Tag Archives: short sale expert

Avoid Foreclosure: Know Your State’s Foreclosure Law

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The foreclosure law of the state in which the property is located controls how the foreclosure process is completed. Every state’s foreclosure statute delineates the various time periods for each step involved in the entire foreclosure process from start to finish. So, the statute can be seen as a roadmap of sorts, assisting homeowners interested in figuring out how to stop the foreclosure of their home.

In some states the process is a legal one which is begun in a court of law with the filing of a document called a Lis Pendens (which literally means “a lawsuit pending”). This is known as “judicial” foreclosure.

In other states the process is begun “non-judicially” by the filing and recording of a Notice of Default with the county recorder’s office by either the lender directly, or through a disinterested third party known as a “trustee.”

The actual length of the foreclosure process varies from state to state depending again on the state’s foreclosure statute. In some states it can take as little as three months, while in other states the entire process can drag out for as much as a year.

California Overview

Judicial Non-Judicial Process Period Sale Publication Redemption Period Sale/NTS
Yes Yes 117 Days 21 Days 365* Days Trustee
Judicial Foreclosures are not common

Pre-foreclosure Period

Court foreclosures only occur if a lender desires a deficiency judgment. This process gives a borrower up to one year to redeem the property after the foreclosure sale. It is recommended that the borrower find a way to resolve it, or get some foreclosure assistance.

In almost all cases, foreclosures are handled out of court. The process begins when a lender files a notice of default with the county recorder identifying the default amount and the date the borrower must pay off the default. The notice is mailed to the borrower and other affected parties.

Up to five business days before the trustee sale, the borrower may pay off the default plus any applicable costs of foreclosure and stop foreclosure. Three months after the notice of default is filed, the lender can schedule a trustee’s sale of the property.

Notice Of Sale / Auction

At least 20 days before the trustee’s sale, the notice of sale must be posted on the property and in one local public location. The notice is also published once a week for three weeks in a local newspaper, starting at least 20 days before the sale date. The notice is mailed to the borrower at least 20 days before the sale and to anyone who requests the notice. The notice must contain the date, time, and location of the sale, the property address, and the trustee’s contact information. In addition, the notice of sale must be recorded with the county recorder at least 14 days before the sale.

The trustee’s sale is a public auction and the property is sold to the winning bidder. The trustee may require bidders to pay the full bid amount in cash or cashier’s check. Anyone may bid at the sale, including the lender and any junior lien holders. A trustee’s sale may be postponed by announcement at the sale. If a sale is postponed more than three times, a new notice of sale must be issued.

After the sale is complete, the trustee transfers ownership to the winning bidder. The borrower does not have the right to redeem the property after the sale.

* Judicial Foreclosures Only

 

 

 

 

Source:  www.realtytrac.com/foreclosure-laws/California-Foreclosure-Laws.asp

Expanding our efforts to help more homeowners and strengthen hard-hit communities

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Today, the Administration announced important enhancements to the Making Home Affordable Program, including the Home Affordable Modification Program (HAMP), to expand the reach of the program to help additional homeowners stay in their homes and strengthen hard-hit communities. These enhancements will provide additional relief to struggling homeowners, renters, and their neighborhoods to accelerate the housing market recovery and improve our overall economy.

The Administration is committed to a multi-pronged effort to support American homeowners to help heal our nation’s housing market. This includes providing refinancing opportunities for responsible homeowners, transitioning foreclosed properties into rental housing to help reduce the overhang of unsold homes, and providing states hardest hit by the foreclosure crisis with resources to develop targeted relief programs that work for their communities.

To date, HAMP has helped more than 900,000 struggling families permanently modify their mortgage loans, providing them with a median savings of more than $500 every month.  For these families, this savings can mean the difference between keeping their home and foreclosure.   These efforts have set the industry standard for successful modifications and have helped prompt private lenders to modify an additional 2.6 million mortgages.  In total, public and private efforts have helped more than 4.6 million Americans get mortgage aid to prevent avoidable foreclosures since HAMP was launched.

When the MHA was announced in March of 2009, it was not easy to predict what would happen to the housing market by 2012.  As we enter 2012, the housing market shows signs of recovery but is still fragile. The MHA programs have proven to be critical foreclosure prevention tools, setting new standards for the mortgage industry to follow. These enhancements will extend the reach of HAMP to a broader pool of struggling homeowners and provide more robust relief to those who participate:

