A few weeks ago she opened an envelope and discovered that July 23rd was the date set when her home would be among many others on the Sherriff’s Sale docket. Widowed many years ago she purchased the home two years before this year’s birthday; her eighty-third. She put all she had into the down payment for the home knowing, in all likelihood, it would be the only thing of substance she would leave to her children.
The modest home sits in a neighborhood that is showing the beginning signs of deterioration. Her home is in fine shape, but some of those around her are in desperate need of paint and new roofs. One down the street has been boarded up and bears a “CONDEMNED” sign. Two years ago she bought the house for $145,000 and that’s still about what it’s worth.
Where will she go? For financial reasons, her daughter lives with her and her son lives in another city with a family of his own. No assets, fixed income and facing foreclosure, her options are in short supply.
She is learning first hand that lenders are eager to lend money for a home purchase and even happier to take a customer’s payments. But a customer quickly experiences the lender’s Mr. Hyde side when they miss a payment or two.
One of the busiest departments in any mortgage servicing company is Loss Mitigation; especially since many homes were purchased with adjustable rate mortgages and those rates have started moving upward. The department of Loss Mitigation is responsible to ease the company’s losses by collecting past due debts or negotiating various forms of repayment from borrowers.
The people who work in this department are faced with a daunting task made more difficult by delinquent borrowers who fabricate more stories than Aesop. Yet even when dealing with fables, they are still charged with minimizing the company’s losses. And they are ready to do so but there is a protocol that can help any borrower who finds themselves talking with the Loss Mitigation department.
First, get to the right department. The generic customer service representative can only help you find the number to the Loss Mitigation department. Run of the mill customer service is not equipped to negotiate these matters.
Second, make the choice to respond not react. It’s nerve wracking when dealing with anyone to whom a delinquent debt is owed and when it’s your home, the emotions can run especially high. So make the purposeful choice to give calm, accurate and direct answers. Try and remember that everyone involved is interested in minimizing their losses.
Third, understand that they hold the note, so they make the rules. They will require a written letter called a “hardship letter” explaining the circumstances beyond the borrower’s control that led them to the place where they can no longer afford the monthly payment. Just a reminder; evidence will be required for every claim made in the letter, so write a convincing letter, but be able to back it up.
Fourth, be ready to provide financial records. Most likely they will request many of the same documents provided when the loan was closed. Records like two years taxes (all schedules), most recent pay stubs showing year-to-date income, bank statements, and any investment statements, all give the lender a clear picture of your situation.
Fifth, if a settlement is reached or a note is modified, there could still be both credit and tax consequences. Most likely any settlement with your lender will report negatively on your credit report. But hey, over time credit repairs and the house is saved. Some settlements or loan modifications can mean tax consequences so be sure to consult a tax advisor for a more complete understanding of these ramifications.
I’m still negotiating to save the widow’s home and I don’t know the final outcome. But one day at a time we work together to provide the documentation the lender representative requests. Most likely her home will remain on the docket for Sherriff’s Sale, but the amount owed against the property makes it unlikely that it will sell on July 23rd. We’re already planning on continuing the negotiation on the 24th.
Monday, July 27, 2009
Friday, June 19, 2009
Ready for Sale (Part Four of Four)
Over the past three weeks we have taken a look at what some local experts say is the best way to get your home ready for sale. Some have commented that the ideas have been helpful, while others have offered their own suggestions, some of which were good enough to be included in future articles.
For this, the final installment in the series, I want to share some of the ideas that have come from discussions I have had over countless cups of coffee with scores of people involved in various areas real estate. These ideas have been synergized into my way of thinking so unfortunately I won’t be giving credit where it is most likely due. So in advance let me apologize to anyone whose idea I have “borrowed” whether or not I have had permission.
The current housing market is more oriented toward the buyers than the sellers. Housing inventories are high and interest rates are still low. (Okay they’re higher than they were a few weeks ago, but seriously, 30-year fixed rates in the 5% range are fantastic rates.) This combination makes tilts the balance such that the seller is walking uphill to get every dollar they can out of their home.
Conversely, buyers are looking for the best value for their home buying dollar. Buying a home is in some ways like buying a vehicle. Sure it runs well on the test drive, but what unexpected repairs could I be facing in the near future? And how much will these repairs cost me? The home may pass inspection, but after three weeks of ninety-degree heat, the A/C compressor may just give up the fight. That could be a financial challenge.
So here are three suggestions that can go a long way to help quell buyer suspicions and reinforce the price the sellers set. I will give fair warning that these suggestions will cost the sellers a bit of money, but could make the difference on whether or not you have to drop your sales price to get an interested buyer.
Get Your Home Inspected. Sure most buyers will have the home inspected before they close, but if a seller orders a professional inspection and then affects the suggested repairs this pro-activity could encourage prospective buyers to give extra consideration to that home. Have the inspection report laying out on the kitchen counter along with the paid receipts for the repairs. Buyers will be impressed that the seller is not trying to hide anything negative about the house. Once they put an offer on the home they will hire their own inspector, but if the necessary repairs have already been affected, everyone will be more comfortable with the transaction.
