Preforeclosure (7)

NEW FHA Short Sale Requirements

Effective October 1, 2013 U.S. Department of Housing and Urban Development (HUD) has announced the following changes to their Federal Housing Administration (FHA) Short Sale requirements:

  • Eligibility Requirements: To successfully complete a short sale under the FHA short sale program, the borrowers must meet the following requirements:
    • They cannot list the property with or sell it to anyone with whom they are related or have a close personal or business relationship.  In legal terms, it must be an "arm's-length" transaction.  Any knowing violation of the arm's-length requirement may be a violation of federal law.
    • Your mortgage must be in default, on the date the short sale transaction closes.
    • Before closing, any additional liens against the property must be released. A lien holder who demands a payment to release its lien must submit a written statement, and an agreement to release the lien if that amount is paid.
  • Financial Hardship Validation Requirement: For a standard preforeclosure short sale sale, servicers must use a Deficit Income Test (DIT) to determine a homeowner's financial hardship.  The IRS Collection Financial Standards will be used to verify homeowners expenses not reflected in their credit report.  Only owner-occupied properties are eligible for the standard preforeclosure sale.
  • New Streamlined Short Sale Option: Homeowners eligible for a streamlined short sale may not be required to submit financial information or have a financial hardship.  Principal residences, second homes, investment properties and service members who have received Permanent Change of Station (PCS) Orders are potentially eligible.
  • Property Appraisal: The appraisal of your property should be completed within approximately ten business days.  After the appraisal, the short sale file will be updated and prepared for review.  In some cases, approval may be required by the investor and/or FHA, which may take more time.
  • Cash Contribution: As a new condition, you might be required to make a final payment (sometimes called a cash contribution) before or at closing.  This payment will reduce the deficiency balance.
  • Borrower's Incentive Compensation: If you are an owner occupant, acting in good faith, and successfully selling your property, you may be eligible for an incentive of up to $3,000.  If you are required to make cash contribution, you are not eligible for this incentive.
  • Short Sale Contract Addendum:
    • The revised FHA short sale addendum must be signed and dated by all parties.  Under this addendum, all parties agree that the subject property must be sold through an arm's-length transaction.  An arm's-length transaction is defined as a short sale between two unrelated parties that is characterized by a selling price and other conditions that would prevail in an open market environment.  Also, no hidden terms or special understandings can exist between any of the parties (e.g., buyer, seller, appraiser, sales agent, closing agent, and mortgagee) involved in the transaction.
  • Action Required: Review the Short Sale FHA Program guides located on the Agent Resource Center:

To review additional information about FHA requirements, please log on to www.hud.gov. Questions can be directed to Short Sale Customer/Agent care at 1.866.880.1232.

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February Foreclosures Take Action Now

According to the Distressed Property Institute, more than 80 percent of distressed homeowners who go into foreclosure have never contacted their lender or a real estate professional for help. That’s a staggering number when help and relief are available.

Avoid North Texas Foreclosure

Without fail, our phone rings off the hook near the end of every month from desperate homeowners looking for help. After checking the local foreclosure lists, we often find that the house is already scheduled for foreclosure the following week. At that point, it’s nearly impossible to get a Short Sale in place to stop it.

An important thing to understand about Short Sales is that the process is anything but “short.” The only thing “short” about a Short Sale is the payoff to the lender. The sooner the homeowner contacts someone for help, the more time is available to work the Short Sales process.

We encourage homeowners across the United States to get educated on the options available should they become financially distressed. Short Sales are a great tool, providing relief to all parties.

Just remember to choose a REALTOR® with a proven Short Sale track record to negotiate on your behalf. Making the right choice can mean the world of difference to your financial future.

Tom Branch, Broker, CDPE, SFR

Based on "Avoiding Foreclosure - The Field Guide to Short Sales" © 2010 - Tom Branch and Gina Branch

 

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This is just a follow up to my recent blog from a day or so ago.I had mentioned in my previous blog the Temecula BPO where the occupant did not have keys to the four children's bedrooms upstairs. I contacted the agent and she rescheduled an appointment for me again this morning at 9:00 a.m. All I needed were the 4 pictures since I had already taken all the other necessary pics previously.Well, i arrived right on time. knocked on the door, rang the door bell and no on answered. i called the Short Sale agent and luckily she answered. I explained the issue and she said she would call the seller. She called me back and a few moments later, the occupant opened the door. The house was full of people which made me wonder why noone answered when I knocked. The doors were still loacked axcept one. I was able to use a tiny flathead eyeglass screwdriver to open the lock on a second door (I brought one just for this reason). But the other two were standard key locks and, again, I was unable to take all the needed pics. I'm submitting the BPO with pics of the locked doorknobs and a notation to the Short Sale Negotiator.In closing let me impress upon you Short Sale agents once more that it is imperative that you meet the BPO agent at the property to assure the BPO is completed properly. Not only to provide your own comps and to point out any deferred maintenance issues or problems that would affect value on the report, but also to provide access for the BPO agent. Plus it is always good to be present with the homeowner to show you are doing your job.Just more food for thought.By the way, if you or someone you know is at risk of losing a home to foreclosure, please know that there are new options available to avoid this devastating occurance. And know that there is someone here you can trust to help. As a Certified Pre-Foreclosure Specialist, I understand the ins and outs of Short Sales and Loan Modifications. I am also a Wachovia and World Bank trained Pre-Foreclosure expert and well educated in the Government’s new H.A.F.A. and H.A.M.P. programs for helping homeowners facing foreclosure.
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Buyers & Buyer/Broker Agreements!

