SHRA's Foreclosure Consumer Workshop
If you’re having trouble wrapping your mind around the mortgage meltdown, you’re not alone. There are several workshops around the Sacramento area to help people trying to hang onto their homes – and those looking for bargains.
This story was reported by KXJZ's Steve Milne and Ben Adler.
If you’re having trouble wrapping your mind around the mortgage meltdown, you’re not alone. Many homeowners, like Sacramento’s Sydney Porter, are wondering how they got into such a big mess in the first place:
Porter: “There’s certain papers I had in my packet I got now, I’m thinking, well, I didn’t see this here. Cause if I woulda saw this, I wouldn’t have agreed to this here.”
Porter’s hardly the only one asking for help. There are several workshops around the Sacramento area to help people trying to hang onto their homes – and those looking for bargains.
Foreclosure and Mortgage Default Consumer Workshop
By: Ben Adler
Ever since December, Sacramento resident Sydney Porter has worked from 9am to 5pm. Not at a job -- she’s retired and disabled -- but at trying to keep her Meadowview home.
Porter: “I get up, work Monday through Friday, then come Friday at five o’clock, I say, okay, ain’t nothin’ else I can do. Rest your mind Saturday and Sunday, cool on out, then we’ll get back up Monday morning, get on the phone and start all over.”
Porter has a five-page log of everyone she’s called – her lender, her mortgage company, even the real estate broker who sold her the house (though she’s nowhere to be found). Porter’s also called at least 15 other lenders. She’s lucky to get a call back, she says, and when she does …
Porter: “I say, look, I owe $145,000. The equity is $132,000. Can you help me? And they say no, right then and there.”
So Porter was one of a couple dozen people at the Oak Park Community Center on a recent evening.
Workshop Leader: “We are here tonight to help you clarify that process of sustaining you in your home.”
This is the second in a series of consumer workshops – run by the Sacramento Housing and Redevelopment Agency. They’re a chance to meet one-on-one with community organizations that can advocate on a homeowner’s behalf. Someone like Oksana Hill with the Sacramento Mutual Housing Association.
Hill: “Well, Sydney, what I would do is I would suggest that we meet, and I would be happy to call your lender, your servicer, and see what’s going on.”
Porter requested a modified loan from her lender in January, and still hasn’t heard back. She’s not sure what to do next. Her adjustable-rate mortgage payment went up in January, and it’s jumping again on June 1st – beyond, Porter says, what she can afford. She says she’ll do everything she can to hold onto her house, and she’s counting on her modified loan request to get approved. But if not …
Porter: “My last resource is a short sale. Or either maybe just walk away and file bankruptcy and just say, forget it.”
Porter wouldn’t be alone if she had to resort to a short sale. It’s a growing trend both around the Sacramento region and across the country. It turns out there's a class for people looking to move in on the short sale market.
Short Sales Workshop
By: Steve Milne
The class is called: “Short Sales: The Upside of a Down Market”….and the title says it all – it’s putting a positive spin on a dire circumstance.
Workshop Leader: “This is why a short sale would work versus a foreclosure because that doesn’t make any sense …”
About 20 people paid $50 to take this night class in an office building on Howe Avenue, the home of an adult education program called Learning Exchange. It’s taught by David Lal – a San Francisco-based real estate broker.
Lal: Our focus here is on investors who would like to buy these short sales transactions.
Steve: Well, I guess one person’s tragedy is somebody else’s gain? Lal: Unfortunately that’s true because at some point somebody’s going to acquire this property for considerably less than what the mortgages were so if we structure it properly it allows both the investors to be able to prosper and it allows homeowners to be able to walk away with some dignity.
Here’s how a short sale works: Let’s say you bought a home two years ago and you paid $400,000 for it. Something happens where you can’t afford the monthly mortgage payments anymore. So you put your house up for sale. But the market has tanked and your home is only worth $300,000. Rather than letting the bank repossess your home -- or go into foreclosure -- you decide to bargain with the lender for a smaller sales price.
David Lal is teaching investors how to negotiate deals on those properties.
Lal: And that allows the homeowner to be able to move on and not be foreclosed upon and it allows the investor to be able to actually get a good deal on the market.
Investors are finding those deals all over the Sacramento area. But in this region, “short sale central” is in Elk Grove. That’s where real estate agent Tracey Saizan works.
Saizan: So Elk Grove, Natomas, Roseville, Rocklin, those are the areas that I think are getting beat up pretty badly.
She says the bulk of short sales are in places where there’s been a lot of new home building and plenty of borrowers who got caught in the sub-prime mortgage debacle.
But dealing with short sales is a headache for most real estate agents. Saizan says short sales are more work -- and sometimes the lender slashes the agent’s commission.
Saizan: I’ve heard agents say ‘well, I’m not showing any short sales to my buyer’. But nine out of 10 listings in the 95757 zip code are short sale, nine out of 10.
Back at the Short Sales workshop, Angela Hughes is paying close attention and taking copious notes. She hopes to come away with a little more real estate savvy.
Hughes: Some really hard times for some people means opportunities for others and possibly a chance to get a house at a very good price.
Steve: So you’re looking at this as an investment?
Hughes: Actually I’m looking to use it as an investment and also possibly find a house for my mother that she can afford the payment on.
And she’s in a good position to do both. Experts say short sales will continue to surge as the number of local homeowners struggling with rising adjustable rate mortgages keeps going up.