Advocating For Homeowners
By Ron Margolis Realtor, Hawaii Life Real Estate Services LLC
Tell us about your business. I am a full-time Realtor, and while I spent a good part of my first few years of work with buyers primarily looking for second homes, I’ve gone through a paradigm shift as the real estate industry has changed. Over time, as the market got slower and slower, I realized there were really only two places to focus if I was going to be busy: short sales and bank-owned properties. Originally, I had decided to make my goal focusing on short sales and at the same time work to help Kaua’i homeowners avoid foreclosure. I feel it’s evolved to a point where I’m more like a professional Realtor who is a consumer advocate for all the people in my community. It’s not really selling – it’s offering to help people and taking away all the stress and unpredictability from their lives in dealing with the banks.
Do people have options aside from facing a foreclo-sure? The first option is to reinstate the loan – pay the bank the money owed. That means I’ve got to pay the bank the money I’m behind, and that’s not an option for everyone, or they wouldn’t be behind. The next best option is to ask the bank for some forbearance – the delinquent amount is spread out over a period of time, and each month I make my regular mortgage payment and a portion of the arrears.
Also, I work with people to acquire loan modifications – started by the government as a “making homes affordable program” – that are an option because, in theory, it gives people a lower loan payment per month.
Can people still sell their homes even if they are potentially facing foreclo-sure? Most Kaua’i residents desire to stay in their homes if at all possible, even when the homeowners owe more on the property than it is currently worth. An option is a short sale. The main benefit is that your credit is not nearly as devastated as in a foreclosure. A foreclosure may prevent you from buying a home for at least seven years, as opposed to a short sale, where you may be eligible to purchase again within 18 months. A short sale is a more-dignified solution. The worst thing someone can do with a foreclosure is stick their head in the sand.
How has the housing market changed? Now the market consists of more distressed sales and very complicated transactions. That’s the norm. And what’s the exception are buyers who are well-qualified and sellers who are motivated – a simple transaction. So, the whole market’s turned around, and what’s attracted me to work in this space is I’m very comfortable with change and I like to problem-solve, and these transactions are replete with problems.
What is the most challenging aspect of your business? One of the challenges is the lack of experience that buyers and their representatives have with the short sale process. They may not properly educate the buyer on what to expect, because buyers need to know that there may be many levels of negotiation. Buyers can walk away from a transaction. Another challenge is that for many people this is very emotional. There are almost 7 million properties in foreclosure right now in America, one in every 10 people are behind in their mortgage, and one in four people owe more on their property than it’s worth – basically a national epidemic. Yet we’re conditioned to think that losing your home is an embarrassing, shameful thing. In this perfect storm of conditions, I think we need to shift our attitude and recognize many people made bad decisions and many people were encouraged to take risks they shouldn’t have, and it’s frustrating.
What do you find rewarding about this business? I get to be a champion for the homeowners having these problems. I get to help them understand there’s light at the end of the tunnel.
A free Home Retention seminar will be held from 3 to 5 p.m. and 7 to 9 p.m. Nov. 1 at Aston Kaua’i Beach Resort. For more information, visit kauaiavoidforeclosure.com or hawaiilife.com or call 346-7095.