Loan Modifications. You can do them yourself!

Hello all, since I've started my loan modification business www.dontshortsale.com many have been asking me if they can modify their loan themselves. My answer is YES! All that is necessary for a loan modification is your current income and expenses and a reason why the borrower fell behind on the payments. Many people feel intimidated and/or frustrated when dealing with their lenders to modify loans. It takes a lot of patience to deal with the peons who don't seem to have rhyme or reason for what they request from the borrowers again and again and again. This frustration factor is the primary reason why most people give up on trying to do their own loan modification and hire my company to do it. And we do it. We're churning out the modifications now, which is tremendously exciting for a start up company. Unfortunately I don't have alot of time to devote to answering questions now that I am not working for a non-profit anymore, but I try to express myself through blogging. If anyone needs a pointer on how to do their own loan modification, google! If you need your loan modified and don't want to do it yourself come visit my company here.

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Whaaa??? What's this? Whispers of a Real Estate Market recovery?

For Home Buyers, The Window To Negotiate With Sellers May Be Closing
from The Mortgage Reports Blog by Dan Green

Accordig to ZipRealty, home supplies are falling in most major U.S. housing marketsIf home prices are all about Supply and Demand curves, it looks like the national recovery is well-underway -- the housing inventory is falling in most major markets.

As reported by ZipRealty, the number of single-family homes for sale nationwide declined by 1.6 percent in October.

What's most interesting about the data, though, is that healthy markets like Seattle and Chicago played as much a part in reducing national home supplies as previously hard-hit cities like Miami and San Diego.

There are a few reasons for home supply dip:

1. Home buyers are keenly aware of the negotiation leverage they have over sellers and they know how to use it
2. Banks are getting good at selling foreclosed homes

These two elements combined to help homes sell like hotcakes during what is typically a "slow" month in real estate, boding well for the housing market going forward. The figures are consistent with the other housing data from last month that showed more homes under contract and more homes selling.

But, wait. There's more!

Over the past few weeks, Chase Mortgage, CitiMortgage, Bank of America and Fannie Mae have all enacted some form of moratorium on home foreclosures. This, too, should lead to lower inventory levels because fewer homes will head for the auction block.

In every market, the value of real estate is based on scarcity.

If the number of homes for sale dwarf the number of active home buyers in that particular market, home prices are going to fall. They have to. It's basic economics. And, that's precisely what we've seen over the past few years -- home supply outpaced home demand for them.

But, based on the chart above, a series of data points from October, and the political pressure to help homeowners in need, expect for home supplies to fall in 2009, taking home buyer's negotiation leverage with it.

Fannie and Freddie's announcement to modify loans and it's effect on pricing.

Here we are, deep into the slough of the deepest real estate downturn in my generation's history and today Fannie Mae and Freddie Mac announce that they are going to be modifying loans based on the borrower's true ability to repay them. My phone starts ringing off the hook with enthusiastic folks on the brink of foreclosure (that's about 80% of the country by my reckoning) wanting to know my educated opinion of the matter. After I thank them for their flattery, I calmly delve into my grounded in reality pragmatic discourse.

"We've heard this before" says I. "First from the individual lenders, then the county of L.A., then the state of California, then the Bush administration that helped all this to happen, and now the biggest holders of mortgage paper in the universe." My caller is always speechless at this point, so I steamroll forward. "None of their interventions has made so much as a dent in the evil behemoth of foreclosures that is sweeping across our formerly great nation." Still no speech from the other end of the line. What did they expect? Good news? This is foreclosure we are talking about, the depth and breadth so deep that it literally bankrupted the world financial system. Sometimes I will offer my opinion. "I think this is electioneering/PR for the giants to give the public hope and distract them while they manuver behind the scenes and continue to rape this country. Thanks George." At this point, they are usually deflated. I'm sorry to do it but I don't see enough tangible action taken on the street level, house by house, block by block, to give me any cause to believe that we are going to get out of our foreclosure nightmare.

So what will this do with prices? Well, it will likely stabilize them in the short term because foreclosures will be abated...temporarily. The underlying problem is that hordes of people bought houses they will never be able to afford and until values and subsequent loan amounts are reduced to a level that is sustainable to someone making the median income for LA county, about $40000 or $2500 a month after taxes. According to the proposed modifications, mortgage payments will be pegged at 38% of monthly net income. 38% of $2500 is $950 including property tax and insurance that number is closer to $700 a month. At 7% interest a $700 payment affords about $120000 of mortgage. Therefore, that's what the median price will be adjusted to in LA county. According to current data, our median price is $370000 so we're still more than 300% above the federally mandated "workout" guidelines. We've still got a long way down.

