Home Ownership Matters Preservation Center, Inc

WORD: Non-Recourse Loan

2010-07-13T08:00:00.000-04:00

And the WORD for Today Is …

Non-Recourse Loan

His bark is worse than his bite. You’re familiar with the expression but who knew that it applied to banks as well. If you are behind on your mortgage—and millions of people are—you have probably been barked at by someone at your bank. It is reasonable that they make an effort to collect the funds which you owe them, but when you are unable to do so, you have conveyed that you are unable to do so, frequently some barking gets started.

A non-recourse loan means the bank has NO BITE. They have no recourse, or option to do anything else to you after they take the house. They cannot seek a deficiency judgment. Without a deficiency judgment there is no way for them to:

Attach your pay check (/garnishment/)
Pursue any of your other assets
This includes any/all retirement accounts

Once they acquire the home/property, whether that is via foreclosure, a deed-in-lieu or by trustee auction when the home was secured by a deed of trust, ALL THAT THEIR BANK CAN EVER GET IS THE HOUSE. There is no legal provision for them to ever come after the borrower for anything else.

The states listed below are generally non-recourse states:

Alabama (some exceptions apply)
Alaska
Arizona
Arkansas
California (as long as non-judicial foreclosure is used, which is the most common)
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (as long as non-judicial foreclosure is used)
New Hampshire
Oregon
Tennessee
Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
Virginia
Washington (as long as non-judicial foreclosure is used, which is the most common)
West Virginia

*It is critical that the homeowner do several things:

Seek legal counsel to be sure they understand the implications, based the specific mortgage or deed of trust involved
Consider the specific financial resources and have clarity on what is at stake
Evaluate the total picture, then make a decision based on a full assessment of the situation

***This should not be construed to be legal advice. SEEK COUNSEL.

"Remember, knowledge can be empowering!"

Mildred

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org
Copyright © 2010. All Rights Reserved. Mildred Wilkins Consulting, Inc.

WORD: Recourse

2010-07-09T08:00:00.001-04:00

And the WORD for Today Is...

Recourse – in mortgage banking, recourse represents a loan investor’s right to obtain reimbursement of loan losses from the seller of the loans. The amount of the obligation is recognized as a reduction of the gain on the sale of the loans. By contrast, a mortgage sold without recourse means that the new holder assumes the risk of default.

These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:

Michigan
Minnesota
North Carolina
Rhode Island (lender can seek deficiency judgment)
South Dakota
Utah (lender can seek deficiency judgment)
Wyoming

Now, because you have a mortgage in one of the above states does not necessarily mean that you have the get out of jail free card. Please review your loan documents and I also strongly recommend you consult an attorney who specializes in real estate law. There are a lot of laws to protect the consumer and educating yourself as to your rights will help you greatly in deciding a course of action. If you have refinanced or have a second mortgage, they are usually recourse loans so your options there are more limited, however not insurmountable. Banks are hurting so badly right now that for those that are in distressful situations (ie you have very little assets), you have some good negotiating leverage. From the banks perspective, something is better than nothing.

"Remember, knowledge can be empowering!"

Mildred

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org
Copyright © 2010. All Rights Reserved. Mildred Wilkins Consulting, Inc.

Q&A: Strategic Default

2010-06-26T08:00:00.001-04:00

Strategic Default

Q. My house is worth considerably less than what my mortgage payoff is currently. My husband and I are still working and can manage the payment but it just does not make sense to keep making a payment every month when we are so upside down. I have heard the phrase ‘strategic default’ which seems to mean the people just decided to walk away and leave the house. Is this something we should consider?

A. The issue of strategic default has not been addressed in this blog at all until it was mentioned recently in the jingle mail blog. First, let’s get some clarity about what is being called a strategic default. As the phrase is being used currently it most often refers to someone who:

Has the financial means to keep making the mortgage payment
Has determined that the balance is significantly higher than the value of the property to the point that no turnaround is likely in the foreseeable future
Has been unsuccessful in getting the lender to renegotiate for a reduced principal balance
Has consciously made the decision to forgo additional mortgage payments and let the chips fall where they may (including the most likely outcome being foreclosure)

Now that I have provided clarity on when it might be considered, I will answer that question you asked, which is, should you consider it. My answer is that ONLY you can decide if you are willing to accept the consequences which are likely to occur as a result of a strategic default. I would not presume to try to move you one way nor the other. I will give you a glimpse of possible consequences to help you in the decision.

Possible consequences include:

Foreclosure—very likely—almost a given
Deficiency judgment—depends on your state foreclosure laws, highly likely where permitted
Additional expenses incurred due to vandalism to the property after you abandon and before the lender/guarantor puts the property into their name. Scary thought if they never do. (or if it is six months or a year from now and the value of the home has continued to decrease.)
Lender or Guarantor may be successful in going after assets you have to satisfy the deficiency mentioned above
Negative impact on the possibility of a future home purchase (kind of like a separation, you left but you can’t marry anybody else until you get the divorce)
Possible liability should someone be injured or killed on the property while you are still the title holder and the party responsible for insurance (even though you have not paid it)
Possible tax liability for the shortage, once that has been determined
I could mention a few more but you get the picture

While there is the compulsion to walk away from this really, really difficult situation you need to weigh the pros and cons carefully...then ask yourself...what is the worst thing that can happen?

Can you live with that, whatever that is? If you can, then move forward knowing that you considered the options and made an informed decision. Best of luck, whatever you decide.

"Remember, knowledge can be empowering!"

Mildred

WORD: Jingle Mail

2010-06-25T08:00:00.000-04:00

And the WORD for Today is...

‘Jingle Mail’

Words come into use and then fade from the forefront in the same way that clothes go out of fashion or popular stars fall into obscurity. Then something happens and they appear again. “Jingle mail" is such an expression. It may be a new expression to you but the phrase is being recycled because we are repeating the situation which sparks its use in the first place. Specifically, huge numbers of consumers who are hopelessly upside down on their mortgage, unable to get anything worked out with the lender and finally, in frustration, they simply mail the keys back to the bank. Keys in the mail—hence the phrase 'jingle mail’. Previous recessions—the oil bust in Texas and the dot com craziness immediately come to mind from recent history—left thousands of borrowers feeling so helpless that they eventually totally conceded and simply mailed the keys back to their lender. No workout, no release from further obligation—just I give—you win—take these keys and... You get the picture.

Across the country—and in your neighborhood—jingle mail which used to be an option of last resort is now being used by a new crop of borrowers. An especially interesting twist is that sometimes theses borrowers are NOT behind and sometimes they are behind but choose not to make the mortgage payment because their home is so seriously upside down.

Another new phrase has emerged; strategic default. This concept is gaining widespread acceptance as a reasonable way to deal with an unreasonable situation, especially if that borrower has not been able to get a solution from their lender which they felt was a reasonable one. Strategic defaults are increasing dramatically across the country and creating an intense firestorm over whether it is the ‘right’ thing to do'. I will not debate the ethical or moral side of the issue but will discuss the contractual side in a later post.

Suffice it to say that jingle mail will continue on the upswing since it is frequently used by someone who could not or chose not to get a formal deed-in-lieu completed by the lender. Instead, their solution was to use our reliable postal system to give the bank access to the house without the need to change the locks. Post office + Keys = Jingle mail.

"Remember, Knowledge CAN BE Empowering"

Mildred

If you found this post helpful why not sign up for the direct RSS feed? Or BUZZ this? Or tweet a friend?

"How to Eat an Elephant"

2010-06-24T08:00:00.001-04:00

How to Eat an Elephant

Not a very appealing thought is it? But doesn’t that describe how you are feeling as you try to make sense of the situation with your mortgage—like you are trying to swallow an elephant whole? There is a way to accomplish this though—let me tell you how.

I have been writing for many years so it should not surprise you that my minor in college was English. I have loved literature since I was 5 or 6 years old. (Long time ago and an entirely different story). During first year college one of my English textbooks was called ”Way Out—A Thematic Reader”. Awesome book. It included a short story “How to Dismount From an Elephant” which shared with great humor how to return to the ground should you find yourself marooned on an elephant sometime.

Your mortgage is behind, your finances in a mess and you can’t get a straight answer from the bank or anybody else for that matter. You are facing a challenge equilivalent to needing to “Eat an Elephant” with no clear idea where to start. I mean R E A L L Y.

• The ear is WAY UP THERE.

• The tail is totally unappealing even though you could reach it.

• The side is REALLY BIG.

• The toes are accessible but really DIRTY.

If you are facing a possible foreclosure (ELEPHANT)—may I suggest you take a position and declare—YOU’RE GOING DOWN!

Now where do you start? At the foot—those dirty toes—the foundation. He cannot stand—not for very long—if you create an emergency with a toe. We recommend the submission of a qualified written request as a way to command his attention. There is ample information about the QWR on this blog as well as on the general web. For specific instructions, “Avoiding Foreclosure Using the Qualified Written Request” is another educational tool I have written which gives you step by step instructions on HOW to prepare this document yourself without incurring the expense of an attorney.

Develop a plan. Go to www.HOMPCI.org. Click on the Foreclosure/Loss Mitigation section and use the information there to figure our how to proceed. You need to know:

a. What to do if you are a ‘Frozen Borrower”

b. What to do NEXT if you are behind on your mortgage payment

c. How to ‘Buy TIME...’ to determine a strategy

The Home Ownership Matters Preservation Center, Inc is committed to being your foreclosure intervention resource. Materials are written with the average consumer in mind so they are easy to understand and while they deal with serious and sometimes difficult and/or legal issues, you will find them easy to understand. Many of the resources not only help you understand the issue but provide specific instructions for what can be done and how. Visit today, share the site with family or friends, and continue to visit as new material is being added continually. That’s www.HOMPCI.org.

"Remember, knowledge can be empowering!"

Mildred

Mortgage News: Moratorium on Foreclosures

2010-06-23T08:00:00.001-04:00

We interrupt this blog to bring you

Moratorium on Foreclosures

First, let’s discuss what a moratorium is and why you should care, even if you do not live in California.

If you live in California and your principal residence is in default, then last week’s news which halts foreclosure on many homes is welcome news for you. The California Mortgage Foreclosure Prevention Act went into effect on June 15, 2010.

A moratorium means that certain actions will be prohibited for a stated period of time. In this particular case we are talking about the Governor of the State of California declaring that a substantial percentage of the mortgages in the state will be exempt from foreclosure action even though the borrower is in default for the next 90 days. This is awesome news, especially if you happen to be one of those borrowers.

There are criteria which apply, but you would expect no less:

a. Must be the borrower’s principal residence

b. Borrower must not have filed bankruptcy

c. Must be a first mortgage or deed of trust

d. Borrower must not be represented by someone who is engaging in foreclosure stall tactics

e. Applies to loans which were made between January 1, 2003 and January 1, 2008

f. Lender must already have filed a notice of default

The intention of the law is to break the momentum of foreclosures and allow ample time for lenders to work with borrowers on trying to utilize some kind of option (such as a modification) which can avert the foreclosure altogether.

Let’s talk about moratoriums in general. A California consumer called me a couple of days ago and was confused because she thought the moratorium had been put in place by the President for the entire United States. I cleared that misconception up by explaining that a moratorium can be issued by any one of several different individuals or organizations:

a. The President—for a specific area or for the United States, if he chose

b. A Governor—for his state or a portion of his state (or certain specified loans as this one does)

c. A Lender or Bank—for any of the loans they hold or for loans from a particular state, region or classification

d. A Guarantor (HUD, Fannie Mae, Freddie Mac)–for any of the loans they hold or for loans from a particular state, region or classification

e. A Mayor—for his city or for a classification within his city

Any person or entity who has the authority to mandate a moratorium also has the authority to set the perimeters which will apply:

1. How long will the moratorium be in place?

2. What is the purpose of the moratorium?

3. What loans are covered—will it be owner-occupied only? Will it include investment property? Loans from what period of time?

4. What other rules apply?

5. Any such rules as they deem appropriate can be set by the party who puts the moratorium in place.

This is good information for you to become familiar with because there is a strong possibility that other governors or mayors will follow suit. Additionally, as I pointed out, a number of other parties may also decide to give consumers a break in order to stop the backlog of foreclosed properties which is devastating not only the homeowners who lost them but the neighborhoods where those vacant homes now sit.

There is now an overwhelming consensus that if there is any possible way to work something out with the current borrower it is in everyone’s best interest to do so.

Have you checked to see what your lender or your city has been up to lately?

“Remember, knowledge can be empowering!”

Mildred

Resources You Can Use: HOMPCI.org

2010-06-22T08:00:00.000-04:00

I’m Behind on My Mortgage...Now What?

Initial Exercise: Read “Are You a FROZEN consumer?” which is available at www.HOMPCI.org

Now you are ready to proceed to the “Foreclosure Prevention Checklist” which is also available on the site. Both are located under the Foreclosure/Loss Mitigation Section.

"Buying TIME" Notebook: Download FREE!

2010-06-21T08:00:00.000-04:00

We are pleased to provide this notebook as a tool to help you with working through your housing situation. The notebook was originally created in January of 2009 for attendees of the four (4) hour training “Buying TIME...When the money is running out.” One of the most important aspects of trying to deal with any problem is to keep the details straight, to document:

a. What has been done?
b. When was it done?
c. What options are available and need to be considered?
d. What is to be done next?
e. By whom? Why? When?
f. Who did you speak to and when?
g. What other action steps are required? By you? By the other party?
h. What deadlines are important? When will you follow up?
i. What laws or guidelines apply? Do you understand them?
j. Where can you get other information?
k. If a complaint is needed, where should it be filed? When? Why?
l. And other information which does not occur to me at this moment

As a trainer I felt it was important to give the attendees of the live seminar this notebook as a handout to help them get started. I weighed the extra cost the notebooks added to the cost of the presentations and felt it was a crucial expense. A couple of sponsors felt the cost of printing was not justified since essentially the notebook is blank pages which you can use to record your ‘adventure’. I strongly disagreed and have had numerous attendees to tell me how valuable they felt it would be to have a designated place to record all their communications. The goal setting page at the beginning is a good start. It encourages you to determine what you EXPECT to be your outcome and then commit to making it happen in a systematic way.

Positive reinforcement on a daily basis is also important. Having been reared in a poor family with limited resources and an almost total lack of support and encouragement of any kind, I learned early on the tremendous value of encouragement, particularly external encouragement to continue to believe that you could overcome seemingly insurmountable obstacles. When positive reinforcement is coupled with the knowledge you need to deal with the situation, you will be amazed at your ability to weather the storm.

The “Buying TIME Notebook” is a resource. It provides a mechanism, a system, coupled with encouragement to continue to pursue an outcome which you can be satisfied with. Click Here to Download Your Copy Today!

Use it and be blessed!

“Remember, knowledge can be empowering”

Mildred

Q&A: Does Commission Change When a Family Member is the Buyer?

