Sarasota short sale specialist

What is a short sale? Do I qualify for a short sale?

2011-12-22T12:19:00.000-05:00

SHORT SALE OR LOAN MOD?

2011-12-02T13:30:00.001-05:00

The truth behind failed loan mod programOverwhelmed servicers, undeserving borrowers are only part of the story By Jack GuttentagInman News™"Who or what is responsible for the failure of the government's mortgage modification program to make a sizable dent in the volume of foreclosures?" Many factors are involved in this complicated story, but in my view, there are two major factors. The deserving-borrower mindsetFrom the beginning, the operating premise of the government's modification program has been that only deserving borrowers should be helped. The programs require that borrowers be suffering from financial hardship, and that their mortgage payment exceeds 31 percent of their income. Balance reductions as a modification tool are discouraged or prohibited because they constitute a permanent benefit that can't be retracted when the borrower is no longer suffering hardship. And borrowers who don't occupy their homes as their permanent residence are ineligible because they are investors looking for profit. Never mind that they are also major purchases of foreclosed homes.The government is not always so discriminating in who it helps. When it rescued insurance corporation AIG from impending failure, for example, it also protected major Wall Street firms who were creditors of AIG from the losses they would have incurred had AIG been allowed to default -- losses these creditors richly deserved. This difference in treatment between Wall Street and Main Street reflected the difference in the challenge faced by policymakers. In the AIG case, they confronted a potential financial crisis that had to be dealt with immediately to avoid a catastrophe. Even if it were possible to design a plan that would have imposed losses on AIG's major creditors while preventing a contagious loss of confidence generally, which is not at all clear, there wasn't time to do it. The government couldn't avoid benefiting the undeserving creditors of AIG. Foreclosures, in contrast, have been viewed as a major problem, but not a crisis. Time was available for planning and deliberation, and out of that process emerged the rules designed to prevent undeserving borrowers from benefiting. This had the effect of disqualifying many borrowers, which was the purpose. But it also made the programs more complex to administer, aggravating dysfunction in the mortgage servicing industry, which resulted in many deserving borrowers not being helped.Had the foreclosure problem been viewed as a crisis, the remedies fashioned would have been much simpler, implementation would have been much faster, and many undeserving borrowers would have benefited. But more deserving borrowers would have benefited as well, and the total impact could have been large enough to do the job. Causes of servicing dysfunctionThe firms servicing mortgages have been unable to cope with the enormous volume of modification requests that they have received. The results are well known to the borrowers and their advisers who have tried to get their loans modified. Borrowers have faced endless delays; an inability to reach the employee with whom they had their previous contact; conflicting stories from different employees who have been involved with their case; lost documents that don't get reported back to the borrower; and on and on. The service is less terrible now than two years ago, but is still terrible. Servicer dysfunction in connection with modifications has its roots in the prior history of the industry. The evolution of the industry was implicitly based on the assumption that the financial crisis, and the ensuing decline in home prices and rise in foreclosures, could not happen.Separation of servicing and ownership: At one time, mortgages were serviced by the firm that owned them, but today a very large proportion is serviced by firms under contract with the owner.This separation permitted servicing firms to reduce servicing costs by increasing volume, but it made government efforts to increase modifications more difficult because there were two parties involved instead of one. In general, under their contracts with owners, servicers are barred from taking any action that is not in the financial interest of the owners. In attempting to encourage modifications, the government has necessarily dealt with servicers, but has had to take account of the servicers' obligations to owners. This led the government to develop a net present value (NPV) rule that servicers apply to every modification.If the application of the rule indicates that the mortgage will have a higher NPV to the owner with modification than without it, the servicer's obligation to the owner is met. But the NPV rule is a complex step in an already complex process. Furthermore, because the NPV is calculated by the servicer and uses some servicer-specific information, there is no way for borrowers to know in advance if they will qualify for a modification.Rationalization of servicing: The development of mortgage servicing as a separate line of business was accompanied by process changes designed to enhance efficiency. In general, this involved automating everything that could be automated, and simplifying functions that could not be automated so that they could be performed by relatively unskilled (and lower-paid) employees.But modifications require a higher level of skills, which few servicer employees had. Of equal importance, servicers did not have the systems they needed for handling and routing inbound calls and faxes; for tracking files; for compiling and recording documents received from borrowers; for allocating responsibilities among staff; and so on. In effect, servicers were on the beach with no protection when the modification tsunami hit them.

3 options for buying home after short sale

2011-11-21T12:57:00.001-05:00

REThink Real Estate By Tara-Nicholle NelsonInman News™Share ThisQ: I experienced a hardship two years ago and had to sell my house via short sale. I am now ready to purchase a home but heard I would have to wait another year because of FHA rules. I have been paying my rent on time and my credit is in the 700s. What programs or other options do I have in terms of obtaining a loan? I want to purchase a house for $70,000. --T. JordanA: I'm glad to hear that your hardship has passed, and that you've been able to get your finances back in shape. Whoever you've spoken to is correct: There is a three-year waiting period after a short sale before you can qualify for an FHA loan on a new home. As I see it, though, you have three clear options:1. Wait a year. The fact is, time flies -- and you're only 12 months away from the expiration of the FHA waiting period. Frankly, there are so many homes on the market right now, including an enormous percentage of distressed properties with condition problems and such, that between getting their own financial ducks in a row and house hunting, it is taking many homebuyers more than a year from the time they get started to get into contract, even without any waiting period.Unless you have an uber-urgent reason to move or are very flush with cash (see No. 2, below), my advice is to wait the year. In the meantime, pay your bills on time -- every time -- and work with your mortgage and real estate brokers to make sure all your other financial ducks are in a row so there are no surprises when your waiting period is up.2. Get a non-FHA loan. FHA is popular -- especially among those who only have the cash to make the FHA minimum 3.5 percent down payment -- but it's not the only game in town. The vast majority of conventional (non-FHA) loans available from mainstream lenders are insured by Fannie Mae and Freddie Mac.Both these agencies impose a shorter, two-year, post-short-sale waiting period, as long as the borrower is coming in with a 20 percent down payment. If you wait an additional two years, the minimum down payment requirement comes down to 10 percent, but by then you will qualify for the 3.5 percent FHA mortgage.3. Plead the case of extenuating circumstances. FHA guidelines do make an exception for the three-year, post-short-sale waiting period for former homeowners/wannabe borrowers who can document that they were forced to do the short sale by extenuating circumstances. The most common fact scenarios that fit the bill are a job transfer to another area (not job loss) or a natural disaster that affected the property (e.g., fire, flood, etc.).Beyond that, whether a "hardship," to use your terminology, rises to the level of an extenuating circumstance for purposes of qualifying for an FHA loan is up to the discretion of the lender, but things like a job loss, the adjustment of a mortgage or the decline of the home's market value do not count. If you had, say, an accident or illness that resulted in a temporary disability, it might be worth the effort to plead your case. Speak with your mortgage professional about whether you can make a credible argument in favor of shortening your waiting period

