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Homeowners with second mortgages have a higher risk of a delayed short sale or foreclosure. Why? The 2^nd lienholders have trouble (rightly so) allowing tens of thousands of dollars to be forgiven and often times, their denial of the short sale offer results in more loss on their interest(s) than if they cooperated. Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, says, “Subordinate liens have become the biggest hurdle to resolving the foreclosure crisis more quickly.” How do our agents resolve the 2^nd mortgage issue? By Persistence and Communication.

First, what are some local governments doing to eradicate the subordinate lienholders issue? A recent bill proposed by Rep. Jerry McNerney (Cali’s 11^th congressional District) called the “Fast Help For Homeowners Act” aims to expedite short sales by requiring second mortgage lenders to review and make a decision on a short sale agreement within 45 days. If the lender does not respond within the time frame, the short sale is deemed “approved” by the second mortgage lender on the 46^th day. McNerney ultimately wants this bill to provide relief to homeowners throughout the country.

I commend rep Mcnerney for putting effort in publicizing the issue and proposing ways to get 2^nd lienholders to comply. Do I believe more laws and regulations will improve the situation? Not necessarily. Will it actually produce positive results for the short sellers? From a historical perspective, one can easily be skeptical but we all can hope for the best.

To set the scene (reiteration of my last post) of a typical short sale with primary and subordinate lienholders, picture a room of five famished people waiting for food and suddenly throwing one pie right in the middle. Most likely, a fight will break out for the pie and it will probably end up getting ruined resulting in a loss for everyone (AKA foreclosure). This is what typically happens in a short sale transaction and 2^nd lienholders are usually the biggest contributors to this demise.

What uncooperative 2^nd lienholders do not understand is IF they allow the property to fall into foreclosure, they will get nothing from the transaction. Yes, they are able to pursue the borrower for the remaining balance post auction but they would have to pursue via lawsuit which will add on more costs, time, and a headache. The homeowner will probably end up filing for bankruptcy anyway.

Now, one indispensable element to a successful short sale transaction is COMMUNICATION. Our previous post The Secrets Of A Pro Negotiator, emphasizes the importance of communicating with all parties of the transactions well, one of which is the 2^nd lienholder. The job of a professional short sale agent or 3^rd party negotiator is to communicate the simple notion, “Here is the whole pie. You can either have a piece of the pie or nothing at all. We think you should take the piece we offer you.” Although many no’s will be spoken from the 2^nd lienholder, through months of persistence and explaining the present circumstances, they will eventually understand that accepting the offer will be the better financial choice than the alternative.

What do you think is the solution for subordinate lienholders?

Peter

This short sale was a bit involved, but I received final approval yesterday on the B of A first lien.  I already have the approval for the Chase HELOC, so we are into Escrow and roaring to a close.  Interesting how I waited weeks for that final Investor approval, (after accepting their counter), and once it came through, they gave us..wait-are you ready????  8 days total to CLOSE!  And that counts 2 days over the weekend..eeeekkkk!

I will, of course, try to extend the close and normally, they are good about that.  It's a cash purchase, but even so..who can close on an Equity Sale in 8 working days???  Never say die, dig in, and stay focused..we're off!

Short Sale Specifics:

81-375 National Dr.  La Quinta, CA.  Listed mid-May for $1,200,000.

First Note:  B of A  PML in the amount of approx. $1,400,000

Second Note:  Chase HELOC in the amount of approx. $250,000

Sales Price:  $925,000 with $8,500 being paid to the second.  All deficiencies cancelled. 

This home was not a "steal."  It is a good value for the home, and although seems hard to believe, the neighborhood it is in, Norman Estates, supports this sales price.  These homes were built in 2004-2005, and consequently the 58 home neighborhood has been hit extremely hard by the housing market decline.

Listed to Close in approximately 90 days..another successful Short Sale transaction by your Palm Springs Valley shortsale specialist.  Give me a call for a FREE property consultation!  No obligations, no strings attached, just FREE information that might help you sort out what's best for your particular situation.

