Posts Tagged ‘short sales’

New results with better number for the bail out program.  But, the admittance of a delayed conversion and trial being extended has me wondering.  That is good news….if this is truly the answer and the reason of the HAMP program.  So I am not trying to be a critic, but and my observation is that looking like a way to string along (a good percentage mind you) the inevitable…. fail loan mod’s and people out of there home.  In some ways (being the critic) it would appear that the BIG BANKS would have their numbers and plan on them for this benefit.  Of course the other benefit is to see them succeed, but somewhere in the middle therein lies the truth.

My specific solution would be to become clear on if this is really a benefit for each homeowner based on the own financial future.  I know leaving a home and the security has a lot of weight, but the challenge is if it is a misled solution in the first place?  Know your numbers and plan for the future. The banks are requesting it, and we as homeowner’s should expect it.

I have a good math class to share if you want to use it or share it.  Please email me for more details.  Mikeo@lmsgnow.com

http://www.dsnews.com/articles/treasury-report-shows-230000-homeowners-in-permanent-hamp-mods-2010-04-14

Please feel free to leave your comments below!

Keep it short,

Mike Knows

…What …..more government programs!!!????  I had to add my Bostonian sarcasm to this.  And as we (the collective masses with problem property “issues”) come into another attempt to get HELP with this mess.  We are now faced with HAFA..the new Short Sale program.  THE GREAT thing is we still are working short sales and we are not needing HAFA to get them approved for homeowners!

Email me at Mikeo@lmsgnow.com for the summary.

Essentially we have another attempt to handle this issue and make it efficient for the lender.  However, there is more to identify for the pro’s and con’s of this program largely because of the HAMP (loan modification program) that has done so miserably.  Nonetheless we see this as a “works in progress” and we will have a full line of both sides.  If the results are anything like the HAMP then we will have certainly looked at CHUMP and HUMP as alternatives.  Stay tuned as we unravel this.

Keep it short,

Mike Knows

Mikeo@lmsgnow.com

Now this topic / subject is very literal in the Massachusetts housing market.  We have reached historic levels (no pun intended) for total inches of rain.  Even as I write this, we have an additional 4 more inches TODAY!  The reports of homes flooded and under water is ridiculous…

Which brings me to a relative topic.  The under water homes because of value declines and inventory that is flooding the market (because of the foreclosures).  What is important to note is that I just read an article that forecasts when the Boston real estate values would land on dry land.  They are forecasting 2017!!!  This is a very important discussion that should be reviewed by someone whom may be trying to keep their home afloat.  I am specifically addressing those whom are behind on payments and may be trying or have tried some type of program HAMP, CHUMP (j/k)  or some other “save my home” program” that may be out there.  These homeowners may be considering trying to stem an evil tide of debt while really they should just BAIL!  Bail out!?  BAIL THIS!  To each person and decision is based on knowledge and weighing out their options.  But, before they lose it completely they should consider the forecast…..and more importantly starting fresh without going down with the ship.  Again, this is just my experience and perspective, and a choice I had to make (with no regrets) in the same storm.  For more information check out www.Help-ME-ShortSales.com

More on the article: http://www.dsnews.com/articles/how-long-will-negative-equity-last-2010-03-29

Keep it short,

Mike Knows

I just read an article (yes another one!) to support predictable real estate and the PRIME OPPORTUNITY in short sales.  There is and will be a growing issue with Commercial Real Estate and defaults.  It is predicted and it is expected.  The cycle of real estate is reliable. Each sector follows each other.  We have seen (and continue to see) the correction with the residential market and as it turns toward recovery (projected 0ut another 3 years) so does the turn for the Commercial Real Estate.  What does that mean to you and I?  Well it depends.  If you prepare and plan for it, it could mean MAJOR OPPORTUNITY for short sales, and the ability to use this previous market (the one we are in now) to support our level of experience in dealing with a market such as this.  Winning over CASH SUPPORTERS to invest with (a.k.a. investor partners) will be a key component to the game.  Build it and they will come.

http://realtytimes.com/rtpages/20100225_losses.htm

Keep it Short,

Mike Knows

Do you know your defensive interval ratio? Most novice short sale investors don’t’ have a clue what this even refers to while veteran investors have probably already rattled off their ratio. If you aren’t the accounting type don’t worry – a defensive interval ratio Is really quite simple. It’s the level of liquidity that reflects the ability of your business to meet current debt obligations. Plain and simple – how prepared are you to withstand a little period of insecurity? It’s a good number to know and something to keep an eye on in order to preserve your spending power and look good at the bank.

