I don't want to lose my house! How do I keep it?

No one wants to lose their house to foreclosure. Its scary and stressful. There are so many what ifs and unknowns that come with it. So if you truly want to save your home, what are your options?

You can speak to your lender and ask them to work with you. They'll want to know why you got behind, also known as a hardship letter, which explains why you got behind. They'll also want to know about your finances now, including how much you and anyone else in your household makes and what you owe. This will determine whether you have the income necessary to keep on making the payments on your property. It also helps them determine what kind of financial options they'll offer you.

You can have someone who specializes in loss mitigation to work with your lender for you. They usually have more experience and relationships with lenders and their loss mitigation departments. That may give them an edge on getting you a workable deal. Be careful of companies who want you to sign something that gives them you're deed (these people are trying to steal your home from you). Most companies charge a fee for this service (it is how they make their money), but not all are a ripoff. If they are not able to assist you in saving your home, they may have access to investors who will buy it -- again, get some professional advice before accepting an offer that seems either unreasonable or too good to be true.

There is NO magic answer. Its true that lenders don't want to own your home. They make their money by loaning money, not owning property. It always costs them more to own it because that's money they can't loan, and they don't manage the properties they own. They pay legal fees to take property back and then have to pay more fees to sell it including closing costs to title companies and real estate broker commissions. However, you must be able to show you can now make reasonable payments or there is no way to save your property.

All you need to do is pick up a newspaper or watch the news to know you are not alone. This is a very stressful time for many people who can not afford to keep their homes. Don't be afraid to talk to your lender and, if looking to outside companies or investors, make sure to do a little homework before you say yes to their services or offers.

If I can be of assistance to you or someone you know, don't hesitate to drop me an email with their name and phone number.

The Real Estate Market Will Go Lower! Won't It?

I can't tell you how many times I've heard those words during the last year. I think we need a little perspective.

How much lower do you want it to go before you take a chance to make some great money? 5%? 10%? Do you really think it will go that low or lower than that?

Growing up in Southern California, I watched the real estate market go up and down a number of times. Funny thing is, as low as its dropped, its never dropped as low as it was five years ago, even two years ago. The Las Vegas market had an appreciation of over 50% in one year in 2004. That meant a house you could have bought for $100,000 in 2004 was now $150,000. The following year it went up an additional 25% or that $150,000 was now $187,500. Then the market started to slow down, and yes some neighborhoods have dropped about 5%. So instead of $187,500, the how is now worth $177,500. So if you paid $100,000 and now your home is worth $177,500, that's still a tremendous amount of appreciation.

What about those interest rates, up one day, down the next, and then back up again. Oh my, the rates are too high!!! Are you kidding??? On a $200,000 mortgage the difference in payments between 6.25% and 6.38% is $21! That's one latte a week! You mean that one latte a week is going to keep you from buying now versus buying 6 months from now, when you're taking a chance the rates might really go up. That's what happens if we go into a recession.

For those of you who don't remember the recession of the early 1980's, I bought my first house at 13 3/8%, and because there was no such thing as locking in your rate then, my rate which would have been 12 7/8% actually went up the 1/2 point 3 days before I was supposed to close. When my lender called me and told me I needed to bring an additional $7,000 to closing I almost had heart failure. Now that's an interest rate to worry about.

What if real estate goes down more? For some parts of the country, real estate isn't going down. The media does what it does best by instilling fear -- the housing market is still going down, interest rates are going up, don't do anything because you'll lose money, blah, blah, blah. I wonder what would happen if the media had to tell us only positive things. Do you think that maybe people would be happier and not be afraid to take advantage of a good deal?

I 'm not saying you shouldn't do your homework, or more popularly known as "due diligence." Whether or not you use a Realtor to help you buy or sell, you need to know what's really going on in your neighborhood, your town, your city, your state. Real estate really is a very regional animal. Las Vegas is having a tough time while some parts of the country are seeing appreciation, but that doesn't mean there aren't some really good deals to be had if you know where and how to look.

Great!!! What does that mean to you?

Part of the reason Las Vegas is suffering is because so many inexperienced people didn't bother to check what was going on in the market before they bought. They relied on the media to tell them what was happening, worked with brand new agents, and didn't actually do any due diligence other than what the last house sold for. Investors and buyers who did their homework aren't feeling the pinch now that others are. They may not be making a ton of appreciation right now, but they didn't overpay for their property and they understand that we're in a buy and hold market for a little while, meaning they are renting out their properties or utilizing a great exit strategy including offering properties as a lease option. More about that in another blog.

