This article can help you make a good business decision about your home and your finances if you fall in to any of these situations. It’s best to start work as soon as possible. Even though it’s called a short sale, without the proper guidance the process can be very lengthy.

• You are behind on your home mortgage payments
• You are in an interest-only home loan and/or “underwater” on your mortgage
• You lender is threatening, or has began foreclosure
• You are thinking about a short sale on your home

 At Coastal REO we understand what a difficult time people have making a decision about buying or selling a home. Deciding to do a short sale to avoid foreclosure is even more difficult, but it can be easier by simply looking at it as a business decision and trying to take the emotion out of the situation. This is how your lender looks at a short sale, as a transaction to get the most value out of an under-performing asset. It may be harder for you because it’s YOUR home, but you have to look at it without your emotions to have a level playing field with the bank or lender.

 You may ask yourself: “Why would I short sale my home instead of just letting it go into foreclosure?” There are several great reasons to do a short sale instead of a foreclosure.

1. YOU stay in control in a short sale instead of banks and lawyers controlling a foreclosure
2. A Short Sale is less damaging to your credit. FICO estimates a drop of 85-125 points vs. 250-300 in a foreclosure
3. A South Carolina foreclosure is a Judicial Procedure and comes with the public scrutiny of notices, hearings and court dates like all matters of public record.
4. Lenders are aggressively pursuing the Short Sale route, and some lenders are offering the Seller a substantial financial incentive to cooperate.
5. The new Servicing Alignment Initiative introduced by the FHFA will pay loan servicers to reach out to borrowers who are behind on their mortgage payments.

 The object of a short sale is to negotiate a sale of your home with your lender, and one that will be in your best interests moving forward. Before that can happen, you need to have a buyer in place with a Purchase Contract on your home. The best way to achieve this is to price your home aggressively. You need to find a price point that will get you an offer on your home in 15 to 30 days. This is where the expertise of a Coastal Solutions agent can be vital. We can help you find the perfect price because of our in-depth knowledge of Myrtle Beach home prices and sales trends.

 The next step is to have all your financial information ready and have copies on hand for your lender. There are quite a few documents you will need in a short sale and having a packet with these papers in it will speed the process along. Remember, the income tax break for a short sale ends this year and the short sale process takes time.

1. Your tax returns for the last 2 years
2. Your 2 most recent bank statements
3. Your 2 most recent pay stubs
4. If you are self-employed, a year to date P&L and personal financial statement will likely be required

 The mortgage lender looks at these documents to help verify your “hardship” eligibility and understand why you can’t pay a mortgage as agreed. There are many different types of hardships and Coastal Solutions understands how to present your situation to a lender so that you can secure a short sale.We know this is a very difficult time in your life, but if you call us at 843.839.8046, we can help you explore your options to avoid foreclosure and possible damage to your credit scores.

 Now is the time to make a hard decision and answer some tough questions about your mortgage. Are you going to walk away from your underwater home?  Do you want to stop further damage to your credit in hopes of buying another home in the near future? Are you going pursue a short sale to avoid foreclosure? Who can help me deal with my lender? Coastal REO Solutions is ready to help when you are ready to begin.

 Call or use our Contact Form to reach Coastal Solutions of Myrtle Beach today if you are faced with the possibility of Foreclosure or have a question about the Short Sale process.

On May 2, 2011 Chief Justice Jean H. Toal, so ordered a stay on Mortgage Foreclosures as they apply to a homeowners PRIMARY RESIDENCE.  This order is the result of what many of us are already well too aware of, NO COMMUNICATION with the Lender.

Many times the different departments within the Lending institutions are unaware that a foreclosure proceeding and a form of Loss Mitigation are going on at the same time.  I can’t tell you how many times I have had a Short Sale Approved and the Borrower/Mortgagor is served with “Lis Pendens” paperwork in reference to a Foreclosure proceeding.  Lenders could save countless dollars if they could communicate with themselves.

What does this “Order” mean and how does it apply to your situation?

1.This “Order” only applies to a Mortgagor’s Primary Residence*
2.A Foreclosure Intervention Plan must be offered to the Mortgagor
3.Any pending Foreclosures are “stayed” (put on hold NOT dismissed) until the Foreclosure Intervention Plans have been exhausted or offer is declined by Mortgagor
4.All parties must act in good faith to reach an agreement, if not Court can take any action it deems appropriate including assessing attorney fees against the culpable party.
5.If a plan is agreed to it must be in writing and served on all parties.   If Borrower complies with agreement, foreclosure must be dismissed within 90 days.  If Borrower breaches the agreement, Bank’s attorney files a Notice of Breach and foreclosure continues.

