Realtor Coaching & Training: real estate license
Loan Modifications are one of the hottest topics in the real estate industry….
More Loan Mod FAQs:
QUESTION:
How can a Loan Mod stop foreclosure?
ANSWER:
A detailed financial analysis is performed by the Loan Mod Specialist and the borrower, to determine their best alternatives. By reviewing the lender’s loss mitigation policies and the state’s foreclosure laws, the Loan Mod specialist is able to best assist the homeowner.QUESTION:
What do I do if my state requires a license?
ANSWER:
Every week the states are refining the laws regarding this topic. Even in the states where an additional license is required (which as far as I know accounts for less than 10 states) you have 3 options:
1) Get the license.
2) In many of the states that do require a license, if you don’t charge upfront fees you don’t need a license. For example, in California a real estate license is all you need to offer mods…but, if you require up front fees you need a license…so, no up front fees. There has been a lot of bad press about companies that charge up front fees and don’t complete the mod. So, understandably the states are cracking down for this reason.
3) Work with a licensed company. 2 benefits…’partner’ with an existing company..You originate the mod…they process the paperwork etc. Basically, you would ‘work for’ the licensed mod company. You create the business, complete 2-3 forms..then they do the rest. Generally speaking, you can arrange a 50/50 split. $1500-1800 to you. Another side benefit of going this route is that they may be in the position to send you listings. They will have many borrowers who (for whatever reason) don’t follow through on the mod. Many of those sellers will turn into short sale leads…for you.
QUESTION:
How is the borrower’s credit affected by doing a loan modification?
ANSWER:
It is not affected.
QUESTION:
How is the borrower’s tax liability affected?
ANSWER:
It is not affected by doing a loan mod.
Popularity: 1% [?]
Realtor Coaching students….you need to develop a thick skin this year. The negative stories about housing will easily outpace and positive stories 20:1.
What this means is that you must have a clear plan for your business in 2009. Lets do a little be honest, its going to get far worse before it gets better.The news will get worse, peoples attitudes will get worse, the housing sales will get worse….you get the idea. Have you created your 2009 Business Plan Yet…watch this free video that will show you how-to now.
Expect the word ‘Recession’ to be soon replaced with the word ‘Depression’. Here is the thing you should know..there is no real definition of the word ‘Depression’. I searched all over the net and found no real definition. In other words, the word ‘Depression’ will be used because its more powerful vs. ‘recession’. Newspapers will sell more copies, TV news shows will have more viewers…drama+hype = money for the media. Don’t kid yourself about that. (I am guilty of this as well….read the title of this blog post!)
With that said, its tough out there. No doubt. No of us can question we are living in historic times. Everything about our industry is changing.
Answer these questions…how many homes sold (according to the MLS) in your market last month? Hundreds….probably thousands…? Who were the agents who sold those homes? Were those home sales foreclosures and short sales? What do you need to do NOW to learn how to become the agent with those sales?
HINT: You need to understand that there MILLIONS of homes being sold….matter of fact in 2009 the NAR is estimating there will be over 5,000,000 home sales nationwide….ready for this next point….its estimated that HALF…2,500,000 of those sales will be FORECLOSURES AND SHORT SALES! Did you catch that….there are agents who are making a fortune in THIS market…because they simply learned what this market required….
Whenever the end of this protracted housing downturn is reached we will see an entirely different real estate industry. At the peak of the housing market there were more than 2.5 million members of the NAR. Now (its rumored) that there are only 850,000 members.
Our industry has many things in common with the Big 3 Detroit automakers. They were drunk on low interest rates, cheap gas and high margin SUVs…..the real estate industry was drunk on…..low interest rates, easy access to credit and a housing consumer addicted to ‘moving up’.
Now all of that has changed. If there are less than half the agents it makes sense that there will be… less than half the brokers, title companies, mortgage companies, home inspectors, moving companies….you get the idea. Massive retraction and giving back the gains made over the Booming 2000s housing bubble.
Where does that leave you? Chance are you will be one of the survivors….you will succeed despite the massive wholesale shift in our industry. You have made it through the past 2 years you will make it through the rest of this housing mess. Whatever you have been doing for the last 24 months…continue doing it but, get better at it. AND, don’t stop learning.
