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Are we rethinking what we label as a “moral dilemma?” Is it just a “business decision?”

02-12-12
Myrl Jeffcoat
Myrl Jeffcoat: Real Estate Sales Person in Sacramento, CA
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  • Office: (916) 635-0420
  • Mobile: (916) 635-0420
  • Secondary: (916) 635-0420

I remember a couple years ago, real estate professionals were expressing they had just about seen it all in recent years. Some of us thought it might get better, but alas, subsequent action by those in power to create meaningful change, has mostly translated to too little – too late!


In 2010, Zillow.com reported 31% of California’s homeowners were underwater. In other words, they owed more on their mortgages than the current value of their homes. In present day, February 2012, the percentages have continued to increase, with some cities and areas of California reporting percentages considerably higher.

Two years ago, Kurtis Ming of Sacramento's Channel 13/CW31 (CBS), showcased the dilemma many homeowners experience, in a segment titled, "Giving Up On Your Home."

The expose’ asked the important question, if you are underwater in your house, and even if you can afford it, should you stay on course - or walk away?

Ming’s article showcased an El Dorado County couple, who was able to afford their home, acquired in 2005, but had decided to walk away. They saw it as a business decision.

Increasingly, real estate professionals are hearing from folks, who decline to believe they have a moral obligation to pay mortgages. These individuals have seen a double standard for Main Street and Wall Street. Main Street has historically felt ethically bound to contractual promises, but Wall Street often fails to be bound by ethics, when seeking to minimize losses.

When Kurtis Ming first aired his story in 2010, the California Bankers Association released the following response:

"During the past few years as foreclosures have increased we have seen historic efforts by the government, financial services industry and consumer groups to help millions of borrowers stay in their homes. These foreclosure relief/mortgage modification programs are designed to help borrowers who have a willingness to stay in their home, yet are no longer able to make their monthly mortgage payment. These programs were not designed to help those borrowers who have the resources to pay their mortgage, yet find themselves owing more than the house is worth. Throughout, concerns have been expressed over the moral hazard resulting from efforts to keep borrowers in their homes. Establishing residential mortgage assistance programs is intended to create a safety net for borrowers and minimize the adverse consequences of foreclosures to the overall economy.

With respect to what you refer to as "responsible" borrowers, it is expected that those borrowers demonstrating an ability to make their payment would continue to do so according to the terms of the loan documents they signed. The bank released funds based on that agreement and a failure to honor that agreement jeopardizes shareholders whose investment is adversely affected when loans are not repaid. In general, principal reductions may be considered by banks on a case by case basis, where a number of factors are taken into consideration including a borrower's ability to pay." --Beth Mills, California Bankers Association

So here’s the question as we sit here today. For those of you who have eyed the housing landscape from the trenches - What are your feelings and thoughts concerning Kurtis Ming's report written in February 2010? Do you see any meaningful change in the trenches – or do things seem much the same!

Click the following link for the complete Kurtis Ming report titled, "Giving Up On Your Home" It is very worth reading! It could just as easily been written in February 2012, as February 2010.
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Which is more work -- a divorce or a short sale?

02-12-12
Elizabeth Weintraub, Sacramento Short Sale Agent, Land Park, #00697006 Lyon RE
Elizabeth Weintraub, Sacramento Short Sale Agent, Land Park, #00697006 Lyon RE: Real Estate Agent in Sacramento, CA
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  • Office: (916) 233-6759
  • Mobile: (916) 233-6759
  • Secondary: (916) 552-7283

If I am to alienate anybody with my blog this morning, let's start out with a joke I heard. OK, a conservative, a moderate and a liberal walk into the bar. The bartender says Hello, Mitt.

Now we move to lawyers. First, let me say that many, many of my clients are lawyers. I'm not really sure why but I imagine it's because I tend to think first, act second. I don't go around clicking on every "like" button I see. But maybe it's because I like lawyers that I have so many as clients. Or, perhaps we have too many darn lawyers in the world, just like real estate agents.

Did you know that in California almost one person in every 35 people has a real estate license? That's a disgusting number!

