A Candid Conversation, a Hot Tip about Foreclosure Prevention, and a helpful video...
Over lunch the other day a friend confided in me. He’s a very successful professional realtor who’s an expert in foreclosures.
“Jake,” he said, “this market is unbelievable…”
“Ya - I’ll bet you’re making a killing,” I replied.
“I won’t deny there are more deals than I can possibly get involved right now, but the hard luck stories are what I’m talking about.”
“What, you getting a conscience, Bill? I thought you were a foreclosure professional…”
“Its true I’ve made money over the years through foreclosed properties, but in this market I have people calling me that have been hard working Americans for 15 to 30 years who never thought they’d be in a situation trying to prevent foreclosure on their property.”
“Everybody’s feeling the pinch right now.”
“Right, and many of these people calling me believed in the American dream just like you and me, but the triple whammy of seeing their investment portfolio lose half its value, the housing slump wiping out 10 to 35 percent of their property value, and then losing jobs through corporate downsizing, well, it’s just killing what we’ve always believed in.”
“So what are you saying?”
“I’m just saying that it’s really tough out there right now for some good American people. Many are on a slippery slope just trying to hang on, trying to figure out a way to prevent foreclosure on their homes. It hurts to see some of them go through it…”
Click Here for Resources to Help Avoid Foreclosure
“So what can they do?”
“Well, the fact is that most of them have options, they just don’t know it. The lenders haven’t always been real cooperative but I think they’re more willing than ever to work with their borrowers. People just need to know what the options are and how to talk to their lender about it.”
“So are the lenders spelling out the options to them?”
“Well, while they’re more flexible right now, they’re still not just rolling out the red carpet to them. Bottom line is they want their money in the shortest amount of time safely possible. Because of that fact they’re not necessarily going to spell all of the options out to their clients – some of the options don’t really favor the lender.”
“Give me an example.”
“Take short selling. I’ve practiced short selling in the past, but it was much tougher than it is right now. Essentially, a short sale requires the lender to forgive a certain amount of the principle on the mortgage.”
“Whoa, I’m starting to see your point – nobody likes to lose money, especially a lender.”
“Exactly, that’s why they might not inform a borrower about it.”
“So how’s it work?”
“Typically the homeowner hires a realtor to market the property at a reduced price – we’re talking about a considerable amount below market value. In many cases the realtor agrees to accept a lower commission on the sale.”
“Really; do you do that?”
“Yes, I sometimes do. Like I said, seeing some of these people try to prevent foreclosure on their home is like seeing my family or my parents go through it. Believe it or not Jake, I do have a heart.”
“I know Bill; I’m just giving you a hard time. So what happens if you find a buyer?”
“Well, remember that the market’s soft, so we’ll price it at what we think is fair. But, as you know, negotiations on the price usually take place and in this market buyers are trying to push the price as low as they can. In the end we have to come to terms on a price that the lender will accept.”
“Wow, sounds pretty simple.”
“It’s not always simple.”
“What do you mean?”
Well, like I said, the lender isn’t always exceptionally cooperative. They might scrutinize the borrowers’ financial situation and, if they feel the borrower has been less than truthful or has evidence of expenditures that the lender feels are misappropriated priorities, they’ll be a little more difficult to deal with.”
“So, if my sister is facing foreclosure on her home, what advice would you give me for her?”
“First, she should educate herself on all of the options available to her. There are a variety of means in which to do this such as publications for purchase and speaking with professionals – I recommend them all. Once armed with the right information she should schedule a time to talk with her lender concerning the options she’s become aware of to see what might be the best solution.”
Click Here for Resources on How to Prevent Foreclosure
Bill is a great guy and a great friend. I rib him a little but the truth is that he’s helped a lot of people in tough situations trying to prevent foreclosure. Thanks Bill.
If you’re currently in a difficult situation and trying to prevent foreclosure, I encourage you to do like bill said and explore your options. You can find resources right here on this page. Talk with a professional concerning your specific situation as well.
I hope you found this information helpful. Thanks for stopping by. Following is a video that will help you understand the short sale method a little better. This is Jake Newman signing off…
