Deadly Mistake #1: Thinking you can’t afford it:
Today, buying the home of your dreams is easier than ever before. Many people who thought that buying the home they wanted was simply out of their reach are now enjoying a new lifestyle in their very own new home.

Buying a home is the smartest financial decision you will ever make. In fact, most American and Canadian home owners would be financially broke at retirement if it weren’t for one saving grace – the equity in their home. Furthermore, mortgage rates are more flexible today than ever and tax allowances favor home ownership.

Real estate values have always risen steadily. Of course there are peaks and valleys, but the long term the trend is a consistent increase. This means that every month when you make a mortgage payment the amount that you owe on the home goes down and the value typically increases. This owe less-worth more situation is called equity build-up and is the reason you can’t afford not to buy.

Even if you have little money for a down payment or credit problems, chances are that you can still buy that new home. It just comes down to knowing the right strategies, and working with the right people.

Deadly Mistake #2: Not hiring a buyer’s agent to represent you:
Buying property is a complex and stressful task. In fact, it is often the biggest single investment you will make in your lifetime. At the same time, real estate transactions have become increasingly complicated. New technology, laws, procedures and competition from other buyers require buyer agents to perform at an ever-increasing level of professionalism. For many home buyers, the process turns into a terrible, stressful ordeal. In addition, making the wrong decisions can end up costing you thousands of dollars. It does not have to be this way!

Work with a buyer’s agent who has a keen understanding of the real estate business and who is on your side. Buyer’s agents have a fiduciary duty to you. That means they are loyal to only you and are obligated to look out for your best interests. Buyer’s agents can help you find the best home, the best lender and the best inspector. Best of all, in most cases, the buyer’s agent is paid out of the seller’s commission, even though he/she works for you.

Trying to buy a home without an agent at all is, well… unthinkable.

Deadly Mistake #3: Getting a cheap inspection:
Buying a home is probably the most expensive purchase you will ever make. This is no time to shop for a cheap inspection. The cost of a home inspection is very small relative to the home being inspected. The additional cost of hiring a certified inspector is almost insignificant. As a home buyer, you have recently been crunching the numbers, negotiating offers, adding up closing costs, shopping for mortgages and trying to get the best deals. Do not stop now. Do not let your real estate agent, a patty-cake inspector or anyone else talk you into skimping here.

NACHI front-ends its membership requirements. NACHI turns down more than 1/2 the inspectors who want to join because they can’t fulfill the membership requirements.

NACHI certified inspectors perform the best inspections by far. NACHI certified inspectors earn their fees many times over. They do more, they deserve more, and yes they generally charge a little more. Do yourself a favor…and pay a little more for the quality inspection you deserve.

The bank won’t foreclose on me while I am in the middle of a loan modification. There have been many news stories of people that have lost their homes to foreclosure while they were in the middle of a loan modification

The bank is trying to help me keep my home. The bank is only doing what it needs to do to be profitable for itself

If I let the home foreclose I am better off then a short sale. With the right agent working on your behalf a short sale will always be better and if you don’t like the terms you can let it foreclose anyway.

If I do a short sale, I will have to pay taxes. If the bank forgives the debt then you will get a 1099C. This could be taxable income if it is not treated properly. What people don’t realize is that they have the potential to get this either way through a short sale or a foreclosure. If it’s a short sale it is usually less then if it’s a foreclosure anyway. There are multiple tax laws that get you out of paying taxes on it so consult an accountant first.

I am filing bankruptcy anyway, I can’t do a short sale. You can do a short sale either before a bankruptcy or after a bankruptcy. In a bankruptcy the home is included but the bank still has to foreclose on it to regain ownership of it. Therefore it will still be counted as a foreclosure against you.

I can’t short sale my home because I am current on my mortgage. You do not need to be late to short sale your home. You just have to be able to prove a hardship.

I got denied for my loan modification so I won’t qualify for a short sale Actually most people who don’t qualify for a loan mod will actually qualify for a short sale.

There are actually a lot of people that are trying to get loam modifications right now but they don’t have any income or consistent income. What they don’t realize is that the bank is actually doing a loan application on you to find out what your ability to pay is. If you don’t have the ability to pay or have consistent provable income then you will be declined for the loan modification. If people were to talk to myself or another professional first they would be able to know this immediately. Since they don’t ask up front they will in the middle of the loan modification process and could be in it for months with the hope of getting the mod when they never had a chance to begin with. Its too bad that the bank reps can’t tell you that from out of the gate.

In a nutshell it is my opinion that for 95% of Americans, a loan modification is not what is in their best interest. That is what is in the banks best interest to prevent themselves from being taken over by the FDIC. The slower that they can move through all of the shadow inventory the better their balance sheets are going to be. They are losing money on the loans that were all generated in the prosperous times, but make no mistake the big banks are still making billions of dollars.

So why wouldn’t I just walk away? Wouldn’t it be much easier to walk away? I hear these statements all of the time. The answer to that questions is yes, for now its easier. Its not for a few years will it matter whether you had a short sale or a foreclosure.

Let me explain:

I have had clients who’ve had attorney’s advise them to file chapter 7 bankruptcy and just include the home in it as it would be easier. For now it is easier! Later on when you go and fill out a credit application or a job application they will always ask you 2 questions. Have you ever filed for bankruptcy or have you ever had a foreclosure? These 2 questions could hamper your ability to get a job, high security clearance, a car, a house or the right interest rate on whatever you are purchasing.

Also when you do a short sale, you get to leave your home on your own terms and not the banks. You get to save face with your neighbors, as they don’t necessarily know that you are shorting and can see that you just decided to sell. You more then likely will get more time to live in your home without making a payment while the short sale takes place allowing you time to save up cash to pay off other debts and put yourself in a better situation. The bank also saves money as statistically they get back .65 cents on the dollar with a foreclosure whereas with a short sale they get back .85 cents on the dollar. It makes financial sense for the bank to short sale vs. foreclosure or even a deed in lieu of foreclosure. In fact like I stated earlier, it makes more financial sense for the banks to short or foreclose, get their money back and loan it out at retail rates, then it does to modify the note. Like I said before, the banks know that the majority of the loans that they modify will re-default again. In fact over 10.1 million homes are in danger of going into default over the next 5 years. There are only 50.1 million homes in the US, and the funny thing is that thousands of homes will be go through the circle of purchase and foreclosure multiple times during the downturn.

