Q: What designation will lenders look for when applying for REO's and BPO's?

A: Until 2 years ago there was NO designation available, primarily they looked for experience. Within the past two years the Five Star conference, associated with dsnews (default servicing news) has been offering a certification program which is the national , elite certification for folks trained by the default industry—to serve the default industry.

The (FIS) Foreclosure Intervention Specialist certification is less well known (been around for 3 years) but is certainly excellent additonal training if you are interested in going after foreclosure related business.

I think the combination of BOTH would make you very well prepared to handle REO/BPO work if you are trying to break into that business. That is one of the few areas of real estate which has an abundance of activity right now and will continue to do so for the next 5-10 years.

Since the instructor worked for Fannie Mae as a Broker-specialist, I strongly urge you to take the FIS training and the Five Star training.

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.)

WORD: Chattel Mortgage

And the WORD for Today is:

Chattel Mortgage—a lien on personal property. A chattel mortgage may also be called a security interest.

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: Agent

And the WORD for Today is:

Agent—any person who is authorized to act for or represent another (principal). Such authority may be expressed or implied. It is always recommended that such authority be in writing. In issues related to defaulted loans a housing counselor is working as an ‘agent’ for the consumer. An attorney or real estate person who is helping is also acting as an ‘agent’. It important to note that a lender is prohibited from sharing details of your mortgage situation with any one other than the mortgage holder without WRITTEN notice that such person is in fact, acting as your agent and has given WRITTEN, SIGNED authorization for the lender to discuss your personal finances.

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

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

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

Myth #11

Myth #11: That non-profits agencies are the ONLY option consumers should have for default counseling and other real estate professionals (especially REALTORS) should stick to selling houses and keep their nose out of foreclosure intervention.

Reality: As stated above, many borrowers who need help are prohibited by income from receiving help because their income is too high. Even if they were not, non-profit agencies across the country are staggering under the volume of requests for help. While they are reluctant to see any other professionals step onto what is perceived by many to be “their turf’ consumers need help; they need it today not four months from now.

Reason: The shocking answer if that a turf war has emerged over who should claim the defaulted borrower. Should it be the lender? (whom the consumer does not trust and who has made no inroads in connecting with such borrowers). Should it be non-profits who gleefully tell everyone ‘that is our job”? (while distraught borrowers by the HUNDREDS in HUNDREDS of thousands say they called the toll-free number to no avail. Funding, staffing and training are the issues for the organization and the politicians. The consumer issue is they are in default NOW and need someone who can provide them with some clarity and direction NOW. Many will disagree but I am the author of this article and I believe that history will show that real estate professionals will step to fill that gap in significant ways during the next 3-5 years as we see this housing crisis run its course.

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.)

WORD: Equity

And the WORD for Today is:

Equity—the current market value of the property MINUS any and all liens against it (mortgage, etc or any other legally enforceable liens). Example: You have a home, which cost you $150,000. You have an outstanding 1st mortgage of $120,000, a 2nd mortgage of $10,000 and no other applicable liens. The current market value of the home is $160,000 with total debt of $130,000 the homeowner’s equity is $30,000. If property values have declined in the area and the current market value of the above mentioned home is only $125,000 the house is what is being called ‘upside down’. There is NO EQUITY and instead the owner owes $5,000 more than the market will bear.

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: Upside Down

And the WORD for Today is:

Upside down—refers to a situation when a consumer owes more on a house than the mortgage pay-off. Also called Underwater.

Underwater—relative to housing—this is a term which means a home cannot be sold on the open market today for enough money to pay-off the existing mortgage. There are a number of factors which might contribute to this being the case; an over-supply of houses in this price point perhaps because of over building, a limited supply of buyers for this type house, lack of easily affordable financing, a declining market because of excessive foreclosures, or various other factors might impact the seller’s ability to get an offer for as much as the current indebtedness on the property.

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

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

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

Q&A: Crisis Budget

Q. We have been in our house for several years and did not refinance or get a second mortgage like so many people seem to have done over the past few years. We have managed to make our payments on time and things were fine until they cut back my hours at work six months ago. We struggled but we were still getting by until my husband was laid off two months ago. He cannot find a job even though he is trying really hard. We have already talked to the bank about trying to work with us on the mortgage but they can’t with the little bit of income we have. I don’t even care about the house any more. What can we do to try to keep food in the house until we have to move? We need help just to survive. Can you make any suggestions? We will try anything.

A. For many people today the truth is that they, like you, are in survival mode. I will not address any possibilities for saving your home since your focus is survival of your family. First, you should be applauded for looking at the survival issues as being more urgent than your housing issue.

I would encourage you to immediately adapt a crisis or survival budget. I will cover a whole list of things to do, some I am sure you’ve already thought of but some which you might not have considered. Here goes.

