Kris & Kim Darney Short Selling Southern California Homes
Kris & Kim Darney are seasoned real estate professionals experienced in many facets of the commercial and residential real estate market.
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HAFA (Home Affordable Foreclosure Alternative) was established to assist America's homeowners through these troubled times of decreasing home values and finding a "graceful exit" from a bad financial situation.
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These are helpful links that will assist you with any questions that might arise during the process of selling and buying real property.
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We're proud to announce our "Short Sell, Rent & Buy Back" program being rolled out to Americans in need.
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Contact Kris And Kim Your information is all confidential and will not be used for marketing purposes. Kris and Kim will contact you by email to answer your questions. If you woul
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A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices in California during the first quarter of 2012, the lowest level since the second quarter of 2007 when 53,943 NODs were recorded, according to DataQuick.
NOD filings peaked in the first quarter of 2009 at 135,431.
The number of NODs also decreased by 8.5 percent from the previous quarter, and by 17.6 percent from the first quarter a year ago, according to DataQuick.
“Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.
NOD filings were more concentrated in zip codes with median sale prices below $200,000. Those areas saw 8.9 NODs filed for every 1,000 homes, while zip codes with a median sales price from $200,000 to $800,000 had 5.6 NODs filed per 1,000 homes. For zip codes with even higher sale prices – above $800,000 – 2.3 NODs were filed for every 1,000 homes.
Fewer homes were lost to foreclosure, too, with the Trustees Deeds (TD) recorded totaling 30,261 during the first quarter, down 29.7 percent from the 43,052 TDs in the first quarter a year ago.
This year’s first quarter also recorded the lowest level of TDs since 2007.
“[R]emarkably, whole batches of presumed ‘toxic’ mortgages continue to perform,” said Walsh. “There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought.”
TDs were also concentrated in more affordable neighborhoods. In areas where the sales price was below $200,000, 5.9 homes were lost for every 1,000 compared to zip codes with $800,000-plus median prices that had 0.8 foreclosures per 1,000 homes.
The most active banks in the formal foreclosure process for the 2012 first quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380), and JP Morgan (5,343).
The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo), and Cal-Western Reconveyance Corp (Wells Fargo).
DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Thanks to
JPMorgan Chase completed short sales on 61% of its delinquent mortgage liquidations in 2011, the most of any servicer, according to data compiled by the bank’s securities research group.
JPMorgan Chase completed short sales on 61% of its delinquent mortgage liquidations in 2011, the most of any servicer, according to data compiled by the bank’s securities research group.
As the robo-signing freeze put a hold on the foreclosure process, the largest servicers turned to short sales over REO. By the end of last year, servicers were completing short sales on more than half of their inventory of home loans more than 60 days delinquent or in foreclosure, according to the report. In 2008, short sales took roughly 25% of all liquidations.
According to Chase analysts, short selling a property resulted in an average 56% loss on the loan, roughly 15% lower than an REO sale.
A recent story [4] in Bloomberg detailed how short sales peaked even as a percentage of overall home sales in January.
Analysts at Chase, using the same Lender Processing Services data, broke down which servicers were doing the most.
Following Chase, Bank of America completed short sales on 52% of its liquidations. Ally Financial and Wells Fargo both did short sales on more than 41% of their resolutions.
Even firms not involved in the robo-signing investigation from the attorneys general turned to short sales. While still under Goldman Sachs ownership, 43% of Litton Loan Servicing liquidations were short sales, followed by 43% atIndyMac and 39% of American Home Mortgage Servicing, according to the report.
Fannie Mae and Freddie Mac will hold servicers to stricter short sale timelines beginning in June. The AGs and federal prosecutors installed similar short sale standards in the $25 billion foreclosure settlement as well. A recent report from RealtyTrac showed 2012 could lead to even more short sales.
Chase analysts project servicers will have to liquidate roughly 2 million loans either through short sale or REO every year for the foreseeable future.
“Given that liquidation is inevitable for so many borrowers, investors in distressed assets should look to servicers who are more aggressive about pursuing short sales, where severities are lower,” analysts said in the report. “In general, there has been a trend of increasing short sales, and the percentage of all liquidations that goes through short sales is over 45% now.”
It’s the dreaded question real estate agents fear when speaking to the seller. “May I be present at the open house or showing?”
