tag:blogger.com,1999:blog-57077190481254902962024-03-13T12:43:35.189-07:00Know Your Foreclosure OptionsDaniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.comBlogger127125tag:blogger.com,1999:blog-5707719048125490296.post-71959033461720715052013-03-18T08:38:00.001-07:002013-03-18T08:38:18.802-07:00The State of Distressed Properties according to short sale expertsA cool graph showing the state of distressed properties. Her are some of the highlights:<br />
<br />
<li>According to Corelogic, 412,000 short sales were successfully completed in 2012. Corelogic anticipates 400,000 short sales to be completed in 2013.</li>
<li>Also according to a Corelogic report from January of 2013, “negative equity and near-negative equity mortgages accounted for 26.8 percent of all residential properties with a mortgage nationwide in the third quarter of 2012.”</li>
<br />
<br />
For more detailed info, the link to the article<br />
<br />
<a href="http://www.shortsaleexpeditor.com/in-the-news/the-state-of-distressed-properties-short-sale-expert-info/">The-state-of-distressed-properties-short-sale-expert-info</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-10808200621181676662013-01-29T22:47:00.001-08:002013-01-29T22:47:16.130-08:00Fannie, Freddie to let underwater homeowners out of mortgages<h2>
<section class="bd post-title-section fix"><hgroup class="post-title fix"> </hgroup></section></h2>
<section class="bd post-title-section fix"><hgroup class="post-title fix"><h1 class="entry-title">
Fannie, Freddie to let underwater homeowners out of mortgages</h1>
<h2>
</h2>
</hgroup><h2>
<div class="metabar">
<div class="metabar-pad">
<em>by <span class="author vcard sc"><span class="fn"><a href="http://agbeat.com/author/tara/" rel="author" title="Posts by Tara Steele">Tara Steele</a></span></span> in <span class="categories sc"><a href="http://agbeat.com/housing-news/" rel="category tag" title="View all posts in Housing News">Housing News</a></span>- <time class="date time published updated sc" datetime="2013-01-29T00:58:13+00:00">January 29, 2013</time> </em></div>
</div>
</h2>
</section><h2>
<aside class="post-excerpt">In an extremely controversial move, Fannie and Freddie have decided to allow underwater homeowners out of their mortgages if they continued to pay on time.</aside></h2>
<h2>
</h2>
<h2>
Relief for underwater homeowners</h2>
<br />
<br />
Beginning next month, Fannie Mae and Freddie Mac will allow underwater homeowners to walk away from their homes in a controversial move to offer relief to homeowners who have kept up with their payments, according to Bloomberg.com. While most contention has centered around homeowners that fail to or cannot pay their mortgages, many argue that homeowners owing more than their<a href="http://agbeat.com/housing-news"> house </a>is worth are also victims of the recession, which Fannie and Freddie intend to address. <br />
<br />
The two mortgage giants back the majority of home loans in America, totaling over $5.2 trillion in mortgages. If homeowners with loans backed by Fannie or Freddie can show they owe more than their house is worth but have paid their loan on time, and they can show they need to relocate due to work, illness, or other qualifying reasons, they can apply for a deed-in-lieu transaction which will forgive the difference between the home’s value and the remaining balance on the mortgage, in exchange for handing the property over. <br />
<br />
Bloomberg reports that under specific circumstances, underwater homeowners may still be required to pay a portion of the difference as a cash contribution of up to 20 percent of their financial reserves (excluding retirement funds), or a promissory note for future no-interest repayments. <br />
<h2>
Support for this controversial move</h2>
Supporters note that previous attempts to help struggling homeowners pushed borrowers to default before they could receive help, whereas this program incentivizes only behavior that is positive and keeps their loan on track, noting that underwater homeowners didn’t make a bad purchase decision, rather were punished by lending and housing policies that crashed the economy. <br />
“Fannie and Freddie are finally recognizing that some people are stuck in their homes,” the director of housing finance and policy at the Center for American Progress tells Bloomberg. “There are a lot of families who need to move who can’t do it if they’re going to have debt hanging over their heads. There’s no winner when someone is forced to default on their mortgage — not the investor, not the homeowner, and certainly not the neighborhood.”<br />
<h2>
Criticism for this controversial move</h2>
Some suspect the timing of the announcement, as the housing sector is finally beginning to improve, with home values steadily improving – with Fannie and Freddie owing taxpayers a combined $190 billion, it could stunt their ability to repay. <br />
“It’s an extraordinarily generous approach for companies still in debt to American taxpayers,” said Phillip Swagel, a professor at the University of Maryland’s School of Public Policy in College Park, Maryland. “We’re giving people an incentive to walk away, right when the housing market is starting to right itself.”Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com1tag:blogger.com,1999:blog-5707719048125490296.post-38627988346564900542013-01-01T22:01:00.003-08:002013-01-01T22:01:56.928-08:00Treasury foreclosure prevention info-push begins final phase | REwired<a href="http://www.housingwire.com/rewired/spotting-flops-versus-true-ads-public-service-marketing#.UOPNTiOZyZc.blogger">Treasury foreclosure prevention info-push begins final phase | REwired</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-51669199321629346402013-01-01T22:01:00.001-08:002013-01-01T22:01:05.562-08:00Homeowners faking filings to delay foreclosure<h1>
Homeowners faking filings to delay foreclosure</h1>
<div class="byline">
Nick Taylor</div>
<em>27-Dec-2012</em><br />
<div id="articlewrapperdiv">
<img align="right" alt="Legal documents" src="http://www.securingindustry.com/security-documents-and-it/homeowners-faking-filings-to-delay-foreclosure/s110/a1550/?cmd=ShowAsset&x=250&assetID=2913&nosurround=true&fakeExtension=.jpg" title="Legal documents" />Homeowners in California are buying fake documents to delay foreclosures on their properties, a local paper reports.<br /><br />Prosecutors in Stanislaus County, California, have cottoned on to the practice and begun cases against four homeowners. The four are accused of filing phony court documents - claiming the debt has been repaid or changing a trustee - in an attempt to stall foreclosure proceedings.<br /><br />"It comes to a point where enough is enough. How many breaks can we give these people?” Jeff Mangar, a prosecutor with the district attorney's fraud unit, told <em>The Modesto Bee</em>. Staff handling filings are now aware of the practice and tip off investigators.<br /><br />The counterfeit court filings are available online - for a fee - from websites claiming they can tie up banks in administrative proceedings for years. A website reviewed by the <em>Bee</em> claims none of its 2,600 customers have made a mortgage payment in the past two years.</div>
©
2013 SecuringPharma.comDaniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-8784977996908781802012-12-11T08:42:00.001-08:002012-12-11T08:42:09.406-08:00Why short sale sellers may now incur costs at closing<br />
<strong>Why short sale sellers may now incur costs at closing</strong><br />
<section class="bd post-title-section fix"><div class="metabar">
<div class="metabar-pad">
