During the Clinton years, it was, “it’s the economy, stupid!” Now, without doubt, “it’s the mortgages, stupid!” Without a major fix, the global economic meltdown, most experts say, will only grow worse.
And, if you think that is not possible, just check out the value of GM shares! They’re so weak, you can almost trade in your current GM vehicle for the entire company!

Individual banks have been lining up to announce they have come up with plans to help people who are on the verge of foreclosure. These plans don’t go far enough or help enough people.

The Government announced yesterday, a “plan to ease mortgage payments for troubled borrowers through finance giants Fannie Mae and Freddie Mac,” according to Reuters.

But even this is probably not enough.

A New York Times report paints a stark and scary picture of the housing situation in the nation at the moment. The article quotes a real estate data company’s findings that 7.6 million homes in the U.S. are “underwater” (the new term for negative equity)–and more than 2 million more are about to fall off a cliff.

And, one poor California town, Mountain House, has the dubious distinction of having about 90 percent of all its homeowners owing more on their mortgages than the actual worth of their houses!

Clearly, the government must do more…a lot more…to stop these homeowners from, understandably, walking away from their devaluing homes.

The solution will by its very nature be unfair to those who borrowed wisely and are continuing to pay their mortgages. But, when a town has 90 percent of its home owners in negative equity–with more towns to surely follow–fairness becomes less important than being practical.

Whether you voted for Barack Obama or not, you have to almost feel sorry for the guy, taking office with the expectation that he will save the U.S.—the world—from further economic ruin.

A new AP poll just out shows 7 in 10 people–an amazing 72 percent– “voice confidence the president-elect will make the changes needed to revive the stalling economy.” 44 percent of Republicans reportedly feel the same way!

But “Superman” doesn’t fly into Washington to save the nation till January 20th and many bad things can happen till then.

That is why Bushman, if he has any sense of legacy, will use the same awesome executive powers he used to subvert the Constitution to help jolt the economy.

A lame-duck Congress was a possibility…but leaders there don’t feel much like calling one if Bushman is going to stand in the way.

As the saying goes—-lead, or get out of the way! That’s a hint, George.

Photo Credit: DifferentObamas

If you're new here, you may want to subscribe to our RSS feed or sign up for our real estate social network. Thanks for visiting!

Tags: fannie, foreclosure, foreclosure rescue, freddie, housing rescue, mortgage, paulson

The BiggerPockets Real Estate Investing for Real News Blog is officially the first media outlet to announce the arrival of a new website dedicated to helping dogs and cats victimized by foreclosure.

Abandoned Animals of Foreclosure: Help Is On The Way

I have been working in the foreclosure market since I began investing in 1999 and I have run into animals affected by foreclosure. Some were going to be dropped off at shelters while others ended up being left behind in the house…Abandoned.

In fact, last year a homeowner told me they were planning to take their puppy to the pound after I left. Needless to say, I didn’t leave alone. I fostered that puppy for two months until I found it a new home. That’s just me. I have known that animals are abandoned at times but, I never thought I could do much to prevent it and certainly not enough to make a big difference.

In mid-August, I got an email from a woman I used to work with. It contained a link to an article published by the Dallas Morning News. It reported on the growing number of pets that are being abandoned by their owners as a result of losing their houses to foreclosure. It said the local animal shelters have seen an increase of foreclosure homeowners dropping their dogs and cats off with the hope that they will be adopted. An official with the Dallas area SPCA said it has been a growing problem and appears to be getting worse.

I read the article several times and I continued thinking about it for several days.

Two weeks ago… It hit me! I hope that I have come up with a way to make a BIG difference by saving thousands of animals. I have been hard at work transforming my idea into a reality. It is a work in progress and will likely be non-stop updating but, I am hoping that my idea will demonstrate how one person is capable of saving thousands of dogs, cats and other household pets that are or will be affected by foreclosure.

Introducing… HelpForeclosurePets.com

I have summarized how HelpForeclosurePets.com will be able to save thousands of foreclosure pets in Dallas – Fort Worth and maybe on a National level as well.

