Foreclosures

Foreclosures piling up with family debt
By MICHAEL MILLER Staff Writer, (609) 463-6712 and SABA ALI
Press of Atlantic City
Published: Thursday, November 16, 2006

CAPE MAY COURT HOUSE — Tammy Garrison nearly lost her childhood home to a sheriff's sale Wednesday, but a postponement gave her a month's reprieve.
The lender foreclosed on this Lower Township home last fall. Garrison said her mother suffered a disabling injury and could not work.

“My father built this house. I grew up here. It is extremely important to me,” she said.

She hopes she can save the home by taking over the mortgage. In the meantime, the auction has been rescheduled for December.

The region is seeing more sheriff's sales. New Jersey is leading the Northeast in the number of foreclosures, according to the real-estate advisory firm Foreclosures
.com. The firm said New Jersey has seen 23,272 foreclosures so far this year, or about 63 percent more than all of last year.

Relatively few of these homes wind up for sale in county courthouses, Cape May County Sheriff John Callinan said.

“So much goes on behind the scenes. The banks negotiate and try to work things out,” he said.

His office has sold 114 Cape May County properties at auction through November compared with 95 all of last year and 91 in 2004. Ocean County, too, has seen more auctions: 150 so far compared with just 99 in all of 2005. In Cumberland County, auctions were up slightly over last year.

Callinan said wildly fluctuating numbers make it hard to gauge trends. But one thing is constant. Each auctioned property has its own story, he said. Occasionally, the property owners attend the auction in the hope that the bid price will exceed the amount owed. Any surplus usually goes to the property owner.

“It's tragic. Some of them have just given up. People sometimes are working on slippery sands. It's a sad thing,” he said.

On Wednesday, a home at 4 E. 11th St. in Ocean City sold for $226,300 in just the second bid.

Ocean County Undersheriff Wayne Rupert said changes in bankruptcy law give homeowners fewer outs, driving more properties to auction.

“Now you can only get one bankruptcy in 12 months. That's made a difference,” he said.

The downturn in the real-estate market has scared off most speculative investors at sheriff's sales.

“It went from competitive to cutthroat. Now the market is starting to drop down,” he said. “Almost all of the properties we've sold have gone back to the bank or lender. The local investors are holding off until values level off. Then they'll start picking them up.”

Pasquale Arcuri is a buying exception. On Wednesday, this waiter from Wildwood attended an auction in Cape May County. His wife had a baby four months ago. Now they are looking to move out of their rental home into their first house. He has become a regular at these weekly auctions.

“I'm just trying to get a small family home at the right price,” he said.

Arcuri said he does not relish the idea of picking up the pieces of someone else's ruined life. But booming property values in Cape May County limit his choices, he said.

“It's a shame these things happen,” he said.

In Cumberland County, finance counselor Lisa Ortiz dedicates most of her time lately to helping families keep their homes off auction rolls.

She works for Affordable Homes of Millville Ecumenical Inc. This nonprofit typically helps first-time buyers find homes. Instead, she has been busier helping people keep theirs.

The organization counseled 52 families, most of which were able to keep from losing their homes, compared to 17 last year, said Donna Turner, the group's director.

Turner said she is growing more dismayed by the changing nature of their mission.

“This is not what we went into the business of homeownership for,” she said.

The organization rehabilitates old houses in Millville and sells them at an affordable rate. It also prepares first-time buyers for the financial responsibility of homeownership. It only counsels homeowners referred to it by banks and mortgage lenders.

Increases in foreclosures usually follow a slowdown in the housing market, a jump in the unemployment rate or spikes in property taxes or energy costs, said Richard Perniciaro. He is an economist and director of the Center for Regional and Business Research at Atlantic Cape Community College.

Lending institutions relaxed some rules, making it easier for buyers to purchase homes but easier to default on mortgages, he said.

Perniciaro said some buyers never consider the associated costs of homeownership such as insurance, property taxes and utility bills.

The typical family that walks through the doors for foreclosure counseling has two incomes and two to three children. They owe $10,000 in credit-card debt and are three months behind in mortgage payments, Turner said. The family uses its credit cards for living expenses and has no real savings, she said.

The situation gets worse when one of the incomes disappears due to a divorce, death or job loss.

