BrokerIPTV : We are talking with Jon Goodman today, a real-estate attorney Frascona, Joiner, Goodman and Greenstein, P.C. who specializes in foreclosure. Jon it seems like everybody wants a little piece of the pie in the foreclosure business. You obviously have the owner who is trying to get out from underneath the distress. You have got investor who wants to pickup the property at good price, you have got the lender who wants their money and then finally you have got the real-estate agents who is trying to figure out how to get their cut. Are you seeing a lot of real-estate agents jumping into the foreclosure band wagon market?
Jon Goodman: Yes, volume garden variety sales is down and the real-estate brokers are trying to figure out how to make money in the slow market and they know that one of the opportunities is to play in the market as investors, but also help people who are going through the foreclosure process and perhaps help that owner realize on the equity out of their property.
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BrokerIPTV : Now, agents for a long time never really played in the foreclosure market, because there really wasnt a big demand for it, but now agents are having to learn this business. Whats the key element they should know?
Jon Goodman: Well, there are two key elements that they should know. One key element is that in 2006 the Colorado legislature pass something called the foreclosure protection act. It was designed to discourage predatory practices against people in foreclosures. So, when real-estate brokers are helping people in foreclosure, they need to have a good understanding of the foreclosure protection act. The other key thing that real-estate brokers have to have a sense of this is that, the law will be changing January 1, 2008 in the foreclosure laws will be changing essentially taking away the owners redemption rights, taking that time moving prior to the foreclosure sale and creating a longer cure period.
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BrokerIPTV : Lets talk about that longer cure period in 2008. its now like four months. I would think thats advantage realtor, because now he feels like he has got some more time, possibly or no?
Jon Goodman: The good news about the new law is the realtor has more time to work out. What we would call a short pay transaction or some other workout transaction, but the bad news is they have more time to workout the short-sale transaction. The concept is that some times the amount of time it takes to get something done, expands into the time you have to do it and only time will tell one of the disadvantages of the new system is, is it in our current system the owner has two opportunities to pull the iron out of the fire and if they dont get their act together by the foreclosure sale. Sometimes the foreclosure sales snaps the owner out of their denial, the property goes to foreclosure sale and then the owner gets realistic about lowering the price of the property to meet the market and that might actually help the real-estate broker get a commission generating transaction.
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BrokerIPTV : What are some snags in the process of dealing with the lender or the bank in this instance? Dealing with the potential investor for real-estate agents? I have heard some horror stories about not getting paid, not getting their due commission, bank tying up the sale forever, things of that nature.
Jon Goodman: Ok, one of the biggest problems for real-estate broker dealing with situation it just dealing with the under-staff nature, the bureaucracy on the lender side. Its very hard for real-estate broker to buss through that voice messaging system and they like to actually get somebody who can pay attention and has enough time to make intelligent decision to accept less then the lender though to facilitate a short-sale, I would say thats the biggest problem. Another problem is that lenders sometime under appreciate what value the real-estate broker brings to the transaction and so they put pressure on the real-estate brokers to shave their commissions off. Then I would say a third problem is managing the expectations of the seller. Real-estate brokers are like any other professional. Real-estate brokers are trying to figure out how best to convert their time into money and real-estate brokers, there are some who have a lot of specification about short pays and are very good at finding the ones that have a higher likelihood to close, but there are some real-estate brokers who naively blunder into the process and end-up spinning their wheels quite a bit.
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BrokerIPTV : Final question. It seems like the people who are doing well and I know this is your group is the attorneys in the process are attorneys who are specializing in this foreclosure practice bombarded with business right now?
Jon Goodman: The different ways lawyers get involve in the business, we get involved in the business representing lenders helping or representing lenders who are foreclosing, but we also get in the business helping investors and owner who have been foreclosure upon and yes. We are bombarded with business, but one of the thing people have to keep in mind
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