Some of my clients hire a lawyer to do a short sale. Some do it upfront and others do it toward the end. I encourage it. For one thing, I am not a lawyer. I can't give legal advice. I can't tell you how many times a client has told me she understands that I can't give legal advice but . . . what about this, that, or the other thing? She's not asking for advice, she's asking for my opinion. Sorry, she's asking for legal advice. I can lose my real estate license for giving legal advice. Do you want me to lose my license, is that what you are suggesting?

I have no qualms sharing with short sale sellers what kind of red flags they should look for, what might possibly happen. And then I say, "Get legal advice because you can't count on anything I just told you as I am not qualified to give you legal advice." Go talk to a lawyer. What is $200 or $2,000 or whatever as compared to the rest of your life? As compared to a deficiency judgment? As compared to thousands of dollars in taxes?

One of my clients asked yesterday why her best friend spent $900 for a divorce but my client's short sale, because she hired a lawyer, cost her three times as much. She wanted to know which was more work. A divorce or a short sale?

Hands down, I'm telling ya, it's the short sale. I would know. I've been divorced 4 times. As a Sacramento short sale agent, I've closed tons of short sales, and a short sale is a lot more work than a divorce. A short sale involves a lot more people. It's more painful. It's more time consuming. But at least -- unlike a divorce -- you're only gonna do it once. So, do it right.

If I think you need a lawyer, you can bet I will tell you. Not every seller in California does, unlike other parts of the country in which lawyers are mandatory. We have SB 458 and CA Civil Code 580e in California. Plus, some short sales are easier than others. But every short sale seller needs legal advice. You can't get legal advice from your short sale agent. If your agent tries to give you legal advice, you better fire your agent.

8 Comments
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Sacramento Apartment Stairway Sinking - This Needs To Be Addressed

02-11-12
Tom Arstingstall - Dry Rot, Water Damage General Contractor in Sacramento
Tom Arstingstall - Dry Rot, Water Damage General Contractor in Sacramento: Builder-Contractor in Placerville, CA
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Sacramento Apartment Stairway Sinking - This Needs To Be Addressed


One of the dangers in apartment construction is dry rot, sometimes it just happens over the years. This Sacramento stairway was found to be sinking quite a bit. The steps were originally at 6 ¾” each, this first step is now at 2”.

Why is it sinking? The wood has rotted and is no longer structurally sound, and is in need of repair.

The stairway is 14 feet in the air, this should be corrected right away.

Sinking stairway in Sacramento

6 Comments
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Wonderful Flavors at Namaste Nepal - Gold River/Rancho Cordova

02-10-12
Myrl Jeffcoat
Myrl Jeffcoat: Real Estate Sales Person in Sacramento, CA
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  • Office: (916) 635-0420
  • Mobile: (916) 635-0420
  • Secondary: (916) 635-0420

This was a busy Friday morning for me. I needed to be at Kaiser Permanente before 7:30 am, for routine lab work. I couldn’t help smiling when I read a sign inside Kaiser’s lobby, which pointed to an “Assertive Training” class up on the 2nd floor. I didn’t know they taught things like that, and wondered if “Anger Management” classes were offered on the same floor:-)

After the lab vampire had her way with my arm, I headed on to BelAir, my favorite grocery store. What they say about shopping on an empty stomach is true. Because I hadn’t eaten since last evening, I grabbed a banana from the grocery bag, to eat in the car on the way home. I kept breakfast light, because I knew I would be enjoying a treat - either Thai or Indian food for lunch.

Sunriver Shopping Center has two great little restaurants. As I cruised by Thai Jasmine, which I have blogged about before, I couldn’t help notice a new sign to the right of the door. “We Serve Vegetarians,” it read. “Gee, I wonder what “vegetarians” taste like,” I chuckled to myself. This was a morning of playing word games in my head!

At the opposite end of the Sunriver Shopping Center from Thai Jasmine, is Namaste Nepal. This restaurant enjoys space formerly held by Udupi Café.


