Dori Kay, CDPE-CHS-ePRO (714) 309-1589 *OC

Important information provided by the California Association of Realtors

Undisclosed Short Sale Payments May Be Illegal

"Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws. Short sale agents have increasingly reported to C.A.R. about requests for agents and their clients to pay junior lien-holders and others, oftentimes outside of escrow.

One common scenario is when a short sale seller's senior lender authorizes a payment of $3,000, for example, to extinguish a junior lien, but the junior lender demands that the buyer pays an additional $9,000 outside of escrow. Not only would it be risky for a buyer to pay outside of escrow, but concealing this additional payment from a federally-insured senior lender may constitute loan fraud, which is a crime punishable by 30 years imprisonment plus a $1 million fine (18 U.S.C. section 1014). Furthermore, omitting from the HUD-1 Statement any charges paid at settlement by either a buyer or seller may violate the Real Estate Settlement Procedures Act (RESPA) (Appendix A to 24 C.F.R. Part 3500). Depending on the specific circumstances, carrying out these payment requests may also violate other laws and regulations, and an agent's participation in the scheme may be subject to license revocation by the Department of Real Estate or other disciplinary action."

Agents and their clients are encouraged to file any complaints regarding fraudulent activities to the proper authorities, including the following agencies:

Attorney General's Office

California Department of Justice

Telephone: 800-952-5225

http://ag.ca.gov/consumers/mailform.htm

Department of Housing and Urban Development (HUD)

HUD Office of Inspector General Hotline (GFI)

Telephone: 800-347-3735

http://www.hud.gov/offices/oig/hotline

Federal Bureau of Investigation (FBI)

Telephone: 202-324-3000

https://tips.fbi.gov

SHORT SALE HELP IN HUNTINGTON BEACH

Help By A Certified Distressed Property Expert

Recently, there have been reports claiming that a "strategic default" can be an appropriate and even beneficial reaction to an upside-down mortgage or impending foreclosure. While this idea has spread rapidly, the truth is that a default is never an easy road to choose, and rarely is it ever strategic. In fact, defaulting on your mortgage can be incredibly dangerous and irresponsible when handling the financial future of you and your family. Unfortunately, the ramifications of a "strategic default" are rarely---if ever---explained, leaving many homeowners stranded on an island of misinformation.

If this is your situation, first understand that you are not alone. Millions of homeowners nationwide are in similar circumstances. The only difference between them and you is that you're looking for answers...and this is a great start!

So what's the difference between a regular default and one this is 'strategic'?

Default occurs when a homeowner falls behind on mortgage payments. This can be due to a hardship, which can include (but is limited to) job loss, divorce, medical bills, or a monthly income shortfall. Due to current economic conditions, literally millions of homeowners across the country have found themselves in default situations. For homeowners in default, programs have been initiated through the administration and lending institutions to provide solutions and to salvage financial futures.

In a "strategic default," the homeowner simply chooses to "walk away" from the mortgage---in other words, move out and stop paying---even though they may be able to make the payments. This is often done when the homeowner owes more on the home than it's worth, and views the home as a bad investment. However, most of these homeowners do not understand that walking away from the mortgage will expose them to foreclosure, credit issues, current and future employment challenges, and possible debt collections.

If you're underwater on your mortgage or behind on payments, you need to know that there is time to analyze your options before foreclosure happens. More importantly, there are alternatives that will protect your credit and financial well-being. Educate yourself about "Strategic Default - Why Walking Away Is Not The Answer."

Mortgage lenders are looking to avoid the foreclosure process just as much as homeowners. While they are not in the real estate business, some have instituted further options to help homeowners avoid foreclosure.

The U.S. Treasury recently announced new incentives, time lines and procedures for short sales. The HAFA Program, part of the Home Affordable Modification Program (HAMP), simplifies short sales procedures by setting limits on the time it takes lenders to respond, freeing borrowers from debt and capping claims of subordinate lien holders.

