Tuesday, February 26, 2008

You Walk Away?

I have heard a couple of news stories about a web site called YouWalkAway.com.

The aim of the website and the subject matter do not make me feel warm and fuzzy. The subject is walking away from your mortgage and minimizing the damage.

After listening on MPR I had to visit the site. I feel anyone who walks away from an obligation or anyone who encourgages others to do so had better check their moral compass.

I went to the web site and it was not quite as sleasy as I expected. You see the thing is what the web site seems to be offering is information on legal rights of those being foreclosed.

Before the whole foreclosure situation was recoginized by anyone I had a single guy come to me asking for help selling his house. He had lost his job and could not make payments or get a loan.
He said the mortgage company was making harrassing calls and played one on his answering machine for me. He had equity in his house, but no way to access it. We knew there was a six month redemption period and thought it was reasonable we could get the home sold in that time.

He borrowed a little money from a relative and did some minor fixup to the house and we put it on the market. He was offered a job out of town, which for survival, he had to accept. He turned off the utilities in the house and notified the mortgage company he was working on getting the property sold even though he was just living in it on weekends.

The mortage company immediatly filed for an acceleration of the redemption period because of "abandonment" which they proved by showing the utilities had been shut off.

They changed the locks, listed the property and sold it, taking the owners equity.

This is a case where the mortgage company knew the law and their rights and exercised them fully, Maybe even a little more than fully. No one from the mortgage company expressed remorse or bad feeling about what they did.

If this is the attitude taken by the mortgage company, should it be any great suprise that individuals would want to use the law to do the best they can? The Lending industry has set the tone.

I do not think it is right to "just walk away" from an obligation. On the other hand it doesn't surprise me even a little bit that people who are facing foreclosure might take steps to minimize the financial damage.

Friday, February 8, 2008

Open Houses

An open house is a way for you to see the inside of a home without a formal appointment. You can also meet different Realtors and get an idea of what they are like. If the open house is not too busy you can chat with the Realtor and get questions answered face to face.
In any given area there is usually a time most open houses are held. When I worked in Saint Paul and Minneapolis most open houses were held on Sunday afternoon. Usually I would do two open house of about two hours each.
Occasionally I would do open houses on Thursday evening.
In Red Wing most open houses are held on Saturday afternoons. In Saint Paul and Minneapolis open Houses are advertised in the Sunday paper while in the Red Wing area you'll need to look at the real estate insert in the Thursday Red Wing paper to see open house advertisements. Sometimes the only advertisement for an open house is the signs with arrows at the time of the open house.
Here is why a Realtor does an open house. The obvious reason is to try and sell the house, but few homes actually sell as a result of the open house. The more productive reason for a Realtor to do an open house is the potential of finding new customers.
Most Realtors will have a guest register for you to sign. Some people are not anxious to sign a guest register because they don't know what it is for. I request that everyone through an open house signs in. Of course, I like to have the names of those I meet especially if it turns out there is some reason to contact them, but just as important is the need to know who has been in a person's home.
You are a stranger entering someone's private home. If they are letting people off the street walk into their home, it is reasonable there should be some record of who these people are.
If you are working with a Realtor already they may have told you not to go through any open houses. Sometimes visiting an open house can cause confusion between Realtors regarding who you are working with. Avoiding all open houses is the easiest scenario for your Realtor, but may be an unreasonable request if you like going to them.
Sometimes another Realtor will call me before an open house and ask if its okay to send a customer through. I always say yes. More frequently someone will mention that they are working with another Realtor by saying something or just making a note on the guest register.
The confusion could come if the Realtor holding the open house doesn't know that you are working with another agent and you show interest in that property or ask for information on other properties.
Just as its a professional courtesy for the Realtor in the open house to welcome customers of another Realtor, it is a courtesy to inform the Realtor if you are working with another agent.
In general, open houses are a low key, informal way to get a look at the inside of a house. Its a good way to gather information on homes and Realtors. The Realtor will be happy to see you come through the door.