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More Changes for the underwater borrower!!!

October 24, 2011 By

HARP Refinance Program Expanded

Borrowers who are current on their home loans may be able to refinance for lower interest rates, even if they are seriously upside down. The Federal Housing Finance Agency (FHFA) announced today that it will broaden the scope of the Home Affordable Refinance Program (HARP) by removing the current 125 percent loan-to-value cap for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. Other program enhancements include, among other things, reducing certain fees, eliminating the need for a new property appraisal if the FHFA has a reliable automated valuation model (AVM) estimate, and extending HARP until the end of 2013. New federal guidelines for the HARP changes should be released to mortgage lenders and servicers by November 15.

The basic eligibility requirements for an enhanced HARP loan are as follows:
Existing mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac. To check whether a borrower has a Fannie Mae or Freddie Mac loan, go to http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx.
Existing mortgage loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009.
Existing mortgage loan cannot have been refinanced under HARP previously (except for Fannie Mae loans refinanced between March and May 2009).
Current loan-to-value (LTV) ratio must be more than 80%.
Existing mortgage loan must be current, with no late payments in the past six months, and no more than one late payment in the past 12 months.

More information is available from FHFA at http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf.

Filed Under: Loan Modifications, Short Sale Updates, This month in Real Estate, What's New?, whats happening with my loan modification, who can help me get financing Tagged With: , , , , ,

Know when to say “NO”!

October 1, 2011 By

*THE MOST SUCCESSFUL SHORT SALE LISTING AGENTS IN THIS MARKET ARE THE ONES THAT KNOW HOW/WHEN TO SAY “NO”*

1. DETERMINE IF THE HOMEOWNER CAN/WANTS TO STAY IN THE HOME.
With the push for lender’s to keep people in their homes, a loan modification is a possibility and your homeowner needs to know about it. Be knowledgeable and be able to explain to them their options. For example, if a homeowner has not made a payment in 12 months, know how to calculate the payment to determine whether or not they can afford the terms of a modification. Review the statement with the homeowner and determine the following:

Add the current mortgage balance + missed payments + penalties
Amortize the balance at 2% over 30 years
Add in the taxes, insurance and/or HOA
Determine if they can afford it and that it is not greater than 34% of their gross income

2. REVIEW ALL THE MORTGAGE STATEMENTS WITH THE HOMEOWNERS

3. PULL A PRELIMINARY TITLE REPORT AND CHECK FOR ALL LIENS

If a client determines the best option for them is a short sale, help them understand the process, discuss the scenarios, explain what may or may not happen with the buyer, with the appraisal, and with the lender/negotiator. The best chance of a successful short sale starts with an educated, understanding and cooperative client.

If they choose not to cooperate, or they just want to stay in their home, help them find comfort in that decision, and educate them on what to expect. You never know if they will change their mind and call you later.

If you or someone you know needs the help of a skilled short sale consultant, like me, feel good knowing that I’m here to help you. Simply give me a call or send me an email…

INSIGHT AND THOUGHT PROVIDED BY SCOTT CHAPLIN, BANK OF AMERICA

Filed Under: how can I get a loan modification, how do I get a loan modification, how do I get financial help, Short Sale Updates, whats happening with my loan modification, who can help me get financing Tagged With: , , , , , , , , , , ,

Have you heard about SB458?

July 25, 2011 By
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This is some major news…

In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder. Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale. This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units. Any purported waiver of this rule shall be void and against public policy.

Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale. A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.
Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

Now the real question is, how will the second lien holders negotiate towards a settlement? You should expect that they will increase their demands to close and make the negotiating process that much more challenging. Your thoughts?

Filed Under: Short Sale Updates, What's New? Tagged With: , , , , , , , ,

Proposed settlement would force banks to allow short sales for delinquent homeowners – LA Times

April 5, 2011 By

The proposed deal among banks and government officials is aimed at stabilizing the real estate market and helping underwater borrowers who are months behind on mortgage payments avoid foreclosure.

By Jim Puzzanghera and Alejandro Lazo, Los Angeles Times -March 30, 2011
Reporting from Washington and Los Angeles—

Major banks may be forced to let severely delinquent homeowners sell their houses for less than the loan amounts owed as part of a broad settlement of federal and state investigations into botched foreclosure paperwork, according to government officials involved in the negotiations.

The requirement to allow so-called short sales would be in addition to forcing mortgage servicers to reduce the amount some homeowners owe on their loans, said two officials, who spoke on the condition of anonymity because negotiations are ongoing.

The goal of short sales would be twofold: provide a quicker and more economical way for banks to dispose of distressed real estate and to help stabilize the real estate market by clearing out a backlog of defaulted mortgages that are poised for foreclosure.

They would be used in situations in which borrowers were so underwater that the more costly and time-consuming process of foreclosure would seem to be the only option.

