Are Promissory Notes Good Or Bad For Homeowners During A Short Sale Negotiation?

Are promissory notes on 2nd liens good or bad for clients during a short sale? It's common knowledge that a foreclosure, deficiency judgment or debt being sold to a collections company will have a serious negative impact on an individuals credit history, but what about an unsecured promissory note that is required by a 2nd lien holder in order to get a short sale approved?

During a recent conversation with my credit repair expert, Doug Minor http://www.easycreditrelief.com/, Doug informed me that promissory notes for 2nd lien holders during the short sale actually help establish and repair the credit score quicker. Doug stated making payments on a promissory note will establish a new trade line, which often leads to additional credit being issued by other creditors. In my experience most homeowners are unaware of this and this information could be the information the homeowner needed to decided whether or not to agree to the promissory note.

Promissory Note: A promissory note is also an unsecured note and a contract between the lender and borrower where the borrower agrees to pay the difference (or a percentage of the difference) between the amount owed and the sales price of the property. This is usually presented during a short sale and can only be enforced if the borrower agrees in writing. These notes are also negotiable after the short sale.

If your a homeowner or Realtor looking for information on how a short sale, foreclosure, bankruptcy or debt collections effect credit, I highly recommend Doug Minor from http://www.easycreditrelief.com/

Santa Clarita San Fernando Valley or Ventura County Are You Struggling With Your Mortgage? Here is A Client Testimonial

Santa Clarita Valley, San Fernando Valley or Ventura County are you struggling with your mortgage? You owe it to yourself to understand what pre foreclosure options you have. Jennifer and I have the training & experience to educate homeowners on the options they qualify for. If your looking for ways to minimize your financial loss and limit the damage to your credit history you need a trusted professional, trained in the pre foreclosure process. We have obtained our Pre Foreclosure Specialists certification PSC, and the Certified Distressed Property Expert CDPE designation. Please take the time to contact us for a free consultation and a current market analysis of your property. You owe it to yourself to learn what options you can utilize to avoid foreclosure. Due to our Law Enforcement background, all financial information disclosed is confidential and protected. You can contact us through our website contact page http://www.santaclaritavalleyhomesonline.com/contact.htm or call us 661.290.3837 with any questions you may have.

Also, if you are struggling with a Wachovia, World Savings and Golden West mortgage Jennifer and I have a short sale manager we can put you in direct contact with that will explain your pre foreclosure options with these loans.

Below is a client testimonial from one of our recently closed short sale transactions.

October 27, 2009

To Whom It May Concern:

I am writing this letter to express my gratitude for getting the pleasure to work with real estate agents Gary and Jennifer Ricco. They both represented my ex-husband and me in a Short Sale of our single-family home.

Gary and Jennifer went above and beyond to guide me through the process. They spent an exorbitant amount of hours meeting with me, making phone calls to both my mortgage company and the buyer’s loan company, not to mention communicating with the Escrow Officer. Gary and Jennifer always kept me informed at every step throughout the entire process and made sure to explain things in terms I would be able to understand.

Gary and Jennifer made what was already a very difficult situation, a smooth one by showing a genuine compassion for my unique circumstances. They were willing to work with me even though my ex-husband was going to be deployed and unreachable throughout most of the process. Their flexibility and creativity were key factors in getting escrow to close, saving me from having a foreclosure permanently on my credit report.

I highly recommend Gary and Jennifer Ricco to anyone who needs assistance with either buying or selling a home, no matter how complicated. I am truly grateful for all their hard work and appreciate their time and professional, yet compassionate attitude. As I look back on that difficult time in my life, getting divorced and short selling my home, I realize just how blessed I was to have Gary and Jennifer’s help.

Sincerely,


Kelly C

Is Your Realtor Trained In Pre Foreclosure Options? Jennifer & Gary Ricco Santa Clarita's Certified Pre Foreclosure Specialists

I find it hard to believe some Realtors are still trying to bypass educating themselves fully in pre foreclosure process. Utilizing third party negotiators to negotiate pre foreclosure's can be a benefit; however the Realtor has the fiduciary duty to ensure the negotiator is licensed and skilled at negotiating the "most favorable outcome". In order to properly screen individuals or companies claiming to be third party negotiators, the Realtor has to have the knowledge first. The Realtor who sits across the table from the clients armed with this knowledge is the key. As a result of bypassing their own education, or resisting the education, untrained Realtors utilizing negotiators only focused on short sale negotiations, continue to pass along incorrect information to homeowners, information which could cause the homeowner not to have the "most favorable outcome".

