Only if you want to pick the worst choice in a bad situation. With a foreclosure, your credit will be severely impacted, security clearances can be challenged, your ability to finance ANYTHING in the future will be challenged, and the debt owed will not go away. When you do a short sale in Virginia, or other states, you will most likely ALWAYS be in a better position.
Some of my short sale staff and I met with Bank of America in Miami today at their “Short Sale Summit”. We had a nice small group that met twice this afternoon - and I got to ask and have answered several questions which I think are important to those agents who are working short sales.
THEY SENT THE BIG GUNS
First, we definitely had the top end management for this discussion. Bob Hora is the Short Sale, Deed in Lieu, REO, LandSafe Field Services Executive for Legacy Asset Servicing at Bank of America. He leads a team of 5,000 associates – those that you speak to regarding short sales and deeds in lieu through Bank of America as lender or servicer. Joining him was David Sunlin, Bob’s immediate junior who is Senior Vice President and Operations Executive for Short sales, Deed in Lieu and Real Estate Management for Bank of America – meaning he is in charge of real estate operations for Bank of America’s default loan servicing operations. On a more local side, Matthew McCain is the Home Loans Manager for BoA and his territory is all of South Florida, and he acted as moderator. He is a go to guy for this region (his base is in Naples) and will make presenations to individual agent and Realtor groups if requested.
BoA FAVORING SHORT SALES OVER MODIFICATIONS
It seemed from the discussion, that BoA wants to do short sales more than they want to do loan modifications through HAMP or in house programs. There seemed to be a more significant emphasis toward short sales for avoiding foreclosure than through modifications. In fact, although they flew in about a dozen “expeditors” available for us to share specific file processing issues – none of them dealt with loan modifications. There was zero mention of principal reduction programs.
INVOLVING REAL ESTATE AGENTS IN THE DEED IN LIEU OPPORTUNITY
BoA is seriously floating the idea that if a short sale is denied or a short sale cannot reasonable be consummated, the real estate agent can become involved in the process of a deed in lieu of foreclosure process. This will have some limitations on the degree of involvement by agents as they cannot be forced into an unauthorized practice of law situation. Watch for this to develop over the next several months and for some compensation to the agents for their involvement in the process.
CASH FOR KEYS WITH DEFICIENCY RELEASE TO AVOID FORECLOSURE DELAYS
This is on the front burner for implementation beginning September 2011 - Another program that we should begin to see put into operation is “an aggressive and meaningful” program to encourage homeowners to not ride out a foreclosure process for all its worth (ie: living in the property for as long as possible without paying the mortgage). This is a “cash for keys” type program that more realistically takes into consideration the benefits to the homeowner of the extended foreclosure lawsuit timing vs. a waiver of deficiency rights coupled with a “cash for keys” that takes into consideration more than borrower income, but also loan size and size of home to make this successful – but expect it to be more meaningful than similar programs through HAFA. This may be a huge opportunity for agents to convert to listings those that may have just been sitting out the foreclosure process as a free ride.
DO I NEED TO STOP PAYING MY MORTGAGE TO GET BANK ATTENTION?
Still think that you have to stop paying the mortgage to get a short sale? You are still wrong and this time we heard it not just from me - but straight from Bank of America. Although proving up hardship can be easier with a stoppage of payments (and indeed some investors serviced by BoA require delinquencies ranging up to 120 days before a hardship is deemed “valid”), the specific statement of policy was that delinquency is NOT necessary provided other factors of hardship and imminent default can be shown.
NEGOTIATION MINUTIA AND FRUSTATION WITH NEGOTIATOR DEMANDS
They acknowledged that some of their negotiators sweat the small things (like “we won’t pay for the termite inspection”) instead of looking at the big picture, and they are working on training improvements to even-out the process of analysis and create consistency in the process. Still, there are plenty of quirks in their systems.
“THAT MAKES NO LOGIC” STILL PREVALENT
One expeditor, who was trying to help us on a HUD issue regarding a seller contribution to the closing proceeds, listened to my explanation to my seminar attendees of the issue with “why is the banking thinking this way?” At some of my seminars I have a PowerPoint slide that asks 3 simple questions that can be answered with logic. Everyone get them right and we all agree that everyone applied logic to get a 100% score. I then tell the seminar attendees to take a 10 minute break and go to their cars and lock their logic in their car trunks – and then come back so we can continue the seminar. Logic has no place in the short sale negotiation process. The BoA expeditor (who was from California) said it was the best and most accurate analogy of the actual “without logic” process that she had heard.
