Short Sale Myths…and Facts Part 1

by Rodney Forbes on August 15, 2009

short-sale-pictureAs real estate values have dropped over the last couple of years, drastically in some places, thousands of home owners have found themselves either upside down on their mortgage, unable to afford their payments, or both.

The topic of short sales and foreclosures seem to dominate the headlines everywhere. There has been a lot written about short sales and whether you should or shouldn’t short sale your home if you’re in this situation. This has led to many misconceptions about short selling your home.

This series is about the myths regarding short sales. Caveat: The rules regarding short sales are different for every lender and are changing all the time as the market changes. ALWAYS consult a real estate attorney and a CPA regarding the particulars of short selling.

Short sale Myth #1:

You need to be behind in your payments before the lender with consider a short sale.

Fact:

This may have true in the past, but today the key phrase is hardship. Certainly being behind in payments is the most common type of hardship. But hardship could also be caused by job loss, death in the family, divorce, adjustable rate mortgage hike, loss of property value (especially in places like California, Arizona, Nevada and Florida).

If you are considering a short sale make sure you also consult with a licensed Realtor(r) who specializes in short sales. In the Palm Beach County area, especially in Palm Beach Gardens, West Palm Beach and Jupiter, Forbes Realty of South Florida is focused on short sales and helping homeowners through the process.

Rodney Forbes, broker for Forbes Realty, has also co-authored the book “Should I Short Sale My Home?”. Click her for your FREE copy.

Watch for the next article in the Short Sale Myths series. Or, just subscribe to the blog and they will be sent automatically.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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I hope this series helps many homeowners who don’t know which way to turn when it comes to short sales.

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money-spiralNew study about what economists are calling, “Strategic Default”. Where homeowners who CAN afford to stay in their homes despite negative equity are choosing not to……

How widespread is this practice? New research* based on a survey of 1,000 homeowners suggests that one in four mortgage defaults are “strategic”—by people who could meet their payments but who choose not to. The main drivers of strategic default are the scale of negative equity, and moral and social considerations. Few would opt to renege on their mortgage if the equity gap were below 10% of their home’s value, the authors find, partly because of the costs of moving. But one in six would bail out if loans were underwater by a half.

* 25% of all defaults are homeowners who CAN afford to pay..choosing not to. They are making the decision that the negative ramifications of foreclosure (or short sale) are less significant to them than the burden of the negative equity.

Four-fifths think strategic default is wrong. Those in the unethical minority are four times more likely to renege on loans (allowing for other influences) when their negative equity reaches $50,000. But morality has its price. When the equity gap reaches $100,000, “immoral” homeowners are only twice as keen to walk away from their debts as “moral” ones. People under 35 or over 65 are less likely to believe that default is wrong. So are the well-educated.

* Interesting….People under 35 or over 65 are less likely to believe that default is wrong. So are the well-educated.

* There IS a price…there is a number where even the most financially conservative homeowner will walk away. Understand, this is what keeps the banks (and the government) up at night. They know that once a homeowner is X% upside down…they will let the house go..(Short Sale or for the misinformed…foreclosure).

Anger about bail-outs of banks or carmakers does not weaken the moral barrier to default. But people who live in neighbourhoods where home repossessions are frequent are more likely to welsh on loans. Homeowners who know someone who has defaulted strategically are 82% more likely to say they would do so, too. The likelihood of strategic default rises more quickly once the rate of local home foreclosures reaches a critical level. That hints at a vicious cycle of foreclosures that both depress home prices and weaken the social and economic barriers to further defaults. To break the cycle, policymakers need to address the problem of negative equity, not just unaffordable interest payments.

Here are my questions for you…what is your number? Seriously….at what point would you decide that leaving is better than staying…

Are you considering or have you already done a ’strategic default’?

How much negative equity would your mortgage have to be before you choose to sell it short sale (etc)?

What are you seeing in your market..are homeowners choosing to let their homes go that are 10% upside down….30%…50%? In areas of the country where homes have depreciated 30%+ what will keep those homeowners from not following this same path?

Let us know what you think..share your comments….

