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I’m coming off an amazing weekend. I’m dedicated to success and recently joined and exclusive mastermind group because I recognize the importance of continuing my education.Expensive… you bet. But the values in ideas, networks, resources, and friendships are priceless.

This is a group of highly successful people dedicated to bettering themselves. People committed to action. People not afraid to answer your questions and call you an idiot. Hard core business people that don’t have time for BS and recognize the value of their time.

Hopefully you have surrounded yourself with people that not only support you but push you to better yourself. People either add value to your life or take value from it.

Most people would be well served to get rid of many of their so called “friends” that do not add to their lives and replace them with people going the right direction.

Is that too much for you to handle? If so then don’t expect your life, success, or finances to change!

Author Gerald Romine

Contrary to what all the so called experts say the real estate market s could rebound “overnight”. Conventional wisdom and history show that markets and cycles change slowly. The best conventional wisdom analogy is that of turning around a huge ship…. It doesn’t turn on a dime, it takes time!

So why is Gerald Romine saying the market could turn around overnight? Because we do not have a housing crash, we have a credit fiasco where the lenders have tightened their belt making it very difficult to borrow money. There are buyers a plenty for the market and housing IF the lenders want to loosen the lending guidelines.

Put in plain English… if it was easy to qualify and get loans there would be a rush of buyers getting property. The reason I say the market could turn on a dime is because lenders could change the lending guidelines overnight if they wanted to.

Supporting Articles:

• Banks Fail to Lower Mortgage Rates as Bernanke Cuts Money Costs - Bloomberg
• Mortgage approvals fall by a third - Guardian
• Mortgage application volume rises, MBA says

What’s happened is the Federal Reserve has lowered interest rates but the banks are not lowering the lending rates, are receiving more loan applications, and banks are approving fewer and fewer applications.

Facts You Should Know·

• The difference between the 10-year government bond yield and the average U.S. fixed mortgage rate was 2.7 percentage points last month, the widest spread since1986.
• ·The median price of single-family homes dropped 8.7 percent since February 2007, the most in four decades of record keeping.
  
• The national vacancy rate increased to 2.8 percent in the fourth quarter, matching 2007’s first-quarter rate that was the highest in records going back to 1956, the U.S. Census Bureau reported Jan. 29.

While nobody has a crystal ball we should look at the facts and see the problems in the market today revolve around the ability to borrow
money. Lending institutions could change their lending criteria overnight and flood the market with ready willing and able buyers. But it is likely they will take small steady steps and control the wave of applications.

Don’t tell me it can’t be done or won’t happen because for the week ending March 21 mortgage application volume rose 48.1% compared to the previous week because the publish perceived the Federal Reserve’s rate cut would transfer to lower rates from the borrowers. It didn’t. But imagine what would happen if the lenders dropped the lending rates 1% and made it easy to borrow money. The rush would be on!

Author: Gerald Romine

Foreclosure is the equitable proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner’s failure to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust.” Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that “the lender has foreclosed its mortgage or lien.”

Types of Foreclosure

The mortgage holder can usually initiate foreclosure anytime after a default on the mortgage. Within the United States, several types of foreclosure exist. Two are widely used, with the rest being possibilities in a few states. The most important type of foreclosure is foreclosure by judicial sale. This is available in every state and is the required method in many. It involves the sale of the mortgaged property done under the supervision of a court, with the proceeds going first to satisfy the mortgage, and then to satisfy other lien holders, and finally to the mortgagor. Because it is a legal action, all the proper parties must be notified of the foreclosure, and there will be both pleadings and some sort of judicial decision, usually after a short trial.

