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February 2007

January 2007

Valuable Resource For Residents & Prospective Residents of Penn Estates

Visit this website which is dedicated to all things Penn Estates:  Penn Estates Network

Here you will find detailed MLS listings of homes and lots available for sale, a resident business to business directory (which offers free ads to homeowners!), valuable links for everything from movies to commuter info to local health care to shopping and more. There is also a community events calendar.

Be sure to visit this unique resource for all of your Penn Estates questions.


The Bursting Bubble of Real Estate

Cari McGee hit the nail on the head with her post about the media's frenzied announcements about home sales plummeting across the nation.  Her main point, that real estate markets are LOCAL, is well worth repeating...over and over if necessary and until consumers and agents hear it, understand it and take it to heart.  And her points about why listening to these 'reports' is very misleading to buyers, sellers and agents are important ones, not the least important of which concerns the negative effects this could have on her (our) good market.  Read her post, substitute the word 'Poconos' for 'Tri-Cities' and you have a commentary perfectly suited to our market, even though she's writing on the opposite side of the country. 

My Broker brought news of a discussion of this very same issue - the media's distortion of real estate sales and the whole doom & gloom theme - back from the National Association of REALTORS' Convention in New Orleans in December.  Apparently agents & brokers from all over the country are sitting in their living rooms at night, yelling at their television news anchors, 'Hey, wait a minute, we're doing great!' like I am.  As an agent, I'm annoyed because it makes my job a tougher as a Listing Agent AND as a Buyer's Agent, having to defend my market against the negative effects of the news.  But more importantly, as a homeowner I am concerned because my home's value is at stake - if everyone starts believing this barrage of stories, it could become a self-fulfilling prophecy.  With agents, buyers and sellers all expecting prices to fall, couldn't that make prices fall?

Fortunately, I haven't seen too much ill-effect from all this as of this writing.  Sales are still brisk (even in January!!), inventory, while higher than last year, is not flooding the market by any means, and buyers are able to buy at prices they are comfortable with.  A pretty even market, not skewed to favor the buyer or the seller.  Can't complain! 


Know What You're Buying!

I recently had a transaction where a Buyer was purchasing a lot that the Seller purchased at tax sale.  We ran in to problems when the title search came back because the chain of title included a couple of tax sales and several deeds that lacked a legal description of the property.  Now, these things can normally be worked out but they take some time...tracking down previous owners, quiet title actions, etc, are not things that happen in a matter of days, it could take weeks or even months to straighten them out.  Unfortunately, this buyer was anxious to get on with the business of building their home and waiting wasn't an option.

The point I am trying to make here is know what you are buying.  If you are purchasing a property or home that was involved in a tax sale, foreclosure or some such not-your-run-of-the-mill situation, be prepared for stuff like this to come up.  These situations do not always mean there will be title problems, but chances are certainly better that something might come up.  Be prepared for the possiblity by discussing it with your agent, and save yourself alot of stress and heartache.


Drowning in Your Mortgage? Avoiding Foreclosure in PA

No lifeguard on duty

Foreclosure rates are big news these days, especially here in Monroe County where the rate of foreclosure – that is, how often lenders take properties back for non-payment of the mortgage – is one of the highest in the State. It is becoming more common in this era of financing ‘creativity’ for borrowers to get upside-down on their obligations, with the advent of a highly competitive lending market offering low- and no-down-payment loans, adjustable rates, balloon loans and myriad other products to help just about anyone get into a home regardless of their solvency. And the proliferation of Predatory Lending hasn’t helped any. All of these things have exacerbated the usual problems that cause a borrower to get behind, like job loss, medical problems, divorce, etc.

Be Proactive & Safeguard Your Home From Foreclosure

Regardless of the reasons why someone may get behind in their mortgage payments, there are many opportunities to remedy the problem before the foreclosure process starts. The important and thing to keep in mind is, lenders do not want to foreclose and take the property back! Delinquent borrowers often have the mindset that their lender is just waiting for them to get behind so they can take their house. This couldn’t be further from the truth. Banks and mortgage companies are in the money business, not the real estate business. Foreclosing on property often costs the lender upwards of 20% of the outstanding balance, taking into account the costs to foreclose, hold and maintain or fix-up the property. Addressing delinquency issues early is in everyone’s best interest. If you can, call your lender as soon as you know you have a problem in making your payments – before you are delinquent and before the situation becomes harder to resolve.