RELATION OF CREDIT SCORES TO DEFICIENCY WAIVER
A conflict arose regarding a statement made many times that a low FICO score was a determining factor in obtaining the coveted waiver of deficiency in the short sale approval letter. The conflict was relative to the statement that you can do a short sale without defaulting on the mortgage. David remarked that no conflicting statement was intended, and that waivers can be determined not merely on FICO scores but on other factors as well. Our experience in our office cannot correlate credit scores with whether or not BoA provides a waiver of deficiency.
CONFUSING SHORT SALE APPROVAL LETTER LANGUAGE
We recently received a very confusing approval letter that said both that the lender was reserving its rights to a deficiency and in the same letter that the lender will report to the IRS with a Form 1099 the forgiveness of income from the short sale. Bob took the letter from me and promised a review from their legal staff and a response. The letter is discussed in my article, NEW AND CONFUSING BANK OF AMERICA SHORT SALE "APPROVAL" LANGUAGE.
ESCROWS MAY INCLUDE ASSOCIATION ASSESSMENTS FOR FUTURE LOANS
Lastly, expect some pilot programs on new loans that add on to the escrow list not only real estate taxes and insurance, but condominium / property / homeowner association assessments. The fight to get short sales through is constantly being waged between lender and association. BoA is also considering setting up an association lien subset of negotiators to improve the short sale opportunities even with unpaid association fees. [We maintain that the better course of action for homeowners is to continue paying the association, as unpaid assessments can be the straw that prevents the short sale from succeeding.]
The bad news is that the BoA time-line for short sales still deems 4 and a half months as acceptable. So the educated buyer (educated by their agent?) is a key element for retaining the buyer through the short sale process.
Bank of America actually put together a meaningful program for agents and attorneys that process short sales and the experience was well worth the 3 hour drive. Stay tuned for updates and developments!
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Copyright 2011 by Richard P. Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com
See our easy to find articles at TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.
File went through all the non-HAFA hoops to get started--all cash buyer for last listed price was rejected by FNMA. By this time prices have fallen even more-file re-submitted for FNMA approval at contract price. 30 days later, no response. I have escalated through Equator, sent e-mail to VP of short sales at FNMA, and file is also escalated at FNMA Business Analysis level (takes 10 days for review, she said). No response from anyone through Equator, negotiator has been available only minimally thruout this file. Sale has been postedponed once already, currently set for Sept 7th, and buyer (our second buyer) is cancelling because it's taking too long for approval. Supposedly, FNMA doesn't like to lose properties in foreclosure, but that's what's happening to this one. Does anyone know if FNMA will postpone sale date more than one time? BofA is a "delegated" servicer by FNMA to negotiate their files for them, no one at FNMA seemed to know about this file.
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We all live in the same world and we all pretty much see the same news, usually depending on who is delivering that news helps shape our opinions. There is only so many ways to say we are in a recession or arguably just coming out of one. Regardless of that news along with our country’s debt and budgetry issues, real estate continues to get a lot of attention. The country as a whole is still having some issues of course, but Charlotte, NC is not one of them. It is actually considered one of the country’s most popular up and coming destinations and places to call home.
The truth is that real estate is making a comeback…slowly, for sure, but a comeback none the less. You can see it by looking at other aspects of the economy. For example, consumer spending is up. This means that people are starting to loosen up a little bit on what they spend their money on and what they save. A year ago people were not spending money at all. It was all about saving and paying down debt and credit cards. But now we are seeing signs of life with people starting to come around and open their wallets a little less reluctantly. Sure it still is hard to reach into it, but at least they pull their wallet out at all.
What does that have to do with the real estate industry? Well, I believe that when people start getting more comfortable spending money on the smaller things, they soon start getting comfortable spending money on larger things. The problem still exists though that it is not that people don’t want to buy or even can’t buy, they just are unsure. When people start spending money again and gain some of that consumer confidence, the market will begin to grow. We will see more people out shopping for homes at first. The just browsing phase. From there people become more and more confident and decide they will see if and what they would be approved for. When that happens we will see a large influx of loan requests coming in. And at that point people realize that they can get approved for a loan.
Home ownership is still one of the best investments you can make. The market continues to have favorable positioning for buyers. The smart ones will realize this a little bit earlier and buy when prices and rates are low and watch those values eventually recover.