CALL LEHIGH VALLEY SHORT SALE SPECIALIST CARL SANFILIPPO (888) 445-8880 FOR A FREE PHONE CONSULTATION!

A good Lehigh Valley short sale agent will maintain consistent contact with you and your lender making sure that everyone is still in the loop about the short sale process on account that they have been known to take some time to complete. Honesty with your agent going a long way, and could potentially help your short sale process speed up and get you back on track and on with your life far sooner than a foreclosure would do.

When you have chosen your short sale Realtor in Lehigh Valley, you should have by now obtained some trust in them. Your short sale agent will be representing you in your short sale, in addition to handling all negotiations on your behalf; so it only makes sense to be fully honest with them about everything and never feel afraid to ask questions.

The more surprises your Realtor comes in contact with, there will be more of a probability of a delay or rejection. Upon meeting your Realtor and discussing important information about your hardship, remember they are there for you, there services are free for you, take advantage of that and let someone help you get through your tough time.

Your agent will first need to be informed on how many liens you may have against the property and the amount of banks are involved. It is also important to let your Realtor know if you have been making your Homeowner association dues. Examples of liens may include mechanic’s liens, IRS tax liens, Child Support judgment, etc.

The more liens that are opposed to the property, the more difficult it is to close a short sale successfully. Your short sale specialist will also need to know the names and numbers of the banks on your mortgage, the amount of your monthly payments and how much you owe on the home.

CALL LEHIGH VALLEY SHORT SALE AGENT CARL SANFILIPPO (888) 445-8880 FOR A FREE PHONE CONSULTATION.

A good Lehigh Valley short sale agent will maintain consistent contact with you and your lender making sure that everyone is still in the loop about the short sale process on account that they have been known to take some time to complete. Honesty with your agent going a long way, and could potentially help your short sale process speed up and get you back on track and on with your life far sooner than a foreclosure would do.

When you have chosen your short sale Realtor in Lehigh Valley, you should have by now obtained some trust in them. Your short sale agent will be representing you in your short sale, in addition to handling all negotiations on your behalf; so it only makes sense to be fully honest with them about everything and never feel afraid to ask questions.

The more surprises your Realtor comes in contact with, there will be more of a probability of a delay or rejection. Upon meeting your Realtor and discussing important information about your hardship, remember they are there for you, there services are free for you, take advantage of that and let someone help you get through your tough time.

Your agent will first need to be informed on how many liens you may have against the property and the amount of banks are involved. It is also important to let your Realtor know if you have been making your Homeowner association dues. Examples of liens may include mechanic’s liens, IRS tax liens, Child Support judgment, etc.

The more liens that are opposed to the property, the more difficult it is to close a short sale successfully. Your short sale specialist will also need to know the names and numbers of the banks on your mortgage, the amount of your monthly payments and how much you owe on the home.

In Woodside  from Jan 1, 2012 until June 30, 2012 there were:

3 closed short sales

4 closed bank owned homes

Total sales during this time period were 51

Total % Short Sales: 5.8%

Total % REO Sales: 7.8%

Total Percentage  Woodside Distressed Properties: 13.6%

These numbers do not tell the whole story. 3 of the 4 foreslosures and 2 of the 3 short sales were in the Skyline area which is always a harder sell than closer to town, so given that information again, there are almost no distressed property sales in Woodside. There are currently 47 active listings in Woodside, about the same number as in Palo Alto, but without the incredible competition for homes like in the Palo Alto market. Maybe it is worth giving Woodside a look if you are having trouble finding what you want in Palo Alto.

