Wednesday, September 30, 2009

A Disturbing Trend: Delinquent Homeowners Abandoning Their Homes

In my efforts to locate homeowners who are behind on their mortgage payments, or already in foreclosure, I have discovered a disturbing trend. It appears that many of these homeowners are simply abandoning their homes and ignoring their problems. This is a terrible idea. Until the bank owns your home, you are liable for anything that happens to or on your property. Beside the liability issues, "abandoning ship" does nothing to stop, or even mitigate your potential liability to the lender(s).

If you are a homeowner in financial trouble, please do not abandon your home. Follow the instructions in my blog post Question and Answer: What Should I Do if I Can't Pay My Mortgage?.

If you live in the following areas, please contact me as I can help you solve your real estate problems since I am a Middle Tennessee short sale, pre-foreclosure (preforeclosure) and foreclosure expert and REALTOR.
  • Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
  • Williamson County Tennessee: Brentwood TN and Franklin TN
  • Davidson County Tennessee: Nashville TN and Belle Meade TN

Question and Answer: What Should I Do if I Can't Pay My Mortgage?

Question: What should I do if I can't pay my mortgage?

Answer: If you are a homeowner who cannot pay your mortgage payment(s), or are already in foreclosure, you should do the following:
  1. Loan Modification - Even though you do not have a good chance of getting a loan modification approved by your lender(s), you should give it a try.  Therefore, contact your mortgage company immediately to discuss a loan modification.
  2. Discuss your situation with a real estate attorney and/or bankruptcy attorney to discuss your options if the loan modification is not approved.
  3. If a loan modification will not work, or is not approved, and you owe more than your home is worth and you cannot pay you mortgage, you need to speak with a REALTOR who specializes in short sales and pre-foreclosures (preforeclosures) to discuss selling your home.
If you live in the following areas, please contact me as I can help you get out of this situation.
  • Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
  • Williamson County Tennessee: Brentwood TN and Franklin TN
  • Davidson County Tennessee: Nashville TN and Belle Meade TN

Bank of America CEO Will Resign at the End of the Year

According to this New York Times article, Bank of America Chief to Depart at Year’s End, Kenneth D. Lewis, will resign at the end of 2009. According to the article, he "celebrated his daring takeover of Merrill Lynch as the crowning triumph of a long career. On Wednesday, that conquest proved to be his downfall, as he announced his resignation after months of legal and political scrutiny over how the deal went down. Mr. Lewis leaves as Congress, the attorney general of New York and investors turn up pressure on the bank over not disclosing Merrill's losses and bonuses to shareholders. A federal judge recently refused to accept a settlement brokered between Bank of America and the Securities and Exchange Commission, saying the bank and the commission never fully explained how the decisions were made."

I think all the bank CEO's should step down right now as they have mismanaged their banks and collected millions in pay and bonuses despite their failings. The banks has completely botched the handling of pre-foreclosures, short sales and foreclosures. I am personally dealing with Bank of America on a short sale located in Murfreesboro Tennessee (Rutherford County TN) and I was able to get approval within 3 weeks, but it took a lot of phone calls and emails to push them to a decision. It just should not be that difficult. As a result of Bank of America's incompetence (and the incompetence of other lenders) there are more short sales and foreclosures in Middle Tennessee (in the Nashville TN area) than there should be. Goodbye Mr. Lewis!

If you are a homeowner who cannot pay your mortgage payment(s), or are already in foreclosure, my recommendation is that if you should do the following:
  1. Loan Modification - Even though you do not have a good chance of getting a loan modification approved by your lender(s), you should give it a try.  Therefore, contact your mortgage company immediately to discuss a loan modification.
  2. Discuss your situation with a real estate attorney and/or bankruptcy attorney to discuss your options if the loan modification is not approved.
  3. If a loan modification will not work, or is not approved, and you owe more than your home is worth and you cannot pay you mortgage, you need to speak with a REALTOR who specializes in short sales and pre-foreclosures (preforeclosures) to discuss selling your home.
If you live in the following areas, please contact me as I can help you get out of this situation.
  • Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
  • Williamson County Tennessee: Brentwood TN and Franklin TN
  • Davidson County Tennessee: Nashville TN and Belle Meade TN