One more reason to negotiate a short sale vs. letting it foreclose would be to limit your losses. In other words when you negotiate while you still own the home it gives you bargaining power. When the short sale is completed and the bank issues the approval letter, it will state exactly how they are going to treat you. If you don’t like the terms or in other words the bank doesn’t state that they are going to forgive the debt then you can opt not to close. There can always be more negotiations at that point to get another approval letter with the anti-deficiency language in it. You can negotiate away the deficiency on both first and second mortgages before you actually close. On the other hand if you let the property foreclose, the banks usually have a certain amount of time where they can decide to come after you for the difference. In Utah for example, the 1st mortgage has 90 days to decided to pursue the difference, the 2nd mortgage or any other liens secured by a deed of trust have 6 years to pursue the deficiency. Many people are blindsided by the banks after they have a chance to start the recovery process and get back on their feet, they will be contacted by a collection agency. For some unlucky people, this will cause them to file bankruptcy or they will have to settle a debt that they thought went away. If only they had the right information before they let their home foreclose, then they could have had everything done and over with without the threat of anything coming after them later.  The true statistic is that there were 1 million homes that foreclosed last year alone. Only 300,000 of them ever contacted a realtor to list their home and attempt a short sale or even sell it out right because they had equity.

Your home may be in good condition and well built, yet simple clutter will create a perception of chaos, confusion, and disorder.  The purchase decision is an emotional and intellectual response, based on a level of trust in your home.  When buyers see clutter, they assume that the home has been neglected, with more to fix than meets the eye.  This perception undermines your home’s market value.

De-cluttering is an essential part of your preparation, and is virtually cost free. This activity is goes hand in hand with moving.  Before you put your home on the market, have a garage sale, throw some things out, and box stuff up.  Your move will be easier, and you will create an open, spacious, simplified look that buyers love.  If you need support, a local home staging service can work with your furniture and create a whole new look.  When it comes to selling your home, less is truly more.

1) Front Yard

De-cluttering starts with your front yard.  Make sure the yard is mowed and edged, and remove toys, junk piles, empty flower pots, etc.

An evenly cut yard is pleasing to the eye.  Fertilize the grass a month or two ahead.

Overgrown, woody shrubs give an old, tired look.  Trim or remove them.

Do not allow shrubs to cover windows. They block light on the interior, and give an appearance of crowding on the exterior.

Coil hoses and place any tools inside the garage.

Find a place to store extra cars or boats – other than the front of your house.

De-clutter flower beds.  Mulch is inexpensive (about $2.00 per bag), and does wonders to simplify garden beds, especially in winter when plants are thin. Add flowers on the porch or in beds if weather permits.

Too many flowerpots are distracting – use a few large pots with healthy plants.

Never have empty pots or dead plants sitting around.

Dried wreaths may be used on doors in winter, for a simple focal point.

2) Entry

The buyers’ first impression is critical, and shapes their attitude throughout the showing.

Invest in a brand new welcome mat.

Stains, scratches and dirty spots create distractions to the eye, and are a form of clutter.  Clean, paint, and eliminate as many of these as possible.

Pay close attention to your front door.  Is it dirty, darkened by mildew, or in need of re-finishing?

Fresh paint or stain will make a huge difference.

Consider having your whole house power washed to remove stains, spider webs and other clutter.

The foyer should be clear of shoes, coats, or excess items on the walls.

Create a single focal point in the entry with an attractive table or painting.

3) Living Areas

Rooms should be sparsely furnished to appear larger and lighter.

The garage or an off-site storage room can be used to hold extra pieces of furniture.

Move large pieces of equipment – drums, telescopes, exercise equipment, etc. – to the garage or off-site.

Do not allow furniture to block windows, doorways, or traffic patterns through rooms.

Do not allow wires to cross traffic patterns.

Choose one or two elements as the main points of interest in a room -  wood floors, a  view, a table or piece of furniture, a nicely made bed, etc.

Too many personal collections and photographs are distracting for buyers.

Buyers must be able to imagine their own family in the home.

A few decorative items or photographs on tables are fine, but reduce these to just a few nice pieces.

Remove hunting trophies. They can be overwhelming in a small room, and may bother some buyers.

Large plants often take up too much space. Allow only a few healthy plants in the house.

Bookshelves add a warm touch to a room, but be sure that they are not overloaded.

Place books so that the backs are even. Lay some books horizontally, and leave open space for art
objects.

Open window blinds and leave on a few lamps for pleasant lighting.

4) Kitchen

The kitchen is the heart of the home and plays an important part in attracting the heart of a buyer. This is an active area that usually needs special attention.

Clean, evenly finished cabinetry is a must.  Add new paint or stain, if necessary.

Benjamin Moore Paints has a product called “Howard’s Restore-a-finish” that works wonders on scratched or worn cabinets.

New cabinet pulls are an inexpensive item that can help tie the room together in terms of colors and finishes.

Remove purely functional items – such as baking pans, small appliances, vitamins, phone books, plastic bags, etc.

Do not have notes or photos on the refrigerator.

Clear the counters completely, then add back a few decorator items.

Choose decorative pieces that contribute to a warm, elegant, organized look.

Some suggestions: Flowers, fruit, cookbooks, wine, bowls, antiques, new dish towels, small designer appliances, etc.

Often the area under the sink needs organizing and cleaning.

Never leave trash containers out in the kitchen.

5) Bathrooms

It is important to de-clutter bathrooms to give them a touch of elegance or romance.

Keep in mind that you will give up some privacy during the marketing period.

Start by removing everything from the counters.

Remove any toilet brushes or cleaners that are visible.

Put items that you use daily -  toothbrushes, soaps, razors – in a container, and place the container inside in a cabinet.

Decorate with fresh soaps, flowers, bowls, photos, or designer bath items.

Invest in new towels and fold them carefully.

Never leave medicines, money, x rated magazines, jewelry, guns, or personal possessions of this type on display.

6) Bedrooms

Bedrooms should appear restful and serene.  Sparsely furnished is best.

Use your best covers, or invest in new ones if yours are worn.

Clear off bedside tables, and add back just a few books or nice items.

Bedside lamps add a warm ambience for showings.

Remove excess paintings or photos from the walls.

In some cases, old curtains do more harm than good. Take them down and clean the windows for a fresh look.

Children’s bedrooms usually need to be simplified.  Take down posters and box up toys.  Avoid an overcrowded look.

7) Closets

Organize your pantry with everything facing forward. Remove excess food and containers.

Relieve your closets if they are stuffed.  Pack items that are not needed.

The laundry room often functions as a spill over room with junk on the shelves. Clear everything out, and have just a few soap boxes visible.

Often sellers have organized their homes to express themselves – their travels, collections, interests, favorite colors and unique tastes.  However, when selling a home, the goal is just the opposite.  It is to create a clean, simple background that many different buyers would like to move into.  Excess items and clutter confuses and distracts buyers during showings. They should not be required to look past your possessions.  They are there to see if your house fits them, and their emotional level response is a strong factor in their decision.  Warm, clean, simple, spacious, well lighted, neutral – and uncluttered – these are the keys to getting the best price for your home.

When you are moving, you are already spending a lot of extra money.  It helps to know some tricks for saving some money.  Then your moving expenditures will not be so great.

One of the easiest ways to save money on relocating is to move less stuff.

Be sure to go through your things beforehand and throw out, give away, or sell whatever you will not need. A lot of people get into a time crunch when they are relocating, and they don’t have time to do this. They end up moving a lot of stuff that they then throw out when they reach their destination.

