Sell short to save your shirt

Dear Editors,

Tough times may continue in Durango in 2010, and the growing number of foreclosures is an economic indicator that the national crisis has hit our beloved mountain community. I write this as someone concerned about the misinformation out there regarding foreclosures, short sales and the available options when you are behind on your mortgage. You can get the monkey off your back and still keep your shirt on if you give yourself time … .

A notice to foreclose (known as the Notice of Election and Demand for Sale, or NED) is filed when a borrower is “late” on payments. Typically, a lender doesn’t file the NED until the borrower is 90 days behind in payments. Once filed, the borrower has 110-120 days to “cure” the default by renegotiating the terms of their loan (known as loan modification) or becoming current on their payments. Due to the penalties that accrue by being late, the latter is often very difficult. Local market values have declined, and many borrowers who purchased at the height of the market with very little down are now wondering why they should even bother trying as they’ve fallen on hard times.

The 110-120 day period to cure is crucial if the borrower wants to avoid foreclosure and pursue selling their home in a short sale. A short sale occurs when the lender of record agrees to discount their payoff to accommodate a sale. The lender will consider doing so under certain circumstances, which include seller hardship; market values that are less than the amount needed to pay off all loans; encumbrances; selling costs; and delinquencies in payments. Regrettably, most lenders have still not caught on to the fact that we are in a crisis; most will not work with you until a payment is missed. Of course, missing a payment just to get their attention will hurt your credit and is not advisable.

Lenders will consider a short sale as a viable option to foreclosure as they are not in the business of owning property, nor do they want the bad debt. Foreclosing4

on a property is expensive and maintaining and/or repairing that property to make it ready for sale is not desirable for the lender either. The bank will often obtain a better price in a short sale than if they foreclose.

A short sale will be successful only when a strategically calculated sale price is determined based on the lender’s parameters, particularly if there is a second mortgage on the property or it is an FHA loan. A short sale will be considered by a lender only if there is a hardship, including job loss, death, medical situation, or divorce. Choosing to expand your family, deciding that the house “isn’t right” for you, or making poor choices with other purchases are not justifiable reasons for a lender to short sale a property. A short sale offer will only be considered by a lender if that offer is close to the market value, as determined by the lender’s various appraisal methods. Contrary to popular belief, banks are not in the business of giving away properties. The Durango market has maintained a high percentage of its value; most lenders would prefer to foreclose and sell it themselves if they can’t get a decent return on their initial investment through a short sale.

The potential downside of short sales? They include possible tax ramifications and the lender seeking the shortage in the form of a promissory note or deficiency judgment. The Mortgage Forgiveness Relief Act of 2007 protects those granted debt forgiveness for a loan secured for a qualified principle residence. Whether a lender can/will pursue shortages is related to whether the loan is a recourse or nonrecourse loan, and that amount can often be negotiated down.

The upside of a short sale vs. foreclosure? If your property ends up in foreclosure, you will have a deficiency judgment filed for the total amount owed and it will be tagged to your Social Security number, unless you file bankruptcy. With a short sale, there will be less impact to your credit, with the possibility of no or significantly less

Most importantly, if you are behind on your payments, seek advice from a Colorado licensed attorney, CPA and real estate professional specializing and experienced in short sales.  

– Judi Mora, Durango

Help Colorado with the count

Dear Editors,

The Census 2010 Project is now in the process of soliciting job applications from La Plata County residents to fill a pool of eligible potential census workers. As the census process progresses through the spring, individuals from this pool will be offered one of several well-paying positions assisting in the effort to see that every person residing in our county as of Census Day, April 1, has been counted. The League of Women Voters of La Plata County urges you to take up this challenge and help get the best possible count. If you are bilingual, you are especially needed; but there are many spots for English-only speakers. The strategy is to have neighbors counting neighbors.

The first step of the hiring process is to call the toll-free jobs line; 1-866-861-2010 and arrange for a local interview. You will then take a short test, which can be retaken if necessary. If you are nervous about taking a test, more information and a practice test are available on the internet at www.2010censusjobs.gov. When you pass, you join the database of folks ready to be called up as opportunities present themselves. You will receive paid training at the time you agree to a particular position.

There are a number of reasons for making an extra effort to count our resident population accurately. Each person missed represents approximately $1,000/year less in federal funds that will come into Colorado to our state and local governments. The census also allocates the number of Congressional representatives accorded to Colorado and therefore, the number of electoral votes Colorado gets (plus two for our two Senatorial seats) in presidential elections for the next 10 years. Additionally, the number and geographic distribution of our residents helps align all elective districts right down to the local level according to precepts of fairness developed by Congress and the courts.

This is a crucial matter for La Plata County and for Colorado. We need you to help out if you can.  

– Marilyn Brown, League of Women Voter of La Plata County

Song

Patsy Cline’s recording of “Crazy”

Is the perfect song.

The combination of emotion, voice inflection

And intonation are explicitly captured.

The singer’s heart has been wrenched deeply  

And is melodiously comforted

By the crystalline staccato of the piano.

One can sense the intense distress

In her lyrical rise,

Accented most perceptibly

By the pull  

Of instrumental nuances.

The soft baritones of the chorus create the perfect

Counterpoint to the melody and the song’s theme.

They say that “True Art” is the synthesis

Of ideas, emotions and talent woven

Into a tapestry of  wonderment.

If one listens carefully, one becomes transfixed

By the uncertainties, hurts and longings  

That are harmoniously woven

In the heart’s

Desperate and desolate agony.

– Burt Baldwin, Ignacio