2010-06-14T08:00:00.001-04:00

Q. We have our home listed with a REALTOR whom we feel has done a really good job for us in getting the house listed. The agent also has done a great dealing of advertising, has nice flyers etc. The house has been on the market for more than 4 months but we have not gotten any offers. Now we have what could be a good thing or it could be a problem. WE have been approached by a family member who wants to buy the house. We would like to sell it to them and can negotiate the terms between ourselves. Our question: Do we owe the full commission to the real estate agent who has the house listed since they did not technically find the buyer?

A. Most likely you owe the full commission to the company who has your home listed. As you presented the scenario it appears that the discussion with the family member only came up recently and therefore could not (or might not) have been discussed prior to you signing the listing contract.

The major consideration is what does your contract state:

a. About the amount of commission which will be paid?

b. About any ‘exceptions’ to that payment arrangement?

If you had known that a family member MIGHT be interested in buying your home, then you could have included in the contract a provision which excluded you from paying a commission if this SPECIFIC PERSON decided to purchase. Or you could have negotiated to pay a smaller percentage of commission to compensate the brokerage/agent for their work and expenses but something less than the full commission. The brokerage most likely would have insisted that the exclusion be for a set period of time, like 45 days. It would have been a matter of negotiation between you and the agent to determine what amount of commission and what amount of time worked for the two of you.

One of the core principles of issues related to housing is that it always comes down to ‘what does the contract state’. You can be held to the terms which you agreed to when you entered the arrangement.

What can you do now?

Read your contract so you know what it states. Are you prohibited from selling to anyone who has ‘viewed’ the home during the terms of the listing for a certain period of time AFTER the listing expires? (Most contracts have such a provision)
Ask your agent for a meeting to discuss your listing. Speak candidly about your situation and suggest a compromise of less than full commission.
If you get their agreement, then you need to have them put that in writing and get the signature of the broker who will ultimately be the party who is receiving less than the contract stipulated.

IF you are reading this and are considering listing your home, it would be wise to include an exclusion of anyone who has already expressed even minimal interest in your home, how long do they have to submit a contract and clearly state what amount of commission will still be due under the contract.

Selling to family members can be dicey (to say the least). I personally feel both of you still need the help of a real estate professional to work through the details and that you should expect to pay for that representation.

Best of luck with your home sale!

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org

Mildred's Musings: Spiritual Growth in an Age of Anxiety

2010-06-09T08:00:00.001-04:00

“The Road Less Travelled and Beyond”

Spiritual Growth in an Age of Anxiety

***A Promotional Ad for a book by M. Scott Peck

It might seem odd to promote a book on a blog dedicated to stabilizing neighborhoods.But this is a ‘special ‘ book. This book is written to encourage growth for a time ‘such as this’. I chose to re-read it recently because I was feeling more anxiety than I could recall feeling before in my life and my life has been filled with drama and loss. A major source of the current anxiety stems from living 15 minutes from the beach in Pensacola. The unrelenting trepidation of waiting to see IF the oil would come is over. It’s here.

I moved back south in 2006 specifically to live on the water near my roots (south Alabama). I had hoped that living on the water and being close to my family would ease the pain. Neither helped. Nothing can replace the necessary grieving process which is internal. Peace is not a place you move to and people cannot magically provide it. My daughter Dovie loved Florida and had dreamed of moving to the Gulf Coast area. I came and I missed her more rather than less. I wanted her to share the beauty here.

Eventually I took a forced grieving period (also called a nervous breakdown), left Florida for 8 months and did the grieving I had delayed. I returned in May of 2009. This time I chose not to live on the water but only slightly inland. I resumed an aggressive travel schedule, frequently spending as few as 6-7 days per month in Florida. I also crammed my away time with so much that I was too tired when I was here to go visit the beautiful beaches of Perdido Key, only 15 minutes from my front door. I have rarely taken the time to spend leisurely appreciating this natural wonder because:

I was too busy
I’d have more time when I retire (whenever that might be )
It’s not going anywhere

None of those reasons can quiet the sadness I feel that I have grossly underutilized a golden opportunity which was right at my doorstep. Literally. We take too much for granted. While I have an immense appreciation and respect for the awesome power of nature to heal and encourage us, I have taken this gift for granted. I have benefitted from those magical times on the water to quiet my inner turmoil and allow me a brief glimpse of the wonder of it all. Whether at sunrise or sunset or middle of the afternoon, there is nothing which compares to standing on the beaches of the Gulf Coast. You are compelled to adjust your attitude just by the sheer majesty of the it all. And it has been altered, perhaps beyond our power to restore.

Today’s economic climate, natural disasters, rising unemployment, challenges such as the Gulf oil spill, the foreclosure crisis—ALL combine to leave many, if not most, of us looking for ways to maintain a sense of balance. Survival is uppermost in our minds but balance is necessary for survival.

Quoting from the book jacket “Dr. Peck continues the journey of spiritual growth that began with “The Road Less Travelled”; one of the most influential books in modern times. To the famous opening lines of that book—‘Life is difficult’—he now adds, ‘Life is complex’. But the greatest challenge, he reminds us, is to learn to deal with life’s conflicts, problems and paradoxes to find the true simplicity that lies on the other side of complexity.”

This book is a serious book, not to be skimmed over lightly. It will cause you to analyze your current thinking process. It might be that thinking more deeply, expanding your vision of what is possible, given your current unsettling circumstances, could be just what the doctor ordered. I encourage you to consider that possibility, with your heart open to receive.

I will confess that frequently when I start to write I have no idea where I am headed with an entry. Only as the writing flows does it become clear to me why it seemed the subject to share. We are facing, individually and collectively, the most difficult times in the past 50-60 years. Our ability to survive—the Gulf oil spill and the cracks and crevices in our personal lives—will require new, deeper thinking. Authors such as Dr. Peck can point the way. Why not get a copy today?

It is available also from Simon and Schuster in audio. Read or listen—and GROW!

Be steadfast in determination.

Mildred

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org

WORD: Knowledge

2010-06-08T08:00:00.000-04:00

And the WORD for Today Is...

Knowledge

Wikipedia states: “Knowledge is defined by the Oxford English Dictionary as (i) expertise, and skills acquired by a person through experience or education; the theoretical or practical understanding of a subject; (ii) what is known in a particular field or in total; facts and information; or (iii) awareness or familiarity gained by experience of a fact or situation."

Trying to get some agreement on what knowledge is seems to be a lot like trying to get a group of five (5) kittens to agree to pose for a group photo. Not happening anytime soon.

Knowledge is generally perceived to be ‘something we know’ or have a substantial certainty about. Whether we gained this ‘knowing’ or certainty through keen observation, academic pursuit, personal experience or is comprised of the cumulative wisdom which has been shared by others leads to an entire new area of disagreement.

There is, however, almost universal acceptance that knowledge has been transferred via the written word for generations and will continue to do so for many more. Now the medium which is used for that transfer is undergoing transformation at warp speed. What would those early writers and scholars think of our internet and eBooks?

Watch for numerous upcoming titles on foreclosure intervention in the form of eBooks.

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org

Mildred's Musings

2010-06-07T08:00:00.002-04:00

~~Knowledge is Power!~~

Knowledge CAN BE Empowering!

Knowledge is Power! How often have you heard that said? How frequently I have personally stated and written it. It has been the cornerstone of much of the work and writing I have done for more than 17 years in the real estate market. I believed it until a couple of days ago—and now I don’t. No one said anything different which changed my mind, more, I just became aware that knowledge, in and of itself, does NOT equate to power.

I should point out that I just finished reading M. Scott Peck’s “The Road Less Travelled and Beyond” for the 3rd or 4th time since it was released in 1997. His books are awesome and will cause you to think. One of the dominant themes in this specific book is ‘thinking well.’ Reading the book (an attempt on my part to gain some knowledge or insight into why I have been feeling stuck in some areas of my life) was the nudge I needed to deepen my understanding. Just as an aside, this book was given to me by my daughter (now deceased) with the inscription “To Mother with Love, Live and Learn, Dovie”. Now, as during her lifetime, she provides inspiration at just the moment I need it. I found and re-read this ‘gift’ just when I needed to be reminded to dig deeper. I am sure that digging deeper has led to the revelation that knowledge is NOT power.

Knowledge is an all important tool to changing our situation but it has no power UNLESS and UNTIL it has been activated and then utilized. Let me explain. I would be rich if I could be paid even $1 for every time I have said, “Mildred, you are supposed to be smart, how did you get yourself into this situation?” Or, “Why can’t you get out of this situation?”

The answer to both questions is that having a great deal of knowledge does not necessarily equate to having fewer problems or knowing how to deal with them when they crop up. Additionally, being knowledgeable in a specific area (say, foreclosure intervention) does not translate into being knowledgeable in other areas (say, relationships or finances). So knowledge of the subject at hand is needed (whatever the subject at hand happens to be).

That knowledge—even when acquired—has NO Power. . .

UNLESS—you decide to implement it

UNTIL—you decide to enforce it

UNLESS—you are willing to withstand whatever recriminations

may come against you as you utilize it

UNTIL—you have the conviction that utilizing the knowledge is

more beneficial than choosing not to use it has been

UNLESS—you are willing to challenge the current situation

based on the knowledge you possess

Let’s say you have a contract or a will which clearly shows you as the beneficiary of a substantial amount of money. You have the document in your possession. You are aware (have the knowledge) that you have the document and further, you are aware that it states you are the beneficiary to receive the funds.

That knowledge has NO inherent power.
That knowledge is worthless.
That knowledge is impotent . . .

UNLESS and UNTIL. . .

That knowledge can be empowering—when it leads to action.

Be empowered by the knowledge you hold! Seek the knowledge you need.

Be Blessed.

Mildred

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org

Announcing:

2010-06-01T08:00:00.000-04:00

A major change has occurred; supported by a very important continuum.

Home Ownership Matters Preservation Center, Inc was incorporated on February 11, 2010 as a new, not-for-profit housing agency. This new organization exists for the primary purpose of direct consumer education as a way to reduce the number of consumers who are facing foreclosure, losing their dream while simultaneously eroding the stability of neighborhoods across the country. HOMPCI is in the process of becoming a 501(c) 3 organization, has already engaged an Executive Director, Michael Montgomery and begun the background work to address the current foreclosure challenge in a substantially different way—direct consumer education.

The old HOM blog will remain (it was decided that it is too valuable to discard) but the focus from this date will be exclusively consumer based. While all real estate professionals can benefit from spending time studying the blog, it will exist exclusively for the benefit of consumers. The primary author of blog entries will continue to be Mildred Wilkins, who is the founder of both HOM and HOMPCI. It is expected that over a period of time there will be entries from attorneys or other resources which will expand the scope of the blog, making it even more valuable.

Another major change will be that you can submit questions directly to the blog for answers. We encourage you to do so, since the question you have is probably the same thing which is on the mind of a few hundred other folks but none of you took the time to write in. We encourage you to sign up for the RSS feed to you get your home ownership/foreclosure intervention information for the day.

Share with family or friends. Consider joining HOMPCI as a supporting member in order to help us continue to expand the services and programs being offered. Donations in any amount are appreciated. Why not do that today?

Host: Home Ownership Matters Preservation Center, Inc. www.HOMPCI.org

Press Release: HOM Announces (FIS) Foreclosure Intervention Specialist Training Underway in Charleston

2010-04-01T08:00:00.000-04:00

Home Ownership Matters announces (FIS) Foreclosure

Intervention Specialist training underway in Charleston

Indianapolis, IN–April 1, 2010 — HOM President and Founder Mildred Wilkins is pleased to announce the overwhelming positive response from attendees of (FIS) the foreclosure certification program being offered for the first time in the state of South Carolina. Approximately sixty licensees began the 5 day certification program on March 15th, 2010 in Charleston. The Foreclosure Intervention Specialist Program (FIS) has additionally been approved by Real Estate Commissions in Colorado, Ohio, Oklahoma, Nebraska, Kansas and Indiana. It is expected that the program will be launched in Pennsylvania in early summer and has been offered in Florida without CE credit to attendees from a number of states. NAR provided funding for this critical training through their Foreclosure Prevention and Response (FPR) grant.

This certification program was developed by Mildred Wilkins, president of HOM, LLC headquartered in Indianapolis, Indiana. The program provides 30 hours of material in a classroom setting designed to prepare attendees to become knowledgeable about the options available to consumers who are in default on their home loans. Included in the course are components which address the foreclosure process, ethics, fair housing, the short sale process as well as options for keeping the home. Real estate professionals need a broad knowledge base to make appropriate recommendations when a default has occurred. (FIS) training provides that broad base. The practice of real estate has evolved rapidly as foreclosures have increased dramatically creating a need for a new field of knowledge. Foreclosure is frequently avoidable but unfortunately consumers have limited opportunities to learn what options are available. Nor has there been a way for consumers to identify professionals who have the ability to help them. Within the last two years professionals have sought to differentiate themselves with a short sale certification for this reason.

The Foreclosure Intervention Specialist (FIS) certification will set apart those agents who have taken extensive training to be prepared to handle the challenges associated with transactions when the consumer owes more than the property is worth on the open market. The training can alter the outcome of mortgage default when a consumer chooses an agent who is an (FIS) specialist. (FIS) is the oldest certification (offered first in 2005) and the most comprehensive of the programs available to agents. The completion of this program will also help licensees avoid liability while helping them to work more effectively to avert foreclosure for their clients.

Ms. Wilkins is a former Fannie Mae Broker-Specialist who sold foreclosed properties for their disposition department out of Dallas, Texas. She has received loss mitigation training from NeighborWorks America, Fannie Mae and HUD. Since founding HOM in 2002, her work has been featured in the New York Times and BusinessWeek, she has also appeared on MSNBC and NPR. In addition, foreclosure related articles she has written have been published in REALTOR magazines around the country.

Wilkins has been a faculty member for Graduate REALTOR Institute (GRI). She is also a former member of the faculty of NeighborWorks America as a trainer in Foreclosure Intervention. She is regularly a speaker or trainer at numerous state/regional conferences on foreclosure intervention, predatory lending, loss mitigation and/or mortgage fraud. She is widely recognized as a leading expert on these subjects. HOM has been certified as a continuing education provider for real estate professionals in Colorado, Nebraska, Kansas, Ohio Indiana, Kentucky, Tennessee, Oklahoma, Iowa, South Carolina and Alabama. Wilkins is an approved instructor for attorneys in Indiana and Ohio.

This (FIS) training session is scheduled for completion May 19 and 20. Registration is restricted to current enrollees. To schedule an (FIS) training series in your area, contact Mildred directly (866) 507-5105.

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.)

PSA: Jury Duty Scam

2010-03-31T08:00:00.001-04:00

Pass this on to your grown children. This has been verified by the FBI (their link is also included below). Please pass this on to everyone in your email address book. It is spreading fast so be prepared should you get this call. Most of us take those summonses for jury duty seriously, but enough people skip out on their civic duty that a new and ominous kind of fraud has surfaced.

The caller claims to be a jury coordinator. If you protest that you never received a summons for jury duty, the Scammer asks you for your Social Security number and date of birth so he or she can verify the information and cancel the arrest warrant. Give out any of this information and bingo, your identity was just stolen.

