WORD: Dual Agency

And the WORD for Today is:

Dual Agency—the representation of two parties (principals) who have opposing interests. Dual agency is legal in most states as long as both parties have been informed that the agent also represents the other party. In real estate dual agency most often refers to an agent who represents both the buyer and seller in a transaction. Likewise, the escrow or title agent is also working for both parties and must be neutral. This author is philosophically opposed to dual agency except under very limited and special circumstances. While real estate professionals will argue that there is no problem as long as you stay neutral, staying neutral is, itself a problem from my viewpoint. I don’t want someone representing me to be neutral; I want you to be proactively working exclusively for my best interests. Dual agency does not provide for putting my interests above the interests of the opposing party. Consumers should seriously consider the value of separate representation even when dual agency seems simpler. You can’t legislate impartiality; most humans tend to side with one part or the other, even when legally obligated to “be fair”.

See yesterday's post for more information on dual agency.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Did You Know: Dual Agency

Dual Agency Dilemma

FYI: “Dual Agency” can be harmful to your health.

The things you have to be careful of continue to multiply. Even a large percentage of the things which are completely legal can come back to bite you in the proverbial “you know where”. One of those things is dual agency. Such a nice sounding phrase. Could end up hurting you about as much as a friendly rattlesnake.

You may not know the word but you have probably been involved in a dual agency relationship without being aware of it. Dual agency exists when a professional represents a person to handle an issue and then also agrees to represent the other party in that same transaction. Most folks would think you were crazy if you decided to use the attorney who is representing your spouse in a divorce against you. You would clearly see that is not likely to end up with the result that is best for you.

Yet, in the real estate world, not only is dual agency common practice; it is totally legal. Most real estate agents are unhappy if anyone (especially me) says that dual agency is seldom your best choice. When an agent represents both sides of the transaction, they get both sides of the commission. That is good for them; not necessarily so good for you. It’s called a “conflict of interest”. Suffice to say that just because the law allows it, that does not mean that regular professionals can balance the opposing needs of two different parties and get the resolution which is best for EACH party. Consequently, the professional is happy, most often the other individuals feel a tad bit taken advantage of.

Anyone who has ever bought a house using the agent who had it listed has participated in a “dual agency” situation where the agent represented both sides of the transaction—the SELLER and the BUYER. If you take a poll of the folks who have done this, most of the buyers and some of the sellers think they got a raw deal BECAUSE their agent was looking out for the other party. Some will tell you that they did not understand that the agent WAS representing the other party as well. You may be surprised when informed that you signed a document which stated you were agreeing to the “dual agency" representation. You made it legal by virtue of your signature.

Dual agency is legal; requires the signature of both parties that they understand and agree to such representation; and is likely to give you heartburn.

Solution: Don’t Do It! Select your own representation, someone who has an exclusive commitment to represent your best interests. You want your agent to recommend the toughest inspection company and then fight to have all the repairs completed which are reasonable under the law in your state. A dual agent has to look out for both parties and is much more likely to find an “easy” inspection company, go light on recommendations for repairs and try to placate everyone, thereby satisfying nobody but themselves.

Would you like to share your spouse??? Is dual agency really in your best interest?? I told you, “don’t do it.”

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Fast Fact: Bankruptcy Clarity

FACT: It is not a well known fact that when you file bankruptcy the decision as to whether you will be in a Chapter 7 or a Chapter 13 is NOT determined by the attorney who files the paperwork for you, nor by you.

The decision as to whether you will be allowed to declare a 7 and walk away from your obligations, or if you will be required to participate in a Chapter 13 and make payments to the court which will be forwarded to your creditors over a period of years, will be made by the Trustee of the Court.

The Trustee will evaluate your situation and make a decision as to what he/she believes is best given your resources and ability to honor the obligations you made. It is not, nor should it be seen as, a slam dunk to walk away from debts. You need to know this before you file. Bankruptcy can be the solution you need, under certain circumstances. Following my divorce it was the option which allowed me to declare a Chapter 7 and be released from the obligation to pay back a deficiency of $8,000 on a $10,000 can and another $28,000 on a house barely worth 100,000. But it was the trustee who looked at my income and made that choice, not my attorney. Attorneys present recommendations; TRUSTEES MAKE DECISIONS. Clarity is good, it helps you be prepared.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Q&A: Short Sale

Q: What happens if I sell my home for less than I owe on the mortgage?