  • Extending the Administration’s Mortgage Modification Program.  In order to help more families at a time when many across the nation still need relief, the Making Home Affordable Program deadline will be extended for an additional year through December 31, 2013. This date conforms to the extended deadline for the Home Affordable Refinance Program (HARP).
  • Expanding Eligibility to Reduce Additional Foreclosures and Help Stabilize Neighborhoods.  Eligibility for HAMP will be expanded so that it reaches a broader pool of distressed borrowers.  Additional borrowers will now have an opportunity to receive modification assistance through an additional evaluation process that provides the same homeowner protections and clear rules for servicers established by HAMP.  This includes:
    • Ensuring that borrowers struggling to make ends meet because of debt beyond their mortgage can participate. Many homeowners who have an affordable first mortgage payment struggle beneath the weight of other debt such as second liens and medical bills.  Recognizing that many homeowners in this situation are still struggling to make ends meet, the program is being expanded to offer another evaluation opportunity with more flexible debt-to-income criteria to expand modification assistance to borrowers with higher levels of secondary debt who otherwise meet program requirements.
    • Preventing additional foreclosures to support renters and stabilize communities. Treasury will expand eligibility to include properties that are currently occupied by a tenant as well as vacant properties which the borrower intends to rent. This will provide critical relief to both homeowners that live in their homes and those who rent their homes, while further stabilizing communities from the blight of vacant and foreclosed properties. Single family homes are an important source of affordable rental housing, and foreclosure of investor-owned homes has disproportionate negative effects on low- and moderate-income renters.
  • Increasing Incentives for Cost-Effective Mortgage Modifications that Help Borrowers Rebuild Equity in Their Homes.  Currently, HAMP includes an option for servicers to provide homeowners with modifications that include principal reduction, when a borrower owes significantly more on their mortgage than their home is worth.  While not appropriate in all circumstances, principal reduction modifications are an important tool in the overall effort to help homeowners achieve affordable and sustainable mortgages.  To further encourage investors to consider or expand use of principal reduction modifications, the Administration will:
    • Triple the incentives provided to investors who agree to reduce principal for borrowers:  To increase the amount of principal that is reduced, Treasury will triple incentives to investors, paying from 18 to 63 cents on the dollar, depending on the degree of change in the loan-to-value ratio.
    • Offer principal reduction incentives for loans insured or owned by the GSEs. HAMP borrowers who have loans owned or guaranteed by Fannie Mae or Freddie Mac (the GSEs) do not currently benefit from principal reduction loan modifications. To encourage the GSEs to offer this assistance to underwater borrowers, Treasury has notified the GSEs’ regulator, the Federal Housing Finance Agency (FHFA), that it will pay principal reduction incentives to Fannie Mae or Freddie Mac if they allow servicers to forgive principal in conjunction with a HAMP modification.

While the economy continues to shows signs of recovery, the broader housing market remains fragile. HAMP continues to offer homeowners some of the most sustainable assistance available and has established critical standards and protections for homeowners that we believe must continue as the housing market heals.  Extending the reach of HAMP will assist a broader pool of struggling homeowners, offer support for tenants at risk of displacement due to foreclosure, and provide more robust relief to those who participate.  Taken together, these enhancements will help the housing market recover faster from an unprecedented crisis.

 

 

 

Timothy G. Massad is Assistant Secretary for Financial Stability.

Posted in:  Making Home Affordable
http://www.treasury.gov/connect/blog/Pages/Expanding-our-efforts-to-help-more-homeowners-and-strengthen-hard-hit-communities.aspx

Foreclosure Homes Account for 20 Percent of All U.S. Residential Sales in Q3 2011 According to RealtyTrac(R)

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RVINE, CA, Jan 26, 2012 (MARKETWIRE via COMTEX) — RealtyTrac(R) ( www.realtytrac.com ), the leading online marketplace for foreclosures, today released its Q3 2011 U.S. Foreclosure Sales Report(TM), which shows that sales of homes that were in some stage of foreclosure or bank owned accounted for 20 percent of all U.S. residential sales in the third quarter of 2011, down from 22 percent of all sales in the second quarter and down from 30 percent of all sales in the third quarter of 2010.

Third parties purchased a total of 221,536 residential properties in some stage of foreclosure (NOD, LIS, NTS, NFS) or bank-owned (REO) during the third quarter, down 11 percent from a revised second quarter total and down 5 percent from the third quarter of 2010.

The average sales price of homes in foreclosure or bank owned was $165,322 in the third quarter, up 1 percent from the previous quarter but down 3 percent from the third quarter of 2010. The average sales price of these foreclosure-related sales was 34 percent below the average sales price of homes not in foreclosure, matching the 34 percent foreclosure discount in the second quarter but below the 37 percent discount in the third quarter of 2010.

“While foreclosures continue to represent an excellent bargain-buying opportunity for many buyers and investors, foreclosure sales accounted for a smaller share of the total market in the third quarter. That trend is not too surprising given the continued ambiguity surrounding proper foreclosure procedures — and the ripple effect that has on sales of foreclosed properties that might have been improperly foreclosed,” said Brandon Moore, chief executive officer of RealtyTrac. “The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties.

“Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales,” Moore continued. “In 2005 and 2006, foreclosure sales consistently accounted for less than 5 percent of all sales nationwide.”

