Luxury Home Foreclosures

Before we get started on today’s tip of the day, make sureyou register for tonight’s training call at 9:00 pm ET. Mytop student is revealing tonight how he grossed a profit of$580,275.00 on just 5 deals. We’ll be breaking these dealsdown step-by-step to show you how you can do these dealstoo.

Now is the time to put your plan in place for luxury homesshort sales in 2010. Doing just one luxury deal per monthwith a profit of $100,000 or more will create a $1.2 Millionbusiness for you in 2010.

Right now, there are only 17 seatsleft for tonight’s training.
Get your seat now beforethey’re all gone. Nothing will be sold on tonight’straining. Join me here: http://www.dcfawcett.com/goThe entire VSSI community is talking about this boombergarticle on Luxury Home Foreclosures: “Luxury-Home Owners in U.S. Use ‘Short Sales’ as Defaults Rise”Homeowners with mortgages of more than $1 million aredefaulting at almost twice the U.S. rate and some areturning to so-called short sales to unload properties asstock-market losses and pay cuts squeeze wealthy borrowers.Payments on about 12 percent of mortgages exceeding $1million were 90 days or more overdue in September, comparedwith 6.3 percent on loans less than $250,000 and 7.4 percenton all U.S. mortgages, according to data from First AmericanCoreLogic Inc., a Santa Ana, California-based research firm.

The rate for mortgages above $1 million was 4.7 percent ayear earlier.“You are just starting to see the tip of the iceberg withluxury short sales,” said Adrian Heyman, owner of PropertyAdvisors, a real estate broker in Scottsdale, Arizona. “Alot of wealthy people are upside down in their mortgages andthey just can’t afford the second or third vacation homeanymore.”

There are 114,000 home loans of more than $1 million,according to First American. About a quarter of allmortgaged homes in the U.S. have loan balances bigger thantheir current value, known as being upside down orunderwater, the data company said.The entry-level segment of the housing market was aided thisyear by an $8,000 first-time buyers tax credit that pushedresales to a 6.1 million annual pace in October, the highestsince February 2007, the National Association of Realtorssaid in a Nov. 23 report.President Barack Obama signed a bill last month extendingthe program into next year. The new version keeps thefirst-time buyer benefit and makes a smaller creditavailable to some move- up buyers. It can’t be used forhomes priced above $800,000.The Fed purchases haven’t affected the high end of themarket because they exclude so-called jumbo loans.

Mortgagesabove the $729,750 limit set by Congress for the nation’shighest-priced markets cost almost 1 percentage point morethan conforming loans, according to Keith Gumbinger, vicepresident at HSH Associates, a mortgage-data company inPompton Plains, New Jersey. That’s quadruple the historicspread.Losses on luxury short sales will be high.There is huge pent-up demand for short sales or walk awaysat the high end, especially pay option ARMs for which WellsFargo is loaded to the gills.

The banks wake up to find themselves in deep water nowforced to accept 3 times more short sales. After avoiding short sales for years “Banks Take Losses onShort Sales as Foreclosures Soar.” Short sales almosttripled to 40,000 in the first six months of 2009 from thesame period a year earlier. Yet for each short sale, therewere 25 foreclosures started or completed in the first halfof this year, according to data from the Office of ThriftSupervision and the Office of the Comptroller of theCurrency.“It’s really finally dawning on banks that they’re betteroff with a short sale,” said Richard Green, director of theLusk Center for Real Estate at the University of SouthernCalifornia in Los Angeles. “

I think banks were in denial.”Lenders have been reluctant to do such sales because theydidn’t have procedures for employees to approve a financialloss for the company, said Alan White, assistant professorat Valparaiso University School of Law in Valparaiso,Indiana.“A short sale requires somebody to stick their neck out andmake a decision,” said White, an expert in consumer law andbankruptcy. “

There are not good structures in place toincentivize losses.”Bankers also have been slow to sign off on short salesbecause homeowner associations, mortgage insurers andsecond- lien holders may not agree to the terms of the deal,said Michael Frantantoni, vice president of single familyresearch at the Mortgage Bankers Association.Pressure is building to approve short sales as the number ofdelinquent mortgages has grown to 3.2 million and anestimated 7 million foreclosures loom in the next two tothree years, according to Irvine, California-basedRealtyTrac Inc., which compiles and sells U.S. mortgagedelinquency data.

New Treasury Department guidelines for foreclosurealternatives scheduled to take effect in April 2010 willrequire lenders to consider borrowers for a short sale ontheir primary residence 30 days after missing twoconsecutive payments on a modified loan or after theborrower requests a short sale.Here’s

Obama’s Plan for the foreclosure problem. Heobviously needs your help! The Treasury Department would pay up to $1,500 for ahomeowner to relocate, $1,000 to loan servicing companiesthat accept a sale and a maximum of $1,000 to help settle asecond mortgage or subordinate lien. A lender must agree torelease the borrower from all liability for repayment forthe mortgage, under the Treasury plan. “Pick-a-Pay” mortgages have among the highest rates ofnegative equity, because borrowers could select theirmonthly payments, often paying less than the interest, withthe difference added to the principal.


That formula meansthat total loan debt was increasing at a time propertyvalues were falling.Wells Fargo held $87.8 billion of such loans as of Sept. 30,down $7.5 billion from the end of last year.New rules for short sales favor homeowners and short saleinvestors.Note the rule changes in the second article. They are verysignificant.1) Lenders have to consider short sales2) A lender must agree to release the borrower from allliability for repayment for the mortgage.Are you registered for tonight’s training yet? We only have17 seats left. Nothing will be sold on this webinar.


Go here to get one before we are 100% full: http://www.dcfawcett.com/goTalk to you tonight. Don’t be late. DCPS: After you register, you’ll be sent to a page where youcan ask me a question and I’ll answer it on one of my dailyemails or videos. Just go here to signup for tonight’s training and thewebpage will change automatically after you signup:http://www.dcfawcett.com/go