Saturday, January 26, 2008
What is a Forbearance?
One of the options you might have in avoiding foreclosure is sometimes called Forbearance. It's often spelled with an e (Forebearance) probably because of it's relation to Foreclosure.
Forbearance or more accurately, a Forbearance Agreement is exactly that. It's an agreement between you and the lender. It generally allows you to stop making payments now, (temporarily) and add those payments to the end of your loan. Some forbearance agreements allow a gradual payback .
Unlike other loans you might have, if you fall behind on your mortgage, in order to catch up you'll have to completely catch up. Your Visa card will gladly take any money you send them. Your mortgage servicer will actually return your incomplete payment.
Got Examples?
You bet! Here's two.
Joe vs. the Volcano
You probably know Joe. Maybe not by name but you remember him. He worked on a fancy cruise ship. Joe's job is to light the Baked Alaska. He's a highly trained and well respected person. It's a dangerous job. Very few can do what Joe does.
Unfortunately, Joe lost his job. Out of respect to Joe's privacy I can't go into details here.
He found a new company almost immediately. On another ship, with another cruise line that would hire him, but because of the nature of his job he would have to wait almost six months to set sail. He was out of work for almost six months!
Joe looked at Craigslist
to no avail. Joe used all his savings and tried to keep up with his payments. He was more than 3 months behind. Now that he had his first paycheck in hand, it was time to make his mortgage payment. Joe called his Lender. His Lender said he needed to pay all the missed payments, plus all the penalties. Joe didn't have that kind of cash. Joe called his Lender again and this time they were very rude to him. They told him to just make his payments.
Joe was distraught. He was ready to walk away, to let his home go into foreclosure. He wanted his home, he had a job, and he had a mortgage he could pay, he just couldn't catch back up.
Joe was talking to the wrong people. He was talking to his lender's collection department. It wasn't his fault, it's where they sent him.
Enter the Forbearance Agreement. Joe finally got to the correct people (not the collections dept). Together they worked out a Forbearance Agreement. He would start making his payments again and, because he could, he would also start catching up on the amount he was behind. Joe was now back in good standing with his lender!
Don't Stand by Kathy
Kathy didn't lose her job. Poor Kathy was having the time of her life! She was enjoying yet another cruise off the Sicilian Coast.
Marvin and Melissa had never been on a cruise. They were a young couple honeymooning from Paducah, KY. They were seated at the table next to Kathy. Marvin wasn't feeling so good. Maybe it was the tequila shooters at lunch, maybe it was the seasickness. Whatever it was, just as the waiter started to Flambe their dessert Marvin's stomach decided to return it's contents to the dinner table. Remember the pie eating contest in "Stand By Me"? Keep that thought.
The unfortunate waiter, who was a highly trained professional and had thought up this moment that he had seen everything, suddenly realized he had not (seen everything). In his surprise, the dessert cart went flying!
Poor Kathy. She suddenly found herself an integral part of the Baked Alaska, lactose intolerant as she was. The caramelizing sugar, estimated to be at 320 F, caused 3rd degree burns over much of Kathy's arms and legs.
Always proactive, she called her lender from the helicopter. Kathy faced a month in the hospital. It would be two months before she could return to her job as an exotic belly dancer in Vegas. She initially talked to many of the same people Joe did. She also got many of the same answers. Luckily she finally ended up talking to the right person. He arranged a Forbearance Agreement that put off her payments for the next two months and added them to the end of her loan. Kathy was back to being good with her Lender.
So there's two fine examples of how a Forbearance Agreement could help.
Labels: debt forgiveness, Forbearance, Short Sale Negotiation
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Monday, January 14, 2008
Current Short Sales
- Single Family Home, 3 bdrm / 2 bath, 1,406 Sq Ft. Bay Point, CA 94565
- Single Family Home, 4 bdrm / 2 bath, 1,808 Sq Ft. Richmond, CA 94806
- Single Family Home in San Lorenzo,CA priced in the low $300's
- Single Family Home in San Leandro, CA priced in the low $300's
- Duplex in Oakland, CA
- Single Family Home in Lathrop, CA
- Single Family Home in Richmond, CA
Labels: Local Short Sales
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Wednesday, January 9, 2008
Who gets paid first?
| No, not California Deamin'... Time and time again I am asked which liens get paid off first. Want to play a game? Number the following from 1 to 7 as to who get's paid first.
Here's the answers. I'll do this in the order in which they get paid. You may be surprised...
So how'd you do? In a short sale transaction the order of lien priority is critical in negotiations.
| All the leaves are brown |
Labels: Lien Priority, Short Sale Negotiation
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Tuesday, January 8, 2008
What is a Short Sale?
In the simplest of terms, a Short Sale is the transaction when the Seller's Net (what the seller will receive once all fees and commissions are paid out) is less than what is owed.
- "I owe $300,000 and I can sell it for $250,000" - Short Sale
- "I owe $300,000 and I can sell it for $650,000" - NOT a Short Sale
- "I owe $300,000 and I can sell it for $300,000" - Short Sale
Option #1 and #2 are clear and easy to understand.
Option #3 the seller would net less than what they are owed due to the commissions and fees involved in any real estate transaction.
Labels: Short Sale Negotiation
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Monday, January 7, 2008
What a short sale is NOT
One of my favorite writers and all around great people is Rosemary Brooks. Understanding what constitutes a Short Sale is critical. Understanding what a Short Sale is NOT - equally critical!
Recently she offered up this excellent list of common misconceptions.
You can find her original article here on her Mother & Daughter Blog
If you need an agent, you simply can't find any better -
Give Rosemary a call at 866-750-8282
A Short Sale is NOT
A sale under market value
A Short Sale is NOT
Bank owned (foreclosed) house
A Short Sale is NOT
House being sold at public auction
A Short Sale is NOT
A home that is paid for and the being sold for under its Market Value
A Short Sale is NOT
House is sold on the county steps for the highest bidder - Trustee Sale
A Short Sale is NOT
When you turn your home back to the lender under the DIL process
A Short Sale is NOT
Lender does not grant approval for short payoff but you lose the house at the end of the foreclosure time-line
A short sale is when you owe more than your home is worth AND you list and receive a formal offer that is approved by the lender BUT it is for less than what you owe on the mortgage.
And contrary to popular belief you DO NOT HAVE to be in default to be considered for a short sale.
And BEWARE of verbal agreements. Get it in writing... the only was it is an agreement.
Labels: Negotiation, Short Sale
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Saturday, January 5, 2008
H.R. 3648: Mortgage Forgiveness Debt Relief Act of 2007
Read the FAQ on the IRS Website.
Labels: debt forgiveness, Mortgage Debt Relief Act
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Friday, January 4, 2008
Do it Yourself Short Sales? - Why?
I was reading today a post by
Labels: debt forgiveness, Mortgage Debt Relief Act
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!