A: First, your lender would have to approve such a sale (normally called a short sale). It is important that the terms of that agreement stipulate that they will not come after you for the difference (called a deficiency). Whether or not they will waive their right to legally pursue you for the deficiency will depend on several things, including what kind of loan you have, whether or not they are likely to be able to collect on an eventual judgment, how much of the shortage will be covered by the insurance policy they have on the home, whether or not you had demonstrated that you had a hardship which made making payments impossible. In other words, there are a lot of variables.

Most important for you is that the agreement for short sale include a waiver of deficiency judgment and that you have this, in writing, prior to signing closing documents.

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Deficiency

Deficiency—in real estate it is a shortage in the amount of proceeds a lender receives AFTER they have disposed of an acquired property. When a lender sells a home they have acquired, whether by foreclosure or deed-in-lieu or insurance claim, the deficiency is the amount still unpaid after the sale. This represents the amount of loss to the lender(s) or other entities, which may have a claim against the property.

The amount not covered by the offer to purchase. This represents the amount of loss to the lender(s) or other entities that may have a claim against the property.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

FAST FACTS: Avoid Modification Relapse

It is critical that you follow up to be sure that the new “modified” mortgage which you have been successful in negotiating is duly recorded. A modified mortgage is intended to be a permanent change in the terms of your loan, but it is important that you not only negotiate for terms which are sustainable, but that you also take care that the agreement includes a provision for the lender to record the new mortgage in a timely fashion. Failure to do so could lead to a disastrous situation in the future when your loan is transferred to a new servicer. Your new servicer could refuse to acknowledge and/or abide by the terms of the “modification” and instead treat it as a temporary agreement between you and the servicer who completed the paperwork. Essentially they can say, "we must abide by the terms of the original note." There has been no subsequent mortgage recorded.

Avoid mortgage modification relapse by either:

1. requiring the lender to record the modification within a short timeframe after the agreement;
2. utilizing the services of an attorney or other professional who accepts responsibility for guaranteeing that the modified loan will be recorded
   

In either case, you must check YOURSELF to be sure that the mortgage has been reported to your local recorder’s office in a timely fashion (you could get transferred to another servicer any minute).

Don’t allow your lender to take advantage of you, AGAIN, by agreeing to a modification and then transferring you to another servicer who is legally obligated to follow the terms of the original instead of your modified loan.

Forewarned is forarmed—but only if you do what you need to do.
We’re trying to look out for you--help us out, DO YOUR PART.

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Late Charge

And the WORDS for Today:

Late Charge—is a penalty (fee) charged to a borrower who failed to make an installment payment on time. For mortgage payments, late charges usually are incurred if the creditor has not received the scheduled payment by the 15th of the month. Prior to that date the borrower is in what is commonly called a “grace period.” Late charges are usually allowed to be included on your tax return as interest for tax deduction purposes. The amount of the late fee will typically be stipulated in the contract itself or set by state statue. In all cases it must be considered “reasonable” and not violate state usury laws.

Late Charge Assessment—a fee charged to a borrower’s account when a payment is not received by the due date. This fee is typically charged when a payment is not received by the 15th of the month.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Involuntary Lien

The WORD for Today is:

Involuntary Lien—any lien, such as a tax lien, judgment lien, etc which attaches to property without the consent of the owner. Such a lien is unlike a mortgage lien, which a borrower voluntarily agrees to have placed against a property.

A legal claim against property that must be satisfied when the property is sold. A judgment affecting all the property an owner has or acquires during the legal life of the lien. Statutory and involuntary liens fall into four categories:

1. Property tax liens—These are placed against a property when the property taxes are not paid on time; they are given precedence over all other claims; if they continue to be delinquent for five years, the property will be sold off to pay the taxes; whenever a property is foreclosed upon, taxes are always the first debts paid.
2. Judgment liens—These are general liens resulting when a person suing another person wins a judgment from a court for the sums owing and records an abstract of that judgment
3. Mechanics liens—These are recorded with the county by contractors, subcontractors, materials suppliers, or workers who wish to be paid for their delinquent bills covering labor or materials on new construction, land improvements, or remodeling projects
4. Federal or State liens—These result from unpaid federal or state taxes, personal and inheritance taxes being the most common.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Myth #8

Myth #8: The consumer does not have to worry about a deficiency if the lender agreed to a short sale.

Reality: The fact that a lender/servicer allows a short sale does not automatically grant the consumer protection from a deficiency judgment in the future. The only automatic proviso for such protection is if the loan were insured by FHA.

