Bank owned Foreclosure!  We can close in 10 days! Call Stephanie (949)338-1824 to schedule an appointment.Wonderful floor plan that is open, light and bright 1533 sq. ft. . 3 bedrooms and 2.5 bathrooms.Ceramic Tile and Maple Cabinets in the spacious Kitchen. The Fireplace in the Family Room is framed by beautiful tile. There is a spacious Laundry Room with ample storage.The Master Bedroom is very nice with a separate Roman Tub, Dual Vanity, Walk-In Closet,& west facing Balcony. Also upstairs is a Media Niche with storage. New paint and carpet throughout.The oversized two car garage has epoxy coated floors.Priced to sell!!!!  $384,500 

The Freddie Mac program will take off August 1, 2010, but servicers can start using their initiative version right away.  Just like the HAFA we already know, servicers will have to offer homeowners a HAMP modification first and borrowers can receive up to $3000 in relocation assistance.

How are Freddie HAFA sales different from the standard program?

• Freddie’s program is the allowances to subordinate liens.  Each junior lien, in order of priority, may receive no more than 6% of their unpaid principal balance up to an aggregate cap of $6000,   in exchange for release of the subordinate liens and satisfaction of the underlying debts.  That means that if a home has 2 liens in subordinate position, one is a $210,000 HELOC recorded before a $2700 HOA lien, the HELOC will only get $6000 and the HOA nothing.
• Freddie Mac will accept the short-sale minimum acceptable net proceeds in satisfaction of the amount owed under the note and release of its lien
• Freddie Mac will not require promissory notes or cash contributions from the borrower by Subordinate lienholders must also agree to release all liens without promissory notes or contributions from the borrower in order for the borrower to close under the program.

Fannie Mae HAFA sales include greater incentives for the servicers, taking the max under the Treasury program at $1500 to $2,200.

In our loss mitigation office, we cringe when we hear the negotiator confirm the investor is Fannie and Freddie.  Their involvement has historically meant longer approval times.

The snails pace would make it hard to effectively market the property for a FMV retail buyer who would be willing to wait it out while their minimum net requirements would often dissuade investor offers.  The new HAFA initiatives may help speed up the process!  Thanks Fannie and Freddie.  See you down the road!

According to a Bank of America credit loss mititgation exec, they have failed to handle customers at the “standards Bank of America is accustomed to.”

That statement actually frightens me a little. Those of us in the short sale industry, prior to Equator and even now, know that Bank of America customer service is not pie in the sky.

According to reports, Bank of America has the lowest rate of successful permanent loan modifications under HAMP of the four largest banks.  [Four largest banks:  JPMorgan Chase @ 16%, Citibank @ 18%, and Wells Fargo @ 20%]

Bank of America keeps the same PR response of: we are training more people and making systems better….like use of the new Equator system for short sales.

According to the same exec – they are still receiving “more customer complaints than… are acceptable”.

The new program from BAC, their National Homeownership Retention Program, will help reduce the monthly mortgage payment to 31% of their monthly income for HAMP-eligible homeowners by first forbearing principal and ultimately forgiving it they stay current on payments.  The bank is targeting over 43,000 borrowers who they say are already eligible for their new program.

According to a Trulia and RealtyTrac on-line survey,  the number of U.S. consumers who would consider buying a foreclosed property has dropped from 55% in May 2009 to only 45% this year.

This is just as banks are getting ready to dump thousands of properties into the market.  In the first quarter, banks repossessed a record of nearly 258,000 properties.

Last year’s annual total of 918,000 properties repossessed was a record on its own.  At this pace the lenders are going to blow past the last year’s annual number before the World Series final game.

We have already reported on the 4+ million homeowners who are in a seriously delinquent position right now.  Of those that actually avoided foreclosure last year using the HAMP program, 10 families lost their home.  How many will it be this year?

Now, too many foreclosures will water down the drinks.

Buyer hurdles:  Lending restrictions are still tighter than you know what, no more tax credits, and despite a few local buyer grant programs it is tough to find a buyer that out-right qualifies.

