Real Estate Scams Everyone needs to know about!

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Rent to Own Homes Situation

Provide buyers-tenants and sellers-landlords additional options during questionable times for the market or the individual parties. The general agreement allows for a potential buyer, who may not have the capital to buy the house out-right or the credit to get a loan, to pay a deposit up-front, traditional rent and a rent premium and live in desired home immediately.

The deposit on a rent-to-own is usually between one and five percent of the property price. The traditional rent goes straight to the seller-landlord, as in any other rental agreement. The rent premium acts as a further deposit toward the purchase of the house. Most rent-to-own contracts are fairly short term – one to three years is the usual length – and the price of the property is usually established at the contract signing. However, other details of the arrangement depend on which type of rent-to-own agreement you enter.

Lease Option Situation

A lease option allows the buyer-tenant to work towards the purchase of the house without an obligation to buy. This arrangement provides the buyer-tenant 12 to 36 months to save money or raise a credit score that is slightly below the needed one. A lease option also reduces the potential buyer’s anxiety about making the long-term and all-inclusive commitment of purchasing a home and provides him or her time to further consider the pros, cons and responsibilities of home ownership. At the same time, a lease option agreement gives the seller-landlord more security than with a traditional renter. The tenant can ultimately decide not to by the home, but he or she usually forfeits the original deposit and the rent premiums paid every month.

Lease Purchase Situation

 Unlike a lease option, in a lease purchase the buyer-tenant agrees to buy the house in the initial contract and is obligated to follow through with the purchase at the end of the lease term. A lease purchase provides the seller-landlord the most security outside of an out-right sale, as it contractually guarantees the eventual purchase of the property by the buyer-tenant. However, both parties should be cautious if the agreement is hinged on a significant savings or credit score improvement, as a failure to accomplish either may result in a continued inability for the tenant to purchase the home, leaving both buyer and seller in a lurch. If the tenant ultimately decides NOT to buy the house, he or she faces the potential consequences of a broken contract in addition to losing the deposit and rent premiums. The seller, then, also faces legal expenses in pursuing the broken contract.   


The path to a successful rent-to-own – for both buyers-tenants and sellers-landlords – requires a solid and detailed contract and a thorough game plan. If potential buyers engage in a lease option or purchase in an effort to improve their credit over the lease period, they should make sure they do in fact raise their credit scores and will be granted loans for the mortgage. Otherwise, premiums and deposits will be surrendered, and they may end up in a worse position than in the beginning. Likewise, sellers-landlords should enter rent-to-own arrangements acknowledging that they are usually long-term solutions and not avenues for immediate capital. For security and planning, both parties should establish a property price at the beginning of the agreement – or decide to go with the market price at the time of the purchase – and write the price into the contract. Sellers, landlords, property managers and buyers/flippers who have available properties they just want to sell can list their property on http://ow.ly/2oBz6.

Also, sellers, landlords, property managers and buyers/flippers who have available rent-to-own homes or properties they just want to sell; can list their property with there detail home buying or rent-to-own specifics on http://ow.ly/2oBDg. 

This Simply add your rent-to-own,  all financial information, and all the client preferred information to the database. Afterwards, We will be email blasting the rent-to-own, lease options and purchases properties information to the requested clients area with in the database.

Red Flags:  Documentation If you have bad credit and would like to buy a home, you probably already know that in the current market getting a mortgage is going to be difficult. The subprime market is gone and even FHA guidelines seem to be getting tighter all the time.



As of 2010, most lenders will require that you have a credit score of at least a 620 in order to qualify for an FHA loan. You might have heard that FHA guidelines do allow for lower scores. While this is certainly true, you should keep in mind that it is the lenders, not FHA, that underwrites your mortgage. Because of the increased liability that they face, most of them are opting for higher standards than what FHA allows for.

If your credit score is less than this, you basically have two options. You can continue to rent and work to improve your credit so that you qualify for a poor credit mortgage loan, or you can get into a rent to own home and work to repair your credit while living in the home. Which option is best largely depends on your situation. If you are only a few points away and have already saved the money that you will need for your down payment, working on credit repair can make sense. On the other hand, if you have a ways to go it can make sense to go ahead and enter into a rent to own contract on a home that you plan to purchase in a year or two. Most contracts will allow you to purchase at any time during the rental period, so you can always get a mortgage as soon as your credit score allows.