Talk about a waste of money. Take the time to get rid of these things before you move.

Remember that if you give some of your stuff away, you should request a receipt so that you can deduct the amount donated from your taxes.  This will save you money again.

Another way to save money is to do a lot of the work yourself. Even if you hire movers, you can do the packing yourself. This will save a lot of money. The time-intensive work costs the most, so do your own packing and save a bundle.  Remember to get started early if you are going to be doing your own packing. You cannot pack up an entire household at the last minute.

Of course, you can save even more by renting a moving truck and loading and driving it yourself. But here you have to think about how much help you have. If it takes you two days to load the truck, you might be cheaper off to hire professionals to do your relocation. They will do it a lot quicker and you will lose less friends too.

When you are relocating, there are a lot of ways to save money besides the obvious. For example, make sure you leave your old apartment in pristine condition, so that you will get your security deposit back. This is like found money that can be used for other things when you are moving.

You can also save money by canceling your cable service a month early. You won’t have much time to watch it anyway. You will be too busy packing and going through your things in preparation for the move. In the place you are relocating to, wait a month before hooking up the cable. In this way, you save the money of two months of cable service.

On the day of the relocation, pack yourself some meals in a cooler and you can save a lot of money on restaurant meals.

Sometimes the stress of relocating makes you spend money just to save time and energy. But if you plan ahead, you will not have these unexpected expenses. Instead of renting an expensive hotel room, try to stay with friends, or at least pack the kids of to Grandma’s until the move is over.

Be creative, and you will come up with a lot more ways to save money on relocating.

Lets talk about another term that is a hot topic right now. “Strategic default”. Basically what this means is that from a financial perspective it just doesn’t make any sense to pay on the home anymore and it is worth walking away from. Now this can be dangerous depending on your deficiency laws so make sure that you consult with an attorney or a Short Sale realtor that knows what is happening in the market.

There is a Law Professor at the University of Arizona that has written many articles on strategic default, has been in the press and even written a few books on the subject, so if you want to dive deeper into the topic read his book.
Now I don’t completely agree 100% with what he has to say, but we both believe in bettering the financial situation of the homeowner. He talks about just walking away from the home without saying a word. Depending on what state you are in will determine how much of a risk you are taking on walking away and potentially getting sued for the difference. There are 2 lines of thought for this process and I’ll explain what they are:

The first is the Short Sale approach. If you are upside down on your home and you decide that it is worth walking away from then obviously you will stop making your payments. You can attempt to do a short sale on the home and blame it on some hardship that either caused your income to go down or your expenses to go up. You will submit all of your financials to the bank and even if they see that you have the ability to pay, they may just approve the short sale anyway to lessen their own losses. The may ask you to participate in the loss by bringing some cash to the table or by signing a prom note but all of this is negotiable and can be negotiated away or very low in comparison to the loss on the home. By going this route you will be able to negotiate your debt forgiveness up front before you decide to make a move. If you don’t get the deficiency waived then you always have that escape route and just let it foreclose anyway. Depending on your state laws, if you don’t get the deficiency waiver then you may be better off to let it foreclose anyway. At least you gave it a shot and possible extended the time that you could live in the home without making a payment.

The second approach is to just walk away. The mindset that many have is that they don’t want to show the banks what they have as far as cash and assets are concerned before they let the home foreclose. Then that might give the bank the idea that there is money to go after and so the bank would pursue the difference, where if they didn’t know about the assets then they may not have pursued. This definitely has some rational behind it, but my argument against this is twofold. #1 You will be taking the risk that the bank will come after you for the difference and you no longer will have the home as leverage to cut yourself a better deal. #2 The bank probably already knows what you own, because when you got the loan your loan officer filled out a 1003 form which lists all your assets. Many people overestimate this a bit so that they feel like they have a better shot at getting the mortgage in the first place. Most homeowners forget that the already submitted this information to the bank.

So my argument between the 2 choices is that you have a better shot going through the short sale and negotiating away the deficiency rather then letting it foreclose when it comes to doing a strategic default.

Most people that are considering a strategic default are battling in their heads between the financial dilemma and the moral dilemma. In our society it is engrained into us from infancy that to be an upstanding individual that you need to pay all of your debts and maintain true to your obligations. This is being combated by the financial dilemma that you are throwing away a lot of money that will not come back to you. This will limit your ability to provide for your family and delay when or if you will be able to retire. Most people also hold their credit in high regard and are worried that they will not be able to function without good credit. I will go into this more later.

The variables and questions that come into play when you are severely upside down and considering a default are: what’s the home worth? What’s your payment? What can it rent for? Is your market still going down? How long will it take to recover the lost equity if the trends that are predicted in your area are accurate? What’s the price to rent ratio?

Nationally over the past 15 years the price to rent ratio has been about a 16:1 ratio, depending on the part of the country that you live in.  This means that if you had a $1000 per month rental income, $12000 per year multiplied by 16 and you would get your estimated value on your home, which in this case would be $192,000. So if you owe $300,000 and it’s only worth under this scenario $192,000, then you have an issue. Your payment on $300000 would roughly be about $2000 per month. This means that you could walk away or short sale and go rent a similar home down the street for roughly half what you were paying on your mortgage. Even after the interest tax deduction you are ahead of the game on a monthly basis of about $700 and you got to shed over $100,000 of negative equity off of your shoulders. When brought into these terms it makes financial sense all day long to default, complete a short sale and move on.

The key to loan modifications is to follow up constantly and to try not to get too frustrated through the process. Remember that your odds of getting one are less then 10% but if you persevere you can succeed. I recommend that you let a professional help you with the loan modification if that’s the route that you want. There were a lot of loan modification companies that were out there until congress passed a law called MARS. This put most loan modification companies out of business as it made it so that they couldn’t charge people up front for their services. Now you have 3 options. You can hire an attorney that is experienced in the loan mod process. This usually costs somewhere between $2000 and $6000 and is charged up front as a retainer. The second option is to do it yourself,  (I don’t recommend it). The third option is my favorite. There are HUD sponsored non-profit organizations that counsel people on their homes and help them with loan modifications. You can go to the department of Housing and Urban developments website to search for a location in your area. This is very low cost or free service to you to use. They only get their funds if they have people to help. It’s in their best interest to consult with you.

In order to do a loan modification you need to be able to show a hardship and you also need to show an ability to pay. Like I said before the banks don’t want to give you a loan modification. It costs them with man hours, attorneys, paperwork etc, several thousand dollars to evaluate and give out a loan modification whether you end up doing it or not. They will look and are required to look at everyone. In order to start a loan modification you will need to gather the basic information together:

2 years tax returns
2 months bank statements
2 months pay stubs
If self employed a year to date Profit and Loss statement
A hardship letter (what happened that changed)
Financial form (a statement of your income and expenses)

Each bank has different forms that they want you to fill out that ask the information that they want to know. Now remember if you ever decide to let it foreclose or try to do a short sale you will be disclosing what assets you have etc, which could give them ammo to decide to come after you for a deficiency. Make sure that a loan mod is what you really want before you give them all of your personal information. Now you may have already disclosed your assets when you purchased the home so if that’s the case then its not going to hurt you to tell them again as they already have documentation of it.

