Bank Refuses To Help...Seller forced into foreclosure.

This is a another real Customer case:
Facts: Seller bought condo in Daly City for $385,000 with 10% down in March 2006. Towards the end of 2006 several Condos in the same building foreclosure and where later sold for under $300,000. Ever since the Seller has tried to refinance to get of a 2 year fix-adjustable loan.
Each time the banks have declined her due to value going down. In Daly City (as of 5/08) there are bought 9 condos similar to hers for under $200,000.

Action: Since October 2007 I have been working with the her lenders and/or servicing company: America's Servicing Company(Fremont was the lender originally). I submitted all the paper work a short sale and on 3/17/08 I submitted a offer from a Agent representing a Buyer. Since then I have tried to contact the Lender and I was always told that it was been looked. However, the Seller called me yesterday 5/8/08: Her condo will be up for sale at the Redwood City Court House on 5/30/08.

Results: So I really think that Lenders are not motivated enough to act faster and with better intention to help distressed Sellers.

So now we have another statistic. And just this week I've have 3 other people consulting with me on what to do. I really don't think I can help them.

This business of short sales is a very stressful sale, and a lot of it comes from dealing with the Lenders.

How did I get into this mess? Should I stop paying my mortgage? Help?

Hello readers. This is not easy to write. Like many of you the current credit, mortgage, housing crises has finally hit me hard! And it is hard to admit that as a real estate agent myself I cannot figure a way out.
Problem: I bought a second single-family home in Richmond, California in 8/2005. I refinanced in 4/2006 and now I cannot make the mortgage payments and I need to decide whether to continue making payments or not. I have to make this decision by May 15, 2008.
I have invested a lot of time researching what the consequences may be, and I have found out that there are a lot of contradictions in the opinion of experts.I have patiently waited to see what comes out of Congress or the Lenders but nothing so far has helped.
Background: In 8/2005 a friend and I bought a house for investment purposes in Richmond. The goal was to buy and hold and eventually sell at a profit.We did not speculate, we did not lie to get our loan, we did not over buy. We bought something that we could afford and responsibly pay for. We bought a moderate house less than $400,000. The only possible mistake was that we ended up getting a 2 year fixed loan after which it would adjust. This loan was obtained from Fremont Savings Bank.
Then my friend lost her job and could no longer help make the payments. I continued paying it on my own. Then in 4/2007 I was able to refinance. I say that I refinanced just in time, because a few weeks later the whole mortgage/credit crises hit hard. Suddenly this house loss about 40% of its value. I had 10% equity at the time of refinance, but when the value dropped I lost all equity.
Overnight it seems that houses around my house were now worth 50% of less. And signs of foreclosures, and boarded up houses starting appearing.
Still I made my payments. As a real estate agent I was still closing transactions. There were still buyers, sellers, borrowers and mortgage CREDIT. But then the buyers dried up. And those that wanted to buy could not get loans. So my income went down. As I write this I have about 6 Short Sales transactions going on but either buyers cancel or the Lenders refuse to negotiate.
Since 12/2007 I still made my payments, but I knew I was heading for trouble so I started to call my lenders, Bank of America and Washington Mutual to see if I could modify terms. They refused then and continue to refuse to negotiated. They tell me that I first have to stop paying my mortgage before they talk to me about loan modifications, short sale, etc.
I called the many counseling help lines, and still no help. Everyone tells me that as long as I pay my mortgage then the lenders have no reason to negotiate anything.
In Summary: And so my house is worth much less than I owe. There are too many houses for sale, and now I have to decide whether I stop paying my mortgage in order to get the Bank's attention. But this has consequences:
The Consequences: I have researched the California foreclosure laws, my loan contract,the new and proposed State and Federal laws and nothing seems clear.
If I let the lender foreclose on or short sale my house, what are the tax consequence? Since it is not my primary home.
Will the lenders foreclose and stop there, or will they try to go after my primary home.
If I stop making mortgage payments in order to begin the process of getting the banks' attention, I will need to ruin my credit score. And this then has a lot of other consequences.
Responsibility: I know that I am responsible to pay this mortgage. However, the decrease in value of my house wasn't of my doing. Also, the lenders don't want to extend credit even though my FICO score is (as of 3/08 it was 756) very good since they think values will still go down. I also see the Federal Government is rescuing major banks, lenders (persuading Bank of America to buy CountryWide under favorable loan rates, helping JP Morgan buy Bear Sterns, etc).
From a purely investment perspective it doesn't make sense to keep the house. In my opinion, it will be at least 10years , if ever, bythe time my house goes back up to its current loan value.
And I have to decide whether I will make the mortgage payment to Bank of America (1st) and Washington Mutual(2nd) by May 15, 2008 or begin to let this nightmare finish.

