Is it going down? Obviously the answer is yes. The real question on most people's mind is, "how long will this last?" Our national real estate market is cyclical and it has it's periods of appreciation and growth and then, to correct, it has it's periods of depreciation and a slow market.
Based on the current 'hard to qualify' mortgage market and the general fear most people and investors have of buying in a declining market, the prices will continue to drop.
In my opinion, with the ongoing cuts to the fed funds rate, in this upcoming election year, our declining market will hit a temporary 'plateau' next year before finishing the decline in 2010. My belief is that we will hit that major plateau in 2010 and will most likely endure a couple years of moderate adjustments up/down to our local market before we hit our next real 'up' market.
-Trent
Wednesday, October 03, 2007
Sunday, September 16, 2007
Are the subprime programs dead?
The mortgage market has changed DRASTICALLY in the last 10 months. In December 2006, a person with a 540 score could get a loan to purchase a home with 100% financing without having to show tax returns or pay stubs.
Now, anyone who doesn't have a 700 score and can prove their income with tax returns and pay stubs will need to put at least 5%-10% down to purchase a home.
That is why I say the market has changed drastically. It is obvious that the 'old' subprime programs are long gone and any lender in business today only does Alt-A (which is pretty close to straight up 'A Paper' now), A Paper, FHA or loans that are under the conforming loan limits.
Right now, the main problem with our mortgage market is that the high default and foreclosure rates are causing such losses to the banks that secondary market investors are not interested in buying mortgages. Hopefully, rate cuts will be coming soon to at least increase the spread/margin for the lenders so they can attract back some secondary money to increse liquidity, which will in turn slowly loosen loan guidelines a little.
-Trent Chapman
Now, anyone who doesn't have a 700 score and can prove their income with tax returns and pay stubs will need to put at least 5%-10% down to purchase a home.
That is why I say the market has changed drastically. It is obvious that the 'old' subprime programs are long gone and any lender in business today only does Alt-A (which is pretty close to straight up 'A Paper' now), A Paper, FHA or loans that are under the conforming loan limits.
Right now, the main problem with our mortgage market is that the high default and foreclosure rates are causing such losses to the banks that secondary market investors are not interested in buying mortgages. Hopefully, rate cuts will be coming soon to at least increase the spread/margin for the lenders so they can attract back some secondary money to increse liquidity, which will in turn slowly loosen loan guidelines a little.
-Trent Chapman
Tuesday, April 17, 2007
Foreclosures still on the rise in San Diego
From NBCSanDiego.com -
"There were more than 3,900 foreclosures in San Diego from January through March, DataQuick Information Systems said Monday. That is a 156 percent increase from last year.
Foreclosures also hit record highs in Sacramento and Contra Costa counties.
Throughout the state, foreclosures rose 148 percent to nearly 47,000 -- its highest level in nearly 10 years. Dataquick said the numbers reflect a peak in the number of new home loans reached in the summer of 2005."
- So, if you have problems keeping up with your payments and you can't sell your home, you aren't alone. Don't feel ashamed or embarrassed if you are one of the thousand and thousands who are possibly facing foreclosure.
Call before it is too late and see if there is something that can be done for you to avoid foreclosure, we'll do it.
I talk with dozens of folks each month who have the same problem. A lot of them could save their home and aviod foreclosure if there was a way to first fix their credit. I have found an option for those that need to boost their score 80-120 points to save their home.
When you are ready to go over your options, call me at 760-752-1800 x111
Your Friend, Trent Chapman
"There were more than 3,900 foreclosures in San Diego from January through March, DataQuick Information Systems said Monday. That is a 156 percent increase from last year.
Foreclosures also hit record highs in Sacramento and Contra Costa counties.
Throughout the state, foreclosures rose 148 percent to nearly 47,000 -- its highest level in nearly 10 years. Dataquick said the numbers reflect a peak in the number of new home loans reached in the summer of 2005."
- So, if you have problems keeping up with your payments and you can't sell your home, you aren't alone. Don't feel ashamed or embarrassed if you are one of the thousand and thousands who are possibly facing foreclosure.
Call before it is too late and see if there is something that can be done for you to avoid foreclosure, we'll do it.
