Real Estate Information Archive

As a Realtor® and a member of this community, it amazes me how many people do not want to face their troubles. Homeowners are facing foreclosure and we are finding that 7 out of 10 homeowners do nothing to try to avoid it. If homeowners would recognize their problems and seek help, most of those homeowners might be able to get a loan modification to stay in their homes and almost all of those that cannot get a loan modification can sell their home short of what they owe on it. There are so many programs out there today that have been created to help homeowners, such as the Home Affordable Modification Program (HAMP), Home Affordable Foreclosure Alternatives(HAFA), the Realtor Neighborhood Stabilization Project as well as other local and national programs. Those of us that work in these industries for a living are seeing how hard this recession is hitting people; we want to do what we can to help them. We realize that this is not a problem that is just hitting people who poorly managed their money; this is hitting people of all demographics, rich, poor, young and old. I think that homeowners are looking at their current financial situation and thinking that this is because they didn’t do something right, that they somehow failed their families and themselves, when that’s not the case at all. Homeowners who refinanced their homes during the housing bubble, when prices were at the top of the market are extremely anxious because now they are so upside down on their home that they don’t know what to do with themselves. I want to let these homeowners know that we are here to help, you can call your Realtor® and that we can help you. Those Realtors® that have put in the effort and received additional education are your best source. A Certified Distressed Property Expert (CDPE) or SFR (Short Sale and Foreclosure Resource Certified) have received additional training to help homeowners navigate through the process of getting a loan modification or selling their home as a short sale. This year alone, we are expected to surpass 1,000,000 homes in foreclosure nationwide, lenders loose about twice as much on foreclosure over a short sale and even more if it would have been a loan modification. Lenders are willing to work with homeowners to find alternatives over a foreclosure. If you or someone you know is struggling with making mortgage payments, please seek help. Foreclosures are hurting our economy, your neighborhoods property values and people’s credit and self esteem. In many cases a foreclosure affects families harder than losing a loved one.

Citizens for Lower Taxes and a Stronger Economy (The "VOTE NO on 4" campaign) leads opposition to Amendment 4, coordinating a grassroots network of more than 30 campaign chairs and over 1900 volunteers.  The campaign's statewide board of directors is diverse, including former Florida League of Cities Chairman, Clarence Anthony, Florida Chamber of Commerce President, Mark Wilson, and Florida AFL-CIO Executive Committee member, Frank Ortis. To date, more than 280 labor, business, civic, and planning organizations oppose Amendment 4; more join the fight every day.  For more information, please visit www.Florida2010.org.

I hope you’re doing well! I always like staying in touch with the members of my community. I wanted to let you know about a free seminar I’m putting on to inform homeowners in our community about their foreclosure-avoidance options. This seminar takes place from 7:30pm to 8:30 on June 21st, at The Longwood City Community Building at 200 West Warren Ave. Longwood.

You may not know this, but I’m a Certified Distressed Property Expert. This means I have an extensive knowledge of all the options available to homeowners facing financial hardship. Personally, I think that one foreclosure in our community is one too many! I know that foreclosure can be prevented with information alone.

Recent statistics show that more than 1 in 7 homeowners are behind on mortgage payments. In this market, chances are you or someone you know could use some help. That’s why this free seminar is so important. I want to help as many members of our community as I can to find assistance and solutions.

Be a hero in our community. Pass along this information to help someone learn how to avoid foreclosure and start a secure financial future.

I hope to see you and your friends there; this seminar is FREE and open to the public.

With approximately 1/3 to 1/2 of short sale contract never closing, you need to choose your Realtor carefully and do your homework.  There is a lot to gain by buying a short sale, the biggest gain is that you will be able to get a larger home for your money or you might be able to get in a neighborhood that you previously could not afford.  Dian Hymer wrote an article on Inman News which sums it all up.  This article is like spoken out of my own heart and is a must read for anyone that is thinking of buying a short sale.  Click here to link to the article.

If you think that you need to sell your home in a Short Sale or that you need help finding a solution to your mortgage problem, then you might want to follow this link to my website http://www.avoidforeclosureincentralflorida.com which explains a lot of the options that a homeowner has today.

As we all know, the real-estate market has changed a lot in the last four years.  From being a sellers market where anything and everything sold fast and was easy to handle, that market did not require much effort nor put any strain on the Realtor.  But to make it in today’s market Realtor’s really have to earn their commission, we have had to take several classes about handling Short Sales and Foreclosures as they are now the norm in Real-estate today. Unfortunately not all of us have been willing to adjust and spend the time needed to learn how to bee a REAL PROFESSIONAL, even though most of us have done so.  This situation is hampering sales and hurting some of our customers, as it is with regret that I had to write an e-mail to one of my foreign national customer explaining the status of his contract on a Short Sale home. I am including a translation of this e-mail in this Blog:

I do not have much to say today, as you know I have sent several e-mails to the listing agent trying to find out the status of our contract. I have also left several messages on her answering machine, but she dose not reply to messages. Finally yesterday, I managed to get hold of the listing agent and requested a report on the status of the file, the reply I received was that the file is being worked on, but she did not give any specifics. When I asked why she had not sent us the Sellers Disclosures, I got an answer in some kind of English that I did not understand. At this time I asked her for her broker’s cell phone number and got laughed at, but she gave me his number.