Foreclosure is something that many people think can never happen to them.  The reality is it can happen to anyone.  It happens to good, responsible people every day.  There are many reasons that may leave us believing that foreclosure is the only option.

• Rising interest rates
• Unemployment
• Health problems
• Divorce
• Personal tragedy such as the loss of a family member

With the foreclosure process varies from state to state, here in Utah it is up to the lender and their attorney to determine how close they want to conform to the guidelines.  To help educate you on the process of foreclosure, here are the four basic steps:

STEP ONE:  Late Payments Reported.  Most lenders will report a 30 day to the credit reporting agencies at this time and your credit will be affected.  If you don’t pay the late payment the lender will continue to report the late payment every 30 days.  In addition, the lender will usually only accept the full payment all at once.  This means that you will have to come up with two or three month’s worth of payments all at once rather than paying a portion of payments now and a portion in the future.

STEP TWO:  Notice of Default.  Once you go 90-120 days behind, the lender may hire an attorney or title company to begin the format process of foreclosing on your house.  Once the Notice of Default has been recorded, a 90 day time clock begins.  This period is referred to as the Reinstatement Period.  During this time you have the right to bring your loan status current.  A sign that the Notice of Default has been filed will usually be the sudden attention that you receive from Debt Counselors.  Your foreclosure status is now public record.

STEP THREE:  Notice of Trustee Sale.  After the 90 day Reinstatement Period the next step is the Notice of Trustee Sale.  The attorney is required to advertise that your property will be sold at a foreclosure auction.  The lender may or may not accept late payments, interest, and fees to reinstate the loan, but they require everything outstanding to be paid in order to stop the foreclosure process.

STEP FOUR:  Trustee of Sale or Auction.  This is the final step of the foreclosure process.  The auction takes place.  This usually happens at the County Courthouse.  At this point the property is no longer yours and you will be given a short time to vacate the property.  In addition to losing your home, the foreclosure will be reported on your credit and will generally stay on there for 7 years.  During which time, it will be very difficult to rent a home, buy a car or take out a loan.  There are many options to avoid going into foreclosure.  Contrary to belief, lenders don’t like to foreclose.  Most lenders save foreclosure as their last resort to collect debt.  There are a number of things you can do to avoid foreclosure, but you have to act on them sooner rather than later.  Waiting NEVER helps!

There are ways to stop foreclosure before it is too late:

• Refinance from a private lender or Reinstate
• Repayment Plan
• Forbearance or Stipulation Agreement
• Rewrite or Modify Loans
• Short Sale
• Deed in Lieu of Foreclosure

Mortgage modifications are become more and more common, with the rising foreclosure rates in the United State, until recently mortgage, companies have been reluctant to provide help to people facing foreclosures by utilizing a mortgage modification program. Lenders are starting to use them more often not with the huge influx in homeowners that are in jeopardy of losing their home to a foreclosure. The lenders have come to realize that by working with the homeowners they have a chance at taking additional loses that are putting many mortgage companies into bankruptcy.

A mortgage modification or often times called a loan modification allow borrowers the opportunity to re-negotiate the terms of their mortgage loans, thereby reducing the required monthly payment. This option gives people facing a financial hardship the chance to save their home from a foreclosure. Establishing a new payment plan trough a successful mortgage modification will help you avoid foreclosure.

Lenders and borrowers have many reasons to work through this hard situation together, and establish a suitable plan that works for all parties involved. Selling you home may not be an option, especially with today’s market conditions and the circumstances that have causes this unfortunate situation to begin with. Therefore, if your home is to be saved from foreclosure, you and your lender will have to work together.

Mortgage modifications are often times a reasonable solution to prevent foreclosure. By negotiating a new payment, structure lenders still get their money and the borrower is able to keep their home. However, negotiating a mortgage modification is not that simple. Successful loan modification will require documentation to prove your current financial position with the lender. This information is also use to verify your ability to pay the new loan if the bank is willing to work with the homeowner.

While not all banks offer this type of solution, it never hurts to talk to them and find out. Who knows, it may be just what you need to prevent losing your home to a foreclosure. Lenders are staring to work more with borrowers facing foreclosure in this difficult time, lenders do not want your home, they are in the business of lending money not property management, and with the close to 2 million homes in foreclosure lenders are running out of options too. Qualifications for this type of solution, may be difficult and time consuming, but keep in mind what your goal is. Protect your most valuable asset, save your home from foreclosure with a mortgage loan modification.

When assessing the value of a property, many investors and other commercial property buyers look at comparable sales to determine the true current market value of a property. The comparable sales can show you exactly what properties are selling for, not just the asking price. If you know three or four properties of similar characteristics sold for about the same amount, then you can determine what the value of your property is. Donít ever just look at the asking price, as it can be as far off as the owner wishes. He or she may be dreaming in regards to what the property is really worth!

Comparable sales, or comps, are the properties that have sold around the subject property that are zoned identically, and are about the same amount of acreage. It also helps if the comparable sales are from properties that have similar uses.

Comparable sales may not always be the most accurate for your specific property. They could be from many years ago, may not be of similar use, many not have the same characteristics such as the availability of utilities, or may not have a comparable amount of road frontage, or could be a considerable distance from the subject property.

In order to get around this problem, you must use the closest properties that you can. You simply adjust the price according to the changes in the market or property characteristics.

For example, if a comparable sale was from 2010, and the current year is 2012, then you can adjust the price according to the appreciation the overall commercial market has experienced in a specific area.

Or, if the subject property has a total road frontage of 200 feet, and the comparable sale property has frontage of 1000 feet, you can adjust the price or value appropriately.

As you can see, finding the true current market value of a property can take some investigation and adjustment in relation to the properties that have sold in the past. The more recent and similar the comparable sale is, the easier and more accurately you can assess the true value of the property.

It is a good idea to collect as many comparable sales as possible and take inventory of each. What are the characteristics? What are the uses? Assess each one individually and then group them together to determine an overall consensus. You should be able to determine the current market value at this point. The more properties you have to pool from, the more accurate a number you will have.

Very often brokers or agents supply you with comps from the area of interest as part of the service of selling the subject property. If you are not familiar with the area, you must be leery of the comps that they send you.

I have received comps of properties in the most affluent areas for a subject property that was positioned in a lower to medium class area which completely misrepresented the true market value of the property. Unless I had investigated further and asked many questions, I could have easily taken this property as a true comparable sale, and would have expected a far greater return than what I really would have experienced.

Unfortunately, as much as you want to trust the information that you are given by a source, you must always perform your very own investigation because brokers and agents are there to sell their properties. Many of them are honest and will do the best they can to give you the most accurate information. However, there are those who will dupe a buyer in order to sell the property and receive their commission. It is important to be aware of these tactics. Although we donít like to admit that they happen, they most certainly do.

