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Federal Government Shuts Down Mortgage Relief Scams

December 6, 2011 By

We have all seen the news reports on scammers offering to help homeowners lower their monthly mortgage payments. Well, relief is finally here. The federal government has stepped in to crack down on these scams.

Scam Advertisers

There is an abundance of online ads located on search engines, that advertise these scams. They promise to help modify mortgage loans through a government program called the Home Affordable Modification Program (or HAMP).

In November of this year, the federal government agency in charge of investigating fraud made an announcement. It had shut down 85 scams that had online ads on Google. Days later, they announced the termination of 125 more scamming advertisers on Yahoo and Bing. “‘The first place many homeowners turn for help in lowering their mortgage is the Internet through online search engines, and that’s precisely where they are being taken advantage of and targeted,” said Christy Romero, Deputy Special Inspector General for the Troubled Asset Relief Program (SIGTARP).”

Agencies Working Together

SIGTARP is working tirelessly to stop these fraudulent activities. They want to protect homeowners from becoming victims to these con-artists. They are also working very hard to label them as criminals and hold them accountable for defrauding homeowners in the name of legitimate government-related programs.

To show their support, Google has banned 500 of their online advertisers that were linked to these online mortgage scams. Microsoft cut ties with 400 in one week alone. These were customers that advertised their scams on their Bing and Yahoo search engines. Both Google and Microsoft are working with the US Department of Treasury to find ways to identify these paid search scam advertisers.

Ways to Spot a Scam

  1. Of all the mortgage scams out there, the most common involves asking homeowners to pay up-front fees. These fees are supposed to be in exchange for help with mortgage modifications. Once the scammers get the fees, they are never to be seen or heard from again.
  2. In some cases, scammers advise the homeowners to stop making mortgage payments to their lenders. And, furthermore, cease all contact with them altogether. Homeowners are told to send the “modified” payments to the scammers, who never send a cent of it to the lenders.
  3. These con-artists have even been skilled enough to get homeowners to transfer their property ownership to them. They are told that this will somehow “save” their home. The property ownership is supposed to be transferred back, upon contingency. But, this never happens.

No Way Out Once In

Once a homeowner is taken by one of these scammers, there is almost no way out. By the time the scam begins to fall apart, homeowners are even further behind in their payments than before. They are also out of thousands of dollars paid in up-front fees to the con-artist. By then, it’s almost impossible to catch up on delinquent mortgage payments.

Be aware of anyone who tells you to stop making your mortgage payments. Be even more leary if they tell you to halt all contact with your lender. SIGTARP urges homeowners to get free help with their Home Affordable Modification Program (HAMP) modifications from their own mortgage lenders or a HUD approved housing counselor.

This article was written by Kimberley Kelly, an Indio California real estate agent. For more about Kim, you can visit her website at http://kimberleyjoykelly.com/ where you can see many great golf course homes in the Palm Springs Valley.

Filed Under: Mortgage Loan Options Tagged With: ,

Why Today’s Low Interest Rates are Better than the $8,000 Tax Credit

November 27, 2011 By

For those who missed out on the deadline to take advantage of the $8,000 tax credit, the good news is that there is still plenty of opportunity for saving money when purchasing a home. In fact, according to many experts, those who purchase a home today could actually save far more on their purchase than those who purchased a home in time to get the tax credit thanks to the low mortgage interest rates that are currently available.

Although mortgage interest rates were already at attractively low levels while the tax credit was still in play, the rates have continued to drop ever since the credit expired. As a result, those who purchase a home today are likely to save more over the life of the loan than they would have received from the tax credit. A buyer who purchases a $180,000 home and borrows $173,700 at an interest rate of 5.125%, for example, can expect to save more than $15,000 over the lifetime of a 30 year loan when borrowing at an interest rate of 4.75%.

In addition to saving due to the lowered interest rates, many buyers are finding that the asking prices on homes have lowered since the tax credit expired. Furthermore, many homebuilders are offering special incentives to those who purchase a home now. In many cases, these incentives are actually more valuable than the $8,000 tax credit. For example, some are offering free appliances, basement upgrades and special discount programs that help buyers save even more money.

So, while it might be disappointing to some that they weren’t able to take advantage of the tax credit, it might actually be a blessing in disguise. While you might not be able to see the savings right off the top, there is a very good chance that you will enjoy an even greater savings on your home now that the tax credit incentive has passed.