Well, I lost buyers today and I figured I'd vent here to all of you.There's been times when I've stopped working with a buyer before. Sometimes I fire them and sometimes I refer them to someone else, depending upon certain factors. But today, I just lost em.We've been working together for about 5 months and I've shown them quite a few homes in several areas. I've held their hand, helped them secure financing, explained the options and used my expertise to educate them in today's market. We've made 2 other offers and have been beaten out by the multiple-offer-auction atmosphere of the current repo market.I showed the husband a property on Thursday while his wife was out of town and he wanted to get his wife to see it. He really liked it and so we set up a time to go see it after church on Sunday, since his wife was due to be back Saturday, mid-day. Sunday came and I didn't see them at church nor did they return my call. After 2 more voice mail messages over the past 3 days, the husband finally called me back. He was a little hesitant and sounded very apprehensive on the phone. I thought maybe they had a death in the family. But then he said it, "uh...sorry to tell you, but...we already made an offer on that house with another Realtor".Inside my head I was yelling, "WHAT?" and going thru my mind was the vision of me shaking him and smacking him, saying, "What were you thinking?". But all that came out of my mouth was a calm, "Really? Hmmm."To make a long story short, they are acquaintances from church. Because I viewed them more like friends and not clients, I didn't have them sign a buyer/broker agreement and went off of faith and trust. I do that quite often with buyers whom I look at as friends more than clients. The wife got back into town a little earlier Saturday than expected and so the husband decided to drive her by the house he saw. The listing agent was having an Open House and they actually went in and saw the home. Then, the listing agent talked them in to making the offer right then and there with promises of saving them money and guaranteeing them they would get the house if they went with him. The buyer really couldn't explain exactly what the agent said or exactly how the agent was going to be able to accomplish this, but they wrote the offer up, submitted it and got accepted this afternoon, right before he called me.No, I didn't ask how he thought the bank's Realtor would get them a "better deal". I didn't ask why he thought the bank's Realtor would work for a one time buyer just as hard as he works for the bank that gives him 50 to 75 deals a year or more. I didn't ask what price he offered although I expect it's quite a bit more than I would have suggested for that home. I also didn't ask him how he was going to face me every Sunday and Wednesday at church from now on. I just said, "thanks for the call and I hope things work out for you and your family!". What I DID do was immediately go off my diet and buy a Venti Rasberry Mocha, drowning my sorrows in sugar and caffeine and asking myself why I didn't have them sign a buyer/broker agreement.It will be interesting to see how this deal of theirs all pans out. Perhaps in the future, I'll start having even my friends and family sign buyer/broker agreements. Or probably not and I'll be blogging about this issue again in the future the next time it happens.By the way, if you or someone you know is at risk of losing a home to foreclosure, please know that there are new options available to avoid this devastating occurrence. And know that there is someone here you can trust to help. As a Certified Pre-Foreclosure Specialist, I understand the ins and outs of Short Sales and Loan Modifications. I am also a Wachovia and World Bank trained Pre-Foreclosure expert and well educated in the Government’s new H.A.F.A. and H.A.M.P. programs for helping homeowners facing foreclosure.Click on the link below to find out more about Preforeclosure alternatives:http://www.partnerfirst.org/raywright/Click on the link below to search all homes available in the MLS::http://raywrightsellshomes.com/f-properties.htmlClick on the link below to read what other clients have said about my service:http://raywrightsellshomes.com/f-testimonials.html
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When listing a Short Sale one of the most important things during the process is the BPO (Broker Price Opinion). For those of you not familiar with these it is somewhat of a mini appraisal done by a Realtor to help advise the bank of the market value during a loan modification or short sale. It is important for the listing agent to meet the BPO agent to assist in providing detailed info about the property and it's value. You never know what the experience level of the BPO agent is. They might not even be the actual BPO agent and merely a licensed assistant. I do tons of BPOs for both loan modifications and other agent's Short Sales. What amazes me is how many times the listing agent doesn't show up when I have an interior BPO.Today, after driving all the way down to Temecula from Riverside, I found that the home was in a gated community. I tried calling the agent to no avail. I searched the MLS from my phone trying to find gate codes. There were none and the property I was headed to wasn't listed. I finally was able to follow someone else in and I was met by the homeowner. The homeowner didn't speak English. I don't speak Spanish. When she answered the door, she looked puzzeled at who I was and why I was there. The best I could do was wave my camera in the air to show her I wanted to take pictures. She reluctantly let me in but I'm not sure if she even knew why. The next issue was that 4 of her 6 bedroom doors were locked and I couldn't get in to take pics. Apparently the rooms belonged to her kids and they locked them before going to school. She didn't have keys.Well, I took pics of what I could and left, leaving another message for the agent to reschedule me driving all the way back down to Temecula AGAIN! I let the asset manager know I needed an extension and why. he thought it was funny.Foreclosures are a bad thing for homeowners. No one wants to be foreclosed on. Realizing this, the Government (along with cooperation from the banks) is making it far easier and appealing for homeowners to conduct Short Sales to save themselves and their credit from the terrible stigma and long term affects of the dreaded foreclosure. Short Sales are a great avenue to help homewoners and the banks are getting better at getting them pushed thru. But without agents out there that are willing to do their job and do it well, the homeowner is left...well, pretty much just left!So, agents...PLEASE! Help me help you! And homeowners, make sure you have copies of your kid's bedroom keys.By the way, if you or someone you know is at risk of losing a home to foreclosure, please know that there are new options available to avoid this devastating occurance. And know that there is someone here you can trust to help. As a Certified Pre-Foreclosure Specialist, I understand the ins and outs of Short Sales and Loan Modifications. I am also a Wachovia and World Bank trained Pre-Foreclosure expert and well educated in the Government’s new H.A.F.A. and H.A.M.P. programs for helping homeowners facing foreclosure.Click on the link below to find out more about Preforeclosure alternatives:http://www.partnerfirst.org/raywright/Click on the link below to search the MLS:http://raywrightsellshomes.com/f-properties.html
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Should I sell or buy my Kansas City home via a short sale?A Continuing Guide to Understanding Short Sales Series.Whether you are facing the possibility of needing to sell your Kansas City Home via a short sale or if you are considering buying a short sale, you will need to have information and tips on understanding this ever growing popular tool for home selling and buying. Over the course of several weeks, I will be providing a series of quick tips and information from experiences that my clients have had in selling and buying short sales as well as very practical information supplied by the National Association of Realtors as well as other well respected short sale authorities.Today let's start with:"What is a short sale?"There are plenty of definitions that you can find. The simplest way that I have defined it is that a short sale arises when the total costs associated with the sale of real estate including, but not limited to, the payment of all outstanding mortgage(s), taxes, real estate commissions and other liens exceeds the amount of the proceeds from the sale AND, the existing lender(s) or mortgage holder(s) agree, based on the borrower/property owner meeting certain requirements, to accept a payoff that is less than the balance due in order that the home can be sold/closed.I look forward to exploring and discussing this ever popular growing niche in selling and buying Kansas City homes with you."Remember, you have options to the financial situation that you may be in with your home-I have helped many families who were facing uncertainty with their Kansas City homes including pre-foreclosure-let me help you."-SuzanneYOU MIGHT BE ABLE TO AVOID A FORECLOSURE WITH A SHORT SALE-Don't wait to find out if you qualify.REQUEST FREE CONFIDENTIAL PRE-FORECLOSURE OR SHORT SALE ANALYSIS OF YOUR KANSAS CITY HOME.Search All MLS Kansas City Home ListingsSuzanne Hinton-Hinton Homes-Pre-Foreclosure and short sale specialist. Specializing in assisting home buyers and sellers with their Kansas City homes-short sales.Suzanne Hinton, Voted 5 Star Real Estate Agent, providing real estate services to home buyers and sellers in the areas of Overland Park, Shawnee, Prairie Village, Olathe, Mission, Merriam, Roeland Park, Leawood, Kansas City, Lee's Summit and all surrounding cities in the Johnson County, Kansas and Kansas City Metropolitan area.Suzanne is also a specialized pre-foreclosure and Kansas City short sale agent with a successful track record of having listed and sold short sale listings throughout the Kansas City Metropolitan area including in Kansas and Missouri.
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Loan Modification Scams

