Gary Sandler Inc., Realtors®
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Even though the vast majority of New Mexico homeowners dodged the so-called subprime bullet, foreclosures are not new to the Land of Enchantment. Health issues, job losses, changes in family situations, and natural disasters have been turning our enchanted financial worlds upside down for as long as anyone can remember. |
In the past, many folks who were not able to make their mortgage payments as scheduled immediately joined the "Head in the Sand Club." While underground, they would discard written notices from their mortgage servicer, dodge phone calls from their bank, and pretty much become invisible to anyone having anything to do with their loan. Today, however, homeowners who want to avoid foreclosure have to be proactive. How proactive? Here are the basics:
START EARLY: If you have advance knowledge that you may soon have difficulty making your mortgage payment, call your lender - IMMEDIATELY! They have specialists available to assist in determining if your loan payments can be temporarily suspended or reduced, or whether trying to sell your home to avoid foreclosure would be a better strategy. Gary has personally worked with scores of homeowners and their lenders over the years, more often than not negotiating a workable compromise for both parties. If no workout or compromise is possible, the next step is to offer your property for sale. |
SPEED SELLING: So how much time do you think your mortgage company will give you to sell your home before they initiate foreclosure proceedings? Not much. Most lenders now file Notices of Default (NDs) after the second missed payment if no workout or compromise has been reached. According to New Mexico law, the actual foreclosure sale can be held as soon as 30 (or more) days after the Notice of Default is filed. Have you done the math? Most sellers who face foreclosure have between 30 and 90 days to sell their home, or else.
Gary Sandler has valuable experience marketing homes in severe "buyers" markets and can show you how he can bring about the sale of your home in time to avoid a foreclosure. Okay, there are some cases where a "market value" sale is impossible because the value of the property is lower than the balance of the mortgage. There's a remedy for that situation as well. |
THE SHORT SALE: Let's say that you're a lender who is holding a $200,000 mortgage on a home that is currently worth $190,000. Let's also say that the bean counters at your bank have estimated that the foreclosure will cost the bank about 25% of the value of the loan or $50,000 - leaving it with about $140,000 ($190,000 - $50,000) to cover the $200,000 loan. The result is a $60,000 loss.
Now try this scenario on for size: Gary Sandler finds a buyer for your home, but the buyer is only willing to pay $180,000 for the property (and you still owe $200,000). Let's also say that Gary calculates that once the property is sold and all of the costs are paid, the lender will receive around $164,000. The bean counters at the bank then spring into action, calculating the size of the loss. Let's see… the bank is receiving $164,000 from the transaction, and the borrower owed $200,000. How much will the bank lose if the property is sold?
About $36,000, according to the bean counters. Is the picture becoming clearer? The bean counters estimate that the bank would lose around $60,000 if it were to foreclose on the property. They also estimated that the bank would lose only around $36,000 (or $24,000 less) if it were to accept the buyer's offer. Hello? What would you do if you owned the bank? |
Gary has years of experience negotiating short sales between his clients and their lenders and mortgage servicers, including negotiating two short sales of his own. Many considerations come into play when short sales take place, and Gary has the expertise to skillfully guide you - consideration by consideration - through the entire process. But, again, there's always a chance that a sale won't come about or the lender won't cooperate and a foreclosure will ensue. Not to worry, you still have valuable options!
HIDDEN CASH: Even if foreclosure is eminent, homeowners still have valuable rights. One of those rights, known as the "Right of Redemption," gives property owners the right to redeem their property after the foreclosure has occurred. Former owners may buy out the successful bidder at the foreclosure sale for the price paid at the sale, if they can do so within about 30 days of the foreclosure. Don't underestimate the value of this right. Depending on the property and the situation, investors have been known to pay thousands of dollars for redemption rights, so that they can redeem the property in place of the former owner.
Here's another monetary opportunity. Have you ever heard the term, "Cash for Keys?" It's a term lenders use to describe the cash incentives they give to homeowners who agree to peacefully vacate a property. Depending on the situation, incentive payments can range from a few hundred dollars to a few thousand dollars. Dollars in the "hundreds" are more typical, but Gary has a long history of successfully negotiating satisfactory settlements for his clients. |
