If you are a homeowner who has even thought to call your bank for help with a loan modification, I’m sure you got used to hearing the old “Your call is very important to us.”  Well many homeowners got fed up and started to write to their Congresswoman – Maxine Waters in Southern California.  Well boy did she get a lesson is what homeowners go thru.  Kudos to her for trying to help and thank goodness she saw what homeowners are really experiencing.  It certainly does not feel like banks are here to help… I wish they were.  I blogged about my feelings HERE and have also copied a recap of a talk radio show I heard today on KGO 810 Radio in San Francisco.  (We serve the East Bay communities of Contra Costa, Alameda and parts of Solano County).  I’m sure what is described here, and experienced by Ms. Waters is no surprise to many of you – sadly.  But you know what, keep writing to your senators, your congresspeople, your local officials – everyone you can – these banks need to be held accountable for their non-help.

See below for radio recap:

Friday  January 23 , 2009

2 PM:  Congresswoman Gets the Runaround on Bank Help Lines…

In a revealing example of what she says the average homeowner faces, a California Congresswoman spent more than two hours on the phone trying, without success, to find someone at the Bank of America who could help a struggling constituent modify his mortgage payments. ABC News “Nightline” cameras were rolling as Congresswoman Maxine Waters (D-Ca.) was repeatedly put on hold for long stretches, disconnected, transferred to extensions that did not work and ultimately switched to a recording which directed her to the bank’s website.

Guest: Congresswoman Maxine Waters, D - Los Angeles.  

Click here to listen to the entire hour for up to 7 days after the intial broadcast.

That is a question we’re asked alot.  The answer is NOTHING.  At least not monetarily.  We treat these sales as a typical real estate sale whereas we’re basically paid nothing unless and until the deal closes.  So we sign you up as a typical seller.  You do the listing agreement and its ancillary documents, the statewide disclosures as is typical, and then we’ll give you a few other pieces to complete specific to the short sale.  But we don’t get paid unless we close the deal.  In fact, we don’t take all deals, it has to make sense for the bank and if there are issues we can’t help you overcome, we may decline the opportunity. 

A short sale does require some work on your part.  There is more paperwork. We’ll need some specific items from you before we’ll even list the property.  This saves us all time.  My belief is that one of the top reasons for a short sale failure is the listing agent.  We want to save everyone the trouble by having your entire package DONE , up front and in advance.  Then, when we get an offer for your property we are ready to submit right to the lender without delay.

Sometimes offers don’t come in right away… and sometimes the banks take their time looking at the short sale request files.  What that means is that we’ll ask you to continue to send us your pay stubs as you get them, as well as your bank statements.  Its not unusual for a loss mitigator/short sale specialist at your lender to come back after 2 months and say they’re ‘missing’ updated items.  By being proactive, we’ll always have what they need to complete the file.  Our goal is to NEVER be the reason for any delays.

So, if you want to explore the option of a short sale in Contra Costa (and parts of Alameda) County, call us for detailed information on what you’ll need to gather and complete for us.  Then, when we come with the bulk of the paperwork for you to complete, you’ll be ready with YOUR documents.

. . . 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.

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)