At this point, most agents will pause, take a deep breath and think of all the reasons why this is the worst idea possible. Having the seller present during an open house or showing of their property is almost always a bad idea. Here are three reasons why.
The presence of a seller can be off-putting.
Home buyers need to feel as comfortable as possible when looking at a potential new home. It’s a big investment, and they should feel welcome to open closets, look in cabinets, look behind the couch, or put their ears up the walls or windows. A serious buyer of a property needs to do whatever they can to learn about the home.
In the presence of a seller, the buyer may feel like a guest in a stranger’s home, a patron at a museum, or something in between. They spend too much time being cautious and not enough time really delving into the property. When buyers don’t feel completely comfortable to explore, they may miss the intricacies of a property. Or they might not give the home a fair chance. This means a missed opportunity for both the buyer and the seller.
Honesty is always the best policy, of course. But don’t forget that this is a “sales” process, and that less is usually more. Let’s say a potential buyer asks the seller about the neighbors. “Oh, we love our neighbors!,” the seller answers. “They drop by our house all the time and we do the same. They’ve got high school-age kids, too, who are a lot of fun. It’s one big, constant block party!” While some might like this idea, others who value their privacy will be turned off.
A seller may experience hurt feelings from questions or comments that buyers ask. This could lead to a negotiation that starts off on a bad note.
For example, a buyer touring a home with dark colored walls, floors and heavy window coverings asked his agent what it would cost to refinish the floors and paint the place. The seller, who preferred the dark, was insulted by the questions and immediately went on the defensive. When the low offer came in from that buyer, the seller couldn’t help but think that they were trying to discount the price to pay for those cosmetic changes. The seller refused to budge on price.
In this instance, emotions got the best of the seller. Ultimately, the seller lost a buyer and a good offer. The final sales price came in less than that offer by $7,500.
Every once in a while it helps for the seller to be present during an open house or showing.
After weeks on the market without any offers, especially with a property that needs serious cosmetic or staging work, it might be helpful for the seller to attend the open house anonymously. They can hear directly from buyers that the paint job is off-putting, how the place feels too much like a bachelor pad, and so on. The real estate agent may have been trying to tell the seller these things all along, but sometimes, independent confirmation is needed before the seller will take action.
As an example, a seller’s home was at the top of a hill. There was a steep walk from the driveway to the front door, which proved to be a major objection among potential buyers. The seller, a triathlete, just couldn’t grasp why buyers would object, and he wouldn’t budge on the price. By being present (briefly) at one open house, the seller witnessed buyers arriving breathlessly, saying snide comments like, “If I bought this home, I could cancel my gym membership.” He got the message and agreed to drop the home’s price significantly.
We appreciate that the US Government now owns over 50% of our homes in the US through Freddie and Fannie and the fact that they are getting on board with their own initiatives of accelerating short sales or get fined! Any how you slice it…this is good news! Thanks INMAN!
Fannie Mae and Freddie Mac will require loan servicers who need more than 30 days to make a decision on a short-sale offer to provide weekly status updates and give a thumbs-up or thumbs-down no later than 60 days after receiving an offer.
The new short-sale timelines, announced this week by Fannie and Freddie’s regulator, the Federal Housing Finance Agency, take effect in June as the first step in a broader effort to “develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure.”
FHFA said it expects additional changes to be in place by the end of the year that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.
Freddie Mac issued more specifics on its new short-sale timeline, which applies not only to offers on properties in Freddie Mac’s traditional short-sale program, but to requests from borrowers to be considered for a short sale or deed-in-lieu of foreclosure under the Home Affordable Foreclosures Alternatives (HAFA) program.
Although Freddie Mac expects loan servicers to make a decision within 30 days, it recognizes that servicers may need more time to obtain a broker price opinion or approval from a private mortgage insurer before accepting a short-sale offer or approving a HAFA borrower response package (BRP).
If a loan servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.
Well…That’s lack luster! We anticipated Huge Short Sale #’s. However, who could have anticipated the story of “robo signing” and the massive amounts of fraud being committed by the banks? No one…except the bank executives that committed the fraud.
So…here are the numbers:
Short sale volumes may not have experienced the boom many predicted, but they’re certainly moving up.
Late last week, the Office of the Comptroller of the Currency issued a report on year-end loss mitigation activity for most of the mortgages serviced by the nation’s largest banks.