Pre-foreclosure sales flat from year ago, REO sales down A total of 92,824 pre-foreclosure homes — in default or scheduled for auction — sold to third parties in the third quarter, a decrease of 9 percent from the previous quarter and nearly identical to the 92,967 pre-foreclosure sales in the third quarter of 2010. Pre-foreclosure sales accounted for nearly 9 percent of all sales, the same as in the second quarter, but down from 12 percent of all sales in the third quarter of 2010.

Pre-foreclosure sales increased more than 30 percent on an annual basis in Michigan (up 68 percent), North Carolina (up 44 percent), Ohio (up 43 percent) and Georgia (up 35 percent). Pre-foreclosure sales outnumbered REO sales in several states in the third quarter, including Colorado, Florida, New Jersey and New York.

Pre-foreclosures, which are often sold via short sale, had an average sales price nationwide of $191,119, a discount of 24 percent below the average sales price of homes not in foreclosure. That was up from the 23 percent discount in the previous quarter and matched the 24 percent discount in the third quarter of 2010. Pre-foreclosures that sold in the third quarter took an average of 318 days to sell after receiving an initial foreclosure notice, up from an average of 245 days in the second quarter and average of 236 days in the third quarter of 2010.

A total of 128,712 bank-owned (REO) homes sold to third parties in the third quarter, down 13 percent from the second quarter and down nearly 8 percent from the third quarter of 2010. REO sales accounted for nearly 12 percent of all sales in the third quarter, down from 13 percent of all sales in the previous quarter and down from nearly 18 percent of all sales in the third quarter of 2010.

Nationally, REOs had an average sales price of $146,437 in the third quarter, a discount of nearly 42 percent below the average sales price of homes not in foreclosure. That matched a 42 percent discount on REOs in the second quarter, but was down from a 45 percent discount in the third quarter of 2010. REOs that sold in the third quarter took an average of 193 days to sell after being foreclosed on, up from 178 days in the second quarter and 161 days in the third quarter of 2010.

Nevada, California and Arizona post highest percentage of foreclosure sales Foreclosure-related sales accounted for nearly 57 percent of all residential sales in Nevada during the third quarter, the highest percentage of any state. Third parties purchased a total of 13,992 homes in foreclosure or bank owned in Nevada during the third quarter, nearly identical to the 13,858 foreclosure-related sales in the previous quarter, but up 24 percent from the third quarter of 2010.

Third parties purchased a total of 62,583 homes in foreclosure or bank owned in California, representing nearly 44 percent of the state’s total residential property sales in the third quarter — the second highest percentage of any state. Foreclosure-related sales in California decreased nearly 7 percent from the previous quarter but were up 7 percent from the third quarter of 2010.

Arizona foreclosure-related sales accounted for 43 percent of all sales in the state, the third highest percentage of any state. Third parties purchased a total of 21,619 homes in foreclosure or bank owned in Arizona during the quarter, down nearly 14 percent from the previous quarter, but up 19 percent from the third quarter of 2010.

Other states where foreclosure-related sales accounted for at least 20 percent of all sales included Georgia (34 percent), Colorado (26 percent) and Michigan (23 percent).

Due to a nearly 30 percent decrease from the previous year, Florida foreclosure-related sales in the third quarter accounted for 19 percent of all sales in the state — down from 39 percent of all sales in the third quarter of 2010.

Click here for information on the U.S. metro areas with the biggest foreclosure discounts.

Report License The RealtyTrac U.S. Foreclosure Sales Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Order Customized Reports Detailed and historical foreclosure data used to create the above report may be purchased through the RealtyTrac Data Licensing Department at 949.502.8300 Ext. 158. Aggregate data is available at the state, metro, county and zip code levels dating back to 2005, and address-level foreclosure records are also available historically.

About RealtyTrac Inc. RealtyTrac ( www.realtytrac.com ) is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting more than 3 million unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments to help evaluate foreclosure trends and address policy issues related to foreclosures.







Source: RealtyTrac http://www.marketwatch.com/story/foreclosure-homes-account-for-20-percent-of-all-us-residential-sales-in-q3-2011-according-to-realtytracr-2012-01-26

					

		
		
	


				
					
	

		

						
California Attorney General Rejects Foreclosure Settlement

			
						

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Calling it “inadequate for California,” the state is rejecting the latest settlement proposal between states and major U.S. banks over lending abuses that fueled the foreclosure crisis.


California Attorney General Kamala Harris pulled out of nationwide talks with the banks in October, saying the proposed $25 billion deal gave too much immunity to lenders and didn’t provide enough relief for homeowners in a state hard hit by the mortgage meltdown.


On Wednesday, Harris’ office said a new version of the settlement plan still falls short of those goals.


“At this point, this deal does not suffice for California,” said spokesman Shum Preston.