I talk with dozens of folks each month who have the same problem. A lot of them could save their home and aviod foreclosure if there was a way to first fix their credit. I have found an option for those that need to boost their score 80-120 points to save their home.
When you are ready to go over your options, call me at 760-752-1800 x111
Your Friend, Trent Chapman
Friday, March 23, 2007
Homeowners, Lenders Skirt Default, May Curb U.S. Housing Slump
I found this article on bloomberg.com and thought you all would be interested to read Kathleen Howley's article -
March 21 (Bloomberg) -- Rolando Ruiz and Stephanie Rodrigues telephoned their mortgage lender two weeks ago and offered to hand over the keys to their three-bedroom house in Providence, Rhode Island. They lost their jobs and haven't made a loan payment since January.
``I told the bank to come get the keys and just let me know when we need to be out, but they said why not put it up for sale and we might be able to work something out,'' said Rodrigues, the 22-year-old mother of two girls.
Homeowners such as the Rhode Island couple are finding their mortgage companies eager to accept a sale price that falls short of a property's loan balance -- a so-called mortgage short sale. The number of U.S. loans entering foreclosure reached an all-time high in the fourth quarter, according to the Washington-based Mortgage Bankers Association. That's spawning a cottage industry of real estate investors who profit as lenders try to avoid adding properties to their portfolios.
``Banks don't want to be real estate managers,'' said Doug Duncan, chief economist of the mortgage association. ``The fact that delinquencies are rising means we're going to see more pre- foreclosure sales.''
Almost 5 percent of U.S. mortgages had payments overdue by 30 days or more at the end of last year, the highest since 2003, Duncan said. No one tracks or estimates the number of borrowers who avoid foreclosure with a short sale, according to Duncan and David Berson, chief economist of Washington-based Fannie Mae, the largest buyer of mortgages. There's ample evidence that the number is increasing, they said.
`It's Happening'
``Clearly it's happening and the numbers are rising,'' Berson said. ``What we need to know to be concerned is how it compares to the last cycle, but no one tracks that.''
The short sales may mitigate the impact of the housing slump as the properties avoid being tallied as foreclosures. At the same time, they will help push the U.S. median home price to a third consecutive quarterly decline in 2007's first three months, Berson said.
``The way the banks see it, it's better than if the house goes into foreclosure, stands empty, and sees its value spiral downward before it's auctioned on the courthouse steps,'' Duncan said. ``It helps to clear the market.''
Both sides benefit from the transaction. Lenders absolve a portion of the mortgage and don't end up owning property. Although borrowers lose their homes, they avoid the stigma of default, making it more likely they will buy another property in the future.
Rising Delinquencies
Overdue payments, or delinquencies, on all types of loans in the fourth quarter rose to 4.95 percent, almost half a percentage point above the 4.47 percent average of the previous three years, Duncan said.
Late payments by subprime borrowers, those with tarnished or insufficient credit, climbed to 13.3 percent, compared with 2.57 percent for prime mortgages, according to a report released last week by the bankers' group. Foreclosures on prime mortgages rose to 0.5 percent from 0.42 percent a year earlier, a sign of broader trouble in the mortgage market.
In the U.K., where real estate prices are rising, the number of mortgages with payments between three to six months late slipped to 59,100, or 0.5 percent, in the second half of 2006 from 62,920, or 0.54 percent, a year earlier, according to the London-based Council of Mortgage Lenders.
As a growing number of U.S. borrowers were unable to pay their loans, more than 30 subprime lenders have closed since late 2006, according to a March 16 report from Newport Beach, California-based Pacific Investment Management Co.
Subprime Lenders
Wells Fargo & Co. and National City Corp. face the most risk among the largest regional banks from rising defaults by subprime borrowers, analysts at Merrill Lynch & Co. wrote in a report last month. About 12 percent to 14 percent of San Francisco-based Wells Fargo's total loans outstanding and 8.5 percent of Cleveland-based National City's were made to subprime borrowers.
Merrill estimated that subprime holdings at Bank of America Corp., U.S. Bancorp, BB&T Corp. and Wachovia Corp. were 3 percent to 5 percent.