Get Expert Assistance from a Middle Tennessee Distressed Real Estate, Short Sale, Pre-foreclosure and Foreclosure REALTOR, Real Estate Expert & Real Estate Professional

Get Expert Assistance from a Middle Tennessee Distressed Real Estate, Short Sale, Pre-foreclosure and Foreclosure REALTOR, Real Estate Expert & Real Estate Professional

Attention Property Owners and Homeowners in Middle Tennessee (Rutherford County TN, Williamson County TN, Davidson County TN, Murfreesboro TN, Smyrna TN, La Vergne TN, Eagleville TN, Lascassas TN, Rockvale TN, Christiana TN, Brentwood TN, Franklin TN, Nashville TN and Belle Meade TN) - Get Expert Assistance from a Middle Tennessee Distressed Real Estate, Short Sale, Pre-foreclosure and Foreclosure REALTOR, Real Estate Expert & Real Estate Professional
If one or more of the above situations apply to you then you need to get help from a Short Sale, Pre-foreclosure and Foreclosure REALTOR & Real Estate Professional who can help you avoid Foreclosure, sell your home via a Short Sale, or even get a Loan Modification.

A Loan Modification may help you keep your home and should be considered. However, many lenders seem unwilling to grant modifications. If you cannot get a loan modification, or your home is worth less than the mortgage balance(s), or you just can't afford to keep your home then a Short Sale may be your best option as it could salvage what is left of your credit and to reduce the risk of the lender pursuing you for their net loss (deficiency judgment). Acting quickly will give you the greatest chance of getting your life back without all the stress and worry. For immediate help please contact Jim McCormack now!*

Jim McCormack's Foreclosure and Short Sale Assistance Hotline

(615) 653-4383
*Jim McCormack is a REALTOR, not an attorney. You should consult an attorney before making any real estate decisions.

For more information, please visit my real estate website, JimTheRealEstateExpert.com, which is focused on helping property owners who are in foreclosure, or who need expert assistance with a short sale (i.e. where the property value is worth less than the mortgage debt). My website is designed to inform short sale and pre-foreclosure sellers and consumers on how to best solve their real estate problems in the quickest time possible. The articles and tools throughout the website are FREE, with zero strings attached.

If you would like more information first, please let me introduce myself. My name is James W. McCormack. I am a Short Sale, Pre-foreclosure and Foreclosure REALTOR and Real Estate Expert. I am a 10+ year real estate sales veteran and full-time real estate professional who specializes in helping people solve their real estate problems. I focus on short sales, pre-foreclosures, foreclosures and investment properties in the Middle Tennessee TN market with my primary focus being on Murfreesboro, Smyrna, La Vergne and Eagleville in Rutherford County, Brentwood and Franklin in Williamson County and Nashville and Belle Meade in Davidson County. My website helps you to search for and find short sale listings, pre-foreclosure listings and foreclosure listings in Murfreesboro TN, Smyrna TN, La Vergne TN, Brentwood TN, Franklin TN, Belle Meade TN and Nashville TN.

I am a real estate expert who is here to help you. Please call me at 615-653-4383 to discuss your real estate situation or problems. I almost always return phone calls by the next business day.

I provide the following real estate services:

Specialty and Challenging Real Estate (Sales, Consulting & Leasing):
1. Physically Distressed Properties (i.e. fixer uppers, rehab properties, handyman specials, etc.).
2. Foreclosures.
3. Pre-foreclosures (i.e. Notice of Default, etc.).
4. Short Sales (i.e. where the sale price is not enough to pay off the mortgage(s) and other liens.).
5. Bank Owned Real Estate (i.e. REO's).
6. Divorce Sales.
7. Estate Sales.
8. Abandoned and Vacant Properties.
9. Rental Homes and Properties (Leasing and Consulting).
10. Lease Option/Lease Purchase Homes (Sales, Leasing & Consulting).
11. Other Difficult Situations.

Commercial and Investment Real Estate (Sales & Leasing):
1. Small Multifamily Properties (2-4 units).
2. Apartment Buildings (5+ units).

