Eminent Domain Could Help Underwater Homeowners

Article provided by Brenda Mayer of Cozy Cabins Realty.

San Bernardino county has formed the Joint Powers Authority (JPA) to research the idea to use eminent domain to help underwater homeowners.  The proposal was formed during talks with private investment firm,  Mortgage Resolution Partners (MRP), earlier this year.  The fact that SB County officials and MRP held several meetings prior to formal public meetings is in question of possible violations of the Brown Act.

The proposed plan would have SB County become a client of MRP and with the county's use of eminent domain, underwater properties would have their mortgages condemned and a new mortgage issued to the homeowner.  The mortgage company would be given "fair market value" for the condemned mortgage.  Government secured mortgages would not qualify for the program, only mortgages that are held by private investors would be considered.  The largest group of privately held mortgages are higher end loans where in many cases, the investor has been unwilling to assist a underwater homeowner with a principal reduction.  Only homeowners that are current on their loan payments would be considered.

On Friday, July 13th, the JPA was officially formed to research the viability of the project and has been given the power to act on this project by the County Board of Supervisors.  County chief executive Greg Devereaux was appointed as Chairperson of the JPA with directors Fontana City Manager Ken Hunt, Ontario City Manager Chris Hughes, county Redevelopment Director Dena Fuentes and Ontario's housing and neighborhood development director, Brent Schultz.  

The meeting at the San Bernardino County Government Center was filled with concerned community members including many real estate professionals.  Timothy Cameron, managing director of the Securities Industry and Financial Markets Association's asset manager's group, told the committee that the residents of the region would find it harder to get loans and investors would suffer losses.  He also said such a move would invite costly litigation.  

Our own association voiced concern to the committee questioning the use of eminent domain action for a private purpose when the description of eminent domain in the California code specifically states this action is to be used for projects to benefit the public.  We also addressed the concern that if eminent domain is abused in this way that lenders would be less willing to invest in property in the San Bernardino county out of fear that their investment would be condemned.  Also, with the use of this process, the homeowner's binding contract with their lender will have been violated.  There is nothing to stop the lender from issuing a 1099 to the homeowner for the financial difference that is given to the lender through the eminent domain process and the balance of the note.  The homeowner could be responsible for thousands in federal and state taxes as the 1099 translates to earned income.

Privately, many in our industry are worried that if this proposal is passed, then the boundary lines surrounding the use of eminent domain would continue to blur.  The next meeting of the SB County Joint Powers Authority is scheduled for August 16th. 

Learn How to Buy Short Sales - July 11th Newport Coast, CA

Learn How to Buy Short Sales

~Free Seminar~

Wednesday, July 11th from 6:30pm-8pm 

Learn how to find deals, submit your offer and the timeline for a successful close.  Panel of experts in the field including a Real Estate Attorney, Mortgage Broker, Certified Distressed Property Expert and Real Estate Broker. 

Newport Coast Community Center

6401 San Joaquin Hills Road

Newport Coast, CA 92657

RSVP to 949.249.2424

Learn How to Buy Short Sales - May 30th

Join us Wednesday, May 30th at 

the Newport Coast Community Center

6401 San Joaquin Hills Road

Newport Coast, CA 92657

*Free parking

Learn from a panel of experts including a certified distressed property expert, 

short sale negotiator, mortgage broker, tax attorney, and real estate broker. 

Any questions? Please call 949.249.2424

No agents please.

Know Your Real Estate Options

Are you a homeowner concerned about your current real estate situation?  Do you need help understanding your options such as short sale, loan mod, deed in lieu, bankruptcy, or forebearance?

Attend our free catered seminar and learn from Experts in the field including an Attorney, Short Sale Negotiator, 5 Star Broker and Certified Distressed Property Expert and a Mortgage Expert.

Free catered seminar on Tuesday, May 17th from 6:30pm-8pm at the Newport Coast Community Center.

RSVP to 949.249.2424.  No agents please.

*Next seminar Wednesday, June 22nd

FHA Debuts New Plan for Underwater Owners

The latest government program to help underwater borrowers debuted Tuesday.

Under the plan, the Federal Housing Administration permits lenders to choose which borrowers will participate from among their clientele. The idea is that there are some borrowers banks and investors want to get rid of because they are likely to default anyway.

To qualify, borrowers must be current on their mortgages and owe at least 15 percent more than their home’s current value. Lenders must agree to forgive at least 10 percent of the debt.

