I’m curious as to how those of you on RELIB feel about this. Is it fraud or is the homeowner justified?

Foreclosures are not slowing and bank owned homes are continuing to rise in the market resulting in home values decreasing as much as 40% or more in the worst areas. What is a distressed homeowner to do? Some are getting creative avoiding their losses, but are they getting away with fraud? 

A nasty mix:  Distressed homeowners can’t make their payment and are facing foreclosure if the bank will not modify their loan. Their home is now worth half it was when they purchased it.  Their credit is still good. They approach a real estate agent for help.  Some agents encourage the homeowner to “buy and bail”.  Unfortunately, agents in some areas see nothing wrong with this and consider the lender’s unwillingness to modify the loan a business deal, so this is one as well.

Here’s the twist:  The homeowner gets qualified for a second loan by proposing to rent their existing home to cover the second mortgage payments. They only need to provide a rental agreement showing they will rent their first home. The underwriters allow rental income to cover as much as 75% of the mortgage payments on the first home. This allows the second mortgage to be secured that may not otherwise be affordable. Once approved for the loan, they purchase another home and then walk away from the existing home rather than renting it. This is the “Buy and Bail”. It is happening a lot in California.  California is a non-deficiency state where it is more difficult for a lender to sue consumers who walk away from their mortgages, although if the homeowner purchased or refinanced their home with a line of credit, they could more easily be sued by the lender.

It is worth the risk? I am deeply saddened for the distressed homeowner, but I think it is fraud anyway you look at it and Fannie Mae considers it fraud. If some seem to have gotten away with it, I am assuming it will catch up with them in time. When the crisis is over, banks could go back and pick up the remnants of their losses when time allows; this one probably would be first on the list.

 Fannie Mae is now fighting back: They have recently revised their guidelines for such a scenario. Applicants who will rent their first home will be required to produce supporting evidence, including an executed lease agreement. They will also have to prove they can pay the mortgage, property tax and insurance for both residences. Exceptions will only be made for borrowers who have at least 30% equity in their current home.

While showing bank owned (REO) properties I have had numerous problems with people coming in the home without an agent while I am showing the property to my clients. When they walk in I ask them if they are with an agent and when they say no, I politely ask them to leave and tell them they must be represented by an agent to view the property. They usually comply.

A few days ago this happened again, but the people lied to me and said their agent was in the car and will be coming in shortly. I watched them carefully and one woman went back outside and then a few minutes later came back in. I asked again where their agent was and she said she was on her way. Then they left a minute or two later...no agent came in representing them. Is this a common problem with anyone else? It is happening to me way too much!

As you know, most bank owned properties have a combo lock and not a supra lock box. When I open the combo lock, I mix up the numbers after taking out the key so the combo is not exposed while I am showing the home. I have heard many horror stories and experienced one first hand of people gaining access to vacant homes and fraudulently leasing the home to unknowing victims collecting first month's rent and security deposit along with other fees and then they disappear! Hmmmm...I'm wondering if this is one way they gain access!

Foreclosure may be the best solution for many distressed homeowners that have no better choice! Maybe I have been out of the loop, but I just learned about this and wanted to pass it along.  

www.youwalkaway.com  started in January and is helping distressed homeowners just simply walk away from their homes, but be able to stay in their homes hassle free from 8 months to a year while they regroup.

Here is a story from ABC News.

http://abcnews.go.com/Video/playerIndex?id=4220208&affil=wxyz

Would it be a good idea to recommend this company to distressed homeowners that have no better choice? I would really appreciate your opinions!

Google just release their Street View for our city of Chino Hills. This is a great tool for enhancing listings as well as our neighborhoods! You can virtually drive down the street! Below is a Street View map of Turquoise Cir N in Chino Hills. Darn...it was trash day!

I am beginning to see lease listings with "foreclosures okay" in the descriptions welcoming people to apply for a lease who have lost their homes due to foreclosure and now have damaged credit. There are many families right now needing to lease a home until they can get back on their feet.

More and more people that have not been able to sell their homes in this market are leasing them and I commend those that are willing to help victims of foreclosure. Although it is risky to lease to people with bad credit, most of these people have paid all of their bills on time, but just could not pay their mortgage which doubled or more after a rate adjustment.

Those that can't sell and those that have faced foreclosure are all victims of this market....let's work together!

The Feds just announced a plan to delay foreclosures to allow more time for distressed homeowners to work out solutions with their bank. Lenders will contact homeowners that are 90 or more days overdue and be given the opportunity to delay the foreclosure process for 30 days to work out a possible affordable solution.

