Spring Fever and An Improving Market

February might have been a great month! The National Association of Realtors will release its existing-home sales data tomorrow and many analysts are already predicting strong numbers. Bloomberg reports that home purchases climbed in February to the highest level in almost two years. New construction, on the other hand, shows a more mixed message. Today, the Commerce Department reported that housing starts fell in February but permits for future construction jumped to their highest level in over 3 years.

Unsold Inventory, Low Prices and The Drag on the Economy

Unsold inventory and lost equity continue to be a drag on our economic recovery. Despite steady improvement in both new construction and existing homes, an oversupply of unsold homes continues to keep prices down and slow the recovery. (U.S. Housing Report Shows Uneven Growth, N.Y. Times, March 20, 2012). This oversupply also includes the vast “Ghost Inventory” of distressed properties, such as short sales, foreclosures, and REOs.

These depressed prices and the loss of homeowner’s equity both caused the economic crisis and is slowing the recovery. The decline in home values (prices) has restricted borrowing power, further slowing the recovery. Indeed, many people are unable to tap the value of their home by refinancing or selling. As an unexpected consequence, our economic recovery has been strongest in areas that did not have severe price drops, reports Amir Sufi, professor of finance at the University of Chicago. (Measuring Housing’s Drag on the Economy, New York Times, February 24, 2012). Likewise, the recovery has been weak in states like Arizona, California, Florida, and Nevada – states hit with the larges housing price declines.

Thus, the improvement in home sales is the first piece of good news. A full economic recovery, however, may require more than strong numbers in new and existing home sales. It will likely require more robust recovery in home prices.

Short Sale Escalation – TWEET TWEET!

Short Sale Escalation With Social Media

Challenges arise in almost every short sale. Frustrated and running out of options, Realtor Nicole Charles of Keller Williams in Madison, Wisconsin, turned to twitter:

@Ask_WellsFargo Can anyone please help me with a short sale issue? Getting the run around an am about to lose the Buyer due to delays. HELP

Wells Fargo responded! First, in tweets, they asked for more information and direct contact. After a few more tweets and correspondence, a representative promised to escalate the matter and have answers that day. She had revived a dying sale through social media!

Escalation

Creative and persistent agents understand the importance of escalation in short sale negotiations. This can be as simple as contacting a manager or supervisor. It can also include contacting the investor or mortgage insurance company directly. The goal of escalation is to reach an individual with more authority and the ability to move the transaction towards closing. Often, the biggest challenge is simply finding contact information for that escalated individual. Some agents call Fannie Mae or Freddie Mac directly, when they know they are the investor. Others manage to glean investor contact information from hints or clues in correspondence. And this creative agent discovered the newest way to get things done – social media and twitter!

Thank you Nicole Charles for this fantastic tip!

Legal Assistance for Homeowners in Foreclosure

Free Legal Help for Homeowners Facing Foreclosure in Dane County

Dane County Foreclosure Prevention Taskforce
www.daneforeclosurehelp.org
For more information contact:
Dan O’Callaghan (608) 283-0117or Ellen Bernards (608) 576-8658

  

What:            FREE LEGAL HELP!  For homeowners facing foreclosure. Help available in English and in Spanish Ayuda disponible en español también.

Who:              For homeowners who have received a Foreclosure Summons and Complaint

When:           11:00 am – 1:00 pm, Thursday, March 1, 2012 & Every 1^st and 3^rd Thursday of the month.

Where:          City-County Building, 3^rd floor, 210 Martin Luther King Jr. Blvd.

THIS IS A RECURRING EVENT, 1^ST AND 3^RD THURSDAY OF EACH MONTH.

FREE LEGAL HELP is available for Dane County homeowners in foreclosure.  Homeowners can receive basic legal information and free assistance in writing an Answer to the lawsuit at the Foreclosure Answer Clinic.  The Clinic has assisted almost 200 homeowners to understand the legal process of foreclosure and to respond their lawsuit. Homeowners who respond in writing to the lawsuit have more control over the process and a better chance for a favorable outcome.   

Homeowners have ONE CHANCE to file an Answer to their lawsuit. Filing an Answer is one of the critical things a homeowner MUST do even if the homeowner is in communication with the lender and working on options such as a loan modification or short sale.

Time is of the essence because homeowners generally have only 20 calendar days from the date they receive the initial lawsuit papers to file a formal response called an Answer.  Failing to file an Answer to the lawsuit on time significantly reduces homeowners’ control over the process and their ability to share their story with the judge. In addition, they may not be notified of important steps in the court process of foreclosure.

The Clinic is open the 1st and 3rd Thursdays of each month from 11:00 a.m. to 1:00 p.m. on the 3rd floor of the City-County Building, 210 Martin Luther King Jr. Blvd, Madison.  No appointments are necessary.  Homeowners should bring their Summons and Complaint as well as any other relevant papers about the foreclosure.  

The Foreclosure Answer Clinic is a collaborative effort of the Dane County Foreclosure Prevention Taskforce, the Dane County Bar Association and the UW Law School, with grant funding provided by the State Bar of Wisconsin and other support provided by Dane County.

Who We Are.  The Dane County Foreclosure Prevention Taskforce is a coalition of public agencies, non-profit service providers and other community partners working together to develop sustainable alternatives to foreclosure in Dane County. For more information, please visit daneforeclosurehelp.org.

Our Mission.  To develop and implement a coordinated response to the current foreclosure problem in Dane County. 

Mortgage Relief for Distressed Homeowners?

