Short Sale Angels

Do You Need FREE PRINTABLE Short Sale Information?

2012-02-08T15:07:00.000-08:00

We now offer a small library of free, printable information documents for you to download and print.

These documents are very helpful in understanding the foreclosure and short sale processes, and also offer a comparison chart of the two choices and how they could impact your life and your finances.

Click HERE to go to our documents.

Short Cartoon About Our Services

2011-12-05T13:40:00.000-08:00

Are You Being Encouraged to Consider A "Mortgage Audit"? Watch This Video.

2011-11-10T20:47:00.000-08:00

Freddie Mac Could Take TEN Years to Unload Its REO Inventory

2011-11-09T09:26:00.000-08:00

(Reposted from Housing Wire)

Thursday, November 3rd, 2011, 12:23 pm

Freddie Mac vendors sold fewer REO properties in the third quarter than they did earlier in the year as nonperforming loans continue to climb.

More than 25,300 repossessed homes held by Freddie Mac sold in the third quarter, down 13.5% from the nearly 30,000 in the previous three months. It was also a 17% decline from the record-setting 31,600 sold in the first quarter.

At the same time Freddie unloaded the 25,300 REO, it repossessed another 24,300 homes back into the inventory. At the end of the quarter, Freddie held 60,000 REO on its books, which has been trimmed — as new foreclosures are completed — from 75,000 one year ago.

If the current trend holds, and the GSE reduces a net 1,000 REO from its inventory every quarter, it would take 60 quarters to unload its entire inventory — roughly 15 years.

(Read the full article here)

2011-10-20T09:28:00.000-07:00

Bank of America: The Great Off-Loading Begins

2011-08-12T17:56:00.001-07:00

According to a July 28 article by Jon Prior at housingwire.com, Bank of America will "likely" begin moving certain high-risk loans to subservicers, in accordance with its pending settlement with investors.

This move will involve "eight to ten" specialty servicers that have expertise in delinquent or problem loans.

This is an attempt to remedy what many investors saw as B of A's sluggish efforts to resolve lingering delinquencies. According to some complaints, the bank delayed foreclosure even in cases where it was inevitable--meanwhile continuing to collect servicing fees. And borrowers that sought short sales or modifications encountered similar delays.

The implication of this transfer is that these loans will be pushed toward resolution more quickly. That's good news for the industry, which has been paralyzed by servicer inaction.

It's especially good news for homeowners needing to resolve a distressed Bank of America mortgage. Finally, Bank of America is acknowledging that a short sale is the best option for everyone when a borrower can't sustain even modified payments.

The major servicers also know this, but have been reluctant to release large numbers of loans to the specialty servicers that could make it happen.

At last, that's changing.

Once the subservicers of these loans receive the designated files, the short sale for homeowners with these loans will become a relatively painless, and much simpler thing to complete.

Short Sales Continuing Through 2011 - More Success

2011-02-11T15:07:00.000-08:00

While the REO / Foreclosure wave in northern California--well, really, California in general--short sales are still moving along well.

As well as a short sale can move, of course, as they still take several months to close. But, even the talking heads and the economic advisors around the country are no longer "nay-sayers" when it comes to taking the plunge and buying a short sale.

What does this mean to you?

If you are a buyer, you no longer need to be afraid of a short sale, if you can be patient. If you are the lucky one who makes the offer that is submitted to the bank, you most likely will get the home. Just be sure you make an offer that is reasonably close to the appropriate value of the home, as the bank will do an appraisal.

If you are a seller, and you need to let your home go, you can still realize some benefit by short-selling your home, as opposed to handing the keys back to the bank (or going through a full-blown foreclosure). Some benefits may include the opportunity to stay in your home longer in order to save for your move; potentially less damage to your long-term credit rating (if you hope to buy a home again in the future); and knowing that you worked with the buyer of your home cooperatively to get them in there.

Many people prefer the idea of knowing who ends up in their home, as opposed to the idea of having the bank hire what one of my clients describes as "cannibals" to go in, forcibly change the locks and "clean" the home as they call it. Often, what really happens is that the cannibals actually strip the house of valuable items such as appliances, and then report to the bank that they found the home devoid of the items.

Of course, it all comes down to taking a deep breath, mustering some patience, and letting a really good Realtor come in and work her magic.

Wondering About Short Sales?

2010-07-16T11:10:00.000-07:00

Here are some words of wisdom:

In today's economic climate, many families are finding themselves in dire straights. The home that was once a blessing has now become a financial burden.

In an attempt to avoid foreclosure, which can reap havoc on one's credit for years to come, homeowners are searching out details on short sales.

In simple terms, a foreclosure is when, after defaulting on payments (typically after 3 months), an estate becomes the absolute property of the lender. And what's more, in some cases you, the homeowner, may also be responsible for "deficiency judgments." These mean if the sale of the foreclosed property doesn't satisfy the amount of the loan, you may be obligated to pay the difference.

On the other hand, a short sale, according to MSN Money, is "the sale of a house for less than what the owner still owes on the mortgage. If the lender agrees to a short sale, the rest of the homeowner's debt typically is forgiven. Lenders sometimes agree to the procedure in order to take a small loss and avoid the lengthy and costly foreclosure process."

