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Archive for February, 2011

Foreclosure v. Short Sale – Part 3 02.14.2011

Last week we discussed how a foreclosure on your home in Clark County or King County might play out and how working with a real estate attorney can be valuable. This week we’ll briefly focus on the short sale process – a remedy that might be worthwhile to explore if your Battle Ground or Snoqualmie home is at risk.

In order for a short sale to be a reasonable solution to your financial situation you must keep three key elements in mind. First, you must have a buyer willing to purchase the home at a reasonable price. Second, your lender must be willing to negotiate and accept an amount less than the amount you owe on the home. Third, you must ensure that the lender waives any right to come after you for a deficiency on the amount owed. If you don’t have all three of these elements in place, it does not make sense to put the time and effort into trying to complete a short sale.

Generally, the first step in working a short sale is to find a buyer. Once the buyer is in place and understands that your home is offered as a short sale home, contact your lender to negotiate the short sale agreement. It is likely that the dealings with the lender will take some time and will require repeated communications on your part. Remember, you are the driving force behind the short sale, so don’t be discouraged when you are asked to put forth effort to ensure the transaction goes through. Once you have the bank and lender lined up, work with the title company to close the deal. Again, DO NOT forget to ensure that the lender can’t come after you for a deficiency once the short sale is complete.

Selling your home by short sale can be complicated and frustrating. It might be in your best interest to work with a real estate agent that is savvy to the short sale process. If you don’t know a real estate agent, we can make a referral for you. We work with several, including Kale Dunning of Dunning and Associates . Also, give us a call at either of our offices, Battle Ground or Snoqualmie. Our attorneys are experienced with the short sale process and can guide you through the details. We can turn your complex issue into a simple solution!

Foreclosure v. Short Sale – Part 2 02.09.2011

As we continue to discuss the legal aspects of foreclosure in Washington State for our clients in Clark County and King County, it is important to understand a bit about what foreclosure means financially. The financial consequences of foreclosure might not be as bad as you think. While there certainly will be a hit on your credit, it is likely that your credit has already suffered significantly if you are to the point where your home is being foreclosed upon.

RCW 61.24 – Limits on Deficiency. When your home is sold at a Trustee’s Sale, it is likely that the amount paid to purchase the home will be less than the amount you owe on the mortgage. This difference in amounts results in a deficiency. Most homeowners going through foreclosure worry about being sued for this deficiency following the Trustee’s Sale. However, under Washington law, the right of a creditor to seek a deficiency is limited to commercial loans. That means that if your loan was entered into primarily for personal, family or household purposes, the lender will be unable to pursue a deficiency against you. To repeat – unless your loan was for a commercial purpose, you will most likely not be liable for any deficiency that arises out of a foreclosure on your home.

Buying a Home After Foreclosure. Many folks worry that a foreclosure will limit their ability to buy another home in the future. This may be true. Many lenders won’t qualify buyers if those buyers have lost a home in foreclosure during the previous five to seven years. Similar rules apply for FHA and VA loans. However, with the economic changes we’ve seen during the past three years, these black and white rules might not always apply. Factors such as increased income, ability to make large down payment or significantly adjusted debt-to-income ratios might impact your ability to obtain a new loan. Check with lenders to find out more info on this issue.

As we’ve mentioned before, this blog series is not intended to give you legal advice. If you have specific questions regarding the financial consequences of foreclosure, give us a call at either of our Battle Ground or Snoqualmie law offices. We’d be happy to consult with you on whatever real estate law issues you might have.

Foreclosure v. Short Sale – Part 1 02.08.2011

While statistics show that home foreclosures across the country are in a slight decline, the actual numbers of homeowners with distressed property are still staggering. At the end of December 2010 Clark County was the third-worst ranked county in Washington for percentage of homeowners in some stage of foreclosure with just under 3,900 homes in trouble. King County had a better percentage than Clark County but still had nearly 4,100 homes in the foreclosure process. Not good numbers – especially for the families going through the foreclosure process.

What type of notice should you expect during the legal process of foreclosure? Initially, you will likely get a notice of delinquency from your lender regarding missed payments. If you do not come current with your payments, the next notice you will likely receive will be a letter notifying you that you are in default and that your loan will be accelerated (meaning you’ll owe the entire balance of the loan and not just the missed monthly payments) if you do not cure the delinquency. Finally, you will receive a notice of Trustee’s Sale designating a time at which your home will be sold in a non-judicial foreclosure process.