Unfortunately, when a homeowner gets behind in their payments, their first response is no response-the lenders’ letters and calls go unanswered due to, most often, embarrassment and a feeling that there is little that can be done. ‘You can’t get blood from a stone’ is a self-defeating mindset. This early time in your delinquency is a prime opportunity to explore your options with your lender, especially if you’ve already decided to sell the property. There are a variety of options to be discussed including the acceptance of partial or interest-only payments for awhile, accepting small additional monthly payments to catch up on arrearages, adding arrearages on to the end of the loan, or even refinancing. All of these options give you an opportunity to get caught up, help you to save your credit, and, if you are selling the property, buy you the time you need to get the sale accomplished, before foreclosure occurs.

Need More Help? PA Offers Mortgage Assistance

If these options don’t work, another option is available through the Pennsylvania Housing Finance Agency (PHFA) called Homeowners’ Emergency Mortgage Assistance Program (HEMAP). A homeowner who receives an ‘Act 91 Notice’ from their lender advising them of their delinquency can apply within 30 days for a HEMAP loan to bring their payments current and may be eligible for continuing payment assistance for as long as 24 months. Criteria that determines eligibility for this program are: home is owned and occupied by a PA resident, mortgage payments are at least 60 days behind, the applicant is suffering financial hardship through no fault of their own, and, the applicant has reasonable prospects of being able to make normal mortgage payments after the assistance ends. For more information contact PHFA at 800.342.2397 or www.phfa.org.

When All Else Fails, Short Sale

Sometimes, though, these remedies are not enough. Perhaps the borrower’s situation is such that getting caught up is not possible and the amount owed on the home is more than what it can be sold for. Usually this occurs as a result of extreme circumstances and the last-resort option available in this situation is called a ‘short-sale’. Basically a short-sale is when a lender accepts less than what they are owed in lieu of going through the foreclosure proceeding. A borrower must prove that they are financially unable to pay back the loan as originally contracted so be prepared for full financial disclosure. It is a good idea to start this process before you begin to market your property as it can take awhile to get bank approvals. This way, when you do find a buyer, you are able to commit to a closing date knowing that the lender is on board with the plan.

Getting behind on your mortgage payments does not have to be the end of your homeownership career, nor does it have to be the death of your credit score. Communicating with your lender early on can make or break your ability to keep your home. And if that is not an option, selling your home is an excellent alternative to foreclosure. If you do decide to sell, talk to your real estate agent frankly about your situation. An experienced agent can help immensely in the process and NOT being upfront about the situation can sabotage your efforts to sell the home. This is not the time to be embarrassed or less than open about your situation. Remember, your goals and your agent’s goals for your listing are mutually inclusive!

Don't Get Taken Advantage of in Your Time of Trouble

Try to be proactive when you get in to trouble with your mortgage payments by addressing the issue early on. But do be wary of scams. HUD reports that the most common scams which take advantage of homeowners in default are skimming and phony counseling agencies. Skimming is when you are approached by someone who promises to pay off what you owe to the lender if you sign over ownership of the property using a Quit Claim Deed. The skimmer then rents out the property, never pays off your mortgage and the lender ends up foreclosing anyway, leaving you with the credit problems. Phony counseling agencies contact homeowners in default and offer to help for a fee. Once they get your money, they either do nothing, or they contact your lender or advise you to sell your house – remedies you can do on your own.

To avoid scams, take the following precautions: don’t sign anything you don’t understand, make sure you get all promises in writing, beware of contracts of sale or loan assumption that do not formally release you from liability for your mortgage, and check with your lawyer, real estate agent or mortgage company before entering into any transaction involving your home.

The key to making the best of the difficult situation of mortgage delinquency and possible foreclosure is take control of the situation by knowing your options, doing your homework and acting decisively. Remember that it is the rare situation that is hopeless and without remedy!

Please do not hesitate to contact me info@lisasanderson.com with any questions about this information. I am here to help.