It's the latest "new" craze in the real estate investment world - the Mortgage Assignment, or MA.
The concept of a MA is simple and straightforward: Assignee/Buyer assumes ownership of the property AND financial responsibility for all attached liens (Mortgages and "possibly" other liens).
The property remains in the name of the original Seller and the investor, or real estate agent, becomes the Assignor - meaning they accepted a fee for putting the MA together.
In most cases, the assignee is "purchasing" a property on which the debt obligation exceeds the "current market value".
As far as the assignees are concerned, it's a good enough deal because they are not able to qualify for a loan, in this current economy, but they don't want to rent and the MA appears to be a fantastic solution.
A magic solution to the woes of millions of sellers that are facing foreclosure, NOT facing foreclosure, need to sell, want to sell, have been unsuccessful in selling their "over-leveraged" homes, and the list goes on.
On the surface, it sounds like a bumper crop for real estate investors and agents.
Truthfully, MAs can have devastating affects on sellers, buyers and lien holders - whose loans are "assumed" by the assignee/buyer.
We all understand that mortgages are not assumable without the written approval of the mortgagor, generally speaking, right ?
Mortgagors also have MI (Mortgage Insurance), in the event that the mortgagee fails to honor their debt obligation, as outlined in the mortgage/Note.
Many attorneys are stating that the transaction of a MA will void the terms of the MI, because the property is no longer considered owner occupied - so the lender/servicer would have to foreclose.
However, it's also suggested that if the lender was served notice, through the closing of the MA, that the use of the property has changed - the policy could still be maintained, though the cost could increase.
That's one reason for concern.
More reasons should be clear, as well, like:
Have you heard of buyer's remorse ?
What could happen, years down the road, when the economy is recovering and all those sellers have moved on, settled into a life that does NOT include the debts they left behind to their assignee/buyer on that MA deal ?
While it's possible that the assignee/buyer could now qualify for a loan, they also may have come to realize that the house they "purchased" may not be worth what's owed - maybe they want out - they've gone through "changes" and their house no longer suits their needs - what could happen ?
Think REAL hard about that AND the mess that could ensue, like litigation and more credit challenges, like who is ACTUALLY responsible for the liens on that property (HINT: The original seller).
Consider, also, because YOU assigned that deal (Assignor), to that assignee, what your liability might be relating to ALL those deals you closed, with your name, your company - it could be a long and hard road for you.
Am I saying that MAs are bad news ? Not sure - I'm still researching them.
I recommend you do the same.
Peace out ~
Mik - New To You RE, LLC
I am sure we have all heard of affirmations and many of us have tried to use them, some with results and some not. If you have tried and been disappointed, you will discover in this article the reason why!
What are Affirmations?
Well, an affirmation is a statement which we repeat many times either verbally, mentally or ideally both. They are just words then? Exactly right! Now words without emotion and vision are pretty flimsy no matter how many times you say them, especially if you are reading something that is written by someone else. Now don't get me wrong there are some very powerful, proven pre-written affirmations out there, but you must 'feel' the power of the words before they can work for you, you need to resonate with the words, that's why I believe that your own words are powerful!
Words follow thought, first you have thought and then the words, so do you see that it is the inner you that has to have the belief and the feeling, then the words affirm it to be your truth, so this is why some affirmations work and others don't!
In my earlier articles I talk of vision first, then write it, feel the emotion then go over it and over it, I believe that these steps are far more powerful because they keep you focused and you eventually have this affirmed in all of your senses and most importantly your subconscious mind! You cannot help but feel emotionally charged, then it is your reality and you manifest your desires!
You need to feel with every fibre of your being that what you desire has already happened. Without this feeling, your affirmation has no power. An affirmation is only effective if it is stated in the present tense, for example; "I now have a wonderful job." If you state I am going to have this job", then it will always be in the future, can you see that? So if you have practised affirmations saying "I want to be slim" or I will create my ideal partner", then it is always in front of you waiting to happen! So try" I now have my perfect partner". Keep your affirmations short and precise, there are many examples available, if they are suitable keep them, but if they are words you would not use I would consider changing slightly.
Once you have a good affirmation that feels right to you, say it often and then some more, write it repeatedly and visualise, the more effort and emotion you put in, the sooner you will start to see results and as you see the results you will be enthusiastic and not have to work so hard at it. Belief will grow as you succeed.
Remember you need to 'feel' what is like to have that desire right now, what does it bring for you? How does it change your life? Really taste it!
So there you go, now you know how this works and you have a simple formula for creating affirmations that will work for you. If you follow these steps above, you can easily manifest any desire or dreams that you would like to have in your life.
Affirmations can work to improve you life and your circumstances, learn how to use them effectively and create the things you dream of! To all you deserve and desire!