It is simply a great time to buy a home. So get out there, start looking around, submit a loan request and see what happens. You may be surprised at what kind of a response you really get.
Kevin Post, Business Editor for my local paper, the Atlantic City Press, wrote an article for today’s Sunday edition you can find it here. The article reported that people are LESS satisfied with the process of buying and selling a home.
That makes my head spin for several reasons. First interest rates are at all time lows. Borrowing for those who qualify (and I assume that almost every home buyer interviewed financed their purchase) is as good as it gets in this or maybe a few lifetimes to come. Second there is a large inventory of homes on the market and generally sellers are aggressively wanting to close deals. Real estate agents are going belly up and fleeing the profession every week leaving fewer, more qualified agents with time to assist their clients. I could go on but all signs point to more satisfied buyers, all but one important one.
The Short Sale process and the failure of agents to effectively handle and communicate the special circumstances of these types of deals. It begins with many agents not knowing what to expect.
I have to admit I didn’t have much of a clue myself when I signed a contract to purchase our family home as a short-sale almost three years ago. I studied real estate in law school, understood the foreclosure and tax sale process and knew how to evaluate the pros and cons of bankruptcy for a client. I had not done a short sale but the deal on the house was too good to pass up so I dove in.
Every agent who is working with a short sale buyer needs to understand and communicate the following so their clients are satisfied by the experience, seek out the agent again and refer the agent to friends:
There is more paperwork in a Short Sale - A short sale packet is over 100 pages. It takes time to build and it takes time to review. Once I am retained I begin putting together the packet, most of it is financial information about the seller’s condition and the property condition and value. Most sellers do not have this information readily available and take up to 30 days to put things together and turn them over which is one of the most frustrating choke points. Some agents and negotiators wait until the contract is signed to start gathering this information which extends this process even longer.
There are more parties that need to approve the sale - In a conventional sale the buyer sends a contract to the seller, the seller signs, inspections are done, title is ordered, mortgage companies are satisfied and things move to closing with 30 days or so. With a short sale the lender needs to approve. They review the packet of information, may request additional information, wait until any bankruptcy proceedings are completed, order an independent appraisal of the property, review comparable sales and each lender follows different internal protocols… get the picture?
There is a different timing to things - In order to protect both the buyers and the sellers there needs to be a short sale addendum which details how things will proceed including when to do inspections, how long a buyer is willing to hold on, how and when the deposits are to be delivered. Buyers need to know there is more to the dance of the short sale.
The homeowner is distressed and distressed people do strange things sometimes - I could tell you but you probably would not believe me. Telling you would do you no good either. You see people are original and create new and amazing ways to do stupid things, self-destructive things, especially people who are losing their home. Real estate professionals need to do a better job talking sellers through the situation, counseling them and giving them realistic hope about re-entering the housing market in a 2-5 years. In doing so they prepare for themselves a hot list of clients for the future. Trust me and ask me if you are an agent reading this and are interested about how this can sustain your business while helping people and improving the communities you serve.
The process takes time, often up to six months from contract to approval - Most agents and repeat buyers are used to 30 days to close. Because of the circumstances listed above, a more realistic plan is 120-180 days to close.
My house took 14 months but it was the most tangled mess anyone had ever seen and it was one of the early transactions. However we hung in because we could and because the house was right for us. However there were days when I wish I would have known what to expect.
There are agents in southern New Jersey who are promising 45-60 day turn around to hook people in, the truth is if everything went exactly right it might happen. But in almost every case it is a pipe dream and the agent knows it. Furthermore there are agents who are negotiating short sales for sellers who neither understand or care about the legal ramifications of the papers their sellers are signing. “They will never buy another house anyway”, I have heard out there.
If not legally, then certainly professionally, the agent that takes these reckless steps and over-promises on what they can realistically deliver will pay a heavy price. Sadly it is often the clients who pay most dearly in these scenarios (i.e. Bernie Madoff, Enron and any Ponzi scheme you can name).
Agents need to understand the realities and communicate truthfully with their clients. It will cost a deal or two along the way but it is the right way to do business and in the end that matters more to a professional. Buyers and sellers need to make sure they do their homework and resist falling for the false promises of unscrupulous transients. Ten years from now when that person is your waiter or waitress or jitney driver you will be glad you invested the time to read this column all of the way through.
Short Sale Sellers; Check your Listing Agents' References!
