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I have been in the unfortunate place to see this happen to many times to people that really don’t deserve this conclusion. Yes, this is the feeling if not the words people speak after they see their home sold at a Trustee Sale.

The sorrowful thing is that in most cases this situation can be avoided. Often people become embarrassed that they cannot make the mortgage payment on their home   Then too often they go into denial of the problem and do not take advantage of the solutions that are available. Alternatively, almost as bad they wait until the last moments to act and “Stop Foreclosure”.

I am a person that has been in Real Estate for years, mostly as an investor or a financial advisor and like most Americans, I have experienced major loses in my investments. Today, I focus on helping people with distressed property through short sales and or loan modifications. I enjoy the job, as it has enabled me to help many people in severe situations move to a much less stressful and manageable life.

I find that the common thing that most of my clients feel is that they do not want to be truant from their commitments, and yet they feel they can no longer live off their credit cards to make ends meet. If this is your circumstance, you have a lot of company as practically half of the Real Estate on the market today is either A Short Sale or Bank Owned from foreclosure.

If you are someone that may possibly face foreclosure, take advantage of people like me that are trained in mortgage modification and short sales. Do it early as the process takes time, and avoid the disruptive experience of the sheriff coming and putting you and your family out on the street.

For those that read my blog, I have been so busy with People’s Short Sales, I have failed in being consistent with my writing. However, as I have mentioned before I am going to post the misconceptions of short sales.  The on today is THE LENDER WILL NOT ACCEPT AN OFFER BELOW FAIR MARKET VALUE, This is a common misconception that if the fair market value of a property is $400,000 and the owner owes $500,000 the bank will not accept anything less than $400,000.

This is simply not true. The lenders often accept offer as low as 15% or more below current market value. It is all about framing the offer to look like it is the lender’s best interest, and that it would make the most sense for them to accept it rather than the alternative. Putting together a solid offer and submission of the hardship is the key to the bank decision.

From the lenders view if they do not accept the below-market -value offer, the alternative is for them to let the property go to foreclosure and then to sell it as one of their Bank Owned Properties (REO). However, if they do accept your offer, they avoid altogether the costly foreclosure sale and recuperate precuperate from their investment right away. They also do not have to risk something happening to the property, or a more sever real estate market. Furthermore, the possibility that they would not be able to sell the property for months and months on ends. Used to your advantage, these can make for some very convincing arguments for the bank as to why they should accept your offer. Lenders will often find that it makes good sense to accept a short sale at below fair market value even as much as 15% below in compelling cases.

Every so once in a while someone will say something about Lender Short Sales that blow me away.   The most recent one was when a new client told me that her ex-real estate agent, who claimed to be short sale savvy, told her that it was not her place to know the financial details of the sellers hardship.   This agent did not even have a disclosure authorization signed by the seller.   Wow, if your going to represent yourself as qualified do the public a favor and get qualified.   Don’t get me wrong as I think there are a lot of agents that know how to transact a short sale and if not there are plenty of schools on the subject to become knowledgeable and qualified.

Anyway this has motivated me to write a series of blogs on the many misconceptions I hear every day regarding short sales.   The first and most common one is: “Lenders will not accept a short sale unless the client is behind on their payment”

This is so very untrue.  If the lender understands that the hardship which exists will lead to a foreclosure they will be glad to do the short sale before there are late payments.   It only reduces the losses to the lender.    Hence the most important thing is that the homeowner must show a valid hardship and clarify that he will eventually begin to miss payments.

Also the homeowners short sale negotiator needs to understand that very often the file must get pushed into the lenders short sale department as there is no late payments that typically accomplish this.   In addition, as there is no late payments the file may not have as high of priority as the file that is foreclosing tomorrow.

Recently  Harris Real Estate University and I have co-authored a book called “Guide to Short Sale for the Property Owner”. The book has been written to help all Real Estate Owners which are facing difficult times with the worst real estate market in history.

Recently, the Federal Reserve Chairman, Ben Bernanke, said unless foreclosures can be slowed, home prices will likely fall further.

“The declines in home prices have contributed to the rising tide of foreclosures,” he told a congressional panel last week. “By adding to the stock of vacant homes for sale, these foreclosures have in turn intensified the downward pressure on home prices in some areas.”

I hope this is not your dilemma, but if it is a Short Sale on your property early in the crisis is less destructive and disruptive to your family now and in the future.

You can get this book by going to www.short-sale-book.com and summit your email address for link download.   Also if my team and I can help with any question, please feel free to contact us.

Sincerely,

Ron Caudle

The Caudle Team clip_image002

Coldwell Banker

Brothers Reality, LLC

8525 E Pinnacle Peak Road

Scottsdale, AZ 85255

(480) 585-0809 Office

(602) 330-6750 Mobile

RealtorCaudle@gmail.com

Now that we have all the financial institutions failing, congress can no longer lie low to avoid the bailout blame.  Fannie Mae and Freddie Mac account for 50% of all the mortgages held in this country.  At the time of their bail out this month they had $5.4 trillion dollars in mortgages and $1.4 trillion in subprime holding.

Now we have the Bush Administration and the Secretary of the Treasury, Henry Paulson, suggesting that we create another Resolution Trust Corporation (RTC) like we had during the S&L Bailout to absorb these distressed mortgaged properties.  The RTC of 1989 was created to manage and sell off the assets of the S&Ls, so how does that translate into buying bad paper while the home owner remains in the property?   I do not claim to be a economist, but I do not see the logic in this suggestion.

Also how much will the congress go along with this idea?  The fact is that in 2003 the Bush Administration tried to slow down the aggressive lending of Fannie Mae and Freddy Mac which has lead us into this meltdown.  The New York Times story of September 11, 2003 read: “The Bush Administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”  Who stopped him?  The Congress with the strong Democratic ties back to Fannie and Freddy.  So why do we think the Congress is going to support him more today?

The Bush Administration is asking for $700 billion to solve a multi trillion dollar problem.  The battle is shaping up in Congress today, not necessarily to derail it but to complicate and delay the lawmakers authorization of the Treasury Securities that would finance Bush’s recommendations.  Also they are faced with protecting all us taxpayers on one hand while helping the millions of struggling individuals with their mortgage payments.  These are two goal that are inherently contradictory.

Oh, did I mention that Congress is schedualed to adjorn September 26, 2008, I doubt that much will change in the short term and we will be continuing to stuggle though these difficalt times.

What do you think???

As for me, I plan to continue to help the property owner, and the mortgage lender through the process of real estate short sales, which seems to be the least destructive solution for both parties given the financial problems of today

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