Licensed CA. DRE
Personal Broker # : 01102481
Corporation Broker # :01378065
Certified Short Sale Specialist
32 years experience
Article on Orange County's Priciest Short Sale
Home Owner Bail Out
What is a Short Sale?
Short Sales are the solution for solving today’s real estate problems. The banks were bailed out now it is your turn.
When we purchased our homes we had the idea that we could sell or refinance them as needed. Since home prices have fallen, refinancing or selling may be impossible. Lenders are denying requests for modifications and not reducing balances. If you find yourself in this predicament, a “Short Sale: is the solution, and can be obtained through Steve Spiro, a Certified Short Sales Specialist and Principal Broker of Asset Liquidators.
In a “Short Sale” arranged by Asset Liquidators there is no cost to you. It will allow you to sell your home for less than you owe on it. The bank will waive the portion of your loan that does not get paid off at close of escrow. At Asset Liquidators, this procedure typically takes 9 to 12 months to complete. Steve will design a custom solution for your situation. This may include a sale and lease back so you can stay in your home and don’t have to move or cash back for relocation expenses. He can also arrange for you to qualify for and purchase or lease a new home before or after the Short Sale. The benefits for the home owner also include avoiding foreclosure and deficiency judgments. It may have little impact to your credit compared to a foreclosure or bankruptcy. It will postpone the foreclosure sale date allowing the homeowners more time to stay in their property without making payments.
With a properly handled Short Sale, your loans, secured taxes, HOA dues and all cost of sale will be paid by the lender. There are no fees to you, the bank pays for everything. Consider a Short Sale as the free solution to dispose of your upside down real estate. A Short Sale must be handled by an expert. Don’t trust your Short Sale to just anyone.
For a custom solution, call Steve Spiro a California Realtor- Broker with 32 years of real estate transactional experience and a Certified Short Sale Specialist. He can be reached at 949-212-3492. email: Steve@Asset-Liquidators.net
E-Mail or Call Steve today at Steve@Asset-Liquidators.net
or 949 212-3492
The Truth About Loan Modifications
I want to share this question from a client and my answer, After that you will find my opinion on the truth about loan Modifications,
"The other cost of a loan modification"
I just received mail confirmation from Chase on a loan modification. They have agreed to a reduction in payments to make the cost affordable for us. Due to the value of the house, I know that it still amounts to us "renting" the house. However for the cost of the new payments, I could not rent a house similar to this one. I will keep your information if anything changes.
Dear Home Owner ,
Thanks for letting me know. These loan mods are good for the bank and bad for you. Unfortunately the truth of the matter is that they are likely offering to increase your balance making this not only a worse financial investment for you disguised as a good loan for their books but they are causing you to miss your window of opportunity to get this $750,000. Debt off from around your neck. Please consider the following,
The window of opportunity I am talking about has significant benefits for you that will be lost forever if you go down this path they are leading you, not to mention that they are likely lying to you anyway. If they are giving you trial mod payments that are low, at the end of the trial mod they will just deny the modification or increase them to fully amortize putting you in the same position. I have seen it a hundred time.
The mortgage debt relief act is set to expire at the end of 2012. This is in place with the Feds and the State to get you off the hook on the taxes for the amount that the lender forgives in a short sale or if you walk away in a foreclosure. If you wait until you realize that the lender just sold you a bill of goods to walk away or do a short sale it will be too late to avoid a significant tax bill on phantom income.
The bank is trying to keep you paying on a bad financial investment causing you to give up your opportunity to have the best financial opportunity of your life. We will not likely see prices and rates this low again in our life time. Do you really want to miss that opportunity just for “cheap rent”? In the end under their plan you will have a large debt you can’t pay back preventing you from getting a home that is a good financial investment. You also may be facing a large tax liability. Your home should be your biggest and best financial investment not your worst financial nightmare dragging you down and tying your hands preventing you from taking part in the best real estate buying opportunity decades.
I have been in real estate for 32 years. I have the wisdom of long term perspective. I have made millions from my real estate over the years. But digging in and paying the bank for nothing is not how you do it. Timing in real estate is everything. You do it by pushing the loss on the bank since they are willing to take it on a short sale and buying back in at the bottom of the price and rate cycle so you can ride the appreciation tide back up while controlling the property with a low 30 or 15 year fixed rate loan.
