Holt Barber

How to Avoid a Foreclosure in Texas

Nationally forecasters are predicting that 2010 and 2011 are going to be even worse than 2009. According to NAR (National Association of Reatlors), almost 1/3 of all pre-owned homes sold in 2009 were either short sales or foreclosures. The Dallas Morning News reports that more than 1 in 10 homeowners in Texas are behind on their mortgages.

Why? I thought we were almost through the worst part? Perhaps you are asking yourself the same questions I have been asking myself. I found some common ingredients that have been leading us down this path.

• Unemployment - No job = no income. No income means you can't pay the bills.
• Predatory Lending - Remember those ARM's (Adjustable Rate Mortgage) that were so popular 4 & 5 years ago? Well, those are currently expiring and the interest rates will rise. Many, if not most, homeowners will not be able to afford their new mortgage payment.
• Distended Debt - Did you know when most find themselves in more debt than they can handle, they actually pay their credit cards before they pay for their utilities and mortgage?
• Increase in Home Inventory - With the Spring Market on the way - the banks are trying to sell the homes they have taken back and this coupled with the normal home owners who are planning on moving - means more than the normal 6 month supply of inventory. More homes mean more competition and with fewer buyers.

Sound challenging? If you up to your eye balls in debt, currently facing unemployment, have an ARM that is about to expire or need to sell your home and can't get out of it what you have in it - what are you to do?

Don't stick you head in the sand and hope no one notices. You need to act fast because you do have options and a foreclosure is usually the worst option of them all.

First, you will need to speak with your mortgage company to see if they can help you to either restructure your loan (so that you can afford your payments), work out a repayment plan with your lender, perhaps borrow some money to get current on your payments or possibly refinance your loan with better rates and terms.

If this seems overwhelming, ask a Realtor like myself who has experience helping home owners like you who are facing the same hardships. If you have tried the above options and have come up short then you need to discuss the other options available to you with a qualified Realtor.

Your options here could include (depending on which state you live in as the option vary from state to state)

1. Rent your home out for the short term while you get back on your feet
2. Sell your home
3. Enter into a Deed in Lieu of Foreclosure
4. File for bankruptcy protection which could help delay the foreclosure process
5. Sell your home by way of a short sale.

Trust me this is not a time to be prideful. Heck, I am a Realtor and even I have had to sell one of my homes as a short sale. My wife and I had a home in Chicago that we bought but my sister was diagnosed with cancer and we made a sudden move back to Dallas. Our home sale in Chicago lost over $130,000 in less than two years. We had to go to the bank and ask them for a short sale. It was not an easy process but we worked hard and they allowed us to sell our home for considerably less than we owed them and therefore we were able to pick up the pieces and start rebuilding. They were able to make more than they would have in a Foreclosure and they also avoided all of the legal fees associated with the foreclosure transaction.

Here are 8 Strategies to Avoid Foreclosure:

1. Be proactive about the problem address warning signs when they first appear.
2. Contact your lender as soon as you become aware that you might have a problem.
3. Read your mail. Not knowing does not solve the problem it just delays the final result and increases the pain and stress of the situation.
4. Contact a HUD approved housing counselor.
5. Prioritize your spending. Pay your house payment and health insurance first!
6. Look for additional ways to generate cash.
7. Don't fall prey to scam artists like a private "foreclosure prevention specialist;" instead go to www.HUD.gov to obtain valid information about foreclosure prevention.
8. Make an appointment with a REALTOR® to discuss the problem and get advice.

A foreclosure is a serious matter and contrary to popular belief when your home goes into foreclosure this does not mean that you walk away from the home "scot free". There are only a few states that are "non-recourse" meaning the lender can't come after you for the difference between what you owe and what they actually sell it for. Most of the time you will be responsible for the difference which most people don't find out until a year or so later when they get a letter in the mail from the lawyer saying the mortgage company has come calling.

Life Happens...Make educated decisions about your future and seek the help you need.

If you would like a copy of the "Making Home Affordable" brochure which is a program enacted by our government that offers two different potential solutions for borrowers who need help with their current loans then you can email or call me and I will be happy to send it you.

Holt Barber

Ebby Halliday Realtors

Holt@Ebby.com

972-795-3636

5013 W. Plano Pkwy Suite #100

Plano, TX 75093

I just left a networking event where I asked everyone to raise their hands if they have heard or believe that there is no money out there if you want to buy a home today. Ninety percent of the people raised their hands. It is simply NOT true! The media is lying to you and to me.

Sure the banks that are still in business have tightened their requirements on who they will lend to (as they should have 5 years ago):

• You actually do need a pulse
• You do need a Job
• You will need to have money to put down on the house
• You can't be up to your eyeballs in debts
• You can't buy a home that you can't afford

What a great philosophy to build off of!! The truth of the matter is that you should not be buying a home if you are in debt and don't have money to put down (this is what got this country in trouble in the first place). You should have a stable income and career before you think about buying a home. You should not be buying something you cannot afford or a home that will cause you financial hardship later (no matter how good of an investment you think it is…you can’t borrow your way to being rich). A home is supposed to be a good investment...not destroy everything you have worked so hard for.

