Today I asked someone who’s an expert on the FDIC bank takeovers to share their thoughts on when the real estate market will turn around.
They said, “earlier today I pulled out my black magic ball. Shook it. Flipped it over. And it said, “Ask me later”.
Black Magic Ball
2010 Real Estate Goals
If one of your 2010 goals is to update skills, increase knowledge, and to network within the mortgage default business sector then consider attending various conferences.
They’re a great way to accomplish all three goals at one time.
To get you started, here are a few suggestions.
If your goal is to gain education on the latest trends and issues, consider attending conferences like REOCON. It will feature how the disposition of REO properties may be secondary to the Short Sale transactions and Loan Modifications taking place in 2010, and how real estate agents must adapt.
o REOCON will be from January 29 – 31, 2010 @ the Anaheim Marriott, and the Keynote Speaker will be Christopher Thornberg. He’s one of California’s leading economic forecasters, and he’s an expert in the economic forecasting, regional development, real estate dynamics, and labor markets. Additionally, he was one of the earliest predictors of the housing market crash and of the economic recession that has followed.
If your goal is to network within a specific company and gain knowledge on how they operate, consider attending one of their sponsored seminars. For example, last year I attended a great Short Sale seminar sponsored by Chicago Title. Then I attended a wonderful open house hosted by the First American REO Asset Management’s office in Denver. That event enabled me to speak directly with their Asset Management team.
If your goal is to network with other agents and associates, consider attending the REOMAC dinners. They happen throughout the year, and they’re primarily hosted within major markets. Plus, you don’t have to be a member to attend. The cost for non-members is a bit more, but the networking and insight is worth the price.
One more suggestion, consider joining a trade association.
- If you list residential REO properties consider joining NRBA, REOMAC, REOConnection, or REOBroker.
- If you list Commercial REO properties, consider joining CREOBA.
- Minority associations include: AAREA (Asian community), NAHREP (Hispanic community), and NAREB (African American community).
Short Sales & Foreclosure Alternatives Program
Today The New York Times posted an article titled, U.S. Loan Effort Is Seen as Adding to Housing Woes. Okay I’ve read this theory before and almost didn’t finish the article, but then it got interesting by focusing on Short Sales and the Foreclosure Alternatives Program.
That interested me. Back in August 2009 I attended a conference for the California Mortgage Bankers Association (CMBA), and many break-out sessions discussed how the Administration, Lenders, and Servicers would work together to keep properties from becoming bank-owned real estate owned (REO). They’d do so by streamlining the Short Sale and Loss Mitigation process.
I left that conference thinking about real estate agents who primarily generate revenue by listing REOs, and how many of those agents struggled to make an income. Why? The foreclosure moratorium kept them from receiving REO listings. In fact, I know a few who are facing foreclosure because they were not getting any listings. Talk about ironic.
After the CMBA, I thought if REO listing agents didn’t diversify their services to include Short Sale, Loan Modification, or Credit Counseling they’d continue to struggle through the next few years.
Now five months after the CMBA, the Foreclosure Alternative Program has unfolded. Time will tell if this is a successful program. One thing if certain, it’s a reminder that the mortgage default industry is constantly changing—trying to find the right solution to solve our tsunami housing-problem.
Additionally, it’s also proof-positive that to be successful, we need to keep up with the changes. For example, agents who rely on REO listings might want to consider getting a Short Sale certification. Plus, if a homeowner has been unsuccessful in selling their home via a Short Sale, try again. And make sure their agent has experience is this type of sale.
For more information, here’s a quick overview the Foreclosure Alternatives Program:
- It complements HAMP by providing viable alternatives for borrowers who are HAMP eligible.
- It utilizes borrower financial and hardship information collected in conjunction with HAMP, eliminating the need for additional eligibility analysis. (This is greatly needed.)
- It allows the borrower to receive pre-approved short sale terms prior to the property listing.
- It prohibits the servicer from requiring, as a condition of approving the short sale, a reduction in the real estate commission agreed upon in the listing agreement.
- It requires that borrowers be fully released from future liability for the debt.
- It provides financial incentives to borrowers, servicers, and investors.
7 tips for a successful outcome when tenants face a foreclosure eviction
Okay, time for updates.
