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RE: How Would You Advise YOUR Relative???

Created by:

Deede Wockenfuss, Licensed Real Estate Agent, Chandler, AZ

Date: November 22, 2007, Number of Replies: 2

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Tony Couch says, "Your relative should stick to his WORD
and hold on. If he has overextended him/herself that is an issue beyond the real estate market."

Tony, I guess I forgot to let you know that I am also a Loss Mitigation Counselor for major servicers. Because of this, I know that my relative is not alone in this situation and that he did not cause it. Had he cashed out his equity, or bought large ticket items in the 3 years he was in the real estate business, I would agree with you. But, this is NOT his fault. The house next door just sold at auction for $57,000!!!! He paid $300,000 for his home! This is NOT a normal cyclical real estate change. It is devastation in our area and thousands of homes in the same neighborhood are going to foreclosure and forcing the market down. Again, IT IS NOT HIS FAULT! My relative has a FICO score over 800. He did not get this score by NOT paying his debts. This current real estate downturn is as abnormal today, as the hot 2005 market was then.

The cause of my relatives' situation is greedy investors, and crooked lenders. If everyone else in his neighborhood in his situation is bailing out, why should he be the only one to "keep his word"? To do so is to set himself up for a lifetime of debt he can't ever get out of. I just can't advise any client or relative of mine to do such a thing. Even the major servicers I work with have told me that some borrowers in these situations should just file bankruptcy and start over.

Speaking of bankruptcy, boy, has Congress blown it this time! They changed all of the laws to 'protect' lenders and banks of credit cards. Even if you file bankruptcy, you don't clear your credit card debt. Guess what the bankruptcy lawyers are telling their clients? They are telling them to PAY THEIR CREDIT CARDS, and NOT pay their mortgage. If they go bankrupt, their mortgage goes away, but some of the credit card debt stays. Tony, there are just too many obstacles keeping the honest consumer from lifetime debt and poverty. I just can't agree with you. You are a good man to be so "moral", but unfortunately keeping the debt and "keeping his word" to the lender were not one of the options I asked for help with.

-
Deede Wockenfuss
Marketing Manager
Assist 2 Sell, Buyers and Sellers Best Choice
480-558-0555

Go To:
www.4GilbertHomes.Com
for your FREE "Real-Time MLS Market Report!

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Anne Hunter

Date: November 23, 2007

"The house next door just sold at auction for $57,000!!!! He paid $300,000 for
his home! This is NOT a normal cyclical real estate change. It is devastation
in our area and thousands of homes in the same neighborhood are going to
foreclosure and forcing the market down."

I've noticed this year in Colorado that there are often two price points in a
neighborhood, or condominium complex. Especially in the latter, there may be
several solds and for sales with prices that 25-30%lower than the others.
However the higher priced homes, even if their square footage is identical are
selling for an almost "normal" price because their condition merits it. A good
appraiser will consider the properties that are similar in condition and
ownership for the appraisal. And there are at least 2 kinds of buyers.

The entity that bought a house for $57k next door to a 300k home is not going to
sell it for that price, you may be sure. It is extremely likely that that home
will be restored to a good or excellent condition, and then enjoyed by a lucky
homeowner, or sold at a price more like the neighborhood's previous level.

But then, I sold homes in the 80's and early 90's in Colorado, so I know that
there are always opportunities in all kinds of markets.

Anne Hunter, CRS, ABR, E-Pro, SRES Connecting People with Homes
Anne Hunter & Co Metro Brokers
Lakewood, Colorado
Anne@AnneHunter.com http://www.AnneHunter.com

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Fred Pickard Licensed Real Estate Broker, Palmyra, PA

Date: November 24, 2007

I'm assuming the original post referred to a sheriff's sale foreclosure auction at the courthouse. It would have to have been that method to be recorded (as opposed to one of these traveling auction shows in a hotel ballroom, which generally are reserve auctions).

Usually, the note holder has a representative at the sales with instructions to bid against any bidders until the bid reaches a percent of the default (usually 85 to 88%). Lenders do not let properties go at auction for 15 or 20% of value.

It will be recorded (and any appropriate transfer taxes paid) at the price indicated, but the lender only really pays the fees charged by the sheriff. In this day and age of 'get rich quick in foreclosure" infomercials, a lot of sheeple think that they can buy a house for 10 or 15 cents on a dollar.

I go to the sales monthly in two local counties. In reality, less than 10% of the properties actually sell at the foreclosure auctions. The remainder go to the lender and become REO's.

Fred Pickard Broker Owner
CRS, CRB, GRI, e-Pro Certified Trainer
Exit Realty Innovations
251 West Chocolate Avenue
Hershey PA 17033
mailto:Fred@MoveToHershey.com

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