated your position from our Thursday phone call and simply let the home go into foreclosure. The lender would have eventually taken the property back through the legal means of foreclosure mandated by separate state law. Within 30-60 days the lender would then submit to the state court a deficiency amount within the state allowances. The court would approve the deficiency and the homeowner/borrower would have a judgment for this amount on their credit for up to 20 years. This judgment would earn the legal limit, usually 9.0%, until satisfied. The approximate $100,000, or specifically what the state allows and the court approves, will be subject to collection activities by the lender. The lender would have the right to go after this money by all legal means available to them under the law. The liability is clearly present and the emotional pain of collection agents, wage garnishments, and administrators will soon begin. Keep in mind the lenders did in fact lend the people the money and they have a right to legal remedy. Given the after tax income required to settle such a large sum many borrowers seek the refuge of bankruptcy. Please ask any attorney if you question my statements.

In summary, it’s all about personal choice. A distressed homeowner currently has two choices to address your mortgage problem:

• One - they can pay all the expenses of selling their home and make up the difference you
owed to the lenders.
• Two - they can choose to do nothing and allow the property to go to foreclosure.

I am giving them a third choice. They can choose to take the positive proactive path and propose a comprehensive solution to the lenders in the form of a short sale proposal. With our solution they will save the majority of their credit and minimize the negative financial impact of the mortgage problem. The choice between the current two options and our suggested third alternative is completely up to the homeowner.

Now you can decide if a short sale or a foreclosure is the path to take. The short sale quantifies the personal liability and represents cooperation and a comprehensive solution that addresses all four major items in my “dear homeowner” letter on my site. A foreclosure is the result of a homeowner that is simply dumping their problem on the lender. Foreclosures carry liability unless deficiency judgments are preempted by state law as they are in only a few states. Such liability can drive many to bankruptcy. As far as the credit strategy goes well you certainly do not have to take my word for it. I provide both elements listed above for all our clients as part of a plan.
One final issue:

The second to last paragraph of your article says “you have to convince your lender …” This is a very daunting task you are suggesting to families without experience that may be in need of real help. You have a lot of power in your position. People take what you write in the newspaper many times as gospel. In my opinion your viewpoint and comment conveys a cavalier attitude that the waters are safe and the lenders are kind and cooperative. Respectfully, this is simply not the case and you are giving people false hope. You also may be sending them to the slaughter house as in the example I gave you with a client’s recent loan modification experience. If you recall this is where “The Great American Shake Down” continued and the lender robbed them of $10K only to increase the payment by $1,000 per month.

The Short Sale Negotiator in conjunction with Tucker & Assoc. PLLC battle with lenders everyday for our clients. If it were so easy we would have no purpose. It is not easy even for the experienced professionals.

Note: We have added several new additional items to our site to try to help skeptics better understand the solution (thenegotiatedsolution.com).

Thank you for your time and again for the honorable mention and link in Sunday’s paper. George

The mortgage market has been in trouble for well over a year now.  We are all aware of the mortgage defaults within subprime, alternative A, and now the beginnings of what was once considered prime loans defaulting.  No one ever expected that Fannie Mae and Freddie Mac would be nationalized in our lifetime.  The worst case scenario actually came to pass.  At first glance it is rather impressive that Congress and the entire leadership hierarchy seem appalled that Secretary Paulson used the “bazooka”.  Did everybody forget about Franklin Raines the former Fannie Mae CEO and the 11 billion in missing funds or covered up losses (fraud)?

As I recall, we sent our brother Raines packing with a tidy sum of severance.  Congress looked the other way and continued to push their affordable housing programs and no one looked very closely at the GSE’s books. The GSE Punch Bowl was such an unpopular subject because Congress has been mingling their hands in the GSE’s for quite some time.  Of course nobody wanted to find out that it was a house of cards and that the capital was gone.  Then The Treasury Department, headed by Secretary Paulson, hired Morgan Stanley to investigate and low and behold approx 35 billion of the supposed capital was tax credits and a ball of you know what.

It took a man formally from the private sector to do the dirty work.  Conservatorship sounds nice but eventually the government will nationalize these firms.  For now it’s a nice Band-Aid unless you were a stockholder.  The good news is that the FHA program that is run by the government has never cost taxpayers.  Maybe the government is the ideal foundation as a cornerstone for a stable nationwide mortgage platform.  History is a good guide that Fannie and Freddie are in safe hands and we will have mortgage money available for qualified applicants to buy homes.