The fraud has been reported so far in 11 states, including Oklahoma , Illinois , and Colorado . This (swindle) is particularly insidious because they use intimidation over the phone to try to bully people into giving information by pretending they are with the court system.

The FBI and the federal court system have issued nationwide alerts on their web sites, warning consumers about the fraud.

Check it out here: http://www.fbi.gov/page2/june06/jury_scams060206.htm

And here: http://www.snopes.com/crime/fraud/juryduty.asp

Please make sure and pass this on

So, you think you want to become an REO Broker?

2010-03-26T08:00:00.001-04:00

Get ‘Em Listed and Roll in the Dough…

It happens every time I teach a class (and I just had an (FIS) class in Charleston last week). Several of my students will get all fired up about becoming a listing agent handling REO’s as the fast track to real estate success. Even though the class is (and is advertised as such) designed to help REALTORS learn how to be successful with options to AVERT foreclosures, someone always attends for the SPECIFIC purpose of meeting me and having me tell them the short cut to becoming a Fannie Mae broker or a representative for some other REO account. Aside from the fact that that is not the purpose of the training, there will always be someone who is persistent in trying to move conversation in that direction.

This article is for you—you know who you are.

Ah-h-h, the Cushy Life of an REO listing agent

I’ve been there, done that, got the T-shirt AND the award. I received the 1st Rising Star Award as Rookie Broker of Year for the United States from Fannie Mae in 2000. They were right on target with their assessment; my star has been rising, (also drifting, getting lost and other mundane contortions) ever since. Oh, but I digress.

The truth is that my Fannie Mae experience was, overall, a really good one. I received excellent training at the Disposition Center in Dallas, and great support from my initial salesperson, Shirley Mastenbrook. I learned how to effectively price property based on a precise analysis of market data and I sold a heck of a lot of Fannie Mae homes. My sales volume and income both increased dramatically. However, my life, as I knew it, completely disappeared. It’s emotionally devastating to process a forceful eviction. To be the person who stands there and officially authorizes someone to be thrown out of their home. Being property manager extraordinaire is an emotionally draining and time-consuming gig.

It’s a New Day

The REO market is booming and in some areas there are more REO’s available than traditional listings. Loss mitigation efforts, including modification and short sale attempts, have slowed the number of completed foreclosures even though the number is still unbelievably high. However, the amount of ‘shadow’ inventory (REO’s being held by guarantors and NOT being placed on the market) is estimated to be a significant amount and must eventually be placed on the open market.

Market dynamics are rapidly evolving. A new mixture of guidelines for disposition changing in response to market conditions and/or government regulations, recommendations or directives and REO owners all serve to make today’s REO broker’s job a very challenging one. The practicalities of good business decisions shaping what will or can be during the time period the REO is under the control of the guarantor or lender is fluid. When you own or manage a few properties you can be almost casual about how you dispose of them. When you own thousands upon thousands, stacked on top of each other, you have to utilize a more systematic, inventive approach in reducing those expenses which revert to you and become vigilant in avoiding any expenses you can. Utilization of a strong contract, with strict adherence to its dictates can mean survival or failure to survive. Whether expenses are moved to listing agents, buyer’s agents or buyers is immaterial; what is important is that anything which can be shifted to someone else, be shifted. The list is growing—now even eviction costs have been added to the list of costs which can be shifted to someone else.

Flies in the Ointment

Nothing messes up a good plan faster than messy details. It should not cause you concern if the dollar amount tied to a detail is a small number, with only two place holders, like $99.00. It gets serious when the numbers are BIG numbers, with 3 or more placeholders, say $475.00 for instance.

Likewise, phrases such as “shall maintain the premises” are not a big deal, unless the premises include a pool or some other high maintenance component. Assuming the responsibility to maintain can keep a person awake at night better than a crying baby. Didn’t they explain that ‘handle utilities’ meant that ‘deposits when required’ would come from your checking account? I suggest you re-check your account balance to be sure you can AFFORD to be an REO listing broker. It’s good business, if you can get it—provided you are sure you understand what you are signing up for.

Re-imbursement is on the Way

**Insignificant detail—To be delivered by deranged carrier pigeon who will be dispatched later this year.

I am not throwing snipes at Fannie Mae. They did an excellent job of processing reimbursements and doing so in a timely fashion based on the criteria they had set for their agents. However, things could be dicey IF you forgot to submit invoices on time. REO sellers are SERIOUS about their deadlines. You miss it; you eat it!!! No equivocating. You agreed and said you understood, this is a business, not a game for newbies who want to play at REO sales. Suck it up, write the check and remember to check due dates more carefully in the future. If you want to depress me, e-mail me and ask about the $15,000.00 I had to shell out after missing a few deadlines—it doesn’t take long for carpet and paint to run into some serious money. BIG numbers, with five place holders—like $15,000.00.

REO’s can be LEASED

Awesome plan! Announced by Freddie Mac in January of ‘09 and Fannie Mae in November of ‘09. This is the deal. Both organizations were (and remain) concerned with the increasingly large inventory of foreclosed properties as well as the public perception that they are not doing all they can to help alleviate the problem. Both have begun lease-back programs so that either the former owner of the property or a tenant placed there by the owner can lease the home back—AFTER foreclosure.

In a nutshell, the Freddie plan is a month-to-month lease, at current market rent. The property will be on the market during that timeframe and the new BUYER assumes responsibility for the eviction process and related costs to get the occupant out of their new home.

The Fannie Mae plan is essentially the same, except that it allows for a one year lease period. If you are the REO broker for either of these guarantors you have the honor of explaining the particulars and the implications to a buyer’s agent. What appears to be a win-win for Fannie or Freddie and the occupant can become a nightmare for the agents involved and a potential purchaser. The magnitude of unintended consequences is enough to make my hair go straight (and I have a very short, curly Afro). I suggest you take a crash course in landlord-tenant law in your state. Additionally, please check to be sure your E&O Insurance premiums are current.

Would I do it again?

The truth is, I might be tempted because of the guaranteed revenue stream. The reality, however, is the same as the prospect of teaching middle school kids: someone has to do it but I am not that hard up yet. Having sold REO’s for 2 ½ years, very successfully, I can see how dramatically the terrain has changed. Today’s REALTOR has a lot more risk, many more potential ‘bosses’, and fewer clear guidelines in an arena which mimics the wild, wild west pretty closely. Training by the companies who select agents is almost non-existent. The entire process is further complicated by the fact that you are stepping into situations like the landlord scenario I mentioned in the paragraph above.

For agents who decide this is still the route you wish to pursue, I’d like to share some thoughts on making an informed decision.

The Five Star Conference, complete with training institute, offers just what you need—but the entire cost for that training will be at your own expense. The timing of the annual event may not coincide with when you want to get started and there are numerous other challenges to concern yourself with as well. Learn how to perform a professional BPO (www.fanniemaebpo.com) so that you are really good at determining property value PRIOR to the listing. Additionally, it might be beneficial for you to read the actual contract used by the guarantor you think you want to represent. I am suggesting that you read both the listing agency contract (which you and your broker will need to sign) and the contract which you will provide to buyers/buyer’s agents. You can learn a lot about the firm you will be working for by studying the documents which will bind you to them.

REO sellers do not all require the same level of service

It is important that you pre-determine what type of REO listing agent you want to be: an agent who only lists properties (such as HUD homes) without an obligation to handle utilities, etc – or does property management to a degree (Fannie Mae or Freddie Mac) or offers an even broader range of services such as rehab, keeping utilities in your name and a full menu of other services. Then only seek or accept listings from an REO seller whose needs mesh with those services which you are willing to perform.

I would caution you to avoid seeing the REO business as something you will just ‘tack on’ to the rest of your business. Most REO sellers are very demanding. Their volume is growing faster than mushrooms and a huge quantity of ‘shadow’ inventory is just waiting to be released. It would be wise to see this as a major part of your business and to make a decision based on whether you were prepared or willing to shift and become primarily an REO seller’s agent if this is the path you chose. If you do well, the volume will definitely follow. If you do poorly because you cannot handle unexpected volume, they will drop you like a hot potato and never speak to you again. They take “failure to perform” very seriously.

I would encourage you to talk to some agents who have listed REO’s within the past 18 months. Sit down with them over dinner (your treat) and ask for an honest analysis of those things which they see as problematic.

Your final question to them should be: “What is the worst thing that could happen?” Consider their answer. If you can live with the worst thing that could happen, then go for it.

Best of luck in the REO world.

Happy to be a “Former Fannie Mae Broker”

WORD: Days on Market (DOM/D.O.M.)

2010-03-25T08:00:00.000-04:00

And the WORD for Today is...

DOM stands for “Days on Market” and is used primarily by real estate agents to indicate the number of days between when a property was first listed and when it eventually closed. You would think this would be simple math and not likely to be misleading, but the reality is that it (like most things) can be manipulated to give a more favorable picture than the actual truth.

First, let’s discuss WHY the number is important. If you are a buyer, you are likely interested in whether or not the listing is a new one (with a low number of DOM). This might indicate the seller has not gotten too worried about getting an offer and may be less willing to negotiate. On the flip side, a larger number of days on market could very well signify a seller who is starting to worry about the chances of getting the price they want and has become more willing to negotiate as a consequence.

Next, let’s discuss how this is one of those times when what you see may be an illusion. If the property has been listed with Agent Y for 95 days, then the listing sheet will show 95 DOM. But suppose the property has previously been listed with Agent X for a full 6months, 180 DOM but the listing expired without being sold. The cumulative DOM is actually 180 + 95 = an astonishing 275.

A seller might prefer you not be aware of the lengthy timeframe the home has been marketed, without success. Many REALTORS would also prefer that you not have access to that information. Only recently have real estate boards begun changing their guidelines to include CUMULATIVE days on market as information which can be accessed by the general public. While the information has always been available for an agent who chose to check the listing history on a property, a potential purchaser could not gain access to this information which was controlled by MLS systems.

As a consumer advocate, I believe it is only appropriate that the potential buyer have full disclosure of ALL pertinent facts. It is certainly important to have an opportunity to question WHY a home has been marketed for over 9 months and not been sold. The answers to the WHY could shape the decision of this potential buyer—whether the issue was the price, condition, some external factor, whatever it might be. Those boards which have chosen to fully disclose this important information are to be commended; those who still fail to do so should consider the implications of providing less than full disclosure a material fact to the public.

Myth vs. Reality: Short Sale During Bankruptcy

2010-03-24T08:00:00.001-04:00

Myth: There is a widespread misconception that since the consumer still owns the house they have the option of putting it on the market anytime they want to, including when they have filed for bankruptcy protection. Sadly, there are some attorneys who will tell the consumer that there is no problem since they are ‘just marketing’ and will get approval from the Trustee for any eventual sale. Too many real estate salespeople are afraid they will miss the opportunity for the listing unless they go ahead and sign a listing contract sooner, rather than later. Everyone is feeling pressured and so a decision is made which is directly contrary to the law and is almost certain to anger the Trustee when they are made aware that a listing is in place. Since Trustees are people, this is not likely to bode well for the debtor.

Reality: All assets are considered frozen from the time the consumer officially files for the bankruptcy. A consumer is prohibited by Federal bankruptcy law from transferring or selling ANY assets until a determination has been made by the Trustee about which assets are to be sold or relinquished to satisfy creditors and which can legally be retained by the debtor. In the meantime, ANY asset advertised as available for sale clearly constitutes an attempt to dispose of that asset in direct violation of the law.

WARNING: If you are a REALTOR, you should be careful to explain to any borrower who is in default and becomes a listing client what is covered above and further, let them know that you will need to remove the listing from the market should they decide it is in their best interest to file for bankruptcy. A licensee should never have a property on the market unless and until the Trustee of the court has given a specific release (in writing) which says that the listing has the approval of that court. Your worst nightmare as a real estate agent could be getting an offer on a property which is, in fact, not available because it has not yet been released by that Trustee. You will have placed the listing client in an impossible position: an inability to close, which would open them up to the possibility of a lawsuit for “failure to perform.” Essentially I am saying this is one of those times when you cannot take matters into your own hands—EVERYONE should wait for the official determination of the Trustee of the Court. Once this has been handed down, provided to all interested parties in writing, then move forward based on the latitude you have been given.

WORD: Redemption Right

2010-03-23T08:00:00.001-04:00

And the WORD for Today is...

Redemption Right – is outlined in state statutes and varies from state to state. Many consumers sign away their redemption rights without knowing they had any. A telephone call to the sheriff or trustee’s office in your area will provide you with information concerning timeframes and the specific procedure necessary to redeem your home. Good 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.)

WORD: Escrow Account

2010-03-22T09:39:00.000-04:00

And the WORD for Today is...

Escrow Account – is an account established by the lender at the time of the closing on your home so they will have the funds needed to pay your insurance and taxes when they come due. You can see this as a “forced” savings account with an amount in each of your mortgage payments added for insurance and taxes. This is common practice and many people (including me) see it as a good thing since it avoids the likelihood that you will not have saved enough money when these expenses come due if they were not included in escrow.

Q&A: Losing Home to Tax Sale

2010-03-21T08:00:00.000-04:00

Q. I am behind on my property taxes and wonder can someone just pay my taxes and take my house? Surely that is not possible, but a friend has warned me that it is something I should be worried about.

A. The short answer is YES, you can lose your home because you did not pay the property taxes. However, it is not something which could happen without you receiving notice and having ample time to resolve the problem. Let me explain.

While it is true that a person can lose their home because they failed to pay the property taxes, that usually will not become an issue unless you are at least 2 or more years past due with the taxes. Property taxes are mandated under state or local municipal law and are collected by an office which has the authority to do so. The name of the office may be tax assessor or tax collector or similar. In addition to collecting taxes when due, this same office has the authority to:

Place a lien against any property owner who has not paid the appropriate taxes for an extended period of time (and the amount of time will vary from municipality to municipality, set by local law)
Notify the owner that the property will be made available for sale due to unpaid taxes, if the problem is not corrected within a specified period of time
Proceed to offer the property for sale at an auction specifically for the purpose of collecting unpaid taxes
Advertise the availability of the property for past due taxes and complete the sale at the designated time

*Some folks have gotten wealthy by acquiring property in this manner because the prior owner was not aware of their redemption rights.

Many states have a redemption period during which you can reclaim your property by re-paying the amount of the tax bill, court costs and any other applicable costs. This redemption period may be as short as 6 months or as long as 2 years. You will need to check the statutes in your city/state. It is important that you keep abreast of your tax situation, even if you are not able to make the regular mortgage payment.

My experience has taught me that the individual most likely to be unaware that their taxes have not been paid is someone who had a mortgage with taxes included as an escrow item and then refinanced.

When they processed the refinancing, no escrow account was set up for the payment of the taxes so the individual who has not been in the habit of paying taxes simply ignores the tax BILLS they have been receiving believing that they are the tax NOTICES/RECEIPTS which they are accustomed to getting. Their taxes fall further and further behind until the appropriate authority utilizes the process outlined above to collect the taxes.

Please take the time immediately to verify your actual tax situation; you may even be able to make partial payments to the taxing authority to avoid losing your home in this manner. Yes, you may have the right to get it back, but better to keep it in the first place.