The situation has provided plenty of opportunity for property investors like 30-year-old Dallas Alford of Wilmington, North Carolina. Business is booming, he said.
`More Forgiving'
``Lenders have become more forgiving in the last few months because defaults are rising, and they're not in the business of owning houses,'' Alford said. ``Trying to put that kind of deal together a year ago was a waste of time because banks weren't interested in a buyback.''
Alford said he handles about three or four mortgage buyback transactions a month with lenders usually forgiving $30,000 to $40,000 per loan. He declined to identify the banks involved.
In a typical deal, Alford finds a homeowner who has lost a job or had a business fail and gotten behind on his mortgage payments. He might be willing to pay $205,000 for a house that has a $235,000 mortgage, which would require the lender to forgive $30,000 of the loan.
Historically, only about 25 percent of mortgages that are delinquent end up in foreclosure. Some are resolved through a short sale and others result in a ``deed in lieu of foreclosure'' in which the owner surrenders the deed without a foreclosure and the bank ends up as a property owner.
Dwindling Options
In contrast, almost all mortgage forgiveness involves the sale of the property, said Regan Brewer, a counselor at Acorn Housing, a Chicago-based consumer group that provides free housing counseling to low- and moderate-income homebuyers. It's not likely a bank will reduce the loan's principal just because a house has fallen in value. In rare cases, borrowers can negotiate with banks to reduce late fees and charges that have been added to their loan's balance, Brewer said.
About three-quarters of the 400 homeowners who have visited the Acorn Housing office in Chicago in the past two months have been subprime borrowers who can't make their mortgage payments because their loans are resetting at higher rates, Brewer said. Some subprime loans reset every six months, she said.
``I don't know too many people who can afford to see their mortgage payment go up $400 or $600 every six months,'' Brewer said. ``Most people don't have the income to keep up with that.''
Borrowers who run into trouble paying their mortgages have fewer options in today's market, compared with a few years ago.
During the five-year housing boom that ended in 2005, owners who fell behind on payments could sell their homes and pay off their loans or get better refinancing terms based on the higher value of their property.
Falling Prices
That's what Ruiz, a truck driver, and Rodrigues, a bank customer-service worker, said they hoped to do. The first-time buyers paid $195,000 a year ago for an eight-room house and spent about $12,000 renovating it.
Ruiz, 33, lost his job driving an appliance delivery truck in November. Rodrigues lost her job at Bank of America in January. They found they couldn't recoup the money they put into the property because real estate values in Providence had fallen. The city's median selling price declined 1.1 percent in the fourth quarter to $291,300 from $294,400 a year earlier, according to the Chicago-based National Association of Realtors.
``If the market had kept rising, we would have been fine because we could have easily sold for a profit when we lost our jobs,'' said Rodrigues. ``Now, we're in a jam.''
`Crazy Loans'
Home prices fell in about half of U.S. cities in the fourth quarter, according to the realtors association. The national median price for a previously owned house was $219,300 in the fourth quarter, down 2.7 percent from a year earlier, the Chicago-based trade group said in a Feb. 15 report.
About 15 percent of U.S. banks tightened underwriting standards in the fourth quarter, making it more difficult for people to qualify for mortgages, the Federal Reserve's Senior Loan Officer Survey reported in January.
That action came too late, said Jonathan Werner, a real estate investor in Livonia, Michigan, who negotiates buyback deals with homeowners and banks.
``A lot of people have over-borrowed to pay high home prices, and lenders pushed crazy loans on people they knew probably couldn't pay them back,'' said Werner.
Werner said he's so overwhelmed with calls from homeowners who want a quick sale rather than a foreclosure that he no longer needs to advertise in newspapers for customers.
Wayne County
Most of his clients live in Wayne County in southeastern Michigan, which ranked first in the U.S. for foreclosures in 2006, according to Realty Trac, an industry Web site. The county has 33 towns and cities, including Detroit, and a population of 2.1 million, making it the largest in the state.
Subprime mortgages have rates that are at least 2 or 3 percentage points more than safer prime loans. About 20 percent of all new mortgages made last year were to subprime borrowers, according to Duncan of the mortgage association.