At this juncture, we have a reasonable level of stability with the government backing both Fannie Mae and Freddie Mac.  These institutions will continue to play a significant role in the backbone of mortgage availability and they will set the pace as the guidelines that protect both lenders and borrowers revert to the old school ideology.  The reversion is well underway and it is prudent that you listen to the market and interpret important messages.  A recent very positive message can be drawn by changes regarding foreclosure at Fannie Mae.  Both GSE’s used to require any perspective borrower seeking a loan that had a prior foreclosure to have a minimum of three years reestablished and/or re-affirmed credit.

A comfortable old school guideline was 3 years with a minimum of 5 traditional trades reestablished and/or reaffirmed over a period of not less than 24 months.  This was considered reasonable given foreclosure was considered the kiss of death in the mortgage arena.  Today I am told that the guidelines for foreclosure at Fannie Mae recently went to 5 years with some consideration from Fannie and many secondary market lenders going to 7 years before borrowers would be eligible for a new mortgage after a foreclosure.

However, there is a very interesting catch.  Fannie stated that if you, as a distressed homeowner, successfully completed a short sale with your lender then you would be eligible for a new mortgage in a little as 2 years.  What is the message the market is conveying to you?  The market is telling you that responsible homeowners that do not dump their problems on their lenders, but rather provide their lenders a solution, will be rewarded.  Regardless of your situation the potential for gain is significant when you use the weapon of choice, the Short Sale.  Fear not, for you have everything to gain and when the dust settles no one will be able to deny that there was a housing crisis that affected millions.  Those that took the positive productive path towards a solution with their lenders will be rewarded by the market.

The essence of a Short Sale is that it is a solution for both you and your lender.  Allow me to be blunt. The lender gets rid of you, and you lose the headache and the majority, and many times all, of the unpaid residual mortgage debt. This sounds very enticing given that your current options are limited. I would like to touch on where most people are mentally regarding the current housing crisis and the current options that are available.

Let’s face it, people are stuck with property all over the country that they cannot afford and they don’t have the money to sell the houses. When the tide went out, everybody was affected. Today the majority of the people simply focus on the problem and they are angry and obsessive about it.  Often I hear things like, “can you help me sue my lender”, or,” my builder hustled me to close”, or “my lender switched the loan program on me at the last minute”.  It’s ok to be angry and I know these type of things happened to many people.  Other people may have simply made a bad decision and are now financially stuck and can’t afford to sell the house and they are looking for a way out.  Regardless of where you are physiologically and emotionally, it is very important to put the problem behind you, and strictly focus on the realistic options you now have. That leads us to the solution.

Today you have two options.  First, you can pay the lender everything that is owed and cover all of the expenses of selling the property.  Secondly, you can choose to do nothing, waffle around for a bit longer, and then eventually allow the property to go into foreclosure.  Both of these options are not very attractive. The first is usually not financially feasible and the second will hurt you immensely for many years.  This brings us to the solution which is a new third option that many people may not be aware of or trust due to lack of knowledge.  The Short Sale Solution is a wonderful option because it is the only positive proactive path you can take where both you and your lender have the opportunity to win.

How does the Short Sale Option benefit both the distressed homeowner and the lender?  To avoid confusion, let me be very clear and tell you that you are going to sell your house for whatever the real bid of the current market may be and you will be moving out at some future date. The solution hinges on your cooperation. With a Short Sale you are offering the lender the opportunity to sign on the dotted line for less than what is owed to them and frankly get rid of you, your problems, the property, and all other financial risk associated with the property.  In return, you minimize the negative affects to your credit by avoiding foreclosure, you get out from under the burden of the home thereby not allowing it to wreck you financially, and you have the opportunity to have a significant amount of mortgage debt forgiven with no further recourse.

Many people simply do not understand or trust when the statement is made that debt can be forgiven with no further recourse. It almost sounds too good to be true. However, it is very true that the current macro environment in real estate lends the opportunity to just about anyone who is underwater on their home relative to equity and losing sleep over it. If you are at this very moment beginning to obsess over what you paid for the property and what you owe on it that is very natural. You are caught up in an emotional web and stranded like a deer in the headlights. It’s time for you to take a time out and investigate if a Short Sale Solution is an attractive viable option for you. Deadbeats walk away from their accountability while productive people strive to find solutions. It’s a personal choice. Make the right choice!