Comparable sales are really the only way you can determine the true value of a property. It may take a comparable from another city, or even county of identical characteristics to determine the most accurate value. If necessary, ask a trustworthy broker or agent for assistance, as they will know their market inside and out, and be able to point you in the right direction as to what the property is really worth. Get two or three opinions in order to validate any information you might receive.

Be proactive… don’t despair!

The first question you may have is whether or not you can keep your home.  Well, yes… it may certainly be possible.  However, you must act fast and have a little bit of luck on your side. There are so many variables when it comes to foreclosure that it is impossible to say for sure until we see your situation whether it is indeed possible, or not.  But even if it’s too late to keep it, it’s probably not too late to work with the bank to reconstruct the situation.

Call our trustworthy professionals to get the advice you need in a timely fashion.

So, what other options do you have?

Loan Modification

When it comes to the murky truth about loan modifications, you must know the ins and outs of programs for it to work the way you expect it to. The truth is, only a meager 3% percent actually have success in getting a loan modification on their own.  You need professionals like us that have the experience to go through your case with a fine tooth comb and figure out the best course of action. We work hands on with a company that can prequalify you for a loan modification, if that’s what you choose to do. It’s better than working directly with the lender because they can run through the programs available and explain everything, so you don’t end up making an already bad situation even worse.  The best bet is to give us a call, so that one of our loan modification specialists can take a look at your case. Remember, time is of the essence.  The sooner you make that call, the faster we can get you some help.

Bankruptcy

Just the word bankruptcy has a very negative feel to it.  However, it can be a very good tool for your credit to recover; given the right circumstances. Bankruptcy can also help you stay in your home and can also help to improve your equity position. In order for you to fully understand all of the good and bad things about bankruptcy, you must contact us and talk to one of our partnering real estate attorneys. There is no time like right now, and you have no obligations to make any decisions today.

Find an Investor

No one wants to give up their home, and we are here to tell you all of the options available. We work closely with investors that can do a number of things to help you stay where you want to be most. Depending on the circumstances, an investor can either buy the home on a short sale or lease it back to you, or they could potentially purchase the home and rent it out to you.  Some may consider even reselling the home back to you for a predetermined price. If any of these options intrigue you, then give us a call today for more details and to see if your Utah home qualifies for this option.

Investor Liens

Sometimes people experience a temporary setback in their finances and need a little cash to get back on their feet. This is an option for those who just need a boost to get through the hard times. We know that at any moment, something could happen to you or your family that could set you back financially, such as medical problems or changing careers. We work with investors that would be willing to give you the extra cash you need to catch up on your mortgage payments, as long as you can show adequate repayment ability. The investor would then place a lien on your home until it is paid back in full. This is a quick and painless process that can happen very quickly. If you have any interest in getting some extra cash to save your home CLICK HERE to Contact Us.

Unfortunately, there are many businesses who are taking advantage of people who are already in a tough spot and who are not familiar with all of the options that are available. Here are some things to look out for.

Beware of any company or individual who…

• Claims they can stop a foreclosure, no matter what the circumstances may be. This is false from the get-go and should a huge red flag.
• Only accepts a wire transfer or cashier’s check.
• Doesn’t want you to contact your own lawyer, lender or any other real estate counselor.
• Tries to get you sign papers that you are unclear about.
• Encourages you to lease your home so you can buy it back over time.
• Tells you to make your mortgage payments directly to them; rather than your lender.
• Attempts to sway you into transferring your property deed or title to them.
• Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
• Pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

There are some things you need to be aware of when shopping for a company that can help you save your home from foreclosure. Avoid being a victim of fraud.  On top of nearly losing your home, that’s the LAST thing you need.

Report Fraud

If you think you’ve been a victim of foreclosure fraud, contact:

• Federal Trade Commission
• Your state Attorney General
• Your local Better Business Bureau

Call Save My Davis Home today for real quality service!

In order to get a loan modification, all you need to do is go to www.knowyouroptions.com and download the HAMP packet. This is a Fannie Mae sponsored website for homeowners. Or you can go directly to the bank that holds your mortgage and usually download the forms directly from their website. You will then compile the required financial information, along with a hardship letter. After that there will be two options. You can gather up all of these documents and get it to a bank representative, and then follow up with them on a daily basis until the loan modification is either completed or declined. Going in directly to the bank yourself cuts out any worry of mismanagement and best of all… it’s FREE!

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Don’t be misled!

One thing we want the citizens of Utah to know is that they don’t have to become a victim of the system. Too often, people think that once they are late or faulty on their mortgage for a few months in a row, then a foreclosure will occur. This is when many people begin to lose hope. The truth is, the process is very long and there are a ton of options that can prevent this from happening.

That’s where we come in. SaveMyUtahHome.com has developed this website with the sole purpose of giving you all the ammo you need to “fight for your right” to stay in your home.

To learn more about the options available to you please click here http://stopforeclosuredavisweber.com/and sign up for The Truth About Short Sales, Loan Modifications and Foreclosure.

1. Be a Pre-Approved Buyer: A pre-approved buyer always has the advantage in an offer situation. Becoming pre-approved is very easy: you complete your loan application with a credit check prior to beginning your home search process. Pre-approval means that you have actually been approved for the purchase by a lender, which gives you the edge in home purchase negotiating.

2. Beat The Competition to The Best New Listings: The search process can be both fun and trying. You will notice that some homes sell very fast and others hang around for long periods of time. The best homes at the best prices sell fast. Keeping on top of this is essential. Connect with a professional Real Estate agent that knows the market and keeps you updated.

3. Do The Research: Make yourself a “home value expert.” Investigate the areas and price ranges for the kind of home you are looking for. Get a good idea of the price ranges these homes sell for and how long the market time is for them. Your agent is a great asset here.

4. Have Your Offer Presented in Person: Your agent represents you and your best interests. To adequately do this, make sure that your home offer is presented by them directly to the seller. The personal touch will give you the edge. Your agent also might pick up critical information during this meeting.

5. Prove That You Are a Serious Buyer: The best way to accomplish this is with strong earnest money. This might mean that you put 5% or more down to get the sellers attention.

6. Don’t Go Crazy: Even in a hot market, be cool and calculated with your decisions. A knowledgeable agent can really help you here. Your home purchase may be your single largest investment. It is important to make sure that you get the best deal possible. Overpaying now will make it harder to get your value back when you sell.

7. Keep Your Offer Simple and Clean: Make sure that your contract to purchase is simple, clean and not bogged down with unnecessary contingencies, especially repairs. Keep the time frames of repairs and responses to a minimum. The cleaner your offer, the more interested the seller will become. This may help you purchase the property at the best price.

8. Don’t Wing It Alone: What you need most in today’s complex marketplace is an experienced and professional real estate agent who represents your interests only. No matter how heated the competition or the negotiations, a professional agent will represent your best interests, keep you from paying too much and help you maximize your investment.