Reason: Being allowed to close does not negate the terms of the mortgage. On of those terms is a provision which allows the lender to come after the consumer for any shortage even when the lender has granted a short sale or accepted a deed-in-lieu if the lender has not specifically agreed to waive their right to do so.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Q&A: Landlord in Foreclosure

Q: I have been renting a wonderful house for the past 8 months and really like the neighborhood. My landlord was really nice when I first looked at the place, but I have not heard from him for the past two months. No reason I should, since everything was working okay. Today I came home to find a sheriff’s sale notice stuck to the front door. The landlord’s number is disconnected and I don’t know what to do. Who should I call? What can I do? What did he do with my rent money?

A: First, slow down and take a deep breath. It probably won’t make you feel any better to know that thousands of folks across the country are facing the same dilemma: what to do when your landlord fails to pay the mortgage even though you are paying rent on a regular basis. It has become a common problem.

It is important that you not panic. Let’s discuss the things you can do which are likely to be of help. It is also a good plan to avoid doing stupid stuff which might make you feel better for a minute but will not improve your situation. (Example: tearing something up.)

Before you do anything else: decide what you want. Given this new turn of events, re-consider your options carefully before you decide what steps you will take.

Specifically:

a. do you want to stay through the term of your lease?
b. would you be just as happy to move on to some other option now that you have been given the chance to “break your lease”?
c. do you just want the time to carefully pack and move?

Make a decision, then move to action.

If the sheriff’s notice does not say when the sale will take place, then get that information from the local sheriff’s department so you have an idea how much time you have to take whatever action you have chosen.

Next, check the landlord tenant laws in your state to see what recourse you have, under the law, if the landlord goes into foreclosure. These laws should be readily available, perhaps on your Attorney General’s site.

Then check the foreclosure laws in your state (use google “ _______ state foreclosure laws”). You are looking specifically for notifications required of tenant occupied properties when a foreclosure is pending. Some states require notice be provided to the “unnamed tenants” of a property as part of the foreclosure process in order to avoid exactly your situation. This will be particularly important if you want to stay during the remainder of the leased term.

You need to get some information about the property in order to proceed further. You can start with the information on the sheriff’s notice which will give you some details to get the other information you must have. You will likely need to talk to the county clerk’s office, perhaps the tax assessor and as well as do some on-line research. You will need:

a. the correct names on the title
b. lender or holder of note
c. insurer of the note (if it is Fannie Mae or Freddie Mac you are lucky)
d. attorney who is representing the lender

Notify the sheriff’s department, the attorney, the lender (if you can find a number) and the insurer that you are residing in the home, as a tenant. Be prepared to show that rental payments are current.

If the insurer is Fannie or Freddie, both have implemented programs which will allow tenants to continue to reside in the homes and rent directly from Fannie or Freddie during the time they are being marketed for sale to a new buyer. (Are you up for that?)

Pull yourself together and make a ‘new’ decision based on adjusted circumstances.

**I did not forget that you asked what he did with your rent money. Probably wine and loose women. Doesn’t matter, what is your next step?

Oh, by the way, don’t send off next month’s rent payment just yet.

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.
"Answer Book in a Foreclosure Climate" by Mildred Wilkins, available in 2009 from www.DovePublishingHouse.com.

(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)

WORD: Fair Credit Reporting Act

Fair Credit Reporting Act—is a consumer protection law, which regulates the disclosure of consumer credit reports. It was passed to ensure the accuracy and privacy of the information which is kept by credit bureaus and other agencies which report credit. The FCRA also gives consumers the right to know what information these entities are distributing about them to creditors, employers, potential landlords, insurance companies or anyone else who has the legal right to request such information.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Myth: Modification vs Refinance

Myth: There is a widespread myth that a modification is just a re-financing of the loan. The two options have some things in common, but they are worlds apart. Let’s get some clarity.

Fact: Modification is usually a much better option for a borrower, especially if you are behind on the mortgage and want to use this option to get a loan which you can afford.

Both a modification and a re-finance will result in the old loan being paid off and a new loan being created. However, almost everything else about the two are dramatically different.

A modification:

a. Will be handled by the lender/servicer currently holding the loan (a big plus)
b. Will NOT require a new appraisal or upfront fees to be paid (a significant financial blessing)
c. MAY be used even when a person’s credit score has already been lowered by late or unpaid payments
d. Should definitely be considered if your interest rate is scheduled to reset

Under the terms of a modification:

1. the term of the loan can be stretched out (which reduces your monthly payment)
2. the interest rate can be changed from a variable to a fixed rate
3. the interest rate may be lowered
4. the principal balance on the loan (the amount you owe) can be reduced with documentation that the actual value of the home has declined (almost a given in today’s market)

A re-finance has major differences which are not as consumer friendly.