The government estimates that between 500,000 and 1.5 million borrowers will be helped, but analysts at Barclays Capital say they doubt whether the program will reach 300,000 borrowers.

Source: Associated Press, Alan Zibel (09/07/2010)

If you need help with your current situation, call us today. We do Short Sales with no fees to the seller. The Canaday Group has over 30 years experience. Don't risk your home with anyone less qualified.

Tips for what you can do NOW to Avoid Foreclosure

Don't wait. Expect long wait times when calling your servicer. Ask for the "home retention team." If you are put on hold, wait until someone comes back on the line. Keep a record of whom you speak to and what was said.
Know your options. The Making Home Affordable Mortgage Modification Program is the government's main program to prevent foreclosures. More than 2,300 servicing companies participate, covering about 85% of all single family home loans. Check with your servicer to see if a new loan that could lower your payments is an option. Check out HUD.gov or MakingHomeAffordable.gov
Build a budget. Make a list of your monthly expenses and ask what sacrifices you are willing to make to remain in your house.
Manage the process. You will have to fill out lots of paperwork. Take your time and be patient. Be honest and realistic when answering questions. Make copies of everything before you send. Verify the recipient received your docs.
Try again. You can reapply if you are turned down. If you don't qualify, maybe it is time to short sale your home. Exit gracefully before foreclosure is at your door.

Thank You!

Thank you to those that came out to our Short Sale Seminar last night. We had a wonderful evening with Lee Ann Canaday & Adam Alcaraz presenting the latest market info, how to buy the right short sale and how to properly short sale a home. Stay tuned for the next seminar!

How to Buy Short Sales & How to Avoid Foreclosure ~ FREE Seminar

Free Seminar on Tuesday, October 27th from 6:30pm-8pm.

Lee Ann Canaday with the Canaday Group is a Certified Distressed Property Expert (CDPE). The Canaday Group has a short sale department and has successfully closed numerous short sales. Short sales allow a homeowner with a legitimate hardship to sell their property for less than the balance of their mortgages and avoid foreclosure. At our seminar we will explain the short sale process, how to obtain financing, how to avoid foreclosure and we will present short sales currently on the market.

Location:
UCI University Club
801 E. Peltason
Irvine, CA 92697
*Food & beverages provided
Any questions, please call 949.249.2424

Top 10 Reasons to Avoid Foreclosure continued...

Reason #6-10.

Reason #6 Current Employment
Employers have the right and will actively check the credit regularly of all employees who are in sensitive positions. A foreclosure can be grounds for immediately reassignment or termination, whereas a short sale is not reported on a credit report and is therefore is not a challenge to employment.

Reason #7 Future Employment
Increasingly more and more employees are requiring credit checks on applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment. A short sale is not reported on a credit report and is therefore will not challenge employment.

Reason #8 Deficiency Judgment
In 100% of foreclosures (except in those states where there is no deficiency) the bank has a right to pursue a deficiency judgment. In some short sales it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner. In a foreclosure the home will have to go through an REO process if it does not sell at auction. In most cases this will result in a lower sales price and longer time to sale in a declining market. This will result in a higher possible deficiency judgment. In a properly managed short sale the home is sold at a price that should be close to market value and in almost all cases will be better than an REO sale resulting in lower deficiency.

Reason #9 Control
In a foreclosure situation homeowners are often stressed because they don't know when or how things will happen. In a short sale with a qualified short sale agent assisting the process, much more control can be given in regards to timing and the sale process. With this type of clarity, it's easier to make an informed decision versus waiting to see what the bank's next move will be.

Reason #10 Peace of Mind
How can you put a price on "Peace of Mind"? The satisfaction knowing one has done everything possible to satisfy one's debt is priceless and long lasting. This may be the most important reason of all.

Homeowners who are delinquent in payments and struggling due to deficient equity are often at their wits end and desperate for help. Local lenders are overwhelmed, and while there are many credit, loan and law companies out there claiming that they can help - for a fee, consumers are quite understandably not sure where to turn.


If you'd like to know more about how to buy a short-sale or how to avoid foreclosure, Lee Ann Canaday a Certified Distressed Property Expert (CDPE) and Adam Alcaraz a Realtor/Counselor with over 13 years experience offer a free ongoing information session on "How to Buy Short Sales and How to Avoid Foreclosure". The next seminar is scheduled for Tuesday October 27h, 6:30 -8:00 p.m. at UCI University Club, 801 E. Peltason, Irvine.

