Mike Glastonbury

In the course of my daily dealings with potential short sale clients in the Punta Gorda- Port Charlotte - North Port area, I am often asked the same set of questions. It seems that a lot of uncertainty still surrounds the whole short sale process.

Probably the most common question I'm asked is, "when should I initiate a short sale?"

This is probably not the easiest question to answer. You should investigate and initiate a short sale as soon as you start getting that funny feeling in your gut that all is not right with your financial situation. You know, the gnawing feeling that the juggling act to pay all the bills is about to come crashing down, sooner rather than later.

Everybody seems to come to the conclusion that short sale is right for them over a period of time. Nobody wakes up one day and decides to do a short sale of their house. They may contemplate, and even investigate, other remedies such as a refinance, loan forebearance, loan modification, sale of their house, or simply to walk away. One by one the utter impracticality of each solution becomes apparent.

And, even at this point many are reluctant to make the decision. Some wait till their mortgage is solidly in default, or maybe even the foreclosure papers are filed, before they make the decision.

Understandable though these actions (or lack of action) may be, it is very dangerous to squander the most important resource available to distressed homeowners to succesfully close a short sale of their home - TIME.

So, if somebody has those feelings of uncertainty and confusion, my answer to the question above would be "as soon as you start feeling uncomfortable with your mortgage situation, investigate your options, analyze them, and make an informed decision!"

Time, in many of these situations, is certainly of the essence. Don't sabotage the most sensible 'way out' by jeopardizing the limited time you may have to act

We invite homeowners who are starting to feel uncomfortable with their mortgage situation to visit our website at www.FloridaMortgageRelief.info and start getting educated!

In my last post I discussed the HAFA program which is the US Treasury short sale program. HAFA is an outgrowth of the HAMP program which was the US Treasury response to the mortgage crisis during the financial meltdown.

I suppose I put the cart before the horse because I didn't really go into much detail about the HAMP Loan Modification program. That's probably because the HAMP program has been considered a dismal failure by many real estate agents - not entirely without justification!

Nevertheless, the HAMP program has worked for some Punta Gorda - Port Charlotte - North Port home-owners, and we'd be derelict in our duty as real estate agents if we ddin't explore all the options available to distressed home-owners. It seems as if many agents just abandoned these poor souls to the 'Foreclosure Rescue' sharks out there. These are the indivduals and organizations that attempt to sell loan mods to financially distressed folk for a couple of grand! Talk about kicking them when they're down.

So, in the interest of full disclosure - I absolutely believe Short Sales are the best way for a severely 'upside-down' mortgage holder to avoid a foreclosure - here are some specifics about the HAMP Loan Modification program:

If you are one of the many Punta Gorda - Port Charlotte - North Port home-owners who can no longer afford to make their monthly loan payments, you may qualify for a loan modification to make your monthly mortgage payment more affordable. Millions of mortgage holders who may be current, but are having difficulty making their loan payments and borrowers who have already missed one or more payments may be eligible.

These are the criteria that banks will apply to see if you qualify for a HAMP Loan Modification.

• Is your Punta Gorda - Port Charlotte - North Port home your primary residence?

• Is the amount you owe on your first mortgage equal to or less than $729,750?

• Are you having trouble paying your mortgage? For example, have you had a significant increase in your mortgage payment OR reduction in your income since you got your current loan OR have you suffered a hardship that has increased your expenses (divorce or medical expense)?

• Did you get your current mortgage before January 1, 2009?

• Is your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues, if applicable) more than 31% of your current gross income?

A Loan Modification is absolutely an option worth exploring, if only to put your mind at ease that you did everything possible to save your home from foreclosure. Just bear in mind that a Loan Modification is NOT the only way to address the problem. Short Sales are a sensible way to solve the problem of the upside down mortgage. And HAMP also has a Deed-in-Lieu program which offers homeowners a (fairly) graceful exit should neither a loan mod or a short sale solve your problem.

For a comprehensive discussion of the ways to find relief from a toxic mortgage without the indignity of foreclosure, we invite Punta Gorda - Port Charlotte - North Port homeowners to visit our Mortgage Relief Information site.

The government introduced the Making Home Affordable Plan (HAMP) as part of the financial bailout. The intent of the plan was to facilitate loan modifications to help people stay in their homes. Despite the best intentions, the plan didn't work as the housing crisis deepened. It quickly became apparent that more comprehensive action needed to be taken.

The natural outgrowth of the loan modification plan was the Home Affordable Foreclosure Alternative (HAFA) plan. It was intended for people whose loan modification - for whatever reason - did not work! The intent of the plan is to help homeowners either sell their home through a short sale, or complete a Deed-in-Lieu of foreclosure.

Short Sales have been around in our area for quite a while, but there has been no uniform standard applied. In fact, it could be argued that complete chaos reigns supreme in the short sale market. The Punta Gorda - Port Charlotte - North Port areas are no exception when it comes to short sale confusion.

The government plan streamlines the short sale process and creates incentives for borrowers and their banks to participate. Homeowners in the Punta Gorda - Port Charlotte - North Port areas can benefit by participating in the HAFA program as follows.