Just a quick note to make aware some who may not be in the know. There is a television marketing campaign for loan modifications that is currently being shown nationwide. It touts interest rates as low as 1% and offers homeowners help with loan modifications. The extremely fine print at the end of the commercial states the truth but it is only on the screen for a brief moment before disappearing. The truth is that the commercial is for a 3rd party referral service that takes an upfront fee and then provides you information on loan modification companies and attorneys in your area. It's just a big costly scam.While there are many reputable attorneys and services that offer help with loan modifications, as a homeowner, you need not pay extra money just to get a referral to one of them. if you are in need of a preforeclosure specialist or help with a loan modification, be very careful and make sure the person you are dealing with is one of those reputable service providers.Just more food for thought.By the way, if you or someone you know is at risk of losing a home to foreclosure, please know that there are new options available to avoid this devastating occurrence. And know that there is someone here you can trust to help. As a Certified Pre-Foreclosure Specialist, I understand the ins and outs of Short Sales and Loan Modifications. I am also a Wachovia and World Bank trained Pre-Foreclosure expert and well educated in the Government’s new H.A.F.A. and H.A.M.P. programs for helping homeowners facing foreclosure.Click on the link below to find out more about Preforeclosure alternatives:"http://www.partnerfirst.org/raywright/"Click on the link below to search all homes available in the MLS:http://raywrightsellshomes.com/f-properties.htmlClick on the link below to read what other clients have said about my service:http://raywrightsellshomes.com/f-testimonials.html
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