It wasn’t so long ago that, in the real estate world, short sales and/foreclosure were few and far between. Before 2008, it was almost unheard of for anyone to lose their home when they could usually sell it with a capital gain to get themselves out of trouble. It’s not to say that there weren’t a share of distressed homeowners out there, but when a foreclosure happened, most everyone simply shook their heads and thought “Wow. How bad were they with their money to let THAT happen.”
Flash forward, and (unfortunately), short sales and foreclosures have become almost commonplace. In the Santa Clarita Valley alone, 63% of the inventory of homes for sale revolve around distressed properties (Either short sales or bank-owned properties). Now we know there’s been quite an economic kerfuffle that’s resulted in quite a few homeowners finding themselves very upside down on their mortgage along with either one or more persons in the household unemployed or having their income cut considerably. We are seeing our way through it, and while there are glimmers of hope on the horizon, the numbers don’t lie. 63%….Sigh.
Here’s where the story takes an interesting turn. In the past few years, a bumper industry has sprung up in “saviors” coming out of the woodwork to help those poor homeowners out of their financial woes. As you may or may not know, when a lender has filed a Notice of Default (N.O.D.) against a homeowner which is the first big step in the foreclosure process, it becomes part of the public record. Well, someone gathers that information up once it’s published and stores it in a database. There’s the FIRST bumper business…Selling lists of homeowners who are about to be thrown out of their homes.
Who buys these lists? Realtors, lenders, scam artists…What?
As a licensed realtor, I do have a legitimate concern regarding a homeowner’s distressed situation. I do market my services and have helped homeowners avoid foreclosure LEGALLY and with the blessings of the Department of Real Estate and the California Association of Realtors. I’m above board, like most of my colleagues, and we’re not out to exploit your situation.
But beware the offer that sounds too good to be true! As we know that old adage, “If it’s too good to be true…You’re gonna get screwed!” Wait, that’s not how that goes. The end result usually is the same, though.
When this whole housing mess started a few years ago, loan modification companies sprang out of nowhere claiming to help you negotiate a better deal with your lender. They usually wanted an upfront fee (Which even back then was illegal, but does a distressed homeowner know the law when they are desperately trying to save their home?), and rarely (less than 10%) got anyone the loan mod deal they wanted.
Now, the State of California has cracked down on many of those scams, but if you have received a solicitation from a company claiming they will help you stay in their home, remember that it is illegal for anyone to ask for money up front. There is a law on the books that loopholes the issue for attorneys who are engaged in the practice of foreclosure prevention (CA 2945), but even still, you don’t have to pay anyone up front if you don’t want to.
The best thing to do is to try and work with your lender first. They have the final say, and no matter what someone tells you, it ultimately is up to the lender as to whether they will deal with you or not.
Another ripoff gem hitting the mailboxes of distressed homeowners is the notion that companies (I’m not going to mention any names…Ahem…Bella, LLC *Cough cough*) can buy your home from you at or above fair market value, then RENT your home back to you at what would be the equivalent of the price of a one bedroom apartment, then offer to sell the home back to you after a 3 year lease agreement. This is what I call…A total SCAM! It involves magic math, and promises that these companies can’t possibly keep without the lender’s approval. RUN…don’t walk…Away from deals like this!
If you are in a financial situation that has put you at risk of losing your home, try contacting your lender directly first to see if there is anything that can be worked out. If you are unemployed and suffering financial hardship, there are new rules from Freddie Mac on the books that say your lender MUST try to work out a forbearance plan or reduction for at least six months.
If you don’t qualify for the Unemployment Forbearance Plan and you’re facing foreclosure, contact a real estate professional. Contact a professional who knows your area and knows how to deal with the banks, and understands the short sale process.
I am a certified short sale professional. I am also one who gives my clients the real deal as far as what their options are and what their expectations should be. I am qualified to answer your questions and steer you away from a bank foreclosure. You can learn more about me by going to http://kaul4homes.com/stop-foreclosure.htm or call me directly at 661-209-7447. No obligation, no arm-twisting, just common sense answers to your questions.
If you ask an average homeowner, most could not explain how the foreclosure process and timeline work. Sadly, there are also a number of Real Estate Agents who are just as misinformed. So I’m here to clear the air.
Given the number of foreclosures across the nation, it’s important to understand the timeline and sequence of events. Knowing your timeframes will help homeowners avoid the foreclosure trap. Here in California, for example, we have the highest number of foreclosures in the United States. Between January and June 30, 2010, California bore witness to approximately 340,000 foreclosures. That’s just foreclosures, folks. We haven’t even tapped into the Short Sale numbers, which run upwards of 50%, 60%, 70% of available inventory and higher depending on your neck of the woods.