Good luck!

WORD: Dual Agency

2010-03-20T08:00:00.000-04:00

And the WORD for Today is...

Dual Agency — means 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”.

Q&A: Smoke & Mirrors

2010-03-19T08:00:00.000-04:00

Q. I am extremely frustrated trying to getting my lender to work with me on getting a modification of my loan. I have already received notice that they have started foreclosure but I have also received a couple of letters which says they are willing to work with me on trying to keep my home. The problem is that the letters I have received do not have a name so I don’t know who to speak to. Every time I call I get a different person who gives me different instructions on what I need to do. Why don’t they provide a name so I can talk to the same individual and get something worked out?

A. The problem you are experiencing is a common one. It is amazing that lenders/servicers who claim to be doing everything they can to work with borrowers can’t provide a name for a contact or REAL numbers so you are not going through a series of numbers and extensions which frequently lead you nowhere. Most folks would assume if you got an unsigned letter that the sender was not serious about having you reach them.

Lenders and Servicers are under a great deal of pressure:

a. Pressure from the GUARANTOR who will ultimately absorb any loss via an insurance claim after an acquisition (foreclosure or deed-in-lieu)

b. Pressure from the government (whether or not they received TARP funds) to try to avoid foreclosures

c. Pressure from any investor who has purchased the underlying mortgage to collect and forward payments on a monthly basis, in a timely manner (or cover them themselves)

d. Pressure created by the INHERENT CONFLICT because the lender/bank needs to look out for their own best interest which is NOT best served by a lengthy loan workout and the guarantor whose BEST interest is not served by an acquisition. Essentially, the lender and their servicing partner have the responsibility for looking out for the guarantor which conflicts with their personal best interest. It’s kind of like a kid who has to appear to be compliant with a parent’s instructions since blatant defiance is totally unacceptable. S-o-o-o-o, you get surface compliance but lack of depth and sincerity. So consumers get telephone numbers which deadend nowhere and letters which say reach out and call me, but fail to say who sent them.

SMOKE & MIRRORS

There is the strong possibility that the failure to make it easy be in touch and get clarity for a workout could be a smokescreen. IF there is a foreclosure, the lender/bank closes the file and submits a claim for the amount of the shortage. End of their pain.

The behavior of SOME borrowers has become the anticipated response from all borrowers. As a consequence, practices at the servicer centers tend to demonstrate, by and large, an expectation that the home is going to foreclosure so why should they waste time and effort on genuine workout attempts.

If they work at doing a workout there is the aggravation of trying to work with a defaulted borrower who might not be totally committed to the process and either does not understand or for other reasons does not provide all the materials requested or does not do so in a timely fashion. Dragging the pre-foreclosure period out for months WHILE THE INVESTOR IS DEMANDING MONTHLY PAYMENTS can be a drag on the lender’s bottom line.

Consumers play into this mentality by not doing ALL that they can do to comply but the larger responsibility falls on the lender/servicer as the LEADER and PACESETTER for a workout to be completed. The lender/servicers could start by having a person’s name in the signature box of a letter saying call me, I can help.

IS THAT TOO MUCH TO ASK?

WORD: Highest and Best Offer

2010-03-18T08:00:00.000-04:00

And the WORD for Today Is...

“Highest and Best” Offer – is a term generally associated with the purchase of bank owned property. When more than one offer has been submitted to the guarantor/seller, the buyer’s agent may be asked to submit the buyer’s “highest and best” offer. They may choose to increase the offer in the hopes of being selected from multiple offers held by the lender, withdraw their offer altogether or hold steady at the amount and with terms previously submitted. Highest and best offers should always be written and the notification from the listing agent should clearly indicate the time frame for response.

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: Multiple Offer

2010-03-17T08:00:00.001-04:00

And the WORD for Today Is...

Multiple Offers – are likely to be submitted when the property is either listed as a pre-foreclosure sale or is already foreclosed. Lenders encourage multiple offers since they are looking to get the highest amount they can for the property and pitting potential purchasers against each other is a way to accomplish that. It is perfectly legal. A buyer in such a situation should request written notice that the lender is holding multiple offers and if there is a designated time when all offers will be read and considered.

(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.)

INtro #51: Buyer's Agent—A Different Game...Short Sale & REO Buyers

2010-03-16T08:00:00.000-04:00

HOM INtro #51: Buyer's Agent—A Different Game...Short Sale & REO Buyers

To view this in a larger format click here.

To view this in PDF format click here.

(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: Highest and Best

2010-03-15T08:00:00.000-04:00

I am sure that the person who submitted the question below will have made a decision before they have a chance to get my answer. In any case, the answer could be helpful to anyone who has or might write an offer on an REO property so I am including it on the website.

Q. My wife and I wrote an offer a week ago on a bank-owned house and today our agent told us that the bank has another offer in addition to ours and gave us an opportunity to change the offer if we want to and give them our ‘highest and best’ offer by 5 p.m. tomorrow. Is this common? How should we respond?

A. First, just as a point of clarity, we are talking about a fairly common practice when you are trying to purchase an REO (real estate owned) property. The process of purchasing such a property is significantly different. The guarantor or lender who is selling such a property is interested ONLY in the highest net dollar amount. One way to increase the net is to encourage competing buyers to make offers on the same property (creating a multiple offer situation). Once the agent who represents such a seller is holding more than one offer, the strategy is then to have them compete against each other which results in a higher amount being offered for the home.

This process has rules. All potential buyers should be given the same time frame to respond and either increase their offer amount or re-affirm the amount they offered before is, in fact, their ‘highest and best’ offer. This option should be provided to the buyer’s agent (via fax) and provide for a signature so that the buyer’s agent can confirm that they have received the notification that the buyer needs to respond by a specific time.

The time frame for response varies but it is not uncommon for it to be 24-48 hours. A buyer has the option of withdrawing their offer if they decide they do not wish to participate in the bidding war. A buyer who is still interested and wants to increase their bid should be certain that their agent gets their revised offer in prior to the expiration of the required time frame. A follow-up phone call would be appropriate since the seller is going to make a decision based on the offers they receive during the stated response time.

WORD: Month-to-Month Tenancy

2010-03-12T08:00:00.000-05:00

And the WORD for Today is...

Month-to-Month Tenancy – refers to a tenancy where no written lease is involved, with rent being paid monthly. The parties will usually agree about conditions of continued occupancy including obligations concerning notice for moving or eviction. The guidelines for eviction may be set by state statute. See www.ShowHomes.com for an example of month-to-month tenancy as a business model. Such a model meets the needs of property owners who need to sell their homes and, for whatever reason, must vacate but believe the home would have increased appeal to a buyer if it were occupied. A resident home manager with month-to-month tenancy is a good solution. Such an arrangement is becoming common practice with upper-end properties around the country.

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: Straw Man

2010-03-11T08:00:00.001-05:00

And the WORD for Today is...

Straw Man – also sometimes called a “straw buyer.” Either expression refers to a person who acts for another, not in the open, but acts as a principal to hide the identity of the party for whom he is covering up.

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.)

Q&A: Listing agent to help me buy

2010-03-10T08:00:00.000-05:00

Q. Last week while visiting open houses, I found a house which I really, really like and want to purchase. The listing agent has been very helpful and since I don’t have an agent, she is encouraging me to go ahead and let her help me with the purchase before someone else gets it. Is it a good idea to let the listing agent represent me as well?

A. Agency is the relationship you establish when you select or engage someone to represent you. It is a legal arrangement where you become the principal and they, as your agent has a responsibility to protect your interests in helping you complete a transaction. It is implicit in this agreement that they have a fiduciary responsibility to put your interests first.

Dual agency

The situation you are asking about is commonly called dual agency, where one party represents both people. It is entirely legal, but can become complicated. The agent must disclose to both clients the existence of the other client (get you to sign a paper which says you understand and are comfortable with this arrangement). The legal requirement addresses the issue of appropriate disclosure; it does not address the issue of human nature. Human nature is such that most of us are going to choose between two individuals one of them whom we like a little better or for some reason feel a little closer to and work harder to get what they want out of a situation. In addition, in a house purchase, the listing agent has a relationship FIRST with the sellers. Even if there is an agreement to treat all parties fairly, if there is a major inspection issue (for instance) it is likely to be harder for the agent to press the people who listed with her to spend the necessary money when they already have an accepted price. On the other hand, if you had selected a buyer’s agent whose only responsibility is to represent you, then your agent can fight aggressively for having the repair done since they have NO connection to nor consideration for the seller.

Limited or dual agency is very popular with many agents who contend there does not have to be a conflict and they can handle any conflict which arises.

I disagree and believe that while dual agency may be legal, it is fraught with the opportunity for a buyer to receive less than full representation. The major fringe benefit for agents is that dual agency comes with dual paychecks. When I sold real estate, I declined dual agency unless it was an inter-family transaction where they simply needed a competent agent to process the transaction but they were already in agreement about the details.

I will never forget one transaction where I had the listing and my client did NOT understand why I did not want to represent a buyer who wanted her property. I explained dual agency and the problem which that MIGHT create. I told her I wanted her house to sell but I did not want to represent the buyer.

She took that to mean I didn’t think much of her house (which was a reflection of her lack of self esteem and lack of understanding of agency as I had explained it to her). Her house appeared to be in excellent condition, very well kept, neat, clean. Roughly a $65,000 starter home in Indianapolis. I would not have listed it had I not felt comfortable with its presentation and my ability to sell it. We get the house under contract with a young woman who had wanted me to represent her as well since she did not have an agent when she first looked at the property during an open house. I had insisted she had to go find another REALTOR since I would only represent the listing side.

Her inspection uncovered a major leak in the attic which required a full roof replacement for FHA financing. Neither my seller nor I had any idea there was a problem with the roof since there had not yet been a leak inside the house, but here we are with an accepted offer, scheduled to close in two weeks. She is looking at an outlay of more than $4,000 to put on a new roof which would eat up almost every penny which she expected to get from the proceeds AND she didn’t have the funds to do it in advance. We tried to negotiate to get the buyer to increase her purchase price, to no avail. My seller was unwilling to move forward to closing at the agreed price AND shell out the funds for the roof. We did not close because she could not (chose not) to correct the problem. I supported her position. I felt she had a legitimate position. She somehow felt that if I had represented the buyer I could have made her accept the house without the roof replacement and that I had cost her the sale. She did NOT relist with me.

I am sharing that I refused to participate in dual agency and still lost the transaction and some agents reading this will say I should have represented both of them. I am more convinced than I was before that transaction began that the worse possible situation for me would have been representing both of these women—essentially AGAINST each other—over a $4,000 roof issue.

In real life, too often agents do press one party to go ahead when they run in a scenario similar to the one above. When they do so, they fail to pass the test of integrity and do a disservice to the real estate industry and the clients whom they profess to represent. The general public has significantly less regard for all real estate salespeople, including REALTORS, than they did 10-12 years ago. We have lost their respect as a profession because of the multitude of agents who do not adhere to the standards which had placed us in such high regards just a mere 20 years ago.

Agents: Will you be part of the move toward professionalism? Integrity? Respect?

Consumers: Will you become better educated about what you should expect from your agent and then demand that they provide a level of service which you are comfortable with?

You’re paying for it, you deserve no less!

WORD: Maturity

2010-01-29T08:00:00.000-05:00

And the WORD for Today Is...

Maturity – the termination period of a mortgage note. For example, a 15 year mortgage will become mature in 15 years.

In sales law, the date a note becomes due is said to be its maturity date.

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.)

INtro #75: Your Mortgage Documents...Filled with Surprises

2010-01-28T08:00:00.000-05:00

HOM INtro #75: Your Mortgage Documents...Filled with Surprises

To view this in a larger format click here.

To view this in PDF format click here.

(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.)

Current Event Commentary: The Beginning of a New Era

2010-01-27T08:00:00.001-05:00

We are pleased to announce an addition to the line-up here are HomeOwnershipMatters.blogspot.com. Effective February 1st a new, regular component of the blog will be a “Current Event Commentary”.

This is a fairly significant change from most of the blog segments, which by and large have steered clear of any commentary on news stories and instead have focused on straight education with a minimum of opinions about the current news. It can be a little dicey when you start to mix commentary with facts, guidelines and personal experiences. Commentary is by definition—subjective, personal opinion.

Facts, rules, regulations, laws and personal experiences can all be documented, cross checked, verified.

They are SAFE. As long as you get the details accurate, who can challenge you? You simply tell them to go check the facts and get back to you. End of conversation.

Commentary—on the other hand—has no such shield to protect the author of the comment. It’s basically just YOU and YOUR opinion. For the “Current Event Commentary” blog entries I will need to be careful to clearly identify “I” to eliminate the possible misunderstanding that other team members here at HOM share MY opinion. They may; they may not.

I feel pretty alone. And yet I feel it is time to step away from the ‘safe’ teacher position, at least occasionally, and address how I feel about stories, changes and challenges facing many of today’s consumers. You may be personally facing some housing challenges and I want to take the opportunity to be candid about what I feel a particular new story or change in policy means for the average person.

I will address a current event when it relates to housing/mortgages/foreclosure in a way which I feel commands/demands my attention. You will already have heard the news so I won’t waste time re-reporting. Instead, I will provide you with an honest analysis, based on my experience in this field. I will cut it, slice and dice it and turn it sideways so I can help you figure out what was MEANT by what was stated (or left unstated). I have always believed, as Paul Harvey stated so forcefully “the REST of the story” was the telling part, the important part, the part lurking underneath the oft-quoted part.

You can bet there is more than meets the eye when a story is about banks or banking or any other aspect of our current housing crisis. Nothing is what it seems, promises are illusions and all the players seem to be clustered together.

I hope you’ll enjoy the “Current Event Commentary” beginning next week and encourage you to tell me what you think about it by emailing directly to: mildred_b_w@msn.com.

Modification Myth

2010-01-22T08:00:00.001-05:00

MYTH—It is a widespread myth that borrowers who are in default have no money and therefore no way to pay for help with addressing their default situation. The argument is frequently the logic for non-profits who insist that it is somehow immoral for a borrower to be asked to contribute to the service which they need. While I support non-profits, I have never bought into this false thinking. I believe that most folks appreciate more what they have contributed to and think that non-profits could offer more services to more people if they adopted a sliding scale which allowed clients to pay according to income level with a provision for totally FREE service in situations which clearly warranted such.

REALITY—many borrowers do have money—SOME money. No matter what circumstance caused the default, many borrowers not only have some money but are both willing and anxious to find someone whom they feel can help them with their mortgage mess and are both able and expect to pay for that service. This is especially true of middle to upper income borrowers who are used to paying for any service they get and are more likely to be suspicious of service offered for FREE. As an example, the borrower in a $500,000 house who has been laid off is likely to have resources to make the mortgage payment for a while before savings, retirement and/or other accounts are depleted. This individual is looking for an attorney or similar professional with knowledge of the foreclosure process, possible impact on his taxes, etc to help with the tough decisions which have to be made. Additionally, this same borrower, while highly competent at his/her job is acutely aware that they are unprepared to negotiate for themselves in this arena. To my point, I recently personally coached a highly skilled attorney through the loan modification process and the mandatory meeting with the Lender shop which has been instituted by law in the state of Indiana. The attorney was able to do what I told her to do but she did not know WHAT to do or WHY certain things were important because this is not her area of expertise. She needed professional coaching to deal with the bank world. She is one of several consumers whom I have personally coached through the process and helped them to be able to represent themselves since I am not in a position to do so.