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Find Middle TN Real Estate, Houses, Homes, Townhomes, Condos, Building Lots, Farms & Land
Find Short Sales, Pre-foreclosures, Foreclosures, REO's, Bank Owned Properties, Fixer Uppers & Other Distressed Real Estate

Freddie Mac Goes Door Knocking to Help Struggling Homeowners Complete Loan Modifications

According to this Freddie Mac news release, FREDDIE MAC STARTS DOOR-TO-DOOR EFFORT HELPING BORROWERS COMPLETE HOME AFFORDABLE MODIFICATIONS, Freddie Mac "has hired Titanium Solutions, Inc. to meet with delinquent borrowers at their homes and help them supply missing information, documents and complete other actions needed to begin their three month trial payment periods for Home Affordable Modifications under President Obama’s Making Home Affordable program. Titanium Solutions will target late-paying borrowers with Freddie Mac-owned mortgages who have not returned letters or phone calls sent by their servicers, or who need to provide additional information or documents to launch their three-month Home Affordable Modification trial periods. Titanium will also help those borrowers who have started their Trial periods complete the documentation process to enable them to be converted into final modifications."

The release quotes Ingrid Beckles, Senior Vice President of Default Asset Management at Freddie Mac, as saying "By meeting with our borrowers, one on one, in their homes Titanium Solutions can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods. We believe this can give borrowers seeking Home Affordable Modifications the same type of personalized guidance they may have had when they were buying their home or applying for their mortgage.

Overall, I think this door knocking is a good idea since most homeowners who have fallen behind on their mortgage payments, or are already in foreclosure, just stop communicating with the lenders and try to ignore the whole thing (not a good idea). Struggling homeowners should openly engage their lenders to see what options they have. A loan modification may indeed be the best option, however, most people do not qualify for a loan modification due to insufficient income (think unemployed) or too much overall debt.  While I do not think that loan modifications can solve the foreclosure crisis we are currently in, for some folks it is the best option.

My recommendation is that if you are a homeowner in financial distress you should contact your mortgage company immediately to discuss a loan modification even though you do not have a good chance of getting a loan modification approved. Some chance is better than the no chance you will have if you do nothing. You may also want to speak with a real estate attorney and/or bankruptcy attorney to discuss your options. If a loan modification will not work, or is not approved, then you need to speak with a REALTOR who specializes in short sales and pre-foreclosures (preforeclosures) to discuss selling your home when you owe more than your home is worth and/or you are not able to pay your monthly mortgage payments. If you live in the following areas, please contact me as I can help you get out of this situation.
  • Rutherford County Tennessee: Murfreesboro TN, Smyrna TN and La Vergne TN (LaVergne TN)
  • Williamson County Tennessee: Brentwood TN and Franklin TN
  • Davidson County Tennessee: Nashville TN and Belle Meade TN

Could Tighter Loan Underwriting Standards Hurt the Housing Recovery?

According to this RISMEDIA article, Credit Woes to Threaten Housing Recovery?, "Nearly two-thirds of single-family home builders are reporting a severe lack of credit for housing production, threatening the fragile housing recovery before it has time to take hold, according to a new builder survey of acquisition, development and construction (AD&C) financing conducted by the National Association of Home Builders (NAHB)."

The article quotes NAHB Chairman Joe Robson, a home builder from Tulsa OK, as saying "Across the country, home builders and developers are reporting a deterioration in credit availability and intensifying pressure on borrowers with outstanding loans. Lenders are cutting off loans for viable new housing projects and producing unnecessary foreclosures and losses on AD&C loans. With the pending expiration of the $8,000 first-time home buyer tax credit, these challenges threaten to halt any positive developments we have seen in the housing market in recent months.  There can be no meaningful economic recovery until the flow of credit is restored to housing."  (My thoughts: Since when has housing been a legitimate driver of the economy for any extended period of time?  How can over priced asset prices such as housing create long term jobs?)

According to the article, the most recent NAHB survey of AD&C financing conditions, showed that some 63% of builders thought that the "availability of credit for single-family construction loans worsened in the second quarter of 2009."