Determining how much home you can afford, or what payment you feel comfortable with, can be a trying process. Calling lenders, looking at mortgage loan programs and interest rates can be confusing, to say the least. There is an easy way to get started, and give yourself an idea of where you stand.

The first step is to find out what mortgage interest rates are at the current time. You can typically do this with a couple of phone calls to lenders or some quick looking on the internet. Get your rates on conventional fixed rate loans. Now use this handy table to see what your payment would be at different price ranges and interest rates. Payments might be higher or lower than those shown in the chart depending on current interest rates.

To obtain a very clear picture of how much home you can actually qualify for, the best idea is to contact a reputable local lender and let them analyze your entire situation. The lender can calculate your income-to-debt ratio, do a quick credit score and give you the information you need. Typically, lenders like to see a ratio not exceeding about 28%. This does not take into consideration long term monthly debt. As an example, to qualify for a loan, lenders may require ratios of 28% or 36%. This means you can spend up to 28% of your gross monthly income on a motgage payment, and no more than 36% of your gross monthly income on all forms of debt, mortgage included.

We work with a number of loan officers and would be happy to recommend one right for you.

How much home can you afford? Use our finance center to learn about your loan options below. There are several loan programs available, and depending on your credit history, there is bound to be one that is perfect for you. Here are a few examples of the most popular programs offered today:

When you are spending hundreds of thousands of dollars for a home, you need to make sure that what you are getting is well worth it.

No home is absolutely perfect. You can always expect to have to spend something on your new home. The average is $6,000 within the first six months, according to industry experts. In a time when you should be looking at paint samples and new furniture, why would you want to spend your time on repairing what you just bought?

A professional home inspection is key to truly understanding the home you are purchasing. You want to turn to a reliable inspector that is a member of an association that establishes strict requirements for membership, such as the American Society of Home Inspectors and the National Association of Home Inspectors.

The inspector should provide you with a list of what the inspection will result in. For example, some inspectors will not inspect for termites or termite damage, indoor air quality or the potential of mold to cause illness. The inspector should remind you that the inspection report is not a guarantee. The inspector is not liable for any repairs as a result of his or her performance.

But even though you hire an inspector, you are still responsible for doing a little investigating yourself. For example, even if your lender doesn’t require it, hire a termite inspector. But have the inspector look for all pests. Termites aren’t the only pests that cause damage. So do carpenter bees, rats, squirrels and scorpions.

You may have received a disclosure form with the signed contract for purchase. Many states require that the seller fill out this disclosure. But don’t let yourself rely only on this report. Many issues are forgotten about or not considered major by the owner. Yes, the basement got wet twice in the last ten years, but they could forget about it or not consider it a problem.

Disclosure issues usually arise because buyers expect the disclosure to hold more power than it really does. Make sure that your inspector has a copy of the disclosure and will look at any issues brought up by the seller.

When it comes to buying a home, you need to know everything you can about the home, neighborhood, market conditions and mortgage options. Your knowledge will give you an added negotiating tool when dealing with agents, lenders and sellers. Make sure that you have a full understanding of each step.

Unless you’ve been living under a rock, by now you are familiar with the term “short sale”, but what is it, exactly? The easy explanation is that it means to sell a home for less than what is owed on the mortgage. For example, if your home was purchased at $300,000 but you sell it for $175,000; the sale is “short” by $125,000 over what is owed.

With the drastic fall in home prices that has occurred within the past few years, it is estimated that 23% + of the homes in the United States are now underwater. That means that as soon as a borrower needs to sell for personal reasons, such as – job loss, job transfer, divorce or retirement – or many of the other reasons that are out there, it will become much more difficult unless the homeowner has cash to bring to the table. It would take too long to sell the home otherwise. In the case with most families in America right now, if there is any extra money in the household, it certainly isn’t substantial enough to cure the large deficit that would be required. This is when a short sale is needed.

One question that our clients often ask is; “Why would a bank want to do a short sale over just taking the home through foreclosure?”  The truth is that the bank does not want your home. They just want the payments to be made or to get as much money back out of the property as possible, so that they can loan that money out again. They are quite simply, all about the money.  Therefore, when a bank does a short sale, statistically they only recoup about 85 cents on the dollar. If the home is taken through foreclosure, they only recoup about 65 cents on the dollar. So, you can see why they would want to do the short sale option first and go through foreclosure only as a last resort.

The reason why there is such a big difference between the two scenarios is that while a home is being sold, the homeowner still lives in the home and takes care of it. When homes are well cared for, they usually drive a higher price when sold. There are also fewer issues during the sale.

An abandoned property becomes very tough to sell.  Homes that are vacant get vandalized.  Sometimes even their previous owners take things with them that are meant to stay; like kitchen cabinets, fixtures and lights or anything else of value.

A Stroll through the Short Sale Process

If you’re having trouble making your mortgage payment but want to avoid foreclosure, the short sale process is one way to go. At the very least, you’ll be able to put off a foreclosure for up to a year; at best, you could even end up renting the house you’re living in now for half of your current monthly mortgage payment!

But before you decide to do a short sale, here’s what you need to know about the process.

To qualify for a short sale, you’ll need to prove financial hardship.

The federal government started a program in April called Home Affordable Foreclosures Alternatives. HAFA sets deadlines for different parts of the short sale process, pays incentives to homeowners and mortgage holders, and requires that homeowners be released from any future liability for their mortgage.

That last point is important because, in the majority of states, the mortgage holder can come after you for the difference after a short sale. And some bankers are starting to get aggressive about doing just that. Not only that, your lender has 6 years to start trying to collect, and once it starts, it can hound you for 20 years!

Homeowners have already been able to negotiate their way out of their mortgages through short sales, but the passage of HAFA might make that process even easier.

Don’t try to go to your lender yourself to negotiate a short sale. That way leads to heartaches when you aren’t able to execute a short sale because you don’t understand the process. Instead, hire a Realtor who specializes in short sales to negotiate with your lender for you. Please trust us on this. Kristin and I are both Realtors, and we had to go through a lot of short sale training and education to be able to truly do a good job for our clients.   Short sales are not for the inexperienced Realtor.

Once you get the go-ahead from your lender, list your short sale with your Realtor. Your lender might try to force you to go with a particular Realtor or agency—don’t do it.

Of course, once your house is listed, you may end up getting very little notice on the move date, so it’s time to start planning for that date now. This means getting rid of stuff you don’t need, packing anything you can pack, and making plans on where and how you want to live when the short sale is done.

But don’t expect your short sale to be “short,” either! With the current market, it can take up to a year to sell even the best houses. However, you’ll be able to save the money you were using to pay your mortgage during that time!

When it comes to saving you from the frustrations of a foreclosure, there’s not a much better route than the short sale process. You may still need to foreclose, mind you, but at least with a short sale, you’re putting off that date, usually for a long time.

And don’t fret if you need help finding a qualified, certified short sale Realtor.  Just contact us and we can help you find one in your area.