SOLUTION—Trained, competent foreclosure intervention counselors—who work for a fee, to represent those who cannot get representation at HUD approved or other such agencies. There is room in the market place for both. There are consumers at both ends of the spectrum who need appropriate, professional help. Recently I was asked by an upper income borrower what exactly I do other than the training for REALTORS. I explained that I am a consumer advocate and try to reach borrowers for whom I can provide FREE workshops or materials to in order to help make a difference in their situation. His question then was ”Why are you discriminating against people who have money?” The question caught me off guard and caused me pause. The truth is that I come from a background of poverty and I have a commitment to make as much of a difference as I can for those who are struggling. Does that mean I should not share my knowledge with those who can afford to pay for it?

It struck me as a novel concept. It resulted in a paradigm shift.

(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.)

Assessing HAMP a year later

2010-01-21T08:00:00.001-05:00

H A M P—Home Affordable Loan Modification Program was discussed in detail yesterday. If you missed it, it would be valuable to read it before you read today's blog.

First, let’s analyze what has been accomplished under the program. The program was projected to reach over 4 million homeowners with much needed help to sustain home ownership. The end of the year report indicates that fewer than 100,000 have, in fact, been granted permanent (5 year permanent) mortgage modifications since the program was implemented in March, 2009. For those 100,000 or so, they see it as a success (even if they do feel 20 years older because of the process). I feel pretty sure that the other 3,900,000 would consider it a failure. The horror stories of run-arounds, and lost paperwork and so on and so forth defies explanation and even the most mild-mannered person can be pushed too far.

Why Has HAMP failed?

The simple reasons are that it was created without a clear understanding of how the bank world works (the role of the guarantor behind the loan) and some other critical components were just overlooked.

Capacity—The dilluge of consumers instantaneously seeking help totally overwhelmed servicing shops who were already stretched past capacity because of defaults. Without funding for the hiring and training for substantial increases in staff to handle the flood of requests for help, the plan was doomed to be as ineffective as history has shown it to be. Individual lenders have sent PR teams across the country to talk about the way they handle modifications, but I am talking about a massive, organized, on-going effort to train the staff within the lender shops what was expected from the government and how the program was to be implemented. For a simple look at the capacity issue—I have folks tell me all the time, “You should be offering this and you should be doing that and why aren’t you answering questions online from individual borrowers?” I look at them like they’re crazy. HOM is a small company with 3 employees and the company’s income is generated almost exclusively from speaker fees. You want production equilvalent to a large company but you are not offering any funding or staffing just creating more jobs. The NEED for something does not translate into the CAPACITY to provide it without resources which include funding and personnel. HAMP did not adequately address the capacity to get the job done.

Resources—The expectation that only HUD approved housing agencies or similar non-profits should be the ONLY endorsed sources for help totally belies the fact that the program was designed for borrowers with mortgage balances up to $725,000 and non-profits primarily restrict their services to folks who earn less than middle income. Hence, no provision for a referral to anyone if you are not at the lowest end of the income spectrum. Worse, a condemnation (by our President no less) of any organization which offers help for a fee (to middle and upper income borrowers who are looking for such help). This major oversight means there were no guidelines, training, or criteria established for this needed service and YES, some vultures stepped in to fill the gap. California now has some pretty strong anti-vulture legislation which pushed most of the loan modification businesses there out of business, and not a day too soon for many of borrowers who have found that un-trained and un-regulated help can lead to a diastrous outcome.

Non-Profit Push Back

I understand that I am inviting non-profits to yell at me but before you start yelling to defend your position as the only people who care—What is your current back log? How many more people could you see? Is your staff already maxed out? Have all of your counselors received substantial modification and foreclosure law education in your state? Do you offer a sliding scale so any homeowner, any income level has access to your services? What is your success rate with completed modifications? Are borrowers re-defaulting within a few months? If the answer to any of those questions is yes, this indicate you are already serving your maximum capacity (and I am informed enough to know that most are). Stop arguing that help should ONLY be available to those whom you serve and embrace the idea that all borrowers, all income levels deserve to have representation to help them with the crazy world of banking. Businesses which have trained staff, operated ethically, with sufficient government regulations and appropriate bonds in place could go a long way to easing the foreclosure problem which continues to plague this county and will for the next several years. The time has come for the creation of Foreclosure Intervention Services—For Hire, as respectable businesses, listed in the phone book right next to non-profits as a resource for struggling borrowers. Repeat after me—Prohibition did not stop folks from getting alcohol—it just made the bootleg market prosper. When are we going to learn? Where there is a need—a provider will emerge.

Program Lacked Basic Understanding of the Bank World

It was a VOLUNTARY program. Lenders were not required to participate. In fact, they could NOT be forced to participate. It is not possible to force someone to alter the terms of a contractual agreement AFTER the fact. It doesn’t matter that the entity trying to compel cooperation was the US government. Mortgages are legally binding contracts. Lenders already had not only the contract with the borrower, but contracts with the investor, the guarantor, the hedge fund, and so on. The performance of one contract impacted several other contracts and therefore made it nearly impossible to make a significant change to the original contract (the mortgage) because of the cascading impact on all the other contracts which had grown out of the securitization of the underlying contract. Formulating a plan without a clearcut understanding of the securitization process was a major misstep in trying to implement HAMP.

Motivation Insufficient

Beyond the securitization problem, the issue of sufficient motivation to modify made the challenge almost insurmountable. While many would argue that the lenders were paid for their cooperation, that argument fails to address what they would receive by NOT cooperating. Now lenders are going to be mad when I state emphatically that they receive MORE to foreclose than they do to modify. How could that be you ask. Lenders lose money DURING the default process: they must pay the investor as agreed, incur expenses associated with the servicing of the loan, work to avoid having a lien placed against the property for failure to pay homeowners’ association dues, cover the cost of insurance to avoid an uninsured loss, etc, etc. All of these are out-of-pocket expenses—UNTIL a foreclosure is completed. Then, on ALL insured loans, which is MOST of them, the lender recoups many of the expenses which they have put out and collect the amount of the insurance on the loan. It is true that they will seldom get back the missed payments (that remains a loss to them) but the other expenses are usually reimbursable expenses. If you’ve wondered why it seems that the lender is not really trying to work with you, simply consider they need the process to be over, so a claim can be filed.

HAFA—A New Program announced on November 30, 2009 will be addressed next week.

(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.)

Reflections on the Home Affordable Loan Modification Program

2010-01-20T08:00:00.001-05:00

The Obama Administration announced the H A M P program with great fanfare on March 4, 2009. It was a bold step to address the foreclosure problem which was clearly swirling out of control. $75 Billion committed to reducing loan payments. Projected to help more than 4 million homeowners.

It Began With a Premise

Foreclosures in the country were occurring at break neck speed and something had to be done. The plan was conceived based on the premise that homeowners would pay their mortgages—IF they could. Despite being upside-down, borrowers are committed to retaining their home. Warren Buffet has been quoted as saying “Commentary on the current housing crises often ignores the crucial fact that most foreclosures do not occur because a house is worth less than it’s mortgage (upside down). Rather, foreclosure takes place because borrowers can’t pay the monthly payment they agreed to pay.” It is a premise with which I agree and an honorable premise on which to craft a resolution.

A Look At the Program

H A M P or Home Affordable Loan Modification Program was launched with the specific and ambitious goal of making sure that millions of Americans would have the opportunity to remain in their homes even though market dynamics and other factors beyond their control meant the value of the property had declined AND they were struggling with payments but they wanted to keep their home. The goals were clear, the mandate receiving strong support. It seemed a good thing—for all the right reasons.

Reduction in Payment

To address the ‘ability to pay’ the H A M P plan provided guidelines for getting those payments under control. Conservative banking guidelines for many years had shown that mortgage payments at no more than 31% of a borrower’s income usually prove to be sustainable so that OLD underwriting guideline was used as a benchmark for what should be the new goal to help us get out of this mess.

To accomplish this, lenders and their servicing partners were provided with guidelines to make this happen:

a. First, Reduce the payment amount so that it was no more than 31% of the borrower’s monthly income

b. Reduce the interest rate to as low as 2% as a way to get the payment down farther

c. Extend the term of the loan—up to 40 years—further reducing the monthly payment

d. If the payment amount was still more than 31% of the borrower’s monthly income, THEN funds from the H A M P fund would be used to pay whatever was needed to get the payment down to 31% of monthly income

Adjusting the principle balance was not an option addressed by this plan even though it was a logical step (in the opinion of this writer) and had been the objective of the ‘cram down’ component of the bankruptcy reform legislation defeated late in 2008.

Criteria for Participation

H A M P was created as an option for owner-occupied properties with outstanding balances of $729,750 or less. The homeowner was required to demonstrate a hardship caused by a factor or factors beyond their control. It applied to loans originated prior to January 1, 2009. Modified payments were set up for 3 months, as a test to see if the borrower could afford the new payment.

If they made that threshold, then the loan modification became permanent (for 5 years, so let’s say, semi-permanent).

Investors or speculators were exempted from participations. So if you had bought into the hype that building a piece of America was the way to financial security, you were on your own. Consequently, it was expected by a number of observers that the number of foreclosures in this segment would rise dramatically, and RISE they have.

Incentives

In order to facilitate this voluntary program, the H A M P initiative provided for financial inducement to all parties to participate. Servicers (and/or the lenders whom they represented) were to receive $1,000 for each completed modification. The plan called for an additional $1,000 for each year the modification remained in place with a cap after 3 years. The borrower could get $1,000 off their principal balance for each year, up to five years.

“Net Present Value” Test

In order to determine which loans should be modified, lenders/servicers were to conduct a ‘net present value’ test. The test was supposed to compare the expected cash flow which would be generated under the program (with a modified, performing loan) as compared with the expected cash flow if the loan were not modified (and continued non-performing if the borrower were already in default). Let’s see, some $ paid, versus $0 paid. Not a hard test really. Seems like a no-brainer to me.

Good intentions for a worthy cause. So how did it go wrong. Why have consumers across the country been yelling fowl by the hundreds of thousands? Why has the Administration acknowledged that the program has not reached nearly the scope that they projected? We’ll provide those assessments in tomorrow’s blog. Don’t miss it.

(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.)

Press Release: HOM Announces Loan Modification Specialist (LMS) Certification in Las Vegas

2010-01-18T08:00:00.000-05:00

NEWS RELEASE

FOR IMMEDIATE RELEASE – January 15, 2010

Contact: Mildred Wilkins at 1 (866) 507-5105 mildredwilkins@HomeOwnershipMatters.com

Home Ownership Matters Training Institute

Offers Loan Modification Specialist Certification in Las Vegas

Indianapolis, IN, January 15, 2010—National speaker and foreclosure intervention trainer Mildred Wilkins is pleased to announce that the (LMS), Loan Modification Specialist certification program for real estate professionals seeking to help borrowers modify their home mortgage loan will be offered in Las Vegas, Nevada March 11-13, 2010. The program has previously been offered only in Florida. Nevada has the dubious honor of being one of the hardest hit states with borrowers losing their homes to foreclosure. Many are seeking the help they need to avoid it.

With a number of loan modification businesses already in operation in the state, it makes sense to offer high quality training to those looking to provide consumers with an option when they face the challenge of trying to cope with the overwhelming task of preparing to deal with the lender’s shop. Professional training coupled with certification from a nationally recognized trainer and former Fannie Mae Broker-Specialist could give you the edge you need in the development of your business.

As the national news continues to report; the Administrations’ modification program implemented last spring has failed woefully in reaching even a fraction of the borrowers who qualify for help. There are some clear cut reasons why that is true, and those reasons will be discussed with clarity during this course.

Wilkins has been a foreclosure prevention trainer for several years, and has offered a 5 day training (FIS) Foreclosure Intervention Specialist certification for REALTORS® since 2005. The (LMS) certification program was developed in 2009 to meet the need for professionals who understand the process and are familiar with the ‘bank game’ to specifically focus on ONLY loan modification business development. Consumers deserve skilled representation to have at least a fighting chance at getting a modification when one is warranted. The program is designed for experienced professionals, whether attorneys, loan officers or real estate agents who already understand the mortgage process and are familiar with typical closing documents. (LMS) training will provide attendees with the tools to provide a high level of professional service while avoiding many of the pitfalls in this rapidly expanding arena.

The housing crisis has increased dramatically creating a need for a new field of knowledge—a new type of expert. Foreclosure is frequently avoidable but unfortunately consumers have limited opportunities to learn what options are available. Nor is there a way for consumers to identify professionals who have the ability to help them rather than perpetuate yet another injustice. (LMS) addresses that need by empowering real estate professionals to be prepared to handle borrowers in default with increased knowledge and the tools to be effective in working with lender shops to effect a successful modification or other retention option.

Ms. Wilkins sold foreclosed properties for Fannie Mae’s disposition department out of Dallas, Texas for 2 ½ years. She has received loss mitigation training from NeighborWorks America, Fannie Mae and HUD and Legal Services. Since founding HOM in 2002, she has been quoted in the New York Times, BusinessWeek and the Huffington Post. She has appeared on MSNBC and NPR. In addition, foreclosure related articles she has written have been published in BAS and REALTOR® magazines around the country.

Wilkins has taught for Graduate REALTOR Institute (GRI). She is also a member of the faculty of NeighborWorks America as a trainer in Foreclosure Intervention. She is regularly a speaker or trainer at numerous state/regional conferences on foreclosure intervention, predatory lending, loss mitigation and/or mortgage fraud. She is widely recognized as a leading expert on these subjects. HOM has been certified as a continuing education provider for real estate professionals in Colorado, Nebraska, Kansas, Ohio, Indiana, Kentucky, Tennessee, Oklahoma, Iowa and Alabama. Wilkins is an approved instructor for attorneys in Indiana and Ohio.

Today’s challenges require more expanded knowledge than ever before. Get the edge you need! Register today!

www.HomeOwnershipMatters.com for registration/information.

Email: MildredWilkins@HomeOwnershipMatters.com

WORD: Letter of Intent

2010-01-17T08:00:00.000-05:00

And the WORD for Today Is...

Letter of Intent – is a formal method used by a prospective purchaser (developer, traditional buyer, or lessee) to show they are interested in acquiring a property. A letter of intent is not an offer and does not create a legal obligation for either party. A developer may use letters of intent to help secure financing for the project based on the expressed intent from one or more potential tenants.

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: Preliminary Title Report

2010-01-16T08:00:00.000-05:00

And the WORD for Today Is...

