Mike Sikorski,MBA,GRI

A very effective method of selling real estate in a buyer's market is to consider offering owner financing, which can offer both the buyer and seller many benefits in the selling and financing of real estate.

Unlike many seller's who may end up giving a deep discount to sell their property outright, owner financing will likely allow the seller to sell their property at a fair price, plus could provide additional income in the form of monthly payments that could either help pay the debt service on their property or go right to the bottom line, potentially adding more dollars to the sales price over time. The buyer's benefit by securing a property that can help them establish or re-establish credit that over a period of time can help them secure a low interest mortgage loan and receive potential tax benefits as well.

Unfortunately, very few property sellers consider offering owner financing simply because of the complexities involved, which include what types of financing to offer, how to qualify potential home buyers, what documentation to ask for, and so on. There are many financial and real estate professionals who offer their services to help sellers get all of the information and documentation necessary to successfully secure owner financing for themselves and their buyers.

There are several types of owner financing currently available, and depending on the seller's current circumstances will determine what type of owner financing they can offer to a potential buyer. The most common types of owner financing available include a Land Contract, Agreement for Deed, Contract for Deed, Lease with Option to Purchase, and a regular promissory note secured by a mortgage.

If a property seller owns their property free and clear, meaning no mortgages are currently secured by the property, the seller can choose any of the financing options listed above. If however, the property seller currently has a mortgage on their property, they are limited to offering all of the financing options listed except for the note and mortgage loan, unless of course the seller can pay off their mortgage and replace it with a seller held note and mortgage. These other financing options could be considered a wrap around mortgage, which encompasses the seller's existing mortgage with the additional loan amount which is based on the sales price and the down payment.

Before a seller and/or buyer considers getting involved with an owner financing arrangement, several steps must be taken and full disclosure from both parties must be acknowledged to fully understand each parties responsibilities to the real estate transaction. The buyer needs to be fully aware that the seller is in a position to offer owner financing, and is not experiencing any financial difficulties with their own mortgage. As for the seller, they need to know that the buyer will be in a position to get their own mortgage in the near future, and eventually purchase the home outright. Depending on the buyer's circumstances regarding their income and/or credit, the exact term of the owner financing must coincide within the timetable necessary for the buyer to complete the sales transaction.

Therefore, it is highly recommended that both buyer and seller seek professional advice to make sure that any type of owner financing that is considered will work for both buyer and seller. This advice can be very inexpensive to both buyer and seller, and can save a lot of headaches later.

Owner financing is a tremendous tool for sellers to help them sell their home quickly and at a better price and could potentially add income benefits as well.

For free information on the benefits of owner financing for both the buyer and seller, please call 941-206-6000.

Mike Sikorski, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Email Mike@FloridaRealty.net

Web site www.FloridaRealty.net

Financing the purchase of a home is getting more difficult these days, especially for those consumers who may have recent or past credit delinquencies in their credit file.

Credit score requirements by most mortgage lenders are changing on a weekly basis, requiring no less than a 580 middle score from the three credit repositories: Transunion, Experian, & Equifax.

Many of the loan approvals issued by banks and mortgage lenders over the last several months have failed to close due to these changes in the credit score requirements, leaving many potential homeowners without the means necessary to finance their home purchase.

In years past, banks and mortgage lenders had the ability to finance home purchase for consumers with low credit scores, recent delinquency and even a recent bankruptcy. Well, those are long gone, with the large number of foreclosures around the country as evidence of substandard underwriting of consumers with low credit scores.

Today, thousands of consumers with credit issues still choose to shop for a home first sign a purchase contract for a home they think they can afford, and then take their chances of securing financing with a bank or mortgage lender.

I still find consumers with credit issues armed with a purchase contract, running from bank to bank, mortgage lender to mortgage lender, scrambling to find someone to finance their home purchase. In most cases, they fail to get their financing, fail to get their home, and could likely lose the deposit on the purchase contract.

Here are some tips on helping you to deal effectively with your credit issues:

*Get a FREE copy of your credit report from all three credit repositories. All three credit repositories (Transunion, Experian, & Equifax) allow consumers one free credit report per year. Other firms such as www.FreeCreditReport.com can provide you with additional services such as credit analysis and helpful information on improving your credit.

*Use Your FREE Credit Report When Shopping For a Mortgage. Mortgage lenders are anxious to see your credit report, especially your credit scores. Bring the free credit report to your loan officer when you first apply for a mortgage. The information contained within your free credit report should provide sufficient information for the loan officers to determine if your credit works within their own underwriting guidelines. A competent, experienced loan officer will easily understand the information on this report. If a loan officer insists on ordering his or her own credit report on you before committing to a loan approval or denial, consider applying with another bank or mortgage lender. Needless inquiries into your credit file can lower your credit scores as well as decrease your chances for a loan approval.