Foreclosure activity rises in October

2011-11-15T09:34:00.000-05:00

RealtyTrac: New state law results in a 75% drop in default notices in Nevada By Inman NewsInman News™In another sign foreclosure activity is ramping up, foreclosure filings rose nationwide in October compared to the month before, according to the latest report from foreclosure data site RealtyTrac. One in every 563 housing units, or 230,678 properties, received a filing -- a default notice, scheduled auction, or bank repossession -- in October. While that's a 7 percent jump from September, filings were still down nearly 31 percent from October 2010."The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we've been in for the past year as lenders corrected foreclosure paperwork and processing problems," said James Saccacio, RealtyTrac's CEO, in statement. The number of homes receiving default notices increased 10 percent month to month in October, to 77,733 properties, though that's still down 23 percent from October 2010. In states that follow a judicial foreclosure process, default notices reached an 11-month high of 39,282, accounting for about half of all default notice filings. Three states saw particularly significant month-to-month increases in default notices: Florida (28 percent), Pennsylvania (50 percent) and Indiana (61 percent).Scheduled auctions rose 8 percent month to month but fell 38 percent year over year in October to 85,321. Auctions in judicial foreclosure states also reached an 11-month high last month, to 25,941. On a monthly basis, auctions increased significantly in three states: Florida (57 percent), Minnesota (43 percent) and Illinois (38 percent).Banks repossessed 67,624 properties in October, up 4 percent from September, but down 27 percent from October 2010. Four states saw especially large month-to-month increases in REO (bank-owned home) activity: Michigan (40 percent), Oregon (45 percent), New Jersey (48 percent) and Indiana (73 percent). Five states accounted for 53 percent of nationwide foreclosure activity in October: Nevada, California, Arizona, Florida and Michigan.A new Nevada state law designed to crack down on documentation irregularities by foreclosing lenders took effect in October, likely leading to the 75 percent monthly decrease in default notices in the state, RealtyTrac said. Nevertheless, Nevada had the highest foreclosure rate in the nation for the 58th straight month in October.10 states with the highest foreclosure activity rates in October:Area Foreclosure rate (October 2011) U.S. 1 in 563 housing units Nevada 1 in 180 California 1 in 243 Arizona 1 in 259 Florida 1 in 268 Michigan 1 in 282 Georgia 1 in 406 Illinois 1 in 423 Idaho 1 in 432 Oregon 1 in 455 Colorado 1 in 458 Source: RealtyTracAmong metropolitan areas with a population of 200,000 or more, Stockton, Calif., had the highest foreclosure rate in October with 1 in 143 units receiving a foreclosure filing. Las Vegas had previously held the top spot for 22 straight months, but dropped down to No. 5 due to an 80 percent monthly drop in new default notices, RealtyTrac said.Metro area Foreclosure rate (October 2011) Stockton, Calif. 1 in 143 housing units Modesto, Calif. 1 in 148 Vallejo-Fairfield, Calif. 1 in 150 Riverside-San Bernardino, Calif. 1 in 155 Las Vegas 1 in 162 Saginaw, Mich. 1 in 174 Sacramento, Calif. 1 in 176 Cape Coral-Fort Myers, Fla. 1 in 190 Merced, Calif. 1 in 200 Orlando, Fla. 1 in 208

Foreclosure inventories growing in states that allow judicial foreclosure

2011-11-04T15:13:00.000-04:00

LPS: Fewer homes entering process, but pipeline is clogged Share ThisThe percentage of homes in the foreclosure process continued to climb in September, even as delinquencies and foreclosure starts declined, according to the latest report from data aggregator Lender Processing Services Inc.While fewer homes are entering the foreclosure pipeline, there's been an even more drastic slowdown in homes coming out the other end, due in large part to the "robo-signing" controversy, which has slowed the pace at which lenders can repossess homes and put them back on the market.LPS said foreclosure starts were down 20 percent in September from a year ago, to 220,273, slightly below the three-year average. But foreclosure starts continue to outnumber foreclosure sales by a factor of more than three to one, reflecting the fact many homes are tied up in the system for months or years after lenders initiate foreclosure proceedings.Foreclosure inventories continue to grow in judicial foreclosure states where courts handle foreclosure proceedings, with lenders taking an average 761 days to complete the foreclosure process on delinquent homeowners in those states -- six months longer than in nonjudicial states.Nationwide, nearly 40 percent of homeowners in foreclosure had not made a payment in two years, and 72 percent had not made a payment in a year or more, LPS said.LPS estimated there were 2.17 million homes in some stage of the foreclosure process at the end of September. That's 4.18 percent of all homes with mortgages and an 8.9 percent increase in the foreclosure rate, which stood at 3.84 percent at the same time a year ago.Another 4.2 million homeowners were at least one payment behind on their mortgages. That's 8.09 percent of all homes with mortgages, down 12.7 percent from the 9.27 percent delinquency rate a year ago.A bright spot in the report was that the number of seriously delinquent loans -- mortgages in arrears by 90 days or more but not yet in foreclosure -- continues to decline. While 1.84 million homeowners were seriously delinquent, that's down 39 percent from January 2010, when 3.06 million mortgages were on the verge of foreclosure.The government is standing behind about half of seriously delinquent loans, either through Fannie Mae and Freddie Mac (19 percent) or Federal Housing Administration, U.S. Department of Agriculture and Department of Veterans Affairs loan guarantee programs (32 percent).The rest are loans that were bundled into "private label" mortgage-backed securities (37 percent) or retained by lenders in their investment portfolios (12 percent).While robo-signing has slowed down lender repossessions, many seriously delinquent homeowners are able to avoid foreclosure through loan modifications. Lenders have signed off on about 2 million loan modifications since January 2010, LPS noted in reporting the downward trend in serious delinquencies. There's been a dramatic decline in the redefault rate on modified loans, with about nine out of 10 modifications resulting in reduced payments for borrowers.Loan modifications could be less of a factor going forward, with both Home Affordable Modification Program (HAMP) and non-HAMP loan modifications down sharply in the second quarter from a year ago.Total loan modifications were down 44 percent during the second quarter from a year ago, to 149,000, with HAMP modifications falling 35 percent and proprietary modifications down 50 percent.A separate report by the Census Bureau showed the steady decline in the homeownership rate during the housing bust may have hit bottom during the third quarter.At 66.3 percent, the homeownership rate during the third quarter was down 0.6 percentage points from a year ago, but up 0.4 percentage points from the second quarter, the Census Bureau said.For decades, the rate of homeownership ranged between 63 and 66 percent, though it began a climb above normal rates in the mid-1990s and peaked at above 69 percent just before the housing bust.Writing on the blog Calculated Risk, Bill McBride said decennial Census numbers suggest the actual homeownership rate is now probably closer to the 64 to 65 percent range.LPS estimates that the total number of U.S. first mortgages has declined by 6.8 percent since January 2008, when there were an estimated 55.7 million homes with mortgages.Most of that drop -- a decline of nearly 3.8 million mortgages -- was presumably the result of elevated foreclosures and the lower homeownership rate. Homes that go into lenders' real estate owned (REO) inventories or are purchased by investors in all-cash transactions don't have mortgages.While some homeowners would also have paid off their mortgages in full and owned their homes outright, the total number of outstanding mortgages usually grows as the population and housing stock expands and first-time homebuyers take out new loans.

Will short sales help the housing market.

2011-07-19T14:32:00.000-04:00

Great debate on short sales watch and learn!

The Seven most dangerous Short Sale Myths

2011-06-27T13:14:00.000-04:00

With 25 - 50% of Sarata property owners owing more on thier mortgages than the value of the property, a short sale can be an excellent solution for homeowners who must sell or face foreclosure. Unfortunately, a number of myths about short sales have developed, and it is important to understand the reality of this process should you find it meets your current needs.

•Myth #1 – The Bank Would Rather Foreclose than Bother with a Short Sale
This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly.
Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.

The qualifications for a short sale include:
1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
2. Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
•Myth #2 – You Must Be Behind on Your Mortgage to Negotiate a Short Sale
While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency. If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.
•Myth #3 – There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure
This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.
The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is
complete.
•Myth #4 – Listing My Home as a Short Sale is an Embarrassment
It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.
With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.
•Myth #5 – Short Sales are Impossible and Never Get Approved
This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not. For example, agents with the Certified Distressed Property Expert® (CDPE) Designation
receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.
•Myth #6 – Banks are Waiting on a Bailout and Not Accepting Short Sales
You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses. Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of “eliminating distressed assets through modification or short sale.”
•Myth #7 – Buyers are Not Interested in Short Sale Properties
This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.
For buyers, short sales and foreclosures have become synonymous with “good deals.” More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.

Funny turn on Bank Of America

2011-06-08T11:28:00.002-04:00

Visit msnbc.com for breaking news, world news, and news about the economy

Where have all the foreclosures gone?

2011-02-11T09:44:00.000-05:00

Drive any neighborhood..search for ‘notice of defaults’.. in the most major US metro areas and its clear there should be a ton of REOs for sale NOW…but, there isn’t.

Not yet, anyway.

The question is..why? Why aren’t there more REOs for sale now, why are the lenders delaying the release of these listings?

Watch this CNBC Video with RealtyTracs Rick Sharga to have that question answered.

Short sale buyers get best deals in 2010

2011-01-27T09:13:00.000-05:00

This is an interesting statistical article posted by Adam robinson a local foreclosure specialist in Sarasota. According to these statistics if you can wait out the short sale process it just might be the better deal out there. Some people just don't have the time or patience to wait it out but for those that do they could be getting the best deals.

