SHORT SALE. This former model home in Laurel Knoll East offers a versatile floor plan and boasts gleaming Brazilian cherry floors on the 1st level, a renovated kitchen, and 3800+ sq ft of house. The 1st floor offers many options for the family or entertaining. Host a formal dinner party in the expanded dining room, a summer sizzler on the deck and two patios, or a casual affair in the step-down family room with its soaring 2-story stone fireplace and skylights. No matter what type of get-together, cooking is a joy in the updated granite kitchen. The breakfast nook is one of several rooms that overlooks the wooded back yard. The original den includes its own lanai. The master bedroom boasts a new bamboo floor, step-up sitting area, plenty of closet space, and a new en-suite bath with beautiful finishes. Relax in the jetted tub or use the fully tiled walk-in shower. Three more bedrooms, each with ample closet space and another full bath complete the second level. The wooded back yard provides a great private oasis. Your backyard BBQs would be the envy of the neighborhood with 2 large patios and wood deck surrounded by the tall trees. The home currently includes the original sales office and extra 1/2 bath in place of the 2-car garage. But if you need it, converting it back would be easy. New HVAC, roof and more. Owner is licensed agent. Book your tour today and ask about the home theater.

Welcome to Orchard Estates in Edgewater Park.  Located on a quiet cul de sac, this home has been beautifully and meticulously maintained.  The living room off the foyer and the dining room are light and bright each with dual exposures.  You'll be proud to show off this new, expanded kitchen which features a skylight over the large island with seating, granite counters, loads of cabinet space and a breakfast area.  You and your guests will enjoy the adjoining family room with its cozy brick fireplace and access through sliding doors to the patio and back yard.  Currently configured as a three bedroom, the master suite is very large with three closets (one a walk-in) and a brand new, en-suite master bathroom.  You'll find the other bedrooms to be ample in size with good closet space.  The hall bathroom was completely redone so recently that the grout may not be dry.  Pull down stairs give way to the attic for even more storage.  The finished basement offers more living space, a cedar closet and tons of storage space.  The two-car garage can be accessed from the house or the back yard.  The garage is oversized and includes a workshop/bench and even more storage.  From the curb you'll notice the lush landscaping.  Great attention has been paid to the choice of plants, shrubs and trees in the yard.  The list of enhancements in the home is quite long including a brand new hot water heater, new energy efficient windows throughout, new bathroom and more.  A one year home warranty is included for the lucky buyer of this home.  Call to schedule your private tour today.

Have you ever noticed Christmas decorations still hanging around while you’re marching down the street in the July 4^th parade?  Or have half of the lights burned out in your neighbor’s menorah perhaps because your calendar says it’s June?  Decorations have a shelf life.  Sometimes the expiration date is determined by your HOA.

When you live in a neighborhood or community that is controlled by a Home Owner’s Association, there are rules that everyone is supposed to follow.   There may also be laws or ordinances that apply to holiday decorations.   It’s important that you know both the rules and local laws before putting up holiday decorations.   And scheduling to take them down.

So what will the HOA do if you don’t adhere to the decoration requirement?  The first, safest and most accurate answer is: the HOA can do whatever its rules allow or mandate.  If the HOA is very relaxed and doesn’t flex its collective muscle, they may do nothing.  You may simply receive a letter or request to remove the decorations.  If the HOA is very strict and the rules allow, they may charge a fine.

If you’re new to the community, ask the neighbors.  They can tell you how strict the Association has been in the past.  Of course, it’s best to respect and follow the rules.  That said, an HOA will sometimes be lenient if severe weather conditions have delayed the majority of residents from removing their decorations.  Simply not lighting them until the weather improves can also reduce the risk of a citation.  Beware; freezing temperatures alone do no constitute severe weather.  A blizzard with several feet of snow will probably buy you a few days.

The rules and requirements in an HOA are meant to protect property values.  Consistency and uniformity help to increase values.  The job of the Board of Managers is to set and enforce rules which help ensure the best combination of freedom and conformity.  If owners wish to have a louder voice in the direction of the community, interested residents can always seek a position on the Board. 