Read the full article here

Filed Under: first time home buyers, Selling your Home, Short Sale Updates, What's New? Tagged With: , , , , , ,

11.4% of all U.S. homes are vacant – CNN Money

April 4, 2011 By
vacant_house.gi.top

By Les Christie, staff writerMarch 29, 2011: 2:51 PM ET
NEW YORK (CNNMoney) — There is a correction on this story.

High residential vacancies are killing many housing markets, as foreclosed homes sit on the market and depress sale prices and property values.

The national vacancy rate at 11.4% according to a release Tuesday from the Census Bureau.

“Vacant homes equal more downward pressure on home prices,” said Brad Hunter, chief economist for Metrostudy, a real estate information provider.

Maine had the highest proportion of empty housing stock, at 22.8%. Other states with gluts of empty houses included Vermont (20.5%), Florida (17.5%), Arizona (16.3%) and Alaska (15.9%).

The way the census calculates the vacancy rates, however, is problematic. It includes properties such as ski lodges, beach houses and pied-à-terres that many real estate statisticians would not.

10 fastest-growing U.S. cities
These are often summer homes or second homes, but census lumps them together with homes that have been sold but not occupied, empty homes for sale or rent, and homes used by migrant workers. Basically, anything other than a primary residence is considered vacant.

“You can only live in one home,” said William Chapin of the Census Bureau’s Housing Statistics Branch. “If you own five homes that you occasionally live in, four of them will be counted as vacant.”

But Paul Bishop, the vice president for research for the National Association of Realtors, countered that these properties aren’t vacant in the usual sense of the term. “A vacation home is hardly the same situation as a foreclosed home that has been taken back by the bank,” he said.

Read the full article here

Filed Under: first time home buyers, Selling your Home, Short Sale Updates, What's New? Tagged With: , , , , ,

3 Reasons the Term “Strategic Default” Is Misleading

April 4, 2011 By

In a recent study, the Chicago Booth/Kellogg School Financial Trust Index found that a full 36% of Americans would consider “strategic default”—another term for walking away from your mortgage—if they were underwater (owed more on their home than what it was worth).

Now that more than one in four American homeowners is “underwater,” I feel that it’s important for the community to know the truth about strategic default.

The truth is the foreclosure process carries with it credit issues, current and future employment challenges, issues with security clearance and possible debt collections.

That’s why it is vital to explain the 3 reasons why the term “strategic default” is misleading:

1. There’s nothing strategic about defaulting on purpose, especially when you have options like short sales, mortgage modifications, and refinance (just to name a few) that may keep you from foreclosure.
2. The waiting periods to apply for a new mortgage loan are at least five years less in a short sale vs. a foreclosure.
3. A foreclosure will show up on your credit report every time you apply for a home loan, car loan, new job, etc., and will affect your financial situation for many years to come.

If you are underwater and can no longer afford your mortgage payments, you need to create a genuine strategy to avoid foreclosure, helping to provide stability for you and our community.

If you have any questions about what steps you or someone you care about should take next, contact me today!

IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

Filed Under: Short Sale Updates, What's New?

Distressed Home Sales Rising – O.C. Register

March 31, 2011 By
ForSaleBankOwned-300x221

O.C. Register Reports:

Nearly one out of every two houses sold in Orange County last month was either a bank-owned home or a “short sale,” the California Association of Realtors reported this week.

“Distressed homes” accounted for a greater share of all existing single-family homes sold in O.C. last month compared to both January and to February 2010.

The state Realtor Group reported:
48% of all existing single-family homes sold in O.C. in February were distressed sales — either because they were homes previously seized by lenders through foreclosure or because they were short sales. (Short sales are homes selling for less than the amount owed on their mortgage.)

That compres to 43% of all sales in January and 42% in February 2010.

Statewide, distressed sales accounted for 56% of all existing single-family home sales. That’s up from 54% in January and 55% in February 2010.

Bank-owned homes accounted for 33% of the homes sold statewide, and short sales accounted for 23%.
For some real estate context …

Read the full article here

Filed Under: Selling your Home, Short Sale Updates, What's New? Tagged With: , , , , , , , ,

Mortgage Insurance will be killing off more and more short sales this year…

March 10, 2011 By

Have you heard? There are a large number of loans that have been either sold on the secondary market, or the lenders have some how insured themselves against future losses on their 2nd trust deeds with their own Mortgage Insurance.

You as a struggling homeowner might be thinking, I don’t have or pay mortgage insurance, and you are correct! This is lender paid Mortgage Insurance, and it will be the death of thousands of short sales this year!

Here is an example of what I’m referring too… Let’s say that you purchased a home in 2005 for $500,000 and you did an 80/20 loan ~ financing a total of 100% of the purchase price (an 80% first of $400,000 and a 20% second of $100,000). The benefit of structuring your mortgage in this manner was that you didn’t have to pay for PMI (Private Mortgage Insurance). PMI covers the lender or leverages their risk of loss on a higher loan to value if you as the borrower default. You as a borrower could typically save some money, come out with a lower monthly payment and by financing the entire purchase amount without having the M.I. you had a greater tax deduction.