Top 10 Reasons to Avoid Foreclosure

Before you jump to the conclusion that a foreclosure is your only option, or the easiest/quickest way out of a difficult and stressful financial situation...think again! Here's #1-5. Check back for #6-10! A short sale (short sales allow a homeowner with a legitimate hardship to sell their property for less than the balance of their mortgages) can be a viable alternative to foreclosure and one that bears serious consideration. Consumers often don't realize that the ramifications of a foreclosure are very different than those of a short-sale.

Reason # 1 - Future Fannie Mae Loan - Primary & Non-Primary Residence
A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of five years vs. a homeowner who negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage for a primary residence after two years. An investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for seven years vs. an investor who successfully negotiates a short sale will be eligible for a Fannie Mae backed investment mortgage after only two years.

Reason #2 - Future loan with any mortgage company
On any future 1003 application, a prospective borrower will have to answer YES to the question "Have you had property foreclosed upon or given title or deed in lieu thereof in the last seven years?" - this will affect future rates. There is no similar declaration or question regarding a short sale.

Reason #3 - Credit Score
In a foreclosure scenario the homeowners credit score may be lowered anywhere from 250 to 300 points - typically affecting the score for over three years. In a short-sale situation only the late payments on the mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the credit score as little as 50 points if all other payments are being made. The effect of a short sale can be as brief as 12 or 18 months.

Reason #4 Credit History
A foreclosure will remain as a public record on a person's credit history for 10 years or more. Whereas, a short sale is not reported on a credit history. The loan is typically reported as "paid in full, settled."

Reason # 5 Security Clearances
Outside of a conviction for a serious misdemeanor or felony, a foreclosure is the most challenging issues against a security clearance. In almost all cases, if a homeowner has a foreclosure and is a police officer, is in the military, CIA or any other position that requires a security clearance the clearance will be revoked and their position will be terminated. A short sale on its own does not challenge most security clearances.

"How to Buy Short Sales & Avoid Foreclosure" free seminar Oct. 27th at UCI University Club - 801 E. Peltason Irvine. 6:30pm - 8pm.

"How to Buy Short Sales & Avoid Foreclosure" Free Seminar

The Canaday Group would like you to attend a free information session on
How to Buy Short Sales & Avoid Foreclosure
It will be held Wednesday, June 24th from 6:30pm -8:30pm.
Program will begin at 7pm.

Lee Ann Canaday with the Canaday Group is a Certified Distressed Property Expert (CDPE). The Canaday Group has a short sale department and has successfully closed numerous short sales. Short sales allow a homeowner with a legitimate hardship to sell their property for less than the balance of their mortgages and avoid foreclosure. At our seminar we will explain the short sale process, how to obtain financing, how to avoid foreclosure and we will present short sales currently on the market. Laurie Garrick with Bank of America will be providing finance information and prequalifying interested parties.

Location:
Mission Viejo Library
100 Civic Center
Mission Viejo, CA 92691

*Food & beverages provided
Any questions? Call 949.249.2424

How to Buy Short Sales *Free Seminar*

The Canaday Group would like you to attend a free information session on
How to Buy Short Sales
It will be held Tuesday, April 21st from 6:30pm -8:30pm. Program will begin at 7pm.

Lee Ann Canaday with the Canaday Group is a Certified Distressed Property Expert (CDPE). The Canaday Group has a short sale department and has successfully closed numerous short sales. Short sales allow a homeowner with a legitimate hardship to sell their property for less than the balance of their mortgages and avoid foreclosure. At our seminar we will explain the short sale process, how to obtain financing, and short sales currently on the market.

Location is the UCI University Club- 801 East Peltason Irvine, CA 92697
The Club is easily accessed from North or South County using the 405 freeway or 73 toll road.
*Food & beverages provided
Any questions? Call 949.249.2424

Deficiency Judgment with a Successful Short Sale vs. Foreclosure

Deficiency Judgment is defined as the amount for which the borrow is personally liable on a note and mortgage if the foreclosure sale does not bring enough to cover the debt. The judgment is for the total amount and not for the deficiency, the recovery from the foreclosure sale being deducted from this amount.

Deficiency Judgment
Foreclosure-In 100% of foreclosures (except in those states where there is no deficiency) the bank has the right to pursue a deficiency judgment.
Successful Short Sale-In some successful short sales it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner.

Deficiency Judgment (amount)
Foreclosure-In a foreclosure the home will have to go through a REO process if it does not sell at auction. In most cases this will result in a lower sales price and longer time to sale in a declining market. This will result in a higher possible deficiency judgment.
Successful Short Sale-In a properly managed short sale the home is sold at a price that should be close to market value and in almost all cases will be better than a REO sale resulting in a lower deficiency.