I just ran some stats on 2010, residential sales in Sarasota County. In 2010, short sales buyers were rewarded for their patience of enduring a short sale by gettting the best deals on residential homes. Short Sale buyers saved an average of 37% or $56/sq.ft. compared to buyers of non-distressed proeprties in Sarasota County in 2010. Buyers of REO/Bank Owned properteis paid an average of $119.54/sq.ft.

In Sarasota County in 2010 there were a total of 8934 residential sales. Although, the bank owned properties sold faster and for higher percentage of of the listed (asking price), they were not the best deals based on the average cost per square foot.

5,174 of these sales were non-distressed sales or fair market sales. They sold for an average of $150.92/sq.ft. and 91.55% of listed price after 141 days on the market and closed after 182 days (averaged 41 days under contract).
There were 1,773 short sales closed in Sarasota county in 2010. They sold for an average of $94.91/sq.ft. and 94.11% of the listed price. They were on the market an average of 167 days before closing 282 days after being listed (averaged 115 days under contract).
1,986 bank owned properties closed in 2010 for an average of $119.54/sq.ft.. These were on the market the shortest time averaging only 46 days to contract and 82 days to closing. (averaged 36 days under contract).
Bank owned proeprties also sold for a higher percentage of the asking price. On average the bank owned proeprties sold for 98% of the listed price. I will be writiing more about the percentage of sales price to list price, based on days on the market in a blog later this week.

All figures used above are the average value. Since I was interested in comparing cost per square foot, these stats are for residential sales in Sarasota County in 2010, as reported in MFR MLS.

Adam Robinson, Broker
SarasotaForeclosures.com Inc.

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7 Tips for Short Sale Success

2011-01-07T13:24:00.000-05:00

Have to sell your home for less than it’s worth? Our seven tips will help you get the best price.

1. Know who you owe
A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you.

2. Pick your short sale team
You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview and listen carefully for signs that they understand the complexities of the short sale process.

Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success.

3. Get your documents ready
Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years.

4. Expect delays
Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale--and even longer if you must negotiate with more than one lender or lienholder.

Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays.

5. Anticipate demands
Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete?

6. Know the tax implications
Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.

7. Consider how the short sale will affect your credit and what you must pay
Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy.

Ask your lawyer whether you'll be responsible for paying back the lenders' loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.

This article includes general information about tax laws and consequences, but isn't intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction.

Predictions

2010-12-24T09:36:00.002-05:00

For Housing to Recover, It Comes Down to Confidence

2010-12-24T09:31:00.000-05:00

This is an article posted by Diana Olick of CNBC news:

Patrick Newport over at IHS Global Insight noted that while the seasonal adjustments pushed the numbers up, in reality November's actual sales volume was the lowest ever recorded.

Even the National Association of Home Builders couldn't muster much enthusiasm. "The gain represents a partial bounce-back from a near-record low, downwardly revised number of new-home sales in October," went their release.

"While builders continue to face a great deal of competition from short-sale and foreclosure properties, the improvement registered in new-home sales in November is a good sign," said Bob Jones, chairman of the National Association of Home Builders.

Still, the builders are concerned about lack of credit to build new homes. They claim that when demand surges, they will not have product to offer. This even as the Commerce Department reported an 8.2 month supply of newly constructed homes at the current sales pace, but the current sales pace is pretty awful.

As we came to the end of 2010, I was asked to do all kinds of prediction pieces, which I dutifully did. Neither I, nor anyone who studies housing, can make any promises in this market. There is simply no historical context with which to judge.
"Inventory management continues to improve. The number of new homes for sale fell to the lowest level since 1968.," notes Newport. "And though the turnover rate—the median time it takes to sell a new home—inched up 0.1 month, to 8.2 months, this is a vast improvement over March 2010, when the turnover rate hit an all-time high of 14.4 months."

As we came to the end of 2010, I was asked to do all kinds of prediction pieces, which I dutifully did. We picked some stocks, looked at sectors and geographic regions, and noted the headwinds.

Neither I, nor anyone who studies housing, can make any promises in this market. There is simply no historical context with which to judge.

I continue to believe that while we can argue 'til we're blue about credit, government incentives, fraud and blame, the fate of the housing market lies in confidence. The minute Americans see a real reason for hope, a lift from the bottom—and a potential for profit— housing will come roaring back.

2011-2012 Home Values | Expert Expects Another 15-30% Drop In Home Values

2010-12-24T09:24:00.000-05:00

“More than 2 years after the financial crisis, a weak residential and commercial real estate market remains the biggest threat to the economy, according to ValuEngine’s Richard Suttmeier.

Looking out into 2011, Suttmeier warns residential housing could fall another 15-30%. “The housing market is still overpriced relative to where we began the new millennium,” he tells Aaron in this segment. “Prices are still about 50% higher than where we were at the end of 1999.”

Can't sell your home for a decent price? You're not alone.

2010-12-10T09:09:00.000-05:00

Here is an interesting article posted by CNN Money

NEW YORK (CNNMoney.com) -- American homes are expected to be worth $1.7 trillion less in 2010 than they were worth last year, according to a report released Thursday by real estate website Zillow.

This year's drop in home values is 63% bigger than the $1 trillion dip in 2009, and brings the total value lost since the housing market's peak in 2006 to a whopping $9 trillion.

While the homebuyer tax credit helped prop up the housing market in the second half of 2009 and the first half of 2010, home values continued their slide in the second half of the year. Almost $700 billion in value was lost in the first half of the year, compared to Zillow's estimates of $1 trillion in the second half of 2010.

"It's a testament to the nearly irresistible force of the overall market correction that government incentives can only temporarily hold back the tide, and that the market will ultimately find its natural equilibrium of supply and demand," said Zillow Chief Economist Dr. Stan Humphries.

And it may not get much better.

"Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief," Humphries said.

Only 24% of the 129 markets Zillow tracked increased in total home value this year. Home values increased $10.8 billion in the Boston metropolitan statistical area (MSA), and $10.2 billion in San Diego MSA.

The Robo-Signing Saga Continues

2010-12-03T09:09:00.000-05:00

Freddie Mac and Fannie Mae have recently ended their temporary ban on selling foreclosed homes in the latest installment of the “Robo-Signing Scandal.” After cutting ties with the law firm that allegedly forged signatures and hid flawed files from auditors, the two government-sponsored entities (GSEs) have given brokers the green light on marketing foreclosures or completing the sales of those already under contract.

Freddie and Fannie own or guarantee about half of all U.S. home mortgages. With 31 million loans worth about $5 trillion, the two GSEs are significant players in the distressed property market. Around 1 percent (250,000) of Freddie’s and Fannie’s mortgages are foreclosures, while another 8 percent (2.48 million) are currently delinquent.

October: Home Sales Down, Investors Up

2010-11-24T10:14:00.000-05:00

NAR reported a 2.2 percent decline in its existing-home sales estimate for 2010 to 4.43 million, down from 4.53 million in September. This represents a 26 percent decrease from 2009, which was one of the worst years in U.S. real estate history. However, total housing inventory at the end of October fell slightly to 3.86 million existing homes, or a 10.5-month supply.

Another interesting point from this report was that investors made up 19 percent of October transactions, which is up 36 percent over 2009. In addition, all-cash buyers were 29 percent of the market, up 20 percent from 2009.

New fed initiatives to help foreclosures

2010-11-22T14:59:00.001-05:00

WASHINGTON – Nov. 22, 2010 – The Department of Justice’s Access to Justice Initiative and Vice President Joe Biden announced a series of steps on Friday that the government will take to help middle class and low-income families secure their legal rights in a foreclosure. Those steps includes strengthening of foreclosure mediation programs, helping veterans secure the legal help they need, and making it easier for workers to find a qualified attorney when they believe their rights have been violated.

The announcement is the culmination of work between the Department of Justice’s (DOJ) Access to Justice Initiative and federal agencies like the Department of Labor (DOL), the Department of Housing and Urban Development (HUD), and the Department of Veterans Affairs (VA), and others.

“Many people’s lives can be improved without major new investments, and in fact with real savings, if we simply help them access the legal rights and benefits that are theirs,” says DOJ Senior Counselor for Access to Justice Larry Tribe.

