Journey' End foreclosures, Foreclosures in Journeys End

As of December 4th, 2010 there are 35 Journey's End homes in some stage of foreclosure. This doesn't mean that there are 35 bank-owned homes in Journey's End, but these 35 have had a Lis Pendens filed, perhaps had a sale date set (courthouse sale) or have actually been sold at a foreclosure (courthouse) sale but have not yet been placed on the market.

Below I will identify these properties by street:

• Bither - 3
• C Durham - 8
• Ethan - 1
• Eugene - 1
• Finamore - 8
• Houlton - 8
• Jessica - 1
• Kevin - 1
• Kirsten - 1
• Nikki - 2
• Wilbur - 1

Doing some further research reveals that only one of the 35 properties is 'under contract' attempting a short sale. Perhaps some of the other 34 have short sale contracts in at the bank already but their home is no longer listed in the MLS, are attempting to negotiate a loan modification, forebearance agreement, deed-in lieu, or some other solution. But I have found that mostly, homeowners in default tend to ignore the issue until it is too late to have a good, workable, solution available.




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A Thanksgiving wish

Finally! One of the big franchises ADMITS IT!

Thanks to the NotoriousROB blog for the heads-up on this video. Keep in mind while you watch this that this is a Keller Williams agent recruiting video...



And this is why I opened a small, personalized office long ago...I realized that it was me, my wife and our like-minded agents that our clients were hiring...not some company logo.

 I don't think many realty companies, large or small, make ANY promise to the consumer other than vague platitudes "we are the biggest/we sell the most etc., nothing like "we hire only the most highly skilled/we fire the bad agents...you know what I mean. And the ones that do make consumer based promises often do absolutely nothing to actually KEEP AND ENFORCE that promise, from recruiting, to rules, to marketing, to service standards.

But it is refreshing to finally see one of the big guys admit what the consumer already knows: It is the AGENTS, not the company.

All of the big franchises say that they have the best agents...etc, etc. But if you've ever gone on an interview as a real estate agent, you would know that there is never a competency test, ethics test or any kind of test for that matter. As a matter of fact, it is usually a 'reverse' interview...with the agent deciding whom THEY want to go work for. It's almost: If you have a license, you have a job.

There's no free lunch

I have started to see this being promoted recently by mail and on the radio.

"If we don't sell your house in ___days...WE'LL BUY IT!"

Sounds great...especially in this market. Worth checking out? That's what the agent is hoping you'll think. Get their phone to ring...but they'll most likely never discuss the details over the phone..."much to complicated and need to see your home to see if it qualifies"...get the foot in the door.  But there is NEVER a free lunch; there is always a cost associated.

But, particularly in this type of market, it would be "good business" if the agent NEVER bought any homes, or if they did, that they were purchased at such a drastic discount that the seller could do better selling the home themselves. 

I have gone to several seminars where they promoted this (tactic/gimmick) and it starts out sounding something like this:
" Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc., Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home".

The hidden details usually follow some or all of these general guidelines:

• Must purchase one of the agents listings...or at least buy a 'full commission' home with them
• Seller must still pay a full commission on the 'guaranteed' sale
• Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
• "Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
• Original list price 5% below comparables
• Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100%  for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
• Sign the listing agreement first...then the guaranteed purchase details come later
• May be a maximum allowable program price
• Restrictions on home condition
• Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

• With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
• If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
• Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
• Can they assign the guaranteed sale price (as in a wholesaler)?

Good, solid, cutting-edge marketing, a detailed understanding of the local and national economic factors affecting home values, subdivision level market knowledge, ability to analyze trends...trust and mutual respect...THIS is what is needed today.


Thanks for reading

Nobody likes an 'I told you so'...but

"GET READY FOR THE GREAT MERS WHITEWASH BILL"

"Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen."

John Carney, CNBC--"When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS...

Now it appears that Congress may attempt to prevent any MERS' meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines...And be subject to court challenges on mortgage ownership by foreclosure defense attorneys.

Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.

Remember, this is the SAME Congress that "almost" passed the "Notarization Act" by voice vote and it reached Obama's desk. We will never know who voted for it, as a voice vote is not recorded, and it flew threw BOTH House and Senate.

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimize mortgage transfers conducted through MERS' private database...."

Just look at my post of 10/26 on my Winston Trails blog at www.WinstonTrails.info ...this is EXACTLY what I feared would happen. Too big to fail also means too big to have to comply with the laws I guess. When was the last time you broke the law and then had legislation passed on your behalf?  I don't want to turn this into a politcal blog...but...

That one heck of a 5 o’clock shadow

Standard & Poor’s, known as a leader of financial market intelligence, has revised estimates for when we can expect this much-talked-about shadow inventory to clear up. S&P now estimates that it will take 41 months—or nearly three and a half years—to get through and sell off all that shadow inventory lurking in the national real estate market background.

This number is up drastically from it’s assessment a year ago when it estimated it would take 33 months to complete this process…(That’s 25% longer than their last estimate and these guys are the “leader in financial market intelligence”?) S&P’s report states that the growth in the nation’s shadow inventory is affecting the housing market in three ways.

First, low liquidation rates are artificially skewing the visible supply of these distressed properties on the market. Second, this ever-growing inventory is having a negative affect on existing home prices. And finally, home prices will only begin to stabilize once this shadow inventory backlogged is cleared out.

Check out my video-tip blog....lots of helpful info

Just click on the image above

Foreclosures gone wild...the trilogy.

