Steve Mun / San Jose Short Sale Agent

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The bank dragged you through the dreadful experience of a loan modification, only to humiliate you months later by announcing they rejected your request and were also going to accelerate the foreclosure process to boot (a little surprise called dual track foreclosure). They were supposed to help you; but not only did they not help you, they made things worse by putting you on the fast track to foreclosure.

You are so angry, that you want the bank to foreclose on you and you want to start destroying the house before they get it back. Understandably you are angry and no one would blame you for wanting to punch holes in the walls. You feel you were tricked.

However, now that it is clear there is no help coming, are you really doing what is in your best interest or are you letting your anger get the best of you? This was the exact scenario of a client who was flying out of control after he received the rejection letter. (Sadly, this type of back-story is quite common when you listen to homeowners in distress).

After punching a couple of holes in the wall out of anger, he took heed to what the bank employee told him: hire a good Realtor to do a short sale of the property before the trustee sale (auction) was completed.

My client decided he was not going to let his anger prevent him from exercising options that were available to him. He needed to get any help he could. The denial of the loan modification meant he was not going to get any financial relief. He was certain to lose his home but the bigger problem was the thought of owing the banks the difference on the loss of value after foreclosure (a.k.a. deficiency claim); this meant he would incur more debt obligation.

One of his close friends had informed him that he was going to lose his home anyway, so why not take advantage of financial benefits that were legally available to him? His friend was in a very similar situation and had just completed a HAFA short sale on his home with me; so he insisted on calling me. His friend stopped the foreclosure from happening and showing up on his credit history; received a $3,000 check to help relocate; the proceeds helped pay down the obligations on his HOA and taxes; and most importantly, he was able to cleanly walk away from the home because the deficiency claim was waived as a condition of the short sale agreement. He wasn’t walking away empty handed; he was taking full advantage of all of the financial benefits available to him.

Some readers may question the ethics behind the homeowner who fell behind on his mortgage, walking away from the home with money in his pockets. The ethical consideration behind HAFA and its financial benefits to homeowners is not for me or other Realtors to consider. We are simply responsible for working to achieve the best outcome for our clients using all tools that are at our disposal. We have a fiduciary duty to take the very best care of our clients.

Programs like HAFA are not forced upon the lenders who participate in the program: it is a voluntary program. If the lenders did not feel they were benefitting from paying some homeowners to make it easier for them to walk away from their unaffordable homes, then nobody could force them to participate in a money losing proposition. Please don’t feel sorry for the lenders, because they are making more money by permitting short sales than foreclosures; even after making financial incentives to distressed homeowners.

Now back to my angry client. Was he a bad person for making financial gains when he was the one who could not continue to pay his mortgage? I would disagree with that statement. I would say he was being a good consumer and taking full advantage of all programs and benefits which were legally available to him. For him to let his anger overwhelm him and to lose out on financial incentive intended for him would have been both foolish and a self-defeating thing to do. The best way for him to take revenge against a bank for which he had nothing but contempt would be to make full use of the system and extract more benefit than was originally offered. And he was able to do this, as we successfully closed escrow last week.

It was a pleasant, beautiful sunny day today as the San Jose Short Sale Agent drove around previewing some homes while listening to some oldies on the radio. It turned into a much nicer day when my client who was closing on his short sale today, invited me to lunch after he picked up his check for the $3000 relocation assistance check from his HAFA short sale. He was so excited that the nightmare was ending, that he wanted to celebrate with me.

It a little over two months ago when he contacted me, feeling he was at the end of his ropes. Chase had just informed him they were denying his request for a loan modification after dragging it out for months and the prospect of staying in his home was now up in the air. But he had made up his mind. He realized, despite his emotional attachment, he could no longer afford to keep the home. He had to give it up and move on with his life and make a new life for him and his family.

In a little over two months, that same lender – Chase - was willing to allow him to sell his home for a loss, forgive him the deficiency, but on top of that gave him a check for $3,000 to help with the relocation to his new rental. As we were discussing over dim sum lunch, he was so happy and grateful that he is able to move forward without the burden of his mortgage, he seemed like a different man. He was saying he could not sleep even last night, because he was concerned that something could go wrong and we would not be able record the deed and close escrow today. He was going to sleep well tonight!

We were discussing why more people who are in similar situation as himself would not choose his route if they were unable to get loan modifications or otherwise afford to keep their homes. We came to the conclusion it is probably due to lack of information. If distressed homeowners knew that their income tax exemptions and the benefits of financial incentives from HAFA were ending soon, they would probably take decisive action as to prevent missing out on those valuable benefits. He would tell his friends whom he knows are having difficulty paying their mortgages to take action.

Dear reader, if you or someone you know, are in a similar situation where you have come to the conclusion that you cannot afford to keep your home, but you cannot sell your home either because of the debt you owe to the banks, please take action soon and before this year is up. Naturally, if you reside in the greaterSilicon Valley, I would love to help you so you can move forward with a new chapter in your life.

However, I am not saying you have to come to me necessarily; I respectfully and sincerely urge you to talk to someone who is an expert in the field of Short Sale and get help soon before the two programs expire. I think I would not be doing my job and my personal quest to help as many people fight foreclosures if I were not educating people about programs that are available; yet many people are not taking advantage due to lack of information.

Please talk to someone. Indecision means you are making a decision to allow foreclosure to happen to you.

I read an article this morning about another local teacher getting arrested for molesting a child. As a parent, this is really upsetting when teacher who are entrusted to educate your children are accused of molesting them.

As parents, we can’t be everywhere or know everything, but we can at least protect our children by learning where the 63,000 California registered sex offenders reside in our neighborhoods. Sex offenders are required to register their residence in California. These convicted ex-teachers will at least be tracked in the future.

Whether you are a home buyer searching for a new home; or you are a resident who wish to see if a registered sex offender has recently moved into your neighborhood; or perhaps you frequent a local park and want to know if a registered offender lives near by where your children play. There is public record information made available to you.

InCaliforniathe Attorney General’s Office provides the public with access to such information on a website.

http://www.meganslaw.ca.gov/

Arm yourself with knowledge.