David Thompson

Are Banks Better off Foreclosing Beaufort, SC Homes?

Remember this past summer, when loan modification statistics were starting to become revealed? The data was murky, at best, when it came to determining whether the government's Making Home Affordable efforts - part of the overall stimulus package - was helping distressed homeowners keep their homes.

There were early indications that banks were dragging their feet. Then the U.S. Treasury started to put pressure on the banks, who pledged to increase those in trial modifications from about 200,000 to 500,000 by Nov. 1.

Now that we're past that date, there's no hard-and-fast data yet that shows that goal has been met. What there HAS been is complaining that banks are still reluctant to help homeowners avoid foreclosure - even though the government has put in place incentives for them to do just that - and the suggestion that a staggering number of new foreclosures lies ahead.

It begs the question. "If banks are being given incentives to modify loans, why aren't they doing so?"

Well, a consumer advocacy group called the National Consumer Law Center says banks are financially better off foreclosing than modifying.

In a report titled "Why Servicers Foreclose, When They Should Modify, and Other Puzzles of Servicer Behavior," NCLC lawyer Diane Thompson concludes that banks would rather start the foreclosure process than work with a struggling homeowner.

"With home values plummeting and layoffs common, homeowners are crumbling under the weight of mortgages that were at best only marginally affordable when made," Thompson said in a press release. "One common sense solution to the foreclosure crisis is to modify the loan terms in more instances. Foreclosures are a costly ordeal for the homeowner, the lender, and the community. Yet they continue to outstrip loan modifications because servicers have no incentive to help borrowers stay in their homes."

According to the report:

Loan modifications inevitably cost the servicer something. A servicer deciding between a foreclosure and a loan modification faces the prospect of near certain loss if the loan is modified, and no penalty, but potential profit, if the home is foreclosed."

The report's blames the securitization of mortgage products for the lack of interest on the part of loan servicers to work out principal and interest reduction plans. The report concludes that paying investors holding mortgages that are modified is more expensive than going into foreclosure. The report makes several recommendations to change the existing modification issue:

The NCLC report outlines the following action steps:

•· Avoid irresponsible lending through regulation of loan origination
•· Mandate loan modifications before a foreclosure
•· Fund quality mediation programs
•· Provide for principal reductions on existing loans in the Administration's Home Affordable Modification Program (HAMP) and through bankruptcy reform
•· Increase automated and standardized loan modifications for borrowers in default and provide a safety net for borrowers for whom a standardized modification is not affordable or who later default, through no fault of their own, on a loan modification
•· Ease accounting rules for modifications to facilitate standardized review, encourage long-term modifications, and enhance servicer recovery of the expenses incurred in performing a modification
•· Require more transparency and uniformity in how servicers report loan modifications to investors
•· Limit fees charged borrowers in default to reasonable and necessary ones

You can access the full report at www.ConsumerLaw.org

Beaufort, SC Foreclosure Real Estate for Sale
David Thompson, Foreclosure Specialist and his REO Masters Team offers expertise in identifying, evaluating and assisting clients in purchasing and liquidating foreclosure and short sale properties in the Beaufort and Bluffton, SC area. (843) 812-5214

Beaufort, SC "Move-up" Buyers Join the Party

If you've owned the same home for the past five years and are looking to move, you just got invited to the party.

The bill signed by President Obama on Nov. 5 that extended the tax credit for first-time home buyers also included a provision for a reduced credit for "move-up" buyers.

Those who have lived in a home for five consecutive years during the past eight years are eligible for a credit similar to the first-time buyers credit if they purchase a new home that is more expensive than their current one.

Like the first-time buyers credit, it is 10 percent of the purchase price of a new home, up to a maximum of $6,500 (the first-time buyers credit has a max of $8,000). You must have a signed purchase contract by April 30 of next year and the transaction must close by June 30.

Income restrictions on both credits were eased a bit under the new legislation. Single tax filers earning up to $125,000 ($225,000 for couples filing jointly) can get the full credit.

The extension of the first-timers credit should help the recovering housing market keep the momentum it has gained since the credit was established. The National Association of Realtors estimates that about 350,000 people who would not have otherwise purchased homes did so because of the credit, which was set to expire on Nov. 30.

The inclusion of move-up buyers could bring even more buyers into the market, which would help stabilize prices further. The original credit, NAR Chief Economist Lawrence Yun said, did not have the impact on the "move-up" part of the market that the NAR had hoped.

With so many foreclosures for sale, many of the first-time homebuyers who qualified for the credit moved into houses whose sellers were not in position to buy another home. So it was the entry-level, "starter" home segment of the market that mostly benefited.

Beaufort, SC Foreclosure Real Estate for Sale
David Thompson, Foreclosure Specialist and his REO Masters Team offers expertise in identifying, evaluating and assisting clients in purchasing and liquidating foreclosure and short sale properties in the Beaufort and Bluffton, SC area. (843) 812-5214

Thanks to the Veterans.... And Happy Birthday USMC

Well, another week has come and gone! As I think about all I needed to do and how some things I still didn't get to, I also think about some things and moments that I missed out on due to the pace of the days. What did you miss out on this week?

Did you take a moment to think about it? How happy would it have made you or better yet how happy would it have made the other person if you would've been able to share the moment with them?

Today is November 10^th which is the 234^th Birthday of the United States Marine Corps. Happy Birthday Marines!! Since its beginning in 1775 in a Philadelphia, PA bar named Tun Tavern the Marine Corps service members and their families faithfully continue to make enormous sacrifices for us on a daily basis. Some give everything. Take the opportunity to wish them a happy birthday and let them know you are thankful for all that they do. As a Marine myself, I had the opportunity to participate in this historic celebration annually and to this day I still consider it my Birthday as well. My wife and kids even told me "Happy Birthday" today! So, on behalf of the Thompson family I wish all you Devil Dogs a Happy Birthday and thank you for your service!