I am not sure what the future holds (it seems everyone else does) but one thing I do know for sure is that there has not been a better time to buy a home in the past 20 years. September and October will go down in history as one the best times (in a very long time) to purchase a home.

• Interest rates are still around 6% (this is fantastic)
• Home prices have dropped because of the few buyers on the market (supply and demand)
• Builders are selling their home below cost
• Banks are giving their returned homes away
• Home sellers have to compete with the builders and banks so they have started dropping their prices.
• There are a lot of homes to choose from
• A first time home buyer or those who have not owned a home in the past 3 years gets a $7,500 tax credit

This is a perfect time for those of you who have saved, patiently waited and prepared for the perfect time to buy a home.

Please don't listen to the media...I spoke with two lenders today and they both said they have great programs available to those people who can qualify (those who have planned & saved well). These are the people who will come out on top when this storm blows over.

If this is you...congratulations you are in the perfect position. Act now--I think we are coming out of this...September and October will go down in history- be a part of that history. Call you lender or your Realtor...if you don't know of a trusted, honest, professional Lender or Realtor who will look at your situation and give you the best advice for your family then call me. I have a great network of ethical Realtors all across the country. If you’re in the Dallas Fort Worth area call me…If you’re not in my area, I will find you someone that you can trust.

I want to be a part of the solution that helps this country once again be the greatest country on God’s green Earth.

Sincerely,

Holt Barber

Ebby Halliday Realtors

c:972-795-3636

Holt@Ebby.com

• The first very special benefit of this program is that it is not just for people who have never owned a home. (First-Time Home Buyers)
• First-Time Home Buyer is defined by law as a buyer who had not owned a home used as a principle residence the past three years.
• U.S. citizens who file taxes are eligible for the program.

Income Limits:

An additional benefit of the program is that it's available to a huge segment of U.S. Taxpayers.

• Single or head-of-household taxpayers can claim the full credit if their adjusted gross income (AGI) is less than $75,000.
• Single or head-of-household taxpayers with an AGI between $75,000 and $95,000 are eligible to receive a partial tax credit.
• Married couples filing a joint return can claim the full credit if their adjusted gross income (AGI) is less than $150,000.
• Married couples filing a joint return with an AGI between $150,000 and $170,000 are eligible to receive a partial tax credit.

• Effective Dates of the Tax Credit:

Qualified Buyers would receive the applicable Tax Credit for the purchase of any home on or after April 9, 2008 and on or before June 30, 2009. The purchase must close and fund.

• Refundable credit means - the amount of the credit is fully applied as tax paid. It reduces tax owed or increases refund as applicable.
• Example A: A buyer qualifies for the full credit and prior to the credit they would have a refund due of $2,000 on their Tax Return. The buyer would then receive a total refund of $9,500. The combination of the two.
• Example B: A buyer qualifies for the full credit and prior to the credit they would have owed $1000 on their Tax Return. In this case the buyer would now receive a refund of $6,500. The difference between the two.

Choice of Tax Year for Credit:

A potentially substantial benefit of the program is that the buyer may be able to choose the Tax Year in which they want to apply the Tax Credit.

• If the home is purchased in 2009, prior to the end of the program, the buyer may elect to apply the Tax Credit to either their 2008 Tax Return or their 2009 Tax Return...whichever they believe benefits themselves the most!
• If the home is purchased in 2008, the Tax Credit must be claimed on the buyer’s 2008 Tax Return.

Types of Homes which Qualify:

Here’s yet another major benefit not seen in other incentive programs. Just about every type of home and price range qualifies for the Tax Credit.

• New & Pre-Owned Homes
• New & Pre-Owned Townhomes
• New & Pre-Owned Condominiums
• Even 'Build-On-Your-Own' lot

Home Price Effects:

• The Tax Credit values, whether full or partial credits, are capped at 10% of the purchase price or $7,500 whichever is less.
• Example: a property bought for $62,000 has a maximum Tax Credit available of $6,200.

Payback Provisions:

• One should view this Program as an interest-free loan to be repaid over 15 years.
• An additional benefit is that the buyer does not start making the repayments until the 2nd Year after the Tax Credit is claimed.
• The Tax Credit and then repayments are made through the buyer’s Tax Returns annually… No separate checks and bills to keep up with!
• If the buyer sells the home prior to full repayment, the balance owed would be due from the proceeds/profit of the sale. If there is insufficient proceeds/profit, then the remaining balance of the Tax Credit payback would be ‘forgiven.’

Now is a great time to buy!

With all the negative news in our country right now I know it is scary to be thinking about buying a house. There are some great opportunities available to those of you who can afford to capitalize on the benefits of buying right now.

• Interest rate are very low.
• Yes, there are banks willing to loan money to those who are qualified.
• There is a decent amount of inventory to choose from.
• Many builders have great incentives right now.
• This tax credit.
• Buy Low...Sell High!

If you or someone you know could benefit from this exciting program and the benefits of buying a home in today's market then please give me a call.

