Jacquie Cliff's Real Estate Blog

Part of doing a short sale is submitting a hardship letter to the lender stating your case and why with your situation, they should accept an offer on your home that is less than what is owed on it.

What a hardship letter is not is a place to complain about what your lender has or hasn’t done to make things easier on you. Your hardship letter must be honest and present why and how your situation has changed and why you can no longer afford to make the payments.

If you are facing a short sale situation, the hardship letter is just part of the puzzle in successfully selling your home.  Please take a look at my article on how to write a short sale hardship letter, then give me a call at 425-773-3149 to set up a time to discuss your specific situation.

Fannie Mae has decided to drop the hammer a bit on homeowners that are ‘strategically defaulting’ on their home loans.  This is not very surprising actually with people walking away from their home at a record pace.

The word from Fannie Mae is that you will be BARRED from obtaining a Fannie Mae backed loan for 7 years if you do not attempt to modify or use other methods of home retention or work out plans with your lender.

In addition, people that live in jurisdictions that allow deficiency judgments may also find themselves perused after walking away.

The moral of the story?  TRY AND WORK OUT YOUR HOME LOAN!!!

The reality is that you may be able to adjust your payment to less than what you would pay for rent.  It is worth the time and effort to try and make it work.  If it doesn’t end up coming together then at least you tried and can still be eligible for a Fannie Mae loan in just two or three years instead of seven!

Well, our brokers are not really becoming zombies, but coming up in the next month or so the ‘agent’ and ‘broker’ designations for real estate professionals in Washington state are getting a make over.  The reason for this?  I would like to blissfully believe that it is simply because the state is wanting agents to be more qualified and more competent, but my suspicion is that they simply want more and higher licensing fees.

So what is going on?  As of July 1st real estate ‘agents’ will become ‘brokers’.  The old ‘associate brokers’ will become ‘managing brokers’ and ‘brokers’ will become ‘designated brokers’.  Sounds great doesn’t it?

Does this all mean that the inept and poor quality agents will drop out of the market magically?  I don’t think so.  It just means they have a new name and more hours of class time under their belts.  Bad real estate agents will always be bad agents no matter how hard you educate them.

MY DISCLAIMER!

As part of this, of course, all my marketing materials will change to referring from me as an ‘agent’ to ‘broker’.  If you see any place in old articles, websites, ect.  this is simply an over site. Honestly I don’t remember all the places I have articles, profiles and so on posted, so it is likely I will miss one or two.

Four Washington state-based banks, including the Bank of Everett, will begin operation as one institution Monday.

Bank of Everett will consolidate itself into Bank of the Northwest, along with Bank of Bellevue, Bank of Tacoma and Issaquah Community Bank. The move is intended to alleviate pressure on the banks’ Michigan-based holding company, which was hit hard by federal regulators last year.
Read the full article

In a continuation of the bank mergers and acquisitions, the Bank of Everett, the Bank of Bellevue and the Bank of Tacoma and the Issaquah Community Bank have all merged in under the Bank of the Northwest.  What this means for consumers is still not clear.  My main concern is for what this continuing consolidation of lending power means to the home loan market.

All we can really do is wait and see what effect the bank consolidations and raising of the Fed interest rates will have on consumer home loans.

These closures are becoming more and more common place and aren’t even making the news anymore.  Friday the FDIC shuttered Evergreen bank and sold it to the Umpqua bank of Oregon.  The predictions I am seeing is that the current financial crisis is accelerating the process of consolidation with strong banks sucking up those that extended too much credit.

On Friday, January 22, 2010, Evergreen Bank, Seattle, WA was closed by the Washington Department of Financial Institutions. Subsequently, the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
All deposit accounts, excluding certain brokered deposits, have been transferred to Umpqua Bank, Roseburg, OR. For more information on Umpqua Bank, visit us at www.umpquabank.com.
The FDIC has assembled useful information regarding your relationship with Evergreen Bank. Besides a checking account, you may have Certificates of Deposit, a business checking account, a Social Security direct deposit, and other relationships with the institution.
Please select the link below to read more about this event:
FDIC Bank Closing Information for Evergreen Bank
Online service will remain available.

Most home owners in the Seattle area are in a short sale situation.  Meaning of course that if they sell their home now, it will not sell for enough to cover what is owed to the bank.  There is a lot of debate whether it is better to let a home go into foreclosure, short sale it or just stick with it and try and do a loan modification. 

I am not a big proponent of letting the banks foreclose on homes.  Foreclosures are hard on your credit and makes it impossible to buy a home again in the near future.  Letting the bank foreclose on your home also means a 200-300 point hit on your credit report.  Not a good thing.

The much anticipated government programs to get banks to do loan modifications is not having a stunning effect.  I have heard few success stories, and while it is possible, it is not a guaranteed thing.  Plus, this is only an option if you are planning on staying in your home.  If you have to move, tough luck.

That leaves short sales; the bane of real estate agents lives.  Many are even charging money up front just to take a short sale listing.  I still don’t but it is a trend I am seeing more and more.  Some agents are not even taking short sale listings or even showing them to their buyers if they can avoid it! 

Short sales mean we need to not only find a buyer from your home, but convince the bank that they need accept an offer that they should take less for your home than what is owed upon it.   I would love to tell you that I am capable of making banks process short sales and that every one I have laid hands on has magically gone through, but banks don’t work that way.  Offers made on short sale properties can take months to process.  Much of that time is just sitting in the dark, and that is AFTER we get an offer.

What I can tell you, is that you absolutely need an experienced, skilled agent that can keep the sale of your home on track.  Not submitting the right piece of paper, or saying the right magic words can result in the bank rejecting an offer or denying your short sale.  This isn’t for the faint of heart. 

