Short answer is - probably not. Meaning - I have never seen it happen. Banks generally like a clean deal, and most bank addendums seem to have language that discourages this sort of thing.

Not only is that the short answer; it is only today’s answer. Tomorrow could be a whole different ball game. This business changes faster than the flight schedules of a major airline.

One of the distinctions is that, according to the article, is that “when borrowers sell their home or refinance, they may have to share a portion of the profits with HUD.”

This would seem to give new meaning to the word “vague.” They MAY have to SHARE a Portion of the profits?

Beyond that, it certainly raises some interesting questions for the future. I am all for keeping people in their homes and preventing foreclosures, but is this disinction a potential market killer? What happens to the family that goes into this program, then the breadwinner gets transferred. They need to sell, but they also need some cash to buy a new house in the new town? What happens when the stork visits and a family needs to move up to a home with more space? How do they do that with no equity?

It seems to me that we have a lot of plans, may of which seem to include ready-fire-aim.

In zip code 22407 - which covers the are west of Rt 95 - in Fredericksburg & Spotsylvania County.

Homes sold over $300,000

February 21,2009 - May 21, 2009                17         

February 21,2008 - May 21, 2008                35

February 21,2007 - May 21, 2007                83

February 21,2006 - May 21, 2006                149

This is quite a slide, both in units sold, and in value.

Tomorrow - numbers for homes under $150,000

Kevin McGrath-Broker/Owner
RE/MAX BRAVO
10401 Courthouse Road
Spotsylvania/Fredericksburg VA 22553

www.fredva.com

The next step was to get the Highest & Best offer from each potential buyer; this is pretty standard practice when selling a bank foreclosure.

We sent out the request via email, and the responses started pouring in. 7 of them. Still missing 3. Being a nice guy, I call. First agent - they were “at their job” and had not checked their email. Second agent - had not been into the office yet to check their email. Oh - this was at 4:00 PM. Third agent - no answer - I never got a call back.

So out of the 10 offers received, we get 7 responses. 3 agents - cut out right away. Missed their chance. Oh, wait a minute. It was not their chance. It was their clients chance. Their client is the one who lost. Wrote a contract on a house, and got kicked out. All because they did not answer their phone or check their email.

Todays real estate market moves in minutes, not in hours, and certainly not in days. The agent that does not have a smart phone to get email, or has “a job” and only does real estate part time is at a severe disadvantage. Their client may find themselves in an even worse position. They may lose out on a house.

Kevin McGrath - Broker Owner

          www.fredva.com

What will generally happen is that the bank may make a “Cash For Keys” offer. What this means is that they may  be willing to financially compensate the occupant for vacating the property in a timely manner. The bank does not generally care if it is the owner or a tenant; just that it is the person or persons currently occupying the property.

The bank likes for the vacate date to be sooner rather than later; generally no more than 30 days.

All personal property, and I do mean all, must be removed from the property. This is very important. When the representative from the bank comes to the property, they will generally have a check for the occupant, but if the property is not ready and free of all personal belongings, the check is not released. Notice I said property, not house. Ther can’t be anything left anywhere on the property that is personal in nature.

Now, that being said, the house can’t be stripped either. I have seen situations where the occupant removed all of the appliances, the heat pump, the furnace, even the doro knobs, and they still thought they were getting a check. Not happening.

If it is done right, a Cash For Keys can soften a tough situation for an occupant. If it is done right, the bank shows up with a check, the occupant hands them the keys, they get a check, and walk away.

Not a bad deal - getting paid for doing something they were going to have to do anyway.

**Please keep in mind that this is a general description of the cash for keys process. It is generally a voluntary program, meaning neither side is obligated to participate. Also, each bank has a different program in regards to offering cash for keys. Some may not even offer it.

Kevin McGrath - Broker/Owner
RE/MAX BRAVO
www.fredva.com
Licensed in the State of Virginia

This was recently discussed in a blog by Bill Freehling of  fredericksburg.com (Fredericksburg Virginia).

Bill McClary, Spokesman for ClearPoint Credit Counseling Solutions, gave a very clear answer to a question posed by a consumer as to why this is happening. An excerpt is below.

“All credit card companies use risk models to determine how much interest you pay and how much credit they will extend to you. Your situation is typical of what we are seeing with other consumers in this difficult economy. The reason that creditors are increasing interest rates and lowering credit limits is because their risk models are changing based on patterns they are seeing with consumer activity, credit scores and recent changes in income levels of cardholders.”

I understand that credit card companies have a business to run, and that they also have a responsibility to the stock holders to run a responsible business.

