Brian Pitcher's Blog

Don’t let the banks beat you down!  My goal is to educate people so that they are armed with as much information as possible and not naïve in thinking that this economic hard spell is over.

Every situation is different. You may believe that your situation is too difficult or that you don’t qualify for our help. On the contrary, we want to help as many families as possible; both who live within the many cities we work in, as well as encouraging those in other communities with our guidance and expertise.

I will explain all of the incentives and options with loan modifications and other options that are available to you.

What are loan modifications? There are many misconceptions of what loan modifications are. In a nutshell, a loan modification is a change in the loan terms with the lender. These changes are permanent, with the intention of a reduced payment that the homeowner can afford.  Loan modifications are similar to refinances (also called refis); however your original loan will stay with the same bank.

Who can qualify for a loan modification? You need to qualify for it. It is a very similar process that you went through when purchasing the home, except it is a reversal process.  Instead of proving you have enough income flowing in to pay for the home, you now need to present a valid hardship. The banks do not consider inflation or your personal expenses going up as a true hardship, like they might be willing to do for a short sale. A hardship can only be considered if your income goes down.  Anyone who has experienced a reduction of their income could potentially qualify. Yet, there is a threshold on what the bank is willing do.

To determine your eligibility, answer these questions: http://savemyutahhome.com/2011/10/loan-modification-questions-where-do-i-start/

If you can’t keep up with your monthly mortgage payments, it forces the lender to take legal action in accordance with the promissory note you signed to obtain the mortgage note.  They will seize the property and try to recoup their losses by auctioning it or selling it.  The main goal of the bank by loaning you the money for a house purchase is to make a profit through the interest payments that you pay over a prolonged 15, 20 or 30 year mortgage. So, if you stop making those loan payments you are “defaulting” on the financial agreement between you and the bank. Banks don’t like to lose money. They are not in the business to help you; they are in business to make money.

The lender can initiate the foreclosure process anywhere between 90 – 120 days after you miss a payment. You must miss mortgage payments repeatedly in order for the foreclosure process to start. But if this happens and the foreclosure goes through, your home will be put up for auction. If you’re still living in it and the home is purchased by another party through a bank sale, your untimely eviction can be as swift as within two weeks, or up to 45 days from the auction date.

To learn more about your short sale process please download our free ebook here
http://savemyutahhome.com/

The bank can’t make you leave your home until the foreclosure process is fully complete.  You are still the official homeowner until the lender has completed all of the necessary legal steps of the foreclosure process.  However, if you have already ditched the home and it becomes vacant, the bank has the legal right to secure the property.

It is unwise to leave the property vacated.  If the bank discovers it is left empty or attempts to confirm that someone still lives in it, they may send a bank official to check on the property.  They might have reason to suspect abandonment, such as calls left unanswered or inspections in which there never seemed to be a person there.  If this occurs, they are likely to change the locks and do any necessary winterizing to protect the home from potential damage or vandalism.

To Read The Entrire article please click on the link below

http://savemyutahhome.com/2011/10/can-the-bank-kick-me-out/

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Do you want to save your home? Find out how by downloading this free ebook “The Truth About Short Sales” Click here now

Today is a sad day, not just for the technology folks, but for the world. As most of you know we have lost an amazing man, Steve Jobs. As I think about where I have been in the real estate world, and where I am going today, creating online programs for real estate agents around the world, I remember a great entrepreneur that helped make all of this possible.

During Steve Jobs commencement speech at Stanford he made quotes that will live with many of our future generations…

“Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

A few years ago when starting the process for Program 4681 I thought I had all the dots mapped out; the vision on what Program 4681 would look like, and how it needed to work for short sale agents around the US. As I looked closer I knew there were a few missing pieces; a powerful team of professionals that weren’t just about real estate, ones that knew how to create engagement, so that people would listen. I knew with that final touch, together we could offer a service that would truly help my industry. With that team came the connection, and as I look back, I now see how the dots connected, and truly understand what Steve Jobs meant when he said look backwards, not forward.

The piece below was on the back of one of Steve Jobs favorite reading pieces, and as they signed off for the last time these words were on the back cover; Stay Hungry. Stay Foolish, so as I sign off today, I wish each of you to Stay Hungry. Stay Foolish, and as I stand with a billion other people feeling the great loss that I feel today, I also thank you, Steve Jobs, for your legacy, words of wisdom and the tools that you gave us yesterday, today, and for many years to come!

Stay Hungry. Stay Foolish.

There is a very important subject that I need to talk about.  If you get nothing more out of this report, I want you to understand this. When the bank loses money on you from a foreclosure or a short sale, they have a right to file a lawsuit against you. It doesn’t mean that they will. Let’s just say that you decided to let your home just foreclose, rather than trying to use one of the options discussed in loan modifications or short sales. When the home sold at auction for $100,000 less than what was owed on it, what happened to the difference in what was owed and what the home sold for? What happens to that money? Many think that it just goes away. It doesn’t. Whatever the deficiency amount is (in this case, $100k), the bank can either sue you for it, or they can give you what is called ‘forgiveness of debt’. The forgiveness of debt is what you want.

Here is how it works. When the bank writes off the bad debt on its taxes, it is labeled as forgiveness of debt. They bank is required to send you a 1099 for that. If an accountant does not treat it properly, it could be considered taxable income to you. In this scenario, your capital gains tax amount would be roughly $25,000.