Now, November 11^th is a holiday too. It's Veterans Day! As we remember all who have served in the armed forces I again encourage you to find a veteran and say thank you. November 11 is a day for us to give thanks and remember all of those who through their selfless service showed they cared about protecting our freedoms and right to pursue happiness. So again, from the bottom of our hearts here in the Thompson house, THANK YOU for your service. We appreciate all that you have done and continue to do without hesitation.

Unfortunately all that we love comes at a price. As I asked you earlier to think about a moment you missed, I now ask you to remember all of the moments that our service members miss. I know that there are some choices in the past that I have made that kept me from participating in "moments" that I will never have the opportunity to experience, share or do over. I missed the birth of my first son (Austin) due to me being deployed overseas. I remember how happy yet how sad I was all at the same time. Every day we have choices to make and there are some we will get wrong. I just hope I get more right! I am sure you do too.

I know there are some things we can't avoid due to our many responsibilities in our daily lives and sometimes there is no way to around it. But as we go around within our daily lives let's do so understanding that others are sacrificing their moments so that we may have the opportunity to experience ours.

Take some time out of your day to remember those who have served and call a veteran you know, write them a thank you, send them a quick email or go up to one and shake their hand and say thank you. Thank you for your sacrifices and giving me the opportunity and the freedom to have my moment.

Beaufort, SC Foreclosure Real Estate for Sale
David Thompson, Foreclosure Specialist and his REO Masters Team offers expertise in identifying, evaluating and assisting clients in purchasing and liquidating foreclosure and short sale properties in the Beaufort and Bluffton, SC area. (843) 812-5214

Trash In = $$$ Out - Investor Pain - Beaufort, SC

Well, Halloween is over but the candy isn't! A couple of weeks ago I had the distinct pleasure of sitting in on my two oldest son's orthodontist screening for braces. I am also excited to announce that both of them are winners of a program that will give them a new and improved "grill". What is great about all of this was that they started the process on October 30^th the day before Halloween. They were pretty disappointed to say the least when they heard the candy and food options begin to dwindle. Halloween didn't seem to sound as if it would be much fun for them and their faces showed it. It was already appearing to be painful.

I took a closer look at this and how some real estate investors whether they were misguided, misinformed or uncaring have looks of pain right now. Don't get me wrong there are quite a few investors smiling too. Let's for just a minute compare a house to our teeth. As children we often overlook the importance of taking care of our teeth by watching what we put in our mouth and how we take care of the "toxic waste" that accumulates and destroys our tooth structure and foundation. Well, it's just like an investment property.

There are many reasons as to why property investors fail to carry quality rental properties. They have often been caught up in the excitement, sometimes overleveraged, poor landlords and I could go on. But where the costly mistake is made often occurs by who they allow in to their property. There is no doubt that you are always taking a chance but as an investor if you do not screen the clients properly and manage them and the property correctly or hire a true professional to do it for you it often ends in disaster. Now the cost of the property skyrockets and the pain begins.

Now for most of us we watch what we eat, we brush and floss as we are supposed to and visit out dentist routinely. Shouldn't we manage our investments the same way? By having a proper screening process which includes "reading the labels" (credit reports, background) of our property occupants and make sure we are putting in place the adequate check-ups hopefully the pain you feel when it is time to make those repairs and improvements won't be like buying braces every time!

So, Austin and Charles lay off the Doritos and the Snickers for a while and take some Tylenol for the pressure and pain and everything will turn out just fine. And as real estate investors, let's watch what we put in our house so it's easier to take care of our foundation and structures and hopefully going to the contractor or in other terms "dentist" doesn't cost as much as a new "grill" for the kids and isn't as scary as Halloween . You will still need the Tylenol though!

Beaufort, SC Foreclosure Real Estate for Sale
David Thompson, Foreclosure Specialist and his REO Masters Team offers expertise in identifying, evaluating and assisting clients in purchasing and liquidating foreclosure and short sale properties in the Beaufort and Bluffton, SC area. (843) 812-5214

New Beaufort County South Carolina Foreclosures for September 2009

As the foreclosures around the nation have hit a record high during the third qtr of 2009 Beaufort County is no exception. The chart below indicates the new foreclosures for the month of September 2009 within Beaufort County. As you can see, the bulk of the counties REO properties exist in the southern portion of the county with Hilton Head topping the chart and Bluffton following closely behind.

Chart provided by RealtyTrac

We are entering another stage of the foreclosure market where the prime mortgages are beginning to show that they are not bullet proof to the market. As property values decrease and the economy sits stagnant more and more home owners are beginning to see they owe more than what their home is worth. This also means they are running out of options and are often left without knowing what those options are. The prime mortgage defaults are not expected to peak for several more months.

For more information regarding available foreclosure homes please feel free to call David Thompson of Team REO Masters today. If you are real estate investor and would like to build or expand your investment property portfolio you deserve a knowledgable and professional team working with you.

Beaufort, SC Foreclosure Real Estate for Sale
David Thompson, Foreclosure Specialist and his REO Masters Team offers expertise in identifying, evaluating and assisting clients in purchasing and liquidating foreclosure and short sale properties in the Beaufort and Bluffton, SC area. (843) 812-5214 http://www.beaufortcountyhomesforsale.com/Buying-Foreclosed-Properties-Beaufort-County