Hugo Meza

I had a client who came to my office and tells me "I want to short sale my House. It is not worth it to keep it. I can make my payments if I put some more effort, But I can also prove that I don't earn enough money to continue paying" What is the right answer? What do we suggest this person? Is it Ethical to help him to do the short sale? Does it really make sense for homeowners to hold on to their house knowing their house is worth 100s of thousand less than they owe to their lenders? How long is going to take for the market to turn around? How many years will take to make up the 100K loss that the homeowners incurred? What is a better option for a person who is under water for 100K or more? In the other hand, I had another customer who came to me asking me for a loan modification. I thought she couldn't qualify for loan modification and her house was worth about 200K less than she owes to her lender. She is a single mother of two girls. I suggested her to start all over and do the short sale. She didn't want accept that and she went to an attorney to do the loan modification. The attorney made his money, but didn't do anything for her. She still think she is going to keep the house and somehow she will make it happen. The market is still shaky. We don't know where the market is going? How do we help these people? All I know is that at least we need to be truthful and straight forward with these people. We need to be knowledgeable about other options and let them choose!

Most people are familiar with the term short sale by now. Well, Not all because I have seen some realtors who does not know what they are yet. I kind wish i was one of them sometimes! That means they didnt deal with any short sale. :) I think most realtor would agree with me that short sales are a pain in the neck! There are homeowners who are trying to modify their loan, but do not qualify for it. In my Opinion, their next best option might be short sale. Of course, this is case by case. I am sure an bankruptcy attorney somewhere there will disagree with me.

Some benefits of a short sale

· You are in control of the sale, not the bank.

· You may sleep better at night knowing who is buying your home.

· No social stigma of the "F" word, (foreclosure)

· If multiple unit property, you might stay paying rent to the new owner

· Your home sale will be handled like any other home sale.

· All lenders report short sales differently and some do not report them to the credit bureaus at all, but most of the time, short sale will show as SETTLE on your credit report

· Judgments are often negotiated between the seller (realtor) and the short sale bank

· You might or might not be issue a 1099 on the defficiency (you dont have to pay tax on your primary home)

· LESS COSTLY

· You could buy a house after 2 years according to HUD

· Your credit score starts raising after you sale (settle the debt)

· BEST of All, You will have Peace Of Mind (POM POM)! STRESS FREE and You wont be paying for a Under Value Property

Disadvantages

Comparing to Foreclosure the disadvantage is minimum

· Yur credit score drops, this is because you were late

· You wont have your house

· Might have to pay taxes on a secondary home or investment home

Anything else you could add! Please comment on it!

If I can be of any help, Please let me know as well!

I'd like to see how other realtors are handling Loan modifications. In my state (NJ), We cannot legally charge for processing loan modifications therefore I have to refer to attorneys or those who are doing loan modifications for living. What I sometimes do is analyze the person's situation to see if the bank would consider them for Obama's help for homeowners program. Most of those who came to my office do not qualify. I have suggested them to do a short sale, but they refused because they believe somebody could still help them therefore they end going somewhere else where somebody tells them they can do it. At the end, they end up doing nothing for them and the homeowner ending with even less money they had. I have also seen homeowners who have been paying on time, no hardship, no change in their financial situation who stops paying hoping that their bank will reduce their payment because someone in the road told them or they determined themselves to take advantage of Obama's program. The result of this is that they are in a deeper hole where they cannot get out of it.

My Only recomendation to these homeowners is to BE CAREFULL and analyze your own situation.There are many companies that have been closed because they were found taking advantage of this homeowneres who are seeking help. Modifications can be done by the owner themselves. Another thing I do for these homeowners is to encourage to do it themselves and use me as a support.

Some other options are:

•· Repayment Plan

•· Forbearance

•· Loan Assumption

•· Short Sale (Pre Foreclosure Sale)

•· Deed in Lieu

•· Bankruptcy