Preliminary Title Report – refers to a report showing the condition of the title before a sale or loan transaction. It is prudent for real estate agents to request a preliminary report immediately upon the listing of a property for short sale due to the increased likelihood the defaulted borrower may have other “challenges” such as unpaid taxes or home association dues. It important to have this information to get a clearer picture of the borrowers’ financial liabilities as well as to allow adequate time to resolve any issues which must be resolved prior to closing. An updated title report should be prepared prior to closing and the issuing of a title insurance policy.

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.)

Intro #5: What is a Hardship Package?

2010-01-15T08:00:00.000-05:00

HOM INtro #5: What is a Hardship Package?

To view this in a larger format click here.

To view this in PDF format click here.

(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.)

FYI: Trick-e-ration

2010-01-13T08:00:00.001-05:00

It’s NOT a check; it’s TRICK-E-RATION

When is depositing a check a BAD thing?

And….the correct answer is: When it is Trick-e-ration.

I got a check in the mail

You know how it is this time of year, money is tight and utility bills are high and you are looking for an answer to your finances in any shape, form or fashion. I am right there with you. This morning when I took the trash out I checked the mail, which I had not done the day before (I had enough bills already, thank you very much). To my surprise there was an unexpected check there, from a company I recognized, with my correct name and address and everything.

Trick-e-ration begins

It really looked like a check. The edges were all perforated for you to be able to easily tear it open. It clearly stated on the outside “check enclosed”. There really WAS a check inside. Payable to me or the bearer. Payable at (or drawn on) JPMorgan Chase Bank. I admit it, I went and got a deposit slip and placed the check with my purse so that when I went out later in the day I could deposit it. It did cross my mind to wonder why the Fun Club was sending me a check but hey, money is money. I needed the little check for $9.25. I even said “Thank you Lord”.

Bad things could happen . . .

I sat down to write my blog for today on something else totally different and laid the check beside me on the desk. That is when I noticed that there was a small box underneath the amount for the check and just above the signature line which said:
“By cashing or depositing this check you are purchasing a membership in AutoVantage Enhanced. Void if amount over $9.25.”

Almost got me

Many folks who know me think of me as a ‘smart person’. And the truth is that I probably am fairly bright. I know my subject matter and I am a college graduate and I make a decent living traveling around the country and speaking on the issues of foreclosure, mortgage fraud and the like. However, the truth is that ‘smart people’ make mistakes just like anyone else because being smart in a particular area does not mean you know any more that anybody else in some other subject matter and ALL of us make mistakes. If I was not in the habit of STUDYING contracts and looking for some kind of ‘trick’ in things related to banking and business, I would have gotten got. I stopped, studied my ‘gift check’ and decided they were trying to trick me into signing up for a subscription to something I had never even heard of before.

Marketing is Marketing

At first I was not mad with them for using this unique way of marketing. It is a brilliant plan. It almost worked on me. But then I start to think about the many folks, especially seniors, who would fall for this and get themselves into trouble because if you deposit this little pitsy check, bad stuff starts to happen.

Bad things you didn’t expect

On the back of my ’gift check’ where you endorse it.

“READ CAREFULLY BEFORE SIGNING”.

By cashing this check I agree to a thirty day trial offer in AutoVantage Enhanced. I understand that the $15.99 monthly fee will be automatically charged to my credit card with Great Fun unless I cancel my membership by calling 1-877-397-4430 before the end of the trial period. I understand that after my first year I will be charged $16.99 per month for the next twelve months and I will also be charged every month thereafter at the then-current monthly fee, unless I call to cancel and owe nothing thereafter.

CHECK VOID IF ALTERED OR UNSIGNED

X_________________________________________________
Signature of Payee required for processing T71479105

Warning

Please read again (or for the first time if you never read it before) the blog entry for April 16, 2009 on your signature. Now I am mad. I am very, very mad. I am mad not because they A LMOST got me but I am mad because I can see how they got my mom and your mom and hundreds of thousands of others who either cannot read well or did not read and signed themselves into a long term mess for some magazine subscription that they never would have signed up for had some slick marketing guru not come up with the novel idea of sending out a real check—with TRICK-E-RATION strings attached. Just a comment: when legitimate people need to send a check in the mail—for legitimate reasons—NEVER do they write on the outside, CHECK ENCLOSED. They try to avoid advertising to your mail carrier or anyone else that you have received a check. Clearly, the reason it was written on the outside of my ‘gift check’ was to ensure that I would open it and hoping I would cash it without closely examining exactly the nasty strings attached. Clearly, TRICK-E-RATION. I am going to forward my ‘gift check’ to the Attorney General’s office for every state in the union and hope that they will help these folk with their next advertising campaign.

BE forewarned…

If you read the introduction of why I write this blog I readily admit that I have done almost all the wrong stuff you can do related to housing and it is only through God’s grace that I have survived to report the outcome and point you in a better direction. I am awfully glad the check came so I would have yet another ‘personal educational experience’ to share with you. I don’t always enjoy the lessons of life; frequently they are harsh and not nearly as gentle as this near miss. However, I appreciate all of them. All of them have led to the place where I am and will take me on to where I am destined to be. The same is true for you.

Embrace today! Be grateful that things are as good as they are and watch out for Trick-e-ration!

Know that you are blessed!

(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.)

Use of HOM Copyright Material

2010-01-09T08:00:00.000-05:00

Articles and forms which have been provided by HOM may be used for your personal use without concern about a complaint. You MAY NOT, however:

Remove the copyright notation
Change ANYTHING — title, headers, etc
Remove the name, company name or other identifier of the author
Reproduce for the purpose of selling or otherwise gaining benefit from the use of copyright material

IF you violate standard copyright guidelines, relative to HOM materials, you should expect:

An Ethics complaint, at the least
A lawsuit if you have sought to gain financially from the use of HOM material
Public identification of your improper use of HOM materials

You SHOULD:

Contact Heather (HomeOwnershipMatters@gmail.com) or myself for permission to use HOM materials on your website or marketing we will gladly provide you with a release which will clearly identify the restrictions on use so there is no misunderstanding. It is NOT complicated to avoid copyright infringement

We are happy to partner with real estate boards, other organizations and brokerage firms to provide foreclosure related articles and materials. The goal of the company is to be a partner with other real estate professionals in spreading information which will be helpful to the general public. The use of HOM material, whether it is a portion or an article in its entirety, with proper credits will never create a problem.

We will, however, not allow blatant misuse of HOM materials without addressing the issue when it comes to our attention.

Common courtesy, adherence to ethical guidelines and use of good judgment will avoid any problem.

Sincerely,

Mildred

Mildred Wilkins, President and Founder

Home Ownership Matters, LLC Toll-Free: (866) 507-5105 Fax: (877) 587-4507

7399 N Shadeland Ave. #164 Website: www.HomeOwnershipMatters.com

Indianapolis, IN 46250 Blog: HomeOwnershipMatters.blogspot.com

INtro #14: Who You Gonna Call?

2010-01-08T08:00:00.000-05:00

HOM INtro #14: Who You Gonna Call?

To view this in a larger format click here.

To view this in PDF format click here.

(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: Satisfaction

2010-01-07T08:00:00.001-05:00

And the WORD for Today Is...

Satisfaction – the discharge of an obligation by paying the amount which was due. The term is used most often in relationship to a mortgage, deed of trust or contract. It may also be used to indicate payment of a debt such as a judgment.

Satisfaction is also the term used to describe the instrument which is recorded to say payment has been made.

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.)

Q&A: Money in the Bank

2010-01-06T08:00:00.001-05:00

Q: If I want to do a short sale and I have money in the bank (let’s say $10,000) can my lender take that money from me?

A: I have some good news and some bad news.

Good news: No, a lender cannot force you to withdraw money from your personal accounts to give them if your home is upside down. Nor can they withdraw money from your accounts if you are in default. Their hands are tied in relationship to other assets you may have, they only have control of your house.

Bad news: You can’t force them nor compel them to approve a short sale IF YOU HAVE $10,000 IN THE BANK. But they do have control of your HOUSE. They can—and will—refuse to allow the short sale to close unless you have demonstrated that you have no resources with which to cover even part of the shortage.

So, I expect your question then becomes, “How would they know what I have in the bank?” And the answer is: you have to tell them. In order to even be considered for a short sale you must provide details of your finances through an extensive hardship package. They will usually ask for the last 2 years’s tax returns, most recent 3 months’ bank statements, savings accounts, etc. (You should keep in mind that your loan application detailed what accounts you had). You will also be required to sign stating that you are telling the truth.

The servicer has an obligation, imposed by the guarantor, to be sure that you DON’T have resources to offset the anticipated loss before they agree to let you close. It’s that catch 22 thing again, you ain’t got enough money, but you are blocked because you do have money.

Likely outcome: They will most likely agree to a short sale provided you cough up the $10K. I said they can’t just take it, which is different than refusing to play ball until you fork it over.

I encourage you to watch INtro #5 “What’s a Hardship Package Anyway?” It’s available, FREE, at www.HOMwebinar.com

Good luck!

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.)

Press Release: HOM Announces (FIS) Course in South Carolina

2010-01-05T08:00:00.002-05:00

NEWS RELEASE

FOR IMMEDIATE RELEASE – January 5, 2010

Contact: Mildred Wilkins at (866) 507-5105

Lora Able at (843) 760-9400 x125

Home Ownership Matters announces 1st Foreclosure Intervention Specialists (FIS) course offering in South Carolina

Indianapolis, IN, January 5, 2010—HOM President and Founder Mildred Wilkins joins Lora Able, Director of Education, Charleston-Trident Association of REALTORS®, in announcing that (FIS), a comprehensive foreclosure certification program, will be offered for the first time in the state of South Carolina. Registration was officially announced during a live webcast with Ms. Wilkins on December 15th. More than 27 REALTORS® have already registered; capacity is set at 75. The Foreclosure Intervention Specialist Program (FIS) has additionally been approved for CE credit by Real Estate Commissions in Colorado, Kansas, Ohio, Oklahoma, Nebraska and Indiana. The program has been offered in Florida without CE credit to attendees from a number of states. NAR provided funding for this critical training.

This certification program was developed in 2005 by Mildred Wilkins, president of HOM, LLC headquartered in Indianapolis, Indiana. The program provides 30 hours of material in a classroom setting designed to prepare attendees to become knowledgeable about the options available to consumers who are in default on their home loans. Included in the course are components which address the foreclosure process, ethics, fair housing, the short sale process as well as options for keeping the home. Real estate professionals need a broad knowledge base to make appropriate recommendations when a default has occurred. (FIS) training provides that broad base.

The practice of real estate has evolved rapidly as foreclosures have increased dramatically, creating a need for a new field of knowledge. Foreclosure is frequently avoidable but unfortunately consumers have limited opportunities to learn what options are available. Nor is there a way for consumers to identify professionals who have the ability to help them. (FIS) addresses that need by empowering REALTORS® to be prepared to handle borrowers in default with increased knowledge and professionalism.

The Foreclosure Intervention Specialist (FIS) certification will set apart those agents who have taken extensive training to be prepared to handle the challenges associated with transactions when the consumer owes more than the property is worth on the open market. The training can alter the outcome of mortgage default when a consumer chooses an agent who is an (FIS) specialist. The completion of this program will also help licensees avoid liability while helping them to work more effectively to avert foreclosure.

Ms. Wilkins is a former Fannie Mae Broker-Specialist who sold foreclosed properties for their disposition department out of Dallas, Texas. She has received loss mitigation training from NeighborWorks America, Fannie Mae and HUD. Since founding HOM in 2002, she has been quoted in the New York Times, BusinessWeek and the Huffington Post. She has appeared on MSNBC and NPR. In addition, foreclosure related articles she has written have been published in BAS and REALTOR® magazines around the country.

Wilkins has taught for Graduate REALTOR® Institute (GRI). She is also a member of the faculty of NeighborWorks America as a trainer in Foreclosure Intervention. She is regularly a speaker or trainer at numerous state/regional conferences on foreclosure intervention, predatory lending, loss mitigation and/or mortgage fraud. She is widely recognized as a leading expert on these subjects. HOM has been certified as a continuing education provider for real estate professionals in Colorado, Nebraska, Ohio, Indiana, Kentucky, Tennessee, Oklahoma, Iowa and Alabama. Wilkins is an approved instructor for attorneys in Indiana and Ohio.

Today’s challenges require more expanded knowledge than ever before. The next (FIS) training is scheduled in Florida the week of Feb 22-26. Combine education and vacation. Get the edge you need!

Or register for the course in Charleston, South Carolina scheduled to begin March 15th. Education directors who are interested in auditing the first 3 days or scheduling an (FIS) training series in your area may contact Mildred directly. Funds from NAR’s FPR grants could make this certification a viable option for your membership. Call today!

www.HomeOwnershipMatters.com for registration/information.

Email: MildredWilkins@HomeOwnershipMatters.com

WORD: Accord and Satisfaction

2010-01-04T08:00:00.000-05:00

And the WORD for Today Is...

Accord and Satisfaction – refers to the legal term which applies when you clearly indicate that the payment you are making represents the full and final payment to resolve a disputed debt. If the creditor accepts the payment, the law treats that payment as the final payment.

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: Accord

2010-01-03T08:00:00.000-05:00

And the WORD for Today Is...

Accord – in real estate refers to an agreement by which one accepts something different (usually less) than what is owed on the debt as full satisfaction. It is critical that the borrower get some written documentation, prior to payment of funds, that the agreed upon amount will be considered payment in full. A borrower may negotiate for such a settlement when there is a dispute about the amount which is actually owed or the creditor agrees to accept a lower amount due to decreased likelihood they can collect the full amount. This type of agreement is called “accord and satisfaction”.

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.)

Q&A: Offer Doesn't Cover Loan

2010-01-02T08:00:00.000-05:00

Q: A common question over the past year has been: “What happens if I am trying to sell my house and I am not able to get a new buyer who will pay as much as my outstanding loan?” “What are my options then?”

A: The questions you raise are faced by many borrowers across the country and the answers to your questions vary somewhat depending on several factors:

a. Your circumstances, including your reason for default

b. Your guarantor, meaning who ultimately is holding the loan and stands to lose the amount NOT being offered by the new buyer

c. Your resources, ie. Money in savings, retirement account, etc.

d. Current restrictions or requirements from external forces such as the TREASURY

Ordinarily, to sell your home, you need to get an offer which will cover all the costs associated with the transfer AND cover the full amount due to the lender to pay off your mortgage in full. In today’s climate frequently the value of the home has fallen and that is not possible, creating what is now commonly called a ‘short sale’. The lender may require one of more of the following options:

1. You sign an unsecured note for the difference (or an amount you negotiate which is less than the difference but will satisfy the guarantor).

2. You bring a check to closing for the difference between the offer and the amount owed.

3. Someone other than you (the real estate agent, the purchaser) pay the difference or a negotiated, compromised amount in order to allow the closing to move forward

HOW do you handle a potential sale when you are not likely to get all that you owe from a new buyer?

Select a REALTOR® who is experienced in handling short sales in your area and work closely with them in providing everything your lender/servicer is requesting in order to get them to accept an amount which is consistent with the current value of the home.

IF you cannot negotiate a compromise for less than the full amount owed: THEN foreclosure is frequently the outcome.

