You Want to Wait?

This article from the Washington Times on-line paper today states that soon the government will have to end its near total purchase of mortgages that have been generated so far this year. The extension of the first time home buyer credit will stabilize the already shaky real estate market, but only as long as the credit is available. With the eventual withdrawal from the market banks will have to pick up the slack with the mortgages. In a nutshell this means that rates will go up sometime in spring of 2010. Banks are in the business to make money and at 4.78% for a 30 year fixed note, banks generally are not too excited about these low rates. Many experts agree that rates will increase at least one percent to 6%. While this is still historically low, the increase in interest rate has a negative consequence to a buyers purchasing ability. This is what concerns most real estate experts and should most definitely concern soon-to-be home sellers. The old adage that "Spring" is the time to sell is gone in this market. If you are serious about selling NOW is the time to put your home on the market. Waiting could cost you thousands of dollars. If you would like to know more feel free to call me and we can talk, no strings attached, as to why this is the case. You can always reach me toll free at 1-888-HEY GLEN.

Q: My bank wants a hardship letter for my short sale. Can you give me some tips on what to write?

A: A hardship letter is almost always required by every lender. This letter should be brief and to the point AND it should be no longer than one page. There are three elements to this letter too. First you should apologize to the lender for being in this situation. Second your letter must state what your situation is and why you are having trouble making your payments and finally the letter must indicate that you have exhausted all other efforts to resolve the situation. It goes without saying, but this should be all true. Don't make the mistake of writing more than one page. You will be submitting a lot of information along with the hardship letter and you want the loss mitigation department to actually read this letter. Keep it simple and direct.

Q: Someone at work mentioned that if I was behind in my mortgage payments I could do a short sale. What is this?

A. A short sale is an agreement between you, the homeowner, and the bank to forgive a portion of your loan balance. For instance, if your mortgage is for $300,000 and the best price you can obtain for the sale of your home is $275,000, the bank may be willing to agree to forgive the $25,000 on your note. There are conditions to this. If you find yourself in this situation it is always a good idea to get good counsel from an attorney. Each lender has different requirements for a short sale, but if you are contemplating this route you will need to contact your lender and ask for a short sale package. The package will have requirements of what you need to submit to the bank before they will consider a short sale. Here is an important point. Whatever the bank asks for give it to them. This is not the time to argue with the lenders requirements. Short sales are growing in popularity and can be good options for homeowners in trouble who want to avoid foreclosure.

Beware of the Foreclosure Scam

How could it possibly get worse? If you are in pre-foreclosure or foreclosure please be aware that there are scam artists out there who will prey on you in your distress. They will send you correspondence that looks like it came from your bank asking you to send your payment, partial payment or fee to this "specific department" at the bank. All sorts of promises will be made to you about the process and your ability to stay in your home. Meanwhile the real lender is not receiving the payments pushing you into further trouble. When in doubt call your bank or your attorney, but don't fall for these sick scams. Watch this blog for more tips on the foreclosure process.