<em>by <span class="author vcard sc"><span class="fn"><a href="http://agbeat.com/author/melissa/" rel="author" title="Posts by Melissa Zavala"><span style="color: black;">Melissa Zavala</span></a></span></span> in <span class="categories sc"><a href="http://agbeat.com/real-estate-coaching-tutorials/coaching/" rel="category tag" title="View all posts in Coaching"><strong><span style="color: black;">Coaching</span></strong></a>, <a href="http://agbeat.com/residential/" rel="category tag" title="View all posts in Residential"><strong><span style="color: black;">Residential</span></strong></a></span>- <time class="date time published updated sc" datetime="2012-11-20T07:18:49+00:00">November 20, 2012</time> </em></div>
</div>
</section> <br />
<aside class="post-excerpt">Whether in California where laws have just changed, or in any other state, it is best to be fully equipped to know how to negotiate in advance so a short sale doesn't mean bringing money to the closing table. </aside><div class="entry_wrap fix">
<div class="entry_content">
<img alt="money dollar Why short sale sellers may now incur costs at closing" class="alignnone size-full wp-image-59876" height="433" src="http://agbeat.wpengine.netdna-cdn.com/wp-content/uploads/2012/10/money-dollar.jpg" title="money-dollar" width="780" /><br />
<h2>
Increase in Foreclosure Cancellations</h2>
Foreclosure Radar recently reported <a href="http://www.dsnews.com/articles/california-dual-trackig-ban-leads-to-spike-in-cancelled-foreclosures-2012-11-14" rel="nofollow" target="_blank">increased foreclosures cancellations</a> in the state of California thanks to a recent change in California law that prohibits dual tracking (that’s proceeding toward foreclosure when there is a short sale or loan modification is in the works).<br />
You’d think that the banks would be rolling out the red carpet for short sales based on the decline in the number of foreclosures. Unfortunately, that is not always the case. In fact, often times short sale guidelines from some investor note holders cause the lender to remove or reduce some of the seller fees that need to be paid from the sale proceeds. Some of the fees that the lenders continue to cut are settlement costs; title insurance; HOA document fees, transfer fees and outstanding dues; buyer closing costs; septic certification and pumping fees; property repairs; pest control fees and other non-institutional liens.<br />
<h2>
Reviewing the Settlement Statement</h2>
When you submit a short sale package to the lender (or if you are processing your short sale through Equator), you need to prepare a settlement statement that includes all of the possible seller fees associated with the closing of the transaction. It doesn’t matter whether you manually input your fees through Equator or whether you fax the settlement statement to the short sale lender, the lender will rely heavily on that statement in order to determine whether the short sale will be accepted, countered, or declined.<br />
After reviewing the settlement statement, you may receive a call from the bank employee and he or she may tell you that the lender will not pay certain fees. So, how are you going to get the transaction closed if the lender refuses to pay certain fees?<br />
<strong>Here are some ways to get additional fees paid at or before closing:</strong><br />
<ol>
<li><strong>Reach out to the buyer.</strong> If the buyer really wants the property, s/he may be willing to cover some of the unpaid fees. Speak with the buyer’s agent, and don’t forget to get permission from the lien holder for the buyer to cover these fees.</li>
<li><strong>Discuss options with the seller.</strong> In certain parts of the United States, the law permits the seller to pay some of the unpaid fees at closing. Make sure to get permission from the lender for the seller to make a contribution at closing.</li>
<li><strong>Negotiate.</strong> If unpaid HOA dues (or other liens) are not covered by the bank, try to negotiate. Offer 40 cents on the dollar and see how that goes. With all of your experience dealing with short sales, your negotiating skills may be much better than you think.</li>
<li><strong>Provide a commission credit.</strong> While not an optimal scenario, there are certain situations where agents may want to credit commission in order to cover unpaid fees.</li>
</ol>
It’s a good idea to set expectations accordingly with respect to the short sale transaction. When taking the short sale listing, mention to the seller that there are sometimes situations where fees do need to be paid at closing. Since many short sale sellers are under the impression that a short sale is totally free, it’s a good idea to explain the entire scope of the short sale before you find yourself giving away your commission.</div>
</div>
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
http://agbeat.com/real-estate-coaching-tutorials/coaching/short-sale-sellers-may-incur-costs-at-closing/Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-33101576656772073802012-11-06T06:18:00.003-08:002012-11-06T06:18:57.336-08:00New Streamlined Short Sale guidelines Fannie and Freddie Mac<strong></strong><br />
<strong></strong><br />
<strong>According to a recent article on Housing Wire, the new <a href="http://www.shortsaleexpeditor.com/short-sale-banks/fannie-mae/fannie-and-freddie-align-short-sale-guidelines/" target="_blank">streamlined short sale guidelines</a> for <a href="http://www.shortsaleexpeditor.com/short-sale-banks/fannie-mae/fannie-mae-or-freddie-mac-how-do-i-know/" target="_blank">Fannie Mae and Freddie Mac</a> short sales (beginning November 1) are alleged to be a win-win.</strong><br />
Remember that as these new short sale guidelines aim to have a more streamlined short sale when the investor owner of the loan is either Fannie Mae or Freddie Mac.<br />
<strong>These guidelines (information courtesy of the California Association of Realtors®):</strong><br />
<ul>
<li><em>Eliminate current Fannie Mae and Freddie Mac short sale programs and create a single standard short sale process for both entities (Fannie and Freddie HAFA programs will expire at the end of the year).</em></li>
<li><em>Enable servicers to quickly and easily qualify certain borrowers who are current on their mortgages for short sales without waiting for an approval from Fannie Mae or Freddie Mac</em></li>
<li><em>Offer special treatment for military personnel with Permanent Change of Station (PCS) orders.</em></li>
<li><em>Standardize and clarify foreclosure suspensions on a property with an approved short sale.</em></li>
<li><em>May pay borrowers up to $3,000 in relocation assistance.</em></li>
<li><em>Offer up to $6,000 to subordinate lien holders to expedite a short sale.</em></li>
</ul>
According to information provided directly to Housing Wire from FHFA, <strong>servicers will have the authority to approve a standard short sale for borrowers</strong> who are 31 days or more delinquent and borrowers who are less than 31 days delinquent as long as they are facing a hardship.<br />
If a borrower is less than 31 days delinquent and facing a hardship (e.g., divorce, death, disability or military change of station orders), servicers now have the authority to approve a short sale without sending the paperwork to Fannie Mae or Freddie Mac.<br />
<strong>Just as we have seen with previous short sale programs, this streamlined program will only be as good as the bank employees that process the <a href="http://www.shortsaleexpeditor.com/short-sale-listings/short-sale-packages-and-documentation-collection/" target="_blank">short sale packages</a>.</strong><br />
<strong>So, is this a trick or a treat? We will just have to wait and see.</strong><br />
<div class="post_tags">
Tagged as: <a href="http://www.shortsaleexpeditor.com/tag/fannie-mae/" rel="tag nofollow">Fannie Mae</a>, <a href="http://www.shortsaleexpeditor.com/tag/freddie-mac/" rel="tag nofollow">Freddie Mac</a>, <a href="http://www.shortsaleexpeditor.com/tag/short-sale-guidelines/" rel="tag nofollow">short sale guidelines</a></div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-31601997439811141922012-10-19T11:34:00.002-07:002012-10-19T11:34:22.561-07:00Why Loan Modification is detrimental to you<h1 class="headline">