Filed Under: Mortgage Loan Options Tagged With: ,

Getting Help with Your Down Payment When Buying a Home

November 27, 2011 By

Thanks to the low housing prices combined with the great interest rates that are currently being offered on home mortgage loans, now is definitely a great time to purchase a home. Unfortunately, many people who are poised and ready to take advantage of these great deals do not have the money saved up for a down payment. For those who find themselves in this situation, however, there are options available that can still help them with purchasing the home of their dreams.

While it was once a common practice for banks to provide loans to buyers without a down payment, the recent economic crash has pretty much put an end to that practice. With the help of special down payment assistance programs, however, interested buyers can still purchase a home even if they do not have the money to put down on it.

Currently, Freddie Mac requires mortgage loan buyers to come up with approximately 5 percent of the cost of the down payment and closing costs. First-time homebuyers, however, can obtain assistance with the help of tax credits, grants and other government programs. Those who are interested in learning more about these programs should visit the U.S. Department of Housing and Urban Development’s Website. Here, they can search through a directory that provides information about down payment assistance programs that are specific to each state, county and locality. Some programs that may provide assistance to homebuyers include:

  • HOME Investment Partnerships Program
  • Community Development Block Grant Program
  • American Dream Downpayment Initiative
  • Neighborhood Stabilization Program

The amount of assistance provided by each of these programs is dependent upon a number of factors, including the geographic location and the financial needs of the buyer. Depending upon the program and the individual qualifications, it is possible to receive anywhere from a few hundred dollars to several thousand dollars through one of these programs.

When obtaining assistance through one of these programs, it is important to understand certain differences. With grant programs, for example, the homebuyer does not have to repay the funds that are provided. Certain restrictions will apply with these types of programs, however, as grants generally require meeting certain income guidelines and the buyer usually must remain in the home for a certain period of time after making the purchase. Loan programs are different from grants in that they must be repaid, but the loan may be deferred for a period of time and may have a very low interest rate. In some cases, these loans do not accrue any interest at all over a certain period of time.

Contact your Colorado mortgage professional for more information.  If you don’t already have one, contact us.

Filed Under: Mortgage Loan Options Tagged With: , , , , , ,

State Faces Lawsuit Regarding Foreclosure Process

December 18, 2010 By

The state of Colorado is facing a lawsuit alleging that it allowed lenders to take properties from homeowners without following the due process laws that are required under the United State’s Constitution.

“Colorado’s foreclosure process and law are unconstitutional,” said Andrew O’Connor, who is with the Prater Legal Offices, in a recent Denver Post article.

According to O’Connor, the state’s current system does not allow borrowers to receive the fair hearing they are entitled to receive. In fact, current legislation allows lenders to foreclose on a home even if a fraudulent origination lead to the delinquency. Furthermore, lenders can foreclose on a property even while promising to make loan modifications and they don’t have to provide any proof before a judge.

Those who are in support of the current system believe Colorado provides a balanced approach to the foreclosure process, as it is the only state that uses an elected official or an appointee to serve as the trustee. According to O’Connor and other critics, however, the current system is set up to only serve the interests of the lender. This is largely due to the fact that judges only address two issues when a foreclosure case comes before the court: whether or not the borrower is an active military member and whether or not the borrower is delinquent in payments.

This year alone, the state is expected to handle 40,000 new foreclosure filings. As such, it would be no simple task to take every one of these cases to court. Furthermore, by requiring each case to go to court, the foreclosure process will take much longer, which means the there will be an even greater loss to the value of the homes. Critics of changing the current system are concerned that the change would hurt both lenders and the general public.

“You have public oversight of this process that is much more detailed and more analytical in making sure that everybody’s rights are respected,” said Mike Rosser, who is a lending industry veteran as well as the former chairman of the Colorado Foreclosure Prevention Task Force.

The state’s current loan modifications started in the 1890s after borrowers were adversely affected by a silver bust. Under this system, the governor appoints public trustees to the 10 largest counties, with the exception of Denver. In Denver, the elected clerk and recorder serves this function. For the smaller counties, an elected county treasurer is responsible for handling the duties of the public trustee. By having public trustees in place, supporters of the system believe it helps to cut down on private trustee abuses, which typically involve charging higher fees and reclaiming homes more quickly.

“It gives us a degree of separation,” said Robert Sagel, who is the treasure and public trustee in Morgan County. “We are a disinterested party.”

According to RealtyTrac, private-trustee foreclosures take an average of three months to complete. In Colorado, the process is supposed to take 110 to 125 days, although it can sometimes take longer due to certain delays. In states with “judicial” foreclosures, on the other hand, it takes an average of six months to complete the process. In New York, which is the state where the process takes the longest, it takes an average of 445 days to complete the process.

