Research and exhaust all your options.  Loan Mods are working for some folks should you want to try to first keep your home.  If you don’t qualify for one then you can short sale your home, restore your credit and buy again a home that is in line with todays true market value.

Enjoy – Stay Informed!

Kenny

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Only 331,000 of the 975,000 loan modifications that have been completed to date have been written under the federal government Home Affordable Modification Program (HAMP); the rest are the result of proprietary loan modifications from servicers and lenders.

What happens to borrowers when their modifications are turned down by HAMP?  In 45% of the cases the Lenders work out a proprietary modification.  Another 2.4% end up selling their homes through a Short Sale.  About 3% file for bankruptcy, thus delaying any final resolution on the home.  Another 10% end up losing the home to foreclosure.

The Treasury Department report on the program notes that there are wide discrepancies between servicers on what happens to those who request a modification.  To a large extent, it is the luck of the draw as to whether a loan modification will be successfully completed.  The loan modification process has, on the whole, slowed the progress of foreclosures.

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Bottom line is that you should consider all your options and work with a competent professional who can help guide you so you can make an intelligent decision.  Loan mods are becoming successful for many folks who are advised & helped out correctly the first time around.

For those of you that have read my blog you know that I’m not a big proponent of Loan Modification due to it’s over promising and under delivering and in my opinion, just postponing the inevitable.  For most folks, short selling their home is probably the best thing to do so they can rebuild in the next 12 months and buy a house that is at it’s current market rate.

BUT…I’ve heard mixed stories.  It seems that HAMP can be successful (it’s currently failing 50% of it’s applicants who are on trial mods) IF…and this is a big IF…the companies that are helping these folks get into the HAMP trial modification plan work out the homeowners financials CORRECTLY to begin with…AND…IF they we’re truthful to those whose homes are 35-50% less than the loan amount, as logic would think, it would most likely be better they short sold their home even if the loan mod payment was low enough for them to afford because they probably couldn’t make up the deficiency in value in their lifetime.  Cut your losses and move on.

For more commentary about this, below is an excerpt from a newsletter I subscribe to:

“Smart Real Estate News & Commentary by Chris McLaughlin August 31, 2010″

You can subscribe directly at the following link:  http://www.smartrealestatenews.com/

Banks have long come under fire not doing enough to help troubled homeowners, particularly when the mortgage crisis started spinning out of control in 2007. Many loan servicers initially addressed the problem by tacking on the missed payments, which only increased strapped homeowners’ monthly burden.  However, banks now are doing nearly twice as many modifications under their own foreclosure prevention initiatives than under the Obama administration’s signature Home Affordable Modification Program (HAMP).

Servicers completed nearly 644,000 so-called “proprietary permanent modifications” in the first half of this year, compared to 332,000 such adjustments made under the Obama program, according to Hope Now, a consortium of mortgage servicers, investors and housing counselors.  About half of borrowers who don’t land a permanent HAMP modification are given an in-house adjustment, according to federal statistics.  About 78% of banks’ in-house modifications involved interest rate and principal reductions, Hope Now found.  Wells Fargo, for instance, said last week it has reduced more than $3.1 billion in principal on nearly 60,000 loan modifications in the past 18 months. It uses a combination of principal adjustments, interest rate reductions and term extensions to assist its borrowers.

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Submitted by Tim Harris on August 26, 2010 – 10:32 am

Click on the following link below for the whole story.

My take folks…continuing to make a mortgage payment an a house that is so underwater and is putting your family & future family i.e. kids at risk of ever having a fruitful life than do what the banks, commercial property owners and other businesses do when their “investments – i.e. real estate” is no longer a worthy investment” – cut your losses and rebuild.  Why is it okay for them and considered smart while homeowners are being made to feel guilty as it’s their moral obligation to make their payments and to the point that they bankrupt themselves, destroy their family with no way out.  I’m not arguing what the “moral” thing to do is here.  In my opinion, this is solely a business contract that has gone south and you, the homeowner(s), need to do what’s best for you & your future.

http://timandjulieharris.com/2010/08/26/jingle-mail-strategic-short-sale-walking-away-becoming-trendy/

Thanks Tim & Julie Harris and Harris Real Estate University for staying on the cutting edge and helping agents help owners build for a better future.

Kenny Wagner

Believe it or not, you may just need help getting a temporary reduction in your payments to ‘catch up’.  In any case, call me to talk about the several options that you may not be aware of.

If you don’t know what else to do and you don’t call me at 1-702-204-3945, what will it cost you in damaged credit, frustration and stress?

If I am unavailable when you call, you can either leave me a message or with one of my assistants who are taking calls from 8am to 9pm Pacific time Monday through Saturday.

I know how you feel and I can help.

Kenny

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist

The Foreclosure Mitigation Company
Short Sale & Foreclosure Specialists

1-702-483-0890 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com

And Did You Know That Most Short Sale Agents Who “Do Short Sales” Have A 90%+ FAILURE Rate When Negotiating Short Sales According To The National Association Of Realtors?  That Means The Average Agent Will Only Get 1 Or 2 (At Best) Out Of Every 10 Short Sales To Work.  I Have A 90%+ Success Rate When Closing Short Sales Transactions.  See A Sample Of My Short Sale Approval Letters HERE.

