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Areas of Expertise

Foreclosure Solutions

The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to Baltimore-area residents for foreclosure are many. Following is a brief explanation of these solutions, including their benefits and drawbacks:

Reinstatement
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.

• Benefit: Does not require the mortgage company or lender's approval.
• Drawback: Requires that a homeowner be able to pay all back payments, fines and fees.

Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

• Benefit: Allows the homeowner to make back payments over time.
• Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Some mortgage companies will require a homeowner to 'qualify' for forbearance.

Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

• Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan
• Drawback: Requires that a homeowner 'qualify' for the new payment and will often require full documentation. Lender has to be actively pursuing modifications.

Rent the Property
A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, is able to convert their property to a rental and use the rental income to pay the mortgage.

• Benefit: Allows homeowner to keep property indefinitely.
• Drawback: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

• Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
• Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Bankruptcy
Many have considered and marketed bankruptcy as a 'foreclosure solution,' but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

• Benefit: Does not require lender approval.
• Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall-not stop-the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Refinance
If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

• Benefit: In some cases, this will lower payments.
• Drawback: In today's market, a refinance will almost always raise mortgage payments, and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)
If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

• Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.
• Drawback: Must be active military to qualify.

Sell the Property
Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

• Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.
• Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

• Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).
• Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Please call me today for a free confidential evaluation of your individual situation, property value, and possible options.

Do I qualify for a short sale?

The qualifications for a short sale include any or all of the following:

1. Financial Hardship - There is a situation causing you to have trouble affording your mortgage.
2. Monthly Income Shortfall - In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
3. Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

What is a mortgage modification?

A mortgage modification is a process through which your mortgage lender changes any or all of the following:

• Your interest rate
• Your principal balance (through a reduction)
• Your loan terms (example: from an adjustable to a fixed rate)

This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.

Why would a lender modify my mortgage?

Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.

What do I need to qualify for a mortgage modification?

According to the Making Home Affordable Web site (www.MakingHomeAffordable.gov), you will need the following information for your lender to consider a modification:

• Information about your first mortgage, such as your monthly mortgage statement
• Information about any second mortgage or home equity line of credit on the house
• Account balances and minimum monthly payments due on all of your credit cards
• Account balances and monthly payments on all your other debts such as student loans and car loans
• Your most recent income tax return
• Information about your savings and other assets
• Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources

If applicable, it may also be helpful to have a letter describing any circumstances that caused your income to reduce or expenses to increase (job loss, divorce, illness, etc.)

How do I qualify for a mortgage modification?

The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):

• Loss Mitigation
• Mortgage Modification
• H.O.P.E.

Prior to contacting your mortgage lender you can quickly complete an eligibility test at www.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage lenders and servicers, visit www.HopeNow.com.

What if I don't qualify for a mortgage modification, can't afford my home, and owe more than it's worth?

You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Agents like me, with the Certified Distressed Property Expert® Designation, have undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Speak to your market expert to see if you may qualify.

What is a Home Affordable Refinance?

If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.

What are the qualifications for a Home Affordable Refinance?

According to the resources released by the government, following are a list of qualifications:

• You are the owner occupant of a one- to four-unit home
• The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)
• At the time you apply, you are current on your mortgage payments (you haven't been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
• You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
• You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your

Not All Real Estate Agents Are Qualified Short Sale Experts

Here are 10 questions to ask your real estate agent before you sign on the dotted line...

1.Can my real estate agent explain the short sale process to me?

2.How do I know if my property will qualify for a short sale?

3.Does my real estate agent know what information I will need to provide to the lending institution?

4.Does my real estate agent know what "hardship" categories qualify me as a short sale candidate with the lending institution?

5.Does my real estate agent know how to create an effective short sale strategy?

6.Does my real estate agent have prior experience and specialize in working with homeowners and lending institutions to create a short sale transaction.

7.Does my real estate agent know how to market my home since efficient timing is essential.

8.Does your real estate agent know how to price your home?

9.Does your real estate agent have a pricing/marketing campaign for 14/30/45days?

10.How do you know if you are really comfortable with the real estate agent the you are selecting?

1. Can my real estate agent explain the short sale process to me?

Answer: The Baltimore Short Sale Team is a group of qualified short-sale real estate specialists. We can clearly and logically help evaluate your situation, explain in detail the short-sale process, and create a strategy.

2. How do I know if my property will qualify for a Short Sale?

Answer: The Baltimore Short Sale Team knows the specific guidelines and understands the short sale process so that your property can be accurately evaluated to address your specific situation.

3. Does my real estate agent know what information I will need to provide to the lending institution?

Answer: The Baltimore Short Sale Team will be able to ask the right questions and provide you with the appropriate paperwork to begin the process of creating a short sale package for the lending institution to review your current financial situation.

