The Treasury Department yesterday gave guidance to servicers on the Home Affordable Foreclosure Alternatives Program (HAFA).
The new version of HAFA looks very much like the one envisioned in the initial announcement made in May.
Yesterday's Treasury announcement includes the general terms and conditions, evaluation process, documentation, and reporting requirements.
The program will take effect April 2010 and servicers already participating in the Home Affordable Modification Program (HAMP) will be required to follow guidance.
One aspect of the the program is that it standardizes the eligibility for short sales. It is available to borrowers who meet HAMP eligibility requirements although do not qualify for a Trial Period Plan or do not successfully complete a Trial Period Plan.
Upon the successful closure of a short sale or deed-in-lieu through the HAFA, the following incentives of $1,500 in relocation assistance to the borrower; $1,000 in expense reimbursement to the servicer; as well as up to $1,000 in investor reimbursement for subordinate lien releases will be given.
Aside from these incentives, the program uses borrower financial information collected in conjunction with HAMP, removing the need for added eligibility analysis, sets minimum acceptable net sale proceeds to be determined by a consistent written policy developed by each servicer, and requires borrowers to be fully released from future liability for the debt.
According to analysts from Bank of America Merrill Lynch, the program is positive on the margin.
Even though the program provides standard rules, documentation, and process flow, the ability for servicers to make their own policy will leave HAFA's success largely up to them.
The success of this program, analysts said, is also a "double edged sword." They explained that short sales limit loss severity because of lower advancing and better bids on the property as compared with REOs.
But, analysts said that increased short sales will shorten the liquidation timelines and release the supply of distressed properties into the market sooner.
One of the key drivers of the better-than-expected headline numbers in the housing market, analysts said, has been the stalled foreclosure process. These numbers could also be attributed to the supply being artificially held back from hitting the market.
They further added that many of the issues that they have highlighted in the past still remain, such as moral hazard.
Sunday, December 20, 2009
Saturday, December 19, 2009
Do you need to sell your home, but owe more than it is worth?
It is very common these days for seller'sl to find themselves in a situation where they owe more than the home will sell for. These are called a short sales and they take special dedication and skill to process successfully!
Not every agent can or will do short sales!
Because short sales are difficult to manage and need extra attention, many agents are charging up front fees, or are not taking short sale listings at all! I work with sellers in difficult situations. It isn't always easy, but it is very rewarding to help homeowners solve their real estate problems.
The sooner you call me, the sooner we can find a solution for you!
Whatever your reason for selling, I can help you make it happen by successfully marketing and negotiating the sale of your home. You aren't in this alone!
Similarly, in this current economic crisis, millions of homeowners facing financial hardship and possible foreclosure action are requesting the help of agents with the Certified Distressed Property Expert® (CDPE) designation. A CDPE is a real estate professional with specific understanding of the complex issues that confront homeowners in distress. Through comprehensive training and market experience, CDPE's are able to provide real solutions for homeowners facing hardships in today's market.
The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. CDPE's believe that in almost all cases, the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools necessary to help homeowners find the best solution for their particular situation. While enduring financial difficulties are challenging for any family, the process of finding a qualified real estate professional should not be. Tim Schmitz has achieved the CDPE designation, ensuring you deal with a professional trained to address your specific needs. CDPE's don't merely assist in selling properties, they serve and help save their clients in need.
Check out my other site at:
www.raincityshortsale.com
Not every agent can or will do short sales!
Because short sales are difficult to manage and need extra attention, many agents are charging up front fees, or are not taking short sale listings at all! I work with sellers in difficult situations. It isn't always easy, but it is very rewarding to help homeowners solve their real estate problems.
The sooner you call me, the sooner we can find a solution for you!
Whatever your reason for selling, I can help you make it happen by successfully marketing and negotiating the sale of your home. You aren't in this alone!
Similarly, in this current economic crisis, millions of homeowners facing financial hardship and possible foreclosure action are requesting the help of agents with the Certified Distressed Property Expert® (CDPE) designation. A CDPE is a real estate professional with specific understanding of the complex issues that confront homeowners in distress. Through comprehensive training and market experience, CDPE's are able to provide real solutions for homeowners facing hardships in today's market.
