Owe more than your home is worth?

I started this blog because many consumers think that because they owe more on their house than what it may be worth, they have to do something…a short sale or be foreclosed on…something!

First and foremost, just because you owe more on something than what it is worth, doesn’t mean you have to do anything. As soon as you drove your new car off the dealership lot, you owed more than what it was worth, but chances are, like me, instead of worrying about it, you just continued to enjoy your car.

If for any reason at all, you do feel like you need to do something, you have options. While there is not enough time on here to cover them all, I can give you the most common.

First, as I already mentioned, you can do nothing. You can continue to pay your mortgage and enjoy your house as long as you keep paying it. Orange County home prices in the past have always appreciated over time. You can probably expect they will again.

Secondly, you may be able to refinance with your current lender to a lower rate. Today the banks would rather help refinance you instead of having to take your home back. It is in their best interest to help you in this situation. Many real estate agents and loan officers will not take the risk in telling you this because it is not in their best interest to do so. This is the best remedy for many people in this same situation.

The third option is that you can sell your home….even if you do owe more than it is worth. This is what is known as a short sale. You will have the option of paying the bank the difference in what is owed and what it is worth but if you cannot afford to pay that difference, the bank will typically still allow you to do so. The best thing about this option is that right now, if it is your primary residence, you may have no tax consequences whatsoever. You will need to check with your CPA for more information on this situation as I am not a tax advisor.

Another option is to walk away. Stop making your payments and walk away. The bank will foreclose on your house and this typically has the worst tax consequences for you, but it is an option for many. Again, discuss this or any of these options with a CPA before proceeding.

You do have other options as well, and I would love to share them all with you. As you can well imagine, there’s just too much to tell you about on this blog, but it’s easy for you to get more information. There is no cost, hassle or obligation to obtain these options. It is just my small way of helping educate people who may be facing home ownership challenges.

So call me, Dave Osborne with Referral RES at 714-349-5454. I look forward to helping you out.

Thanks!

Fearing that the current state of the housing market is dragging the economy into recession, the senate today passed a test vote approving the biggest government program ever to bail out troubled homeowners. This legislation, if passed, will create a $300 billion fund to help up to 400,000 homeowners refinance their current loans into more affordable government backed loans.

This bill easily passed a senate test vote 83-9 and is supported by both Democrats and Republicans alike. There are spending aspects of the proposed bill that the White House is leery of and thus will need revisions before President Bush will support the bill. This bill can pass as early as Mid-July.

The new bailout bill will be funded with new tariffs on Fannie Mae and Freddie Mac. It will also subject both mortgage enterprises to regulation overhauls. In light of Fannie and Freddie's slow response to help recovery in the troubled housing market, many are optimistic that this new legislation will provide the relief needed to correct the market.

No word yet as to have this will affect the most recent Homeowner's Economic Stimulus Package. Stay tuned to TheOCmls.com for regular updates.

Thinking through the process....

What a crazy 3 weeks the last have been. I am behind on showing you which Homes need Heaved but rest easy knowing that you can still search for them yourself at TheOCmls.com.

I'm taking a little departure this week from talking strictly about real estate for a few good reasons.

First, I myself am in the process of preparing my home for sale, and buying a new one. Like you, I understand that this takes a lot of work and a lot of organizing. There is so much to figure out, dollars to calculate, neighborhoods to choose from, concern about the market, etc. etc.. It can be a real challenge keeping everything together.

Secondly, to help me through the process, I have discovered an amazing breakthrough technology that is helping me sort through all the details and is keeping me focused on the things that need the most attention.

The technology is called Mind Mapping. With a pen and a piece of paper, you can layout your thoughts in an organic, free flowing process which will actually help you get organized and structured.


If you, like me, think that pen and paper are good, but software is "better" then you might be interested in knowing there are other options. I just this week discovered Tony Buzan's iMind Map software. After using the free demo for only 10 minutes, I was literally blown away at the power of this software. It helped me immediately lay-out all the things I needed to do in preparation of selling my house, but the way it is set up encouraged me to think through the details and I was able to add items that I had completely forgot about. As I "played" with it, my mind was aflutter with ideas of other places this program would be helpful.

Besides helping me organize my thoughts in regards to moving, I also quickly developed a new company org. chart and laid out a new marketing program for the company as well.

2 days ago, I had never even heard of the name Tony Buzan. A quick search of him on Google shows that he is a world renown thinker and educator and has written many books on the power of the mind. Ken Blanchard, author of The One Minute Manager and Forbes Magazine both recognize Tony Buzan as a leader in his field.

I am so glad I found out about this, I could not wait to share it with you all. I strongly encourage you to check out the free download for yourself. It is good for 7 days but I have a feeling you will know in the first 10 minutes if it will benefit you at all.

After you try it out, report back to me. I would love to get your feedback on it. Thanks and have a great week!