Bad Housing Market

For the last day or so I’ve been in conversation with several people (including attorneys….ect) about homeowners walking away from their mortgages and I have my own opinion about it. Yes there are consequences for those that leave and walk away from an obligation they signed up for BUT what about when “LIFE” happens and it does. Meaning sickness, death, health issues, job loss, the housing market crash (negative equity)……ect.

What about when the banks will NOT work with you and assist you?

Here is the recent article I read below, would love to get your thoughts as well.

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Walk away from your mortgage? Time to get ‘ruthless
By Les Christie

NEW YORK (CNNMoney) — Should you keep paying your mortgage on a home that’s dwindling in value?
No way, say an increasing number of underwater homeowners who are voluntarily choosing to “walk away” from their home loans, a practice known as “strategic default.”
Jon Maddux, CEO of YouWalkAway.com, reports 10% more clients this year to his company, which advises people how best to handle the walk away process.
Charles Gallagher, a real estate attorney in St. Petersburg, Fla., has also seen an uptick.
And a recent survey by home finance company Fannie Mae found that while only about 27% of homeowners would even consider walking away, that’s up from 15% last year.
In an early 2010 report, Morgan Stanley (MS, Fortune 500) researchers said nearly 200,000 defaults in the prior year were voluntary, or roughly 12% of the total. The bank expects to issue updated estimates in coming weeks.

10 dirt cheap housing markets

The profile of a typical strategic defaulter is not what you’d expect, said Peter Ticktin, a Florida-based attorney, whose firm is handling 3,000 foreclosure cases.
“Because they borrowed money and stopped paying their loans, you would think they’re deadbeats — but it’s not like that,” Ticktin said. In fact, most are good credit risks with high FICO scores, according to Andrew Jennings, chief analytics officer at Fair Isaac (FICO), the company behind FICO. Take Jeff Horton, an IT manager in Orlando, Fla.
He stopped making mortgage payments on two homes in October 2009, a condo purchased for $140,000 in 2005, and a house he bought two years later for $265,000. He had occupied the condo until he bought the house, and then rented it out.
“I would have kept up the payments, but the condo was appraised for $54,000 and the house, $135,000,” said Horton.
To keep paying off the homes didn’t add up. He could rent a nice three-bedroom home in town for about $1,000 a month, less than half what he was paying for his mortgages, even after rental income.
For him and other homeowners, that makes up for the credit-score hit and the fact that you won’t be able to get a mortgage for several years.

Before he stopped paying, his credit score was an excellent 750. It dipped as low as 520, but is up to 600 again.
“Strategic default can be a financially sophisticated thing to do,” said Mark Fleming, chief economist for CoreLogic, the financial analytics company. “And it makes sense that more financially savvy people do it. They may treat their mortgages like they would their investment portfolios — in a financially ruthless manner.”

Home price ‘double-dip’

Sometimes, borrowers have to acquire that ruthlessness.
Helen Sheridan purchased a townhouse condo in 2006 at the height of the boom in San Diego. She paid $630,000 for a place worth $450,000 today.
When the economy tanked, she lost about 30% of her income as a certified public accountant and her mortgage payments, while still doable, became burdensome. With a teenage daughter and son, she was facing college costs.
She had to overcome some conventional thinking about the sanctity of debt repayment to make what she realizes is the correct financial choice. “I still feel guilty,” Sheridan said. “I break out in tears, but I have a family to support.”
One factor that pushed her over the edge was that the house needs maintenance and repair.

Able To Pay But Walking Away

“People are more educated about the process,” said Maddux of YouWalkAway. “They’re making more calculated, less emotional, decisions and are less fearful and less concerned about the stigma.”
Sheridan is getting help from YouWalkAway and her house will be auctioned off on June 13.
University of Arizona law professor Brent White thinks the past few years of banking scandals have reinforced the view that it’s not unethical to walk away.

“There’s a sense that the banks don’t follow the ‘rules,’ but somehow the little guy is supposed to — more and more people are saying ‘enough is enough’ and walking away,” said White, who is also the author of “Underwater Home: What Should You Do If You Owe More on Your Home than It’s Worth?” Some homeowners, however, can’t get past the stigma.
Gallagher represents a Florida couple, a dentist and a financial consultant who is well known in the area. They bought a house for $1.4 million during the boom, and considered walking away when it was appraised recently at close to $400,000.