There are more reasons to avoid foreclosure than just your credit rating. A recent report from NeighborWorks America ® notes that other factors come into play in neighborhoods affected by foreclosures. These issues include such things as lowered property values, increased incidence of financial scams, youth stress and instability, and increased crime rates. The report notes, "Abandoned homes from the foreclosure crisis have a direct effect on the rise in crime in communities." And according to another study by Dan Immergluck of the Georgia Institute of Technology in Atlanta and Geoff Smith of the Woodstock Institute in Chicago, “When the foreclosure rate increases one percentage point, neighborhood violent crime rises 2.33 percent.”

There are some prudent steps to take when considering a short sale.

First, learn about loan modifications. Honesty is the best policy when it comes to lenders. Pick up the phone and call your lender, explain your situation, and see what your options may be that could allow you to stay in your home. The processes of foreclosure and short sale can be costly to lenders, and they may be willing to work out a payment schedule that will get you through this trying time.

Second, consult with the experts. According to the National Association of Realtors, by using a qualified team of short sale professionals, along with a real estate attorney, you can ensure that you aren't taken advantage of during the short sale process. This team can help:

- Provide you with a comparative market analysis (CMA) or broker price opinion (BPO).

- Help you set an appropriate listing price for your home, market the home, and get it sold.

- Put special language in the MLS that indicates your home is a short sale and that lender approval is needed (all MLSs permit, and some now require, that the short-sale status be disclosed to potential buyers).

- Ease the process of working with your lender or lenders.

- Negotiate the contract with the buyers.

Next, prepare yourself -- and your potential buyers -- for a long selling process. Waiting for your lender’s approval of your short-sale package can take several weeks to months. (The upside of this waiting time is that it gives you some extra time in your home).

Finally, a short sale is not the end all solution to your problems. Though there have been recent allowances made by the government under the Mortgage Forgiveness Debt Relief Act and the Debt Cancellation Act, debt forgiven by your lender may be considered income that taxes will have to paid upon.

If you are having trouble making your mortgage payments, be sure to speak to a licensed real estate professional about your options regarding debt programs and short sales.

(View Printable Version -- click here)

Underwater? Alternatives to Walking Away

2010-07-16T11:02:00.000-07:00

Home owners who are "underwater" with their home loan and seek to come up for air by walking away from the debt, could still be gasping for relief years down the road.

There are occasions when walking away from your home -- and down the road to foreclosure -- is your only option, but seldom is it the best alternative.

Mortgages are "underwater" or "upside down" when the property experiences negative equity -- the mortgage is larger than the current value of the property. Negative equity is caused by a decline property value, an increase in mortgage debt or, most likely, both.

The consensus among experts is to consider the alternatives before abandoning your home, talk with your lender and seek counseling from a U.S. Department of Housing and Urban Affairs (HUD) certified counselor.

Don Bisenius, the head of Freddie Mac's home-loan guarantee business, recently asked borrowers to stick it out through the crisis.

Bisenius said foreclosures lead to degraded neighborhoods, more expensive mortgages and reduced home values.

"In the end, borrowers considering a strategic default should recognize the damaging impact their actions can have on others," he wrote.

The Obama Administration's frequently updated and strengthened multi-tiered MakingHomeAffordable.com program and other government efforts offer a good start with a host of options.

• Refinancing, turning in your existing mortgage for a new one, is perhaps the toughest option to accomplish. A refinance requires meeting stiff underwriting requirements -- an excellent credit report, a high credit score of 720 or more, documented career level income and little debt, for starters.

Federal programs, including the Federal Housing Administration's refinance effort, can be a good bet for those who haven't yet faced hardship and can qualify for a new loan.

• A mortgage modification reworks the terms of existing loans to get the payment down to a more affordable level. To add greater affordability, lenders lower the interest rate, lengthen the term of the loan or reduce the principal -- or do some combination of all three. Modifications can be used by qualified home owners who aren't yet struggling as well as those who are in a pinch.

• Short sales

Modifications and short sales can impact your credit, but not necessarily with the force of a foreclosure.

Bottom line, exploring all the options is a better first step than walking away.

I understand feeling financial pressure is difficult and embarrassing, but there is a point at which everyone has time to explore the options. In just about every case, that's much better than doing nothing at all. I strongly feel there is no reason for anyone to get a foreclosure" said Zdenka Mahan, a real estate agent with Intero Real Estate in Los Gatos.

(View Printable Version -- click here)

High-End Homeowners Defaulting At Increasing Rate

2010-07-16T10:50:00.000-07:00

(New York Times)

LOS ALTOS, Calif. -- No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars. No, even the wealthy are not immune to the struggles brought by this economy.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

(Read More)

Consumer Credit Scores Sink to New Lows

2010-07-16T10:35:00.000-07:00

(Los Angeles Times)

If you've been watching your credit score plunge, you are NOT alone.

About 25.5% of Americans had credit scores below 600 in April, according to FICO Inc. Historically, only about 15% of consumers have had scores below that level.

Battered by unemployment and tighter lending standards, the credit scores of millions of Americans are sinking to new lows.

About 43.4 million people had credit scores below 600 in April, according to FICO Inc. Historically, only about 15% of consumers — or 25.5 million — have had scores below that level, FICO said.

Consumers with low credit scores will have increased difficulty obtaining credit cards and other loans, said Christian deRitis, director of credit analytics at Moody's Analytics.

A high national unemployment rate — 9.5% in June — has helped drive down scores, DeRitis said. "Delinquencies are on the rise. People out of work are not making payments on debts, and that negatively impacts their scores," he said.