1. You probably won’t qualify for a re-finance if your credit has been dinged.
2. You must go to an outside source (different lender) apply, and pay fees for processing a new loan
3. There will be fees associated with the process such as an appraisal and possibly a lender’s inspection
4. Closing the transaction will cost another substantial fee
5. Strong possibility of a higher, rather than a lower, payment

When it’s all said and done, the climate is right for your lender or servicer to be willing to consider a modification of your loan if you are struggling to make payments. It is definitely in their best interests to help you resume making regular payments even if those are at a reduced amount.

There will be paperwork required for either of these options. You will need to demonstrate your ability to make payments and fill out the hardship documents which are required, but it is well worth the effort to get a PERMANENT change to your loan which makes it a workable situation for you as well as the lender.

Call your lender today. Best of luck.

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

The "Frozen Person"

Perhaps you have never heard the expression before. Most likely that is because you have not been blessed to be in one of my classes or hear me speak before. You know 'frozen people’, you may have been a ‘frozen person’ before. I WAS a ‘FROZEN PERSON’ for almost a year back in 1991, just before they dragged the car away (repossessed) and then foreclosed on my home. I understand the concept.

I created the expression ‘frozen person’ to describe a consumer so traumatized by the pieces of their lives falling in around them that they become ‘frozen’. Unable to function. Frozen people can not: open envelopes, cook regular meals, answer the telephone. Sometimes they cannot answer the door, or they forget to take a bath. Brushing your teeth is not that important if you are a frozen person. Frozen people are still very REAL people, they are just people who life has handed a really raw deal and they are waiting—frozen, trying to figure out what to do with the deal.

Frozen people need a lot—love, patience, information and mostly time—time to thaw out and figure out how to deal with the DEAL.

This blog can help you (or someone you know) to deal. Visit regularly for real estate insight—in a usable format.

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Fast Fact: Release of Liability

Release of Liability

FACT: This is a very important paragraph in your mortgage or deed of trust. Tricky, how the things you don’t pay much attention to can come back and bite you in the proverbial butt. This is one of them.

The reason we are discussing it here is because it comes into play if you decide to let someone assume the mortgage on your home. This is further complicated by the fact that the bank may agree to allow someone to assume the mortgage on your behalf; yet you are still legally obligated to pay the mortgage should THEY become unable to keep up payments.

How could that be? It’s called "release of liability.” Read the section in your note. It clearly says that unless the lender specifically grants a "release of liability" you are still on the hook for all payments until the loan is paid in full. My son said when he was 13, “you better ask somebody." Consider yourself warned: contact an attorney and have him to prepare a "release of liability" to be signed by the lender, PRIOR to agreeing to allow anyone to assume your mortgage. You’ve already agreed to this arrangement when you took out the loan; you need someone to get you “off the hook.”

**This also applies to rental car contracts. You are on the hook for the time and amount you promised no matter what side deal you cook up after you leave the dealership. (In fact, you are prohibited from legally making any side deals). Yes, I know it happens all the time. Consider yourself warned. I am trying to look out for you.

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

What's That Mean? (O-Z)

OCC- Office of the Controller of the Currency

PI– Principal and Interest

PITI- Principal, Interest, Taxes and Insurance

PMI- Private Mortgage Insurance

POB- Point of Beginning

P.O.C.- Paid Outside of Closing

PUD- Planned Unit Development

QWR- Qualified Written Request

RAL- Refund Anticipation Loan

REIT- Real Estate Investment Trust

RESPA- Real Estate Settlement Procedures Act

REO- Real Estate Owned

RTO- Rent-to-Own

SRA- Senior Residential Appraiser.

SREA- Society of Real Estate Appraisers.

SRPA- Senior Real Property Appraiser.

TILA- Truth-in-Lending Act

Y.S.P.- Yield Spread Premium. See Predator Lending Practices.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

Reinstate and Redemption: Worlds apart

FACT: The two words have dramatically different meanings. To reinstate a loan means that the consumer is behind on their mortgage payment but has arranged with the bank to catch up the past due amount. Even though the lender has accelerated the loan (demanded payment in full along with all applicable costs and fees) the lender reserves the right to allow a re-instatement if they so choose. Most often the lender will decide this is a reasonable option in order to avoid a foreclosure if the consumer’s situation has changed and it appears likely that payments will be made in the future in a timely fashion. The amount needed to reinstate usually includes all past due payments, interest and may include attorney fees. Once the borrower has reinstated the loan, they resume payments just as they had before the default.