The 227,570 new short sales completed in 2011 was a 12% increase from one year ago and more than double the 112,000 measured in 2009, according to the report.
As the robo-signing freeze thaws, and new requirements under the attorneys general settlement are enforced, short sales may continue upward in 2012.
In California, the sale of distressed properties slowed down as equity sales picked up in February after two months of decline, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported Monday.
“A lack of inventory in the bank-owned (REO) and short sale market was a contributing factor to the decline in share of distressed sales in February,” said C.A.R. President LeFrancis Arnold. “In fact, REO inventory declined 24 percent in February from the previous year, while short sale inventory dropped 17 percent during the same period.”
The share distressed properties that sold statewide decreased to 48.9 percent in February, down from January’s 50.1 percent and from 55.2 percent a year ago in February 2011.
When looking at the types of distressed properties sold statewide, short sales were down in February at 23 percent compared to 23.8 percent in January, but still up from last February’s share of 22.9 percent.
The share of REO sales also made a slight downturn in February and stood at 25.2 percent, a drop compared to January’s 25.9 percent and down from the 31.9 percent reported last year in February.
After seeing a two-month decline, equity sales increased in February, making up 51.1 percent of home sales in February. Equity sales made up 49.9 and 44.8 percent of all sales in January 2012 and February 2011, respectively.
Based on signed contracts, C.A.R.‘s Pending Home Sales Index (PHSI) went up from a revised 102.3 in January to 127.8 in February. The index also was up from the 111.8 index recorded February 2011, the 10th month in a row pending sales were higher than the previous year. Pending home sales are forward-looking indicators of future home sales activity and provide information on the future direction of the market.
The HARP 2.0 refinance program will become widely available to underwater homeowners on Monday March 19, 2012 and is expected to bring mortgage relief to those who are current on their home loan, but have been unable to refinance into today’s historically low mortgage rates because of their negative equity status.
The full implementation of the revamped HARP 2.0 program, which was initially announced by President Obama in late October of 2011, has taken several months to come to fruition. And while in recent months it has been available on a manual basis and limited to just the homeowner’s current servicer, the series of changes that the computerized version of the program is undergoing this weekend, will dramatically increase the volume and speed of applications processed (think flying 100 people across the ocean versus 100 people swimming across it).
To be eligible for a HARP refinance, you can either use this HARP eligibility calculator with detailed eligibility explanations or follow the general guidelines below:
1. Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. If you are unsure, you can check both Fannie Mae and Freddie Mac’s websites or you can call their toll-free number for confirmation.
2. You must have closed your current loan on or before May 31, 2009.
3. You must not have made a late payment within the past six months and have had no more than one late payment within the past 12 months.
4. Your loan must fall under the current conforming loan limits. If you are unsure, you can find out here: http://themortgagereports.com/loan-limits/
If you met the general guidelines, what’s next?
Zillow’s Director of Mortgages, Erin Lantz, recommends you start by contacting your current loan servicer to see if you are eligible. “You current servicer should be able to tell you if your loan qualifies for a HARP refinance and can help you apply for it. However, just like a regular mortgage program, it makes sense to shop around and compare rates, fees and lender service levels. So start with your current servicer, but it is also a good idea to check out at least one other lender.”
HARP Program specific contact information for major mortgage servicers with whom you already have a mortgage through (not for new loans or shopping for a new servicer):
Bank of America: 1-800-846-2222
Wells Fargo: 1-877-937-9357
Chase: 1-800-848-9136
Citi: 1-800-283-7918
US Bank: 1-866-932-0462
As if Nevada hasn’t been plagued enough with massive property declines. A new law that impacted the foreclosure filings procedure placed a virtual stop on all filings. The new law requires much additional paper work from entities that are filing. Including full disclosure of investors.
Mortgage servicers are slowly easing into the Nevada foreclosure process again.
Notices of default, the first step in the foreclosure process, plunged in October after a new law passed requiring servicers to file a copy of the deed of trust, the mortgage note and each assignment of the note.
Servicers filed roughly 5,000 default notices in September, then the new law went into effect, forcing new filings down to less than 40 statewide, said Verise Campbell, deputy director of the Nevada foreclosure mediation program, at a House subcommittee hearing Thursday.
But new foreclosure filings did increase to 400 in February, according to the most recent data from Campbell.
And servicers are planning to reboot the process soon, she said.