Many people also have high credit balances when compared with the total amount of credit available to them, DeRitis said. This trend, when combined with an inability to acquire more credit, has served as a "double-edged sword" for the economy, he said.

Those in the middle of the spectrum have also declined. Moderate credit scores, between 650 and 699, fell to 11.9% from a historical average of 15%.

The distribution of credit scores tends to shift during recessions, said Craig Watts, spokesman for FICO Inc. "Our experience has been that when a two-income family turns into a one-income family, people have to prioritize which bills to pay, and some bills aren't paid," Watts said.

As consumers have had difficulty getting more credit, the pace of the economic recovery has slowed.

"It's a bit of a vicious cycle," DeRitis said. "The threshold of good and bad credit has been raised as lenders rush to safety. That depresses spending, which negatively impacts the economy overall."

On a bright note, the percentage of consumers with high scores of 800 or above has risen. Those with pristine records are at 17.9%, well above the historical average of 13%, although slightly down from the 18.7% in April 2008.

The economic downturn has made people more aware of how important it is to lower personal debt, DeRitis said. Those who are still employed and receiving regular paychecks have decreased spending and paid down loans, he said.

This trend will ultimately have long-term benefits for the economy, but short-term recovery will be sluggish.

"In the long run, it's best to have consumers who are managing debts in a sustainable way," DeRitis said, "unlike the boom-and-bust cycle we've seen in the past."

But as unemployment nationwide continues to hover near 10% and unemployment insurance benefits run out for those out of work, the immediate outlook is gloomy.

"Until the labor market turns around, people will remain unable to pay bills," DeRitis said. "Lowered consumption will only add extra friction to the economy."

The calculation for FICO scores considers two factors: how consistently bills are paid and how much available credit is in use. Slow or delinquent payments and high amounts of debt result in lowered scores.

Foreclosures: Unforseen Additional Risks of "Walking Away"

2010-06-10T14:20:00.000-07:00

RISMEDIA, June 8, 2010—(MCT)—Before Larry Thomas unloaded his Pompano Beach, Fla., home last fall for a fraction of what he paid, he cut a deal that will keep him from worrying about a huge debt hanging over his head.

Thomas insisted that his lender, American Home Mortgage Servicing, agree not to come after him for the estimated $174,000 he still owed on his two mortgages. “I feel incredible relief,” the restaurant manager said recently.

Others may not be as fortunate. Lenders will file a tidal wave of lawsuits against homeowners in the next few years as a way to recoup losses when home sales or foreclosure auctions don’t result in enough money to pay the mortgages in full, real estate and legal analysts say. “It will be a dramatic problem because the borrowers will not know it’s coming,” said Frank Alexander, a law professor at Emory University in Atlanta.

Laws vary from state to state. In Florida, banks have five years from the date of the sale to file for so-called deficiency judgments and up to 20 years to collect. Lenders can garnish wages or make claims on borrowers’ assets.

Before the housing meltdown, few lenders filed these lawsuits. Foreclosures and short sales—selling for less than the mortgage amount—were relatively rare at the time, and many of the homeowners didn’t have sufficient assets to make it worth the banks’ time and expense.

But following the heady days of the housing boom that spawned millionaire investors seemingly overnight, it’s not uncommon for borrowers to default on mortgages while still holding lucrative investments.

As the next wave of the housing crisis plays out, those most in danger of getting slapped with lawsuits include angry homeowners who ransack properties they’re losing in foreclosure and borrowers who walk away from “underwater” mortgages. In both cases, analysts say, banks will want to discourage other people from such behavior.

More than four in 10 homeowners said they would consider abandoning properties that are underwater, or worth less than the mortgages, according to a national online survey released recently by real estate firms Trulia and RealtyTrac.

Mortgage companies typically won’t sue homeowners who negotiate in good faith or those who default on their loans because of job losses or other unforeseen circumstances, said Anthony Manno, an executive with Steelbridge Real Estate Services. The Miami-based company works with lenders on the resale of foreclosed homes. Still, borrowers shouldn’t rely on a lender’s verbal commitment, Manno said. “Get something in writing.”

Critics insist that spite will play a role in some of these lawsuits. Lenders deny it.

“We certainly would not do that,” said Russell Greene, president of Grand Bank & Trust of Florida in West Palm Beach. “It’s a business decision—not an emotional decision. It’s very time-consuming to take someone to court.”

Even if lenders don’t pursue the judgments, they could sell mortgage debt to collection agencies at deep discounts. And it will be those debt collectors that will hound borrowers, said Shari Olefson, a Fort Lauderdale real estate lawyer.

“They paid money to be able to hassle you,” she said.

Thomas, the former Pompano Beach homeowner, said he didn’t have money for a down payment but was approved for 100% financing on two loans in spring 2006. He bought a three-bedroom home for $245,000. Thomas said he soon became responsible for the entire mortgage after his roommate lost his job. That became even more difficult after Thomas took a pay cut.

So he attempted a short sale, eventually finding plenty of prospective buyers interested in a property that had plummeted nearly 70% in value. He and American Home Mortgage accepted one offer for $80,000. After closing costs, the lender netted about $71,000, said his Fort Lauderdale lawyer, Joe Kohn. But before the sale closed, Kohn had American Home Mortgage waive its right to collect on the remaining mortgage debt.

