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Some tenants are better than others. Yet no matter how ethical a tenant might be, or how diligent in paying the monthly rent, even terrific tenants can get badly hurt by a foreclosure.

Landlords don’t usually discuss their financial problems with their renters. Why would they? If the property owner is falling behind on his/her mortgage payment, they fear that if the tenant finds out, the tenant might just follow suit and quit making the rent payment. And the landlord, headed for foreclosure,  needs money badly. Tenants of rental properties are often among the last to know about a pending foreclosure.

A landlord’s  foreclosure leaves a tenant in a precarious position and can potentially have a lasting effect on the tenant’s future ability to rent as well as throwing the tenant’s life into disarray while they scramble for housing unexpectedly. The scramble for a new home is a short-term problem. There are other pitfalls for renters, that can last for years beyond the foreclosure, and have a much more significant impact on the renter’s future.

When a lender “takes back” a home through foreclosure, the lender’s primary goal is to sell the property as quickly as possible. Empty properties are easier to sell than occupied properties. The lender, determined to sell quickly, must take steps to make the house as sell-able as possible. These steps often include emptying the house of it’s occupants. In other words, and eviction takes place. And here is where tenants can get hurt.

An eviction is a formal, legal action. Many legal actions are part of the Public Records. And Public Records are part of a Credit Report. So a tenant can end up with an Eviction on their Credit report! This can happen even if the tenant does not fight the eviction. Many lenders will “follow protocol” just to be sure future litigation cannot happen. Protocol in this case is a legal eviction. The lender, wishing to have a perfect “paper trail” of documents, can insist on following the letter of the law with regards to an eviction. They insist on following the process to it’s bitter end.

The ripple effects of the current mortgage market continue to surface in unexpected ways.  If you are a renter and find yourself in this unpleasant situation, document everything (make copies of any communications, and make written notes of any verbal conversations). You might want to consider speaking with legal counsel just to be safe. And make copies of all your rent checks (front and back) in case you ever need to prove that you made all your rent payments on time.

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Posted in Credit Bites, Foreclosure, Miscellaneous, Real Estate Bites | 3 Comments »

Tags: bremerton real estate, kitsap real estate, port orchard real estate, poulsbo real estate, silverdale real estate, washington state foreclosure

John and Mary are frightened and more than a little upset. They need to ask for an extension on the closing of their new home purchase because the financing is not ready. They made an offer on their new home 26 days ago and had no idea their Loan Approval Letter was not worth the paper it was written on! Now their Earnest Money is at risk and the money they already spent on a moving company is in question. In addition, they have already paid for the appraisal.

When is a loan approval not a loan approval?

This is not a frequent occurance. It does happen often enough that savvy Realtors® and experienced sellers are somewhat wary of Mortgage Pre-Approval Letters from loan officers they don’t know through previous transactions. The reason they are wary is simple. Experienced Realtors® know that Pre-Approval Letters are written by loan officers, and loan officers can’t approve loans!

The who’s who of a mortgage transaction.

A Loan Originator is the real name for a person like me who is more commonly called a Loan Officer. A loan originator does exactly what the title implies. He or she creates (or originates) mortgage business. A loan originator’s primary job is to supply a never-ending flow of new loan clients. The title of Loan Officer is rather misleading. A good loan originator does not have to work very hard to maintain a flow of business. Previous happy clients and satisfied Realtors® will keep him or her pretty busy without the need to spend much time marketing.

After they find a client to work with, loan originators are responsible for making certain everything that must be done to close the loan, is indeed accomplished. This includes coordinating a Title Company, an Appraisal Company, a mortgage processor, two Realtors® (one for the buyer and one for the seller) and of course, the borrower. But, a loan officer does not approve loans.

The Loan Underwriter is an employee of the bank. The underwriter’s job is to make sure the borrower (represented by the Loan Originator) fits the Lenders Guidelines for Approval. The underwriter is the person who actually approves the mortgage loan. Very few borrowers ever speak with a Loan Underwriter. Many underwriters prefer it that way. They are busy people who want to be able to move quickly from one loan to the next. There jobs are dependent on speed and accuracy. Getting bogged down with client phone calls does not help with either speed or accuracy.

Whether you, as a borrower, are working with a Bank or a Mortgage Broker, your primary contact is probably a Loan Originator, not an underwriter.

How do you make sure your Pre-Approval Letter is worth something?

A Loan Commitment Letter is the document an underwriter sends to the loan officer once a loan is approved. This is the real thing! A commitment letter will detail every aspect of the mortgage. It will include the terms and interest rate. It will itemize the “Conditions” (the items that must be provided or explained for final approval). The commitment letter will be dated and it will have an expiration date. It may be signed by the underwriter. The Loan Commitment Letter is a formal, legally binding document.

So, if you want to be sure your pre-approval is really an approval, request to see the Commitment Letter! If you are unfamiliar with anything in the letter, have your loan officer explain the unfamiliar portions. It is after all, your loan commitment letter and there is no reason you shouldn’t see it!

