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Gary Ricco Pre Foreclosure Specialist PSC & CDPE

Are promissory notes good or bad for clients during a short sale negotiation?

Are promissory notes on 2nd liens good or bad for clients during a short sale? It's common knowledge that a foreclosure, deficiency judgment or debt being sold to a collections company will have a serious negative impact on an individuals credit history, but what about an unsecured promissory note that is required by a 2nd lien holder in order to get a short sale approved?

During a recent conversation with my credit repair expert, Doug Minor www.easycreditrelief.com, Doug informed me that promissory notes for 2nd lien holders during the short sale actually help establish and repair the credit score quicker. Doug stated making payments on a promissory note will establish a new trade line, which often leads to additional credit being issued by other creditors. In my experience most homeowners are unaware of this and this information could be the information the homeowner needed to decided whether or not to agree to the promissory note.

Promissory Note: A promissory note is also an unsecured note and a contract between the lender and borrower where the borrower agrees to pay the difference (or a percentage of the difference) between the amount owed and the sales price of the property. This is usually presented during a short sale and can only be enforced if the borrower agrees in writing. These notes are also negotiable after the short sale.

If your a homeowner or Realtor looking for information on how a short sale, foreclosure, bankruptcy or debt collections effect credit, I highly recommend Doug Minor from www.easycreditrelief.com

Is Your Realtor Properly Trained In Pre Foreclosure Options? Jennifer & Gary Ricco Certified Pre Foreclosure Specialists

I find it hard to believe some Realtors are still trying to bypass educating themselves fully in pre foreclosure process. Utilizing third party negotiators to negotiate pre foreclosure's can be a benefit; however the Realtor has the fiduciary duty to ensure the negotiator is licensed and skilled at negotiating the "most favorable outcome". In order to properly screen individuals or companies claiming to be third party negotiators, the Realtor has to have the knowledge first. The Realtor who sits across the table from the clients armed with this knowledge is the key. As a result of bypassing their own education, or resisting the education, untrained Realtors utilizing negotiators only focused on short sale negotiations, continue to pass along incorrect information to homeowners, information which could cause the homeowner not to have the "most favorable outcome".

It's imperative that Realtors possess the correct information when having intelligent conversations with clients. Trained Realtors can point out facts without giving legal or tax advice to homeowners on the possible Tax & Deficiency issues. California is one of 12 states with Anti-Deficiency Laws. In some cases going through a foreclosure is the most favorable outcome because of the protections provided by the Anti-Deficiency Laws. Realtors need to know the difference. Realtors with a Pre Foreclosure Specialists Certification can point out the facts and explain non-recourse & recourse issues as they relate to; purchase money loans with PMI or LPMI, 80/20 non recourse splits involving 100% financing, or a 1st lien with a 2ndlien recourse Home Equity Line of Credit, (HELOC).

When choosing a Realtor to handle your pre foreclosure transaction, the Realtor must demonstrate their working knowledge of the guidelines the servicers and each note holder (investor) are working off of. Understanding how all the Government Programs, like the "Making Homes Affordable Program", the "Helping Families Save Homes Act" or President Obama's Foreclosure Alternative Program, ("FAP" Program) is setting the stage to streamline homeowner assistance. Most of these programs are requiring the servicer to attempt a loan modification; however the homeowner has to meet debt to income (DTI) ratios in order to qualify, if not the struggling homeowner can then proceed with a short sale, deed in lieu and lastly a foreclosure.

The Realtor must also be able to understand and point out the language used in approval letters, in order to guide the homeowner's conversation with their legal counsel. The terms "release" and "satisfy" should be scrutinized. Here is an actual example from a short sale approval I recently negotiated. The approval language used by SLS to "Release the lien secured by its Deed of Trust and "Release" the seller from liability under their promissory note was for a recourse 2nd lien, where the homeowner used a HELOC to pull out money out.

As you can see I was able to negotiate with SLS on the 2nd Lien (Recourse HELOC) and its investors to release the lien and release the seller from liability. This is very favorable language for the seller, who verified this with their counsel prior to moving forward and closing the short sale. These transactions must be negotiated and documented by a highly trained Realtor, a Realtor doing short sales with a purpose, not by default because these type of transactions are a majority of current real estate market.