*Get Approved For Financing BEFORE You Sign A Purchase Contract. Knowing how much you can afford in terms of loan amount and the monthly loan payment is most important. Signing a purchase contract for a home without first knowing that you can afford to purchase the home will not only create disappointment for you, it could also obligate you to purchase the home anyway, depending on the legal verbiage of the purchase contract. Knowing how much you can

*If Your Loan Request is Denied, Work diligently to fix your Credit Issues. Deal with your credit issues by contacting creditors directly to clear up the delinquencies. Consult with a credit counselor about payment plans that can help you re-establish a payment history and even help to re-establish your credit. Consumers with serious credit issues should consider consulting with an attorney who specializes in bankruptcy.

Working to correct credit issues will make it easier to secure better financing options when you are ready to purchase a home. Choosing to ignore your credit issues when applying for a mortgage loan makes it less likely you will get the financing you desire. With increased credit standards asked for by most mortgage lenders, ignoring credit issues to today will certainly diminish your chances of securing financing in the future.

Mike Sikorski MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

(941)206-6000

Mike@FloridaRealty.net

Question: What do you get when you combine a dishonest mortgage broker, dishonest title agent, and a dishonest real estate appraiser? Answer: heavy fines as well as a lengthy prison sentence!

Law enforcement officials and government regulators are cracking down hard on people involved in all aspects of the real estate business who commit or conspire to create fraudulent mortgage loans as well as illegally obtain mortgage loans, which ultimately costs tens of billions of dollars to both mortgage lenders and consumers each and every year.

Recently, Federal agents in both Miami and Anchorage, Alaska have charged numerous people with scheming to defraud banks and mortgage lenders out of millions of dollars in illegally obtained mortgage loans. These individuals include home sellers, so-called ‘straw' buyers, real estate agents, title agents, real estate appraisers, bank employees and mortgage brokers, all d in the purchase & sale of properties using inflated real estate appraisals, fraudulent loan documents, as well as inflated mortgage loans, allowing these people to pocket millions of dollars. Kickbacks and bribes were paid to cooperating home sellers with the remaining individuals earning illegally obtained commissions in their respective professions.

These various individuals are now facing charges of mail fraud, bank fraud, wire fraud, money laundering, as well as giving false statements (e.g. signing loan documents you know to be false!), with penalties involving lengthy prison terms as well as millions of dollars in fines. The home sellers themselves are also faced with these same charges.

In these particular cases, the persons involved seem so far away, especially with Anchorage Alaska thousands of miles away from Florida. Yet you may not know it, but mortgage fraud has occurred right here, in our own back yard!

Numerous homeowners in and around our community as well as nationwide have obtained fraudulent mortgage loans to either purchase a home or refinance the mortgage on their current home, who under normal circumstances would have never received a mortgage loan of the amount they did. As a result, many of these same homeowners are now facing the very real prospect of losing their home to foreclosure.

Recently, I have personally spoken with well over 100 homeowners in and around our community who have disclosed some rather unorthodox methods of purchasing and financing real estate, all of which was accomplished with the aid of some very unscrupulous mortgage brokers, mortgage bankers, title agents, real estate appraisers, and yes, even real estate agents. In almost every case, each of these homeowners has obtained a mortgage that would never be approved by an honest mortgage loan underwriter. Each homeowner had debt to income ratios that almost doubled what a conventional mortgage loan underwriter would find acceptable. Each of these homeowners had fully documented income sources, with no job or income changes since their loan was first obtained. You may be asking yourself, how could this happen? How can someone get a mortgage loan they know they cannot afford, and yet somehow still qualify for what amounts to be a very unaffordable mortgage loan? Mortgage fraud, pure and simple.

These days it seems mortgage fraud is involving more than the usual suspects. Now the actual home owners and home sellers are getting involved, perhaps not realizing that their involvement alone subjects them to the same scrutiny of that of anyone else involved in a fraudulent transaction. Falsifying income tax returns, creating pay stubs, and conspiring with others to re-create an income or credit history is being accomplished by real estate professionals, mortgage professionals and consumers alike, all in the effort get something that you would normally not qualify for.

The current mortgage and real estate crisis we are now faced with is definitely giving pause to many, especially those faced with losing their homes to foreclosure. However, those people involved in many of these mortgage loans that were obtained fraudulently should be more concerned about how they may be judged in the near future, should they get caught being a party to mortgage fraud.

There is no home or mortgage loan you must have that means having to commit mortgage fraud to get it. One can only hope that seeing this mortgage and real estate crisis first hand will cause them to think twice about being a party to mortgage fraud.

