(What follows is a hypothetical scenario. It is based upon at least 50 recent interviews with clients involved in distressed housing transactions as well as
After reading news articles and talking with Realtors and distressed borrowers, it has become more and more apparent that the federal government’s HAMP modification program
Trying to select which distressed housing option you should pursue? Surprisingly, under certain circumstances, permitting the bank to foreclose may be the best option.
Why would an Oregon attorney nearing retirement, choose to leave his comfortable firm, open a solo real estate practice, and start a website and blog? Well, they say sharks have to keep moving to stay alive….
Fannie Mae, the secondary mortgage giant, is targeting certain borrowers, whom they say, are voluntarily electing to go into foreclosure rather than continue paying on a loan that may be a hundred thousand dollars or more over the value of their home today. Fannie calls these “strategic defaults’ and vows to either go after them personally, refuse to buy their future housing loans for seven or more years, or do both. Apparently, Fannie has forgotten that the very banks who sold them the paper created many of these exotic loan products, ignored borrowers’ credit, and basically helped create our credit mess in the first place.
In today’s real estate marketplace, credit is driving all lending decisions. And the bar keeps getting raised. But you can’t fix it if you don’t know it’s broken – or how badly it’s broken. You need to know what’s on your credit report and what your credit score is. Only then can you get started fixing it.
For many years, Oregon has had a seller property disclosure law. It requires owners of 1 to 4 family dwellings to disclose to buyers certain important information about the property being sold. It does not require sellers to disclose what they don’t know – just what they do know. This seems only fair. However, Oregon’s property disclosure law expressly excludes banks. When the law was first created years ago, the exclusion made sense. But today, with bank REOs comprising one of the largest segments of all sales transactions, consumers need a minimal level of protection. If sellers of 1 to 4 family homes cannot hide behind “caveat emptor” (buyer beware) why should banks?
Oregon legislative drafting can be like making sausage – you don’t want to watch the process. A case in point is the Legislature’s attempt to deal with homeowners’ promissory note liability that can survive the foreclosure of certain mortgages on distressed housing. The sausages were House Bills 3004 and 3656 – both attempted to deal with “piggy-back” loans – those 80% and 20% mortgages stacked on top of each other. The bills were enacted in 2009 and 2010, respectively. In both cases the Legislature came up short. Who suffers? The Oregon homeowner, of course. No wonder they’re distressed.