If you have any questions about short sales or foreclosures in San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

In Portola Valley from Jan 1, 2012 until June 30, 2012 there were:

0 closed short sales

1 closed bank owned homes

Total sales during this time period were 32

Total % Short Sales: 0%

Total % REO Sales: 3.2%

Total Percentage  Portola Valley Distressed Properties: 3.2%

Obviously Portola Valley is not a hotbed of distressed property activity. The one foreclosure was on a small house on Aliso in Ladera which sold for $1,075,000, a great price for that neighborhood. It is however a fabulous place to look for a home if you want a large lot, an incredible community feel, and plenty of local services as well as recreational activities.

If you have any questions about short sales or foreclosures in San Mateo County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

In Palo Alto from Jan 1, 2012 until June 30, 2012 there were:

1 closed short sales

3 closed bank owned homes

Total sales during this time period were 284

Total % Short Sales: .3%

Total % REO Sales: .9%

Total Percentage  Palo Alto Distressed Properties: 1.2%

1.2% of all Palo Alto sales being distressed properties is not enough to even comment on. The price of homes have in Palo Alto is now up to pre 2008 prices in the $2,500,000 price range and the homes over $2,500,000 usually do not have loans that are a very high percentage of their value so anyone who is having financial problems can generally sell and be made whole. So if you are looking for a bargain, look outside of Palo Alto.

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Short Sales and Trust and Probate Sales

Differences Between FHA and Conventional Mortgages

Across the land the vast majority of home buyers use either a FHA or a conventional mortgage to purchase a property. While these loans are similar in a few ways, there are some pronounced differences. Each one has benefits that cater to a particular group of buyers. Understanding how they are different and which one is best suited to different circumstances will help buyers feel more informed about their financial situation.

FHA Loan

FHA stands for Federal Housing Authority. This agency does not make the loan itself. Instead, they insure FHA loans that are offered by approved mortgage lenders. The lender is protected in the event the borrower does not repay the loan.

FHA is committed to providing basic, conservative loans. A large number of their deals are fixed rate loans even though FHA does allow for adjustable rate mortgages.

Conventional loan

A loan that is not insured by FHA is most likely a conventional mortgage. Mortgage brokers, banks, and credit unions offer a wide variety of conventional loans. Conventional loans have more unique offerings such as interest only type of deal or a combination of a first and second mortgage used for a purchase.

Down Payments

One of the major differences among the two types of loans is the requirement for a down payment. FHA will allow buyers to pay 3.5% of the home's price as a down payment. The money used for the down payment may come from cash on hand, savings, retirement accounts or even a gift from a relative.

For conventional loans, the normal down payment is 20% of the home's value. However, there are quite a few loans that will allow a 10% or 5% down payment. The money used for the down payment must come from the borrowers own funds such as savings, investments or retirement accounts.

Private Mortgage Insurance

Both the FHA loan and conventional loan requires private mortgage insurance (PMI) if the buyer makes a down payment that is less than 20% of the purchase price. This insurance is designed to protect the lender if the loan is not repaid in full.

With a conventional loan, the PMI will be in place until the loan balance is paid down to 80% of the home's value. Typically, the PMI amounts for a conventional loan are higher than a FHA loan.

For an FHA loan, there is a fee charged at the time of the loan closing as well as a monthly amount paid with the loan payments. The monthly amount is enforced until the loan amount reaches 78% of the home's value.

Credit Score Requirements

Conventional loans have usually been reserved for customers with the highest credit scores. Due to the problems faced by the mortgage industry over the past several years, this fact is even more true today. Conventional loans rely heavily on standard credit reports offered by the major credit bureaus. Most conventional mortgages are approved by a computer system and reviewed by underwriters.

On the other hand, FHA loans will allow a slightly lower credit score. In addition, FHA will allow underwriters to go beyond the computer system and make approvals based on a borrower's complete file. Items like residence history, rental history and stable job history can persuade some FHA lenders to approve a loan for people who have scores that are slightly less than perfect.

Who has experience asking and getting ING DIRECT in DE to increase the agent commission to 6%?  What needs to be done in order to get them off their stated $35,000 max. commission payment?  Please help.

