Kathryn Davis

In a recent article I wrote on Google News I mentioned that some homeowners are choosing to have their homes foreclosed on and a percentage of those homeowners are doing what is called a buy and bail. And that I have seen this practice in Southern California in the Inland Empire and San Diego area. As I said in that article that this practice could be construed as mortgage fraud. I have had a lot of interest from my readers wanting to know more about this. I do not condone it, it is mortgage fraud! Buying and bailing requires you to lie about your finances, your standing with your current mortgage and if this new property will be owner occupied or not when obviously your current mortgage is an owner occupied. That is mortgage fraud. Mortgage fraud happens when a borrower withholds information -- such as a deliberate intent to stop making payments to another creditor -- or falsifies information -- either would cause the new lender to reject the loan if the lender knew about it. This is usually done by homeowners who have some money in the bank and are either unable to make their current high interest high amount loan and want a comparable home for a smaller loan or they can afford their payments but don't want to, or it is more rare to be a homeowner who is completely ignorant of this and thinks its ok to do and his loan agent doesn't advise him.

It's also fraud to lie on a loan application and produce false documents to the lender. The FBI defines mortgage fraud as "any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan."

If you are thinking about doing a buy and bail you should re-consider as if you get caught you might go to jail and pay a hefty fine for the fraud. This is something that we will be seeing in the papers banks will start prosecuting homeowners for mortgage fraud with the buy and bails. You have to remember there is a paper trail, this can be proven in court that a homeowner committed fraud. This has been happening in California I am sorry to say and I have personally seen some of it in my area, Riverside County. I do not advise doing this. As a realtor I know the ramifications and as a paralegal I really know the ramifications.

Well if anyone here reads my articles on FreeRateUpdate.com and Google News then this is no suprise as I have predicted this. Existing home sales dropped again almost 17%! We thought with the new home buyers tax credit sales would surge and we would be on the upswing of the housing crisis. That dream has been crushed. Sales overall are up from 2008 but are still no where near prices 4 years ago. The big question on everyone's mind is when are we going to finally be out of this mess? Well as I have said all along..... it depends on the unemployment rate. If people start regaining their jobs they can pay their mortgage, if they can pay their mortgage they don't lose their home! DUH! We know that there is another flood of foreclosures set to hit the real estate market due to ARM mortgages re-setting and the backlogged foreclosure inventory that the banks have been sitting on. This will bring prices down again and is expected for the 1st half of 2010. Washington is expecting states to make more budget cuts and cut more government jobs this will hurt homeowners as well, 2010 will not be a good year for some. It will probably take another year before we see the light at the end of the tunnel but we won't be where we were in 2005 and 2006 until around 2020 or later

I have had the pleasure of meeting with HELP founder Chris Sorrenson a few times and I am pleased to promote his program!

For those of you who don't know, HELP- Homeownership Education Learning Program is backed by Riverside County, a non profit organization aimed at educating homeowners on their foreclosure options, how to buy REO's, short sales and the ever changing real estate market and trends. They also have a program aimed at educating and certifying realtors in the latest information, and true working foreclosure options for homeowners. HELP has strict guidelines and standards for the agents who go through their 2 day program. Being a HELP certified agent will put you above the rest! Homeowners interviewing agents will know that with a HELP certified agent they will get the best out there.

I am 110% behind HELP. I believe that it is our duty as realtors who have specific and inside information to the market to educate homeowners who may be facing foreclosure what their true options are! There are so many greedy scam artists out there who are preying on these vulnerable people and families and it is wrong. If homeowners have knowledge then they have power! Power to see through the scam artists lies, power to say no to the mortgage lender who wants to foreclose, power to take the power back in their lives!

Can you stand to sit by and continue to watch family after family be scammed or lay down and let foreclosure run over them? I can't maybe it's because I cheer for the under dog, but I like giving people hope, and arming them with desperately needed information. I like being a trusted advocate in the community.

If you would like information on HELP's next agent certification class be sure to email me and I will be happy to help sign you up. :)

email- kdavisrealestate@yahoo.com

and to check out HELP for yourself go to www.freehomeownershiphelp.org

This really is a GREAT program!!!

I have had quite a few homeowners ask me if they do a Loan Modification how and will it show or affect their fico. Well after doing some research here is my answer.

FICO credit scores are calculated from information in consumer credit reports. How or if a loan mod affects a person's fico score really depends on the mortgage company and how they choose to report the event to the credit burear, as well as the individual's overall credit profile. It also depends on how far behind in payments the person is as well, if they are 3 or more months behind in their mortgage you can bet that the mortgage lates will be on that credit report and damaging their score. Sometimes in a successful loan modification I have seen mortgage lenders agree to remove the lates from the homeowners credit report which is a huge help to somone with a 620 credit score get back to 650 or 700. So it isn't so much the loan modification that affects the FICO score it is the late payments. And as I said, I have seen lenders agree to remove the lates from credit reports, but not all and not all the time for every loan modification.

According to CNN Housing prices are "flattening out"

NEW YORK (CNNMoney.com) -- Home price gains earlier this year flattened out in October, according to a report issued Tuesday.

Those of us in the real estate business here in Southern California especialy where I am in the Inland Empire have seen that prices are all over the place. We have more buyers then we have active inventory right now. Anyone working with buyers knows that REO's have multiple bids, standard sales have multiple bids, short sales have multiple bids (however I have noticed the shortsales have a smaller amount)

However with the end of 2009 there will be another spike in the amount of foreclosures as many ARM (adjustible rate mortgages) will be adjusting to higher rates and re-setting. A great deal of those homeowners with ARMS will find it difficult to make this new interest rate. Experts say that this new wave of foreclosures will be a strong wave, but not nearly as bad as 2007. We will see. Short sales I suspect will continue to be strong in this martket.

My wish is that homeowners are more wise and won't fall for as many foreclosure scams that are out there.

To really arm and protect yourself as a homeowner you need to consult 3 professionals,

Realtor

Attorney

CPA