Foreclosures: Help Your Neighbor and Yourself

By on 19 March, 2012 in Real Estate, Sandra Nickel with 0 Comments

Recently, I was sitting at my desk doing what I normally do first thing in the morning Monday-Friday: calling friends and clients (many of whom are both) to say happy birthday. It gets my day off to a great, positive start; and I hope it sets the tone for them as well.

One of the people I called could not be reached because their number had been disconnected. It was unexpected, and I wondered what had happened. Instinctively, I checked the probate records and found they no longer owned the McGehee Estates home we had sold them some years ago. What’s worse, the home was owned by FNMA, which meant it had been foreclosed. Not good for them and not good for the neighborhood.

What happened? I wondered. So I called the mutual friend who had referred them to us. Turns out the husband — active duty military — had been reassigned and, at the same time, he and his wife decided their marriage was at an end. They, the mutual friend said, were “upside down” in both of the homes they owned and made the decision just to walk away.

This is a tragedy on two fronts. The Midtown neighborhoods where the homes are located sustained a blow because foreclosures in Montgomery are typically selling at a discount of 20-40 percent below regular fair market value. And the gentleman in question suffered damage to his military career that he may never be able to overcome. Wonder if he knew that at the time?

Foreclosure is not a huge problem in Midtown, but it is occurring more with every passing day. Of the 341 homes sold in the area in the past 12 months, 59 (17%) were foreclosures being resold. And 33 of the 319 home currently available for sale are foreclosures as well.

This, as I’ve already stated, hurts both neighborhoods and people. Someone sustaining a foreclosure is totally out of the homebuying market for at least three years, a lot longer in some instances. And while appraisers used to be able to ignore foreclosures as “distress sales,” they are now required by the lenders to consider them as comps. So property values suffer.

And it’s a all real shame because we do have a viable alternative to many possible foreclosures: short sales. While the transaction is terribly named (the typical short sale takes upwards of 12 weeks from contract to closing), it can be a welcome solution to a thorny problem.

Being underwater is only part of the reason that a lender will accept a short sale: It is settlement of the mortgage debt for less than what is actually owed. The borrower must also show proof that he/she/they have had a change in circumstances that makes it impossible for them to continue to make payments as agreed.

Putting a short sale together — and keeping it together — takes special training and knowledge married to a willingness to dog the details until the deal comes together. Because we at the Hat Team care deeply about our clients and our community, I have obtained special training that enables me to manage these transactions to a successful conclusion. I’ve also built a network of like-minded agents all over the nation who likewise are committed to making a difference in their hometowns.

So if you know someone — in Midtown, in Montgomery, or any town in the country — tell them to call me. Or if they’d rather be anonymous at least in the beginning, refer them to our special web site: Do it for them and do it for their neighbors, please!

Sandra Nickel has been listing and selling residential real estate for over 29 years, most with an intense focus on Montgomery’s Midtown neighborhoods. Sandra serves on the Mid-Alabama Coalition for the Homeless, the Cloverdale Business Coalition, Historic Southview, the Volunteer and Information Center, Landmarks Foundation and her own neighborhood Garden District Preservation Association.

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