Some subprime borrowers were given loans without income verification at rates that probably will jump to levels they can't afford, said Federal Reserve Governor Susan Bies in a Feb. 20 speech at Duke University's Fuqua School of Business in Durham, North Carolina.
``Products that had adjustable payments every month began to be mass marketed to subprime borrowers, and we found that there was just stated income, no testing of income,'' Bies said. Borrowers ``did not have the ability to absorb the higher payments when the payments started shooting up.''
While the loans may have looked good on the books during 2006, many of them haven't performed well. Countrywide Financial Corp., the biggest U.S. mortgage lender, said payments at the end of 2006 were late on almost 20 percent of the subprime loans it tracks for other companies and investors who own them.
The situation may get worse, Bies said in a March 9 speech at a risk-management forum in Charlotte, North Carolina.
Back to Renting
``What's happening is the front end of this wave of teaser- rate loans that are coming into full pricing,'' Bies said. ``So what we're seeing in this narrow segment is the beginning of the wave. This is not the end, this is the beginning.''
It's a beginning of a different sort for Rodrigues and Ruiz, the Providence homeowners. Before they lost their jobs, they were earning about $5,000 a month, Rodrigues said. Now, they take in about $800 in unemployment benefits, and they're getting ready to move.
``It looks like we're going back to being renters, if we can find a place we can afford,'' Rodrigues said.
For the article in it's original format go HERE.
March 21 (Bloomberg) -- Rolando Ruiz and Stephanie Rodrigues telephoned their mortgage lender two weeks ago and offered to hand over the keys to their three-bedroom house in Providence, Rhode Island. They lost their jobs and haven't made a loan payment since January.
``I told the bank to come get the keys and just let me know when we need to be out, but they said why not put it up for sale and we might be able to work something out,'' said Rodrigues, the 22-year-old mother of two girls.
Homeowners such as the Rhode Island couple are finding their mortgage companies eager to accept a sale price that falls short of a property's loan balance -- a so-called mortgage short sale. The number of U.S. loans entering foreclosure reached an all-time high in the fourth quarter, according to the Washington-based Mortgage Bankers Association. That's spawning a cottage industry of real estate investors who profit as lenders try to avoid adding properties to their portfolios.
``Banks don't want to be real estate managers,'' said Doug Duncan, chief economist of the mortgage association. ``The fact that delinquencies are rising means we're going to see more pre- foreclosure sales.''
Almost 5 percent of U.S. mortgages had payments overdue by 30 days or more at the end of last year, the highest since 2003, Duncan said. No one tracks or estimates the number of borrowers who avoid foreclosure with a short sale, according to Duncan and David Berson, chief economist of Washington-based Fannie Mae, the largest buyer of mortgages. There's ample evidence that the number is increasing, they said.
`It's Happening'
``Clearly it's happening and the numbers are rising,'' Berson said. ``What we need to know to be concerned is how it compares to the last cycle, but no one tracks that.''
The short sales may mitigate the impact of the housing slump as the properties avoid being tallied as foreclosures. At the same time, they will help push the U.S. median home price to a third consecutive quarterly decline in 2007's first three months, Berson said.
``The way the banks see it, it's better than if the house goes into foreclosure, stands empty, and sees its value spiral downward before it's auctioned on the courthouse steps,'' Duncan said. ``It helps to clear the market.''
Both sides benefit from the transaction. Lenders absolve a portion of the mortgage and don't end up owning property. Although borrowers lose their homes, they avoid the stigma of default, making it more likely they will buy another property in the future.
Rising Delinquencies
Overdue payments, or delinquencies, on all types of loans in the fourth quarter rose to 4.95 percent, almost half a percentage point above the 4.47 percent average of the previous three years, Duncan said.
Late payments by subprime borrowers, those with tarnished or insufficient credit, climbed to 13.3 percent, compared with 2.57 percent for prime mortgages, according to a report released last week by the bankers' group. Foreclosures on prime mortgages rose to 0.5 percent from 0.42 percent a year earlier, a sign of broader trouble in the mortgage market.