Regardless of your situation you should understand that credit repair can take some time. There are no quick fixes and you should steer clear of any company who presents some scheme that is guaranteed to improve your credit score quickly.


If you carry credit card debt, one of the best ways to improve your credit score is by paying down your debt. In fact, if you have the ability to pay off a significant portion of your debt, you should expect to see significant improvements in your credit score.

Red Flags:   Collection accounts can be address through several strategies such as debt validation and pay for delete. Both of these can be good alternatives depending on your situation. With a little hard work, you can eventually achieve your dream of owning a home!

Other Associated sites:
http://www.offerin12hours.com/kfranklin

http://www.renttoownbuyer.com/kfranklin

http://www.realestateinvestordeals.com/kfranklin




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Protect Yourself From Mortgage Fraud

NACA coming to a city near you: Here's how to save your "HOME".

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Soon, NACA will once again travel across the county in order to help America’s at risk homeowners. Here are some of the projected cities:

◦WASHINGTON, DC July 16-23 TBD

◦LOS ANGELES, CA Sept 16-20 TBD

◦SACRAMENTO,CA Sept 24-28 TBD

This is a Save-a-Thon, that means 24 hours a day or over 100 straight hours. We expect many thousands of homeowners with an unaffordable mortgage to attend these events. NACA’s historic Save the Dream Tour has been an incredible success with over 375,000 participants in fifteen cities and many thousands of homeowners receiving same day solutions. Most people have had their mortgages payments permanently reduced by over $500 and many by over $1,000 a month often with interest rates reduced to 3% or 2% and sometimes a principal reduction. All of NACA’s services are FREE. Over 300 NACA counselors will work with you to determine an affordable mortgage payment. In addition, the servicers/lenders have hundreds of staff on-site and in their offices to approve your solution.

NACA’s historic Save the Dream Tour has been an incredible success with hundreds of thousands participants in thirteen cities. Thousands of homeowners received same day solutions having their mortgage payments permanently reduced by over $500 and many by over $1,000 a month often with interest rates reduced to 3% or 2% and sometimes a principal reduction. NACA has legally binding agreements with all the major lenders / servicers to achieve this. All of NACA’s services are FREE!

NACA will continue the Save the Dream tour in 2010 with events in thirty cities nationwide. We will soon be updating the website with the Tour Schedule.

Other Associated sites:
http://www.offerin12hours.com/kfranklin

http://www.renttoownbuyer.com/kfranklin

http://www.realestateinvestordeals.com/kfranklin



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Foreclosures Are Ripe

Okay, true or false:

31% of all home sales in the first quarter of 2010 were foreclosures.

You’re thinking it’s true, right? I mean, why would I make up such shocking numbers for no reason?

Well, you’re right. It’s actually true. Though pretty unbelievable.

What’s even more amazing is that prices for distressed properties were 27% lower than average prices for non-distressed ones.

RealtyTrac says those numbers are up 2500% from the height of the boom! And they claim that most of these properties were picked up by either first time homebuyers or investors. (Ahem, prime customers for folk like us, if you catch my drift. If you don’t, send me a message and we’ll talk.)

And the biggest sources of foreclosure properties were Nevada, California, and Arizona. (Hey, where’d Florida go?)

And average closing prices for distressed homes in Ohio, Kentucky, and Illinois had the biggest discounts, 39% below non-distressed.

So, where are we moving first? And if we don’t move, where are our clients moving? Because we’ve got to get in on these prices. If you have any ideas, share them with the group. We’d love to hear what you’re thinking.

Other Associated sites:

http://www.offerin12hours.com/kfranklin
http://www.renttoownbuyer.com/kfranklin
http://www.realestateinvestordeals.com/kfranklin

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The Fannie Mae (FNM: 0.3425 -2.14%) mortgage portfolio passed $813bn in May, climbing $24bn from April, according to its monthly summary.

In his market report, Jim Vogel of FTN Financial is increasing expectations of how much debt Fannie will issue to fund more “dead assets.” Fannie could issue more debt paid back to investors at scheduled times and at the investors discretion, also known callable debt. The growth shown in May was financed mostly by this short-term borrowing, according to Vogel.

“Fanie will have clear sailing for is next Benchmark on Wednesday, July 7 with no Treasury supply and limited corporate competition in front of earnings announcements,” Vogel wrote. He added another $5bn in issuance “is certainly possible.”

