Thursday, March 29, 2012
Thursday, March 22, 2012
B of A Cooperative Short Sale. what is it??
What is a Cooperative Short Sale? In a Cooperative Short Sale, you list the property for sale at fair market value. If the property is sold, the proceeds from the sale are used to pay off the mortgage debt, even if the proceeds are less than the amount owed on the mortgage. By working with Bank of America and a real estate professional to successfully complete a Cooperative Short Sale, we can help you avoid some of the negative aspects of a foreclosure.
B of A started this program to cut down on the time frame but also the amount of documentation that you have to provide
Benefits of a Cooperative Short Sale include:
*You have up to 4 months to sell the property.
*You may be eligible to receive relocation assistance of $2,500 to help with moving, relocation and rental expenses.
*If the Cooperative short sale is successful, Bank of America will not pursue the deficiency balance on your loan.
*You will have dedicated support so you have the information you need to make informed decisions throughout the process.
To see if you qualify for this program, give me a call and have your loan number ready.
Monday, March 19, 2012
Americans More Optimistic About Housing, Economy
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Americans’ concerns over housing and the economy are subsiding, according to Fannie Mae’s National Housing Survey from February.
An improving job market is a big part of what’s behind Americans feeling more confident about the housing market and the direction of the economy, according to the survey.
“The pickup in the pace of hiring over the past few months has helped soothe consumer concerns, lifting their moods regarding their personal finances, the direction of the economy, and their views on the housing market,” says Doug Duncan, chief economist of Fannie Mae. “As a result, we’ve seen more potential for economic upside, creating a more balanced near-term outlook.”
The survey found that 28 percent of Americans expect home prices to increase over the next 12 months while 53 percent say prices will likely stay the same. Fifteen percent say they expect home prices to decline.
Meanwhile, the majority of those surveyed see rental prices continuing to increase over the next year.
Sixty-five percent of those surveyed say that if they were going to move they’d buy their next home; 29 percent say they would rent.
With low mortgage rates and falling home prices, 70 percent of those surveyed say now is a good time to purchase a home. Also, more Americans surveyed say now is a good time to sell, rising to 13 percent in February, which is the highest level in more than a year but still low by historic standards.
Overall, Americans expressed more confidence about their personal financial situation, with only 12 percent saying they expected their personal financial situation to worsen in the next 12 months — which is the lowest number in more than a year.
Tuesday, March 13, 2012
WHAT YOU NEED TO KNOW ABOUT THE NATIONAL MORTGAGE SETTLEMENT
On Monday, March 12th, the proposed Settlement documents were filed in Federal Court revealing what each of the Lenders is required to do. You can read the details at http://nationalmortgagesettlement.com/. How they’ll meet those obligations is critical to upside down homeowners. Those details are slowly emerging through analysis, press-releases, and side deals. Here’s what you need to know so far:
1. The Lenders - the Settlement ends lawsuits by the Federal Government and State Attorney Generals against: Bank of America, Wells Fargo, JP Morgan Chase, Citigroup, and GMAC/Ally.
2. The Settlement - requires the 5 Lenders to collectively provide up to $25 Billion in relief to distressed borrowers and payments to government agencies. This will be provided through a combination of direct cash payments and credits for debt reduction and other loan adjustments. The individual lender shares are: BofA: $11.82 Billion; Wells Fargo: $5.35 Billion; Chase: $5.29 Billion; Citigroup: $2.21 Billion; and Ally: $610 Million.
3. The Allocations - The Settlement requires the Lenders to provide the relief through three broad categories:
(1) Foreclosure Assistance Payments - paid to State and Federal Govenerment agencies;
(2) Consumer Relief Programs - credits for principal reduction of 1st and 2nd loans;
(3) Loan Refinancing - provides interest rate and principal reduction
4. The Side Deals - The Settlement is very complex and the devil will be in the details since each lender can map out exactly how it plans to satisfy its allocations. See my recent Blog on the Wells Fargo roadmap. However, already participating lenders are cutting “side-deals” to obtain a better result by offering even better settlement options:
a. Bank of America - announced deeper principal reductions for about 200,000 homeowners, up to $100,000 each. In exchange, they will avoid up to $850 Million in penalties. BofA has also announced that it is temporarily halting foreclosures while it identifies and solicits the potential beneficiaries of these reductions.
b. Ally - announced possible principal reductions to current market value. Further, some borrowers in extreme financial distress may get reductions to 85% of their home’s value.