LULAC Receives $25,000 Donation From Countrywide Bank For Homebuyer Education Programs.

Washington, DC - The League of United Latin American Citizens National Housing Commission (LNHC) today announced that it has received $25,000 from Countrywide Bank, FSB, the third largest federal savings bank in the U.S. and a member of the Countrywide (NYSE:CFC) family of companies. Countrywide Bank’s financial support will allow the National Housing Commission to continue to promote educational programs on home buying, foreclosure prevention, financial literacy, credit and other areas for Latinos, especially for young people and the elderly.
January 10, 2008
http://www.lulac.org/advocacy/press/2008/homebuyer.html

The Real Real Estate Crises

As a real estate agent, I am suppose to sound optimistic about what is going on in the real estate industry. However, the reality is that I don't think things will get better until late 2010 or 2011. Also, I think that what is going on is more than just real estate problem. It is only the beginning. Our economy is going through structural changes.

Here are some things I think contribute to what is going on:
1. the oil consumption : we now have billions of new people who can buy cars, washers, dryers and therefore, need energy: India, China, Latin America, Africa....where having a clothes washer was a luxury it is pretty much becoming a common item, as a car, motor bike.

2. US and world real estate prices exploded. I think this is primarily due to an increase of credit (credit card, mortgages) being more easily available.

Now, I don't think it is because people are getting richer. Yes, people may getting paid more (eg. India, China, Mexico for example). I think it is because the big banks are making credit more available.
And, the forthcoming, credit crises as the mortgage crisis today.

That's globally. Locally,
In San Francisco, who really can afford to make a mortgage payment of $800,000 without a minimum of 2 salaries?
How many service jobs pay well enough to pay a $4,000 mortgage? Plus property taxes, etc.

Add a car payment of at least $400 per month.

Again, what's the problem credit. We are no longer willing to safe to buy something. We want it now using credit. I recently was talking to friend who has stopped making his mortgage payments, and bought 3 LCD TVS....He spent $7,500 on 3 othem and bought them on credit.

I asked why not just 1, or save up to buy them. His response that he wants TODAY, will enjoy them TODAY, and if he goes bankrupt tomorrow at least he enjoyed already.
wow.

como calcular su tasa de interes cuando no es fijo

Hay various tipos de prestamos hipotecarios....se pueden categorizar en 2 sectores:
prestamos figos y prestamos adjustables....

Son los prestamos adjustables la razon de muchos de los problemas de cual los proprietarios no puedan pagar su casa.

Como se calcula el interes de un prestamo adjustable? Tiene que leer la Nota o hablar con "customer service" y conseguir la informacion seguiente:

1. la fecha en cual se combierte en adjustable: el premier dia, en 6 meses en 2 anos?
2. El "margin"
3. el index y el nombre de index: existen muchos indicis: labor, 12th, etc.

el nuevo interest es Interest = Index + Margin

ejemplo:
Hoy tengo la tasa de 6.9, y se adjustable april 1, 2008, el margin es 4.1, y el indice es el Labor 6 Meses

su nueva tasa (usand el indice de 2/08) seria Interest = 3.1 + 4.1= 7.2%

The real estate meltdown and life changes -a private note.

Hi everyone. I want to share parts of an article I wrote recently for LatinoWebWatch on online marketing for Latinos. I was reflecting on the current state of real estate and my career as a Broker and an Online Real Estate Marketing:

I work as a real estate broker in San Francisco, but I am hoping that I can make Online Marketing my full time profession(ie. money making job). Online Marketing is my passion and my hobby but until recently I have been so busy with real estate and mortgages. I am still quite busy, however, I see the writing on the wall--the home buying and home financing industry has dramatically changed. And I think that these industry/consumer changes are economical and STRUCTURAL. You see, with the high number of foreclosures, the short sales epidemic, the credit crunch and election year politics the real estate and mortgage industry has changed. New laws are being created that may over regulate, that may eliminate hard working and willing to pay home buyers from buying, and home owners from refinancing.

