Charles Gardner-Real Estate Consultant

Signs of the Times - How Short Sale Investors Can Spot the True Turn-Around

At the first sign of slowing declines and a few stocks going up in value, the media is eager to report that the worst is over. Before you run out and begin buying up stocks or bonds it might be a good idea to review the signs of a real bottom. Expect a true turn-around to take place after the following events have been established:

Debt Liquidation. While the big bank bail-outs and automobile manufacturers might seem to have drained the Federal Reserve, remember what we spoke about earlier this week...the giant derivative mess is still waiting in the sidelines with numbers that literally dwarf everything else to date. Wait until the true debt liquidation takes place before getting overly excited by the early signs of a supposed recovery.

Failures. Sooner or later the federal government will stop bailing out bad companies and instead, turn their sights on trying to preserve what is left of the American economy. In a Darwinian struggle for survival, weak companies will fail while larger companies purchase assets for pennies on the dollar.

Don't expect the government to make a major announcement restricting all the bail-outs, instead, simply keep a close eye on spending to see the signs of slowing and eventual capitulation related to the bail-outs. Plain and simple, the federal government won't be able to afford the true cost of throwing good money at bad business.

Wall Street Woes. Short sale investors already know how fickle the media and traditional economists can be when it comes to investment advice so it should come as no surprise that they will once again be wrong when it comes to Wall Street. When you begin hearing that all stocks are now 'worthless' then start searching for signs of the bottom....the same way that real estate has been nearing its own bottom presently. Remember, the tendency is always toward an over-correction prior to a true turn-around.

The Big Event. Every turn around is preceded by a "big event." While we don't pretend to know the future, we can learn a little from the past and take an educated guess that the big event preceding the true turn around could borrow from the pages of history in the form of a major monetary policy change, national bank holiday or other watershed event that "re-sets" the currency and economic system. Already nations from around the world are calling for a new reserve currency to be issued by the International Monetary Fund while the

Internet itself is rampant with reports speculating on the emergences of the Amero in much the same way Europe adopted a co-existent currency in the Euro. Whatever form the big event takes, it is certain to reduce those holding dollars, stocks and bonds to potential ruin.

Take time to review the history of other nations in the grip of economic uncertainty to determine how well real estate performed. Indeed, it is one of the few assets that lead to wealth after the true turn-around took place. Meanwhile, keep your eyes and ears open for opportunity to establish your financial future via short sale investments...the time to buy the best bargains is always on the way down - not up. That is when you will really want to sell then reap the rewards of all your hard work and determination.

See you on the other side!

Charles Gardner, R.E Investor

Short Sale Investor

Fighting Fair - Foreclosure Requirements Take Toll on Short Sales

Short sale investor are increasingly confronted with the prospect of losing out on a short sale deals as sellers seek to maximize the time they are able to live in a home for "free." A plethora of informational items are advising sellers to fight foreclosure and use stall tactics including entertaining multiple short sale offers and fighting foreclosure technicalities.

Learn how to identify stalling tactics and avoid wasting time on sellers playing the waiting game by understanding the basics of foreclosure requirements and delay techniques.

Foreclosure Requirements

1. Notice of Default - must contain information on money owed and time allotted for payment.

2. Recording of Notice of Default

3. Notice of Property Sales Date

4. Notification of Redemption Period

5. Notification of Foreclosure Commencement

6. Publication of Intended Foreclosure in public forum/legal notices.

Each of these may be governed by specific state requirements but should provide a general overview of the major steps. If any of the above are not specified or fail to conform to time or other legal requirements the current homeowner has the right to petition or file a complaint, effectively extending the time period to comply.

Short Sale Steps

Short sale investors may be able to spot potential delay tactics merely by asking if the seller is entertaining other offers; be cautious when working with a seller that seems minimally concerned with the details and overly concerned with obtaining a written offer of any type. While it could simply be an indication of a motivated seller, it may also be a play designed to keep the stream of offers rolling in while they are busy at work elsewhere.

Some short sale investors have the opportunity to actually review paperwork held by the seller. If you are fortunate enough to do so, keep an eye out for glaring inconsistencies which could trigger a protracted dispute. The last thing you need to become involved with is an extended closing or convoluted scheme designed to keep the seller in a home rent free while your time and money is tied up with a trip to nowhere.

Learn how to qualify and quantify your positions. Just like any good investor, short sales should have a time and profit potential in mind prior to actually making an offer. Use deadlines and escapes clauses to your benefit in order to maximize returns and minimize headaches. Sweeten the pot by offering a few hundred dollar reward for a quick closing or negotiate other items important to the seller and/or bank to get the deal done in a timely manner. Don't be afraid to think out of the box but avoid unnecessary complications that could become a stumbling block in their own right.

Loan modification program starts

The Treasury Department announced that the first six participants to sign up for

President Obama's loan modification program are JPMorgan Chase, which will get

up to $3.6 billion in subsidy and incentive payments; Wells Fargo, $2.9 billion;

and Citigroup, $2 billion. The others are GMAC Mortgage, $633 million; Saxon

Mortgage Services, $407 million; and Select Portfolio Servicing, $376 million.

