BrokerIPTV Real Estate News and Videos

Alternatives to foreclosures, short sales and land trusts

Mark Eibner BrokerIPTV: Well, we are here today with Jonathan Goodman with Frascona, Joiner, Goodman, and Greenstein and as always John, it is a pleasure to have you here in BrokerIPTV.

Jonathan Goodman: Thank you Mark.

Mark Eibner: And one of the subjects I called you up to talk about... we all have heard a lot of things about foreclosures and what I am really seeing a lot of as a broker is short sale transactions or short pay off transactions and I know all the brokers have heard about them, but maybe you can explain to us really what is a short pay off from legal lingo? What is a short pay off transaction? <more>

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BrokerIPTV: Today we are talking with John Goodman, real estate attorney. We appreciate you being here

Jon Goodman: Thanks for having me.

BrokerIPTV: One of the things I got to thinking about with current market conditions are you busier or not so busy?

Jon Goodman: We are busier, but the work isn't as fun as it used to be. There is lot of chaos out there and when there is chaos, people need lawyers. People sniping at each other more, but we are quite busy.

BrokerIPTV: All right, well this topic is about fraud and I want to know how big of a problem is mortgage fraud, I think I know the answer, but I would like to hear from you?

Jon Goodman: I think mortgage fraud is a big problem. Nobody knows how big a problem until we hit the bottom. Mortgage fraud doesnt tend to be detected until loans go into default and remains to be seen how many more mortgages will go into fault, but it is a big problem, it is very easy to guess that somewhere around 5%, say a residential mortgages are tainted by mortgage fraud.

BrokerIPTV: And because of the current market conditions, have we seen more which fraud go like this?

Jon Goodman: We have seen the revelation of mortgage fraud escalate, yes. In August of 2007, the lending industry had an awakening and had really cracked down and so I don't think there is a lot of new mortgage fraud going on in the system, but there is lots of mortgage fraud being reviled.

BrokerIPTV: About types?

Jon Goodman: There are lots of different types of mortgage fraud. One type is occupancy fraud, another type is lying about income and one my favorite types of mortgage fraud is what I called evaluation loan fraud. Where other people might call appraisal loan fraud, where people are faking the prices of properties, they are artificially inflating them to induce lenders to loan more against the property than the otherwise would.

BrokerIPTV: I am going to tough on a occupancy fraud, because when I was read around and look at it is statistics and even I talk that the revelation that occupancy fraud is may be comprising 1/5th of the fraud out there and it is something as simple as, yes I have every intention of buying this house as my primary residence, when they did, they were making it for investment, but they led everyone to believe it was going to be primary residence. To me that almost seem like the easiest type of fraud to pass by, am I correct?

Jon Goodman: Yes, it easiest because it is just making a representation on a form, its also culturally the easiest, it sort of classic wink-wink, why-why kind of lie that a lot of people have been making and for lending industry has been turning a blinds eye to that.

BrokerIPTV: How good for the mortgage industry?

Jon Goodman: Well, in Colorado I think a year from now, I think things will be better. It might get worse before then, but I think Colorado is a little bit ahead of the curve and Colorado did not get puffed up as much as some other places. So, I am optimistic about Colorado in a year from the rest of the country, only time will tell, yes.

BrokerIPTV: Jon, thanks, great information, I appreciate it.

Jon Goodman: Thank you.

BrokerIPTV: Today we are talking with Jon Goodman, real estate attorney. Jon thanks for being with us I appreciate that.

Jon Goodman: Thanks for having me.

BrokerIPTV: You know these are interesting times and I want to talk about short sales, because they seems to be the topic around the water crew that quite a bit of real estate offices among consumers, it has the short sale become the ugliest of the possible transaction out there?

Jon Goodman: Its a quite a burden especially for broker, especially for listing brokers put together. What I tell my listing broker clients is if you are busy as you want to be handling got ready transaction, it is great, but some broker aren't as busy as they want to be and so they have to go through the hassle of trying put short sales together.

BrokerIPTV: Why is it that they have become specifically short sales more and more difficult?

Jon Goodman: Well, in some ways I think they have gotten little easier, but they have gotten more difficult for two reasons. One of the reasons they have got more difficult is, lenders have been getting more aggressive about trying to create auction like dynamics. They don't get an offering and then just focus on one offer, they want the listing broker to bring in several offers and try and create competition between those buyers to drive the price up. The second reason is the lenders just aren't staffed up enough to deal with these things and so the file languish it is hard to get attention get deal actually close.

BrokerIPTV: So, Jon would it be better if the buyers out there just said listen, may be we got to look at just properties that went already to foreclosure, because it is going to be less painful, easier process, less time consuming? Jon Goodman: It depends on the needs of that buyer, there are some buyers who will lock into a property, want that property and will not want to wait for the property, because its foreclosure process, it can take a while. Also, once a property goes through the foreclosure process the property is general exposed to the market and that buyers competing against other buyers. If a buyer wants to go to the head of the line, if they will and they are patience enough, a short pay might be a good way for that buyer to go.

