Loan Modifications Program Yet To Take Off
Lakewood, California
If you don’t qualify for a loan modification, is a short sale your best option?
There is a lot of conflict with lenders loss mitigation teams battling other departments within the banks structure. Even today the different departments struggle with short sales or wonder if they should foreclose. A Lakewood short sale will save the lender more money over the long haul, because they don’t have to maintain the property, taxes, the fear of vandalism, and a whole host of other complications
The Obama administration introduced the $75 billion loan modifications program 4 months ago to refinance and modify millions of mortgages, by offering government subsidies and incentives for servicers, lenders, and borrowers. The plan offers $1,000 to mortgage companies for each loan they modify, followed by $1,000 per year for the next 3 years. The program has been ineffective so far with millions of homeowners continuing to slip into delinquency and foreclosure. Analysts attribute the slow progress of the program to operational constraints faced by mortgage companies. Experts say ” mortgage companies need to do better to promote the program.”
They need to do a much better job on the basic management and operational side of their firms. Believe it or not even in today’s banking industry the level of training is not there yet. Many mortgage companies/lenders acknowledge they need to do more. Tom Kelly, a spokesman for JP Morgan Chase, which now owns Washington Mutual, said “the bank has added 950 loan counselors since the beginning of the year, bringing the total to 3,500, in order to expedite the process,but we’ve got a lot more to do,” said Kelly.
Slow Approval Process for Short Sales Hampers Housing Rebound
Lakewood, California
Experts believe that the current level of housing inventory has to come down for the industry to get into a phase of sustained recovery. Lakewood Short sale transactions offer a win-win-win situation to buyers, sellers, and lenders, and help clear the housing inventory available for sale. While short sales have risen in the last year or so, experts believe that banks are still not fully prepared to approve the transactions in a timely manner which we all have seen if you have worked a short sale. In today’s real world it is very common for delays of six weeks to four months are not uncommon, or banks rejecting a 20% discount at short-sale only to ultimately take the property back and market it at 40 or 50% lower.
Banks have to report their mortgage assets on a mark-to-market basis, and any sale at a price lower than the value in their books will mean a reduction in their reported profits. Bankers also complain that some buyers take advantage of the current situation, and demand a price which is way below the market price, but after counter offer after counter offer the buyer gets frustrated from the transaction, and walks on to another deal down the street.
Short sales have taken far too long, and with a lot of frustration for everyone involved in the transaction. A lot of experts say “that the faster you clear off this excess inventory the faster you can stabilize home prices.”
Regards,
Bernie Germani
310-918-9102
Short Sales in Las Vegas
In the past, many Las Vegas Real Estate Agents were recommending to their clients to stay away from short sales because of the length of time it took to close them. Plus, there was little guarantee the bank would accept their offer after months of reviewing it. But due to the decrease in REO inventory in Las Vegas, many real estate agents are showing short sales and writing offers. We have seen an increase in showings on our short sales and are starting to receive multiple offers. Unfortunately, we are not seeing the Banks move any quicker in accepting short sale offers.
It is very discouraging for Las Vegas buyers to have to wait months to get an answer on whether their offer has been accepted or not. Many Las Vegas buyer agents take their frustration out on the listing agent as if they are the reason the bank has not furnished a response on their offer yet. We do our best to keep the buyer’s agent fully abreast of the short sale as we move through the process with the negotiator. It is very important that the buyer’s agent and the listing agent work together to make the transaction go as smoothly as possible for the buyer and seller.
If you are thinking about selling your Las Vegas Home and you owe more than it is worth, contact Sena & Associates today at 702.376.0088 and we can discuss your options of doing a short sale. Feel free to visit our Frequently asked Short Sale Questions.
Federal Guidelines for Short Payoff, Short Sales!
The Federal Government has added new incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP), which is part of the administration’s Making Home Affordable plan.
Loan servicers may consider short sales or deeds-in-lieu of foreclosure for borrowers who do not qualify to have their loans modified on a permanent basis under the Making Home Affordable Loan Modification Program.
1. Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program, but don’t qualify for a modification or do not successfully complete the three-month trial period. Before proceeding with a foreclosure, servicers must determine if a short sale is appropriate.
2. Incentives include: $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; $1,500 for borrowers/homeowners to help with relocation expenses; and up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).
3. The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.
4. Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.
5. In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions.
6. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.
7. The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price.
8. Servicers may not charge fees to borrowers/homeowners for participating in the FAP. Homeowners can sell their home with NO-COSTS!
9. The program is in effect through 2012
10. Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer (Deed-in-lieu) in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions).
Take advantage of the Mortgage Forgiveness Debt Relief Act of 2007; which former President Bush signed into law. This measure gives tax breaks to homeowners who have mortgage debt forgiven. A taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence. The tax break applies to debts discharged from January 1, 2007 and expires December 31, 2009.