On the other hand, redemption typically means that the borrower must pay the entire amount of the loan plus all costs including attorney fees in order to re-claim their home AFTER the foreclosure has been completed. A consumer’s right to redemption, including how long they have in order to exercise this right, is determined by state statutes. What fees the lender is able to collect is governed by the terms of the mortgage note or the deed of trust. Redemption timeframes vary from a very short period of time which expires at the time of the sheriff’s sale or may continue for a matter of months. The longest redemption period in the country (related to foreclosure due to failure to make timely mortgage payments), is 1 year, in the state of Alabama.

Watch for a section on State foreclosure laws which will include redemption timeframes which will be included on the Home Ownership Matters website by the end of April under the Foreclosure section. Share the knowledge with your friends.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)

From the Desk of: Buying T-I-M-E

Never before has the expression “If I could just buy some time” meant so much to people. When you are facing foreclosure you need time to discover your options, analyze your situation and implement an action plan. Your most precious commodity is time…And it’s running out.

When your money is running out…

You don’t have time to wait for the trickle down effect of the stimulus package to make a difference in your personal situation. While the package will make a significant difference over the long haul for thousands of Americans, anyone who thinks it is going to quickly make a difference for EVERY American is kidding themselves. Facing reality is hard, but necessary. As a country, we have ignored hard truths with disastrous consequences for too long. Nothing will be gained by continuing to point fingers. However, we must immediately recognize that each of us has a role to play in correcting the serious housing problem we face as a country. (Even if your home is paid off, FREE and CLEAR). The housing market holds the key to stabilizing our country, so anything we can do to keep people in their homes is a step in the right direction.

First thing’s first...

DO NOT ABANDON YOUR HOME. Even when you are behind on your mortgage, no matter how far behind you are, DO NOT abandon your home until the entire legal process has been played out. You can stay in YOUR house until your right to possession has ended. Exactly when that time is will be determined by three (3) factors:

1. Type of foreclosure in your state: judicial or non-judicial
2. Whether you have a mortgage or a deed of trust
3. State statutes regarding sheriff or trustee sale and possession timeframes

Find out the answers to items 1, 2 and 3, and then abide by them. Make sure your lender abides by them as well. Things could improve while you are holding out. Hold on.

Things are changing radically and very quickly because of the magnitude of the housing problem. Your local courts could dramatically change the way they process pending foreclosures so that you have a chance to work things out with the lender. Stay in our home and fight for the chance to work things out. More banks are willing to work with borrowers today simply because they really can’t manage the huge backlog of homes which have already been lost to foreclosure. If you can present a viable plan, your chances of retaining home ownership are pretty good.

Second thing’s second…

I know you know that, but I needed to get your attention. Probably the second most valuable thing anyone will ever tell you to do to save your home from foreclosure is to

1. Demand the lender or servicer who is threatening to sue you for foreclosure produce the original note/deed of trust which says you owe them. In legal terms you are asking them to demonstrate that they are the “real party of interest.” In common language that means, prove I owe you. Prove you have the right to demand payments from me.
   
2. The most effective way to demand this documentation is with a “qualified written request”. You are entitled to request that and any other information you want which is related to servicing on your loan (any mortgage loan in the United States) under federal RESPA regulations. Details are taught in the workshop.

What Choices do I have????

Let’s consider the answer to that question. It is critical that you start with an honest inventory of your situation. How far behind are you? Do you have the resources to resume payments? If not now, when will you be able to do so? What do you want to do? What are you ABLE to do? Why should the bank consider your proposal? You’ll need to able to defend it as being reasonable, based on your current circumstances.

Space in this article will not allow me to go into detail but I will provide you with the options you can consider. Do further research on each of them, online, in the library, on websites such as HomeOwnershipMatters.com Or at the blog: HomeOwnershipMatters.blogspot.com.

1. Options to keep the house—special forbearance, loan modification or a partial claim. You need to learn what each of these means and how it works
2. Options to let the house go—short sale, assumption or deed-in-lieu. All of these options are better than foreclosure but you need to know exactly how they work to avoid creating yet another problem for yourself down the road.
3. Reverse mortgage could be considered, it could be your solution. Be sure to use a government backed reverse mortgage if you decide to use this option.
4. Receiving disability payments (if you have a claim pending) could make the difference. Hold on until you know what you will be receiving
5. Acquiring a roommate could change your finances—get started working on it (I mean a roommate who will PAY—not one who will add to your expenses)
6. Selling unnecessary items in order to cover the gap until you get a permanent solution. Ebay or Craigslist could bring in some immediate cash. (Stop crying—we are trying to save your home and Buy “T I M E”).
7. Some other solution which has not even occurred to me

“Answer” the summons

The summons is your official notification that the lender has moved to legal action. The court notifies you via the “summons”. Your response should be to the clerk of the courts, the lender/servicer and their attorney. It is critical that your answer be received within the legally stipulated timeframe in your state. It is strongly recommended that the answer be sent by certified mail, with a signature required. This is a task which you can handle on your own, with a little coaching.