Are you having a hard time with your mortgage?  Are you afraid that you are going to slip into foreclosure?  Did you already receive a foreclosure notice?  Here are some helpful tips.

1. Have a qualified, experienced loan modification attorney examine your mortgage contract for any potential violations.  It is important to have an attorney experienced with contracts review your mortgage to see if there were any Truth in Lending violations that may help you in your loan modification negotiations.

2. Have a qualified loan modification attorney help you gather and organize all of your financial information, including:  bank statements from the last year; tax returns from the last year or two; pay stubs; savings and retirement account information; and much more.  Having this information organized properly will make your loan modification application easier to fill out.  It will also make writing your hardship letter much easier.

3. Know Your Budget and it’s important to remember that a loan modification does not make your loan payment disappear.  Your loan modification simply resets the terms and lowers your payments.  You will still have to make your monthly mortgage payments on time once the loan modification goes through.

4. Save up your house payments. Usually, people stop making their house payment because they cannot afford to make the full payment.  For example, if someone has an adjustable rate mortgage (or ARM) and their interest rate increases, doubling their loan payment from $1,100 to $2,200, they will stop making payments.  However, this should not be taken as an invitation to just spend that $1,100.  Once you get your loan modification you will have to make a larger payment, as well as subsequent payments every month.  Put the mortgage money into a high-yield savings account and let that money be kept in one place accruing a little bit of interest.  If it takes you four months to complete the loan modification process, you should have $4,400 plus interest waiting to be spent on keeping your home.

These are the kinds of tips a qualified loan modification attorney can inform you of.  Keeping your home has to be a high priority in your life, and a qualified, experienced loan modification attorney can help you achieve that goal.  Spiraling debt, bills piled high and foreclosure notices can cause fear, anxiety and even apathy.  However, a loan modification attorney can help you formulate a plan to stay in your home without having to declare bankruptcy.

Finding a rent-to-own house is one of the many ways someone with bad or no credit can buy  a house. You will often find them called names like lease/options, lease with option to buy, lease purchase, lease 2 purchase, rent with option to buy, rent to own, or rent to buy homes.

There are a few differences between rent-to-own and lease-option agreements, although many people use the terms interchangeably. With a rent to own (or rent to buy) home, the buyer makes an agreement with the owner that part or all of the rent money will go towards the down payment of the home, and at a certain date, perhaps 2-5 years in the future, the renter will purchase the home, using the money that was set aside as the down payment.

There is usually not much money put down in the beginning, outside of what would normally be needed for a rental home, so this is a good way to get into a home for little or no down payment.

Another advantage to a rent to buy situation is that if you compare how much rent money is applied monthly to the home price, even if it is only 25-50%, it will still be much more money paid on the principal of the house than if you had taken out a loan for it. If you look at how much money goes to the principal payment of a home with a typical mortgage loan, you will find that most of your mortgage payment in the beginning is just paying interest on the loan. A rent to own agreement, where the money goes directly to the payment of the home, could be saving you a lot of money in the long run.

With a lease-with-option-to-buy, a renter signs a lease agreement (often for a shorter period of time, like1-2 years, but it could be longer). The renter/buyer usually pays a sum in cash, usually non-refundable, to the owner in agreement to buy the house at a later date for the price agreed upon. The renter has the option or right to buy the home, so in the end they have a choice and can back out it they want. Some of the rent paid may or may not go towards the purchase price of the home.

This is a technique often used by real estate investors in periods when the interest rate is rising fast. This way they hope to buy the home at a lower interest rate on a later date. In the meantime, they will sublease the home to someone else, who will make the payments for them.

Again, the terms lease option and rent to buy are pretty much used interchangeably today, so check with the owner to find out exactly what terms they are offering. Or approach an owner with your own offer for renting to own.

If you are a renter who is tired of paying someone else’s mortgage and want to own your own home, this is one of many ways that you can buy a home. One of the drawbacks is that you will still need to purchase the home at a later date. This may be a problem if you have bad credit, because you may still need to qualify for a loan when it is time to purchase the home. If your credit can be repaired in several years, this may be a great way for you to get your home now, and good motivation to clean up your credit for the future.

Real estate is not always an easy venture to be involved in. Mortgages are huge loans, and monthly payments can be extremely steep. Especially with the trend a few years back to give out sub-prime mortgages, there have been a lot of foreclosures lately. But foreclosure should be avoided at all costs.

So let’s assume for a moment that you are unable to make your mortgage payments. You become a defaulted owner. Now what? Well, typically, your lending institution will foreclose its mortgage. If this happens, not only will you lose your property when it goes back to the bank, you will lose all your equity. In addition, foreclosure reduces your credit rating, leaving a permanent stain on your credit account. This can be extremely hard to remove, and may prevent you from ever borrowing again. Finally, you may even have to pay taxes on the debt reduction amount. So in trying to save money, you’ve only added another expense to your list of bills. All in all, foreclosure is a bad deal for you.

There are two main types of foreclosure, foreclosure by judicial sale and foreclosure by power of sale. In the former, the court supervises the sale of the property. In the latter, the bank or mortgage holder sells the home. In a strict foreclosure, not in use in all states, the bank would assume the deed of the defaulted mortgage, without the obligation to sell. This method is less popular as few banks want to become landlords. Usually, by whatever means, the foreclosure involves the sale of the property.

If you are unable to make your mortgage payments, or in any other way are unable to fulfill the obligations of your lending contract, it is best if you sell your real estate as soon as possible. This may mean selling at a much lower rate than market value, however as a homeowner, you may be able to retain some equity from your home, and you will definitely save your credit rating. This is very important for your future real estate purchases, and just about anything else in your life. By selling your home yourself, with or without the help of an agent, you are keeping the power in your hands. Even if you come out of it with no equity, the chances of losing money is slim unless your home has become totally derelict. Even then, you are still better off selling it yourself than allowing a foreclosure to go ahead.

While in a stressful situation such as mounting debt, it can seem like the easy thing to drop everything and run. But as I’ve outlined, it is never to your advantage to let a property foreclose. The key to saving yourself from this fate may be an honest analysis of your expenses. If you can see a problem coming, you have more time to act on it. Rather than waiting to the last minute, put your home up for sale as soon as you suspect you will have trouble making payments in the future. The more time you have to sell, the more likely you’ll walk away with a fair price for your property. You may even be able to find another, cheaper home, and nobody will have been the wiser that you narrowly escaped financial disaster.

Your credit score is a very important number when trying to purchase a home.  If you have pulled your credit score and are disappointed by what you see, here are some simple things you can do to improve your score.

Check Accuracy.  Believe it or not, mistakes on a report are common.  You can dispute anything that is incorrect.  Make sure you know what is on your credit report, however, pulling it to often can look negative.

Pay Your Bills on Time.  It sounds simple, however sometimes it is easier said than done.  It is important to build a healthy payment history.  It is the single best way to rebuild damaged credit.  It is the largest factor in determining your credit score (35 percent).