On the other hand, what if I used the same line of reasoning at home?

Let’s say my son does all of his homework. He goes to school everyday, and he gets good grades. His classmates, however, fail the class and don’t do their homework.

Using the same rule that the credit card companies are using, I should send my kid to his room with no supper, and ground him for a week………….

Kevin McGrath - Broker/Owner
RE/MAX BRAVO
www.fredva.com
Licensed in the State of Virginia

Being a mother of four, I know how doing anything with children can be a big adventure. Whether it is grocery shopping, football games, or visiting with friends. When it comes time to shop for a house it isn’t any different. Hiring a sitter or leaving the kids with grandma may be the first thought, but if that is not an option or your children really want to come along here are some things you can do to make the experience a good one for everyone.

The best way to start out any adventure is with preparation. During the process of house shopping it is very important for everyone to be prepared and to know what to expect. As a parent they are many things you can do to make the process go smoothly. Start by talking with your agent and let him or her know that your children will be coming along with you. If you have several children or little ones still in car seats it may be easier to take your own vehicle. Next talk with your children let them know what to expect and set some ground rules such as no touching when visiting homes, using your quiet voice, and saving questions for the ride to the next house. Depending on the age of your children, set realistic expectations. Here are some dos and don’ts,

·         Don’t visit too many houses at one time; set the maximum at five or six.

·         Don’t set an appointment to look at houses when your children are tired or hungry.

·         Do involve you children in the process, ask them which house they like, which room they would want, and what they like or disliked about each house.

·         Do make a goody bag with a few favorite toys, small notebook for writing questions or keeping a checklist, some stickers and a bottle of water.

·         Do have something fun planned for afterwards, a trip to the park, or ice cream shop, or just a fun activity for when you get home.

·         And finally don’t hesitate to reschedule if someone is not feeling well or if after a few houses everyone is already tired and cranky.

 
With a little planning, finding a house can be an experience that the whole family will enjoy and remember for years to come.

Leah Jacobsen, your family friendly Realtor
REMAX Bravo
www.findingyouahome.com
Licensed Salesperson in the Commonwealth of Virginia

Let’s say you wrote an offer on a foreclosure, the offer was accepted, everyone signed, the contract is ratified (basically meaning that all parties have had a meeting of the minds, signed, and everyone has a copy). Now most banks let you do an inspection, within a reasonable period of time, which is of course spelled out in the contract. So let’s assume that all this has happened, and that you are out there on a Saturday morning, and your home inspector gives you the report which lists some roof repairs and a couple of plumbing issues. Now you are standing there thinking “oh man, this place is sold as-is, and now I have to pay for all of these repairs.” Maybe, but maybe not. Never hurts to ask, but how you ask can be the key.

Banks like it easy. Asset managers, the people who really do all the work managing these foreclosed properties, are doing all that they can to keep up with their workload. You want to make it easy for them.

#1. Get two estimates for the work needed. Make sure that they are nice clean copies.
#2. Give the seller the estimates, the inspection report, and an addendum asking for a credit at closing based on the estimates. Your Realtor will know how to handle all of this.

Now you have done a couple of things. You have provided clear information related to your request, you have provided an estimate of the cost, and you have basically said to them “I’ll take care of it if you will just help me out a little with the cost.”

Now - very important - make it a reasonable request. If you go in asking for $10,000 in repairs on a $75,000 house, I am not liking your chances. And the seller (Bank) could still come back and say “sorry - sold as-is.” But if you go in with a reasonable request, well documentated and uncomplicated, you never know what might happen, and you just might save a buck.

Kevin McGrath - Broker Owner
RE/MAX BRAVO
www.fredva.com
Licensed In The State Of Virginia

The article talks about how many owners or occupants of homes that have been foreclosed on here in Virginia are finding creating and sometimes desperate ways to stay in the homes. I can see how this could happen; I can only imagine the steps I might take if I was looking at my family being out on the street.

The article also talks about how “squatters”  have taken up residence in many of these homes. I can see how this could happen, but I will submit that this is probably the exception, not the norm. There are certain steps that should reduce the chance of this happening. When the bank takes possession of a home at foreclosure, they send a representative, usually two, out to check the occupancy status of the property. The representative, sometimes a Realtor and sometimes a securing vendor contracted by the bank, checks the occupancy and reports back to the bank. If it is vacant, the property is secured, the grass is cut, the home is cleaned up, valuations are completed, and within a few weeks the property is on the market. During the entire process, Realtors have the responsibility as an agent for the bank is to conduct weekly checks on the properties. If there were squatters in any one of my properties, I would know about it pretty quickly.