Reading articles like this one about mortgage fraud is one thing; actually reading the headlines of the arrests & indictments of people within their own community and seeing the names of the actual individuals facing serious prison time has to be a real wake up call. Let's hope everyone wakes up today, and realize that the mortgage fraud you commit today may end up costing you your freedom tomorrow.

Mike Sikorski, MBA,GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Mike@FloridaRealty.net

How far will you go to get the dream home you have always wanted, or the lowest interest mortgage available? Are you willing to claim assets you do not have, or income that you truly cannot prove to be true? If so, you could be facing a lengthy prison term and a very heavy fine.

The moment you sign a loan application that contains fraudulent information as it relates to income, debts, or assets, you have committed mortgage fraud. Even if you are turned down for a mortgage loan, or if a mortgage loan does not close, you can still be subject to prosecution for mortgage fraud.

It is illegal for a person to make any false statement regarding income, assets, debt, matters of identification, or to willfully overvalue any land or property, in a loan and credit application for the purpose of influencing in any way the action of a financial institution. The Federal Bureau of Investigation investigates these crimes where individuals could face up to 30 years in prison, a $1,000,000 fine, or both.

The following are examples of what is considered mortgage fraud:

* Providing false names, addresses, and Social Security numbers.

*Providing fraudulent documentation regarding income, such as Federal income tax returns,

W-2's, 1099's, and pay stubs.

*Intentionally overvaluing assets or failing to disclose debts or other liabilities

Even the submission of a loan application to a bank or mortgage lender that contains fraudulent information is considered Bank Fraud; put the loan application in the mail to the mortgage lender, it becomes Mail Fraud; send the application to a mortgage lender by facsimile (fax) or email, it becomes Wire Fraud.

Dishonest consumers and unscrupulous mortgage brokers have been known to go to great lengths to get a mortgage loan by means of fraud, simply to get a lower interest rate or a higher loan to value mortgage loan. Sometimes consumers and mortgage brokers will work together to commit mortgage fraud, and a mortgage broker may decide to take it upon themselves to commit mortgage fraud. You may be an unwilling participant to mortgage fraud, but if you put your signature on a loan application that may be inaccurate or fraudulent, you are just as guilty as the mortgage broker, and you both could end up paying a very heavy price.

There is home for sale or mortgage you have to have that is worth to the lengths of committing mortgage fraud. There is an excellent chance that you could get caught committing mortgage fraud, even before a mortgage loan has closed. In fact, most instances of mortgage fraud are caught at the very beginning; at the time the loan application is made.

Banks and most mortgage lenders are highly trained to look for various types of mortgage fraud, by analyzing your loan application and income documentation, looking for red flags that could be some form of mortgage fraud. For example, the income tax returns you provide to a mortgage lender can be verified for accuracy through the IRS in as little as 48 hours, verifying the income you are claiming on the tax returns you gave the mortgage lender is the same as you are reporting to the IRS. The advent of computer software programs such as tax preparation & payroll software easily purchased at your local office supply store have given banks and mortgage lenders even more reason to scrutinize your tax returns, w-2's, 1099's, and pay stubs, looking to make sure everything is where it should be.

If your bank or mortgage lender catches you committing fraud, they may not even tell you about it. They could simply turn your loan application down and not say another word. It's when you get a knock at your door from an FBI agent or some other law enforcement official that you know you have been caught.

The best way to avoid mortgage fraud is to not be a party to fraud. If you apply for a mortgage loan, provide only accurate and truthful information from the start. Make sure the loan application that you place your signature on is truthful and accurate. The signature on the loan application is you attesting that the information provided by you is truthful and accurate. Make sure the bank or mortgage lender you choose is, honest, & trustworthy. Check references, question their experience in residential lending, and try to avoid overzealous mortgage brokers bent on getting you a mortgage loan at any cost. Even when you attend the loan closing, make sure the loan application you sign is truthful and accurate. Any information on the loan application that may be untruthful or inaccurate becomes valid at the time you sign that loan application. If there is incorrect information on the application at your loan closing, it is better to put the closing off until the loan application is corrected. It could possibly delay the loan closing from happening all together, but it could help avoid having to answer questions later, and save you from a lengthy prison term and heavy fine later.

There is no dream home or low interest mortgage you have to have if it means committing mortgage fraud, and there are no second chances if you are caught committing mortgage fraud. The home or mortgage you receive today through mortgage fraud could offer severe consequences later. That knock on your door could likely be someone holding a badge in one hand with handcuffs in the other.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Fl. 33952

Phone (941) 206-6000

Mike@FloridaRealty.net

Just when you thought the housing and mortgage crisis was limited to only homeowners, a new victim has been brought into the fray, one who doesn't own a home or have a mortgage. Who are these new, unsuspecting victims? The people who are actually renting homes!

