Tag Archives: short sale

It Pays to be Proactive in a Short Sale

Under new guidelines set down by Fannie Mae and Freddie Mac, underwater borrowers who are seeking to sell their homes for less than what they owe must now receive decisions from their lenders within 60 business days. But if they are not careful, floundering borrowers can cause delays beyond the two-month deadline.

Contact the appraisers at www.scappraisals.com for short sale values.

The new rules, which took effect June 15, apply only to loans owned or rolled into securities by Fannie and Freddie. But because the two mortgage giants are the main conduits between primary lenders and investors in mortgages, their precepts cut a wide swath.

More than 10 million homeowners are said to be underwater with their mortgages. Not all want to get out. Many are content with their current situations and have no intention of moving, at least for now. Others continue to hold on in hopes that values will start rising again.

Unfortunately, others need to go, and many of them would rather sell at a loss through a short sale — a loss their lenders would have to absorb — than have their homes taken away.

The new 60-day rule became necessary because lenders were taking an inordinate amount of time to make up their minds — eight months on average at one point, according to RealtyTrac, a foreclosure data firm. It took so long to receive an answer that many would-be buyers became tired of waiting for a decision and went elsewhere.

But borrowers need to realize that the rules cut both ways. While lenders are required to adhere to faster timelines, borrowers also must do their part. Otherwise, they can short-circuit their own short sale.

A decision can be delayed, for example, if all the paperwork the lender requires has not been supplied. If something as simple as a photocopy of a driver’s license is missing, a borrower might have to start the process over, says Steven Horne of Wingspan Portfolio Advisors, a firm that services nonperforming loans.

Consequently, Horne and others agree that the most important thing a borrower can do is engage the services of a real estate professional or attorney who has experience in short sales, preferably with their particular lender. Not to bash rookies, but now is not the time to allow someone to cut his or her teeth on a deal.

Read more at: http://www.chicagotribune.com/classified/realestate/foreclosure/sc-cons-0621-short-sales-20120622,0,2460153.story

Disclaimer: for information and entertainment purposes only

Cash Incentives for Short Sales Get Mixed Reviews

Greg Hull couldn’t believe what he was hearing.

It was last fall, and Hull, a Madison, Wis.-area real estate agent for the past six years, was in the midst of difficult negotiations on a deal.

His client, Linda Paul, owned a four-bedroom, 3,300-square-foot home that had lost more than half its assessed value due mostly to dry rot and other massive water damage between 2006, when she bought it, and 2008, when she stopped making payments.

Contact the appraisers at www.scappraisals.com to determine the value of your property before negotiating with the bank.  The banks order an appraisal before negotiating a short sale why should you not have the same ammunition?

Hull was trying to get Paul’s bank, JPMorgan Chase, to agree to a short sale, a compromise in which a home is sold for less than its outstanding mortgage. It can be good for both sides, because it generally does less damage to a seller’s credit while also typically costing the lender less in time and money to unload the property than a foreclosure would.

Hull was also hoping to get the bank to waive its right to make Paul pay the mortgage deficit, which came to more than $160,000 before late fees and interest.

But Paul had one additional request. She said Chase had offered in a letter to give her $20,000 for agreeing to the short sale.

“She said, ‘We’ll do the short sale, but make sure I still get my 20 grand,'” Hull recalled.

“I basically didn’t believe her,” he added. “I told her they were already looking at hundreds of thousands in losses on the forgiven deficit. Why would they give you $20,000 on top of it?”

But Paul was right, and she got her $20,000, in addition to walking away from the outstanding balance, when the home was sold to an investor on Oct. 21 for $116,000. Paul had purchased it for $334,000 in November 2006.

Read more: http://www.chicagotribune.com/classified/realestate/foreclosure/sc-cons-0315-short-sales-20120316,0,1542649.story

Disclaimer: for information and entertainment purposes only

What is a Strategic Mortgage Default?

A strategic default is the decision by a borrower to stop making payments (i.e., to default) on a debt despite having the financial ability to make the payments.

Order an appraisal from the appraisers at www.scappraisals.com to determine the value of your property before starting negotiations.  Remember the bank will hire their own “experts” to use in the negotiation; why not have your own ammo.

This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house’s price such that the debt owed is (considerably) greater than the value of the property — the property has negative equity or is underwater — and is expected to remain so for the foreseeable future, such as following the bursting of a real estate bubble.

A short sale negotiator makes a case for default from the UT Newspaper.

Jacalyn Blank, a Clairemont-based short sale negotiator, wrote this guest post for the U-T San Diego in response to last week’s story about an anti-strategic default website started by a local real estate agent. Blank, who works with strategic defaulters, makes the case for what’s now a more widely accepted practice. We featured Blank in a business Q&A last fall: Meet a San Diego short sale negotiator.

Myth: Strategic defaulters are bringing down home values and impeding a housing recovery.

Truth: Strategic defaulters are not selling their house for a discount. They are selling it for what it is worth in today’s market. A “normal” sale is still selling for less than the house was valued at 6 to 8 years ago, even though it is a “normal” sale. This isn’t because of short sales or even foreclosures. All distressed property sales are a symptom of the real problem: Homeowners owe too much on inflated mortgages they obtained in an unsustainable housing high. The attachment to an inflated value comes from the name “housing crisis,” when really what we have is a “mortgage crisis.”

Read more at: http://www.utsandiego.com/news/2012/mar/19/are-strategic-defaults-right-or-wrong/

Disclaimer: for information and entertainment purposes only