• A flyer will be mailed to homeowner’s currently in foreclosure in the Dallas - Fort Worth area. It will contain information posted on the website Help Foreclosure Pets.com such as, where owners can turn to for help with their pets like City Shelters, “No-Kill” Shelters, Temporary Boarding, Fosters and Adoption options.
• The site’s main feature is the Pet Connection Board. It will connect pet owners with others who may be able to save their pet by fostering, boarding or adopting foreclosure pets in need.
• Pet owners needing help are encouraged to post information about their pet, what type of situation they feel would be best for their pet and their contact information.
• In order for this concept to work, people interested or able to foster, provide boarding or adopt need to post their contact information on the Pet Connection Board, along with how they are able to help.
• The website also includes rescue information for specific breeds and other organizations & clubs that may be able to help.
• The website will be continuously updated with links to other sites that offer a service to needy animals.
• Help Foreclosure Pets needs donations from individual and corporate sponsors, to help save these voiceless animals. Those sponsoring the mailings will be listed on the flyers, envelopes as well as receive free banner advertising on the web site.
• In order to send a flyer to over 3,000 homeowners in foreclosure every month, a complete list is needed and in Dallas the list must be purchased.

I am happy to announce that Help Foreclosure Pets has its first major sponsor! Foreclosure Listing Service of Addison, Texas, will generously donate monthly foreclosure lists covering four Counties in North Texas.

A big “Thank You” to George Roddy Senior, President and owner of Foreclosure Listing Service.

I hope that anyone interested in saving these animals will contact Help Foreclosure Pets or other organizations dedicated to the same.

One of my mottos with DFW Mentor has been, “Investors Helping Investors.”
Help Foreclosure Pets is “My” way of providing a voice for dogs, cats and other innocent family pets needing help.

The motto of Help Foreclosure Pets is… “People Helping…Foreclosure Pets.”

Tags: abandoned pets, foreclosure, foreclosure pets, foreclosure rescue, Foreclosures

Okay I admit it… I used to be an active “chatter” in a local chat room on Yahoo. It was a room where many people from the Dallas area met up to…Chat. Many of us had met outside of the cyber room at local restaurants, clubs and the like.

Yahoo had recently shut down a lot of the member created chat rooms in the wake of all the negativity and sponsor lawsuits. Lets face it…The public opinion of chat rooms was not good. I was a virtual unknown person to most chatters because I stayed away from the “in person” socials but, that all changed one morning. Here is what happened:

A room regular was talking on “voice” and venting about his house early one morning and I was listening a few steps away making my breakfast. This is what “Monte” said, “I got this letter from some attorney who says he is going to sell my house! How does he think he can do that? He doesn’t own MY house so, how can he sell MY house?” My head spun around so fast that I almost gave myself whiplash. I ran to the computer and grabbed the microphone to speak in the room and here is what was said…

Jim: Monte, what is the name of the law firm that sent you that letter?
Monte: Uhmmm, it says ummm.. Barnett, Burke & Associates.
Jim: Would that be BARRETT Burke?
Monte: Yeah, that’s it.
Jim: Monte, email me your number. I need to talk to you NOW.
(That law firm processes nearly 40% of all foreclosures in the state of Texas)

Within a few minutes I was on the phone with him and I told him that I was a local foreclosure expert and taught classes at Foreclosure Listing Service in Addison. I told him I needed to meet with him and his wife right away because, the letter he got was his notice that his house was in foreclosure and he had less than three weeks left before it would go to the auction. He was shocked and claimed he had no idea (I didn’t know how he could be shocked after missing nine payments). Two hours later I was at his house and explained all about the foreclosure process to him and his wife and what options he may have to save his house.

I remember how bad I felt while explaining the situation because his wife just sat there, staring at me with her eyes wide open, not able to say a word. She had no idea the mortgage was past due at all. She had not seen any letters from the lender or taken any call from them. Monte never told her early on and the situation only got worse as the missed payments added up.

After going over all of the possible solutions, I decided that bankruptcy was likely the best option for them and they agreed. I made a call to Hariett Langston, a friend of mine who is a bankruptcy lawyer in Dallas. Monte and his wife were overwhelmed with the situation and asked if I would go with them when they met with the attorney and I told them I would.

We met with Hariett that same week and everything appeared to be set to stop the foreclosure. All Monte needed to do was pay the bankruptcy filing fee.

