Does the CARES ACT foreclosure moratorium apply for my loan?

Stop foreclosure

The Executive Order by President Biden extending the CARES ACT moratorium on foreclosures until March 31st doesn’t necessarily apply to everyone. That’s critical news not effectively covered in the media.

For more info, let’s turn to consumer rights and foreclosure defense attorney Josh Denbeaux who clarified in his recent podcast it applies to your mortgage loan if it’s federally backed.

That means Fannie Mae, Freddie Mac, FHA or VA loans.

While this moratorium may feel like a safety net, it’s important to take action now! The first step is to find out if your loan is owned by a federally backed lender.

Is my loan federally backed
Who owns my loan? Is it federally backed?

Is my loan federally backed?

How would you know? Start with the following links to research who owns your loan. You’ll need your loan number and SS#:
Fannie Mae Loan Lookup
Freddie Mac Loan Lookup
– FHA requires a phone call – 877-622-8525

If it applies to your loan, you should exercise it. That means it’s time to take aggressive action such as extending a forbearance.

Use the moratorium to find a solution. To start, find more information on forbearance options at CARES ACT Mortgage Forbearance published by the Consumer Finance Protection Bureau.

To benefit successfully from the foreclosure moratorium, it’s critical to take action. You have options!

Can I sell my home now?

Selling your home now may be an option. Our strong sellers market may support a successful sale to pay off your loan. But if values are under water we can negotiate a short sale during the moratorium, save your credit, resolve the deficiency and create a fresh start.

For an instant estimate on your home’s current value visit HomeValuesbySusanna.com.

How can I stop foreclosure?

In some cases, legal action could stop the foreclosure altogether depending on when and how the foreclosure was filed. Contact me for a referral to a lawyer who specializes in fighting the banks.

If you are at risk of foreclosure, have a forbearance in place or need one, this is the time to act. Start with my overview of options at FightTheBank.org.

Can short sales work?

Misinformation is stopping many home owners from getting the help they need. Check out – Top 10 myths about short sales for the truth about short sales. We can stop foreclosure and resolve your debt.

What to do next?

Contact me for help with resources and referrals. There are many options but they all require proactive action by the home owner.

If you’re interested in buying distressed properties, be sure to check out my short sale buyers guide and then let’s talk.

Short sale approval in 45 days!

short sale approval

How long does it take to get short sale approval? Typically lien holder approval in 90 days is an excellent result. However, it makes a huge difference who you work with!

Knowledge and experience make or break your short sale success. Who your agent is, and who is handling negotiations matter.

When I hear the stories about how short sales don’t work, it’s truly a short sale myth. The truth is those stories come from bad experiences due to poor advise and lack of support.

What if an auction is scheduled?

Facing an auction date can feel like it’s too late to get help. Not true! My clients home was scheduled for foreclosure auction on January 19th. When we met, they had given up hope and thought it was too late.

Working with Realestate Recovery Group we put the sellers short sale package together, opened communication with the lien holder, and got the property listed right away even though I had no access.

The former tenants changed the locks. It took two weeks to get permission from the asset manager to re-key the property and be able to show the home.

In the meantime, using aggressive marketing I built up buyer demand. After my first open house we had multiple offers. The first buyer canceled for personal reasons. So we moved forward with a back-up buyer and continued negotiations with the lien holder.

The buyers agent did an excellent job guiding her clients through their inspections and loan application. They were uncertain and nervous about short sales. She successfully collaborated and kept them on track. Now they celebrate their new home at a great price.

If you’re interested in buying a short sale or foreclosure, be sure to bookmark my Community Guide for instant access to distressed properties on the Main Line including off-market foreclosures.

How to get help?

For more information on how short sales stop foreclosure visit FightTheBank.org. You’ll also find information on forbearances, loan modifications and other options for home owners in distress.

If you know anyone who needs help with a COVID-19 forbearance coming due, a property ‘under water’ on values or facing foreclosure, please help us connect.

There are solutions. Short sales do work and I’m here to help.

Top 10 Short Sale Myths

Top 10 short sale myths

What are the top 10 myths about short sales? Many people give up hope facing foreclosure and believe a short sale isn’t possible. When in fact, short sales do indeed work. And in a variety of circumstances.

It’s an excellent solution for home owners who may be behind on their mortgage, stuck in a forbearance they can’t repay or just under market where the loan balance is greater than current values.