The article states that home builders reporting worsening credit conditions cited the following reasons for the decline in lending:
  • 80% said that lenders are lowering the allowable loan-to-value ratios.
  • 76% reported that lenders are not making new loans."
  • "75% stated that lenders are reducing the amount they are willing to lend"
  • 62% said that lenders are requiring personal guarantees or collateral not related to the project.
According to the survey "Two-thirds of respondents reported putting single-family construction projects on hold until the financing climate gets better."

The article notes that lenders, as an explanation for the reduced lending activity, have told home builders that banking regulators are forcing them to tighten lending standards.  Federal regulators, on the other hand, say that they have not restricted lenders from making more loans.

The article states that the "NAHB believes that regulators and lenders should provide leeway to residential construction borrowers who have loans in good standing by providing flexibility on re-appraisals, loan modifications and perhaps forbearance on loans to give builders time to complete and sell their inventory."

I have to say that I have had enough of this nonsense.  We do not need more credit to help a housing market that has imploded as a result of too much credit.  I do have a serious problem with lenders due to their taking of taxpayer bailout monies and their grossly incompetent handling of short sales and foreclosures, but I do not blame them for reducing their loan activities or tightening their credit standards in the face of rising unemployment and increasing loan delinquencies.  It appears that the NAHB is doing nothing but advocating something that will help home builders sell their over priced homes to naive home buyers - all at tax payer expense as these loans go bad and the federal government steps in to continue to bail out the lenders that made these loans when the financially strapped home buyers need to short sell their homes and/or fall into foreclosure.

Therefore, the answer to the blog post title question is "No" for the following 2 reasons.
  1. There is no actual housing recovery. Housing prices continue to fall and foreclosures continue to increase.  Where is there is more than average government intervention, such as CA with their $10,000 new construction home purchase tax credit, there has a been a slight bump in prices that will only get worse when that government intervention is stopped.
  2. Tighter housing credit will actually the housing market in the long run due to weeding out financially unstable buyers. Long term housing market stability is the most important thing now.
Given the absurdly high levels of new construction still going on and available for purchase in Middle Tennessee (Rutherford County: Murfreesboro TN, Smyrna TN and La Vergne TN) the housing market here will continue to decline for years to come as there will be more builder bankruptcies, short sales and foreclosures in the Middle TN market.

    Peterbilt Permanently Closing Middle Tennessee Plant

    According to this Nashville Business Journal article, Peterbilt permanently closing Tennessee plant, effective 12/1/2009 Peterbilt Motors Co., the well known truck manufacturer, will shutter the Madison Tennessee (located in Davidson County TN northwest of Nashville TN) plant. According to the article, "The Madison plant had not built trucks since July 2008, when the company and the United Auto Workers Local 1832 were unable to agree on a new contract. But company officials said the decision to shutter — and eventually close — the plant was a result of falling demand for the heavy-duty trucks, not because of labor issues."

    The article quotes Bill Jackson, Peterbilt General Manager, as saying "This was a difficult, but necessary decision. The current and projected market conditions are very challenging and Peterbilt is aligning its production capacity with market demand. Peterbilt is proud to have been a member of the greater Nashville community for 40 years and we thank our employees for their excellent contribution."

    According to the article, all of the company's truck manufacturing will move to Peterbilt's other plant in Denton, Texas. The article states "The 2,000-worker facility, which does not have union representation, announced layoffs there in January, though the company didn’t specify how many jobs were impacted, saying only that it was a small number. At the Nashville plant, 313 workers were laid off in June 2008 when the contract expired, according to the Tennessee Department of Labor."

    While Peterbilt officials said that the Madison TN plant closing was a result of market conditions, not union/labor issues, I have to believe that the union was a major factor in the plant closing. The fact is that unions cause companies to earn less and to layoff workers in order to remain competitive. In this case the union caused the loss of at lease a large percentage of the 313 lost jobs. Given that 25% of homeowners have no savings to cover their living expenses if they were to lose their jobs (see my previous blog post Too Many Homeowers Have No Savings) I think it is reasonable to conclude that more job losses will cause more short sales and foreclosures in Middle Tennessee as a large percentage of unemployed people in Middle TN cannot pay their mortgages even for a short period of time due to a lack of savings.