A new settlement among big banks may provide relief to many struggling home owners.  Nearly 20% of all home mortgages are underwater – the home is worth less than the amount owed to the bank. This has been the major cause of the foreclosure crisis nationally and a problem many have sought to remedy. A new settlement with big banks raises hope for many underwater home owners that they may be able to reduce their loan or refinance with better terms.

New Federal Settlement

Ordinarily, a bank will not lend to a homeowner if the home is worth less than the current mortgage because it requires the homeowner to borrow more money than the home is worth. Under the new settlement, tens of billions of dollars will be earmarked for homeowner relief. It is unclear how this money will be dolled out, but it is presumed that it will include:

• Reducing the principle balance owed on a loan
  
• Refinancing to a lower rate
  
• Providing incentives to lenders to approve refinances, modifications, or short sales
  
• Providing cash settlements to some homeowners who have already lost their home to foreclosure
  

As with previous federal programs (HAFA and HAMP), this program is not expected to provide broad reaching relief. It will only apply to about 10% of underwater homeowners. Nevertheless, this might be enough to stabilize the housing market and provide a much needed boost to the hardest hit segment of the market.

For a detailed summary of the settlement, see the New York Times Article.

Madison Realtors, lenders, and attorneys are invited to our seminar on Short Sales & Foreclosures:

Short Sale Seminar

February 23, 2012: 1pm – 4pm

City Center West
525 Junction Rd.
Madison, WI 53717-2152

REGISTER HERE

Licensed REALTORS, Attorneys and lenders are invited to attend this powerful seminar on short sales, foreclosures, and navigating distressed properties. This seminar has previously been approved for 3 Hours of Continuing Legal Education credits in Wisconsin.

Attorney Peter Zarov will be breaking down the foreclosure time line, the short sale process, and REALTOR’s risks and responsibilities. This class will cover:

• Short sale time line
  
• Foreclosure process and understanding timing and leverage.
  
• How to avoid liability during a short sale (Your referral team, common scams, etc.)
  
• The short sale packet and best practices to submit
  
• The HAFA Short Sale Program and other new incentives
  
• Transactional pitfalls and how to avoid them
  
• Bankruptcy and how it affects sales
  

Agents will a acquire critical knowledge of the foreclosure process in Wisconsin, short sale procedures, and important trends in distressed property transactions.  Surviving and thriving in this market requires a familiarity and understanding of these topics. 

The Event is $15 and includes a 65 page packet of outlines, materials, and forms.  

 
 

2011 December Home Sales Report – Wisconsin REALTORS® Association

2011 December Home Sales Report – Wisconsin REALTORS® Association.

Better Business Bureau – False Complaint

Recently, a number of REALTORs in Wisconsin received emails to inform them of Better Business Bureau complaints. The emails may include official logos and request that the REALTOR open the complaint report. The emails often take the following form:

 

Good afternoon,

Here with the Better Business Bureau would like to notify you that we have been sent a complaint (ID 44265713) from your customer related to their dealership with you. Please open the COMPLAINT REPORT {WEBLINK OMMITTED} below to find the details on this case and suggest us about your point of view as soon as possible. We are looking forward to hearing from you.

 

Sincerely,

 

Fernando Grodhaus

Dispute Counselor

Better Business Bureau

 

This is NOT a real complaint and you should NOT open the link.

In all likelihood, this is a phishing scam or a virus. Most scams can be identified by the poor grammar or deplorably bad writing. The Better Business Bureau, for instance, is unlikely to request that you “Suggest us about your point of view” or state that your customer has a complaint about their “dealership with you.”

Whenever you receive a questionable email like this, the easiest tool to discover a scam is Google or another search engine. Try a Google search of portions of the email or of the author’s name. In this case, we discovered this to be a scam.

Google Search

How Should A Buyer “Take Title” – Ask an Attorney

I’m a Realtor and my buyers just got married after closing and want to know if they need to change anything on the title of the house. What should I tell them?

This is a dangerous question to answer without treading into the realm of legal advice. The simple answer is: your buyers don’t need to do anything — marriage doesn’t change the fact that they jointly own the property.  But, the deeper question likely being asked is, “How should I hold title now that I’m married.”  This is a legal question and should only be answered by an attorney.

When two or more people acquire title to real estate, their rights can be established by important language on the deed. For instance, unmarried individuals could designate their rights as Joint Tenants or Tenants in Common. Similarly, married individuals may want to own the property with survivorship rights so that the property will automatically transfer to the surviving spouse when one spouse passes away.

These designations have very significant legal meanings and can determine who has ownership rights upon a sale or at death. These choices are not simple, require an analysis of a number of factors, and most importantly, constitute legal advice.

Many lenders, Realtors, and title professionals tell all married buyers, “You should take the property as survivorship marital property – everyone does that.” This may be good advice for the majority of people. But, for the few married individuals who have good reason not to make this choice, this is not only bad advice, it could constitute legal malpractice.

Indeed, there are a multitude of reasons that married individuals might not want survivorship rights, including:

• They have a premarital agreement,
  
• They may be using funds for the purchase that they wish to keep separate,
  
• One or the other of the spouses has children from another marriage
  
• There is a will or estate plan in place
  
• They have or will soon have inheritance
  
• Many other factors
  

The analysis of these and other facts is a purely legal function that should not be undertaken by non-attorneys. The majority of married couples do opt for survivorship marital property, after consulting with an attorney. Nevertheless, this does not mean that non-attorneys should assume that this choice is right for everyone.

The Realtor, lender, or title company that is asked the question, “how should the buyer take title” should answer:

The buyer should consult an attorney to determine what is best for their given facts and circumstances. I am not an attorney and cannot provide that kind of advice.