Saving Your Home from Foreclosure Part 2

A couple of weeks ago, I published a post on how to save your home from foreclosure. I had three steps but really, we only covered steps 1 and 2 in the earlier post.

1. Do your homework: make sure you have all of your loan documentation and understand the terminology
2. Call your lender: there are a number of programs, including Making Home Affordable, that your lender may have available to help you

Number 3: If all else fails, you may have to sell your home

Selling your home in a good market used to take about 90 days. Today the market reflects a trend of 6 - 12 months... But what if you can't afford your home anymore? What options do you have available to you to avoid foreclosure? One option is a short-sale.

Unfortunately, steps # 1 and # 2 may work to prove that you really can't afford your home anymore. In part 2 of this post, we will explore "short sales." A short sale is basically when you work with a realtor to sell your home for what you owe on the mortgage. The bank has to approve the sale. It's up to the bank whether or not they will allow you to sell your home for less than what is owed on the mortgage. This still will negatively impact your credit but not nearly as bad as a foreclosure. How your credit is affected depends primarily on how / if the mortgage lender reports the sale of your home and thus the repayment of the loan (mortgage).

There are a lot of variables when it comes to making the decision to sell your home. It's best to seek expert advice. Here are a few resources to become more familiar with the concept and the process of a short sale:


Video from CNN Money

Video from CBS News

About.com article on Short Sales

List of articles on Short Sales and understanding Foreclosures available on About.com

What Happens in a Short Sale When You Have Two Loans?


As a real estate agent, I've worked with a few clients who've successfully sold their home via the short sale process. If you think this option is a solution for you, contact me and let's talk about it.

Saving Your Home From Foreclosure - Part 1

(Disclaimer: First, please keep in mind that I am NOT a personal finance expert and the information that follows is based on information readily available elsewhere on the internet.)


Number 1: Do your homework

Gather together all of your mortgage loan documentation. When did you last pay the bill? Where did you send it? What date did the check clear your bank? How much did you pay? Have you called them recently? Did you take notes on the call? If so, who did you speak to? Did you make any promises? Gather together all of your loan information so that you will have it handy... don't forget to make sure you have the account number. And if you have a second mortgage, make sure you have that information, too.

Research a few websites to learn the terminology and what options may be available to you from special assistance programs. Here are a few websites that I recommend:

http://makinghomeaffordable.gov/- This is the new government run resource for home owners.
Visit your mortgage lender's website (it should be listed on the last bill you received) they may have a special assistance program

Read the post ... and the notes... on Clark Howard's website about the loan modification program

Be very wary of the scam artists out there who promise to help you with your mortgage. You should NEVER have to pay anything to get help. Except maybe an application fee directly to YOUR mortgage company for a loan modification.

A national list of foreclosure assistance programs can be found on the National Association of Realtors website http://www.realtor.org/home_buyers_and_sellers/foreclosure_assistance_programs_by_state
The U.S. Department of Housing & Urban Development - http://www.hud.gov/foreclosure/

Get to know the terminology with online mortgage glossaries like this one.


Number 2: Pick up the phone and call your lender.


Remember, everything you tell them can potentially be used to help them collect. So don't offer your life story to the first person who answers. That person is a customer service representative in the collections department. There's not a lot they can do for you. You want to speak to their supervisor or someone in "Loss Mitigation." Loss Mitigation is a department that most mortgage lenders have where the loan specialists are well versed in all of the programs and options the lender has available to work with you in bringing your loan current.

Typically, options your mortgage lender may have available include:
(see glossary for definitions)

1. Special Forebearance Plan - this is typically for a temporary financial set back


2. Repayment Plan - you agree to pay the past due amount spread out over a set period of time


3. Partial Claim - if you have an FHA loan, HUD may be able to help bring your account current


4. Loan Modification - if the investors backing your loan will allow it, the mortgage lender can modify the terms of your loan to keep you out of foreclosure

Take your time when you speak to the loan specialist so that they can type all of your information correctly into their database system. These "notes" that they're taking will be important as this process moves forward because the lender will refer to them in making decisions and whenever you call with questions. Think about what you're saying so that your story is consistent each and every time you call. I'm not saying you're not telling the truth but the lender is hearing a sob story from everyone these days. Make sure that your reason(s) for falling behind on your loan don't change from week to week.