If Considering Another Agent Or Negotiation Company, I Advise Asking Them For Their Most Recent Approval Letters From The Banks Showing They Can Get The Job Done… Most Can Not.

My Success Rate Is So High Because I Have Been Specifically Trained On Short Sales By THREE Of The Most Well Known Top Loss Mitigators In The Country & A Top Short Sale Attorney - (Jerami King – KK Consulting; Suzanne Erickson – American Loss Mitigation; Lee Honish – Short Sale Genius & Jeff Watson – Top Short Sale Attorney) On How To Negotiate A Settlement With Your Current Lenders So You Can Sell The Property, And Get Out From Under This Burden.

Best Of All, My Compensation Is Usually Paid By The Bank, So You Won’t Have Any Out-Of-Pocket Expense & You Keep Your Full Commission.

If you are considering bankruptcy as an alternative to foreclosure, that may have a greater impact to your FICO score. While a foreclosure is a single account that you default on, declaring bankruptcy has the opportunity to affect multiple accounts and therefore has potential to have a greater negative impact on your FICO score.

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company

1-702-204-3945 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com

On November 5th, 2009 FANNIE MAE announced their “DEED FOR LEASE” program that allows homeowners to lease their home in exchange for their deed.

WASHINGTON, DC — Fannie Mae (FNM/NYSE) is implementing the Deed for Lease™ Program under which qualifying homeowners facing foreclosure will be able to remain in their homes by signing a lease in connection with the voluntary transfer of the property deed back to the lender.

So it is official, but this brings to mind a couple questions:

Does this really help you the homeowner?  It says that you can “qualify” for up to a 12 month lease with potential for a renewal.  Does this mean that it could be shorter?  Looks like FANNIE MAE is trying to stem the amount of foreclosures they are acquiring each month in addition to trying to create some revenue to stem their mounting losses.

After reviewing the announcement from FANNIE MAE & reading an article in the LA TIMES on this announcement, I just see this as a temporary band aid to a growing problem for FANNIE MAE, which is all the foreclosures that they are acquiring.  What about the tax ramifications?  Giving up their deed for a lease is very similar to a deed in lieu except that the homeowner gets to stay in their home for a period of time but versus a short sale the tax ramifications are greater for both a deed in lieu of foreclosure or a deed for lease.  So who does this really help?  The homeowner or FANNIE MAE?

Moreover, for this to work, any subordinate lien holders must release their lien.  It’s been my experience that subordinate lien holders would rather short sale and receive something than voluntarily give up their lien position for nothing.

Here is what Jay Ryan, VP of FANNIE MAE has to say about the program:

“The Deed for Lease Program provides an additional option for qualifying homeowners who are facing foreclosure and are not eligible for modifications,” said Jay Ryan, Vice President of Fannie Mae. “This new program helps eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities.”

My first initial reaction is that it doesn’t address the issue head on.   I believe short sales are the answer and until they help with streamlining their approval process with short sales FANNIE MAE, along with other lenders, will continue to acquire more properties through foreclosure.  Homeowners do not want a temporary fix where they are allowed to lease back their house where they eventually have to move anyways.  Homeowners want an immediate solution to their current problem which allows them to move on and start building a new life.

For additional information about the Deed for Lease Program, including full details on program eligibility, please review the Guide Announcement on www.efanniemae.com.

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company

1-702-204-3945 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com

Nine options when facing Foreclosure

1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction.  Loan applications generally ask if the applicant has ever been foreclosed upon.  Credit reports also disclose this damaging information. Not the best option.

2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees.  Usually this is accomplished through a refinance of the debt.  New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default.  With this option, there should be equity in the home.

3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.

4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan.  This may allow the homeowner to catch up at a more affordable level.  To qualify, you must prove to the lender you have fixed the problem that caused the late payment.

5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation.  The lender may even be able to provide a temporary payment reduction or suspension of payments.  Information will be required from the lender to show that you are able to meet the new payment plan requirements.

6. Partial Claim – A loan from the lender for a 2^nd loan to include back payments, costs and fees.

7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing.  Banks generally require the home be well maintained, all mortgage payment and taxes must be current.  Most loan applications ask if this has ever happened.

8. Bankruptcy – This option can liquidate debt and/or allow more time.  I can refer you to a qualified bankruptcy attorney.

–Chapter 7 (Liquidation) To completely settle personal debt.

–Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.

–Chapter 11 (Business Reorganization) A business debt solution.

9. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale.  In this case, the homeowner will get cash from the sale.  On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value.

I affirm that I have read this and understand that I have several options available to me and that there may be more than those listed above.  I affirm that I have been advised that I should consult an Attorney and CPA.  Understanding this I know that I have the option to choose to use The Foreclosure Mitigation Company to assist me in negotiating the short sale of my home.

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company

1-702-204-3945 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com