Now those that do qualify are losing interest in the properties we are flush with.  Why? I gander that the decrease in interest in likely due to non-responsive contract processes, bidding wars, hidden costs, repairs needed that limit available financing, and possible renovation costs.  The groups most likely to still buy a foreclosure despite the issues are first time buyers or investors.

The more properties entering the market while consumer interest wanes, means longer days on market or the servicers will have to sell them at investor levels.  Buying a foreclosure can mean dramatic savings.  Investors will always buy for the lowest percentage, as they should.

Short Sales are Still the Way to Go

For those of us in the short sale business: An REO flush market and low investor purchases will definitely justify discount offers.

Buyers who are unhappy with the risks of an REO purchase should be encouraged to buy a short sale.  Short sales are often still cared for by the owner-occupant, come with a seller’s disclosure, do not come with long-winded bid processes, all while providing the buyer the most controlled opportunity to buy at true market value.

LPS goes on to report that for every one loan that improves its delinquency status, two loans are headed for hell in a hand basket. Loans improving from delinquent to cured is at a 3 month low.

Positive notes remaining: New start delinquencies have declined, but if you look at the last twenty years, they are at historical highs.  Loans at the foreclosure stage of delinquency have declined almost 3% from nearly 4.19 million loans in March to a little over 4.07 million loans by the end of April.

However, one in seven of the 52 million households in the U.S. are somewhere between having missed a payment and eviction.

The highest number of mortgage delinquencies are now coming from prime mortgages.  Borrowers with subprime loans, who defaulted due to their inability to handle the rise in payments when their loans reset are being replaced by prime borrowers who have lost the ability to pay due to job loss.  In fact, the delinquency rate is improving in the sand states where the boom took roots and is now increasing in states hit the hardest by the poor job market…i.e. Michigan, Rhode Island, Illinois.

Stabilization?  Not yet.  Delinquency and foreclosure rates are much higher than the same time last year.  Delinquencies are up 10.7% over last year and foreclosures are up 20.4% over last year.  So, don’t give a lot of weight to month to month decreases.

Time for short sales!!!

The following time-line applies to non-judicial California Foreclosures under a Deed of Trust. (non-judicial foreclosure is used far more commonly in California than a Judicial Foreclosure and California is a “one-action” state)

Foreclosures begin when the Trustor (borrower) stops making the monthly payments to the Beneficiary (Lender), the first missed payment (30+ days) is technical default, but in practice , most Beneficiaries do not begin the process until the third payment (90+ days) is missed. If the Beneficiary cannot resolve the defaulted payment amount with the Trustor through Forbearance or other Loss Mitigation measures, the Beneficiary will instruct the Trustee to begin Foreclosure proceedings.

•1.   Notice of Default: Foreclosure proceedings start with a Notice of Default (NOD). The lender (or trustee for the lender) files a Notice of Default with the county, after the property owner (trustor) fails to make loan payment(s).  This is done to give constructive notice to the public which is required by law.  The owner may be delinquent anywhere from 15 days to 12 months or more.  After the recording of the Notice of Default the borrower and junior lien holders (2^nd mortgage, etc.) are given proper notification and the borrower has at least 90 days to bring their account current with lender.  This time period is also referred to as the Reinstatement Period.

•2.   Notice of Trustee Sale: If the borrower does not reinstate their account (or obtain some other form of loan workout such as a loan modification) the lender can authorize and instruct the Trustee to record the Notice of Trustee Sale (NOS). A notice of trustee sale must be mailed by certified mail to the borrower, return receipt requested, 20 days before the foreclosure sale.  The Notice of Trustee Sale is recorded at the County Recorder’s office in the County where the property is located at least 14 days before the sale.  It contains the date, time, and place where the auction (trustee sale) will take place.  This notice has to be published in a adjudicated newspaper in the city where the property is located.  The NOS is posted on the property as a requirement of law.  If access to the property is restricted by means of a central guard gate then the notice must be posted on the guard gate.  Additionally the NOS must be posted at on public place in the city where the property is to be sold at least 20 days prior to the sale.  The borrower may reinstate the loan (bring it current) up to 5 days prior to the trustee sale.

Day 1: Notice of Default recorded with County Recorder.

Within 10 Business Days: Trustee mails Notice of Default to borrower(s) with the recording date.

