WORD: Abandonment

The WORD for Today Is:

Abandonment–means you have voluntarily left the mortgaged property. If the borrower assumes another housing payment, say rent, they are demonstrating the ability to continue making house payments, even if the amount would have been reduced. Loss mitigation rights are nullified by abandonment. While a lender may CHOOSE to still work with you; they are not OBLIGATED to do so even on government loans. See default trigger event.

Refers to the voluntary relinquishing of ownership rights by failure to use the property. Abandonment usually requires two things:
a. failure to use the property (not being physically present for an extended period of time).
b. coupled with the intent to give up your interest in the property (the actual removal of your possessions from the property which would signify you have no further interest).

It is important to understand what constitutes abandonment because a borrower’s rights could be on the line. A lender has the right to aggressively move forward with foreclosure action under the “abandonment clause” in most mortgage notes. As an author/trainer I travel extensively and may be away from my residence for 2-3 weeks at a time (do not use the property). That does not constitute abandonment since my belongings are still in place and look as though someone plans to return eventually. Therefore, there is no intent to give up my interest in the home just because I am away for an extended period of time. A borrower who removes most or all of their possessions from their home while in default is usually guilty of abandonment and should expect foreclosure action to follow.

© 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: Gifting Property

Q.  My wife and I own a piece of property which we would like to give to someone else but we are not sure how to go about doing that.  I was told it is a simple procedure and does not require an attorney.  Can you direct us to what we should do?

A: The process is actually very simple to complete though you really do need to consult an attorney about the implications of such a move since once it’s done, it’s done.

To transfer title to someone else, to ”gift” your real estate property to them, can usually be facilitated by completing a “quit claim deed” which identifies you as the owner of the real estate, provides the address and legal description of the property to be transferred and the name of the party to whom you are giving it. Most often this is a one page document, you can get a copy from many large real estate offices or an office supply store. 

The form will need to be notarized and then recorded in your local recorder’s office. A small fee will apply ($35-$50). Please understand that you have now transferred ownership rights in the property. This has NO impact whatsoever on who is responsible for making the payments on this same piece of real estate. Having said that, this is not a viable option for dividing up property in a divorce if the objective is to change who is responsible for the mortgage. Refinancing the home is the way to accomplish that objective with one party taking out a loan to pay off the old mortgage which simultaneously changes the ownership to only one party.

Again, talk to an attorney about this very important real estate transaction. Don’t let the fact that it is simple and commonplace trick you into believing it does not have major consequences.

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

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

Q&A: Real Party of Interest

Q. I had been making payments for more than a year to Company X and fell behind on my mortgage payments by a couple of months. Today I got what looks like a foreclosure notice from a company I have never heard of before. The amount they say I owe is wrong and they are claiming that I have not made payments for the past 8 months. I don’t want to lose my home over some mistake but I can’t afford an attorney. Is there some way that I can figure out how to keep my home on my own?

A. There is a strong possibility that you may be able to block the foreclosure long enough to figure out what is going on. Your first step is to file an “answer” (see here) to all the correct parties.

Let’s cover some basics about the “real party of interest.” The real party of interest is the only entity or individual who can be the plaintiff in a lawsuit. Concerning your mortgage or deed of trust, the real party must either have purchased or otherwise have acquired legal ownership of the collateral in order to sue you as a plaintiff for non-payment of the debt. There is also a provision for a servicer who has been granted servicing rights “with assigns” to be the named plaintiff as well, since such a arrangement grants all rights to the holder as though they were the rightful owner. “Servicing rights only” does NOT grant one the power to sue for payment as a plaintiff in a foreclosure action.

In all cases, the named plaintiff should be able to provide documentation that they have the legal right to pursue you for payment. Send a qualified written request and demand that they provide such documentation. The documentation you need is a copy of the transfer of your note/deed of trust. Or proof that a transfer of servicing rights “with assigns” was made prior to the filing of the foreclosure. With so many lenders making transfers of files all the time, they have gotten really sloppy about these little details. Many times servicers are identified as plaintiffs in a foreclosure action when they have no legal right to do so. Challenge the validity of the action, not the truthfulness of your default. Additionally, dispute the amount declared to be in default and request documentation of all funds paid by you on the account.