Oh, I forgot to add that although I am still quite busy, a lot of my work seems more like non-profit counseling trying to help customers either to refinance, renegotiate with their lenders or just try to comfort them and help them move out.

Although I like helping people, and this is one of the reasons I got in real estate [being a member of the communities I serve] I see that it will be very hard to make a living. I think that what has helped me "survive" this long is that all throughout my real estate career I have been very proactive in real estate online marketing.

Coming from an eCommerce background before getting into real estate I knew and still believe that the Internet/eCommerce will completely change the Real Estate & Mortgage business...and it has, see move.com, zillow.com, realtor.com, ziprealty.com, trulia.com, etc.

And this is all happening real time and now.. So I hope to focus more on my passion of Real Estate Online Marketing and Latino-Hispanic Online Marketing, and I hope to make a living out of my dream.

Affordable Housing in Oakland

A constant battle we have in California is that of affordable housing. In some cities, like San Francisco, Oakland, San Jose, you often end up in bitter fights depending on which side you're on...As a resident in San Francisco we usually have long bitter fights. We all agree we need affordable housing. We need it for renters and we need it for home buyers. Renting and home ownership is beyond the reach of a lot people. Oakland will be dealing with the same:

"Oakland officials are ready to wade into one of the city's thorniest housing issues: whether to require developers to include below-market-rate housing in future projects.

The council deadlocked last year on the hot-button issue before then-Mayor Jerry Brown cast a tie-breaking vote against the rule. One of the hallmarks of Brown's two-term administration was his "10K" plan to build enough units for 10,000 new residents downtown as a way of revitalizing the city.

On Tuesday, a citizen panel formed to deal with housing will recommend that affordable housing be required in some cases, although not enough to appease some housing advocates.." San Francisco Chronicle, see sfgate.com

Dumping the First Time Home Buyer at the first signs of trouble

Where have all the lenders and agents gone? 

Has the real estate and loan industry abandoned the Latino
First Time Home Buyer? It seems they have. It was only a few months ago that most major companies and reports where announcing their plans to serve the growing latino home buyer. But that was until this subprime mess exploded.

What about all those first time home buyers that bought with adjustable loans
with a 2 or 3 year period. A lot of these loans are adjusting now and causing
great suffering to these home owners. Many of these borrowers cannot afford the
payment increase and or can no longer refinance, or sell due to current market
conditions. So now what. I recently wrote Senator Feinstein asking her to get
the lenders to waive various onerous conditions especially the Pre Payment
Penalty. This penalty imprisons someone from refinancing due to the high cost of
this penalty.  If borrowers wait until the penalty expires it may be harder
to get a loan.

I recently heard from a real estate agent at PruLatino (Prudential's Hispanic
Full Service real estate office) in northern California. He was complaining
about how Prudential has abandoned their focus on the latino home buyer due to
current subprime problems.

As Realtor Magazine states: "Reaching out to Latino customers in word
and deed.  Several years ago, the California Association of Realtors
release research showing that 20 percent of California home sales involved
buyers or sellers with a Hispanic surname.  Those findings motivated Ed
Krafchow, president of residential brokerage giant Prudential California/Nevada/Texas Realty, to conduct similar research on his company ... In response, Krafchow initiated a Hispanic outreach effort and this year launched  a Spanglish language listings magazine, Palacio." (Realtor Magazine, August 2007)

However, it seems the magazine has not been released, and if my friend at
PruLatino is correct, it seems Prudential was "reaching out for the easy
MONEY only and not in word and deed."

So for all of us involved in the real estate business, let's not forget those
buyers and future buyers who fed us and our families while it was good.

Rent and Eviction Control when buying a property in San Francisco

I attended the National Association of Real Estate Professionals (NAHREP)
luncheon today. And  attorney Jeff Woo spoke about
the San Francisco laws for selling or buying a property with tenants.
San Francisco has rent and eviction control, and because over 62% of city voters
are renters, the laws will favor tenants over landlords. So as investors,
single family buyers, duplex or four plex buyers, etc. we have to know the laws in order to maximize our gains and to make smart buying decisions.

