Michael Wolff's Real Estate & Finance Blog

A little while back I had the pleasure of meeting Kris Paden through one of the networking websites that I belong to.  She is an Estate Planning Attorney and we quickly realized how our professions complement each other. My experience is that most people (homeowners, Realtors, Agents, etc.) do not realize the importance of properly planning for the future to avoid costly (both emotionally and financially) legal issues such as probate.  I came up with "10 Questions for an Estate Planning Attorney" which she readily and thoroughly answered. PLEASE NOTE that this is based on California law only.  For information in your State please do not hesitate to ask for a referral.  ALSO NOTE that these answers are for general informational purposes ONLY and are NOT legal advice to be relied upon.  Every family or individual has their own unique goals, plans and situations.

1. What is estate planning?

It's an arrangement for the conservation and transfer of your wealth after your death. An estate plan is designed to see that you keep the most money and other property for your heirs at the least cost to you during your lifetime, and to them when they inherit. The basic elements are a Trust, Will, Durable Power of Attorney and Advance Health Care Directive. Please visit my web page at www.krispaden.com for a brief description of each of these documents. There are many more levels of estate planning that involve reducing estate taxes. There is also something generally referred to as "Asset Protection." Generally, this is shielding your personal assets from any business creditors by changing your business structure from a sole proprietorship to a different type of business entity such as an LLC or Corporation.

 

2. What is the most common mistake people make with estate planning?

Doing it on-line or buying software and doing it themselves. They are canned estate plans and if they don't ask you the right questions you will never know if something important has been completely missed. For the same reason, I have my tax returns prepared by a professional, because I have no way of knowing if I'm missing something.

 

3. Why should someone take the time to meet with an estate planning attorney?

To have their specific goals and concerns discussed and brought to the surface, and to fine tailor an estate plan to address those goals and concerns.

 

4. Who should do estate planning?

Anyone who wants to create their own plan rather than having the default plan created for them by the government. You might as well pick who you want to inherit your estate, as well as pick who you want to administer once you pass away. Otherwise, the law picks these people for you. More specifically, if you have minor children, you want to have a Will so you can name a guardian for your children in case something happens to you. In California, if you own assets over $100,000.00 you want to have a Revocable Living Trust so your heirs (children, etc.) can inherit your assets without having to go through probate court. If you own assets over $2 million (including the full value of your home without subtracting your mortgage, and any life insurance death benefits), then you want to do Estate Tax planning so you can reduce or completely eliminate owing federal estate taxes when you pass away. Everyone should name agents for health and financial matters in the event they become incapacitated. In a nutshell, almost everyone can benefit from an estate plan.

 

5. How does someone know they need to do an estate plan?

Some of the main triggers are: 1) if you have minor children, 2) if there is someone in your family who you wouldn't want to inherit from you or you wouldn't want to be in charge of anything after your death, 3) if you have over $100,000.00 in assets as discussed above, 4) if you want to avoid owing the estate tax (death tax), and if you want to avoid a conservatorship (this is where an agent is named for you by a court to make health care and financial decisions for you in the event you become incapacitated. This happened to Britney Spears in 2008). Generally, you need to plan for when you are not here or, because of illness, unable to speak for yourself. You probably don't want someone else — such as the state — to make important, and very personal, decisions for you or the family you will leave behind.

 

6. Is it only for the super wealthy?

No. Anyone in California with an estate over $100,000.00 has to have their estate administered under the supervision of the probate division of the California State Court. The average time in California for probate court takes 2 years and the cost is a % of the value of the estate. For example, if you have an estate worth $500,000.00, the cost will be a minimum of $25,000.00. This is the amount of money to pay the executor, the attorney and the court costs. This money comes off of the top of the estate and the deceased's heir will receive that much less. Most people in California who own a home have more than $100,000.00 in assets. By creating a Revocable Living Trust, your estate can be administered under Trust Administration law and the time and the cost is a fraction of the time and cost for an estate to be administered under the supervision of the probate court. Also, the benefit of naming an agent to make health care and financial decisions for you once you become incapacitated is immense and has nothing to do with how wealthy you are.