For a copy of the Mortgage Forgiveness Debt Relief Act of 2007 visit: http://www.govtrack.us/congress/bill.xpd?bill=h110-3648
Hector Aguilar of the ALMA Real Estate Group with Coldwell Banker Town & Country, is an expert at listing, negotiating, and selling ”SHORT PAY SALES” in Southern California. We serve Los Angeles, San Bernardino, Riverside, & Orange Counties. We have a full staff of experienced and skilled negotiators.
Call today for a private consultation. Ask for Hector Aguilar. We look forward to assisting you through this difficult market.
Hector Aguilar, The ALMA Real Estate Group
Office (626) 966-3688 Ext 301 Direct: (626)255-2783
Email: haguilar@ALMARealEstateGroup.com, info@HectorSellsHomes.com
Visit us: www.ALMARealEstateGroup.com , www.HectorSellsHomes.com
Coldwell Banker Town & Country, 345 E Rowland St, Covina, CA 91723
Are Lenders More Receptive To Short Sales
Lakewood,Ca
I hear this information, but short sales are still taking a long time. I’m hoping this will allow for lenders/investors to move the file through more swiftly. Today a loss mitigator I spoke to(a 21 year old college grad) is working 300 files currently. I said “I’m sorry to hear that, and I feel sorry for you, so how many hours a week do you work?” The answer wa
s shocking.
She replied 60 hours a week…. Ouch!!!!
No wonder why we don’t get answers back from these people.
In May Last month, the Obama administration, through the Making Home Affordable program, offered lenders and loan providers an incentive of up to $1,000 for each completed short sale, and up to $1,000 more to share the cost of paying any second-mortgage lenders to release their claim on the property. Homeowners too were offered up to $1,500 for relocation expenses.
The incentives offered by the government, coupled with lenders wanting to reduce bad loans, are likely to increase the number of short sale transactions in the near-future. “Without a doubt, lenders are more willing to work through short sales,” said Andre L. Mitchell, the executive vice president of the Lynx Mortgage Bank. “In this marketplace if the lenders can negotiate in any way to get rid of a bad loan, they’re going to do it.” Banks may lose less money in short sales than in foreclosures, where banks may carry the house for a considerable period of time before selling it. Analysts believe short sales are often the
best option, even for homeowners thinking about a new loan to save the home. “It’s gotten to the point where people understand that sometimes you have to start over,” says Mitchell. “A loan modification might help you in the short term, but sometimes what people need to do is get out completely.”
Bernie Germani
Short Sale Specialist
310-918-9102
HSBC & Short Sales
Has anyone had any experience with HSBC and short sale negotiations? I just took a listing and HSBC is the only lien holder. What is their time frame for negotiations? Will they push back the foreclosure date if they are working with an offer?
Any feedback would be appreciated.
Thank you
Elise Fay
602-329-7782
Can You Buy a Lakewood Short Sale With No Money Down??
Lakewood, California
The Mortgage Meltdown has created entrepreneurs on a whole different level who have created short sale funding companies that will provide the cash for you to purchase a short sale from the bank with none of your own cash required, but after your short sale is approved by the lender, and you have the funds in place to purchase from the lender, these transitional lenders, require that you already have a new buyer in place to immediately purchase the short sale property from you. If you can’t find a buyer who can qualify for a new loan, then what? Will I be stuck buying the property? A BIG FAT NO YOU WON’T!!!!
You now have to find a buyer who can qualify for a loan, and who has a down payment to purchase the short sale from you, or risk losing your short sale approval from the bank.
With guidelines very stringent and the present credit crunch we are all experiencing this, and for us (Realtors/Investors) have become more difficult to attain a qualified buyer. Therefore, it is ever more important that you expand your demographics by providing creative solutions for your potential buyers by structuring a form of seller financing that will allow your new potential buyer to purchase the short sale home from you with some Owner Financing.
Just think, if you could offer your short sale home at a tremendous discounted price, and do it with Owner Financing, how many more potential buyers you would reach over and above the competition. You would be the answer to every new home buyer’s dream!
Well, there is a strategy that can be used to accomplish just that. It involves you (Investor) as the seller providing a seller concession, or credit to the buyer at closing which would be equal to the amount of the required down payment or you the seller could offer a seller carried back note.
However, I recommend that you contact Bernie Germanibecause he understands the unique requirements that a real estate investor has; Bernie Germani has an extensive understanding and background in creative finance, and how to structure them. and also a real estate investor who has adapted to our market changing.
Realtors, We need to think outside of the box in today’s real estate market, and I hope you’ll take advantage of this information The opportunities are abundant, and waiting for you. Seize them, and take control of your financial destiny.