After 3 Months: Set sales date, time and location unless a bankruptcy has been filed, or other event (loan modification) occurs that holds the timeline.

20 Days Prior to Sale Date: Public Notice of Sale.

14 Days Prior to Sale Date: Notice of Sale must be submitted to recorder’s office.

5 Days Prior to Sale Date: Borrower’s right to reinstate expires.

Sale Date: The property is sold to the highest bidder or reverts back to the lender (beneficiary).



• Short Sale Offer Price is Too Low

Banks will order a BPO (Broker’s Price Opinion) that will be performed by a local agent or broker in order to establish the current fair market value of your home.  This is generally done within a few weeks of us submitting the short sale offer to the lender. They may order several BPOs in order to get a solid idea of the fair market value.  Sometimes they will even order a full appraisal. A justification of value should be submitted by whoever is representing you on the short sale in the form of a CMA (Comparative Market Analysis), BPO, or AVM (Automated Valuation Model such as Freddie Mac Home Value Explorer).  If the bank believes it can make more money by taking the property through foreclosure proceedings, the bank will reject the offer. SS Agents have a successful track record of substantiating our claims of market value and refuting the lender’s assessment of value when it is inaccurate.

• Short Sale Package is Incomplete

Ask any short sale specialist and you’ll hear horror stories of how banks lose documentation. In some cases, it doesn’t matter how many times the package is overnight mailed or faxed; the bank just seems to misplace it. Worse, an important document might not be in the file, and without all required documents the sale will not be granted.  You must select a short sale agent/negotiator that is relentless in supplying and verifying receipt of documentation.  SS Agents understand the reality of how bank representatives handle and receive documentation.  We leave no stone un-turned and are constantly vigilant about verifying that documentation requirements are met and exceeded.

• Seller Does Not Qualify

If the seller is asking for debt forgiveness, the bank will want to see a hardship letter from the seller that explains why the seller cannot afford to pay back the shortfall difference. Sellers who have large amount of liquid assets are at a disadvantage if the sellers are unwilling to work out a repayment plan with the bank.  Your agent/negotiator must be able to concisely and effectively demonstrate your hardship.  Many inexperienced agents do not have effective means and systems to adequately establish your hardship with the bank.

• Buyer Does Not Qualify

The desire to buy a home and the financial means to afford a mortgage payment do not mean a buyer qualifies to buy a home. A buyer’s lender will examine credit history, length of time on the job, debt ratios, and a host of other criteria to determine a borrower’s qualifications. Loan standards have been elevated quite a bit since the housing crisis began.  To gain credibility with the seller’s bank, buyers need to submit a loan pre-qualification letter and proof of funds along with the offer.  We are effective at evaluating the strength of the potential buyer because we require them to qualify with our financing options in addition to any financing they have already secured.  In this manner, we protect you from wasting time with non-qualified buyers.  Time is precious in a short sale transaction and we cannot afford to sacrifice it for a buyer that is unlikely to qualify.  It can mean the difference between successfully selling your home and foreclosure.

• Bank Sold or Transferred the Loan

Sometimes, the bank won’t realize it no longer holds the mortgage on the property until many months have passed during short sale process. If the bank has sold the mortgage to another lender, the bank has no authority to approve a short sale because it has released the asset. Although the seller may continue to receive statements from the bank, the bank might be servicing the loan but not own it.  Although the short sale or loss mitigation department may not be aware of the transfer to another lender… we will be.  We maintain frequent follow-up with servicing to ascertain that the loan remains with the current lender.

You can get cash back from the short sale of your home. The Home Affordable Foreclosure Alternatives guidelines have been added to the Making Home Affordable program. Short sale incentives for homeowner’s that include cash back and formal time frames to list and sell your home have been added. It is crucial that you select a real estate agency that has familiarity with this program and a track record of success in obtaining successful resolutions for clients. Many real estate agents are either unaware of this program, unfamiliar with the methods to obtain it, or ignore it because it provides no direct incentive to them. SS AGENTS Group is committed to obtaining the best possible resolution for all of our clients and will secure this assistance for those who are eligible.

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Click Here for the HAFA Short Sale guidelines.