Moving forward to 2011 – we are just now starting to see borrowers that are in the short sale negotiating phase being asked for very unrealistic contributions, in addition to being asked to sign 5~10 year promissory notes on these 2nd mortgages. In the past we have been able to work around the contributions, and in some cases negotiate the promissory note way down or even have it removed. Right now, that is not the case! PMI, TPI, and other Mortgage Insurance Companies are literally forcing the borrower and the 1st lender into foreclosure, and they are not happy about that.

Here is the behind the scenes challenge right now… The first lenders won’t allow the second lenders to get more than what they are paying them, or in certain cases won’t allow the buyer or borrower to pay then 2nd lender more money as the 1st lender is typically taking a larger loss – and they would then want the money. We are seeing so many sellers that simply don’t have the funds to bring in, can’t sign a promissory note, or in most cases just can’t do that because the first lender won’t allow that – the only alternative is for the seller to then go with a deed in lieu of foreclosure. The deed in lieu sounds a little better than a foreclosure right? Well most of time a deed in lieu of foreclosure is not an option because of marketing time, or because there is a 2nd mortgage on the property or other tax liens, IRS liens, etc.. and If there are, the 1st lender then has to accept financial responsibility for those liens should they accept a deed in lieu… so really the only thing left is the foreclosure.

So the million dollar question really is… How is the Mortgage Insurance Company helping the 2nd lenders secure more money or protect their losses? In most cases the are wiped out in the foreclosure making this a total loss to them, and then the insurance company would then have to write a bigger check to the investor. How is the M.I. company coming out ahead on this? Are they being subsidized? Is there money transferring hands behind the scenes that we are not privy too? Who is looking out for the innocent victim here which is the seller that is a true hardship, the borrower who has done everything right in order to make sure that they minimized damage to their credit, the property, values to the neighborhood, YOUR neighborhood?

This just isn’t right, and I would love to hear your thoughts and opinions on this… all you have to do is leave a comment below.

Something has to change and it has to change quickly!

Filed Under: Selling your Home, Short Sale Updates, What's New? Tagged With: , , , , ,

Only 1 in 4 Got Mortgage Relief

March 10, 2011 By
Sarah Larson had to prove to Bank of America that she wasn't dead when she tried to get the mortgage modified on her Minneapolis home.

Republicans now want to kill HAMP Program that made only a small dent
By ALAN ZIBEL And LOUISE RADNOFSKY

Sarah Larson had to prove to Bank of America that she wasn't dead when she tried to get the mortgage modified on her Minneapolis home.


Sarah Larson had to prove to Bank of America that she wasn’t dead when she tried to get the mortgage modified on her Minneapolis home.

Just one in four of the 2.7 million homeowners who sought to participate in the Obama administration’s signature mortgage assistance program have succeeded in getting their monthly payments reduced.

The rest failed to qualify for the program or were disqualified after they were initially accepted into the program, according to an analysis by the Wall Street Journal of data on applicants to the program newly released by the Treasury Department.

In all, about 680,000 homeowners who applied for the Home Affordable Modification Program, or HAMP, had received permanent modifications of their loans and were making timely payments or were still in the trial phase as of December.

Read the full article here

Filed Under: Financing, Loan Modifications, Selling your Home, Short Sale Updates, What's New?, who can help me get financing

Survey: Gloomy Views Persist on Housing, Economy – WSJ Online

March 8, 2011 By
Getty Images

FEBRUARY 28, 2011, 9:35 AM ETBy Nick Timiraos

Getty Images

The number of Americans who believe that buying a home is a safe investment continues to fall, according to a new survey on housing attitudes from Fannie Mae.

Just 64% of respondents said they believe a home is a safe investment, down from 70% one year ago and 83% in December 2003.

The survey found that more Americans say it’s a bad time to sell a house, and fewer Americans say it’s a good time to buy. Still, the share of respondents who believe home prices will stay flat or increase over the next year (78%) posted a slight increase from one year ago (73%).

“We’re looking for a little pickup in 2011 over 2010, but nothing that would say the housing market is rebounding,” says Doug Duncan, chief economist at Fannie Mae. If oil prices climb higher, “that could easily temper whatever bits of optimism exist,” he said.

Fannie’s national housing survey included other highlights:

The economy: The survey found that Americans’ gloomy views on the economy were essentially unchanged from one year ago, with almost two-thirds saying that the economy is on the wrong track.

While 19% of people said their income had increased significantly in the past year, some 34% said that expenses had increased significantly. “That to me is a signal of the difficulty that the economy has in growing robustly,” said Duncan.

Mortgages: Nearly three-quarters of respondents said they thought it would be harder to get a mortgage in the future, up from just over two-thirds one year ago.

Read the full article here

Filed Under: first time home buyers, Selling your Home, Short Sale Updates, What's New? Tagged With: , , , , , , , , ,
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