Posts Tagged ‘Short Sales’

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Short Sales Get Shorter: New Deadlines to go into Effect

March 16, 2012

As part of a settlement with state attorneys general, the five largest mortgage servicers are adopting new requirements for short sales, which is expected to speed-up what has been known as a lengthy process.

Here are some of the new requirements for servicers under the settlement:

·     1.   Servicers must provide borrowers with a decision within 30 days after receiving a short sale package request.

·      2.  Servicers will be required to notify a borrower, also within 30 days, if any necessary documents are missing to process the short sale request.

·      3. Servicers must notify a borrower immediately if a deficiency payment is needed to approve the short sale. They also must provide an estimated amount for the deficiency payment needed for the short sale.

·      4.  Servicers are also required to form an internal group to review all short sale requests.

·     5.    Banks will be considered in violation of the settlement requirements if they take longer than 30 days on more than 10 percent of the short sale requests.
Violations can carry fines of up to $1 million and $5 million for repeat offenses.

“If a real estate broker can get a checklist from the bank detailing what documentation is needed, everything can be provided up front, and the bank will be required to give a thumbs-up or a thumbs-down within 30 days,” short sale specialist Chris Hanson with the Hanson Law Firm told HousingWire. “That’s not a bad deal.”

Source: Realtor Magazine

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STOP massive sale of foreclosed homes.

December 16, 2011

There is a simple way to address our current housing crisis – the sale of distressed properties could be easily slowed or stopped with ONE SIMPLE STEP. Banks need to write down the loans on homes that are underwater and allow good borrowers to refinance at today’s lower interest rates.

The most distressing things for most homeowners is that their homes are so UNDERVALUED that they will NEVER see a time when their home will be worth what they owe on it. It’s a reality and it is discouraging. Banks can start to turn the economy and housing around by going to people who are not in distress and beginning the process of re-evaluating value and re-negotiating outstanding balances to make home ownership attractive. To ignore this is fact is going to result in increased defaults and more short sales and foreclosures. It’s going to happen!

Recently, Moody’s released the following statement on the sale of foreclosed homes: They found that on average, a foreclosed property will be valued about 18 percent lower than average home prices, and will be subject to an additional sales discount of about 15 percent.

The banking industry is creating the depreciation of home values when they are personally responsible for the sale of homes at 30% less than fair market rate resulting in the downturn in value on surrounding homes. Banks are making a bad situation worse. I am shocked that no one seems to address this issue in the media or in Congress.

Who wins? Investors. Who loses? Everyone else – especially the American public.

If this fact is true then why not reduce the principal balance on underwater loans by 30% thereby rewarding homeowners who choose to stay in their homes and pay their mortgages. Does anyone really think that people are going to pay their loans out of a sense of obligation and responsibility? Seriously? I predict a mass exodus as people figure out that they are better off renting and getting out from a debt they can never actually pay off and for which their home will never be worth.

Let’s get serious about solutions to real estate and the housing crisis. Do I think this is going to happen? Hell, no. We have a government that is ineffective and impotent and a banking industry getting rich on investments. The American public continues to struggle with no one reaching out a helping hand. Is there anyone out there who can make a stand for the people?

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Politics as usual – ugh

October 25, 2010

 

As real estate sales spiral to new lows – we have the election season in full swing. Everybody is right and everybody else is wrong. 

But I hope our newly elected officials wake up and realize that AS THE HOUSING MARKET GOES – SO GOES THE ECONOMY. It’s not just about job stimulus – it IS about fixing housing and it won’t happen overnight. 

Banks needs to reward GOOD borrowers with better rates in an upside down market. Banks need to AGREE to short sales where they will actually MAKE MORE MONEY than going through the lengthy foreclosure process. Someone needs to start thinking about solutions instead of highlighting the problems that seem unsolvable.  

May sanity reign and may we change the course of this country for the good. 

Read the following New York Times article:  http://www.nytimes.com/2010/10/25/business/25short.html?th&emc=th

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Are there bargains in today’s market? Not exactly…read on…

February 15, 2010

WEST PALM BEACH, Fla. – Feb. 12, 2010 – Think there are all kinds of crazy deals to be had in today’s real estate market?

That’s what 31-year-old Jason Bellak thought, too – a year ago. He’s been searching that long for something in the $150,000 price range in Palm Beach County. Short sale, condo, townhouse, foreclosure – he’s looked at them all, made offers on several, but is still living with his parents in Royal Palm Beach.

Despite a perception that three-bedroom, two-bath beauties with granite countertops and good schools can be yours for a song – or at least for 20 percent down – it’s not a market reality, say frustrated homebuyers and their Realtors.

Cash investors, sluggish banks and thorny financing are limiting the options for your average homebuyer, who, by the way, is sick of hearing, “It’s a buyers’ market.”

“I was like most people, thinking there were a lot of deals out there,” Bellak said. “But it quickly became apparent that it wasn’t going to be such an easy process.”

Competition is highest now in the $150,000 to $250,000 price range, said market analyst Jack McCabe of McCabe Research and Consulting in Deerfield Beach.

The median single-family home in Palm Beach County sold for $238,000 in January – 9 percent higher than in 2009, according to the Realtors Association of the Palm Beaches. Inventory in January was down to eight months, less than half of what it was in January 2009.

“Most people still think we’re in this terrible market, but the inventory tells a different story,” said Realtor Scott Smith, who has clients struggling to find homes in the Jupiter and Palm Beach Gardens area even though they’re willing to spend between $350,000 and $400,000.