If there is a Pending Foreclosure on your home the Lenders/Bank’s attorney MUST certify the following has occurred in order to proceed with the Foreclosure.

A)All Borrowers are served with notice of right to a Foreclosure Intervention;
B)Bank has received all documents necessary to evaluate the Foreclosure Intervention
C)Borrower has had a “full and fair opportunity” to submit info to Bank
D)If denied, Bank has to notify Borrower and give Borrower 30 days to respond to denial
E)If Borrower fails or refuses to cooperate within 30 days of notice, Bank can proceed to foreclose

Actions filed after 5/9/11:  Bank’s attorney must file with Summons & Complaint a notice of right to a Foreclosure Intervention.  Before a hearing can be set Bank’s attorney must certify items A-E above.  All information has to go through the Bank’s attorney.

As this “certification” process will prove to be very difficult this “Order” is very likely to cause a log jam of Foreclosures.  This log jam will force Lenders/Banks to be more accepting of other forms loss mitigation such as Short Sales, Note Modifications, Deed in Lieu, and loan modifications.  Since you will still have to have the income to qualify for Loan Mod’s and Note Modifications a Short Sale is typically going to be the better option.  The Short Sale process is the best way to prevent further damage to your credit rating, thus assuring a shorter time frame to repair any damage that has occurred.

A short sale in real estate occurs when the outstanding debt (mortgage) against a property is greater than what the property can be sold for. Short Sales are a way for homeowners to avoid bankruptcy or foreclosure proceeding by convincing the bank to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. With a successful short sale you can avoid the public notification of a foreclosure and more importantly keep the foreclosure off of your credit report.

There is absolutely no reason to let your property go to foreclosure.  At Coastal REO Solutions one of our asset managers will assist you through the Short Sale process. Through a short sale you still maintain some control and we can negotiate the deficiency (money still owed to Lender after the sale) down and even sometimes away. If you do nothing and let the lender foreclose on your property they will dictate how much money is owed.

Don’t forget to sign up for our monthly newsletter to stay informed and feel free to use our custom one-touch short sale and bank owned property search application. Timing has never been better to purchase property in Myrtle Beach.

If you are headed towards foreclosure please call or email us!!

We can HELP! 843-839-8046 or info@coastalreosolutions.com.

Washington Post Article

Charlotte Observer Article

Complete Administrative Order

I recently had a chance to sit down and discuss the current climate of Myrtle Beach real estate with one of the most successful and   knowledgeable foreclosed property specialists in South Carolina, Jason Ellis of Coastal Reo Solutions.

Q – Jason, what are you seeing in the Myrtle Beach home market right now?

A – We are experiencing a rise in foreclosure properties and short sales, and I expect that this trend might continue in the foreseeable future. We have seen great gains in the number of homes and condos that have been sold this summer, partly from the First Time Buyers Tax Credit and hopefully because the worst of the recession is behind us. But a great many of those sales have come from the value buyers are finding in short sale and foreclosed properties.

Q - Jason, what exactly is a Foreclosure?

A – This is the lawful course of action that a mortgage lender could employ to repossess your house. Once this happens, you must move out of your home, because possession and ownership reverts to the mortgage holder. If your property is “underwater”, which means its value is less than the total sum of money that you owe on your real estate loan; a deficiency judgment could be pursued by the lender against you as well.  Foreclosures and deficiency judgments could both severely impact your ability to qualify for credit for at least 7 years, and in some cases up to 10 years.

Q – What steps should I take if I am unable to make my mortgage payments?

1.  NEVER avoid your lender. The bank doesn’t want to take your property from you, believe it or not. They would much prefer to work out a solution to the problem at hand, rather than create a new more complex one for themselves.

2.  Document whatever fiscal adversities you face: the loss of a job, salary reduction, medical problems, natural disaster, death of cosigner, etc.

3.  Your lender can’t help you if they don’t know how to contact you! Call, visit, or write to your lender’s Loss Mitigation Department as quickly as possible to begin a loan workout.  Your lender will be more apt to work out a solution with you if they realize you are making an effort to correct the situation before it gets any further out of hand.

