Mortgage holders must realize it’s not the end of the earth.

When the people we know of as friends and neighbors find they have mortgage problems, their first shock is the foreclosure service. They go to the front door one morning to pick up the daily paper, only to be greeted by a process server handing them a foreclosure notice. This is the first of many instances when these people will discover they have been let down by the ongoing failure of our federal and state governments. Because government has failed to force financial institutions to do their part and resolve our national housing instability, every well written summons and complaint seeking the foreclosure of a mortgage will result in a forced, judicial sale of a house. So is there life after being served notice? There can be.

Every mortgage simply says that if the borrower does not make the monthly payment, keep up homeowners insurance and avoid violations and a number of other conditions, they will be sued in State or Federal Court. Eventually, this is the first act that leads to a foreclosure sale. Sadly, the homebuyer will hear these words at the closing table while signing a mass of documents but will concentrate on anything but the potential chaos of these results.  

What’s gone wrong for foreclosed homeowners

The numbers speak for themselves: mortgage loan defaults do not result in an equally significant number of sustainable loan modifications.  This fact was pointed out last year by a group of 15 Attorneys General, including our New York State Banking Superintendent. The fifteen signed and sent a letter to the Comptroller of the Currency and the Director of Office of Thrift Supervision stating "the majority of loan modifications in the past year have not led to meaningful payment relief to homeowners. We are concerned that either the institutions supervised by the OCC and OTS have thus far failed to offer homeowners sustainable loan modifications, in contravention to guidance issued by the federal banking agencies...."    

Now, a year later, this State Foreclosure Prevention Working Group issued its Data Report No.4, January 2010, showing that the number of homeowners in default continues to grow, not lessen. Efforts to mitigate loss are hopelessly backlogged, principal reductions are a rare bird indeed; and that our lenders and banks have "not succeeded in turning the corner to reduce the high levels of foreclosure."  In her February 11, 2010 Newsday article, Ellen Yan lays bare the shocking facts that the "number of newly started foreclosure cases on Long Island went up last month."  On a hopeful note, she adds that there are some positive trends now forthcoming and reports on one such successful loan modification for a Nassau county homeowner, even after the lender served a foreclosure papers. 

Ms Yan described in an earlier article that "state law will require settlement conferences for all borrowers in the foreclosure process".   She reported how court officials are "hoping to keep these people, more of them, in their homes."  But due to reticence, ignorance of their options or merely the apathy of hopelessness, many people who have come face to face with the process server feel no hope in reaching out for guidance, counsel and assistance.  This in spite of the fact that each foreclosure summons is required to provide phone numbers for counseling agencies, and each court house provides a Clerk's Office for homeowners to get information on their options.  

What to do when foreclosure service strikes

There are several positive success oriented strategies homeowners in foreclosure can enact. Focus on the fact that homes can be saved and loans can be modified or at the very least a short sale can be worked out saving the owners from foreclosure. I regularly see homeowners who were served with a foreclosure summons and need counsel and defense to save their home.  When we meet, I  explain their options, and point them in the right directon of a good attorney to help. They often come away with the confidence that there is a process for solution.  They also understand that if you do nothing you will get nothing.

The potential to succeed is limitless.  Meeting a process server can feel as if the weight of the world is crashing down. But don’t just hang your head and start cleaning out the closets. Take action! Look to mentors, neighbors and professionals who have had experience in this area.  And most of all, take heart. The statistics are overwhelming--- one out of seven borrowers are behind on their mortgage, according to the Mortgage Bankers Association 3rd Quarter 2009 survey.  This clearly means that you are not alone. 

But it also means that someone won't magically appear in your living room to describe what actions you need to consider.   To succeed, it means that you must begin the process of rebuilding your financial confidence. When you do, you will be assured of meeting someone who has had a similar problem but has done something to start a process that will fight the foreclosure action, slow it down to the point of engaging your lender in Court at a foreclosure settlement hearing, submitting for a loan modification or if necessary, taking all the other actions legally yours to protect against a foreclosure sale.