For more than a year, the nation’s five largest mortgage lenders – Bank of America, Citibank,Wells Fargo, JPMorgan Chase and Ally – have been working on a settlement agreement with a coalition of attorneys general in 50 states.


The latest settlement proposal seeks to help nearly 1 million homeowners, who could see the size of their mortgages lowered by an average of $20,000, according to the Associated Press.


The deal also calls for payment of about $1,800 to homeowners harmed by deceptive lending practices, the AP said.


Some consumer groups said the deal is an imperfect compromise that still provides significant reforms.


The Center for Responsible Lending said the pact could mean sustainable loan modifications for many delinquent homeowners and could end so-called “robo-signing” practices by requiring banks to individually review key foreclosure documents.


California and other states began their investigations after lenders and mortgage servicers were accused of rubber-stamping foreclosures without actually reviewing homeowners’ loan documents.


California is the nation’s No. 1 state when it comes to the number of foreclosures.


According to Irvine-based RealtyTrac, more than 420,000 homes had a foreclosure filing last year, which is more than double the filings in Florida, which had the next most filings.


Lawyers in the AG’s office have reviewed the settlement offer during the past several days and found that the proposal prevents the state from pursuing substantial legal actions against lenders.


“Our state has been clear about what any multistate settlement must contain: transparency, relief going to the most distressed homeowners, and meaningful enforcement that ensures accountability,” said Preston.


The state’s rejection came a day after President Barack Obama in his State of the Union speech called for the creation of a special investigative unit to delve into abusive lending practices that helped trigger the foreclosure crisis.


In many ways, the goals of federal unit, made up of federal prosecutors and state attorneys general, are similar to those of the 40-member Mortgage Fraud Strike Force set up by Harris in May.


That unit recently joined forces with Nevada Attorney General Catherine Cortez Masto’s mortgage fraud strike force to investigate lending abuses.












Source: By Rick Daysog

Read more here: http://www.sacbee.com/2012/01/26/4216052/california-attorney-general-rejects.html#storylink=cpy


 

					

		
		
	


				
					
	

		

						
The Most Important Short Sale Do’s and Don’ts

			
						

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Do educate yourself. This is THE most important thing you can do.  Short sales can be complicated. You need every bit of information you can get when you jump into the short sale process.


Don’t wait until it’s too late. If you drag your feet and hide from the fact that you’ve stopped making mortgage payments, it will cost your credit rating and it will put any chances of a short sale in risk.


Do be diligent. There have been very closable short sales that fail because the homeowners either stop responding to their agents, stop returning paperwork, stop returning phone calls, stop caring, etc. It can be a difficult process, but at the end of it you will be free of the mortgage, the upside-down house and your financial future will have a better foundation.


Don’t stop taking care of your home. Yes, you will be moving, but if you stop mowing the lawn or keeping the place tidy, that unkemptness will discourage any potential buyers.


Do keep paying your HOA dues! Any unpaid HOA dues will need to be settled either before or at the close of a short sale escrow. Sometimes the buyer or the first lien mortgage bank will contribute to these outstanding bills, but not every time. And Home Owner Associations will send your defaulted HOA bill to a collection lawyer who will slap you and your property with their own outrageous charges.


Don’t rent your home out. In these economic times there are unsavory renters, many of them lost their own homes, that don’t mind giving you the first month’s rent and a security deposit, only to never pay you another payment. You lose the house to foreclosure, but they live rent free for the foreseeable future.


Do your homework when choosing a real estate agent or broker when you go to list your house for a short sale. The wrong short sale agent can ruin your chances of avoiding foreclosure.  Short sales require diligence, confidence and an unmatched work ethic. Find that short sale REALTOR that knows her stuff, knows how to work and knows exactly what the banks want to approve your short sale.


Don’t think that you need a real estate agent that knows your neighborhood to short sale your home. In a short sale transaction, it’s about the short sale negotiation and working relationship with your lender(s), not that your home’s location is special compared to the listing around the corner. Out-of-area agents easily price properties using a Comparative Market Analysis (CMA). In fact, banks regularly pay agents and real estate brokers a minimal fee, usually $50 or $75, to price out-of-area properties for them. Your local neighborhood real estate agent may not be the right person. You need a tough and knowledgeable short sale specialist.


Do expect to move soon, or not for months. When your home receives an offer that is just the start for your short sale transaction. But the bank could decide to approve your short sale right away, which means you may only have 30 to 45 days to relocate. But, the approval process could take up to three to six months! Don’t move prematurely. It makes no sense to pay rent while your home sits empty. Communicate with your agent and keep updated on where the short sale process is.


Don’t stop paying your water bills, sewer bills or trash bills! Any unpaid bills may slow down or stop the short sale process.


Do consult your tax man or even a tax attorney when considering a short sale. Even the best short sale agents are not legally allowed to advise on tax implications of your particular situation, and the best short sale real estate agents don’t. A tax accountant CPA or real estate attorney has a better understanding and the legal right to advise you on such matters.