Christine Sullivan, a spokeswoman for the lender, wrote in an e-mail that she can’t discuss Thomas’ case because of privacy issues. But when homeowners seeking short sales demonstrate legitimate hardship, “we provide a full release of liability, and we do not pursue deficiency judgments.”

Some banks say they won’t file a lawsuit, though they aren’t willing to put that in writing, Kohn said. “I have no choice but to accept that,” he said. “Even when you play by the rules, banks don’t always do what we’d like.”

Under new government guidelines for short sales that took effect this spring, lenders aren’t supposed to hold homeowners responsible for any remaining mortgage debt. But not all short sales fall under the guidelines, while some lenders choose not to implement them, Kohn said.

A forgiven mortgage balance through 2012 is not considered taxable income on a primary residence as long as the debt was used to buy or improve the house. But borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount.

Homeowners who hand their properties back to the bank through so-called deeds in lieu of foreclosure also should make sure they won’t be on the hook for any mortgage debt.

With friends facing deficiency judgments, Thomas said he’s grateful he sought legal advice on how to avoid a lawsuit. He now rents a home west of Boca Raton, but he just found out the owner is in foreclosure. “I’ve escaped my own problem, only to inherit someone else’s,” Thomas said. “But this is nothing. It’s just a matter of picking up the pieces and moving on to the next rental.”

(c) 2010, Sun Sentinel.

Distributed by McClatchy-Tribune Information Services.

Help For Unemployed Homeowners

2010-05-13T10:52:00.000-07:00

Help for Unemployed Homeowners

By July 1, all mortgage servicers participating in the Making Home Affordable Program will offer extra help for homeowners struggling to make their monthly mortgage payments because of unemployment. The Unemployment Program will offer homeowners a forbearance period to temporarily reduce or suspend their monthly mortgage payments while they seek re-employment.

The minimum forbearance period is three months, although a mortgage servicer may extend it depending on the investor and regulator guidelines. If a homeowner becomes re-employed in that time, the forbearance period will end and the homeowner will be evaluated for a mortgage modification under the Making Home Affordable Program. Unemployment benefits will no longer qualify as income for the mortgage modification program.

During the forbearance period, a homeowner’s monthly mortgage payment must be reduced to no more than 31 percent (or less) of their gross monthly income. The servicer can decide to temporarily suspend payments in full. The payment amount and due dates will be decided by the servicer depending on investor and regulator guidelines.

To qualify, a homeowner must meet the following eligibility criteria:

The mortgage must be a first lien mortgage, originated on or before January 1, 2009, and the unpaid principal balance must be equal to or less than $729,750 for a one-unit property.
The property must be the homeowner’s principal residence.
The mortgage has not been previously modified through a Home Affordable Modification.
The homeowner was ineligible for a Home Affordable Modification.
The homeowner is either behind on payments (but not by more than three consecutive months) or it is reasonably forseeable that the homeowner will fall behind.
The total monthly mortgage payment is greater than 31 percent of the homeowner’s gross monthly income. If the payment is less, it is up to the servicer’s discretion if they will offer the program to the homeowner.
The homeowner will be unemployed at the start of the forbearance period, and is able to document this because they will be receiving unemployment benefits in the month the forbearance period begins (even if the benefits expire before the forbearance period ends).

A mortgage servicer may require that, based on investor and regulator guidelines, homeowners have received at least three months of unemployment benefits before they begin a forbearance period.

There is no cost to apply to the Unemployment Program, although late charges may accrue while the homeowner is being evaluated for the program or in the program. A mortgage servicer may not collect late charges from the homeowner while they are still in the forbearance period.

Servicers may not initiate foreclosure proceedings or conduct a foreclosure sale while a homeowner is being evaluated for the Unemployment Program or in the forbearance period.
To determine if you qualify for the Unemployment Program, contact your mortgage servicer. You should learn your eligibility within ten days of submitting complete documentation to your servicer.
If you have any questions after speaking with your servicer, or need assistance applying to the program, call 1-888-995-HOPE (4673) to speak with a HUD-approved housing counselor for free.
To read the guidelines for the Unemployment Program for all mortgages not held by Fannie Mae or Freddie Mac, click here.

Realty Times: What Is A Short Sale

2010-05-07T15:58:00.000-07:00

Read UNBIASED information on short sales. Visit the Realty Times article, found here:

Realty Times Article: What Is A Short Sale?

For Sale: 4BR/2+1BA Single Family House in Meadow Vista / Weimar Area, CA, $269,000

2010-03-25T10:59:00.000-07:00

For Sale: 4BR/2+1BA Single Family House in Meadow Vista / Weimar Area, CA, $269,000

More on the "Troubled Waters" -- Some Small Movement

2010-03-12T12:30:00.000-08:00

Owners of bad loans are increasingly making deals with borrowers to avoid a foreclosure, which tends to reduce returns for investors and place a black mark on the homeowner's credit.

Lawmakers and regulators are becoming more accepting of these solutions even though they mean the borrower loses the home. The trend comes after more than two years of loan modification programs and foreclosure moratoriums that have produced mixed results, with many homeowners ineligible or defaulting again.

Where a modification isn't feasible, the U.S. Treasury in April will begin paying borrowers who agree to a deed-in-lieu of foreclosure or short sale, where a home is sold for less than outstanding debt. Unlike most modifications, those actions erase excess debt and reset home values, solving the problem of underwater loans that are a top cause of defaults.

