By Tony Evans
Everybody wants to know how to steal a house, and there are plenty of people trying to these days. Say you’ve missed some mortgage payments and think maybe you’ll be able to “catch up” later on, but you can’t. You call your lender explaining your ‘temporary problem,’ but they can’t think of anything. Your house has been on the market over 90 days with no action, and you bug your Realtor every day and twice on Sunday.
The Buzzz has a tip! Uncle Sam helps everyone else, foreign and domestic – why not you? I have an old saying: “you won’t get it if you don’t ask”. ASK your lender about helping you get a one-time payment from the government FHA Insurance Fund to bring your mortgage payments current. You may qualify if your loan is at least four months delinquent – but no more than 12 months.
Try this number: 800-569-4287 – let your lender know, too. Also, another section of FHA has created a new loan program called FHASecure, to help subprime borrowers refinance out of that ratty and risky ARM loan. Since the program was announced late last year, so far 277,000 applications have been submitted, but only about half have been approved for one reason or another. Google – FHASecure.com. It never hurts to try everything when in a desperate situation, so go for it. And if you don’t get approved, remember, I’m just the messenger, so keep that shotgun on safety.
In this Part One section on Short Sales, let me help you out with some basic news on how you might be able to get out of your mess by way of a short sale. Many sellers are turning to what is known as short selling as a means of climbing out of their dire straits. Briefly, here’s how it works: In a short sale, the lender allows the property to be sold for less than the total amount still due on the loan. In some rare cases, the lender may even forgive the entire remaining debt, but if you believe that, I’m putting a group together to buy the Mississippi River: $50,000 buy-in, then sell sections for a profit; get your money up fast folks, it can’t miss. Cash only, please.
When the housing market was booming and real estate values were approaching sky-high levels, short selling was virtually unheard of, but now with a slower market more and more home owners are looking to this practice as a way to avoid a costly foreclosure. The benefits of short selling over foreclosure are obvious. A foreclosure puts a long-lasting dagger through your credit history and it can be costly. Short selling is faster and less expensive, and doesn’t look as bad on your credit as a foreclosure.
The short sale package comes from your lender, which provides all the paperwork. Nothing complicated, just items like a brief description of your hardship, last two years taxes, one month pay stubs, and a current P&L sheet. You will be required to contact a Realtor you trust, who in turn will be in touch with your lender. The Realtor lists the home, provides comparable sales and a few other minor items.
They do most of the work, not you. That’s a good thing. The Realtor gets paid when the home is sold via a short sale. Remember, you must have missed at least four payments before taking action.
Assuming all the paperwork is correct, your lender takes it to a committee, and if they agree to a short sale you will be awarded an approval sheet. Then your Realtor can initiate short sale proceedings. Things generally move fast after approval. If you owed the lender $140,000 and the agreed price is $110,000 – some buyers will come out from under the rock and make a deal. Your lender will be a happy camper (no foreclosure expenses), the Realtor pockets a few bucks for their work, and you’re off the hook with no more mail threats or disturbing phone calls.
In Short Sale Part Two next week I’ll lay out a plan on how to make easy money getting involved with a different part of the SS program, and it’s easier than you think.
Inside Buzz Bits and Bytes — By now you’ve heard the big plans from the Treasury about the Fed maybe taking over everything that’s wrong with the economy. George W said he initiated the idea to give the story cachet. Yawn! Isn’t this the “fox and hen-house scenario”?
‘Dubbyah’ also promised (hand over his heart and the Scouts Honor sign) that the southern border fencing would be completed by this December. Hey, wait a minute Pres. George W, if we don’t secure the border BEFORE this December, the Monday Night Game on TV in America might be Jai Alai. Yikes!
I’ll tell you one thing, if Fed Honcho Big Ben, GWB, and our elected officials keep treating this country like their own private pin-ball machine, trying to save everybody’s financial butt, the only speaking jobs they’ll get when they leave (or get booted out of office) will be at a poetry reading in Amarillo, Texas or the Kiwanis Club. And that head clown at HUD who was dumped after being asleep at the switch for years, hopefully saved some paychecks because he won’t be able to get a job anywhere east of Moscow.
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