Then I called the broker on his cell, gave him a status report and asked him for assistance in this case. Also I informed him that his agent had told me that he would be handling the negotiations with the bank. The only thing he told me is that they were working on this file, but he did not give me any specific answer when I asked specific questions. When I would not give up and continued to ask specific questions he asked me if I would hold for a second (I though he was going to get the file) and I am still on a hold. Now I understand why the listing agent laughs when some one asks for her broker’s number.                            I am sorry that I can not give you any better information about the status of your file and that professionalism is so poor here in Florida.

It is my hope that this Blog will “shake up” you the so-called REALTOR that is still knocking your head against the rock and thinking that you do not need to learn how to handle the market today and push you to get the education that is needed in today’s market.

I also hope that you realize that you need to honor “your promise of professionalism” and:

“Respond promptly to inquires and request for information” (NAR, The Code of Ethics, Pathways to Professionalism, Section I, Subsection 2.).

Respond to other agents’ calls, faxes, and e-mails promptly and courteously.

Show courtesy, trust and respect to other Real estate professionals” (NAR, Section III, Subsection 2.).

Also I would like to take the opportunity to remind you about that:

“To be successful in the business, mutual respect is essential.

Real estate is a reputation business.  What you do today may affect your reputation – and business – for years to come” (NAR, Section III, Subsections 11 & 12.).       

It is amazing how quickly lenders are finding ways to avoid the new RESPA (Real estate Settlement Procedure Act) and avoiding this consumer protection act.  Kenneth Harney wrote an interesting article in The Washington Post, January 16, 2010 title “Mortgage lenders can sidestep new rules to prevent lowball estimates”.

Let’s take a look at what the purpose of RESPA is: It is to make sure that the consumer (borrower) knows what is involved in borrowing and also the cost of borrowing or obtaining a mortgage for their home. Also the purpose of it is to empower the borrower to shop around for less expensive services. Keep in mind that borrowing funds is like renting, meaning you are renting the funds to purchase a home and when you rent you shop around so why not shop around when you borrow.

HUD (US Department of Housing and Urban Development) has created a lot of print material to empower the borrowers and assist them with the loan process and make sure that they know their rights, their duties and what to expect. Among their publications is the "Shopping for Your Loan booklet". Here is a link to HUD’s RESPA home page.

But let’s go back to the article that I mentioned above, in the article lenders defend why they can not give borrowers a GFE (Good Faith Estimate) and why they have to use worksheets instead. I wonder, do the lenders know what they are doing? They are running a business and selling services, if they do not know what the cost is or how their products work, should they be in this business? Some of the most common explanations a Judge gets from a homeowner in foreclosure is: I did not know about this balloon payment, I did not know this was an adjustable rate loan, I did not know this loan was interest only for the first two years and so on. In other words lender did not make sure that the borrowers knew what kind of a loan they were getting and I wonder, do these lenders still want to keep it this way, despite all the foreclosures and Short Sales?

When Mr. Harney asked HUD’s spokesman about their position on the worksheet, the response was: [I]“that although the rules are silent on the subject, worksheets can be a useful tool when the consumer doesn't want to give enough information for a formal application”. And he went on to say: [I]“if worksheets become commonplace and threaten to water down the consumer protections on settlement fees provided by the GFE reforms, her agency will need to take a thorough look at the situation and possibly issue "updated guidelines."” Reading between the lines of what the HUD spokesman said: Borrower you need to educate yourself about your rights and what is involved in the loan process and to the Lender if you do not get it right this time we will force you to do it right.

The bottom line is: Borrowers, Realtors, Loan Officers, Title Companies need to learn the new RESPA rules and regulations and start to practice them as a normal part of your business.

When the Lenders had ample funds to loan and money was burning holes in their pockets, they were creative finding ways to qualify everyone for a mortgage.  The Lenders had their marketing teams work on creating new and effective ways of qualifying people; it seemed to be the goal of getting everyone over their head in debt.  If someone dared to say something negative about their way of doing business, the response was: You’re old fashioned, he is negative, and you’re pessimistic or something even worse.  In their race to top each others marketing they created other loans like: No income, verified assets (NIVA) loans, no income, no assets (NINA) loans and no income, no assets, no job (NINJA) loans among other.  These are what the industry calls LIAR LOANS, but the loan officer also told the buyer that the equity in the home would go up and they would be able to sell with profit in few years.

Let’s look at where we are now!

According to Housingwire.com we here in Florida surpassed California and now rank number two in the Nation with every 165 homes in danger of being bank owned, California has 180 in danger of being bank owned.

