After signing the mortgage deal

• No matter if you have done your mortgage or mortgage refinance with Wells Fargo or Bank of America the lenders can sell the loan to investors on the secondary mortgage market. The moment the borrower signs his or her loan documents he has no role to play in this regard.

When mortgages get sold

• Once the mortgages are sold, fairly they’re divided into two major parts, the first part is the actual mortgage itself and the second part which is sold is the servicing rights. The first portion is attached with a bunch of other mortgages and sold to an investor in the form of bonds or some kind of investment vehicle. Once you sold the first portion of the mortgage the payment you make to the company servicing your loan, small percentage of your payment is accepted by the company and the rest of it is paid to the investor. The second portion of the mortgage is paid to the company which will hold the servicing rights to your mortgage and handle all the administrative tasks that come with servicing your loan, like sending out statements, collecting past due payments and so on.

When the Original Lender Goes Bankrupt?

When your original lender file for bankruptcy after selling both the mortgage and its servicing rights, you remain no more obligated to pay them but if they keep the servicing rights and sell off just the mortgage as an investment vehicle, they will be compelled to liquidate its assets, which means they have to sell the servicing rights to someone else. Once the servicing rights are sold, the change you’ll first notice is that the company you are currently paying has been changed.

What happens if the Servicing Company declares bankruptcy?

If eventually the company which presently holding the servicing rights goes bankrupt? Same procedure will be repeated. The company will be forced to sell the mortgage servicing rights at a discount to another company or investor and you’ll start paying to yet another new company.

What happens if finally the investor declares Bankruptcy?

Have you ever given a thought what will be the consequences if the investor who bought the actual mortgages itself, as some sort of investment vehicle, goes bankrupt? Don’t worry most probably you won’t even know about it. No matter what happens to the mortgage, the company might sell it to some other company or might lose it in a lawsuit, either way; your loan terms will remain unaffected.

To conclude, no matter what happens, no matter how many times your loan is sold or how many companies holding it go bankrupt, the terms of your mortgage will never be changed or modified in any way.

Carla Hill explains more in this recent article:

http://realtytimes.com/newsfiles/realtimes2.nsf/rtpages5.1/20110517_neighborhood.htm

You see, running a business isn’t all just fast cars and going on vacation, it does require a little bit of yourself before you can get there. So take a look at this podcast and give me your feed back below.

Please leave any questions or comments that you have…

Pretty staggering numbers, but again, I expect to see numbers like this given our current national real estate market, lack of available financing, and lack of able buyers.

You can read more this subject by clicking here.

Strike one back for the good guys…My only question here is, where were the cops?

You can catch the full story here:

http://www.winknews.com/Local-Florida/2011-05-16/Real-Estate-company-hires-security-guard-to-watch-house-attacks-thieves

So when you are a small bank and a large amount of your revenue is generated from these type of loans, that spells some real trouble. Many of these local banks to not have the deep pockets that the large institutions have, and they are much more susceptible to default.

Sadly, these banks tend to be the best banks out there in terms of customer service, products and pricing. I am a member of just such a bank in my local area, and some of the things they that have done for me were totally unheard of with the national chains.

You need to have access to the MLS, but you don’t want to pay for anything else. And on top of that, the NAR forces an annual fee of $40 for political non-sense.

You can read the full story here:

http://realestate.about.com/b/2011/05/14/no-they-dont-listen-nar-picks-our-pockets.htm

I hadn’t thought about this before, so when I ran across an article on ActiveRain, I thought you would be interested as well. The basic premise is that the feds want to ensure they get their money, so they require a 10% withholding on the money, to ensure it doesn’t leave the US, never to return.

The problem is, the bank will often deny the short sale if this withholding occurs. So what do you do? Click here to see some options.

Kristine Ginsberg goes on with some more things you can do very, very cheaply to give the exterior of your home a fantastic face lift. You can check it out here.

Even if they are self employed, make a lot of money and have been in business for awhile, they may have lots of write-offs and therefore do not have the ability to qualify for a loan.

So in short, confirming that your potential clients have pre-approval letters in their hands in the best way to ensure that you do not waste your time on an unqualified buyer.

Donne Knudsen provides more detail on this subject at the following location:

http://activerain.com/blogsview/2289000/there-is-no-such-thing-as-a-golden-buyer-anymore-get-pre-approved-first-

Because of the real estate bubble burst, many people are finding themselves with more mortgage than home value. And if they truly need to sell now, getting them out of their house without them having to write a check at the closing table just might not be feasible.