Enjoy your decorations, while they’re in season.  And have fun taking them down, when the time is right.

By: G. M. Filisko

When your homeowners association has more to do than its volunteers can handle, it's time to call in a professional manager. Here are 10 tips for picking the right one.

1. Know what you need. Start your search by making a list of what you’d like the management company to do. You can put anything on the list, as long as the HOA board keeps the responsibility to oversee the management company’s actions. Knowing what your HOA needs will help you focus your search. 

2. Choose a person or committee to do the preliminary search. Expect to devote about 20 hours to choosing a company, says Elizabeth White, an attorney at LeClairRyan in Williamsburg, Va., who represents community associations.

3. Ask if your state requires some level of manager licensing. If so, seek out companies and candidates with the proper credentials. “We’re finding a lot of management companies in states that require licensing (that) haven’t gotten the license,” White says. States that require licenses or registration include Alaska, Connecticut, the District of Columbia, Florida, Georgia, Nevada, and Virginia. Starting in 2011, Illinois will require licenses.

4. Consider a company certified by the Community Associations Institute. This Alexandria, Va.-based organization has a range of certifications for companies and individual managers.

5. Be sure the company performs criminal background checks on its employees, especially its managers. Do your own background checks, too. Check references and do an onsite visit. “Speak to board members of associations managed by that company,” suggests David Regenbaum, CEO of Association Management Inc. in Houston. “Visit the company’s office and get a sense of its business philosophy. Some are merely bookkeeping and secretarial services. Others are fully committed and involved in the community. Make sure you select the company that’s appropriate to your needs.”

6. Investigate the firm’s bonding and insurance. Your state law and governing documents may spell out minimum standards for both, Taylor says. But a management company should also have liability insurance and workers’ compensation insurance covering its employees. Ask for a copy of the company’s insurance certificate, recommends Robert White, managing director of KW Property Management & Consulting in Miami. His firm carries a $2 million liability policy, plus a $10 million umbrella policy.

7. Read the fine print. It’s the rare management company that works without a signed contract. “It goes without saying,” Elizabeth White says, “that you should never sign the management company’s form contract.” Have your association lawyer suggest changes.

8. Try to negotiate for a one-year contract rather than the three-year contracts many companies seek. Why commit to a three-year contract if you can negotiate a one-year contract with the option to renew at one-year intervals for two years at the same price?

9. Scrutinize termination provisions. “As a manager, I don’t mind receiving 30 days’ notice of termination,” Regenbaum says. “But you shouldn’t allow the management company to give you 30 days’ notice because it’s difficult to scramble to find another manager in that time.” You need 60 to 90 days to repeat the search process if things don’t work out with your current management company.

10. Ask for a complete fee schedule, so you can compare competing contracts. Big costs may be buried in extra fees. For example, a company may provide for a manager to attend one meeting every six months and charge $100 per hour after that. It may also charge separately for postage and to manage a vote on and payment collection for special assessments. The lesson, according to Elizabeth White: Bids that come in significantly lower than others should be red flags.

Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

Welcome to Lonaconing East. This beautifully maintained, 4 year young townhome boasts many amenities and upgraded features.  You'll immediately feel the warmth of "home" in the living room with the cozy fireplace and gleaming hardwood floors throughout.  The open concept first floor makes entertaining guests a breeze, whether the party is inside or out.  The kitchen offers stainless steel appliances, a large island which accommodates 2 or 3 barstools.  Take the party outside through sliding French doors to the low-maintenance deck and largest fenced back yard in the community.   Work from home?  No problem with the home office conveniently located on the first floor.  You'll also find a half bath, laundry room, and access to the finished garage on the first level.  Upstairs, the owner suite features a dramatic cathedral ceiling, huge walk-in closet, and a spa-like bath with dual vanities, walk-in shower, and jetted corner tub. The large second bedroom suite also includes its own bathroom for the ultimate in privacy.  The finished basement includes a custom made, Chicago rail bar with beer on tap at the Kegerator, refrigerator, and tons of storage.  No need for guests to go upstairs with the second half bath located in the basement.  Even with so much finished area, there is still plenty of storage space, which could be finished as well.  Some of the other features include a full irrigation system, builder's structural warranty, professional landscaping, and more.  Don't miss your opportunity to call this wonderful home yours.  Truly move-in ready, all you need to do is bring your belongings.  Call today for your private tour.  Office Exclusive.

