IN THIS ISSUE

Pg 1—Editorial: The Problem With Short Sales

Pg 1—CHART: Coral Bay Average, Median, & # of Sales, 1990 thru 1st Qtr 2009.

Pg 2—That’s What You Say [Survey Results of Home Buyers & Sellers]

Pg 2—CHART: 1st Qtr 2009 Closed Sales, Coral Bay

Pg 2—Surviving Job Loss

Pg 3—GUEST ARTICLE — Refinance Your Health/Life Insurance?

Pg 3—GRAPH: Number of  Transactions in Coral Bay 1990—thru 1st Qtr 2009

Pg 4—Quote Of The Month

Pg 4—Inside The Numbers, Coral Bay 2009 YTD

EDDIE VELIE, Consultant, Realtor, Mortgage Broker, CAM

http://EddieVelie.com

(O) (954) 263-6287

Broker@EddieVelie.com

(F) (954) 532-9695

http://VelieRealEstate.com

©  2009 Velie Real Estate Services, LLC

         Articles and opinions here in do not necessarily reflect the opinions of EXIT Realty or any of my business, social, or voluntary affiliations or associations.

QUOTE OF THE MONTH

Obama to states: Spend stimulus wisely – or else

       "If we see money being misspent, we're going to put a stop to it," Obama told a gathering of state officials.

      Vice President Joe Biden, who is coordinating oversight of stimulus spending, opened the conference with an equally stern warning.

      "Six months from now, if the verdict on this effort is that we've wasted the money, we built things that were unnecessary or we've done things that are legal but make no sense, then, folks, don't look for any help from the federal government for a long while," he said. Copyright © 2009 The Associated Press, Darlene Superville, [Excerpts From] (Associated Press Writer.) [Perhaps they are talking about the $68,000 fence the Coral Bay CDD paid $243,000 for, and didn’t even include landscaping or clean-up of broken concrete! — Eddie Velie]

A Real Estate, Mortgage, & HOA Information Newsletter

A COMMUNITY SERVICE NEWSLETTER

At Home In Coral Bay

Editorial:

The Trouble With Short Sales

         Short Sales were rare less than two years ago after several years of rising prices. Popularized by this collapsed real estate market, this largely misunderstood term has become part of our everyday conversations, but not because they are successfully closed.

         Some sources say up to 20% of short sales close. My own research shows that  less than 5% of short sales in Coral Bay closed depending on whether you are dividing the total of “Expired,” & “Cancelled,” etc., or dividing by the total number of closed sales.

         Short sales don’t close for dozens of reasons, some of which seem unbelievable at times. The ultimate affect of these reasons leave buyers & industry professionals frustrated and disappointed. Here are some of the reasons:

         First, as I understand it, the person who can make the decision to approve the loss may not exist. The mortgage is packaged with other like mortgages and sold as a bond to, perhaps, hundreds of investors. Want to see an example? Look up deeds where the owner is a bond series.

         Second, the seller may have undisclosed assets the lender finds out about and is unwilling to accept or forgive the loss.

         Third, if there is a second mortgage, they may not agree to tiny settlement offer from the first mortgage holder.

         Fourth, the seller does not even own the property! Upon researching one short sale situation, I learned the seller had a third mortgage with the previous seller. In these situations, the deed stays in the previous owner’s name until the seller’s mortgage is paid off.

         Fifth, the seller may be just stalling for time to live in the house as long as possible before being evicted after the court auction. Unbelievable? Multiply a $3,000 payment X 12 months X 2 years = $72,000 saved by the person currently on the deed. They stall for time by making the house difficult to show by requiring appointments, narrow times slots, listing agent escort, etc.

         Sixth, the seller has lost all motivation to keep the house neat  for showing. They figure they have lost all the money they can  lose so why even try to keep it neat and

clean so the lender gets a better offer and minimizes their losses.

         Seventh, the seller does not cooperate and provide the necessary documentation in a timely manner to the people negotiating on their behalf.

         Eighth, the seller, in exploring all the angles to get out of the situation, obstructs the negotiator’s efforts. For example, the listing agent is negotiating with the loss mitigation department, and the seller decides to try to re-negotiate the mortgage without telling the listing agent. The file is stalled, sent to another department, and they start all over.