<a href="http://bangordailynews.com/2012/07/15/business/loan-modification-problems-with-the-wrong-company-can-cost-consumers-money/" rel="bookmark" title="Permanent Link to Loan modification problems with the wrong company can cost consumers money">Loan modification problems with the wrong company can cost consumers money</a></h1>
<div class="byline">
By <a href="http://bangordailynews.com/author/russ-van-arsdale/">Russ Van Arsdale</a>, executive director, Northeast Contact</div>
<div class="datetime">
</div>
<div class="datetime">
</div>
<div class="datetime">
Posted <span class="date">July 15, 2012,</span> at <span class="time">11:26 a.m.</span></div>
<div class="entry">
<br />
<br />
A weary consumer from midcoast Maine wrote to us recently in hopes that others could benefit from her experience. She had sought some relief from her mortgage payment in the form of what is becoming a nasty twist on advance fee schemes.<br />
Many homeowners have had their loans renegotiated with satisfactory results. Others, like our consumer, had been swayed by a company against which the Federal Trade Commission recently filed a complaint.<br />
<br />
The company, calling itself Advocates For Consumer Affairs, had promised a number of clients that it could lower their interest rates and cut monthly payments on the order of 50-80 percent. It could do this, it claimed, using a tool called a forensic mortgage loan audit.<br />
<br />
<br />
The FTC cites claims on the company’s website (now defunct) which claimed “up to 95 percent of mortgages may be legally unenforceable due to defects like lost documents, improper notices, appraisal and/or predatory lending.” The forensic audit could find these defects and use them as leverage to broker a better deal with the holder of the mortgage.<br />
<br />
All the client had to do was pay the company several hundred dollars (in our consumer’s case, $1,800) up front. It was only later that the hard truth became clear.<br />
The FTC reports that it’s found no evidence that forensic loan audits help with a loan modification or any other form of foreclosure relief. That’s the case even if the audit is undertaken by a trained, licensed, legitimate auditor, mortgage professional or lawyer.<br />
<br />
Some federal laws make it possible to sue your lender based on errors in loan documents. Even if you sue and win, though, your lender doesn’t have to adjust the terms of your loan to make it more affordable.If you cancel your loan, you’ll have to return the borrowed money; that makes losing your home a real possibility.<br />
<br />
People who are in default or are facing foreclosure are likely targets for foreclosure rescue scams. The midcoast consumer had entered into a business relationship with Advocates just weeks before the FTC hit the firm with, first, a temporary restraining order, then a preliminary injunction.<br />
In its complaint, the FTC charged the firm:<br />
<div style="padding-left: 30px;">
• Did not secure interest rates or payment reductions that it promised.</div>
<div style="padding-left: 30px;">
• Either didn’t contact lenders or, if it did, failed to follow up.</div>
<div style="padding-left: 30px;">
• Failed to return phone or email inquiries seeking updates on clients’ cases.</div>
<div style="padding-left: 30px;">
• Didn’t give refunds to customers requesting them.</div>
<div style="padding-left: 30px;">
• Put consumers at risk of losing their homes and having their credit ratings damaged.</div>
<br />
The case is pending, and the midcoast consumer, along with many others in similar situations, is out a lot of money. We would urge people with mortgage woes to visit our blog and under the “education” tab find “foreclosure prevention kit,” a link to the Pine Tree Legal Assistance website and some excellent advice on how to really deal with mortgage problems.<br />
You also may call 888-995-HOPE any time for free personalized advice from people in housing counseling agencies certified by HUD.<br />
<em></em><br />
<em></em><br />
<em>Consumer</em><em> </em><em>Forum</em><em> is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit </em><em>consumer</em><em> organization. Individual and business memberships are available at modest rates. For assistance with </em><em>consumer</em><em>-related issues, including </em><em>consumer</em><em> fraud and identity theft, or for information, write </em><em>Consumer</em><em> </em><em>Forum</em><em>, P.O. Box 486, Brewer 04412, visit necontact.wordpress.com or email contacexdir@live.com.</em></div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-88597454148310377632012-10-16T07:41:00.000-07:002012-10-16T07:41:26.861-07:00Short Sale Documentation-What is Needed.<a href="http://agbeat.com/real-estate-coaching-tutorials/coaching/how-to-survive-the-short-sale-listing/" target="_blank">Short sale documentation</a> is often required in order to determine whether there is a verifiable hardship or proof of imminent hardship. Many short sale lenders have guidelines with respect to hardship and can only approve short sales where they collect this documentation, and verify that the seller has a legitimate hardship—not just a plan for strategic default.<br />
<br />
In conducting short sale, agents learn how critical is to gather and submit supporting documentations on a timely matter. Frequently, precious time is wasted when lender notifies that they do not have all the documents at hand thus can't issue approval.<br />
<br />
<a href="http://agbeat.com/real-estate-coaching-tutorials/coaching/short-sale-documentation-whats-the-need/">Short Sale Documentation-What is Needed.</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-41461698611992952422012-10-08T10:55:00.002-07:002012-10-08T10:55:26.254-07:00Why the big banks are doing more short sales<div class="noprint right">
</div>
<h2 class="header">
Why the big banks are doing more short sales</h2>
<br />
<div class="content_info">
<div class="byline">
By <a href="http://www.utsandiego.com/staff/lily-leung/">Lily Leung</a></div>
<div class="date">
Saturday, October 6, 2012</div>
</div>
<br />
<div class="story_lead_photo">
<div class="photo">
<a href="http://www.utsandiego.com/photos/2012/oct/05/698784/"><img alt="" src="http://media.utsandiego.com/img/photos/2012/10/05/ShortSale_ILLO_t400.jpg?a43852d237593c63a3f872b0283e00b96c481ec7" /></a></div>
</div>
<br />
<div class="story_body">
San Diego County’s level of housing distress took a pivotal turn this year.
Short sales, once rare deals in the real estate world, now make up a bigger
share of the residential market compared <strong><a href="http://www.utsandiego.com/news/2012/sep/17/mortgage-defaults-down/">to
foreclosed homes that have been resold</a></strong>.<br />
Short sales allow homeowners who can’t afford their mortgages to sell their
homes for less than what they still owe, as long as the lender says OK. One in
five homes resold in the county were short sales, based on August numbers from
local real estate tracker DataQuick. Compare that to single-digit percentages
seen while the housing bubble began to percolate in 2007.<br />
Short sales are expected to become even more common and easier to close as
Freddie Mac, which owns or guarantees a sizable chunk of mortgages in
California, will make it easier for borrowers to complete them starting next
month. Borrowers will see that the process is considerably shorter and that it
will leave less of a financial black mark on their credit histories.<br />
Already boosting the number of short sales is a $25 billion mortgage deal
between the nation’s biggest banks and 49 states that settled foreclosure abuse
allegations and was signed earlier this year. The agreement essentially forces
banks to do more short sales and provide relief to borrowers on expedited terms.