Agents, if you would like this informatin in Microsoft Publisher format to use with your own branding as 3-fold printable brochure then send me an email Holt@Ebby.com

God only knows...I wonder the same thing. When I wonder about things like our current economy I turn to people who know a little more about these things than I do. Dave Ramsey is one of these people. Here is an exert from a recent post by Dave Ramsey

Dave's Thoughts About the Economy

Over the past month, we've witnessed the largest bankruptcy in history, the stock market dropping like a rock, and the talking heads on TV freaking out that the world is coming to an end. I'm here to tell you the truth-we're going to make it. We're going to be fine. Take a chill pill.

This month I've compiled some of the most-asked questions I've gotten recently from you:

Are we okay, Dave?

Definitely. Remember Enron and WorldCom in the recent years? We survived that. But much worse than all this was the financial crisis of the ‘80s - S&L collapse and 1,000 bank failures in 2 years. We're nowhere near this type of thing; that was probably 50 to 100 times worse than all of this.

What does all of this come back to?

Greedy banks financing homes to broke people. It all seemed to work okay in their minds when the economy was booming, but when the economy slowed a little bit broke people quit paying on their subprime mortgages. DUH. No wonder they went out of business. Stupid decisions.

Is there anything we can do to fix this bailout mess?

YES! Here's a quick summary: Companies that had billions in subprime loans were feeling the effects of their stupid decision to make those loans in the first place, and practically gave them away for pennies on the dollar. But since no one wants these loans, and they've had to mark them down to market value, it has frozen the market. If we temporarily change the rule that forces companies to do that, that will free the market up.

This is an absolutely huge deal, and it involves everyone getting in touch with their congressperson before we spend hundreds of billions of dollars that we don't need to! Learn more

Will the collapse of businesses and banks affect me?

No, not unless you work there. Thousands of stock brokers on Wall Street have lost their jobs in the past few weeks, but that happens in other industries across the country in good and bad times. This time it just happened in NYC where all the national news media is so they made a big deal of it.

If I have 401(k) money in a Merrill Lynch or AIG trading account, should I move the money elsewhere?

No. Your money isn't with them; your 401(k) money is in the stocks. These big companies are just managers (unless you directly own stock in their company). The only thing that may be an issue is if they crash later, you may have some customer service issues, but your money is still safe. This is a good reminder to not have all of your money in one stock-that's stupid. Always spread out your money in various growth stock mutual funds.

With these acquisitions, will my 401(k) account and entire portfolio with Merrill Lynch be lost?

No. They just own the company Merrill Lynch. Look at it this way-if I owned 6 rental properties and hired a management company that eventually failed, I would still own the properties; I just wouldn't have a manager. Your broker doesn't have title to your stuff. Your 401(k) is not a company asset; that's the beauty of it.

Should I sell my US stocks to buy gold and foreign stocks?

Absolutely not! Why would you think foreign stocks are any better than US stocks? Again, diversify your money in good growth stock mutual funds instead.

What practical lessons should small business owners learn from these bank difficulties?

When you have no cash, you freakin' go broke. You must keep some cash on hand, no matter what kind of business you have. Give yourself some wiggle room where you can take a hit and still be standing.

Remain calm, America. We're in a slow time, but just pay your bills and you're going to be fine.

How much does a free Banana tree cost...?

My Dad gave me a banana tree last year that he dug it out of his own yard. If you have ever had a banana tree then you know they reproduce at an alarming rate. I gladly accepted this free plant. I have a huge yard and the owners before me did not care much for outdoor living...I however, am the opposite.

Recently when I was over at my Dad's house I noticed that his banana tree was about 12 feet tall (seriously). My bananas tree or rather my field of banana trees are only about 3 feet tall.

Naturally, the question I asked was "Dad, why is your banana tree so much bigger than mine?" Well, I found that he waters his every day and he only focuses on that one tree. I on the other hand do not; I try to keep them all going at once.

Banana trees love water & sun. Actually, I think that is all they desire. We have plenty of free sunshine here in Dallas, but I wonder how much water that 12 foot tall banana tree cost my dad this year. It looks great...but like so many other things that are not indigenous to this region... it takes more effort to produce well.

There are parts of my real estate career that are not indigenous to me. I love to help people find a new home, I am great at marketing properties for sellers and I love the art of negotiations...these aspects grow more naturally in me. What I have to "water" most is how to find new business.

I don't like to ask people if they know of someone who is thinking about buying or selling a home...I am not sure why but I resist it constantly. The reality for me is that if I don't water this part of my business, my whole "banana tree" will die.

Although some days I wish I had not planted that free banana tree (my water bill is costing me a lot this year)... I don't regret that I am a Realtor even though there is a drought in my industry.

Unlike my banana tree I was born and raised in Texas, I only focus on one thing (real estate) and I can (and will) survive a drought...but I still need some water. If you know of someone who would like a free banana tree and a new place to call home I can help. I will find them a new place to call home AND I will even plant them a new banana tree. Better yet, I will plant a tree that belongs here in this great state of Texas.

Want to help Holt water his real estate tree?

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