According to consumer advocates, whoever has the most influence in creating the rules will automatically have an advantage in the process. Although public trustees are supposed to be neutral because they are following the law, the lending industry had a greater hand in developing the law than homeowners.

“It looks to me like the lending industry knew what they needed and were able to get it passed without thinking about the ramifications for debtors,” said Nancy Bentson Essex, who is an attorney in Crested Butte.

For example, one change that took place in 2006 made it possible for lenders or their attorneys to sign a “qualified holder” certificate and to provide a copy of the original note to the public trustee. Yet, the lender doesn’t have to prove to the public trustee that the note was properly endorsed or even assigned to them. Furthermore, the state does not require mortgage assignments and transfers to be recorded with the county clerk.

Filed Under: Colorado Foreclosures Tagged With: , ,

Luxury Housing Market Still Floundering in Many Parts of the Country

December 17, 2010 By

A turnaround in the luxury market has long been considered to be the first indicator of an economic recovery. Yet, according to many experts, the housing market in the United States is not likely to be healthy again for at least another year. In fact, in many parts of the country, the prices on luxury homes are still in the process of falling.

While luxury home prices are starting to recover in some areas, some key markets are still struggling. In Southern California, for example, housing values have started to enjoy a bit of a rebound. Many experts believe that the upper end of the market still has not reached bottom despite the high profile estate purchases that have recently taken place in the area, such as the Bel-Air home that sold for $50 million and the home in Hollywood Hills recently purchased by actor Sacha Baron Bohen for $18.9 million.

“Good locations will be the first out, and luxury is generally in good locations,” said economist John Burns, who is the head of a real estate consulting firm in Irvine, California, in a recent Los Angeles Times article.

Although there is no definitive reason for the continuing funk, many analysts feel the foreclosures and short sales that pushed down home prices is finally catching up to the high end market. In short, it just took more time for the market trend to reach the luxury market. According to Burns, the “formerly affluent people who borrowed far too much money” are simply running out of options for keeping their homes out of foreclosure.

Still, there are others in the luxury market who are a little more optimistic. Douglas Yearley, who is the chief executive officer of Toll Brothers Inc., which is the largest builder of luxury homes in the United States, says the worst is behind us and that the market is likely to gain momentum in 2012.

“The recovery is here to stay,” said Yearly in a recent Blommberg article. “I think 2011 will be an improving year, but I think 2012 will be a big year for us.”

Already, Toll Brothers has started to see a profit. In fact, the company just recently announced its second straight quarterly profit after having reported losses for three years.

Filed Under: Luxury Foreclosures Tagged With: , , ,

Luxury Foreclosures Have Significant Impact on HOAs

December 15, 2010 By

Luxury condos and communities around the country are feeling the pinch in more ways than one. Not only are many of the units at these communities sitting empty as they go into foreclosure, but some are having difficulty with keeping up with routine maintenance and with making necessary repairs because their homeowner’s associations do not have the funds. After all, if no one is there to pay the dues, it is impossible for the HOA to collect the funds it needs. In some cases, the problem is so extreme that luxury condos have faced the possibility of being shut down.

“The fire marshal told us he was about to close it down,” said Jeff Blocker, who is BMI Management company managed the luxury Palmas de Mallorca condo in Daytona Beach, in a recent Daytona Beach News-Journal article. “We were lucky that an owner stepped up and advanced us his assessments for the year and we made the repairs.”

The luxury condo faced the possibility of being shut down after the HOA didn’t have the $3,000 that was necessary to fix the water pump that feeds the fire suppression sprinklers. The condo didn’t have the money because more than half of its 12 units were empty with the previous tenants being delinquent on their assessments.

“I have never seen it this bad. I’m getting five foreclosure notices a day,” said Vicki Diaz, who is the president of World of Homes, which provides services to more than 100 community associations.

According to the Community Associations Institute in Alexandria, VA, approximately 62 million Americans are currently living in a community that is governed by a community association. Furthermore, more than half of the country’s 310,000 community associations are struggling with financial issues that are associated with empty units, mortgage foreclosures and delinquent accounts. According to a recent survey conducted by the CAI, which includes 30,000 members, the number of associations reporting delinquencies above 5 percent increased to 65 percent. This is quite a jump when compared to the 19 percent that were reporting the same in 2005. The survey also found that nearly one-third of the associations had a delinquency rate of more than 10 percent, while 10 percent of associations had a rate that was above 20 percent.