(The answer to THESE QUESTIONS are at the essence of what will allow this housing lead depression/ recession to end)

Thanks to: Tim Harris

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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To keep up with real estate news and information subscribe to our blog at http://SouthFloridaRealEstateReport.com

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When Will Home Prices Rebound? (2020..2023…LONGER?)

by Rodney Forbes on August 15, 2009

us house prices decline graph 300x195 When Will Home Prices Rebound? (2020..2023...LONGER?)

Great article from USNews.com.

One of the constant topics of discussion in the virtual halls of HREU is…when will prices return to their previous ‘peak’ values of 2006ish. In other words, can someone realistically..’wait it out…wait for prices to return’. Well, the answer is YES…if they want to wait..

10-20 years!

You know where the housing market has been. You may not want to know where it’s headed.

There are tentative signs the depressed housing market may finally be close to bottoming out. That might sound like good news, but hitting bottom doesn’t mean an upward rebound will follow anytime soon. Economist Celia Chen of Moody’s Economy.com has published a forecast suggesting that residential real estate could take 10 years to recover in most states—and 20 years in Florida and California.

Agents, translated…this means that there will be at least another 10 years of a market where Short Sales and REOs are common. Stop waiting around for the market to return to ‘normal’…this market IS the new normal. Start by learning how to quickly and easily do short sales. Watch the Agent Short Sale Secrets video now and then download the FREE Short Sale How-to Book.

Chen predicts that house prices will stop falling by the second quarter of 2010, which is consistent with what the Federal Reserve and many other forecasters have said. But her longer-term outlook helps explain why many economists are gloomy about the nation’s economic prospects for the next several years. Some of Chen’s predictions:

By the time house prices stop falling, they’ll be down 43 percent from peak prices reached in 2006, as measured by the Case-Shiller home-price index.

That will mark the deepest housing correction since 1890, and probably ever in the United States (meaningful data go back only to the late 19th century). The prior worst housing bust was from 1916 to 1932, when house values fell 37 percent. Beating that dismal record suggests we’re no smarter now than in the Great Depression.

Nationwide, price levels won’t regain the peaks of 2006 until 2020. In the worst-hit states, Florida and California, the rebound will take until 2030. Five other states won’t hit their 2006 peaks until after 2023. Anybody who doubts that it could take that long should consider the real estate bust in Japan, where prices are still down by half from the peaks they reached 15 years ago.

Agents, did you read that……in some markets home values won’t recover to be worth what many paid until…2020 or later. That means that knowing how to do a short sale (REALLY..knowing how to do a short sale) is no longer optional. In many markets 50%+ of EVERY homeowner is upside down. Watch the FREE Agent Short Sale Secrets video now and then grab your FREE Agent Short Sale Secrets book.

Other states, mainly those where the housing boom was muted, will bounce back faster. Homes in Texas, Oklahoma, and a handful of southern and Farm Belt states could regain peak prices within seven years, after falling by less than 10 percent. If it felt as if the housing boom was passing you by earlier this decade, count your blessings.

Forecasts like this should temper some of the recent hype over the stock market rally and a dip, probably temporary, in the national unemployment rate. If housing remains as depressed as this forecast suggests, it will be extremely hard to mount the kind of recovery it will take to bring back jobs and boost consumer spending. Housing represents a huge chunk of the economy—about 16 percent—and at such depressed levels it would take runaway growth in other areas to compensate for a moribund housing market.

But that’s unlikely too, since housing is also a source of much of the personal wealth that fuels consumer spending. The plunge in home values has been the major factor in the evaporation of $14 trillion of Americans’ net worth, and that in turn is likely to depress spending for the foreseeable future. In past recessions, a housing rebound has been the spark that helped turn the economy around. This time, we’ll need a lot of other sparks.

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This article courtesy of Tim Harris highlights another viewpoint of time frames for real estate recovery. For more information on real estate in Palm Beach County, specifically in Palm Beach Gardens and Jupiter, call 561-337-4810 or email Rodney@ForbesRealtyOnline.com. For up to date real estate news in south Florida subscribe to our blog http://SouthFloridaRealEstateReport.com
Our specialty is working with first time home buyers and also sellers in distress. Our expertise is working with short sale real estate.