Future Loans with a Successful Short Sale vs. Foreclosure

Homeowner consequences of a successful short sale vs. foreclosure and how it relates to your future loans.

Future Fannie Mae Loan - Primary Residence
Foreclosure-A homeowner who loses a home to Foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.
Successful Short Sale-A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after only 2 years.

Future Fannie Mae Loan - Non Primary
Foreclosure-An Investor who allows a property to go to Foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years.
Successful Short Sale-An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after only 2 years.

Future Loan with any Mortgage Company
Foreclosure-On any future 1003 application, a prospective borrower will have to answer YES to question C in Section VIII of the standard 1003 that asks "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" this will affect future rates.
Successful Short Sale-There is no similar declaration or question regarding a short sale.

Short Sale vs. Foreclosure & Your Employment

How will a Short Sale vs. Foreclosure affect your Current Employment & Future Employment? Here are the answers:

Current Employment
Foreclosure-Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure in many cases is ground for immediate reassignment or termination
Successful Short Sale-A short sale is not reported on a credit report and is therefore not a challenge to employment.

Future Employment
Foreclosure-Many employers are requiring credit checks on all job applicants. A foreclosure is one of the most detrimental credit items an applicant can have and in most cases will challenge employment.
Successful Short Sale-A short sale is not reported on a credit report and is therefore not a challenge to employment.

Foreclosure vs. Successful Short Sale

We would like to share some tips on how the short sale route is much better than foreclosure. The Canaday Group mortgage counseling department is here for you and will review your options, please call us.

Credit Score
Foreclosure-Did you know that your credit score may be lowered anywhere from 250 to over 300 points? Typically will affect score for over 3 years.
Successful Short Sale- Only late payments on mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A short sale's affect can be as brief as 12 to 18 months.

Credit History
Foreclosure- Foreclosure will remain as a public record on a person's credit history for 10 years or more.
Successful Short Sale- Short sale is not reported on a credit history. There is no specific reporting item for 'short sale'. The loan is typically reported 'paid in full, settled'.

Attend our Avoid Foreclosure Seminar on March 11th 7pm at Tijeras Creek Golf Club in Rancho Santa Margarita.

Mortgage Counseling Department

Thank you to all who attended our Avoid Foreclosure Seminar. Due to its success we plan on having another seminar on Wednesday, March 11th at 7pm. Location will be Rancho Santa Margarita. Please stay tuned for details. There are a lot of people in Orange County who have purchased a home or refinanced in the past few years who may now be in trouble in their loan. The Canaday Group has recently opened a Mortgage Counseling and Short Sale department to accommodate all troubled homeowners. Our Mortgage counselor is a realtor who has been helping homeowners for the past 14 years. He is an expert in Mortgage Counseling and if needed, Short Sales. We are ready NOW to help you or any friends and family of yours.

Short Sale Defined

Gearing up for our Foreclosure Seminar on Jan. 21st, we would like to share some short sale info:
A Short Sale is a real estate transaction where a property is sold for less than what is owed to the seller's existing mortgage, usually due to an impending foreclosure. In this situation, the lender for the seller's mortgage agrees to forgive a portion of the loan amount to help the seller avoid foreclosure and sell their property to a new buyer.
Prior to the Mortgage Forgiveness Debt Relief Act of 2007 a lender would typically send a 1099 to the Seller in the following year for the amount that the mortgage had been discounted to close the short sale transaction.
Many homeowners are affected by adjusting rates of ARM loans. Many are in a position to sell their property due to little or no equity to refinance out of their unaffordable interest payments.

If you need help with your loan come to our seminar. There are options & the Canaday Group Mortgage Counseling Department may be able to help you.

Foreclosure Seminar - Jan. 21st

"Want to Avoid Foreclosure?"
The Canaday Group would like you to attend a FREE seminar.
It will be held Wednesday, Jan. 21st from 6:30pm-8:30pm.

The Canaday Group mortgage counseling department does:
1. Short Sales
2. Mortgage Counseling
3. Loan Modifications
4. Postponements

Need help with your loan? Loan Payments too high? THERE ARE OPTIONS.

If you are looking for help with your current situation, please attend our seminar. Location is 2 First American Way, Santa Ana, CA 92707. Click here for directions: http://firstam.com/oc/directions.html
Refreshments provided. Please call 949.249.2424 to RSVP.