The second type of foreclosure, foreclosure by power of sale, involves the sale of the property by the mortgage holder not through the supervision of a court. Where it is available, foreclosure by power of sale is generally a more expedient way of foreclosing on a property than foreclosure by judicial sale. The majority of states allow this method of foreclosure. Again, proceeds from the sale go first to the mortgage holder, then to other lien holders, and finally to the mortgagor. Other types of foreclosure are only available in limited places and are therefore considered minor methods of foreclosure. Strict foreclosure is one example. Under strict foreclosure, when a mortgagor defaults, a court orders the mortgagor to pay the mortgage within a certain period of time. If the mortgagor fails, the mortgage holder automatically gains title, with no obligation to sell the property. Strict foreclosure was the original method of foreclosure, but today it is only available in a few states, such as Connecticut, New Hampshire and Vermont.

For more information on foreclosures visit www.kickassshortsales.com.

Author: Gerald Romine

A great find I thought you would enjoy.

Are you keeping up with the kick butt headlines on my real estate blog? You should be.

Existing Home Sales in U.S. Unexpectedly Increased (Update3)

From Bloomberg: By Courtney Schlisserman -- Sales of existing homes in the U.S. unexpectedly rose in February for the first time in seven months, easing concern credit restrictions and falling prices would hurt demand.

Might be a good time to buy first home

From: McClatchy Newspapers — CHICAGO - Everyone likes a bargain. So it’s no surprise that as home prices fall in many markets, those who have been priced out of owning a home are beginning to take notice. And some in the real-estate industry are saying that factors are aligning to make this a good time for first-time buyers to be in the market because they don’t have to face the challenge of selling a home to buy another.

What Does Gerald Romine See?

The feedback I’m hearing is investors are coming back and new investors are entering the market. The bargain hunters are out and both are great signs that things could be stabilizing. Do not mis-interpret that to mean the worries and troubles are over. They are not. However the increase in existing home sales and new buyers going to the market is encouraging for investors. If the trend continues that is good news… but the thing to be looking for is the lenders to loosen up the lending guidelines. When that happens the floodgates will be open and the market will turn on a dime. Now is the time to be a bargain hunter. Buy anything you can if you can make it cashflow as a rental property with 5% down or less.

Author: Gerald Romine

Have you ever wanted to know the rules the loss mitigator is following when you are negotiating a short sale? Here’s the rules from Fannie Mae that should be very enlightening if you take the time to read them.

NOTE: These are merely guidelines and because a lender has a guideline does not mean it has to be followed.

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FNMA Short Sale

Introduction:

The purpose of these procedures is to complete a successful short sale workout in accordance with FNMA Federal National Mortgage Association guidelines.

References

1 FNMA – Home Savers Solution Network
2 FNMA Delegated Schedule of Authority
3 Mi Companies Work Rules

Mortgagor Qualifications

When you are qualifying the mortgagor, it’s important to review the financial information on file to determine whether or not the mortgagor has experienced a verifiable loss of income or increase in living expenses. The following information is reviewed to make this determination:

• Current POI Proof of Income should not be older than 60 days for all sources:
• Pay stubs: Pay stubs must be legible and include the mortgagor name or Social Security Number, pay dates, rate, and deductions.
• Profit and Loss:Must be for the last 90 days, signed, and dated by the preparer.
• Rental: Need a signed and dated letter from the renter or a lease agreement including payment frequency and amount.
• Non-Obligor income: If the non-obligor is contributing to the household with his income, need a signed and dated letter stating how much is being contributed monthly from the non-obligor.
• Child Support: Need a copy of the child support order or letter from the person paying child support that states the amount and how often it is paid.Need copies of three months worth of bank statements if direct deposited from the state disbursement unit.
• Social Security: Need current copy of award letter or if direct deposited.
• Reason for Default – You need a brief explanation indicating cause of delinquency. Verify the mortgagor had a decrease in income and/or increase in expenses that caused the delinquency.This can be a separate letter or on the space provided on the Financial Worksheet.
• Completed Financial Worksheet: Completed, signed, and dated by all mortgagors.This is only necessary if the financial information on DLQ3 has not been updated in the last 30 days.
• Credit Report:Must be pulled within the last 90 days.