Also, can a non-CA Lender ask that the Buyer use an out of state (in PA) escrow agent?  What are the Seller's rights if any here?

Thank you. HELP!

Call Carl SanFilippo toll FREE (888) 445-8880 for a FREE phone consultation!!!

It is very crucial for you to prove to your lender that you are now back on your feet and will be able to stay consistent with your mortgage payments as well as begin to pay back the unpaid amount. Your lender may request that you repay the missed payments over the timeframe of six to twelve months. If you have found yourself to be in this particular circumstance, please know that you do have options at hand.

There are several homeowners who have failed to make several mortgage payments and their lenders have come to forgive them and were still able to save their home. Of course, your lender will need to be convinced that you can still keep your home, and with this, you will need to provide a few things. You will need to let your lender know that whatever your temporary dilemma may have been was out of your control at that moment. A few examples could be injury, sickness, temporary disability, etc.

Hardships are a common problem that generally affects a homeowner’s judgment on what to do with their home, whether they are far behind on payments, or foresee missed mortgage payments coming up. Alternatives like short sale, loan modification, and forbearance are all ways to refrain from foreclosure.

I listed a short sale with 2 loans serviced by Chase. CLTV is LESS that 50% of market value. Submitted a CASH buyer and assigned a negotiator in less than 3 weeks. Today, he is submitting my package to the investor. 

We'll see...NOD in May 2012 but nothing posted in public record. Negotiating to include payoff to release an abstract of judgement from a deceased husband over a year ago. 

Scheduled to close AUGUST 30. 

Flagstar is denying one of my files saying that my home owner can afford the home and they will not do a short sale.  His only option is to pay off the home in full.  Has anyone experienced this before?  He has not missed a payment yet either. Does he have to miss a payment before he does the short sale?  If you have experienced this with Flagstar please let me know.  I have closed a few short sales with them already so this is a first for me as far as completely being turned down to do a short sale and saying my client has to pay it in full.  

In Santa Clara from Jan 1, 2012 until June 30, 2012 there were:

97 closed short sales

47 closed bank owned homes

Total sales during this time period were 491

Total % Short Sales: 19.8%

Total % REO Sales: 9.6%

Total Percentage  Santa Clara Distressed Properties: 29.4%

29.4% of all Santa Clara sales being distressed is enough to have an effect on the overall market. However, as inventory is still so low, unless these homes are truly physically distressed, which is more common with bank owned homes at this level, most homes will not sell for much less than fair market value. There are twice as many short sales as foreclosures in this time period which is what we are seeing in many other cities. 

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

Understanding Specific Requirements of Appraisal for FHA Loans in Wisconsin

The all-time low mortgage rates combined with affordable home prices have generated a huge growth in business for FHA mortgages. People considering their first home need to understand the specific appraisal requirements for FHA loans in Wisconsin.

Basics of FHA Appraisal

In a nutshell, an FHA appraisal is a conventional appraisal with additional requirements. The goal is to identify any potential repairs that would need to be completed within the next 24 months and have those items addressed before the loan is closed.

It is important to note that an appraiser does not review a home to the depth of a home inspector. A home inspection is still a good idea for a home, especially if it is 5+ years old.

FHA Appraisal Caveats

Only appraisers listed on the FHA approved roster are allowed to inspect homes and complete the evaluation. Before an appraiser is assigned to review a home a FHA case number will be assigned to the loan. The appraisal is valid for the next 90 days. The lender or borrower may change during that time period without the need for a new appraisal.