Bellak can’t even recall the details of all the offers he’s made on homes in the past year. He bid on a three-bedroom townhouse in foreclosure but lost. He made an offer on a short sale condo – meeting the $141,000 asking price – waited three months, but then couldn’t get financing because the homeowners association had too many delinquent accounts.

In most cases, for a buyer to get a Federal Housing Administration-backed loan for a condominium, no more than 15 percent of the units can be more than 30 days past due on association fees.

Now Bellak has his heart set on a two-bedroom Jupiter townhouse.

“I think if this one doesn’t go through, I may hold off for now,” said Bellak, who has been working with Realtor Craig Fialkowski of Herman Group Real Estate in Palm Beach Gardens.

Realtors say part of the problem is that people hear the hype about the down market and expect to find a steal in a great neighborhood.

Last year, more than 500,000 Florida homes received some type of foreclosure notice, according to the Irvine, Calif.-based company RealtyTrac.

But while foreclosures are usually priced low, they’re not always good deals. They could be tagged with liens, have missing appliances or be in general disrepair.

“It’s not like everything just became half-price overnight with no repercussions,” said Realtor Shannon Brink of Re/Max Prestige Realty in downtown West Palm Beach. “Plus, many banks still sell homes off at auction or to capital investors, so not everything even hits the open market.”

Crystal Paul and her fiancé, Antonio Hester, both 25, have been working with Brink since December to find a home for about $150,000.

They’ve looked at a dozen or more properties and have made some offers. But they’ve lost out to investors with ready cash, which is more attractive to banks.

“You find a house you think you can live in, but then you lose it,” Paul said. “The cash investors have the upper hand and here we are just trying to get started.”

When a short sale off Military Trail popped up last week for $139,900, Paul and Hester made an offer that the homeowner accepted. But he owes more than $230,000 on the house, and in the end it’s up to the bank to OK the sale.

Brink said banks will sometimes set a low asking price on a short sale to attract buyers, but with no plans to actually settle for that price.

While short sales have traditionally taken months to settle, new federal guidelines that go into effect in April require banks to respond to short sale offers within 10 days.

More good news for buyers this year is the prediction of an increase in foreclosures that could further reduce prices.

G. Stacy Sirmans, a real estate professor at Florida State University, said the market hasn’t hit bottom and won’t for at least another year.

“It’s definitely a buyers’ market,” Sirmans said.

Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

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The “EYE” of the foreclosure storm

September 26, 2009

As a native Floridian, I know a lot about hurricanes and the one thing I know – Expect the unexpected.

Hurricanes are somewhat predictable. As the hurricane blows through you have destruction followed by a peaceful, tranquil lull where the sun may even reappear and you will walk outside your secured dwellings to survey the damage. It’s called the “eye” of the storm. For a short while, during which the eye passes over land – nothing happens and it is as if there is no storm. That’s where we are right now in FORECLOSURES. We are in the eye of the storm.

The federal government, banks and agents are all predicting we have hit bottom and personally, I think we have. But NO ONE is talking about the fact that the eye of the storm is upon us and a second wave of SERIOUS FORECLOSURES are about to hit the market. We are talking about people who once made a good living, bought an expensive home and are now underwater.

As a real estate agent, I see the forecast CLEARLY yet no one in Congress seems to understand the urgency of working to help homeowners – massive FORECLOSURES are forecasted. Congress needs to help homeowners negotiate the short sale process  or there will be a lot of homes foreclosed. In addition, there are so many people out of work, across all economic categories, that without a job – homes are lost. It’s just that simple.

Health care reform is important – but it is NOT as important as fixing our economy. With no jobs, massive foreclosures and people running out of savings – we are in crisis mode but because we are sitting in the eye of the storm – we don’t see what is coming on the horizon and it’s ugly.

WAKE UP WASHINGTON and start working on the economy and keeping people in their homes. The eye is upon us and the storm approaches.

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Short Sale Success

November 16, 2008

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I am amazed at this newfound craze called the “short sale” and the resulting hysteria in people who think that it is the quick fix for their financial problems. In short, it is not a quick fix and in many cases, it’s not a fix at all.

A short sale occurs when a homeowner sells their home for less than the outstanding balance on their loan with bank approval. It’s a painful process and I have a few bits of advice that might help you.

After a recent discussion with a short sale specialist…I discovered some important facts. First, it helps to not have ANY MONEY. You heard me correctly. Most banks are willing to work on short sales when the owners are out of job and have no ability to repay the loan. If you are employed, you don’t stand a strong chance of getting short sale approved because the bank will try to re-work the loan since you have income and the potential to repay the debt.

Short sales are more difficult for owners with multiple mortgages. While it is not impossible to get a short sale accomplished with many mortgages, the fact remains that it is MUCH EASIER to get short sale approved when you have only ONE LOAN. Multiple loans mean multiple parties. Most second mortgage holders are looking for at least 20% toward their loan…contrary to popular belief; they are not walking away with nothing unless you get foreclosed upon.

Adjustable rate mortgages are much more likely to be short sale approved. EVERYONE hates adjustable rate mortgages. They are single-handedly the worst product on the market and as they adjust, the market has not adjusted with them. With this type of loan, most banks are willing to work with you. If you are in a fixed rate loan with a low interest rate you will probably not be approved for a short sale.

Finally, short sales will most certainly affect your credit. In order to even qualify for a short sale transaction, you will need to have missed a minimum of three payments. No matter what anyone tells you, it will go on your credit as a loan settled for less than owed and your late payments will show as “LATE”. No way to get around this one.

Short sales are here for a little while longer. They will eventually run their course as inventory moves back into the market. For now, seek the advice of a real estate specialist, an accountant and an attorney. Be prepared for one of the toughest decisions you will ever face with knowledgeable advisors.