Folsom CA -Should you walk away or should you stay? Here is how to determine whether or not you should walk away from your home. Because of the decline in the nationwide housing market, I doubt that your home is worth what you paid for it.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

First, determine the current market value of your home. Talk to a realtor. They will give you a market analysis, based on what other homes similar to yours are selling for.

For example, we recently helped a home seller who had paid around $700,000 for his home. We thought the home was worth about $400,000. His mortgage payment was a little over $4500 a month.

When you add in the property taxes and insurance his total monthly payment was around $5,300 a month. Similar homes were renting for around $2,500 a month.

If you compared rental payments, he was way upside down on his home. We ran the numbers and saw that he was on track to repay $1,697,000 over the life of loan.

Next, let’s look at how much he would save by short selling and renting a similar house for two years. First, he would be saving $2500 a month by renting a similar home. In addition when he bought a similar home for $400,000 then he would repay around $934,000 over 30 years.

$1,697,000 minus $934,000 is $763,000. That means he would save $763,000 in mortgage payments over the next 30 years. What can you do with $763,000?

Would it make retirement easier? You probably could completely pay for 3-4 kid’s college tuition. Most people could put 6-7 kids thru college with that kind of money.

Or, he could retire a few years early. Enjoy a little bit more of the “Golden Years.”

It appears that he would be doing better for himself and his family by short selling the house. The bank was probably bailed out by the American Taxpayers. If he pays taxes, then he helped out with that bailout.

This is why I recommend that you look at all the numbers when you are trying to determine whether or not you should walk away. How much money will you be repaying over the life of the loan? Just Google “amortization calculator” and run the numbers.

Add up how much money you would be paying back with your current home and compare it to how much you would pay if you short sold, rented for two years, and bought another home after that.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jeff@hoffmanrealtygroup.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at (916) 983-7653.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Folsom Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this, Jeff Hoffman.

Jeff is a Real Estate Broker at Hoffman Realty Group, Inc..

Phone: (916) 983-7653. jeff@hoffmanrealtygroup.com.

Assisting Home Owners in Distress

Jeff Hoffman specializes in loan modification assistance and short sales in Folsom California. Folsom Loan Modification Help, Folsom Short Sales. Folsom Short Sale Realtor. El Dorado Hills Loan Modification Help, El Dorado Hills Short Sales. El Dorado Hills Short Sale Realtor. Short Sale Realtor. Folsom CA Short Sales. Folsom Realtor.

Copyright 2010 This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Hoffman’s personal views and do not reflect the views of Hoffman Realty Group, Inc.. This information on Folsom Short Sales: Walk Away or Stay? is provided as a courtesy to our viewers to help them make informed decisions.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

The banks are taking pause over allegations of forged documents and signatures. One news story is titled "Bank exec checked only date on foreclosure docs."   According to the story in USA Today, a Wells Fargo acknowledged that he signed foreclosure documents without verifying all the information.

Many fear that homeowners could use these developments to contest and stop foreclosures. An attorney that we know said that lawyers could put run ads saying "Did your lender wrongfully foreclose on you?" They could expect calls from homeowners in foreclosure and people who had already lost their home to foreclosure.

Because of these problems, some title companies have decided to stop writing policies on foreclosed homes.  According to the story in USA Today, Old Republic Title Insurance will no longer write new policies for homes foreclosed upon by JP Morgan Chase.

These title companies guarantee the title for the new homeowner. If the foreclosure were to be reversed they would be stuck in a bad place, both financially and legally. "I want my house back!", the foreclosed homeowner demands. "You better defend these legal problems. After all, you guaranteed that this would be my house!", howls the new homeowner.

But, what started this fiasco? It all started because the so called lenders do not own the loans they are handling. They are actually working as a "servicer" on behalf of the real owners of the loan. Who owns the loan?

All sorts of different entities. Uncle Sam has ownership interest thru ownership of Fannie Mae and Freddie Mac. Those two entities combined own around 50-60% of all US Mortgages.

They purchase a mortgage from a company like Bank of America. Because Bank of America no longer owns the mortgage, they are now a "servicer." They "service" the loan for Fannie Mae. That means they accept payments, do all the accounting, manage escrow accounts, and all the other things involved with managing a loan.