Feds File Fraud Case Against Allied Home Mortgage

Federal prosecutors have filed fraud charges against Allied Home Mortgage and its founder and chief executive, Jim Hodge.  Allied was the largest, privately owned mortgage broker in the nation, having as many as 600 offices nationally at their peak.

The suit alleges that Allied engaged in “reckless mortgage lending, flouting the requirements of the FHA mortgage insurance program and repeatedly lying about its compliance” over a period of 9 years (2001 to 2010).  The current estimated cost to the government (and American people)?  $834 million in insurance claims on defaulted home mortgages.  And that amount could grow higher.  In addition to the 35,801 loans that have already defaulted, there are another 2,509 in default.  That could equate to another $363 million in new insurance claims.

The company’s default rate was a “staggering 55% in 2006 and 2007.  The company originated FHA loans that are typically for moderate to low income borrowers.  It seems that they targeted the more vulnerable, riskier consumer.

The suit goes on to site various offenses including lying to HUD, falsifying records, altering addresses, operating shadow offices without HUD’s approval.  Further, the company employed felons and managers working under false names.  Complaints from consumers have been pouring in about the illegal and reprehensible actions of the company.  Allegations include misrepresenting loan terms and falsifying records to not paying off previous mortgages and diverting hundreds of thousands of dollars.

The case was filed in the US District Court of Manhattan.  The Feds are seeking around $2.5 billion.  That’s Billion…with a “B” or triple damages and civil penalties.  And the investigation continues.

If you’d like to read some articles about the suit, here are links to ProPublica and the NY Times.

http://www.propublica.org/article/feds-file-massive-fraud-case-against-allied-home-mortgage

http://www.nytimes.com/2011/11/02/business/us-sues-allied-home-mortgage-over-lending-practices.html

Thanks for reading.

John

We recently represented a seller whose past (paid off) mortgage had not been recorded properly.  This created a few issues that needed to be resolved before we could close on the property.

Counties record all transactions involving real property.  Deeds, mortgages, and HELOCS or home equity lines of credit are all recorded by the county clerk. 

Perhaps some of the following scenarios are obvious, but, it’s important to make sure your documents are correctly filed and recorded when you:

1. buy or sell a property
2. change your name (marriage or divorce)
3. inherit a property
4. add or delete an owner to the property (marriage, death, buyout, etc)
5. obtain a mortgage
6. refinance a mortgage
7. obtain a new home equity line of credit or HELOC
8. pay off or satisfy a mortgage or home equity loan

Numbers 1 – 4 involve the deed.  Whenever a change in ownership and a new deed is created, it must be recorded.  A new deed is typically created when the property is bought/sold, a person changes his/her name (i.e. marriage, divorce), a property is inherited, and/or an owner is added (i.e. marriage, death, etc).

Numbers 5 – 8 deal with financing.  Some of these scenarios are not always obvious or remembered.  This was the case of our seller. 

When a property is sold, the seller’s outstanding mortgage(s) is typically paid off at closing.  The proceeds from the sale are sent to the mortgage company who then issues a release.  The release is then recorded by the county.  The buyer’s new mortgage is also recorded by the county after settlement (along with the deed).

When a property owner refinances an existing mortgage, the old mortgage is paid off.  A release is issued and recorded AND the new mortgage is recorded. 

The most often forgotten step is the recording of the release of the old mortgage, as was the issue with our seller.  They had refinanced a past mortgage with a new one.  The title search revealed that the new mortgage was recorded, but, the release of the old mortgage was not. 

Ultimately, the home owner bears the responsibility of making sure that all his/her documents are recorded properly.  A simple call to the county clerk’s office can verify whether or not everything is correct.  Sometimes correcting an error can be extremely difficult after some time has passed, especially if the old mortgage company has gone out of business. 

Take a few moments to make sure your docs are recorded.  It can save you time and lots of frustration if you plan to refinance or when you eventually sell.

