About Short Sales

You won’t get a loan modification by waiting in line. It’s just too long. Get “out-of-line” by following my advice.

In the current Loan Modification Frenzy, the “line” is too long. Hundreds of thousands are in the queue ahead of you with more than 50,000 added per week. The banks can’t staff and train and manage and retain nearly enough workers and the systems and procedures are overwhelmed as well. Add to that the fact that the banks are only begrudgingly cooperating with the effort – and you have a formula for frustration and failure.

The front 4% of the line are getting good modifications. So, copy the winners, How do they do it? They get out-of-line and do extraordinary things. Previously I have described ways winners craft their applications and follow-up on the application to use what I call File Inertia. Let me now describe the way they escalate problems.

Because problems are an inevitable part of such a convoluted and broken process, effectively dealing with them is critical. I advise you to 1) Ask 5 Times, 2) Escalate Well and 3) Escalate Well Beyond.

1. Ask 5 Times The common problems are easy. For instance, if they misplaced your 4506-T Form, send them another one. If they request 3 months of bank statements instead of the usual 2send ‘em in. But, when you get information from the agent that is just wrong, and you can’t seem to get them to perceive it…That’s when you should Ask 5 Times. Call back and try another agent, 5 times. That’s right, it’s not worth it to try to prove your point and sometimes the agent is just not trained well enough to ever understand your question or concern. If you burn through 5 agents and can’t get the “right” answer, then ESCALATE.

Escalation means going up the chain of command. It means requesting that a manager or supervisor review the situation with you. Be sure to do this politely to minimize the snub to the agent but be firm. Simply say (to the 5th agent) “Please connect me to your supervisor, will you? This matter is just too important to me to let this go. I want to hear it from a supervisor”. Sometimes the agent will oblige and other times the agent will argue with you. I believe that sometimes too, agents will ask their co-worker to pose as a manager for the call. It may happen that the manager will have to call you back. Don’t hold your breath. Occasionally you will get lucky and a well trained and well informed manager will get on the line and provide some real value.

Escalate Well Beyond the Loss Mitigation Department. Perhaps departmental rules or guidelines have to be altered in your case. Often the individual departments do not have the authority to make exceptions. You should seek assistance and support from other departments, or from bank executives, regulatory agencies, politicians, trade associations or, maybe even the press. Don’t think that your problem is too small for any of them to care about. The secret to winning their support is to ask for it in a way that indicates you 1) have used all the correct channels already, 2) understand their role and have appropriate expectations for what they can do to help, 3) know specifically what you want them to do and 4) that you are the type of person who will not stop escalating if they fail to respond.

Escalations Well Beyond are effective. I’m amazed at the results. It seems that such interventions are always successful and the trick is in convincing the person to get involved.

So many people are impacted by the housing market meltdown that most are sympathetic and will be interested in helping if they can. So, ask well and you will likely get support.

Rockwood is an author and foreclosure expert. He has written extensively on loan modifications.? Visit Rockwood’s site about DIY Loan Modification at Home Loan Modification. Unique version for reprint here: 2011 Loan Mod Problems – Escalate em!.

There are many reasons why homes go into foreclosure. Dealing with foreclosure is going to be difficult no matter what the cause. So if you’re facing a foreclosure it’s crucial that you understand as much as possible about the process and what your options are.

What causes foreclosure?

If a homeowner stops making his mortgage payments or is late making payments, the lender is allowed to start the process of foreclosure, according to the mortgage terms. You should definitely know what the number of payments is that is written into your agreement, so you can take steps to avoid reaching the “magic” number.

How long can homeowners stay in their home once it goes into foreclosure?

As laws are different in each state, there is no real rule. In some states, the law may allow homeowners to stay in the home for up to a year. At the other extreme is a time frame of only a few months. In some cases, the homeowner may decide to wait for an eviction notice before moving out.

What is a redemption law and what is meant by a period of redemption?

When a home goes into foreclosure, many states allow a period of time where a homeowner is allowed to repay overdue mortgage payments. This is what is called a redemption law. Even in a situation where a home has been sold at auction, if the homeowner is able to come up with the total money owed, the redemption law gives the owner the right to reclaim his property. This is as long as the payment is completed in a specified time period.

