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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

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!!!

CALL CARL SANFILIPPO TOLL FREE (888) 445-8880 FOR A FREE PHONE CONSULTATION.  Every homeowner in Lehigh Valley should be educated on their options to avoid a foreclosure in Lehigh Valley. Many options are available in Lehigh Valley to distressed homeowners however; short sales are becoming increasingly popular due to its abilities to assist homeowners in Lehigh Valley. Short sales offer cash back incentives in Lehigh Valley, a credit score that suffers far less than one of a foreclosure in Lehigh Valley and the assistance of a Lehigh Valley short sale specialist at no cost.

Something each and every homeowner in Lehigh Valley worries about is how their credit will be affected once a short sale all is said and done. The truth is, a short sale in Lehigh Valley itself may drop your credit score by 50 points, however it will the delinquent mortgage payments that do the most damage; each missed payment ranging around 30 points. When you compare a short sales versus a foreclosure you will see that a foreclosure may lower your credit score by 300+ points and sit on your credit report for up to ten years. A short sale in Lehigh Valley will typically recover within two years while usually displaying "paid as negotiated" or "settled in full" on your credit report. A foreclosure in Lehigh Valley also has the potential to hold you back from a certain career path because it is not uncommon for employers to do a credit check before making a decision.

One of the greatest benefits of having an experienced Lehigh Valley short sale specialist is having me assist you throughout your short sale. The goal of a Lehigh Valley short sale Realtoris to handle all negotiations on your behalf while working aggressively to get your home sold in Lehigh Valley. A highly qualified Lehigh Valley short sale specialist will be able to keep constant exceptional communication with all parties involved while offering their services to you, at no cost; your lender will typically pay all commission and closing costs. There is no reason to let your home in Lehigh Valley go into foreclosure when you have options available and professionals who dedicate their lives to helping distressed homeowner

May 2012 Could Signal a Turn Around for Housing Market

There is some hope for the real estate market. According to a report published by the Commerce Department the number of homes purchased in May of 2012 was the highest number in over two years. The number of purchases increased from April to May by 7.6%. That number is the best increase since April of 2010 when the tax credit for purchasing a home was still in effect.

Areas of Highest Growth

The places that saw the largest increases were the South and Northeast. The number of homes purchased in the South grew by 12.7% while the growth in the Northeast was 36.7%

Although the total number of sales across the country seems to be off pace from the 700,000 transactions favored by economists, the market is showing other signs of improvement.

Strong Signals from the Market

First and foremost, builders have begun to increase production. More construction is always a positive sign, no matter how small the increase. Second, interest rates for mortgages are still at historically low levels making it easy to afford a home. Third, and this is important too, is the stabilization of home values. Most regions around the country have noticed home values finally holding steady. All of these factors have lead to people buying up existing homes, paving the way to build more properties.

More than Just Statistics

The main reason why economists and financial analysts pay so much attention to new construction comes from their overall economic impact. Building a new home normally produces about three new year-long jobs. It also leads to an increase in taxable revenue by an average of $90,000. Although new homes are only 20% of the entire housing market, the numbers above show how constructions helps the economy thrive.

Supply is Down

At the end of May it was reported that a total of 145,000 new homes were on the market throughout the entire country. Based on current sales numbers the market should go through the existing inventory of new homes in about 4.5 months. Economic experts feel that a 6 month supply of new homes keeps the economy healthy. With a lower than average supply it is possible that home prices could go up simply because demand will be higher.

Prices Already Higher

Speaking in general averages, the price of a home bought in May of 2012 was down ever so slightly from the average price in April. However, when looking at sales from one year ago shows that average prices have gone up by 5.6%.

FOR IMMEDIATE RELEASE:

Michael Collins Earns NAR Broker Price Opinion Resource Certification

Sellers and Lenders Benefit from REALTOR^® Expertise in Broker Price Opinions

Madison, WI — Michael Collins with Rock Realty has earned the nationally recognized Broker Price Opinion Resource certification. The National Association of REALTORS^® offers the BPOR certification to REALTORS^® as evaluating properties depends more than ever on professional expertise and competence, the best use of technology, and a commitment to approach the valuation assignment from all pertinent perspectives.

“As the real estate market evolves we are seeing more demand for broker price opinions, and it’s imperative that REALTORS^® are knowledgeable and educated about how BPOs work, as well as the risks involved,” said NAR President Moe Veissi, broker-owner of Veissi & Associates Inc., in Miami. “The BPO Resource certification not only adds value to the services provided by REALTORS^®, but also it helps practitioners grow their business.”

“BPOs: The Agent’s Role in the Valuation Process” is the required one-day course that provides REALTORS^® with knowledge and skills to reduce risk and increase opportunities to create professional and accurate BPOs. In addition to completing the course, participants are required to take a Webinar. Once awarded the certification, REALTORS^® will be eligible to receive BPO orders as a preferred provider.