The prospect of foreclosure can be financially and emotionally devastating, and often homeowners proceed without guidance of any kind. CDPE's believe that in almost all cases, the best course of action for a homeowner in distress is to speak with a well-informed, licensed real estate professional. They have the tools necessary to help homeowners find the best solution for their particular situation. While enduring financial difficulties are challenging for any family, the process of finding a qualified real estate professional should not be. Tim Schmitz has achieved the CDPE designation, ensuring you deal with a professional trained to address your specific needs. CDPE's don't merely assist in selling properties, they serve and help save their clients in need.
Check out my other site at:
www.raincityshortsale.com
Thursday, December 17, 2009
How important is the lender package in a short sale?
The short sale package can make or break the transaction. The proposal put together for the existing lender and follow up after submission are the most important two issues in getting your short sale approved and closed. You have to make certain that you submit everything the bank is looking for and you may want to submit other items that the bank has not asked for but are highly recommended. Having a complete package is key to getting your short sale looked at by the banks.
Most banks want the following items submitted as a complete package:
• Listing agreement
• Listing history
• Executed contract
• Buyer pre-approval letter or proof of funds if cash
• Preliminary HUD statement
• Hardship letter from seller
• Paycheck stubs (usually latest 2)
• Bank statements (usually last 2 months)
• Financial worksheet
• Tax returns (last 2 years)
• If you cannot include all of these items, make certain to insert a page as a placeholder for that item explaining why you have not included it in the package.
The following items will help to make a stronger package for the negotiator at the bank to review. These items together with the above items will help to make a more powerful case for the approval of the short sale.
• Cover Letter including your contact information
• Explanation of marketing you have done with a brief history of showings and feedback
• Market statistics or a BPO completed by you
• Damage and Repair Report and pictures
Remember also to make sure to put the loan number and borrower’s name on each page you forward to the bank. And of course, make sure you keep an entire package for yourself as the banks often misplace portions of your package.
If you are a seller, experiencing a hardship with your current mortgage and thinking of doing a short sale on your home, make sure you select an agent to list and sell your home who has experience with the short sale process and has successfully sold their short sale listings.
If you are a seller and wish to contact us for a FREE consultation regarding a possible short sale on your home, please call us at (425) 372-6382 or send email to timschmitz@cbbain.com
Most banks want the following items submitted as a complete package:
• Listing agreement
• Listing history
• Executed contract
• Buyer pre-approval letter or proof of funds if cash
• Preliminary HUD statement
• Hardship letter from seller
• Paycheck stubs (usually latest 2)
• Bank statements (usually last 2 months)
• Financial worksheet
• Tax returns (last 2 years)
• If you cannot include all of these items, make certain to insert a page as a placeholder for that item explaining why you have not included it in the package.
The following items will help to make a stronger package for the negotiator at the bank to review. These items together with the above items will help to make a more powerful case for the approval of the short sale.
• Cover Letter including your contact information
• Explanation of marketing you have done with a brief history of showings and feedback
• Market statistics or a BPO completed by you
• Damage and Repair Report and pictures
Remember also to make sure to put the loan number and borrower’s name on each page you forward to the bank. And of course, make sure you keep an entire package for yourself as the banks often misplace portions of your package.
If you are a seller, experiencing a hardship with your current mortgage and thinking of doing a short sale on your home, make sure you select an agent to list and sell your home who has experience with the short sale process and has successfully sold their short sale listings.
If you are a seller and wish to contact us for a FREE consultation regarding a possible short sale on your home, please call us at (425) 372-6382 or send email to timschmitz@cbbain.com
Monday, December 14, 2009
www.raincityshortsale.com
Chances are, you or someone you know in Western Washington is facing the possibility of foreclosure. But you need to understand that you are not alone.
Today, 1 out of every 10 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it's important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.
Through my experience handling distressed properties at Coldwell Banker Bain, I've found that homeowners today have more questions than answers about their circumstances. I have created this site to help you understand the possible solutions to foreclosure, as well as provide a detailed explanation of short sales, which may be the best course of action for some homeowners.
You may also have noticed that I'm offering you a FREE Report to explain your options and help you decide on a course of action. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision.
As an agent with the CDPE® Designation, I have a strong and unique appreciation of the factors affecting the market, and know that there are options available to you.
If you would like to know more about your options, please call me at (425) 372-6382.
I am here to help … in any way I can.