         Ninth, the seller moves out of the house and strips the house of most everything they can carry away including, flooring,

draperies, A/C units, lighting, appliances, counter tops, cabinets, etc.

         Tenth, the terms demanded by the listing agent and seller are ridiculous. For example, demanding a large deposit by the buyer knowing it will tie up the buyer’s money for months.

         Other reasons include fraudulent circumstances, the lender’s refusal or inability  to negotiate, demands by one side or the other to use their favorite vendors, mergers, acquisitions, and bankruptcies.

         I think you have the idea. For everyone involved, this is a nightmare of doubletalk, uncertainty, stalling tactics, deceit, and conspiracy, that is escalating. Bad ethics, and violations of industry standards are becoming “all in a days work.”

         One agent rewrote terms of a contract to trap the buyer. She changed the terms so the buyer would lose their deposit if they walked away before approval by the lender. Fortunately, I could recognize it as creating unenforceable one sided option contract. Changing contracts could also be construed as practicing law without a license (a 3rd degree felony).

         Another real estate agent arranged for a straw buyer to strip the home of its equity because her credit was bad. The agent told the straw buyer it was a refinance. When the deal closed, the straw buyer recorded a Quit Claim Deed with Broward County to transfer the property back to the real estate agent’s name. Neither of them knew that you cannot transfer interest in real property, while you have a mortgage, without triggering the “Due on Sale” clause (the entire mortgage becomes due). I explained this to them after I was hired to try and short sell the property. The straw buyer could not seem to grasp, that she owned the house. She kept murmuring, the other real estate agent still owed her $5,000.

         This one page does not & cannot cover all the dumb or tragic situations I have seen in the last 1-1/2 years. Notwithstanding all the legitimate reasons for people that are losing their homes, we cannot let the “one bad apple” syndrome take hold. We must continue to try and help where we can and try to feel empathy for those that really deserve it. Unfortunately, the odds of them getting out of the house without a foreclosure on their record is a long shot at best.

© 2009, Velie Real Estate Services, LLC

 

A Real Estate, Mortgage, & HOA Information Newsletter

A COMMUNITY SERVICE NEWSLETTER

At Home In Coral Bay

THAT'S WHAT YOU SAY

[Survey of Home Sellers & Buyers]

         Homebuyers, home sellers, and real estate pros don't always agree on what a property is worth, and many buyers thinking that sellers and licensees set the price too high. According to a survey by HomeGain.com Inc., 63 percent of homeowners believe the price their practitioner recommended was too low. About 45 percent of sellers think prices should be 20- to 30-percent higher, and 14 percent believe their home should be priced 30 percent higher.

         Meanwhile, 21 percent of homebuyers say homes are overpriced up to 10 percent; 32 percent say prices are 10 percent to 20 percent too high; and 6 percent say homes are overpriced by at least 20 percent. Only 18 percent of potential homebuyers believe properties are priced fairly.

         "Homeowners know that prices have fallen, but that somehow doesn't apply to them because they have 'upgraded vinyl' or something," says Pamela Frey-Primiani of Keller Williams Realty in Sicklerville, N.J. "Sellers have got to be realistic in their expectations."  (Source: HomeGain.com Inc., 03/05/2009) (© 2009 FLORIDA ASSOCIATION OF REALTORS® OF REALTORS®) 

survive, but it is good to know what you have to fall back on.

              Drastic times call for drastic measures. Nothing is off-limits. Consider selling the second car or recreational vehicle, real estate holdings, rental properties or jewelry.

              After you review your income versus debt obligations, if you don’t have enough money to make ends meet, calculate how much you’ll need for basic household expenses. Your goal is to pay everyone, but if you must make a choice, keep food on the table and your home life stable by paying your rent or mortgage, association assessments, utilities, childcare, insurance premiums and health care.

              Have a family meeting that includes the children. You don't want family members pulling in different directions, and a joint effort yields a better result.

              Make cutbacks wherever possible, knowing that your austere lifestyle will only be temporary. Resolve to stop all non-essential spending immediately.

              Tracking your spending is always a good idea, but when money is tight, it's essential. Write down every cent you spend. After 30 days, review where the money went and decide where to cut back. You'll be amazed how much you can save without feeling the pinch.

