You need professional HELP . . . on the decision to foreclose or short sale that is.  You must seek counsel of an experienced real estate professional, a qualified tax professional and/or an attorney before making any decisions as to whether to foreclose or attempt a short sale.  Both can have pros, cons, consequences and benefits.  Believe it or not, sometimes foreclosure is the right answer.  Often a short sale is the best solution as it enables you to negotiate up front with the lender for any future recourse.  Remember not all agents are qualified to help you with a short sale.  Do your research and be sure your agent has the experience needed and closed , successful short sales behind them.

1. Logistics - there are distinct differences as to how your occupancy of your home will be handled.  In a short sale, you will have to move when the home is sold.  In a foreclosure you may be able to stay months before the sheriff comes knocking on your door during the final steps of an eviction.  Do you know when you’ll have to move?  What is your strategy to secure housing if your credit will be destroyed?
2. Paperwork - in a foreclosure, folks just walk away.  In a short sale, there is a lot of paperwork involved.  Do you know what you need to to assemble in order to ask a lender to accept a short sale?
3. Hardship - did you know that there are many reasons people are in the situations they’re in now with their mortgages?  Does it qualify YOU for a short sale?
4. Scams - did you know that scammers are good at what they do?  Did you know that smart people are signing over the deeds to their homes without realizing it does not relieve them from the obligations they have with the bank?
5. Assets - do you own other assets besides the home you’re in trouble with? Is there a way to protect your other assets (other homes, boats, cars, etc) in either a foreclosure or a short sale?
6. Retirement – most homeowners also have money in their retirement accounts.  Can you still do a short sale with monies in retirement accounts?
7. Privacy – did you know that once a Notice of Default is filed, it is public record? Did you know the Notices of Trustee sales are public notices too?  How can you avoid it getting to that point and maintain privacy in your financial matters?
8. Taxes – did you know that just walking away (foreclosure) may not alleviate your tax liability? Did you know that only some homeowners will feel the effects of the Mortgage Debt Relief Act of 2007?  Can you qualify for Federal tax relief? What about the State?
9. Recourse – did you know that only your purchase money loan(s) is considered a “non-recourse” loan in California? Did you know a “recourse” loan means that the lender can file for a judgement against you if you do not pay your obligation?  Will you be protected against recourse and monetary judgements if you foreclose, or do a short sale?  Are your loans recourse or non-recourse?  Is there a reason to let one of your loans foreclose (i.e. your second) and not the other? (YES there is!)
10. Fraud – did you do a “N-I-N-J-A” loan (No Income, No Job, No Assets), or an all stated income loan with little/no documentation?  Did you fib? At all? Did you bolster your income or assets to get the house? Did you know that is fraud?  And that there is a window of opportunity for the bank to go after you whether you foreclose or short sale if they suspect fraud?  Are you protecting yourself?  What is YOUR best course of action?  

Oh oops, one more:

11.  Bankruptcy – sometimes, for some people, bankruptcy is a solution.  Have you talked to an attorney about the benefits and consequences of filing for Bankruptcy protection?

Realize that for all of these top ten eleven reasons above there may be ten others SPECIFIC to your situation.  NEVER is ignoring the problem the right answer.  The consequences of either a short sale or foreclosure can be significant and can haunt you for years. 

If you need the answers to these, or other questions, call the professional short sale team of Catherine Myers and Terry Osburn of Alain Pinel Realtors in Walnut Creek.  Call 925-683-2125 or 925-381-9944. Or CONTACT US by navigating to our contact page on our site here (see above).

Serving Contra Costa County, and some areas of Alameda and Solano County. 

(Walnut Creek, Danville, San Ramon, Alamo, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Concord, Clayton, Bay Point, Pittsburg, Antioch, Oakley, Brentwood, Benicia, Vallejo, Dublin, Pleasanton, Livermore)

I attended a panel discussion at the local Pleasant Hill campus of JFK University last weekend.  They hosted some very interesting speakers around the topic of the Subprime Meltdown and I’ll probably feature a couple of more of these speakers in future blog posts.  But one speaker I wanted to focus on today was Ken McCormick of the Contra Costa District Attorney’s office.   Mr. McCormick is the lead attorney at the DA’s office prosecuting cases of real estate fraud.  He discussed the various scams he’s seeing right here in our county, and I felt it important to pass along the information he shared so that you, or someone you know, may be spared! 