“Ultimately, the couple did not default,” said Gallagher. “Given her public profile, she was worried about the backlash. She remains making payments on a deeply underwater mortgage.”

The only reason I was invited to attend was on the recommendation of my mentor, Dr. Richmond McCoy. Richmond is the President and CEO of UrbanAmerica Advisors, LLC and has over 28 years experience as a real estate professional and has consummated more than $6 billion in real estate transactions. Dr McCoy had an IN with the Black Enterprise Entrepreneurs Conf/Expo selection committee and could recommend panelists for immediate inclusion in the 2011 conference lineup.

Dr. Richmond McCoy

Click here for more information about UrbanAmerica Advisors, LLC

So when I received the email from his executive assistant followed by a personal phone call from Dr. McCoy I was more than tickled pink…lol. My heart started beating fast, my mind was running 100 mph with things to do and get together. Then I began to think “Wow, ME, REALLY?, he knows 100s other people in the real estate business that he could have called but he called ME!”.

So needless to say I “Maximized” the opportunity while in Atlanta. The trip was a success — Not only did I SHARE with others I LEARNED and NETWORKED. Tremendous opportunities have opened up since my return and I anticipate more to come .

I have been asked how do you get opportunities like this, my answers are below:

1. Find a good mentor

2. Find a good mentor

3. Find a good mentor

Listen, take action, work hard and be consistent. If you are serious about having a successful career, find a good mentor. Opportunities and doors will open that will change your life!

Thank you Richmond for planting the seed and changing my life!

Lolita

Shae Bynes is an incredible person that’s on the move, making things happen, POSITIVE and I met her online : ) This wife and mother of 2 has one of the top real estate investing blogs on the internet, GoodFaithInvesting.com, co-founder of DivaMoneyClub.com and creator of Financial Freedom GPS which is a step-by-step method to help people achieve financial freedom sooner than they ever imagined (and have a life focused on purpose rather than paychecks!). She is someone to know, listen to and I’m glad our paths crossed.

Check out Shae’s video. She shares 3 awesome tips about Financial Freedom that has changed and impacted her life and how it can impact yours.

Click Here for Shae’s Free Webinar

Thank you Shae for taking the time to share this valuable information with us!

For those of you that don’t have my “How To Build A Massive Buyers List Using Social Media” e-course, I encourage you to pick it up today.

Here is a simple explanation:

*Set up a profile on each of the top social media sites: Facebook, LinkedIn, Twitter and Youtube. (Its Free)

*Build trust and maintain a good reputation online.

Don’t panic I will show you how to do each item listed above in my e-course. I can’t go over everything that’s in the e-course in this blog post.

But I think having this simple checklist will give you a good idea of some of the pieces needed.

This e-course is extremely detailed and includes all the resources you need to be successful! Also REAL examples of how I have added cash buyers and sold real estate deals, products and services from my online presence.

It’s also VERY inexpensive so exhale : ) check it out here.

Using social media to build a massive buyers list works BUT you have to take action and the time to implement it.

LET’S TALK

Give me your comments and thoughts below….I’d really like to have a conversation about this post.

In this webinar he shared alot of people are trying to do short sales and jump on the foreclosure band wagon. He stated if you are not familiar with short sales and don’t know how to buy foreclosures at foreclosure auctions then you will be in a world of frustration. I totally agree! It can be very time consuming and have you pulling your hair throughout the process. I decided along time ago to outsource all short sale leads and glad I did.

One of the main points he discussed was focusing on generating more leads into your business everyday and building your list of prospects. Once you understand how valuable that is for your business you won’t have to worry about deals or making money. He shared how “Influential Communication” is critical to maintaining buyers (prospects) on your list and establishing a trusting relationship. He also shared additional points to keep in mind when communicating:

1. Put Your Ideas Across with the written word, video and audio

6. Making yourself a powerful, even heroic figure in your prospects eyes.

I hope these key points help you like they have me : )

By the way, I’m a featured guest on my friend, Shae Bynes REI Masterclass series! Check it out Good Faith Investing

To Your Success,

Lo

Think about it, we all know pretty much what we should be doing. For example if you are overweight and in poor health you need to “lose” weight and have better eating habits, right? If you are in debt you need to quit spending so much, save more and/or make more money.