What is a short sale? How does it work?

In a short sale, property is sold but the proceeds from the sale are less than the amount owed. The lender agrees to take the lesser amount, but the seller may still be obliged to repay the difference between the proceeds of the short sale and the amount owed. The advantage to the seller is that they won’t have a foreclosure showing on their credit history. The disadvantage of course is that it ends up costing you out of pocket money to sell your home.

What is meant by deed-in-lieu of foreclosure?

In a deed-in-lieu of foreclosure, the homeowner turns over the deed to the lender. He in turn cancels the foreclosure proceedings and forgives the mortgage loan. This type of agreement will affect your credit to pretty much the same degree as a foreclosure.

Being well informed can help you decide on the best options when you’re dealing with foreclosure.

If you are facing foreclosure, you need help. Get free foreclosure information at http://getforeclosurefacts.com and find out how to avoid foreclosure.

For many homeowners, there are many who have never been late on their mortgage payments. With the tough unemployment picture deteriorating in the United States and with so many home values slashed and underwater with loss of equity, it is commonplace for many homeowners to find themselves strapped for the first time.

Homeowner Brian whose full name remains concealed for privacy reasons, was always on time with his mortgage payments. He was of the opinion that paying down the mortgage balance was something he aspired to do. His opinion changed when he watched the value of his home falter thus making him question whether it was anymore worthwhile making mortgage payments.

Brian, a police officer together with his real estate wife, Kelly had purchased their 4 bedroom home in an upscale neighborhood of Phoenix in 2005 for $650,000. They forked out 20% down payment knowing that they got a bargain and got a 30-year fixed rate loan for the remaining balance. Anticipating increasing costs for their daughter’s college, home improvements including a wedding, they took out a 2nd mortgage against their home. Currently, they owe about $647,000 on the combined 1st and 2nd mortgage.

Average home prices in Phoenix have fallen 48% after peaking in the summer of 2006 as indicated by the First American CoreLogic Index. As a result, Brian estimates his home to be worth between $375,000 and $425,000 although it has a 4 car garage, a 1.2 acre lot that includes a swimming pool. Zillow.com, a web resource that estimates national home values based on the number of sales within its neighborhoods, estimated the house to be worth $374,000.

There are millions of homeowners in the United States who are currently underwater or indebted to their lenders for more than their homes are valued. They often beg the question whether to remain paying their mortgages and hope for things to recover or leave their houses with the undesirable end result of a seven year foreclosure injury to their credit records.

Thankfully, nobody attempted to remove them from the property as they manage to reach into their savings in order to continue making mortgage payments. As with many other American homeowners who are underwater, the equity in their homes have shrunk or disappeared thus providing them with nothing to fall back on in case of an hospital emergency or an unforeseen loss of salary. Many are stuck in a limbo as a result of fallen home prices. They wish they could sell their houses for adequate funds so as to settle with their lenders but not possible given the current climate. This dilemma makes many home borrowers very likely to experience foreclosure.

The only thing that could save them is a miraculous property rebound in home prices boosting the equity of their home. However, this is very unlikely to happen in the near term.

A number of residents in their town have performed strategic default or mailed in their keys and left their properties. It is convenient for Brian and his family to perform a similar act as it is so tempting for them to rent another dwelling for much less than their mortgage payments accounted together with property taxes, insurance and maintenance costs.

Brian says that he can’t rely on the quick housing recovery. He mentioned that he had to set his limit. If the family savings fell below a certain number, they would have to consider all options including a short-sale transaction.

The definition of a short-sale is when the property is bought by someone for less than the mortgage amount owed and the difference forgiven by the bank. Brian stated that they have always made their mortgage payments. They are frustrated as they are depleting their funds so as to continue making mortgage payments. He urged that at some stage, you will need to know when to stop before hurting yourself and losing all your money.

Learn how to avoid foreclosure by keeping informed on the latest government assisted programs. Read the original article Keep Paying Mortgage Payments Or Walk Away From Your Home?

categories: mortgage,real estate,housing,foreclosure,business,investing,short sale