First, I wanted to share my general “overall” opinion.  It is that if something sounds too good to be true, it probably is!  It’s an old adage that holds oh so true when you and millions of others are in financial distress.  You may become the target of many scam artists (aka CRIMINALS).  This is the market for opportunists of every description, so be careful and don’t be a victim.  Seek counsel at the first hint of trouble.  Better yet, don’t get into trouble by noting the following:

1. DO NOT fall prey to “foreclosure consultants.” NEVER pay upfront fees, or any fees, for someone else to do something you can do yourself, i.e. contacting your lender to negotiate a resolution, a delay or a short sale.  You can seek the counsel of a FREE HUD/housing counselor.  An EXPERIENCED real estate agent can do this for you for FREE.  You can do this yourself.  Do not pay anything out of pocket.
2. Beware of anyone offering to delay the foreclosure of your home for transferring a portion of your house to their company.  Do not transfer ANY part of your property to anyone.
3. You can not eliminate your mortgage, so run away from anyone who tells you that they can “eliminate your mortgage.”  These schemes are complex and not only can you lose your home and all rights to other remediation, but you may be a party to criminal acts.  Don’t do it.
4. Hang up or shut the door if anyone approaches you with an idea that all you do is transfer the property to them for a set period of time (i.e. 1 year) and you can stay in your home as a tenant – often for FREE.  Then, they promise, you fix your credit, bolster your financials, then you get your property back and all’s well.  Did that sound too good to be true?  IT IS. Don’t do it, and report these types of people to the District Attorney’s office.
5. Warning bells should go off if anyone approaches you to either buy your equity or to pay your past due amount and save the house from foreclosure. They say, sell it to me and you’re off the hook. Don’t do it.  Many homes now do not have any equity in them, but regardless, there are those offering to just pay your past due balances in exchange for the title of your house. Beware of anyone offering to “buy you out” of foreclosure.

So, who can help you during this time?  See below for links to HUD (Housing and Urban Development, a governmental agency) and links to various local homeownership counseling agencies. These non-profit groups can help you for free.  Do not pay anyone.  A real estate agent EXPERIENCED in foreclosure avoidance can help you, for free.  Operative word here is experienced.  Too many real estate agents (in my opinion) are helping people with short sales as the best, or only, solution to a foreclosure.  Now, in some cases, short sales can work well – but you MUST know the consequences (tax and financial) before proceeding and all too often homeowners are not being advised of the potential pitfalls that can haunt them for years to come. 

Here’s some information and who you can call for help:

www.fha.gov/foreclosure -good information about foreclosure avoidance.

www.foreclosurehelpandhope.org/avoid_foreclosure.html

HUD foreclosure information: www.hud.gov/foreclosure/index.cfm

Homeownership Preservation Foundation: www.995hope.org  These folks have put together a not for profit network of HUD certified housing counseling agencies.  From their hotline you can be referred to a local agency who can help.

http://www.nw.org/network/foreclosure/default.asp NeighborWorks America Foreclosure resources

Find other local HUD certified housing counseling agencies: http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

Remember, if you decide that a short sale is the best solution, or if you want local referrals to professionals who can help, contact the Contra Costa Foreclosure Avoidance Team.  Catherine Myers and Terry Osburn are experienced and know the process.   They serve Contra Costa residents in Walnut Creek, Concord, Clayton, Pleasant Hill, Danville, Alamo, San Ramon, Lafayette, Orinda, Moraga, Martinez, Bay Point, Pittsburg, Oakley, Brentwood and Antioch.

Catherine’s website:  www.DiabloValley.net

Terry’s website: www.PawsitiveRealEstate.com

Contact: 925-683-2125 or 925-381-9944