Understand this. Working your past clients, calling FSBOs and Expireds, direct mail (etc)…none of those lead generation methods will work exclusively in this kind of market. You already know what I am about to tell you…
You must learn how to offer the housing market…… what the housing market wants.
Simple concept. Ask the market what it wants…then learn how to offer it.
What kind of agent are you….and big lumbering SUV or a high tech in-demand Hybrid?
The Big 3 Automakers waited too long…..they acted exactly like most Realtors. They were hoping and praying that the clouds would magically clear and it would be 2005 all over again. Think about it….are you like the Big 3..trying to sell SUVs in a world that wants smaller, fuel efficient cars? You see, knowing how to prospect FSBOs and Expireds is a great way to generate leads…but, in this market it can’t be your only way. If it is, then you are just like the Big 3 trying to sell SUVs in a world that wants Hybrids.
This point merits repeating….Ask The Market What It Wants….then, Learn How To Offer It.
Don’t know what the market is asking for? Ok, I will make it easy for you. In the US its estimated that nearly 50% of the homeowners will be upside down in their homes. In other words, they owe too much. (YOU probably owe too much.) In states like California over 50% of ALL sales are foreclosures and short sales. AGENTS..did you catch that….50%! That IS what the market wants you to offer it…you must learn how to list and sell short sales…and you will want to learn how to list REOs. We will make it easy for you…watch this Free video about how to easily list and sell short sales. This market demands that you know how to list and sell short sales. (Don’t be GM)
Please understand, not every upside down homeowner has to sell their home. In states like Ohio families have been living in homes worth less than their mortgage amounts for years. It just makes sense that in this market you learn how to offer mortgage loan modifications. Forget what you think you know about loan mods for a second. Think about this…in 41 of the 50 states you need no license to do mods. No license at all…not even a real estate license. Practically everyone you know would love to have you modify their mortgage loan. Help them to save hundreds per month and thousands per year. (By the way..start by lowering your own house payment.) The average mortgage loan mod specialist charges $1,000….$2000….$30000 per loan. Talk about a great way to help others and make money now!
Here are a few more interesting facts that will hopefully motivate you to accept the fact that you may be suffering from SUV thinking in a Hybrid world….
Housing starts dropped to about 441,000 in 2008, their lowest total since 1945 and down from nearly 1.8 million in 2006. Builders are reducing prices and adding optional features at no cost.
Interest rates are at 40-year lows and housing affordability is at its highest level since the 1970s.
None of that matters when people fear for their jobs and are afraid to commit to a major purchase such as a car or a house, Crowe said.
“We have consumer confidence at or near a historic low,” the economist said Tuesday at the building industry trade show, “and it will probably deteriorate in 2009.”
The S&P/Case-Shiller Home Price Index fell 25.3 percent from March 2006 to October 2008.
Crowe said he expects prices to fall another 29 percent this year and new home sales to decline 14 percent.
Delinquency rates on home mortgages have risen significantly and are expected to go higher in 2009, said Frank Nothaft, chief economist for Freddie Mac. Rising unemployment is the “trigger event” for foreclosures, he said.
If you are a ‘SUV Realtor’ then the idea of more foreclosures will cause you fear….But, you are becoming part of the NEW Breed of Hybrid Realtors. Watch this free video now how to cash in on the massive explosion of REOs. The greatest opportunites working with Bank Owned Homes (REOs) is still ahead of us. Watch the free video now.
Credit is ample for borrowers who have equity and a good credit score, can make a down payment and can qualify for a full-documentation conforming loan, Nothaft said.
“The credit box for home mortgages and commercial mortgages has tightened over and over in the face of mounting defaults,” he said.
The Federal Reserve has taken aggressive steps to keep interest rates low and has purchased $125 billion in mortgage-backed securities debt from Fannie Mae and Freddie Mac.
The basic premise behind what’s happening with housing is an imbalance between supply and demand, Crowe said. The nation has an excess “overhang” of 6.2 million homes for sale, about 1.5 million too many, he said.
Portland Cement Association chief economist Ed Sullivan said any recovery probably will not materialize until 2012. The nation lost 2.6 million jobs in 2008 and Sullivan projects another 5.8 million jobs will disappear in the next two years.
Obama’s proposed $775 billion economic stimulus package might not be enough to pull the country from the depths of recession, Sullivan said. He estimates the plan would require $1.2 trillion to restore employment to January 2008 levels.
