Larry answers:

Just like in foreclosure you can get get discounts in short sales. The difference is the amount of time for it to get accepted. Short Sale can take anywhere from 3-6 months to get accepted and tons of paper work. I’ve made a offer and closed on a REO within 30 days. Both are very good techniques, I prefer short sales for a few different reasons.

~Duane McCalla

Larry answers:

Dear Maz,

The real estate market in Port Washington is on life support. There are few homes being sold. Many more are in foreclosure. Lenders are generally not lending in any area of Wisconsin.

Your credit history is critical. The higher and better you credit, the lower the price you should offer for any short sale. And the lower your credit the higher amount up should expect to pay unless this is a cash-out and not a loan take-over..

Try to find a true sale of a comparable property within the past 30 to 90 days. Make the adjustments for size, condition location, age and bedroom/bathrooms.

Deduct $50,000 from this value and prepare your offer with yourself being prepared to walkaway if countered. If the lender/banker is competent they will call you back within the week with a second counter or acceptance.

Remember you are in the driver’s seat. You can find many lovable homes around $200,000. And if you can find one for $50,000 below the current existing market value you will be all the more in love.

The real estate market seems not to be in free fall. That said lenders see little competition for properties. They do not want the expenses of foreclosure nor the prospect of holding onto a non-depreciating asset. They understand they will lose out if squatters enter into the property or thieves strip the property. Let the bank know that you understand what they know and see how the negotiating goes.

When you say “we” have the individual less in love with the home complete the price negotiations. With $50,000 savings, you can convert a not so lovely property into your dream home. Good Hunting!

Larry answers:

If the home is in short sale then I think that you shouldn’t worry about the amount you offer for it. You want to get the lowest price you can and if the bank is not willing to accept it then they can always counter.

To make you offer have more persuasion, I would include a pre-approval letter from a lender. The bank will be more likely to take the offer if it will be a smooth transaction.

Larry answers:

In general foreclosed homes are price lower than comparable homes. They may range from move in condition to major repair, but the price reflects the condition. You are buying “as is” but have the right to inspect and cancel if you don’t like the results. There are no hidden costs per se, but there are additional costs. When you but a foreclosed home (usually FNMA) the seller doesn’t pay transfer tax, title insurance and related closing fees. Contact a local Realtor. Banks don’t sell their foreclosures direct (called REO’s) they list them with Realtors.

Realtor.sailor

Larry answers:

Go to that place yourself.

FYI there are houses that are indeed sold for those prices.

But you should be educated about these things before getting into one.

The safest way is to go to where that house is, research about its paper works and make sure it is safe to buy.

Goodluck

Larry answers:

Those RE agents who have agreements with the banks to sell
their REO have pics

Larry answers:

There are a couple of options and you have hit on both.

#1 Have a real estate agent sell your home. (Do you know one in Puerto Rico?)

#2 Allow the property to go in to the foreclosure procedure.

#3 Have your real estate agent prepare a short sale request to your lender for approval. (You would need to know a real estate in Puerto Rico that specialize in Short sales.

Either selection would reflect negatively on your credit report for several years.

Any contract you need to sign could be done by mail and fax, thus you would not have to return to Puerto Rico.

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

Larry answers:

I am so sorry for your situation at this time of year. It sounds like you may have a type of rental subsidy, such as a Section 8 voucher. If that is the case, go to the agency who has supplied that to you to explain your situation. Legal Aid Society can help you for free, also. Do act very quickly in this situation! There use to be a way to place your rent in an escrow account for situations where landlords weren’t keeping up the property in good hygiene conditions or for situations that would cause injury to the tenant. I don’t think a landlord has to reveal their financial situation to anyone but the mortgage holder. You may be forced to move out or perhaps find out who holds the mortgage and negotiate with them the fact you are living there and plan to stay for a long time and have the means to pay the rent. Banks and mortgage companies don’t want to be holding the bag on homes that produce no mortgage payments by the owner or not having a good tenant to pay their money back to them. We are going to see thousands of foreclosures in 2007 and for the next 3-6 years after that due to people who took out the wrong type of home loans with the wrong type of mortgages and 0% interest on them. There are also people who had terrible FICO scores that were given mortgages. Do you have a lease? I’d want you to find out from the Legal Aid Society or the local University with a law school for assistance on this as a pro bono case. If the landlord knew he/she was going to lose the home, and perhaps tried renting it out to save it, they were acting in good faith. If they knew they were going to lose the house, you were not given the facts. People can sell homes after renting for a while, but if they are decent people will ask the realtor to place in the sales ad that the tenants wish to stay if the property is bought by someone who invests in housing to make them rental property. Somehow it seems the owners knew they were going down the slippery slop of bankruptcy which means the house is the first to go. Only the state of Florida permits a person to keep their home in bankruptcy. I don’t know when the home will go for sale as unpaid taxes but in my state it is happening this month. Pages upon pages in the weekend papers announce them. That’s when anyone can go bid to buy a property but doesn’t mean they are the new owners for 2-3 years when the previous homeowner can go pay itheir back taxes plus penalties and own it once again. If there are tenants next to you in the same situation, you can help one another on this one. But your first line of defense is the agency who is doing the subsidizing of your rent. The next one is the free lawyer as I mentioned above. Sometimes Section 8 people can buy a home of their own if their credit isn’t destroyed. If you have a decent FICO score and can buy the home yourself with the help of the welfare department or agency (usually they don’t tell people they can be homeowners!), you can rent the other side out for more money to maybe pay half or most of your rent. Look at your lease and read the rules of deposit. Usually they are to cover the first and last month’s rent if you fail to pay on your end or leave without notice and are under a lease, pay for damages caused by the use of the property if unreasonable, destruction of property by pets or children, deposits for having pets, and unlawful use of property . Don’t do what they are doing….not paying! Make sure you don’t default on your rent. It could affect you finding another place. Just about everyone runs a credit check on people including being a tenant.