A lease option is not new, though many people who are thinking of getting into real estate as a form of investment have either never heard of it or don't realize just how powerful a tool it actually is. The lease options is a way to get into real estate investment without a mortgage and to maximize your potential return on investment if indeed you do decide to purchase the home. Here's why:
A lease option is an agreement you reach with an owner to lease the home or property for a specified number of months. This can be six months or even up to two years, depending on what the owner prefers and what you can hash out with them. If you do your homework in advance, you will be able to see what the real estate market looks like today and what it will look like in the future. Based on these predictions, you should then decide if a lease option of six months or a year works for you. Perhaps even nine months, which isn't a common lease term but is definitely doable. The owners probably will agree to it, especially if they are hard up for money to pay the mortgage. A lot of people buy second homes thinking they can just sell the first and then get caught with two mortgages when they have trouble selling the first home. These are the perfect people for you to offer a lease option to. It allows you to have a window to see if the property appreciates enough to be worth buying without the commitment of a mortgage, and it allows the owners to have an instant cash infusion. It really is a win-win situation for all involved.
When you sign a lease option, you lease for the specified time then decide to buy or not. That's what so great about it - it's an option, you are under no obligation to actually buy the property. Let's say you lease for a year and the market in that area didn't pick up like you thought. You can leave the agreement once the lease term is up without worry. The owner is then free to get another offer of purchase or lease.
If the property does appreciate in value, you can then buy the property, and all the appreciation can become profit should you choose to sell the home at a future time. If you are getting into real estate investing, there is no sure thing, no way to know exactly how much profit you will get. With a lease option though, you greatly increase your chances of making a profit, with no risk or money down initially. For new real estate investors, this may be your best case scenario.
New To You RE, LLC - NOTE: Be VERY careful with lease options -
Generally, you're expected to put an "Option Fee" down, in addition to your 1st months payment.
As foreclosures are commonplace today -
We recommend minimizing, or eliminating, your option fee and ensure you perform your due diligence - BOTH before the lease option AND during the lease option term.
Should the property fall into foreclosure - you're most likely to lose all $$ spent for and during the term.
Normally I write and teach about creating webinars and teleseminars and other products to teach. But there is another purpose entirely. A purpose for which webinars and teleseminars are well suited.
I'm talking of sales of course.
These internet commercials are quick and easy to create. And they can be quite effective. In this article I'm going to talk about the two types of sales webinars and teleseminars and how to create each of them.
The first type is the simple sales presentation or commercial. These are variations on the type of advertisement you see on the television. Webinars of course use video and match television. Teleseminars are audio based and therefore are closer to radio.
There are two main ways to create a webinar commercial.
The first technique is to use presentation software such as MS PowerPoint or OpenOffice Impress. The script for the presentation is designed into a set of slides. Typically animations are used in order to provide as much visual stimulation as possible. A voice over of the script is usually recorded or music may also be used.
The second technique used is to use movie editing software such as Adobe's After Effects or Jahshaka. These tools have the ability to create animations and add special effects. This capability is used to create a much more flexible animation with a corresponding increased visual stimulation.
Typically the process to create this type of webinar doesn't vary that much from the process used to create a learning content webinar or teleseminar. You begin with a clear understanding and focus on the customer and their needs. The content is then designed in detail taking into account the effects of the webinar (or teleseminar) format. A script may be generated from the design. In any case, the next step is recording the webinar or teleseminar. The result is edited and prepared for publication.
The second type of sales presentation is the hybrid. Unlike the sales presentation or commercial this type of sales webinar uses teaching to sell the product. Think of it as an online version of the local groceries sample carts.
It's a very well known statement that you don't mix training and sales because the audience will consider it dishonest. However, in this case the presentation is considered a sales presentation. The training is considered a sample. In this way it is acceptable.
However, there are some caveats as a result. First you must separate the sales and training portions. Second the training portion cannot contain any sales messages. This is a sample and needs to follow the same rules as any other training. Third you need to refer to this always as a sales presentation -- or it needs to be obvious that is what it is.
Finally the structure is limited. Unlike a normal hybrid, each segment needs to be separated. Typically the structure is in three parts. A beginning setup sales area is followed by the training. After the training is the sales effort and closing.
This past summer the California Legislature approved Senate Bill 931 (SB 931) amending Code of Civil Procedure CCP §580e to provide for anti-deficiency protection to certain short sales.
Short sale sellers have been traditionally faced with the possibility that their lender would seek a deficiency i.e., the difference between the sales price set forth in the short sale and the existing loan balance.
While in many sales for less than the full balance of the existing loans, the paperwork provided by the bank provides for a waiver of the deficiency, most such paper work contain a warning to the seller that the bank was retaining its option to recover the deficiency by an action in court.