Thanks for reading.

John

PRICE REDUCED! This Short Sale is a Great Value. As you enter the spacious foyer of this bright and airy home, you will notice the gleaming Brazilian cherry hardwood floors. The open floor plan along with the spacious back yard is perfect for family gatherings. The living room, dining room and kitchen flow together seamlessly. Take the party outside through sliding doors to the landing deck, patio and backyard. Upstairs, you’ll find a large owner’s suite with two walk-in closets and en suite bathroom. Down the hall are two additional bedrooms and hall bath. The full basement has been finished and still offers ample storage, a cedar closet and full laundry room. The extra deep brick front porch is a great place to sit and unwind at the end of a busy day. Enjoy life on a quiet street while still close to major roads, shopping and Center City Philadelphia.

Solving Your Mortgage Crisis Just Got Easier

5 Steps for a Successful Short Sale

Lenders and the federal government, prompted by the sheer volume of loan modification and short sale requests, have overhauled their systems and programs, making the foreclosure avoidance process much easier than in the past.

If you are considering short selling your home to avoid the financial and emotional fallout of foreclosure, you should be aware of the five steps you should take to increase your chances of a successful transaction.

First, do you qualify?

You must:

1. Have a verifiable hardship, like unemployment, medical bills, or relocation
2. Must have a monthly income shortfall
3. Be insolvent (you have no cash or assets that can be sold to pay down the mortgage), or headed towards insolvency

If you meet these qualifications, follow these five steps to a successful short sale:

1. Contact me so we can identify your servicer and/or investor who will be making the decisions for "the bank," fill out the right short sale packet for the lender, and assemble all the required information needed to list your home for sale
2. Gather financial information (i.e., bank statements, pay stubs) from at least the last three months
3. Keep your house in showcase condition for showings, and make as many repairs as necessary that you can afford
4. Expect the lender, junior lien holders, and private insurance companies to request more paperwork, and try to gather requested information quickly to ensure transaction efficiency
5. Set realistic expectations and work with me, the lender, and the buyer to the satisfaction and benefit of all parties involved

For more information about how the short sale process works, or about any other foreclosure alternatives you may qualify for, call me today. I can help you alleviate the burden that the threat of foreclosure brings, and we can develop a strategy to help you breathe a little easier.  

You may also qualify for government incentive monies.  Programs like HAFA have been approved to offer incentives to cover certain costs for the seller.  Keep reading for information on how you could qualify for cash at the end of the short sale!

Call me or feel free to find some more information at my distressed property site.

Thanks for reading,

John

As recently as a few months ago, if you would have told a real estate agent who specialized in short sales that they’d be raving about a lender’s stellar service and rapid approval times—not to mention significant cash incentives for financially strapped homeowners for pursuing a short sale—you’d have gotten some strange looks.

That’s all changed.  And it’s changed faster and to a greater extent than most real estate professionals ever could have imagined.

With a glut of bank-owned properties dragging down the recovery of the real estate market, as well as the national economy, major lenders are more eager than ever before to avoid foreclosure. So they’ve sharpened their focus on short sales. Big time.

The biggest lenders in the country have staffed up to ensure rapid processing of short sale applications. They’ve ponied up with cash incentives at closing for homeowners who pursue a short sale with a certified distressed property expert. And they’re proactively reaching out to CDPE agents and putting them in touch with delinquent borrowers.

This is big news and the media has not really caught onto it yet. What’s important for you to know is that whatever you’ve read or heard in the past about long lag times and frustrations with short sales is no longer the case in many situations.

As a member of the CDPEAdvanced community, I’m tapped into major lenders and on top of major developments affecting short sales and bank-owned properties.  I invite you to visit my short sale website to learn more and feel free to contact me any time at 856-222-6344 (office) or email me at john.wuertz@prufoxroach.com if you or anyone you know is struggling with an unmanageable mortgage.

Thanks for reading,

John R. Wuertz, CDPE, SFR, ePRO, ABR, SRES

Licensed Real Estate Salesperson

The Real Estate Resource Group

Prudential Fox and Roach, Realtors

856.222.6344 direct

856.912.3219 mobile

john.wuertz@prufoxroach.com

Missing Mortgage Payments?