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Another great buyer testimonial for Rodney Forbes and Forbes Realty of South Florida. Our specialty is working with first time home buyers and distress sellers. We are experts in short sale real estate in Palm Beach County. You can reach us at 561-337-4810 or email Rodney@ForbesRealtyOnline.com
For more real estate news in south Florida subscribe to our blog at http://SouthFloridaRealEstateReport.com

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Check out HREU 90 Day Massive Action Plan. Day 1

by Rodney Forbes on August 12, 2009

Title: HREU 90 Day Massive Action Plan. Day 1.#comment-11395#comment-11395#comment-11395#comment-11395
Link: http://timandjulieharris.com/2009/08/03/real-estate-training-coaching-90-day-plan/#comment-11395

For more information on South Florida real estate call me at 561-337-4810 or email Rodney@ForbesRealtyOnline.com

My south Florida real estate blog has news and information for all buyers, sellers and investors.

http://SouthFloridaRealEstateReport.com

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Happy first time home buyers gives a great testimonial for Rodney Forbes of Forbes Realty of South Florida located in West Palm Beach. Call 561-337-4810 to reach Rodney. His specialty is helping homeowners in distress through short sales. He also works closely with first time home buyers.
You can also check out his blog at http://SouthFloridaRealEstateReport.com

Posted via web from rodneyforbes’s posterous

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Short Sale Myths and Facts…Part 3

by Rodney Forbes on August 11, 2009

shortThe topic of short sales and foreclosures seem to dominate the headlines everywhere. There has been a lot written about short sales and whether you should or shouldn’t short sale your home if you’re in this situation. This has led to many misconceptions about short selling your home.

This series is about the myths regarding short sales. Caveat: The rules regarding short sales are different for every lender and are changing all the time as the market changes. ALWAYS consult a real estate attorney and a CPA regarding the particulars of short selling.

Short Sale Myth #3:

Banks don’t accept short sales.

Even in today’s real estate market there is a widely held belief that banks won’t even accept a short sale. Maybe two years ago when the default rate was much lower banks would deny they accepted short sales if you had called with a hardship.

Today every bank and mortgage company I know of does short sales. It’s just a sign of the times. In Palm Beach County about 30% of all real estate listings are short sales. It may take awhile to get them approved but banks would rather do a short sale than to take a property back under foreclosure.

The most important thing to remember when contemplating whether a short sale is right for you is to get good advice from a real estate attorney and CPA.

If you are considering a short sale make sure you also consult with a licensed Realtor(r) who specializes in short sales. In the Palm Beach County area, especially in Palm Beach Gardens, West Palm Beach and Jupiter, Forbes Realty of South Florida is focused on short sales and helping homeowners through the process.

Rodney Forbes, broker for Forbes Realty, has also co-authored the book “Should I Short Sale My Home?”. Click her for your FREE copy.

Watch for the next article in the Short Sale Myths series. Or, just subscribe to the blog and they will be sent automatically.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

 Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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FTC Cracks down on Get Rich Quick TV Pitches

by Rodney Forbes on August 2, 2009

This post is dedicated to the thousands of people who have purchased infomercial “get rich quick” systems, whether they be for real estate, internet riches, or whatever.

The FTC has finally started to crack down on the worst offenders, the ones you see on TV every night. $39.95 doesn’t sound bad to make me rich, especially when I don’t need any experience or have to do any work. Just set the system up and watch the money roll in! Does that sound familair? It’s only when high pressure follow up calls begin for “personal coaching” that costs thousands.

The following is an excerpt from the Federal Trade Commission

The FTC today announced that it has brought eight new cases against companies that have conned consumers who are struggling to make a living and pay their bills during these difficult economic times. The Commission brought seven additional cases challenging similar conduct earlier this year.

In each new case, the FTC alleged that the defendants’ practices were deceptive or unfair. In some of the cases, the FTC also charged the defendants with making illegal electronic funds transfers or violating the Telemarketing Sales Rule.

In the law enforcement actions announced today, the Commission charged:

John Beck/Mentoring of America, two principals, and three purported “inventors” marketed three get-rich-quick schemes, duping hundreds of thousands of consumers into paying approximately $300 million. The defendants marketed “John Beck’s Free & Clear Real Estate System,” “John Alexander’s Real Estate Riches in 14 Days,” and “Jeff Paul’s Shortcuts to Internet Millions.” The defendants allegedly made false and unsubstantiated claims about potential earnings for users of these systems. They used frequently aired infomercials to sell the systems for $39.95 and then contacted the purchasers via telemarketing to offer “personal coaching services,” which cost several thousand dollars and purportedly would enhance their ability to earn money quickly and easily using the systems. In addition, all purchasers were signed up for continuity programs that cost an additional $39.95 per month, but which were not adequately disclosed to consumers. Some consumers also continued receiving unwanted sales calls after they told the defendants’ telemarketers to stop calling. This case was filed in the U.S. District Court for the Central District of California.