Basically, an answer should acknowledge that you are aware of your situation and that you are working with the lender on a plan. Specify what that plan entails. If you are challenging whether or not the lender has the legal right to foreclose (due to failure to produce the original note or demonstrate that they are the “real party of interest”) this is your time to say so. The foreclosure is likely to be stalled based on the quality of a timely, well prepared “answer”.

Buying “T I M E” workshops offered…

Workshops to teach consumers what they can do to “save themselves” will be offered in cities across the country beginning in March. All workshops will be posted to the HOM calendar as soon as they are confirmed so look for one in your area soon. These workshops are 3 hours in length with an hour after for questions and answers. Attendees will leave with a comprehensive packet which details all the options outlined above as well as a sample “qualified written request” with complete instructions on how to use one most effectively. Each borrower who attends will also walk away with clarity on how to prepare an “answer” since this is also critical if legal action has begun.

Want to host a workshop in your town?

The commitment is simple and inexpensive. A workshop can be offered anywhere in the country if a host is willing to provide a suitable space and advertising to let the public know that the event will be held. There is no fee for the speaker (donations will be accepted) but expenses to the event must be covered. For a nominal expense you can offer a very valuable training which can save homes in your community. For details about what is required, please send an email to Heather at meade.heather@gmail.com.

Local initiative is needed

We all have high expectations of the new administration but our President has said repeatedly, and has demonstrated with his grassroots campaign, that the masses can make a difference, when they choose to become involved. If every person who reads this article would share it with the people in your personal database, you would help several people to avoid foreclosure.

If the leaders of organizations would share the articles and the link to the blog with your entire company, you might save not only their home but the home of some of their family members or friends. Driving people to the blog and website so that they can get practical, easy to understand information to help them with their personal choices could make a big difference. Anyone reading this who has the connections to have a workshop in your city or a program aired on Public Access or Government Access television or local radio show could reach thousands of folks with some concrete/self help which could make all the difference in your community. I am a teacher and a writer. I know the role I am to play. I ask each of you to find your role in helping our country get back on its feet. We must find some resolution to our housing problems.

“Working together, we can make a difference”

Copyright © 2009, Home Ownership Matters, LLC. All Rights Reserved.

(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)

Myth #7

Myth #7: The lender should not have anything to say about the short sale transaction since the consumer still owns the house.

Reality: The lender/servicer does not have anything to say about whether or not a borrower sells their home. They do, however, have a lot to say about whether or not they will release the deed to facilitate such a transaction if they are not being paid the full amount the borrower committed to pay under the terms of the mortgage.

Reason: Quite simply, the borrower MUST have the lender’s approval because the lender is being SHORTED.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)

Myth #6

Myth #6: It is okay to list a home even though the consumer has file bankruptcy because the attorney told you (or your client) to do so.

Reality: When a consumer files a bankruptcy petition all creditors are now prohibited from having any interactions with the borrower or their representatives. All borrower assets (including the aforementioned house) are frozen. Nothing is to be liquidated with the express approval of the trustee of the court.

Reason: All of the things stated above; additionally, it would be unfortunate for you to have a listing which is a “frozen asset” by a Federal court which someone wrote an offer on. Check the questions on your state “Seller Disclosure Form” “Is there any threatened or pending litigation?” The trustee may put the consumer into a Chapter 13 or may require they sign a deed-in-lieu. In either case, there is now no house to be sold.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

(Please e-mail Heather at homeownershipmatters@gmail.com with any questions, comments, or concerns you might have. We appreciate all feedback, comments, and especially your questions. Don't be shy!)

WORD: Still Mortgages...

The WORDS for Today:

Mortgage Fraud-The intended victim is the LENDER. The transaction involves a group of scam artists. The usual players are: a real estate sales person, a mortgage broker, an appraiser, and a title company closer. A buyer is a necessary component of the scam. Sometimes they will be a part of the scam team and sometimes they will not be aware that they are, in fact, breaking the law. This team operates by:
a. Purchasing a low-income property, usually for cash
b. Secure a grossly inflated appraisal to support a new loan
c. Close the transaction with a buyer (typically called a “straw buyer” by law enforcement)
d. Profit from the difference between the lowest cost of the property, perhaps $15-20K and the new loan which will always be substantially HIGHER than the actual value of the dwelling may be as high as $90K-300K depending on the proximity to more expensive housing an the boldness of the players

Mortgage Modification- The borrower may be able to refinance the debt and/or extend the term of the mortgage loan. This may help them to catch up by reducing the monthly payments to a more affordable level. Borrowers may qualify if they have recovered from a financial problem and can afford the new payment amount.