1. Household necessities—food and medicine

• Cook at home—no fast food
• Switch to store brands, minimize food purchases when possible by using simpler dishes (spaghetti instead of lasagna)
• Use coupons and watch for store specials
• Check again to see if you NOW qualify for food stamps
• See if the “Angel Food Ministries” is available in your area
• Look for short dated meats which are dramatically reduced (use immediately or freeze)
• For prescriptions—switch to generics and/or ask your doctor for samples

2. Car expenses

• Can you switch to a lower car payment? Use public transportation?
• Get rid of a second car? Carpool?
• Reduce the number of miles you drive, saving on gas
• Increase the deductible on your insurance to get a lower monthly premium
• Barter for an oil change but DO NOT delay when one is needed

3. Minimize household expenses

• Get rid of cable and minimize the expenses with a land line if you also have a cell phone
• Go to a minimal package with your cell phone company
• Reduce personal care expenses for haircuts, nails (can you barter for the hair or do it at home?)
• Change entertainment to free park or other community events instead of movies, bowling etc
• Cut out playing the lottery or other gambling
• Give up cigarettes or drinking (big saving on 1 or both of these)

4. Look for ways to generate income such as:

• Selling items on eBay
• Holding a garage sale
• Taking items to a consignment shop
• Take in a roommate—be upfront with them about your mortgage situation
• Sell items you don’t need at a flea market
• Look at your skills to see if anyone will pay you for a skill you have (mowing lawns, painting, childcare, fixing items, any one of 50 things)
• Do you have a hobby which could generate income (cake decorating, sewing)

5. Other possibilities

• If the car is paid off, reduce the insurance coverage to liability only
• Change the number of dependents on your W-2’s
• Use conservation methods to reduce your utility bills

6. Housing

• Apply for government subsidized housing (Section 8), even if there is a long waiting list
• Consider moving in with someone (family/friend) for a period of time
• Use techniques for “buying TIME” to stall foreclosure until your situation improves

This is typically called a crisis budget, you can get the definition, and more information, here.

Please share any suggestions you are already using which are not included in the list above. We’ll use them in a future blog and you can help someone else to make it over the hump. We really are all in this together. (You can either leave a comment here, or send an email to Heather at homeownershipmatters@gmail.com).

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.)

WORD: Note

And the WORD for Today is:

Note—refers to a piece of paper which both acknowledges a debt and includes a promise to repay. A promissory note. A note is a written promise to pay a specified sum of money to a designated person or upon their instructions to the holder of the note, at a fixed time or upon demand.

A unilateral agreement which includes an express and absolute promise from the signer of the document to pay the person named a defined sum of money at a specified time or on demand. The holder of a note may assign their right to receive payment to another party, sell or otherwise transfer the note to another party without changing the obligations of the party who gave and signed the note. A note usually includes provisions for the payment of interest. For real estate purposes the note is secured by a mortgage or deed of trust.

“Note”- [in reference to the mortgage document] means the promissory note which is signed and dated by the Borrower. The “note” details the amount owed to the lender and includes the Borrower promise to make periodic payments.

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: 2-1 Buydown

And the WORD for Today is:

2-1 Buydown—means the interest rate is reduced by 2% points for the 1st year of the mortgage and reduced by 1% point for the 2nd year of the mortgage. After that the mortgage levels out for the remaining 28 years of the note. The initial lower rate helps to qualify consumers for a mortgage higher than they might otherwise qualify for and is especially helpful to builders as a financing tool to help to move homes.

The definition of buy-down is here.

You might also want to read this article, where Mildred was quoted on 2-1 Buydowns:
http://www.homeownershipmatters.com/news_articles/perfectstorm%5B1%5D.pdf

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

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

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

Did You Know: Loan Screw-ups

FYI—Loan Screw-ups

It is important that you know some of the ways the servicer of your loan frequently fails in their responsibility to handle their job as they should. Their failure could give you the reason you need to block a pending foreclosure. There are many things they do wrong or fail to do at all but the more common items include:

• Failing to make timely payments from your escrow account
• Failure to aggressively work at a loss mitigation attempt when requested to do so
• Sending you inconsistent letters demanding payment
• Failing to honor forbearance agreement (not you—them)
• Failing to give you proper notice of a servicing transfer and your rights related to that transfer
• Failing to properly apply payments during the transfer period, possibly creating a default
• Failing to provide a timely or complete response to a qualified written request
• Choosing to apply force-placed insurance when you, in fact, already had coverage in place
• Returning mortgage payments
• Improperly placing your payment in a suspense account
• Posting your payment late and/or misapplying your payment
• Threatening foreclosure when, in fact, you are not delinquent
• Charging excessive fees for the use of attorneys, inspections, etc
• Charging fees for services which have not YET been performed
• Creating a default by misapplication of the payments you have sent in

This is just a partial list of things which servicers do on a regular basis which can wreck havoc with your loan. At the least, it can be an inconvenience. At the worst, it can actually cause you to be in default and in foreclosure through no real fault of your own. It happens. Even when you have actually missed mortgage payments and are struggling to keep your home, the loan servicer is still required to handle the account with certain fairly standard and reasonable guidelines. Too often, they fail to do so and you end up getting the short end of the stick. Unless consumers demand they stop the unfair practices and produce documentation of how they have handled your file (via a qualified written request) they will continue to operate like they all got training in the wild, wild west where anything was okay.

What should you do if you suspect your servicer is not dealing with you fairly?

Step One: File a qualified written request following guidelines discussed elsewhere on this blog. (Do additional research on the web; see this entry on Buying TIME from our blog).
Step Two: Try to find an attorney who will represent you in challenging their right to foreclosure.

You must move quickly and with a firm action plan so that you don’t become another foreclosure because the consumer didn’t know that they could fight back.

The “Buying TIME” Foreclosure First Aid Kit, available at www.DovePublishingHouse.com would be of great benefit to you as well.

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.)