Foreclosure mediation programs

DOJ’s Access to Justice Initiative and HUD issued a joint report identifying emerging strategies for effective foreclosure mediation programs. To assist jurisdictions developing or expanding mediation programs, the report describes several features that help boost a program’s effectiveness. The report also lists existing foreclosure mediation programs that are willing to help other programs throughout the nation. View the report here: http://www.justice.gov/atj/effective-mediation-prog-strategies.pdf

HUD also announced a new training webinar that will highlight strategies and resources for avoiding foreclosure. The training – aimed at a wide variety of audiences including homeowners, housing counselors, pro bono attorneys and mediators – will include topics such as accessing housing counseling resources, finding state-specific foreclosure prevention resources, avoiding foreclosure rescue scams, and understanding federal foreclosure prevention programs.

HUD also provided guidance on the use of Community Development Block Grant and Neighborhood Stabilization Funds for housing counseling, a resource that can increase the effectiveness of foreclosure mediation programs. View the guidance here: http://www.hud.gov/offices/cpd/communitydevelopment/programs/pdf/housing_counseling.pdf

In addition to these efforts, NeighborWorks, a national non-profit created by Congress and funded by Congressional appropriations, will debut a foreclosure mediation workshop at the NeighborWorks Training Institute in December. More than 2,000 counselors and other nonprofit professionals are expected to attend the Training Institute. NeighborWorks is one of the largest funders of foreclosure-mitigation counseling in the nation, and is the administrator of the National Foreclosure Mitigation Counseling program.

Finally, the Federal Trade Commission announced a new rule and several enforcement actions to protect vulnerable homeowners from mortgage rescue fraud. View the FTC’s press release here: http://www.ftc.gov/opa/2010/11/mars.shtm

More information about the Department of Justice’s Access to Justice Initiative can be found at: www.justice.gov/access.

© 2010 Florida Realtors®

Wells Fargo Declaration, New York Legislation

2010-10-22T09:58:00.000-04:00

Wells Fargo says it has no plans to freeze foreclosures today or in the future. Since the beginning of the “robo-signing” scandal, where large banks allegedly processed hundreds of thousands of foreclosure documents improperly, Wells Fargo has maintained that its processes have been thorough and in accordance with the law.

John Stumpf, Chairman and CEO of Wells Fargo, released the following statement: “We are confident that our practices, procedures and documentation for both foreclosures and mortgage securitizations are sound and accurate. For those reasons, we did not, and have no plans to, initiate a moratorium on foreclosures.”

Also, in a possible sign of what’s to come in the 23 states requiring judicial review for foreclosure, New York became first state to pass legislation requiring attorneys handling residential foreclosures to sign an affidavit that they took “reasonable” steps to review and verify the accuracy of foreclosure paperwork. Jonathan Lippman, chief judge of the New York Court of Appeals, estimated that there are 80,000 foreclosure actions pending in the state’s courts.

Robo-Signers Scandal Exposed | Robo-Signers Had NO Real Estate Legal Authority

2010-10-15T09:07:00.000-04:00

In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in “foreclosure expert” jobs with no formal training, a Florida lawyer says.

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

“The mortgage servicers hired people who would never question authority,” said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them — earning them the name “robo-signers.”

The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.

Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.

“This was an industry wide scheme designed to defraud homeowners,” Ticktin said.

The depositions paint a surreal picture of foreclosure experts who didn’t understand even the most elementary aspects of the mortgage or foreclosure process — even though they were entrusted as the records custodians of homeowners’ loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn’t define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff’s assignor or defendant. She testified that she didn’t know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. “I don’t know the ins and outs of the loan, I just sign documents,” she said at one point.

Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.

Judges are unlikely to look favorably on a bank that claims paperwork flaws don’t matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book “Foreclosures.”

“There has to be a cornerstone of integrity to the process,” Coffey said.

Bank of America responded to Tiktin’s depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. “This review will ensure we have a full understanding of any potential issues and quickly address them,” Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank’s foreclosure customers have not made a payment in more than 18 months.

JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.

Litton Loan Servicing did not respond to a request for comment.

Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.

For a housing recovery to occur, all the foreclosed properties — which could account for 40 percent of all residential sales by 2012 — need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.

“This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?” says Cris deRitis, director of credit analytics at Moody’s Analytics. “We need to fix these issues before the economy can recover.”

Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you’ve reviewed documents you’ve never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.

So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.

But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of “foreclosure king” David Stern, now under investigation by the Florida attorney general’s office. “Pending the outcome of the AG’s investigation, Citi is not referring new matters to this firm,” the bank said in an e-mailed statement.

Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern’s firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.

Stern’s lawyer, Jeffrey Tew, did not respond to a request for comment.

Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.

The Earls and their attorney now allege that they were victims of fraudulent paperwork.

SHORTSALE PROCESS: GETTING BETTER EVERYDAY

2010-09-27T16:32:00.002-04:00

Over the past year and a half, the Short Sale has begun to dominate real estate markets across the nation.

A homeowner is upside down in their mortgage, can’t sell the home to cover what they owe the bank (or banks in many cases), loses a job, goes through a divorce, an interest rate adjusts, etc., and voila, the homeowner starts missing payments.

What now?

Loan Modification? Sorry folks, loan mods have become quite the sham…just ask your local Department of Real Estate how many companies, claiming to be loan modification specialists, they’ve shut down due to erroneous success rates. And then ask the thousands of homeowners, who paid those companies thousands of dollars upfront to accomplish the task, what they received in return, and then ask them if they got their money back.

Nope.

Why don’t lenders want to grant Loan Modifications? Because statistics show, of the Loan Modifications that actually were granted way back when our economy began to crumble, the homeowner ended up back in default within 6 months, and the bank ended up foreclosing anyway.

So, what now?

Most people turn to the Short Sale, requesting their lender(s) to approve the sale of their property for less than what they owe, and before the bank forecloses. In today’s market, this practice has evolved into a much more successful process. Most lenders have dedicated teams, and systems, to assist in the Short Sale process, and some have even become fairly proficient at approving them.

In the past, the Short Sale process could take 6 months, and beyond. Most, these days, take less than 6 months, and some lenders are turning them out in less than 2 months. A big change from the Short Sale process of 2009.

All this success sounds great, right? A Short Sale should be a slam dunk, yes?…Well, no, not really. In almost every case, a homeowner has to show the lender that continuing to pay the mortgage(s), is an undue financial hardship, and the bank will make the homeowner jump through several hoops to get it done. That being said, unlike the Loan Modification, the hoops can lead to the desired outcome.

If a homeowner is in trouble, like so many are, they shouldn’t screw around waiting for a savior to come to their rescue, praying for thousands of dollars of mortgage debt to miraculously vanish…ain’t gonna happen. They also shouldn’t wait until the “Notice of Sale” posts on their door, to decide what to do. A Short Sale is the best bet for most homeowners in hardship, period.

If what I’ve been talking about pertains to you, find your local Short Sale Agent, schedule an appointment, and find out what they can do for you. Oh, and by the way, a Short Sale is a very complex transaction, and not every real estate agent, is a Short Sale Agent. So, your friend’s cousin’s brother-in-law’s little sister, who is a school teacher, but likes to dabble as a REALTOR, is not the person you need representing your interests when your future is on the line. Search your area online, or go to your local Association of REALTORS…chances are, you’ll find the person who can really help you.

5 reasons homeownership trumps renting

2010-08-31T16:27:00.002-04:00

The seemingly endless run of bad housing news is discouraging some potential homebuyers from considering a purchase. But the truth is that the advantages of homeownership have very little to do with investment gains, and a lot to do with personal comfort and satisfaction.

Here are five of them:

• Be your own landlord. The bank can only kick you out if you don’t pay; a landlord can be much less dependable – deciding to sell the property or choosing to live there themselves.

• Paying the principal is forced savings. Yes, it’s possible that home prices will fall further. It is also possible that your 401(k) will lose value. But over the long haul, both are likely to enjoy modest gains in value.

• Fixed-rate mortgages never rise – and eventually you pay them off. With mortgage rates at record lows, people who buy now are locking in real bargains.

• Good schools. Family-sized rentals are harder to come by in areas with excellent public schools.

• Spacious properties in pleasant neighborhoods. Sizable homes in attractive communities are almost always owned – not rented.

