Paul & Jerri Stracener

Mr. Merca of Bethlehem decided to help his daughter buy a home in 2006. He got a 80% loan with a 20% second to cover the down payment and avoid the additional cost of Private Mortgage Insurance. His daugher and her husband made the montlhly payments, and loved their new home. It was a great place for their two children and they became friends with other families in the neighborhood.

All was well until the couple lost their jobs in December 2008. They didn't know what to do. It was so important for her to save her father's credit, yet they had no money to continue making the monthly payments. She did a lot of research and found out that help would be available to them through the East Athens Housing Authority. They offer counseling for HUD including loan modification or to determine the best option to avoid foreclosure.

In this case, there was no income and no assets to fall back on. The daughter was told to put the house up for a short sale. This was necessary since her father had paid $165,000 for the home and the house next door (HUD foreclosure) had recently sold for $110,000. Angie Wilkinson of East Athens Housing Authority referred her to me.

The process was a little slow to start. They were not sure if I would be able to help them or if they could trust me. It took about 3 weeks for me to get all documents that I needed. The problem was that the father didn't speak English so I was relying on his daughter to take the forms to him and get them signed. I had to have proof that he could not make the mortgage payments, which included getting copies of his tax returns, bank statements and pay stubs.

After the home was listed, the daughter got nervous that it would sell. She didn't know where they would go and didn't want to move the children from the home. Fortunately, she was more concerned about saving her fathers credit. We had several showings and had to reduce the list price from the original price several times. Finally, we received an offer and I submitted it to the 1st and 2nd mortgage holders.

The buyer was a first time buyer and didn't understand the process. She started to get nervous when we didn't hear from the mortgage company after about 3 weeks. I was calling weekly but couldn't get any response. Then, after 4 weeks, on May 26, I received a call that it was approved. I had to quickly negotiate with the 2nd mortgage company to get them to accept the offer from the 1st. We got approval from the 2nd mortgage holder on May 27 so we were ready to close.

The real shake up came when I was informed by the 1st mortgage company that they would not stop the foreclosure! We only had 5 days until the home would be "sold on the courthouse steps"! And, the buyer had not even started the loan process. She had gotten a "pre-approval" but nothing had been done to get the loan closed. She was ready to give up.

Fortunately, she was willing to switch lenders after I told her agent about a mortgage consultant that I work with a lot. Her name is Judy Adams with Bank of America. She is very dedicated and will work as hard as needed to get a loan closed. Everything fell into place... Judy met with the buyer until 10pm that night and submitted the loan to be processed. At 8:30 the next morning, I had a call from an appraiser to set up the appraisal inspection. We switched the closing to Athens attorneys, Quarterman & Hodson, and they were able to get the title work completed in record time.

The buyer had excellent credit so it was easy getting her approved. It was just amazing that it could all happen in such a short time. The last little surprise was that we had to close on Friday, May 29 before 2:00. The loan had to be paid off to avoid the foreclosure sale, which was scheduled for Tuesday, June 2. We closed 3 days after we got approval on the short sale.

The daughter of the owner was so relieved that her father will not have a foreclosure on his credit. The effects of a short sale can be corrected with two years of on time payments. It takes 5-7 years to get a foreclosure off of the credit report. And the family was able to find a much less expensive house to rent until they can get back on their feet, save money for a down payment and buy their own house.

We have been to Square One several times and every time has been wonderful! They have a terrific location, next to the Classic Center on Thomas Street in Athens.

There is outdoor and indoor seating. We always eat in the kitchen area because we enjoy watching the cooks preparing the meals. They are very efficient and one of the owners, Joe, is there checking every dish before it goes out to the customer.

The owners came here from Florida after successfully running a seafood restaurant there for 16 years. They turned that operation over to a manager and moved to Athens. It seems that several of the employees moved here with them. In my opinion, that says a lot about how the restaurant operates -- and its owners.

I may not have the story exactly right, but I do know that the food is delicious! Last night, I had the trout special. It was served with slightly spicy grits and steamed vegetables. Paul had another special that was just seafood (shrimp, scallops, swordfish) with a white wine sauce, served over a rice cake. I didn't try it because I was very happy with my trout but, he loved it.

On our last visit, we overheard a customer saying that he's been in Athens for 30 years and we've never had a good seafood restaurant, until now! This restaurant seems to have a steady flow of traffic every night, even during the summer months! Even though they always have plenty of customers, most times you will be seated right away. I'm pretty sure they take reservations too.

If you get the opportunity, try it. You won't be disappointed.

This article from the Washington Post today...

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/22/AR2009052201483.html

If home buyers are given a bridge loan to use as a down payment, this will certainly help many first time buyers be able to buy a home.

Here is an summary of the consequences of foreclosure, deed in lieu and short sale:

BUYING A HOUSE: A homeowner who loses a home to Foreclosure is inelegible for a Fannie Mae backed mortgage for a period of 5 years. A homeowner who successfully negotiates and closes a short sale will be elegible for a Fannie Mae backed mortgage after only 2 years.

INVESTOR: An investor who allows a property to go to Foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years. An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.

APPLYING FOR A LOAN: On any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 taht asks "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years? This will affect future rates. There is no similar declaration or question regarding a short sale.

CREDIT SCORE: Credit Score after Foreclosure may be lowered anywhere from 250 to over 300 points. Typically this will affect score for over 3 years. Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sales affect can be as brief as 12 to 18 months.

FORECLOSURE VS. SHORT SALE: Foreclosure will remain as a public record on a person's credit history for 10 years or more. Short sale is not reported on a credit history. There is no specific reporting item for 'short sale'. The loan is typically reported 'paid in full, settled'.

If you're behind on your mortgage payments, call us. We can help you decide to what to do. You may be able to negotiatiate loan modification, refinancing your loan or processing a short sale. Whatever you do, don't ignore the problem. We can help but the process takes some time. Call Jerri 706-296-4395.

I have just completed an intensive course on helping homeowners avoid foreclosure. It's the CDPE Certification and was offered to RE/MAX agents in Atlanta this week. It was 2 full days of instruction for handling bank negotiations for short sales (or pre-foreclosure sales) which can be used if other options to avoid foreclosure won't work for a situation.

I have worked with several owners and have been successful in negotiating short sales on several properties over the past year. However, after this course, I am even more focused on helping as many homeowners as possible.

So many owners just think there is no way out once they get behind of the mortgage payment. It is difficult to catch up but most lenders are more than willing to work with you to get the payments up to date. If there has been a hardship that makes it impossible to catch up, call me.

I have everything we need to make the negotiation go as fast as possible. There are many steps involved and lots of agents don't know how to handle short sales. I am proud to be a part of this group of Certified Distressed Property Experts and look forward to helping lots of families work out a plan and move forward with their lives.