July 4th is just around the corner. 

Yet what makes this day so special? What does the 4th of July really mean?

 For some, it's a great time to take a four-day weekend in order to get out of Dodge. Or maybe we'll enjoy a "stay-cation" and stay home with family and friends to enjoy fun, food and fireworks!  Most folks will have the day off, and so some of us will spend our time running errands and finishing items on our spouse's "honey-do" lists. Still others may view the local parade filled with marching bands, horses and beauty queens. But doesn't the fourth mean more than all that?

On July 4th, 1776 we Americans declared our independence from England and have held it ever since. So it's also a day to commemorate the great sacrifices of our military men and women. It's a time to honor current veterans, as well as give thanks to the many anonymous fallen heroes who deserve our deepest gratitude and respect. 

So enjoy the day, but if you can, take the opportunity this weekend to seek out a veteran or active duty member. Visit the local parade and proudly wave the American flag. If possible,  shake a veteran's hand and say "Thank You" for all they've done and continue to do. 

Make it a safe and happy 4th of July!

 Bob Boog is the author of Selling Homes 1-2-3 and Mortgage Modifications made easy. Visit his website at www.short-sales1-2-3.com

 

What is a noun? A noun is a word used to denote a person, place, thing, or idea.
In the Spanish language, nouns are defined as being either masculine or feminine. Examples:

MasculineFeminine

el chico	la chica
boy	girl
el jardín	la universidad
garden	university
el libro	la revista
book	magazine
el miedo	la libertad
fear	liberty

English has masculine and feminine nouns too, but in English they are called "male" or "female" words. Here are some examples: 

COPIER: Female, because once turned off, it takes a while to warm up. Because it is an effective reproductive device when the right buttons are pushed. Because it can wreak havoc when the wrong buttons are pushed.

HAMMER: Male, because it hasn't evolved much over the last 5,000 years, but it's handy to have around.

HOT AIR BALLOON: Male, because to get it to go anywhere you have to light a fire under it... and, of course, there's the hot air part.

HOURGLASS: Female, because over time, the weight shifts to the bottom.

KIDNEYS: Female, because they always go to the bathroom in pairs.

REMOTE CONTROL: Female... Ha! You thought I'd say male. But consider, it gives a man pleasure. He'd be lost without it. Lastly while he doesn't always know the right buttons to push, he keeps trying. ;-)

SHOES: Male, because it is usually unpolished, with its tongue hanging out.

SPONGES: Female, because they are soft and squeezable and retain water.

SUBWAY: Male, because it uses the same old lines to pick people up.

SWISS ARMY KNIFE: Male, because even though it appears useful for a wide variety of work, it spends most of its time just opening bottles.

TIRES: Male, because it goes bald and often is over inflated.

WEB PAGE: Female, because it is always getting hit on.

ZIPLOC BAGS: Male, because they hold everything in, but you can always see right through them.

Bob Boog is the author of Selling Homes 1-2-3. His latest book Mortgage Modifications Made Easy can be found at www.free-loan-mod-info.com

 

One of the stories lost during the media frenzy concerning Michael Jackson's death concerns a new idea for homeowners. It's called "vesting forgiveness of debt". This new idea from Washington might allow homeowners to refinance their existing underwater mortgages with new loans from the government. Why is this important?

 Currently many Americans are walking away from their homes, not because they can't continue to make their payments, but because of negative equity. Based on a recent survey, approximately 26% of all foreclosures are strategic, meaning that homeowners feel that they would be better off walking away and trying to buy later, as they feel that housing prices are going to slide further down.

  Vesting forgiveness of debt might encourage those homeowners to stay. Here is how the plan would work:

 Let's suppose that Mark Jones owns a home that is worth $300,000 in today's market. Unfortunately Mr. Jones owes $400,000 against it. In this case, the government would refinance Mark's property by making two new loans against it. Fannie Mae would create a new first loan for $300,000 and the US Treasury would issue a second loan for $100,000.

 The new Treasury loan would be an interest only loan. Unlike a traditional loan, however, for each year that Mr. Jones stays current on both loans, one fifth of the Treasury loan would be forgiven. In five years, Mr. Jones would completely pay off his second loan!

 The idea is to give an incentive to homeowners like Jones to stay current on their mortgages as well as return to a "positive net equity" position before they retire. The cost to the government is estimated to be around 75 to 100 billion dollars, and the government assumes that it would save approximately 1.5 million homes from foreclosure or complete abandonment.

 So far the Obama administration has not embraced this new idea or any kind of vesting debt reduction, but hasn't rejected the idea either, preferring for the present time to continue to restructure and modify more than one million mortgages via the Making Homes Affordable program.