Most important, my Mom is doing great, and thank God she didn’t suffer any complications from the stroke. A week after the stroke, she needed brain surgery to stop hemorrhaging. That too was a success. Plus her last CAT scan was fine, and now she’s back home; active and looking for some fun. Thank you for your prayers and well wishes.
Last week a cold hit me. After much needed rest, I’m back working. For anyone who’s fighting this blasted virus, good luck; rest and drink plenty of liquids.
As for the bank and my eviction: Great news; the bank acknowledged my lease and stopped the eviction process.
For any tenants facing eviction caused by a foreclosure, here is the last step I took, which I believe caused the bank to acknowledge my lease.
With three day left before the eviction was to begin, I wrote a letter that explained my point of view and my rights. Then I researched the web to find e-mail addresses for any Manager, Director, VP, President, Board Member, and Public Relation personnel that worked for the bank. Then I e-mailed each of those people my letter.
Bad news: Only one person responded to my letter.
Good news: That person helped me. To her I say thank-you for your help and support.
For those facing a tenant eviction caused by foreclosure, here are 7 tips to help you:
1. Know your rights. Read the Tenant Bill of Rights
2. Don’t let negative emotions control you actions (easier said than done).
3. Stay focused on the goal of getting the lender to accept your lease.
4. Be proactive. For example,
- Go to seminar where the bank will have representation, and speak with them directly.
- Hire a lawyer to write a demand letter.
- Share your story with the media that’s reports on foreclosures, the “Tenant Bill of Rights”, and evictions.
- Call your City’s Housing Department to see if they offer support or resources.
5. Call a local real estate association or real estate board. Maybe someone from the bank sits on their Board or a special committee.
- NAHREP represents Hispanic real estate professionals
- AAREA represents Asian real estate professionals
- NAREB represents African American real estate professional
6. Remember that the bank’s real estate agent does not have any authority; rather they offer one conduit to transfer information.
7. When communicating (via letter, e-mail, the phone, in person) be true to yourself and be respectful to the person you’re speaking to. You will not gain anything from being nasty, angry, and mean. Rather be strong, confident, and factual. Easier said than done, but (as my Dad says) cool heads prevail.
Peace to you, in all times and in all ways.
5 Lessons When Facing a Tenant Eviction
Before I outline the lessons, please let me share a personal story. On Monday my Mom had a stroke. Thankfully she’s doing GREAT. Walking. Talking. Joking. Still it caused a brain hemorrhage, and next week she’ll need surgery. Please pray for her. If you’d like to learn about the signs/risk-factors of a stroke visit: Stroke.
Now on to Eviction Lessons 101
Lesson #1 — Know your rights.
Read the Tenants Bill of Rights, which enables the tenant (not the previous owner) to live in the foreclosed home till the lease ends.
Lesson # 2 — Be empowered.
Don’t let your emotions get the best of you. Easier said than done. I’d like nothing more than to get a bit emotional at this moment — after all Mom’s having brain surgery next week, the lender hasn’t approved my lease, and if that doesn’t happen I’m supposed to move by 11/4. Crazy!!!
So, I’ll focus on how the law is on my side. Here’s my challenge:
- The Broker and Asset Manager aren’t communicating, which makes them appear to be ignoring the law and me. That may or may not be true. I really don’t know.
Instead of getting upset, I got a lawyer, Ms. Janet Martin. She’s amazing. She wrote and distributed a “Demand” letter to the Broker and the eviction law firm. When we get contact information for the Lender and their Asset Management Company, they’ll receive a letter too.
Lesson # 3 — Be smart.
Don’t let your Broker tell you that the “rental offer” was good for only a few days. That’s what mine told me. That’s a lie. There is NO time period under the law for the tenant to accept the rental.
Lesson # 4 … Be understanding.
Okay, I’ll give my Broker some slack here … the lender who owns this unit uses a web-log system to communicate – that’s it. No person. No phone number. No e-mail – just a web portal. So if the Broker doesn’t get feedback he can’t pick up the phone and call someone. Not all Lenders work this way, but the one who owns this unit does. This does make sense because Lenders need to streamline the REO management process as much as possible.
Still, when dealing with time-sensitive, legal issues, take on the Lesson #5 …
… Be tenacious.
After getting the demand letter, the Broker immediately contacted Ms. Martin. He then gave her the Lender’s attorney’s phone number. They claimed no responsibility to renting the unit. They said the Broker has that authority to accept the lease. Then they referred her back to the Broker.