Essentially I am saying that many foreclosures are processed and completed, folks lose their homes when the lawsuit was filed by someone who was not, in fact, the “real party of interest.” A consumer borrowed money from Bank X, who transferred the loan to Bank Y, who was then bought by Bank Z. Bank Z owned Bank Y, but your note is still held by Bank Y. Bank Z cannot legally be the plaintiff until there is a transfer of your SPECIFIC note to Bank Z.

It’s a simple concept once you think about it. Use an attorney if you don’t feel competent doing it yourself; but I think you could handle this yourself once you fully understand.

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

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

Word: Orphan Houses

Today’s word is “orphan houses”, a new concept and a direct consequence of the dramatic increase in foreclosures across the country. There are numerous ones in your town and we hope your home doesn’t become one.

What’s an “orphan house” anyway? Unfortunately, it is a home which has been lost as a consequence of foreclosure or was voluntarily relinquished by the homeowner via a deed-in-lieu in order to avoid foreclosure. As if that were not bad enough, the insurer has neglected to transfer the title into their name which can cause major problems for the former owner down the road. 

As long as the title remains in the borrower's name, then any and all liability fall upon that borrower—who remains the owner of record. Thus the name “orphan house”, you lost it, and they have chosen not to legally claim it.

Now why would they do that? Obviously you are smart enough to know that when financial institutions do (or fail to do) something it usually is associated with saving them money. The catch this time is liability.  Whomever owns the property (has the title legally recorded in their name) bears the risk or liability for anything which occurs at or on the property.  If there is a fire and the vacant house burns, the insurer does not have a risk, it is NOT in their name. If the local municipality mows the 4 feet high grass and processes a bill for that address, it will have the former borrower name attached to it. (No new deed has been recorded). The homeowner’s association may continue billing in the name of the former borrower (that would be you) and those bills can be attached to the property as liens. 

As a practical matter, if there has been a foreclosure there is a clear date when the ownership rights in the property ended. That is very murky when you mailed off paperwork to process a deed-in-lieu. Lenders are very willing lately to let you walk, complete the simple form and leave the property (within some guidelines of course). I am simply telling you that they are covered, YOU, however, are not.

How do you avoid an “orphan house” in your future? The best advice is to seek legal counsel about the aftermath of a foreclosure or deed-in-lieu. A competent attorney should be able to help you work through the details so you don’t end up with an unpleasant surprise down the road.

Yes, it is definitely worth the legal fee you will incur to avoid possible financial risk down the road.

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: Tenant

And the WORD for Today is:

Tenant – was the term which originally referred to someone who had possession of a property without regard to their ownership rights in the property.

Commonly refers to a holder of property under a lease or other rental agreement.

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.)

FYI: Stimulus Package as a Home Purchase Motivator—Don’t Jump into Home Ownership

Even I get tired of me sometimes. Folks want to be all excited and I have to keep inserting nasty little details to muddy the waters. The idea of getting $8,000 as FREE MONEY to buy a house is so tempting that I even considered it for a few days myself. Thank goodness I woke up and realized, I had not been planning to buy a house, don’t really want to own a home at this particular point in my life, can’t handle the maintenance nor do I wish to be tied down to a specific home until I am absolutely sure where I want to retire in a few years.

I was recently asked by a young lady at a “Buying TIME” workshop whether or not she should consider buying a house now because of the stimulus money. I asked her a couple of questions to try to determine what answer I should I give her.

a. Were you thinking about buying a house already?

b. Do you know your credit score and have you checked with a lender to see how much home you can afford? Are taxes included in that payment?

c. Is your job stable enough that you feel comfortable making that kind of commitment?

d. Do you have any money saved for a down-payment?

e. Do you have a budget set aside for maintenance?