In Washington State and many others, the seller has the right to request this proof from the Buyer’s Agent. If the seller has a savvy Agent, the Agent will verify the validity of the Pre-Approval Letter by requesting a Loan Commitment Letter.

In John and Mary’s case, had they simply known to ask for a copy of their Loan Commitment Letter, they would have found out that the loan was not yet approved when the Pre-Approval Letter was written. It shouldn’t have happened the way it did, but this happens often enough that as an educated borrower, you must verify that your pre-approval is a genuine approval.

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Posted in Miscellaneous, Mortgage Bites | 9 Comments »

Tags: bremerton real estate, first time homebuyers, port orchard real estate, poulsbo real estate, silverdale real estate

For real estate professionals, as it is for many different sales-oriented businesses, there are a gazillion different plans, programs, and systems available that you can employ to market yourself.  You could invest a nice chunk of change for a high-end website, complete with all the latest and greatest visual bells and whistles. Or, you could spend a ton of money for a personal coach to slap you around and to make sure you’re managing your time wisely. You could even buy a Hummer and convert it into a moving billboard to promote your image/services.

But of all the marketing and promotional tools at my disposal, by the far the most effective and lasting, is my reputation.

Five of the transactions I’ve enjoyed so far this year have come from repeat clients. These were all people who purchased homes through me, and valued my services enough to entrust me with the sale of their homes.

A potential client calls me out of the blue, asking if I would be willing to help sell his home. A good friend of his knows of me, and says I have a good reputation; someone he can trust.

Reputation. It isn’t something that’s easy to achieve. It doesn’t happen overnight. It requires consistent behavior and performance. It takes a long time to earn and develop. In some markets, it can take years and years.

Unfortunately, a good reputation that takes years to cultivate, can be easily destroyed in less than a minute.

With one word or one action, an entire lifetime of good reputation becomes questionable or suspect.

When my kids were little, they used to watch all the Veggie Tales videos. One was entitled, “Larry Boy and the Fib from Outer Space.” In the story, a character named Junior Asparagus tells a lie. Each time he’s confronted about his indiscretion, he lies to cover it up. This ‘Fib’ that starts out very small, gets bigger and bigger as the video progresses. Pretty soon, the ‘Fib’ is GIGANTIC, totally out of control, and about to destroy the town!

That’s the way it is in real life. We start out telling little white lies. The lies become larger and larger, and turn to grey. Pretty soon, the web of deception is HUGE and pitch black. A career is ruined.

One small compromise leads to another small compromise. Pretty soon, compromise becomes a consistent practice, a way of life. A lifelong reputation is destroyed.

How well do you protect your reputation? What checks and balances do you have in place? When temptations present themselves (and they will and do, daily), what keeps you from giving in to compromise? What ensures that your reputation can never be bought?

A good website?   $ 1000 start-up, $ 75 per month

A business coach?  $ 3000 annually

A good reputation?   Priceless.

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Posted in Real Estate Bites, SoundBite Bites | 13 Comments »

Tags: kitsap business reputation, silverdale real estate, silverdale real estate blog

Purchasing a home should be one of life’s simplest and most rewarding experiences.  The process itself represents a right of passage into a world of responsibility tempered by the emotional and financial comfort of homeownership.  The place where you choose to live, after all, is much more than an investment.  Potential buyers, already pressured and rushed, can find themselves unprepared for the uncomfortable questions that often arise before closing.  Regular readers might remember a post that I contributed to this site two months ago.  I graphically recounted the personal behavior that led to my incarceration in a federal prison after many years of working in the title industry.  It’s my intention, through a series of posts, to share consumer-oriented advice that can’t be found elsewhere.  Feel free to contact me with questions via email at edr@rybconsulting.com  or to visit a title industry blog that I host.  Title-opoly deals honestly with a wide spectrum of real estate issues and many of it’s readers are consumers, government regulators, or professional educators.

You’ll find that most of my opinions are very conservative since they were shaped by unique experiences.  For example, most real estate pundits blame consumers for a startling increase in reported fraud statistics and subprime foreclosure rates.  I don’t, and point squarely at the real estate industry and more specifically at it’s self imposed and very complex culture.  Most people working in other careers simply lack the time and ability to learn enough about the system to mastermind a fraudulent deal. Real estate crime requires a great deal of planning and coordination among numerous insiders or others with knowledge and contacts; it takes a team. Consumers blindly following the recommendation of licensed professionals sometimes find their integrity or sensibilities compromised. 

Former Secretary of Housing and Urban Development, Mel Martinez, sought sweeping reform of real estate settlement practices after closing on a home in the D.C. area.  Secretary Martinez, a seasoned attorney and the nations’ top real estate regulator, found himself  both confused and concerned after spending an hour at a table with unrecognizable documents strewn in front of him.  I can’t keep that from happening to you, but I can arm you with an intimate understanding of the pitfalls of any housing transaction and their possible consequences.  I’ll describe the criteria that you need to consider when selecting a real estate agent, loan officer, or title/escrow agent.  You’ll learn enough about the proper progression of events from contract to closing to stop and ask poignant questions when something doesn’t seem right. And, if an unspeakable situation does present itself, you’ll know enough to recognize it as such and will have an exit strategy in place that protects your interests.  A community-based approach to fraud prevention presents opportunities for consumers to avoid exploitation, especially when it’s initiated by industry insiders.

