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Foreclosure Fraud

WHAT IS A REAL ESTATE SHORT SALE?

A short sale is the sale of a property, with the permission of the creditors (lenders), for less than what is owed on it. Short sales are done all the time and we are seeing even more of them now due to so many adjustable rate mortgages adjusting.

A short sale simply means that someone is willing to settle for less than what they originally anticipated. It's part of business. All lenders know that they will not win all the time. Risk and loss of capital is an anticipated cost in the lending industry. Changing economic conditions, conflicts, and Mother Nature are among some of the many causes of unforeseen situations that turn good lending contracts into bad. In the context of foreclosure on secured assets, a short sale occurs when debtors agree to settle their liens for a known amount of money as opposed to taking a chance at auction. Auction prices are often unpredictable and usually greatly discounted. Many lenders are willing to mitigate further risk of loss by making deals before auction. Bad debt is sold by lenders all the time. For instance, there is a huge market for unsecured credit card debt that is sold for pennies on the dollar to collection agencies. That's self-effectuated short sales. Lenders are more than happy to discuss resolution of aged debt. Their business is to lend capital, not dispose of foreclosed assets.

HOW CAN EVERYONE WIN?

Bad feelings are often associated with respect to people making money over the misfortune of others. There are countless scams in the real estate industry that prey on vulnerable people. These scammers rush in and get out quickly. They don't build long term viable businesses that are good for a community. Contrary to what many think, there does not have to be a big loser in order to make money in the foreclosure business. It is a matter of choice. A valuable service can be provided that benefits both the property owner and lenders. People with predator mentality do not last long in this business.

Undoubtedly, the issues leading up to foreclosure are stressful and potentially volatile for all parties. Unforeseen underlying problems often exist. A professional in the foreclosure business mediates a settlement that all parties can move on. In a short sale, the lender has agreed to settle the matter without further claims, and the property owner clears their obligations without the lingering negative effects of a foreclosure and subsequent garnishment of additional monies that auction did not bring. The professional will be thanked by all of the parties involved.

WHAT'S IN IT FOR real estate brokers?

Knowledge of pre-foreclosure investing can greatly expand a real estate broker's earning potential. In today's markets, it is critical to understand properties in foreclosure.

The benefit of becoming well versed in foreclosure is being one of the few who are able to understand such transactions. Most real estate brokers do not want to work with or do not understand such listings. Because of this, it is easier to directly obtain listings or obtain listings referred by other real estate brokers. Many successful careers have been made out of this misunderstood market segment.

WHAT'S IN IT FOR MORTGAGE BROKERS?

Mortgage brokers are usually the first ones to know when a person is unable to keep up with mortgage payments. The first impulse of homeowners in such a situation is to refinance. Often it is the case that the homeowner is not "re-financeable". Mortgage brokers well versed in foreclosure and short sales can offer the homeowner the alternative of selling the house even if the property is over-mortgaged. This way the homeowner avoids being foreclosed and the mortgage broker obtains the property at a good price. Later, when the homeowner is ready, the mortgage broker can finance the homeowner when buying a new home.

WHAT'S IN IT FOR REAL ESTATE INVESTORS?

Knowledge of short sale investing gives the investor an edge in the highly competitive real estate market. Investing is all about getting an edge on the competition and making healthy profits. For the investor willing to do the groundwork, profits can be made without putting any of one's own funds or credit at risk.

Pre-foreclosure investing is one of the best-kept secrets in the real estate financing market today. Dominating short sales is an essential skill for pre-foreclosure investing. This kind of investment is not a convoluted get-rich-quick scheme based on optimized hypothetical markets. Short sales practices have been here since mortgages were invented by the Babylonians more than 4000 years ago. Deals are everywhere for those who are trained to identify them. Short-sales practitioners will always be needed as an alternative to expensive and risky foreclosure proceedings. Short sales acquisition strategies work best on over-mortgaged properties. And guess what, there is a plethora of over-mortgaged properties in almost every market on the West Coast.

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◦	Washington Votes to Increase Foreclosures.
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