I have not answered her question yet and now she is frustrated with me. (I didn’t get to ask her the rest of the questions). Shouldn’t she just take advantage of this maybe once in a lifetime chance to get some free money to buy a home? My answer: Not unless the answer to all the questions I did ask are “YES”.

I have read the stimulus package and the guidelines for the $8,000. I am real clear that it does not come with an annual budget for maintenance, a new lawn mower and appliance package and 95 other things you need if you are about to step out into home ownership. I support home ownership and encourage anyone who is ready to take that step to do so. But because I am a consumer advocate who hopes that the folks who buy homes will live there as long as they choose and not be forced to let the home go because they did not understand all the responsibilities which go with owning a home, I beg you to slow down and consider all the aspects of that choice before you hurry on down and grab the money. Selecting a local HUD-approved housing counseling agency and taking a pre-purchase course as well as some on-line studying could help you avoid making a costly mistake.

Buying a home is a BIG decision; give it the respect it deserves. Owning a home can be extremely rewarding (I’ve owned before) but do it on your terms, when the time is right for you. Buy conservatively and ENJOY.

***An interesting footnote, “Buying TIME...When your money is running out” is a workshop designed to help folks who are struggling with managing payments on their current housing.  So the question raised above was from an attendee at a workshop which would indicate you are not ready to make a home purchase.

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: Mortgage, Continued

The WORDS for Today are:

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

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

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

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

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

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

From the Desk of..."Is the Sky Really Falling?"

Feels like the sky is falling …

Well, maybe that was a piece of the sky you just hit in the middle of the road. Just be glad you are a REALTOR… everyone knows real estate agents don’t have a retirement account to worry about so you haven’t lost anything with the market going crazy. Or have you? I suspect that upon closer examination you’ll discover that, in fact, you’ve lost a great deal. No, the sky isn’t really falling but a few stars are missing. Have you heard of Fannie, Freddie, AIG and Nehman? Life will be different, but different does NOT necessarily mean doomed.

My Sky is Fine

We’re happy for you. Jealous (and suspicious) but grudgingly happy. It’s true that real estate is a local market. Consequently, there are isolated pockets around the country which have not been hard hit with the broad economic issues and the housing meltdown. We all await a return to the time—only two years ago (seems like twenty)—when the sky was up there where the sky is suppose to be and not falling on our heads in chunks. If you’ll excuse me, I think that was another star I saw fall up ahead.

Had a CLOSING lately?

You know, those events where people sign papers at the end of a real estate transaction and everybody leaves the room happy, including two REALTORS with checks in their hot little hands. You haven’t? It’s probably because some tight-fisted lender changed the rules at the last minute and did not approve the buyer after all. Or maybe the buyer’s money from the 401-K which they had planned to use for a down payment just evaporated. E-V-A-P-O-R-A-T-E-D, I tell you. Or the retiree clients you were so excited to get because they actually have CASH are now too scared to move in case their dwindling retirement account keeps shrinking. Or maybe the last honest appraiser in your town came back with an honest valuation so far below the agreed purchase price that everybody freaked. (It could happen). Needless to say, CLOSINGS are becoming a reason to pop a cork and declare a special holiday.

What’s a REALTOR to do?

A good starting place would be to read the article “REALTORS at a Crossroads”. If you missed it, send a quick email to: HomeOwnershipMatters@gmail.com to request a copy.

This is an excellent time to critically analyze whether real estate sales (or real estate period) is what you need to embrace as a career, at this time. Taking stock is always appropriate. Making changes requires self-awareness, recognition of shifts in your personal needs, changes in market dynamics and the courage to create a new road map. The major difference between an enthusiastic adventure into the future and devastating fear is whether you walked---or got pushed. Let’s assume you wish to be the master of your fate. Read on. . .