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Making Home Affordable Short Sale Program (HAFA) SS AGENTS GROUP wants all clients and potential clients to be aware of their options. Recently, additional features were added to the Making Home Affordable program that pertains to short sales.

An important change to the Making Home Affordable plan is the inclusion of a Short Sale or Deed-In-Lieu foreclosure alternative.

For eligible borrowers unable to retain their homes through a Home Affordable Modification, MHA will provide incentives to borrowers, servicers and investors to encourage short sales and deeds-in-lieu. Both allow families and servicers to avoid the costly foreclosure process, and to minimize the negative impact of foreclosures on borrowers, financial institutions and communities.

Both a short sale and a DIL (Deed-In-Lieu) provide an opportunity for borrowers to avoid the consequences of foreclosure. In a short sale, a servicer allows the borrower to sell the property at it’s current value, even if the sale price is less than the total amount owed on the mortgage. Approval of a short sale requires the borrower to list and actively market the at it’s fair value. the sale must have all proceeds (after selling costs) applied to the discounted mortgage payoff. If the borrower actively markets the property but is unable to sell it within the agreed upon time period, a servicer may consider a DIL. With a DIL the borrower voluntarily transfers ownership of the property to the servicer – provided the title is free and clear.

Borrower Eligibility: Borrowers will be eligible for the Foreclosure Alternative Program if they meet the minimum eligibility criteria for a Home Affordable Modification but did not qualify for a modification in the end or were unable to sustain payments during the trial period plan or after the final modification. Prior to going in to foreclosure, participating servicers must evaluate each eligible borrower to determine if a short sale is appropriate. Considerations in the determination include property condition and value, average marketing time in the community where the property is located, the condition of the title including the presence of junior liens and a determination that the net sales proceeds are expected to exceed the investor’s recovery through foreclosure.

Incentive Payments: Borrowers may receive incentive compensation of up to $1,500.00 to assist with relocation expenses.

Standardized Documentation: The program will publish streamlined and standardized documentation, including a Short Sale Agreement and an Offer Acceptance Letter. These documents will outline specific marketing terms, describe the rights and responsibilities of all parties and establish clear timeframes for performance. Creating one standard set of documents that the industry can use is expected to minimize the complexity of these transactions and significantly increase use of the short sale option.

Property Valuation: The servicer will independently establish both property value and the minimum acceptable net return in accordance with investor guidance and will provide instruction to the borrower’s real estate agent regarding the initial list price and any permissible price reductions. The price may be determined based on either: (1) an appraisal performed in accordance with USPAP and/or (2) one or more Broker Price Opinions either of which must be dated within 120 days of the Short Sale Agreement.

Minimum and Maximum Duration: Under the program, servicers will allow borrowers at least 90 days to market and sell the property, with possibly more time based on local market conditions. The property must be listed with a licensed Realtor experienced in selling properties in the neighborhood. Marketing of the property may run concurrently with the foreclosure process; however no foreclosure sale can take place during the marketing period specified in the Short Sale Agreement as long as the borrower is acting in good faith to sell the property. There will be a maximum marketing period of 1 year for the property,

Fees and Charges: Servicers may not charge borrowers fees for participation in the Foreclosure Alternative Program.

Property Eligibility: Any junior liens, mortgages or other debts against the property must be cleared for the property to be sold as a short sale or deeded to the servicer. The servicer can proceed with a short sale or deed-in-lieu if there is a reasonable belief that all liens on the property can be cleared.

Program Expiration: Eligible sellers will be accepted until December 31, 2012. Program payments will be made upon successful completion of a short sale or DIL.

Deed-in-Lieu: At the servicer’s option, the Short Sale Agreement may include a condition that the borrower agrees to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time specified in the Agreement. In this case the borrower would have 30 days to vacate the property and would be entitled to $1,500.00 to assist with relocation expenses, in addition to any other funds the servicer may provide to the borrower.

We believe an educated public is vital in this market, and SS AGENTS Group will continue to provide updates on this program and others. Considering a short sale? Please contact SS AGENTS Real Estate with any questions/concerns you may have 1-866-611-6581 or request a free consultation here.

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