              Contact your creditors to arrange lower payments. Most major credit card issuers have help programs. Explain your situation and what you're doing to resolve it. The creditor may be able to temporarily lower your monthly payment and reduce interest.

              Inform your mortgage lender of your situation. Be prepared to provide documentation of your setback, and have a resolution plan in mind. Since the average consumer doesn't know all the loan modifications available, sit down with a certified housing counselor and map out a plan best suited to your situation.

The National Foundation for Credit Counseling is a national nonprofit credit counseling organization. For more information, visit www.DebtAdvice.org or call (800) 388-2227. En Español, dial (800) 682-9832. (Source: Community Associations Institute Web Site.)

Surviving Job Loss

It's never a good time to lose your job. However, the current economic environment has resulted in business closures, downsizing and layoffs for many in our community. The National Foundation for Credit Counseling offers the following tips for surviving a layoff:

              Allow yourself to be upset or even afraid. These are natural reactions. However, if they become intense, seek professional help. Talking things through and hearing another person's perspective can bring relief and restore your positive outlook.

              Resist the urge to tell your boss what you truly think of him or her. Remember, you may need him or her as a reference for a future job.

              Take advantage of any assistance your workplace offers. Many companies provide placement assistance, job retraining and severance packages. Make sure you are aware of all benefits offered.

              Apply for any applicable government benefits. Your HR representative at work will be a good resource.

              Resist the urge to solve your problems by spending recklessly. It may feel good for the moment, but the high of spending won't equal the low of dealing with additional debt when there is no income.

              Don't be tempted to live off of your credit cards. Someone with a good line of credit could actually support the family at the current standard of living by using credit, but there's no guarantee a new position will materialize any time soon. Expect one month of job search for each $10,000 of annual income you hope to replace. In other words, if you seek a $50,000 salary, it may take you five months to land that job.

              Take a personal inventory. Consider all assets, income and expenses. No one wants to liquidate assets to

At Home In

Coral Bay

A Real Estate, Mortgage, & HOA Information Newsletter

A COMMUNITY SERVICE NEWSLETTER

At Home In Coral Bay

Refinance Your Health/Life Insurance?   By: Tamer Baker

       Everyone is always seeing ads and hearing about refinancing their mortgage.  Of course these days that’s what everyone is focusing on to save money in this economy.  Most people don’t realize that you can actually save money by refinancing your insurance as well!

       Did you know that a new law was passed in January of 2009 that required the life insurance companies to start using updated mortality tables?  What’s that?  It’s a table that shows the average lifespan of men and women of certain ages.  If the table shows a long lifespan, the risk of you dying before your life policy terminates is low, which means your monthly investment into your policy is lower.  The insurance companies were using tables from the 80’s.  People live longer now then they did in the 80’s.  That means the new mortality tables show longer lifespans – which in turn means lower premiums.  In some cases, rates have dropped an astounding 30%!

       If you already have life insurance, now is a good time to see if you’re still getting the best deal.  If you don’t have any life insurance or have recently lost yours, you may want to look into buying a new policy with these lower rates.

       What about health insurance?  Health insurance rates are always going up … no matter if you are on a group plan at work or have coverage on your own.  Group insurance isn’t always the most affordable option anymore.

       You may be overpaying for coverage you don’t think you even need.  Or, you may have just lost your job/benefits and need to try and figure out insurance on your own for the first time.  Did you know that most states actually have insurance companies that are specific to the residents of that state only?  Premiums for these policies are usually dramatically lower, and you still have full access to all of the Dr’s and hospitals you want to, with no referrals.  These are not discount plans, but full coverage insurance just like you’re used to.  It’s always a good idea to speak to a professional who knows the markets for many insurance companies – who works for you and is not specific to just the one insurance company they want to push you into.

       If you are curious about either health or life insurance, you should contact Tamer Baker; your Coral Bay resident insurance agent.  He can help you refinance your current coverage or start new coverage without all the hassles.  Either call him at 954-971-9261 or email him at tamer@findapolicytoday.com.

A Real Estate, Mortgage, & HOA Information Newsletter

A COMMUNITY SERVICE NEWSLETTER

At Home In Coral Bay