Ask yourself these questions:

If you become incapacitated or if you die suddenly, will your loved ones know how you want the situation to be handled?

Will they know what medical arrangements to make or who you want to care for your children?

 

7. I only have a will, is that enough protection for my spouse/family?

It can be. It's a great start. At least you are making your own plan and hopefully naming guardians for minor children in your will. However, just having a will does not prevent your estate having to be administered under the supervision of the probate court. It also does not allow you to take advantage of trust law and the marital deduction to reduce or eliminate the estate tax. Also there are fewer Trust contests in Calfornia than Will contests (i.e. your will is disputed in court).

 

8. What are the effects of NOT having a plan?

The government has made up a plan for you. It is called "intestate succession." How your estate is distributed and who is in charge of such distribution is set forth in the California Probate Code. The people who inherit and the people put in charge may not be the people you would have selected yourself. Your heirs may also inherit less because they have to pay probate fees and costs and possibly estate taxes out of your estate. You will also need a conservatorship established over you if you become incapacitated and you haven't named agents in a Durable Power of Attorney and an Advance Health Care Directive.

 

9. How does NOT having a plan affect the family?

In short, there may be disputes that could have been avoided, privacy is less easily protected, and the costs, time, and difficulty of administering the estate or acting as an agent for an incapacitated person go up.

 

10. How often should an estate plan be reviewed/updated?

It depends on the specific situation. However, a general rule is any time there is a major life event such as a death, birth, wedding, divorce, major illness or a move to another State. Also, keep track of the estate tax law as there will be changes between now and 2011. Even if there are no major changes, you should re-evaluate every 3-5 years.

 

Kris Paden has offered a free 30-minute phone consultation for California residents who want to learn how they can benefit from estate planning.  Here is her contact info:

Phone:(818) 883-6031

Fax (818) 883-6041

Web: http://www.krispaden.com

 

 

Think its hard getting buyers now? It may get more difficult 2 months from now. Currently, Conforming loan limits are as high as $729,750 (in certain high-cost areas) thanks to the Economic Stimulus Act of 2008. What this means is that the Government has allowed Fannie Mae and Fredie Mac to purchase loans up to this loan amount resulting in favorable borrowing rates. Technically you can purchase an $810k home for only 10% down and still get a 30-year fixed loan in the 6's with a 700+ FICO (as well as other Underwriting requirements). This is based on today's rates after the closing bell. Not bad at all. Similar rates for a $250k home with only 5% down. See whats going on? $200k loan and $700k loan with very similar rates.

Now lets take a look at Non-Conforming loans. If you are in a high-cost area (Southern California for example) and you love a home that's listed for $1.2m you will need to put down 20% and need a FICO of 720+ (740+ gives you a better rate!) to get a 30 year fixed loan in the upper 7%'s or higher. In this category an ARM looks more attractive in the mid 6%'s. You can always put down $500k to get within conforming if you wish!

Fast-Forward to January 1, 2009 (or December 1, 2008 for Wells Fargo and other lenders). The ESA of 2008 will have expired and Conforming limits will be reduced to $625,500 in high-cost areas or back to the $417k in the rest of the Country. In this case, a loan amount of $625,501 would now be considered Non-Conforming (or Jumbo) and subject to the higher rates and lack of viable loan options as indicated above. If you are thinking of closing on your new $800k-$900k home after the Holidays, be prepared to put down an additional 10% or suffer the rate hikes.

Bottom line: homeowners in high cost areas whose mortgaged amounts exceed $625,500 now have a swiftly approaching deadline. Switch to a cheaper conforming home loan prior to December 31, 2008, or risk paying the "jumbo premium". Got a client sitting on the fence? Give them a push (or pull)!