CA$H FLOW is back in L.A.

I found an awesome piece of real estate today. It is duplex in Echo Park on a cute cul de sac with sweeping views of Downtown L.A. and specifically Walt Disney Concert Hall all the way to the Hollywood sign. Really gorgeous views. It is right up the street from a brand new city park and it's quiet and secluded yet less than 1/4 mile to the heart of downtown. It is a foreclosure and has been pretty badly vandalized, needing new drywall in several places. It has eight bedrooms, four baths and they are asking 63% of what they foreclosed on. It was built in 2005 which is about 70 years after most of the other properties in the area. The mortgage payment with 20% down would be 2997 so one could pretty easily rent the bottom unit for $2500 and live in the top four bedroom unit with master bedroom views of the Hollywood sign for $500 a month. If THATS not a deal, I really don't know what is.

So what's the downside? Well, to be totally frank the house is FUGLY. That's right, you heard it. Sky Minor called this Echo Park Duplex FUGLY, that means Fing ugly y'all. Although it's new it is not an attractive looking piece of real estate. I won't go into detail here in case the eventual buyer takes offense at the opinion of this broker.

How to lose money and internet ranking.

I am nothing if not honest. I am quick to point out the mistakes I've made along the way in the hopes of my people being able to avoid the same mistakes. This one ranks pretty high up there on the mistake-o-meter.

I am browsing and assessing the latest attacks by my online nemesis Carlos. This is a guy who I invested $125000 with into a bar in West Hollywood. He completely ripped me and several others off. I don't take that sitting down. I looked all over for him then when I couldn't find this slippery 5'3" scammer, I began posting warnings about him and his wife Nayda online. After about two days he started calling me and at first demanding and threatening me if I didn't take my posts down, then he began pleading. I said sure I'll take them down as soon as you pay me at least a fraction of the six figures I gave you that you skated off with. No payment was ever made, but he began posting things about me all over the interwebs under fake names accusing me of being fraudulent, shady, etc. If's that not the pot calling the kettle black I don't what what is. So now my Google ranking for sky minor tycoon, sky minor real estate, sky minor mortgage, etc returns several bogus rip off reports posted from "David", "Sam", "Rachel", etc. claiming amongst other things, that I'm a heroin junky, I am being investigated by the FBI/CIA/Secret Police/Music Critics for poor taste in pets and haircuts and "bad" loans. These fraudulent reports go further claming that I had brokered out loans that led to foreclosure (In Malibu, of all places. I wish I had done a loan in Malibu!) and a plethora of other 8th grade nonsense. I can't remove them, as the site rip-off report has a policy of never taking down bad reviews, be they contrived or not so all I can do is answer every single bogus complaint that Carlos throws at me from whatever city he is ripping people off in and appeal to the sense of the reader. Sigh. Tough lesson to learn. From what I can gather of the lesson so far it would be to don't deal with short people who you suspect are lying (your instinct is probably right), don't deal with people who claim to get "action on the side" cheating on their wives, and if you are not a good judge of character then you'd be better off leaving your money in a CD earning 3.75%. At least we can get something positive out of the ordeal.

Why we are all getting "Shorted" in short sales.

Short sales are being pushed as a win-win situation since the bank gets something, and the homeowner avoids foreclosure. To one blog poster in New Mexico it looks like a lose-lose-lose situation, and they do have some pretty poignant points (how's that for alliteration?) Short sales hurt the mortgage company who loses money. The homeowner loses their home. Families that live around the property lose value in their homes since short sales and foreclosure drive down the values of the homes around it. This hurts families who did everything right, but are still pulled into a situation where they are also underwater on their home. Short sales are not going to stop the spiral of foreclosures that have contributed to the mortgage crisis, and although they might make sense for a particular property owner they can create their own problems.

1 in 6 homeowners, or nearly 12 million homeowners, are upside down on their mortgages. Experts believe that this number will climb to over 15 million in a year, and this figure could be higher if house prices continue to fall. This was reported in a story on ABC News Nightline on October 17, 2008 on the mortgage crisis. To avoid foreclosure and modify your existing mortgage, call me at 310-709-8283 or visit my site here