Don’t think that you must have a real estate attorney to execute your short sale. Most times these lawyers don’t understand real estate or the short sale process as well as an experienced short sale agent does. In fact, many if not most of these lawyers offering short sales require an upfront fee to process your short sale.  real estate agents and brokers only collect commissions from the proceeds of the sale, which comes out of the bank’s pocket, not yours.


Do let your real estate agent put a yard sign in the yard. Yard signs tell buyers trolling streets looking at neighborhoods and houses that yours is a possible candidate.


Don’t make viewing appointments unavailable and hard on buyers and their agents. The more potential buyers that see your home the better chance of short selling it and avoiding foreclosure. Make that home as available to buyers as possible!


Do yourself a favor and remember that millions of Americans are going though their own short sale, or unfortunate foreclosure. This economy is dreadful, and many are experiencing financial hardships and your particular situation is nothing to be ashamed of.


Don’t apply for a home equity line of credit or any other type of credit. If you own other properties that have equity, refrain from pulling money out of any of them during a short sale approval. Your bank and any of your bank’s back-end investors will dig deep into your credit history and find this activity. This kind of action says you are just out for your own financial bottom line, and yes, they will take offense to that.


Do a quick pick up of toys, laundry and any other items lying around when a buyer’s showing appointment is scheduled. Buyers will criticize your messiness like your mother-in-law, and worse, it could affect their offer which in turn could affect your short sale!


Don’t make the mistake of thinking a foreclosure is not much worse than a short sale. It is. A foreclosure will decimate your credit; it will keep you from owning another home for years and it will be a part of your financial incompetence far more than you hope it won’t.


Do keep your hardship letter short and sweet. Explain your situation as-matter-of-factly as possible. Then your bank will look at your finances, tax filings and other documents to verify and support your story. But DO NOT include in your hardship that you bought your home for more than it’s worth. The bank does not care your home is underwater. The bank is losing money too.


Don’t strip the house of its fixtures or other potentially valuable assets. Taking the pool system, or the ceiling fans or the beloved touch-action faucets will degrade your home’s marketability, and for what? A few hundred bucks will not make the financial blow of foreclosure any softer.


Do all your paperwork and return to your real estate agent in a timely matter.  Short sales can die if the proper paperwork is not supplied. It’s a silly way to screw your short sale, but it happens all the time.


Don’t use a short sale negotiating company. They will charge you large upfront fees that they don’t have to return to you even if they do not complete the short sale. And these companies aren’t held up to the same Department of Real Estate code of ethics that real estate agents and REALTORs are. In fact, some banks will not work with them!


Do call and communicate with your bank(s) and let them know you are attempting a short sale. They have thousands of mortgages defaulting, and if they don’t know you are pursuing a short sale, your property may automatically be classified as a pre-foreclosure. Not keeping your mortgage holder informed of the status of your short sale can help expedite your house to foreclosure which will not help your short sale.


Don’t violate the bank’s At Arm’s Length requirement for the short sale. The Arm’s length agreement required from the short sale lender prevents you from “renting the house back”. To avoid any fraud or risk that can result in the bank coming back at you for the balance of your loan. Do it by the book and follow the rules. The risk is not worth it.


Do know that credit card companies may decide to pull your credit due to foreclosure. When a foreclosure shows up on your credit, it says that you are in financial distress and your credit risk increases dramatically.


Don’t think you can’t short sale if you own other properties. This is a common mistake many multiple property owners make. A bank will more than consider a short sale even if you own two or more homes.


Do clean the home and property when you move out. Remove any trash, debris and take or dispose of any of your personal property. The condition of the property before transfer can have a negative effect on the buyer and their desire to own the home, and give them a reason to back out. Cleanliness is next to Godliness, and Sold Short Sales!


Don’t assume the information about short sales you read on the internet is always correct. There are many real estate professionals, and many not-so-professional individuals, giving advice regarding short sales. Some do not have a clue how to handle a short sale, let alone give advice on the subject. Your best bet is to call and talk to any prospective short sale experts. Get a feel of their knowledge base and real estate confidence, and above all else only hire a real estate short sale agent with experience.


DO CALL 360 Realty for more information.  We are Short Sale Experts! 1-800-399-9659


 


 


 


Source:  Garrigus Real Estate Blog

					

		
		
	


				
					
	

		

						
Short Sale Homes in California – Tips for Sellers

			
						

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During the last 3 years, around 650,000 property owners in California have lost their houses to foreclosure. As it stands today, nearly 30 percent of property owners owe more than their property is worth. To avoid repossessions, many of them are choosing to sell their houses for less than the amount they owe, creating a trend in short sale homes in California.


Most sellers are quite new to the short sale process, which is more complicated than ordinary transactions. If you are among those entering uncharted waters, these are some guidelines to keep under consideration when handling your short sale transaction.