An informed and concerned community of consumers is the fraudster’s worst enemy!

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Posted in Guest Writers | 3 Comments »

Tags: bremerton real estate, poulsbo real estate, real estate fraud, silverdale real estate

Heaping piles of unwanted, unopened envelopes in the garbage and decidedly irritating phone calls during dinner are just two of the annoyances of the new millenium. None of the amazing technological advances we see around us seem able to stop marketers from making our lives unneccessarily cluttered. First there is the volume of landfill material that arrives in the mailbox, then there is the seemingly endless string of telephone solicitations. How do they do it? How did they know you just applied for a refinance mortgage? Is somebody leaking your sensitive information to the business sector? Is somebody selling your information? Probably not, and here are two little-known ways to eliminate the clutter.

Creative and entertaining ways of dealing with telemarketing calls at dinner time has become something of a national pasttime in America. And, it is estimated that 80% of Americans sort their mail over the garbage can! If you wait long enough, you can buy everything from a vacation to a vacuum cleaner from somebody you’ve never heard of, who either calls you or sends you mail. Not to mention the subject of email spam. Marketers are a creative bunch and their techniques for finding you can seem mysterious. It’s not mysterious at all though. Marketers simply pay your credit reporting agency to provided them with a list of possible customers. “What about my privacy?”, you ask “Can the credit agencies do that legally”? Your privacy is intact and yes, they can, are the answers to those questions.

How it works

If a solicitor wishes to purchase a list of potential customers for his or her latest and greatest product, they can do so in one of two ways. They can contact the credit agencies and request a list of people who fit certain criteria (like a minimum credit score, a certain amount of time since a bankruptcy or a recent attempt to get a mortgage). The credit agency will apply this criteria to the credit agency database of information and deliver, to the marketer, a list of folks who match. The marketer never sees your credit score or the information on your credit report. They simply know that ,if your name is on the list, you fit the criteria they used to filter the results of the credit agency’s database search.

The second technique is similar. A marketer can supply the credit reporting agencies with a list of potential customers, including their desired criteria again, and the credit agency will check each potential customer’s credit profile against the criteria. The marketer again ends up with a list of matches.

If you have ever been the recipient of a piece of mail claiming the ABC Acme Mortgage Company of Maine can offer you a superior interest rate to the one being offered by your local lender 4 days after you spoke with a loan officer in your home town, now you know how they knew! It’s not because there is a hidden microphone somewhere in your kitchen.

Some people almost relish these solicitations. My wife will not allow me to discard the sales circulars that inhabit the center of the local newspaper, and she gets a peeved look on her face when she finds unopened mail in the garbage. It baffles me, but then, so does the theory of relativity. Many of us would just as soon not have to sort through this pile of trash. I have never applied for a mortgage because of a mail piece and I seriously doubt I ever will. I like human beings. I want to be able to see the person responsible for getting me the best rate and terms.

What you can do about it

The Federal Trade Commission maintains an information web page that explains how marketing companies operate and what you can do to eliminate the clutter. Most of us have heard about the National Do Not Call List, but did you know you can also “opt out” of unwanted mail solicitations?

The Opt Out Pre-Screen website is a website allowing you to do just that. It is maintained by the credit reporting agencies. It is secure, according to the FTC. And you can add your name to the list of people who prefer an uncluttered mail box. Equifax, Experian and TransUnion collaborate to provide this service. You will need to provide detailed information to sign up, including your social security number and other data. But you can have the comfort of knowing that this site is carefully watched by the FTC. Having Big Brother watching has it’s advantages! If you would rather not trust the security of the internet, you can call 1-888-5-OPTOUT to accomplish your goal.

Another little-known resource you can take advantage of is a listing that is maintained by the Direct Marketing Association. This database will protect you from direct marketing solicitations for a period of five years. Many large, national companies are members of the Direct Marketing Association. This will not protect you from a company that is not a member, but it is a beginning. You can register online or contact them at:

Direct Marketing Association
Mail Preference Service
PO Box 643
Carmel, NY 10512

If you wish to file a complaint about a company’s adverising practices, contact the Federal Trade Commission. If you would like to learn more about consumer issues and consumer rights from the FTC, click here. If you have a fraud or Identity Theft issue, you can start with the Consumer Sentinel site. It is accessed by law enforcement personel around the country. If you would like to help fight the email spam problem, you can do that through the FTC as well.

There you have it! Several different ways to de-clutter you mailbox and cut down on dinner-time phone calls. You may want to bookmark this page for future referrence. Or, you can simply visit SoundBiteBlog when you need the information and use the Search Feature at the top of each page. Isn’t it time to have a quiet dinner once again?

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Posted in Miscellaneous | 13 Comments »

Tags: bremerton real estate, kitsap mortgage telemarketers, kitsap real estate telemarketers, port orchard real estate, poulsbo real estate, silverdale real estate