• The homeowner applies to enter the plan before marketing the home. Previously a homeowner could list the home for a short sale, and the bank would only find out when they were presented with an offer.
• The bank establishes a price for the home. Prior to HAFA, a short sale home was offered at whatever a home-owner and their agent conjured up.
• The homeowner is given a time frame in which to sell the house. This is typically 120 days, but it can be extended for up to a year. During this period, the banks undertake NOT to foreclose on the home. Prior to HAFA, a foreclosure could derail the short sale at any point, right up to closing.
• An incentive is paid to the homeowner. The treasury will pay the homeowner $3,000 to assist in relocation AT CLOSING!
• Incentives are also paid to the servicer of the loan, and minimum payoffs are established for second liens. Prior to the HAFA plan many servicer's dragged out the short sale process because they were being paid by the banks and investors a monthly fee. Second and third lien holders were often left out of the equation and consequently they weren't always cooperative in agreeing to a short sale.
• The banks undertake NOT to pursue the homeowner for any deficiency created by forgiveness of the mortgage debt. Prior to the HAFA plan, homeowners had to rely on the lenders goodwill, and hope for the best. This is one of the most significant aspects of the plan!

The government also established criteria for whom they would offer this assistance to:

• The property is the borrowers primary residence.
• The property is occupied. Some consideration is given for borrowers who had to move for employment considerations.
• The borrower participated in the HAMP Loan Modification plan. However, this does not exclude homeowners who didn't participate, it merely channels homeowners through the HAMP plan.
• The mortgage was originated before January 1, 2009.
• The loan balance does not exceed $729,750.
• The mortgage payment exceeds 31% of the borrowers gross monthly income.
• Investors are not eligible for HAFA

Homeowners should also be aware of some changes to the plan which benefit the bank.

• Should the short sale not be completed in the allocated period, the homeowner is bound to proceed with the Deed-in-lieu of foreclosure.
• The banks may charge the homeowner 'rent' to stay in the home for the duration of the short sale period. The stated hardship may affect or even negate this requirement. Prior to HAFA, many homeowners were living rent-free for months - or even years - as the short sale progressed. This aspect of the plan does place some responsibility on the homeowner to provide for their own shelter.

The HAFA plan is certainly a step in the right direction in bringing some order to the somewhat chaotic short sale process which has been bedeviling the housing industry for the last couple of years. There are certainly more aspects to HAFA than we've addressed here, and Fannie Mae and Freddie Mac have established their own versions of HAFA. Currently there are well over 100 banks participating in the HAFA plan.

As always, the best advice for homeowners in these turbulent times is to seek out qualified and competent help. We have been involved in dozens of Punta Gorda - Port Charlotte - North Port short sales over the last few years and have sought Certification as HAFA Short Sale Specialists. We look forward to assisting you. If you'd like us to evaluate your situation as to whether you'd be a good candidate for the HAFA plan, please visit our HAFA Short Sale Website.

IMPORTANT NOTICE

1. Deep Creek Realty is not associated with the government, and our service is not approved by the government or your lender; and

2. Even if you accept this offer and use our service, your lender may not agree to change your loan; and

3. If you stop paying your mortgage, you could lose your home and damage your credit rating.

It seems like foreclosure sales are the wave of the immediate future. We have been getting a large number of calls for Port Charlotte foreclosures. The requests run the gamut - from small investors getting their feet wet - to corporate executives seeking luxury foreclosures.

This segment of the market is very busy. It seems that 'investors' are coming out of the woodwork. And the good deals go fast. With many of these deals, you have to virtually make a snap decision to buy or not to buy. To go home and ponder the deal means you'll more than likely lose it.

Another issue that investors need to consider is this; just because a home is a foreclosure, you don't HAVE TO make a 'lowball' offer. Many of my clients are learning the hard way - that lowball offers aren't getting accepted.

Plenty of buyers out there recognize the value in the property and realize that in the big scheme of things, trying to save a couple of grand now, seems very short-sighted when the property will probably double or treble in value over the next few years!

The argument for buying foreclosures is compelling. In many cases the prices for these homes have rolled back ten years. You certainly can't build a home for $30/sq. ft anywhere that I know of, but you certainly can buy a Port Charlotte foreclosure for that price.

Also, in our area, so many home-owners have been displaced from their homes through the foreclosure process, that there is a seroius shortgage of rental accommodation. An investor client of mine who bought a home from me a few months ago - and is now shopping for more - described how he received over 18 calls in one hour, from a single Craigslist ad!

Another client of mine described feeling like 'a kid in a candy store', and described the current environment as the largest transfer of wealth in a generation.

Anyway you look at it, the current real estate market offers some compelling opportunities for both home buyers and investors. Don't be faint hearted. Seize the day - Carpe Diem!

An important aspect of buying foreclosures is having up to date information. For that reason, our firm has established an automated alert service for Port Charlotte foreclosure buyers. We invite you to visit PortCharlotteForeclosureAlerts.com.

One of the early condo developments in Punta Gorda, the Emerald Pointe development is as attractive today as it was twenty years ago,

Located in Punta Gorda, on the south side of the beautiful Peace River, just off Marion Ave, the Emerald Pointe Condo development is set in mature lush tropical landscaping.

Many of our clients who have experienced the Emerald Pointe lifestyle have asked for a search dedicated to Emerald Pointe condo availability. Well here it is: Search Emerald Pointe Condos.

If you're a current Emerald Pointe owner considering a sale, please call us to discuss your options. Call our Broker, Mike Glastonbury, at 941-258-1962.