It’s Not Too Late

Wondering what a homeowner should expect when payments are missed? The most important thing to know is that no matter what stage of default a homeowner is in, there is almost always a way to avoid foreclosure. That being said, the quicker a homeowner does something about the situation, the less challenging it will be to resolve.

First, here’s what a distressed homeowner should expect to happen when payments are missed:

30 Days Late: The lender will attempt phone contact or send a notice in the mail.

60 Days Late: The lender will attempt to make contact by phone and follow up with another letter in the mail.

90 Days Late: The lender will send a letter demanding all past due amounts within 30 days and start the foreclosure process.

120 Days or More Late: The lender’s attorneys will take over and the homeowner will be responsible for their fees in addition to missed mortgage payments and the loan amount due.

Not late yet, but about to be?

Homeowners who are not late but foresee missing payments should communicate this to their lenders as soon as possible. In the past, many banks wouldn’t work with homeowners unless they were one or more payments behind. In light of the mortgage crisis, most lenders who would rather take a proactive stance and decrease their loan losses. They are more willing than ever to work with homeowners to avoid being late.

If you or someone you care about is late with payments or may miss mortgage payments in the near future, call me.  I can help navigate the process and lead the way back to a path toward financial stability. Contact me today and alleviate the stress that comes with unaffordable mortgage payments.

Thanks for reading.

John

Homeowners are protected by a Federal Trade Commission rule that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until an acceptable written offer has been received from their lender or loan servicer.  It also includes a few other important requirements and prohibitions.  

“At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results,” FTC Chairman Jon Leibowitz said. “By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.” After all, since they cannot make money for nothing, those whose intent is only to defraud the public will vanish from the industry.

The FTC issued the Mortgage Assistance Relief Services (MARS) Rule to protect distressed homeowners from scam artists who have sprung up during the mortgage crisis. This despicable operations falsely claim that, for a fee, they will negotiate with the consumer’s mortgage lender or servicer to obtain a loan modification, a short sale, or other relief from foreclosure. Many of these operations pretend to be affiliated with the government and government housing assistance programs. The FTC has brought more than 30 cases against operations like these, and state and federal law enforcement partners have brought hundreds more.

Advance fee ban

The most significant consumer protection under the FTC’s rule is the advance fee ban. Under this provision, mortgage relief companies may not collect any fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge.

Disclosures

The Rule requires mortgage relief companies, sometimes called dept assistance programs, mortgage modification program counselors and the like, to disclose key information to consumers to protect them from being misled and to help them make better informed decisions. In their advertising and in communications directed at individual consumers (such as telemarketing calls), the companies must disclose that:

• they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
• the lender may not agree to change the consumer’s loan; and
• if companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.

Companies also must explain in their communications to consumers that they can stop doing business with the company at any time, can accept or reject any offer the company obtains from the lender or servicer, and, if they reject the offer, they don’t have to pay the company’s fee. The companies also must disclose the amount of the fee.

Prohibited claims

The MARS Rule prohibits mortgage relief companies from making any false or misleading claims about their services, including claims about:

1. the likelihood of consumers getting the results they seek;
2. the company’s affiliation with government or private entities;
3. the consumer’s payment and other mortgage obligations;
4. the company’s refund and cancellation policies;
5. whether the company has performed the services it promised;
6. whether the company will provide legal representation to consumers;
7. the availability or cost of any alternative to for-profit mortgage assistance relief services;
8. the amount of money a consumer will save by using their services; or
9. the cost of the services.

In addition, the rule bars mortgage relief companies from telling consumers to stop communicating with their lenders or servicers. Companies also must have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.

Attorney exemption

Attorneys are generally exempt from the rule if they meet three conditions: they are engaged in the practice of law, they are licensed in the state where the consumer or the dwelling is located, and they are complying with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorneys must meet a fourth requirement – they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts.