Jeff is an expert with over 20 years of experience in SF tenant law. You can
reach at 415.781.7900, and for the SF Rent Ordinance visit San
Francisco Rent Board

Letter to Senator Feinstein to remove prepayment

Here is a letter I sent to Senator Feinstein's office on 8/22/07 in which I identify that a big problem right now is the PrePaymen Penalty imposed by lenders which imprison the borrower from refinancing or selling due to the potential high amount of the prepayment: Here it is:

August 22, 2007
FAX MEMO
From: John Lira, publisher of LatinoHomeBuyer.com
(415) 609-3331

To: Honorable Senator Dianne Feinstein
Washington, D.C. office:
Phone: (202) 224-3841, Fax: (202) 228-3954
RE: Mortgage - remove the prepayment penalties.

Dear Senator: As a professional Real Estate Broker in San Francisco I know that the current mortgage/housing problem is cyclical and not easy to solve. However, the destruction that it is producing in families (especially lower income families) is tremendous.
I write to you after interviewing many clients seeking help with their loan terms. Unfortunately I have had to turn many away for not finding a way out. Most will end up losing their homes due to foreclosure or through short-sale.
However, there is one thing that I do believe is hurting borrowers unjustly: the severe lender's prepayment penalty.
The prepayment penalty prevents individuals from refinancing or selling due to the amount of the prepayment: usually 6 times the monthly interest; which on average is about $18,000 to $26,000 for a $500,000 home (subprime loan rates).
So if the prepayment penalty is removed then it would help some people refinance or sell and not be forced to sell at a loss which hurts them and the lender.

Thank you for your time,
John Lira

Senator Dodd and mortgage help

New number to help with mortgage problems. I was watching CNBC on 8/21/07 and heard Senator Dodd talk about what the government can do to help owners deal with the mortgage problems.  He announced this number to call 1-888-995-HOPE(4673).

Here is the website for it: http://www.995hope.org/we-can-help/making-the-call/


From the website: Things you should know
Homeowner's HOPE provides free counseling - we do not do refinancing, down payment assistance or provide loans. But we can connect you with local nonprofit resources that provide different kinds of assistance.

Although we have an excellent working relationship with many of the nation's largest mortgage companies, we cannot force a mortgage company to eliminate debt, forgive payments or dictate solutions.


We are here for you 24 hours a day, seven days a week. Most importantly, we want to help. Remember, the sooner you make the courageous decision to call us, the more we can do to help you right your financial ship.

If my lender goes out of business do I still have to pay my mortgage?

Yes. Even if your lender goes bankrupt or out of business you still have to pay your mortgate. You will get a notice telling you where and to whome to send your payments.

¿Si mi prestamista cierra tengo todavía que pagar mi hipoteca?

Si. Aunque su banco deje de existir, usted tiene que segui pagando su hipoteca. Normalmente le llegara un carta en cual le dicen aquien y adonde enviar su pago.

Has the American Dream turned into a nightmare? ¿Se ha vuelto el Sueño Americano una pesadilla?

YES. And in my opinion this has to do primarily due to:
Greed! --buyer's, seller's, agent's, bank's. How can you buy something you cannot afford and with NO money down. I still remember some clients telling me "only in the U.S. can you buy something so expensive with no money down and still get money back." And they said with an incredible but satisfying smile.
Easy Credit! The industry (builders, banks, government) made credit so easy but with one fundamental basic mistake: How can you increase home ownership so fast so much with no increase in real income?

Why Latino Home Buyer? Por Que Latino Home Buyer?

Good question. Real Estate professionals are suppose to be color blind and help their clients achieve the American Dream whether they speak English, Spanish, Chinese, Russian etc. But you do need to help them in a way that they can understand. Therefore, language and culture are important to improve communication and to have a better informed buyer whose first language is not English. Also, many times you are dealing with an extended family who may not all speak English but who want to and will contribute to the buying process.

Lastly from a pure business sense: The demographics show that the biggest group of first time home buyers will be from the immigrant communities whose first language is not English. So it makes good business, relationship and sales sense to be more inclusive.

Mortgage Loan Documents In Spanish, Chinese, and other languages

Assembly Bill AB512 passed and now goes to the Senate. If it passes and is signed into law it would require a Mortgage/Loan Summary page in Spanish, Chinese, Tagalog, Vietnamese or Korean. Read below for more info:


En Espanol: Es posible que una nueve ley se apruebe que requira los documentos de hipoteca/prestamo de casa en varios lenguajes incluyendo espanol.