U.S. modification efforts to date have been "tragic" in delaying housing and economic recovery, Daurio said. "All you are doing is delaying depreciation of the houses," Daurio said. "You are not preventing it by keeping people in a house that they can't afford."

More than 11 million properties with mortgages are "underwater," according to First American CoreLogic. Efforts to expand use of principal forgiveness haven't caught on.

Sacramento CA Short Sales

2010-03-11T16:14:00.000-08:00

We have worked with many, many homeowners and prospective buyers throughout the Sacramento CA real estate market, as well as in the foothills. One of the needs we recognize in sellers in the "upside down" position on their home is the need to speak with somebody in a safe, low-pressure, and informative environment.

We know that you would like to gather as much information as possible before you make a very tough decision. For this reason, we are prepared to meet you either at your home, or in the privacy of our quiet and safe offices, or even to conference with you over the phone, to help you better understand your options.

We have a variety of experts who we can bring in at no cost to consult with you about:

~ how to protect your credit from future damage; when you can expect to be able to buy a home again in the future;

~ where to find rentals that accomodate your needs;

~ how long you can stay in your home as we proceed through the short sale process;

~ how you can repair your credit;

and many other questions.

Tell us how you feel we can best serve you, and we will do the rest.

You can call us immediately by clicking on any of the "Call Me" balloons on this page, or e-mail us at: ShortSaleAngels@gmail.com

If You MUST "Short Sell" -- Be Sure to Choose the RIGHT Realtor!

2010-03-11T16:05:00.000-08:00

More and more, sellers are finding they must choose to "short" their homes when selling. A short sale is one in which the bank or banks that hold the mortgage(s) agree to allow the seller to sell for less than the total owed.

The federal government is finally laying down some ground rules that banks are being required to follow. This was not the case before this year. Before now, banks were often refusing to even discuss a short sale with an owner; forcing them to bankrupt or become foreclosed upon.
With the new rules comes real hope for homeowners who are "under water" and at last, a chance to sell with less damage to their credit and financial picture.

Sadly, while the government and the banks are getting on board, many real estate agents who previously turned their noses up at short sales are jumping on the bandwagon as they did when the foreclosure market bore down like a giant wave. Many are claiming to be "experts" at short sales, and claim a "close rate" much higher than is truthful. Agents who are new to this type of sale are far less likely to be able to actually negotiate the sale of a seller's home, and are actually doing a dis-service in trying to represent sellers with their minimal skills. Some of the leading REO listing agents are guilty of this. They are tapping the market presence they had as REO listers, and trying to convince consumers that they are now experts in short sales--a competely different type of transaction.

Don't get stuck in a listing with this kind of agent! They are not likely to have the experience and clear understanding as an agent or a team who've been on the forefront of these sales since the market started in 2006 and 2007. Even those agents whom you've seen with huge volumes of REO listings, some agents who operate a large team, are only just now trying to jump over from selling REOs to selling your house as a short sale. They are simply not prepared to take good care of you. And, as anybody who tried to buy an REO in the past year can tell you, the REO listing agents are not concerned with customer service, or taking care of you.

If you find you must consider a short sale, we suggest that you ask for firm proof that the agents you consider hiring have been working with short sales for at least three years.
Short Sale Angels & The Gold Rush Group are a reputable team who have been negotiating short sales extensively for over three years. We have been increasing our close rate each year. Not only do we represent sellers in short sales on a routine basis, we also offer coaching to other real estate agents who are trying to work short sales.

We hope you never need a short sale. If you do, we are here to help and to strategize with you about how to protect your credit throughout the process.

Home Prices May Again Drop, According to CNN

2009-10-25T11:26:00.000-07:00

Home prices are predicted to again drop in the majority of the 381 markets surveyed, according to CNN.

Median home prices are predicted to plummet 11.3% by June 30, 2010. The decline is expected to slow and stabilize in 2011, and potentially show slightly over 3% upturn in some markets.

To read more, check the CNN site by clicking here.

Ready to speak to somebody who'll listen?

2009-10-24T14:05:00.000-07:00

Simply click the "Call Me" balloon below, and follow the instructions. Our phone line will call you automatically, and connect you with us. Toll Free.

Sell Short, Get $1,500 in Closing Costs

2009-10-24T13:25:00.000-07:00

The U.S. Treasury is poised to announce a finalized plan to expand mortgage relief efforts to include short sales.

A short sale occurs when the bank allows the sale of a home for less than the existing mortgage balance.

It's a strategy to avoid foreclosure, but banks have been more likely to let a home go into foreclosure, rather than short sell it, even if it means holding the property during moratoriums set by some jurisdictions.

That's because short sale bids often come in well below the last appraisal, real estate agents don't want the extra work involved and buyers fear a four-to-five month transaction period that could end in a no-deal scenario.

To help move more distressed properties through the clogged pipeline, the Treasury, under the Making Home Affordable's Home Affordable Modification Program (HAMP) is expected to announce a $1,500 closing cost incentive for those who agree to short sales or deed-in-lieu deals (the deed is transferred to the lender, avoiding the more costly foreclosure proceeding).

The Treasury will also pay the lender $1,000 for accepting a short sale or deed-in-lieu deal.

Earlier this year when the plan was first announced, there was also a provision to pay second lien holders up to $1,000 to relinquish their claim in such transactions.

Thus far, Refinancing Fannie Mae or Freddie Mac mortgages under the Home Affordable Refinance Program (HARP) and HAMP mortgage modifications have been the "go-to" foreclosure options among federal mortgage relief programs.