Yes it is easy to do nothing and take the deal but where does that leave you in 10 years? With nothing or with 200+K in equity? Believe me as much as you like your home you will love your new one even more especially the financial aspect of it. It will be one that someone else put their heart and money into it and lost to foreclosure. Today the way to get financially ahead with upside down home is to transition. Cut your losses and buy back in and hold on for a the greatest financial ride of your life.
As you can tell I am passionate about real estate. I have owned close to 100 properties. And I have made all of my wealth through appreciation. During my 32 years in real estate I have seen this cycle 3 times. We went over the top in 1979 and in 1989. It was game reset each time just as it is now. Don’t miss your opportunity or fall for the bank’s trick to keep you paying on a bad investment just to make their books look good. They don’t need your help, they got bailed out with our tax dollars.
Besides, on a short sale that I handle, you will not have any payments for 9 to 12 months giving you an opportunity to save more towards your next home. That is even a better short terms deal than the bogus mod “cheap rent” they are offering you. Let me know and we can set up an appointment for me to stop by and answer your questions about the short sale. I am happy to help you through this transition to a new home of your (financial) dreams.
Steve Spiro, Principal Broker/Realtor
949 212-3492 Direct
The Truth About Loan Modifications
1. If you are facing foreclosure a loan modification is not a good solution because, many third parties have or are asking for illegal or unethical upfront fees
(Never pay up front fees for a loan modification).
2. Lenders have only been approving a small percentage of loan modification applications.
3. Most third parties are not successful at getting their clients' loan modifications even if they are licensed realtors or working with an attorney.
4. Even if your loan modification does get approved it will not solve the problem.
A.) They are typically good for the lender and bad for the homeowner.
B.)They will entice you by offering you a lower interest rate and to make you current. But at the same time they will add your unpaid interest and late fees to your principal balance.
C.) In the final analysis if you are still going to owe more than your property is worth, you will still be upside down and are going to be paying out your hard earned money to a lender that has no intention of letting you keep the property or see a dime of return on your investment.
Everything you pay toward the modified loan is money thrown away.
5. Modification are often for only 5 years or less then your loan reverts back to it’s original terms.
6. Modifications typically result in you paying a much higher payment, taxes and insurance and HOA fees if any than you would have to pay for renting a similar home.
A.)Since you will not be building any equity as a result of your higher than rent payments because your loan balance is higher than the value of you home, there is no point in paying that higher payment to own.
B.) It is better to just rent a home for a lower payment and save your extra money so you can buy your next home at a great discount like others are doing today.
7. Modification is bad for one major reason. Lenders are NOT lowering your unpaid balance. If your home is worth less than the balance owed to the lender, it is a bad investment. If you are not building equity and have negative equity, sugar coating it with a low interest rate will not turn a bad real estate investment into a good real estate investment.
8. Modifications often do not lower your payments. if you had an interest only loan, an option arm or if your loan rate reset, when the lender offers you the modification, it is normally principal and interest (fully amortized) and even at the attractive lower interest rate, it does not lower your payments and in fact sometimes increases your payments.
9. Lenders after approving your loan modifications force you to take the deal by holding your property hostage. Assuming you are behind on your payments they will only give you a few days to accept the deal or it will be void. Upon looking at the deal you will see that they will entice you to accept it by offering to make you current and lower your interest rate. The problem is that the way they make you current is to take all of your unpaid payments (interest) and late fees and add that to the unpaid balance. They drop your interest rate (not your balance) to make it appear that they are doing you a favor.
What they are really doing is forcing you to either let them take your home or agree to their terms. You will be made current just by signing and returning the modification and you will get an amazing low interest rate. The only problem is that the principal is being increased and you are now paying interest and making payments on a larger liability that can not be supported by the asset. They are okay with you being upside down and having negative equity, because they are shifting the burdon of the problem to you.
10. It is no wonder that by some reports nearly 100% of all loan modifications made by lenders fail within the first 12 months and the properties end up back in foreclosure.
11. Another trick lenders are playing is that they have you make three months of trial payments telling you that you will be approved and the modificaiton will become permanent after you make three on time payments. Then at the end off the thre months they tell you that sorry but you don't qualify for a low modifaction and sometimes offering to have you try again. I have heard this same story over and over again. Then they go stright to sale with your property in less than 21 days giving you no time. They use the three month trial ploy to get you to keep making payments all of the while while the clock tics on your foreclosure so that they manage to keep the payments coming in from you during the foreclosure period.
12. Face it, if 86.5% of mortgage holders are still making their payments they want to keep that figure up for as long as they can.