This doesn't just affect home buyers. This also includes homeowners with:

* Two mortgages -- one for $417,000 and one for "the difference"

* An ARM that was begrudingly accepted because jumbo fixed rates were too high

* An expensive jumbo fixed rate mortgage

 

In these turbulent times it is more important than ever to keep up with the market changes so you are an informed professional and a resource for your clients, friends and family. I would be more than happy to present this and other topics of interest to your office or clients!

 

Michael Wolff

 

FHA loans are a very popular loan option for many buyers these days; however it is important that the home meets FHA standards. It is for this reason I am providing this checklist to use as a guide when listing a home. Use it to make note of any potential issues before they arise. It is always best to be proactive rather than reactive.  If you would like a high-resolution copy (for printing, laminating, putting on a t-shirt, etc.) of this please email me and we can work something out ;-)!

 

Akron, OH.  A 90 year old woman facing eviction from her foreclosed home attempted suicide by shooting herself.  Bad news, she got shot and is in critical condition.  Good news, Fannie Mae has announced they will forgive her mortgage.  Her home of almost 40 years will be free/clear when she recovers.  What stood out about this to me is that she had a vanilla 30-year fixed loan at 6.375%.  Not bad at all.  Balance was around $45k so payments were under $300.  Regardless, this was not an adjustable loan, this wasn't a fancy pick-a-pay loan nor was it a balloon loan.  She just couldn't afford it.  I am guessing with rising costs of groceries, fuel and other expenses, the mortgage became a lower priority giving way to the cost of living.

 

Cnn.com

 

In other recent developments, the government has passed a $700B Bailout Bill to 'save' the country.  Its about 450 pages of allocations, laws, and hidden agendas.  How will this help us?  Well, for one it will hopefully instill confidence in the banking system and alleviate this 'tight money' we are experiencing.    Maybe rates will drop, maybe some people will get help from Uncle Sam.  Not really sure yet.  Even though the Bill has passed, it will still take time to implement the changes.

 

Stuck in this bill are other provisions and tax breaks that aren't always publicized.  These are all paid for by our tax dollars.

 

Wooden Practice Arrow Tax Exemption. Early reports portrayed this like a low-budget Bridge-to-Nowhere boondoggle. But Archery Trade Association president Jay McAninch said the provision corrects an error in a 2004 bill that slapped a 43 cent per arrow tax on children's wood and fiberglass arrows retailing for about $1 apiece. The tax was intended to apply only to hunting and competition arrows typically costing between $8 and $15 each. Lifting the tax on kids' arrows will cost the treasury $2 million, McAninch said.

Wool Trust Fund. Makers of suits and other wool products made from imported wool get tariff relief worth $148 million. Some of the money goes into a Wool Trust Fund to promote the competitiveness of American wool. Legislation to give clothing makers this break was co-authored in 2007 by Illinois Democratic Rep. Melissa Bean, but Bean's office said she supports the bail-out without all the sweeteners and that she had nothing to do with the wool tariff relief provision.

The NASCAR provision. Owners of race tracks would get to keep writing off the cost of their facilities over seven years, instead of over 15 years as sought by the IRS. Worth an estimated $100 million, the biggest beneficiary of the amendment stands to be International Speedway Corp., the racetrack arm of NASCAR. Both entities are controlled by the France family.

Puerto Rican and Virgin Islands Rum. Rum imported from Puerto Rico and Virgin Islands gets an excise tax rebate of $13.25 per gallon. The rebate lasts through the end of 2009 and is worth $192 million.

Movie and TV Production deduction. Film and TV production companies get up to $397 million in tax breaks over ten years through expansion of a domestic production deduction

Here are the 5 things you need to know about these changes...

1. One single down payment requirement of 3.5% for all purchases.  NO (as of now) Selller-Assisted down payment programs are allowed.

2. Closing costs/prepaids are in addition to the 3.5% down (6% seller contribution allowed)

3. New maximum LTVs (based on lower of sales price or value) are:

• 96.50% for all purchases.
• 98.28% for all regular rate and term refinances (cash out remains at 95%).
• 98.52% for all streamline refinances.