Realtors who don't understand the foreclosure process or negotiating with loss mitigators are more likely to have 2nd liens "charged off". A "Charge Off" is an instance in which a consumer (homeowner) is seriously delinquent in paying a bill and the creditor elects to transfer the account to an accounting category such as "charged to loss" or "bad debt." In such cases, the creditor may also turn the account over to an in-house or third party collections agency. These cause problems and delays and may be a deal breaker when negotiating short sales, however a trained Realtor has the knowledge to deal with this situations.

Here are just a few questions to ask your Real Estate Agent before hiring them.

•· Can my real estate agent explain the short sale process?

•· Does my real estate agent have prior short sale experience & success this year?

•· How do I know if my property qualifies for a short sale?

•· Does my real estate agent know what "hardships" quality for a short sale?

•· Does my real estate agent have an effective short sale strategy?

•· Does my real estate agent know how to effectively Price & Market my property correctly?

•· Which is better- a foreclosure or short sale?

•· What are the consequences of the short sale?

•· Why would the servicer and investor agree to a short sale?

•· How is a short sale different from a normal sale?

Now is not the time to gamble with your financial future, there are lots of real estate agents claiming to be short sale experts. If your serious about finding solutions to minimize your financial loss and limit the damage to your credit history, contact Jennifer and Gary Ricco at Keller Williams VIP Properties. 661-290-3837

Pre Foreclosure Assistance For Santa Clarita Homeowners Struggling With Wachovia, Golden West and World Savings Loans. Jennifer & Gary Ricco Santa Clartia's Pre Foreclosure Specialists

Santa Clarita Homeowners struggling with Wachovia, Golden West or World Savings loans, would you like to speak directly with a Short Sale Manager able to explain, handle and approve your Short Sale?

Jennifer and I have recently been assigned and are working with a manager from Wachovia's Loss Mitigation division who's been assigned to handle the Santa Clarita Valley. This Wachovia representative will meet with all the homeowners that are interested in doing a Loan Modification or Short Sale to avoid foreclosure.

I'm sure as homeowners you have heard the horror stories about the Loan Modification & Short Sales process, the time they take to get the approval and are confused about the ramifications associated with doing these types of transactions. Wachovia understands the position this market has created and now offers Realtors, homeowners and buyers the assistance necessary to streamline the short sale process and approve these transactions within traditional time lines.

Per Wachovia program guidelines the Wachovia representative will meet with homeowners to answer their questions, explain what program they qualify for and ensure their cooperation with a licensed Realtor. The beauty of this program is, you don't have to be behind on payments, however there must be a verifiable hardship in order to participate in this program. You may have received a letter from Wachovia or will be receiving a letter shortly, in any case feel free to contact me, I'll make the necessary arrangements for him to contact you directly.

Here are some of the programs highlights:

*One local point of contact for Realtors and customers to review strategy, submit offers and close the transaction

*On-site property and seller interviews by a Loss Mitigation Manager

*Approvals in 7-10 days

*Average closing from start to finish: 48 business days

*$2500 up to $5000 cash for cooperation/moving expenses

This is a great opportunity for homeowners with Neg Am or interest only loans, who can not get a loan modification due to their negative equity position and debt to income ratios. Take the opportunity to speak directly with a Loss Mitigation Manager who can explain your options and show you how this program can help your family.

Should you be considering a short sale this is the time, with limited inventory and low interest rates Realtors have nothing to show and sell their buyers. Take full advantage of this seller market and position yourself to minimize your financial loss.

Contact Jennifer or I to make an appointment with Wachoiva's Loss Mitigation Manager. 661-290-3837

Santa Clarita Pre Foreclosure Specialists Explains Seller Benefits of a Short Sale, Jennifer & Gary Ricco Keller Williams VIP Properties.

I am continually asked by clients on our listing appointments, "what are the benefits of doing a short sale vs letting the property go through foreclosure?" Without knowing the seller's financial situation, this can be difficult to answer because sometimes it's better to let the property go to a foreclosure because of California's Anti Deficiency laws and the protections they provide.

With that being said, in summary a seller can benefit from a short sale in the following ways.

* The most important, a seller can avoid having a "foreclosure " on their credit report.