Some 260,000 homeowners have refinanced under the HARP program since January, according to the Federal Housing Finance Agency.

FHFA also said during the second quarter this year there were 11,700 short sales and 202,200 trial loan modifications under government programs.

(re-print from syndicated RE Times, through subscription)

How to Stay on Top of Mortgage Payments During a Short-Term Financial Crisis

2009-10-24T12:44:00.001-07:00

With a job loss, divorce, illness, or death or illness of a spouse, you may have a difficult time making your mortgage payment. But don't despair - there are steps you can take to stay on top of your bills and avoid losing your home during this transition period.

One of the most important things you can do is take immediate action, according to the U.S. Department of Housing and Urban Development. First, examine how much money is coming in and how much you owe for your various bills. Eliminate unnecessary spending.

Then, take the following steps:

Contact your lender as soon as possible. Don't let embarrassment stop you from notifying your lender about your financial situation. HUD says most lenders want to help borrowers keep their homes. Foreclosure is expensive for all parties involved. Lenders have workout options to help you keep your home. But lenders are most accommodating when you are just one or two payments behind. The farther behind you get, the fewer options exist. Most lenders will help you explore your options.

Don't ignore mail from your lender. If you haven't contacted your lender and you start receiving letters when you're behind in making your payments, you need to respond when they contact you. If they don't hear from you, they will take legal action.

Talk to a housing counselor. If you don't want to contact your lender right away, call a HUD-approved housing counselor. He or she will help you assess your financial situation, review your options, and - most importantly - help you negotiate with your lender. Counselors are familiar with the work-out arrangements for various lenders.

Prioritize your debts. Under new budget constraints, you'll need to focus on food, utilities, and shelter. If you don't pay your debts, chances are your credit will be negatively impacted. Any money you have after paying for food and utilities should go toward your mortgage payment. In addition to contacting a housing counselor, you may want to contact a non-profit consumer credit counseling agency. A credit counselor can often reduce your monthly bills by negotiating lowered payments or long-term payment plans with your creditors. Most of these agencies provide their services free of charge. Be leery of an agency that requires a large fee or donation.

Keep your credit as clean as possible. Resist the urge to pay with plastic - you don't want to fall behind on additional debts and ultimately mar your credit report. This is especially important if you're trying to find a new job. Many employers check candidates' credit reports. It will also affect you if and when you buy or rent again.

Explore loan workout solutions. If at all possible, stay on top of your mortgage payments. If you are unable to do so, contact your lender to help you find a program.
Once you have contacted your lender and if it appears your financial situation is only temporary, you may be offered one of the following options:

Reinstatement. This means your lender may accept the total amount owned on your mortgage by a specified date.

Forbearance. This is often used in tandem with reinstatement. Your lender may allow you to arrange for a reduction or suspension of payments for a specified period if there is another option in the works in which your loan will be paid off. This is a good option if you know you will have a chunk of money coming to you - perhaps a hiring bonus if you will be starting a new job, investment distribution or sale, or insurance settlement or reimbursement.

Repayment plan. You may be able to renegotiate your payment plan, paying your regular payment plus an amount to bring you up to date on your past due payments.
Just remember, the worst thing you can do is ignore the situation and hope it will go away. The only way it will get better until you get back on your feet financially is through the services of a housing counselor, a lender workout program, or credit counseling - if not all three.

Re-posted from Realty Times syndicated article, with subscription

Short Sale Angels Supports HONEST and Ethical Homeowner Assistance

2009-09-29T14:02:00.000-07:00

Consultants in the loan modification business are not getting very good press. As consultants, (a hat we on the "Short Sale Angels" team sometimes wear), we do not charge a fee for our expertise, and we will support you in exploring ALL OPTIONS before you make any decisions.

When we work for you, we help you by asking many questions, and by putting you in touch with other experts who, like us, are offering their knowledge for free. No charge. Are we Realtors? Yes, we are expert Realtors with a team of other experts who can advise you in their fields.

At some point, you have become concerned enough to begin lookng for answers to many of your questions, and that lead you here, to us. It's our intention to serve you to the best of our abilities and in the manner which will be of the most benefit to you. This may mean you chosse to ask us to sell your home--whether as a short sale or not--or it may be that the end result is that we help you to find another answer to your questions. Either way, you will receive the most professional, courteous, honest, and ethical response from us that we can possibly offer.

If you have questions about who is out there doing business in the guise of assisting homeowners, feel free to take a look at these two articles published by the California State Bar:

http://calbar.ca.gov/calbar/pdfs/ethics/Ethics-Alert-Foreclosure.pdf

http://calbar.ca.gov/state/calbar/calbar_generic.jsp?BV_SessionID=@@@@1494549861.1254259262@@@@&BV_EngineID=cccgadeiefghfikcfngcfkmdffidfng.0&n=96395&cid=10144

Short Sales Are The "New Exit Strategy"

2009-09-01T13:33:00.000-07:00

A re-post from "Hot Property"

The new exit strategy: A short sale
Posted by: Dean Foust

For all the homeowners who are upside down and can no longer make their mortgage payment (because of either a job loss, divorce, or an option ARM that’s resetting higher), up to now the only option was, well, letting the bank foreclose. That’s not a good option since a foreclosure sticks on your credit record for at least 10 years. But some experts are now advocating a “short sale.” This is a case of a distinction with a difference: If your bank agrees to a short sale, you then hire an agent to find a buyer for the house, you sell the house for a loss, and with the bank’s blessing, they agree to eat the loss (although they could still demand the homeowner make some kind of payment or share the loss).