The loan specialist in loss mitigation is going to ask you lots of questions about your current financial status. You will need to be prepared and have access to a fax machine. You may need to provide

• your income tax returns for one or two years
• copies of pay stubs (payroll)
• a list of all of your monthly expenses

All of this will help them to determine which of their options may best fit your situation so that you can avoid foreclosure.

Number 3: If all else fails, you may have to sell your home

Selling your home in a good market used to take about 90 days. Today the market reflects a trend of 6 - 12 months... But what if you can't afford your home anymore? What options do you have available to you to avoid foreclosure? One option is a short-sale.

Unfortunately, steps # 1 and # 2 may work to prove that you really can't afford your home anymore. In part 2 of this post, we will explore "short sales." A short sale is basically when you work with a realtor to sell your home for what you owe on the mortgage. The bank has to approve the sale. It's up to the bank whether or not they will allow you to sell your home for less than what is owed on the mortgage. This still will negatively impact your credit but not nearly as bad as a foreclosure.

I hope to have part 2 of "Saving Your Home From Foreclosure" published in the next few days. In the meantime, if you have questions, please feel free to email me or leave a comment.

Want a hot deal on a house? Georgia’s second-largest bank is in the mood to make one

Everyday, we hear a lot about how awful the housing market is... and every day someone unfortunately, loses their home to foreclosure. In another post, I'll write about what you can do to save your home if you're at risk (Check out a recent tweet: @brodysantiago Do you know someone who's behind on their mortgage? There is help - just ask for a "loan modification" http://ow.ly/j15O) but today, let's talk for a moment about a great opportunity to invest your real estate dollars in Real Estate Owned properties or REOs as they're known in the industry. These are properties owned by the bank that have been foreclosed upon. In metro Atlanta, this list continues to grow but in contrast to places like California or Nevada or the Florida condo market, we're not the land of foreclosures. There are many opportunities for the right investor here in metro Atlanta and I'm happy to assist.

Banks are pricing homes to move.

A recent AJC.com article reports:

Columbus-based Synovus is in the midst of a massive purge of
distressed property, mostly foreclosed homes and vacant lots.
Through auctions run by contractors, the banking company has sold thousands of
properties over the past four months as it works to cleanse a balance sheet
hammered by bad real estate bets, many in the troubled metro Atlanta
market. The sell-off continues this week and next as the bank plans to
auction off about 150 distressed properties through a combination of online and
live auctions. Properties on the block include homes from Carrollton to Canton
and vacant lots from Newnan to Austell.

Minimum bids at one auction hosted by Williams & Williams range from $10,000 for a 2-bedroom, 2-bath home in Cartersville to $50,000 for a 5-bedroom, 3-bath house in Woodstock.

Many banks are selling repossesed homes, but the numbers for Synovus are
eye-popping.
Keep reading...

Georgia is not feeling the greatest impact of the foreclosure crisis but I'm sure if you ask anyone who is living in a 1/2 empty condo building in Buckhead or a subdivision with overgrown lawns and vacant homes, they'd tell a different story. So if you're an investor or would like to evaluate if real estate investing is for you, let me know. There are some great deals in our market but the really good ones are going quick.

Get off the Fence!

The Georgia Association of Realtors is encouraging folks take advantage of the home buying opportunities and tax breaks that are currently available.

Get off the fence – you’ll be glad you did! Already own a home? REALTORS® are your best resource to explore your options if you’re thinking about selling or refinancing.

The new site offers information on the following:

• The Georgia $1,800 tax credit
• The Federal $8,000 tax credit
• Home builders are offering lots of incentives to buyers

If you're on the fence about investing in your next home or your very first home, let's talk about it...

Do you want to move to Cobb County, GA?

Do you already live in Cobb County, Georgia? Do you want to own your own home?

from CobbLine Weekly Newsletter...

Home buying opportunities available with new program

The Neighborhood Stabilization Program will provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. Cobb County will receive approximately $6.9 million from Housing and Urban Development and $1.7 million from the Georgia Department of Community Affairs to rehabilitate, resell or redevelop foreclosed residential real estate in the county's areas of greatest need. The goal is to stabilize neighborhoods and stem the decline of home values. Homebuyers may qualify for this program if they meet certain income criteria. For instance, a family of four can have an income of $85,450 and be eligible to participate. For additional information, please contact the program office at 770-528-7980 or visit buycobb.com

You can also contact me for information on living and buying a home in Cobb County - broderick@kellerknapp.com. You'll be surprised at the opportunities available!