Guidelines for becoming an EXPERT

If you’ve decided to make a change, then aim high. Do your research, know your competition, make a business plan. Yes, even you folks who have been in business since Jesus was a baby. Experts build on their natural skills and experience, plus education . I encourage you to plan too become the in leader in your chosen arena, in your area. There is no better time than now to use your down time to create a vision for a successful future.

Resources to get you there

You can do it; these will help.

• dsnews.com (that’s default servicing news)—This is the trade magazine for lenders and servicers. (sign up for their FREE online newsletter)
• NeighborWorks America—nti.org (that’s National Training Institute) You specifically need to take their 3 day loan servicing class.
• Home Ownership Matters Training Institute—the source for this news article and (FIS) Foreclosure Intervention Specialist training and other specialized courses
• National Consumer Law Center—resource for invaluable materials and classes related predatory lending, bankruptcy and other legal options to challenge foreclosure
• Center for Responsible Lending—terrific resources on lawsuits and challenges to existing practices associated with lending which frequently increase the chances of default
• “Your Real Estate Advisor”—a real estate resource which will help you to understand the terms, laws and forms which are most frequently used in the practice of real estate. This educational book is written in easy to understand language so you’ll be able to apply the valuable knowledge it provides. It is available at www.DovePublishingHouse.com.

The Sun Will Shine Again. . .

It always does. Life guarantees death and taxes. It creates for us unlimited possibilities wrapped up in opportunities. Even the exodus of agents from the business ushers in the opportunity for those remaining to work at differentiating themselves, excelling in their chosen arena and succeeding. The choice remains yours. The tools are available. Today’s consumers need real estate professionals who are experts at what they do. There is a great need for agents who have the ability to educate consumers about the various choices related to their home, especially if the borrower is in default. The ability to facilitate implementation of difficult transactions is, likewise, more urgently needed today than ever before.

Are you prepared for the challenge?

Observations From the Desk of Mildred Wilkins,
President and Founder of Home Ownership Matters, LLC.

© Copyright 2008, Home Ownership Matters, LLC. All rights reserved.
(FIS) is a registered 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.)

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

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.

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 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.

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) 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

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

(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.)

Announcing:

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

Copyright © 2010. Mildred Wilkins Consulting, LLC. All Rights Reserved.

WORD: Dower

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: Self Help

And the WORD for Today is...

Self Help – refers to one party acting against another without the use of legal enforcement such as court marshals, sheriff or other police officials. Self-help used to be widely used by landlords to evict tenants for failure to pay rent. Self-help typically involved simply removing the tenant’s belongings from the property and changing the locks. If any utilities were in the landlord’s name (such as water service) then discontinuing service was a popular self-help strategy. As consumer laws and tenants’ rights legislation have gotten stronger over the past 15-20 years there has been a dramatic decrease in the instances where self-help is employed to divorce an undesirable tenant. Currently, most states protect consumers from landlord self-help strategies. Check your state’s landlord-tenant laws or seek legal counsel if you believe your landlord may have violated your rights through the use of self-help.

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 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.)

From the Desk of..."REALTOR at the Crossroads"

You’re a

REALTOR at the Crossroads

This is not a time for ‘dabbling’ in real estate. If you’re not a BIG DOG or prepared to become one, you really must stay on the porch. If you’re a little ‘soft around the edges’ and cry at scary movies, now would be a good time to non-renew your license.

Challenging Times

We are hard pressed to remember a time which has been harder for the housing market, and consequently, for real estate professionals in the past 25-30 years. If you are still trying to decide whether or not to renew your license, then read on. I have been warning that we were headed for just this situation since 2002. Mostly, I have been laughed at for my trouble or asked “Are you serious?” I was serious and correct. Everybody else is adequately covering the challenges now that we are actually in the midst of them. I have chosen always to understand my environment and figure a way to become at peace with it. So, let’s fast forward to the best of times.