When the market is down, this is the signal when real property investors buy. They look for great deals, often utilizing real estate professionals and experienced property finders to help them locate great deals. Knowing that the Las Vegas market is stabilizing, and may drop a little lower by another 1 or 2%, they understand there are still many great properties out there that should be bought now and held onto for one year.

One thing Las Vegas has going for it is limited buildable land. What does that mean exactly? It means that even though you look around and see lots of empty space, most of it can't be built on -- ever! The federal government owns 97% of Nevada, and much of the property out there can not be built on. The Bureau of Land Management, also known as the BLM, is restricted by law on how much land in Nevada they can sell to developers for public use.

So if you'd like to be on the next real estate wave, NOW is the time to be buying. Contact your favorite real estate professional, if even just to get some advice, on what would make a property a good deal. The one thing about land you should never forget, they're not making any more of it. Feel free to email me about great deals in Las Vegas at HeatherRPeck@cox.net or visit my website at www.FlipEasier.com.

Foreclosure - Now What?

How do I save my house from foreclosure....

Do I have to lose my home to foreclosure? Maybe not. Everyone says not but not everyone believes it. The bank really doesn't want your house. Every time the bank takes back a house, they have to keep 4 times the amount of the loan in reserves which means if you owe $100,000 and the bank forecloses, they can't loan $400,000. Since the bank is in the business of loaning money and not owning real estate, they would rather work with you to keep your home.

OK, I'm behind, what are my options? It depends, if you got behind but are now able to make the payments, the bank or the company you make your payments to may help you do a few things:

• They may let you put up a deposit and spread out what your behind over 18-36 months in addition to your regular payments. This is usually not a great option because it makes your payments a lot more money, something most people have a hard time paying.
  
• They may add what you owe onto the amount of your loan and recalculate your payment, which will raise your payment just a little. This is the best option if you are now able to make the payments on your house.

OK, what if there is no way I make the payments, now what are my options?

• If there are no liens on your property, you may offer to give the bank your house -- also known as a Deed In Lieu. Sometimes the bank will do this to avoid the costs in foreclosing.
• You can sell to someone for less than what you owe. This is called a short sale, when the bank will allow you to sell for less than you owe. The bank has to approve the offer. One important note is the bank will usually notify the IRS that they accepted less than the house was worth and the IRS will send you a tax bill for taxes owed, so you'll need to consult a financial advisor. If the bank knows you are trying to sell, they will sometimes give you additional time because you are making an effort, but every bank is different.
  
• Or you can let them foreclose. This sometimes your only option.
  

So what does a foreclosure do to my credit? Should I file bankruptcy? This is the toughest part to deal with. A foreclosure will stay on your credit for 10 years from the date its complete. A bankruptcy will temporarily stop your foreclosure but it doesn't stop it completely, so unless you have a lot of debts in addition to needing to let your house go to foreclosure, don't file bankruptcy. Its a double whammy on your credit.

Does this mean I'll never be able to buy a house? No, it doesn't. After a bankruptcy, if you make payments on time between 1-2 years, you may be able to get a mortgage, even if its at a high rate. The same applies after a foreclosure. Then lender will take into consideration that you filed bankruptcy or had a foreclosure, but if you've keep your payments on time for the 2 years following, they will usually loan to you again.

Can I negotiate with the lender myself? Yes, you can but its not always easy to do. There are plenty of companies that will negotiate for you. If the lender or loan servicer sends a negotiator to you, there is usually no additional cost to you. If your lender doesn't reach out to you, you can either negotiate yourself or use someone who specializes in loss mitigation to help you. They usually charge a fee from a few hundred dollars to a few thousand. Sometimes its worth the money to have someone else negotiate for you.

Most importantly, unless you are truly selling your house, don't ever quit claim your property over to someone else or give them a deed. That just takes your name off the property but doesn't take your name off the loan -- the person who has the deed controls the property and can resell the house to someone else while you're still responsible for the mortgage. There are people advertising in the paper and on the web who want you to do this very thing. Only sell your house, open escrow, get fair payment and make sure your mortgage is paid off or lender notified in the process.

If you are having trouble with your mortgage payments and want to sell your house or have someone help you negotiate with your lender, drop me an email for some unbiased professional advice at HeatherRPeck@cox.net. I am a licensed Realtor and experienced Loss Mitigator having helped dozens of homeowners just like you.