It's imperative that Realtors possess the correct information when having intelligent conversations with clients. Trained Realtors can point out facts without giving legal or tax advice to homeowners on the possible Tax & Deficiency issues. California is one of 12 states with Anti-Deficiency Laws. In some cases going through a foreclosure is the most favorable outcome because of the protections provided by the Anti-Deficiency Laws. Realtors need to know the difference. Realtors with a Pre Foreclosure Specialists Certification can point out the facts and explain non-recourse & recourse issues as they relate to; purchase money loans with PMI or LPMI, 80/20 non recourse splits involving 100% financing, or a 1st lien with a 2ndlien recourse Home Equity Line of Credit, (HELOC).

When choosing a Realtor to handle your pre foreclosure transaction, the Realtor must demonstrate their working knowledge of the guidelines the servicers and each note holder (investor) are working off of. Understanding how all the Government Programs, like the "Making Homes Affordable Program", the "Helping Families Save Homes Act" or President Obama's Foreclosure Alternative Program, ("FAP" Program) is setting the stage to streamline homeowner assistance. Most of these programs are requiring the servicer to attempt a loan modification; however the homeowner has to meet debt to income (DTI) ratios in order to qualify, if not the struggling homeowner can then proceed with a short sale, deed in lieu and lastly a foreclosure.

The Realtor must also be able to understand and point out the language used in approval letters, in order to guide the homeowner's conversation with their legal counsel. The terms "release" and "satisfy" should be scrutinized. Here is an actual example from a short sale approval I recently negotiated. The approval language used by SLS to "Release the lien secured by its Deed of Trust and "Release" the seller from liability under their promissory note was for a recourse 2nd lien, where the homeowner used a HELOC to pull out money out.



As you can see I was able to negotiate with SLS on the 2nd Lien (Recourse HELOC) and its investors to release the lien and release the seller from liability. This is very favorable language for the seller, who verified this with their counsel prior to moving forward and closing the short sale. These transactions must be negotiated and documented by a highly trained Realtor, a Realtor doing short sales with a purpose, not by default because these type of transactions are a majority of current real estate market.

Realtors who don't understand the foreclosure process or negotiating with loss mitigators are more likely to have 2nd liens "charged off". A "Charge Off" is an instance in which a consumer (homeowner) is seriously delinquent in paying a bill and the creditor elects to transfer the account to an accounting category such as "charged to loss" or "bad debt." In such cases, the creditor may also turn the account over to an in-house or third party collections agency. These cause problems and delays and may be a deal breaker when negotiating short sales, however a trained Realtor has the knowledge to deal with this situations.

Here are just a few questions to ask your Real Estate Agent before hiring them.

•· Can my real estate agent explain the short sale process?
•· Does my real estate agent have prior short sale experience & success this year?
•· How do I know if my property qualifies for a short sale?
•· Does my real estate agent know what "hardships" quality for a short sale?
•· Does my real estate agent have an effective short sale strategy?
•· Does my real estate agent know how to effectively Price & Market my property correctly?
•· Which is better- a foreclosure or short sale?
•· What are the consequences of the short sale?
•· Why would the servicer and investor agree to a short sale?
•· How is a short sale different from a normal sale?

Now is not the time to gamble with your financial future, there are lots of real estate agents claiming to be short sale experts. If your serious about finding solutions to minimize your financial loss and limit the damage to your credit history, contact Jennifer and Gary Ricco at Keller Williams VIP Properties. 661-290-3837 or through our website http://www.santaclaritavalleyhomesonline.com/contact.htm.

Are You A Santa Clarita Homeowner Struggling With Wachovia World Savings or GoldenWest Loan? We Can Help You Speak Directly With A Short Sale Manager

Santa Clarita Homeowners struggling with Wachovia, Golden West or World Savings loans, would you like to speak directly with a Short Sale Manager able to explain, handle and approve your Short Sale?

Jennifer and I have recently been assigned and are working with a manager from Wachovia's Loss Mitigation division who's been assigned to handle the Santa Clarita Valley. This Wachovia representative will meet with all the homeowners that are interested in doing a Loan Modification or Short Sale to avoid foreclosure.

I'm sure as homeowners you have heard the horror stories about the Loan Modification & Short Sales process, the time they take to get the approval and are confused about the ramifications associated with doing these types of transactions. Wachovia understands the position this market has created and now offers Realtors, homeowners and buyers the assistance necessary to streamline the short sale process and approve these transactions within traditional time lines.

Per Wachovia program guidelines the Wachovia representative will meet with homeowners to answer their questions, explain what program they qualify for and ensure their cooperation with a licensed Realtor. The beauty of this program is, you don't have to be behind on payments, however there must be a verifiable hardship in order to participate in this program. You may have received a letter from Wachovia or will be receiving a letter shortly, in any case feel free to contact me, I'll make the necessary arrangements for him to contact you directly.