Get a Pest Inspection. This should be an annual event for most homes anyway. So contact a pest control company and get a licensed termite inspection. Again, have this report available for prospective buyers to see before deciding whether or not they will make an offer on the home. Yes, the buyers will more than likely want to hire their own pest inspection, but when their report matches the one the sellers provided, the home’s value is established even more.
Get an Appraisal. By now some of you have already clicked off and have decided that I’ve lost my last marble. But hear me out...uh, I mean, you’ve read this far so finish the article. Here’s what I’ve discovered. Realtors representing the sellers look for comparable properties that justify the highest possible price for the home. That’s okay they’re supposed to do that. Realtors representing the buyers look for comparable properties that validate a lower price for the home. And that’s okay too. They’re supposed to do that. But if an complete appraisal is done and paid for buyers (and Realtors) have more difficulty making an effective challenge to the seller’s asking price.
Buying a home is an emotional journey for everyone involved. These three suggestions will cost the seller some money up front, but can go a long way toward helping minimize stress in everyone’s corner.
For this, the final installment in the series, I want to share some of the ideas that have come from discussions I have had over countless cups of coffee with scores of people involved in various areas real estate. These ideas have been synergized into my way of thinking so unfortunately I won’t be giving credit where it is most likely due. So in advance let me apologize to anyone whose idea I have “borrowed” whether or not I have had permission.
The current housing market is more oriented toward the buyers than the sellers. Housing inventories are high and interest rates are still low. (Okay they’re higher than they were a few weeks ago, but seriously, 30-year fixed rates in the 5% range are fantastic rates.) This combination makes tilts the balance such that the seller is walking uphill to get every dollar they can out of their home.
Conversely, buyers are looking for the best value for their home buying dollar. Buying a home is in some ways like buying a vehicle. Sure it runs well on the test drive, but what unexpected repairs could I be facing in the near future? And how much will these repairs cost me? The home may pass inspection, but after three weeks of ninety-degree heat, the A/C compressor may just give up the fight. That could be a financial challenge.
So here are three suggestions that can go a long way to help quell buyer suspicions and reinforce the price the sellers set. I will give fair warning that these suggestions will cost the sellers a bit of money, but could make the difference on whether or not you have to drop your sales price to get an interested buyer.
Get Your Home Inspected. Sure most buyers will have the home inspected before they close, but if a seller orders a professional inspection and then affects the suggested repairs this pro-activity could encourage prospective buyers to give extra consideration to that home. Have the inspection report laying out on the kitchen counter along with the paid receipts for the repairs. Buyers will be impressed that the seller is not trying to hide anything negative about the house. Once they put an offer on the home they will hire their own inspector, but if the necessary repairs have already been affected, everyone will be more comfortable with the transaction.
Get a Pest Inspection. This should be an annual event for most homes anyway. So contact a pest control company and get a licensed termite inspection. Again, have this report available for prospective buyers to see before deciding whether or not they will make an offer on the home. Yes, the buyers will more than likely want to hire their own pest inspection, but when their report matches the one the sellers provided, the home’s value is established even more.
Get an Appraisal. By now some of you have already clicked off and have decided that I’ve lost my last marble. But hear me out...uh, I mean, you’ve read this far so finish the article. Here’s what I’ve discovered. Realtors representing the sellers look for comparable properties that justify the highest possible price for the home. That’s okay they’re supposed to do that. Realtors representing the buyers look for comparable properties that validate a lower price for the home. And that’s okay too. They’re supposed to do that. But if an complete appraisal is done and paid for buyers (and Realtors) have more difficulty making an effective challenge to the seller’s asking price.
Buying a home is an emotional journey for everyone involved. These three suggestions will cost the seller some money up front, but can go a long way toward helping minimize stress in everyone’s corner.
Ready for Sale (Part Three of Four)
Most home owners know what they would look for in a home, if they were shopping for a new place to live. The problem comes when the home seller tries to second guess what qualified potential buyers are looking for when they schedule a tour of a home. In this, the third installment of the four-part series we will address a couple of “inside the home” topics that can make all the difference in how your home shows.
Even before potential buyers can appreciate how the inside of your home looks, they are already making judgments by the way your home smells. Just like people we know who smoke and then douse themselves with cologne or perfume; covering up inside home odors doesn’t work either.
There are products on the market that claim to absorb and eliminate odors when sprayed on drapes and upholstery. I’ve used these in my home. At the risk of getting into trouble with my wife let me say that we have a very clean home. But it seems we have to use these products on a somewhat frequent basis to once again remove the odors that were supposed to be eliminated in the previous application. Perhaps it’s just our home, or we aren’t applying the product correctly. I don’t know.