In addition to providing members with the opportunity for BPO business, BPO Resource will explore the multiple uses of BPOs, how they can and cannot be used, and how to filter and select comparables to create expert and precise BPOs. The certification also assists member in creating more comprehensive comparative market analyses for their customers’ listings.  For more information about the BPOR certification, visit www.BPOR.org.

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I am representing the buyer on a Short Sale purchase the Lender is BOA. We got a clear to close last Friday only for the listing agent to tell me He has been trying to get a lien approved for the Hud and his side can't close until that happens. He has negotiated the lien but BOA hasn't approved it for the hud. Also that he found out at the last minute because his seller never disclosed she had a HOA Lien outstanding. How can help him get this file "escalated"? My buyer is nervous and frustrated has to be out of her apt by Aug. 1st and not willing to extend the contract pass this Friday.

Call Carl SanFilippo (888) 445-8880 for a FREE Phone Consultation

It’s no secret the housing market in New Jersey has plunged in recent years and selling a home in New Jersey seems like an almost impossible task. The number of New Jersey short sales have spiked in these years as well. Homeowners in New Jersey have waited months, and some, even years to get out from under their homes. For the homeowner who is looking to sell whether it’s through a short saleor a regular real estate sale, the market has budged and is beginning to look promising for the future. Now, a lot of people wonder how to find out if the housing market is improving or not or what to look for.

The first thing anyone wants to look for is the amount of foreclosures in any neighborhood; this is a great indicator of how good or bad the real estate market is on a local level. If you find fewer foreclosuresin a neighborhood, this is typically a sign of a relatively stable neighborhood but if you find a large number of foreclosures then this could be a sign that particular area is seeing a housing market depression. For the buyer, foreclosed homes could be a good place to look if you plan on buying a home to fix up to your liking.

Another way to tell if the housing market is improving is when housing companies start building large projects in your area, this is good because a good amount of homeowners are expected to move in soon. Housing projects are always a good sign, it shows your local housing market to be making a steady move towards recovery and you are less likely to see foreclosures in that area.

Lower interest rates are another way to tell if the market is improving. Interest rates have seen a huge decline since the housing market took its plunge. Lower interest rates don’t always mean a bad real estate market but since interest rates are at a decrease it is an incentive for buyers who are looking to buy a home. The more money the real estate market sees, the quicker its recovery can increase and the housing market can get back to normal.

If you start seeing business pop up around you or old businesses that closed down but are now reopening their doors, then this is a possible sign of an improving housing market. This is particularly good for the entire economy too because more people will be spending money as well as making money and more money means more homes, which means more jobs so the homes can be built.

The real estate market is showing signs of improving however, more jobs and fewer foreclosures seem to be holding both the economy and the real estate market back from being able to become stable. For buyers, right now would more than likely be your ideal time to buy, but sellers, just keep at it, and make sure you are choosing the right Realtor to help you with your real estate transactions, whether it be a short sale in New Jersey or a regular home sale, competent Realtors are out there and do better your chances of getting you out of your home.

Full Article at: www.seattleshortsaleblog.com

Our team of agents at Seattleshortsaleblog has been extremely successful with short sales for many years now and pinpointing the key attributes that has contributed to our success is quite apparent once you meet our negotiators. As emphasized before in our previous blogs, one of the biggest downfalls in the short sale arena is the lack of communication, or more specifically, the lack of a good communicator. Facilitating a transaction with multiple parties who have only their own financial interests in mind, is not an easy task which is why we at seattleshortsaleblog continue to emphasize the importance of a professional negotiator in your short sale. Let’s explore some qualities to look for when choosing the right agent for your short sale.

Why is a negotiator important in a short sale? 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. A negotiator is like an individual who comes in to help everyone get a piece of the pie with minimal losses for everyone. A short sale transaction is a very similar situation. Everyone is trying to get the most pie they can get but without someone facilitating the portions each entity will receive, it often leads to a foreclosure which is a severe loss for all parties.

So, how do you identify a pro negotiator? I believe one very important factor for a good negotiator is his/her personality. To briefly describe some personality traits that I believe all successful negotiators should have is first and foremost, charisma.  You want a negotiator who is enjoyable to speak with and can build relationships.  Second, is stability and to be direct, an uncanny ability to control emotions. Third, and really most importantly is the ability to listen, you need to provide a party with what they want in order to get what you want or at least mediate their wants and fill as many as possible.

In working with all parties of a transaction, the negotiator should be able to influence servicers (banks), agents, and buyers (exempt sellers because negotiators are on their side). Without building good rapport and maintaining good relations with all of these members, the short sale can easily fall through.

Another key factor for a good agent/negotiator is organization. A short sale involves a plethora of various documents coming from different parties. Without have these files organized, a short sale typically fails as lenders are very particular about timely file submissions. For more information, please read our previous blog on The Key Factor For A Good Short Sale Agent.

What do you think? Are there more qualities a pro negotiator should have? Would love the feedback. Thanks!

Peter