Making (3)

This is common question asked by our clients here in Texas. In this article, I want to give you some things to think about if your client is asking this question..  In deciding whether you should or should not recommend that your client stop making your mortgage payments, these are things we have learned from experience and face every day with our clients.

To begin, you should never recommend that someone stop making a mortgage payment. Its not ethical and lenders would not be happy.  However, you can tell you client what happens if they stop making the payments during a short sale.
 
What happens when a client stops making the mortgage payment:
 
When you are trying to do a short sale  the bank is looking for a hardship, and this can be a number of things. A hardship can be a job loss, Income reduction, forced relocation, Illness or a divorce. If a client continues to make the mortgage payments the bank is less likely to accept the short sale. A lot of investors are rejecting short sales if the mortgage is current. We have had lenders who will tell us just by looking at the file that our clients do not “qualify” because their loan is current.
 
A lot of our clients struggle with this fact because they do not want the missed payments to affect their credit. Most likely if they are in the situation of a hardship their credit has already been affected in some way. If they continue to make the payments the bank may assume they can afford the mortgage and will not consider the “hardship”. The bank will not make the file a priority as they are not in “default”. This is a hard concept to understand as you would think the bank would want to continue to receive payments and still work with struggling homeowners. Unfortunately that is not the case, in order to be considered for most short sales, banks will only review if they are in default. Some banks are now requiring the homeowners to be at least 30-60 days behind on their mortgage. Although this goes for the majority of the banks, there are still a small few that will work with homeowners without being behind.
 
If your client stops the mortgage payment, they need to understand it maybe impossible to "catch back up".  I've had a couple of clients say they plan on stopping the mortgage payments to get the bank to do a short sale and if the short sale is not approved they will get the payments caught back up. 

After a client has missed several payments, the late fees and penalties can be overwhelming. This can make it outside the clients financial ability to actually catch back up.

Bottom line:  Missing payments maybe necessary to get a short sale approved; however, it will impact their credit report and it make cause a foreclosure if the short sale is not approved.

Read more…

I recently attended an online seminar regarding short selling and one of the speakers said something that really stuck with me. He said that many times when a homeowner is faced with the possiblity of being unable to make their mortgage payment(s) for whatever reason, they are not interested in learning how to short sell their home. What is important to them is how they can keep their home and not have to sell it.

While assisting Kansas City home owner's sell their Kansas City home is how I make a living, I have learned how important it is to share with others my knowledge of what may help them even though I receive nothing in return. Knowledge is Power!

So, let's start talking about what things you as a Kansas City home owner may be able to do to avoid having to sell your Kansas City home. As you may have heard, there is a government program called "Making Home Affordable". This program is also commonly known as "HAMP."

  • HAMP is a program designed to assist struggling homeowners to avoid foreclosure by modifying their existing loans to an amount that is financially manageable. There are, however, certain guidelines that must be met before you consider applying for this program. One of the requirements is that the home must be your principal residence. There are eligibility requirements based on your finances as well. However, this is a very good starting point if your goal is NOT to sell your home.

If you don't know what to do if you are falling behind on your mortgage payments or you are currently facing foreclosure of your Kansas City home, Kansas or Missouri, please continue to read the upcoming posts and Request a Free Confidential, no obligation, analysis of your home and options that may be available to you to help reduce the burden you may have.

(There are potential tax consequences that should be discussed with a tax professional. Please do not interpret this information as providing legal, tax or other professional advice which you should seek independently.)
(Image courtesy jscreationz-FreeDigitalPhotos.net)__________________________________________________________________

About the Author:

Suzanne Hinton
Hinton Group-Affiliated with ReMax Premier Realty
Voted 5 Star Best in Customer Satisfaction Real Estate Agent
Phone: 816-520-0917
Email: shinton@remax.net
shortsellingyour kansascityhome

 

 

©2011 Suzanne Hinton-Hinton Homes-Kansas City Short Sale Realtor
Kansas City Short Sales

Read more…
Making Sense Of The Mortgage Crisis-How The FDIC Loss Share Program Is Hurting Homeowners

In September/2009 I wrote a blog titled "Is The FDIC Killing IndyMac OneWest Bank Short Sales & Loan Modifications?". In February/2010, the folks at TBWS used this blog to create a video that ending up going "viral". If you watch the video, you will see that all of the numbers and the explanation of the FDIC loss share program were taken directly from my original blog post. For those of you that are not familiar with the video, at last count it had received over 1.3 million views on YouTube, and even caused the FDIC to issue an official press release debunking the video.

In an attempt to quash the outrage that the video created with Americans across the country, the FDIC not only came out with an official press release, but also released their own YouTube video titled "Loss Sharing Explained" in June/2010. The video attempts to paint the loss share agreements (which they now have with 167 banks) as a benefit to the FDIC. What the video fails to address is the total lack of oversight, and how lenders are abusing the program, and in turn, forcing more homeowners into foreclosure everyday. No matter how the FDIC wants to spin this, the fact remains the same... When a lender can make more money by foreclosing on a homeowner than they can by approving a loan modification or short sale, they will choose foreclosure.

Two weeks ago, I received a call from a woman in South Carolina who had just finished reading my FDIC IndyMac OneWest blog. She had just been turned down for a loan modification from OneWest Bank under the HAMP Program. According to her, they turned her down without even receiving the required documents, and told her that the reason for their denial was that the investor that owned the loan does not participate in HAMP. When she asked who the investor was, she was told that their "policy" doesn't allow them to disclose who owns the loan.

Needless to say, she was furious. I explained to her that without consequences, banks can do whatever they want. And, without transparency, they can tell borrowers whatever they want. The last thing that loan servicing entities like OneWest Bank want is homeowners calling their investors, verifying what the servicing companies are telling them.

In addition, those lenders who are benefiting from an FDIC loss share agreement DO NOT want borrowers to know if they own the loan. By telling borrowers that their "policy" does not allow them to disclose the owner of the loan, they can hide the fact that they in fact own it.

After spending over an hour on the phone with my friend from South Carolina, she came up with a great suggestion. She suggested that I produce a video that explains the FDIC loss share program, and how it affects homeowners who are trying to short sell their home or get a loan modification. Hence, the reason for this blog post today.

The video explains exactly what happened (in a "real-life" transaction) with one of my clients that I represented on a short sale in September/2009. The numbers are the actual numbers that I used to remind OneWest of the profits they stood to make from the FDIC loss share program. When faced with these numbers, they immediately gave up on their demand for a $75,000 promissory note from my client, and approved the short sale. Since writing this FDIC OneWest IndyMac blog in September/2009, I know of at least a dozen other agents across the country that have used this same argument with OneWest Bank, and were successful in closing their short sale deals.

The point of this video is not to bash OneWest Bank. What I hope and pray is that someone in Washington will see it and actually decide that "enough is enough".

I would ask you to PLEASE share this video with everyone you know. If it can get out to enough people, it might just end up on the computer of someone who will actually do something to stop this madness.

Subscribe To This Blog Via Email

Facebook Link Twitter Link LinkedIn Link rss button

Bob Hertzog

Summit Home Consultants

Visit The For Sale Phoenix Homes Website

Copyright © By Bob Hertzog 2010 *Making Sense of The Mortgage Crisis-How The FDIC Loss Share Program Is Hurting Homeowners*


Read more…

Blog Topics by Tags

Monthly Archives

********************************** like buttons ************************