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I’d like to offer a free service to the community, if it’s of benefit to any of you. I’m willing to review any loan modification offer you receive from your lender. They can be quite confusing. I’ve reviewed quite a few already, so I’m pretty comfortable decipheringthem.
If you bring your loan modification papers to me, I promise not to try to “sell” youanything. I’ll just give you my honest opinion about whether you should move forwardwith the proposed loan modification, or refuse it and keep negotiating. We’ll sit downand go over your budget and see how this new loan fits into it. I’ve seen many loanmodifications where the borrower is WORSE off after the modification, and that makesno sense. In other cases, the loan modification truly is the answer to your mortgagesituation, and if so, I’ll tell you.
One of the first things we need to determine is whether this is a permanent modification,or just a temporary one. I’ve seen many loan modifications that are only for a year ortwo, and then they bounce right back up to what it is now. If you are experiencing atemporary drop in income, this may be acceptable to you. Another key component is whether the modification is truly dropping your effective interest rate, or are they only dropping the payment, and all the interest that’s not being paid is being tacked on to your balance. Lastly, we’ll discuss the pros and cons of modifications that drop yourinterest rate instead of dropping your principal balance. I’ve had many clients tell me unconditionally that they won’t accept a loan mod unless the lender drops their balance. I’ve done a lot of research on this topic, and my conclusion may surprise you.
(By the way, if you are currently working with another real estate agent, I won’t be able to review your proposed modification for you as it would be interfering with that relationship.)
If you have questions on this or any other real estate topic, call me at (925) 240-MOVE(6683). To search the MLS for free and view virtual tours of homes for sale, go to:www.SharpHomesOnline.com. Sharp Realty


In the past, your lender could turn you down for a loan mod, and didn’t have to give you a reason why. A recent new law will change that for some homeowners. If you applied for a Home Affordable Modification Program (HAMP) loan mod and are turned down, your lender must now send you a letter detailing why you were rejected. There are up to 33 “data points” that they can use to make their determination. Not all loans will covered by this requirement, so it’s not guaranteed that you’ll get a letter.

The data points look at your home’s value, your debt ratio, income, etc. They will provide the information for the items that lead to your denial. If you think the lender has made a mistake in any of these figures, you have 30 days to appeal and provide them what you believe is the correct information.

They will also look at something called the Net Present Value test (NPV). This can be a complicated calculation, but the basic summary is the lender wants to know if they’ll lose less money be allowing a loan mod, or should they go ahead and just foreclose? There are 51 recommended input values for the NPV test, so it is fairly extensive. They look at the cost of the modification vs. the cost of foreclosure and the chance that the homeowner will default on the loan mod if it is approved. The bottom line is that if the NPV comes out positive for the loan mod, the lender is supposed to offer a loan mod.

Since this is a fairly new development, I haven’t seen any of these letters in person yet. If you happen to get one, I’d love to see it. I’ll be happy to review it with you to see if they had your information correct and if you can appeal.


Real estate values have collapsed the last few years. Distressed properties rule the day. We’ve all heard stories about people buying homes for half of what they were just a few years ago. So it’s reasonable to think that if you are buying a home, you should be able to send in a low-ball offer and the seller should be falling all over themselves to accept your offer, right? Unfortunately, this is NOT the case. Due to foreclosure moratoria, legal challenges and many other reasons, inventory is still pretty low. That means there are still more buyers than sellers, especially in the lower price ranges. Prices have fallen so far that many homes will actually have a positive cash flow after they are rented, so there are a lot of investor buyers in the market right now.

If a property is well-priced considering all factors (size, condition, location, etc.) then you will probably wind up paying close to list price, if not even a bit MORE than list price. Before you think I’m just being a cheerleader for the market, consider the following. A recent study shows that bank-owned homes and even short sales are selling for closer to their listed price than other, non-distressed properties. The banks are doing a lot of research before putting a home on the market. They are getting multiple appraisals or Broker Price Opinions. Many banks have policies where during the first few weeks on the market they won’t take an offer much less than 100% of list price. Some banks are even taking the approach of listing their homes for LESS than what they think they are worth, and then holding off on responding to offers for a week or two. This way the buyers try to out-bid each other and drive the price back up to market value.

Please note that I am NOT saying you should always pay list price or above. It always comes back to VALUE. Run the comps and look at the competition. If it’s listed too low, go ahead and go over. If it’s too high, then offer what you think it is worth.


A few weeks ago I announced a free seminar on short sales and loan mods. I’ve had so many RSVPs that I’ve added another date – 5/11 at 7 pm. I still have some room on 5/7 at 2 and 4:30 pm. You must RSVP to reserve a seat. Best way is to email me at Brian@SharpHomesOnline.com, or call at (925) 998-9712. If you can’t make one of these dates/times, let me know and I’ll put you on list for next time. Or go ahead and contact me anyways and we can discuss your situation over the phone or in person. I’m happy to be a resource for people during these difficult times, and I don’t charge just to talk about your situation!

This will not be one of those seminars where I just “tease” you with partial bits of information and then the rest is a sales pitch for something else. There are just so many people who have questions in this area and there is a lot of bad information floating around that I wanted to share what I’ve learned. I will present for about 50 minutes, and then I’ll stay after for as long as it takes to answer questions.

I’ll go over when you should try a loan mod vs. a short sale, and we’ll discuss if it is ever OK to just walk away. I’ve recently gone through a successful loan modification on my own home. I’ll be happy to share with you what worked for me so you can try your own (I don’t do loan mods for other people), and what your odds of success are. I’ll also discuss how short sales and foreclosures work in the event that a loan mod doesn’t work out, including how it impacts your credit score and ability to buy another home. I’ll also discuss how we got into this real estate mess, and my prediction for the future of our market. I’ll also talk in general terms about the 1099/forgiven debt issue, and whether lenders can pursue you after a short sale, loan mod or foreclosure for the deficiency balance. I’ll also give you the details on a relatively new government program that will pay you $3,000 in relocation expenses when your short sale closes.

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