“If you have indoor pets, smokers, frequently cook spicy fried foods, or clean fish in the kitchen sink (yuck!), a thorough carpet and upholstery cleaning is recommended”, says Steve Dowling, owner of Oklahoma Steam Clean and Restoration (sdowl@cox.net). “Regardless of who the homeowner contracts to do the job, they need to make sure the company uses the right equipment and the right products to remove the source of odors, not cover them up” Dowling said.
Of course home owners do have the option of renting carpet cleaning equipment from the grocery store. And who hasn’t done this? Dive to the store, load up the equipment, unload it at home, figure out how to work the thing, push and pull it for a couple of hours, work on high traffic areas and tough stains, empty the water collector several times, load the equipment back up, drive to the store, unload it and then wake up the next morning to carpets that are still wet.
But perhaps the most frustrating things about the do-it-yourself route, is that often too much of the cleaning product is left in the carpet, which when dry attracts new dirt like a magnet. Within weeks the carpet can look worse than it did before the do-it-yourself self-torture.
Another important area of the home is the tile and grout. This area is more often overlooked than it is addressed by sellers. “It’s just plain bad to go into a house and immediately be knocked out by a mildew odor coming from the bathroom” said, Brad Womack, owner of Integrity Tile Services (www.gotdirtygrout.net). “Grout that has molded or mildewed in and around the tub and shower areas is usually the culprit for mildew odor” Womack added.
Besides replacing broken, chipped or missing tiles anywhere (including kitchen counter and backsplash areas), all tile and grout should be thoroughly cleaned in order to eliminate stains and odors and to make the home look its best.
Womack suggests, “If you choose to clean/seal the tile and grout yourself, make sure that the surface to be sealed is very clean; you don’t want to trap any dirt under the sealer.” There are a number of products on the market that effectively seal grout. But if you don’t have time or the energy to do the job yourself, Womack suggest calling a professional who has the knowledge, skill and equipment to do the job quickly and effectively.
After you have done everything you think needs to be done in order to make your house shine, try this. Shoot a video of your home as if you were a potential buyer. Begin filming by driving up to your home and continue the shoot as you walk up the sidewalk, enter the door and tour the home. Once the video is complete (and unedited) sit down and watch it with your realtor. Then humbly and calmly accept their suggestions.
Even before potential buyers can appreciate how the inside of your home looks, they are already making judgments by the way your home smells. Just like people we know who smoke and then douse themselves with cologne or perfume; covering up inside home odors doesn’t work either.
There are products on the market that claim to absorb and eliminate odors when sprayed on drapes and upholstery. I’ve used these in my home. At the risk of getting into trouble with my wife let me say that we have a very clean home. But it seems we have to use these products on a somewhat frequent basis to once again remove the odors that were supposed to be eliminated in the previous application. Perhaps it’s just our home, or we aren’t applying the product correctly. I don’t know.
“If you have indoor pets, smokers, frequently cook spicy fried foods, or clean fish in the kitchen sink (yuck!), a thorough carpet and upholstery cleaning is recommended”, says Steve Dowling, owner of Oklahoma Steam Clean and Restoration (sdowl@cox.net). “Regardless of who the homeowner contracts to do the job, they need to make sure the company uses the right equipment and the right products to remove the source of odors, not cover them up” Dowling said.
Of course home owners do have the option of renting carpet cleaning equipment from the grocery store. And who hasn’t done this? Dive to the store, load up the equipment, unload it at home, figure out how to work the thing, push and pull it for a couple of hours, work on high traffic areas and tough stains, empty the water collector several times, load the equipment back up, drive to the store, unload it and then wake up the next morning to carpets that are still wet.
But perhaps the most frustrating things about the do-it-yourself route, is that often too much of the cleaning product is left in the carpet, which when dry attracts new dirt like a magnet. Within weeks the carpet can look worse than it did before the do-it-yourself self-torture.
Another important area of the home is the tile and grout. This area is more often overlooked than it is addressed by sellers. “It’s just plain bad to go into a house and immediately be knocked out by a mildew odor coming from the bathroom” said, Brad Womack, owner of Integrity Tile Services (www.gotdirtygrout.net). “Grout that has molded or mildewed in and around the tub and shower areas is usually the culprit for mildew odor” Womack added.
Besides replacing broken, chipped or missing tiles anywhere (including kitchen counter and backsplash areas), all tile and grout should be thoroughly cleaned in order to eliminate stains and odors and to make the home look its best.
Womack suggests, “If you choose to clean/seal the tile and grout yourself, make sure that the surface to be sealed is very clean; you don’t want to trap any dirt under the sealer.” There are a number of products on the market that effectively seal grout. But if you don’t have time or the energy to do the job yourself, Womack suggest calling a professional who has the knowledge, skill and equipment to do the job quickly and effectively.
After you have done everything you think needs to be done in order to make your house shine, try this. Shoot a video of your home as if you were a potential buyer. Begin filming by driving up to your home and continue the shoot as you walk up the sidewalk, enter the door and tour the home. Once the video is complete (and unedited) sit down and watch it with your realtor. Then humbly and calmly accept their suggestions.
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