Yesterday, the Justice Department and 49 out of 50 state Attorneys General announced a settlement agreement with 5 of the nation's largest banks in the Robo-signing and Mortgage Service Fraud scandal that first came to light in late 2010.

The settlement, worth $25 billion dollars, was the largest government negotiated industry settlement since the Tobacco Industry settled in 1998.

In the Settlement, $5 billion is earmarked for $2000 payments to be distributed to borrowers who were illegally foreclosed on between January 1, 2008 and December 31, 2011. The remaining $20 billion will be used to help homeowners who are currently in danger of losing their homes by helping with loan modifications, principle reductions, refinancing, short sales, relocation assistance and other alternatives.

Join us on February 16th, 2012 for an Industry Broadcast, which will give you all the details of the agreement and what it means for agents and their clients. Click here to register!

Current studies show that over 6 million homeowners in the country are potentially facing foreclosure. However, initiating the conversation to find out if a homeowner needs your services can sometimes be uncomfortable or even offensive. That’s why we have a refined a script that works well in any situation, whether you are on the phone or in person, and we call that script the “Distressed Property Rescue Script.”

It’s simple, effective and most importantly it makes homeowners feel comfortable to open up about their situation. This is not a sales call, or a referral call; it’s a rescue call.

Here’s the script:

“Do you, or someone you know, owe more on your property than what it is worth and you don’t know what to do?"

This may sound like a simple question, but each word is designed to elicit a specific response.

Let’s take a look at this script and explain why each section is important.

“Do you, or someone you know.” Adding the part “someone you know” is non-accusatory and let’s the person off the hook. It may also trigger a memory of someone they know who is in trouble which allows you to connect to their market.

“owe more on your property than what it is worth.” Leaving out the words “foreclosure” or “short sale” are important because studies have shown that 65% of homeowners do not understand these terms or know what they mean. They do understand, however, that they are late on payments and that is something they can definitely relate to.

"you don’t know what to do?” This last section is the most important part. Foreclosure is an ambiguous term, one the homeowner may not relate too or even understand. Not knowing what to do has personal implications that every person can recognize, so by communicating in a way that has meaning you help people open up.

When CDPE’s call qualified clients and use this script they report 5 out of 10 and in some cases 10 out 10 calls resulting in referrals.

Begin calling past clients today. Use this script to generate more listings and, more importantly, help someone in your database that already knows you.

Watch the Rescue Script video on You Tube.

Mortgage modification scams made the list of the Better Business Bureau's Top Scams of 2011, with more than 20,000 complaints. Sadly, there are countless organizations out there preying on desperate homeowners.
That's why trained, qualified real estate agents are needed now more than ever. The nationwide network of more than 35,000 CDPE-designated agents has helped hundreds of thousands of homeowners find a dignified solution in difficult times.
But distressed homeowners aren't the only ones being targeted. Unfortunately, even well intentioned agents have been caught up in increasingly sophisticated mortgage fraud scams.
Don't let it happen to you! Join Alex Charfen for a FREE Webinar:

[FREE Webinar] Short Sale Fraud - What One Agent Didn't Know that Cost Him His License Wednesday, January 25 at 2:00 p.m. EST Register today!

Fannie Mae revealed its new Unemployment Forbearance Program, which mortgage servicers are required to implement by March 1 for all Fannie Mae-owned and backed loans.

Servicers can now provide up to six months of relief for eligible unemployed borrowers without Fannie's review and approval. Borrowers may also apply for an additional six months of forbearance, for a total of 12 months.

Fannie's announcement follows a similar move by Freddie Mac.

To find out if your loan is backed by either GSE, use the "Fannie Mae Loan Lookup" or "Freddie Mac Loan Lookup" tools on the Useful Links section of our website.

Effective Feb. 1, Freddie Mac is giving mortgage servicers expanded authority to provide six months of forbearance to unemployed mortgage holders without prior approval, and an additional six months (12 months total) with prior approval. This new policy essentially doubles the previously offered forbearance period. It's important to note:

• This applies to Freddie Mac-owned or guaranteed loans only.
• There is ACTION required. The homeowner must contact the servicer to request the forbearance.
• Delinquent borrowers in an existing short-term forbearance plan can be evaluated for an extended forbearance term under the new policy. Again, homeowners will need to contact their servicer to apply.

For more information, watch Alex Charfen's latest Video Blog Post!

In an effort to shorten overall cycle times, Bank of America has reduced the window for submitting a backup offer on a short sale from 14 days to eight days after the initial offer becomes invalid. Once a backup offer becomes necessary:

• Contact your short sale specialist immediately to let him or her know you have a backup offer to submit.
• Within eight calendar days, resubmit the listing data, submit the short sale offer, and upload the offer documents and supporting documents.

Note: All backup offers will require approval, regardless of similarities to the previous offer. If no backup offer is available:

• The short sale will be closed in Equator by your short sale specialist.
• You should return to marketing the property.
• You may initiate a new short sale in Equator when you receive a new offer on the property.

For more great tips on getting Bank of America short sales approved, download our FREE report!