But here is how it could happen, and I have not been able to figure out why the banks are letting this happen. All you have to do is read the paper and you can easily see that there is an enourmous number of foreclosures happening on a daily basis. But if you are a buyer in today’s market you also know that most of the inventory out there right now is not exactly the cream of the crop. This has happened for various reasons, some of which I am sure I am not privy to, but one of them is that a number of banks recently laid down a moratirium on foreclosures, meaning they ceased all action. These is one problem with this; while this moratorium may have certainly kept some families in there homes, even if only for the short term, there is a large number of these homes that are already vacant. Stopping the foreclosure process on a home that has already been abandoned does not help anyone. Not the family that used to live there. Not the community that is watching their values plummet like a stone in a pond. And certainly not the stock holders of the bank, as the bank will now spend what could amount to many thousands of dollars on a rehab and mold remediation project that might never have been necessary. For some reason, when the banks decided to enact a moratorium on foreclosures, they seemed to have done it as if there were trying carpet bomb the enemy, rather than actually attack each problem with a specific solution. In trying to come up with a plan to keep people in their homes, they also left a huge number of vacant and abandoned homes out there that are falling apart almost as we watch.

Kevin McGrath - Broker/Owner
RE/MAX BRAVO
Spotsylvania, VA 22553
www.fredva.com

This can be for any number of reasons. Typically, when a contract is written, the settlement date is set about 30-40 days in the future. This is not a number set in stone; it just seems to be the average in this part of Virginia. About a month.

For this discussion, let’s assume that the borrower has complied with all of the lender requests for documents in a timely manner. I assume this because it has been two weeks since I, the listing agent, personally sent the ratified contract to the lender, and confirmed that they have received it. I have not been contacted or been informed that there are any issues that could delay closing. As far as I know, the ship is on course.

Let’s fast forward to 2 days before closing. Uh oh - rough waters ahead! I follow up with the lender to get a closing status, and I find out that we are not likely to make the closing date. Why? Oh, the lender now needs more documentation from the borrower. Now. 30 days after they got the file. 3 weeks after they got all documentation from the borrower. Now they realize “oh - we need the purple sheet.” Or whatever. My question is Mr. Lender - “whatcha been doin?”

I get lots of excuses. The loan program changed. New underwriting guidelines. Whatever. Jimmy crack corn and I don’t care. When I sent you the ratified contract, and you confirmed receipt, I assumed you at least glanced in the direction of  the cover sheet I included, the cover sheet with the closing date clearly on it. At that point, when you did not call me and say “I can’t make this close date” I took that as your comittment that you could make the date.

In todays market, this can be quite problematic for buyers. Buying a foreclosure can be a great way for a first time home buyer to get a new house, but there are certain minefields that must be navigated. One is that many, if not all, banks charge a “per diem” fee to the buyer if closing is delayed. I have seen lots of different numbers on this, but an average seems to be about $100. So Mr. Lender misses the closing date, and needs to extend for 5 days. Now the buyer is potentially on the hook for $500, through no fault of their own.

Choosing who you get your mortgage from can be very important. Critical.

If I was getting a mortgage, here is how I might proceed. Let’s assume I have already compared rates and costs, and have narrowed it down. My questions to the loan officer might be:

1. Are you a direct lender or a broker. Meaning, when I have a question, can you answer it, or do you have to make a bunch of phone calls and get back to me? Do you have to call the underwriter and leave a message, or can you yell down the hall to them.

2. How do I get in touch with you? How quickly will you respond to me when I have a question?

3. What percentage of your loans close on time?

And here is big one. When the loan officer has that contract, (or even better - before I even make the offer) I am going to ask him or her, “can you make this closing date?” If so, great. If not, tell me now. Not in 30 days. Now. Today. I want your commitment. Your word. We are going to shake hands, and you are going to email to me confirmation that you can make this happen. If you tell me now that you can’t do it; no problem. I will adjust my offer accordingly, or ask the seller for an extension now. I am all about communciation. But Mr. Lender, if you call me 2 days before closing and tell me we are going to delay because you are not ready, you and me are going to have a problem.

Talk toyour lender up front. Have an understanding. Have it in writing. It is not like it will hold up in court or anything, but you will at least get the satisfaction of having the lender on a phsycological spot if you can’t close on time. And you might even save a buck.

Kevin McGrath - RE/MAX BRAVO - Broker/Owner

www.fredva.com

Licensed In The State Of Virginia