According to the Mortgage Bankers Association, third quarter National Delinquency Survey: The non-seasonally adjusted delinquency rate increased from 8.86 percent in the second quarter of 2009 to 9.94 percent this quarter.  Also they state that percent of loans in foreclosure was 4.47, this means that total14.41 percent of all loans are 30+ days late or in foreclosure, which is the highest ever recorded in the MBA survey.

Then according to CNN Money 1 in 4 mortgages are underwater or up side down (negative equity) or within 5% of being there, a total of 13 million mortgages.

As we can see from the above there are a huge number of distressed homes out there.

What about all these rescue programs out there?

There has been a lot of effort from our government to save our homes, some of these programs are geared to help the public while others like the Neighborhood Stabilization Program are geared towards helping the lenders. Also some lenders have created their own programs to assist their borrowers, the sad things about all these programs is they have not worked as well as their designers were hoping.  The fact that only 1,700 homeowners had pass through the Home Affordable Modification Program (HAMP) in September, tells the whole story. It looks like that some homeowners who got these stated loans (liar loans) are afraid to follow up on the modification and for the first time bring in all their finance documents, like tax returns, all bank statements and so on. Then the government has programs for VA loan borrowers, FHA borrowers, some states have programs in place; there are even some Local Initiatives to assist homeowners that are having problems with their mortgages. In addition to all these programs, the courts have implemented mandatory mediation between the lenders and the borrowers when the lenders are trying to foreclose on a home. The courts are doing this due to the fact that many homeowners have complained to the Court about difficulties with communication with their Lenders. 

What can be done to remove the HAMPering out of the HAMP and other programs?

Well I am a Realtor who has spent a lot of time learning about all these programs and how to communicate with homeowners and lenders, among other things that I have done is to study the most in depth class out there, The Certified Distressed Property Expert class and get the CDPE designation. In addition to this I read a lot about these issues. If you go on my main website http://www.thevikingteam.com/ and click on “Links” you will see that I have gathered a lot of links to the websites of all of these programs. The problem is that when you see all of these links you don’t know where to start, the system needs to be made more streamlined and easier to navigate for the homeowner.  I and many of my fellow Realtors have set up websites for homeowners to look for and learn about what is available of assistance.  My website is called: http://www.avoidforeclosureincentralflorida.com/By setting up websites the Realtor is just showing that he cares and is trying to do his best for the homeowner, but this is not enough, more needs to be done and this is what I would like to see:

1. Service centers in every county where a homeowner who is in trouble or foreseeing problems could go to and talk to a person face to face that would explain to him/her, their situation and guide them on the right path to recovery.
2. Lenders streamline their phone system and make it more customer friendly, so that a homeowner in trouble who calls in does not have to be on hold for up to an hour or more, and then when they forward the homeowners call it is sent to someone who can help the homeowner (not to a debt collector) and guide him to a real solution. If this would happen then the banks might be able to collect more of the debt and reduce their losses.
3. I would like to see the media spend more of their time pointing out solutions and guide the homeowner in the right directions. We have all heard several times about scammers and illegal companies that are making money on other people’s problems, not that I am saying that they don’t need to be exposed.  But I would like to see more time spent in getting homeowners to start saving their homes. Unfortunately there are too many homeowners out there that for some reason do not start the process of saving their homes.

After reading this article of mine, you might be asking yourself; why is he writing this?  Well the answer is; I am fed up with seeing all this waste of time, funds and family well being that I see in the system today and I am not the kind of guy that sits in the corner and mumbles.  I will try my best to change things to the better.

Yesterday I was looking for information on the web, I came a cross a webpage www.ginniemae.gov and looked at it. There I found a Buying vs. Renting calculator, which I had to try out. The results of my calculations were at least extremely surprising, buying a low priced home in Sanford, FL versus renting the exact same model of a home, saves you $85,363 over a 10 year period.  Let me explain what I did, I took my listing at 2418 Chase Ave, Sanford, FL vs. 2541 El Capitan Dr. Sanford, FL both 1,175 sq. ft. homes with 3 bedrooms, 2 bathrooms and 1 car garage (exact same floor plan and the same features). Chase is offered for sale for $124,999 and El Capitan is rented for $950, I used FHA loan with 3.5% down payment and fixed 5.5% interest for 30 years. Than I assumed the fact that the homeowner would own the home for 10 years, pay 1% in property taxes and the value of the home would increase 2% per. year.  Yes, this government calculator told me that the homebuyer would save $85,363 if he sold the home after 10 years.  I was expecting some saving but this high amount, was a surprise for me. Then I wanted to find out how long it would take to save the total purchase price and that looks to be around 13.2 years.

Click on the Ginnie Mae logo and try out the calculator your self.

Note: The calculator  that I talk about above uses these items in its calculations: private mortgage insurance, homeowner's insurance cost, loan closing cost, cost of selling a home, property tax, homeowner's tax saving, and rent increases. Calculator results are estimates only.

Even the IRS thinks Firs-Time Homebuyers need to move, NOW.

This links to the IRS website form 5405 for First-Time Homebuyer Credit.

Newswire from IRS explaining the First-Time Homebuyer Credit.