4. Does my real estate agent know what "hardship" categories qualify me as a short-sale candidate with the lending institution?

Answer: There are very specific categories that lenders consider as "qualified hardships." The Baltimore Short Sale Team will be able to review your situation and inform you of the different types of hardships that most lenders consider "acceptable."

5. Does my real estate agent know how to create an effective short-sale strategy?

Answer: A short sale will only be accepted by the lending institution if both your property and you meet the lending institution's guidelines. With the knowledge and expertise of The Baltimore Short Sale Team, every effort will by made to ensure that you have all of the necessary elements documented to qualify for and complete a short sale.

6. Does my real estate agent have prior experience and specialize in working with home owners and lending institutions to create a short-sale transaction?

Answer: This type of transaction has become a real estate niche. The Baltimore Short Sale Team has specialized knowledge and understands the systems required to be successful. As REO Specilists we deal with banks, loan servicers and asset managers on a daily basis. You can be sure that you've selected a firm with previous experience and expertise.

7. Does my real estate agent know how to market my home, since timing is essential?

Answer: The Baltimore Short Sale Team has specialized tools for selling your home, including the MLS (Multiple Listing Service), cusomized websites, bus tours and caravans, open houses, market flyers and brochures. Again, because timing is so crucial, we know about advanced technological services and know how to apply them to the sale of your home. Our specialty advertising includes: toll-free hotlines, fax-on-demand marketing, and 24-hour access to information on your home.

8. Does my real estate agent know how to price my home?

Answer: The Baltimore Short Sale Team understands the current market conditions and how the market is affecting home sale prices. We will be able to back up our assertions with solid proof by obtaining a comparative market analysis to include three items: the listing and selling prices of homes in your area, a description of comparable homes, and the length of time the homes have been on the market. This gathered information will give you confidence that your home's proposed market value is set at an accurate pricing range.

9. Does your real estate agent have a pricing/marketing campaign for 14, 30, and 45days?

Answer: If your home isn't seeing much interest by prospective buyers after 14 days, the Baltimore Short Sale Team will promptly be able to provide you with a list of things being done on a regular basis to generate activity. We will provide you with a "Weekly Status Gram" communication vs. you having to continually request updates and make suggestions as to how to sell your home. The Baltimore Home Team has the professionalism and expertise in the short sale market.

10. How do I know if I am really comfortable with the real estate agent I am selecting?

Answer: This is a great question to ask yourself. We have all had times where we went along with a decision because of pressure but knew it wasn't the right choice. Ask yourself if you trust The Baltimore Short Sale Team and more importantly, if you feel confident in the way we conduct business. We are happy to provide references so that you can be educated with our skill level and expertise in selling your home as a short sale. You are dealing with a very emotional issue...selling your home. Make sure you are making good business decisions during this trying time. If you decide what we have to offer is not for you, then we'll walk away with no pressure. Fair enough?

Aaron Rice, CDPE, CRS, GRI, SHS

Baltimore Home Team

Keller Williams Realty

3301 Boston St. Suite 200

Baltimore, MD 21224

443-244-0051 Cell

aaron@baltimorehometeam.com

www.AaronRiceHelps.com

Fan Mail

8/7/10

Aaron,

Good to hear from you again. I hope things are going well for you. I truly enjoy your newsletters or blogs or whatever you want to call them. Keep up the good work.

7/24/10

Aaron,
I am grateful for your willingness to share this wealth of information with us. Tony Martinez was right when he assured us that we would be in good hands by attending your class.

N. Rodriguez, Franchise Manager CASA Latino Real Estate

7/21/10

Aaron,

I wanted to say thank you again for the CDPE course you just taught in Fairfax, it far exceeded my expectations. Your personal insight into and perception of the way things work now was very helpful and encouraging.

G. Dean, Realtor

7/20/10

Aaron,

This is great news! Thank you for all of your hard work! I am very grateful and blessed for having a team of knowledgeable and professional folks to help me in this endeavor. Sincere thanks,

N. Washington, Distressed Seller

6/24/10

Dear Mr. Rice:

Hello. I have received the follow-up emails that were sent to me, both last week and today.

I appreciate all the work that you and your staff are doing and the feedback responses.

Thanks

R. Rodriguez, Distressed Seller

6/17/10

Thanks for all your training, and more importantly, the inspiration!

S. Jarrott, Realtor

6/9/10

Hi Aaron,First of all I want to Thank you for all the information you shared with us about Short Sales and much, much more. I left with a Great attitude towards work and eager to start my marketing with Fidelity National Title and most important help people out these terrible situations. I learned so much. Thank You!