4. These changes are effective October 1st, 2008.

5. Purchases already in the pipeline will have until December 31st to be assigned a case number. After January 1st, 2009, all purchases will require the new down payment requirements.

I will post more updates as they become available.

This past weekend I took a few hours to drive around to some open houses in my area, Encino.

I do this for a few reasons:

1. To see what's being sold in my market

2. To meet local Realtors, to let them know I am around and I am available.

3. To see how the listings are presented to the public and other agents

 

I could not believe the first home I went to.  I walked in and was greeted not by an agent and not by the home owner, but by two kids around 6 or 7 years old waiving toys at me.  Their Mother or perhaps babysitter was right behind them.  Conversation went something like this:

 

ME: "Hi, name is Michael Wolff and I am a Mortgage Broker in the area.  Is this your listing?"

HER: "No, I am just sitting here at this open house"

ME: "Are you an agent or do you work for the listing agent?"

HER: "No, I work for the office.  I help with the open house."

 

And that was it.  She had no info about the home, just directed me to the fliers as her son attempted to take me out with some sort of toy truck tied to a rope.  Both kids followed me around attempting to get my attention by throwing something or making noises.  The mother/host/babysitter didn't do anything to stop them.  The home wasnt the nicest in the area and was apparantly staged for showing because on all of the chairs and beds was a BIG sign with the stagers name on it and in bigger letters "DO NOT SIT ON THE FURNITURE".  Seemed as if the stagers weren't even finished as there were mirrors and pictures stacked against each other in the living room.  The home was otherwise clean but the garage had stacked debris and smelled like dead mice.

 

If I were an agent bringing clients, I would have been embarassed.  If I were an unrepresented buyer, I would not of given this home a second thought!

 

 

 

 

 

This brings me to the topic of this post: "What do you do at an Open House?"

 

3 years ago, this open house may have been sufficient.  Perhaps a slot in the front door that read "Insert Offers Here" would have generated some business.  Not today.  The open house is to not only bring in potential buyers for this particular home but also to network with Realtors for future transactions and to start a relationship with uninterested yet unrepresented buyers for other homes.  How about some of my thoughts:

1. If you cannot attend the open house (hopefully because you have other listings and are hosting a different one!) then at least have another agent who is familiar with the home and area present to field any questions from the guests.
2. Hire a home stager that can make the home look like a home, not like a poorly designed and uncomfortable showcase from the Price is Right!
3. Talk to prospects.  Don't try to sell them the home right there but answer all questions and even ask your own.  Get to know them as people, not a sale.
4. Talk to the other agents!  You never know who has big buyer lists and who would love connecting with a reliable listing agent!
5. Don't bring your kids.  We all love them, but if they can't keep quiet coloring off to the side somewhere you might as well have termites playing golf in the kitchen.

 

Am I way off here?  Comments? Thoughts?

 

 

Your Adjustable Mortgage is Going to EXPLODE!

Wait, not so fast!

Don't believe all you hear.  Just because you have an Adjustable Mortgage (ARM, Option ARM, Hybrid ARM, Left ARM, Right ARM of the Law, etc.), DOES NOT necessarily mean you are in serious trouble.  What MAY get you into trouble is if you don't UNDERSTAND what is going to happen to the loan when it DOES adjust!

First, just like Whiskey there are many different types of ARM's out there.  On the surface to the untrained they may all smell the same but they are way different!  Let's outline the different types of Adjustable mortgages.

 

 

Option ARM's

Known Aliases: "1 Month Option Arm", "12 MTA Pay Option ARM," "Pick a Payment Loan", "1-Month MTA", "Cash Flow Option Loan", "Pay Option ARM", "Hybrid Option ARM", "My Broker told me it was a 1% 30 Year Fixed", and more.

