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.