Best of luck with your attempt to move your home in today’s market. With market savvy and determination, it can be done!

(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: Assumable Mortgage (With Approval / No Approval)

2009-12-31T08:00:00.000-05:00

And the WORD for Today Is...

Assumable Mortgage – is a mortgage which has a clause; which means the lender is willing to let a new borrower assume the loan. If the lender approves the assumption then the old borrower has no more liability for the payments. However, if the mortgage holder and the new buyer make an agreement WITHOUT THE APPROVAL OF THE LENDER and the assumption has not been recorded then the original borrower still has the responsibility for the payment. A release of liability would have protected the original borrower in case the new buyer does not continue to make payments in a timely fashion. Protect yourself; get a release signed.

a. Assumable-No Approval

b. Assumable-With Approval

Assumable Mortgage-No Approval – means the lender will not do a credit check on the purchaser and the two parties may make the agreement between themselves.

Assumable Mortgage-With Approval – means the lender will require that the new buyer apply for a mortgage and go through the regular application process before the lender allows the assumption to be processed.

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: Assumption of Mortgage

2009-12-30T08:00:00.000-05:00

And the WORD for Today Is...

Assumption of Mortgage – refers to an agreement by a new buyer to take over, or assume, an existing note, which is secured by a mortgage or deed of trust. It is also called simply ‘an assumption’. The transaction usually requires lender approval of the new borrower in order to release the seller from further liability.

Assumption of mortgage means a new buyer agrees to take over or assume the financial liability under an existing note which is secured by a mortgage or deed of trust. Most notes in force today do not have a provision for an assumption. If the lender does agree to allow an assumption they will almost always insist on the submission and processing of full credit application on the new borrower. The assumption cannot be completed without the lender’s approval. The granting of the approval to assume does NOT release the original borrower from their financial obligation unless the lender also signs a release of liability. A consultation with your attorney is advisable.

It is crucial that a borrower who decides to consider an assumption be aware of the assumption clause which basically states that while they allowed another borrower to take over payments on the mortgage, they have not released the original mortgage holder from their obligation. A consultation with an attorney is strongly advised prior to the completion of an assumption, even with lender approval.

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.)

INtro #26: Mortgage Assumptions: The Good, The Bad, and The Ugly

2009-12-29T08:00:00.001-05:00

Click here to view INtro #26 in PDF format.

(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: Right of Rescission

2009-12-18T08:00:00.000-05:00

And the WORD for Today Is...

Right of Rescission – a borrower has the right to decide they do not wish to proceed with the utilization of services from a particular entity which is known as the right to rescind or “change my mind.” They may change their mind about using a particular service provider altogether or decide to decline specific services being offered. There are rules associated with this right which usually include:

A. How much time is allowed to rescind;

B. What documentation is required to rescind;

C. To whom must you provide such documentation;

D. What address must be used in order to consider the rescission delivered;

E. Other pertinent information.

All of these specifics should be included in the disclosure which requires the borrower(s) signature acknowledging the information was provided and understood.

A provision in the federal Truth in Lending Act that allows borrowers to cancel certain kinds of loans within three (3) days of signing:

TILA establishes a right of rescission for any loan transaction in which the borrower’s principal dwelling is used as security. See 15 U.S.C. § 1635(a). The rescission period extends until “midnight of the third business day following consummation [of the loan], delivery of the notice [of the right to rescind], or delivery of all material disclosures, whichever occurs last.” 12 C.F.R. § 226.23(a)(3). Under TILA regulations, a creditor is required to “deliver two copies of the notice of the right to rescind to each consumer entitled to rescind.” 12 C.F.R. § 226.23(b)(1). This notice “shall be on a separate document that identifies the transaction” and shall “clearly and conspicuously” disclose the consumer’s right to rescind the transaction. Id. If the required notice or material disclosures are not delivered, the right to rescind shall expire three years after consummation. See 12 C.F.R. § 226.23(a)(3).

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: Misrepresentation

2009-12-17T08:00:00.000-05:00

And the WORD for Today Is...

Misrepresentation – refers to a statement or conduct by a person which represents to another something as though it was factual, which is not true. Someone who is obligated to disclose certain known information but fails to do so is also guilty of misrepresentation. For instance, a seller, broker or builder may be required by law to disclose certain information, including defects to a potential buyer. Failure to disclose is misrepresentation. Misrepresentation may be deliberate (known to be wrong), negligent (should have known) or innocent (reasonably believed to be true). Whether or not a suit for damages or other recourse such as rescission of a contract can be brought by the buyer will depend on the facts and the extent of the misrepresentation. It is not uncommon for punitive action to be brought against the broker including the possibility of losing their license to practice real restate. While federal laws provide for privacy concerning personal information, practitioners should keep abreast of state laws, which apply to disclosure of information pertinent to buyers. State seller disclosure laws are in place in most states as well as other laws which licensees should be careful to explain to their sellers. Additionally, changes in the real estate climate, such as short sale transactions, have created the need for new disclosures.

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.)

INtro #37: REALTORS®: Dare to RE-define Yourself

2009-12-16T08:00:00.000-05:00

HOM INtro #37: REALTORS®: Dare to Re-Define Yourself

To view this in a larger format click here.

To view this in PDF format click here.

(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: Assessed Value

2009-12-15T08:00:00.000-05:00

And the WORD for Today Is...

Assessed Value – is the value placed on a property by the tax assessor for the purpose of collecting property taxes. Due to the sheer volume of assessments which must be conducted, it is not uncommon to find mistakes in either the calculations or in the property description. Likewise, there may not be adjustments for exemptions the property owner is entitled to receive. It is a good practice to always carefully review the entire assessment, beginning with the description of your property. The assessor’s office may not be pleased to have you do so, but there is a process to challenge the assessment if you believe it is in error. Things to verify: accurate square footage, components of the house (number of bedrooms, bath, garage bays, etc), type and quantity of exterior material (home is all vinyl but shows assessment for brick front property). If you believe an error has been made assume it was an honest mistake, remain polite but work aggressively to get it corrected.

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..."Are You Ready to Intervene?"

2009-12-14T08:00:00.002-05:00

Twenty Questions for Today’s Real Estate Professional

I was recently asked by the Charleston Trident Board of REALTORS® to differentiate the (FIS) Foreclosure Intervention Specialist certification from other short sale certification programs. Please know that the Board has offered both the (SFR) (Short Sales and Foreclosure Certification) and the (LMC) (Loan Modification Certification) certifications which are excellent programs.

Both have been widely attended in Charleston and I strongly encourage you to sign up for one or both at the next opportunity. Every single licensee should avail themselves of a basic short sale class so they have a rudimentary understanding of this ‘new’ transaction which is dominating the market in many parts of the country.

(FIS) will be offered for the first time in South Carolina beginning March 2010, courtesy of a FPR (Foreclosure Prevention and Response) grant from NAR. I think the operative word of distinction is ‘basic’ as compared to ’comprehensive’. This 30 hour program is designed for the agent who has decided to commit to getting an in-depth understanding of the various facets of handling these intricate transactions—the relationship connection, the Law, the Ethics, property valuation, the process, the negotiating, getting to the closing table, the downside, the resources needed, community partnerships, the self-study to continue to grow and much, much more.

Why offer (FIS)? Because hundreds of students who had taken either the 4 or 8 hour basic short sale training classes offered by Home Ownership Matters beginning in 2003 demanded more. More time, more expansive, more details. The course evolved and in 2005, the (FIS) certification was introduced in Ohio. Since then (FIS) has been approved for CE credit in six (6) states and there are graduates from twelve (12) states. States approved for CE include: Ohio, Indiana, Kansas, Nebraska, Colorado and Oklahoma.

30 hours, 700+ pages of material.

Tried and true methodology coupled with sound philosophy

from a former Fannie Mae Broker-Specialist

Updated regularly and state specific (Law section)

I decided the easiest way to say what you’ll learn is to pose the questions which will be addressed.

Are you ready to intervene?

1. Do you know how to distinguish a ’frozen customer’ from a potential short sale client? Do you currently use an intake form to determine who is a viable candidate for this type transaction and who is just not prepared for the commitment? Can you screen OUT the 60% of folks whom you should not list as short sales?

2. Are you prepared to analyze/distinguish the many HATS which may be required to help someone who is in default: the social worker, medical counselor, marriage counselor, human resources helper, spiritual advisor, budget counselor, salesperson extraordinaire, valuation expert, etc.

Are you real clear on what role you can and/or should play? Are you connected to/familiar with the community resources to address those needs which are outside of your scope of expertise? Do you currently utilize a referral form for this purpose? Can you see the potential for a fair housing complaint (or other complaint) without some standardized referral policy/form?

3. Do you know how to ‘handle’ the law while avoiding the ‘practice of law’? Do you clearly understand that it is necessary to understand some components of the law (and be able to explain them to your client) as part of a short sale attempt or an REO purchase?

4. Do you understand the impact of the seller filing bankruptcy on a potential short sale? The increased likelihood of a deed-in-lieu? Do you currently discuss this at the onset with your customer since it could/should end your relationship if they file later?

5. Are you familiar with the new Treasury guidelines for short sale—other than the fact that the commission cannot be reduced below 6%? Have you studied the guidelines? Do you understand them?

6. Are you familiar with the foreclosure law in your state? Is it a judicial or non-judicial process? What difference does it make? The guidelines for service on a defaulted borrower? Familiar with what the customary forms are and what they look like? Are you aware that violation of state foreclosure law can work in a borrower’s favor to gain extra time which could be used to facilitate a short sale? Or a reverse mortgage?

7. Do you have the expertise to accurately determine the value of a property in today’s declining market? Are you familiar with the professional BPO which is used as the industry standard (fanniemaebpo.com)? Could you complete one and do you understand why it can be much more accurate than the more commonly used CMA or market analysis? Are you clear on why accurate property valuation, from the beginning, plays such a critical role in the success or failure of your short sale effort?

8. Do you feel you clearly understand the unique protocol for short sales, not to be confused with REO and traditional sales? Who signs what? When? Presentation of offers? To whom?

9. Have you figured out what to disclose? To whom? And when?

Are the guidelines set by your Broker consistent with both Federal and state requirements/prohibitions on disclosure? Are you clear on the Who? What? When? HOW?

10. Are you familiar with your Board and Broker’s position on:

a. Disclosure—Who? When? How?

b. Commission—Who? What? When? How?

c. Signing of offers/amendments/price reductions—Who? When?

d. Presentation of offers—To whom? When? Signatures? Why?

e. Multiple offers—that is a whole other 20 questions

11. Does your brokerage utilize a set of disclosure forms which have been customized for the use with short sale scenarios? Are you familiar with them? Do you understand the protection that you may gain from covering the special risks associated with short sale transactions? Are you interested?

12. Do you understand the tax implications for a borrower who has completed a short sale? Please don’t tell me that you thought they were off scot free because the short sale was approved. (They are not) Do you have a referral to a tax accountant?

13. Have you read your state’s Seller Disclosure Law? Have you studied the state disclosure form? Does it include a reference to “threatened or pending litigation“? Or perhaps “notices from any Government or quasi-governmental agency”? Any “challenge to the title”? Are you clear on why any/all of these could forestall a short sale approval and therefore need to be disclosed?

14. Do you have clarity on the impact of a foreclosure on your customer’s ability to purchase down the road? Was that part of your discussion about the reason to consider a short sale in the first place? Have you discussed operating ‘in good faith’ as vital to the ability to keep the house on the market?

15. Is there a 2nd (or 3rd) mortgage? Are there other potential liens against the home (home owners’ association, taxes, personal judgment) which must be dealt with? Got a plan for how you are going to handle those? Do you know where to start?

16. Do you clearly understand the role of the Guarantor and/or the investor in determining whether or not a specific short sale can be approved? For that matter, do you know that the Servicer is merely a go-between hired to facilitate the administration of the loan but is NOT a decision maker? Who is? How can you find them? What are THEIR guidelines? Are they the same from Guarantor to Guarantor? Available in public records?

17. Are you familiar with the Qualified Written Request—backed by Federal Law (RESPA, no less) and the impact it can have as a ‘tool’ in delaying the foreclosure process if well-prepared? Used effectively and in a timely manner, you can gain valuable time to complete the short sale. We’ll cover that.

18. Has your firm/Broker created a “hold harmless” document which covers the scenarios which you cannot be responsible for with the clear understanding from your client that you will have no liability? Since the risk of lawsuit is pretty high with this new type of transaction, getting some understanding of what should be included and why should be paramount, I would think.

19. Have you identified as an agent/brokerage/Broker those scenarios which will require you to end the relationship? Have you established a policy concerning the need for a unilateral (not mutual) release? Under what circumstances, with what notice?

Certainly advance disclosure would be required: I would recommend at the inception of the agency relationship. We cover in detail during (FIS) training what I call the “Divorce Decree”. What happens if the client abandons? Files Bk? Enters into a deed-in-lieu? Refuses showings? Fails to cooperate in other ways? Policies should drive practices and both help to minimize liability.

Proper training and thorough understanding on each of these issues is paramount in order for you to be both effective at processing a short sale from beginning to end AND avoid the various opportunities to get yourself or your client into serious trouble along the way.

Short sales are the new reality for many markets around the country. They have become a major part of the market (along with REO’s) and becoming intimately familiar with how to process them successfully is paramount for any agent who wishes to thrive in today’s market.

If you do not already have clarity on ALL the issues which have been addressed in this article, then you are a prime candidate for the (FIS) certification program. Each of these will be explored and addressed during this 30 hour training program. You will leave with clarity on every single point covered here and will have the expertise to feel confident that you are representing your client with strong tools which have prepared you to be successful in getting the result you hope for and they deserve. YOUR knowledge base is a key component of your professionalism. Your success as a REALTOR® is tied directly to the caliber of your information.

Don’t miss an opportunity to learn, explore and interact with one of leading instructors on this timely topic. Her experience actually doing short sales, her time with Fannie Mae as a Broker-Specialist and expansive training (HUD, Fannie Mae, NeighborWorks, Legal Services, and National Consumer Law Center) can be invaluable to you.

Final Question

Is there someone in your office to whom you can refer a customer who needs short sale help? Within your firm? Maybe you can/should become that ‘Referral agent’ if you do not have the expertise today.

Are you Ready to Intervene????

*(FIS) is a registered trademark of Home Ownership Matters, LLC.

Other Foreclosure Resources

1. www.HOMwebinar.com

3. www.HomeOwnershipMatters.com — Calendar and Foreclosure/Loss Mitigation sections

4. www.nti.org — NeighborWorks America — Training Institute

5. www.consumerlaw.org — National Consumer Law Center

Mildred Wilkins

President of Home Ownership Matters

Author of “Your Real Estate Advisor”

available at: www.DovePublishingHouse.com

Toll-free 1 (866) 507-5105

(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: Attachment

2009-12-13T08:00:00.000-05:00

And the WORD for Today Is...

Attachment – creditors may be allowed to “attach” a line to property you own if you fail to make timely payments. This legal process is governed by state law and may allow attachment to almost any kind of property. Most commonly liens may be attached to your home, car, bank accounts or accounts receivables or wages.