All of these loans have their own different tastes but in general the share the same features:

• Minimum Payment due monthly (based on a 1-2% Pay Rate) which is LESS than the Interest actually due on the loan (based on a 5-8%+ Interest Rate!
• Negative Amortization Possible (and most likely!) This means that instead of paying your balance DOWN, it goes UP!
• Adjustable Feature in either the Pay Rate, Interest Rate or Both.
• Recast.  Recast is when due to the negative amortization your principle balance climbs to a pre-determined level (110%-125% of your original loan amount as outlined in your Adjustable Rate Rider, Note or other instrument you signed and had notarized) you no longer had the attractive minimum payment and instead have the full-amortized payment (both Principle and Interest) which could be more than double or even triple what you were used to.
• Pre-Payment Penalties of 0-3 years of roughly 6 months worth of interest payments.
  

These loans first came on the scene in the mid 80's to combat the normal Fixed Rate loans which were in the 9-10% range.  They offered payment caps as opposed to interest rate caps.  Not bad, but unfortunately these loans increased the principle owed on people's mortgages at an alarming rate.  When things did settle, these loans were good for the short term for people looking to own for only 1-3 years or for investors looking for an increase in monthly cash-flow.  Fast-Forward to the early 2000's and these loans become popular for different reasons:

• Buyers could get a home they really couldn't afford.  This was OK to buyers and their trusted advisors because with the minimum payment, it was now affordable to live in a $1m McMansion.
• Values were climbing without an end in sight.  No one worried about rising balances because this figured paled in comparison to appreciation.  Get into a bind? No problem, refinance out of it!
• Investors loved their return on these loans (increased balances due, pre-payment penalties, increasing values, etc) so they in turn paid Lenders and Brokers pretty impressive commissions for selling one of these to a borrower.  If you as a borrower don't understand YSP (Yield Spread Premium also known as Rebate)  and you didn't care about your Interest Rate on these loans just your minimum Pay Rate, your Broker or Loan Officer could have earned as much as 3% or more directly from the Investor in addition to any origination charged to you directly.

 

Short Term Fixed ARMs

These loans generally had a short term period of a fixed rate followed by a long term period of an adjusting rate.  Subprime loans were famous for being fixed in the shortest of terms and known as 2/28's or 3/27's to name a few.  The "2" or "3" mean the loan was fixed, usually at a decent rate, for 2 and 3 years, respectively, and adjustable for the remaining 28 or 27 years.  Subprime loans also further evolved into the 2/38, 2/48 (yes, it existed) and all other sorts of flavors.  Other types of these ARMs were notated as 1/1, 5/1, 10/6 and so on.  The 1st number represents the amount of time the loan was fixed for, (1 year, 5 years, 10 years, etc) and the 2nd number represents the interval of adjustment AFTER the fixed period; a '6' means every 6 months whereas a '1' means every year.  Get the idea?

Some of the most savvy investors opted for the really low rates of the 1/1 ARMs, playing the market.  Other borrowers opted for the 7/1 or longer fixed periods as lower rate alternatives to a 30-year fixed loan.  If you only planned on owning a home for 4-5 years, this made sense.

 

When will my loan adjust?

If you are reading this now (August 8th, 2008) and you have an Option ARM and you have been making only your minimum payments, you most likely need to refinance right away.  If you borrowed 80% the value of your home when you originated the loan, you are most likely up-side down and should talk to your lender about a Loan Modification so you can sleep at night.  If you have been making your interest-only payment or even the fully-amortized payments, your rate may be where market rates are or possibly even better since the indices (see below) have been performing fairly well.

Now, to determine WHEN your Short Term Fixed ARM will adjust you will need to pull out your original loan documents.  It doesn't matter what you remember or what your Loan Officer told you, it's what you signed that matters.  If you cannot find your loan documents don't worry, you can obtain a copy at your County Recorder's Office or even a local Title Company.  What you are looking for is a document (2-5 or so pages) that is entitled "Adjustable Rate Rider" or something to that affect.  Click the image below to zoom in on the sample.