If you’ve heard that short sales don’t work, it’s usually based on someone’s bad experience who didn’t have the right resources. Or simply lack of information.

Outlined below find the Top 10 Myths about Short Sales that unfortunately stop home owners from reaching out for solutions:

1.    Short Sales are impossible and never get approved

Nothing could be further from the truth!

In the 12 years I’ve specialized in short sales, only a handful were not successful and those were in the midst of the mortgage crisis. Many fail, that’s true. But when I look into the history of those situations it’s because the right team wasn’t in place to help the home owner.

2.  Short Sales take forever

While the process is longer than a traditional sale, you can count on approximately 90 days as an average. With the right team negotiating, sometimes we can close sooner, depending on the bank.

With a strategy directed by a short sale expert, you can enter into an agreement with confidence in a smooth closing upon lien holder acceptance.

Once lien holder accepts, settlement must occur within 30-45 days depending on the bank’s terms. Within that timeframe, buyer and seller can agree on a convenient settlement date.

3. You must be behind on your mortgage to do a Short Sale

While it is true that initially some lenders wanted you to be in default (missed a payment) before they were willing to consider a short sale – this trend has almost all together reversed. Today lenders are looking for verifiable hardship, monthly cash flow shortfall or pending shortfall and insolvency.

If you meet these three requirements and are in a position where you will soon not be able to afford your mortgage, act now! Don’t wait until the countdown to foreclosure has started and you have even less time.

4.  Buyers don’t want Short Sales

This is a myth that potential sellers hear all the time.  In fact many agents are getting calls from buyers who say “I only want to look at foreclosures and Short Sales!” I personally have investors who want to help home owners, and recognize this can be a positive outcome for all in a difficult situation.

Short Sales and Foreclosures have become synonymous – not with issues – but with GOOD DEALS. International buyers specifically are interested in these properties as well.

5. Listing my home as a Short Sale is an embarrassment

It is understandable that you may have reservations about letting the world know that you owe more on your home than it is worth. However, please understand we are in the midst of a national pandemic that is affecting everyone.

It’s a national crisis, not a personal failure. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you towards a solution.

6.  Banks would rather foreclose than do a Short Sale

We know you have heard this; you may have even heard it from an overzealous collections agent working for a lender.  The reality is that banks do not want to foreclose on your property. 

Banks do not want distressed assets on their books. It costs them less to resolve bad debt through a short sale than a foreclosure.

Luxury foreclosure in Villanova at 1425 Mount Pleasant Road. The bank would have netted much more with a short sale than through a foreclosure sale.

7.  There is not enough time to negotiate a Short Sale before my foreclosure

This is a myth that probably hurts homeowners the most.  Many don’t realize that foreclosure is a process and there is time.

The foreclosing party (in most cases a lender) can stall a foreclosure up to the final day of the auction.  Many lenders will stall a foreclosure with as little as a phone call from you letting them know that you are trying to sell.  Almost all lenders will postpone the auction date with a legitimate short sale contract in process.

8. Due to the CARES ACT, I won’t face foreclosure

Even with the moratorium on foreclosures under the COVID-19 CARES ACT, that doesn’t mean the lien holder is stopping their efforts. A foreclosure auction can happen quickly after many months, even years of no apparent action from the bank.

Taking proactive steps towards a solution before facing an auction date is the wisest choice. Don’t wait until the last minute when it might not be possible.

Unfortunately, much misinformation about forbearances has been prominent online, and from what should be trusted resources. Following bad advice about COVID forbearances has put many owners unknowingly at risk of foreclosure.

9. When I called the bank they offered a loan modification

This is one of the most confusing aspects of being in default. By law, the banks are required to offer loan modifications as an option. When home owners reach out the lien holder always says yes, even if they know it won’t apply for you. Offering this paperwork is a step in the process they are required to take, even if they know you won’t qualify.

In the short sale negotiation, our team will help you with the necessary paperwork to submit a loan modification application. To complete a short sale this is a required step.

The Real Estate Recovery Group are experts in this area, and if it’s possible they will help you get a loan modification done. However, most often this is a bureaucratic step in the foreclosure process that provides misguided hope when action towards a real solution is needed.

10. I can’t do a short sale if I have other properties or assets

I’ve helped many home owners who were given this false information. Clients who owned investment properties that were under water, luxury second and third homes and had other assets.