Mortgage Warehousing-means a mortgage company holds a loan, which would ordinarily be sold. Most often the reason to “warehouse” the loans for a period is in anticipation of selling them later at a lower discount. These mortgages will be used as the security with a bank to borrow new money to loan.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Mortgage, Some More...

The WORDS for Today are:

Mortgage Catastrophe Insurance-Insurance coverage which is in excess of a traditional insurance policy. A catastrophic insurance policy will typically cover payment of the mortgage itself (possibly as long as 24 months) payment of a portion of the primary homeowner’s insurance policy deductible as well as other benefits. Catastrophic insurance coverage will always identify what kind of event is sufficient to cause it to become effective such as a war, an earthquake. Interestingly enough a hurricane is not likely to qualify.

Mortgage Electronic Registry Service-An electronic registry system for tracking ownership of individual mortgages, servicing rights, and/or security interests which is used by MERS numbers.

Mortgage Electronic Registration System-Does not typically qualify as the “real party in interest.” MERS is NOT an assignee. If MERS is not named in your note and the loan has not been PROPERLY ASSIGNED to them, they are not legally able to bring foreclosure action. MERS operates as a nominal party; a lender may register (transfer) a defaulted loan to this entity. Currently many consumers who are in default may find MERS shown as the party bringing foreclosure action.

WORD: Mortgage, Continued

The WORDS for Today are:

Mortgage Broker-The mortgage broker is a “middle man” who brings together a lender and a consumer who wants a loan. The broker is not an agent for the consumer and therefore has no fiduciary responsibility towards them.

Mortgage Servicer-May be a bank, mortgage company or a similar business that communicates with borrowers concerning their mortgage loan. A servicer usually works for another company that owns the loan. The responsibilities of a servicer include: accepting and recording payments, handling default issues including various workout options, and supervising the foreclosure process if that becomes necessary. In the event the servicer handling these details has changed, then the lender has the responsibility of notifying the borrower of that change. A servicer may have been hired and given servicing rights only or they may have a broader contract, which includes servicing rights with assigns.

Mortgage Servicing-refers to the handling of the necessary duties of a mortgagee, including collecting payments and making sure taxes and insurance are paid when scheduled. Servicing may be done by the lender or a company that charges a fee to provide these services on behalf of the lender. A servicer who has been granted servicing rights with assigns may initiate foreclosure action just as the lender who owns the loan might do. Releasing a lien after a mortgage has been paid in full is also function of loan servicing.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: More Mortgage!

The WORDS for Today:

Mortgage Company-Is a company authorized to service real estate and charge a fee for this service. Mortgage companies do not offer full service banking options like checking accounts and savings accounts.

Mortgage Identification Number-this refers to the number which has been assigned to a mortgage registered with MERS. This number will be used for identification and other purposes throughout the life of the loan.

Mortgage Instrument-refers to the document which details all the particulars related to a real estate transaction and forms the basis for a security interest to be held by the mortgage holder. A mortgage instrument may be a mortgage, deed of trust or a land contract.

Usually refers to the mortgage or deed of trust which obligates a borrower to make payments on a loan. Either of these documents, coupled with the note, becomes the security for a home loan.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Mortgage

And the WORDS for Today are:

Mortgagor-is the owner of real property who grants a mortgage to a lender in exchange for the money to purchase the property. The mortgagor pledges to repay the loan under specific terms and conditions and are subject to foreclosure if they fail to do so.

Mortgagee-Is the lender in a mortgage agreement.

Usually refers to the party who lends money and receives a mortgage. In some states the lender is treated as the “legal owner” (deed of trust) and may be entitled to rents from the property if it is abandoned by the homeowner. Other states treat the mortgagee as a “secured creditor” with the mortgagor considered to be the owner.

Adjustable Rate Mortgage (ARM)-is a mortgage loan, which gives the lender the right to adjust it interest rate at regularly scheduled intervals on the basis of changes in a specified index. The borrower mortgage must state how often the rate can change as well as set a cap for how high the rate may be increased. You should avoid an adjustable rate mortgage unless you feel certain your income is going to increase sufficiently to allow you to make higher mortgage payments at a later date.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

From the Desk of: REO Landmines

Let’s start with the basics: REO (real estate owned) refers to real estate which is owned by entities such as lenders, servicers or corporations. There are several ways property becomes REO but most often it is through default of the borrower who is either foreclosed upon or voluntarily relinquishes the property through deed-in-lieu. Corporations also become entitled if they acquired the home as part of an employee relocation package buyout.