With the passage of SB 931, which went into effect on January 1, 2011, a borrower that comes within the language of the statute no longer needs to worry that he or she will be sued by the lender for the difference between the loan balance and the sales price received by the lender.
It should be noted, however, that this anti - deficiency protection is afforded only to a loan secured by a first trust deed. Furthermore, it applies only to a single family residence which the statute defines as " a dwelling of not more than four units."
There are certain limitations to this anti - deficiency consumer protection statute. The first and most important limitation is that it does not apply to junior liens. Thus, the holder of a note secured by a second trust deed would still retain the right to sue for the non - payment of the note. Another limitation is that it applies only to human borrowers not corporations. Interesting, however, there is no requirement that the human borrower be an owner occupant. Finally, this statute does not apply when the borrower commits either fraud.
While this statute, on its face, may be a boon to short sales in that it insulates the homeowner from deficiencies in connection with a sale for less than the balance of the loan, there is a potential that this recent enactment will have a chilling effect on short sales because note holders, who can no longer sue for a deficiency, will likely require higher payoffs to offset the potential recovery that they formerly had when deficiencies were possible.
New To You RE NOTE: Some form of legislation NEEDED to be passed, as economic recovery could be set back, dramatically, years down the road when these lenders/servicers seek actual judgements - or sell their "rights" for deficiency to 3rd parties.
CA's SB 931 is a step in the right direction -
Look for other states to enact similar policies
Thanks to the down market, there isn't anything more stressful than selling your home. However there are a few tips that you could use to ensure that your house sells faster and comes within the public radar.
Statistics from the National Association of Realtors have now declared that four out of five home buyers (approx. 80% buyers) used the internet to look for properties, with a large number of people finding their homes on the internet.
To ensure that your house sells quickly it's important to use the internet for help. Homes that are marketed well on the internet sell faster. Using the internet to sell a home ensures that sellers can stage their house, thus making sure that the house is clear of all debris and unwanted items and then go over a magazine style photo shoot so that your house is portrayed at its best. You could the list out the USP of the house and highlight these in every possible website.
There are a number of online sites that can list your home. The more people that see your house, the better the chances of selling. For those trying to sell without the help of a realtor, can also take help from websites that often offer tips to list out your homes. It's important that images of your home are accompanied by a small description of the property.
As earlier said there are a number of websites that help people list out their homes without the help of a real estate advisor.
The charges to list out your home could vary. You could either pay a onetime fee to list your home or choose from a package that lists out your home in several data bases. The package is often inclusive of brochure dispensers, and 'how to do' help. There are sites that help you on how to handle the sale, help in drawing up a valid contract, disclosure of relevant issues, and steps to legally close the deal without help from the real estate advisor. But remember without the help of an experienced realtor you are on your own and might be taken for a ride by complicated buyers who would come up with unique demands. An experienced realtor would help you clear the basics.
For those deciding to shift the burden on to the real estate advisor, there are several websites that list out the real estate advisor in your market. They would the use their expertise to sell your house both online and offline.
When I first started in the business I was taught that one way to find good deals was to call sellers who had ads in the "Real Estate for Sale" section of the Classified Ads. So, I tried it and soon discovered that approximately 90% of the sellers I reached were simply not motivated. In fact, some were downright offensive and nasty.
Have you ever asked a non-motivated seller what their mortgage balance was? I can tell you that it can really bring out the worst in those sellers.
When you are talking to the right seller, their mortgage balance is a piece of information they'll readily share with you. In fact, this can be one of the most critical qualifying questions. The bottom line is this...
You need to have sellers calling you. When they do, they pre-qualify themselves as motivated enough to pick up the phone and call.
If you are concerned about your positive mental attitude when you're calling sellers, here's an important key. You've heard me say it over and over: Avoid people with negative attitudes like the Plague. In fact, I say you should contract an acute case of "selective deafness." Slam your ears shut like steel traps whenever you detect the presence of negativity.
But wait. You say you want to do some outbound calling to sellers but want to reach motivated sellers. How can you do that? Here's a hot idea:
Call the classified ads under Houses (NOT apartments!) for Rent (NOT for Sale!) Think about it. Someone who owns a vacant house is running each one of those ads. And there's an excellent chance that (when the idea is presented to them) that they would love to sell that pain-in-the-neck house.
If you've ever been a landlord, you know that if your property is sitting vacant that's the point at which you'd be willing--if not desperate--to sell. I do this, and it works.
So, if you have the grit to make cold calls, calling the "Houses for Rent" ads is the most effective use of the Classifieds when you're buying because these individuals are motivated. And if you're not working with motivated sellers, you won't be in the business long...
At mikcohen.com - we enjoy sharing insights, helpful tips and specific information. Feel free to comment and share your knowledge and experience, but please keep it respectful.