The first scam is courtesy of a law firm supposedly out of Seattle Washington. They first asked me about a short sale listing I have on the MLS.  Next they invited me to become an “affiliate”. I listened to their online spiel and it didn’t take long for the red flags to start popping out. They claim to offer a unique foreclosure prevention solution.  Their solution is not unique and it does not prevent foreclosure.

They simply ask you to assign your house to their company.   You sign a contract and walk away leaving this shyster law firm to take care of your contractual obligation to your lender.  There is nothing unique about assignment.  Scam artists have been doing this for decades.   Assignment does not get rid of your obligation to your lender!   Mortgage contracts do not allow for assignment.  Once you assign a mortgage, you are immediately in violation of the due on sale clause contained in every mortgage contract. Assigning your home to anyone is a sure way to insure maximum credit pain.  The most likely outcome is bank will ignore the assignment and foreclose.  If you are lucky the firm will do a short sale and flip leaving with only a hefty deficiency judgment.  This outfit is so brazen the even use a .org address usually reserved for non-profit organizations.  They call themselves walkawaytoday.org.

The next scam to hit my in box was in the form of an online walk away calculator sent to me by a friend.  This scam has taken advantage of the new catch phrase ‘strategic default.’  Besides the handy dandy calculator they have a page dedicated to educating you about scams.   They put together a good list of things to watch out from scan artists.

One warning I found ironic was, “*It is likely a foreclosure scam if you are being asked to pay money up front to negotiate a loan modification on your behalf if the company is not a law firm or a DRE approved Real Estate Broker.”  Then they proceed to convince you to send them $995 for a ‘The Personalized Plan’

Please!  Please!  Never pay upfront fees!

I read through the list of promises in the “Personalized Plan.”   For the most part the promises list is made up of simple things you should be able to do on your own.  The more difficult items can be done for you for FREE by experience and certified counselors at non-profit organizations.

Another of their scam warnings says, “***It is likely a foreclosure scam if someone says they can cancel your mortgage all together and stop foreclosure due to an error in your loan documents. “  But then they advertize another service called Foreclosure ok.  The advertisement states, “We may be able to help you get the financing you need to buy a new home, even 1 day after foreclosure.”  Are they kidding? This is a blatant credit repair scam.

Here’s the scary part. On their website you find logos of over 2 dozen news organizations that supposedly ‘feature’ You Walk Away.    The “Time” article specifically featured them as a rip off, because a non-profit center could do the same work for free.   They also fail to mention that the State of California has filed a class action law suit against them.   I couldn’t find anyone who actually endorsed their program.  But they do manage to get their strategic default message into the news.

What are the proper steps to take if you are in trouble with your mortgage?

First, stay in touch with your lender.

Next, find a certified counselor at a nonprofit organization.  In Minnesota contact the Minnesota Home Ownership center.

Click on the link or call 651-659-9336 or toll free 866-462-6466.

After working with a counselor, if you are still faced with losing your home a short sale will allow you to repair your credit in the shortest period of time.   Contact a Realtor with an experienced short sale team.  A team that includes an attorney for legal advice with no upfront fees is a big plus.

Your last alternative should be a cash for keys walk away.  The government actually has a new program pressuring lenders with an incentive to do a deed in lieu of foreclosure.  The program is called HAFA.   You don’t need a lawyer for this!!

Questions on Short Sales

If you have questions take action.   Call me or use the form below and someone will contact you.

The Minnesota Real Estate Team has several experienced short sale agents and we have an attorney to help navigate the legal complexities of short sale negotiation.   We charge no upfront fees. All attorney and Realtor fees are paid at closing from the proceeds of the sale.

Technorati Tags: Avoid Foreclosure, Defaults, Foreclosures, HAFA, Short Sales

It seems that whenever there is a crisis affecting  people, there is always an army of scum bags ready to step  in and make the situation worse.  If you or anyone you know is having trouble paying a mortgage there is FREE help available from good reputable sources.  In Minnesota we have an organization called the Minnesota Home ownership Center.   These people provide free mortgage counseling from certified home counselors.  They also act as a sort of central clearing house statewide and can help people find mortgage  counselors anywhere in Minnesota.

The Home Ownership Center Toll Free number is 1-866-462-6466.

Know your Rights!

I also ran across a national legal  organization dedicated to preventing loan scams. Its  simply called Prevent Loan Scams.   The website: PreventLoanScams.org

The Prevent Loan Scam website contains  lots of information regarding home owner rights in each state.  Did you know Minnesota already has several statutes aimed at helping distressed home owners?  For reference here are a few of those statutes:

1.)  Minnesota Law Prohibits Advance Fees for Loan Modification Services (Minnesota Statute 325N.01-.09)

2.) Protection of Homeowners Against Equity Stripping by Foreclosure Purchasers (Minnesota Statute 325N.10-.18)

3.) Credit Services Organization Act (Minnesota Statute 332.52-332.60).

