I just read an article on DSNews, the leading magazine that discusses the latest on the default servicing industry, that mortgage delinquency rates rose from the March. April's data shows that there are 6,388,000 mortgages that are at least 30 days late or in the foreclosure process. The article did not go into detail about the reasoning behind the increase in delinquent mortgages, but we can certainly speculate some reasons for this while looking around at our communities.
While the unemployment rates seem to be on the slow track showing slight improvements in the job sector, there are many other indicators showing that our country is begining to dig it's way out of the rescession. However, that does not mean that mortgage delinquencies immediately dissappear because there are small sign of improvement around the economy. Take a look at your own community and neighborhood conversations to find what people are stresssed about. People are still in distressed financial situations, still looking for jobs and trying to play catch up on their bills.
Loan modifications are still playing a big roll for mortgagors and lenders alike. I have taken some time out of my days to help a few clients with loan modifications as they've been given the run around by other non-profit and profit agencies alike. These companies are dropping the ball somewhere, somehow on the mortgagors and their files sit at a stand still with the lenders because the follow up and persistence just isn't a priority while working the cases. While helping these clients, I've discovered that most lenders require a homeowner to be behind on their payments by at least 30 days before they can even submit a modification request. This is one contributor to the 6,388,000 delinquent home loans.
If you'd like to see more of the article, click here. If you know of anyone that is in a distressed financial situation, please have them give me a call. I've successfully negotiated loan modifications for Bank of America, GMAC and Wells Fargo, so if you know someone that is struggling to get this completed I can help in this areana as well.
Your friend in the business,
Liz Novotny
651-203-1769 or liz@liznovotny.com
Wednesday, May 18, 2011
Wednesday, May 4, 2011
Who's negotiating my short sale?
I was speaking with a newer friend recently about his experience selling his home as a short sale. I was not the listing agent on this situation as this friend had already signed on to another realtor about the time that we were getting to know each other. I wanted to hear about his experience, first to ensure that the process went smoothly and secondly to see how this agent negotiated with the bank in the event there was something I could learn.
I found out rather quickly this agent ended up taking money out of my friend's pocket. His agent hired an attorney to negotiate the short sale in lieu of taking the time to do this themselves. Agents do this so they can continue focusing their time on the rest of their business instead of getting bogged down to a phone and computer while working with the bank. While this is becoming more common place in the distressed market, I've yet to see an attorney get an offer negotiated faster or smoother than when the agent negotiates themselves. The price of hiring an attorney to negotiate a short sale could get expensive, depending on the attorney doing the negotiating. The attorney will either charge a flat fee or a percentage of the commission on the sale. Most agents will deduct this fee out of their own commission, as they feel this is their price to pay. However, this was unfortunately not the case in my friend's situation.
My friend ended up paying the attorney's fees out of their own pocket! As part of the listing agreement, they had agreed to pay the attorney's fees themselves instead of the agent deducting this from their commission.The sellers were to receive a small amount of relocation assistance at the closing table because they had an FHA loan and FHA allows for $1000 to the seller at closing. Most loans do not allow funds to go to the seller, due to the fact that the lender is writing off the remaining balance. While the sellers didn't have to come up with the money out of their own pocket before closing, they did lose out on money that was rightfully theirs at the closing table.
I share this story with you to illustrate that how they were taken advantage of. In this housing market, there are many realtors out there that will do what they can to keep as much commission in their pocket as possible. If that means charging a seller a fee that should have come from themselves, they apparently see nothing wrong with this situation. People in distressed situations should never have to pay to sell their house, even as a short sale. I ask you to please keep this in mind when you hear about folks discussing short sales with you in the future. Remind them that a realtor with INTEGRITY will never charge a distressed seller uncustomary fees to sell their home.
Feel free to call or write with questions or comments on this situation, I'm always happy to help.
I found out rather quickly this agent ended up taking money out of my friend's pocket. His agent hired an attorney to negotiate the short sale in lieu of taking the time to do this themselves. Agents do this so they can continue focusing their time on the rest of their business instead of getting bogged down to a phone and computer while working with the bank. While this is becoming more common place in the distressed market, I've yet to see an attorney get an offer negotiated faster or smoother than when the agent negotiates themselves. The price of hiring an attorney to negotiate a short sale could get expensive, depending on the attorney doing the negotiating. The attorney will either charge a flat fee or a percentage of the commission on the sale. Most agents will deduct this fee out of their own commission, as they feel this is their price to pay. However, this was unfortunately not the case in my friend's situation.
My friend ended up paying the attorney's fees out of their own pocket! As part of the listing agreement, they had agreed to pay the attorney's fees themselves instead of the agent deducting this from their commission.The sellers were to receive a small amount of relocation assistance at the closing table because they had an FHA loan and FHA allows for $1000 to the seller at closing. Most loans do not allow funds to go to the seller, due to the fact that the lender is writing off the remaining balance. While the sellers didn't have to come up with the money out of their own pocket before closing, they did lose out on money that was rightfully theirs at the closing table.
I share this story with you to illustrate that how they were taken advantage of. In this housing market, there are many realtors out there that will do what they can to keep as much commission in their pocket as possible. If that means charging a seller a fee that should have come from themselves, they apparently see nothing wrong with this situation. People in distressed situations should never have to pay to sell their house, even as a short sale. I ask you to please keep this in mind when you hear about folks discussing short sales with you in the future. Remind them that a realtor with INTEGRITY will never charge a distressed seller uncustomary fees to sell their home.
Feel free to call or write with questions or comments on this situation, I'm always happy to help.
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