All of these short sale clients received debt forgiveness. As an example, one client had $400,000 in an investment account which went untouched. Another client owned 3 additional properties. Lenders cannot touch your IRA and 401K retirement accounts.

Even with additional assets, my clients did not have to contribute towards the deficiency. Debt forgiveness is always the goal with a short sale.

These can be scary and confusing situations. What’s most important to know is that help is available! Book your confidential appointment here.

Note: The information provided is for informational purposes. No legal advise is given or implied.

What to do when my COVID-19 forbearance ends?

What happens with a forbearance

When mortgage forbearances under the CARES ACT were promoted, no one realized 6 months later we would still be in the midst of this COVID crisis with forbearances ending, and no easy answers in sight.

Information was confusing, and many people signing up for forbearances did not realize that the full amount would be due at the end of the agreed upon period in order to become current on their mortgage.

In fact, real estate industry leaders shared incorrect information at the beginning of the COVID pandemic, claiming a forbearance does NOT require a balloon payment at the end, but that the delinquency would be wrapped on the the end of the loan. That’s a deferment and must be negotiated with your lender. You can hear it for yourself in this video:

Also unclear was the impact a forbearance has on your credit and the ability to qualify for a refinance.

What should I do?

Experts say it’s important to reach out to your lender ahead of the ending of your forbearance to discuss options. Such as converting the missed payments to a deferral on the end of the loan (see articles below).

Also, you’ll want to check your credit report to see how exactly this is being reported.

Consumer Resources

Where can you get help? These consumer resources include links for helpful details:

What happens when COVID forbearance ends?Freddie Mac
What to do after you receive a forbearance? Consumer Finance
What happens when loan forbearance endsExperian.com

“Under provisions of the CARES Act, if you get mortgage forbearance on a federally backed loan as part of COVID-19 relief, your loan servicer cannot charge extra interest on forbearance repayments or require you to repay excused payments in a single lump sum at the end of the forbearance period.” Experian.com

Mortgage Loan Forbearance Options

There are different options on different types of loans.

What’s so confusing are the ‘sound bytes’ shared, when what’s needed is detailed information regarding your particular situation.

How do I negotiate with my lender about my forbearance?

Negotiating with your lender can be scary, and confusing. Two local experts recently offered their insights and availability on my Podcast to help home owners in the Greater Philadelphia and New Jersey areas – Lee Perlman, Bankruptcy Attorney and Michael Daiello, Real Estate Dispute Attorney and Litigator who specializes in helping landlords who face the impact of tenants not paying rent under the CARES ACT rental forbearance protections.

Take action now!

Please know you are NOT alone; see my detailed market update on distressed properties – Q3 Distressed Property Report ;

Spike in 2020 Foreclosures

The most important thing to do if you’re facing problems with your mortgage is to ask for help right away!

It’s emotionally challenging and can feel overwhelming, but there is hope, and there is help. Doing nothing may put your property at risk of foreclosure.

Start with visiting www.FightTheBank.org for more information about short sales and options to avoid foreclosure.

Please comment below or reach out for a confidential conversation. I’ll gladly connect you with local experts who can help in your situation.

Be sure to subscribe to stay in touch!

Loading

Pre-Foreclosure Market Update – Q3 2020

Foreclosure Market Report

September showed record breaking sales in Philadelphia, but what about the dramatic spike in pre-foreclosure distressed properties? Does the foreclosure market threaten to haunt real estate values in Philadelphia?

Multiple realities of quantum physics

Market reports are complicated with what science fiction buffs might call “multiple realities” – especially true in our current national economy. You don’t have to understand quantum physics, but there are many sides to the story of current real estate market trends on the Main Line and in the greater Philadelphia area.

You’ve probably heard me say this before, analyzing real estate markets is a lot like watching the ocean. What appears to be calm water, can have cross currents and under tows to be aware of.

Let’s start with the good news!

September was record-breaking month for both number of sales and median sales price for Philadelphia County.

On the Main Line, demand continues to exceed supply with values on the rise and days on market declining.

Due to changing buying patterns due to COVID along with the exodus from New York and other dense urban areas our small, quiet Main Line townships have literally shifted into prime destinations.

What about October?

In October the number of showings and new contracts declined. However, all indications are that values remain stable in most areas.

Analysts explain “markets despise uncertainty” and it appears people were holding off on buying or selling until after the election.