My name is Dori Kay, and as a CDPE-designated agent, I have the most current information on this program and participating lenders. Let me assist you in organizing all the necessary paperwork to ensure you have everything you need to make an informed decision on your future. "Strategic Default" is not the answer.

Visit my website and learn more about "Strategic Default - Why Walking Away Is Not The Answer" or contact me directly at (714) 309-1589.

Do you know what steps to take to Avoid Foreclosure in Huntington Beach, CA? My name is Dori Kay, Certified Distressed Property Expert, and I am here to help you avoid foreclosure.

Chances are you or someone you know are having difficulties in making the monthly mortgage payments. More than 70% of these homeowners proceed without seeking assistance and without getting the facts on how to avoid foreclosure.

Many homeowners don't realize that foreclosure is a process, and there is time to make decisions that may result in a better outcome. Time is of the essence though, so take action to avoid foreclosure now. Having the motivation to take action, and finding a professional who can work with you in finding a solution to avoid foreclosure, can ease the frustration.

So where do you start?

Step 1: Take Action

• Congratulations!
• You have already taken your first step to avoid foreclosure by reading this information.
• You are proactive about finding a solution to avoid foreclosure, and the answers to many of your questions are right here.

Step 2: Contact an Educated Agent

The Washington Post reported on a recent study that found "Troubled homeowners who receive housing counseling are 60% more likely to have their mortgage payments lowered significantly than borrowers who navigate the process themselves."

• Look for the Certified Distressed Property Expert Logo (CDPE)

Step 3: Organize Your Personal Documents and Information

Expedite the process!

No matter what process you choose to avoid foreclosure, the process can be expedited by assembling these materials:

- Checking account statements

- Savings account statements

- Recent mortgage statements

- Last two paycheck stubs

- Last two years tax returns

- A letter of hardship

I can assist you in this process!

Step 4: Contact Your Lender

• Lenders want to avoid foreclosure
• Lenders are not in real estate, do not want to take ownership of a home and don't want houses to sit idle on the market
• Contact your lender as soon as possible to discuss your solutions to your circumstance and avoid foreclosure
• Keep your agent informed

Step 5: Understand All Your Options to Avoid Foreclosure

As a CDPE designated agent, I have the most current information on the options available to you. Here's a brief summary of a few options to avoid foreclosure:

SHORT SALE

A short sale is a dignified alternative to foreclosure, allowing a homeowner who owes more on their property than it is currently worth, to sell their property at a price for less than is owed.

DEED IN LIEU OF FORECLOSURE

Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process.

FORBEARANCE OR REPAYMENT PLAN

A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner usually makes their current mortgage payment in addition to a portion of the back payments they owe.

MORTGAGE MODIFICATION

A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These usually result in a lower payment to the homeowner and a more affordable mortgage.

RENT THE PROPERTY

Renting a property can also be an option if the homeowner who has a mortgage payment low enough, they can convert their property to a rental and use the rental income to pay the mortgage.

BANKRUPTCY

Is only a 'foreclosure solution,' in some states and situations, but still remains a challenging financial decision.

MORTGAGE REFINANCE

A mortgage refinance can be an option if a homeowner has sufficient equity in their property and their credit is still in good standing.

SERVICEMEMBERS CIVIL RELIEF ACT

This act was implemented to help members of the military experiencing financial distress due to deployment. Contact me for more information.

SALE OF PROPERTY

Selling your property can be accomplished if the homeowner has sufficient equity in their property and a qualified agent who understands the current market. If you don't have equity, a short sale may be the best option.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options. Let me help you avoid foreclosure.

Step 6: Action!

• Obtain a copy of my free report, "Your First Steps to Avoid Foreclosure" and pass it along to anyone who may benefit from this information and also avoid foreclosure
• Contact me today and let's get you back on the path to financial security and avoid foreclosure

In Closing

• I believe every homeowner deserves the best information and education to avoid losing a home to foreclosure and damaging credit for years to come
• As a CDPE, I have trained to help homeowners in difficult situations avoid foreclosure