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You are here: Home » 2011 » February

WELLS AND WACHOVIA MODIFICATIONS

If you have a loan with Wells Fargo or Wachovia, this may be of interest to you. If you are having any kind of challenge with making your payment, or foresee having problems in the future, they are having a free “home preservation” event on March 21st. They will have modification people on site and if you qualify, they can modify your loan on the spot!
Here is what they have to say about the event on their website: “At this workshop you’ll find out about programs that may help you keep your home. You’ll personally meet with a representative who will confidentially discuss your financial concerns and options. Plus, see if you’re eligible for a loan modification under the government’s Home Affordable Modification Program. You’ll get answers to your questions: Learn about options that may help you overcome payment challenges. Understand how you may be able to keep your home and avoid foreclosure. Connect with helpful resources such as housing counselors and learn about online tools.”
This is not a “seminar.” You need to call ahead and reserve an appointment to meet with someone personally and confidentially to talk about your situation specifically. Call them at 800-405-8067. They will have appointments available from 10 am to 7 pm on 3/21. It will be held at the Crowne Plaza Concord Hotel-California Ballroom. 45 John Glenn Drive, Concord. For more info, visit Wells Fargo’s website at www.wfhmevents.com/leadingthewayhome

If you go, please do me a favor and report back to me how it went, and if you were able to get a successful loan modification.

SHORT SALE/LOAN MOD SEMINAR

I will be giving a free seminar on March 6th at 9:45 a.m. that all are invited to. I will be covering a broad range of topics including: Discussion of how loan mods, short sales and foreclosures work, who is a good candidate for each, impact on your credit score, can your lender pursue you after, will you owe tax on forgiven debt, how to rebuild your credit score after one of the above and a discussion of many of the various government loan mod and short sale programs available. Then I will wrap up with my prediction for where the market will go from here.

Obviously, I have a lot to cover, so I will talk fast. My talk will take about 45-50 minutes, but I always leave time at the end for questions and answers from the group. Plus I will hang out after to try to answer as many individual questions as I can. This is not a “sales-pitch” for any particular course of action. While doing a short sale is an option for some people, many times my advice is to try something else first, and only look at short sale as a last resort. I’m just finding there is a lot of confusion out there in the marketplace right now on these topics. So if I can help clear some of the basics for you, I’ll be satisfied.

We are limited on space, so you must RSVP through me to make sure you reserve a spot. When you RSVP, I’ll tell you where the seminar will be held. It will NOT be held at my office, so if you show up at my office on March 6th, you will be disappointed! You can call me at the number below, or email me at Brian@SharpHomesOnline.com to RSVP. I will be doing another of these seminars again in a few months, so if you can’t make this one, email me anyways if you would like me to notify you when the next one gets scheduled.

FORECLOSURES TO PEAK THIS YEAR?

Once again, I’ve heard on “good authority” that the banks are about to release a whole bunch of foreclosed properties on the market. The problem is, I’ve had this same report from the same source the last two years, and the huge tsunami of REO properties never materialized. So I’m starting to doubt my source… I don’t doubt that they believe they are telling me the truth. It’s just that there are too many factors at work here, all the way up to the very highest levels of government. But it’s not just my source, I’m reading this in all kinds of real estate reports, that the pressure is building, and they are really going to do it this year, so get ready!

This is quite a bit like the story of the boy who cried “Wolf!” and the townspeople tuned him out. But there is something critically important about that story that people tend to forget–at the end of the story, the wolf DOES show up!

Delinquencies remain stubbornly high. Loan mod programs are still only marginally successful, and the fall-out rate is still quite high. Unemployment is still high, and house prices haven’t “bounced back” to their prior levels. There is no easy answer to our real estate mess. Either the banks are going to continue to delay foreclosures when they can, hoping things “get better.” Meanwhile they are papering over their losses with the government knowingly looking the other way. Or they will go ahead and start foreclosing in masse, which will tank the market further. Neither option is a great one. My guess is they will foreclose on a certain percentage of their most seriously delinquent loans, and then keep “kicking the can” down the road on the rest. Welcome to the “muddle-through” real estate market for the next few years.

SHORT SALE NEGOTIATION FEES

Short sales take a LOT of work just to get them to the point where the lender(s) approve the terms of the deal. Many listing agents hire a third party negotiating company, either just to save the agent’s time, or they may feel the third party company will have a better success rate, or both. The listing agent has a choice, to either pay the fee themselves out of their commission, or have someone else pay it. If the listing agent pays it themselves, it’s usually fine. It’s when they ask someone else to pay that it can get troublesome.

If they ask the seller to pay, the seller’s lender may have an issue with that, thinking that if the seller has any “extra” money, that should go to the lender. If they ask the lender to pay it, the lender will often turn it down, as they consider the commission to be sufficient compensation. If they ask the buyer’s agent to pay it, the buyer’s agent will probably retort, “That’s your job, you pay it if you want.”

That leaves the buyer. We are seeing some listings where the buyer is being required to pay the fee directly to the negotiating company. But when this fee shows up on the closing documents, the seller’s lender may not allow it. Their feeling is that the buyer would have discounted this fee off the price of the house. Having the buyer pay it outside the closing statement to hide it from the lender could be illegal. Some agents are asking the buyer to ask for a credit for “closing costs” as part of their offer, and then this credit goes to the negotiating company, or directly to the listing agent to reimburse them for paying the fee. The California Department of Real Estate is concerned about this approach and has issued a directive advising against it. There are issues with agency, violation of fiduciary duty, non-disclosed dual agency, not to mention that disguising a negotiating fee as something else in order to “slide it past the lender at closing” is loan fraud.

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