On Jan. 4, Federal Reserve Chairman Ben Bernanke sent a letter and white paper to Congress outlining his insights and recommendations on restoring the health of the U.S. housing market. Among the key findings on current market conditions:

• Housing prices remain 33% below their early 2006 peak
• Currently, 1 in 5 mortgage holders are underwater (12 million homeowners)
• In states with the price declines (i.e. Nevada, Arizona and Florida) roughly half of all mortgage borrowers are underwater on their loans
• The number of properties currently in the foreclosure process is more than four times larger than the number of properties in REO inventory

The white paper suggests that no single solution exists and that progress will come through "persistent and careful efforts to address a range of difficult and interdependent issues"—a position we have always stressed. Among these efforts, the paper strongly recommends incentives for alternatives to foreclosure, namely a short sale or deed-in-lieu. The white paper also emphasizes a fact we are all too aware of: foreclosures drive down property values in the surrounding area and lead to a "ripple-effect" that harms homeowners, lenders and taxpayers alike. Watch my Video Blog Post to hear more insights on the Federal Reserve's recommendations.

With 1 in 10 homeowners not paying their mortgage—and Major Lenders predicting huge increases in short sale closings in 2012—savvy agents are finding new and creative ways to find and attract distressed property listings.

A great place to start your outreach campaign is a list of NODs. Notices of Default, or NODs, are legal notices sent by a mortgage servicer to a homeowner who is 90 days late on their mortgage.

With a few simple modifications, you can use many of the same marketing techniques with NODs that have yielded you results when prospecting for traditional listings. For maximum impact, utilize the following:

Multi-touch Approach

Don’t expect results after one call, mailing or door knock. The foreclosure process can take months, and many distressed homeowners will refuse to face the reality of their situation until their time has run out.

As with any effective outreach campaign, follow the “Rule of 7,” which states that the majority of prospects need to be contacted a minimum of seven times before they notice your message. Distressed homeowners, who are often in denial of their situation, may require even more touches. Stick with it; persistence is key when marketing to NODs.

Multi-method Approach

Not all homeowners will respond to the same type of messaging. A consistent but varied approach to outreach will often yield the best results.

Include the following elements in your NOD outreach campaign:

• Letter
• Postcard
• Free Report
• Door Knock with Flyer or Door Hanger
• Handwritten Note
• Foreclosure Avoidance Seminar Invitation

Be sure to include your contact info, including a website address where they can download informative resources (such as a free report with foreclosure avoidance tips) in exchange for their name, email and phone number. This will help you track the success of your outreach and enable you to follow up with interested leads.

Get in a “Saving” Mindset (not a “Selling” One)

Before you begin your outreach, get centered and set the intention that you are going to help the person you are contacting.

When you have a long list of NODs to tackle, it’s easy to forget there’s a real family on the other end, and they are probably going through one of the most difficult times in their lives. The threat of losing your home is frightening and highly emotional. Be respectful, and always set out with the intention of helping instead of selling.

Additionally, don’t imply that you know the homeowner themselves is in financial distress. For example, when door knocking say, “I’m out here today to let my neighbors know that if they or someone they know is behind on their mortgage payments and doesn’t know what to do, I am here to help.”

Now that you’ve connected with homeowners in your area who need help, make sure you’re listing their property the RIGHT way. Download our FREE report: The 5 Steps to Listing a Successful Short Sale!

On Dec. 21, the Office of the Comptroller of the Currency released its latest report, which shows delinquencies remained elevated during the third quarter of 2011.

The number of new foreclosures increased by 21 percent during the quarter, partly due to servicers lifting the voluntary "foreclosure freeze" implemented in late 2010 as a result of the robo-signing scandal.

The overall increase has resulted in the number of foreclosures in process increasing to 4.1 percent of the overall portfolio, or 1,327,077 loans, at the end of the third quarter of 2011.

This supports RealtyTrac's latest data, which also predicts increased foreclosure activity in 2012.

"November's numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs (bank-owned homes) or short sales sometime early next year," said James Saccacio, co-founder of RealtyTrac, in a statement.

Agents can help stem the tide of foreclosures in their market by educating distressed homeowners on alternatives, such as short sales.

Click here to learn more about how you can save families from foreclosure while growing your real estate business in 2012.

The holiday season should be a magical time of year. However, for a growing number of families, the usual holiday celebrations are trumped by financial troubles, foreclosure and the looming threat of eviction.

Fannie Mae and Freddie Mac offered some relief to such families by announcing an “Eviction Moratorium” through January 2, 2012. During this time, families living in foreclosed homes will not be forced to leave, though legal proceedings may continue as scheduled.

Undoubtedly, Fannie and Freddie’s efforts will prove comforting to homeowners who find themselves in this situation. However, the relief is short lived.

Remember, the “eviction moratorium” is only a short reprieve, so we urge you to continue reaching out to homeowners during the holiday season. Simply knowing that options exist can provide them with peace of mind. And during the holidays, a little peace of mind is an invaluable gift.

If you are not yet a CDPE and would like to learn how you, too, can help homeowners in distress, watch our FREE PREVIEW of the CDPE Designation Course.