In addition to placing strain on the HOA and community, other owners have to pick up the slack when people become delinquent on their fees. In some cases, this may result in making higher monthly payments. In other cases, it may result in a reduction of services or even a combination of the two.

“I have sat in board meetings where members say they don’t want to place a lien on a property because they say the owners are so nice,” said Blocker. “But when I tell them that they would have to pay more, it becomes a them-versus-me attitude and they change their mind.”

Not only do these delinquencies affect routine maintenance, but the CAI found that 38 percent of associations had to postpone planned capital improvements due to the revenue shortfalls. Similarly, 35 percent had to cut back on landscaping services while 31 percent had to reduce contributions to reserve accounts. Even worse, 23 percent had to actually borrow from their reserve accounts, while 16 percent were forced to impose special assessments and 12 percent had to use their residents to perform minor services.

Filed Under: Luxury Foreclosures Tagged With: , ,

Tips for Choosing a REALTOR®

December 2, 2010 By

Whether buying or selling a home, it is important have the right professional by your side. After all, with the help of a REALTOR®, you can be certain the entire transaction will go as smoothly as possible. In addition, with a Realtor negotiating on your behalf, you can rest assured you are getting the best deal possible. Therefore, it is certainly in your best interest to take your time when selecting a Realtor. To that end, here are a few tips for choosing the right Realtor for you.

Tip #1: Look for Someone with Experience

While an inexperienced REALTOR® may very well be able to help you with your needs, you are generally better off hiring someone who has a great deal of experience in the industry. This is particularly true if you are buying or selling a home in a specialized area, as an experienced Realtor will be more likely to have the connections necessary to ensure a smooth buying or selling process.

Tip #2: Check on Credentials

When hiring a REALTOR®, it is also in your best interest to hire someone who belongs to professional organizations and had other credentials demonstrating his or her commitment to the profession. By taking the time to obtain credentials, the REALTOR® is proving that he or she is dedicated to being the best in the field. Yet other credentials demonstrate the REALTORS® desire to meet the needs of specific types of clients with unique needs. Obtaining a CRS or GRI designation, for example, means the Realtor has taken the time to complete specialized training that may be of value to you.

Tip #3: Learn More About Their Marketing Methods

Believe it or not, not all REALTORS®are created equally when it comes to the marketing methods that they implement. Clearly, you want to work with someone who will use the most innovative and aggressive techniques possible, so be sure to ask potential agents to tell you more about the marketing methods they will use as you try to determine who you will hire.

Tip #4: Examine the Track Record

As you interview potential REALTORS®, you should also take a critical look at their track records. Again, you should pay particular attention to their success rates within the neighborhood you wish to buy or sell. Some questions you should ask in this area include:

  • How long does it generally take you to sell a home?
  • How does your sales rate compare to the general market rate?
  • How do the final sale prices on your homes compare to the initial asking price?

Tip #5: Learn More About Support Services

Finally, you should be sure to ask the REALTOR® about the support services that he or she provides. At a minimum, the Realtor should be able to recommend companies to provide you with the additional services that you might need, such as contractors to help make improvements to your home or mortgage companies to help you obtain a loan.

Filed Under: Best Practices Tagged With: ,

Colorado Foreclosure Rates on the Decline

October 26, 2010 By

A recent RealtyTrac report has found that new Colorado foreclosure saw a 2.93% drop in September when compared to the same time last year.

In all, Colorado saw 6,030 properties with foreclosure filings in September, which equates to one filing for every 357 homes. This figure is slightly above the national rate of one in every 371 homes. Furthermore, Colorado saw a 3.01% increase in foreclosure filings when comparing August 2010 to September of that same year. RealtyTrac further reports that Colorado ranked 12th in the country in September in terms of its foreclosure rate. In August, the state ranked 11th, while July found the state in 13th place. During the first half of 2010 and throughout the entire year of 2009, the state was ranked in 10th position.

RealtyTrac further reported that Colorado had 16,315 properties with foreclosure filings during the third quarter, which equates to a rate of one in every 132 homes. This figure represents an increase by 0.31% when compared to the third quarter of 2009 as well as a 6.72% increase when compared to the second quarter of 2010.

At the national level, RealtyTrac found that 347,420 homes were in the foreclosure filing stage in September. This figure represents a 1.1% increase when compared to September of 2009 and a 2.53% increase when compared to August of 2010. When comparing all of the states. RealtyTrac found that Nevada had the highest foreclosure filing rate in the country of just one in 69 homes in September. Florida, Arizona, California and Idaho round out the top five.

“Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months,” said James J. Saccacio, who is the CEO of RealtyTrac, in a statement. “We expect to see a dip in those bank repossessions – and possibly earlier stages of the foreclosure process – in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks.”

Visit our website to search for Denver short sales and obtain more information.

Filed Under: Colorado Foreclosures Tagged With: ,

5 Alternatives to Going Into Foreclosure

October 9, 2010 By

If you are struggling to make your monthly mortgage payments, you might think foreclosing on your home is inevitable. In reality, there are several other options that are worth exploring before you take this step. Here is a look at a few that you might want to consider.

Reinstatement

With a reinstatement, you ask the lender how much is owed on the mortgage loan up to that date and then you pay it off. Of course, while this is the simplest solution, it is also the most difficult one for most homeowners. After all, if you had the money to pay off your mortgage, you probably wouldn’t have been in this position in the first place. Furthermore, you will need to pay off any fees and fines that you have accrued as well. Still, one benefit to this option is that you don’t need to have the lender’s approval to do it.

Forbearance or Repayment Plan

With a forbearance or repayment plan, you negotiate with the lender in order to pay back your back payments over a period of time. Usually, you continue to make your current payments while making your back payments with this type of arrangement. Therefore, this option is still a difficult one for those who are truly in financial trouble. If you simply hit a rough patch and things are back on track, however, this might be a good option for you.

Mortgage Modification

With a mortgage modification, you and the lender agree to change some aspect of the loan. For example, the lender might agree to reduce the interest rate, to reduce the balance of the loan, to increase the terms of the loan or to make other types of modifications that will help reduce your monthly payments. Of course, you have to go through a qualification process in order to enjoy these modifications and, depending upon the type of modification that is made, it could actually increase the amount you end up paying over the lifetime of the loan.

Deed in Lieu of Foreclosure

Another option you might want to consider is a deed in lieu of foreclosure. Also referred to as a “friendly foreclosure,” a deed in lieu of foreclosure allows you to hand over the property to the lender without actually going through the foreclosure process. Obviously, this will still result in a loss of the home and the deed in lieu may still be reported to the credit bureau, but this option does prevent the lender from being able to seek a deficiency judgment against you. As such, it can help you save a significant amount of money in the long run.

Servicemembers Civil Relief Act

If you are a member of the military and you are experiencing financial troubles due to deployment, you may qualify for assistance through the Servicemembers Civil Relief Act. If you qualify for this program, your payments for all your debts, including your mortgage payment, will be lowered.

Filed Under: Foreclosure Options Tagged With: , , , ,

Deciding on the Right Fixes for your Fixer-Upper

October 8, 2010 By

Are you considering investing in a “fixer-upper” in order to profit from a fix and flip deal? If so, there are several things you need to keep in mind in order to ensure you obtain the type of profit you are looking for. Most importantly, you need to consider the cost of the fixes you plan to make. After all, you want to be certain the money you invest in the purchase and repair of the home will pay off. To that end, here are some things you should consider when determining the repairs and renovations you will make on the home you have purchased.

Follow the Formula

One of the first things you need to consider when trying to determine the renovations you will make to the home is the cost of the renovation. Put simply, you don’t want to invest $40,000 into renovations that will only increase the value of the home by $10,000. To that end, you should be certain to focus on renovations that will yield a proper return on investment. Ideally, you should stick to a three-to-one formula when deciding on the renovations you will make. In other words, for every dollar you spend, you should expect a return of three dollars. If the renovation you are considering will not yield this high of a return, you should seriously reconsider your plans.

Consider the Details

In many cases, it is the small details that have the greatest impact on the overall value of a home. Simple things like putting flowers on the porch, installing a new mailbox and even trimming back the trees can increase its value. In short, you don’t always have to invest a significant amount of money – if any at all – in order to increase the value of the home. Other small investments that will increase the home’s appeal without costing a great deal of money include installing new light fixtures, door knobs, curtains, faucets, switch covers and shelves. Cleaning up the yard and doing things such as adding new wood chips or rocks to outdoor paths will also help increase the value of the home.

Make Necessary Repairs

Obviously, you will also need to make any necessary repairs to the home before you put it back on the market. Unfortunately, this is where you can lose a significant amount of money. Therefore, it is important to have a clear idea of the necessary repairs before you purchase the home. Otherwise, the repairs you are forced to make may eliminate your profit margin.

Filed Under: Fix & Flip Strategies Tagged With: , ,
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