Here is a good article on being honest with your real estate clients:

http://activerain.com/blogsview/2297339/now-isn-t-a-good-time-to-sell-your-home-

This information comes from AddPR.com, and you can view the full article here. The six tips they mention are these:

Tip 1: Research comparable properties
Tip 2: Know the market
Tip 3: Play in a down market
Tip 4: Don’t go for the ‘renovator’s dream’
Tip 5: Follow auctions
Tip 6: Buy by private treaty

And even then, the “repair costs” that they estimate will likely not be the true costs, and/or they will add money to the price to be able to negotiate down.

So here’s the big problem when you see this type of advertising. All the wannabe and green investors come running. And they are likely to bid more than the house should go for, because they lack the required experience necessary to facilitate a profitable investment transaction.

My advice – either be the first one to the property and negotiate a deal that works, or be the last one to look at it. A handyman special that has sat on the market for months could likely be a deal. The key, as always, is knowing the seller’s level of motivation.

A seller who just lists the property and has 2 or more offers come in is not very likely to negotiate much, because they don’t have to. But let the property sit for awhile, and the seller tends to soften up. Be the seller’s last hope for a sale, and now you really have some leverage!

Be careful in the real estate investing game, the most important part by far is getting the property at a significant discount, or you won’t make any money.

It’s pretty much a no win situation for the home owner, however the banks “seem” to be trying to help the mortgage holders out, by offering them an incentive for doing a short sale. The problem with this is, they may not be providing the necessary fine print in their marketing, and consequently, most average home owners with no real estate knowledge could get taken advantage of.

Take a look at the following post providing more details on this subject.

I’m talking about investors who approach lending organizations and expect to acquire loans that consider the property’s value after repairs. So when they find out the loan will be given based on the current market price of the home, their plan often snaps like a twig.

Stout Street Funding has released a report further detailing these problems called The 12 Deadly Mistakes to Avoid When Applying for a Private Real Estate Loan, which you can download here.

So what’s the solution?

Well, any idiot can figure out if you don’t have enough money to cover your expenses, you have to stop spending money.

But our government doesn’t work that way.

They just increase the legal limit and continue to borrow. Don’t expect anything different to come out of today’s politics.

My question is, how long can we keep this up before another country conquers us on economics alone?

But why not follow someone else’s proven strategy, then modify it to fit your needs?

Take a look at this open house article, and see if you can get some ideas. Just a hint, in today’s market, you need to be doing offline and online marketing if you really want to be effective, and drive a lot of traffic to your open houses…

So things like videos, neighborhood breakdowns, market pricing information, and maps are a wonderful thing to keep people on your site and interested in what you have to offer.

So instead of just pasting a static picture of a map to your site, why not embed a real one from Google?

Check this out for a great way to accomplish this task.

Commercial real estate has seen major declines in the last few years, so it is good to hear some good news. But again, the major flaw in the commercial sector (as well as the residential sector) is financing. Investors as well as primary home owners are feeling the pain of stiffer lending requirements and higher down payments, just to name a few pains.

What will that mean for the future? I don’t know, but you can read the full story here.

Many commercial real estate loans are limited to a 5 year maturity, and thus they come up for renewal or payoff much shorter than that of an average home owner. So higher commercial loan costs could mean more foreclosures; more bad news…

You can read more about it here:

http://blogs.forbes.com/greatspeculations/2011/05/13/commercial-real-estates-sink-or-swim-moment-as-qe-2-heads-to-port/

RealtyTimes posted an article about this recently, basically going over 2 major points, training and accountability.

Feel free to check out what they have to say here:

http://realtytimes.com/newsfiles/realtimes2.nsf/rtpages5.1/20110513_micromanage.htm

But Justin offers several things, including these:

Home Building Pros

• Control
• Knowledge
• Expert Advice
• Eco-Friendly Potential

Home Building Cons

• Cost Overruns
• Time
• Stress

So before you decide that building your own home is for you, just remember to take everything into consideration. Building your own home may be right up your alley, but for some folks, is just really doesn’t fit their personality, schedule or otherwise.

You can read more about the article by clicking here.

Take a look at the following video, and please feel free to leave me any comments or questions have in the box below.