I’m here to help you sell more properties, please contact me for more information on how I’m working with Realtors nationwide closing their high end short sales.
Remember, finding a new buyer that will qualify for a new loan is the key to completing a successful short sale flip transaction. Without these final elements in place, your short sale approval, along with your transitional short sale funding mean nothing, if you can’t complete your short sale transaction, and access the profit you have built into the deal for yourself.
I’m a licensed California Realtor and I’m teaching Realtors nationwide how to get your high end short sales sold. I’m here to help out in any way I can, please contact me for more information on how I’m working with Realtors nationwide to get their high end short sales sold.
Regards,
Bernie Germani
310-918-9102 Direct
hsaincome4u@gmail.com
New Statistics for Arizona-Short Sales
For those of you who own properties in Arizona or have clients who own properties, there was just a new article posted today. Approximately 42% of homeowners in Arizona are upside down on their mortgage. That is an amzaing statistic given that President Obama implemented the Homeowner Affordability Program. But wait…it gets better. Do you know how many homeowners his program has helped….Hold on …. 50. Not 5000 or 50,000 but only 50 peopel nationwide. With markets like Phoneix where values have dropped MORE than 5% (the program guidelines say 105% of home values for a loan mod.), what options are available to these homeowners? SHORT SALES are the answer!! Let’s help these homeowners and give them some dignity and a chance at gaining control of their finances down the road. I have been extremely successful at negotiating Short Sales for my clients. There are plenty of buyers ready, willing and able to perform and purchase a home. Why wiat until it goes into foreclosure only to see the home deteriorate and become a huge eyesore. In most cases, the homeowner still shows a pride of ownership in their home. No empty promises here. If I can help you, I will tell you upfront. This is a viable alternative. Let’s help eachother and our communities-don’t wait for the government to bail you out.
Elise Fay, Realtor John Hall & Associates
Glendale AZ Short Sale Expert
Short Sales & Your 401K
Hi, I am looking for some guidance. At each stage of negotiations with Wells Fargo, we keep meeting their demands and then I am told that we will get an approval. Well, we are at what I think is the final stage and now the investor wants to see the sellers 401k statements.
That does not see m right. I have never been asked for that before–ever! Why should my clients purge their life savings when the bank has already technically approved the price, short sale payoff, terms etc. Everything is in line. Does anyone have an answer or some advice for me on this.
Thank you
Elise Fay
John Hall & Assoc. Glendale AZ
www.homesByElise.com
Deficiency Negotiations
When there’s a second mortgage and the property value is less than the first mortgage balance, a second mortgage can forgo foreclosure and instead simply sue on the promissory note. This means the homeowner’s woes don’t end at foreclosure – in many cases, it’s just the beginning. I’m not trying to be a downer, but I don’t read much from short sale investors or real estate agents about negotiating with the shorting lender on the deficiency and I believe from the homeowner’s vantage point, that’s the most important aspect.
Second mortgages (or second trust deeds) don’t normally roll over and offer a full release on a short sale and in light of the above, why would they? Their goal is to claw back as much as possible on the transaction and if you’re not careful, in many cases, they will kill your short sale entirely.
Here’s an example of a successful negotiation on a second mortgage:
HSBC First Offer (lien release only – this means continued collection after the short sale)
Seller Rejects by Modifying Short Payoff
Negotiating for this type of release can take time. In the above example, it was an extra two months to save the seller some $38k and enable him to recover and get on with his life. But unfortunately, this won’t work with the normal short sale buyer. The normal short sale buyer loads all of his anxiety on the seller because he or she wants to close the short sale quickly and doesn’t understand the short sale process. This is case in point why many/most short sales don’t come together to a beautiful close. The right buyer is needed and proper negotiation (which can take time) is required. Real estate agents are great and every one of my short sales throughout the U.S.A. involves at least one real estate agent – I refuse to work without them; however, without a buyer who understands the short sale process and expert negotiation, pieces of the puzzle are missing. You can try to put those pieces of the puzzle that you have together and you can still call it a short sale, but let’s be honest, it’s not beautiful.
Short sales should be beautiful. Deficiency balances, continued collection, and judgments are short sale souvenirs that are (more times than not) the product of puzzles with malfunctioning/missing pieces. If you’re a seller, do me a favor and don’t accept anything less than perfection on your short sale transaction.
Paul Buys Short Sales
(702) 430-9390
Visit: Broken Credit Blog
Tony Sena
Hector Aguilar
Robb Edwards
Andy Morris
Rick Stuart
GERARD GRACI
Steven Wright
Paul Jerome
Bernie Germani
Jonathan Katz
Jodi Bakst
Elise Fay
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