Short Sale vs Foreclosure: Which one is best?

With the unemployment rate at 9.5% as of October and headed to 10.5% by the end of the year, foreclosures and short sales are occurring in epidemic proportions. When someone is facing the devastating fact that they can no longer maintain their mortgage payment, it is important for financially devastated home owners to protect themselves as best they can. So where do you turn once you realize you cannot hold onto your home?

Once a home owner gets to this point there are two possible choices they can make. Walk away through foreclosure and live with the devastating effects on your credit for years to come or find an alternate solution. At first, home owners who are already mentally exhausted after months of falling behind on payments with no relief in sight might be tempted to just throw in the towel and walk away. However, foreclosure is the worst option you can choose. So what are the alternatives and why is foreclosure the worst option?

The Foreclosure Option
In the foreclosure process the lender assumes ownership of the house. Not only do you lose your house, you lose your equity (if there is any) and down payment as well. Also, a lender can get a judgement against you for any late fees and the cost of the foreclosure action. That’s just the beginning. Your credit will be in complete shambles for years to come making any sort of credit purchase almost impossible. This option should be the absolute last resort.

The Short Sale Option
The short sale of a home is possible when the property is worth less than the amount owed on the loan, commonly referred to as being “upside down” on a mortgage. However, in order to make a short sale possible, the mortgage lender must agree to discount the balance of the home loan due to the financial hardship of the borrower. The negotiation of the new loan balance usually takes place between the borrower and the loan modification or workout department of the bank or lender.

Although your credit will be affected negatively, this can be salvaged much sooner than redeeming your credit from a foreclosure. Another advantage to a short sale is once a buyer has been found, most home owners can avoid paying the mortgage payment while negotiations are taking place. Your home will also be put up for sale as is, which means you won’t be stuck with repairs in order for the house to close escrow.

Getting a Short Sale Done in Time
Getting a short sale done before a foreclosure takes place is of the utmost importance. To do that, you must have a Realtor in place that is experienced with the short sale process in order for it to not fall through. “Well…aren’t all Realtors knowledgeable in short sales”, you ask? Absolutely not. Short sales must go through a bank or lending institution as opposed to a seller and a specific ‘short sale’ process must be followed. Experience can make or break the short sale purchase.

Time is of the essence and your credit is at stake. This is not the time to place your future in the hands of a Realtor that is not completely experienced in the short sale process and might not get the job done in time.

Sean T Shallis and The Shallis Group are considered one of the Nations leading Short Sales experts. Call Sean immediately for a personal and confidential conversation about your personal situation. My direct line is 201-427-1032.

Mortgage Companies Impede Foreclosure Program

With a $75 billion dollar government bail out program in place, why are mortgage companies reluctant to help troubled homeowners?

Mortgage companies met with the Obama administration in Washington recently to answer questions as to why delinquent homeowners are not getting the relief they need as soon as possible. The companies are being asked to hire more staff and train them immediately to help speed up the application process for mortgage relief. Although adequate staffing maybe one cause for the delay in approved applications for loan modifications, another could be the extremely profitable fees that are collected when a loan becomes delinquent.

Delinquent Fees
Financial insiders and attorneys say that it is more advantageous for a mortgage company to delay or turn down homeowners seeking foreclosure relief due to the large delinquency fees that can be collected even if the home goes into foreclosure. Mortgage companies can still collect delinquency fees even though a homeowner is no longer making payments from the foreclosure proceeds once the property is sold. The longer these troubled loans stay delinquent, the more money in tacked on fees the lender gets to collect.

“I don’t think they’re motivated to do modifications at all. They keep hitting the loan all the way through for junk fees. It’s a license to do whatever they want,” says MargeryGolant a Florida attorney who represents homeowners in foreclosure and a former industry insider for Ocwen Financial. Recently the Federal Reserve Bank out of Boston came out with a similar claim stating, “The rules by which servicers are reimbursed for expenses may provide a perverse incentive to foreclose rather than modify.”

Late Fees Add Up
If a loan payment is due on the 1st of every month, a borrower usually has until the 16th before the loan starts to accrue past due fees. These fees could be as high as 6% of the monthly mortgage payment. So if a borrower’s monthly payment is $2000, a late fee of $120 could be tacked on in addition to the $2000. If a $2000 a month mortgage is four months past due, delinquency fees could add up to $480, which becomes a great hardship to those that can’t make the basic monthly payment.