Counseling begins with a review of the family's spending and budget. This helps Ortiz build a case to take to the lender so the family can pay down debt while keeping its home.

“The biggest misconception homeowners come to us with is that the bank is after their house. In fact, the bank will do whatever it can to help them repay their loan,” Ortiz said.

The publicly traded mortgage firm Freddie Mac provides several options to borrowers who face foreclosure, spokesman Brad German said. This improves the lender's delinquency rate on loans.

A 2005 company survey found that in more than half of foreclosures, the borrowers never contacted the bank for fear of embarrassment and the ultimately misguided belief they could catch up on their own.

Last year, the Millville nonprofit was able to help 85 percent of referrals keep their homes. This year, that success rate has dropped to 70 percent, Turner said.

Too often, residents in debt wait too long to ask for help, she said.

When that happens, their homes and dreams are put up for auction in lonely courthouses.

Questions and Answers

Ask George & Chuck: Questions from Consumers
by George Stephens & Chuck Jacobus
Realty Times
November 14, 2006


Question (NJ): My girlfriend and I are buying a condo unit in NJ. I am self-employed, and am not on our mortgage application. We want to know how to ensure that the house is equally both of ours and will go fully to the other person should one of us die. Do we put me on the title and deed at closing? Can we do this if I am not on the mortgage app? What effect will this have on us when we get married?

Answer: Since you are not currently married, you and your girl-friend can co-own the condo either as Tenants In Common or as Joint Tenants With Right of Survivorship. NUPPLegal defines these two methods of ownership as:


Tenancy in Common: In a tenancy in common, all owners have equal rights to use the property. Ownership shares may be equal, however, unequal shares may be arranged by deed or other written contract. An advantage of tenancy in common ownership is that each co-owner is free to transfer or bequeath his/her interest to anyone he/she chooses.

Tenancy in common is the most common way for unmarried people to own property together. Married couples also can use this form of co-ownership, but more often choose joint tenancy or tenancy by the entirety.

Joint Tenancy with Right of Survivorship: Any two (or more) people can own property-typically real estate or a bank account-in joint tenancy with rights of survivorship. When one of them dies, his or her share automatically goes to the surviving owner. The phrase "as joint tenants with full rights of survivorship" or similar wording (governed by state statute) must appear in the deed. A joint tenant cannot use a will to leave his or her share of joint tenancy property to someone else. If all joint tenants die simultaneously, no one owner has survived any of the others, each joint tenant's interest in the property passes by their will.
Sometimes owners decide to change ownership of property from joint tenancy to tenancy in common in order to leave their interests to someone other than the surviving joint tenant(s). In most all states, transfers out of joint tenancy into another form of co-ownership can be done even if the other joint tenant objects.

You may, however, need to be listed on your mortgage application as a co-purchaser, even though your credit is not used for loan qualification purposes, in order to have both of your names appear on the deed. We recommend that you check with a mortgage company as to the best way to disclose your co-tenancy of the condo.

Question (GA): I am a real estate agent in Georgia and have an exclusive right to sell listing on a piece of property for 5.5 million. The owner is a reasonably good client but will always try to talk me down on commissions. Last week he told me that he had taken a contract on this property but had not said anything to me because, there were still a couple of contingencies and he wanted me to continue to show it. Apparently he is going to pay a commission to an individual who constantly shows property and receives a commission, but who is not licensed.

From what I understand, he is sometimes paid by the buyers and sometimes the sellers. Naturally, I was shocked but kept my cool until I had talked with an attorney and my broker. What can be done to the person who is getting my commission? I do understand I have a claim against the seller but I also want to stop this individual from this practice.

Answer: If you have an Exclusive Right To Sell listing agreement (as opposed to an Exclusive Agency Agreement), then your first choice should be to enlist your broker's agreement to sue for the commission if and when it becomes appropriate.

We are surprised that neither your real estate broker nor the attorney with whom you stated that you spoke advised you to contact the Georgia Real Estate Commission ("GREC") and file a complaint against this unlicensed person. Are there substantive additional facts that make contacting GREC and/or filing a complaint unwise?

Question (CA): My wife and I are looking to buy a second home and also a section 8 rental in the Houston/Sugarland area. Our daughter and soon-to-be son-in-law live in Sugar Land. Can you recommend an affordable area?