This site has a wealth of information just on Minnesota. Including:

• Help for distressed homeowners
• Scam reporting
• A list of alleged Minnesota scammers
• Important state laws
• References to Law enforcement
• And a summary of Our Minnesota Crisis

We at the Minnesota Real estate Team are dedicated to preventing foreclosure one home owner at a time.  We encourage people to seek  free professional help.  We are here to help.  If you must sell your home we have experienced specialists to help.  We don’t charge upfront fees.  We have an upcoming seminar for distressed home owners.  Thursday, March 4 from 6:30 to 8pm at Cornerstone Mortgage-435 Gateway Blvd, Burnsville, MN, Denae Frampton and Trent Johnson will host Short Sale Solutions. You can sign up for this seminar on this site.

If you would like a personal one on one explanation of how the short sale process works just call or email.

I’ve also set up a special site where you can read and download information on short sales.

Technorati Tags: Avoid Foreclosure, Defaults, Foreclosures, Short Sales

Over the last few weeks I’ve run across a few articles what the future holds for the large number of homeowners in default or about to go into default and facing foreclosure.   Many experts expect to see a big increase in successful short sales.  While I’m not a national expert, I am a full time Realtor trained in working with distressed property owners.  As such I keep a close eye on the direction of the distressed market is going .  I try and analyze what’s working for distressed homeowners and what’s not working.  From my point of view it does look like 2010 will be the  Year of the Short Sale.

2009 might be called the year of the foreclosure.  It might also be called the year of the failed mortgage modification.   Foreclosure activity hit highs in the summer of 2009.  In my blogs on Shadow inventory you can see the trend. Foreclosure activity peaked in July and the trend has been downward.  Unfortunately foreclosure sales are not keeping pace with number of defaults.

Also during 2009 the Obama administration introduced the “Making Home Affordable” campaign.   This program was all about keeping people in their homes through refinancing or loan modification.   As part of the Making Home Affordable program many banks signed on for the  Home Affordable Modification Program (HAMP).  HAMP gives lenders incentives for modifying loans for trouble home owners.   The aim of HAMP is laudable, but the results have been disappointing.    Some say the program is poorly designed, others blame the lenders, but another fact is undeniable. Many homeowners in distress cannot afford to stay in their home even if the loan payments are lowered significantly.  Eventually, these homes will be sold.

After several months of poor progress of the HAMP program, the administration announced a new directive to HAMP participants as part of the Making Home Affordable program.  This new directive is called Home Affordable Foreclosure Alternatives ( HAFA).   HAFA gives incentives to banks for Short Sale and Deed in Lieu of foreclosure.  The directive goes into effect April 5, 2010.  Lenders can choose to participate before April 5.   In most cases Short sales and Deed In lieu are much more cost effective than foreclosure for lenders.  In basic terms; Short sales and Deed in lieu make more sense than foreclosure! Unfortunately, short sales too often end up in frustration and foreclosure.   Many Realtors acting as buyer agents will discourage buyers from making offers on short sales for this reason.

So what’s different in 2010?

Besides the HAFA directive, there are  other factors that point to an increase in short sales in 2010.

• Major mortgage servicers like Wells Fargo  have been ramping up the number of people working with distressed home owners. In a December 10, 2009 press release Wells announced, “The company has worked to improve responsiveness to its customers and improve its overall operating process through efforts such as increasing home retention staff by more than 7,600 people in 2009 – for a total of 15,000 U.S.-based staff – to manage the increased home preservation volume.”     Even Bank of America, which has a terrible reputation regarding short sales has promised to streamline its short sale process.
• Realtors across the country are becoming better trained to help home owners.  The Certified Distressed Property Expert (CDPE) Institute recently announced that 19,000 people have completed their training course and are now CDPE members.  The National Association of Realtors (NAR) has also begun a certification program called Short Sale and Foreclosure (SFR) Certification.
• Political pressure is ramping up big time!  Everyone is aware of the anger over the housing collapse.  With congressional elections coming later this year, there is pressure to show results. With so many loan modifications failing the  alternative with the least pain for homeowners, lenders and the housing market would seem to be a big increase of short sales.

What should a homeowner in trouble do?

First of all take  action! Learn your options.

• Avoid foreclosure scams-never pay up front fees!
• Check out the Making home Affordable website: http://makinghomeaffordable.gov/
• Find a free local housing counselor through The Minnesota Home Ownership Center
• Attend a free Seminar put on by a top notch CDPE short sale expert.  Our team is sponsoring two of these events check them out on this site.                          How to Avoid Foreclosure Seminars
• Down load helpful information from my short sale site.

The  Minnesota Real Estate Team is dedicated to solving the Foreclosure crisis one homeowner at a time.

Technorati Tags: Avoid Foreclosure, Foreclosures, HAFA, HAMP, Home affordability, Making Home AFfordable, Short Sale Seminar, Short Sales