Whatever mechanism resulted in the acquisition, a piece of real estate is now owned by an entity who needs to sell it. A special division, either called the REO or disposition division, is usually charged with the task of turning REO properties into liquid assets. As the foreclosure problem worsens the percentage of homes on the local market for sale which are, in fact, REO’s has increased. Strategies for dealing with the holders of these properties are somewhat different than purchasing from a private citizen. Those differences can be looked at as potential landmines if you are not familiar with the process.

Landmine # 1. Most REO properties are sold using a standardized contract which will be used throughout the nation. (for instance, HUD, Fannie Mae, VA). The language and terms in these contracts will supersede anything you write in your local purchase agreement, therefore, it is critical that you understand all the language in their standard contract.

Landmine # 2. Most REO properties are sold “as is”. While entities must allow for an independent inspection if one is allowed by state law, there is no requirement that any repairs be made as a result of the inspection.

Landmine # 3. Buyer are frequently charged a per day fee for delays in closing caused by their side of the transaction. Whether caused by the borrower, their lender or the realtor does not matter. It is not uncommon for the delay fee to be $100.00 per day.

Landmine # 4. Transfer of title will usually be granted with a special warranty deed or a Sheriff’s deed. Both provide a MARKETABLE title; not a CLEAR title. It is common for liens to remain attached.

Landmine # 5. When submitting an offer on an REO property, you buy the whole “kit and kaboodle.” What’s in the “kaboodle.”

Copyright 2007, Home Ownership Matters, LLC. All Rights Reserved.

(As always, if you have any questions, comments or feedback, we welcome and appreciate them. Just e-mail Heather at homeownershipmatters@gmail.com. Thanks for reading, and come back soon to see what else we've posted!)

Did You Know: Foreclosure First Aid Kit

Foreclosure “First-Aid Kit”

Warning: Sales pitch about to follow

The core value of HOM is to reach consumers (private and professionals) with the information which can make a difference in real estate transactions. Rules, laws, regulations and mountains of other material which you’d need to wade through and then try to digest in order to make sense of your personal real estate dealings. My experiences, training and continual research help me to be able to give you the Reader’s Digest version.

The Foreclosure “First-Aid Kit” is a product designed to give you more expansive information on the use of the ‘qualified written request’ and other information which lenders and servicers would really prefer that you not have. The “Little Black Book” section of the kit is priceless if your lender is listed there.

As a consumer advocate I must continually walk the line between looking out for the interest of consumers who have been shafted by the financial markets and keeping myself accountable (as well as financially solvent) to live to teach and speak another day.

My intention in providing this CD for sale is to provide information which I have chosen (for a number of reasons) not to post directly on the website or blog, but instead to provide it to those who have benefited from the material which I have provided FREE and who think they could gain from the information shared within the first aid kit.

If you are personally facing foreclosure, or someone you know is in default and believe that foreclosure is a possibility, then you owe it to yourself to send for your copy of the CD today. Available for only 19.95, CLICK HERE to order yours today.

**Previous problems with distribution of the CD during 2008 have been corrected. Your copy will be mailed within 7 days of the receipt of your payment. Prompt shipment guaranteed or your copy is FREE.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)

WORD: Notice to Quit, Tenant at Sufference, and Unlawful Detainer

The WORDS for Today:

Notice to Quit—this is a notice given by the owner of a property (usually a landlord) to demand that a tenant leave without a specific period of time in order to avoid FORCEFUL EVICTION. The guidelines for such a notice vary from state to state.

A notice by a landlord to a tenant to vacate rented property. Usually the giving of “notice to quit” for nonpayment of renters allows the tenant less time to vacate than if the notice is due to
some other occurrence. A landlord may utilize such a notice for failure to pay rent or other violations of the terms of the lease agreement.

Tenant at Sufferance—refers to someone who has legal possession of the property but refuses to leave (also called HOLDS OVER) after the termination of the authorized time frame. The use of a FORCEFUL EVICTION may be necessary to gain possession from a tenant at sufferance. Such an individual obviously did not learn the meaning of “don’t wear out your welcome.”

Unlawful Detainer—the unjustifiable possession of property by a person who has entered the property lawfully but whose right to possession has terminated. This situation is most common with a tenant who fails to vacate at the end of the agreed term. Legal action culminating in a FORCEFUL EVICTION is recommended rather than the landlord compounding the situation by engaging in an illegal or self-help eviction.

Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.

(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)