Take initiative


With short sale homes, it pays off to be pro-active. Get in touch with your bank as soon as you can. Keep a record of all of your conversations. Stay on your toes. Ask for updates when required.


Do research


Find out the short sale guidelines of your bank previously so you know what documents to prepare.


Submit a total package


When submitting applications for approve your short sale, make sure the package is complete and presented in an organized manner. A basic short sale package sometimes includes financial statements, paycheck stubs, tax returns, sales comparables, listing and sales agreements, a hardship letter, an estimated HUD-1 Settlement Statement, and CAR’s standard form Authorization to Release.


Get a good offer


A reasonable and realistic price is the key to getting lenders to sign off on short sale homes in California . Coordinate with prospective home buyers to make sure they submit a clean offer.


Work with a licensed real estate agent


Ask friends, relatives or colleagues if they know of a realtor experienced with short sale homes in California. Screen completely for candidates. Interview more than one agent for the position. Don’t forget to request for references.


Seek legal and tax advice


Short sale homes in California can have significant consequences on a seller’s tax, credit and personal liability. Talk to an attorney and accountant to make sure you’re on the right track.


Being well prepared and pro-active and having the right supporting system are essential to successful transactions involving short sale homes in California. While the lender controls the end result, remember that you can always stack the chances in your favour.


 


 


 


Source: http://financehelpnews.com

					

		
		
	


				
					
	

		

						
A Southern California Short Sale May be your Best Option Short Sale – If you have a Hardship

			
						

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Foreclosure Alternatives


One of the biggest mistakes some people make at this point is being too

attached to their property. This will cause heartache, heart attacks, and a huge amount of stress.


Let me start off by sharing a true story of a very good friend of mine, Roman.

Roman was too proud to tell me of his situation, and had no idea that I could have helped him. At the time, he was in his mid 30′s and suffered a heart attack during the foreclosure process of his home. Roman paid someone, who called them self a “professional” to do a Loan Modification, while the lender, behind his back…turned around and foreclosed on his home.


This incident that happened to Roman is what motivated me to go help people in this situation. I need to get the word out that a house is a commodity as well as a home. When times like this happen your house should be treated as a commodity and be sold so that the family can move on, pay less for rent elsewhere for a few years, and get back on top of things. How you handle things from this point can make or break you in the near future and for years to come. You can not ignore the problem you face.


We all know someone like Roman, who does construction, and has been affected by this housing crunch. It is no secret that locally, here in Riverside County, Southern California, our economy has taken a significant hit. Many people have not only lost their jobs but the businesses that hired them have also gone away as well.


It is of no fault of the average citizen to lose their property to foreclosure.

The banks set this up long ago by having special loan programs creating a bubble that had to burst. The result of that bursting bubble is smart people short sell their homes while others do nothing.


The following is the most common options someone facing foreclosure can do along with the pros and cons…


Short Sale

Short Sales have been proven to be the number one alternative to Foreclosure. 

If a homeowner owes more on their property than it is currently worth, then they can ask a qualified REALTOR Broker to market and short sell their property.


A Short Sale requires the property to be on the open market and the homeowner must have a financial hardship to qualify. Hardships can be defined as a change in the financial stability of the people on the loan, between the time the home was purchased and the time of the short sale.


Acceptable short sale hardships include but are not limited to: mortgage payment increase, job loss, cut in pay, cut in hours, unemployment, divorce, excessive debt, forced or unplanned relocation, and more.


* Pros: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment.


    

  • The Borrower may qualify for another mortgage in as little as 2 – 3 years  (as opposed to 5-7 years for a foreclosure).
    • 

  • NO DEFICIENCY IN CALIFORNIA ON SHORT SALES http://www.car.org/newsstand/newsreleases/sb458 check the law to be sure you are covered – California sb458
    • 



50% Short Sale Success Rate

Currently July 2012 success rate based on single family homes sold as short sales vs single family homes listed as short sales 516 Listed, 256 Sold.


Very Close to 50% SUCCESS RATE - based on the area So Cal Homes Realty Services. This is basically saying your odds of short selling your property is about half, whereas a year ago they were about 33% or one in three, and two years ago the odds were around 12.5% or one in eight.


* Cons: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way. You can not short sell your house to a friend, family member, or anyone you know. You cannot collect any money from the short sale of the property unless you do a special short sale known as HAFA Short Sale.


HAFA Short Sale 

A HAFA Short Sale – Home Affordable Foreclosure Alternatives has some different options in a short sale where as the buyer gets up to $3,000 at the close of escrow. A lender will pre price the property for sale on a price that the bank will accept for the short sale.


I believe it might be wise to apply for the HAFA short sale with the bank, but be ready to deny the HAFA portion and see what the bank wants. You have an option ( a small time frame ) to deny the HAFA portion and remain in control.