Since we all know this just do it already! For 2011 just tell yourself I’m going to “do it already” and stick with it. I told myself this a few years ago and I’m grateful for the “Just Do It” Nike commercials because they motivated me to become more of an “action taker”.

So don’t stress about the new year’s resolutions, just do it already and be consistent. You will need a few things to keep you focused, on track and motivated:

1. Support from others that care for you and want to see you succeed, VERY important.

2. Your goals written down and in front of you to view everyday!

3. Persistence and a drive to see the end results.

I shared this video on my Facebook fan page and received alot of positive feedback. I think it will sum up this blog post : ) Happy New Year and To Our Success in 2011!

This is also a time of thanksgiving and sharing. Actually ANYTIME is a great time to share and give. I would like to do something special for you.

So what are you doing Lo….

How to Build a Massive Buyers List Using Social Media

I am giving away a copy of my 1st product soon to launch in January 2011 entitled “How To Build A Massive Buyers List Using Social Media”.

As an investor building a buyers list is the most crucial aspects of becoming a successful real estate investor. Ever heard “Money is in the List”? Well believe me it is and this e-course is designed to show you how to use Facebook, Twitter, LinkedIn and Youtube to attract ALL the buyers to you like flies!

I am EXPOSING my business model on how to build a million dollar buyers list. This is no watered down e-course it has solid content you can start using TODAY to get more buyers for your deals and products!

What you have to do to get this awesome e-course…..

All you have to do is post a comment or a short video below of what you are thankful for, simple right? Also what motivates you and one of your favorite quotes.

How do you win…..

Each person that submits their comment or video, what motivates them and favorite quote will be entered into a drawing. I will draw and announce the winner on video and post it this Friday, November 26th by 3pm cst.

I’m also giving away……

Ginormous, Outrageous, Audacious Living Book

A copy of “Ginormous, Outrageous, Audacious Living” book written by Samantha Murchek. This is a great book and is designed to help you discover all of the gifts that you have been uniquely designed with and to move forward experiencing a life that is so much more than you have ever dreamed or imagined.

You can find it in book stores but the winner will also receive Samantha’s book at ZERO cost. The e-course and book are excellent resources to motivate and guide you into 2011!

That’s not ALL…….

For everyone that submits a comment/video, what motivates them and favorite quote will receive a special gift. If you don’t win the drawing you still WIN!

So Take Action and share this post with others….

Lo

Its a wonderful thing to network and work with people that don’t complain and cry about the economy, their lives and what they can’t do for whatever reason.

I’m so proud of my student and mentee Juanita for taking action and closing her first deal. Even before she completed Lo’s Real Estate Wholesale Investing mentoring program she has already received her first check and about to close her second deal! She has a “Make It Happen” attitude and drive that’s out of this world.

See how “crazy” excited she is……

I wanted to dedicate this blog post to her and let her know I appreciate her hard work, dedication and commitment!

Question, do you have a “Make It Happen” attitude?

To your Success,

Lo

To Your Success,

Lolita “aka” Lo

Article by Holden Lewis

Is it safe to buy a foreclosure?

It’s safe to buy a previously foreclosed-upon house if title insurance is available on it, experts say.

The “robosigning” scandal — in which banks and law firms cut corners on foreclosure paperwork — caused some lenders to suspend their foreclosure cases this fall while they reviewed their procedures.

Foreclosure chaos:

• Foreclosure chaos and homebuyers, sellers
• Who owns the foreclosure you bought?
• Foreclosures and title insurance
• How foreclosure works in your state
• Foreclosure: judicial or nonjudicial?

What would happen to the buyer of a foreclosed house if the home previously had been wrongly repossessed?

As long as the new lender and new owner have title insurance, the former owner can’t seize the home back. The new owner will keep the house, and the displaced former owner might be compensated with money.

“To the extent that a borrower who was foreclosed upon has recourse, it’s against the foreclosing lender, and they can seek monetary damages. But the property’s gone,” says Mark Skilling, chief operating officer and general counsel for ForeclosureRadar, an online foreclosure data marketplace based in northern California.

“The current owner who got title insurance — they get to keep the property. They’re a good-faith purchaser,” Skilling says.

Bargain bin protection

That’s welcome news for homebuyers who rummage through the bargain bin of foreclosed houses.