5. What to Do Now - Although the Settlement terms must still be approved by a Federal Judge, if you are in financial distress and in danger of losing your home, contact your State Attorney General’s office for information and contact links with the specific lenders. The California AG’s website for the National Settlement is at http://oag.ca.gov/nationalmortgagesettlement and has internet and/or phone contacts for each of the participating lenders. Don’t expect immediate relief. The Settlement is a process that still requires Court approval, will take several months to get organized, and will take up to three years to fully provide benefits. But, it does promise substantial relief for those who qualify and diligently pursue the available benefits.
The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are upside-down on your loan, especially if you’re facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.
Article was written by Steve Beede.
Monday, March 5, 2012
WILL YOUR LENDER PAY YOU TO SHORT SALE YOUR HOME?
By Steve Beede.
As reported in DSNews.com, a Massachusetts real estate company, McGeough LaMachia Realtors, conducted a nationwide study which indicated that short sales bring a 24% greater return to lenders than foreclosures. This study by compared sale prices of short sales vs REOs in multiple states including California. The average difference was $43,000! And that likely did not take into consideration the cost of foreclosure including many months more of non-payment plus carrying costs as an REO. It therefore is no surprise that some lenders have actively sought to promote short sales by offering incentives to upside down owners to not just walk away.
Chase has been offering incentives of up to $35,000; BofA: up to $25,000; Wells Fargo: up to $20,000; and Citibank: up to $12,000. With many more foreclosures likely coming in 2012, these programs may very well expand especially in states like Florida where foreclosures require a legal action in the courts. According to a Chase spokesman: “When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure.”
According to market analyst Realty Trac, a mountain of pending repossessions is holding back a recovery in the housing market, where prices have fallen for six straight years, and damping economic growth. Owners of more than 14 million homes are in foreclosure, behind on their mortgages or owe more than their properties are worth. Short sales represented only 9% of all residential transactions last year with many owners holding out for a Loan Modification or otherwise staying in their property payment free for over a year while their home moves to foreclosure. Lenders are realizing that they can dramatically cut their losses by paying owners to sell the property now.
Unfortunately, the government agencies which hold at least 60% of the delinquent loans have not gotten the message. FHA offers only $1,500 in incentives. Fannie Mae and Freddie Mac offer incentives up to $3,000 but only through the HAFA program. Perhaps this government resistance to economic logic explains why lenders are returning to profitability while the government languishes in a Budget mess.
For some commentators however, any such payment is viewed as a reward for defaulting on obligations and sets a precident which might encourage others to also default. While indeed there is a “moral hazard” involved in any perceived bailout – whether it be government helping the banks or anyone helping the homeowners – the reality is that our economic recovery requires that we resolve the housing crisis as soon as possible regardless of whom is to blame.
From my vantage point, having now advised over 4,000 upside down property owners over the past 3 years, this is not about deadbeat borrowers trying to avoid their debts. Many people still fail to appreciate the impact that this housing crisis has had on upside-down owners. For most, it is not a choice whether to pay or lose their home. Job losses and escalating loan costs have made many loans unaffordable for the average person. Almost all Loan Modification programs including the government’s HAMP program start with a threshhold that people should not be paying more than 31% of their income on their loan. However, a recent study by the Center for Housing Policy indicates that nearly 1/4 of all homeowners are paying over 50% of their income for housing costs. The Report indicates a similar payment ratio for renters.
With high unemployment and increasing costs for everything from gas to groceries, it is likely that more and more struggling homeowners will lose the battle to keep their homes leaving short sale or foreclosure as their only alternatives. Look for even more Lenders to offer incentives to move these properties faster and reduce their losses. Whether the government agencies will get on board will remain questionable especially in an election year when the granting of any payment to a defaulted borrower will be considered by some to be a waste of taxpayer dollars.
The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are upside-down on your loan, especially if youre facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.
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