Foreclosure just does not need to happen, and you can help by passing the information below to your family and friends.
FORECOSURE TIMELINE
Day 1: Notice of Default (NOD) Recorded. The official clock has started ticking and the countdown to foreclosure has begun. Homeowner enters the “redemption period” and has 90 days to bring loan up to date and out of default, including any penalties and fees. Homeowners will receive notification of NOD filing by mail. Always open correspondence from your mortgage provider.
Day 91: Notice of Trustee Sale (NOTS) is posted. This ends the redemption period and trustee sale date is set.
Day 112: Trustee Sale (TS) can be held 21 days after NOTS is posted. Property is sold to highest bidder at public auction.
Basically, in approximately 112 days (or less than four months) the home can be lost to foreclosure. In California, the estimated foreclosure timeline is a minimum of 120 days.
Now, I know what you are thinking. “So what! My neighbors house hasn’t been foreclosed upon and they’ve been trying to sell it through Short Sale for almost 2 years now. Banks just don’t follow that. And they’ve been living there for free.” We have all heard the stories and know how NODs aren’t always filed and there are delays once it’s been filed, etc.
While, yes, that’s true in a number of cases what most forget is postponement of the Trustee’s Sale DOES NOT STOP the foreclosure timeline. Given I’m not a lawyer and don’t know case law by hand, I want you to really digest that statement:
Postponement of the Trustee’s Sale DOES NOT STOP the foreclosure timeline.
I’m sure you can only imagine the problems homeowners are facing not realizing this piece of the puzzle. The timeline does not stop folks. Which means even though you have received postponements due to short sale or loan modification, once these dates have been reached your home can be foreclosed upon in a nanosecond. The banks can foreclose your property in an instant and the law is behind them.
For more information on laws that govern California Foreclosure, look up CA Civil Code 2924gf and 2923.5
It’s been said time and again that “It’s all about Relationships” when it comes to your real estate transaction. As simple as that statement may seem, it’s also the most forgotten — especially when dealing with (dare I say it?) T H E B A N K S!
So, you are getting a Loan Modification and the only way to get your point across is to cuss and yell at your servicer. (ding, ding) Wrong Answer. When trying to sell your home through a Short Sale and your Agent calls with information from The Bank, do you start plotting your Agent’s and The Bank’s demise? Um, No! Or perhaps while trying to Avoid Foreclosure, you decide to avoid The Bank all-together!? As Dr. Phil would say: How’s that working for ya? I’m guessing it’s not. You are more frustrated than ever — just ready to give up and walk. It’s just not worth the hassle, you might say.
It’s time to take a step back. Breathe. Reassess your relationship with The Bank. Evaluate your expectations. Many have high hopes of being saved but very few understand the reality. Few understand The Bank.
Let’s look at a few ways we can help make our relationship with The Bank better, easier and get one step closer to Avoiding Foreclosure:
1. ALWAYS REMEMBER your relationship with your lender.
* It is not the bank’s responsibility to protect your interests.
* The bank is not designed to save you money.
* The banks have no legal duty to actually approve you for a loan modification or short sale.
* The banks have no legal duty to postpone your foreclosure while you are in a loan mod review process (unless you get it in writing).
* Do not rely on the bank to look out for your best interest.
2. Promptly open AND read all your mail involving your property … especially if it’s from your lender!
3. If you don’t understand the bank’s correspondence, seek immediate professional assistance (with emphasis on IMMEDIATE).
* However, don’t rely completely upon others to think and act for you.
* If you are working with a servicer immediately forward all correspondence to your service provider.
4. Carefully review anything you sign with your lender, to include loan workout agreements (forbearance/trial payment periods).
5. Document each and every conversation you have with your banking institution.
* Write down day, time, name, number, ID numbers, extensions, etc.
* Take detailed notes
6. Keep in constant communication with your lender and service provider.
* Noncommunication, like in any relationship, is a killer.
Lisa B. Kaul is a licensed real estate agent serving the Southern California communities of Santa Clarita, the San Fernando Valley, the Antelope Valley, Simi Valley and the Conejo Valley. Lisa also has a vast network of thousands of realtors who are ready to help you anywhere in the U.S.A. For more information, go to http://KaulGirl.com. For more information on avoiding foreclosures, go to http://Kaul4Homes.com
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