Thousands of homeowners (namely investors and property speculators unable to sell homes purchased in the recent sellers market) have opted to rent their homes to help offset their monthly debt service. Low market rents compared with high risk, high interest mortgage payments are causing many investors to go ‘out of pocket' to pay the difference each and every month, creating a negative cash flow position costing hundreds and sometimes even thousands of dollars monthly in subsidized debt service payments.

"Robbing Peter to Pay Paul" Landlords/investors juggling several properties with negative cash flow are often seen prioritizing which mortgages should get paid first. This can prove especially difficult after doing this for several months, in most cases providing disaster results. Poor bookkeeping coupled with a consistently delinquent mortgage history are causing many landlords to default on their mortgages all together, leaving many of their tenants with no place to go.

"...But I'm paying My Rent on Time!!" A perfect rental history may still get a tenant evicted from their homes, especially those tenants renting from landlords' facing a property foreclosure. The rental lease you signed with your landlord may afford you some legal remedies, but in most cases may not help you if your landlord ends up in foreclosure. If your landlord does end up in foreclosure, they might not tell you directly, but you will find out soon enough, when a sheriff's deputy or other process server serves you, the tenant, with a summons for foreclosure. Your actual name likely will not appear on the summons, except as Tenant #1, 2, 3, & 4. The summons is merely to inform you that the leasehold interest you have in the property is at risk of foreclosure. At this point, you should strongly consider seeking the advice of a competent attorney to help you understand your rights as a tenant. The rents you pay today may only end up in your landlord's pocket, with no assurances that your landlord will honorably pay their monthly mortgage payment.

So You Want To Rent Me your Home.... Although it is customary for the landlord to interview a prospective tenant, in these times, it may be just as important for a tenant to interview the prospective landlord. Before you sign a lease for the next home that you rent, ask your prospective landlord about the number of homes they are currently renting out, as well as the number of year's experience they have as a landlord. Ask them about their take on the current mortgage and housing crisis, especially their thoughts on the high number of rentals falling into foreclosure. It may not hurt to do quick search of the Public Records with the Clerk of the Circuit Court in your county may show pending lawsuits or foreclosure actions against a prospective landlord. Access to these records is easily attainable over the Internet.

Help Your Landlord, Help Yourself. The difficulty a landlord has in making their monthly mortgage payments could present a real opportunity for you, the tenant, to actually purchase the home you're renting. Depending on the market value of the home you are renting, how much your landlord owes on their mortgage, and how much you can afford to pay each month you may present a real opportunity for you to purchase the home through a short sale, provided that your landlord's mortgage lender will approve of a short sale. If this is not an option, and you find out the home you are renting is in foreclosure, consider having a frank and open discussion with your landlord regarding the remaining term of your lease and how it may be affected by a potential foreclosure on the property you live in. Inquire about any security deposits you may have paid at the beginning of the lease. If your landlord is uncooperative, you may want to consult a competent attorney immediately.

Get All of Your Ducks In A Row A foreclosure action against your landlord could pose potential problems for you should you decide to rent somewhere else. A sudden move in the middle of a lease could raise questions from future landlords, so proper documentation by you to support your rental history is critically important. Some examples of proper documentation to consider are as follows:

*Pay all monthly rent payments and security deposits by personal check, bank check, or money orders. Paying cash proves nothing in terms of a rental history, and provides no support to you should you seek to recover any security deposits. Always pay in a format that can prove your honesty.

*Keep copies of cancelled checks to show a consistent payment history. Cancelled checks are the most effective way to show your ability to make monthly rent payments on time as well as the frequency of paying your rent at a certain time every month. A consistent payment history can provide indisputable proof that you are a good risk.

*If you are served a foreclosure summons, keep a copy for your records. If the rental you are living in does fall into foreclosure, you are likely to be served foreclosure papers as well, since you have a leasehold interest in the property. If you lose your rental as a result of a foreclosure through no fault of your own, the foreclosure papers you are served along with the documentation noted above will greatly enhance your chances of securing another rental with greater ease, and will also help you tremendously in the event you decide to purchase a home of your own in the near future.

You may not always know if your landlord is making their mortgage payments, but through careful landlord screening and proper documentation, you can protect yourself and minimize the chance of facing eviction by foreclosure.

For free copy of "Ten Tips for Tenants" or a free brochure on "Why Rent When You Can Buy?" please call 941-206-6000.

Mike Sikorski, MBA, GRI

Licensed Real Estate Broker

Licensed Mortgage Broker

Loss Mitigation Specialist

Florida Realty Network LLC

22079 Kimble Avenue

Port Charlotte, Florida 33952

Phone 941-206-6000

Mike@FloridaRealty.net