The Mortgage Man

Get more out of your mortgage experience!

Archive for Short Sale

Buy A Home For The Price Of A Used Car?

While many home owners suffer across the country, the current market is creating unprecedented buying opportunities.

It is no secret that every story has two sides.  You are pummeled in the media on a daily basis with the stories of doom and gloom about today’s housing market, and its affect on home owners nationwide.  What you may not have heard about is the flip side of the coin which is the buying opportunities that are being created.

Throughout the last century, more millionaires have been created through real estate than all other business combined, and right now there is a clearance sale going on that could change your financial future.  That may sound a little sales pitchy, but it is true.  Those who position themselves correctly today will be poised for financial independence tomorrow.  Those who listen to the mainstream media can sit back 2 years from now and talk about what they could have done but didn’t.

As reported on Good Morning America this morning, in Detroit, Michigan there are currently 1745 homes on the market for less than $10,000.  That’s not a misprint.  When you can buy a home for less than you would spend on a decent used car, there is a tremendous opportunity to create wealth and income.  It is not just Detroit though, there are amazing buying opportunities all over the country right now, and if you are even considering buying a home, now may be the time.

Here are some free resources where you can find distressed properties nationwide.  (some are free trials, but still worth visiting) (click on Investors) (this one is general property listings, but they have an extensive database nationwide) (over 600,000 active foreclosure listings nationwide) (free foreclosure search nationwide)


Perdido Key Condo Deals – Purple Parrot

Purple Parrot Village Resort in Perdido Key gives you the feeling you have just stepped onto a carribean island.  With its unique cottage style bungalos and huge lagoon style pool, it is hard to believe that you can get a piece of this paradise for little more than $100,000.

Lagoon style pool at Purple Parrot

With the rise in foreclosure rates, and a sluggish economy, vacation properties such as Purple Parrot have had challenges recently.  The good news is that because of this, a unique buyers opportunity has been created where you can own one of these island living gems for half of what they were selling for just 3 years ago.

Tropical cottage at Purple Parrot

You can find several of them listed as preforeclosure short sales at  If you are in the market for an investment property within walking distance to the beach, this is possibly the best deal available on the key right now.

For a local real estate professional specializing in beach properties on Perdido Key, go to

Foreclosure Filings Continue To Soar

Foreclosure filings for last month were up 48% over the same period last year.

According to a recent article on MSNBC, 261,255 homes received some sort of foreclosure filing in the month of May.  This is an increase of 48% over May 2007, and a 7% increase from April.  Additionally, a report by Credit Suisse has predicted that as many as 6.5 million mortgages will fall into foreclosure over the next five years totaling 8% of the entire housing market.

Estimates are that between 50 and 60% of home owners in foreclosure will lose their homes.  The rest will be able to either sell or refinance.  Many of those sales will end up being “Short Sales”, meaning that they will sell for less than what is owed on the property in order to avoid foreclosure.

No “Hope Now” For Government Program

Hope Now government sponsored mortgage bailout program falls short.

While the Hope Now organization claims to have helped more than 1 million home owners since its inception late in 2007, a recent inquiry by another high ranking government official claims that the numbers are much lower.

For anyone who thinks that the government is going to swoop in and save you from your problems, here is yet another glowing example that government programs suck up tax payer money while providing little help.  According to a recent investigation by the treasury department, only 187,000 home owners have been helped by the program.  Of those, only 30,000 resulted in an actual mortgage modification.

This of course is no surprise to me, or most people in the real estate industry, but it is an example that you are better off in the private sector than muddling through a government program.  A press release posted on today makes mention of a new company here in Pensacola that is seeking a solution (or at least more help) for the problem with foreclosures.  In many cases, the problem is deeper than a modification.  If you can’t afford to keep the house, you are better off selling to avoid foreclosure so that you can be in a better position to buy in the future. is using the simple concept of a short sale to help home owners sell with no equity to escape foreclosure.

Perdido Key Condo Deals – Windemere

Windemere Beachfront Condo for $288 / square foot.

Gulf View from the balcony of Windemere

There are some amazing deals on beach front real estate on Perdido Key, and here is an example of one that is currently listed.  At $329,000, this 1176 s.f. unit in Windemere (directly on the gulf on Perdido Key) is one of the lowest price per square foot units available on the market.

