Answers For Owners Blog

This week's Homeowner Web Resource is a tool that will help homeowners determine their credit worthiness in the eyes of lenders. AnnualCreditReport.com is a legitimate website where you can request an instant copy of your credit report from the three largest credit reporting agencies.

By law everyone is allowed once every 12 months to have a free copy of their credit report from each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion.

Homeowners should always explore their available options including refinancing out of an high adjustable rate mortgage or sub-primes loans. Knowing your credit score along with the information on your report (good and bad) before you go for a loan will make it easier for you to frame your story in a way that a lending institution may be willing to work with you.

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Posted In: Web Resources For Homeowners

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When homeowners are facing foreclosure many feel that their last resort is to declare bankruptcy. Declaring bankruptcy stops the foreclosure process, and allows the homeowner to keep their home from being sold on the courthouse steps. Unfortunately though, the ability for the homeowner to keep their home usually only lasts a little while.

As a result of 2005's Bankruptcy Abuse Prevention and Consumer Protection Act (PDF) homeowners are only allowed to declare bankruptcy one time as a means of stopping a pending foreclosure. Homeowners who declare bankruptcy are put into a Chapter 13 bankruptcy plan which requires them to work out a payment plan to pay off all of their debts usually within 60 months. This is a flawed system because what it does is creates an additional payment for a homeowner to make in addition to the bills they already have. If a homeowner cannot pay their existing bills, how are they possibly going to pay yet one more monthly bill?

If the homeowner who declares bankruptcy is unable to keep up with their payments to the bankruptcy trustee as laid out in their bankruptcy plan, then they will be 'kicked out' of their plan (discharged) and the foreclosure process starts right back up. This time though since they homeowner declared bankruptcy already, they cannot declare bankruptcy again to stop the new foreclosure process.

The main point that homeowners should recognize here is that a foreclosure will damage your credit, but you will be able to recover. Declaring bankruptcy will damage your credit also, but again you will be able to recover. However, if you declare bankruptcy and then get kicked out of your plan and then are foreclosed on by the bank, your credit will not be so easily restored. Bankruptcy as a stalling tactic may not be the best course of action and before doing so you should consult with a qualified attorney in your state that is familiar with both foreclosure and bankruptcy law.

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This week's Homeowner Web Resource deals with the issues that face homeowners who are going through a divorce. When divorcing - should you sell your house? Should you keep your house? How much is your house worth and how does the divorcing couple agree on a price and split of the profits.

This article addresses these questions as well as others. Divorce is just another hardship that people face which makes selling their house a necessity. Many times one person cannot afford to buy the other person out and still make the mortgage payments using only their income. Other times each of the spouses have purchased other residences and therefore need to see the home they own together.

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In last week's Homeowner Web Resource I pointed to an article that outlined some of the drawbacks to selling your home as a fisbo (For Sale By Owner).

Everyone who is trying to sell their house in this market knows that it is soft and buyers are wielding more power than they have in past few years. How does the soft market affect how you market your property for sale by owner?

First I think we need to look at what motivates people to sell their house without an agent. They want to retain as much equity that they have built as possible and don't want to hand over 5% to 7% to an agent. I understand this logic and always work deals with owners that maximizes the amount of money they are able to walk away with. However, in a soft market selling by yourself can more often be a hard sale.

In order to maximize your chances of selling in a soft market owners should consider building in appropriate discounts. Owners who are willing to part with a fraction of the money they are saving on an agent commission can be built into a lower asking price for your home. Buyers love discounts and homes that are being sold privately can improve their chances of being sold when an appropriate discount is provided.

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Posted In: For Sale By Owner (FSBO)

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This week's Homeowner Web Resource comes from SmartMoney and is an outline of the benefits and pitfalls of selling your house without an agent.

The article provides interesting information for those homeowners who are exploring the fisbo (FSBO - for sale by owner) route. Selling your property without an agent can certainly save you money, but it is hard work.

When you're ready to advertise your home, cast a wide net. Because your house won't be included in the multiple-listing service (or MLS, where members of the National Association of Realtors pool their real-estate listings to stimulate sales) you've got to generate traffic on your own. Buy classified ads in all your local papers, including shoppers and weekly alternative publications. Many areas have freebie real-estate newspapers that cater to people selling their own homes. You may also want to list your home online.

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Posted In: For Sale By Owner (FSBO) , Web Resources For Homeowners

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The other day I posted How Much Is My House Worth and I talked a bit about different ways that owners can find their home's value when they have to sell. One of the services I mentioned in my post was the online tool Zillow.com. I just found this interesting quote from Zillow's spokesperson in a New York Times article, Forget Gimmicks: Buyers Want Numbers (RR).

This approach differs from that of sites like Zillow.com, whose goal is to attract an audience for its information and to sell advertising on the basis of the size of that audience.

Within a few months of its opening, however, Zillow attracted some unwelcome attention. In October, the National Community Reinvestment Coalition, a nonprofit consumer group in Washington, filed a complaint with the Federal Trade Commission that contended that inaccurate valuations on the site, both high and low, were damaging the interests of all consumers and particularly the interests of working families.