The past three years have seen enormous actions from our financial institutions to engage this unheard-of concept of banks giving borrowers a second chance. And there are more to come. On the horizon, there are steps now in process to implement a Treasury Department plan to modify eligible borrowers who have a second mortgage lien.  These ideas are bold and innovative and require much on the part of the lender, but also on the part of the homeowner.  Remember, foreclosure service isn’t the end of the earth. It’s a new beginning for the many who head in the direction of a solution.

As a certified distressed property specialist, I am  able to provide you with the information you'll need to go forward. There is no financial obligation to me for this information at any time.

Last Week; wasn't a good one for the economic bulls, and particularly those that think the housing markets are making a turn. Jan existing home sales were expected to have increased about 1.0%, they tanked to a decline of 7.7% with the inventory of unsold homes increasing to 7.8 month from 7.2 months in Dec. New home sales in Jan really fell, with the forecast of an increase of 3.7% over a weak month in Dec, sales plunged 11.2%. Bernanke testified in Congress last week, it went OK and markets only took out of it that once again Bernanke reiterated interest rates would stay low for a lot longer. We are hearing that it will likely be four more meetings before the FF rate is increased, that takes to out to the latter part of this year. It all depends on the economy; we still think the foundations of the present optimism are too optimistic are too excessive, but that is that famous wall of worry it takes. Not only housing data; consumer confidence in Feb declined substantially; the Conference Board's index of confidence dropped over 10 points (20%) from Jan to Feb to a low read of 46.0; the U. of Michigan consumer index didn't slide at all and remained unchanged on the month------more to be confused about. Although the week was punctuated with very soft economic data, the equity markets held well with very little change in the key indexes. The interest rate markets improved; the 10 yr note yield fell 16 basis points to 3.62% and 30 yr mortgage rates declined about 8 to 10 basis points.

Was your home built before 1978? 

In all homes built before 1978 there is a chance that lead paint was present somewhere in the building process of the home. It’s estimated that about 38 million homes contain lead paint. If you in the process of purchasing a home built before 1978 that needs updating or you are considering doing some remodeling, after April 22, 2010  you will be required to have contractors to both test those homes for lead and be certified to work within them using strict lead safety practices.

Once the work begins, areas containing lead paint must be sealed off from the rest of the home in order to minimize exposure to dust that exposes risk of lead exposure. A daily cleanup routine using the use of a special vacuum will be mandatory and the related additional costs will translate to you the consumer.

For more on the EPA standards and the new law visit http://www.epa.gov/lead/pubs/renovation.htm

Save the Date!!

March 13, 2010 at the Nyack Center  9:00am – 12:00pm,

The River Rowing Association’s 4^th Annual Pull With Purpose charity erg-a-thon to benefit the Nyack Center and their many programs.  Teams of five or more row in relay fashion for two hours -- the team with the most meters wins!  Put your team together now and help support the community in a fun and exciting way.  Minimum donation is $25/rower, but the more money you raise, the better shot you'll have at winning one of many prizes.  See attached flyer, full details and team registration at www.riverrowing.org.

5:00pm – 10:00pm, The River Rowing Association Annual Benefit.  $45/person, $15 6-12 yrs, 5 and under free.   Whether you “Pulled With Purpose” at our charity erg-a-thon to benefit the Nyack Center and need to refuel, or just want to support the River Rowing Association, join us for dinner at the Nyack Center.  Cocktail hour at 5pm, dinner at 6pm.  Nyack’s own rockabilly group Four Gun Ridge to play from 8pm to 10pm.  For tickets register here.

I'm in the middle of negotiating a short sale that has received multiple bids, which is par for the course if done correctly. However, short sales are not for the faint hearted from either the seller or buyers side. One of the Realtors involved in this transaction asked me to explain the process in order to make sure that her client's are fully aware of what to expect, and I thought others would be interested too, so here goes....

