does increase in new home starts mean the market has hit bottom?

What does the rise in new housing starts mean for the market with hundreds of thousands of homes for sale?

Does this indicate a bottom or just more swelling for a battered sector?

Doesn't this glut the market even more, threatening future growth?

Loan Modification, Forbearance and Short Sales

I am often asked about loan modifications (usually lowering your house payment) and short sales (selling your home at no cost to you, even when you owe more than it is worth). "Loan mods" and "Short Sales" can be a great alternative to foreclosure, but there are some traps to be aware of. Here are some tips that might help you:

 

1. Don’t ever pay an upfront fee for a loan modification. These are scams that usually result in nothing more than lining the pockets of predators at the expense of distressed homeowners who can afford it the least.

 

2. If your lender is willing to modify your loan, you can work out a loan modification for free by simply contacting your lender.

 

3. Although most homeowners who seek a loan modification don’t get one that is truly affordable for them, it is certainly worth exploring.

 

4. Far too many homeowners wait too long to seek the help of a professional who can help them sell their home, and therefore end up in foreclosure.

 

5. Most people who obtain a loan modification or a forbearance agreement end up either selling, or in foreclosure anyway. This happens due to many factors, but is usually because the bank didn't lower the payment far enough to make a meaningful difference to the homeowners budget.

 

6. Hold on to your savings and your retirement. Unfortunately, many homeowners have used up savings, borrowed from family/friends, and/or even used up their retirement in an effort to save the house from foreclosure, and end up losing their homes despite their sincere efforts.

 

7. Be honest with yourself about your situation. Asses realistically whether or not you can really afford this home. In most cases, the payment on your home should be no more than 25% of your monthly income. If this is not the case for you, you may want to consider your options carefully.

 

8. Beware of agents who claim to know about short sales. These are difficult transactions, and you should only entrust yours to someone who has closed at least 50 of them. You do not want to be someone's learning experience.

 

9. Whatever you do, please don’t wait until it’s too late to contact me. I can almost always keep people from having a foreclosure on their record (if they contact me early enough), and I can usually keep them in their homes for 4-6 months without making a payment. I have even managed to keep people in their homes for up to 2 YEARS WITHOUT MAKING A PAYMENT. Best of all my service doesn’t cost the homeowner anything!

 

If you do find yourself needing to sell, please contact me immediately. I have successfully closed literally hundreds of short sales, and am considered the nations expert on them. Take a look at www.TheShortSaleCompany.com . Even though it is designed for agents, it is a great resource for learning about the subject. There is also an video clip of National Talk Show Host Dave Ramsey interviewing me about short sales and loan modifications.

 

Please, call me if you have any questions, or if I can help in any way...

 

Talk to you soon,

 

Michael Hellickson

Washington States Number One Real Estate Agent

CEO The Short Sale Company

Hellickson Real Estate Team

206-300-6453

Who is to Blame for the Mortgage Meltdown?

With foreclosures at an all time high, more Americans losing their homes than ever before, mortgage companies going out of business at an alarming rate (over 50% in 2007), and the dollar falling faster than President Bush's approval ratings, it begs the question...who is to blame? Who do you think is responsible for the current United States financial crises? What factors do you believe led to the demise of the booming real estate economy?

What is a deed in lieu of foreclosure?

Lender's have often pushed homeowners into a deed in lieu of foreclosure. What is that, how does it differ from a regular foreclosure, and which is better for the homeowner: Deed in Lieu of foreclosure, foreclosure, or a short sale?
Post your thoughts here. I will share my thoughts later this week.

Why would banks want to do a short sale?

More than ever before, Americans are losing their homes to foreclosure. Why would banks want to do a short sale instead of a foreclosure?

Should the US Government freeze interest rates?

The Bush administration is working behind the scenes with industry leaders on a plan to extend lower, introductory interest rates on home loans before they reset at higher levels. Do you think the federal government should provide assistance in helping cash-strapped homeowners?

Short Sale Vs. Foreclosure

I am often asked why someone would want to do a short sale rather than letting the home go back to the bank through foreclosure or deed in lieu of foreclosure. The answers are quite simple:

1. To avoid the FORECLOSURE stamp on your credit report, which has a MAJOR IMPACT on one's credit for 7 or more years.

2. To avoid a potential deficiency judgement. While there is no guarantee that a short sale will eliminate a deficiency judgement, the short sale process by its very nature will show the lien holder(s) that the borrower is insolvent. Most banks won't seek a deficiency judgement if they have been convinced, through the short sale process, that there is no money to go after. Think about it, why would they spend all that money on attorney's fees, court costs, and collection agencies if they truely believe there is nothing to go after.

3. A short sale is far less damaging to one's credit history. A short sale is supposed to show up as "settled debt" on the credit report.

Feel free to respond to this post, or post your own questions/comments here.