Here are some of the programs highlights:

*One local point of contact for Realtors and customers to review strategy, submit offers and close the transaction
*On-site property and seller interviews by a Loss Mitigation Manager
*Approvals in 7-10 days
*Average closing from start to finish: 48 business days
*$2500 up to $5000 cash for cooperation/moving expenses

This is a great opportunity for homeowners with Neg Am or interest only loans, who can not get a loan modification due to their negative equity position and debt to income ratios. Take the opportunity to speak directly with a Loss Mitigation Manager who can explain your options and show you how this program can help your family.

Should you be considering a short sale this is the time, with limited inventory and low interest rates Realtors have nothing to show and sell their buyers. Take full advantage of this seller market and position yourself to minimize your financial loss.

Contact Jennifer or I to make an appointment with Wachoiva's Loss Mitigation Manager. 661-290-3837, or through our website http://www.santaclaritavalleyhomesonline.com/contact.htm.

What Are The Benefis Of Doing A Short Sale vs. Letting The Property Go Through Foreclosure? Realtor's Jennifer & Gary Ricco Explain

We are continually asked by clients on our listing appointments, "what are the benefits of doing a short sale vs letting the property go through foreclosure?" Without knowing the seller's financial situation, this can be difficult to answer because sometimes it's better to let the property go to a foreclosure because of California's Anti Deficiency laws and the protections they provide.

With that being said, in summary a seller can benefit from a short sale in the following ways.

* The most important, a seller can avoid having a "foreclosure " on their credit report.
*According to recent Fannie Mae lending guidelines, you can be eligible to qualify for a Fannie Mae backed loan two years after the short sale completes.
*Assuming the seller is already not making mortgage payments, they can continue to live in the property and not make payments during the short sale. The lender of Record actually prefers that the borrower continue to live in the property. Statistically, occupied homes tend to be better maintained then vacant properties, making the property more marketable.
*Most lenders feel that staying in the house is the "right thing to do" when in default. They tend to feel walking away from the house is irresponsible and unfair to the lender.
*Sellers often do not understand that when doing a short sale, the senior lien holder will pay for the costs of the sale.(i.E, commissions,escrow fees, title insurance, deliquent property taxes, ect.)

Here are the risks associated with Vacancy that lenders are faced with and why they prefer the borrower to stay in the home during the short sale process.

Vacancy risks can be broken down to three (3) primary categories.

1. Maintenance:
Maintenance issues on vacant properties stack up quickly. Lenders take on the expense of securing & maintaining the the property ahead of the foreclosure. Lenders hire costly preservation companies to maintain the property.

2. Theft & Vandalism:
Vacant properties are easy target for thieves looking for appliances and/or for the copper out of A/C units and pipes. Also vacant properties are a magnet for squatters and or juveniles that cause thousand of dollars of damage, all costs the lenders assumes in a foreclosure. Municipal fines can run as high as $1000 per violation, per property, per day for properties not maintained.

3. Vacant Property Ordinances:
Cities and counties across the country have drafted vacant property ordinances aimed at two things:
a) Reducing neighborhood blight by pushing lenders with the threat of financial penalties, to secure, monitor and maintain vacant bank owned properties.
b) Generating revenue, municipalities are looking for ways to make up for revenue short falls they face.

Each vacant property ordinance is different. It is estimated that there are over 5,000 distinct & separate vacant property ordinances across the country.

If your struggling with your mortgage, you owe it to your self to understand what pre foreclosure options you have. Jennifer and I have the training & experience to educate homeowners on the options they qualify for. If your looking for ways to minimize your financial loss and limit the damage to your credit history you need a trusted professional, trained in the pre foreclosure process. Jennifer and I have obtained our Pre Foreclosure Specialists certification and the Certified Distressed Property Expert designation.

Also, if you are struggling with a Wachovia, World Savings and Golden West mortgage Jennifer and I have a short sale manager we can put you in direct contact with that will explain your pre foreclosure options with these loans. Give a call at 661.290.3837 or contact us through our website http://www.santaclaritavalleyhomesonline.com/contact.htm.

A Bank That Gets it! Wachovia Has Streamlined Their Short Sale Process Which Has Been Expanded To North Los Angeles County

Wachovia Streamlines Their Short Sales process!

North Los Angeles Homeowners struggling with Wachovia, Golden West or World Savings loans, would you like to speak directly with a Short Sale Manager able to explain, handle and approve your Short Sale?

Jennifer and I have recently been assigned a manager from Wachovia's short sale division. Our Wachovia representative will meet with all the homeowners we represent that are interested in doing a short sale to avoid foreclosure.