 

 

About half-way down the page is a section numbered 4 entitled "Interest Rate and Monthly Payment Changes".  Click the image below to see a close up.  If you pay attention to the details, you will see there aren't #'s 1-3.  I have no idea why they were missing.  Anyways, you see that 4 (B) is clearly labeled "Change Dates".  Clearly states the date the loan may change and also how often the loan may change, 6 months.  If you notice on the above sample that this particular loan was created April 16th, 2003.  With a Change Date May 1, 2008 and with a potential change every 6 months, this loan is nicknamed a "5/6 ARM".  Get it?

 

 

How is my rate determined when my loan starts to adjust?

When your loan adjusts, it is based on two numbers: a margin and an index.  The margin is fixed for the life of your loan and is outlined in your original loan documents.  It may not say exactly "your margin is ____" but may say something like "... the Note Holder will calculate my new interest rate by adding ____ % to the Current Index". Click on the image just above and you will see in section 4(C) "Calculation of Changes" the exact wording of this particular loan.  Yours should be similar.

The index is the adjustable portion of your loan.  There are many different indices: 12 Month MTA, 11th District Cost of Funds (COFI), COSI, CODI, T-Bill, LIBOR (6 month and 12 month flavors), Prime Rate, etc.  The MTA, COFI, COSI, CODI and T-Bill were popular with the Option ARMs, the LIBOR was popular with the Short Term Fixed ARMs and the Prime Rate is attached to most of your Home Equity Lines of Credit (HELOC) and Credit Cards. Again let's look at the above sample.  The index for this particular loan is outlines in 4(B) "The Index". Indices are generally published in your local newspaper in the Investment or Real Estate sections or available online on about a million different websites. I like to view them here.

When your loan is about to adjust, simply take the margin and add it to the index. That magic number is your new rate! This can be higher, lower or the same as your current rate.

Michael, wait! Is there a limit to how it can change? I mean, what if it’s really, really high?

No need to worry (or maybe you do need to worry), your loan has limits on how high it can go, how low it can go and on every subsequent change (every 6 or 12 months as we discussed) there are other caps. Click the image below zoom in on a sample of the same Adjustable Rate Rider we've been talking about. Section 4(D) states that on the first Change Date, the rate will not be greater than 10.875% nor lower than 2.25%. For this particular loan, a 10.875% is a 5% increase from what this borrower had been paying for 5 years. This could be a shock. But don't worry! The current 6-month LIBOR is at 3.1184 and the margin on this loan is a 2.25. This means the rate has actually decreased to 5.368%!

 

Michael, wait! This is awesome, I understand now but... what happens 6 months from now? This loan says it will adjust every 6 months!

Again, no need to worry. 4(D) also tells us that after this first adjustment, all future adjustments will never be greater than 1% of what the previous rate was at. Also, the life-cap on this loan is 10.875% which means it can never be higher than that, even 20 years from now.

 

I've done my homework, I know my loan will adjust for the worse and I can't afford it. What now?

You have a few options. First and cheapest is a Loan Modification. You contact your current lender and let them know what's going on. Tell them your calculations, tell them you can't afford the new payment and they can possibly help you by either keeping your rate the same or maybe even offering you a lower rate. You can also hire someone with experience to do this for you.

Second option is to refinance into a fixed loan. You can call me (888 989 6533) and I would be more than happy to go over options with you.

What? You owe more than your home is worth?

You can refinance up to 97% the value of your home with an FHA loan and ask your current lender to either forgive the difference OR carry a 2nd Mortgage above and beyond what the home is worth. This is allowed by HUD but good luck getting your current lender to play ball!

More realistically, thanks to the new Housing Bill you can possibly refinance into an FHA loan for 90% of the current value of your home with a few caveats:

• You will pay Mortgage Insurance on your new loan just like every other FHA loan (unless its a 15 year loan under 90% LTV).
• You will share future equity in your home with the Government.
• You will pay increased fees to the Government for these loans.

Note: As of this writing, these new changes to HUD have not yet been implemented and even when they do; it may take some time for Lenders to work this into their systems.

Lastly, if it makes sense for you, you can always sell your home under a short-sale agreement with your current lender.