There are many misguided people out there – some who have been instructed by untrustworthy sources – to allow a foreclosure on their home so that they don’t have to pay taxes on the loss. This is not accurate. People should understand that they will receive a 1099 either way. At least if you short sale the home, the loss will be less for the homeowner. There are multiple ways that an accountant can classify the 1099 when you get your taxes done to get out of paying taxes on it.

Now, I am not an accountant… so consult your tax accountant on these strategies. Make sure you ask! There are 3 known strategies that I know of:

1. Insolvency. To be insolvent means that you owe more than what you are worth, therefore you don’t have to pay taxes on the extra amount.
2. Mortgage Debt Forgiveness Relief Act.  This is designed for those that are solvent but who still need help. The exact tax code that you can Google to read about it is called H.R. 3648. You can also Google the term: ‘publication 4681 from the IRS’.  This will help to provide an explanation to your accountant on how to deal with debt forgiveness. It applies to people who purchased owner occupied homes and applies to purchase money only. Any monies refinanced out of the house could be taxable, depending on where the money was spent.
3. Investment properties.  Non-owner occupied residences that were purchased as an investment property or used for business purposes with plans to make a profit require a special  business tax code stating that; ‘If you receive a 1099 from a business loss, you will not have to pay the taxes on that 1099’.

Remember I mentioned that it’s easier to deal with a 1099 than it is to deal with a deficiency lawsuit.  Most of the large national banks across the country send out 1099s across the board for first lien mortgages. It’s the local banks and credit unions that are trying to push people into bankruptcy by suing them for the balance. However, you may be able to negotiate with them in case this happens.  For example, let’s say that you had a deficiency with Bank of America for $80,000. We have been able to settle with them on our clients behalf after the closing for about $5,000; in some cases.

Now, as far as the second mortgages are concerned, it all depends on the client whether or not the bank will sue them or pursue payment arrangements for the balance. We approach these situations on a case-by-case basis. Some will sue and some won’t. This may happen whether you short sale or foreclose, so at least you have more control with a short sale.

To find out if Short Sale is the right option for your family, please click here to receive your free copy of “The Truth about Loan Modifications, Short Sales and Foreclosure.”

Selling a house can be a bit like having a baby–everyone gives you advice that may or may not be true for you.  Here are ten myths uncovered:

Myth 1:  You should always price your home high and gradually lower it if it doesn’t sell.

Truth:  Pricing too high can be as bad as pricing too low.

You may think that by listing high you can always accept a lower offer, but if you do, you’ll miss the buyers looking in the price range where your home should be.  Offers may not even come in, because interested buyers are scared off by the price and won’t bother to look.  By the time the listing price is corrected, you will have lost a large group of potential buyers.  Your real estate agent will offer you a comparable market analysis.  This is a document that compares your home to other similar homes in your area, with the goal of helping you to accurately assess your home’s true market value.

Myth 2:  Minor repairs can wait until later.  There are more important things to be done.

Truth:  Minor repairs make your house more marketable, allowing you to maximize your return (or minimize loss) on the sale.

By and large, buyers are looking for an inviting home in move-in condition.  Buyers who are willing to tackle the repairs after moving in automatically subtract the cost of needed fix-ups from the price they offer.  You save nothing by putting off these items, and you may likely slow the sale of your home.

Myth 3:  Once potential buyers see the inside of your home, curb appeal won’t matter.

Truth:  Buyers probably won’t make it to the inside of the home if the outside of your home does not appeal to them.

Many buyers drive by a home before deciding whether or not to look inside.  Your home’s exterior will have less than a minute to make a good first impression.  Spruce up the lawn, trim shrubs and trees, and weed the garden.  Clear walkways and driveways of leaves and other debris.  Repair gutters and eaves, touch up the exterior paint and repair or resurface cracked driveways and sidewalks.  Place potted flowers out front, hang a wreath on the door and put out a pleasing welcome mat for added curb appeal.

Myth 4:  Once potential buyers fall in love with the exterior look of your home, you put interior improvements on the back burner.

Truth:  Buyers have no qualms about walking right out the front door within 60 seconds if the house doesn’t look like it could be theirs.

Remember that most buyers are looking for an inviting home in move-in condition.  Spending a few thousand dollars for the right work on your home before you sell it, usually translates into a higher selling price and shorter marketing time.  Your real estate agent will consult with you about the repairs and replacements that will benefit you most.

To read the entire article please click here: http://goo.gl/25RQz

Many people ask about a ‘deed in lieu of foreclosure’ without fully understanding what it is.  In a nutshell, the repercussions are about the same as a foreclosure. It still counts as a foreclosure on your credit. Basically, you go to the bank and tell them; “I will turn the deed to the home over to you if you agree to not pursue me for the difference.”

The bank will still want your financials, just like they would on a short sale. You have to qualify. So, when the bank says that they won’t pursue you, it simply means that they will forgive the debt and send you a 1099 that you will still need to deal with. You will also be giving the property back to them a lot earlier than you would if you just stayed and lived there until it forecloses. When the home forecloses on the courthouse steps, you will probably get a knock on the door within a few days from either the investor that purchased the home or from the Listing Agent for the bank.

To read the entire article please click here