--------------------------------------------------------------------------------

Jun 9, 2007 - Knight Ridder Tribune Business News
Author(s): Barbara E. Hernandez

--------------------------------------------------------------------------------

Jun. 9--Non-English speakers could benefit from a proposed state law that will require home loan documents to be translated into five languages after the state Assembly voted to pass the bill late Thursday.
The bill, known as AB512, would require crucial mortgage terms to be translated into Spanish, Chinese, Tagalog, Vietnamese or Korean if a business primarily negotiates in that language. The bill passed 47-29, with four Assembly members abstaining, along party lines, with most Democrats voting for the bill, Assemblyman Mark DeSaulnier, D-Concord, said. "It's a good bill," DeSaulnier said. "It will help consumer confidence about the integrity of their transaction." DeSaulnier said that negative stories about predatory lending to limited-English speakers have hurt the whole industry and the proposed law is an "appropriate and prudent" one.

(from MortgageNewsWatcho.com, 6/10/07
http://www.mortgagenewswatch.com/newsviewer.php?ppa=%3Aqsvv%5F%5BmroooopUTeb%7DGL%7Dbfem%5E%21)

Puede el banco comprar seguro de casa contra mi voluntad?

Si tienes una hipoteca sobre tu casa, tienes que tener seguro contra incendios (hazard/fire insurance) por requisito de banco.  Si no tienes hipoteca (la casa es 100% tuya) aun es muy recomendable que tengas segura por si se quema, etc. Si no tienes seguro el banco te manda un carta enqual te dice que si no obtienes seguro ellos van a obtener el seguro y tu lo tiendes que pagar.Si tienes seguro tienes que mandales copia de la "policy" como prueba.

The Power of the Latino Vote. Let's get something in return

Through our Vote comes Political Power. Through Political Power comes the power to change

how we live, how we are treated, our economic, educational well being, and of course home ownership

and  immigration.

 

So the 2008 Presidential  campaign has started and the Latino vote will be fought for.  Let's make them earn our vote,

lets make them keep their promises (which is very unlikely), and let's, therefore, get something in return for

our community as the candidates seek our vote and supports.

 

Let's get real just immigration reform, affordable housing, have banks better serve us, health care for all, and the list goes on.

 

Here are some highlights about the campaigns and Latinos, from from Cnn.com, http://www.cnn.com/2007/POLITICS/05/31/hispanics.2008.ap/index.html

Latinos are the U.S.'s largest and fastest-growing minority group
• Early voting states Florida, California and New York have large Latino populations
• President Bush captured 40 percent of the Latino vote in 2004, most ever for GOP
• As the Latino population has grown, so has the rate of voting participation

 

Hispanics tend to lean Democratic in national elections, but President Bush showed in 2004 that Republicans have much at stake. Bush captured about 40 percent of the Hispanic vote that year, the most ever for a GOP presidential candidate. His Democratic rival, John Kerry, won 53 percent, down from the 62 percent former Vice President Al Gore garnered in 2000.

California's Hispanic population is nearing 36 percent -- more than double the U.S. average. However, Latino historically vote in numbers well below their share of the population, in part because many are either too young to vote, unregistered or foreign citizens.

Are we making our living at the Cost of the working Poor?

A new study shows that subprime loans are affecting blacks and Latinos more than other groups.
And what is sad is that a lot of these groups could have qualified for non subprime loans.As a real estate and loan agent, I think that many of us perhaps don't intentionally want to hurt our clients, but we fail to do our work and chose the easy path of getting our
client subprime loans because (1) the banks tells that we should because they are easier to get,or (2) we intentionally do it to get a greater compensation.If we really do care about of clients then we should start questioning the loan programs the banks/lenders are asking to submit.
Are we making our living at the Cost of the working Poor?
For more info see
http://money.canoe.ca/News/Sectors/BanksFinance/2007/05/19/4193328-cp.html

Short Sales & Taxes / Venta De Casa Por Menos De Lo Que Se debe al Banco

Very simply: A short sale is when you sell (must sell) your house for less than what you owe the bank on your mortgage.The difference between what you owe the bank and what the bank accepts as sales price may be tax by the IRS as ordinary income, capital gains. Please see a real estate tax expert.

Usted vende su casa por un "Short Sale" cuando tiene que venderla por menos de lo que le debe al banco por la hipoteca. Usted podra tener que pagar impuestos (Federlales, Estateles) en la cantidad de lo que el banco le perdona.