An “undertow” of loan delinquencies

Looking backwards at September data one might think that it’s time to surf the big waves and catch the ride of your life.

However, there’s an ‘undertow’ most analysts reporting on real estate are not addressing – a sharp increase in loan delinquencies.

The extreme spike in the number of mortgages delinquent 90+ days or in pre-foreclosure is at a level we haven’t seen since 2009.

Mortgage delinquencies spike in 2020 due to COVID

The “backstory”

What complicates delinquent mortgage reporting in 2020 is the surge of mortgage forbearances entered due to COVID-19 CARES ACT.

Incorrect information and bad advise early in the COVID pandemic led to confusing a mortgage forbearance with a deferral. What also wasn’t clear was the impact on credit and ability to refinance.

Many owners did not know full “balloon” payments would be due at the end of their forbearance period and are in a difficult situation confused about what to do as their forbearance ends.

Could the delinquent property data be incorrect?

What the graph above doesn’t address is whether the spike in delinquencies could partially be due to incorrect credit bureau reporting of mortgages in forbearance.

For instance, ConsumerFinance.org advises checking your credit report if you have a forbearance as it should not be shown as a loan default;

“Servicers may report that your account is in forbearance. However, if you were otherwise current on your account and have received relief as defined by the CARES Act, your servicer or creditor is required to report your account as current”

What to do now?

As you can see, I’m a fan of analyzing data. However, when it comes to deciding the right time to buy or sell it’s important to look at the big picture of your goals. History has shown real estate values survive market changes in the long run. It’s all about what’s best for you.

Please contact me for a confidential consultation. We’ll look at the micro-market trends for your particular goals and location.

And if you know anyone facing problems paying their mortgage who wonders what to do now, it’s time to get help! For more information about short sales and options to avoid foreclosure, visit FightTheBank.org.

Be sure to subscribe for future blog updates. Let’s talk!

What if my tenants can’t pay their rent due to COVID-19?

Attorney Michael Daiello shares insights into options to avoid foreclosure when you can’t pay your mortgage.

“I have received a number of phone calls over the past several weeks about the duty of landlords to pay lenders on mortgaged properties. The obvious best outcome is when borrowers and lenders work together for a reasonable solution. But what options are available if negotiations are unsuccessful? Does the current environment trigger a “force majeure” event under a lending agreement?

In spite of the lockdown, there is no general law that grants a borrower entitlement to cease payment. However, the language of any Note, Mortgage or Security Agreement may vary from case to case.

Failing to pay a mortgage will eventually result in a lender initiating a foreclosure action. A property owner receiving a notice of foreclosure often wrongly assumes there’s nothing they can do. Some of the options include applications for modifications of the mortgage, a short sale, a deed in lieu of foreclosure or fighting the foreclosure case in court.”

This month’s guide is a quick reference sheet of potential options for foreclosure defense. Please share this month’s guide with any small businesses or professionals that are concerned about foreclosure.

For more information on how to avoid foreclosure whether it’s your primary residence, vacation home or an investment property, visit FightTheBank.org and let’s talk. I’ve been helping home owners successfully avoid foreclosure and negotiate debt forgiveness since 2008. #fightthebank #phillymarketminute

Luxury Short Sale Failure on the Main Line

What do you think of when you hear words like “foreclosure” and “short sale”?? Most don’t think of multi-million dollar estate homes. But sometimes luxury home owners face impossible situations. Like a home that’s worth only 1/2 of what it was in the peak of the market, or simply “under water” on values and the market won’t support a successful sale.

No one is exempt from tragedies like a medical crisis that can turn your life upside down, no matter what your income bracket. I’ve found my luxury clients face some additional challenges.

While many people suffer from lack of resources, on the other hand bad information can come from high net worth advisers who mean well but don’t specialize in avoiding foreclosure.

This home was on the market for $3.5M and failed as a short sale and went to foreclosure. Now it’s listed by the bank for $1.9M.

For instance, a client of mine was given advise by her attorney to make significant repairs / improvements prior to selling based on a Zestimate. It wasn’t a correct valuation and ended up causing the owner to incur more debt instead of simply resolving the bad mortgage.

No matter what the situation is, please contact me. No one has to go to foreclosure. There are options! Book a 15-minute confidential consultation with short sale expert Susanna Kunkel.

Note: After a price reduction to $1,695,000, 1425 Pleasant Road closed Nov 30, 2020 at a final price of $1,325,000.