*According to recent Fannie Mae lending guidelines, you can be eligible to qualify for a Fannie Mae backed loan two years after the short sale completes.

*Assuming the seller is already not making mortgage payments, they can continue to live in the property and not make payments during the short sale. The lender of Record actually prefers that the borrower continue to live in the property. Statistically, occupied homes tend to be better maintained then vacant properties, making the property more marketable.

*Most lenders feel that staying in the house is the "right thing to do" when in default. They tend to feel walking away from the house is irresponsible and unfair to the lender.

*Sellers often do not understand that when doing a short sale, the senior lien holder will pay for the costs of the sale.(i.E, commissions,escrow fees, title insurance, deliquent property taxes, ect.)

Here are the risks associated with Vacancy that lenders are faced with and why they prefer the borrower to stay in the home during the short sale process.

Vacancy risks can be broken down to three (3) primary categories.

1. Maintenance:

Maintenance issues on vacant properties stack up quickly. Lenders take on the expense of securing & maintaining the the property ahead of the foreclosure. Lenders hire costly preservation companies to maintain the property.

2. Theft & Vandalism:

Vacant properties are easy target for thieves looking for appliances and/or for the copper out of A/C units and pipes. Also vacant properties are a magnet for squatters and or juveniles that cause thousand of dollars of damage, all costs the lenders assumes in a foreclosure. Municipal fines can run as high as $1000 per violation, per property, per day for properties not maintained.

3. Vacant Property Ordinances:

Cities and counties across the country have drafted vacant property ordinances aimed at two things:

a) Reducing neighborhood blight by pushing lenders with the threat of financial penalties, to secure, monitor and maintain vacant bank owned properties.

b) Generating revenue, municipalities are looking for ways to make up for revenue short falls they face.

Each vacant property ordinance is different. It is estimated that there are over 5,000 distinct & separate vacant property ordinances across the country.

If your struggling with your mortgage, you owe it to your self to understand what pre foreclosure options you have. Jennifer and I have the training & experience to educate homeowners on the options they qualify for. If your looking for ways to minimize your financial loss and limit the damage to your credit history you need a trusted professional, trained in the pre foreclosure process. Jennifer and I have obtained our Pre Foreclosure Specialists certification and the Certified Distressed Property Expert designation.

Also if you are struggling with a Wachovia, World Savings and Golden West mortgage Jennifer and I have a short sale manager we can put you in direct contact with that will explain your pre foreclosure options with these loans.

Wachovia's Streamlined Short Sale Process Has Been Expaned To North Los Angeles County Homeowners!

Wachovia Streamlines Their Short Sales process!

North Los Angeles Homeowners struggling with Wachovia, Golden West or World Savings loans, would you like to speak directly with a Short Sale Manager able to explain, handle and approve your Short Sale?

Jennifer and I have recently been assigned a manager from Wachovia's short sale division. Our Wachovia representative will meet with all the homeowners we represent that are interested in doing a short sale to avoid foreclosure.

I'm sure as homeowners you have heard the horror stories about the short sale process, the time they take to get the approval and the ramifications associated with doing a short sale. Wachovia understands the position this market has created and now offers Realtors, homeowners and buyers the assistance necessary to streamline the short sale process and approve these transactions within traditional time lines.

Per Wachovia guidelines our Wachovia representative will meet with homeowners to answer their questions and ensure their cooperation. The beauty of this program is, you don't have to be behind on payments, however there must be a verifiable hardship in order to participate in this program.

Here are some of the programs highlights:

*One local point of contact for Realtors and customers to review strategy, submit offers and close the transaction

*On-site property and seller interviews by Short Sale Manager

*Approvals in 7-10 days

*Average closing from start to finish: 48 business days

WHAT DOES THIS MEAN TO YOU?

*Working with a Bank that "Get's It!"

*Professional Local Partner paired with you to help facilitate the closing of the sale

*Unprecedented Turn Around Time for Approval

*A Short Sale Transaction that will close in the Same Time Frame as a Regular Purchase

*YOUR VOICE IS HEARD!

If you have a Wachovia home loan that is in danger of defaulting, please give us a call. For more information on this program, please contact Jennifer & Gary Ricco of Keller Williams VIP Properties 1 (661) 290-3837.