Renaissance Realty Group’s Blog: Foreclosure is not inevitable. Their are other options.

Eric:

Its good to show folks what other options there are.  There is no easy choice.

Its also important that these folks know that no matter what, its not the end of the world. There will be hard choices to make, but in the end it will work out.

Have a great day!

Sam

When I started in Real Estate I thought you just have to be King of the Art of the Deal.. now I know why Donald Trump has no hair.. the BEST agents do worry about the people and not the profit... and I have as many people stay in their home as I have Sell their home... but as you can see I still have a full head of hair so I guess I still have a long way to go to Be King of the Deals.

 

Thanks for the great advise. We would probably not have that many Atlanta foreclosures and Atlanta HUD homes, if these people listened to such advice.

Here is GA we have to work fast to avoid foreclosure..

GA is a NO PAY NO STAY SYSTEM... NO COURT ACTION ... the lender just needs to send notice to foreclosure to the owner.. Run notice 4 Thursday in a row then wait for the next first Tuesday court house auction.

Now I am seeing lenders waiting 3 -4 months missed payments before they start action... and thats were I fit in if I can be in touch with the barrow ... otherwise by the time it is in public notice is maybe to late to stop.

I love what I do and the ones that I am able to help seem to think I do it really well.

 

The BIG DETAILS BELOW

 

 

Quick Facts -  Judicial Foreclosure Available: Yes -  Non-Judicial Foreclosure Available: Yes -  Primary Security Instruments: Deed of Trust, Mortgage -  Timeline: Typically 90 days -  Right of Redemption: Yes -  Deficiency Judgments Allowed: Yes

In Georgia, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process. Judicial Foreclosure The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, the property will be auctioned off to the highest bidder. Non-Judicial Foreclosure The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines". Power of Sale Foreclosure Guidelines If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows: A foreclosure notice must be mailed by certified mail, return receipt requested to the borrower no later than 15 days prior to the date of the foreclosure sale. The time period begins the day the letter is postmarked. The notice must be mailed to the address given to the lender by written notice from the borrower. No waiver or release of the rights to notice is valid if it was signed at the same time as the original documents. The notice must be published in a newspaper of general circulation in the county where the sale will be held once a week for four (4) weeks proceeding the date of the foreclosure sale. The sale must be made by public auction on the first Tuesday of the month between 10:00 am and 4:00 p.m. at the courthouse. Lenders may seek a deficiency judgment in Georgia.

This is great advice. This is something similar to what I send out to each person when they go on the NOD list and ask if they need any help. They usually are so greatful that I'm not pressing them for the listing and really truly want to help them keep their home that when it does come time to sell, they call me.

Want hugs and kisses at the closing... along with you check .. be honest be helpful be great at what you do... even those clients that lose their home to Short/Sales feel like I did everything to 1.) keep them in thier home 2.) get them the best price I could for their home. 3.) treated them with respect.

I have always help there is no Check big enough to stop me from bring Honor to my Business.

 

Eric stated, "A short sale means that the bank will accept less than is owed on your mortgage as payment in full."

Eric, your statement is not entirely true.  A mortgagee approved short sale permits a homeowner to sell his or her own home without paying all that is due on the mortgage(s), but the mortgagee may require the deficiency be repaid over time as an unsecured loan, or a voluntary lien against another property, or will pursue a deficiency judgment and seek wage garnishment.

The best case scenario would have the "lender" forgive the debt as payment in full... which then creates an exposure to liability to pay income tax on the forgiven debt.  In many cases, the "income" arising from forgiven debt is partially or substantially exempt from tax. 

Short sales are not a free ride. There are consequences.

 

Knowledge or Fear .if you could pick  

 

Agree... 101% however what I do like to remind my clients... at the day of closing on a short sale... you have an ENDING...

Meaning with a foreclosure you never know when it will all end... i.e.

 Will they sell the home on the court house steps?

Will they get enough at the court house sale to satisfy all liens and loans?

When will they come and "put my stuff on the street"

If they do not get it sold on the court house steps how long till it goes on the market

At what price will it go on the market?

How long will it be on the market?