Had a listing appointment last week with a potential Short Sale Seller. He is only 30 days delinquent and his property is spectacular..truly stunning. The Location is very questionable for a home of this magnitude and that's where he, being the Architect, may have gone wrong. But..Mr. Seller is very bright, very successful, and well-versed in the world of the Short Sale.
Because there are two loans with two Lenders and a huge amount of money to forgive, this one is going to be a trick..but I think because of the location and the loss of Income here, it should get approved.
I spent quite a bit of time with my Seller. We went over comps, we went over loans, we went over Lenders, we went over documentation required and then he asked me for four recent references. Bless him!! I had them, gave him the names/e-mails and left feeling pretty confident. I knew that I was just one of several interviewees, and being a Realist, I know nothing is a slam dunk, but I was hopeful.
Three days later, he called.
"I did contact your references and they were very complimentary of your and your Short Sale knowledge and services. I definately want to list with YOU!"
I am thrilled, but I also feel even more confident. I now know that my Seller truly does believe I know my business, and will help me even quicker with anything I should ask him for. Hopefully, we can make this difficult transaction as smooth as possible. I'm also very impressed with Mr. Seller. He actually followed up with my Short Sale references and called them!
Short Sales are not Standard Sales and do not fit into just any old Realtors Agenda. Find out how many Short Sales your potential List Agent has listed, contingent, pending and CLOSED over the past few months..several years is even better. All the Certifications in the world do NOT compare to SHORT SALE experience. Find out if your List Agent is up to the job.
I was told today by B of A, that as of July 25th, Freddie Mac is no longer accepting HAFA. Has anyone else heard of this?
The NJ Superior Court Appellate Division recently handed down an interesting ruling in the case of DEUTSCHE BANK NATIONAL TRUST COMPANY v. MITCHELL.
The Court believes it is important for a bank or other lending corporation to actually hold the lien or note on a property before foreclosing on it. Seems like a simple enough point but with the crazy world of mortgage resale and assignment it is a point which has slipped through the crack more than once over the past few years. It is interesting that at the trial level it seems the Court was fine with allowing the foreclosure to proceed based on the fact the lender was assigned the note after they filed for foreclosure but before the property went to Sheriff’s Sale.
It is an interesting case but there is another part of the case that caught my eye, one the Court was not called to rule upon but it is essential for every distressed homeowner to read and understand.
Bethea in this story is the homeowner who after her mother died had trouble paying her mortgage and looked for someone to help her navigate her pre-foreclosure options.
The Agreement provided that Bethea would create a reserve account by setting aside $37,187 from the closing proceeds. If Bethea failed to make a rental payment, the Agreement authorized counsel to pay the rent from the reserve account. The Agreement also provided that Bethea would pay Elite a $25,000 “consulting fee.” Mitchell received $10,000 from the “consulting fee.”
I am currently assisting some Kansas homeowners with a request to Wells Fargo of an approval of a short sale of their home. Their existing loan is FHA and we have requested a pre approval to participate in the short sale program. While meeting to discuss the various possible options available, I learned that the homeowner that lived in the home was responsible for making the monthly mortgage payments. Therefore, according to her, she would be the one to request the short sale approval from Wells Fargo.
BUT, what she did not realize is that because her parents had co-signed for the loan at the time of the initial FHA loan was taken out, they too would be included in the request for the short sale and a possible foreclosure. Just because her cosigners did not live in the home and that she had agreed with her “parents” to make the monthly payment, does not mean that they are immune to having to provide the required information and meet the guidelines of the lender from whom a short sale is being requested. They are also on the note to repay the lender back.
If you have a cosigner on your note, remember make sure that all parties on the note understand what their obligations and requirements are when applying for a short sale approval.
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If you don’t know what to do if you are falling behind on your mortgage payments or you are currently facing foreclosure of your Kansas City home, Kansas or Missouri, please continue to read the upcoming posts and Request a Free Confidential, no obligation, analysis of your home and options that may be available to you to help reduce the burden you may have.
(There are potential tax consequences that should be discussed with a tax professional. Please do not interpret this information as providing legal, tax or other professional advice which you should seek independently.)
(Image courtesy photostock /FreeDigitalPhotos.net)
About the Author:
Suzanne Hinton
Hinton Group-Affiliated with ReMax Premier Realty
Voted 5 Star Best in Customer Satisfaction Real Estate Agent
Phone: 816-520-0917
Email: shinton@remax.net
shortsellingyourkansascityhome
©2011 Suzanne Hinton-Hinton Homes-Kansas City Short Sale Realtor
Kansas City Short Sales
My short sale file was shut down over an "E"!!!!
