Banks Seek Payback from Walkaways
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Increasingly aggressive mortgage lenders are seeking to collect deficiencies from former home owners who walked away from their properties or sold them in short sales.
Many states, including Florida, give mortgage holders as long as five years to seek a deficiency judgment. If granted, the bank gets up to 20 years to collect and the option to renew for another 20 years if the debt isn’t paid.
About one-third of U.S. states, including California and Arizona, prohibit collection efforts after foreclosure, but home owners usually waive that protection in a refinance.
Most states allow collection on unpaid home-equity loans.
Banks are most likely to try to collect from people who walk away from a property on which they are still making payments.
“The bank is going to pull your credit report, and if you’re current on your other bills they are going to come after you and potentially ruin you,” said Larry Tolchinsky, a Florida real estate attorney.
Source: Bloomberg, Kathleen M. Howley (01/28/2010)
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Principal Cuts May Prevent Foreclosures
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At least 7 million borrowers will lose their homes this year and next unless there is a broad increase in property values or lenders become much more willing to cut the principal on mortgage loans, an analyst with Amherst Securities Group told the U.S. House Financial Services Committee last month.
That testimony has motivated Federal Deposit Insurance Corp. Chair Sheila Blair to consider incentives for lenders to cut principal on $45 billion in mortgages her agency has acquired from seized banks.
“We’re looking now at whether we should provide some further loss-sharing for principal write downs,” says Bair. “Now you’re in a situation where even the good mortgages are going bad because people are losing their jobs.”
While principal reductions are rare, some banks are doing them. In the third quarter of 2009, about 21,000 home loans were modified by reducing the principal, according to Mortgage Metrics, a government publication.
Mark Zandi, the chief economist for Moody’s Economy.com, suggests that banks receive a federal match of $1 for every $2 in principal reductions they offer to home owners.
“You’re not going to wipe out all the borrowers’ negative equity,” he says. “This just gives them enough hope to get them committed again.”
Source: Bloomberg, John Gittelsohn and Prashant Gopal (01/07/2010)
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Selling a Home in Maryland and Virginia.
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Selling your home is an involved process that affects your family and your future. Before you begin this process, you'll want to ensure that you have the most up-to-date information. When should you sell? How do you get the best price? What kinds of renovations should be made prior to the sale?
These home selling reports will assist you in answering the many questions that arise during the home selling process. When you're armed with the right information, and an experienced real estate professional, you'll be closer to reaching your goal - selling your home fast, and for the best price. Please contact me if you have any questions about selling your Maryland and/or Virginia home.
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5 ‘Hip’ Ideas for Do-it-Yourself Staging
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By Erica Christoffer, Contributing Editor, REALTOR® MagazineLooking for some quick home staging ideas that don’t cost a lot? Here are five inexpensive “Hip Tipz” from stager Charlene Storozuk that will help you show off a home with painting techniques and found objects. 1. Paint bedroom furniture antique white and the walls a darker tint. Add crystal hardware such as a chandelier or light fixtures for added elegance to create a French-inspired bedroom. 2. Frame a favorite tea towel for display in the kitchen. 3. Make the rooms off the hallway appear larger by painting them a lighter shade than the hallway. 4. Vintage door panels make an interesting headboard when painted. 5. Make a sloped ceiling appear taller by installing a shelf underneath at height of lowest point of slope.
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