Order Appraisal – When the appraisal is completed, you must complete three steps before the mortgagor(s) are considered for a short sale.
- Qualify the mortgagor
- Qualify the property
- Qualify the sales contract

Qualify the Mortgagor
The Liquidation negotiator will…

1. Calculate all qualifying income.
2. Verify the expenses on the Financial Worksheet.The reason for default is due to a verifiable increase in expenses or decrease in income.
3. If the expenses are greater than the income, proceed with qualifying the property.If the expenses are less than the income, the mortgagor may qualify for a retention option. Redirect the file to the FNMA Retention team. Also, if there is a positive cash flow you may want to ask the borrower to make a cash contribution or sign a promissory note.

Qualify the Property

Property may be occupied or vacant. Most MI insurers request 91% of the “as is” appraised value; FNMA requires 90% of the “as is” appraised value.

Qualify the Sales Contract

Sales Contract

The Liquidation negotiator will…

1. Make sure the contract is executed by all parties.
2. Counter the offer to the FMV Fair Market Value (appraised value).The contract must have a closing date.
3. Have any “and/or assigned” clauses removed from the contract.“And/or assigned” clauses cannot be included in the sales contract. This clause means they can place the deed in someone’s name other than the listed buyers which could violate HUD’sArm’s Length Policy.
4. Have the contract addendum and listing addendum signed by all parties.

HUD 1 or Net Sheet

The Liquidation negotiator will…

1. Verify all seller closing costs are normal and customary.

• Realtor commissions do not exceed 6 percent of the sales price.(6% if 2 realtors are involved; 3% if 1 realtor is involved)
• Sales price on the HUDI matches the sales contract.
• The net proceeds are at least 90 percent of the appraised value & 91% for most Mi Co.

Cost Analysis

The Liquidation negotiator will…

1. Verify outstanding foreclosure fees and cost.
2. Run the cost analysis (Be sure to include the outstanding f/c attorney fees & costs & the appraisal fee). Submit the presale through HSSN to obtain approval on non-delegated deals. Wait to obtain approval from the investor & Mi Co before issuing out the approval letter.

Issue Approval

The Liquidation negotiator will…

1. Make sure the Approval letter contains the following:

• The buyer(s) and seller(s) names on it.
• The date of the sales contract.
• The estimated closing date.
• The approved closing costs.

Steps to Follow Prior to Closing

The title company or closing attorney will need to provide the estimated final HUD Housing and Urban Development I for approval.

The Liquidation negotiator will…

1. Fax the approved HUD I and Attachment F back to the closing title company or closing attorney.
2. Complete Attachment G.

Steps to Follow After Closing

The Liquidation negotiator will…

1. Verify you have received the net proceeds check, HUDI signed by all parties.
2. Make sure the proceeds check and the net amount on the HUDI match or funds wired confirmation.
3. Make sure the disbursement date on the HUD1 matches the check date.
4. Forward the complete file to Settlement along with the Settlement Checklist.

Removals/Denials

The mortgagor(s) may be terminated from the Pre Sale program for the following reasons.

• Un-resolvable title issues.
• The mortgagor did not market the property at FMV to obtain an offer.
• Voluntary withdrawal by the mortgagor(s).

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If you need software to complete short sale packages, address loss mitigator concerns, and use a proven format for getting offers accepted this one is the best available.

Author: Gerald Romine

The 7 Ways To Prevent Foreclosure

Whether you are an investor or homeowner faced with a foreclosure we believe you should know and understand all of your options. For the purpose of instruction this article assumes you are a homeowner facing foreclosure.

Foreclosure Rules

Rule #1: Contact your lender right away to discuss your options.

Rule #2: Never ignore the lender’s letters or phone calls.

Rule #3: Ask the lender for a reinstatement or repayment plan.

Rule #4: Know your options

1) Reinstatement

Reinstatement might be possible when you are behind in your payments but can promise a lump sum to bring payments current by a specific date. Call the lender and ask to speak with the workout department. The lender would prefer to have the loan reinstated and have you stay in the home then to foreclose on the property.

2) Repayment Plan

If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to a certain number of monthly payments until your account is current.

