Attorney General and the Department of Justice cracking down on fraudulent negotiation companies!

Amen - When is the first indictment? Oh, I forgot the banking industry has great lobbyist and government backing so they won’t be targeted - This my issue with the whole crack down. If it wasn’t for the national lenders making it so difficult for people to do loan modifications and short sales, you would not have companies that provided this type of service. I agree 100% that no one should pay any upfront fees for having someone help modify their loan or do a short sale. Why? First, the success ratio for loan mods is less than 12%, so your chances are slim to none of getting approved at all. Secondly, if a company is effective at negotiating short sales, they should have the confidence to get their fees at the close of the transaction.

We the taxpayers are funding these banks through the government bailout, and I am appalled at the lack of ethics, standards and accountability that our government and politicians are making the banks follow. I deal with hundreds of distressed home owners in the Portland real estate area on a monthly basis and I deal with the lenders daily. You would be shocked at the callous and deceptive practices that they follow. I support a full crackdown of fraudulent companies, but start at the top.

Commercial Loan Modifications, Get Some Help

If you thought residential Portland real estate was complicated, commercial Portland real estate also has it share of issues in the current market. Locally, I have received numerous phone calls this month about commercial property defaults and the tax implications involved. The article below outlines some very positive news from the government, who is trying to slow down the steam roller that is headed towards businesses in a hurry. The government will now make it easier for commercial real estate loans to be modified and also keep their tax status. The question is of course, will the Big Bad Wolves, aka the Banks, work with the borrower?

http://online.wsj.com/article/BT-CO-20090915-709931.html

Another plan - This time from the FDIC

The FDIC covers some of the losses incurred by failed banks, so to help homeowners avoid foreclosure, they are encouraging banks to reduce mortgage payments for the unemployed struggling to pay their notes. This is basically a 3-6 month forbearance, with the balance payable over the life of the loan. The FDIC will cover the difference for the lenders, if any lenders agree to cooperate. http://money.cnn.com/2009/09/11/news/economy/forbearance_unemployment/index.htm?postversion=2009091118

The government and it's related agencies can implement 100 programs to help Americans, but if they can't deliver on these programs effectively, it's nothing but hyperbole. Let's keep these plans simple and effective. These programs need to be easy to understand for everyone, loss mitigators and homeowners alike, so that we can get loan mod approvals up from 12%. Yesterday, I met with an attorney who had no idea about a new law here in Oregon: HB 3004. Simply, if the 1st and 2nd purchase money mortgages on a home are with the same lender, the 2nd can no longer seek a deficiency judgment against the homeowner if they fail to perform. In this case, the client had US Bank holding both mortgages, and he literally skipped out of the restaurant with a big smile on his face.

Is the Obama Plan Working?

Maybe. Personally, we have seen a better response time from the lenders on short sales and loan modifications just recently, the approval time has decreased by about 12 days on average. Their cooperation with us has improved and that's a step in the right direction, but this is still an arduous process. Loan modifications are up 3% in the last 2 months to an average of 12% of eligible homeowner receiving approvals. That's still pretty rough, but any improvement is welcome. Here's a good example of a success story: A client just received an approved loan modification on a $1 million balance from 6.37% to 2.5% for 5 years! That's what is needed, since we all know these lenders really don't want to foreclose on these high end homes. Contact us anytime for answers to your Portland real estate questions in this unique market.

I was approved for a short sale! I am off the hook!

Not so fast. In all reality, that is where the negotiations start. Are the banks releasing you from the debt as well, or are they just releasing the lien and expecting you to pay the remaining balance? For example: We are helping a local attorney with the short sale on his home. He only had one loan and the bank verbally told him they would not seek a deficiency. I explained that the wording in the approval letter did not state that, and that he should not close until they included the appropriate verbiage in the approval letter. He decided to close the transaction. (Remember - This is an attorney). 3 weeks later he called me up explaining that his credit report showed a balance owing. Hate to say I told you so! First - Understand the laws of your state. Is it a non-deficiency state or a recourse state. That knowledge will give your negotiating strength over the bank. Second - Always have things in writing, verbal agreements do not work. Third - Make sure you are working with someone that has extensive experience in these type of transactions. In the real estate field, the new term is Certified Short Sale Specialist. This is important, because at least you have the fundamentals, but if that person has not closed at least 50 short sale transactions they are a rookie!

We have closed hundreds of short sales and would be pleased to discuss your unique situation to show how we can help out. Give us a ring at 503-594-0805 or email me at nick@oregonhomesaver.com


Written by Nick Shivers