Some banks are even offering cash as incentives to get more people to short
sell.<br />
“Banks are really motivated to do short sales,” said Matt Battiata, who owns
Del Mar-based Battiata Real Estate. “...Banks have decided and learned over the
last several years that short sales are a much better way to mitigate loss.”<br />
The end result appears to be good for the housing market.<br />
The increase in short sales means a more dynamic real estate market, fewer
losses for banks and increased chances that short sellers could buy homes again
after a shorter hiatus.<br />
<h3>
Why the latest Freddie Mac changes matter</h3>
The biggest change? Freddie Mac officials in late August said they will no
longer require homeowners to default on their mortgage in order to qualify for a
short sale. As of Nov. 1, homeowners with Freddie-backed loans would just have
to prove financial hardship from events including death, divorce or
disability.<br />
The change is a great protection for consumers because Freddie Mac doesn’t
typically postpone foreclosures for defaulted borrowers trying to qualify for a
short sale, said <strong><a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CEIQFjAA&url=http%3A%2F%2Fwww.utsandiego.com%2Fnews%2F2011%2Faug%2F21%2Fshort-sale-negotiator%2F&ei=e3pvUISnKZDpiwK14YFI&usg=AFQjCNFOa_ckt2jQbL0TpjX39rckCYGJeQ&sig2=73nw2cKznvlGyR0bkV7oPg">San
Diego short sale negotiator Jacalyn Blank</a></strong>. If the short sale falls
through, then the homeowner with a Freddie-owned loan is likely to face
foreclosure.<br />
Without the upcoming change, “it’s a much more dangerous game to play,” Blank
added. “...Now they won’t have to take that risk anymore.”<br />
The change also helps borrowers preserve their credit score, which can take a
dive if they are behind on their mortgage payments and hurt their chances of
buying another home.<br />
The latest Freddie Mac changes also involve giving its servicers (the
companies that handle mortgage payments) more authority during the short sale
process.<br />
This is another biggie, Blank said, because “it’s a long chain of telephone”
among Freddie, the servicer and negotiators without this newly granted
authority.<br />
“This should cut two to three weeks out of the (short-sale) process,” she
said.<br />
Freddie Mac buys mortgages from lenders and sells them to investors on the
secondary mortgage market. The government-controlled company with fellow
mortgage giant Fannie Mae owns or guarantees more than 50 percent of the
mortgages in California, so what Freddie says and does in a short sale could
affect a number of potential buyers and sellers in the market.<br />
<h3>
Why the mortgage settlement matters</h3>
Six months ago, five of the nation’s largest lenders struck a $25 billion
deal with attorneys general of 49 states to settle allegations that they
financially hurt borrowers and abused the mortgage system for years. Though
pundits would later <strong><a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&ved=0CCcQFjAB&url=http%3A%2F%2Fblogs.kqed.org%2Fnewsfix%2F2012%2F03%2F13%2Fcritics-say-mortgage-settlement-not-such-a-big-deal%2F&ei=-3pvUPW7HMqXiAL6hoHgCA&usg=AFQjCNEytehzYKusVYFzGos-umfu_kSBxQ&sig2=lA6ILVYlQvjJO4nqoZZIWw">criticize
California Attorney General Kamala Harris</a></strong> and other leaders for
giving in to the banks too easily, the long-awaited settlement was major. It’s
second only to the massive tobacco-industry deal reached in the 1990s.<br />
Politics aside, the point of the historic agreement was to force those
lenders — Bank of America, Wells Fargo, Citi, Chase and Ally — to provide relief
to consumers in the form of loan modifications, mortgage forgiveness,
refinances, and yes, short sales. So far consumer relief has totaled more than
$10 billion, with 80 percent of that being short sales.<br />
More than 74,000 borrowers nationwide have completed short sales through the
settlement, based on a recent report from the agency watching over the deal.
Roughly 34 percent were done in California. (County-by-county tallies were not
available.)<br />
The logic behind short sales is to get struggling homeowners out of homes
they can no longer or barely afford and shift those properties to consumers who
are in a better financial position.<br />
“We tried, we really did,” said Mary Anne Camilon, who moved in with family
in Ventura County after losing her teaching job in San Diego. “When we realized
we weren’t moving back to the San Diego area, there was no reason to hold on to
it (the house) anymore.”<br />
<strong><a href="http://www.nationalmortgagesettlement.com/">The national
mortgage settlement</a></strong> is structured in a way that banks get more
incentives if they provide more consumer relief, such as short sales, during the
first year instead of dragging it out through the three years they have been
allotted.<br />
Possible penalties are also pushing banks to move faster. Every time one of
the lenders provides consumer relief, they get a credit toward their settlement
record. If they fail to fulfill what they promised in the deal within three
years, then they could pay at least 125 percent “of its unmet commitment
amount,” the mortgage report stated.<br />
“I believe we have made a good first step,” wrote the appointed mortgage
settlement watchdog Joseph A. Smith in the progress study dated Aug. 29. “More
hard work remains.”<br />
<h3>
Why cash bonuses will help</h3>
Major banks like Bank of America and Chase are pushing more short sales
through with the help of cash.<br />
They’re offering distressed borrowers deals that for some are hard to
believe.<br />
“I think it said, ‘You could be eligible for up to $20,000 in funds to help
you get into a new home...” said Camilon, the teacher who short sold her Vista
property.<br />
She was skeptical, but after consulting with Ryan Donigan, of Utopia Mortgage
& Real Estate, she went ahead with a short sale. Once escrow closed, she got
her money.<br />
The trend of banks offering cash bonuses for completed short sales emerged
about a year, <strong><a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&ved=0CF0QFjAC&url=http%3A%2F%2Fwww.utsandiego.com%2Fnews%2F2011%2Foct%2F08%2Fbanks-offer-cash-troubled-homeowners-completed-sho%2F&ei=W3tvUKatMuWriALMlIDgCg&usg=AFQjCNGXvY5GG3VtG-J8V7fili-a3j6w-w&sig2=PK1_m4ThmsqTmK9BsX7NSg">as
the U-T San Diego reported</a></strong>. But it has grown more common. This
year, Bank of America began to offer it to any of its borrowers who ask. Certain
banks are pickier.<br />
Bank of America is offering delinquent homeowners $2,500 and $30,000 in
relocation help once a pre-approved short sale closes. Similar offers, many of
which appear expedited, have been seen from Citi, Chase and others.<br />
“I have a Carlsbad seller who got a letter from Chase saying they will pay
them $35,000 to do a short sale,” said Battiata. “There’s outreach...On a
foreclosure, they lose more money.”<br />
<h3>
What this means for the market</h3>
Transit planner Brian Lane and his wife bought their Lakeside home at the
height of the market. As the recession set in, the couple with two kids could
barely afford the mortgage so they short sold their home in March 2010.<br />
Despite that experience, the Lanes want to own again and it could be as soon
as the upcoming spring.<br />
“I am just starting to look,” Lane said. “We had a short sale in March 2010,
so will be waiting to March 2013 to close an FHA loan.”<br />
As the banks continue to fulfill their promises to hurt borrowers through the
$25 billion foreclosure settlement and the Freddie Mac changes take effect, more
former homeowners like Lane could theoretically own again within a short time
period. Their credit scores won’t sink as low because they aren’t forced to
default and because a short sale gives off less of a sting on your credit report
than a foreclosure.<br />
“My story is going to become quite common as those who short sold are looking