Tim Schmitz
www.raincityshortsale.com
Tim Schmitz
Coldwell Banker Bain
7808 SE 28th St., Ste# 128
Mercer Island, WA 98040
(425) 372-6382
Today, 1 out of every 10 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it's important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.
Through my experience handling distressed properties at Coldwell Banker Bain, I've found that homeowners today have more questions than answers about their circumstances. I have created this site to help you understand the possible solutions to foreclosure, as well as provide a detailed explanation of short sales, which may be the best course of action for some homeowners.
You may also have noticed that I'm offering you a FREE Report to explain your options and help you decide on a course of action. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision.
As an agent with the CDPE® Designation, I have a strong and unique appreciation of the factors affecting the market, and know that there are options available to you.
If you would like to know more about your options, please call me at (425) 372-6382.
I am here to help … in any way I can.
Tim Schmitz
www.raincityshortsale.com
Tim Schmitz
Coldwell Banker Bain
7808 SE 28th St., Ste# 128
Mercer Island, WA 98040
(425) 372-6382
Tuesday, November 17, 2009
How a Short Sale Can Stop Foreclosure
No one wants the stigma attached to having a home repossessed by the lender through foreclosure, or the black mark left on one’s credit history for every creditor to see in black and white. And it can stay there for as long as 10 years no less.
Although essentially similar in process, for a homeowner to stop foreclosure in Houston the state laws may be slightly different for another city. Many homeowners who bought around the top of the market, back in 2004 through 2006, are now stuck with having purchased more home than they could afford. Through the ease of obtaining exotic adjustable rate mortgages during those years, homeowners found themselves over-encumbered with debt, having financed as much as 110 percent of the sales price of their home.
As a result, they are now finding themselves with a monthly payment that is unaffordable as interest rates adjust to higher rates, thus bringing the new payment to as much as 25 to 50 percent higher than the initial payments they made.
Now they are left looking for a way out of a dire financial situation without the stigma left over. For distressed homeowners one possible option is the short sale. Selling a home via a short sale is a legitimate method for stopping the foreclosure process, allowing the homeowner to get on with life and without the ding to the credit record.
What’s the catch? By definition a short sale is literally the sale of a home for less money than is currently owed the lender on the outstanding mortgage being foreclosed on. In other words the home is “upside down“ from a financial aspect. Therefore, the catch is that in order to successfully conduct a short sale, the foreclosing lender has to agree to it, essentially agreeing to accept less money than it is owed on the loan secured by the house.
A short sale is not a vehicle normally seen during a seller’s market when multiple offers are lining up at the door competing with each other for the house. Short sales are most widely accepted during a buyer’s market when home sales are dragging, home values are declining, and inventories of available properties are growing to the point that the lender basically is just throwing up its hands and saying some money for the house is better than no money at all.
Lenders are not in the business of owning real estate. They get upset when they have too many properties on their REO (real estate-owned) books instead of out in the market making it a profit through monthly mortgage payments. Plus, the foreclosure process is not free. Every house they foreclose on costs them thousands of dollars. So, in some instances, agreeing to a short sale is in the lender’s best interest.
And it is up to the homeowner to convince the lender that this is one of those circumstances where it’s better to fish and cut bait. It’s a matter of numbers and economics. The homeowner needs to demonstrate to the lender hard numbers that will lead the lender to conclude that selling via a short sale is going to benefit them more than the amount they would garner from foreclosing on the property and then selling it as an REO.
Keep in mind there is one major downside to a short sale, however. As much as the lender wants to keep the property off its books, it also wants the money it’s owed. In many situations the lender will make it a condition of agreeing to a short sale that the homeowner sign a promissory note to make up all or part of the difference between the proceeds from the short sale and the amount owed on the original debt.
Also, an important aspect most homeowners don’t realize when they decide to go the short sale route, is that any amount of the debt that the lender forgives is considered to be taxable income by the Internal Revenue Service. The lender must submit a form to the IRS stating the amount of debt forgiven, so the tax man can be waiting for the homeowner when April 15 rolls around next year —if any of the debt was indeed forgiven.
So for homeowners looking at all their options to stop foreclosure and save their home, the first step should be to contact their lender right away to try and negotiate a workout plan to temporarily lower payments, or to refinance to a fixed-rate loan.