 Good idea or bad? What do you think?

Bob Boog is the author of Selling Homes 1-2-3. His latest work is called Mortgage Modifications Made Easy and can be found at www.free-loan-mod-info.com

Doing the Mortgage Modification Two-Step by Bob Boog

 

If you are a homeowner who is dancing on thin ice, you may be looking at what others are doing to save their homes, and finding that many homeowners are modifying their mortgages. A mortgage or loan modification may not always result in thousands of dollars in principal being reduced, but it could mean a lower interest rate, an extension of the length of the loan (changing a 30 year loan to a 40 year term to reduce payments) or converting an adjustable rate loan to a low fixed rate loan.

The goal is to help a homeowner stay in his home, but homeowners should be wary. The current economic situation has also helped create unscrupulous loan mod specialists who prey on naïve homeowners. Some of these scammers will just take your money and never do a thing - allowing the house to foreclose. So here are six red flags to watch out for when doing the mortgage modification two-step:

 

•1.                          Specialist demands a large advance fee. A request for a large advance payment should alert you to the possibility of fraud, as some homeowners have learned the hard way after handing over their hard-earned money.

•2.                          Makes a 100% guarantee of success. Example: "We have saved thousands of homeowners, and we can help you too. Free consultation. Money-back guarantee! Note: there is no guarantee that any loan modification will be successful as it is up to the individual lender to modify one or more of the terms of your home loan.

•3.                          Too good to be true testimonials. "We reduced Terry Lee's principal balance from $350,000 to $85,000." Run, don't walk away from this one!

•4.                          Request that you grant a Power of Attorney to the specialist. A Power of Attorney allows the scammer to lawfully evict you from your home, and then collect the rent he charges to another tenant. Many times the person requesting the Power of Attorney represents a loan modification company that is attorney-backed, affiliated or attorney-based, but in reality the entity sending the letter has no such affiliation and is just skirting the law.

•5.                          Lease or rent-back scams, this is where the homeowner is told to transfer title via a Quitclaim or Grant deed to a third party, so that the homeowner can rent the property from the third-party, and buy the home back later. Transferring the title to a third party, however, is a dangerous thing to do because it gives a con artist the opportunity to evict you and then resell or rent the home.

•6.                          Just "sign prepared documents" without reviewing them.  Be wary of specialists who don't allow you to take documents to your attorney or any trusted friend for review. Be especially concerned if a salesperson tells you that "they're just a bunch of boring forms".

 

Another red flag to watch for might simply be the high-pressure sales tactics of some salespeople who threaten that "you must act today" and/or instructions NOT to contact your lender, attorney, accountant or non-profit housing counselor.

            The loan modification two-step is a popular real estate dance that many homeowners are doing. If you are not able to refinance your home because of the present market conditions, do your research and contact a non-profit housing center for referrals. Or you can just carefully follow the instructions from your lender, and you too may enjoy the benefits of lower monthly mortgage payments!

 

Bob Boog is a real estate broker and author of Mortgage Modifications Made Easy: a 50 page "do-it-yourself guide" $29.95 for homeowners who want more information, tips and tricks for successfully modifying a home loan. www.free-loan-mod-info.com

Are you behind in your house payments? Here are six tips if you are unable to make your mortgage payment:

1. Don't take the "ostrich approach" and ignore the problem.

The further behind you become in your mortgage, the harder it will be to reinstate your loan and the more likely that you will lose your house. Contact your friends and family members to see if you can borrow money. There are also online places where people have successfully found "angel" donor such as www.craigslist.com and www.prosper.com

2. Contact your lender as soon as you realize that you have a problem.

If you find out on Friday that your company is going to be "downsizing" soon, call your lender. Lenders really will work with you because they do not want your house. The government is presently working with lenders to offer them options to help borrowers through difficult financial times. So you may find that your lender will work with you.

3. Open all mail from your lender.

Some lenders may seem harassing with their constant phone calls, but sometimes they do this because they can offer good information about foreclosure prevention options. Good news to weather financial problems may also come in the mail, so don't throw it away. Important notices of pending legal action may come in the form of registered mail, and failure to open the mail will not be an excuse in foreclosure court.

4. Call a Credit Counseling Service or Visit One Online.

Credit counseling services are available to those who know that they can't make their payments. Call 1-800-569-4287 to find a counseling service located in your state. You can also find more information about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office, or by visiting: www.hud.gov/offices/hsg/sfh/hcc/hccprof14.cfm

5. Beware of Foreclosure Prevention Companies.

Many for-profit companies offering to negotiate with your lender are rip-offs and will just take your money and not provide any service. While there are some legitimate businesses, some will charge you as much as two or three month's mortgage payment for information. Your lender will provide the same services for free and may even be willing to modify your loan for free if you contact them and provide them the necessary financial information.