to re-enter the market,” added Lane, whose score took a 150-point dive after his
short sale. Now? It’s rebounded to more than 700.<br />
“I’m optimistic,” he said. “I hear home prices are going up a little ... so
hopefully the people who have been waiting to put their house on the market will
put it out because it’s more of a seller’s market.”<br />
Have story tips, a hot property listing or a question? <strong>Email
me</strong>: <strong><a href="mailto:lily.leung@utsandiego.com">lily.leung@utsandiego.com</a></strong> |
<strong>Tweet me</strong>: @<strong><a href="http://www.twitter.com/LilyShumLeung">LilyShumLeung</a></strong> |
<strong><a href="http://www.signonsandiego.com/rss/headlines/business/realestate/">Subscribe
to this blog</a></strong>.</div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-32383275433168130542012-10-03T07:07:00.001-07:002012-10-03T07:07:24.811-07:00Musings About Short Sales and Late Payments<h1 class="entry-title">
Musings About Short Sales and Late Payments</h1>
<div class="byline">
<div class="right">
<div id="fb">
</div>
<div class="twitter">
</div>
</div>
</div>
<div class="headline_meta">
by <span class="author vcard fn">Melissa Zavala</span> on <abbr class="published" title="2012-10-03">October 3, 2012</abbr></div>
<div class="format_text entry-content">
<img alt="short sales with late payments" class="post_image alignright" height="281" src="http://www.shortsaleexpeditor.com/wp-content/uploads/2012/02/underwater.jpg" width="375" /><strong></strong><br />
<strong></strong><br />
<strong>Have you ever had a client ask you if they could participate in a short sale without missing a mortgage payment? </strong><strong>If so, how did you respond?</strong><br />
<br />
Prospective short sale sellers that are still making their mortgage payments are often curious about whether they could successfully receive short sale approval on their home without ever missing a payment.<br />
Clearly those folks are a little different from the faction who are unemployed or underemployed and can barely make ends meet. These are borrowers facing imminent default or those out to sell their home for other reasons. Often borrowers still making their mortgage payments have a strong desire to preserve their credit.<br />
<br />
<strong>So, the question is, “Can you participate in a short sale without missing a mortgage payment?”</strong><br />
<strong>The answer is simple (read: sarcasm): Yes, no, or maybe.</strong><br />
<strong>There are certain short sale lenders that will approve a short sale with no missed payments—especially for those short sale sellers facing imminent default.</strong> There are other lenders that will not. And, to even make it more confusing, remember that all of the big servicing companies (<a href="http://www.shortsaleexpeditor.com/short-sale-banks/bank-of-america/bank-of-america-declines-short-sale-over-missing-initial/" target="_blank">Bank of America</a>, <a href="http://www.shortsaleexpeditor.com/short-sale-banks/chase-bank/thirty-thousand-dollar-short-sale-incentive-%E2%80%93-wow/" target="_blank">Chase</a>, <a href="http://www.shortsaleexpeditor.com/in-the-news/wells-fargo-short-sales-now-processed-on-equator/" target="_blank">Wells Fargo</a> among others) service loans for hundreds of investors—each with their own guidelines for short sale approval.<br />
So, what does that mean for you and to your business? It means that even if one B of A short sale got approved with no late payments, it’s possible that the next will not. Each short sale seller’s loan is owned by a different noteholder, and it is the noteholder guidelines that control the decision-making process.<br />
<strong></strong><br />
<strong></strong><br />
<strong>In 2012 alone, we have seen a handful of short sale sellers that have been told that their short sale will only be evaluated if the borrower is 60 days late on the mortgage: we’ve seen it at B of A, we’ve seen it at Wells Fargo, and we’ve seen it at IndyMac.</strong> Heck… we even received a conditional approval the other day from PNC that said that the short sale approval letter is conditioned upon the seller missing two payments. However, the negotiator did do a solid for the short sale seller; she pushed the closing date out 65 days so that now the seller can go late.<br />
<strong>The bottom line is that there are many unknowns with short sales.</strong> Often times experienced agents and short sale processors can surmise how things will probably happen based upon their previous experience. However, with all of the continuing changes in the distressed property world, you really never know.</div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-58746206645909527562012-10-02T19:32:00.003-07:002012-10-02T19:32:26.527-07:00Free Short Sale Conference Call<div class="separator" style="clear: both; text-align: center;">
<a href="http://4.bp.blogspot.com/-loykr5fddaw/UGujmOon_qI/AAAAAAAAAGA/57xGyRUHnXc/s1600/Version+2+short+sale+conference+call.JPG.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="494" src="http://4.bp.blogspot.com/-loykr5fddaw/UGujmOon_qI/AAAAAAAAAGA/57xGyRUHnXc/s640/Version+2+short+sale+conference+call.JPG.jpg" width="640" /></a></div>
<br />Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-3651457720118095922012-10-01T11:16:00.003-07:002012-10-19T11:34:47.629-07:00Bank of America and subordinate loansBorrowers with second liens owned and serviced by <strong>Bank of America</strong> may qualify to get their subordinate debt extinguished entirely.<br />
<br />
The banking giant mailed 150,000 letters to pre-qualified homeowners who are eligible to have their Bank of America second-lien mortgages eliminated. The full story from Housingwire below:<br />
<br />
<br />
<a href="http://www.housingwire.com/print/news/bofa-informs-thousands-they-may-qualify-2nd-lien-extinguishment">Bank of America may eliminate 2nd liens to those who qualify</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-83264562348827370342012-09-26T08:34:00.001-07:002012-09-26T08:34:33.488-07:00Attorney General Kamala D. Harris today announced that claim forms will be sent to approximately 432,584 California borrowers who lost their homes to foreclosure between January 1, 2008 and December 31, 2011 and may be eligible for a settlement payment under the $25 billion national mortgage foreclosure settlement. Below the detailed announcement from Sacramento.<br />
<br />
<br />
<a href="http://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-announces-national-administrator-begin">National Foreclosure Refund Process</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-45511060058733490932012-09-24T10:10:00.002-07:002012-09-24T10:10:29.649-07:00Short Sale Vs. Foreclosure from Banks preference.Lately, especially after the settlement of Department of Justice (DOJ) and Attorney generals against the 5 major lenders, there has been a pronounced shift in the attitude how lenders treat short sale. In fact, the <em>FHFA</em> announced new guidelines to streamline short sale.<br />
<br />
<a href="http://www.kcmblog.com/2012/08/24/short-sales-vs-foreclosures-banks-preference/">short-sales-vs-foreclosures-banks-preference</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-42826376877848973432012-09-24T10:03:00.002-07:002012-09-24T10:03:34.068-07:00Short Sale Vs. Foreclosure. 10 Mitos<br />
<br />
<br />
<a href="http://www.kcmblog.com/2012/05/09/short-sale-vs-foreclosure-10-common-myths-busted/">short-sale-vs-foreclosure-10-common-myths-busted</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-42623073973830017942012-09-19T15:27:00.000-07:002012-09-19T15:27:51.600-07:00Partial Release of Lien for Short sales<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-M2lXIn5WjE0/UFpGWRiF4zI/AAAAAAAAAFw/PDxVwCWM2aM/s1600/partial+release+tax+liens.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" hea="true" height="640" src="http://2.bp.blogspot.com/-M2lXIn5WjE0/UFpGWRiF4zI/AAAAAAAAAFw/PDxVwCWM2aM/s640/partial+release+tax+liens.jpg" width="494" /></a></div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-79255773436241513652012-09-16T09:09:00.000-07:002012-09-16T09:10:11.261-07:00Inman News: 3 tips for leaving an underwater home behindSince the onset of housing crisis, there has been instances where homeowners who were not in distress made strategic defaults in order to get out of underwater homes. Although ethically and morally questionable, this practice is still practiced. It takes careful planning to exit from your current home into next home. Here is an interesting article from Inman News about the topic.<br />
