John Newman

Let me first state that neither I nor Keller Williams Realty are advising homeowners to default on thier mortgage and homeowners should consider the legal, tax and financial consequences of doing so.

In a research paper written by Brent White, Associate Professor of Law, University of Arizona, Mr. White makes an argument as to why it makes sense to walk away from your mortgage. Mr. White makes some interesting points:

• Homeowners do not walk away due to shame and guilt associated with foreclosure and perceived fear of the consequences of foreclosure, even when those consequences are in actuality much less severe than most homeowners have been lead to believe.
• As of June 2009, more than 32% of all mortgaged properties in the U.S. were "underwater", meaning that the homeowner owed more on their mortgage than their home was worth.
• Mr. White, makes the argument that "Millions of U.S. homeowners could save hundreds of thousands of dollars by strategically defaulting on their mortgage." "Homeowners should be walking away in droves. But they aren't"

Wow, this is a gutsy article you can view the abbreviated version at http://blogs.wsj.com/developments/2009/10/30/its-ok-to-walk-away-a-law-professor-argues/

View my Short Sale Blog!

I just read an interesting article inthe Baltimore Sun about the magnitude of foreclosures in MD. Here are a couple of quick facts:

• 163,479 Foreclosures Projected 2009-2012
• Foreclosure starts up 470% from 2006
• Lost Home Equity Wealth $1.9 Trillion
• 134,923 Families behind on Mortgage as of the end of June

These estimates come from the Center for Responsible Lending in a September 2009 report. Now also think about this, these numbers do not take into consideration an increase in Unemployment or the number of Strategic Defaults that are becoming more common.

As taxpayers it is our duty to do what we can to stop these foreclosures, at the end of the day, WE WILL BE THE ONES PAYING FOR IT! If you know someone who may be at the end of their rope, through them a lifeline and have them contact me, a Short Sale may be an option.

Before I get into the meat of this blog, let me first preface this by saying that I am not an attorney, do not practice law, and am not a member of a bar association. THEREFORE I CANNOT GIVE LEGAL ADVICE.

A short sale negotiation is actually a pretty simple concept, a homeowner needs to present a logical, and compelling case to a lender that a "short sale" will be financially beneficial to them, it's that simple. In my opinion, the bank really is not concerned as to WHY you want to short sale a home. A LENDER WANTS TO KNOW THAT BY SHORT SELLING THE HOME THE LENDER WILL AVOID FURTHUR LOSSES. Lenders are terrified right now. The same government that was asking them to LEND, LEND, LEND is now asking them to prevent foreclosure, prevent foreclosure, prevent foreclosure for the same people they were pressured to lend to?????? The banks are aware that NO ONE really knows exactly how many foreclosures are looming, but we all know that as home values decline the number of foreclosures increase.

Back to the negotiations, prepare a financial analysis showing the bank WHY they make MORE MONEY and you will be on your way to a successful short sale.

FREE REPORT TOP 10 SHORT SALE NEGOTIATION TIPS.

According to RealtyTrac, one of the leading foreclosure tracking companies, in the 3rd quarter of 2009 there was 1 foreclosure filing for every 157 households in Maryland! I REPEAT 1 FORECLOSURE FOR EVERY 157 HOUSEHOLDS! To put it in perspective, the average person has 130 FACEBOOK friends so basically if you have a FACEBOOK account YOU KNOW SOMEONE WHO IS GETTING READY TO LOSE THEIR HOME! Maryland ranks in the top 15 states for the number of foreclosure filings, and the number of filings is up more than 50% from the 2nd quarter of this year and more than 80% from the 3rd quarter of last year. Don't let your friends, family or neighbors become a statistic, have them give me a call as a SHORT SALE may be an option.

view the Realtytrac article at

http://www.realtytrac.com/contentmanagement/pressrelease.aspx?channelid=9&accnt=0&itemid=7706

Well, I thought the title would get your attention, but the truth of the matter Short Sales are not simple. However, they are becoming easier and more prevalent in the Anne Arundel County, MD market. It seems as if every servicer and/or lender has their own set of guidelines and once you have these guidelines, FOLLOW THE RULES! Also, make sure that you document all of your conversations with the names of the individuals you have spoken to. I have found that in the middle of a transaction a lender may assign another negotiator or case worker. Also, when listing a short sale, have your investor clients write an offer! This will get the short sale process started, BPO ordered, and negotiator assigned. If the bank accepts the offer, it is a win/win for everyone. If not, you will have a basis for listing the property. Short sales will be here for a while, so get used to them and be informed. Your clients will really appreciate you when you have helped them stop foreclosure, sold their property, and had the bank forgive the debt.