It has been estimated that the number of mortgages 90 days or more past due hit 3 million by June of 2009. Mortgage lenders can see double digit profits coming from late fees tacked onto loans giving them little incentive to rescue troubled homeowners.

In this economy, the right real estate help is essential. Please contact Sean T Shallis at The Shallis Group for a personal consultation on your buying or selling needs at 201-427-1032.

(source: Yahoo Finance)

Hoboken Mayor Peter Cammarano, Jersey City Deputy Mayor and City Council president busted by FBI

Breaking News:

US Attorney’s office press conference regarding this corruption probe in Jersey City and elsewhere is at noon.

The suspects are scheduled to appear in U.S. District Court in Newark later today. Those arrested were: Secaucus Mayor Dennis Elwell, Hoboken Mayor Peter Cammarano, Jersey City Council President Mariano Vega, Jersey City Deputy Mayor Leona Baldini, Jersey City Republican John Guarini, La Vern Webb-Washington, a Jersey City council candidate, Joseph Castagna, Jersey City’s health officer, and Michael Manzo, a long-time veteran of the Jersey City fire department..

There will be a press conference at noon and the arraignments will begin at 2:00 pm. They are showing the arrested in handcuffs on local news stations. Guy Catrillo is one of them as well.

The arrests are the result of a two-year FBI and IRS probe that began with an investigation of money transfers by members of the Syrian enclaves in Deal and Brooklyn. Those arrested this morning include key religious leaders in the tight-knit, wealthy communities.

UPDATE, 9:23 AM: The Record reports that former council candidate LaVern Webb-Washington, as well as Jersey City health officer Joseph Castagna and local Republican John Guarini have also been arrested. Pictures at NBC show that former Ward E candidate Guy Catrillo was also arrested.

UPDATE, 10:55 AM: Politicker is reporting that longtime Jersey City Democratic strategist Joe Cardwell and Municipal Utilities Authority board member Joe Cardwell was also among those arrested today.

UPDATE, 11:23 AM: Two of this year’s mayoral candidates have also been charged: L. Harvey Smith and Lou Manzo. You can read the complaints against them here and here. Also, the Journal is reporting that Jimmy King is on the list.

The Walk of Shame

UPDATE, 12.15 PM:
44 people charged!

UPDATE, 12.26 PM:

Arrested this morning

Facing political corruption charges:

Moshe Altman, 39, of Monsey, NY, charged with conspiracy to commit extortion under color of official right & money laundering

Charlie Ammon, 33, of Lakewood, NJ, charged with conspiracy to commit extortion under color of official right

Leona Beldini, 74, of Jersey City, charged with conspiracy to commit extortion under color of official right

Peter Cammarano III, 32, Dem., of Hoboken, NJ, charged with conspiracy to commit extortion under color of official right

Joseph Cardwell, 68, of Jersey City, NJ, charged with agreeing to offer bribe to public official

Joseph Castagna, 53, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Guy Catrillo, 54, of Jersey City, NJ, charged with attempted extortion under color of official right

Edward Cheatam, 61, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right & attempted extortion

Dennis Elwell, 64, Dem., of Secaucus, NJ, charged with conspiracy to commit extortion under color of official right

Itzak Friedlander, 41, of Union City, NJ, charged with money laundering conspiracy

Richard Greene, 45, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

John Guarini, 59, of Bayonne, NJ, charged with conspiracy to commit extortion under color of official right

Shimon Haber, 34, of Brooklyn, NY, charged with money laundering conspiracy

Denis Jaslow, 46, of Wall, NJ, charged with conspiracy to commit extortion under color of official right

Maher A. Khalil, 39, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right & attempted extortion

James P. “Jimmy” King, 67, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Louis Manzo, 54, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Michael Manzo, 53, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Ronald Manzo, 65, of Bayonne, NJ, charged with conspiracy to commit extortion under color of official right

Michael Schaffer, 58, of Hoboken, NJ, charged with conspiracy to commit extortion under color of official right

Lori Serrano, 37, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Jack Shaw, 61, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

L. Harvey Smith, 60, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Anthony R. Suarez, 42, Dem., of Ridgefield, NJ, charged with conspiracy to commit extortion under color of official right

Vincent Tabbachino, 68, of Fairview, NJ, charged with conspiracy to commit extortion under color of official right & money laundering

Daniel M. Van Pelt, 44, Rep. of Waretown, NJ, charged with attempted extortion under color of official right

Mariano Vega, 59, of Jersey City, NJ, charged with conspiracy to commit extortion under color of official right

Lavern Webb-Washington, 60, of Jersey City, charged with conspiracy to commit extortion under color of official right

Jeffrey Williamson, 57, of Lakewood, NJ, charged with attempted extortion under color of official right

Faced with charges of money laundering:

Eliahu Ben Haim, 58, of Long Branch, NJ, charged with money laundering.

