Saunders, Real Estate, Hamptons

Real Estate Center

Jan 12, 2009 10:16 AMPublication: The East Hampton Press & The Southampton Press

Alternatives to foreclosures explained

Jan 12, 2009 10:16 AM

Most people who own homes at some point worry about being able to make their mortgage payments, but a group of concerned women whose work is shaped by East End real estate believe many people are too afraid of the consequences to ask for help with their mortgages before it’s too late.

Town & Country Real Estate agent Elizabeth (Missy) Capozzoli is leading the group in a series of free workshops titled “Options for Homeowners in this Troubled Market.” The first workshop will be held on Wednesday, January 14, at 7 p.m. at the Hampton Bays Library on Ponquogue Avenue.

“I came up with the concept while I was getting certified in short sales,” said Ms. Capozzoli, referring to the practice of selling houses for less than the outstanding amount of a mortgage. “The teacher was trying to teach us to capitalize on people’s misfortune. I realized no one wants to help people.”

Two of Ms. Capozzoli’s friends, attorney Robin Long and mortgage broker Victoria Homan, who works for the Manhattan Mortgage Company, will also present information about legal issues and refinancing.

“We want to inform people what their choices are. We’re hitting a very hard time. I’m showing houses that have foreclosed, where the people have been evicted,” said Ms. Capozzoli.

She added that it is in everyone’s interest for individual homeowners to protect their homes from foreclosure, because foreclosed properties reduce the value of all properties in the area.

“Every time a house gets foreclosed on, all the other houses lose a percentage point in value in the neighborhood, which means there’ll now be more short sales and more foreclosures,” she said.

A representative from Congressman Tim Bishop’s office will also attend the seminar, though Ms. Capozzoli said that the representative will be gathering information and will likely not give input about potential governmental help for the mortgage crisis.

“People get afraid and they can’t pay their bills. They start getting letters and ignore them rather than explore their options,” she said. “Their options are basically refinancing to see if they can do something to change the loan. We want to first see if we can help them to refinance. That’s what Victoria will do. We’ll give them the option of a short sale, which is much better for their credit.”

Ms. Capozzoli, who had been an agent with Allan Schneider Associates and the Corcoran Group before joining Town & Country last year, said that the process of holding a short sale must be undertaken before homeowners have fallen so far behind on their mortgages that foreclosure is an imminent threat.

“A short sale is when a house is now valued less than what is owed on the mortgage,” she said. “There’s a lot of that out here. People don’t even understand that they can get out if they want to sell. The homeowner needs to write a letter to the bank explaining dire circumstances. If the bank says yes, we negotiate what they will take.”

She said that many banks are more agreeable to a short sale, since if they go through with full foreclosures, the bank often has to pay property taxes.

“Some banks will only take 88 percent of a loan’s value, but others are taking 50 cents on the dollar,” she said. “It’s great for investors and great for sellers; because your house is foreclosed on, the bank is entitled to attach a personal judgment against homeowners.”

In the case of a foreclosure, that judgment takes seven to 10 years before it is no longer on a homeowner’s record, while sellers’ records will be clear in about nine months with a short sale.

Ms. Capozzoli said that none of the women who are leading the seminar will be paid for their work, unless a short sale goes through, in which case the agents and attorneys involved with the sale will be paid by the banks involved.

“I think that a lot of agents don’t want to deal with it,” she said of short sales. “It’s a reduced rate and it’s a lot of work. If the bank has already started foreclosure proceedings, it’s harder to get approved. If the foreclosure proceedings haven’t been started, the bank would rather hold off.”

In addition to the Hampton Bays seminar, Ms. Capozzoli is planning two more, one in the East Hampton community of Springs and one in the North Fork, in the coming weeks.

“Those are the areas where they’re going to be hardest hit in the near future,” she said, adding that she bases that belief on the broker price opinions that she has been asked by banks to supply about properties in Springs and Hampton Bays.

“Because of drops in sales, the sales that are happening are much lower than they were. A year ago [banks] would have taken comps within the past six months. Then it was 90 days. Now they’re asking for the market comps. Everything is changing.”

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