How to Calculate

Calculating the defensive interval ratio is easy; simple use the following formula to plug in your own numbers:

Defensive assets (anything you can sell or access when in need including money owed to you by others)/Projected daily operational expenditures – noncash charges

For example, let’s assume you have cash on hand of $50,000, access to bonds in $25,000 and expect to receive another $25,000 from debts, deals and other income for a total of $100,000. Your daily cost of sales, operating expenses and other income requirements amount to $1,000 per day giving you a projected daily expenditure of 100 days

How to Use

Keep an eye on both your personal and business defensive interval ratio. As a rule of thumb, more is better but it is possible to have too much cash sitting on the sidelines. Financial managers and short-term creditors pay special attention to defensive interval ratios so they are of particular interest to those seeking OPM or outside funding for quick cash deals or other relatively short term transactions.

Personal – Strive for at least a 90 day defensive interval ratio up to whatever makes you happy.

Professional – Calculate independently of your personal ratio. 30 days is a solid score but anything above 180 days tends to work against you by reflecting an overly cautious investing style with money sitting on the sidelines. Put the money to work in order to demonstrate your ability to formulate solid returns and mitigate risk. If you are unable to find appropriate investment instruments due to a relatively minor sum of money, try pooling it with others or use it as collateral when approaching deeper pockets than your own. In either case, show that you know and understand the concept behind the approach.

Research – Finally, take time to perform your own research with potential partners and others prior to sealing any deal. Obtain a quick look at their position before lending money or going into a partnership with anyone. Looks can be deceiving especially when it comes to elusive ideas like short sales.

Make sure they have the staying power requires to become equitable partners rather than a burden which weighs you down in the long run.

Experts believe that the current level of housing inventory has to come down for the industry to get into a phase of sustained recovery. Short sale transactions offer a win-win-win situation to buyers, sellers, and lenders, and help clear the housing inventory available for sale. While short sales have risen in the last year or so, experts believe that banks are still not fully prepared to approve the transactions in a timely manner. Rick Shargo, vice president of marketing at RealtyTrac, said: “Interminable delays of six weeks to three months are not uncommon, or banks rejecting a 20% discount at short-sale only to ultimately take the property back and market it at 40 or 50% lower.”

Banks have to report their mortgage assets on a mark-to-market basis, and any sale at a price lower than the value in their books will mean a reduction in their reported profits. Bankers also complain that some buyers take advantage of the current situation, and demand a price which is way below the market price. Walter Molony, spokesman for the National Association of Realtors, said: “Short sales have taken far too long. The faster you clear off this excess inventory the faster you can stabilize home prices.”

Which is better when it comes to short sales- Cooperation or Competition?  The fact of the matter is this; the most successful investors know how to do both. Unfortunately, the majority of people tend to fall heavily into one or the other. They key is to understand what your natural tendency is toward then take steps to deliberately seek out the other complimentary side. Find out how you rank by taking this cooperation versus competition quiz:

Using a scale from 1 – 5 rank yourself on each of the following:

1 = Strongly Disagree. 5 = Strongly Agree.

1. Get in my way and you will pay for it.
2. Force is the most effective way to persuade someone or something.
3. Retaliation or retribution is justified.
4. It is unwise to trust many/most people.
5. Treating people with kindness is a sign of weakness.
6. The means justify the ends….sometimes people will get hurt.
7. Winning is more important than how the game is played.
8. Success is not optional – no matter what the cost.
9. Second chances are for suckers. Burn me once…but never twice.
10. The game should be played like your life depends upon it.
11. People need to get along with others.
12. I like to help others.
13. Your loss is my loss.
14. True strength is knowing how to take a hit then get back up again.
15. The journey – not the destination – is what is important.
16. Teamwork is the best method.
17. Success without helping others is meaningless.
18. Everyone needs a second chance sometime.
19. Children should be taught to turn the other cheek and forgive early in life.
20. The Golden Rule is an imperative to success in life.

How to interpret your results:

Add up all your points for items 1-10.

Put your total here:

Add up all your points for items 11-20.

Put total here:

Those that score higher for 1-10 are primarily competitive in nature. Those that score higher in items 11-20 are primarily cooperative in nature. The goal is to become balanced in both areas. If you are too competitive, seek out a softer side that allows others to win as well. By meeting their needs you increase your own odds at success and satisfaction. For those that are highly cooperative, seek out ways to challenge your growth and don’t be afraid to enjoy winning. You work hard for it and deserve it.

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See you at the top!