I guess this is one of those times where I truly wish the buyer's name was Linda Green!! Go figure.
Click the image below to check out an awesome power point presentation on Robo Signing.
We recently submitted an offer to ASC for a short sale property at 84k (market value at 115,000 property needing about 20k in repairs) Lender countered at offer of 99k - buyer countered back at 90k. I received an email yesterday from the negotiator that the MI company is now requiring at NET of 96k - Is this deal dead or is there something I can do to counter this??
The question of whether to short sell a home in probate used to be rare, but now unfortunately it is not. There are estates where the owner dies, owes more than the house is worth, and a decision needs to be made by the Personal Representative (executor) as to what to do.
My opinion, try it. If it is in the best interest of the bank/investor to short sell rather than foreclose they will do it. If it is not, they won't and will take it to foreclosure.
So who benefits if the home is sold as a short sale? Well the realtor for sure. The commission is paid by the bank.
However, if the attorney's fees are put on the HUD1 statement (the statement saying who is paying for what and who is receiving what money) the bank may pay them. Also, the payment to the personal representative can go on the HUD1. This would make it worthwhile for the Personal Representative to try and do the short sale. This can be very handy if the representative is a Bank or Professional Fiduciary.
The heirs do not get anything out of a short sale so it does not matter to them if the property is foreclosed or sold short, but it does matter to the neighborhood. A vacant foreclosed home brings the other homes around it down, while a short sale is cared for by the realtor and even if vacant is not abandoned.
So should you bother?
I think so.
If you have any questions about probate or short sales, please feel free to contact me.
Marcy Moyer
Keller Williams Realty
marcy@marcymoyer.com
650-619-9285
D.R.E. 01191194
Marcy Moyer Keller Williams Realty Palo Alto, Ca. Specialist in Trust and Probate Sales
I recently attended an online seminar regarding short selling and one of the speakers said something that really stuck with me. He said that many times when a homeowner is faced with the possiblity of being unable to make their mortgage payment(s) for whatever reason, they are not interested in learning how to short sell their home. What is important to them is how they can keep their home and not have to sell it.
While assisting Kansas City home owner's sell their Kansas City home is how I make a living, I have learned how important it is to share with others my knowledge of what may help them even though I receive nothing in return. Knowledge is Power!
So, let's start talking about what things you as a Kansas City home owner may be able to do to avoid having to sell your Kansas City home. As you may have heard, there is a government program called "Making Home Affordable". This program is also commonly known as "HAMP."
If you don't know what to do if you are falling behind on your mortgage payments or you are currently facing foreclosure of your Kansas City home, Kansas or Missouri, please continue to read the upcoming posts and Request a Free Confidential, no obligation, analysis of your home and options that may be available to you to help reduce the burden you may have.
(There are potential tax consequences that should be discussed with a tax professional. Please do not interpret this information as providing legal, tax or other professional advice which you should seek independently.)
(Image courtesy jscreationz-FreeDigitalPhotos.net)__________________________________________________________________
About the Author:
Suzanne Hinton
Hinton Group-Affiliated with ReMax Premier Realty
Voted 5 Star Best in Customer Satisfaction Real Estate Agent
Phone: 816-520-0917
Email: shinton@remax.net
shortsellingyour kansascityhome
©2011 Suzanne Hinton-Hinton Homes-Kansas City Short Sale Realtor
Kansas City Short Sales
I got a chance to watch a couple of agents go at it with each other in a real estate forum trying to answer a question about doing short sales. It was interesting, to say the least. Besides the two main agents who proclaimed themselves the “experts” and hijacked the conversation, there were a few others who chimed in and made some comments. But the question was never specifically answered.
The question posed was whether a lender will approve a short sale if the borrower had assets. He didn’t provide a lot of detail but wanted to either do a short sale or let his home go into foreclosure and he specifically asked not to get into a debate about the ethics in not paying his mortgage.
The argument or “discussion” in the forum quickly evolved into a big debate about the ethics of what people considered to be strategic default. One expert proclaimed it was morally and ethically wrong to engage in strategic default and the lenders would not go for it. The other expert proclaimed morality and ethics had nothing to do with his decision and it was more about money.