BrokerIPTV: Alright, best advice to stay out of trouble both the seller and the agent, or the buyer for that matter?

Jon Goodman: When I advice listing brokers contemplating a short sale, I tell them to look for 5 things. One of them is they got to have a seller who deadly pride and as Bill Gates is going to get a short sale, if a lender is going to ask the Bill Gates to bring money to the closing to make up the short fall. You need a seller who is behind in their mortgage. You need a contract lenders do not consider these things hypothetically. You need to have patience buyer and you need to have a seller who has some compiling reason to move.

BrokerIPTV: Yeah, okay, its great and in for the consumer, who is thinking about buying, best advice?

Jon Goodman: The consumer is work with the real estate broker who is sophisticated enough to pull this things off, at least they are tricky transaction, there is a lot of real estate brokers out there who really know their way around shot pace, but there is a lot who don't and you like to work with somebody who is experienced.

BrokerIPTV: I did tell I was going to ask this, but I will throw it in, how do you feel about 3rd parity companies involved?

Jon Goodman: That's a complicated topic. I represent at least one of those 3rd party companies and of course there are very honorable and well intentional about [Inaudible], but there are a lot of short with things out there and there is lot of bumble about there and they cause a lot of problems.

BrokerIPTV: Jon good advice, I appreciate it, thank you.

Jon Goodman: Thank you.

If you lost a home to foreclosure last year or paid mortgage insurance premiums, there is some good news. Congress enacted laws in late 2007 to allow deduction of some mortgage insurance premiums. This could amount to a tax break of up to $350. The foreclosure tax break applies to all taxpayers who were granted forgiveness of mortgage debt. Previously, this amount was fully taxable and could have run into the tens of thousands of dollars.

http://www.businessweek.com/ap/financialnews/D8U6GH5O0.htm

IPTV January 2008 NewsReel

Denver is 1 of Only 12 of the nations 50 Metropolitan areas have a high risk of price declines, according to the PMI Mortgage Insurance companys Winter 2008 Market Risk index. This index is based on the 3rd quarter Office of Federal Housing Oversight data, and ranks the 50 largest metropolitan areas according to the likelihood in price declines. 12 of these metropolitan areas have a 1% or less risk of price declines. Areas that had the highest price run-ups in recent years are at highest risk of price deterioration.

http://www.rockymountainnews.com/news/2008/jan/16/metro-area-home-values-likely-hold/

If you lost a home to foreclosure last year or paid mortgage insurance premiums, there is some good news. Congress enacted laws in late 2007 to allow deduction of some mortgage insurance premiums. This could amount to a tax break of up to $350. The foreclosure tax break applies to all taxpayers who were granted forgiveness of mortgage debt. Previously, this amount was fully taxable and could have run into the tens of thousands of dollars.

http://www.businessweek.com/ap/financialnews/D8U6GH5O0.htm

On the subprime mortgage crisis front, Bank of America has announced a deal where they will buy the troubled Countrywide Financial for $4.1 billion dollars. This will make Bank of America the nations largest mortgage lender and will provide much needed relief to the largest independent mortgage banker. While this acquisition is a major step in solving the mortgage meltdown, more failures and acquisitions are anticipated in the coming months.

http://www.msnbc.msn.com/id/22606833

Consumer Confidence showed a slight increase in December, according to the Conference Board. Consumers also believe that there will be more jobs in the future and that their personal incomes will be higher in the coming months. While these are bright spots, overall consumer sentiment seems to point to a slowing of the economy. The Conference Board developed and reports monthly on consumer confidence, as well as the Leading Economic Indicators report, which is expected at the end of January.

http://www.conference-board.org/economics/consumerconfidence.cfm

First American Corporation, one of the largest national title insurers, announced plans to spin off its financial services business. It also announced a 4th quarter loss, due mainly to costs from the California wildfires. They also announced plans to aggressively manage employee costs, and are looking to move processing jobs to counties like India and the Phillipines. Chief Financial Officer Frank MacMahon said that up to 40% of their workforce may be moved offshore.

http://www.reuters.com/article/bankingFinancial/idUSBNG6641820080115

In Technology news, Google has announced plans for expanding its offerings for the IPhone. Google introduced access to mail, calendars, search, and Google Reader last month and unveiled additional enhancements that allow better navigation and easier user interface, using the iPhone touch screen. Google gadgets are now available for the iPhone as well. Google is moving forward with the Android mobile platform, and phones using this platform are expected later this year.

http://www.internetnews.com/wireless/article.php/3721541

A 40 hour laptop battery? Researcher at Stanford Universitys Department of Materials Science and Engineering have found a way to give rechargeable lithium ion batteries as much as 10 times more charge. These batteries are used from everything from iPods to laptops. A patent has been filed for the technology and negotiations are ongoing with battery manufacturers. Yi Cui, assistant professor, states,