<br />
<a href="http://www.inman.com/buyers-sellers/columnists/taranichollenelson/3-tips-leaving-underwater-home-behind">Inman News:3 tips for leaving an underwater home behind.</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-52676339585036254232012-09-15T09:00:00.001-07:002012-09-15T09:00:42.760-07:00HOUSING: Hours before short sale closes, bank forecloses<br />
Another example of rampant banks'mistake of handling clients'record or just new attitude toward their willingness to foreclose of borrowers ?<br />
<br />
<a href="http://www.nctimes.com/business/housing-hours-before-short-sale-closes-bank-forecloses/article_4e3a6b32-6645-52bc-adea-611480758509.html">HOUSING: Hours before short sale closes, bank forecloses</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-39493820878419007252012-09-13T10:20:00.001-07:002012-09-13T10:21:31.976-07:00Have You Heard ? Financial Exemption for short sale is about to expire.<div class="separator" style="clear: both; text-align: center;">
</div>
<div class="separator" style="clear: both; text-align: center;">
<a href="http://2.bp.blogspot.com/-Wdk6Ra6wW6s/UFIVqZ7C1UI/AAAAAAAAAFg/HQLcwSv11aE/s1600/Have+You+Heard.JPG.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" hea="true" height="414" src="http://2.bp.blogspot.com/-Wdk6Ra6wW6s/UFIVqZ7C1UI/AAAAAAAAAFg/HQLcwSv11aE/s640/Have+You+Heard.JPG.jpg" width="640" /></a></div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-56047500995088937512012-09-13T10:14:00.003-07:002012-09-13T10:14:18.720-07:00Fannie Mae, Freddie Mac OK limited principal reduction in California<br />
<br />
<a href="http://www.latimes.com/business/money/la-fi-mo-fannie-freddie-20120912,0,5058953.story">Fannie Mae, Freddie Mac OK limited principal reduction in California</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-4067607353178260652012-09-11T00:48:00.001-07:002012-09-11T00:48:19.502-07:00Nonprofit Counselors: Missing Link Between Borrower and Servicer?<h1 class="headline">
Nonprofit Counselors: Missing Link Between Borrower and Servicer?</h1>
<h2 class="byline">
<span>By: Esther Cho <span style="float: right;">09/09/2012</span> </span></h2>
<div class="body">
<br />
<br />
Delinquent borrowers oftentimes make themselves as elusive and unavailable as possible when it comes to communicating with their servicers. During a panel at the Five Star Conference, industry experts discussed the reasons behind the difficulty in reaching borrowers. <br />
<br />
Colleen Hernandez, <span class="caps">CEO</span> and president of the <a href="http://www.995hope.org/">Homeownership Preservation Foundation</a> (<span class="caps">HPF</span>), explained three main reasons why borrowers won’t respond or reach out to their servicer. <br />
For one, when borrowers don’t have the money to bring their account current, then for them, it seems pointless to contact their servicer. <br />
<br />
“They think that their servicer wants money, and, since a struggling homeowner often doesn’t have that money, they think, ‘What’s the point?’” said Hernandez in a follow-up email interview. “Additionally, many homeowners believe that calling their servicer will actually speed up the foreclosure process.”<br />
A second reason is borrowers don’t know who to trust. With the countless scams that exist to target struggling homeowners, it can be difficult to know who is there to truly help. <br />
<br />
Hernandez said that when she Googles foreclosure prevention every morning, she’s amazed by those who have morphed from yesterday’s name to today’s name based on headlines. <br />
Hernandez said the third reason borrowers don’t reach out is they need help with more than their mortgage. Instead, they need a financial advisor who can look at the entire picture. <br />
<br />
Additionally, Hernandez said, “What homeowners typically don’t understand is that, more than anything, servicers want performing loans and are often willing to explore ways in which they can bring a loan back to performing status and avoid a costly foreclosure.”<br />
For borrowers, however, they are oftentimes in a situation where their loan has been sold several times to different servicers, in addition to the scammers reaching out to them. <br />
<br />
To help borrowers get the information they need as they maneuver their way through confusing terrain, <span class="caps">HPF</span> is able to act as a bridge between borrowers and servicers. <br />
<br />
“While many servicers now send out letters advising delinquent borrowers to contact them directly, they also recommend that homeowners contact a nonprofit housing counselor, like those available by calling the Homeowner’s <span class="caps">HOPE</span> Hotline at 888-995-<span class="caps">HOPE</span>. Homeowners often feel more comfortable speaking with someone who doesn’t have any ‘skin in the game’ and is providing honest, non-judgemental advice on what their options are, the potential impact on their family and their finances, and a lifeline to call for future questions,” said Hernandez. <br />
<br />
Besides enlisting the help of a third-party counselor, another strategy to ensure borrowers get the information they need is face-to-face contact. <br />
Jay Loeb, VP of Strategic Development at <a href="http://www.nationalcreditors.com/">National Creditors Connection</a>, explained that after the phone calls and letters have gone out and neither has worked, face-to-face contact can be another solution to engage borrowers. <br />
<em>[Editor’s note: The Five Star Conference is hosted by The Five Star Institute, DS News’ parent company.]</em></div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-64639053441079806942012-09-10T14:43:00.000-07:002012-09-10T14:43:00.018-07:00DSNEWS: Negative Equity and Its Impact on Current Loans<h1 class="headline">
Negative Equity and Its Impact on Current Loans: Report</h1>
<h2 class="byline">
<span>By: Esther Cho <span style="float: right;">09/10/2012</span> </span></h2>
<div class="body">
<br />
<br />
Eighteen percent of current loans remain underwater, according to <a href="http://www.lpsvcs.com/Pages/default.aspx">Lender Processing Services’</a> (<span class="caps">LPS</span>) July Mortgage Monitor report. In states where the percent of current loans sitting underwater is extremely high, the percentage of new problem loans was also higher. <br />
<br />
For example, the state with the highest share of new problem loans was Nevada, where 54.7 percent of current loans are underwater, followed by Florida (33.1 percent), Arizona (28.4 percent), and Georgia (42.8 percent). <br />
<br />
<span class="caps">LPS</span> also examined the relationship between high loan-to-value ratios (<span class="caps">LTV</span>) and the likelihood of becoming a new problem loan. For loans that had an <span class="caps">LTV</span> greater than 150 percent, 4.4 percent went from being current to delinquent. <br />
<br />
For loans with an <span class="caps">LTV</span> of 110-120 percent, 2.2 percent became new problem loans. <br />
“As negative equity increases, we see corresponding increases in the number of new problem loans. In Nevada and Florida, two of the states with the highest percentage of underwater borrowers, more than three percent of borrowers who were up to date on their payments are 60 or more days delinquent six months later. This suggests that further home price declines – should they occur – could jeopardize recent improvements,” explained Herb Blecher, senior vice president of <span class="caps">LPS</span> Applied Analytics.<br />