Best of Times

This is the best of times to seize the opportunities being presented by today’s challenging real estate market. If you have lived a few years past, say, 30, you know that inherent in all difficulties lies the potential for new opportunities. This really is the best of times to take stock of both your personal and professional lives and decide—AGAIN—what you want to become when you grow up. While traditional real estate sales, for the average REALTOR, have become difficult at best, YOU are not average. You decided to read this article hoping to find insight and perhaps direction since you recognize you are at a crossroads.

Today’s Reality

No matter what city or state you happen to call home the challenges facing real estate professionals today are remarkably similar. There are more properties available for sale, a somewhat (or perhaps extreme) smaller pool of traditional buyers, tighter guidelines for financing, more REOS and a multiplicity of factors pushing property values down. Did I describe your market pretty accurately? There are exceptions, of course, but your market is likely described above. Today’s reality. Your success depends very little on what is going on in your market. Instead, your success is tied to how you respond to the market and whether or not you position yourself to be one of the agents who not only survives---but thrives—during this turbulent market. A concentrated, committed, full-time effort will almost guarantee success.

Specialization in Expanding Fields

The successful real estate professional two years from now will be able to look back and tell you with clarity exactly when they stood at the crossroads and made a choice which took their career to a new level. Specialization in one of those areas which are expanding because of the downturn will allow you to become one of those future success stories.

What Might a Career Shift Look Like?

• REO sales person—representing lenders/servicers by selling bank owned property. ( I am a former Fannie-Mae Broker specialist.) Can you imagine the volume of listings I would have now if I still represented them?
• Trash-out Specialist—handling all the details needed to trash-out and prep homes which have been foreclosed
• Locksmith—again—working for lenders to re-key when properties are vacated prior to foreclosure and again after the sheriff’s sale for placement on the open market as an REO
• Reverse Mortgage Specialist—working for a company which sells reverse mortgages to seniors who have equity in their homes as a way to avoid foreclosure/enhance their lives
• Foreclosure Intervention Specialist—(FIS)–starting a business as a consultant to offer foreclosure intervention counseling/representation, especially in upper end markets/areas
• Investor—in rental property you expect to hold for the duration of this down economy
• Property Manager—for single or multi-family—WARNING—not a simple as saying you can.
• Short Sale Specialist—again-not as simple as saying you can. Agents who have learned to be proficient at the strategies for successfully completing a short sale will be in demand. You would have more business than you could handle—IF YOU KNEW the secrets to successful short sales.
• Default Counselor—not the same as a foreclosure intervention specialist at all. You would most likely work for a non-profit agency doing counseling or you might start your own firm
• Real Estate Attorney–who decides to represent consumers who are struggling with their mortgage payments. You would also receive referrals from REALTORS, default counselors, and foreclosure intervention specialist when legal help was needed—WHICH IS CONTINUALLY.
• Lawn Care Company—not very glamorous---but definitely a business with a strong demand. As more foreclosures occur lenders are increasingly under the gun to keep properties which they own maintained. They’d rather pay you than the city.
• Show Home Franchisee Owner—finding qualified tenants for upper end properties while they remain listed. It’s a different class of property management. Great income—thriving in some markets.
• Property Valuation—using professional BPO forms ( such as the Fannie Mae BPO long form) and skills which include making adjustments for individual components of the property. Your most likely employer: lenders and servicers. Additionally, I believe consumers would be willing to pay for fairly accurate assessment of their property’s current resale value in order to help with their difficult choices in this climate. (I’m sorry guys, the traditional BPO or CMA is not thorough enough for today’s market.)

Dare to Re-Define Yourself

Trust me, time is on your side. The current wave will be rolling for the next 5-7 years or more. Get ready for the next ‘stage’ of your real estate career. Since I entered real estate in 1993, I have gone from buyer’s agent for entry level homes to listing agent to Fannie Mae Broker-Specialist to becoming a national trainer on foreclosure issues. Life is about ‘stages.’ Get un-stuck, buckle up and hang on!!.

You’re a REALTOR at a crossroads; which path meshes with your skills and interests?

