Frustrated With Loan Modification? Consider Short Sale

I recenlty read a great article written by Paul Kiel of the watchdog group ProPublica. The article addresses the rise of Loan Modification Failures. Mr. Kiel writes that "of the 1.2 million homeowners who have begun a modification in the last year, about 265,000 are stuck in "trial periods" for six months or more"'.

Mr. Kiel further writes that homeowners and advocates list common complaints such as mortgage servicers frequently ask for the same information over and over; give contradictory information; make mistakes and in the end, many homeowners under these trial periods end up worse off than if they'd never been on trial.

As a real estate professional, I have offered consultation with many of these distress homeowners who are frustrated, angered and under duress. Often times they just want to throw their hands upward and give up. They want out and they are contemplating abandoning their properties.

To that end, Short Sale becomes the only option I urge these homeowners to consider. Why? Short Sale minimizes damage to credit as an approved short sale means a creditor is willing to settle the debt in full for the amount owed by the debtor for a value that is less than what the creditor is owed. The remaining balance is forgiven and the homeowner will no longer owe anything to the creditor. The caveat is that the homeowner will likely receive from the creditor a IRS-1099 form for the loss amount difference which then must be reported as income on the debtor's tax return. If it's a principle residence, any Capital Gains Tax may be forgiven under the Mortgage Debt Relief Act. Always best to consult with Tax Advisors on these matters.

In contrast to the action of abandoning the home, the creditor no doubt will effect forclosure action and may release the securiity interest of the property under a Release of Lien once resold but the amount owed is not forgiven. The homeowner still owes any balances to the creditor and furthermore, maybe liable for damages as consequences of their actions.

If you would like to read Paul Kiel's article entitled "Loan Mod Logjam Continues for 265,000 Homeowners; Failures Jump"; visit www.propublica.org/site/author/paul_kiel

For more information about Short Sales or for a FREE consultation, call me at 888-713-7261 or visit my website at http://www.jesserosete.com/

What a great time to buy Real Estate!

I am a Real Estate Broker serving the greater S.F. Bay Area. With all the hoopla surrounding the current real estate market and the several foreclosure auctions that were conducted, I was curious to know what impact the market has caused to the real estate inventory.
Clearly, the media attention has been focused on the subprime fall out and subsequent foreclosure rise in many parts of the bay area. Real Estate Sales has been slow for several months according to Dataquick who monitors sales trends nationally. However, some experts speculate that sales have been flat for at least three months indicating the possibility that prices are at or near bottom.

So what does this mean to buyers? Let me just say – It’s a great time to buy real estate. With the new FHA loan limits, coupled with the large inventory of homes available for sale; If you’ve sat and waited on the fence watching the market – NOW IS the time to take advantage and buy your dream home or investment property. I recently took a look on MLS and found over 1,000 homes priced under $200k. Amazing! As a service to the buying public, I offer the following links to help you get started.

Search the Multiple Listing Service for FREE at http://www.jesserosete.com/Default.aspx?page=9

Get pre-approved on line at http://www.freeinfo-reports.com/gold_mortgageapp.asp

Arm yourself with knowledge and understanding of the buying processes and your options to finance your purchase. I strongly suggest teaming up with a high level communicator and negotiator such as yours truly but it is equally important to remember to stick to a budget plan that does not break your bank account.

Buying a home is a big step but with proper expert guidance using licensed professionals, the journey to your success can be a pleasant and rewarding experience. Good luck in your real estate endeavors!

Investors! What Went Wrong?

So many of my investors who attended my investment seminars learned that buying multi unit apartment buildings is a better investment strategy than buying single family homes.

Our investors learned the art of leverage; spread risk with multi renter's and when to trade up using tax deferred exchanges. As a result, while other investors are being foreclosed on their single family home investments, our investor properties are holding up to the changes in the market. As a matter of fact, we are excited that our rental units are filling up with foreclosed homeowners renting our units.

Think about it. How often do you see an apartment building in a foreclosure situation. I saw one in the recent foreclosure auctions held in San Mateo. The reason, the investor bought the building at the peak pricing levels and then could not get the rents high enough for the building to support itself. On top of that, I speculate that the investor had no property management skill sets and did not know what they were doing. The investor who bought it at auction forked out $285,000 cash! It needs about $70,000 in repairs to bring it up to par. What a deal! The investor (probably someone I taught) essentially bought the building at 1999 pricing; once fix up; he will support a loan about $355,000. If you know anything about cash flow. My worksheet is screaming Cha Ching! Monthly cash flow of about $2,200 a month. Potential rent income of $4,700 minus debt and expenses of approximately $2,500. Way to go!

But back to the investors who bought single family homes. Several years ago, I often heard arguments about buying a pretty new home versus an old apartment built in the 60's. The common argument - "why should I invest in an older apartment when I can buy a new home". Well, all of these investors missed the boat! You see, its all about leverage. I argued that pretty does nothing to my pocket book and that cash flow is king! Your one renter Vs my four renters, I can afford to have a vacancy.

Our investors are excited. We all feel like we did in the late 90's and early 2000's. Time to start adding to our investment portfolio's. Enough said. Want to know how to invest the smarter way? I'm easy to find. ww.jesserosete.com or freeinfo-reports.com

It's a Great Time To Buy Real Estate; Hurray for FHA !

Yes, the stimulus package was approved and became law! Fannie Mae and Freddie Mac can know gaurantee loans up to 125 percent of each area's median, with a minimum o $417,000 and a maximum of $729,950 for most bay area counties except Sonoma and Solano which have lower limits - Sonoma ($662,500) and Solano ($557,500). The old limit was $417,000

Under these new guidelines, FHA program loans will once again be the impetus to which first time buyers will use to acquire their first home. What I like about it is that the guidelines for FHA loans make it easier to acquire loans with zero or little down and because the programs are federally insured, banks will offer lower rates which benefits first time buyers and even those wanting to convert their large jumbo loans to conventional loans.

Now couple this with the high inventory of homes and presto! -- Buyers are in the drivers seat! More choices in affordable homes, seller and developer's are offering incentives and discounts to the buying public; what more can you ask? So if you're a buyer, what are your next steps?

Set yourself up. Get up to speed on the market and then get pre-qualified or pre-approved to find out how much home you can buy. Understand the process of buying and connect with licensed realtor professionals who can guide you through the buying processes.


If you need free information and resources, go to http://www.freeinfo-reports.com/ Everything you need to get started is available and free. You can even search the Multiple Listing Service for homes around the bay area.