Example. You fall 5 payment behind on your house

3) Private Money Loan

A Private Money Loan at a high interest rate is often the best solution for the homeowner because it allows them to bring the other loans current. Although the interest rate is higher it is usually cheaper to pay a higher interest rate on a small loan and keep the existing financing in place compared to refinancing a large new loan at a higher interest rate(because of bad credit and a pending foreclosure). Most private money lenders require a total loan to value ratio below 75% and are equity based lenders meaning more importance is placed on the house securing the debt than a personal credit rating. Make sure you are dealing with a private money lender and not a mortgage broker, bank, or hard money lender(all of these may charge exorbitant points and fees costing you more money). With a private money lender you keep the ownership of your house, borrow only what you need, and can repair your credit over time. Unfortunately private money lenders are difficult to find.

4) Sell Your House To An Investor

If 1, 2, & 3 are not an option then you can sell your house to an investor. On average a seller nets 85% of the sales price after taking into consideration all selling, closing, & misc. expenses. An investor will expect to make a reasonable profit but can close quickly with cash or may take over existing debt & bring the loan current. A credible investor closes quickly which starts rebuilding your credit immediately and may put cash in your pocket depending on your equity. If you have little/no equity see #6.

5) Sell Your House and Lease Option Back

This is a very popular option and must be done by a willing investor. Typically the investor takes over the existing debt or gets new financing then gives the seller the option to buy the property back at a later date for a higher amount. The seller gets to stay in the house and make reasonable lease payments while rebuilding their credit. Done right this can be a solution but the disadvantage is you lose ownership of the house and tax write offs. Another option that may be less expensive is getting a Private Money Loan. If you have little or no equity an investor may be able to do a short sale(see #6) then lease option the house back to you.

NOTE: We are not a big fan of lease optioning the home back to the owner because unless it is done correctly there is too much that can go wrong at a later date. We mention it here to cover all the options.

6) Short Sale

A short sale is when an investor purchases a property conditioned upon the lender discounting the loan(s) to a lower amount. This may be the only solution for sellers that have little or no equity or are over financed owing more than the value of the property. Make sure you work with a credible investor experienced in short sales. Do not do business with anyone that guarantees or promises results- they simply can’t because there is no way of knowing what discount a lender will accept. Many times acceptance will not occur until just before the foreclosure date. Note: If you have little or no equity it is important to start working with a credible investor ASAP because the short sale process takes time.

7) List The Property With A Realtor

This is the option of last resort. FACT: there are thousands of houses listed on the MLS that Realtors can’t sell. Average days on the market continues to climb! The foreclosure process limits the time you have to sell. You simply don’t have the time. Realtors do not understand options 3, 4, 5, and 6. Realtors increase your costs with exorbitant commissions and most seasoned investors avoid working with Realtors on short sales.

For a complete understanding of short sales visit this site.

Author: Gerald Romine

Short Sale Definition

Short Sale: In real estate, a short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagee. Extenuating circumstances delegate whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower’s financial situation. A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. Here’s a free site completely dedicated to short sales and foreclosure investing. Author: Gerald Romine

Weak people are afraid to ask for help because they feel it reveals their weakness. Strong people will readily ask for help because they are most interested in achieving results and getting stronger than in protecting their fragile ego.

As a real estate investor one of the best things you can do is ask for help from people who are qualified to give answers. Sadly, few ever take advantage and ask for help.

My system is used nationwide and I’m happy to say that many first time investors have turned into full time pro’s within a very short period of time. Additionally I provide email support for a year to answer questions as they come up.

The key thing to remember is when you don’t know something due your due diligence to find out… which translates don’t be so lazy as to ask somebody without first making a reasonable effort on your part. Google and Wikipedia will do wonders. If that does not work then ask!

Author: Gerald Romine

Too often real estate investors get stuck in a business mindset and forget there is more to life than real estate investing. There will always be real estate deals to chase but we have to learn to take the time to enjoy family and friends and to enjoy this marvelous journey called life.