Located in a building built in 2004, this unit has 2 bedrooms, 2 full baths and a very spacious balcony that is so close to the water that you can smell the salt in the air.

For questions about financing availability, or to get more information on other deals available on Perdido Key, Contact Me directly and I will be happy to help.

What Is A Short Sale?

A short sale allows you to avoid foreclosure by selling your home for less than you owe.

Short Sale to avoid forelcosure

A short sale is a term that describes the sale of your property when the mortgage holder agrees to accept a payoff that is less than the outstanding balance as payment in full. In a short sale, the lender agrees that in an effort to avoid foreclosure, they feel that accepting the lower payoff is a better financial decision than foreclosing on the home and selling it at auction.

Why would a lender agree to a short sale?

On average, a foreclosure costs the mortgage company $25,000 to $50,000. In addition to the legal and carrying costs associated with the lender holding a home in foreclosure, there is the liability of owning a vacant and abandoned home. If curious kids jump the fence, and one drowns in the pool, the liability falls on the owner (who in a foreclosure is the lender). But, first and foremost, lenders are not in the real estate business, they are in the money lending business. Any activity that takes away from that core business model costs time and money. If there is an offer on the house that is less than the current balance owed, it is very likely that the offer will at least be considered if it can be justified that accepting the offer is less costly than actually foreclosing on the home.

For more information on short sales and how you can avoid foreclosure through this process, visit .

What Do You Do If You Have An Adjustable Rate Mortgage Coming Due?

Hundreds of thousands of adjustable rate 3/1 ARMs were originated in 2005, and will be resetting this year. So what do you do if you are faced with this?

Adjustable rate mortgage ARM

Millions of home owners nationwide are concerned about the economy, the real estate market, and the rising energy costs. As if that weren’t enough, many of them have a ticking clock on their mortgage rate that will be adjusting soon. Like sands through the hourglass, that day will eventually come and you can bury your head in the sand and hope that it goes away, or you can be proactive.

So, what are your options if your ARM is coming due?

  1. You can allow the rate to adjust if the difference in the new payment is negligible and you can still afford the payment after the adjustment. this will depend largely on the index that your loan is based on. If you have a treasury index loan, it is likely that you will have a larger adjustment than if you had a LIBOR index loan. This of course was just the luck of the draw at the time you got your loan as to which one had the better rate at the time. But, the LIBOR loan is more likely if you were in a non conforming type underwriting scenario such as “stated income” or “interest only” or both. If this is not a problem, you can sleep better at night knowing that your payment adjustment will not be the end of the world.
  2. If you can not afford the new payment, you may need to refinance into a fixed rate loan. Fixed rate loans are still very competitive right now, and as I write this, the national average is 6.05% for a conventional 30 year fixed rate mortgage (there is a lot of fine print with that quote that includes primary residence, 20% equity, no cash out at closing, etc.). If you have an adjustable rate, and you have equity in your home that will allow you to refinance, it may very well be worth it even if you take a higher rate than you have currently. For example, if your current rate is 5.5% and it will adjust this year with a maximum adjustment cap of 1%, you may consider refinancing at 6% for the long term security of knowing that the rate will never adjust again, rather than wait for the adjustable rate to move to 6.5%.
  3. If your overall financial situation has changed, and you can no longer afford the payment regardless whether you refinance or not, you have to sell. The government is not going to step in and save you, and neither will your mortgage company. All of the consumer protection discussions going on have nothing to do with changes in lifestyle, they directly address mortgage practices that took place at the time your loan was originated. So be aware, you have to be proactive, particularly if you are past due on your payment already.
  4. If you have no equity in your home, and you can no longer afford the payment, you have 2 choices: 1) Foreclosure, or 2) a Short Sale. A short sale is no easy task, and not everyone qualifies, but it is worth the hassle to not have a foreclosure on your record. A short sale, simply put, is getting a buyer to pay less than what you owe on the property, and convincing the lender to accept that as payment in full. This is not a new program, but it has exploded in popularity in the last year. This option will affect your credit in about the same way that a credit card account would where they agreed to settle for less than the amount owed. it is not a glowing recommendation on your credit, but it is significantly better than a foreclosure.

There are obviously more details involved in your situation than what I have covered here, but hopefully this helps to put your options out on the table.