TEXAS BORROWERS RECEIVE RESTITUTION
DALLAS (Dallas Morning News) – As part of the largest predatory-lending lawsuit in history, Countrywide will use $8.4 billion to modify mortgage terms for 400,000 borrowers in Texas and ten other states who received unaffordable loans from the lender.
The settlement has reserved $7.5 million for Texas to distribute restitution payments worth $2,300 to help borrowers who already lost their homes or are near foreclosure — 120 days or more delinquent on payments.
About 3,260 Texans are eligible for restitution, according to a spokesman with the Texas Attorney General's office.
Under the settlement, borrowers could get the $2,300 payment if their first loan payment was due between Jan. 1, 2004, and Dec. 31, 2007, and they made six or fewer payments before losing their home.
For borrowers who can't afford to refinance their mortgage and have to leave their home through a foreclosure sale, the settlement provides relocation assistance of $2,000 per borrower.
My first impression is that we are a bunch of big irresponsible babies. We can't drive with coffee in our laps. We can't take responsibility for our MEGA consumption and ruin of the earth. Now we also can't be expected to actually read what we're signing. Who are these people that bought houses that they could only afford for 6 months?
I honestly don't know the extent of this lawsuit. I haven't read what the complaint was. I haven't done any research. All I know is that a few people that overextended without considering the consequences have now made getting a loan so hard that it's considered a heroic event!
I'm blaming it on all the Jocks in high school. The ones that would do anything to bed a cheerleader :-)
Showing posts with label default. Show all posts
Showing posts with label default. Show all posts
Friday, February 13, 2009
Tuesday, February 10, 2009
Landlord Scams
Just met another prospective tenant that has to move because her landlord is being foreclosed on. She just moved in, gave a hefty deposit and now has to move.
It seems there are a lot of desperate people out there! I wrote about the scams on Craigslist where people posed as property owners and rented out homes that were in default. These "posers" took people's money and disappeared.
I don't know what to do to stop this theft. All I know how to do is to warn you of it's occurence.
If you need help checking on a property - and whether it's in default or researching who the owner is - just shoot me an email.
I am here to help.
R
It seems there are a lot of desperate people out there! I wrote about the scams on Craigslist where people posed as property owners and rented out homes that were in default. These "posers" took people's money and disappeared.
I don't know what to do to stop this theft. All I know how to do is to warn you of it's occurence.
If you need help checking on a property - and whether it's in default or researching who the owner is - just shoot me an email.
I am here to help.
R
Thursday, January 1, 2009
Loan Mod Updates
It was only a few weeks ago that I read the statistics showing that the majority of borrowers that were given modified loan terms in order to keep the owner in the home were delinquent within 12 months of the modification!
I really thought that was the end of loan mods. I mean, if they don't work then why spend so much time and energy on them. After all, it's not really the loan terms that are the problems, it's that the borrowers were ill equipped to be home owners.
Perhaps they use some sort of "new logic", kinda like "new math" down at Fannie Mae because here's the latest article today from the LA Times:
More lenders allow “early workout” loan alterations
Borrowers with loans owned by Fannie Mae no longer have to be behind in payments in order to qualify for a loan modification. Borrowers facing financial difficulty, such as losing a source of income, now can apply for an “early workout” loan alteration. Under Fannie Mae’s program, borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If the reduced payments are made on time each month during the trial period, the modified mortgage terms may become permanent.
I'm thinking I would do a better job with that bailout money...
I really thought that was the end of loan mods. I mean, if they don't work then why spend so much time and energy on them. After all, it's not really the loan terms that are the problems, it's that the borrowers were ill equipped to be home owners.
Perhaps they use some sort of "new logic", kinda like "new math" down at Fannie Mae because here's the latest article today from the LA Times:
More lenders allow “early workout” loan alterations
Borrowers with loans owned by Fannie Mae no longer have to be behind in payments in order to qualify for a loan modification. Borrowers facing financial difficulty, such as losing a source of income, now can apply for an “early workout” loan alteration. Under Fannie Mae’s program, borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If the reduced payments are made on time each month during the trial period, the modified mortgage terms may become permanent.
I'm thinking I would do a better job with that bailout money...
Wednesday, August 20, 2008
4 Investment Lessons Learned The Hard Way
Just got off the phone with clients - a term I am using very loosely for these folks.
They bought an investment property about 30 months ago, with someone else, because their friend-of-a-friend salesperson told them it would break even. They apologetically called me a few months later. They were sorry they hadn't used me, they were trying to help this new salesperson and now they were having trouble with tenants and their new agent wasn't any help. [I looked up the salesperson on the DRE website and saw that he had been in the business 11 months.] These clients knew I did property management so they pumped me for information and help for about 40 minutes before begging off on paying for my services because they wouldn't break even on their investment.
A few months later they called again. They had received the supplemental tax bill and wanted to know why it wasn't paid at the closing. I explained how it worked and when I got off the phone I realized that their break even property was now a couple hundred dollars a month negative.
Tonight they called because they are out of money. They have tapped all their credit cards, one of the current tenants has lost his job and they haven't paid for August. Plus the property is worth about $85,000 less than what they owe on it before title, escrow and sales fees. Now they are shopping around for the cheapest agent to sell it.
Of course, I mentioned that most agents have no experience with short sales, that's why only about 32% of them close before the trustee sale. I reminded them that ALL of my short sales had closed and that their loan is a purchase money loan so the bank won't come after them for a deficiency judgment.
"In essence, you're not paying the fees anyway - why not hire the best?!!"
There was a long pause and they told me they'd call me back. I am not holding my breath.
So, did you catch the four lessons?
1) Taking someone's word on the numbers is like handing your money over to your crazy uncle Charlie. You have to learn to check the numbers yourself.