Ms. Martin is tenaciously great. She called the Broker back. He denied having rental authority, and he gave her the number to the firm who wrote original eviction letter. Her conversation was that firm was virtually the identical to the one with the first firm. Really? Unbelievable!
Well, here’s the latest ….
Today I found out that the Lender said my lease was not valid for it included “a lease with an option to buy”. Hence, they are literally ignoring the law. Hummmmm.
Updates to follow.
Foreclosure2Homelessness; a survey
While researching foreclosures, evictions, and renters I came across an interesting 2009 Foreclosure Survey by the National Law Center on Homelessness and Poverty titled, Foreclosure2Homelessness. It states:
- In 2008, one in five foreclosure properties were rentals; many had multiple units.
- The National Low Income Housing Coalition estimates that 40 percent of families facing eviction due to foreclosure are renters and 7 million households living on vary low incomes (31 – 50 percent of Area Median income) are at risk of foreclosure.
With that knowledge, I’ll share a conversation with a prominent real estate broker who receives REO listings from Fannie Mae. We talked about Lenders, Servicers, and Fannie Mae/Freddie Mac and their compliance with the Tenants Bill of Rights.
Knowing the Broker just met with Fannie, specifically to discuss the challenges of becoming a property manager for their REOs, the Broker told me that the Fannie representative said they received nearly 6,000 rental applications for their foreclosed properties, yet they only approved 200 of those applicants.
Their explanation; they’re not in the business of renting property; and those approved applications were done to show the Obama Administration that they were trying to help tenants from being evicted.
Wow, can that be true? I don’t know. Yet in fairness to Fannie Mae I called them to asked about their rental policy and for a comment regarding their rental numbers. They acknowledged having low rental number (no exact amount was given). They said most people choose the “Cash for Keys” option to help with moving expenses.
Hummmmm, okay …. still, I wonder did the bank that owns my unit make me a “vacant” offer to rent it? If so, that would explain why the agent (who’s listing my bank-owned/REO home) has ignored my request to continue renting it.
It’s just a thought.
Tenants Bill of Rights
Okay … why am I looking to rent a new place when I have a lease? Great question. Especially knowing that the Tenants Bill of Rights enables tenants to live in the foreclosed home till the lease ends.
Still the question remains, why haven’t I been more aggressive at renting my current foreclosed home? In my defense, I did tell the REO Listing Agent that I wanted to rent the place (twice).
But he’s ignoring me, and I’ve been given a 90-day notice, and I don’t want to be evicted, and I get tired of dealing with the issue, and sometime I believe that by moving my life will get easier… bla, bla, bla, bla.
Then again, moving means I must spend time looking for a new place, and pay a credit report and movers and security deposits AND possibly parking tickets. Either way — staying or moving — it’s draining.
Here’s the problem; I’m tired of living in this “foreclosure black-hole”. I’m not sure when I fell in. Maybe after the mailman delivered his 20th certified foreclosure letter; or maybe after a Notice of Trustee Sale was posted on my home and all the neighbors talked about it for weeks; or maybe after a few strange people slowly drove past my home and pointed at it. I know they’re saying, that’s the place in foreclosure, and it’s going to auction tomorrow. Most likely I fell into the pit on auction day. What a chaotic, out-of-control feeling, knowing that your home is being auction off, and there’s nothing you can do.
It doesn’t matter if you’re the homeowner or a tenant, the foreclosure experience is maddening, and a point comes where you just want the craziness to end.
Here’s the good news — thanks to the listing agent who’s ignoring me, I’m pissed off. It doesn’t matter how nice he was in the past, I won’t be ignored when it comes to my living arrangements. So, I hired a lawyer to communicate with him and the bank. Hopefully that’ll capture their attention.
How ironic is it that I started TDN to help people understand the foreclosure process? You could say I walk the talk.
Updates to follow.
Foreclosure’s side effects … parking tickets
As mentioned in my last post … my rental place was foreclosed, which is causing me to move out, and today I went looking for a new place.
I scheduled an appointment to see a place; showed up on time, only to discover the landlord did a “No Show”. GREAT. That nearly wasted an hour of my day. Then while walking back to my car I saw the street sweeper and parking ticket lady. Yep, on Friday between 12-4 there is no street parking, and yes I got a $47 ticket. GREAT … !#$%@.