I'm sure as homeowners you have heard the horror stories about the short sale process, the time they take to get the approval and the ramifications associated with doing a short sale. Wachovia understands the position this market has created and now offers Realtors, homeowners and buyers the assistance necessary to streamline the short sale process and approve these transactions within traditional time lines.

Per Wachovia guidelines our Wachovia representative will meet with homeowners to answer their questions and ensure their cooperation. The beauty of this program is, you don't have to be behind on payments, however there must be a verifiable hardship in order to participate in this program.

Here are some of the programs highlights:

*One local point of contact for Realtors and customers to review strategy, submit offers and close the transaction
*On-site property and seller interviews by Short Sale Manager
*Approvals in 7-10 days
*Average closing from start to finish: 48 business days

WHAT DOES THIS MEAN TO YOU?

*Working with a Bank that "Get's It!"
*Professional Local Partner paired with you to help facilitate the closing of the sale
*Unprecedented Turn Around Time for Approval
*A Short Sale Transaction that will close in the Same Time Frame as a Regular Purchase
*YOUR VOICE IS HEARD!

If you have a Wachovia home loan that is in danger of defaulting, please give us a call. For more information on this program, please contact Jennifer & Gary Ricco of Keller Williams VIP Properties 1 (661) 290-3837 or contat us though our website http://www.santaclaritavalleyhomesonline.com/contact.htm.

Are You A Frustrated Buyer? Let Jennifer & Gary Ricco, Realtors From Keller Williams Help You

I have been through 8 homes, either outbid or short sales going under review for "modification". It is extremely frustrating. Seems to be a shortage of homes that fit our criteria, should I hang in there and relax, or put it off until next year? Will the $8K be there next year or is it over in 2009?

Frustrated over the housing market in Santa Clarita. We finally decided to stop renting and jump into this market. I went to a direct lending institution and we were pre-approved for a decent amount for the income that I make. Armed with a pre-approval letter, proof of funds, Fico scores and a 3% earnest money deposit we found a Realtor to work with who has patience beyond measure but we keep running into the same problem every single time. We find a place that suites all of our needs, is in a decent location and we would be able to see ourselves living there for a few years. We put offers in on 4 places thus far, every single time we have had to wait 4-5 days and get STOMPED on by someone with a better offer, granted they would never really ever tell us the amount of the other offers. This situation has been ridiculous, we have been almost $20,000.00 over the asking price in some cases and we would still lose the bid. Its become so frustrating, what are we to do in this market to position ourselves to get our offer accepted?

These are some of the stories we have heard from frustrated home buyers and I'm sure, if your trying to purchase a home right now you have a story similar to these. The competition is fierce in Santa Clarita as it is in all of California as well. Its important to understand we are experiencing historically low levels of inventory to sell here in Santa Clarita and all across California.

We can all speculate how this market is being manipulated by the government & the banks. In reality, the market it is what it is and takes highly trained professionals driven by ethics, not commissions to get the job done. As Realtors, Jennifer and I have sought the best training our industry has to offer. We have both received our Pre Foreclosure Specialists certifications http://www.partnerfirst.org/ and the Certified Distressed Property Expert designation http://www.cdepnow.com/. This training ensures sellers & buyers are working with two highly trained professionals who are staying on top of this changing real estate market. Our knowledge and professionalism helps alleviate the frustrations home buyers are experiencing in this market.
This is how Jennifer and I position home buyers to win bidding wars with their offers.

First; As a Realtor we have to understand your purchasing power, which will paint a clear picture of the areas/properties in Santa Clarita you can afford. Closing cost credits, HOA dues & Mello-Roos expenses are major factors that need to be addressed.

Second; Jennifer and I study the comps in each particular neighborhood. Looking within a 1/2 mile radius first, then 1 mile out should their be no current comps and compare per-square-foot costs. We examine the median prices of the pending against the median prices of the solds. We use only the comps of homes that match as closely as possible to the home you want to buy.
Prior to showing the property we always talk with the listing agent in a effort to determine a price to offer, see if the listing agent has a ton of offers and if the property is still available. These facts will often help determine if you have to offer more than the list price. Jennifer and I will then suggest you offer a price within that range, knowing it will not appraise, at which point your the only offer to renegotiate with.

Finally; Put down at least a 3% earnest money deposit, of the asking price. You're going to put the money into escrow anyway, so do it upfront. Jennifer and I always write a letter to the seller, explaining why you want to buy that home and submit it with your offer.

Here is a link to our FREE MLS search engine. Its very user friendly. If your looking to make a purchase in this market please call us for a consultation, we'd be happy to help you understand our local market conditions. http://www.santaclaritavalleyhomesonline.com/buyers.htm. If you have questions you can call us at 661.290.3837 or contact us through our website http://www.santaclaritavalleyhomesonline.com/contact.htm.