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Homeowners: read your mail to avoid unfair foreclosure

While homeowners should never be foreclosed on for a technicality, there are notifications and details to be aware of before ever falling into disaster.

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Wells Fargo Forecloses on Home After Mortgage Overpayment

In a long line of sad foreclosure tales, there was a recent report about a homeowner with a Wells Fargo mortgage who was offered a loan modification, accepted, never missed a mortgage payment, and then lost his home to foreclosure. On the surface, it certainly doesn’t make sense, and it’s definitely not the happily-ever-after story that the Treasury department was hoping for when they created the Home Affordable Modification Program (HAMP).

With only limited details available, it appears that this erroneous foreclosure is yet another sad commentary on how human error, poor communication, and inefficiency can seriously impact the lives of homeowners. Additionally, it’s ironic that the Independent Foreclosure Review settlement checks (payouts for this very error) are now in the mail, while this grievous error still occurs.

Common Pre-Foreclosure Mailings

One thing that this story brings up is the extreme importance of opening the mail. Borrowers facing foreclosure and borrowers with pending foreclosure dates are deluged with mail, and many are too scared or uncomfortable to open the envelopes.

Depending upon where the borrower resides, here are some items that may come in the mail once the property is actively in the foreclosure process:

  1. Notice of Default. This is a copy of an official document that has been recorded by the foreclosing party. It states that the property is in active foreclosure status, generally due to multiple missed mortgage payments. Copies of the Notice of Default are generally mailed to the mortgagee.
  2. Notice of Trustee’s Sale (or Sheriff’s Sale). Once the subject property is close to the official foreclosure date (the date that the bank will auction the property or the property will revert back to the bank), this notice will be mailed to the mortgagee and posted on the door of the property. In most states, the Notice of Sale is posted about 3 weeks prior to the sale date.
  3. Postcards and Direct Mail. Once the property is on the public records as an active foreclosure, all sorts of businesses will send direct mail. From loan modification companies to Realtors® looking to list the property as a short sale, the owner’s mailbox will be filled with all sorts of pre-foreclosure advertising.

Sometimes Good Things Come in Small Packages

There are occasions when individuals facing foreclosure receive good news in the mail. Here are just a few instances when good news is sent to distressed borrowers:

  1. Principal Reduction Offers. Some lenders offer borrowers a reduction in principal on their mortgage via US Mail.
  2. Short Sale Incentive Offers. Certain mortgage lenders offer up to $40,000 to distressed borrowers facing foreclosure when those borrowers agree to participate in a short sale.
  3. Mortgage Forgiveness. Junior lien holders may write off the loans and send the borrower a reconveyance, which states that the borrower does not owe any money: the debt it totally forgiven as if it were paid in full.
  4. Loan Modification.  Many distressed borrowers are offered trial periods for loan modification. And, if they make the payments and submit requested documentation in a timely manner, they will receive the benefits of improved rate and terms on their existing mortgage (of course, this didn’t work quite right in the case of the Wells Fargo borrower in the recent report).

There is no question that a person who makes mortgage payments in a timely manner and never misses a mortgage payment should not lose his or her home to foreclosure. That being said (and knowing what we do about the quantity of mail that fills the mailbox during the foreclosure process), you have to wonder how the situation described in the report got so out of hand. Did the owner live off site? Was the mail in English and perhaps this individual speaks another language? Or, did the homeowner lose the key to the mailbox?

If you are an agent working with distressed borrowers, it is vital to assign your clients the task of opening each and every piece of mail that comes to them. Meet clients weekly to review the mail and be sure that you are cognizant of any looming foreclosure dates. Of course, you and the seller may be in for a few pleasant surprises as well.

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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