Of course the parking ticket lady didn’t have sympathy for me (no matter how brilliantly I pleaded my case). With a smile she handed me the ticket saying, Have a nice day.
Thinking about those simple unpleasant moments, I thought about the side effects of foreclosure … parking tickets.
Here’s my logic … If my landlord had not foreclosed I wouldn’t need to move. Consequently I wouldn’t have been looking for a new place, which means I wouldn’t have parked on that street and gotten a ticket. Then again I also thought about the city, and how it lost nearly 30% of it’s property tax income, and now needs to give people tickets to make money.
Maybe that’s some crazy logic. It really doesn’t make me feel better because in reality it feels like robbing Peter to pay Paul. It’s all cyclical.
Why did I create The Default News?
Many people have asked me … What do I get out of The Default News (TDN), why did I create it? That answer is rather personal, and those who I’ve shared it with say my story should be shared with you. So, hoping that my insight offers some encouragement, here’s my answer.
In 1990 without any knowledge of the real estate market my husband and I bought a house in Corona, and in 1995 sold it due to our divorce. In hindsight we bought and sold at the worst time; the high and low of the market. Consequently we lost a lot of money. That experience caused me to believe that real estate was the worst investment. Hence for the next 10+ years I didn’t buy, only rented (consequently giving a landlord over $100,000 during that time period)
Then in 2005, after I sadly watched the real estate market skyrocket, I was hired by a national real estate network to be their REO Specialist. At the time I knew NOTHING of foreclosures, REOs, and real estate. But I knew how to create synergistic partnerships, and that (in essence) is what I was hired to do.
During the next two years, I studied the mortgage default industry by going to conferences, meeting with title companies, lawyers, REO Listing Agents, and Asset Management companies. I realized the value of networking with other real estate professionals, and that each market is different, and that real estate can be a great investment.
By 2007, I also came to believe that the mortgage default industry was elusive. For example, I was surprised to learn that most homeowners didn’t know their lender had a Loss Mitigation department or for that matter how to reach the Loss Mitigation department. Also, many homeowners didn’t know their options to either keep or give up a property. And surprisingly, many people didn’t know how to organize their finances or paperwork when facing a Short Sale or loan modification.
That frustrated me, because I keep thinking back to when I bought/sold the house in Corona. I too didn’t know how to manage my real estate investment, or my options to either keep or give up the home during the divorce. If I could have, should have, would have!!!!
So I started writing a newsletter reporting on trends and issues within the mortgage default industry. That’s how all this began. My goal was to educate people about the foreclosure process and to help them be less emotional when facing foreclosure (easier said than done).
During the past two years TDN has grown beyond a simple newsletter. It now offers resources — in all 50 states — for those either facing foreclosure or for those wishing to purchase a bank-owned/REO. Hopefully the insight helps them make a good decision out of a bad situation.
One more personal note … The place that I’m renting went into foreclosure, and on 11/04/09 I’ll be evicted. How ironic is that!!! It’s time for me to buy.
Follow-up w/Loan Mod problems
A few weeks ago I wrote about a couple who applied for a loan modification.
Their application started in April ‘09, and to date it’s not complete. Why? Well, there are three common problems:
- Submitted documents get lost.
- Re-submitted documents become outdated.
- Never speaking to the same person twice.
So this couple met with a HUD approved credit counselor who called the lender, and re-submitted all needed paperwork. Finally the application was complete.
Not so fast, last week the couple got a letter from the lender, who needed a copy of their insurance policy… That was a new request, and as usual, the letter was not signed…. Hummmm.
What can you do If you’re facing the same situation?
- First, continue meeting with the HUD approved counselor. Have them contact the lender, and have them confirm all paperwork has been submitted. There’s nothing better than their support. You don’t need to do this alone.
- Second, contact the Loan Modification department and get the names of their Supervisor, VP, and President. Then write the President a letter and cc: the others.
- Third, contact the lender’s public relations department and voice your complaint. Ask them if there is anything they can do to help?
Basically, you want the direct name/phone # of someone (with authority) who will give you an e-mail/fax # (to submit paperwork) that’s goes directly to their desk.
If that doesn’t work, voice a complaint with the Better Business Bureau, your local Congressman, and your state’s Mortgage Bankers Association.
Good luck!