Observations From the Desk of Mildred Wilkins,
President and Founder of Home Ownership Matters, LLC.

© Copyright 2008, Home Ownership Matters, LLC. All rights reserved.
(FIS) is a registered 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.)

From the Desk of..."The Party's Over"

Party’s Over...Now for the Clean-up

I’ve always enjoyed entertaining. Fact is, I’d rather have 20 folks over than 5 and if 50 came for dinner—why that would be awesome. Everyone comes expecting to get their personal favorite —WHATEVER—and I aimed to please. The menu was always extensive. No one was required to bring anything to the table and surprisingly—almost no one did.

Dinner is over. Everyone had too much of everything, stuffed extra in a plastic bag and they’re out the door. I am exhausted—but happy because I gave them what they wanted. They’re happy because they:

• got what they wanted
• didn’t have to work too hard for it
• got “extra” for another day

What’s Wrong With This Picture

For starters, I am now financially depleted, exhausted and the house looks like the scene of a train wreck. Only a couple of people even offered to help with the clean-up before taking off. Fifty people can eat a lot and leave a substantial mess in their wake. Dovie, my daughter, pointed out that while I might be having fun, I was setting a bad precedent. It amazes me how long it took me to change the party rules and request contributions and help with the clean-up. My budget has improved and the house was clean when the last ten folks left. I enjoyed my parties more---can you imagine that?

Lessons Learned

Financing the entire event is expensive. It deprives others of the satisfaction of participation. It’s an amazing human phenomen—when folks don’t pay for or help to prepare food they have enormous appetites, little sense sharing fairly and unilaterally take more than they can consume. The host budget is gradually depleted and eventually the parties must cease. 100% financing is a close parallel. The real estate bubble bursting is a prime example of national over-indulgence.

Oh, What a Tangled Web We Weave . . .

Alan Greenspan in recent testimony concerning our current financial meltdown has admitted to being totally blindsided by the financial collapse. No disrespect intended, but how could the former head of the Federal Reserve believe that financial institutions would self regulate appropriately when the business model for creating mortgage securities begged you—literally begged you-to mix bad apples with good apples. After all, they were being shipped overseas tomorrow; NEXT DAY EXPRESS, early delivery guaranteed. The United States has woven a tapestry of bad appraisals, “liar loans” and no collateral into a housing market which threatens to unravel the world economy.

Party House—Closed for Repairs

Builders, mortgage brokers, large insurance firms, government backed loan program participants, Wall Street investment firms and the rest of the party givers are, shall we say, “down on their luck right now.” Based on the latest news regarding bailouts, acquisitions and financial institutions in the intensive care unit, things are not looking too good.

There are no parties scheduled for the foreseeable future. Maybe there will be a few small get-togethers for a limited number of truly qualified buyers/sellers but the orgies are a thing of the past. Sometimes the hangover is so bad that the participants swear off alcohol for the rest of their lives. Me thinks Americans have decided enmasse to go on the “lending wagon” and become, albeit by necessity, responsible partakers of mortgage financing. Likewise, I believe that financial institutions which have operated as though they could be irresponsible forever since they were selling almost all the junk they allowed to be funded have discovered that having your accounts balanced right under Wall Street’s nose is bad for business.

The Intensive Care Unit

There are so many institutions checking into the unit that it is hard to keep up. If you are not familiar with the Implod-0-meter this is a great time to check out their website at The Law Blog. The mere existence of this business is another indicator of someone who has seized an opportunity borne of this housing crisis to create a niche for themselves. The articles are timely; the information is invaluable. You have to ability to check the “condition” of the financial institutions which impact your day-to-day business. I strongly recommend that it rates a bookmark as a favorite. This site has become a personal favorite for the real deal on those institutions which are continuing to shape the real estate market. An old farm analogy: “If you forget what kind of peas you planted, just wait until they come up”. Sowing and reaping is a universal principle which applies equally as well to mortgages as it does to farm crops.

Push Your Sleeves Up . . .