As a San Jose Short Sale Agent, I tend to agree with the latter expert. When you are dealing with short sales with lenders, the department you deal with is called Loss Mitigation. Let me say it again: Loss Mitigation. Their job description is patently obvious: it is to mitigate or lessen the loss for the lenders.
Yes, there obviously are moral and ethical implications of not paying your mortgage when you have the financial ability to do so. I firmly believe you should pay when you can and live up to your contractual obligations. However, the question posed specifically asked not to judge the ethical implications but sought opinion as to whether a lender would agree to a short sale when the borrower stopped paying and was headed towards foreclosure.
There is no definite yes or no answer in these matters as the answer lies in the details. It has a lot to do with how much assets the borrower has or does not have. However, if the lender is faced between foreclosure and short sale, from my experience, the loss mitigation department chooses short sales over foreclosures. At the end of the day, the primary decision will be about which method loses less money for the lenders, then, other factors like ethics and mortality can be entertained.
Why do you think big lenders like Chase and Wells Fargo are offering people up to $35,000 to do a short sale without even verifying their financial information? HAFA recently amended its rules to state that servicers are no longer required to verify any financial information, but only to collect signed hardship letters. Do these actions by large lenders and servicers sound like they are overly concerned about the ethical or moral issues surrounding foreclosures?
I can’t speak for other States, but in California, the recent changes in the law means if the lenders agree to permit a short sale, then the issues about deficiencies become null and void. Once a short sale has been approved, the seller can walk away clean without looking over their shoulders. Yet, another procedure that make completing a short sale more effective and efficient and preferable to foreclosure. It’s all about money; if the institutions can make more money foreclosing, they will certainly choose that method, but everything recently is geared towards choosing short sales. Yes, the lenders hate strategic defaulters, but they hate losing money even more.
So back to the question about would a lender approve a short sale if the borrower has assets? It would depend on how much assets the borrower had and whether foreclosure would yield more money for the lender or a short sale.
Is a Seller required to keep the air-conditioning running (to prevent mold) while the home is vacant before closing? The home (short sale) I’m due to close on later this month is now vacant. The tenant transferred the utilities to her new house when she moved out at the end of last month and I’m worried about mold setting in during these HOT Florida temperatures. There is also a spa that will not be running. Is there a law requiring the Seller to keep the home safe while vacant or is it just a moral decision for the Seller?
Not by a long shot! Although foreclosure activity has fallen all over the country it’s due to a glut of paperwork problems rather than any kind of improvement in the housing market.
Foreclosure activity has slowed due to scrutiny since last fall when banks had to do damage control over robo-signing scandals. Robo-signing involved allegations that employees were accused of signing legal documents without even a cursory review.
Home prices also continue to decline or at best remain stagnant. According to the S&P/Case-Shiller 20-city index the market is off by 4.5% across most of the country during May of 2011 compared to the same period last year.
This is from the Florida Association of Realtors(R) newsletter:
.........Banks have resisted a push to reduce principal owed by homeowners behind on their payments. One concern is that borrowers in good standing will stop making payments in order to lower their balances.
Bank of America has offered to reduce principal for loans in its own portfolio and for those the bank services for private investors, the person said. Loans owned by government-controlled mortgage giants Fannie Mae and Freddie Mac would not be eligible.
Of the 14 million loans serviced by Bank of America, half are owned by Fannie and Freddie. One-quarter are owned by the bank, and another quarter by private investors. Borrowers with a balance of $1 million or less and who live in their homes would be eligible. The homeowner’s monthly mortgage debt would have to be equal to 25 percent or more of their monthly income.
Short sale homes are some of the most sought properties in the foreclosure market. They are popular with their affordable and inexpensive price which cause home buyers to prefer them over buying or building a new one. Even investors spend a huge amount of resources just to find short sale homes.
Short sale homes can be a profitable investment given in a right circumstances. A short sale means that the owner itself sells the house and apply the proceeds on his loan. By this circumstances, a buyer can grab the opportunity to offer a good deal and negotiate well to the owner.
A short sale homes makes a lot of benefits. One of these is that the home buyer can purchase the house for a cheap price. The bank or lender can recover their money faster, and the home seller could avoid hectics in dealing with foreclosure.
If you are planning to purchase a short sale homes, you can bargain for a better price and know how to make a winning offer. You may be able to buy a property that is worth much more than what you have spent.
Planning to buy short sales in Phoenix AZ? You may check out Phoenix Homes for Sale.
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