Summary

I hope that by reading this post you have a better idea as to how your ARM works and that you have the knowledge now to know if you are in trouble or not.  Knowledge is Power.

Michael Wolff

Not sure if this is considered advertising, selling, or what BUT I have tons of materials intended to spark new business for LO's and Realtors. This current CD in particular is an Interview with Dave Jenks, VP of R&D at Keller Williams University focusing on how to get NEW first-time home buyer business. Please read below and click the CD or link to request one. Thank you!

REALTORS: Get a Free Audio Interview CD featuring Dave Jenks! Capturing First-Time Home Buyer's. An interview with Dave Jenks. For those of you who dont know him, Dave Jenks is the VP of R&D for Keller Williams University. He is also co-author of both best sellers "The Millionaire Real Estate Agent" and "The Millionaire Real Estate Investor". He has been in the Real Estate industry since 1981 and has taught for the Dale Carnegie Institute. In summary, the man knows what he's doing. This Audio Interview CD runs almost an hour and will give you some very helpful tips, tricks and insights into capturing First-Time Home Buyer business. This information compounded with the new $7,500 Tax Credit (thank you Mr. Bush) will help take your business to the next level. Contact me and I will drop a copy of this CD in the mail for you, FREE of charge! I'll even pay for the stamp.

No matter where I look, all I see and hear are short-sales.  They seem to be the biggest ticket item out there.  I have met with and spoke to many sellers, Loan Officers and Realtors who claim to know all about them but have no idea how the process works or why a short-sale is a better alternative to a foreclosure.  For the seller, a short-sale is better because you are able to buy a new home just 2 years after the short-sale; a foreclosure keeps you renting for at least 5.  For Realtors and Loan Officers a short-sale is the only way to get paid on a transaction.  A short-sale is generally better for the lender as well because it keeps the house occupied with the water and electricity on, saves it from squatters and (generally) keeps the lawn mowed, not to mention they lose a lot less money.

That's all good and fine. I'm sure you can read all about this in 100 other blogs or websites.  But, for the seller's... what happens AFTER the short-sale? What are their options?  Where do they go? Where do they live? How?

Depending on your situation, your previous mortgage and your attitude, your credit may be completely shot or you may just have some blemishes from the previous mortgage.  The most severe credit issues will probably leave you a renter for a short time while those issues are worked out. I hope you saved the money you weren't using for your mortgage because your new landlord will probably require a few months security deposit.  Don't want to be just a renter?  Perhaps a lease-option would work for you.  This topic requires a few posts on its own but can be a great way to get back into the game in no time.  Besides renting or lease-optioning you could live with relatives or friends.   Perhaps they could move in with you BEFORE the short-sale to help make payments?

If you can or can't get the rest of your finances in order, if you file a bankruptcy, if you short-sold 50% less than you bought it for 18 months ago, if you have more collections than open tradlines.... whatever you've been through, a good credit repair company or legal firm could help you get things back in order.  2 years to buy again after a short-sale? Yes... but thats assuming the short-sale remains on your credit. Yes, even the ugliest of credit can be cleaned up legally and efficiently.  Credit reporting guidelines and the 3 bureaus give you the MAXIMIM amount of time items remain on your credit, but whats the MINIMUM?

No matter what you do, a priority should be to get your credit back in line.  Don't wait for it to fix itself because you will be waiting a long time.  The sooner your credit is back to where it was pre-disaster, the sooner you can own a new home.  Perhaps you can buy an exact model match for half the price?  I recommend two credit restoration companies one is slow and cheap, the other is fast and not as cheap.  Either way you will get the results you need, just a matter of how long you want to wait and how much you want to pay.  Good, Fast or Cheap.... choose two!

Let me know how I can be of service to you.

Michael Wolff

 

 

 

Off tomorrow for our Honeymoon!

 

Too bad I'll have a few files I need to work on while in Aruba but business doesn't stop for anything and my clients loans cant wait!

 

UPDATES!  Here are some photos from the Honeymoon!