While it was difficult to pass up another lunch with Thai Jasmine’s exquisite Kaeng Ka-Ree (chicken, sweet potatoes, carrot and yellow onion; simmered in coconut milk-spicy yellow curry), I managed to continue on a few doors to try Namaste Nepal’s lunch buffet, which is enjoying their Grand Opening. When I first arrived at 11:30 am, the tables were sparsely populated with patrons. But soon, the doors quickly began opening and closing with a steady parade of hungry people. By the time my lunch finished, I was beginning to fear they might run out of tables.

The food at Namaste Nepal, is wonderful! The thing about curry dishes is no two cooks will blend and create their curries and their dishes the same. In addition to exotic flavors, the really special ones have a sophistication, which makes one feel like thousands of years of civilization were needed to create such a perfect dish. Thai Jasmine and Namaste Nepal both have menu items that share those qualities. And both restaurants are reasonably priced.

Sunrise Shopping Center is located on the 2200 block of Sunrise Boulevard @ Coloma Road, Gold River/Rancho Cordova.

15 Comments
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Why a Preapproval Letter Ain't Worth Jack Crap and What To Do About It

02-10-12
Elizabeth Weintraub, Sacramento Short Sale Agent, Land Park, #00697006 Lyon RE
Elizabeth Weintraub, Sacramento Short Sale Agent, Land Park, #00697006 Lyon RE: Real Estate Agent in Sacramento, CA
  • view my blog
  • Office: (916) 233-6759
  • Mobile: (916) 233-6759
  • Secondary: (916) 552-7283

There are a lot of agents in Sacramento who watch what I do and copy me. I'd say these guys are pretty smart. Because what I do works. I prove it over and over. As a Sacramento short sale agent, I like to believe I'm fairly competent and good at my job. So, if I tend to set the standard for what a short sale agent should do to be successful, that's OK. I don't mind agents using my methods. I freely share because we're all in this boat together.

Last year I did almost 100 transactions. I'll probably exceed that number this year. Every time I close a short sale, I learn something from it. I analyze it. I think about it. I figure out what caused problems during the transaction and come up with solutions so I don't have to face those situations a second time. Call me silly, but this process makes sense to me. Why would I want to repeat a headache?

I'm not one of those agents who bangs her head back and forth in doorways because it feels so good to stop.

One of the larger problems I've seen lately originate with the preapproval letters from lenders. They've always been sorta worthless, but some of them should never have been written. It's way too easy for a mortgage broker to type a borrower's name into a template and print out a preapproval. There is no guarantee that the mortgage broker has qualified the borrower in the least. It doesn't mean the borrower has filled out a loan application. It doesn't even mean the mortgage broker has checked the borrower's credit report.

And don't get me started on mortgage brokers who try to wear two hats and work as a real estate agent, too . . .

Nobody wants to go through the waiting period for short sale approval and get rejected in underwriting. Not me, not the sellers, and not even the buyers. But it happens more often than you would imagine. And sometimes, the file is rejected or kicked out of underwriting for simple red flags that should have been noted at the time of the preapproval letter. Things like low FICO scores, derogatory credit, not enough time on the job.

I work darn hard for my sellers. I submit offers the bank will take. I produce short sale approval letters drawn from blood, sweat and tears. We survive the home inspection without repairs. But when that file goes to underwriting, my sellers and I want to be relatively assured that all of our efforts were not in vain. We want to close. We don't want to hear the buyer has been rejected by underwriting because the buyer was never fully qualified to buy a home in the first place. I know how those REO agents feel when they require preapproval letters from a major lender over a mortgage broker, and I know why.

That's why we request a full DU (desktop underwriting) from the buyer's lender to accompany that short sale offer. It doesn't disclose everything, but it gives a pretty good snapshot. Did you know that a desktop underwriting finding can result in a preliminary Fannie Mae approval even though the FICO scores might be too low to qualify for a conventional loan? It's true. You can't just assume because the buyer has a DU approval that the buyer will be approved, either. You need to read between the lines, apply critical thinking.

Many mortgage brokers do not even run a DU prior to issuing a preapproval letter. How do I know that? Because I have a desk full of preapproval letters with dates that precede the DU. What does that tell you? They're putting the cart before the horse. Not on my watch.

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