A week before the foreclosure sale I went to their house and was a bit surprised to learn that he had not paid the filing fee. I asked him when he was going to file and he just shook his head and said he didn’t know. I remember pausing for a few seconds and it dawned on me why he had not filed. I said, “Monte… You don’t have the money to file, do you?” In a very humble manner, he looked down at the floor and shook his head. ($500 was the amount he needed to get the bankruptcy filed)

As I drove home I thought to myself that it would be simple if I just wrote a check for the $500 but, I thought that he really needed to pay something so important himself. I got an idea about that time and sent an email to one of the chat room regulars who organized the chat room socials. I recall stating in that email that online chat rooms have such a negative public image and went on to tell her about Monte, his situation and I asked her if she could set up a fund raising get together. It would be our way of proving that normal, everyday people go to chat rooms and this was a chance to show at least one chat room could do something good. I told her that he only needed $500 and all it would take is $5 here, $10 there and a $20 from a few… $500 could be raised.

She arranged to have a Dallas chat fundraiser social for that coming Saturday night. I called Monte and told him about the fundraiser. He asked me to not do it (his pride was the obstacle) but, I told him that we were going to do it anyway and it would be nice if he attended. He later told me he was so choked up that he couldn’t say anything but, he did finally say he would attend.

I expected a handful of people to show up for the fundraiser but, I was wrong. Much to my surprise… At least 50 to 60 regulars from that chat room showed up and contributed. At the end of the night, ordinary people from a Yahoo chat room donated more than $700 to help save someone from losing their house.

The next day I gave the proceeds to Monte & his wife and they quickly paid the attorney the fee to file their bankruptcy and their house…No…Their “home” was saved.

The story got another interesting twist a few days later. I got a call from a reporter who wrote for a well known local media outlet. They had heard about the fundraiser and thought it was a great community effort story that should be told and asked if I wanted them to write about it.

It took only a few seconds for me to process my answer but, I remember thinking that such publicity would be great for business and my classes would see a boost in attendance. Then I thought about the possibility of other homeowners that would read the story and what would my answer be to them if they contacted me and asked me to do a fundraiser for them as well?

I told the reporter that as wild as the story was, I never expected things to unfold as they did. I told them that I had to pass on their offer because, I had done it to help someone and wouldn’t feel right about profiting off of someone else’s stressful and humbling foreclosure experience. They understood and that was the end of it.

I have to admit . . . Of all the positive experiences I have had in real estate, helping Monte might rank as number one. What stands out in my mind was the fact that so many people pitched in to help save a family from losing their home and they did it for someone most had never met or only knew of by screen name…That’s what made it so great.

This happened in 2005 and two days ago I got a phone call from Monte. He just wanted to give me an update and I was happy to hear they still have their home.

During the call I told him about the reporter. He was surprised I hadn’t told him and more surprised that I turned them down. At the end of the call, Monte told me that three years was long enough and he encouraged me to tell the story of how a bunch of chatters from a Yahoo chat room, came together and did something good.

Thanks Monte.

Tags: bankruptcy, chat room, foreclosure, foreclosure rescue, home owner, NOD

It’s become commonplace to see advertisements of all type promoting some new foreclosure rescue company that is the savior of those in distress and about to lose their home. These companies appear to have all the answers to the distressed homeowners mortgage issues, and for absolutely free, they will save you and get those nasty banks off your back!

Last week I had the great displeasure of learning a bit about the inner workings of such operations, and believe me, they’re not helping anyone but themselves. A client of mine noticed a short sale listing in his neighborhood boasting a price of 130k under the homes tax assessed value, which is pretty incredible. I found it hard to believe the lender had approved that price, since they’re almost certain to do better than that at auction. The home had sold for over one million three years ago and is on the water; it carried 1.3 million in debt, and was listed at just 878k.

My client was very interested in making an offer on this home, so I contacted the agent, and then the foreclosure rescue company (as directed by the agent) that was apparently mediating between the lender and homeowner. I’ve been involved in a few short sales and I’m quite familiar with the process, so I asked the foreclosure co. when the offers would be presented to the lender; I was told, they would not.

He (the company owner) was bold enough to tell me that he would hold all of the offers, and then submit his own offer to the bank for just 500k. Now all of this was being done without the seller’s knowledge, or the listing agents. The foreclosure company was attempting to acquire the property for ½ price, then “accept” an offer from one of the sellers for over 300k more. The idea was apparently to manipulate the escrow company into some type of a dual close with two sets of docs (the lender only seeing one set), which would never happen at an honest escrow company.