Few consumers buy houses at foreclosure auctions. More commonly, consumers buy foreclosed properties from the banks that seized them.

The term for such houses is REO, for real estate owned — as in, “real estate owned” by a bank. Some real estate agents specialize in selling REO properties.

A good share of REO houses are decrepit. Many sit empty for months before they are sold, and they end up in such bad shape that they are ineligible for mortgages. Investors often buy these REOs with cash, fix them up and sell them, just like the house flippers of the boom years.

Whether bought from the bank or from a flipper, almost all REOs are listed through real estate agents.

Armando Montelongo, host of “Flip This House” on the A&E network, says certain phrases in the listing — such as “completely rehabbed” or “newly remodeled” — are signs that the dwelling was a foreclosure, and is now in good-enough shape to be eligible for a home loan.

“It’s the benefit of buying an REO from somebody who flips properties, versus buying an REO straight from the bank,” says Montelongo, who lives in San Antonio.

Cloudy titles

However the foreclosed house ends up in a buyer’s hands, issues that lurk in the property’s past could “cloud title” — cast uncertainty on the buyer’s ownership rights. Title insurance protects against such defects in the title, such as undiscovered liens, forged signatures or defects in documentation.

There are two types of title policies. Lender’s policies protect lenders and owner’s policies protect owners. Mortgage lenders always require lender’s title policies.

Owner’s policies are optional, and are recommended for properties that have been through foreclosure.

“From the consumer’s perspective, I don’t think they have a lot to fear as long as they’re able to purchase title insurance on an REO property,” says Ivan Choi, national default sales executive for New Vista Asset Management based in San Diego. “By and large, the title companies are still out offering policies.”

There have been reports that title insurers have refused to issue policies on some homes foreclosed by lenders involved in the robosigning scandal. Responding to these reports, Fidelity National Financial — the largest mortgage insurance company — issued a statement that “this situation will not have a material adverse impact on its title business.”

The statement said “new owners and their lenders would have the rights of good-faith purchasers which should not be affected by potential defects in documentation.”

Those “good-faith purchasers” won’t be kicked out of their houses, Skilling says. He adds that Fidelity’s message is that “they’re still going to underwrite on REO properties.”

Looking like more homeowners will be underwater on there home values by the first of the 2011.

Lolita

Article by Gerri Willis published October 14th, 2010

“The Chilling Effect of a Foreclosure Freeze”

The foreclosure fiasco is not just about attorneys general or banks or robo-signers, it’s about homeowners – those that haven’t paid their mortgage and those that have.

This latest crisis impacts an already crumbling housing market – as illustrated by new numbers out today.

Lenders seized more homes this summer than in any three month stretch since 2006. More than 288,000 properties were lost to foreclosure in the third quarter. That’s up from nearly 270,000 in the second quarter.

The numbers showed 816,000 homes have been seized through the first nine months of the year and banks are on track to seize 1.2 million by the end of 2010.

Already more than 2.5 million homes have been lost to foreclosure since the recession started.

But many of the foreclosures may be challenged in court because of robo-signer allegations.

The freeze by some banks could mean we won’t top the million mark this year, but we’ll see a ridiculous spike at the start of next year.

That could have a severe impact on home sales and home prices – pushing hard-working Americans even more underwater on their homes.

A freeze in foreclosure sales between now and December could amount to removing 30% of all home sales for that period. Moody’s says that’s good news if you’re a homeowner looking to sell in the near term, because there won’t be as much competition. If you’re looking to sell further down the line, well that’s not so good news.

Settling allegations of fraud could take months for the banks and they could be subject to financial penalties.

Here’s what banking analyst Dick Bove told me last week: JPMorgan said extending its review of foreclosure cases to 41 states would double the number of cases under review to 115,000.

GMAC and Bank of America are reviewing procedures in all 50 states. An Ohio lawsuit filed by the attorney general is seeking damages for consumers of $25,000 for each violation.

And the fiasco is hurting stocks: shares of Bank of America, Wells Fargo, Citigroup and JPMorgan fell between 4% and 6% today.

If similar cases were brought in all 50 states, it could total billions of dollars in damages and fines for lenders and others involved in foreclosures.

So what does this mean for you? Good luck trying to get a bank to give you a mortgage; as if they weren’t gun shy enough already.

If you find this article helpful please share it. Would love your comments and thoughts as well.