6. Don't EVER sign a Power of Attorney Form without Understanding its Ramifications!

If any person claims they can stop your foreclosure immediately if you sign a Power of Attorney appointing them to act on your behalf, you may well be signing over the title to your property. With this document properly recorded, you can be evicted from your own home! Never sign a legal document without reading and understanding all the terms and conditions. Get professional advice from an attorney or a trusted real estate professional first.

Foreclosure prevention counseling and homeless counseling services are available free of charge through HUD's Housing Counseling Program. Housing Counseling agencies participating in HUD's Housing Counseling Program are not permitted to charge consumers for these specific housing counseling services.

More more information, please visit your local HUD office. You can find a branch nearby by visiting their website at http://www.hud.gov/localoffices.cfm.

Bob Boog is the author of three books on selling real estate, Selling Homes 1-2-3, Real Estate Sales from Hell and How to Find a Killer Real Estate Deal. His latest masterpiece is titled Short-Sales 1-2-3. Visit his website at www.short-sales1-2-3.com

 

 

Many homeowners interested in reducing their monthly payments are turning to their trusted real estate agent, lawyer or mortgage broker to help them modify the terms of their mortgages and won't blink an eye when learning that the average loan mod fee is between $2,495 -$8,500. (Actually, the fee in California may be even higher - the maximum allowable fee is 10 percent of the loan balance.)

Hold on a minute. If you stop to think about it, ten percent of the loan balance is a lot of money! If the loan balance is $500,000, for example, ten percent is $50,000! That's a lot of money!

So as Joan Rivers would say, "Can we talk?"

Why is a loan modification fee so high? I believe there are three reasons, but I bet you already know the answer to reason one.

Reason One: This reason is incredibly simple. Everyone knows it. The reason a loan modification specialist charges so much is because that most homeowners expect to pay an exorbitant amount. After all, many modification firms are headed by attorneys, and we all know that an hour spent with an attorney doesn't come cheap. By the way, do you know the definition of an attorney? An expensive lawyer. ;-) Also, most mortgage specialists will tell the owner that he should skip a few mortgage payments to show the bank that the owner earnestly needs help, so the owner will have ready money to pay the loan modification specialist's high-priced fee!

Reason Two: The second reason the fee is high has to do with kick-backs and referrals. Did you know that loan modification companies typically pay referral fees of between $500 -$1,000 to real estate agents and others who refer clients to them? It's true, yet most people don't know this. Most owners simply want to have a lower house payment so they'll blindly follow the recommendation of a local authority (real estate agent or accountant) to help them come to the right decision. Advertisers have known about the "expert factor" for some time now. That's why they use actors who play doctors on TV. So if your local tax preparer or real estate expert suggests that you contact Steinman & Sons law firm to modify your home mortgage, you may do so because that's what a local knowledgeable person advised you to do - not knowing that the "expert" would then be paid a referral fee of between $500 to $1,000 dollars!

Reason Three: The third and final reason that a mortgage modification fee costs so much is because homeowners have been led to believe that modifying a loan is difficult and that a homeowner cannot possibly do it by themselves. Not true. The truth is that loan mods are not all that difficult and if you do your own modification you can be assured that your best interests will be represented. After all, even the top-ranked attorney loan modification company cannot guarantee a 100% success ratio. And in a worse-case scenario, if an owner signs an agreement with a law firm to modify the owner's mortgage and the law firm cannot modify it, the owner will now owe an attorney money PLUS be billed by the lender for his back payments! Ouch. That's a double whammy!

A better approach is to just do it yourself; then if that fails contact a lawyer or modification specialist. The reason that many owners don't initially do this is because most people are often motivated by the fear of losing something than the thought of gaining something. They are more afraid of doing something wrong than just trying. Remember: even the top-rated loan modification company cannot guarantee with a 100% certainty that they will be able to get you the payment that you want.  Plus, if you do your own modification you may be able to request that the lender reduce your loan by the amount of the high-priced modification fee. Who knows? Your lender may be willing to give you a break.

There you have it. Three little-known reasons why loan modifications cost so much. An often quoted passage, "the truth shall set you free" should be revised to "the truth shall help set you financially free" because many homeowners are saving big money by doing a loan modification themselves - without having to hire a high-priced specialist. Who knows? Maybe you'll be next.

