Home Recovery ProgramUniting to Save Homeowners From Foreclosure

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Help! I didn’t do anything but hide and boy now do I regret it! 03/28/2012

Help! I didn’t do anything but hide and boy now do I regret it!

I built a million dollar house and then refinanced it with one of those 1.9 variable loans. When the monthly payments were increased after two years, it became difficult to make the mortgage payments. Not only that, but I was in an automobile accident and my own business began to suffer as I recovered from the accident.

It wasn’t a year later that I couldn’t pay the mortgage payment at all. That is when I started to see the handwriting on the wall. I owed more than what the property was worth. I owed around one million dollars and the house was only worth around $700,000. We tried to sell the house but we had no offers. Of course, we wanted into sell it for what we had put into it but the fair market value had decreased.

We missed several monthly payments which led me to believe there was no way out of such a miserable mess. This is when I went into my “cave”. I was being threatened with foreclosure. I didn’t think there was any way out, so in despair and somewhat depressed; I did not do anything but wait for the inevitable. The house was taken from us and sold by the bank for only $585,000. Everyone lost in this process, the Realtor, Bank, and homeowner. Through all this I did nothing. I felt I had lost control. I fell into the victim mentality.

My credit took a dive and will not be restored for years. I could not even think of buying a new home after going through the foreclosure process. I could have maintained some control with a little education and knowledge but I refused to look into foreclosure alternatives.

I had to learn again that there is a certain power that comes with gaining knowledge. The power would have given me a measure of control to have choices in this life altering experience. Forbearance, Deed in Lieu, Loan Modification and Short Sales are programs I should have examined. The better choice for me was to do a short sale for this would of   saved me both regret and grief.

 Short Sale Association of America specializes  in short sales dedication, to both the distressed homeowner and to the Realtor, and even to the Bank or Servicer. Everyone comes out of the Short Sale process with some gain.  In fact their dedication to these processes and programs are what all are looking for when they need help as oppose to the embarrassment process of foreclosure. As you study and gain knowledge through the website of SSAA, you will have the education that I can only wish I had when I was the distressed homeowner. I would have been greatly benefited if my Realtor had the support of SSAA.

If you are in this predicament now find a realtor who understands short sales, for it can be a difficult but well worth it process. Learn all you can so you will have the power of choice to make decisions necessary for this stressful time.

If you are a realtor I recommend you take a long look of what SSAA has to offer. You are the ones that will bring relief and hope to the distresses homeowner. SSAA is equipped and ready to help you through this difficult and time consuming process. They can take care of most all your needs. I have looked at a lot of sites on the computer concerning foreclosure alternatives and  SSAA with its programs, automated marketing, education, the offering of you own website,  real leads,  processing center and unlimited coaching and training can’t be beat.  SSAA touches all the bases, a home run.
Be smart! Don’t remain in your “cave”. Help is just a step away.

Don Wayne

Percentage of All Home Sales to Short Sales 06/21/2011

What percentage of all home sales will be short sales in the coming months?

What about in one year? 40%? 50%?

Short sales rose from 17 percent in February to a record-high 19.6 percent in March. This is a chart that was included in the Housing Pulse Survey from Campbell Surveys and Inside Mortgage Finance:

Pay close attention to the sudden decrease in Damaged REO properties (red line) compared to short sales (blue line), which is drastically on the rise.

How would you interpret these results?

Are you prepared to handle the overwhelming demand for short sale expertise in the market? SSAA is giving away the following free digital e-books to agents who are adapting to market demands:

  1. Lender & Government Program Forms: The most comprehensive compilation of bank and government short sale, HAFA, and loss mitigation forms.
  2. Distressed-Mortgage Field Guide: Learn effective lead generation strategies, marketing ideas, and proven short sale negotiation techniques in one easy-to-read e-Guide.
  3. Mortgage Metrics & Graphs: A comprehensive arrangement of performance data on first lien residential mortgages serviced by national banks. Includes SSAA’s custom charts, graphs, and tables that readability.

DOWNLOAD ALL E-BOOKS HERE

According to Core Logic, over half of all home sales in Michigan (62.8%), Nevada (60.3%), and Arizona (51.5%) are distressed sales. Rounding out the top 10 were California, Utah, Idaho, Georgia, Florida, Colorado, and Hawaii.

Lenders Can Detect Double Closings on Short Sales: The Solution? 06/20/2011


Investigate

Did you know that lenders can detect double-closings on short sale deals AND find out if a short sale property was sold again in the months following a closing? They can!

I was doing some research today on some of the latest short sale facts and trends and came across a research article with some great information:

  • The number of short sales has nearly tripled in the last eight quarters
  • 23 percent of all mortgages in the United States have negative equity (upside-down)
  • The number of short sales is expected to increase by another 25 percent in 2011
Here are a couple of neat graphs I found on Core Logic's site that illustrate these trends:

Short Sale Volume Projections

As I continued to read through the study it became apparent to me what they were really trying to imply about today's short sale trends. Banks have shown increasing concern for the amount of "suspicious" short sale transactions that have occured within the past three years. A "suspicious" transaction is a short sale that may have caused the lender to incur "unnecessary losses." 