After those and all other options have been exhausted, the next step might be attempting to get the lender to agree to a short sale. If so, then before going too far it is advisable to seek the assistance of a real estate professional who is well versed in short sales. Not all real estate brokers or sales agents know how to conduct a short sale or how to work with lenders in negotiating one.
Bottom line: Whether you want to stop foreclosure in King or Snohomish Counties or another area of western Washington, don’t be afraid to ask a real estate professional if he or she has any experience working short sales. If not, move on and interview until you find one who has. Possessing a real estate license does not make them an automatic expert in short sales. It calls for extra training not all real estate professionals have.
Remember: you are paying them to represent your interests and you want the most qualified representation possible when it comes to stopping foreclosure and saving your home.
www.raincityrealtor.com
Although essentially similar in process, for a homeowner to stop foreclosure in Houston the state laws may be slightly different for another city. Many homeowners who bought around the top of the market, back in 2004 through 2006, are now stuck with having purchased more home than they could afford. Through the ease of obtaining exotic adjustable rate mortgages during those years, homeowners found themselves over-encumbered with debt, having financed as much as 110 percent of the sales price of their home.
As a result, they are now finding themselves with a monthly payment that is unaffordable as interest rates adjust to higher rates, thus bringing the new payment to as much as 25 to 50 percent higher than the initial payments they made.
Now they are left looking for a way out of a dire financial situation without the stigma left over. For distressed homeowners one possible option is the short sale. Selling a home via a short sale is a legitimate method for stopping the foreclosure process, allowing the homeowner to get on with life and without the ding to the credit record.
What’s the catch? By definition a short sale is literally the sale of a home for less money than is currently owed the lender on the outstanding mortgage being foreclosed on. In other words the home is “upside down“ from a financial aspect. Therefore, the catch is that in order to successfully conduct a short sale, the foreclosing lender has to agree to it, essentially agreeing to accept less money than it is owed on the loan secured by the house.
A short sale is not a vehicle normally seen during a seller’s market when multiple offers are lining up at the door competing with each other for the house. Short sales are most widely accepted during a buyer’s market when home sales are dragging, home values are declining, and inventories of available properties are growing to the point that the lender basically is just throwing up its hands and saying some money for the house is better than no money at all.
Lenders are not in the business of owning real estate. They get upset when they have too many properties on their REO (real estate-owned) books instead of out in the market making it a profit through monthly mortgage payments. Plus, the foreclosure process is not free. Every house they foreclose on costs them thousands of dollars. So, in some instances, agreeing to a short sale is in the lender’s best interest.
And it is up to the homeowner to convince the lender that this is one of those circumstances where it’s better to fish and cut bait. It’s a matter of numbers and economics. The homeowner needs to demonstrate to the lender hard numbers that will lead the lender to conclude that selling via a short sale is going to benefit them more than the amount they would garner from foreclosing on the property and then selling it as an REO.
Keep in mind there is one major downside to a short sale, however. As much as the lender wants to keep the property off its books, it also wants the money it’s owed. In many situations the lender will make it a condition of agreeing to a short sale that the homeowner sign a promissory note to make up all or part of the difference between the proceeds from the short sale and the amount owed on the original debt.
Also, an important aspect most homeowners don’t realize when they decide to go the short sale route, is that any amount of the debt that the lender forgives is considered to be taxable income by the Internal Revenue Service. The lender must submit a form to the IRS stating the amount of debt forgiven, so the tax man can be waiting for the homeowner when April 15 rolls around next year —if any of the debt was indeed forgiven.
So for homeowners looking at all their options to stop foreclosure and save their home, the first step should be to contact their lender right away to try and negotiate a workout plan to temporarily lower payments, or to refinance to a fixed-rate loan.
After those and all other options have been exhausted, the next step might be attempting to get the lender to agree to a short sale. If so, then before going too far it is advisable to seek the assistance of a real estate professional who is well versed in short sales. Not all real estate brokers or sales agents know how to conduct a short sale or how to work with lenders in negotiating one.
Bottom line: Whether you want to stop foreclosure in King or Snohomish Counties or another area of western Washington, don’t be afraid to ask a real estate professional if he or she has any experience working short sales. If not, move on and interview until you find one who has. Possessing a real estate license does not make them an automatic expert in short sales. It calls for extra training not all real estate professionals have.
Remember: you are paying them to represent your interests and you want the most qualified representation possible when it comes to stopping foreclosure and saving your home.
www.raincityrealtor.com
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