Now some of you may even feel this is an ingenious way to make a fortune, and I have to disagree; there are several things that concern me here (aside from the overall dishonesty of it all). Mainly that the seller is being mislead, and believes the offer she accepted and signed is to be presented to the lender, and the listing agent (after I informed him of what is happening) is turning a blind eye to whats going on, and believes that as long as he submits the offer she accepted to escrow, his job is complete. Also, the agents that are spending their time and money showing this property and writing these offers are doing so in the belief their offers will be submitted to the bank, which is exactly what the listing says. That is a lie.

They also lead people to believe the lender has approved the listing price, when in fact they have not (there are of course too many MLS rule violations to even get into for the agents participating in this process).

Then there are the major issues. The seller will be reported to the IRS for capital gains tax purposes by the lender; if you borrow one million, and the lender accepts payment of just 500k, then in the eyes of Uncle Sam, you made 500k on the deal. So that seller may end up on the tax hook for the money that went into the pocket of the “rescue” company. Also, the lender may still pursue the sellers for the money owed, and attach liens to other properties or assets they may have.

Many company’s do make legitimate profit buying homes from lenders at lowball prices, and selling them for profit. Theres not a thing in the world wrong with that. The types of company’s I’ve just described are attempting to play the middle, and use no money of their own. They are creating additional problems for people already in distress and that is wrong.

So if you are involved in this practice, I beg of you to stop preying on people and destroying lives and making the mortgage crises worse (not that you will listen). The lenders are already going broke, and stealing a little more from them isn’t being a business genius, it’s being a thief. Until people stop viewing the theft of money from banks as a victim-less crime, our economy will continue to suffer.

If you’re a seller, in need of a short sale, contact the bank directly. These sales need to have their approval to move forward or you will never close. You can, if you choose, have your agent deal directly with the lender (you must write a letter of authorization) and submit all offers to them.

The lender will pre-approve a listing price, as well as a commission for the agents involved (it’s typically lower than average commissions). Never go to someone and think you can hand them your problem and they will fix it for free, it simply doesn’t happen that way. If you want it done right, you must do it yourself. If not, then your troubles have only just begun. Don’t fall for the farce of foreclosure rescue.

Tags: foreclosure, foreclosure rescue, foreclosure rescue scam, foreclosure scam, real estate, real-estate-scam

The following information is about what the U.S. Senate is up to. If any of this becomes law, it will have a direct and severe impact on my business.
There are very good and honest investors out there and BiggerPockets has been a great place for new & seasoned investors to get together and let others know how to do things the right and honest way.

• Legislation Expected to be Introduced Soon.
• Measure Likely to be Modeled After Minnesota Law,
• But May Contain Additional Restrictions Harmful to Investors Nationwide

February 22, 2008 (U. S. Senate)

Wisconsin Senator Herb Kohl has announced plans to introduce legislation aimed at curbing the rise of ‘foreclosure rescue scams’ - using a model which may include restrictions that could be harmful to all real estate investors. The measure is likely to contain some or all of the following provisions:

• Ban on leasebacks-to-owners
• Ban on upfront foreclosure consultant fees
• Ban on all “subject to” transactions
• Limitations on an investor’s ability to purchase or take an equity interest in a home in default
• Ban on all advertising related to “Saving Homes from Foreclosure”
• Restrictions on real estate seminars, which could even apply to Real Estate Investor Association meetings

Also noteworthy - in the Minneapolis / HennepinCounty area alone, foreclosures have increased more than five-fold since the 2004 passage of the Minnesota statute.)

On behalf of real estate investors at the national level, the National Association of Responsible Home Rebuilders & Investors (NARHRI) is already tracking this legislation. NARHRI Executive Director John Grant says that NARHRI will offer alternative legislation from the Commonwealth of Virginia, which has the support of the local realtors, lenders, consumer groups, and which recently passed the House unanimously.

NARHRI expects to see intense political pressure for passage of the legislation before members of Congress leave in the fall. NARHRI indicates it will be providing updates on this effort as circumstances warrant.

This is a very serious in my opinion. It is very frustrating to know that there are legitimate, honest and good investors, mentors and teachers that will be affected in a harsh way.

Please, spread the word on this to everyone you know in the business. It is our job to protect our business. If we sit back and say nothing, there will be no voices to be heard and this could actually become law.

Thank you!

Tags: bailout, foreclosure, foreclosure rescue, foreclosure scam, herb kohl, housing, legislation, scams, senate