The Short Sale Hardship Letter: What Is It? Why Is It Important? How Do I Write It?

April 27th, 2011 by Marc

“Short sales” continue to grow in number and now — with REOs — represent a substantial portion of the real estate market. When seeking a short sale, the owner will invariably be asked by the lender to submit a “hardship letter.” Owners should make the hardship letter as compelling as possible, while — needless to say — remaining honest and accurate. (more…)

Free Home Buyer Seminars! Learn About the Housing Market, the Home Buying Process, and Financing Options

April 27th, 2011 by Marc

2012 UPDATE: Our next series of home buyer workshops starts Wednesday, February 15th. Click here for info.

Are you planning to buy or sell your home this spring? The real estate market has changed considerably. There are significant opportunities, and there are risks. Know your options! We have answers to questions like: What’s an “REO”? What’s a “short sale”? How do foreclosures affect market values?

We’ve scheduled a series of home buyer seminars around the Seattle and Bellevue area. We are co-hosting these events with Cobalt Mortgage. We’ll have complimentary refreshments, and we’ll discuss market conditions, mortgages, and paying real estate agent commissions versus paying a flat fee.

Is This a Seminar for First Time Home Buyers? Who Should Attend?

The seminar is for anyone interested in learning more about buying or selling a home in today’s market including first time home buyers, repeat buyers, and sellers.

Next Class:  July 20th Downtown at the WaLaw Realty Offices

2033 Sixth Ave., Ste. 990, Seattle, WA 98121
Click here to RSVP and get directions to the Downtown Seattle Home Buyer Seminar.
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Short Sale vs. Foreclosure: Which is Best?

April 20th, 2011 by Marc

This post is neither legal nor tax advice. Moreover, this post is focused on Washington State, and the laws of each state differ.  For actual legal or tax advice, you need to consult an attorney or tax professional about your specific situation. Rely on a blog for legal or tax advice at your peril.

Short Sale vs. Foreclosure: What’s the difference and is one better than the other? Many, many people now own property that is worth less than the amount owed on it.  Moreover, many people purchased the proverbial “starter home” within the last five years, and they’re ready to move on to their next home (commonly kids are on the way).  Under these circumstances, an owner can either sell the home and then write a check at closing for the balance owed — OUCH! — or get rid of the home with, hopefully, cancellation of the balance of the debt. (more…)

Is it “immoral” to intentionally default on your mortgage?

December 1st, 2009 by Marc

A recent piece in the Seattle Times raised some interesting issues about the interplay between contracts and morality.  Specifically, is it immoral to simply walk away from a mortgage where you owe far more than the home is worth?  At least one law professor believes that homeowners should indeed walk away, and they should so so without any guilt.

I tend to agree with Professor White. It seems to me that people are held to an unfair standard of “morality” when it comes to business decisions, a standard that is not applied to a business entity. For example, if a corporation stands to benefit from breaching a contract, you can bet your bottom dollar that the corporation will avoid its contractual obligations. Nobody will bat an eye.

A person, however, is held to a different standard. When a person enters a contract — including a mortgage — it is assumed that the person has given his “word,” his solemn moral promise. Even where the person stands to lose money by performing his contractual obligations, many people think that the person simply must soldier on and must comply with the contract or he has acted “immorally.”  Don’t believe me?  Check out these comments.

From my perspective, people should do what is in their best self interests. If defaulting on a mortgage is the best course of action, all things considered (including damage to credit score), then the borrower should default. The lender took a risk when it loaned the money, a risk reduced but not eliminated by securing that loan with the house at issue. Thus, the lender — just as much as the buyer — took a risk that house values would decrease, thus jeopardizing the security for the loan. The lender, then, should be prepared for the consequences.

I think Professor’s point is a good one: people don’t default because of social pressures to not do so, social pressures that are applied only to borrowers and not lenders.  This exacerbates the burden on people, to the benefit of the lenders, as a result of the market implosion.