Just to be clear, I have not found a lot of attorneys who truly understand all of the options for distressed homeowners.  Here is where I will put in my shameless plug for those in my geographic area.  The people most knowledgeable about the options are real estate agents who are Certified Distressed Property Experts (CDPE).  We are kept up to date on the ever-changing laws and rulings concerning distressed properties.  If you’re not in my area, I can help you find a CDPE/Colleague in any part of the country.  Banks also tend to approve more transactions when a CDPE is involved, due to our competence.  I am the willing recipient of referrals from the distressed property divisions at two major banks in my area.

The bulk of the ruling went into effect in December, 2010.  The Advance Fee ban went into effect Junaury, 2011.  The FTC rulemaking proceeding was conducted pursuant to Congressional legislation sponsored in 2009 by SenatorsJay Rockefeller and Byron Dorgan. The Final Rule applies only to entities within the FTC’s jurisdiction under the Federal Trade Commission Act, which excludes, among others, banks, savings and loans, federal credit unions, common carriers, and entities engaged in the business of insurance. In June 2009, the FTC issued an Advance Notice of Proposed Rulemaking seeking comment on the practices of for-profit mortgage relief companies. In February 2010, the FTC announced a Notice of Proposed Rulemaking and sought comments from interested persons, including advocates for consumers, the business community, and the legal profession.

Click here for facts about mortgage consumers’ rights.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.

STAFF CONTACT:

Laura Sullivan or Evan Zullow
Bureau of Consumer Protection
202-326-3224

The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. There are options available to home owners in need.  Following is a brief explanation of these solutions, including their benefits and drawbacks:

Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender’s approval and will ‘reinstate’ a mortgage up to the day before the final foreclosure sale.

• Benefit: Does not require the mortgage company or lender’s approval.

• Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

• Benefit: Allows the homeowner to make back payments over time.

• Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to ‘qualify’ for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

• Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan

• Drawback: Requires that a homeowner ‘qualify’ for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

• Benefit: Allows homeowner to keep property indefinitely.

• Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a ‘friendly foreclosure’, a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

• Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.

• Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy
Many have considered and marketed bankruptcy as a ‘foreclosure solution,’ but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

• Benefit: Does not require lender approval.

• Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

• Benefit: In some cases, this will lower payments.

• Drawback: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

• Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.

• Drawback: Must be active military to qualify.

Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

• Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.

• Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).

• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent with a proven track record of success with short sales and distressed properties to guide the way.

This represents only a summary of some of the solutions available to homeowners facing foreclosure.

Please call me today for a free and confidential evaluation of your individual situation, property value, and possible options.

Thanks for reading.

John

Choosing a real estate agent is a business decision at its core, but it can also be very personal in nature.  After all, the agent will be a part of your personal life and (for sellers) have access to your home.  And what is more personal than the place you call “home?”  There are many things to consider when selecting an agent.  Of course, the agent’s license should be active and in good standing.  If you’re in an area that has a Multiple Listing Service (MLS) and Board of Realtors, you’ll want to ensure membership and participation.  You can request to see the agent’s license with valid dates and membership information for the local Board.

Apart from the requirements above, there are many other factors that are important to evaluate.  These include both business and personal considerations.  Let’s start with some of the basic professional/business factors: 

Are the Agency Relationship and Fiduciary Responsibilities aligned with your needs?  It is vital to know how the agent will work for you and if he/she will be working in your best interest or if he/she will also work for the other party in the transaction.  An agent should discuss the various agency relationships at the first substantive meeting.  In most states, this disclosure is legally required.  For whom will the agent work?  Do the agent and company represent buyers or sellers or both?  Are your conversations with the agent confidential?  What are his/her fiduciary responsibilities to you?  I cannot stress enough how important it is that you both fully understand the agency relationship that will exist as you work together.

What are the agent’s Education, Certifications, and Specializations?  Does your state require Continuing Education (CE)?  If not, does your agent regularly attend classes or seek additional certifications?  Does he/she have a specialty that could work to your benefit or make his/her representation to you more valuable?  For example: Is your home considered a luxury property?  Working with a certified luxury specialist would be a wise choice.  Are you looking for a home in an active adult community?  Consider working with an agent who is a Senior Real Estate Specialist (SRES), experienced in the particular needs of mature clients.  Are you struggling with mortgage payments and/or owe more than your home is worth?  It is definitely a wise choice to hire a Certified Distressed Property Expert (CDPE).