Any home that has undergone a conventional appraisal within the last 90 days will still need a FHA case number. In addition, the home must be re-inspected to verify FHA specific items. Here is a list of the items:

• Confirm no existence of drainage or water damage
• Ensure water pressure is adequate for the home without any leaks
• Any exterior and interior lead-based paint must be inspected to identify peeling, chipping or cracking
• Identify exterior access for each bedroom
• Insure the minimum 18” egress and ingress from the lot line to the building
• Test the heater to ensure proper working condition as well as air conditioner
• Ensure electrical outlets are in every room and in working order
• Test the fan/hood over the oven for proper working condition
• Ensure screens are present on roof vents and no more than three layers of roof material
• Determine that the electric box has at least 60 amp
• Properly note existing wiring that is exposed as well as cover plates missing from electrical boxes
• Do a brief inspection of crawl space and attic

Any issue found on the interior portion of the home needs to be either repaired or replaced. On the exterior part of the home any issue needs to be repaired or removed.

Specific Areas of Importance

Of the items mentioned above three seem to get the most attention; water problems or drainage issues, lead-based paint and the ingress/egress points. Concerning the ingress/egress points, common problems occur with homes that have a garage touching the lot line. This prevents the homeowner from accessing the exterior wall of the garage in order to paint. If this is the case the neighbor may be asked for an easement in order to grant the homeowner access.

Consultant Required for 203(k) mortgage

Buyers that are approved for a FHA 203(k) mortgage need to understand that the appraiser will be working with a consultant. The consultant must be approved by FHA. This individual will inspect the home and determine the necessary repairs and improvements and formulate an estimated cost. The appraiser will inspect the home and ensure that the consultant has properly identified all necessary repairs in order to conform to the FHA guidelines.

Has anyone in Calif. done a short sale with Cal HFA? If so, any tips on how to get the process streamlined? I have a trustee sale date in 14 days and just got an offer to send today.

Thanks!

Tracey

Keller Williams Realty, Elk Grove, Ca.

In Mountain View from Jan 1, 2012 until June 30, 2012 there were:

16 closed short sales

22 closed bank owned homes

Total sales during this time period were 349

Total % Short Sales: 4.58%

Total % REO Sales: 6 %

Total Percentage  Mountain View Distressed Properties: 10.58%

10.58% of all Mountain View sales being distressed is not enough to have a major effect on the overall market. Additionally, as inventory is still so low unless these homes are truly physically distressed, which is more common with bank owned homes at this level, it probably will not have much effect at all. Ther are so many employed people looking for homes near Google, Apple, and other high tech companies, that homes are getting multiple offers, selling at appreciating prices, and are almost always in high demand. It is interesting to see there are more foreclosures than short sales which we have not seen in other cities. 

If you have any questions about short sales or foreclosures in Santa Clara County please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

DRE  01191194

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I always check out the List Agent before I take a buyer to a Short Sale Listing.  Why?  Because an inexperienced List Agent can KILL the deal!

Submitted an offer under pressure from my Buyer.  I knew the Agent had never done a Short Sale, but I spoke with him and he seemed amenable to trying to work with me to get an offer to the Lender, Chase.

Chase is one of my more favorite lenders to deal with and there is only one note.  Shouldn't be that hard, right?

Wrong!  As we went along (2 weeks total is all), The list Agent disclosed to me that..

1.  His Seller had an Attorney, but he had convinced the Seller that he (list agent) would handle it and so his Seller had fired the Attorney.

2.  His Seller already had a contact at Chase that he was working with..phone # and everything!

3.  His Seller would not sign the RPA and SSA because the Chase negotiator said they didn't need it and just wanted a HUD-1.

Alarm Bells here..

OK..turns out the Attorney never did go away.  Also turns out the Seller is convinced his property will sell for more and therefore he will be 1099'd for less.  I don't think he's clear that he'll be 1099'd for a Foreclosure also here in California. 

How's it going?  Well..the List Agent called me to tell me that he was raising the price because the Attorney/Seller told Chase that it is worth more than the list Price..$150,000 more, and the List Price is about $150,000 over what it will bring.  So..I am just watching the home and showing my Buyers anything else that is comparable to it. 

Turns out, the Agent didn't even know what an Agent Authorization doc was..eek!

And so the Short Sale wheel turns..Experienced Short Sale List Agents rock!!!