When it does sell at what price will it sell?

Will that sale price be enough to cover the loan?

Will that sale price be enough to cover the expenses of the sale?

Will the lender seek a deficiency judgment after the sale?

When will the lender file the deficiency judgment?

How much will the deficiency judgment be

If I have filed and completed bankruptcy can this new debt by rolled into the repayment program

I am sure I missed a few of the questions that Seller face as they move through this process... so Short Sales are not a get out of Jail free card but the do offer the Seller a place to begin to move forward from .. With knowledge and not fear and questions.

 

 

I agree.  Completing a proactive short sale allows the seller to have some small degree of control, and preserve dignity by selling before a forced foreclosure action. It also demonstrates to future creditors the willingness to help mitigate the problem instead of simply walking away.  I am a tireless advocatre for preforeclosure short sales... and believe in full disclosure to all parties.

Sorta like telling your boss, "I QUIT!" seconds after he says, "You're fired!"

Has anyone run across an option allowing one to do a "short-refinance"?

Has anyone run across an option allowing one to do a "short-refinance"?  

Actually, the recently touted FHASecure initiative is just that. Some non FHA loans which are now delinquent solely due to the increased payment reset... may be refinanced via the FHA program IF the former mortgagee is willing to 1) forgive the deficiency (if any), or, 2) subordinate the deficiency.

 

Hello Eric,  Good post with a lot of great info about short sales.  I would offer, however, that you might want to look at a few instances of the word "their" and "there" as these typos could be confusing to a reader.      

Sam wrote: "It's also important that these folks know that no matter what, its not the end of the world. There will be hard choices to make, but in the end it will work out".  

This is very good counsel.  In my practice, I try to help people understand right up front that they need to look at this process like "it's just business.  There is nothing personal going on about this process though it may seem from time to time that the lenders don't really care.  Instead of worrying about that, try daily to keep your mind on the fact that in a very few months, because you're taking positive steps to address this today, your life will take a turn for the better.  By being proactive today you'll lessen the impact of this financial hardship tomorrow.  Or words to that effect.  Helping people to make sure they don't get down in the dumps, possibly falling into deep depression or even committing suicide -- what we say and do can help people to more realistically look at the situation.  "It's just business".   

Having lived through a foreclosure myself, following a divorce where my ex- refused to sign a Quit Claim Deed to me (there really was no equity in the house so it seemed at the time that her attorney just wanted make sure I was adequately suffering).  I was the one in the house so if the payments were to be made, I would be the one to make them.  The whole thing got ugly very quickly. 

This was during the days when Reaganomics was kicking in, following the ra-ra, runaway inflationary days of the Carternomics period.  The confluence of the economic policies of these two administrations helped to create a lot of hardships for people.  Many people brighter than I lost their shirts, as I like to recall, so I was not the only "idiot".  I had purchased about 10 rental houses in a three year period and got overwhelmed when half of them went vacant.    I was not a "victim", as I was at least 51% to blame for my own economic nightmares, or was it 49%?   Doesn't matter.  What matters was that I got some advice from good people that helped me get through those very dark days 20+ years ago. 

Today, in the 00's, we are in a potentially similar scenario to the early 80's.  There will be lots of opportunities to counsel and console as, "this too shall pass" for them.  Their primary job is to get their short sale package together, write an honest hardship letter, get their budget under control so that they can transition into an apartment or to downsize, then let the professionals help them to avoid foreclosure, if at all possible. 

There truely is an opportunity to help keep people from getting overly depressed.  "It's just business". 

Andrew wrote, "I would offer, however, that you might want to look at a few instances of the word "their" and "there" as these typos could be confusing to a reader."

TIP:

T HERE    in "there" is the word "here" suggesting a place, or location as in, "Look over there!"

 

T HEIR  in "their" is the word "heir" suggesting possession (heir to an estate), as in, "Is that their home?"

Shall we discuss To, Two,or Too?

I think the banks should take all the Adjustable Rate Mortgages and turn them into 4% Scotty 30 years fixed rate.

This way the banks won't have all these properties they don't want and can still make some money on the mortgage.