Clean up requires a stiff upper lip. Let’s focus on the mortgage mess. Instead of trash bags full of refuse we have:

• tightening credit requirements
• decent interests only available with higher credit scores
• large down payment (okay, as opposed to NO down-payment)
• stricter valuation of the collateral
• verification documentation of income and assets

Truth is, none of these clean-up strategies are unreasonable. Further, had they been in place back in 2005, we wouldn’t be up to our hips in mortgage debris.

The American Challenge

We have just elected a new president. Election fatigue is finally over. The celebration party was astonishing. However, the reality is that the US is facing arguably its most difficult challenge in its history as a country. Each of us as an individual must find the strength and ingenuity we have in our genes to weather the storm ahead. We would be foolish and ill-prepared for the journey if we assumed we were headed on a pleasure trip—or off to another big bash. As our forefathers before realized, we are headed for a “New Land.” Let’s each put our shoulder to the wheel and find our inner strength to support our individual communities and our country as a whole.

Our greatest president, John F. Kennedy, said it best for all times, “Ask not what your country can do for you? Ask what you can do for your country?”

Observations From the Desk of Mildred Wilkins,
President and Founder of Home Ownership Matters, LLC.

© Copyright 2008, Home Ownership Matters, LLC. All rights reserved.
(FIS) is a registered 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.)

Reinstate and Redemption: Worlds apart

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

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

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

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

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

Q&A: Deed-in-Lieu Dilemna

Q: My wife and I are behind on our first mortgage. The lender has sent us paperwork which says they are willing to consider taking the house back and would like to ask for a deed in lieu of foreclosure. My question is: what would happen to our second mortgage?

A: This is a question which a lot of people who are struggling with their mortgage payments need to consider.

First, the lender will make a decision as to whether or not they will ACCEPT a deed-in lieu (which allows voluntarily relinquishing the house instead of foreclosing on you) based on whether or not you have a second. Most often, when there is a second mortgage involved, they will decline accepting the deed-in-lieu because their claim to ownership of the property would be encumbered by your second. Essentially, they can say, we don’t want your troubles. This is especially likely to be the case if you took out the second during the past few years and paid off credit card and other debt. In such a case, not only did you convert consumer, unsecured debt, into secured, mortgage debt but you also created a scenario where the investor who is actually carrying the risk on your home does not want to be held responsible for the portion of liability which they did not insure.

Why the lender might still choose foreclosure

Let’s discuss the second thing. Most states’ legal process will allow the 1st mortgage holder to be relieved of any responsibility for the second lien holder’s loss IF THE FIRST FORECLOSES. This caveat means your lender may decide, purely as a business decision, that foreclosure against you is their best option.

As a practical matter, even when a lender has sent you paperwork or indicated that a deed-in-lieu might be an option or you decided to request such resolution to your problem, there is no automatic RIGHT to do this. You will still be required to complete an extensive hardship package to determine whether or not you qualify for the ‘option to give back your house’. In addition to the difficulties tied to having a second loan the lender is required to be sure that you have exhausted all efforts and resources to try to meet your obligation to them.

Deed-in Lieu Warning

While the process is very simple (signing and notarizing a single page document) there are significant risks associated with your future LIABILITY if you do not have an attorney to both prepare the deed-in-lieu document and facilitate a transfer of the property.

Specific risks:

1. Documents never reaching the lender
2. Lender’s failure to record the transfer of the deed in a timely fashion (or ever)
   (becoming very common and a major problem for you if it happens)
3. Possible insurance liability if something happens on the property while
   it is still in your name (Nasty possibility)
4. On-going bills for maintenance or citations from the local health and
   hospital board for health hazards, weeds, etc
5. On-going on home owners’ association dues which could be very costly.

Deed-in-lieu is a slightly better option than foreclosure but should be handled with care and the professional services of an attorney who will address the risks I mentioned above.

FOREWARNED is FOREARMED.