Is the agent Knowledgeable and Experienced in the Area?  Does the agent know the area, the school system, the community, and the market trends?  Has he/she sold any homes in the area recently?  Can he/she speak knowledgeably about the broader real estate market and even financing requirements? 

And then there are the personal considerations:

The relationship you build and maintain with your agent could be relatively long term.  In order to enable the agent to do his/her job well, you need to share a great amount of personal and lifestyle information.  Many times, an agent ultimately knows more about a family (and their finances) than their own friend

 Do your friends or family members have any referrals?  Many people choose their agent based on referrals from someone they know.  Has a friend or neighbor recently bought or sold a home?  Did they have a good experience working with their agent?  Asking for referrals can potentially lead to a good agent.  But even with a referral, it is best to do your own research as well.

Do you “click” with the agent?  While you don’t have to develop a friendship or become “BFF’s,” you have to be able to communicate and understand each other. 

Is the agent full time and available?  I put this under personal considerations rather than basic business credentials for several reasons.  Do you feel you could call this agent with questions and/or comments?  Would messages be returned in a timely manner?  If you see a call come in from the agent, would you answer?  Although agents deserve personal time, we ultimately have to work with our clients’ schedules.  The agent you choose should be flexible, especially when it comes to communicating. 

Is there trust?  As with any hired professional, it is imperative that you trust the agent.  In order to make buying and/or selling decisions, the agent and the advice given have to be credible.  The information you obtain from the agent has to be relevant and on-point. 

Most people begin their search for homes and agents on the Internet.  Much has been written about agents, how many to interview, and even the questions to ask.  Some of the information on the Internet can be valuable while a lot of what I’ve read is also “anti-agent” or simply false, illustrating reasons not to trust real estate agents.  As with all research, it’s important to consider the source of the information and determine its credibility and possible bias.  The best thing a consumer can do is to become informed, look for a professional with a track record of success, understand the working relationship (agency), and hire someone trustworthy who will represent and protect the client’s best interests. 

Thanks for reading…

John

Have you been working with a real estate agent who has decided to change companies? Are you now faced with the decision of whether to continue working with the agent or stay with the company?  Based on a recent survey, there are many reasons a real estate agent may choose to switch companies.  Why should it matter to you and how do you choose between agent and company? 

As a buyer or seller, the evaluation process you employ to make that decision should be somewhat similar to that of the agent’s.  Focus on services that you want and/or need.

The following are services that the company controls:

Internet Exposure: Sellers want to see their home on the Internet…EVERYwhere.  The company should have a good website with feeds to multiple sites.  (So should the agent.)  Part of the Internet campaign should include Realtor.com, the most visited real estate website above all others.  There are multiple subscription levels.  Sellers want them all. 

One-Stop-Shopping:  Buyers prefer a company that makes the transaction as convenient as possible and offers access to Title and lending companies at the same location. 

Market Share: Local market share and the number of agents on the roster are both important.  Having more agents creates the impression of more exposure and more of a collective effort to sell, similar to team spirit.  A larger market share helps to provide knowledge of the area as well as awareness of the inventory and market trends.

Commission Split: The company that pays the agent a larger portion of the total commission amount allows the agent to allot more money toward marketing.  An agent’s split with the company is usually not discussed or made public; however, it can be reflected in the agent’s personal marketing plan. And of course, to state the obvious, the more an agent makes per transaction, the more that agent is incentivized to ensure a successful outcome.

If your agent has chosen to join another company, talk to your agent about how the new company will enhance the services you will receive.  Most people who have already developed a relationship with the agent and established a level of trust continue to work with the existing agent. I recently made the decision to change firms. I was successful in helping my clients evaluate my new company based on the criteria I had used along with demonstrating how their experience would be enhanced moving forward.

If you decide that you prefer to stay with the previous company, you’ll now have to choose another agent.  Buyers and sellers alike look for many different things in an agent.  The process of choosing an agent can be both business and personal in nature. 

How to choose the right agent for you is a blog post that will be coming soon.

Keep reading,

John