Source: The New York Times, Ron Lieber (08/27/2010)

Why Did Housing Crash…Again? | Home Value Double Dip Expected

2010-08-26T10:44:00.000-04:00

Why did housing crash…again? That IS the question….

The National Association of Realtors July home sales resulted in a nearly 30% decrease in home sales.
That is a far greater decrease in sales than expected (even by us)

Interesting CNBC analysis about what is happening now…and what will happen next for housing (and our economy).

Housing High Still Low

2010-07-26T18:43:00.000-04:00

Published: Monday, 26 Jul 2010 | 2:53 PM ET Text Size By: Diana Olick
CNBC Real Estate Reporter
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You would think that a 24 percent positive jump in any index, housing or otherwise, would have the analysts for that industry toasting recovery with bubbly champagne; not so much today.

The 24 percent jump in sales of new construction from May to June followed a 37 percent drop in sales of new construction from April to May (following the expiration of the home buyer tax credit.)

You could say that the two months kind of cancel each other out, slightly to the negative, but today's number, if nothing else, offers a big sigh of relief that while things aren't exactly getting better, they're not getting significantly worse.

And that seems to be the mantra of the market these days.

"We're "stabilizing", but stabilizing at historically poor levels. Foreclosures, sales, prices...no more plummeting, but no improvement yet either."

Diana Olick
Realty Check, CNBC
Just listen to the experts:

Peter Boockvar, Miller Tabak: Bottom line, while the figure was better than expected, new home sales make up less than 10% of the overall industry with existing homes making up the balance. It's good to see a pick up in new home sales but an overall market that still has way to much inventory does not need too many new homes built.

Dan Oppenheim, Credit Suisse: The small sample size, especially given the lack of activity to survey recently, lends itself to extreme volatility in reported Census figures, and it’s hard to trust the data in months like these. Either way, the low level of activity (even with the reported increase) is well below desired absorption levels of builders and will lead to additional pressure on home prices.

Mortgages

30 yr fixed 4.61% 4.78%
30 yr fixed jumbo 5.43% 5.57%
15 yr fixed 4.09% 4.46%
15 yr fixed jumbo 4.99% 5.23%
5/1 ARM 3.66% 3.53%
5/1 jumbo ARM 4.19% 3.67%

Find personalized rates:

Bankrate.com

Mark Hanson, Housing/Mortgage Analyst: In June, New Home Sales as a percentage of Existing Home Sales was also the lowest ever for any June on record and the second lowest in history — last month was the lowest ever. With New Home Sales at 5% of Existing Sales, some many think there is a lot of growth ahead But with demand being in distressed real estate and incredible growth expected through foreclosures & short sales over the near, mid and long term the builders have an uphill battle ahead.

Questions? Comments? RealtyCheck@cnbc.com

© 2010 CNBC, Inc. All Rights Reserved

Fannie Mae to penalize homeowners who walk away

2010-06-24T15:31:00.000-04:00

NEW YORK (AP) – June 24, 2010 – Government-sponsored mortgage purchaser Fannie Mae is trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from getting new loans for seven years.

Troubled borrowers who do not try in good faith to work out a deal, but have the capacity to pay, are targeted by the policy announced Wednesday.

“Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting,” said Terence Edwards, executive vice president for credit portfolio management.

A strategic default occurs when a homeowner stops making payments on a mortgage despite being able to do so. It has become increasingly common in communities where housing values fell sharply and homeowners are “underwater,” or owe more than their houses are worth.

Fannie Mae said that in locations where the law allows, it also plans to take legal action to recoup outstanding mortgage debt from borrowers who strategically default. The company plans to instruct its servicers to monitor delinquent loans facing foreclosure and recommend cases to pursue for such judgments.

A spokesman for fellow government-backed mortgage buyer Freddie Mac said its current policy requires at least a five-year wait. Freddie Mac will “take a close look” at the new Fannie policy, said spokesman Brad German. “We’ll consider it in light of current market conditions in order to manage our risk as effectively as possible.”

Fannie and Freddie were created by Congress to buy mortgages from lenders and package them into bonds that are resold to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion. That’s about half of all mortgages.

The wave of foreclosures affecting Fannie and Freddie loans has caused a major problem for the U.S. government, which effectively guarantees the loans.

The government seized control of Freddie and Fannie in September 2008, a rescue that has cost taxpayers $145 billion so far. The two companies show no signs of becoming self-sufficient.

In announcing the new policy, Fannie Mae said homeowners who make a good faith effort to resolve their situation with their mortgage companies, and those who have extenuating circumstances, will be eligible for new loans in a shorter time period. The company did not detail how long the wait might be.

Fannie Mae shares fell 1 cent to close at 41 cents. Fannie Mae shares finished unchanged at 48 cents. Both companies plan to delist their shares from the New York Stock Exchange because they don’t meet listing requirements that they remain above $1 per share.

Copyright © 2010 The Associated Press, Eileen A.J. Connelly, AP business writer. All rights reserved.

Home Tax credit extended

2010-06-17T16:33:00.001-04:00

Delinquent loans up 21.3% - South Florida Business Journal:

2010-04-13T14:48:00.000-04:00

Delinquent loans up 21.3% - South Florida Business Journal:

How Long For Negative Equity

2010-04-07T14:47:00.005-04:00

Source: WSJ.com
A new study by First American CoreLogic finds that it could take until late 2015 or early 2016 for the typical underwater borrower to have positive home equity, and that homeowners in some of the nation’s hardest hit markets, such as Detroit, could be underwater until as late as 2020.

First American CoreLogic

So-called “underwater” homeowners who owe more than their homes are worth could be holding their breath for much of the next decade.

Of the 10 markets examined in the report, Atlanta, Dallas and Washington, D.C., are the first markets to return underwater homeowners back to positive equity in 2015, followed by Boston and California’s Inland Empire one year later. Pittsburgh, Las Vegas, Fort Myers, Fla., and Lancaster, Pa., aren’t projected to return to positive equity until 2019.

The study notes that even markets where fewer borrowers have negative equity could take a long time to recover “because the few borrowers that are upside down are deeply in negative equity and these are typically not high appreciation markets.”

The research, of course, makes certain assumptions about long-term home prices and how quickly borrowers will pay off their loans. As a baseline, the research uses market-specific forecasts for short-term growth, an annual 3% increase in long-term prices, and average loan balances that decrease through amortization at an annual rate of 3.3%.

Under best-case and worst-case scenarios, which use annual home-price appreciation of 5% and 1.5%, respectively, positive equity begins to return in 2013 and 2017.

The findings show just how paralyzing the negative equity problem could become for the economy over the next few years, as more homeowners are trapped in homes that they can’t sell or refinance. Certainly, delinquencies should slow down once jobs begin to return, and once home prices stabilize, fewer borrowers will be incented to walk away from homes when they can still afford to pay. But the long after-effects of negative equity is one reason that some housing analysts are worried about housing markets taking many years to return to normal.

Popularity: 1% [?]

New program will help homeowners facing foreclosure with short sales

2010-04-07T10:34:00.001-04:00

By Renae Merle
Washington Post Staff Writer
Saturday, April 3, 2010

As foreclosure prevention efforts struggle to make an impact, the Obama administration will launch a program Monday encouraging lenders to allow more distressed homeowners to sell their property for less than they owe on their mortgage.

Government efforts so far have focused on mortgage relief that helps borrowers avoid foreclosure. But the latest push reflects a growing realization that many troubled homeowners cannot qualify for help or would rather move on. So officials are focusing attention on efforts to ease borrowers out of their home without the stigma of a foreclosure.

Under the new program, which has been in the works for nearly a year, lenders are paid if they agree to a short sale, which involves selling a home for less than the balance on the mortgage. The lender must forgive the difference, allowing borrowers to walk away from the rest of the debt. This is potentially cheaper and faster for the lender than a foreclosure and keeps distressed properties from lingering on the market for a long period and bringing down values of neighboring homes.

"This program will provide an alternative to homeowners when a modification is not the best option," said Treasury Department spokeswoman Meg Reilly.

But short sales have traditionally been a long, cumbersome process with lenders who are suspicious of lowball offers dragging out negotiations for months. In some cases, borrowers have second liens on the property and the holders of those liens can block a deal if they don't like the terms.

