Carmen, On the Money…not so “On the Money” when it comes to Short Sales….
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