Buyers pursue short sales hoping to get a good deal. So when you see a price listed for a home that you think is too low for the neighborhood, before you jump on like a hen on a June Bug, ask your agent to call the listing agent to find out if the home is a short sale.

You might want to think twice about making an offer on a pre-foreclosure, short sale home. It's not as simple as you may believe, and very few can close in 60 days or less.

Many of my Rockland & Orange home buyers have waited 4 to 6 months to close on a short sale, sometimes much longer and typically back out if the negotiations don’t move further after the 6 month period.  A lot depends on the Realtor and Attorney team that are negotiating the sale & who owns the mortgage note.

What is a Short Sale?

A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.

Be aware that the seller need not be in default -- to have stopped making mortgage payments -- before a lender will consider a short sale. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.

When you spot a short sale house that interests you, take your hand off the mouse and step away from the computer. Before you get all excited over the prospect of buying that short sale house, pick up the phone and call your real estate agent. Your agent needs to research that short sale listing first.

In some real estate markets, fewer than one in 10 short sales close. Just because that home is listed as a short sale doesn't mean it's really for sale (because it's subject to lender approval), nor does it mean it will sell at the advertised price. Here are 6 things you need to know before trying to buy that short sale.

Comparable Sales For That Short Sale House

The short sales I list in Rockland and Orange are all priced below comparable sales, yet they are priced in line with pending sales. Why? Because short sales take anywhere from 2 to 4 months, on average, to close, and pending sales will become the comparable sales at closing.

Some short sales are priced ridiculously low. These types of listings receive multiple offers. But all is not lost. To get your offer accepted, it will need to be priced near market value. If you're not prepared to pay above a superficial price on a lowball short-sale listing, then pass.

Mortgage Amounts, Number of Loans and Lenders

Ask your agent to research how much is owed against the home and find out the number of loans that are recorded. A second or third mortgage lender will receive peanuts as compared to the amount a senior lender in first position will get.

Moreover, some lenders, deserving or not, get a reputation for being difficult to work with. If your agent is an experienced short sale agent, he or she will know who these lenders are and can advise you of the difficulty you may encounter.

If your offer is 20% or 30% of the mortgaged amount, it is unlikely that your offer will see the light of day on the negotiator's desk.

Short Sale Listing Agent's Track Record

A listing agent who is advertising a short sale but has never closed a short sale is a risky proposition for you. That's because it's up to the listing agent to submit the short sale package to the lender and negotiate. Your buyer's agent can't talk to the bank. Make sure that the listing agent is certified as a distressed property expert.

Some listing agents hire outside companies to do their job, and the results of those negotiations are sketchy at best. Ask yourself, do you want to risk rejection of your short sale purchase because the listing agent has no experience? A listing agent that works together with a local attorney well versed in negotiating short sales is more likely to get the deal done.

Short Sale Seller Qualifications

Find out if the listing agent has received a completed short sale package from the seller, and ask about the contents of that package. A complete short sale package consists, at minimum, of the following:

• Sellers' hardship letter
• Tax returns
• W-2s
• Payroll stubs
• Financial statement
• Bank statements

Some sellers do not want to cooperate and are slow to return these documents. Others have never been told by their agent that these documents are mandatory. You don't want your short sale purchase delayed because the listing agent doesn't have the required documents.

Number of Short Sale Offers Received

Homes priced under market value will receive multiple offers. An agent is not required to disclose the terms of those offers, but you do want to know how many offers you are up against.

Here's how it generally works:

• When a short sale home first comes on the market, the first offer will most likely be a tad below list price.
• The second, at list price.
• The third offer will be slightly higher, maybe by a $1,000 or $2,000.
• The fourth offer will be significantly more.

You want to make an offer that will beat the competition yet still be below market, or don't waste your time.

The Listing Agent's Short Sale Procedures

Although REALTORS are required by the REALTOR Code of Ethics to treat everybody fairly, not every agent is a REALTOR. This means the short sale listing agent may decide to submit only the first offer to the bank and withhold all other offers.