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: Fair Debt Collection Practices Act

And the WORD for Today is:

Fair Debt Collection Practices Act—enforced by the Federal Trade Commission and is another strong consumer protection measure designed to prohibit abusive practices. Such practices might include overcharging, harassment with repeated calls or calls at inconvenient times. It is also a violation of the Fair Debt Collection Act to disclose any information related to your debt to a third party. A third party would include your mother, your spouse, your employer, your roommate, anyone who is NOT YOU. It would be appropriate for you to make a complaint to the Federal Trade Commission against that creditor if they were to violate your consumer rights in this way. The Act prohibits certain specific abusive communications including:

a. At unusual times (before 8am or after 9:00pm)

b. Repeated phone calls or excessive manner

c. At any place which is inconvenient for the consumer

d. At work if the employer does not allow personal calls

e. Directly to the borrower if they have already notified the creditor that they have an attorney.

f. By postcard or any other method which allows for the display of information about the debt to appear on the outside of the envelope.

g. After the borrower has made it clear they do not intend to pay the debt.

For additional information on the Federal Trade Commission, log onto: 

http://www.ftc.gov/index.shtml. 

Additional acts prohibited include:

a. Communicating with anyone other than the borrower except to secure location information

b. Misrepresenting the amount of the debt

c. Misrepresenting the legal status of the debt

d. Misrepresenting what actions the lender may or may not take as a consequence of the unpaid debt

e. Telling the consumer that their failure to pay the debt is a crime (it is NOT)

f. Threatening action which will not or cannot be taken legally against the borrower

g. Threatening to harm the borrower physically

h. Using language which is vulgar or abusive.

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: Redemption Right

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.)

Q&A: Should I Buy?

Q: I am thinking about buying a home even though the market is really bad in my area right now. It seems I might be able to get a really good deal on a house and I want to stop paying rent and get into home ownership. What are some of the things I need to consider? Or should I just wait altogether?

A: In today’s market you should certainly consider not only whether or not you can afford the home (down payment—20% or so, insurance, maintenance, etc) but it is critical that you are comfortable with the stability of the market in the area where you are considering purchasing. Are property values still sliding, or have they stabilized? Do you plan to live in the home for the next 8-10 years so the market conditions overall have returned to a more normal state? Can you buy the home at an amount which you feel will not have you upside down (owing more than possible re-sale) on day one?

If the home needs repairs do you have the funds readily available to handle them or can you do them yourself? Are you sure you are ready to assume the responsibilities associated with owning, caring for the yard, etc? Only you can answer most of these questions. I would recommend that you take some time and evaluate not only the questions which I already asked but also:

1. Why do you wish to buy? Is it to build equity? Enjoy a certain lifestyle? To feel that you have accomplished a goal you set for yourself? Because you are a certain age and you SHOULD? Is it because you are being told you are foolish if you keep renting? Carefully examine whether or not the reasons for considering the purchase come from within and that buying a house will, in fact, meet your needs.
2. Are you informed enough about all the aspects I have raised questions about to make a good decision?

If you are not, then do the research, seek out the answers, get the details so you make an educated decision. Then go for it.

Lastly, please tell me you are looking for a house for shelter, not a house as an investment. On the surface the question above gives the impression it is from an individual looking for a personal residence. I answered based on that assumption.

If you are very strong financially and want to invest in rental property for the long haul, then go for it—with caution. Keep in mind that everything written above still applies.

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: Disclosure Statement

And the WORD for Today Is:

Disclosure Statement – a term commonly used to refer to the document which explains loan terms as required by the Truth in Lending Act. Broadly, a disclosure statement may be any document used by one party to convey important information to another party. Most often, by signing the document, both parties are acknowledging the presenting and receipt of the information included within the disclosure. There is no proviso, most often, for understanding the disclosure. However, recent laws related to predatory lending, foreclosure consultants and mortgage brokers have begun to include language which states “the presenter must disclose and the borrower must understand” certain pertinent information. This information may include things such as fees being charged and rescission 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.)