This next story should come as no surprise then, as a New Jersey Woman named Nina Morra managed to get locked out of her home that had just been accepted into a new loan repayment program.  The story goes something like this:

• Homeowner has a stroke, goes delinquent on payments
• Bank starts foreclosure filings against homeowner
• Bank agrees to a modified repayment program (supposedly) saving the owner from foreclosure
• Owner goes to visit family for Thanksgiving
• Bank sends inspector out to change the locks on the house, despite modification
• Owner comes home to find the no longer have access to their own house

After several days and frustrated calls, the bank acknowledges that they made an error, allowing owner to return to their own home

The Lender?  Bank of America.  This is just another story from the Wall Street institutions that have brought us such great stories such as:

Bank turns Malibu Foreclosure in Party Pad

The Pushy Real Estate Agent

Any wonder why people hate banks these days?

Blog Post Links:

Foreclosure Mistake

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000 – office
301-653-8116 – cell

Charles County Real Estate Blog
SOMD Home Search
Southern Maryland Custom Homes & Land

Turns out that policy of surprise eviction may or may not have been slightly unethical, dumb, and possibly illegal.  Remember when Fannie Mae took that gigantic $700 billion government bailout check?  Turns out there were strings attached, and one of those strings was that “tenants in good standing” of properties they foreclosed on were to be allowed to remain in the property.

Did you miss that provision in the 451 page bailout bill?  Don’t worry, so did Fannie Mae, but now that a couple of lawyers from Connecticut have pointed it out, Fannie has decided to comply rather than face a lawsuit.  I think it’s great that SOMEONE is actually looking out for tenants rights, but the decision leaves me with two questions:

• Who is going to manage the tenants and rental properties?  Is this an internal management structure  being planned (bad idea!), are they going to contract it out to local third party management firms (good idea!), or do they even have a plan for this in place yet? (SUPER bad idea!)
• What sort of plans are in place to prevent fraud?  When some people get evicted, they damage the house on the way out.  The financial equivalent would be to rent the house to someone on a multi-year lease for $1/month.  Even more fraudulent would be to rent the house to an acquaintance(accomplice?) for $1/month and then sublet it back from him.  Now you’ve managed to not pay the rent in the 6-12 months, and you’ve got a fixed rent of $1/month, without even having to move after the foreclosure!  What is Fannie Mae doing to protect itself from that?

Unfortunately, I haven’t found any good answers, yet.  The policy itself is excellent, it’s all those pesky associated details that get in the way.  Bear in mind that while keeping these properties occupied will help protect the condition of the home AND neighborhood, it’s also going to force the lenders to bleed even more red ink since the rental income is considerably lower than the sales value, which would skew their earnings statements further.
~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Charles County Real Estate Blog

    With increasing distress over the slumping housing market and mounting foreclosures, Rep. Hoyer has announced a free foreclosure prevention workshop to brief homeowners on their financing options and assist them in taking steps to avoid foreclosure.

    The workshop, which will include the participation of many of the areas loan servicers, will be on Friday, May 9, from 9:00 a.m. to noon at the Greater Waldorf Jaycees located at 3090 Crain Highway in Waldorf.

Link to Bay Net Article

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

    I’m a firm believer that builders do this intentionally.  They’re struggling for profits, and in the housing pinch they’re forced to drop the prices to get you as a buyer in their door.  Once you’re at their model, you’re on their turf, and their job is to do everything they can to jack the final price of the home up.

    It’s then taken a step further when each model representative makes it a point to brag about how energy efficient they are, or how stainless and granite is standard, blah blah blah…..

    I made a suggestion to this buyer that there may be another option to explore that might make a bit more sense if flexibility is an option.  New construction typically takes 4-6 months to complete, and in communities that have been builder for more than a year, it’s highly possible that you may be able to find a short sale in the community that could be purchased for considerably less that you could have the home built for

    It allows you to negotiate the price of the house completely, not be beaten up by the builder over the cost of each individual upgrade.  It also places you in a great bargaining position with both the homeowner and the bank that’s holding the note:  You’re able to purchase the property for less that it was bought new, and the bank gets to avoid another foreclosure dragging on their profit margins.

    It may not be a perfect solution for everyone, but for true bargain hunters looking for a sensible, affordable alternative, this is a great option.

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116 
Southern Maryland Real Estate Blog

"Banks don’t want your house; they want your money. They want to work with you so you can keep your house. With the market like it is, lenders don’t want to foreclose on you."

    If this were genuinely the case, why is there such an onslaught of REO homes nowadays?  I think it’s a genuine sentiment, but the current mortgage problems like this are occurring anyways, and people, particularly those at risk of foreclosure, need to understand this!

    I cannot stress enough how important constant communication with your lender is when you are facing a risk of foreclosure.  Banks are becoming more and more flexible with homeowners (finally), but the reality is that if there’s ANY possibility of getting the note renegotiated, or getting the house sold before foreclosure, why WOULDN’T you try?

    Banks ARE negotiating on a case by case basis, and it’s worth the attempt.  As the Washington Post article noted, the banks are likely to take a loss once they’ve foreclosed, so why not negotiate NOW to help minimize their loss AND avoid the credit damage and humiliation involved with being forcibly evicted from your home through foreclosure?

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

    March 5th is the date, and the Showplace Arena in Upper Marlboro, MD is the location!  Here’s the skinny:

    Prince George’s County is sponsoring the event, along with HUD and a bunch of other agencies.  There will be 13 national loan servicers there, and they’ll be talking with homeowners that are concerned or worried about the mortgage market.  The goal is to explain how to avoid getting into a bad loan, how to avoid foreclosure, and so forth.

    Workshops will be running from 2pm-8pm, and if you would like to register, all you have to do is call 800-CALL-FHA.

(Special Thanks to The Real Estate Wonk for Blogging this to my attention!)

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
Southern Maryland Real Estate Blog