If you ever wonder about some of the offers being touted on TV, do your own homework online and don’t believe ANYTHING you’re told by the marketers. Their only job is to separate you from your money.

In the end there is no way to get rich quick, unless you sell infomercial junk on TV!

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Beware of “Foreclosure Rescue” Companies

by Rodney Forbes on August 1, 2009

Recently the Florida Attorney General filed suit against several “foreclosure rescue” companies who tout to help homeowners in distress. Read the following exceprt as a warning about those who prey on homeowners facing a short sale or foreclosure.

State regulators filed a lawsuit in Palm Beach Circuit Court Tuesday against four South Florida mortgage loan modification companies they say were collecting a total of up to $1 million in monthly fees, as the Attorney General’s Office cracks down on the foreclosure rescue industry.

Officials said the operations, which were related, illegally used President Barack Obama‘s voice in telemarketing calls and charged up to $5,000 up front to modify home loans, a violation of the 2008 Foreclosure Rescue Fraud Prevention Act. The state is seeking restitution for consumers, civil penalties and the companies’ dissolution.

FHA All Day.Com, Inc., Safety Financial Services, Inc., Housing Assistance Law Center PA and Housing Assistance Now, Inc. were named in the suit, as well as Jason Vitulano, the owner of FHA All Day and Safety Financial. Attorney General spokeswoman Sandi Copes said the state has received a total of 300 complaints about the four businesses, which were based in Delray Beach, Boca Raton and Deerfield Beach.

One filing came from Kim Kyzar. She decided to try to lower the 8.1 percent interest rate on her Lake Worth house after receiving an FHA All Day marketing call featuring Obama talking about low-rate mortgages under the stimulus act.

She said she and her husband, who have an air conditioning business, paid FHA All Day $2,000 up front in March for a “forensic loan document review” plus another $500 for legal costs. But Kyzar became suspicious when the company stopped returning her phone calls in the middle of April. Going to the Boca Raton office, she found it empty.

Source: Diane Lade and The Sun Sentinel

Be very careful. If you are in a distress situation don’t make it worse by paying huge upfront fees to any company. There are reputable loan modification programs around. But only pay a fee for a successful loan modification after it’s complete, or work it out with your bank by yourself.

If the bank recommends a short sale of your home contact a real estate company that specializes in short sales, such as Forbes Realty of South Florida.

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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golffloridagolfcourseFlorida has always been known for great golf. The following is a nice feather in the cap for Palm Beach County.

The Links at Boynton Beach has been named the best municipal golf course in Florida by Golf Digest.

The criteria was a combination of the magazine’s Best Places to Play and Best in State rankings. A municipal course was defined as a facility owned by a city or town, county or state.

The Links has earned 41/2-star ratings in the past three listings of Best Places to Play, according to Manager of Golf Operations Dan Hager, with emphasis placed on pace of play, value, service and course condition. It earned a 41/2-star rating on the municipal-course list as well.

“That’s where we put our efforts, and we must hit high on all the cylinders, ” said Hager, who has been with The Links since its 1984 opening. “People flock to us. We’re excited and elated. It’s quite an accolade.”

The Links, which is in the process of resurfacing its greens and should move from the temporaries now in use by the first or second week in August, accommodates an average of 80,000 rounds per year, according to assistant pro John Scott.

“It’s a park-type setting that’s very appealing,” Scott said. “It can be challenging despite a lack of length (6,297 yards). It’s fun. I never get tired of playing it.”

The Links, as does any municipal course, carries a particular appeal for golfers who grew up playing on one.

“There are wonderful private courses everywhere,” Hager said, “but it’s the municipals that cater to such a diverse group of players. A ‘muny’ is where you create your memories.

Thanks to Greg Stoda and The Palm Beach Post

Click here to find out more about The Links at Boynton Beach.

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