In the U.K., where real estate prices are rising, the number of mortgages with payments between three to six months late slipped to 59,100, or 0.5 percent, in the second half of 2006 from 62,920, or 0.54 percent, a year earlier, according to the London-based Council of Mortgage Lenders.
As a growing number of U.S. borrowers were unable to pay their loans, more than 30 subprime lenders have closed since late 2006, according to a March 16 report from Newport Beach, California-based Pacific Investment Management Co.
Subprime Lenders
Wells Fargo & Co. and National City Corp. face the most risk among the largest regional banks from rising defaults by subprime borrowers, analysts at Merrill Lynch & Co. wrote in a report last month. About 12 percent to 14 percent of San Francisco-based Wells Fargo's total loans outstanding and 8.5 percent of Cleveland-based National City's were made to subprime borrowers.
Merrill estimated that subprime holdings at Bank of America Corp., U.S. Bancorp, BB&T Corp. and Wachovia Corp. were 3 percent to 5 percent.
The situation has provided plenty of opportunity for property investors like 30-year-old Dallas Alford of Wilmington, North Carolina. Business is booming, he said.
`More Forgiving'
``Lenders have become more forgiving in the last few months because defaults are rising, and they're not in the business of owning houses,'' Alford said. ``Trying to put that kind of deal together a year ago was a waste of time because banks weren't interested in a buyback.''
Alford said he handles about three or four mortgage buyback transactions a month with lenders usually forgiving $30,000 to $40,000 per loan. He declined to identify the banks involved.
In a typical deal, Alford finds a homeowner who has lost a job or had a business fail and gotten behind on his mortgage payments. He might be willing to pay $205,000 for a house that has a $235,000 mortgage, which would require the lender to forgive $30,000 of the loan.
Historically, only about 25 percent of mortgages that are delinquent end up in foreclosure. Some are resolved through a short sale and others result in a ``deed in lieu of foreclosure'' in which the owner surrenders the deed without a foreclosure and the bank ends up as a property owner.
Dwindling Options
In contrast, almost all mortgage forgiveness involves the sale of the property, said Regan Brewer, a counselor at Acorn Housing, a Chicago-based consumer group that provides free housing counseling to low- and moderate-income homebuyers. It's not likely a bank will reduce the loan's principal just because a house has fallen in value. In rare cases, borrowers can negotiate with banks to reduce late fees and charges that have been added to their loan's balance, Brewer said.
About three-quarters of the 400 homeowners who have visited the Acorn Housing office in Chicago in the past two months have been subprime borrowers who can't make their mortgage payments because their loans are resetting at higher rates, Brewer said. Some subprime loans reset every six months, she said.
``I don't know too many people who can afford to see their mortgage payment go up $400 or $600 every six months,'' Brewer said. ``Most people don't have the income to keep up with that.''
Borrowers who run into trouble paying their mortgages have fewer options in today's market, compared with a few years ago.
During the five-year housing boom that ended in 2005, owners who fell behind on payments could sell their homes and pay off their loans or get better refinancing terms based on the higher value of their property.
Falling Prices
That's what Ruiz, a truck driver, and Rodrigues, a bank customer-service worker, said they hoped to do. The first-time buyers paid $195,000 a year ago for an eight-room house and spent about $12,000 renovating it.
Ruiz, 33, lost his job driving an appliance delivery truck in November. Rodrigues lost her job at Bank of America in January. They found they couldn't recoup the money they put into the property because real estate values in Providence had fallen. The city's median selling price declined 1.1 percent in the fourth quarter to $291,300 from $294,400 a year earlier, according to the Chicago-based National Association of Realtors.
``If the market had kept rising, we would have been fine because we could have easily sold for a profit when we lost our jobs,'' said Rodrigues. ``Now, we're in a jam.''
`Crazy Loans'
Home prices fell in about half of U.S. cities in the fourth quarter, according to the realtors association. The national median price for a previously owned house was $219,300 in the fourth quarter, down 2.7 percent from a year earlier, the Chicago-based trade group said in a Feb. 15 report.
About 15 percent of U.S. banks tightened underwriting standards in the fourth quarter, making it more difficult for people to qualify for mortgages, the Federal Reserve's Senior Loan Officer Survey reported in January.