What can you do to save your home? First and foremost, you can pay the delinquent amounts owed to cure the default. If you don’t have the funds to cure the default, you can attempt to negotiate a loan modification or you can pursue a short sale. If your lender has initiated a non-judicial foreclosure, you’ll have up until 11 days prior to the Trustee’s Sale to work something out with your lender. If you are unable to cure your default or obtain a modification prior to that time, there is likely not much to be done to stop the sale of your home unless there are issues surrounding the notices your were legally entitled to receive prior to the Trustee’s Sale.

Tomorrow we’ll briefly discuss the financial consequences of foreclosure . . .

As always, if you have any specific questions regarding foreclosure, please give us a call at either our Battle Ground or Snoqualmie office. We are well-versed in real estate law and can likely guide you through the specifics or your legal situation.

Foreclosure v. Short Sale – Intro 02.07.2011

Every week we get calls into both our Battle Ground or Snoqualmie offices from prospective clients interested in the pros and cons of home foreclosures and short sales. As real estate lawyers and land use lawyers, we are prepared to guide folks through each of these processes.

This week, we are going to blog a short series on the issues and the law regarding home foreclosures and short sales. While this series will by no means answer every question you might have about these two options for owners who are no longer able to make their mortgage payments, our hope is to give you the basic information you might need to decide which direction might suit you best in your circumstances.

Check back in during the week to learn a little bit about Washington law and about the foreclosure or short sale process.

GO PACK GO! 02.04.2011

If you’ve been to Loren’s Battle Ground office, you’ll have noticed that he’s a big fan of the Portland Trailblazers and the Green Bay Packers. Whether its basketballs, football helmets, jerseys or photos, he likes to share his passion for all things Blazers and Packers. This weekend is extra special. The Packers are in the Super Bowl for the first time in almost 15 years, and Loren has been extra hyper this week as he looks forward to the big game on Sunday. So whether you know Loren because of contact with him through either our Snoqualmie or Battle Ground offices, know that this weekend he and his family will all be decked out in their Packers jerseys and looking forward watching as another Lombardi trophy heads back to Titletown.

Loren encourages you all to root for the Packers this Sunday. Go Packers!

The Super Bowl and Small Business 02.01.2011

February is upon us which means that many of us are gearing up for our annual Super Bowl parties. This year it’s Packers v. Steelers in a game that features two of the NFL’s most storied franchises. However, the big game isn’t the only NFL story making big news this week. Some are wondering if this might be the last NFL game we see for awhile because of a looming clash between the NFL owners and players over the league’s Collective Bargaining Agreement. While many of us are extremely excited about the Super Bowl (GO PACKERS!), others are legitimately worried that a labor dispute will force the owners to cancel next season in order to force a new deal with the players.

How could one of the most successful enterprises in the United States (an $8 billion a year business that could cost every NFL city – including Seattle and surrounding areas of King County – over $150 million in jobs and revenue) get to the point where everyone in the business including owners, coaches, staff and players could all lose? And what can the labor dispute in the NFL teach small businesses everywhere about business operations?

First, business is business. No matter how good things might be going for your business and no matter how great the outlook for the future might be, business owners can never take their focus off the fact that running a business is tough work and requires constant attention. In Clark County and East King County, small business owners are in a constant battle to develop their businesses beyond the survival phase and into the prosperity phase. Yet even those businesses that do achieve the little bit of breathing room that prosperity can temporarily offer must always continue to push forward in developing all areas of their business. Complacency in business leads to failure, whether your business is in Battle Ground or Snoqualmie or if your business is the National Football League.

Second, surrounding your business with the best professional team you can is the most likely road to success. While both the owners and players union in the NFL have strong arguments regarding their labor positions, it is likely that the side with the best lawyers and accountants is going to have an upper hand in the upcoming labor negotiations. Using an attorney who specializes in small business law or real estate law or land use law could be critical to the success of your business. While many small business owners bristle at the idea of spending a lot of money on lawyers, others have come to realize that it doesn’t always take a lot of money to get excellent help and good advice. These business owners have realized there is great value in surrounding themselves with professionals who can help make their business a success.

Finally, business owners must always stay realistically optimistic. Even if a labor dispute interrupts the 2011-2012 NFL season, there will be professional football again, and the NFL will continue to be a business juggernaut in the American sport’s world. Similarly, whether you are located in the Portland/Vancouver metro area or in the Seattle/Bellevue area, your business will go through many minor and major bumps during 2011. However, if you remain convinced that you will continue to be a success, those bumps will be easier to manage and you’re more likely to be stronger after enduring the hard times.

So, as you watch the Super Bowl this year, remember that NFL is a business too, and, as such, suffers through the tough business decisions that have to be made – just like you do with your business.

And, once again, GO PACKERS!