Emerging Market Trend - New Condo Auctions

Real estate auctions for brand new, never lived in condos in Atlanta are a very promising opportunity for both investors and home buyers looking for a good deal. In the past couple of weeks there has been a lot of buzz around upcoming condo auctions here in Atlanta. The general idea of a condo auction is to allow a growing list of developers who use auctions to move multiple units in a matter of hours.

But buyers looking for a deal may not need to wait for an auction to find one, he said. Prices of intown condos are often slashed before the builder even thinks about going to auction.

Mark your calendars and let's plan to check out these upcoming auctions together:

Aqua - May 16

Cosmopolitan - May 17

As is typical for auctions of higher-end developments, the Aqua sale will be at the swanky W Hotel. Prospective buyers can sign up at a Web site for advance information. They can also see units on the block during a preview period in the weeks before the auction.

Bids at condo auctions often start one-third below the original listing price. At the Aqua auction, for instance, bidding for a one-bedroom, one-bath unit in the “Azure” floor plan starts at $179,000, vs. the last listing price of $389,900. Bids on a larger “Sapphire” unit start at $299,000, down from $759,900.

Because Atlanta has so many unsold units, the auction action is
drawing enterprising business people.

www.ajc.com

Thinking about buying a new home?

Are falling prices encouraging you to think about buying a home? According to a recent article in the NY Times, the opportunity for finding a great deal on a home can become your reality. There are lots of options on the market today including foreclosures and homes in pre-foreclosure (short sale opportunities) in great neighborhoods. Your realtor (hopefully that's me) can assist you with locating properties that meet your budget and lifestyle objectives.

Here's a few tips on information you'll want to have ready to begin the home-buying process:

- Obtain a copy of your credit report from all three of the major reporting agencies so that you know where you stand. It will make the process go a lot smoother if you are pre-qualified by a mortgage lender before you start looking for a home. You'll have a better idea of your budget so that your realtor will know what price range to research for you.

- Think about and identify your "must haves" vs. your "would like to haves" for your new home. What is most important to you, being close to downtown Atlanta, better schools, large back yard or close to your job?

- Review other industry websites for additional home buying tips to add to the conversation with your realtor


Do you have questions? Are you ready to have a conversation with a realtor about buying a new home? It's a buyers' market out there and it doesn't cost the buyer anything to engage a realtor to act as their home buying advocate. Contact me today @ 678-862-3100 or broderick@KellerKnapp.com

Foreclosure Rescue Scams - Beware!

Lately, there has been a lot of news coverage related to the foreclosure crisis in our country and the scam artists who are taking advantage of good people who are trying to save their homes from foreclosure. The bottom line is do not pay for a rescue service!

Check out this new government webite: Making Homes Affordable to learn more about your options as a home owner.

The Obama Administration has introduced a comprehensive Financial Stability Plan to address the key problems at the heart of the current crisis and get our economy back on track. A critical piece of that effort is Making Home Affordable, a plan to stabilize our housing market and help up to 7 to 9 million Americans reduce their monthly mortgage payments to more affordable levels.

The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.

Our consumer website, www.MakingHomeAffordable.gov, provides homeowners with detailed information about these programs along with self-assessment tools and calculators to empower borrowers with the resources they need to determine whether they might be eligible for a modification or a refinance under the Administration's program. Through this website, borrowers can also connect with free counseling resources to help with outstanding questions; locate homeowner events in their communities; find a handy checklist of key documents and materials to have ready when making that important call to their servicer as well as FAQs from borrowers in similar circumstances; and much more.

Interested in Foreclosures?

Recently, some of my investor clients have turned their interests towards foreclosed properties. This type of investment defintely requires the advice of a realtor (remember, the "seller" is who pays our commissions, not the "buyer").

If you're thinking about jumping into the foreclosure market, there are plenty of properties here in the Atlanta metro area and there are also great resources available online to provide you with the knowledge you'll need to be successful.


The nice folks at HUD have a list you can sign up for.





Be careful ... if you don't know what to look for you should definitely take a licensed realtor with you. Heck, take me! I'd love to go... To learn more about why you should use a realtor click here.


Give me a call. Go ahead, don't be shy.

Or... join the conversation... tell us your foreclosure story.