Q – What options are available to me avoid foreclosure?

A – I can think of a few that will help prevent a person from losing their home to foreclosure. Of course, every situation is different and that’s why I suggest getting to a professional agent as quickly as possible. They will know all the arrangements and options that are on the table, and they have a better chance of saving your home than you would on your own, in most cases.

Mortgage Modification – Under certain circumstances your lender can modify your present loan to make it more affordable and repackage any missed payments into the new loan. You might qualify for this option if you have recovered from your financial problems and can afford the new payment amount.

Special Forbearance – This is an arrangement that would be made with the lender to acquire a brief suspension of your mortgage payments. The missed payments, delinquency fees and accrued interest would then be added to the outstanding loan balance. The structure of the repayment plan would vary depending on the lender. One lender may add the back payments owed on to the principle amount of the loan.  A different lending company might lower the interest rate on the mortgage, or could even lower the monthly payments for a prearranged amount of time.

Pre-Foreclosure Sale or Short Sale - This option might permit you to sell your property for less money than is necessary to pay off the full balance of your mortgage loan. In a short sale, the mortgage lender or bank agrees to markdown the value of the loan balance because of a financial or economic hardship experienced by the borrower. The property owner sells the mortgaged property for less money than the outstanding balance of the mortgage and turns over the entire amount of the sale to the lender to satisfy their debt in full. Neither side can be said to be “doing the other a favor.” A short sale could simply be the most simple and economical solution to the problem.

Deed In Lieu Of Foreclosure – This option will allow you to willingly return the property to your lender without damaging your credit further. The “deed in lieu of foreclosure” offers numerous advantages to both the borrower and the lender. The chief advantage to the borrower is that it releases them instantly from the majority, or possibly all, of their personal debt connected to the defaulted loan. The borrower also avoids the public embarrassment of a foreclosure proceeding, and they could obtain more liberal workout terms than they might in formal foreclosure actions.

Q – Couldn’t I just file for Chapter 7 or Chapter 11 bankruptcy and keep my home?

A – Bankruptcy needs to be avoided at all costs.  It’s very important to stress that point to the people who find themselves in this unfortunate position. Bankruptcy is the most damaging thing a person can do to their credit. If this is your only option and you are consulting with a Bankruptcy Attorney, provide the attorney’s name and phone number to your bank.  This will at least get the bank, or collection agencies they have hired, to stop calling you directly.

Q – How could your company help a person or institution in the foreclosure process, and how can they reach you?

A – Coastal REO Solutions (CRS) is a firm devoted to stabilizing the Myrtle Beach real estate market by offering property assessment and risk management services of  property and other assets in any stage of foreclosure. We are the Grand Strand’s leading REO and Troubled Asset Real Estate Firm, so no matter what state of the foreclosure process you find yourself in, call Coastal REO Solutions and we will do our best to help you through this troubling time in your life. We can’t help you if we don’t know about your situation, and contacting us early in the proceeding is absolutely vital for a positive outcome. We accomplish this by utilizing our staff’s superior knowledge of market conditions and strategies. Our phone number is 843-839-8406 and our email address is Info@coastalREOsolutions.com.

If you are a buyer, investor, or speculator looking to purchase foreclosed real estate be sure to use the proprietary search application located on our website.  CRS also has access to Bulk REO packages and Bank Notes that may be purchased.

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The analysts noted that lack of consumer confidence and cautionary spending would create even more loan defaults, as unemployment rates continue to rise and the housing market correction carries into 2010. They also foresee a potential rise in the number of borrowers who “strategically default” or “walk-away” from these negative equity loans to escape the underwater mortgage situation and improve their immediate financial situation, at the risk of being able to obtain mortgage financing in the future.

As foreclosure rates increase, once highly evaluated properties in a neighborhood begin to decrease in value, and some estimates put the loss of value as high as 9%. This depression of property values causes the remaining mortgages to go underwater, and creates a spillover effect on foreclosed properties and the generation of additional REO assets. An REO asset is one owned by a bank because it has not sold at auction, usually because the amount owed to the lender on the home is greater than the properties market value. This increase in “underwater” mortgages will inevitably lead to an increase in bank owned real estate. Coastal REO Solutions has many options and services available to lenders and banks to deal with these foreclosures, defaults and walk-aways. Contact us today to learn about all the options available to your institution.