About Bob Boog Bob Boog is a real estate broker who started selling real estate in 1978. He and his wife Roxana own a small real estate company (Bob Boog Realty) located approximately one hour north of downtown Los Angeles. telephone (661) 259-9723 http://www.short-sales1-2-3.com

 

Okay, just for fun, write down your feelings about short sales in a short poem or haiku. I realize that you're probably busier than a one-legged Riverdancer and can't rhyme like a rap star, but that's okay. Jot down a haiku. What is the proper haiku format? Haiku: a Japanese lyric verse form having three unrhymed lines of five, seven, and five syllables. You can give the poem a title, or not!

Example:

Poem
I gave up my home
Trying to do a short sale
All was for nothing.
Wish that loan rep was in jail!

Haiku#1
Mystery bank lady
working on my short sale
Never calls me back.

Haiku#2                                                                                                                                  Mystery bank lady
I am so tired of waiting
I want to kick your ass

Haiku#2
Faxing the same things
Offer,prequal and HUD-1
This short sale game sucks

Haiku#3
Another two months
It will be a short sale year
I still hope for "yes"

Haiku#4  I like my short sales/  just as I like my women/  -- short,sweet,successful

Okay, I admit it, these were all lame... let's see some of yours

The new Obama homebuyer tax credit has launched out of the starting gate and rather than get left behind, I thought I might find out more about it. Like a lot of real estate people, I don't quite understand it. So I asked my friend and mortgage broker professional, Eric Larsen to help clear up some of the mystery. And maybe my stupidity and his answers will make things clearer for you!
 
Bob Boog: From my understanding, homes purchased in 2008 are eligible for a $7,500 tax credit, right?

Eric Larsen: Yes, but unfortunately, this 2008 credit has to be paid back over 15 years.
Homes purchased in 2009 are eligible for the new $8,000 tax credit and the 2009 credit does not have to be paid back as long as the buyer lives in the home for at least 3 years.

 Bob Boog: So, are we gonna go back and forth between 2008 and 2009, or just talk about 2009 here?

Eric Larsen: Sorry, all of the rest of this information pertains to the 2009 credit:

 Bob Boog: Let's think backwards for a second, cuz that's me. I always do things that I'm not supposed to do first and then people will say, um, you don't qualify for this. You didn't read the fine print. So what is the fine print? What CAN'T a buyer do?

Eric Larsen: A buyer may NOT file a tax return BEFORE they close escrow, hoping to get the credit to use for the purchase they are about to make. This would be filing a false tax return! A buyer CAN file an amended tax return AFTER closing to get a quick refund from their 2008 tax return.

 Bob Boog: So I guess it pays NOT to do your taxes and file for an extension?

Eric Larsen: Not really. I'm just referring to an amended return.

Bob Boog: Okay, so here's the million dollar question, the one that people keep asking me. Can I use the $8,000 credit for my down payment?

 Eric Larsen: Yes and no. By this I mean that No, at this time, you cannot hope to use it directly for a down payment, however, FHA is allowing buyers to get a loan for the $8,000 credit from FHA approved lenders and non-profit organizations (think Nehemiah type agencies) which then can be used for down payment and closing costs (so yes, it CAN be used for down payment). However, while FHA has said it is OK, implementation at the lender and non-profit level is lagging. I am sure plenty of agencies and
lenders will be jumping into this "short term financing" option of the tax credit soon!

 Bob Boog: So this is a good thing, right?

Eric Larsen: Yes definitely. This is the final piece we need in our industry to really make
this tax credit "pop"!

 Bob Boog: So how exactly will it work?

Eric Larsen: The loan can either be paid back when the borrower
gets their refund or the small loan can have monthly payments (if the loan
does have monthly payments it has to be included in the qualifying debt
ratios!).
 

Bob Boog: Are there any other stipulations?

Eric Larsen: Yes, the home purchase MUST CLOSE prior to December 1st, 2009!
 
Bob Boog: Why do they call this credit "refundable?" This confused the heck out of me. Doesn't it mean the buyer has to pay it back some day?

Eric Larsen: No, but that's a good question. Refundable does NOT mean a buyer has to
pay it back, it means a buyer gets the full tax credit even if they have no tax liability (WHY they use the word "refundable" for this is beyond me. Must be government speak).

Bob Boog: What if I make $300,000 a year? Can I still get the tax refund?

Eric Larsen. Sorry, but NO. The tax credit phases out if a buyer makes more than $75,000 per year and disappears entirely if they make more than $95,000 per year ($150,000 to $170,000 is the phase out range for married couples).
 
