Today, for the first time in a very long time, I actually have three post topics floating around in my head!!!! The first one I was going to write today was a follow up to "Are you hulking up your business plan". I had said I would write a post outlining things you can do to improve your business that do not cost much time or money. I promise to write this post later this week. Today, I'm going to be a little self indulgent instead.
I woke up this morning with some questions on my mind and I want to try to get some answers from you guys. I know a lot about listing and selling properties but have to say I lack in my knowledge of the mortgage business. So this is where I need help.
Just about everyday I get phone calls from folks wanting me to list their properties. As always, I start the conversation with some qualifying questions i.e. When did you purchase the property? How much did you pay? How much do you owe? Are you current on your payments? And, Who are your lien holders? More times than not the answers are not good. We bought it 14 months ago. We paid $285,000(it's now worth $225,000). We are three months behind on our payments. We have a 1st with Countrywide and a 2nd with American Home Mortgage.
Now folks, I'm very good at what I do BUT I can't perform miracles so, I pass on the majority of these listings and tell them they need to speak with an Attorney. I have however listed a few of these in the hopes of being able to negotiate a short sale. And that brings me to my questions.
As we know, American Home Mortgage just went belly up. I've read a few press releases on this, this morning, trying to figure out how this affects my Sellers. All I can find is "Current mortgage customers will not be affected". Well OK then. All is well with the world. But………………
Real life example #1. One of my pre-foreclosure/short sale Sellers had just agreed, about 10 days ago, to give American Home Mortgage a "Deed in lieu of foreclosure". Well the obvious question is…How is he affected? Can AHM, now that they have filed bankruptcy and are insolvent, still accept his DILOF? I don't have a clue.
Real life example #2: Countrywide, as the first lien holder, has just started foreclosure on another of my listings. The 2nd lien holder, again, is AHM. My Seller received foreclosure papers from AHM this week and has 20 days to respond. Well…what does he do now? Does the fall out of AHM buy him more time?
Now a bigger question looms in my head. When is Countrywide going down? My market was big time sub prime territory and just about everyone I speak with has a Countrywide mortgage. Heck, I've got two of them myself. It's my understanding that CW was doing a whole bunch of 80/20s and then selling the 2nds to AHM. Almost all of the builders in Poinciana use/used CW. There were 1,000s of new homes sold in Poinciana from late 2004 to late 2006 using CW mortgage. ALL of these properties are now worth anywhere from 20% to 35% less. If Poinciana is any indicator then CW is going to be in a whole heap of financial trouble by the beginning of 2008.
So there you have it, inquiring minds want to know. I've given you some questions, do you have the answers? I sure don't.
*** Image compliments of Rich Schiffer. Thanks Rich!!
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