<br />
Overall, the delinquency rate for July was 7.03 percent, a yearly drop of 11 percent and a 30 percent decline from the January 2010 peak. <br />
<br />
The percent of inventory in foreclosure stood at 4.08 percent and remained mostly unchanged both monthly (-0.2 percent) and yearly (-0.9 percent). <br />
July saw about 186,000 foreclosure starts, down 10.5 percent yearly but up 7.1 percent monthly. There were about twice as many foreclosure starts as foreclosure sales or liquidations, which numbered about 93,000. <br />
<br />
Foreclosure inventory in judicial states continued to be elevated at 6.46 percent compared to non-judicial states (2.38 percent). Also, foreclosure sales was much lower in judicial states, where 2.09 percent of foreclosure inventory went to sale compared to 6.71 percent in non-judicial states.</div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-38413814067414213022012-09-10T10:32:00.003-07:002012-09-10T10:32:35.642-07:00Expiring Mortgage Debt Relief Act Fuels Strategic Default: Survey<h1 class="headline">
Expiring Mortgage Debt Relief Act Fuels Strategic Default: Survey</h1>
<h2 class="byline">
<span>By: Esther Cho <span style="float: right;">05/29/2012</span> </span></h2>
<div class="body">
A foreclosure prevention agency found that the pending expiration of the <a href="http://www.irs.gov/individuals/article/0,,id=179414,00.html">Mortgage Debt Relief Act of 2007</a> is prompting struggling homeowners to strategically default on their loan. </div>
<br />
<br />
<div class="body">
<a href="http://www.youwalkaway.com/">YouWalkAway.com</a> conducted a national survey and found 34 percent of respondents indicated that the act, which is set to expire December 31, 2012, contributed to their decision to walk away sooner rather than later from their property. Those surveyed were YouWalkAway.com clients who were actively considering or navigating through the foreclosure process. </div>
<div class="body">
<br /></div>
<div class="body">
<br /></div>
<div class="body">
The Mortgage Debt Relief Act releases homeowners from the obligation of paying taxes on mortgage debt forgiven from a short sale, foreclosure, or modification. Taxpayers are eligible if the property is the primary residence. </div>
<div class="body">
“The survey results are not surprising; YouWalkAway.com saw a number of homeowners reach out to us in early and mid-2011 due to the impending 2012 deadline,” said Jon Maddux, <span class="caps">CEO</span> of YouWalkAway.com, in a release. “Many were prompted to begin the foreclosure process in 2011 in order to ensure their foreclosure is complete by the end of 2012.”</div>
<div class="body">
<br /></div>
<div class="body">
While the expiring act motivates homeowners to seek completion of the foreclosure process before the expiration date, for those who won’t qualify in time, Maddux said not extending the act will then cause short sales to stop immediately due to the fear of getting hit with a huge tax bill. </div>
<div class="body">
<br /></div>
<div class="body">
In addition, 78 percent of respondents from the YouWalkAway.com survey expressed intentions of walking away from their home. Of those, at least 74 percent would qualify for relief under the act. </div>
<div class="body">
“Potentially millions of people will find themselves stuck with a huge tax bill after foreclosure if the government doesn’t renew the Debt Relief Act at the end of 2012 or if they don’t finalize their foreclosure by that date. The bill may just expire, like when Congress chose not to renew the home buyer’s tax credit,” said Maddux. </div>
<div class="body">
<br /></div>
<div class="body">
Cheryl Gerhardt, a <span class="caps">CPA</span> who has worked with YouWalkAway.com clients, said about 80 percent of the people who approach her about foreclosure tax consequences qualify for the relief under the act. </div>
<div class="body">
“These are usually people who purchased during the height of the market from 2005 to 2007 and never had the opportunity to take out a second, whereas a few years ago clients who were getting foreclosed upon had made purchases in the early 2000’s, took out a home equity line of credit and could not qualify,” said Gerhardt. </div>
<div class="body">
<br /></div>
<div class="body">
In March, House Bill H.R. 4290, or Homeowner Tax Fairness Act, was introduced to extend the act to 2015. The bill is sponsored by Rep. James McDermott.</div>
<div class="body">
The Mortgage Relief Act was actually extended in October 2009, three months before the act’s expiration date. </div>
<div class="body">
<br /></div>
<div class="body">
YouWalkAway.com works with borrowers facing foreclosure as well as those opting to strategically default on their underwater homes. The survey the agency conducted reached out to 2108 borrowers and received responses from over 25 percent of those contacted.</div>
<br />
<br />
<br />
<a href="http://www.dsnews.com/articles/print-view/survey-reveals-expiring-mortgage-debt-relief-act-leads-to-more-strategic-defaults-2012-05-29">http://www.dsnews.com/articles/print-view/survey-reveals-expiring-mortgage-debt-relief-act-leads-to-more-strategic-defaults-2012-05-29</a>Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-38560512532212486062012-09-05T21:17:00.001-07:002012-09-05T21:17:26.633-07:00Short Sale Now or Later ? <strong>Q: What should I be thinking about when it comes to deciding whether or not to short sell? In other words, what are the pros and cons of doing it now versus 3 or 4 years from now? <span id="more-157298"></span></strong>
<table align="right" cellpadding="9" style="width: 168px;"><tbody>
<tr><td><strong></strong></td></tr>
<tr><td></td></tr>
</tbody></table>
<br />
<br />
A: Short-term versus long-term planning is a great decision making exercise. Many times, when people ask me this question, what they’re really asking is, “Why wouldn’t I just short sell in a couple of years, because I’m not ready now?” It’s a fair enough question but is definitely one that requires some immediate attention, even if you choose not to do anything today.<br />
Before we list off the pros and cons of each, there’s one crucial question that you’ll need to ask yourself and have an answer for! The question is, “Where do I want to be when all the house stuff is finished?” You can’t set a course if you don’t have an endpoint. So, whether your decision is to wipe the slate now and be able to buy again in two to three years or it’s to stay in the house as long as you can and then rent, you have to aim towards something.<br />
<br />
Let’s start with the pros and cons of waiting for three or four years, they are…<br />
<br />
<strong>Pros:</strong><br />
<br />
<em>Get to stay in your house longer</em><br />
<br />
<em>Can keep the tax deductions homeownership brings</em><br />
<br />
<em>Leaves the door open for you to possibly keep the house</em><br />
<br />
<em>Avoids the embarrassment of your neighbors talking about your finances</em><br />
<br />
<em>Maintains the status quo (no changes, kids can stay at their school, etc.)</em><br />
<br />
<strong>Cons: </strong><br />
<br />
<em>Uncertainty of how you’ll be taxed</em><br />
<br />
<em>Banks may not allow short sales then</em><br />
<br />
<em>Rental application will look worse than for those who sold short a couple of years ago</em><br />
<br />
<em>Credit recovery can make this a seven year process (staying for three and up to four more for credit recovery)</em><br />
<br />
<em>You could’ve been done by now</em><br />
<br />
<em>Now, let’s see about doing something today…</em><br />
<br />
<strong>Pros:</strong><br />
<br />
<em>The Mortgage Forgiveness Debt Relief Act is still active</em><br />
<br />
<em>Credit recovery begins immediately after the sale</em><br />