The complaint has yet to be resolved, but a spokeswoman for Zillow was careful to point out the site’s disclaimers.

“We’re a starting point,” said the spokeswoman, Amanda Hoffman. “We’re not a crystal ball. It’s the Internet. You sort of have to take everything you read on the Internet with a grain of salt.”

This reinforces my belief that people who need to sell should do as much research as possible about the market and what price their home can command. This will help the owner to price the property appropriately for their needs (e.g. - sell fast, sell for cash, stop foreclosure, end headaches of being a landlord, etc.).

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Do you know how much your house is worth? An accurate understanding of your home's value is always important when you are trying to sell, however with the current sluggishness of the residential real estate market, an the accuracy of your asking price can make the difference between selling fast and not selling at all.

So how do you figure this out? First you can look in your local newspaper's real estate for sale section and try and compare the homes listed there to your own. This is not the best way to go especially if selling fast is what you need to do. More often than not you will be unable to accurately compare the size, area and amenities of the properties listed in the paper to your own home.

Second, you could call a real estate agent and ask that they give you what is called a CMA (comparative market analysis) of your home's value. A CMA compares your home to similar homes that have recently sold in order to give you an idea of the price your home will command in the market. It is important to note that real estate agents are more than willing to provide this service to you for free with the hope that you will list your house for sale with them.

Remember -- agents work on commissions - the higher the price your house sells for, the more money they receive. An over-priced house will not sell quickly in this market.

There are some good online tools that you can use including Zillow. Zillow allows you to enter a property address and see what other homes in the area are selling or have sold for. While some people swear by Zillow and the information it provides, I have not had the same results. I find that for the Middlesex, Monmouth and Mercer County New Jersey areas, the information provided by Zillow is not very helpful.

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All states either use a mortgage or a deed of trust to secure the lender's interests who have loaned money to a borrower so that they may buy real property such as a house, condo / townhouse, commercial building or land. A mortgage is used by some states including New Jersey as a means of a property owner pledging their rights to that property to the lender. The property is the collateral that is described in the loan's promissory note and the mortgage is the document that grants the lender certain rights.

A deed of trust is a document that pledges real property as security for the repayment of a funds that have been borrowed against it. A deed of trust involves three parties where a mortgage only involves two (the borrower and the lender). The three people involved in a deed of trust are the trustor (the borrower), the trustee (title or escrow company) and the beneficiary (the lender). Virginia, among other states, is a deed of trust state.

I have put together a list of states and whether or not they are a mortgage or deed of trust state as well as whether they are a judicial or non-judicial foreclosure state which you can download for free here.

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Posted In: Foreclosure , Mortgage

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This week's Homeowner Web Resource is the Help for Homeowners Facing the Loss of Their Home from the U.S Department of Housing and Urban Development (HUD).

This is a great resource that lays out many of the things that homeowners who are facing the loss of their home should do in order to improve their chances of saving their home.

The HUD page lays out many of the reasons why people are facing foreclosure including job loss, reduced work hours or overtime, retirement, Illness, injury, or death of a family member
and divorce or separation.

HUD also suggests that if you are at risk of losing your home you should IMMEDIATELY contact your lender, along with talking to a housing counseling agency, prioritizing your debts and remaining aware of predatory lending schemes.

As this blog grows we will go into greater detail regarding the foreclosure process along with the steps that homeowners should take and be aware of in order to keep their homes.

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Across the country owners facing foreclosure are becoming more and more commonplace. RealtyTrac, an online company that tracks foreclosures from New Jersey to California reported that for the first quarter of 2007 there were more than 430,000 foreclosure filings, including default notices, auction sale notices and bank repossessions. That is a 27 percent increase from the previous quarter and a 35 percent increase from the first quarter of 2006. The 10 states with the highest rate of foreclosures include: Nevada, Colorado, Georgia, Michigan, California, Florida, Arizona, Ohio, Texas and New Jersey.

Why the increase? Based on our experience working with owners trying to stop foreclosure we understand that there is not just factor or circumstance that causes them to fall behind on their mortgage. Loss of a job, illness, divorce, and many other unexpected financial strains can all be contributing factors. Another more common factor however is the resetting of adjustable rate mortgages.

Now we are seeing more and more ARM mortgages reset from initial low teaser rates to much higher rates that in many cases double a borrower's monthly mortgage payment. The availability of cheap money for all those years that the real estate market was booming is now coming back to haunt owners who experience a slight bump in the road.

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Posted In: Foreclosure

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Answers For Owners is a blog that was created by Clearwater Properties and plans to be focused on distributing helpful and timely information to homeowners. In the current housing market many homeowners have questions about how they can sell their home, stop foreclosure, refinance out of adjustable rate (ARM) mortgage and many, many other things. This blog's mission is to serve as a "one stop shop" where Owners can find the Answers they need.

Here's hoping you find the answers you need!

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