That’s the really short version of how it works. It was this article in the Tucson Citizen that caught my eye and made me aware of short selling. The Tucson Citizen article, in turn, provides links to a couple of other articles that discuss short selling, one on EHow.com and another on a real estate lawyers site.

The experts say you’ll probably need to find a real estate agent willing to work for a smaller commission (which makes the bank a little more willing to absorb the loss), and you’ll also need to scale back your own spending. Putting expensive jewelry on your credit card will make a bank less inclined to do you any favors on the sale of your home. And be prepared that if your bank does absorb the loss, the IRS might treat that as taxable income and you’ll have to come up with the cash to cover the taxes.

Of course, the better option is to find some way to stay in the house—by first, seeing if the lender is willing to restructure the loan, or forgo a couple of monthly payments to help you get back on your feet. Apparently, more and more lenders are willing to make accommodations to avoid taking the property back. Banks hate to take over homes, especially in a declining market, so you shouldn’t underestimate the willingness of a bank to make concessions.

Home Buyer Credit May Be Extended If Feds Can Work Fast

2009-08-17T15:45:00.000-07:00

Washington Report: No Recess for Housing

The House and Senate may have left Capitol Hill for their August break, but housing lobbyists are busy at work gearing up a major campaign to extend the $8,000 home buyer tax credit.

The credit for first-time purchasers is scheduled to expire November 30.

The National Association of Home Builders and the National Association of Realtors want to persuade Congress to nail down an extension of the credit, and maybe even broaden its coverage, as soon as possible.

The home builders are mounting an aggressive campaign during the congressional recess. The association is sending out local teams of members to meet with congressmen and senators in their home districts, urging not only a one year extension of the credit, but an expansion of the concept to cover all home buyers next year, not just first-timers.

Though the endorsement may, or may not, have been connected with the home builders' campaign, one of the most politically powerful Democrats has already signaled that he favors a one year extension.

Senate Majority Leader Harry Reid of Nevada, said he thinks “it's something we can get done.” According to a report in the Las Vegas Sun, Reid made the comment last week during a conference call with Nevada reporters.

Meanwhile, the influential chairman of the Senate banking committee, Connecticut Democrat Chris Dodd, has teamed up with Georgia Republican Senator Johnny Isakson to sponsor a bill that would extend the credit for another year and expand it to a $15,000 maximum.

In the House, two bills have been introduced to extend and expand the credit for either six months or 12 months. The National Association of Realtors is strongly supporting the extension efforts, and is sending its own delegations to lobby key members of the House Ways and Means committee and the Senate Finance committee.

So with all this going on, is it a sure thing that the tax credit will be available in some form for home buyers next year? Should consumers who can't quite make the November 30 deadline breathe easier?

Absolutely not. There is no sure thing on Capitol Hill whenever legislation looks like it's got a clear path to passage. That's when opponents hijack the bill or filibuster it in the Senate.

Nonetheless, extension of the credit looks like it has growing bipartisan support. Mary Trupo, legislative spokesperson for the National Association of Realtors, told Realty Times last week that “we feel Congress is receptive” to the message that the housing tax credit helps create jobs, and stimulates the economy.

But nobody should assume it's a done deal, until it is.

Written by Kenneth R. Harney
August 17, 2009

Qualifying For A Short Sale

2009-08-17T12:40:00.000-07:00

"Short sale" is a hot buzz phrase. Some sellers who decide that their home won't sell at the price they had imagined often start to wonder if they should do a short sale. A short sale doesn't always solve problems, but it most assuredly can create problems. Short sales are not the "saving grace" some home sellers would like to believe.

What is a Short Sale?
A short sale happens when the lender is shorted on a mortgage, meaning the lender accepts less than the total amount that is due. If your mortgage is $100,000, but your home is worth, say, $90,000, you are $10,000 short, not including costs to close the sale such as real estate commissions, recording fees or title and escrow charges.

Sometimes, to avoid going through the costs of foreclosure, a lender will sanction a short sale by letting a buyer purchase the home for less than the mortgage balance while the home is in pre-foreclosure stage. A pre-foreclosure stage is one of the three stages of foreclosures.

Here are sample steps of a short sale:

•Seller signs a listing agreement with a real estate agent subject to selling as a short sale with third-party approval.

•The agent finds a buyer who makes an offer for less than the amount of the mortgage.

•Seller accepts the buyer's purchase offer.

•Seller's lender accepts the buyer's purchase offer.

•Transaction closes when the buyer delivers the funds, the lender releases the lien and the seller delivers the deed.
In fairy-tale land, everybody lives happily ever after. Except the seller. There are consequences.

Qualifications for a Short Sale
Before you eagerly climb aboard the short sale bandwagon, consider the following to determine whether you may qualify for a short sale. If you cannot answer yes to all four requirements, you may not qualify for a short sale.

•The Home's Market Value Has Dropped.
Hard comparable sales must substantiate that the home is worth less than the unpaid balance due the lender. This unpaid balance may include a prepayment penalty.

•The Mortgage is in or Near Default Status.
It used to be that lenders would not consider a short sale if the payments were current, but that is no longer the case. Realizing that other factors contribute to a potential default, many lenders are eager to head off future problems at the pass.