Withholding other offers could be considered to be a violation of the fiduciary relationship formed between the listing agent and the seller. The seller is entitled to receive the highest and best price. Realize that even if your offer is submitted to the bank, as time marches by while waiting for short sale approval, another buyer could outbid you.

Finding the perfect house to call home doesn't have to be hard. Learn how to make your dream home a reality.

Call Vanessa Saunders to find out your best options for either buying or selling a home.

845 598 5083

In a recent internet poll, real estate industry professionals were asked to indicate the value that was generated by their last HVCC appraisal relative to the sales contract price that the seller and buyer had agreed upon. With 57.7% of the sales values being lowered by more than 3% the results below highlight how dramatically HVCC is artificially deflating the value and equity of every home in America.

I have seen it for myself, first hand, how the new HVCC rules are killing the economy, Mortgage Brokers, Realtors and consumers but continues to pad the pockets of the elite bankers. It's the worst white collar crime ever committed on society....

View this explanatory video for a full explanation of what's going on and sign the petition for the permanent reversal of HVCC.

Thank you,

Vanessa

Last Week; interest rates on treasuries increased, the 10 yr note yield jumped 12 basis points, mortgage rates however remained generally unchanged. The week brought the Greece deficit into full focus early in the week generating a little safe haven buying in treasuries but it didn't last long as markets quickly realized the European Union would put a plan ion place to keep Greece from defaulting on its debt. Spain and Portugal are also being observed closely as their financial conditions are not much better than in Greece. The take away from the revelations that sovereign debt among many nations is still on the edge of breaking down; not what markets need now as the debate about recovery is heating up.. Last week had very little economic releases from which to measure economic conditions. The week's major headline was the quarterly refunding by Treasury; it sold $81B of 3 yr notes, 10 yr notes and 30 yr bonds. The 10 and 30 yr auctions were not up to recent standards of strong bidding, but were not failures. China's decision to increase their bank reserves by 50 basis points was met with concern in the US that Asian counties may try to slow growth rates that have escalated to increase concerns over inflation.

FTC Proposes Rule That Would Bar Mortgage Relief Companies From Charging Up-Front Fees

The Federal Trade Commission moved to protect distressed homeowners from the promoters of bogus foreclosure rescue and mortgage modification services by proposing a new rule that would forbid companies to charge up-front for these services. Instead, companies could only collect payment after providing services.

“Homeowners facing foreclosure or struggling to make mortgage payments shouldn’t have to contend with fraudulent ‘companies’ that don’t provide what they promise,” FTC Chairman Jon Leibowitz said. “The proposed rule would outlaw up-front fees so companies can’t take the money and run.” ...Read more...

1.Write love notes to one another, even if it’s just the word “I love you” Leave them where your partner will find them during the day.

2. Share a romantic meal. Prepare it together. Put candles on the table. Dress up. Play your favorite music. Unplug the phone and enjoy each other.

3. Give your partner the day off. Do your partner’s chores for the day. Let them do whatever they want for the whole day. When they get home, they’ll be ready to thank you.

4. Find yourselves a new hobby, a chance for the two of you to spend time together . You can try a couples sports league, cooking workshops or dance classes.

5. Be spontaneous. Do something fun and silly, enter a kissing contest, like the Netflix Greatest Kiss Contest.

6. Pack a picnic complete with candles and wine and take it to a rooftop for a romantic midnight rendezvous.

7. Give your Relationship a fresh start with a fresh coat of paint. Redecorate your bedroom to be more inviting and have an incentive to spend more time there.

8. Go on a second honeymoon. If getting out to a tropical island isn’t a feasible option, no problem….just check into a nice hotel one weekend, for some room service, relaxation and romance.

9. Embrace your inner teenager and do something fun….go to a theme park, stay out all night dancing or go to a midnight movie.

10. Exchange gifts, but set the rule that it has to be something homemade, like a mixed tape or a card. That way it will come from the heart and mean much more.