That action came too late, said Jonathan Werner, a real estate investor in Livonia, Michigan, who negotiates buyback deals with homeowners and banks.
``A lot of people have over-borrowed to pay high home prices, and lenders pushed crazy loans on people they knew probably couldn't pay them back,'' said Werner.
Werner said he's so overwhelmed with calls from homeowners who want a quick sale rather than a foreclosure that he no longer needs to advertise in newspapers for customers.
Wayne County
Most of his clients live in Wayne County in southeastern Michigan, which ranked first in the U.S. for foreclosures in 2006, according to Realty Trac, an industry Web site. The county has 33 towns and cities, including Detroit, and a population of 2.1 million, making it the largest in the state.
Subprime mortgages have rates that are at least 2 or 3 percentage points more than safer prime loans. About 20 percent of all new mortgages made last year were to subprime borrowers, according to Duncan of the mortgage association.
Some subprime borrowers were given loans without income verification at rates that probably will jump to levels they can't afford, said Federal Reserve Governor Susan Bies in a Feb. 20 speech at Duke University's Fuqua School of Business in Durham, North Carolina.
``Products that had adjustable payments every month began to be mass marketed to subprime borrowers, and we found that there was just stated income, no testing of income,'' Bies said. Borrowers ``did not have the ability to absorb the higher payments when the payments started shooting up.''
While the loans may have looked good on the books during 2006, many of them haven't performed well. Countrywide Financial Corp., the biggest U.S. mortgage lender, said payments at the end of 2006 were late on almost 20 percent of the subprime loans it tracks for other companies and investors who own them.
The situation may get worse, Bies said in a March 9 speech at a risk-management forum in Charlotte, North Carolina.
Back to Renting
``What's happening is the front end of this wave of teaser- rate loans that are coming into full pricing,'' Bies said. ``So what we're seeing in this narrow segment is the beginning of the wave. This is not the end, this is the beginning.''
It's a beginning of a different sort for Rodrigues and Ruiz, the Providence homeowners. Before they lost their jobs, they were earning about $5,000 a month, Rodrigues said. Now, they take in about $800 in unemployment benefits, and they're getting ready to move.
``It looks like we're going back to being renters, if we can find a place we can afford,'' Rodrigues said.
For the article in it's original format go HERE.
Tuesday, March 13, 2007
Pros and Cons of a Short Sale
Ok, so this is not always on your mind when you are facing bankruptcy or foreclosure, but there is a way to get out from under a mountain of debt that does not stay on your credit for years and years.
If you opt to get out from under your debt by way of a Short Sale instead of foreclosure, it is possible to make it a WIN - WIN - WIN situation.
Lender - PROS: The lender gets out of a property sooner than later. There is a saying in the industry, "your first loss is your best loss". By accepting an amount less than is owed, the lender reduces the risk of not selling the property at auction or worse, not selling it for 6-8 months after the auction. If the market is declining, this could make it a much greater loss than had the lender accepted the short sale option.
Lender - CONS: On the flip side, the lender may be taking a loss greater than what they would have at auction or selling the property on their own after the auction. Some lenders prefer to roll the dice and sell the property at auction or on their own after the auction.
Buyer - PROS: Most of the time, a buyer of a short sale property is able to purchase a property that is 10%-30% below market value. The buyer moves in with instant eqiuty which acts as a buffer, even if the market were to decline over the following months.
Buyer - CONS: A short sale buyer often will have to be willing to wait to know if their offer has been accepted. The process can take from 4 week to 4 months. This can be a serious problem for some people, but those that can wait are usaully rewarded for their patience.
Seller - PROS: The seller will walk away with a little money in their pocket to get back on their feet and if they worked with the rigth Short Sale Agent, they will have avoided the serious 'foreclosure' or 'paid less than agrees' ding that can affect their credit for 7-10 years. Plus, an Expert Short Sale Agent will have assisted the client in avoiding a deficiency judgement on their credit for the amount of money that the bank lost from selling the home for less than was owed.