•The Seller Has Fallen on Hard Times.
The seller must submit a letter of hardship that explains why the seller can not pay the difference due upon sale, including why the seller has or will stop making the monthly payments.

A few examples that do NOT constitute a hardship are:

1.Bad purchase decisions. Blowing your paycheck on a home theater system with surround sound does not qualify as a hardship.
2.Unhappy with the neighbors. Even if every home on your block has turned into pot growing houses, that will not qualify as a hardship.
3.Buying another home. The lender will not care if you have decided the home is no longer suitable for you or your family.
4.Pregnancy. Increasing the size of your family or starting a family is not considered a hardship.
5.Moving into an apartment. If you decide to move out of your home, that is a lifestyle decision and not a very good reason to abandon your home.

Examples of hardship are:

1.Unemployment
2.Divorce
3.Medical emergency / sudden illness
4.Bankruptcy
5.Death

•The Seller Has No Assets
The lender will probably want to see a copy of the seller's tax returns and / or a financial statement. If the lender discovers assets, the lender may not grant the short sale because the lender will feel that the seller has the ability to pay the shorted difference. Sellers with assets may still be granted a short sale but could be required to pay back the shortfall.

For example, if the seller has cash in a savings account, owns other real estate, stocks, bonds or even IRA accounts, the lender will most likely determine that the seller has assets. However, the lender might discount the amount the seller is required to pay back.

Many entities profit from short sales, but there is no profit allowed for the seller of a short sale.

Short Sale Consequences
A short sale is dependent on a buyer making an offer to purchase. If you do not receive an offer, you will not qualify for a short sale. So even if you meet all the other criteria, it is possible that no one will buy the short sale. It is also dependent on the lender accepting the buyer's offer. If the lender rejects the offer, a short sale will not take place.

•Tax Consequences
If the lender agrees to the short sale, the lender may possess the right to issue you a 1099 for the shorted difference, due to a provision in the IRS code about debt forgiveness. Many situations are exempt from debt forgiveness, according to the Mortgage Forgiveness Debt Relief Act of 2007.

You should speak to a real estate lawyer and a tax accountant to determine the amount of short sale tax consequences, and whether you can afford to pay those taxes, if any.

•Blemished Credit Report
A short sale will show up on your credit report. It's a pre-foreclosure that has been redeemed. Short sales affect credit ratings. While the damage to your credit report may not seem as significantly bad as a foreclosure to you, creditors may not make the distinction. Experts say the drop in your FICO score is identical to a foreclosure reporting.

Always seek legal counsel before attempting to pursue a short sale. A real estate agent cannot give you legal advice.

How Long Will A Short Sale Keep Me From Getting Another Home Loan?

2009-08-10T23:25:00.001-07:00

I worry that my credit will keep me from buying ever again if I "short sale" my home. When will my credit "good enough" to permit me to purchase another home?

Current rules are that a new loan can be obtained under Fannie Mae (Conventional) as soon as two years after a short sale.

Remember, the alternative is most likely foreclosure, and those current guidelines require that Fannie Mae will not allow you to purchase a home for 5 years if you have a foreclosure on your credit record.

Do I Qualify For A Short Sale?

2009-08-09T18:14:00.001-07:00

Not Sure if you qualify for a short sale?
This question requires a free consultation as each short sale case is different and requires a personal understanding of your current situation. However, if you answer yes to some if not all these question, a short sale might be an option for you to consider.

*Have you experienced an unforeseen hardship since you took you loan out?

*Owe more on your property than what you could sell your home?

*Have significant difficulty covering your monthly expenses every month?

*Routinely borrowing money from other sources to make your payment every month?

What are some examples of a hardship?
• Separation or divorce
• Medical Bills
• Inability to work due to health reasons
• Business Failure
• Reduced Income or Unemployment
• Death of a Spouse
• Adjustment in Mortgage payment or unforeseen in

The hardships above are some that a lender will consider and by no means represents a conclusive list. Please call or register on line with your hardships and we can address any questions you might have.

Mortgage Forgiveness Debt Relief Act of 2007

2009-08-09T16:12:00.000-07:00

The Mortgage Forgiveness Debt Relief Act was introduced in Congress on September 25, 2007, and became law on December 20, 2007. This act offered relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing foreclosure. The act extends such relief for three years, applying to debts discharged in calendar year 2007 through 2009. (With the Emergency Economic Stabilization Act of 2008, this tax relief was extended another three years, covering debts discharged through calendar year 2012.)

Normally in US law when a lender decides to forgive all or a portion of a borrower's debt and accept less, the forgiven amount is considered as income for the borrower and is liable to be taxed.

However, after the signing of the Mortgage Forgiveness Act, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences -- rental properties are ineligible for relief -- so consultation with a tax advisor is necessary to ensure that a borrower qualifies.[1] The amount of forgiven mortgage debt allowed to be excluded from income tax is limited to $2 million per year.

- Courtesy of Wikipedia

How Does A Short Sale Affect My Credit?

2009-08-09T16:00:00.000-07:00

A short sale does adversely affect a person's credit report, though the negative impact is typically less than a foreclosure. Short sales are a type of settlement. Like all entries except for bankruptcy, short sales remain on a credit report for seven years. Depending upon other credit information it is typically possible to obtain another mortgage 1-3 years after a short sale.