Answer: We suggest that you register as buyer prospects on the Houston Association of REALTORS® website at har.com, under "Find a Home, Find a REALTOR&Reg;." That site is set up to specifically allow you to familiarize yourselves with homes and Realtors before you make any commitments. Once you develop a list of probable homes in which you have an interest, you will also have a list of Realtor Firms that are active in that area. Interview an adequate number of real estate brokerage firms to select the firm with which you feel the most comfortable, and then do enter into a written Residential Buyer/Tenant Representation Agreement with the firm you select.

Question (WI): I am a licensed loan originator in Wisconsin. In regards to compensating a third party for business, it is my understanding that compensating someone for a sale is against the law. Can the third party company and I have an agreement to make a donation to "cancer foundation" for every sale that I generate? Or what if I would like to know if I can pay the third party company X amount of dollars for every application I submit instead of for each sale generated.

Answer: First we must advise you to seek competent legal counsel licensed to practice in Wisconsin, to obtain the answers to your two questions. As a general response made with the understanding that our response is not legal advice, the State of Wisconsin Department of Financial Institutions requires Loan Originators to not only be licensed, but to also comply with the applicable Wisconsin statutes as well as the applicable federal statutes pertaining to residential mortgage loans (see USC Title 12 Chapter 27)

We advise you to pay special attention to USC Title 12 Chapter 27 Section 2607 since the fines for non-compliance are $10,000 or one year in prison, or both for each violation. There may also be other Wisconsin statutes and/or Rules that must be complied with such as Deceptive Trade Practices to avoid advertising and/or marketing noncompliance.

However, having said the above, it seems to us that if you paid for any advertising or promotion materials that are given out to customers of the third party (including postage if they are mailed), and the car dealership, moving company, or other third-party gave them out as a "thank you for doing business with us," and furthermore you paid the third-party a market rate for providing the thank-you gift, then no "thing of value" has been paid or received by you or the third party (in excess of the actual cost to produce and distribute), and so you may be okay. However, that is why we caution you to obtain an opinion from a Wisconsin licensed attorney who is experienced in mortgage lending and laws that apply to Mortgage Brokers and Loan Originators.

Published: November 14, 2006

Home Staging

Home staging takes listing from drab to fab
A little fix-up work is all that's required of sellers
Monday, November 13, 2006

By Dian Hymer
Inman News

Staging a house for sale is a concept foreign to many home sellers. But, it has been immensely popular in the San Francisco Bay Area where sellers have reaped huge benefits from their efforts.

You don't have to fix up your home before selling. A home can be sold in virtually any condition, if it's priced right. There are basically two reasons why sellers go to the effort and expense to prepare their homes for sale. One is that it helps to bring a higher price. The other is that it usually results in a quicker sale.

It's imperative to make cost-effective cosmetic improvements in order to realize an increase in profit when you sell. Major renovations made just before selling -- such as completely remodeling kitchens and bathrooms -- are not cost-effective. Although they improve the appeal of the home, you aren't likely to recoup the full amount of your investment on a quick turnaround.

But other cosmetic improvements such as refinishing hardwood floors, replacing outdated floor coverings, removing old window coverings (and leaving them off, in most cases), replacing outmoded light fixtures and painting are worth the money. The reasonsuch fix-ups tend to bring a higher price is that most people have difficulty imagining what a house will look like fixed up. You do the fix-up work so that you don't leave the sale of the house to chance.

Fixer-uppers appeal only to certain buyers who usually want a break on the price to compensate for the condition of the property. By sprucing the property up for sale, you appeal to a much broader audience. The more interest there is, the more chance there is for a sale at a higher price.

The goal of fixing up a house for sale is to get it into move-in condition. Let's say your home has an older, dated kitchen. In its present condition, it's a turnoff to buyers who haven't the time and resources to remodel it. By painting outdated cabinets, painting the walls in a trendy decorator color, changing cabinet knobs, updating light fixtures, changing the floor and adding stainless-steel appliances, your kitchen won't be new. But, it will appear fresh and inviting.

You make cosmetic improvements to overcome buyers' objections. If you sold your home with a dismal kitchen, most buyers would discount the house because they couldn't live with the kitchen.