John Downer is facing many of those issues. Within two weeks of putting his Orlando townhouse on the market as a short sale in late January, a bidder offered $35,000 for the three-bedroom home, which Downer had listed for $50,000. He paid $170,000 for it in 2005. "I am cautiously optimistic, but who knows how long it will take," Downer said.

But more than two months later, Downer is still awaiting word on whether his lender will accept the offer. The bank has warned that the process could take six months to a year, he said. And another lender holding his $33,000 second lien has advised that he may still have to pay off that loan if that second bank is not satisfied with the deal's terms. "That would be a deal breaker for us," he said.

The administration has not provided a price tag for its new program or estimated how many people officials expect to help. But to encourage lenders to complete more of these deals, officials announced last week they would increase incentives lenders are offered. Firms can now collect $1,500 if they allow a short sale, up from the $1,000 the government initially planned to offer. A bank that holds a borrower's second lien can receive up to $6,000 for releasing the homeowner from the debt. And to speed up the process, lenders must now agree to a price before the home is put on the market.

There are also more incentives under the program for homeowners, who can receive $3,000 -- up from $1,500 before -- to help cover relocation expenses. "The barriers to short sales include a healthy dose of psychological burden from the homeowner, and sometimes you need that little extra push to get the homeowners to a place where they are ready to let go of their home," said Howard Glaser, a housing industry analyst.

Short sales already make up a growing part of the market, according to First American CoreLogic. They were 8 percent of home sales in January, compared with 5 percent in January 2009, according to the research firm. In the Washington region, they grew to about 15 percent of the market in January, compared with 10 percent in January 2009.

"I do think it [the new program] will help on the margins, but the scale of the mortgage distress is so large, it overwhelms any public policy option," said Sam Khater, a senior economist for First American CoreLogic. "They keep chipping away at it, but it's a tough nut to crack."

Is Treasury Admitting Mod Defeat?

2010-02-16T18:46:00.002-05:00

Published: Monday, 8 Feb 2010 | 12:23 PM ET Text Size By: Diana Olick
CNBC Real Estate Reporter

I'm hearing a lot of buzz about the blogosphere, and it's buzz like this that I find tends to be the flurries before the storm hits (forgive me but I've just survived an epic DC snowstorm).

The buzz surrounds some comments made by a Seth Wheeler, Senior Advisor to the Treasury Department, to the American Securitization Forum last week. He gave the introductory address to a panel entitled: Mortgage Modification and Loss Mitigation Trends: Impacts on RMBS Performance.

In discussing the Obama Administration's Home Affordable Modification Program, which is arguably less successful than anyone intended, Wheeler made a comment leading some to believe that the Administration may be shifting focus from modifications to another program which simply gets troubled borrowers out of their homes as quickly and cleanly as possible.

"Short sales, deeds in lieu are other ways to prevent foreclosures to help achieve stability [in housing]," Wheeler told ASF members and guests. "Modifications are only for a certain subset of distressed homeowners." And we are learning daily that it is a smaller and smaller subset than previously expected, thanks to job losses and strategic default.

On November 30th of last year, with very little fanfare, the Treasury launched the Home Affordable Foreclosure Alternatives program (HAFA??), which specifically targets short sales and deeds in lieu of foreclosure.

According to the directive:

Servicers must consider possible HAMP eligible borrowers for HAFA within 30 calendar days of the date the borrower:

- Does not qualify for a Trial Period Plan;

- Does not successfully complete a Trial Period Plan;

- Is delinquent on a HAMP modification by missing at least two consecutive payments; or

- Requests a short sale or DIL

My guess is that last one is the most popular.

The HAFA program offers incentives in this program "upon successful completion of the short sale" or Deed in Lieu. They include borrower relocation assistance of $1500, a servicer incentive of $1000 to cover administrative and processing costs and investor reimbursement of $1000 for subordinate lien releases. That's when the investor allows up to $3000 in short sale proceeds to go to subordinate lien holders.

"It is my belief that the success of HAFA will be vastly greater than HAMP," says Mark Hanson, a mortgage consultant in California.

"Going forward, figuring out exactly what this means for foreclosures, REO, house sales, housing inventory, values, bank balance sheets, second mortgages, RMBS prices, the builders, the mortgage insurers, and sentiment is where the focus will be."

Questions? Comments? RealtyCheck@cnbc.com

© 2010 CNBC, Inc. All Rights Reserved

More Borrowers Pay Credit Cards Before Mortgages

2010-02-16T18:42:00.002-05:00

Published: Wednesday, 3 Feb 2010 | 1:17 PM ET Text Size By: Diana Olick
CNBC Real Estate Reporter

AP
--------------------------------------------------------------------------------

It's exactly the opposite of the norm. Usually cash-strapped Americans during tough economic times will miss credit card payments before they'll miss mortgage payments.

Welcome to the new world order.

The percentage of borrowers who are delinquent on their mortgages but paying their credit card bills on time is growing, to 6.6 percent in the third quarter of 2009 from 4.9 percent in the same quarter of 2008, according to a new study by Chicago-based TransUnion. In an interview with Reuters, the author of the study, Sean Reardon, confirmed, "This goes against conventional wisdom and that has always been that, when faced with a financial crisis, consumers will pay their secured obligations first, specifically their mortgages."
While concerning, I don't find this surprising at all.
Today's consumer is all about cash-flow, and that means keeping the credit cards current. A home is no longer the product it was even five years ago, no longer an emotional investment. For a growing number of borrowers, a home is now a financial investment plain and simple, and more and more often, a lost investment. I read an article a few years ago about how Americans' attitudes toward their homes was changing, how twenty years ago losing your home was as big a social stigma as it was a hit to your credit rating, even more so. Not anymore.

Let's face it: An awful lot of borrowers out there put nothing into their homes and therefore have neither a financial, nor, more profoundly an emotional nor social stake in the structure. Of course they're going to pay off their credit cards first, because that has an immediate impact on what they can and cannot buy and do.

On top of that, most troubled borrowers have already figured out that there are so many forces in motion trying to save homes from foreclosure that they can easily miss one, two, five or six mortgage payments before even getting a call from the bank; then, they've got many more months of negotiations over modifications, short sale options, even the foreclosure process itself, insuring they will have a roof over their heads for a good long time.

I heard an interesting factoid at the American Securitization Forum conference in DC yesterday.

Home building Analyst Ivy Zelman said that in some Florida counties the courts are so backed up with foreclosures that it can take up to three years to get one home through the system.

That's three years of living rent-free, which frees up plenty of cash to pay the Visa bill.

Questions? Comments? RealtyCheck@cnbc.com

© 2010 CNBC, Inc. All Rights Reserved

Fannie Mae relaxes rules for Florida condos

2010-01-07T17:25:00.000-05:00

South Florida Business Journal
Thursday, January 7, 2010, 3:00pm EST

Modified: Thursday, January 7, 2010, 4:20pm

Florida’s condominium market is getting some attention from Fannie Mae, which is granting “special approval” status to hundreds of condominium properties.

A team of six Fannie Mae assessors in Florida will review hundreds of condo properties across the state that don’t currently meet Fannie Mae eligibility guidelines and will review requirements like occupancy rates and financial stability. Those granted special approval that did not previously meet guidelines, will be eligible for Fannie Mae-backed mortgages.

Two experts on the South Florida market said the move is a step in the right direction, but is certainly not a cure-all.

Normally, Fannie Mae requires that up to 70 percent of a new project’s units be presold and no more than 49 percent be owned by investors, while no more than 15 percent of the unit owners can be 30 days late paying association fees. Waivers have been granted on a case-by-case basis through the Project Eligibility Review Service, which launched last year.

The announcement Thursday streamlines the process for lenders and catalogues projects across the state that are Fannie Mae-eligible. Projects deemed eligible will be listed on www.eFannieMae.com as project reviews are completed. Qualified borrowers wishing to purchase units in these projects will be eligible for financing.

“This new initiative is geared toward providing maximum support for Florida’s distressed condo market as we continue to provide liquidity to the housing market more broadly, said Fannie Mae’s Karen Pallotta in a statement. “The state’s condo market has been particularly hard hit by the housing downturn and we are working with the industry and our partners to do all we can to stabilize the market and help spur recovery.”