Most people who have had a foreclosure on their credit have a difficult time buying a home within the first 3-5 years, unless they have a very sizeable downpayment. Even then, their interest rate will be higher due to the fact that the new lender knows the person has lost a home to foreclosure in the past.
Seller - CONS: This is where we come to the biggest drawback for the seller. The seller will have to give up their home that they have worked so hard to buy and maintain. It can be a negative emotional experience. The seller should always remember, this is just a difficult time, but that things will get better very soon. It can be a very positive time and the seller reflects on the fresh start they are being given. The only negatives on the sellers credit score will be a few mortgage lates, which should not affect the seller after 12-24 months.
If you opt to get out from under your debt by way of a Short Sale instead of foreclosure, it is possible to make it a WIN - WIN - WIN situation.
Lender - PROS: The lender gets out of a property sooner than later. There is a saying in the industry, "your first loss is your best loss". By accepting an amount less than is owed, the lender reduces the risk of not selling the property at auction or worse, not selling it for 6-8 months after the auction. If the market is declining, this could make it a much greater loss than had the lender accepted the short sale option.
Lender - CONS: On the flip side, the lender may be taking a loss greater than what they would have at auction or selling the property on their own after the auction. Some lenders prefer to roll the dice and sell the property at auction or on their own after the auction.
Buyer - PROS: Most of the time, a buyer of a short sale property is able to purchase a property that is 10%-30% below market value. The buyer moves in with instant eqiuty which acts as a buffer, even if the market were to decline over the following months.
Buyer - CONS: A short sale buyer often will have to be willing to wait to know if their offer has been accepted. The process can take from 4 week to 4 months. This can be a serious problem for some people, but those that can wait are usaully rewarded for their patience.
Seller - PROS: The seller will walk away with a little money in their pocket to get back on their feet and if they worked with the rigth Short Sale Agent, they will have avoided the serious 'foreclosure' or 'paid less than agrees' ding that can affect their credit for 7-10 years. Plus, an Expert Short Sale Agent will have assisted the client in avoiding a deficiency judgement on their credit for the amount of money that the bank lost from selling the home for less than was owed.
Most people who have had a foreclosure on their credit have a difficult time buying a home within the first 3-5 years, unless they have a very sizeable downpayment. Even then, their interest rate will be higher due to the fact that the new lender knows the person has lost a home to foreclosure in the past.
Seller - CONS: This is where we come to the biggest drawback for the seller. The seller will have to give up their home that they have worked so hard to buy and maintain. It can be a negative emotional experience. The seller should always remember, this is just a difficult time, but that things will get better very soon. It can be a very positive time and the seller reflects on the fresh start they are being given. The only negatives on the sellers credit score will be a few mortgage lates, which should not affect the seller after 12-24 months.
Tuesday, February 27, 2007
No Equity? What can you do if you're forced to sell?
You may qualify for a Short Sale!
A Short Sale is a special transaction that allows you to sell your home – even when your mortgage debt is higher then the value of your home.
I am a professionally trained real estate agent who has been specifically trained 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 commission will be paid by the bank, so you won’t have any out-of-pocket expense!
A short sale will help you:
***Avoid Foreclosure
***Avoid Bankruptcy
***Protect Credit Score from “foreclosure” ding
***Be free of financial & emotional burdens
If you are ready to sell your home and free yourself from this debt, call me today for a free consultation. Short sale requires trained professional for a successful transaction, so call me today to help you find a solution!
Call (760) 752-1800 x111 for a FREE consultation.
Don't wait - it may be to late.
-Trent
A Short Sale is a special transaction that allows you to sell your home – even when your mortgage debt is higher then the value of your home.
I am a professionally trained real estate agent who has been specifically trained 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 commission will be paid by the bank, so you won’t have any out-of-pocket expense!
A short sale will help you:
***Avoid Foreclosure
***Avoid Bankruptcy
***Protect Credit Score from “foreclosure” ding
***Be free of financial & emotional burdens
If you are ready to sell your home and free yourself from this debt, call me today for a free consultation. Short sale requires trained professional for a successful transaction, so call me today to help you find a solution!
Call (760) 752-1800 x111 for a FREE consultation.
Don't wait - it may be to late.
