Elva Branson-Lee, e-Pro, CDPE

Real Estate Change Agent - Pt. 4

Change agents of the world, are we bracing ourselves for the next onslaught of distressed sellers?

One of my associates in the real estate business has been warning me and anyone else who would listen for the past two years concerning the pending option ARM resest issues that we are about to face in the U.S.

He and others have dramatically described the coming recast as the precursor to a veritable tsunami of new foreclosures.

Precursor? You mean this next wave is not THE wave?

As much as we all may hope that these harbingers of doom are being overly pessimistic, recent reports from industry analysts are confirming the realities behind these particular mortgages and the challenges they present.

A recent Housingwire.com article reported these predictions from Fitch Analysts:

• $29 billion in option ARMs to recast to higher monthly payments by the end of 2009, and an additional $67 billion to recast in 2010; of this, approximately $53 billion is attributed to early recasts.
• 90-day plus delinquencies - already ranging from 10 percent to 24 percent, depending on vintage - to more than double after recast for 2004-2007 vintage loans.
• Fitch estimated the potential average payment increase on the re-casting loans to be 63 percent.
• Option ARM defaults will likely spread into higher priced neighborhoods and higher priced homes.

I hope the Stimulus Package and other long-awaited loan modification programs will be enough to stem some of this tide. Because we're already feeling it in Georgia.

In fact, local papers report that option ARM defaults are already spreading into higher priced neighborhoods and homes in the 22-county Metro Atlanta real estate market. This metropolitan area is experiencing a more bleak foreclosure outlook than the state of Georgia as a whole.

Who do you know who is in trouble with their mortgage? These days, it seem that almost everyone knows someone.

Help me help somebody!

If you are a Georgia homeowner, your neighborhood could be the next to be plagued by REO-driven home prices. Arm yourself with knowledge to help your neighbors avoid foreclosure. For more information on what can be done to forestall the ultimate trauma of foreclosure in Georgia, visit http://www.AvoidGeorgiaForeclosure.com.

Real Estate Agent turned 'Change Agent' - Pt. 3

Because I'm a Change Agent, and not just a real estate agent anymore, and because the health of my business is so closely tied to the health of my community, I can't afford NOT to give away what I know.

Especially when I'm looking for people to help.

That's why I've drawn from my past work with pre-foreclosure clients, as well as the combined experiences and knowledge of my team of real estate experts, and put together an informative e-book to share with my Georgia neighbors everything that I have learned as a REALTOR about how a person can avoid foreclosure in Georgia. It's short and easy to read and understand.

It's also available FREE for the asking at http://AvoidGeorgiaForeclosure.com, and is intended for people in distressed situations, and for the neighbors, friends and family of such home owners. It seems almost everybody knows somebody who is going through it in the current economy. The e-book offers proven strategies for anyone facing a possible bank foreclosure on their real property due to relocation or hardship. I hope it will instruct Georgians on their options, and that they will identify specific information and tactics contained in the book which they can immediately put into action to avoid bank foreclosure.

Because I am a stakeholder in the community both as a resident and as a REALTOR, I want to spread the word quickly and without price constraint. It's too important to hold back.

And hopefully some of them will call on me so I can answer any remaining questions. Then maybe I'll have the opportunity to review their situation and help them identify an appropriate non-foreclosure course of action based on their particular circumstances and needs. And maybe some of them will find their very best option is to list with me for a short sale.

I'm interested to know, what other agents are doing in their markets to address the growing problems of economic hardship and negative equity homesellers?

Any agent can list a short sale.

But it is estimated by the industry analysts whose blogs and podcasts I subscribe to that only 3% of all Realtors know how to successfully close one.

Those of us who can appear to be awfully busy in my market, because according to Atlanta area housing industry reports, nearly 40% of all recent real estate sales have been Short Sales and REOs. A glance at the current listings of homes available for sale on the Georgia MLS corroborates that at least that number of the listings fall into these categories. And for the most part, the homes that do not, are overpriced for the market.

I expect more of the same in the coming year. Until the inventory of homes falls to more normal levels, analysts say, the housing slump is likely to persist. But currently, inventories are being driven higher by the massive wave of mortgage foreclosures and pre-foreclosure listings.

These "distressed" sales now are driving our local market and have driven down prices across the board. And I don't think we've seen the bottom yet. Some experts predict that prices won't bottom until they've reached the level of 2003-2004 prices. I'm no analyst, but it would not surprise me if even that is a conservative estimate based on the economic turbulence the country is experiencing now.

The sheer number of homeowners with negative equity in their homes..the ‘Underwater Homeowners' is staggering. Its predicted that by this time next year half of all real estate transactions will be either foreclosures or short sales.

Metro Atlanta sellers will continue to be challenged in 2009 as the inflated pricing of years past adjusts to levels that buyers can once again afford. With banks and builders continuing to slash prices in order to sell a backlog of foreclosures and new homes, individual sellers will have to price their homes competitively. The catch is that most sellers will likely find themselves upside-down in their mortgages, owing more than the property is currently worth on the market.

In 2009, it will be imperative that Atlanta sellers in this position realize their position and hire an agent who is extensively trained and experienced in getting their short sales closed. An agent who has the CDPE designation will fit this bill.

For more information for distressed sellers in Atlanta, go to http://AvoidGeorgiaForeclosure.com

In my last post, I introduced myself as a Change Agent, a pre-foreclosure specialist on a mission to save as many Georgians from foreclosure as I can, and a partner with our president-elect in effecting positive change in America's economy.

So how am I personally and positively affecting the economic recovery?

Well, I figure the economy won't recover before the real estate market corrects. And every time I help a seller sell before the bank takes their house, I'm helping that correction happen instead of allowing another foreclosed property to drag on the market. Foreclosures hurt the whole community and economy. Boarded up homes become a blight on the neighborhood, driving prices down, reducing the tax base and inviting crime.

To that end I've prepared myself with Alex and Cadey Charfen's systems and information, and I've postioned myself for 2009 as an agent who specializes in foreclosure prevention and short sales. Tne Certified Distressed Property Expert (CDPE) designation has equipped me for increased success with short sales. To date, there are only three agents in the state of Georgia to have earned the CDPE designation, which requires a significant investment of time and money and in-depth foreclosure prevention training.

In a short sale, the lender agrees to accept less than the entire amount due on a seller's mortgage as "payment as agreed." The lender becomes the de facto seller in the transaction, and the defaulting borrower gets to avoid the stain of foreclosure. Short sales are are a far better option for most home owners than foreclosure - repercussions are substantially less and of lesser duration. While a person with a short sale may qualify for a new FHA loan in as little as two years, a foreclosure could follow a borrower forever, particularly when applying for another mortgage.

When I'm successful in helping a homeowner avoid foreclosure with a short sale or loan modification, everybody wins. The homeowner is spared the emotional and economic trauma that comes with foreclosure and eviction. Also, it saves the lender the legal fees, processing fees and marketing costs to foreclose on a home and put it back on the market, which can amount to many thousands of dollars. And a new buyer gets a home at an affordable price and becomes part of the local property tax base.

Get an informative free e-Book on How to Avoid Foreclosure in Georgia at http://AvoidGeorgiaForeclosure.com

As always, I welcome comments, tips and suggestions from other pre-foreclosure professionals. The more information we can get into the hands of stressed homeowners, the more foreclosures we can prevent.