But, that also means they handle problems when someone stops paying. It's their job to negotiate loan modifications. It is their job to manage the foreclosure process. The underlying problem is that they get paid the same money, whether they do a great job or a lousy job.

There is no incentive to do a better job. The actual owners of the loans hardly ever follow up and review their files. They don't realize that the servicers are doing a lousy job on many different things. As a result the owners of the loans are losing money. But, they don't realize it.

A source who wants to remain unnamed alleges that the banks have had problems with forged documents for over 8 years. Here is his explanation of what is happening.

"Let me give you a scenario. ABC Bank loans money to Joe Homeowners. ABC Bank then wants to get their money back to relend to someone else.

So they sell their loan to Fannie Mae. But, they continue to collect the payments and handle the tax escrow. The forward all payments to Fannie Mae, minus a small fee to themselves for the servicing work.

For one reason or another Fannie Mae decides to have another lender take over for them. The new bank, let's call it XYZ Bank starts collecting the payments. Then the homeowners stop paying.

Here's where it gets tricky. XYZ has to prove they have the right to foreclose. But, the original mortgage was given to ABC Bank. So technically only ABC has the right to foreclose. ABC Bank is no longer in business. So XYZ can't really prove they have the right to foreclose.

But, don't tell that to Fannie Mae, the owner of the loan. XYZ has to foreclose. They use a legal loophole that allows them to do so. They often file an affidavit with the court stating that they own the loan.

I saw these affidavits used in foreclosure lawsuits 8 years ago. The problem starts when the employees signing these affidavits don't actually research the files. In one news story in a Bank of America exec acknowledged that she signed up to 8,000 foreclosure documents a month and normally did not read them.

In other words their foreclosure case was based on faulty logic.  I am not going to go into all the issues, but there are a lot of issues there. I've seen homeowners get a loan from ABC Bank. They stop paying on their mortgage.

Several months later they get a foreclosure filing. But, is ABC Bank foreclosing on them? No! XYZ Bank is foreclosing on them. Even more crazy is that XYZ has no paper trail to prove they own the loan. Nothing is provided. It's insane!

That's what my unnamed source told me about this situation. It sounds kind of crazy. I just don't know how these banks got away with this for so long. Makes me wonder what would happen if we reversed the scenario. What would the hypothetical XYZ bank think if I tried to cash a check that was written from an ABC Bank checking account? What do you think would happen? Leave your comment in the comments section below.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jeff@hoffmanrealtygroup.com.  I will contact you for a  free consultation.

When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (916) 983-7653.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Folsom Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender.  Click here to request a copy.

Phone: (916) 983-7653.
jeff@hoffmanrealtygroup.com

Jeff Hoffman specializes in loan modification assistance and short sales in Folsom California. Folsom Loan Modification Help, Folsom Short Sales. Folsom Short Sale Realtor. El Dorado Hills Loan Modification Help, El Dorado Hills Short Sales. El Dorado Hills Short Sale Realtor. Short Sale Realtor. Folsom CA Short Sales. Folsom Realtor.

In California, the all signs suggest that California is ever so slowly coming out of the recession, but we'll likely see a continued sluggish economy until next year.  When we do start to pull out it will likely be based on education, healthcare, exports and technology and to a lesser extent growth in the battered residential construction sector.

In other related news lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The increase in home repossessions came even as the number of properties entering the foreclosure process slowed for the seventh month in a row, foreclosure listing firm RealtyTrac Inc. said Thursday.

In all, banks repossessed 95,364 properties last month, up 3 percent from July and an increase of 25 percent from August 2009.

August makes the ninth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. The previous high was in May.

Among states, Nevada posted the highest foreclosure rate last month, with one in every 84 households receiving a foreclosure notice. That's 4.5 times the national average.

Rounding out the top 10 states with the highest foreclosure rate in August were: Florida, Arizona, California, Idaho, Utah, Georgia, Michigan, Illinois and Hawaii.

In Folsom we currently have 685 homes in various stages of Foreclosure.