First, let me say I am an investor, not a lawyer. This is just general information that investors learn about and say “Holy Cow!” and you might be interested in finding out a little more about. With that disclaimer, let’s dive in. There have been a number of major banking institutions announcing they are stopping the foreclosures temporarily to correct problems with the foreclosure documents. Most people assume that this means they are just checking to make sure every thing was done properly. It turns out there may be just a little bit more to the story. So when someone buys a house or other real estate property and gets a loan, there are some documents they sign at the closing called the mortgage and the note. Your lender may have handled all of these correctly and if they did none of this is going to affect you. But, some lenders sell the loans to others (so they collect their fees and make some money and then are out of the transaction except for maybe collecting the payments or servicing the loan).The loans may be put in a big pile of loans and then sold to other financial institutions that in turn break the big pile of loans into smaller investment pieces and sell the smaller pieces (commonly called mortgage backed securities) to investors. When the borrower closed on the loan, a paper trail of people that handled the documents (note and the mortgage) start to flow. Each time they change hands (ownership), there is supposed to be a group of signatures of the givers and the receivers of those documents as well as the witnesses to the signatures and notaries of the signings. Basically, flaws in the chain of the passing of the mortgage and the note correctly leave the loan open to legal challenges when and if there is ever a foreclosure. Also, both of those documents as well as all of the pieces of paper and signatures following them in the paper trail must be in their possession That is one situation.Another problem that can come up is that if there is a default (failure to pay accordingly) and there was insurance on the performance of the borrower (lender insured that the borrower will pay and on time), there may be limits as to what the current owner of the loan can collect from the borrower that is in foreclosure since the lender got some or all of the money owed paid by the insurance company. There is a legal concept that says the foreclosing party must demonstrate the actual loss. If an insurance company paid them, there is either no loss or a reduced loss since they got payment from the insurance company.A third issue that comes up is called robo-signing. This is the occurrence of people that were not physically present when the documents were signed or changed hands have signed the papers like they were there or signing where they were not authorized to sign. Most of these flaws in the proper documentation are not so noticeable to the borrower since they do not see them. There are people that can search out to see if there are potential problems with loan documents… they are called forensic loan investigators. You can likely do an internet search on that term and find them. These companies usually work in conjunction with attorneys that handle foreclosure cases.So all of this is just to raise you level of understanding of what some of the issues are that are causing the news of foreclosures being suspended because of “document problems”. If you are facing foreclosure, contemplating buying a foreclosure or having problems with your loan, seek counsel from an attorney.
Author Archives: schatzi
Real Estate Training – How to Learn From Crazy Experiences
Hi, I’m Mike Pollak, real estate agent trainer. In real estate sales there are always clients who will test you. They will challenge you. It’s up to you to learn how to deal with it and make bad situations better. I want to illustrate this for you by relating a story to you of how a crazy experience turned out to be money in my pocket.I had a client some time ago who was very peculiar. I was representing him as a buyer’s agent. One day I was talking to him on the phone about a relatively minor issue that needed to be resolved before he could continue with the purchase of his home.I explained over the phone to him what the issue was and how to resolve it. He immediately blew up and threatened to sue me and my broker for trying to force him into doing something he didn’t agree with.Whoa, is this guy for real? At first I was shocked. I quickly realized I had a choice to make. Do I go crazy and argue back to defend myself or do I stay clam and dig deeper to find out what made this guy go nuts on me? Well, I chose the latter. Despite it being very difficult, I kept a cool head and began asking questions to discover the true source of this guy’s crazy blow up. The more questions I asked the closer I got to understanding why this happened. It turned out that he misunderstood me.Wow, going to court over a misunderstanding would have been ridiculous!The point of this is to realize that just because we understand what we are saying doesn’t mean the other person understands. Asking questions to discover the source of the problem is the most effective way to resolve a problem with your clients or anyone for that matter.Even if the person you are talking to is not mad, it’s a great idea to always ask questions to make sure the other person understands you. This can be done by asking open-ended questions to allow them to talk.Let me tell you that this takes practice. If you are prone to get excited quickly, then it will take you more practice. Just remember that you can do it and you’re awesome. That’s your real estate training for the day. Now go get ’em!Did you want to know how the story ends? We closed escrow on a nicely remodeled home that he is very happy with and I got my commission. Just think what would have happened if I blew up at him when he was angry.
Purchasing Real Estate – 2 Tips To Find The Right Property
1. Contacting Companies Directly
Depending on your requirements, it may be advisable to contact real estate companies directly. Although realtors advertise their properties and listings in the newspaper or on the website, when they have exclusive properties for sale, they would like to deal with genuine buyers, otherwise they feel that they will be wasting time if people only want to browse around and view properties without the slightest intention of buying. This is the reason that realtors do not advertise widely to the public at large. Some Companies only deal with commercial and industrial real estate. This requires a realtor who specializes in commercial properties and all the legalities involved.2. Viewing Properties on the Internet
Right now, the Internet is a great way to view properties around the globe. At the click of the mouse, you can view any property even 10,000 miles away, whether it is in India or Australia. There are photographs of properties with detailed views of all the interiors – you can view each and every room, taking into account all the woodwork, granite or marble floors and counters, fabulous kitchens, bedrooms, family rooms and working areas.The Internet is accessible to everyone and saves both time and money. Agents can be contacted and each and every detail can be discussed and only in the final stages will you need to make personal contact. All the legal issues and other property hassles will be taken over by an experienced realtor, so that you can be assured of a hassle-free deal.HUD which stands for Housing and Urban Development, is a scheme where homes are organized by the Government for middle and lower income groups who need to qualify for them. The Government does not loan money directly or keep properties, but they are in touch with property managers who will take care of all loans and properties.
The HUD scheme is extremely important for those who cannot afford the higher end properties and would still like to avail of a real estate property.The Government organized scheme helps many lower income groups to avail of this opportunity of owning their own home. Every State has listings, and each county and city advertise these listings, so that it is available to everyone who needs it. Although the Government does not arrange loans or show these properties, they guide people to the right property managers who will show people the properties and arrange loans for them, which is a great help to those in need of this scheme.