I’ve found that one of the best ways for me to get my mind off real estate is to get outside and enjoy mother nature. It is often when I am out hiking and enjoying life that my best business ideas come to me from out of the blue.

Here’s a few pictures of Sunday’s hike on South Mountain in Phoenix with my family. A short 5 mile hike that took in National Trail and Fat Man’s Pass - a foot-wide slot between two granite boulders that you shimmy through for 25 feet.

Author: Gerald Romine

If you are facing or considering foreclosure, you’re not alone.

The foreclosure rate is up 60% in February and homeowners nationwide are struggling to make ends meet. The most common options are 1) Hang on and hope, 2) Sell if you have equity, 3) Foreclosure, 4) Bankruptcy, 5) Short Sale, and 6) Deed In Lieu of Foreclosure.

Depending on the state you live in there may be another option that is very appealing. For example in Arizona there is a way to walk away from a property without a foreclosure and without damaging your credit.

Warning: There are many scams and rescue programs out there dealing with foreclosure, this is not one of them. Be sure to complete your own due diligence for any such program or claim.

The Arizona Foreclosure Away Program

Is a program based on state and federal law that allows a property to be returned to the lender that prevents a foreclosure or deed in lieu from ever happening. Basically, a foreclosure never takes place so no foreclosure can be reported. The program cost is about 1.5 times a mortgage payment.

We’ve actually gone up against Fannie Mae and although they first protested our program once the laws were explained to the them they accepted the property and stated in writing the transfer to the lender would be reported to the credit bureau as a ‘voluntary conveyance’, would not mention foreclosure, and that no 1099 would be issued!

If you have Arizona property check out this site. If you are in other states similar programs may exist.

Author: Gerald Romine

Bank REO’s are hot right now as many banks are accepting low offers on houses in their REO inventory - often the same houses they refused to short sale (that’s a topic for another day).

I remember back in the 80’s when my Mother had banks calling her to buy properties. She named the price and terms because they just wanted out of the properties and they carried the loans. It was like nothing down owner financing except she was buying from the bank.

The other day I found this site that was reportedly created by a Boston programmer who want to remain anonymous. With this site you can find foreclosed(REO) properties. Right now there are 11 lenders listed including Countrywide, CitiMortgage, Chase, Downey Savings, HSBC, Indymac, Ocwen, Regions Bank, and Wells Fargo.

Warning: searching the websites is easy but takes some time. With Countrywide you can search by state. Some sites have pictures(B of A and Indymac) and some let you search by city or zipcode.

For those using the UREI Software this is a goldmine. Crank out justified REO offers in 5 minutes or less and work with the lenders that will play ball.

If you’ve got a success story please share it for everyone’s benefit.

Author: Gerald Romine

Last week I was at an Infusion U seminar learning a few new tricks about marketing and the online world. I was able to meet Michael Gerber author of The E-Myth and The E-Myth Revisited and listen as he spoke to our small group about the Entrepreneurial Age. It’s quite entertaining and educational to hear a man in his 70’s embrace the digital age and describe Donald Trump as “19th Century.”

It was a nice event, but the most memorable thing for me was learning an important lesson about blogs and the new age that we are in. A blog today is what a website was 10 years ago! When it was explained that websites and email alone are missing a lot of prospective customers (property owners, property buyers) my interest spiked.

What I did not realize is email alone could be missing a lot of customers. A blog and RSS should be incorporated into our marketing. Fortunately they are easy to do.

What’s this have to do with Oprah? In her latest book club selection she is pushing Eckhart Tolle’s book A New Earth with 10 webinars. The moral of the story is if the worlds most influential and recognizable (she’s rich too) media mogul is turning to social media then little guys like us should take notes. We have a lot more to gain than the richest woman in America does by a long shot.

I’ve got to tip my hat to Oprah. She’s a 100% self made billionaire and rose from the most humble beginnings.

Author: Gerald Romine

This is it… you’ve found the home of Gerald Romine’s real estate blog.

Check her often for what’s happening in my world where you’ll be sure to get unsensored information on real estate investing and life in general.

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