A statement issued by Wells Fargo said, "We view this modification program as

yet another incremental opportunity for thousands of homeowners to preserve and

maintain the dream of homeownership." Left unsaid is the fact that now the

second wave of foreclosures will begin, as banks decide which loans are worth

trying to save and which are not.

Details of the loan modification program

Only loans where the cost of the foreclosure would be higher than the cost of

modification will qualify. The modification plan calls for the bank to reduce

interest rates so that the monthly obligation is no more than 38% of a

borrower's pre-tax income, and the government would then kick in money to bring

payments down to 31% of income. Mortgage servicers (banks and mortgage

companies) can also reduce the loan balance to achieve these affordability

levels, and the government will share in the cost of the reduction, up to the

amount the servicer would have received if it had reduced the interest rates.

Treasury will not provide subsidies to reduce rates to levels below 2%. In

addition to subsidizing the interest rates, servicers will use Treasury funding

to pay for incentives for themselves, homeowners, and investors. The program

gives servicers $1,000 for each modification and another $1,000 a year for three

years if the borrower stays current. It will also give $500 to servicers and

$1,500 to mortgage holders if they modify at-risk loans before the borrower

falls behind. Homeowners will even get up to $1,000 a year for five years if

they keep up with payments. The funds will be used to reduce their loan

principals.

Short Sales are growing...work with us!! See you on the other side!!

Charles Gardner

Real Estate Investor, Short Sales and Loan Mods

Shortsales@humble-homz.com

http://humblehomz-re-solutions.com/profit.aspx

Subject: Getting a Loan Modification

Thousands of homeowners are turning to loan modification as a way to overcome mortgage difficulties brought on by the troubled housing market. It's a great option and if you think you may be in trouble, it's something you should strongly consider. Getting a loan modification, though, is no easy task.

Use a loss mitigation company to negotiate on your behalf.

While it is possible to negotiate directly with your lender, it is generally not recommended.
There are many pitfalls that can cause your modification attempts to go awry. You'll want to apply for loss mitigation with a professional company that will ensure everything is done right.

The reason it's so important to strictly follow the lender's process is that they need to make a sound business decision. As such, they are going to review everything about your financial situation and whether or not modifying the loan will actually result in you successfully making payments in the future. If something is done wrong, it can kill your chances.

What you'll need for the process

A good loss mitigation company is going to have a process in place that they know works.
They'll have a package for you that will include such things as a financial worksheet, hardship letter template and a checklist. Trying to put all this together on your own without knowing exactly what's needed can be a nightmare.

You'll also need to gather certain documents such as W2s, bank statements and tax returns. Make sure you are given a checklist that helps you keep track of everything you need.

What happens once your loan has been modified?

A loan modification is permanent. A new contract is drawn up with the revised terms and you and the lender will be expected to adhere to the new conditions.
http://humble-homz.com/loanmod.aspx

What's Better - Short Sales & REO vs. Gold?

Historically gold has served as a store of value throughout most of history so it should come as no surprise it is a favorite among contrarian investors and those seeking a safety "hedge" against both inflation and deflationary pressures...but does gold really measure up to its reputation? Before putting their hard earned money into the hands of an ETF or placing big orders for bullion, short sale investors and others seeking real returns on their money would do well to evaluate the actual numbers - not just the hype. Let's begin by examining a few facts:

During the last bout of major inflation, the average price of gold went from $41 per ounce in 1971 to over $610 in 1980 before reaching a high of $875 per ounce. Today, gold is selling for approximately $900 per ounce...a mere 50 percent increase in 29 years. Adjusted for inflation gold would need to be selling for $2,000 to $2,500 per ounce in order to reach its former high's...clearly, not a solid investment for those seeking "safe" returns. On the other hand, in 1971 the average home sold for roughly $28,000. By 1980 the average selling price increased to roughly $75,000 and by 2006 the average American home was selling for over $240,000. Despite the recent downturn in the real estate market, homes are still selling (on average) for over $180,000.

To provide some perspective, in 1980 it required approximately 85 to 122 ounces of gold to purchase the average home in the United States whereas today you would need 200+ ounces of gold to purchase the average discounted home. Additionally, gold provides zero tax advantages when holding and depending upon the form, may be lost, stolen or require additional storage fees. On the other hand, real estate provides favorable tax advantages and may generate additional cash flow through rentals, leasing or sales of raw materials and assets included in the purchase price of the property.

Further complicating the issue is the advent of ETF's or other paper-backed gold proxies. Unlike taking physical possessions of gold, the use of ETF's, gold stock and other substitutes may allow investors to take advantage of leveraging to increase profits while eliminating much of the storage issues surrounding gold however, the resulting "I.O.U." negates much of the "safety" surrounding gold as an investment hedge. Real estate provides investors and opportunity to use leverage while taking physical possession of actual tangible assets - not merely some type of I.O.U. Even experts agree the amount of physical gold is nowhere near the sums required to fulfill even a fraction of the obligations currently outstanding; hence, the disparate trading between physical sales of gold versus paper gold sales in the recent months.

In summation, investors searching for tangible assets with real rates of return would do well to turn to short sales above gold especially during uncertain economic times.

See you on the other side!

http://humble-homz.com/benefits.aspx