Moe Veissi, National Association of Realtors First Vice President and broker-owner of Veissi & Associates in Miami said in a statement, "NAR applauds Fannie Mae for taking this important step to make condo loans more readily available in Florida. Our state is probably the hardest hit as far as the condo market is concerned, and Fannie Mae's new effort to take a closer look at project eligibility could go a long way to putting projects back on a healthy financial track."

Grant Stern, of Morningside Mortgage Corp. in Bay Harbor Islands, said the move is a step in the right direction, but there's still a need for a secondary market for the mortgages.

Fannie Mae is dealing with the aftermath of a decision last year that made Florida an exception market for condo lending.

"Last year, they went Herbert Hoover on the condo guidleines, and made them entirely too tight," he said. "Fannie Mae has so damaged its lending program for condominiums that very few lenders even want to issue the loans. Even in the buildings that are Fannie Mae approved, you still can't get private mortage insurance, so you still need a 20 percent down payment."

"This won't put Humpty Dumpty back together again, but maybe we'll find a few pieces," he said.

Peter Zalewski, managing principal for Condo Vultures in Bal Harbour, said even in circmustances where Fannie Mae has given approval for a building, "the lender will often find excuses not to provide funding."

At the end of the day, the financing is just not there and flowing, he said. He sees the latest move as bringing in the cavalry, but it still has a long road to ride.

Zalewski, who deals mainly with cash purchasers, finds that buyers who need financing often have to pay a 15 percent to 20 percent premium because sellers realize a deal may fall through months later.

The special approval designation is granted for periods of between nine months and 18 months. It can be assigned to existing condominium properties only.

The move by Fannie seems to support concerns voice in a June South Florida Business Journal article that reported that U.S. Rep. Ron Klein was ready to seek funding for more staff at Fannie Mae to plow through a backlog of project eligibility reviews for condominium buildings.

Fannie Mae’s official response at the time was: “We aren’t aware of any significant backlog.”

Klein said he heard from bankers and developers – and even Fannie Mae officials themselves – that processing a flood of waiver requests is a tall order for six Fannie Mae employees in Washington, D.C.

Charlene Bender, senior VP at Regent Bank in Fort Lauderdale, said waiting for waivers was a problem for some bulk buyers interested in local condo buildings. Bender asked Klein about his progress on the issue at a luncheon sponsored by law firm GrayRobinson, P.A. at Fort Lauderdale’s Riverside Hotel.

Klein assured the audience he would seek to add as many as 20 staffers to help move the process along.

How to buy a house after a short sale New FHA Guidelines

2010-01-06T16:56:00.000-05:00

Click here to read the new FHa Guidelines to purchasing after you have short saled your home. That's correct you heard it there is life after a short sale.

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf

Sarasota number one city to buy

2009-12-08T10:11:00.002-05:00

Visit msnbc.com for breaking news, world news, and news about the economy

Breaking Short Sale News

2009-12-03T18:55:00.000-05:00

New Treasury Department Shortsale Guidelines….

Drum roll please…here is the info:

* No reduced commissions! Lenders can’t ask or demand brokers lower their fees.

* Lenders to PRE-APPROVE short sales.

* Lenders must FULLY RELEASE borrowers from any future obligation (no more deficiency judgment fear!)

* No more money out of pocket demands from second lien holders….or any payback of the debt what-so-ever.

* Borrowers who do a short sale will be PAID up to $1500 to do a short sale! (read that one again)

* Seconds to receive no more than $3,000 TOTAL from the sale.

Bottom line, 2010 is the year of the short sale

U.S. House passes Buchanan drywall bill

2009-12-03T13:36:00.000-05:00

WASHINGTON – Dec. 3, 2009 – The House on Wednesday passed legislation by a 419-to-1 vote that would help Florida homeowners suffering from toxic Chinese drywall avoid foreclosure.
Rep. Vern Buchanan, R-Sarasota, is an original cosponsor of H. Con. Res. 197, which would encourage banks and mortgage servicers to provide impacted homeowners with temporary forbearance on their mortgage payments.
“Many of my constituents have been forced to leave their homes and pay rent in addition to paying their mortgage,” Buchanan said. “This bill would provide them with some financial relief and help them avoid foreclosure.”
Forbearance is sometimes given to borrowers with temporary financial problems, according to a release from Buchanan’s press office
The U.S. Consumer Product Safety Commission reported last month that defective Chinese drywall is causing significant damage to Florida homes and posing serious health threats to people living in impacted homes.
The Senate, led by group of senators including Bill Nelson, D-Fla., passed unanimously a similar resolution Nov. 10.

Copyright © 2009 The Bradenton Herald, Fla. Distributed by McClatchy-Tribune Information Services.

Sarasota-Bradenton home prices rise 5% in September

2009-11-11T14:38:00.000-05:00

But uptick for the quarter is tempered by a 22% dip year over year

HERALD-TRIBUNE ARCHIVE / 2009 / CHIP LITHERLAND Buy photo

The median sales price for the July-to-September period was $169,800, up from $161,500 in the second quarter. Also Tuesday, a government report showed that, after a slow start, the Obama administration's mortgage-relief program has reached one in five eligible homeowners.

Staff and Wire Reports

Published: Wednesday, November 11, 2009 at 1:00 a.m.

Last Modified: Tuesday, November 10, 2009 at 8:16 p.m.

Home prices in the Sarasota-Bradenton market rose about 5 percent from the second to third quarter, though they still declined 22 percent year over year in the most recent period.

Click to enlarge The median sales price for the July-to-September period was $169,800, up from $161,500 in the second, offering hope that perhaps the worst of the price declines might be over.

The Florida Association of Realtors reported on Tuesday that 2,314 homes changed hands in Sarasota-Bradenton during the third quarter, roughly flat with the second quarter but up 32 percent from a year ago.

Sales in the most recent quarter were driven heavily by the first-time home buyers tax credit and by affordable pricing with so many distressed properties in the market.

That brighter word on the Sarasota-Bradenton housing market came as a government report showed that, after a slow start, the Obama administration's mortgage-relief program has reached one in five eligible homeowners.

As of the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for trials lasting up to five months, the Treasury Department said. The modifications reduce monthly payments to more affordable levels.

In California, about 130,000 homeowners have been enrolled in the "Making Home Affordable" loan modification plan, which President Barack Obama unveiled in February. That works out to about 19 percent of the state's homeowners who were either two payments behind or in foreclosure at the end of last month.

Arizona and Nevada had similar rates of assistance as California, at 22 percent and 18 percent, respectively.

But Florida was much lower, at 12 percent, possibly because of high numbers of investor-owned properties that do not qualify for the program.

Meanwhile, the Realtors association reported that in Charlotte County-North Port, prices dropped from a median of $109,500 in the second quarter to $106,700 in the third. The most recent price was down 23 percent from a year ago.

Statewide, the median sales price was $145,500, up from $143,600 in the second quarter but down 22 percent from the third quarter of 2008. There were 44,345 homes changing hands in the third quarter, up from 43,125 in the second and 33,311 a year ago.

The National Association of Realtors reported that home prices fell in eight out of every 10 U.S. cities, with discounted distressed sales making up 30 percent of all deals. But home sales continued their climb, with quarterly sales outpacing the second quarter and the previous year's figures.

The median sales prices of existing homes declined in 123 out of 153 metropolitan areas compared with the same period a year ago. Prices rose in the other 30 cities.
The national median was $177,900, or 11 percent below the third quarter last year.

"The decline in the national median price has moderated recently, and a shrinking supply of unsold inventory suggests we are getting closer to price stabilization in many areas," said Lawrence Yun, the group's chief economist, in a statement. "But we need a steady stream of financially qualified buyers to further reduce inventory and get us to a self-sustaining market."

The NAR, which uses different geographic areas for the local markets, pegged Sarasota-Bradenton's median at $185,200 in the third quarter, up 5.3 percent when compared with $175,800 in the previous quarter. The group does not track the Charlotte County market because it is too small.

But prices in nearby Fort Myers plunged 40 percent to $98,000 from a year ago, the worst drop in the nation. Las Vegas saw its median price tumble almost 35 percent to $138,500 year-over-year.

The largest price gain, by contrast, was in Cumberland, Md., where prices jumped 19 percent to $122,100. Davenport, Iowa, followed with an increase of 14 percent to $115,600.