Stabilizing labor markets and job creation by way of increased infrastructure spending is a “critical ingredient” of that stimulus plan, Sullivan said.
An estimated $65 billion to $70 billion in “shovel-ready” construction projects could begin within 90 to 180 days, he said. Shovel-ready projects are those that have already been designed and engineered and only await funding.
The Council of Mayors has identified 76 shovel-ready projects in Nevada valued at $586 million, including roads, schools and airport construction. They would create 7,200 direct construction jobs and another 19,445 “downstream” jobs and consume 108,000 metric tons of cement, Sullivan said.
Las Vegas shows a 90 percent probability — highest in the nation — that home prices will be lower in two years than they are today because of the overhang of homes for sale, said David Berson, chief economist of PMI. The risk is greater than 50 percent in more than half of all metropolitan statistical areas that prices will be lower in two years.
Mortgage default rates are going to be a problem for a while, he said.
“The primary reason people default is not because they’re under water, but because they can’t make the payment,” Berson said.
Popularity: 1% [?]
More Loan Modification FAQs….
Question: Does the borrower doesn’t need to be behind in payments?
Answer: No.
Question: Do you need another license to do mods?
Answer: Depends on your state. In most of the states you don’t need any license….not even a real estate license! This is changing daily. For example, In California you DON’T need any additional license to do mods. But, if you want to charge up front fees..you will need a license. You need to contact your state to find out what the current laws are. We do our best to stay on top of this and will continue to update you as the laws change. Its up to you to educate yourself on your states policies.
Question: Is doing a loan mod like doing a short sale?
Answer: Its vastly quicker and easier. For example, No BPO, No appraisal. MUCH faster to get processed vs a short sale. No where near the effort…not even close. You should be able to get mod done within 30 days, assuming you follow the checklists and forms we included in your Agent Loan Mod Secrets course.
Question: What if I am in a state that requires a license and I don’t want to get one myself?
Answer: We suggest that you work with an existing Loan Mod company….that has a good reputation. Partnering with one of the existing licensed mod companies has its advantages:
a) You can delegate a majority of the processing to them.
b) If they are required to have a license, they CAN charge up front fees. Most of the companies on our list (part of the system) will pay you $800 up front..and then $500-600 once the mod is complete. Personally, this is the route I would go as they would do all the processing, charging of the client etc. You would focus on just the originating.
c) Partnering would mean that you would have access to their list of leads…people who maybe wanted to do a mod but, will end up having to list their homes….that means short sale listings for you. The statistic is that 3/10 will complete the mod once started.. For more information on short sales: www.AgentShortSaleSecrets.com
Question: Does the borrower need to have good credit to do a loan mod?
Answer: No. They have to prove they can make the new payment.
Popularity: 1% [?]
Mortgage Loan Modifications seem to be the hot topic in real estate….
Question: What is a Loan Mod?
A Loan Modification is a permanent change in one or more of the terms of a mortgagor’s loan. It allows the loan to be reinstated, and it results in a payment the mortgagor can afford.
Question: Can a mortgagee include late charges in the Loan Modification?
Answer: Mortgagee Letter 2008-21 (US Department of Housing and Urban Development) states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.
Question: What do I do if my state requires a license?
Answer: Every week the states are refining the laws regarding this topic. Even in the states where an additional license is required (which as far as I know accounts for less than 10 states) you have 3 options:
1) Get the license.
2) In many of the states that do require a license, if you don’t charge upfront fees you don’t need a license. For example, in California a real estate license is all you need to offer mods…but, if you require up front fees you need a license…so, no up front fees. There has been a lot of bad press about companies that charge up front fees and don’t complete the mod. So, understandably the states are cracking down for this reason.
3) Work with a licensed company. 2 benefits…’partner’ with an existing company..you originate the mod…they process the paperwork etc. Basically, you would ‘work for’ the licensed mod company. You create the business, complete 2-3 forms..then they do the rest. Generally speaking, you can arrange a 50/50 split. $1500-1800 to you. Another side benefit of going this route is that they may be in the position to send you listings. They will have many borrowers who (for whatever reason) don’t follow through on the mod. Many of those sellers will turn into short sale leads…for you.
Popularity: 2% [?]