D Martinez, Realtor

6/1/10

I've looked at your sites and found them to be very informative. I think that every once in awhile we should let people know how much we appreciate their service to the world. From the classes offered, to the market trend info, to simply being an excellent example of an all around good man, it's all good stuff! By the way, I think your marketing skills are phenomenal as well. Even though I don't know you, I believe we need more people in the world like you. Oh, and I just love the Keller Williams slogan "Giving, sharing, helping", it says allot.

M. Martin, Baltimore City's Department of Housing and Community Development

5/24/10

Thanks Aaron. Depending upon what happens today with the townhouse I applied for, I will get movers for June 3rd with the place cleaned out on June 4th. Is this within the time frame Litton has set? You and your team have been life savers!

M. Matthews, (Short Sale-Seller)

5/20/10

I acknowledge receipt of this expeditious approval from SunTrust and will forward it to my client as soon as I complete this email.

It was also gratifying to note that the bank is paying a 6% commission to the Realtors instead of the published 2% for the selling and buying Realtors respectively on MRIS!

I'm assuming Aaron worked some "magic" to secure this much-needed and deeply appreciated commission increase for us from the bank. Bravo Aaron!

Kofi O, Realtor

5/13/10

Hello, Aaron. It was such a pleasure to be in your class. I thoroughly enjoyed it. I went home with my brain spinning from all the new ideas. Now it's just a matter of implementing those ideas. That's the hard part, right? I appreciate your effort and the time you took to teach the class.

K. Hallman, Realtor

3/2/10

Hi Joshua,

First let me say thanks for the opportunity to reside at Madison St.. Trina, Aaron and the rest of the staff that I encountered at Keller Williams have been refreshingly wonderful, helpful, friendly during this process. Kudos to them.

J. Solomon, Tenant

3/5/10

Good Evening,

How do I go about the renewal for CDPE please? My income doubled within 6 months! I am currently partnered with my broker to handle all of our short sales and have a very high success rate! I am currently working on 4 files this month and expect to do twice the business I normally do thanks to the class I took with you as a speaker!

D. Lane, Realtor

3/3/2010

Hi Aaron,
See you at class today - excited to take it..
My world is ROCKING since I started working with you - I LOVE it,

P. Gettier, Realtor

2/24/10

Good afternoon Aaron,

Thank you for getting back to me quickly yesterday and today. I feel that I'm on the right track to resolve this housing issue.

Have a successful day!

M. Black

2/18/10

Aaron Good morning,

This is O. Hill, I am one of the agents who attended and completed your CDPE February 16th and 17th class in Upper Marlboro, MD. I wanted to take a moment to thank you greatly, for the wealth of knowledge, education, enthusiasm, compassion, and understanding that you brought to this two day course. It was very helpful to me that you have so many years of know how in this business. You seemed to be ready and prepared for the litany of questions that my fellow agents had, for that I am eternally grateful, there is nothing more frustrating than attending a class when you can tell that the instructor/ facilitator is not very knowledgeable in regard to the subject matter or isn't a practitioner. I thank you for also being so completely forthcoming with all of the information on internet advertising that is available at no additional cost to us. I want you to know that I will be keeping in contact with you so if ever I become a pest let me know.

I thank you so very much for you being you. Make today a great day for you Aaron you truly are a real estate rock star.

Thanks

O. Hill, Realtor

2/22/10

Aaron:

Thanks for the information. I look forward to working with you.

S. France, Realtor

2/23/10

Aaron,

What a great calendar.. Thank you for your commitment. It's a real pleasure to work with you.

P. Gettier, Realtor

2/5/10

Aaron, Thank you for the opportunity participate in the CDPE courses. I appreciate the opportunity to interact with the realtors and brokers working to solve the foreclosure crisis.

M. Frazier

2/18.10

Hi Aaron, Don't expect you to remember me but suffice it to say that I was in your CDPE class on Feb 17th. Since you were kind enough to offer giving us "stuff" if we sent you an email to remind you, consider this a request for the following:

1) Copy of weekly StatusGrams

2) 101 Ways to use Virtual Assistants

3) Forgot what you called it - it's your Attack Plan (Marching Orders?

Yikes, truly forgot and I can't read my notes!)

My colleague (G. Shikwa) has already signed up for the Advanced Version and is planning to join you for the Phone Rescue Workshop tomorrow.

We are part of a team and have already told our other team members to get certified ASAP! Best $600.00 I ever spent.

Cordially, M. Gilbert, Realtor

2/26/10

Hi Aaron.

What a great class today.

Would Monday be good for a coaching call?

Thanks!

H. Kelbaugh, REALTOR

2/26/10

Hi Aaron, Thank you for a very informative seminar this afternoon. I wanted to register for the CEPE Certification Course on March 23-24.

Best regards,
L. Scott, Realtor