Rather than repeat the entirety of all three recent posts that attempt to explain this recent foreclosure mess/fraud...here are the links to the actual posts over on my Winston Trails blog.

Foreclosures Gone Wild 1

Foreclosures Gone Wild 2

Foreclosures Gone Wild 3

Finally, Jon Stewart gets to the bottom of this foreclosure fraud thing...

Be forewarned...this IS a Jon Stewart video...make sure no one easily offended is watching over your shoulder!

U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

The slide in U.S. home prices may have another three years to go as sellers add as many as 12 million more properties to the market…
“Whether it’s the sidelined, shadow or current inventory, the issue is there’s more supply than demand,” said Oliver Chang, a U.S. housing strategist with Morgan Stanley in San Francisco. “Once you reach a bottom, it will take three or four years for prices to begin to rise 1 or 2 percent a year.”…
Fannie Mae Forecast
Fannie Mae, the largest U.S. mortgage finance company, today lowered its forecast for home sales this year, projecting a 7 percent decline from 2009. A drop in demand after the April 30 tax credit expiration “suggests weakening home prices” in the third quarter, according to Fannie Mae…
8 Million
Douglas Duncan, chief economist for Washington-based Fannie Mae, said in a Bloomberg Radio interview last week that 7 million U.S. homes are vacant or in the foreclosure process. Morgan Stanley’s Chang said the number of bank-owned and foreclosure-bound homes that have yet to hit the market is closer to 8 million…
In addition to the as many as 8 million properties vacant or in foreclosure, owners of another 3.8 million homes -- 5 percent of U.S. households -- said they are “very likely” to put their properties on the market within six months if there is improvement, according to a survey</a> by Seattle-based Zillow.
“This has the potential to create a sawtooth pattern along the bottom,” Stan Humphries, Zillow’s chief economist, said in a telephone interview. “Homes begin to sell and a few sidelined sellers rush into the marketplace and flood the marketplace.” …
The Obama administration’s effort to help mortgage holders, HAMP, is another source of future inventory as owners with new loan terms re- default, Ritholtz said. About half of the modifications done in 2009 were behind in payments by the first quarter of 2010, according to the Treasury Department…

Read the full article by clicking the link below…(if you dare)
U.S. Home Prices Face 3-Year Drop as Inventory Surge Looms - Bloomberg

WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?

A local attorney who counsels many of our clients, Richard Zaretsky, has just posted this excellent article on his blog. It answers the very common, but perplexing question posed above.

Do We All Have A Common Goal?  Do all short sellers cooperate with the short sale process?  The answer is a resounding NO.  The short seller is typically living in the house "for free" and is not all that interested in moving out and paying rent.  Therefore, short sellers are notoriously delay oriented. Banks believe this to be a fact.

I Want To Stay!  Loan Modification borrowers are in a somewhat different boat.  They don't have any plan to move out of the house as they want to modify the loan to something more affordable.

They Want WHAT!?!@?  Short Sellers and Loan Modification borrowers have something in common - they have to accept the lender's terms of the short sale or loan modification or face loss of the home through foreclosure.  The alternative of the loss of the house in foreclosure is usually not an desirable option.  The lender can never be sure that (a) the buyer in a short sale is not going to walk away from the sale at the last minute, (b) the seller will accept the demands the lender conditions the short sale approval upon, or (c) the borrower will accept the loan modification terms offered by the lender (if any are offered at all).

Hurry Up and Wait?  So knowing or believing all the above, if you were the lender and you knew that from start to finish the mortgage foreclosure process was going to take 300 to 700 days and the short sale or modification may or may not end up successful, would you wait 3 or 5 months for a short sale contract or for the borrower to submit complete loan modification information - BEFORE you started the clock on the foreclosure process?  OF COURSE NOT!  Therefore, even if you have a good faith intention to proceed with a short sale or loan modification, the lender will NOT stop a pending suit or delay filing an otherwise ripe suit for foreclosure.  The result is one hand of the lender pursues solutions with the borrower and the other hand of the lender pursues solutions against the borrower - all at the same time.

Remind Me To Stop Before I Drive Off the Cliff!   Even the HAFA and HAMP programs have guidelines for participating lenders that state that the lender will not have to stop the foreclosure process - but only that if a borrower is accepted into the processing of under HAFA or HAMP, the lender will not actually have the foreclosure sale!  But they can go all the way to getting a foreclosure sale date set!

So if you are trying a short sale or modification, don't be surprised when the Sheriff rings your doorbell at 6 a.m. with a subpoena and summons and complaint for foreclosure even though the nice people at the bank are helping you in your "solution".  If you are 90 days or more late (typically), you should expect that visit and introduction to your foreclosure complaint very very soon.  And once you get served BE SURE TO IMMEDIATELY CONTACT YOUR ATTORNEY TO DISCUSS THE FORECLOSURE AND WHAT SHOULD BE DONE ABOUT IT.

Read Richards entire article here: WHY IS THE BANK FORECLOSING IF I AM DOING A SHORT SALE (OR LOAN MODIFICATION)?

Freddie Mac estimates home sales to fall another 23% in 3Q

Below are a few of today’s housing industry headlines:

1. Freddie Mac expects 4 million new and existing home sales in the third quarter, a possible 20.7% decline from last year and 23% drop from the previous quarter.
2. Kondaur (distressed note buyer) chief executive Jon Daurio joined Moody's Investors Service analysts saying he expects prices to fall another 20%…Daurio said he expects the drop to occur over the next three years.

You can read the article here: Freddie Mac estimates home sales to fall another 23% in 3Q « HousingWire