Larry answers:

She should be safe from her creditors. But you might consider getting all of her info and then getting a free consultation with an attorney who specializes in elder care law. Your mother may have a substantial lawsuit against the lenders who victimized her and an attorney may handle it for her on a contingency basis, which means that legal fees would be paid out of any award she might get.

Larry answers:

It depends. Whatever you do see a real estate lawyer and an accountant ASAP. If you don’t you may find creditors coming after you, even after years. It is worth the $375 you’ll have to pay a lawyer to be able to know your creditors will not come after you in the future.

You need to understand the big picture. What are the costs with the bank, the federal government, the state government. If you can do a short sale, it looks better on your credit and allows you to get another house sooner. But for some, foreclosure can be a better option.

WIth the bank, you should find out if it is a recourse or non-recourse loan. If you never took money out of your home and it is the original loan, there is a good chance it is a non-recourse loan (meaning the bank can not go after you for any deficiencies.) But you want to see a lawyer a verify.

Be aware that you might owe federal and state taxes, even though you lost money.

Sorry to give you the bad news, but too many people don’t know the facts when making the decision.

Good luck!

Larry answers:

You are correct! It needs to be an arms length transaction.

Larry answers:

No. Anyone can do it, but it helps to have the knowledge on how the whole process works.

You would need a real estate license if you wanted to earn commissions from the sale or residential or commercial real estate sales. As a whole the license does not help you if you are an investor and many would argue that it is better you don’t have one if you simply wan to invest in real estate. Some people though use the commissions to purchase more property.

Larry answers:

Uhmmm.. About 20%

Larry answers:

I think you have missread your contract. If you are not paying cash on a short sale, you are contingent upon getting a loan. Whoever asked you to waive that contingency was doing you a disservice. How could they guarantee that you would get a loan. They can’t. I would get mad at the person who handed me that paper to sign. Lenders can reject a loan for 100 reasons including an appraisal; no one should ever sign a waiver.
The contract will allow you to cancel based on the HOA documents; check them and reject them. The contract will allow you to cancel based on the title search; read them. The contract will let you cancel if the seller does not close on time: short sales never close on time-cancel as soon as they don’t close and demand your money back..

Larry answers:

Yes, they do short sales, you need to get the highest price for the unit.

I have talked to real estate people that do nothing but short sales.

I see you were not getting any help with you request do I put his here, and yes they do short sales..it takes a while…get a real estate guy that only does short sales.

The real estete guys doing short sales are making record income, but it takes a lot of sales.

Chase Bank Short Sale Forms – Property Financing Discussions
Financial Market Buzz – Chase Bank Short Sale Forms … Sources of Information Prospectus When you purchase shares of a mutual fund, …stanford.edu/group/mrsec/cgi-bin/devel/sites/…/chasebankshort.html

Home sellers frustrated as short-sale deals collapse – USATODAY.com ( Ask here too, how long it takes.)

For more information on short sales, go to www.realtor.org. … Chase Bank, his mortgage servicer, rejected the first offer, which was $14,000 …usatoday.com/money/…/housing/2009-08-04-short-sales-mortgages_N.htm

Good luck.

Larry answers:

Rule number 1: Get everything in writing. Why? Because you can’t trust them.

Rule number 2: You write everything down in a communications log everything to talk to them with date, time, phone number and who. Who is everyone from who answers the phone, etc. Save all your phone company call logs.

Rule number 3: Be ready to take them to court and let them know it!
——————————
What would I do? Glad you asked.

1) Contact the attorney general and submit a claim.
2) Find others in your situation with same bank and call a community meeting.
3) Send a protest letter signed by everyone to the bank.
4) Consider the merits of initiating a “class action” lawsuit.
5) My goal would be to categorize the lender as a “predatory lender” and have the judge void the debt entirely and release the house free and clear of all liens.

Somehow, I think if you do this, they will be very, very responsive.

###

Larry answers:

It’s not really the loan modification itself that would cause a negative report on your credit, a negative rating would be triggered by late or missed payments and not adhering to the terms of your original loan agreement.