Bob Boog: How about if I buy the house from my Uncle Harry?

Eric Larsen: That's another thing. A buyer CANNOT use the credit if they are buying a house from a close relative.

 Bob Boog: Okay, what else haven't you told me?

Eric Larsen: That's it. Oh, if you are doing business in some lower-priced areas ($40,000 - 80,000 homes) keep in mind that the tax credit is $8,000 or 10% of the sales price, whichever is LESS!

 Bob Boog: See? I knew there was a catch. Holding out on me again. You bastard.

Bob Boog: Let's get back to having somebody do your taxes...

 

Eric Larsen: You mean filing an amended return?

 

Bob Boog: Right. My question is, how long does this take?

 

Eric Larsen: How long does it take for the accountant to file the return, or how long before your buyer gets the money back from the Treasury Dept.

 

Bob Boog: Um, you know what I mean.

Eric Larsen: Knowing you, Bob, you want to know how quickly a buyer can expect to get their money from the Treasury Dept. So to directly answer your question, this takes about three to four weeks.

 

Bob Boog: Wow. That's pretty fast!

 

Eric Larsen: I even made a copy of one buyer's Treasury check, so I'm pretty confident that it can be done in that time frame.

 

Bob Boog: So here's another question for you, and it's not really a question, more of a proposed scenario. You know, one of those "what if" scenarios?

 

Eric Larsen: Oh not, not one of those.

 

Bob Boog: Well, I'm just thinking aloud here, ok so what if I'm a buyer and I borrow $8,000 from one of my solvent friends or family members, then I might be able to pay them back pretty quickly, couldn't I? I mean provided that I can get my accountant to file the amended return right away?

 

Eric Larsen: Sure, I don't see why not.

One of the things you’ll find when doing the Making Homes Affordable plan for homeowners is that you’ll get a letter back from the bank stating how much they will want the homeowner to pay on a “trial” basis. Sometimes the lender returns a three month “Forbearance Agreement”, while on other occasions it’s just called a “trial” period. Recently, for example, a client received a letter from his lender stating that the buyer was to make a payment each month in the form of certified funds in the amount of $1,045 per month – which is about half of what he used to be paying. People will often ask, “How do banks come up with this payment amount?” The answer is simple. Under the Making Homes Affordable Plan, the lender will look to see that the payment falls into a 38% total debt ratio. From here the Making Homes Affordable Plan may reduce the debt even further, depending upon other factors including the number of dependents, income and the buyer’s other debts. Example: In order to qualify for a mortgage for which the lender requires a debt-to-income ratio of 28/36: • Yearly Gross Income = $53,000 / Divided by 12 = $4,416 per month income. o $4,416 Monthly Income x .28 = $1,236 allowed for housing expense. o $4,416 Monthly Income x .38 = $1,678 allowed for housing expense plus recurring debt. o $4,416 Monthly Income x .31 =$1,369 allowed under the Making Homes Affordable Program o So the Making Homes Affordable Program may reduce the homeowner’s debt by about $309 per month

Most salespeople would like to be more consistent at sales, and sometimes forget to use consistency with their customers. By this I mean that there is a basic psychological principal that states that most human beings like to think of themselves as being consistent.  After all, if you had a choice, would you rather be known as "Mister Wishy-Washy?" Or "Mister Consistent?"   

 My guess is the latter.

 So if I can get you to make a stand, and go on record for President X, for example, I will have set the stage to ask you to post a sign in your front yard. Once you have posted a sign in your yard, I can then ask for a small, additional campaign donation, couldn't I? Once a stand is taken, there is a natural tendency to behave in ways that are sbbornly consistent with the stand, and most people will agree to the request.

Commitment and consistency helps to explain why writing down goals is more powerful than just thinking about them. Because once a person takes a solid stand on an issue, they are more likely to be consistent with it - in both their thoughts and in their actions.

 Psychologists once ran a consistency experiment that went like this. They placed a poorly lettered sign in the front yard of a house that said "Drive Carefully," and found that most people didn't even slow down to notice it. Then the experiment was moved to a different neighborhood and run again. This time a full 76% of people agreed to the request. What was the difference between the two similar houses? The second group of neighbors had consented to displaying a three-inch square sign that said, "Be a Safe Driver." The second group felt obligated to honor their commitment.

 What this means to you is that any small commitment step that you can ask a person to agree to, will help with bigger requests. That partially explains why a customer who has just purchased something from you (even something small) would be an ideal candidate for another more expensive product or service.

If you liked this post, please visit my website at www.short-sales1-2-3.com