Schmulik Cohen, 35, of Brooklyn, NY, charged with money laundering and illegal money transmitting.

Levi Deutsch, 37, of Brooklyn, NY, charged with money laundering.

Yeshayahu Ehrental, 65, of Brooklyn, NY, charged with money laundering and illegal money transmitting.

Mordchai Fish, 56, of Brooklyn, NY, charged with money laundering.

Yolie Gertner, 30, of Brooklyn, NY, charged with money laundering.

David S. Goldhirsh, 30, of Brooklyn, NY, charged with money laundering.

Saul Kassin, 87, of Brooklyn, NY, charged with money laundering.

Edmund Nahum, 56, of Deal, NJ, charged with money laundering.

Abe Pollack, 40, of Brooklyn, NY, charged with money laundering.

Lavel Schwartz, 57, of Brooklyn, NY, charged with money laundering.

Binyomin Spira, 28, of Brooklyn, NY, charged with money laundering.

Naftoly Weber, 40, of Brooklyn, NY, charged with money laundering.

Arye Weiss, 34, of Brooklyn, NY, charged with money laundering and illegal money transmitting.

Facing charges of human organ trafficking:

Levy-Izhak Rosenbaum, 58, of Brooklyn, NY, charged with conspiracy to transport human organs

Will update as the news emerges.

Getting a Property to Sell

Why a Home Won’t Sell and What Can Be Done
With the current economic climate impacting the real estate market, getting a home to sell can be an overwhelming task. Foreclosures are at an all time high leaving buyers with plenty of choices and amazing deals to be had. There are certain factors to consider if your property has been sitting on the market for a lengthy period of time. First and foremost it is important to set an appropriate and attractive price. This is perhaps the primary reason for turning off perspective buyers. With the help of an experienced real estate agent, a competitive selling price can be determined based on similar home sales in the neighborhood.

Another factor to consider is the condition of the property such as its curb appeal, cleanliness and show room appearance. Not only is a home competing against others of its kind in the neighborhood, it is also competing against new builds with incredible move-in incentives. Quick fixes can be relatively inexpensive. However, the key is to make sure your money is being spent in the right place. With the help of your real estate agent, they can direct you on what changes would make the most impact with a buyer such as new fixtures, fresh paint or updated appliances.

Marketing
Marketing also becomes more important than ever in a “buyer’s market” where competition is tough and exposure can make a tremendous impact. With current marketing trends it is important to utilize multiple marketing mediums such as listing tours, open houses, newspaper and possible TV ads. Another important marketing strategy is the utilization of the internet through real estate listing websites. The National Association of Realtors estimates that over one-third of home buyers search for property on the internet.

Quick Fixes
There are plenty of minor improvements that can be done to a home that will have a tremendous impact on the buyer. Packing up clutter and creating a more generic look to the house will help the buyers envision the homes potential in meeting their needs. Having a spotless house is also a priority in getting it sold more quickly. Carpets are impeccably cleaned, walls need a fresh coat of paint and pet odors must be eliminated. Staging a room has also become a growing trend in helping a home sell more quickly. Furniture can be used to highlight certain features of a room or it can be detracting. There are professionals available that can assist in designing a home to sell.

Ultimately, finding the right real estate professional can be a key factor in the length of time a house sits on the market. For a personal and confidential consultation on what can be done with your property, please contact Sean T Shallis of The Shallis Group at 201-988-1393.

Foreclosure Rescue Scams

• Signing Documents Under False Pretense: Scam artists get homeowners to believe that they are signing new loan documents in order to bring your loan current. However, the document actually relinquishes the deed of the title to the scam artist as part of the “rescue” loan.

• Rent to Buy Back: Many desperate homeowners fall for the rent-to-buy-back tactic which is when the title to the house is signed over on the premise that the homeowner may still live there and pay rent with an option to buy back in the future. The scam artist has now acquired any equity in the home and can raise the rent to the point that is no longer affordable. The previous homeowner, now renter, can be evicted for the inability to pay the rent.