<br />
<em>Gets you out of an “underwater” investment</em><br />
<br />
<em>Puts your recovery time at two to three years</em><br />
<br />
<em>All factors are known (like taxes, deficiencies, bank processes)</em><br />
<br />
<strong>Cons: </strong><br />
<br />
<em>Your situation may improve to where you wouldn’t have needed to sell</em><br />
<br />
<em>You have to move</em><br />
<br />
<em>Not ready, logistically or emotionally</em><br />
<br />
<em>Loss of tax deductions</em><br />
<br />
<em>Immediate change</em><br />
<br />
What does all this mean? Generally speaking, it means that doing something now will force immediate change but will give you known results and a quicker recovery. On the other hand, waiting comes with a huge element of uncertainty that may leave you better or worse off and will be a much longer process.<br />
If you have a hardship (either current or future) and your home is underwater, what are you doing for yourself by staying? You’re probably going to need five to ten years of modest gains in home values just to get back to being even with what you owe. Since you’re asking what you should be thinking about, think about where you’ll be in four years if you do something now.<br />
<br />
<br />
In most cases, if you short sale now, you’re back to being a homeowner in two to three years, you’re able to buy a comparable home for much less, and you’ll have equity in your house with any appreciation that happens. Unless you have a very compelling reason to wait, stop procrastinating and get the next chapter of your life<br />
<br />
Contributed by: Chris DiazDaniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0tag:blogger.com,1999:blog-5707719048125490296.post-82984197880839498082012-09-01T09:24:00.000-07:002012-09-01T09:24:00.975-07:00Short Sales Take Growing Share of Distressed Sales<div class="BlogArticleByline">
by <a href="http://www.mortgagenewsdaily.com/members/jpatswanson/default.aspx">Jann Swanson</a> </div>
<div class="BlogPostSubject" style="padding-bottom: 8px; padding-left: 0px; padding-right: 0px; padding-top: 8px;">
</div>
<div class="BlogPostSubject" style="padding-bottom: 8px; padding-left: 0px; padding-right: 0px; padding-top: 8px;">
Short Sales Take Growing Share of Distressed Sales</div>
<div class="BlogArticleDateline">
<div style="float: right; margin: -5px 10px 0px 0px;">
<div class="fontResizer">
</div>
</div>
Aug 30 2012, 8:05AM </div>
<div class="ArticleBody" style="margin-bottom: 25px;">
<br />
Foreclosed and pre-foreclosed homes maintained their position as the source of <b>over a fifth of U.S. home sales</b> in the second quarter of 2012. Twenty-three percent of all residential sales during the period were of <b>bank-owned properties (REO)</b> or homes in some stage of foreclosure, up from 22 percent in the first quarter of the year and 19 percent in the second quarter of 2011. RealtyTrac, an Irvine, California firm that tracks foreclosure activity, reported that an additional 14 percent of all sales were short sales, where the bank agreed to a payoff lower than the actual outstanding mortgage balance, that were unrelated to foreclosures.<br />
<img src="http://www.mortgagenewsdaily.com/cfs-file.ashx/__key/CommunityServer.Components.SiteFiles/2102_2E00_/RT_2D00_1.png" /><br />
RealtyTrac's second quarter <i>U.S. Foreclosure Sales Report</i> noted that the market share of distressed sales increased even though the actual number of those sales fell 12 percent from the previous quarter and 22 percent from a year earlier. A total of 224,429 foreclosure-related transactions were completed during the quarter.<br />
<br />
<br />
The number of pre-foreclosure sales (short sales) continued to rise relative to sales of REO. Foreclosure related short sales accounted for 107,298 of the distressed sales during the quarter, only 9,733 fewer than bank-owned property sales, the smallest difference between the two since 2007. Eleven percent of all sales during the second quarter were pre-foreclosure sales, up from 8 percent in Q2 2011, and these outnumbered REO sales in 13 states and the District of Columbia. The 117,131 sales of REO represented 12 percent of all sales in the quarter, unchanged from Q1 and one point higher than Q2 2011.<br />
<img src="http://www.mortgagenewsdaily.com/cfs-file.ashx/__key/CommunityServer.Components.SiteFiles/2102_2E00_/RT_2D00_2.png" /><br />
<br />
For the first time since the second quarter of 2010 there was an <b>annual increase in the sales price of distressed homes</b>. The average price of $170,040 reflected a 6 percent increase from the first quarter and 7 percent from the previous year. It was also the largest bump in average price since late 2006. The average price represented a discount of 32 percent from that of a non-foreclosure home, up from a 30 percent discount in both the previous quarter and a year earlier.<br />
<img src="http://www.mortgagenewsdaily.com/cfs-file.ashx/__key/CommunityServer.Components.SiteFiles/2102_2E00_/RT_2D00_3.png" /><br />
<br />
Pre-foreclosure sales closed at an <b>average price</b> of <b>$185,062</b>, a five percent increase from the previous quarter which had represented a low point in RealtyTrac reporting history, but the price was still 1 percent lower than a year earlier. These sales were at an average discount of 26 percent from a market rate sale, up from a 24 percent discount in Q1 and an 18 percent discount in Q2 2011.<br />
<br />
Bank-owned real estate sold for an average price of <b>$155,892</b>, 6 percent higher than in the first quarter and 10 percent above the price in the same quarter of 2011. This represented an average discount of 37 percent unchanged from the first quarter and slightly below the 38 percent discount a year earlier. The highest discounts for distressed property sales were recorded in Texas (41.64 percent) and Massachusetts (40.12 percent).<br />
"The second quarter sales numbers provide solid statistical evidence of what we've been hearing anecdotally from real estate agents, buyers and investors over the past few months: there is a <b>limited supply</b> of available foreclosure inventory to choose from in many markets," said Daren Blomquist, RealtyTrac Vice President. <br />
<br />
"Given this shortage of supply and the seasonally strong buyer demand in the second quarter, it's no surprise that the average foreclosure-related sales price increased both on a quarterly and annual basis.<br />
"Three straight months of increasing foreclosure starts through July may ease the inventory shortage somewhat in the coming months when many of these foreclosure starts translate into listed short sales or bank-owned homes," Blomquist added. "The increase in short sales of properties that have not even started the foreclosure process indicates that lenders are moving further upstream to deal with their distressed inventory, thereby avoiding the increasingly complex and lengthy foreclosure process altogether."<br />
Short sales took an average of 319 days to sell after starting the foreclosure process, up from 306 days in the previous quarter and 245 days in the second quarter of 2011. It took an average of 195 days for REOs to sell after completing the foreclosure process, up from 178 days in both the first quarter and a year earlier.<br />
Pre-foreclosure sales increased on a year-over-year basis in 16 states, including Michigan (42 percent increase), Illinois (35 percent increase), Connecticut (27 percent increase) and Massachusetts (27 percent increase).<br />
Foreclosure sales accounted for 43 percent of all residential sales in both Georgia and Nevada in the second quarter, the two highest percentages among the states despite decreasing foreclosure-related sales activity in both states.<br />
<div style="clear: both;">
</div>
<div style="clear: both;">
Source: MortgageNewsDaily.com</div>
</div>
Daniel Choi REALTOR,CDPE,CHP,BPORhttp://www.blogger.com/profile/11279388572425741398noreply@blogger.com0