* Pros: you get up to $3,000 at the close of escrow to help cover moving expenses. NO DEFICIENCY IN CALIFORNIA ON SHORT SALES http://www.car.org/newsstand/newsreleases/sb458/


50% Short Sale Success Rate

Currently July 2012 success rate based on single family homes sold as short sales vs single family homes listed as short sales 516 Listed, 256 Sold.


Very Close to 50% SUCCESS RATE - based on the area So Cal Homes Realty Services. This is basically saying your odds of short selling your property is about half, whereas a year ago they were about 33% or one in three, and two years ago the odds were around 12.5% or one in eight.


* Cons: Banks generally do not like following government guidelines unless they set it up for themselves. So… lenders tend to have a way of making this short sale far more difficult to do. Generally a lender will pre price the property 10% above market value, killing the option of selling the property and in the contract of the HAFA arrangement you have automatically agreed to do a deed in lieu or voluntarily give up your property in as little as 120 days.


Loan Modification 

Homeowners can apply for a Loan Modification of terms to reduce monthly payment. I call this a banks trap. You will be trapped in your home for a long long time. The payments will go up in a few years just after the benefits to short sell go away.


* Pros: Allows homeowner to avoid foreclosure and stay in the home.


* Cons: Your credit report is Dinged quite heavily right away, when you apply for a Loan Modification. Fewer than 10% are granted Loan Modifications. It requires that a homeowner qualify for the new payment and will often require full documentation. The Lender has to be actively pursuing modifications. No lenders are known for giving Principle Loan reduction, so you still owe the same amount plus fees, back interest, etc. This turns most existing loans into a 40 Year loan in which you will be on the hook for and be unable to sell the property at any time until you have positive equity. This could be 10+ or so years. Should you sell at any time after January 2013, if you are upside down by 200,000 and your property sells, it will be like paying taxes on 200,000 of regular income for that year. You Must pay tax on any difference. The IRS and the California Franchise Tax Board will be after you to collect for the rest of your life with penalties and interest, adding each and every day, and Bankruptcy is not an escape for Tax issues. There will be no forgiveness after the end of 2012! Contact a CPA and verify this Tax information.


Reinstatement


A reinstatement may seem like the simplest solution for a foreclosure, if you happen to have thousands of dollars laying around in the bank. The homeowner requests the total amount owed to the mortgage company to date and pays it. This can be done and will reinstate a mortgage up to five or six days prior to the final foreclosure or trustee sale date.


* Pros: Does not require the mortgage company or lender’s approval.


* Cons: Requires that a homeowner be able to pay all back payments, fines and fees. Usually causes people to borrow more money from family or friends to get further into debt.


Forbearance or Repayment Plan

Lets say you were out of work for a couple of months, but now you are working and things are fine. During that couple of months you were unable to pay your bills.

A forbearance or repayment plan involves the homeowner calling the lender and asking to get caught up by requesting a forbearance. Most lenders may do this but they will only do this once and you must have an excuse that is verifiable, such as you were out of work for two months and now you are caught up. Yes it will cost you some money. What doesn’t?


Pay back the mortgage company over a period of time. You would be typically making the current mortgage payment in addition to a portion of the back payments they owe. Keep in mind the bank has to approve of this situation.


* Pros: Allows the homeowner to make back payments over time.


* Cons: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed. Mortgage companies will require a homeowner to qualify with documentation for forbearance.


Rent the Property or Rent out Rooms

We all know renting out the entire property usually will not cover the mortgage payment. In Some cases it may, and making up the difference may not be that difficult for you. I know many have elected to rent out rooms of their home to make up the difference and are doing well with it. There is an adjustment period to get use to one another but this is a very viable option.

If you do not have a hardship for a short sale this may be your best option.


* Pros: Allows you to keep your home.


* Cons: The issues that can arise with a rental property are many, and rent often does not cover the full cost of property ownership and maintenance. Renting a home out to others will cost you more as they are not the owner will not care as much as you do.


Deed in Lieu of Foreclosure

Also known as a voluntary foreclosure, a deed in lieu allows you to return the property to the lender. The Lender must approve of this option. If there are second liens, tax liens, personal liens,etc this is usually not an option. This is usually best done with a Real Estate Attorney. This option is really not any better than a foreclosure.


When a bank offers you a deed in lieu, think what are they asking you. They are asking you to bail and save them money and just foreclose on your property.

They usually get what they want from you, and fail to give you anything they have offered you such as moving expenses.


* Pros: Sometimes a real estate attorney can negotiate a successful deed in lieu, in a manner whereas the lender will forego their right to a deficiency judgment. This is usually with the help of a qualified Real Estate attorney and paying their fees.


* Cons: Requires you to vacate the property, hire an attorney, and a deed in lieu will usually be reported to credit bureaus the same as a foreclosure.