Check Your Ratio.  While you may be paying your bills on time and seemingly doing everything correct, it is important to check your Debt-to-credit ratio on your credit cards.  You never want to be maxed out.  Ideally, you should only be using about 40 percent of your limit.  Spreading your debt around on a few cards is actually better than having it all in one place.  30 percent of your credit score is outstanding debt.  Step away from the edge.

Commit for the Long Haul.  15 percent of your credit score is determined by the length of time you’ve held a credit relationship.  Don’t close all your credit card accounts once they have been paid off.  It looks positive to a creditor that you have credit that you aren’t using.

Keeping your credit score healthy has a very big impact on how much money you can save on interest.  The good news is that qualifying for a home can sometimes be easier than qualifying for a gas card.  Homes are a great source of collateral (it’s not like the house is going to walk away).  The best tip is to be informed.  Making small changes can have big results.

What is a foreclosure? A foreclosure is a process, not a specific date.  It is the process that lenders have to use to get their money back on a property that they have a lien against because the homeowner has stopped making their monthly payments.

Foreclosure times can vary from state to state. There are two types of foreclosures in this country. Depending on the state you live in will determine which foreclosure process will be used. Most of the United States uses a non-judicial foreclosure, which means that the lender does not have to present your case in front of a judge to foreclose. The difference between a judicial state and a non-judicial state is whether or not the security instrument is a mortgage or a trust deed.

A mortgage, which is verbally used interchangeably, is an agreement between two parties; the borrower and the lender. The trust deed is usually the instrument of choice by the banks, because it is quicker to foreclose upon if the borrower does not pay. There are three parties involved with a deed of trust.  The borrower, lender and trustee who is supposed to hold title to the properties until it is paid for.

Do You Have Questions on Short Sales, Loan Modifications or Foreclosures? Send Us Your Questions Here Joe@StopForeclosureDavisWeber.com

Hypothetically, let’s say your boss transfers you to a new city.  One of your biggest worries may be the prospect of having to sell your home during a housing slump.  Even if you have been making timely payments, this is no time to take on two mortgage payments but you know it may be difficult to sell your home.  This is just one scenario. People need to sell their home for other reasons, such as divorce or needing a bigger place for a growing family; or needing a smaller place after retirement.  So, you may be wondering; “Do I have to be late on my payments to qualify for a short sale?”

Thankfully, the answer is “NO”; you do not need to be late. Our company has completed many short sales even for a seller who was never late on so much as one mortgage payment. The object of getting a short sale approved is to prove to the bank that there is a hardship. A classic hardship includes a job transfer. If you’re wondering if it affected their ability to buy a new home with a short sale on their credit, the answer is ‘yes’ because of the fact they were never late on their payments.

here is a program available with an FHA loan that allows you to do this. As a fair warning though, if you are not late on your payments, the bank will not be in a hurry to complete the short sale for you, because they know you will keep paying the mortgage as long as it takes. Many homeowners in this situation get angry and frustrated.

One of the best things about the short sale process for the seller is that it is free to them. That means that any earned commissions are paid to the realtor who helped to sell the house and are paid for by the bank. The commission does not come out of the seller’s pocket. This will be the cheapest home that you will ever sell. The realtors will charge you whatever is customary in your area.

Do You Have Questions On The Short Sale or Loan Modification Process? Email me your questions here Joe@StopForeclosureDavisWeber.com

Unfortunately, there are many businesses who are taking advantage of people who are already in a tough spot and who are not familiar with all of the options that are available. Here are some things to look out for.

Beware of any company or individual who…

• Claims they can stop a foreclosure, no matter what the circumstances may be. This is false from the get-go and should a huge red flag.
• Only accepts a wire transfer or cashier’s check.
• Doesn’t want you to contact your own lawyer, lender or any other real estate counselor.
• Tries to get you sign papers that you are unclear about.
• Encourages you to lease your home so you can buy it back over time.
• Tells you to make your mortgage payments directly to them; rather than your lender.
• Attempts to sway you into transferring your property deed or title to them.
• Offers to buy your house for cash at a fixed price that is not set by the housing market at the time of sale.
• Pressures you to sign paperwork you haven’t had a chance to read thoroughly or that you don’t understand.

There are some things you need to be aware of when shopping for a company that can help you save your home from foreclosure. Avoid being a victim of fraud.  On top of nearly losing your home, that’s the LAST thing you need.

Well, the answer all depends on you as the homeowner and what your goals are.  It also depends on what your capabilities are.

Loan Modification

• You stay in your home
• You get a better mortgage with better terms
• Credit will be affected but only through the trial period
• Process to get a mod can take up to 6 months or longer

Short Sale

• Home is sold for less than amount owed and you relocate
• Credit is impacted and shows as a settled account
• Process to complete the short sale can take up to 6 months or longer
• In most cases the mortgage debt is forgiven
• Some government plans put cash in your pocket at closing
• Allows you to leave on your own terms

64% of loan modifications are late again within 6 months

Many foreclosures happen to people that are in the middle of the loan modification process. So if this is the route that you are going to take, you need to take responsibility for yourself and ask them to postpone the sale date if there is one everytime you talk to them.

To learn more on what option is best for you please download our free ebook here http://stopforeclosuredavisweber.com

The Home Affordable Foreclosure Alternatives (HAFA) program is for borrowers who, although eligible for the government Home Affordable Modification Program (HAMP), are not able to secure a permanent loan modification or cannot avoid foreclosure. HAFA provides protection and money to eligible borrowers who decide to do a Short Sale or a Deed-in-Lieu of foreclosure.

Some of the key benefits are:

• Borrowers receive $3,000 for relocation assistance.
• Lenders must allow the opportunity for the borrower to attempt a Short Sale or accept a Deed-in-Lieu of foreclosure before following through with a foreclosure.
• Borrowers are fully released from future liability for the first mortgage debt – lenders cannot ask for a cash contribution, promissory note, or deficiency judgment to complete a short sale or DIL.  Additionally, junior lien holders (i.e. 2nd mortgages) who participate in the HAFA incentives must also release borrowers from future liability.

The Home Affordable Modification Program is designed to help financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term. The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use.

Borrower eligibility is based on meeting specific criteria including:

1. borrower is delinquent on their mortgage or faces imminent risk of default
2. property is occupied as borrower’s primary residence
3. mortgage was originated on or before Jan. 1, 2009 and unpaid principal balance must be no greater than $729,750 for one-unit properties.

After determining a borrower’s eligibility, a servicer will take a series of steps to adjust the monthly mortgage payment to 31% of a borrower’s total pretax monthly income:

1. First, reduce the interest rate to as low as 2%,
2. Next, if necessary, extend the loan term to 40 years,
3. Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.

Only 5% of the total borrower’s who applied for a HAMP program have been successful

To learn more about this program and many other government programs offered today, please click here: http://stopforeclosuredavisweber.com/tab/government-programs/