This week, Rich and Steve gave me the day off to celebrate my 5^th wedding anniversary.  While I was away, they had Helene Gerstle in studio to talk about strategies for people facing foreclosure.  Helene is an attorney licensed in Rhode Island and Massachusetts and has been working with people at risk of foreclosure for some time now. Unfortunately there are a lot of people trying to take advantage of homeowners in this most vulnerable time. So it is important to get the right advice from the right people. The important thing to remember is that procrastination will only make things worse.  Foreclosures are costly and most banks would rather work with you than go through the process.  The sooner you open the lines of communication; the better off you will be in the long run. Foreclosures are costly for the bank, and in most situations would much rather work something out.

Here are some tips to make sure you are working with someone who has your best interest at heart:

• Work with a nonprofit, HUD-approved counselor.
• Don’t pay high up- front fees, and be wary of guarantees, like almost everything in life, if it sounds too good to be true, it probably isn’t.
• Know what you are signing-many people inadvertently sign away their homes away in some of these scams, and make sure you properly sign all pertinent documents in a timely manner.

This Week’s Real Estate Insight:

If you feel you are being taken advantage of in a foreclosure work-out, contact your local and state authorities, in Rhode Island, contact:

• Jim Martin, United States Attorney’s Office (401) 709-5357
• Michael Healey, Rhode Island Department of the Attorney General (401) 274-4400, ext. 2234

 Or online at: http://www.riag.ri.gov

     Freddy and Fannie are taking steps to avoid potential future meltdowns by tightening up standards for ARMS and Interest only loans.  They were not the only parties responsible for the mortgage crisis; personal responsibility also played a big part, many homeowners failed to understand the consequences of these exotic loans and many unscrupulous lenders and Rea estate professionals took advantage of that ignorance. Would so many people have bought homes they couldn’t afford if they had a better grasp of the consequences of resetting interest rates and negative amortization?  I make it a point of referring clients within my network of reputable lenders, and try to give as much information personally to my clients and here on Real Estate Insight, so that they can make informed financial decisions.

One recent Real Estate Insight guest has taken informed decision making to an even higher level.  Robert Bailey, author of The Billionaires Little Black Book, The Ultimate Secret Behind Sustainable Wealth spoke with Rich and Steve about the theory behind his new book.  Pointing out that you have a better chance of becoming a billionaire than you do winning the lottery, Rob has taken the knowledge he has garnered from years in financial management and came up with a seven point strategy  for managing personal and professional business decisions, investment decisions, and life choices. Stressing the importance of a team approach to your finances, Bailey devotes a chapter to how a trusted Real Estate advisor fits into this plan. It is a quick read, but filled with great information. The Billionaires Little Black Book is available through Amazon or directly through his website, TrustedAdvisory.com

This Week’s Real Estate Insight:

While the pundits sift through the financial crisis to assign blame, tightening lending standards, a little personal accountability and some sound financial literacy will go a long way  to preventing the next big meltdown.