You open your home up to a larger pool of buyers by doing the improvements mentioned above. Rather than rejecting the house, buyers feel they can move right in without first having to a lot of work. And, you accomplish this without major remodeling; just sprucing the home up to an acceptable level.

HOME SELLER TIP: Sellers often resist spending money on a property they're selling. This is particularly so in the current market, where they may have less chance of receiving multiple offers and a generous price. However, properly preparing your home for sale can give you an advantage in today's challenging market.

Buyers are pickier than they were a year ago when home prices were rising quickly. Currently, appreciation is flat, at best. Many buyers are concerned that prices are falling. So, their enthusiasm for paying huge prices regardless of the condition of the property has waned. Buyers are looking for value.

Getting a house fixed up for sale takes time and money. A good real estate agent can be an invaluable ally in this endeavor. In fact, you should consult with your agent before embarking on any projects to ensure that you make value-enhancing improvements.

THE CLOSING: Resist the temptation to show your home before it's ready. You could lose a prospective buyer who can't visualize how your house will look after the improvements are done.

Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.

Feng Shui for Home Owners Associations

Feng Shui HOA
by Richard Thompson
November 8, 2006
Realty Times


Feng Shui (pronounced "fung shway") is the ancient Chinese art of placement. The goal of Feng Shui is to achieve harmony, comfort and balance, first in one's environment and then in one's life.

Feng Shui translates literally to "wind-water," the two mediums where life exists.

Feng Shui is used to create a living space in harmony with nature. Careful orientation of furniture can attract good karma or repel bad. While there is considerable skepticism about the validity of Feng Shui, the goals of harmony, comfort and balance are certainly those that to which every HOA should aspire. However, in the legalistic environment that haunt many HOAs, these goals may seem far away.

Many HOAs live under "The Rules." Whether spelled out in the governing documents or concocted by an ill or well meaning board, The Rules are there to establish lines which should not be crossed. Those that espouse the need for The Rules often believe they are ironclad and black and white. When it comes time to smite a rule breaker, there is no mercy.

There are various reactions to The Rules:

To some HOA residents, The Rules have little relevancy because they state the obvious: don't bug your neighbors or let your kids or pets run wild.

Others ignore The Rules because they don't apply (I don't have a dog, jet ski, RV or like to play loud music).

Others don't like rules in any form, so violating The Rules is a crusade. (You can't tell ME what to do!).

Then there are those that go about living the way they do, violating The Rules as they go, because [shouting], "It's my God given right as an American to enjoy my property any way I want to, Amen!"

But after all is said and done, the vast majority of HOA residents just want to live in harmony. Most have learned basic give and take behavior when very young and need little instruction as adult.

Those that didn't learn then are slow to change if they change at all. Thus, the sticking point really is what to do with scofflaws which represent a tiny percentage of the whole.

Feng Shui instructs how to harness the mystical powers of nature. One aspect of Feng Shui that drives skeptics to distraction is that the same end can be achieved by different means. The same furniture arranged in different patterns can produce the same harmonious results.

In the same fashion, little used techniques by HOA boards are mediation, accommodation and compromise. The world is not black and white and neither is an HOA. The board actually has the latitude to make deals when it makes sense to do so. An example of this would be a resident that parks a junk car in his driveway which is in direct violation of the HOA's rules.

The board could do battle with this character and spend endless emotional and HOA capital to win the battle. But win, lose or draw, the guy is still a jerk and likely to engage the board on another battlefield on another day. You just can't win with some people. So, the board can just choose not to play and spend its time dealing with those that are more receptive. The board doesn't need to win every battle. Concession can be the greater part of honor.

With a situation like this, it's in the HOA's best interest not to fight. As the saying goes, "Never wrestle with a pig. You both get dirty and the pig likes it." Let the record state: "The board informed the resident of the rule violation repeatedly, mediation was rejected and the board decided that compromise was in the best interest of the HOA."

So take the Feng Shui approach. Rather than putting up rule barriers that attract challenge, craft "harmonious living philosophies" that attract compliance. Most want to live in peace, so craft an environment where harmony can thrive. Then, simply deal with the occasional tough case. Even Feng Shui homes occasionally have to take the trash out, just not every day. Go you and do likewise.

For more on how harmonizing an HOA , see Regenesis.net

Published: November 8, 2006