Bankruptcy

Some think Bankruptcy is some magic solution to to stop lenders from foreclosing on your house. At best it may stall the lender around 30 – 45 days. That is not a huge gain considering you just filed for Bankruptcy. If you have non-mortgage debts that cause a shortfall of paying your mortgage payments and a personal bankruptcy will eliminate these debts, bankruptcy, may be a viable solution.


If you are considering disposing of your property it may be wise to wait until you have disposed of the property before you file for bankruptcy. Using Bankruptcy to keep your property may not be wise. Using bankruptcy to think it will stop lenders from taking your house is a myth.


* Pros: Does not require lender approval.


* Cons: If a homeowner cannot afford their mortgage payment, a bankruptcy will barely stall—not stop—the foreclosure process. Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven – ten years. Most banks know how to get around this in a very short amount of time. Ruins credit. Life will became much more difficult in some ways.


Refinance

If you have sufficient equity in your property and your credit is still in good standing, and you have a documented income, you may be able to refinance your mortgage.


* Pros: In some cases, you can lower your payments.


* Cons: In today’s market, a refinance will almost always raise mortgage payments, and is an expensive process. Usually, must show a reliable source of income. Refinancing a home costs money.


Service Members Civil Relief Act (Military Personnel Only)

If you are a member of the military and experiencing financial distress due to deployment, and you can show that your debt was entered into prior to deployment, you may qualify for relief under the Service Members Civil Relief Act. The American Bar Association has a network of attorneys that will work with you in relation to qualifying for this relief.


* Pros: If qualified, this may lower payments on your consumer debt in addition to mortgage payments.


* Cons: Must be active in the military to qualify.


Sell the Property

Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.


* Pros: Allows homeowner to avoid foreclosure and keep some of their equity.


* Cons: Selling in a down market is not the best time to sell however it is far better than foreclosure.


Foreclosure

Over 60% of the homeowners who are behind in their payments are afraid to read their mail and do nothing, thereby letting their property go to foreclosure.

Most vacate their home long before their property is even taken and suffer down the road with tax issues for the property is no longer considered their principle residence.


* Pros: Allows homeowner to move on and no longer have a house payment.


* Cons: Where do I begin? The song, “It’s no fun being an illegal alien” comes to mind on what life may be like for those who go through foreclosure. Credit issues of this magnitude is a difficult thing to shake. If this is your first option and you have tried to do nothing else, I would be very shocked. You can at least try something. In most cases foreclosure is not the fault of the homeowner, due to loss of work in our economy. These are the people I want to help the most.


Strategic Foreclosure 

The decision, to walk away from their property and let it go to foreclosure.


* Pros: Allows people to walk away from their property and run from their problems.


* Cons: These are people who simply give up. They probably give up on everything. Their word or their word on a contract means nothing. Can anyone ever trust them? These people aid to destroy our economy, and way of life more so than those who are not in control of their situation.


It is wise to consult with a REAL ESTATE ATTORNEY, a REALTOR, and a CPA to figure out your best options.


 


 


Source: Harold Sharpe, SoCal Homes Realty

					

		
		
	


				
					
	

		

						
Short sales Better Option for Homeowners

			
						

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MSNBC reports that the recent increase in short sales may be the relief that the housing market needs during its slow recovery. The number of short sales has increased by 26,000 this year following a jump in the number of foreclosures and short sales in 2010.


According to the source, short sales may also be a better option for homeowners when compared to foreclosures, especially for those who don’t qualify for loan modification.


Homeowners who choose short sales can stay in their homes and start rebuilding their credit sooner than those who find themselves in foreclosure, says the source. FICO reports that the number of points homeowners lose is the same when foreclosing or selling the home for less than the amount owed on the mortgage, but those who opt for short sales will likely obtain a loan quicker, which will help improve their credit scores.


The source reports that some economists are concerned that the decrease in foreclosures may be a result of a built up amount of foreclosures that have not been processed.


“Foreclosures are going to be a drag on the market for a long period of time,” Dean Baker of the Center for Economic and Policy Research told the source. “Until these distressed homes are resold and assimilated back into the market, real estate prices can’t stabilize.”


 


 


 


Source:  Today’s MLS Real Estate News on Dec. 30, 2011

					

		
		
	


				
					
	

		

						
Rihanna Takes $1.9 Million Loss on Rain-Wrecked BHPO House

			
						

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Well that was quick. Less than two months after listing, Rihanna has sold her allegedly waterlogged house in Beverly Crest for more than asking. She paid $6.9 million for the house in 2009, but said she soon found out it wasn’t terribly waterproof; she sued the developers, her real estate agent, inspectors, and others last year. She listed the house, which has eight bedrooms, ten bathrooms, and a pool, in November 2011, asking $4.5 million (it was weirdly categorized as a short sale). A few weeks later, it was in escrow and the sale went through on December 30–the buyer paid $5.03 million.


 


 


 


 


Wednesday, January 4, 2012, by Adrian Glick Kudler