2) Hire a professional property manager. One months worth of vacancy will pay for 10-12 months of property management.
3) Know what the expenses are up front. Include maintenance, vacancy, insurance, the new tax base, etc
4) Hire the Best! You don't have to do it alone. You don't get an extra gold star. Instead you stand to lose a bunch of money and get a foreclosure on your record.
I feel bad for these people. I am a lot like them. I know just enough about something to get me into a lot of trouble! I have to constantly remember my own advice about using my team if you don't have your own. You need a CPA and an Attorney and a great Realtor - at a minimum.
My gut tells me that these folks aren't quite done learning the hard way. Perhaps this example will help you from learning the hard way, too!
They bought an investment property about 30 months ago, with someone else, because their friend-of-a-friend salesperson told them it would break even. They apologetically called me a few months later. They were sorry they hadn't used me, they were trying to help this new salesperson and now they were having trouble with tenants and their new agent wasn't any help. [I looked up the salesperson on the DRE website and saw that he had been in the business 11 months.] These clients knew I did property management so they pumped me for information and help for about 40 minutes before begging off on paying for my services because they wouldn't break even on their investment.
A few months later they called again. They had received the supplemental tax bill and wanted to know why it wasn't paid at the closing. I explained how it worked and when I got off the phone I realized that their break even property was now a couple hundred dollars a month negative.
Tonight they called because they are out of money. They have tapped all their credit cards, one of the current tenants has lost his job and they haven't paid for August. Plus the property is worth about $85,000 less than what they owe on it before title, escrow and sales fees. Now they are shopping around for the cheapest agent to sell it.
Of course, I mentioned that most agents have no experience with short sales, that's why only about 32% of them close before the trustee sale. I reminded them that ALL of my short sales had closed and that their loan is a purchase money loan so the bank won't come after them for a deficiency judgment.
"In essence, you're not paying the fees anyway - why not hire the best?!!"
There was a long pause and they told me they'd call me back. I am not holding my breath.
So, did you catch the four lessons?
1) Taking someone's word on the numbers is like handing your money over to your crazy uncle Charlie. You have to learn to check the numbers yourself.
2) Hire a professional property manager. One months worth of vacancy will pay for 10-12 months of property management.
3) Know what the expenses are up front. Include maintenance, vacancy, insurance, the new tax base, etc
4) Hire the Best! You don't have to do it alone. You don't get an extra gold star. Instead you stand to lose a bunch of money and get a foreclosure on your record.
I feel bad for these people. I am a lot like them. I know just enough about something to get me into a lot of trouble! I have to constantly remember my own advice about using my team if you don't have your own. You need a CPA and an Attorney and a great Realtor - at a minimum.
My gut tells me that these folks aren't quite done learning the hard way. Perhaps this example will help you from learning the hard way, too!
Monday, June 16, 2008
Four things to do NOW if your home is in Default
Todays market is full of uncertainty - exacerbated by the media - and people are ostriching. You know what an ostrich does when it's afraid, right? It puts it's head in the sand.
I'm not sure how great a strategy that really is for an ostrich but I know that for someone in default; that's the way to lose your home.
I had an example of that this morning. I had spoken with this gentleman last week and I'd given him a list of information that I needed from him. I told him I would work on it first thing Monday and I needed it all faxed in by Sunday at noon. This morning I went to work on his file and there was nothing there. This is a man that stands to lose two houses within the next 45 days if he doesn't figure something out and he failed to do ANYTHING. He ostriched.
We humans act irrationally when we are afraid but please, now is not the time to stick your head in the sand. Here are four simple steps that will get you on the path:
1) Analyze the facts. Take a plain piece of paper and fold it down the middle. On the left write "assets" on the right write "liabilities" then write down every asset you have; bank accounts, retirement, your rolex, your SUV, even your furniture. [I had a client sell all her living room furniture. It was over the top Louis XIV and fetched a pretty penny. That and her wedding ring [her husband left her and left a pile of debt] got her out of default.
Now fill in every liability, including loans from mom, cars, lines of credit, that jewelry credit line, everything. Now add up the left, and up the right and subtract the liabilities from the assets. If you come up with a negative number, you are not alone. Now you know the truth of your situation.
2) Consider your options. There could be more options, depending on your situation but, these are the ones I present:
* Bring your loan current; pay back payments + penalties.
* List your home for sale; we can work a quick sale - even without equity, even in this market.
* Sell your home directly to a qualified investor - if you’ve waited too long.
* Refinance or Renegotiate your loan- We have an in-house specialist that rocks!
3)Consult a trusted advisor. And I am not talking about me! :-) Most people have someone to talk things over with. It could be your tax guy, mom/dad, uncle, someone at work... Just make sure this is someone that you trust with your truth. Foreclosure can be very embarassing and it's common to be ashamed. We think we should have been able to see the future. To know that someone could die, or get divorced, have an illness or lose a job. The truth is thing happen and when it's you, you are emotionally involved. Go to your trusted advisor, your neutral third party, and see if there are options you overlooked or other avenues you need to research.
4) Hire a Professional. Once you've done your homework, hire the best you can hire. I just had a guy that wasted 5 weeks with a lender that couldn't do what they promised. When you are in default, you don't have 5 weeks to waste. Hire someone with a proven track record, that's seen a few cycles, that knows how to get the job done with your best interests in mind. I know for me, there are many times that I could have "just sold the house" and made a commission but, instead I helped my client see their options. Maybe they could refinance or pull some money out of an IRA, or sell the big car to get them back on track. So, get a personal referral, google the person, check their references, hire the best. It does cost a little more to hire the best but, if you were getting a heart bypass do you want the intern running a $995 special or do you want the professional that has had a twenty year career and hundreds of healthy happy clients?
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