Fannie issued $36.2bn mortgage-backed securities (MBS) in May, a 3.7% drop from the $37.8bn mark in April and a 71.9% decrease from the $129bn issued in May 2009. MBS issuances reached its peak in the last year in June 2009, when Fannie issued more than $130bn in MBS.

The serious delinquency rate in Fannie Mae’s portfolio fell for the second straight month to 5.3% in April, the latest month of available data. It reached its peak in January 2010 at 5.52%. In April 2009, the delinquency rate was 3.42%.

In May, Fannie purchased another $49bn of loans out of MBS trusts as part of its effort to buy-out seriously delinquent pipelines. That’s up from $46bn in April.


Housing Recovery is Spelled R-E-O


* Mortgage Defaults, Foreclosures Drop Across California: ForeclosureRadar
* Servicers Respond to Deutsche Bank Report; Seek Faster Short Sales
* Pace of Mortgage Delinquency Slowing: LPS
* NAR Offers Realtors Certification for Short Sales, Foreclosures
* Despite HAMP, Mortgage Delinquency Grows 21% over 2009: LPS

Monday, March 15th, 2010, 11:26 am

Short sales are a hot topic right now—especially with a much-ballyhooed government program focused on short sales, the Home Affordable Foreclosure Alternatives program, about to come online. But in the end, the real key to resolving the problems that yet remain in housing is likely to come back to an old standby: REO property sales.

Yes, really. But to understand why, you’ve got to first really understand the scope of the mortgage default problem we’ve now got.

According to data from Lender Processing Services (LPS: 31.31 +0.77%), a whopping 7.4m loans are now non-current, compared to just 4.1m on average between January and June of 2008. A recent JP Morgan Chase (JPM: 36.61 -1.21%) investor presentation presents the problem more visually, per the data below: (You can literally almost see the pig in the python.)

JPM Prime Mortgage Defaults

What the above chart should call attention to is the aging of loans in the default pipeline. Again using LPS data, for all loans more than 90 days in arrears, the average days delinquent is now at 272 days—up from 204 days in early 2008. For loans in foreclosure, the aging numbers are even more staggering: loans in this bucket average 410 days delinquent, up from 260 days delinquent in early 2008.

Ponder those numbers for just a second. On average, severely delinquent borrowers have gone more than 9 months without making a mortgage payment—and yet foreclosure has not yet started for them. For those borrowers who are in the foreclosure process, it’s been an average of 13.6 months—more than one full year—since they last made any payment on their mortgage.

So, can short sales ride in to save the day for these 7.4m troubled borrowers? What about for the many millions more who are current on their loans, but are underwater on property value and unable to sell? For some, short sales will be an important solution—but don’t kid yourself: the hype currently surrounding short sales and the HAFA program will prove to be short-lived, and REO expertise will be prove to be the key to recovery, as it has been in prior cycles.

Let’s explore two primary reasons for this.

Second liens. Laurie Goodman at Amherst Securities, one my favorite mortgage analysts of all time, recently published some analysis showing that $1.053trn in second mortgages remain outstanding—and $963bn of that is on the balance sheets of commercial banks, thrifts and credit unions (the rest is largely within securitized pools). In plain terms, extinguishing second liens will have material impact on the reported capital positions of some of our largest commercial banks, a Very Bad Thing™.

Goodman’s team estimates that roughly 51% of first mortgages outstanding have a second lien associated with them in some form; for prime and Alt-A mortgage holders, those numbers reach closer to 60%.

Second lien holders, when they exist, effectively determine whether a short sale can proceed—and there is zero incentive, whether through the Treasury’s HAFA program or otherwise, for a second lien holder to voluntarily vaporize their note.

Unless, apparently, money can be passed under the table. As seen in a story first broken by Diana Olick at CNBC, we’re already hearing reports of short sale fraud involving second lien holders attempting to extort dollars from seller’s agents directly, outside of the HUD settlement statement. Government’s implicit endorsement of short sales via the HAFA program seems only more likely to increase this sort of pressure. Regulators now face a very unique conflict of interest, and it will be interesting to see how this is resolved: on one hand, violating RESPA helps grease the wheels of a short sale, something the administration wants to see happen; on the other hand, violating RESPA is a federal offense.

All of which means that second liens aren’t just a little stumbling block to short sales; they’re a boulder the size of Texas.