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: Downspout

2009-12-11T08:00:00.000-05:00

And the WORD for Today Is...

Downspout – is a pipe leading from the gutters of a roof to the ground and into the sewer system or away from the building. Downspouts and splash blocks serve the purpose of taking water away from the foundation of a property. If water is not directed away from the surface at the base of the home, then it is likely to seep into the crawl space or basement. Proper maintenance to be sure this does not occur is important.

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: "Borrower not Released; Forebearance by Lender not a Waiver"

2009-12-10T08:00:00.000-05:00

And the WORD for Today Is...

“Borrower not Released; Forbearance by Lender not a Waiver” – [as used in the MORTGAGE document] means any extension or modification to either the amount of payments or the scheduled time of payments does not release the Borrower from their liability under the mortgage, nor does it mean the Lender/Servicer relinquishes any rights they have. In the event they choose to move forward with legal action at a later date, due to this occurrence of default, they reserve the right to do so since the granting of forbearance does not constitute a waiver.

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.)

INtro #41: Cash-for-Keys

2009-12-09T08:00:00.003-05:00

INtro #41: Cash-for-Keys

To view a larger version of this INtro, Click Here.

To view this INtro in PDF format, Click here.

(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: Dower

2009-12-09T08:00:00.001-05:00

And the WORD for Today Is...

Dower – under common law is the interest a wife has in the property of her deceased husband. Dower rights are being changed in many states by state statute to give more equality between men and women in property rights.

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: Real Estate Board

2009-12-08T08:00:00.000-05:00

And the WORD for Today Is...

Real Estate Board – is a board created for the purpose of furthering the goals of real estate professionals in a given area. Such a board is typically composed of regular members who are real estate brokers and salespersons. In addition, there are likely to be affiliate members such as lenders, title companies, builders, etc. They engage in a number of activities including educating each other about their respective businesses as well as educating the general public about how they work.

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.)

HOM Proud to Announce a New Class of (FIS) Graduates

2009-12-07T08:00:00.003-05:00

NEWS RELEASE

FOR IMMEDIATE RELEASE – December 7, 2009

Contact: Mildred Wilkins at 1 (866) 507-5105

mildredwilkins@HomeOwnershipMatters.com

Christie Bevington (402) 323-6506

Home Ownership Matters announces 1st Foreclosure Intervention Specialists (FIS) class graduates in Nebraska

Indianapolis, IN. December 7, 2009—HOM President and Founder Mildred Wilkins joins Christie Bevington of the Nebraska REALTORS® Association in announcing graduates of (FIS) the foreclosure certification program offered for the first time in the state of Nebraska. Sixteen licensees completed the certification program on November 10, 2009 in Omaha, Nebraska. The Foreclosure Intervention Specialist Program (FIS) has additionally been approved by Real Estate Commissions in Kansas, Colorado, Ohio, Oklahoma and Indiana. The program will be launched in South Carolina in March 2010 and has been offered in Florida without CE credit to attendees from a number of states. NAR provided funding for this critical training in Nebraska and is also providing funding for the training in South Carolina.

The practice of real estate has evolved rapidly as foreclosures have increased dramatically, creating a need for a new field of knowledge. Foreclosure is frequently avoidable, but unfortunately, consumers have limited opportunities to learn what options are available. Nor is there a way for consumers to identify professionals who have the ability to help them.

The Foreclosure Intervention Specialist (FIS) certification will set apart those agents who have taken extensive training to be prepared to handle the challenges associated with transactions when the consumer owes more than the property is worth on the open market. The training can alter the outcome of mortgage default when a consumer chooses an agent who is an (FIS) specialist. The completion of this program will also help licensees avoid liability while helping them to work more effectively to avert foreclosure.

Wilkins has been a faculty member for Graduate REALTOR Institute (GRI) since 2004. She is also a member of the faculty of NeighborWorks America as a trainer in Foreclosure Intervention. She is regularly a speaker or trainer at numerous state/regional conferences on foreclosure intervention, predatory lending, loss mitigation and/or mortgage fraud. She is widely recognized as a leading expert on these subjects. HOM has been certified as a continuing education provider for real estate professionals in Colorado, Nebraska, Kansas, Ohio Indiana, Kentucky, Tennessee, Oklahoma, Iowa and Alabama. Wilkins is an approved instructor for attorneys in Indiana and Ohio.

The next (FIS) training is scheduled in Florida the week of Feb 22-26. Combine education and vacation. Or register for the course in Charleston, South Carolina scheduled to begin March 15th. To schedule an (FIS) training series in your area, contact Mildred directly.

www.HomeOwnershipMatters.com for registration/more information.

Email: mildredwilkins@homeownershipmatters.com

(FIS) is a Trademark of Home Ownership Matters, LLC.

(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: Middle Man

2009-12-06T08:00:00.000-05:00

And the WORD for Today Is...

Middle Man – refers to a mortgage broker who is the connection between lenders (frequently large insurance companies or investment groups) and local borrower(s). Mortgage brokers are paid by the borrowers with money borrowed through the loan. In addition, they may get extra income from the lender through a yield spread premium paid outside the closing.

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: Like in Kind Property

2009-12-05T08:00:00.000-05:00

And the WORD for Today Is...

Like in Kind Property – a tax term used to describe a property exchange. Property may be exchanged for a similar property and the tax postponed. The term does not mean that the properties have a physical resemblance but rather that the purpose and intent (investment) of the taxpayer be similar.

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.)

Reverse Mortgage Anxiety

2009-12-04T08:00:00.000-05:00

Reverse Mortgage Anxiety

Myth: There is a prevalent myth out there which is very widespread that if you take out a reverse mortgage you have to be worried about losing your home and that you will then be forced to go live in a nursing home or worse yet, be reduced to living on the street.

Reality: While it is true that there are some unscrupulous companies which will process a reverse mortgage you are protected from the above concerns if you choose a traditional lender and get a reverse mortgage which is guaranteed by the Federal government.

It is true that using the equity in your home for a reverse mortgage is serious business and something you should not do without :

a. Real clarity on EXACTLY what the costs are

b. How much equity your home REALLY has

c. What happens AFTER the reverse mortgage

d. What happens AFTER you no longer live in the home

e. Rights of heirs AFTER your death

Get some answers

All of these questions (and more) can be answered during the MANDATORY counseling session if you are using a government backed reverse mortgage. These counseling sessions are usually provided by a HUD approved housing agency and yes, your family members are welcome (and encouraged) to attend. This decision is important enough to ask the kids to come home and attend with you so that all of you are clear on exactly what this means for the family.

Resources

We have provided you with some good resources and hope that you will take the time to get informed about this option which could make a huge difference in your monthly budget by giving you the extra income you need. Or perhaps allow you to attend more family functions and see the grandkids you haven’t seen in many months. Fixing the kitchen floor/bathroom wall/front porch (you name what needs fixing at your house) could be accomplished with the funds from a reverse mortgage.

It’s your house, your equity—Use it to make your life better.

Just take the time to get some fact first.

AARP — Click here for their website.

Financial Freedom — Click here for their website.

HUD — Click here for their website.

National Consumer Law Center — Click here for their website.

Federal Trade Commission — Click here for their website.

I’m counting on you to do your homework and make a good decision. You are too old to get caught half-stepping!

(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: Inability to Rent Property

2009-12-03T08:00:00.000-05:00

And the WORD for Today Is...

Inability to Rent Property – may trigger the default on a mortgage. It should first be pointed out that most mortgages DO NOT allow for the renting of a property (home) if it was acquired to be owner-occupied. To leave the house and move elsewhere constitutes abandonment. In a situation where such a borrower has been forced to relocate in order to remain employed, then a lender may consider allowing an exception hoping the borrower can rent the property for enough to cover the mortgage. When this is not possible then you have a default caused by the inability to rent the property. Likewise, if it is an investment property and the owner cannot rent it at all due to market or property conditions, then the inability to rent may lead to default and ultimately to foreclosure. See “default trigger event”.

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: Flipping

2009-12-02T08:00:00.001-05:00

And the WORD for Today Is...

Flipping – (repeat re-financing) – usually at the suggestion of the lender or the mortgage broker. This practice eats up any equity in the home by increasing the mortgage amount, requires the payment of a whole new set of fees and is seldom in the best interest of the homeowner. At the end of the re-financing the borrower owes more, has a higher payment and is much more likely to default.

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.)

HOM INtro #22: Loan Modification 101

2009-12-01T08:00:00.003-05:00

To view the PDF version click here.

To view a larger version of this INtro click here.

WORD: Blanket Mortgage

2009-11-30T08:00:00.000-05:00

And the WORD for Today Is...

Blanket Mortgage – has two commonly used meanings. The first use is to refer to a mortgage which covers more than one property currently held by the mortgagor, such as a mortgage for a builder, which covers all the lots in a subdivision. Secondly, it is used to refer to a mortgage which is intended to cover all real property the mortgagor currently has or may acquire in the future. When used with this meaning, it is also called a general mortgage.

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: Discovery

2009-11-29T08:00:00.000-05:00

And the WORD for Today Is...

Discovery – if a consumer believes that foreclosure action is not the appropriate course of action based on their circumstances they have the right to contest the foreclosure. The discovery period allows an opportunity to gather information before trial by demanding that the lender/servicer produce evidence to support their alleged right to foreclose. A competent attorney will demand certain papers related to the transaction be produced, take depositions of the parties to the transaction and potential witnesses, written interrogatories and handle written requests for admissions of facts which are related. The core dispute between the parties will be uncovered during this discovery period.

Discovery can occur in a number of different ways, through legal process, which may be used by the parties to a lawsuit in order to get information from each other. A deposition is one of these ways.

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: Head of Household

2009-11-02T08:00:00.001-05:00

And the WORD for Today is...

Head of a Family – (Head of Household) – is a term used to designate the person in charge of supporting and managing a household. In order to apply for a homestead exemption the application must be completed by the head of household. The head of a family may or may not be a parent.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased atwww.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: Release Letter

2009-11-01T08:00:00.000-05:00

And the WORD for Today is...

Release Letter – is a letter or statement prepared to indicate that one party is granting permission for the release of information (usually personal) to a third party. In real estate, such a release letter is frequently needed to allow a lender to divulge financial information. In the case of a borrower who is in default, a release letter should be signed by the mortgage holder before a default or foreclosure counselor could intervene and talk directly to the servicer on the borrowers’ behalf. Federal privacy laws protect consumers from the risks associated with unauthorized parties being given personal information. If there are two borrowers (co-borrowers) then both should sign such a release.

Federal privacy laws forbid the sharing of certain types of information (financial, medical, etc.) without express written permission being granted. A release letter is a method of protecting both the individual whose information will be shared and the organization which is providing personal information to a third party. For real estate purposes, the release would certainly be needed if a borrower were in default and either, a) used the services of a counselor or consultant to intervene and attempt a workout (release supplied to lender) or b) needed to list their home with a real estate agent. The agent would also need to supply the lender with a release letter in order to facilitate a sale. In addition, the borrower must grant permission for a real estate salesperson to disclose, in advertising, that the sale will be a short sale or will require lender approval. Either statement would allow someone to presume (accurately) that the borrower is in default.

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.)

Q&A: Mutual Release

2009-10-31T08:00:00.000-04:00

Q. It seems to me that the seller of a property is protected from the buyer changing their mind and not moving forward with the transaction because of the earnest money which has been put down on the house. What protects the buyer from buyer remorse?

A. Contracts are legally binding

Terms of the contract cover whether or not the buyer can walk away due to inspection issues or if they fail to get mortgage approval or if the property does not appraise for a figure high enough to satisfy the buyer’s lender.

Earnest money as a deterrent

While the earnest money may be a deterrent to the buyer wanting to walk away from a transaction, the earnest money is being held in escrow and will not be released to either party unless both parties agree OR a court has made a determination of which party is entitled to the earnest money. So… in effect, both buyer and seller are protected unless and until they enter into a mutual release.

Multiple Purpose document

The mutual release is a wonderful, multi-purpose document. Its primary purpose is to get people out of a contractual agreement with the assurance that all parties are satisfied (enough) and will not bring any kind of legal action against any other party to the contract. We will all go home, forget we were ever involved in a contract with you and we will NOT call our attorneys next week (or ever).

Many real estate firms will use two specific mutual release forms; one tailored to things associated with the listing and one tailored to the purchase side of the transaction. It is also possible to use a GENERIC mutual release which has boxes so the appropriate reason can be selected from a list or a space for the specific reason in this case to be printed in.

Common Mutual Release Scenarios

The mutual release in real estate may be used to end the agreement when:

a. Inspection issues cannot be resolved, the transaction is stalled, agreement cannot be reached and closing is no longer desired. This is a very common occurrence in real estate transactions.

Form—Mutual release to the Purchase agreement

b. Seller needs to withdraw the property, for good reason, such as a family emergency.

Form: Mutual release to the Listing agreement

c. The buyer’s financing has fallen through, therefore, they are unable to close

Form: Mutual release to the Purchase agreement

A declaration of what happens to the earnest money would be stipulated in the mutual release.

A mutual release is a protection for all parties from future liability. I strongly recommend that you make every effort to reach a compromise and then translate that agreement into a mutual release—Signed by all parties to the transaction.

Good luck on dealing with the issues which are currently more pressing!

(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: Suspense Account

2009-10-30T08:00:00.001-04:00

And the WORD for Today Is...

Suspense Account – a catch-all account which lenders and/or servicers utilize to temporarily hold funds when a final disposition for the funds in question has not been determined. This account is frequently where funds will be deposited when the borrower sends a partial payment or an account is in default. If you are involved with foreclosure intervention it is noteworthy that unapplied or funds in a suspense account are not recorded as payments on the account. This could be the cause of a default or a stumbling block to resolution of a dispute over actual past due amounts.

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: Normal Wear and Tear

2009-10-29T08:00:00.000-04:00

And the WORD for Today Is...

Normal Wear and Tear – refers to the general wear and tear associated with the “intended” use of a given product or property. The key word here is “intended.” For instance, a home printer is not expected to print 30,000 copies per month so that volume is above the expected amount and a breakdown could be anticipated since its use exceeded “normal wear and tear.” In real estate, the term is used most frequently to refer to the use of property. An apartment manager (or rental homeowner) expects a property to reflect ordinary (normal) usage. You can see traffic patterns, for instance, where people enter a home. In a year’s time the carpet will not be bare based on a family’s regular coming and going. If you are running a day care for 25 kids, then the carpet wear would exceed what most folks would call “normal.” The return of a security deposit frequently hinges on whether the property shows “excess” of normal wear and tear.

You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased atwww.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.)

INtro #75: Your Mortgage Documents...Filled with Surprises

2009-10-28T08:00:00.000-04:00

Another INtro from HOM...

To view this INtro in a larger format, click here.

To view this INtro in PDF format, click here.

Thank you for viewing this INtro! Look for more INtros from HOM coming soon, new topics are added all the time!

(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.)

(You can find a complete list of INtros at both www.DovePublishingHouse.com and www.HomeOwnershipMatters.com)