For example, transactions that were sold in less than one to six months after the short sale closing, where the new sales price was at least 10-40 percent of the short sale price, are deemed "suspicious" transactions. Essentially, these are cases where a buyer purchases a property at an extremely low discount and then flips it to a new retail buyer; oftentimes this occurs the same day of the original short sale closing. Many investors purchase homes at a discount, rehab the property, and sell it at a greater value. I don't think anyone is too concerned about this type of a transaction and recognize it as a legitimate investment. 

The main concern for lenders is the number of short sales being processed where the buyer intends to sell the property immediately after closing (or at the closing table in some states). According to the report, short sales that are resold on the same day have an average of 34 percent ($56,947) gain between sales price. In their estimation, lenders are incurring "tremendous unnecessary loss" as a result of back-to-back closings.

By the way, "suspicious" short sales make up 1.9 percent (one in every 52) of all short sales. 

In order to "mitigate the risk" lenders absorb from "suspicious" short sales, Core Logic is offering a service that will send automatic alerts to banks when two loans are being processed for the same property at the same time by two separate parties. In addition, their Short Sale Monitoring Solution will continue to monitor short sales that have closed in subsequent months and will alert the bank if the property is resold. 

What do you think about this new tool offered to lenders by Core Logic? 

Our main concern lies with the homeowner or seller in this scenario. I know plenty of investors looking for short sale opportunities with the full intention to resale the home quickly. Are they bad people? Should they bepenalized for buying a property at a discount and resaling it at retail price? Again, I don't believe that's the real issue for all of us at SSAA. 

How many homeowners know what they're doing when they're approached by an investor who intends to flip their home in a back-to-back closing? Not many. And for those of us in a position to reach out to homeowners and educate them regarding their rights and options, what are we doing to beat investors to the punch?

There are SO MANY honest and innovative companies and services throughout the ActiveRain network that can help us become better-educated, reach more homeowners in need, and automate our daily tasks. Use them! Seek out the ones that will make you more accessible to distressed-home sellers, build your short sale expertise, and who truly have the homeowner's best interests in mind. 

Listing a Short Sale in 3 Easy Steps 06/20/2011

Listing a short sale can be broken down into the following three steps: identify, sign, and pursue.


1. Identify: Most real estate professionals might say that a short sale will occur when the value of a property is lower than the principle loan balance on a mortgage. This is true in most cases. A short sale can also occur when the net payoff to the first mortgage on the sale of a property is less than the total loan payoff amount, however. Let’s explore a few examples:

  • Scenario #1: A potential seller asks an agent to list their property for $200,000. The agent finds out the property is worth approximately $205,000 and the homeowners owe more than $259,000 on their mortgage. Since the property value is clearly less than the amount owed on the mortgage, the agent properly identifies this transaction as a short sale listing.
  • Scenario #2: An agent lists a property at the beginning of the year with an asking price of $100,000, and a loan balance of $85,000. Buyer-interest in the property has been far less than what they had originally determined, so the agent strategically lowers the asking price every month. The asking price is eventually lowered to $94,500 when a 90,000 offer is received. The agent realizes there will not be enough money to go around at closing to pay commissions, taxes, and other closing costs without shorting the mortgage company. The agent correctly identifies this listing as a short sale and submits the offer and HUD to the bank for review.
  • Scenario #3: An agent agrees to list a property for a friend who is going through some difficult financial circumstances. They have missed two payments on a first and second mortgage and need to sell their home in order to avoid foreclosure. The agent determines their house is worth $350,000 and find out they owe $300,000 on their first mortgage and $100,000 on their second mortgage. Even though the first mortgage is likely to be paid off in full through the sale of the property, the agent correctly identifies it as a short sale since the second mortgage will have to be paid back in short.

2. Sign: Once you have identified your listing as a short sale, it is time to have your seller sign your listing agreement and all other disclosures your state requires to list a short sale. Most states will also require you to mention somewhere in your MLS description that the home is being sold “as-is” or is “subject to lender approval.” Full disclosure to both the seller and the buyer is crucial to the success of a short sale. All parties involved must proceed throughout the process with proper expectations.

3. Pursue: Success in short sales not only requires proper expectation management, but will also require persistence to get the deal done. The short sale lender should be contacted immediately to find out about any imminent foreclosure sale dates, loan product details, and specifics regarding their short sale process. Depending on the proximity of the foreclosure sale date, marketing should be aggressive so that an offer is obtained early on in the process.

Listing a short sale is as simple as identifying whether or not the property meets short sale requirements, getting your paperwork filled out correctly, and being persistent enough to get the deal done quickly. If you would like to receive additional information regarding short sales or working with distressed-home sellers, please contact SSAA for assistance.

©2011 Short Sale Association of America, Inc. All rights reserved.
(800) 378-7722

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