Meet HAFA, child of HAMP. The HAFA program, going into effect on April 5, is getting plenty of attention—and the program’s heart is in the right place. But most are forgetting that it’s an extension of HAMP, the government’s loan modification program that has seen tepid success at best thus far. A loan must first be HAMP-eligible in order for anyone (borrower, servicer, or investor) to qualify for the program’s various incentive payments for short sale or deed-in-lieu.

Which means any of the guidelines applicable to the HAMP program—loan in default or default imminent, within UPB guidelines, owner-occupied, and originated prior to 2009—still apply.

Out of the gate, this simple fact rules out HAFA incentives for the many millions of borrowers that are underwater on their mortgage, but still performing. Read that again, because I’m seeing plenty of overzealous real estate experts suggest that the HAFA program will drive real estate sales for underwater homeowners (so sign up for their paid course to learn how to make millions using short sales!).

As for the 7.4m already troubled borrowers? 1.3m troubled homeowners have received offers for modifications under HAMP to date, according to the latest report card, with 1.1m agreeing to a trial – and of that, 168,000 have moved to permanent status since the program’s start in the middle of last year. (We don’t know how many have since re-defaulted, however.)

One of the largest problems within the HAMP program, even among eligible borrowers, is obtaining the paperwork required from the borrower to process a loan modification. JPM, for example, recently reported that out of every 100 HAMP trials offered, 25 borrowers do not pay as agreed and another 29 do not submit required documents, omitting Social Security Numbers, signatures and the like on documents that are submitted.

Keep in mind these omissions and failed document submissions remain despite 15,000 staff members at JPM alone dedicated to nothing but loss mitigation. These omissions are coming despite an outreach strategy for each borrower that includes 36 calls, 15 letters, and 2 door-knocks prior to JPM kicking any individual borrower out of the HAMP program.

If that’s what we’re seeing in terms of an effort to keep people in their homes, I’m not sure we should expect better performance when it comes to short sales (which would have people leave their home).

Further, HAMP is itself a limited program, which means HAFA will face the same limitations. And HAMP’s handlers in the government understand the limitations of the program; the most recent report card from the Treasury notes that out of an estimated 6m borrowers at 60+ days delinquent, HAMP eligibility currently extends to 1.8m.

While officials repeatedly state that they expect more borrowers to become eligible over time, even if the program hits its goal—3-4m trial offers extended by 2012—it’s still only part of a solution, not the solution. (After all, as the LPS data clearly shows, we’ve already got more than double the 3-4m 2012 HAMP target in troubled borrowers right now, to say nothing of who else will enter the pipeline between now and then.)

The point here isn’t that short sales won’t matter—they will. But expecting HAFA to kick short sales into high gear all of a sudden is probably a very misguided expectation. As is expecting short sales to come to replace REO volumes in distressed real estate transactions.

Instead, the short sale process in general is likely to become more streamlined as a result of the HAFA program, and that will help servicers process more short sales than they may have in the past.

Nonetheless, in the end, we aren’t going to simply short sale our way out of 7m or so housing units’ worth of foreclosure overhang. What gets us out of this mess is tens of thousands of committed real estate professionals that really and truly understand REO.

I’m not alone in this conclusion, either. JPM's got my back on this, and told investors a few weeks back that it sees REO volumes returning in the back half of this year, after dipping sharply in Q4 2009 and Q1 2010 under the influence of various government modification programs.

The company’s baseline projections (below) show REO volumes returning to Q2 2009 levels by the end of this year—with stressed scenarios putting REO volumes back at late 2008 levels by the fourth quarter of 2010.

JPM REO Forecast, Feb 2010

Thanks to effective intervention from the government, we won’t see REO volumes soar to peak levels anytime soon—but we will see elevated inflows at least through the mid-2012, out of necessity. And those inflows should be seen as the road to recovery by anyone watching real estate. JPM forecasts, for example, that by Q4 2012, 22-28% of home sales in the Los Angeles region of California will still be REO; in Phoenix, that number is projected to be 39-50%.

These projections underscore a message I've shared privately with many industry colleagues recently: recovery in housing is spelled R-E-O. Anything else is wasting time until we get there.

Other Associated sites:

http://www.offerin12hours.com/kfranklin
http://www.renttoownbuyer.com/kfranklin
http://www.realestateinvestordeals.com/kfranklin

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