The federal tax credit of up to $8,000 for first-time homebuyers helped boost sales in the third quarter. U.S. home sales grew in 45 states from the second quarter, with 28 states posting double-digit gains.

Total quarterly sales hit a seasonally adjusted annual rate of 5.3 million, up more than 11 percent from 4.76 million in the second quarter.

President Barack Obama signed a bill last week extending and expanding the federal tax credit.

Now, buyers who have owned their current homes for at least five years are eligible for tax credits of up to $6,500. First-time home buyers -- or anyone who has not owned a home in the last three years -- would still get up to $8,000.

To qualify, buyers have to sign a purchase agreement by April 30, 2010, and close by June 30.

Information from the Associated Press was used in this report.

Nearly Half of South Florida Upside Down!

2009-11-10T18:01:00.000-05:00

Nearly half of all owners of single-family homes in the Miami-Fort Lauderdale metropolitan area were underwater at the end of the third quarter, meaning their homes were valued at less than the mortgages owed against them.

Forty-six percent of South Florida homeowners, representing 387,157 homes, were underwater at the end of Sept. 30, compared to 47 percent in the second quarter, according to a new report from Web-based real estate services firm Zillow.com

Nationally, 21 percent of homeowners were underwater as of Sept. 30, down from 23 percent in the second quarter, as home values stabilized in the short term and more underwater borrowers lost their homes to foreclosure, Zillow said.

Zillow’s home price index showed that the median price of a single-family home in the area was $168,400, down 17.1 percent from the same period a year before. Values were down 2.1 percent from the second quarter.

The Zillow index measures values of all homes, not those sold in a particular period. While values continue falling, the firm said September marked the eighth consecutive month of decreasing year-over-year price declines.

Additionally, 50 percent of all homes sold in September sold at a loss, the firm said. A small percentage, 5.5 percent, saw their values rise over the past 12 months.

Time To Buy

2009-11-10T17:49:00.000-05:00

$8,000 Tax Credit Extended to April 30, 2010! NOW Is the Time to Make Your Move.

The 2009 First Time Home Buyers Tax Credit, which was set to expire November 30, 2009, has been extended. The tax credit has been expanded with new changes that will further benefit qualified home buyers (anyone who have not purchased a home within the last three years):

• The new expiration date is April 30, 2010 giving homebuyers over 5 more months and into the spring house-buying season to find their home, get loan approval, and close the transaction.

• In addition, income limits have been raised from $75,000 to $125,000 for single buyers, and for married couples the income limit has been raised from $125,000 to $225,000.

With historically low mortgage rates and still low (but rising) prices, this is a good time to make your move. Many buyers who did not take advantage of the market conditions months ago are wishing they had acted. Don't miss out. Call me to set up a free consultation to help you explore and maximize this opportunity.

Senate Clears Homebuyer Tax Credit!

2009-11-04T13:03:00.000-05:00

Greetings! - here to pass on some exciting updates to the homebuyer tax credit! Senate Clears Homebuyer Tax Credit Extension to Pass This Week
The Senate last night cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers. The legislation will reach President Obama for his signature this week.
The homebuyer tax credit, due to expire in 28 days, would be extended through April 30 of next year. First-time buyers who are in process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.
For the first time, the legislation cleared last night makes move-up buyers as well as first-time buyers would be eligible for a credit. The $8,000 maximum first-timer credit will continue and will now available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years.
The tax credit has fired the housing market, driving existing home sales to the highest level in over two years. The National Association of Realtors reported sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2 percent higher than the 5.10 million-unit pace in September 2008.
We anticipate that the President will sign this bill. I will keep you posted on any new developments

Pretty good article on rebuilding credit after short sale or foreclosure

2009-11-02T09:01:00.001-05:00

http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20091101/ARTICLE/911011006/

Breaking news first time buyer tax credit extended!

2009-10-30T07:40:00.000-04:00

We would like to be among the first in the industry to forward the good news
The Home buyer tax credit has been extended thru June!! See “AP” release below…

Senators agree to extend home buyer tax credit

BY STEPHEN OHLEMACHER
Associated Press

Senators agreed Wednesday to extend a popular tax credit for first-time home buyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time home buyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6 percent in September, and some industry representatives blamed uncertainty about the tax credit.

Senators agreed to extend the existing tax chromed for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to home buyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

Senators were still negotiating the expansion of a separate tax credit that lets money-losing businesses get refunds for taxes paid in previous years, providing them with an immediate source of cash.

Senators in both political parties were hoping to add both tax provisions to a bill that would give people running out of unemployment insurance benefits up to 20 more weeks of federal aid. The Senate could vote on the overall bill as early as Thursday, but lawmakers were still haggling over several unrelated amendments Wednesday evening.

Popular bills like the one to extend unemployment benefits often attract amendments that would have a difficult time passing on their own.

Republicans were demanding that they be given a chance to offer amendments to restrict federal aid to the beleaguered community activist group ACORN and on requiring that people receiving unemployment insurance be processed through E-Verify, an Internet-based system that employers use to check on the immigration status of new hires.

Majority Democrats have refused to add the amendments.

If the Senate passes the bill, it would go to the House, which passed a similar bill extending unemployment benefits last month. House leaders have also said they support extending the tax credit for home buyers.

Sen. Chris Dodd, D-Conn., has been negotiating for several weeks with Sen. Johnny Isakson, R-Ga., to craft an extended tax credit for home buyers that would pass the Senate.

Lawmakers didn't release a cost estimate for extending the tax credit, though similar proposals were projected to cost about $10 billion.

Industry representatives said uncertainty about the tax credit is hurting new home sales. September's decline was the first since March.

About 1.4 million first-time home buyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

The tax credit for money-losing businesses is a favorite among Republican lawmakers. Businesses could get tax refunds by using losses from 2008 and 2009 to offset taxable profits made in the previous five years. Under current law, they can only offset profits from the previous two years.

The provision would help a variety of industries, including retailers, manufacturers and home builders, though it's expensive.

``It's clearly a way to put cash in the hands of some major economic players,'' said Clint Stretch, a tax policy expert at Deloitte Tax.

A similar proposal that was ultimately dropped from the economic stimulus package enacted in February would have cost nearly $20 billion over 10 years. Lawmakers are working to reduce the price tag.

Because people are so strapped for cash, this is a good way to get refunds when businesses need them for operating expenses, said Rachelle Bernstein, vice president and tax counsel for the National Retail Federation.

2009-10-28T18:53:00.000-04:00

2009-10-28T17:37:00.000-04:00

2010 Homebuyer Tax Credit

Statuu of Tax Credit: Gettng Closer

While a final deal was not reached, there were encouraging signs that a deal is very likely. It is more a question of "when" than "if".The proposed deal (which is still subject to change) would extend the tax credit until April 30,2010 and also expand it to "move up" borrowers. Details of the revised homebuyer credit reportedly are as follows:
Credit is changed to 10% of sales price up to $7290
For first time homebuyers, the income level to qualify is $ 75,000/150,000.
For "move up" buyers the income level to qualify is $ 125,000/250,000.
For "move up" buyers, they must have been residing in their primary residence for 5 years.
The credit runs from Dec. 1, 2009 to April 30, 2010.
Sales contracts signed as of April 30, 2010 would have 60 days to close

2009-10-28T13:13:00.000-04:00

I"m told the first time home buyer credit extension was stalled last evening. Rumor has it that there is a compromise being put together by Todd/Liberman that could extend until April 2010. Stay tuned and we'll post it as soon as it becomes public knowledge

2009-10-25T12:32:00.000-04:00

Breaking Housing News….
More evidence that the ‘First Time Home Buyer Credit’ won’t be extended….
….at least in its current form
There are numerous reasons to believe the program is destined soon to go ‘poof’…
1) Numerous reports about abuse in the system.
2) Various studies have shown that the program didn’t create that many sales….buyers would of bought regardless.
3) The overall cost of the program is seen as excessive vs. the benefit.

What is a short sale

2009-10-13T18:40:00.001-04:00

The term “Short Sale” is used to describe a sale where the debt owing against a property combined with the costs of its sale exceeds the property’s market value. Upon sale, the lender accepts net proceeds of sale as full and final settlement of the mortgage, and releases its lien. The amount of debt in excess of proceeds from sale is called the “Deficiency.”