Sadly, if you are upside down in your home right now and have to sell, a short sale is your only option.  It isn’t an easy process and no agent, no matter what they say, can guarantee success.  What I can tell you is that I have been doing short sales for my clients from before it was a household term. 

Are you are in a situation where you need or have to sell your Seattle area home?  Call me today at 425-773-3149 right now!  With short sales, time is of the essence, especially if you are behind on your payments and are looking at an auction date coming up.

Not in the Seattle area and need to sell a home?  Feel free to contact me for a referral to a top notch real estate agent or real estate investor that can help you get out from under your home.

Photo courtesy of TheTruthAbout…

The economy may be rocky, but some businesses still have a market and are going to do well.  Such is the case with Janell’s Gluten-Free Market in Everett.  For those with an intolerance to gluten, finding foods that don’t have any mixed into the ingredients can be a real task.  Luckily the Everett area has a store that is chock full of gluten-free products.

Stop by and check it out the next time you are headed into town.  The address is 7024 Evergreen Way so drop in and take a look!

Follow Janell’s Gluten-Free Market on Twitter

http://janellsglutenfreemarket.com/

I had to share this very funny and not so far from the truth video about buying a bank owned property.  It is becoming increasingly more frustrating to help buyers get into a home, simply because the banks and listing agents just don’t care, or are working by some odd set of rules that have no relationship to reality.

If you have been shopping for a home and been dealing with the banks, you will definitely relate to this video!

This is a great reason to have me on your side when you are dealing with bank owned or short sale properties.  I can be at least a little buffer between you and the lunacy of the banks, and I actually enjoy verbally bludgeoning other agents into action.

I don’t normally repost articles, but this one by Greg Swann is very on topic for what is going on right now.  The current administration’s policies are actually counter productive to our economy stabilizing and the real estate markets finding their own equilibrium. 

The elections this past Tuesday were not a referendum on President Barrack Obama or his plans and policies. How do we know that? Because everyone associated with the Obama administration loudly insists that this cannot be so. They ought to know, right?

Senators and Representatives from states and districts that supported John McCain in the last election might have second thoughts, though, and this is very far from being a bad thing.

Americans insist to each other that they want a government that gets things done — except when they happen to be suffering under a government that is getting things done. If this election was not a referendum on Obama, it was a loud, angry shout about what the government has been doing lately.

The last time voters repudiated an over-ambitious president — the last six years of the Clinton administration — the nation experienced a period of tremendous growth and prosperity. The American people recoiled in horror from socialized medicine, and the resulting government — liberal president, conservative congress — was amazingly beneficial for the American people.

How? By getting nothing done, that’s how.

For free markets to work at their best, entrepreneurs need to be able to plan for the future. If they can surmise that prices and credit terms will not swing wildly over the next few years, they can plan their investments with a sense of security.

And if not? Not.

The Obama administration’s herky-jerky dance of currency inflation, stimulus programs, emergency bailouts and tax credits not only cannot stabilize the economy, they do exactly the opposite: They convince entrepreneurs that now is not a safe time to make plans for the future.

This goes for the real estate market, too. Buyers sit on the sidelines waiting for new tax credits. Sellers live in dread of future interest rate hikes. The Cap and Trade bill promises to complicate life for every homeowner.

So how might these elections have helped us all? It’s simple. If Senators and Representatives are afraid to act, nothing will change. And when nothing changes in Washington, everything changes, usually for the better, for everyone else.

Contributed by: Phoenix Realtor Greg Swann

Two years ago if you had a heartbeat and one hand to sign loan documents, you could purchase your first home.  Times have changed and now lenders are requiring documentation of income again, solid credit scores and expect a sizeable down payment.  Now purchasing a home seem almost impossible for most first time home buyers.  But if you plan ahead you can purchase a home, just not today!

If you are at step zero with no savings and shaky credit then I would encourage you to make a one year plan for the purchase of your first home.  I know it is a long time to wait in our ‘on demand’ instant satisfaction world, but it is realistically the time frame you should look at.  In that year, there are some things you need to take care of.

Building up your down payment
I would make saving 5% of your purchase price your target for the next year.  This may sound stiff, but the more down payment you can save, the better your loan, and the more prepared you will be to purchase a home.  This means in the next year that you will need to cut your expenses and do what ever you can to increase your income.  If you can save up $1,000 a month for the next year, that will give you a 5% down payment on $240,000 home!

Improve your credit score
Banks don’t care how nice a person you are, or if you have good intentions.  They really only see you through the lens of your down payment and credit score.  The higher the number the better, but you should work to get your score above 620 and preferably above 720 to get really good loans.  Get a copy of your credit reports and start looking for negative items you can fix.  Challenge incorrect items, pay off any collections and overdue items. 

Be careful not to close any credit cards, only pay them down.  A common mistake is to pay off and close credit cards thinking it will help.  The truth is that closing a credit card changes your ratios and will actually reduce your overall credit score!

Educate yourself on the financing process
All too often first time home buyers get burned on their home loans because they didn’t realize all the ways that lenders have to make money off of them.  Learn about loans, the fees and so on, so when you sit down to get a loan, you won’t be getting ripped off!  If you have any questions about your loan, I would also suggest that you consult with your real estate agent.  They should know enough about loans to give you an honest opinion.

Find and work with one good real estate agent
You have a year before it is time to buy a house so interview several real estate agents and find one that will work with you and give you solid advice and counsel on areas and what homes are right for you. A good real estate agent will definitely be an asset in your goal of purchasing a home.

Be patient!
Not everything we want in life comes at us at the speed of an order at the McDonalds drive through.  Sometimes we have to wait to get what we really want.  If you have any questions or need a referral to a great real estate agent, feel free to contact me at Jacquie@JacquieCliff.com!