Some loan modifications include a reduction in principle whereby the lender actually “forgives” part of the money you owe them. In those cases, the bank may report the account as “paid for less than owed”, which is not a good rating.

If you did not have any missed or late payments, then your credit should not be affected, unless the principle balance was reduced.

If it were me personally I would call the number back again and maybe record the conversation that you have with the banks representative. I would make sure that by you not paying Nov, that you will not be reported as late.

Larry answers:

Everytime you try to get a loan modification through the bank they make money out of your application and most of the time you’ll get denied, I tried for almost 2 years with BofA to get a loan modification and they got my delinquent payments you should try calling the National Association of Homeowner Advocates, www.naoha.org they helped me for free no upfront fees and very helpful, I caught up and reduced my payment down almost 40%.

Larry answers:

You contact your mortgage company for the info, to send you a packet. It will show as partial payments, so your credit score will be affected.

Larry answers:

Showing MORE income won’t help you

Larry answers:

I am not familiar with Bank of America modification program nor the approval process.

When you received your temporary approval were you assigned a contact person that you worked with to get to the 3 month trial period? If so this is the person to contact for additional information about what to expect after your trial period is complete.

Three months is such a short period of time that you should be working on your permanent modification approval.

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

Larry answers:

With the interest rates as low as they are, I would see what would happen with going to a 15 year loan. Depending on what you are currently paying the new 15 year loan should still give you money back and you will pay a lot less in interest for the life of it.

Larry answers:

There is little difference in interest rate. The difference is 1/8th. With this small difference you should add your wife to the mortgage loan application. No matter the interest rate you will be able to deduct it from your federal income tax.

The monthly mortgage payment would be so insignificant,it is not worth arguing over.

As far as your wife using her 401K to make the down payment, her 401k manager would want to see the mortgage loan application with her name on them.

There are several plans that allow 401ks to be used as down payments in the purchase of property, for illness and a few other things.

These things must be proved with documentation. Failure to prove the use of these funds could cause a heavy tax penalty.

So for what you are attempting to do, the .125 additional interest rate is not worth it.

You need a mortgage broker that is able to explain these things to you,point out the various penalties for withdrawing from your wife’s 401k plan, the interest rate and payments based on the interest rate and the difference in payments for each rate

The difference in the purchase of a $350,000 property with 10% down at 5.375% is $1,763.91. The same cost at 5.25% is $1,690.99.

The difference is $72.92 as oppose to a penalty of approximately 10% for withdrawing from wife’s 401k. Since she is not on the mortgage this might not be possible as a loan to purchase a house that she is not on the mortgage loan application

I hope this has been of some benefit to you, good luck.

“FIGHT ON”

Larry answers:

I work at a mortgage broker shop, and I believe that we can offer better rates to certain consumers then banks can. Sometimes they can offer better then we can. Also, watch the total closing costs as well. I know we get wholesale rates from lenders and offer these to the consumers and just add a small fee to it, but if you were to go to these lenders yourself they would offer you RETAIL rates. This is how my shop works we try to do as much volume as possible and work mostly off of referrals so we try to beat any deal out there, but different places go by different rules. The prime changes from day to day as well so keep that in mind when shopping.

Do not let a lot of people pull your credit cause it could hurt you if you have excessive pulls, maybe only like 5 people in a months time or so.

Good Luck!!!!

Larry answers:

Contact the housing department. It is not legal for them to just up and raise your interest rate unless you asked them to.

Additionally I would send them a copy of your husbands unemployment claim.

Another idea is to check your homeowners insurance, you should have coverage as your home was damaged in a natural disaster.

Larry answers:

It depends on how far along you are in the foreclosure process. First off you need income. Second, communication with your lender is extremely important in the early stages. If you are in the latter stages, you can get a loan reinstatemnet. And lastly you can file chapter 13 bankruptcy even just to delay the foreclosure sale if time is needed to either get the loan reinstated or to find a new place to live. If you do have to move, make sure to negotiate a good cash for keys deal with the lender. They will give you thousands of dollars to move out and leave the property in decent condition within a 30-60 day period.

Larry answers:

Another loan would stop the foreclosure, if you can get it.

I am not sure where the predatory comes in though.

Larry answers:

1. No, do not continue to make payments unless you intend to keep the house. If you’re trying to sell, then stop making payments and put that money away for a rainy day.

2. Whether the bank will accept a short sale is up to it (or them if you have 2 different lenders). I cannot answer that nor can anyone else here. You need to call and talk to them and see what they say.

Good luck!!

Larry answers:

NO

Larry answers:

The option to walk away period or if he fails to close the contract in the stated time in the contract? Huge difference.

How much has the value gone down, a few hundred dollars could lose you the property if you start trying to renegoatiate. IF you do cancel that original contract then make up a new one the process starts all over again.

Don’t know how much you really want this property but those are considerations.

How do you KNOW the property has gone down in value during the process? Depending on your source or someones guesstimate you could lose the house if that information is not very accurate.

Good luck