-Trent
Friday, February 16, 2007
Trapped by debt? Free yourself in 7 steps...
Americans are declaring bankruptcy at record rates, with one in every 100 families affected by a bankruptcy. If you’re overwhelmed with debt, take advantage of your OPTIONS. The next time around, you might not have this opportunity. And if interest continue to rise, the burden of variable-rate credit cards and mortgages will become heavier to bear.
Americans are now carrying $683 billion in revolving credit card debt. That’s not the amount we charge every month; it’s the outstanding unpaid balances on which people pay interest. And, according to a report by Cambridge Consumer Credit Index, 47% of the people who paid less than the full amount on their credit card bills in a recent month, made only the minimum payment due. In fact, only 13% of Americans with an outstanding balance could afford to pay more than half the balance.
Pay now, or pay and pay and pay later!
Not paying off the debt is a strategy that will bury you in interest charges. The way some companies calculate the required minimum payments, it could take you as long as 30 years to pay off your original purchase. And along the way, you’ll pay four times the original charge in finance charges.
Surely the purchase that seems so important this month isn’t worth a lifetime of indebtedness.
It’s time to rein in that debt and do something about paying it down. Here are seven steps you can take to get your debt under control:
Step No. 1: Make a list of what you owe.
Step No. 2: Prioritize your repayments (highest interest 1st).
Step No. 3: Pay off credit cards and don’t roll over balances.
Step No. 4: Get a copy of your credit report and credit score -- and study both carefully.
Step No. 5: Make a spending plan.
Step No. 6: Change your FREE spending ways.
Step No. 7: Get help.
Sometimes credit problems are easily attacked once you’ve faced up to them. The only problem is that there are so many advertisements for “credit counseling” that you can’t be sure whether they’re rip-offs.
The bottom line is if you’ve taken these seven steps, you should be able to work your way out of debt and toward a brighter future. It will take time and lots of self-discipline but it’s worth the effort.
Also, it's almost March AND already my schedule for the month is filling up fast, I have just a few openings left. Again, don't wait! Sometimes time isn't on our side in unforeseen financial circumstances. So please don't hesistate to contact me - I'm sure I can find a solution. Call me directly to schedule a NO OBLIGATION CONSULTATION (760) 752-1800 x111.
Your friend,
Trent Chapman
Americans are now carrying $683 billion in revolving credit card debt. That’s not the amount we charge every month; it’s the outstanding unpaid balances on which people pay interest. And, according to a report by Cambridge Consumer Credit Index, 47% of the people who paid less than the full amount on their credit card bills in a recent month, made only the minimum payment due. In fact, only 13% of Americans with an outstanding balance could afford to pay more than half the balance.
Pay now, or pay and pay and pay later!
Not paying off the debt is a strategy that will bury you in interest charges. The way some companies calculate the required minimum payments, it could take you as long as 30 years to pay off your original purchase. And along the way, you’ll pay four times the original charge in finance charges.
Surely the purchase that seems so important this month isn’t worth a lifetime of indebtedness.
It’s time to rein in that debt and do something about paying it down. Here are seven steps you can take to get your debt under control:
Step No. 1: Make a list of what you owe.
Step No. 2: Prioritize your repayments (highest interest 1st).
Step No. 3: Pay off credit cards and don’t roll over balances.
Step No. 4: Get a copy of your credit report and credit score -- and study both carefully.
Step No. 5: Make a spending plan.
Step No. 6: Change your FREE spending ways.
Step No. 7: Get help.
Sometimes credit problems are easily attacked once you’ve faced up to them. The only problem is that there are so many advertisements for “credit counseling” that you can’t be sure whether they’re rip-offs.
The bottom line is if you’ve taken these seven steps, you should be able to work your way out of debt and toward a brighter future. It will take time and lots of self-discipline but it’s worth the effort.
Also, it's almost March AND already my schedule for the month is filling up fast, I have just a few openings left. Again, don't wait! Sometimes time isn't on our side in unforeseen financial circumstances. So please don't hesistate to contact me - I'm sure I can find a solution. Call me directly to schedule a NO OBLIGATION CONSULTATION (760) 752-1800 x111.
Your friend,
Trent Chapman
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