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=6415739&ch=4226716&src=news Announcement

http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=6406864&ch=4226720&src=news CNN Story

This is backed by the same six banks encompassing the Hope Now Alliance which service almost 50% of the nation's mortgages.

I sure hope this helps. I am seeing so many more foreclosures and short sales all the time!

Recently I processed an accepted offer on a short sale listing. All was competed on the offer and I opened escrow. After three days, escrow had not received the deposit check from the buyer's agent. After contacting the agent, he said his clients had no intention of opening escrow and that they were making multiple offers on many short sale homes they liked. Once they received bank approval on their offers, they would choose which one they wanted. He then said his clients would cancel the escrow...which he never bothered to do.

Is this an acceptable and ethical business practice? Has anyone else had this happen?

I just listed a home as a short sale in a nice area. My client fell victim to a scam and now her investment home is in default. I posted the sign and placed about 50 flyers in the flyer box just a few days ago. I went back yesterday to check on a few things and found the sign post leaning, my sign scratched up and all the flyers gone. Inside the flyer box were two advertising cards from a loan officer that specializes in foreclosure bailouts, pre-foreclosure assistance, hard money, no cost options, debt consolidation, cash outs and more. Should I report a complaint? This is a first for me and would appreciate some advice. 

How do you keep track of your mileage? I book all my travel appointments on my Outlook calendar and use Microsoft Streets and Trips to calculate mileage on my showing itineraries. Every quarter I then add up all my miles from my calendar and showings. Those become my mileage logs.

I just found out about the following mashup mileage calculator that works with a Google calendar ... 

www.mileagecalc.com combines appointments entered in your Google Calendar with addresses retrieved from Google Maps and your website. The site calculates the one-way mileage for each trip and even lets you download the results to a spreadsheet. It "mashes up" the functions of two separate sites to create a third one! You can even download the results to a spreadsheet.

Has anyone used this and if so, how do you like it?

Warning: If you receive an offer with one signature from a married person, counter back for a notarized Inter-spousal Transfer Deed within ten days after acceptance. This should be received directly from escrow.

Warning: Do not allow another person, (friend or family member) of your buyer to take care of their dealings with their lender during escrow unless they have "Power of Attorney".

Warning :Do not allow one day to go by after the contigency deadline if you do not have the removal. Otherwise send a "notice to Perform".

Warning: Before entering escrow, check the co-operating agent's license status with the state.

Warning: If seller plans to stay on the property more than 3 days after the close of escrow, be sure you have rent back instructions in writing with a daily rent amount.

Warning: Do not allow the buyers access of any kind to the property until the deed is recorded.

Warning: Do not highlight any part of the Purchase Agreement including areas your client needs to sign. This could be considered "leading" in a court of law.

Any others?

I just attended a seminar/training session for e-neighborhood's Wyldfyre software. Our MLS has now integrated the software and I am thinking about using it. I was very impressed with the features and custom designing capabilities as well as the flexibility and custom reports. Any comments on Wyldfyre would be greatly appreciated!

http://www.youtube.com/watch?v=12yD8JyaVvY

I'm sure all of us have received "sloppy offers"...a Purchase Agreement submitted on an outdated form, or missing the buyer's or selling agent's signatures, or missing other vital information such as financing terms. In these cases, I ask the selling agent to re-send a completed offer.

However, most of the time I get offers that are complete for the most part, but are still missing things that must be completed, so I address them in a counter offer. Some agents in our office say they refuse to do the work for the selling agent and will not cover those little things in the counter, but insist the selling agent re-submit the offer with everything complete.

Is this being petty or professional?

Our office has an Office Fund to which every agent is expected to contribute a small amount of dues. The dues pay for coffee, tea and paper supplies for clients, the office microwave and small refrigerator and their maintenance, balloons and helium for open houses and events, folding machine for flyers, binder for CMAs, color ink cartridges for the color copier, bulk mail permit, special advertising, special local events and expos, seasonal drawings, Chamber of Commerce membership, greeting cards and flowers for sympathy and special occasions and other miscellaneous items the broker will not pay for.

The Office Fund helps new agents that do not have the equipment or resources to get started as well as benefits seasoned agents with broker name recognition and marketing.

Is this a common thing? Do agents in other brokerages have an office fund such as this?

Okay...Microsoft has come up with new computer technology..."Surface". Check this out at: http://www.microsoft.com/surface/.

Will this revolutionize the way we do real estate transactions? Imagine sitting at a table like this with your client. You have downloaded and prepared documents from Winforms Online. You and your client electronically sign them and then each of you simply put them in your phones with the stroke of a finger! Everyone has their own copy and you are on your way! 

Do you think?