With the Short Sale “Debt Forgiveness” act coming to an end – it may start to look more like “business as usual”.
From the Balloon Notes and Adjustable rate mortgages that are coming due – they are deducing this will cause another Depression in the Current Real Estate market.
Fact or Fiction? I am sure it is true that we are going to see these loan types coming due. FYI, we have watched these loan types come due throughout the decline of real estate since 2007. However, I am not sure if that will cause the “12-30% dip” that is being reported.
I have an example of something I thought would never take place with regard to a Major Bank. One of the large banks is sending out letters, some to our current Short Sale clients, talking about Principal Reductions. Unfortunately, it looks much better than it may be.
Case and point – two of our short sale clients responded to these letters that were generated about Principal Reductions. Let me say that we are all for our clients getting what they want. Furthermore, if our clients are able to keep their homes, and they want to keep their homes, we are all for them keeping their homes!!! Get it?
In both cases – our clients said they would take the deal. We cancelled the short sales – got permission from the buyers – who were in contract – and the listing contracts were nullified.
So far So Good. The clients in both cases were working with the bank, the bank was all “peaches and cream”. They were conversing – all was good in the world. ”Heck, I could not believe this was going to work…” I thought to myself when checking in with one of our clients.
Within 48 hours of each other, we received two phone calls – both from our clients. They had received a notice on their doors that their properties had been sold at auction by their banks.
(It’s okay to insert swear words here) ”Connor, how could they do this to us – Help us please!!!”
Unfortunately – with most banks, the Foreclosure Department – The Collection Department – the Short Sale Department – the Loan Modification/Principal Reduction – DO NOT COMMUNICATE WITH ONE ANOTHER!!!
What now? I suppose both of these clients could “attorney up”. That costs money. They would not have even started the short sale process with us if they had Money to pay attorney’s fees. This is truly sad and the prevalence of examples for these “travesty’s” is becoming more and more common.
Get everything in writing. Look for the small print. Also check the entire form or promise for the almighty (*) – “*” – *… They could be the solution you are looking for before you decide to take your home out of a Short Sale and attempt the “elusive” loan modification with principal reduction.