“Bank and beneficiary representatives have indicated in recent weeks they will soon begin filing notices of default again in Nevada after a review of their documentation and the announcement of the federal agencies and state attorneys general historical mortgage servicing settlement in February,” Campbell said.
Various reports surfaced this week, one in particular fromForeclosureRadar, which said foreclosure starts in Nevada werestill dropping by as much as 14% from January.
RealtyTrac showed foreclosures in Nevada were down 89% from February 2011. The state has held the highest foreclosure rate in the country for 62 straight months.
Janis Grady, director of the Nevada Association of Mortgage Professionals, testified about the state’s still grim outlook. Where there were 2,200 mortgage broker shops at its peak, there are now roughly 161 licensed brokers today. More than 60% of Nevada homeowners are underwater with some in as much as 200% negative equity, meaning they owe twice as much on the loan than the house is worth.
Mortgage Bankers Association numbers released in February showed the amount of homeowners turning 90 days or more delinquent was growing, a sign the market was in serious need of a foreclosure restart.
According to Leonard Chide, of the nonprofit Neighborhood Housing Services of Southern Nevada, servicers will still need time to adapt to new requirements both under old federal programs and the wider foreclosure settlement guidelines.
Negative equity is so bad in the state, Chide said, modifications without principal reduction were no longer enough to keep borrowers from walking away.
“When the clients are informed the lender will not provide a principal reduction, they opt for a short sale instead of a modification,” he said.
To avoid losing homes to foreclosure due to long response times for short sale transactions, three senators introduced legislation to speed up the short sale process.
Senators Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales timelines on February 17. A short sale is a real estate transaction where the homeowner sells the property for less than the unpaid balance with the lender’s approval.
“There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” said Murkowski. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is ‘yes,’ ‘no’ or ‘maybe?’”
The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.
The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer will be limited to one extension of no more than 21 days.
The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.
According to a release from Short Sale New England, short sale homes do not bring down neighboring home values like foreclosed homes do, and 83 percent of short sale buyers are satisfied with their purchase, according to a 2012 Home Ownership Satisfaction Survey conducted by HomeGain.
“The current short sale process can be time consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a homeowner from foreclosure,” said Moe Veissi, president of the National Association of Realtors. “As the leading advocate for homeownership, realtors are supportive of any effort to improve the process for approving short sales.”
Equi-Trax released a survey last year on the issues real estate agents face when completing short sales. Guy Taylor, CEO at Equi-Trax, said 71.9 percent of respondents reported that a short sale can take four to nine months to complete, and they think that is simply too long.”
The survey also found that 18.2 percent of deals require less than three months to complete, with 10 percent requiring more than 10 months.
When agents in the survey were asked to how the short sale process can be improved, 57.6 percent said lenders should take less time to close transactions, 14 percent said borrowers should be better educated about short sales, and 40.4 percent said both of these changes are necessary to improve the process.
In April 2011, a similar bill was introduced by Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey), but this version requested a response deadline of 45 days instead of 75 from lenders. The legislation never came up for debate before a House committee.
A total of 56,258 Notices of Default (NODs) were recorded at county recorders offices in California during the first quarter of 2012, the lowest level since the second quarter of 2007 when 53,943 NODs were recorded, according to DataQuick.
NOD filings peaked in the first quarter of 2009 at 135,431.
The number of NODs also decreased by 8.5 percent from the previous quarter, and by 17.6 percent from the first quarter a year ago, according to DataQuick.
“Foreclosure activity goes up when property values decline, and the worst of that decline was happening three years ago. Right now, property values in many areas appear flat,” said John Walsh, DataQuick president.
NOD filings were more concentrated in zip codes with median sale prices below $200,000. Those areas saw 8.9 NODs filed for every 1,000 homes, while zip codes with a median sales price from $200,000 to $800,000 had 5.6 NODs filed per 1,000 homes. For zip codes with even higher sale prices – above $800,000 – 2.3 NODs were filed for every 1,000 homes.
Fewer homes were lost to foreclosure, too, with the Trustees Deeds (TD) recorded totaling 30,261 during the first quarter, down 29.7 percent from the 43,052 TDs in the first quarter a year ago.
This year’s first quarter also recorded the lowest level of TDs since 2007.
“[R]emarkably, whole batches of presumed ‘toxic’ mortgages continue to perform,” said Walsh. “There’s no doubt that housing, especially negative equity, is one of the biggest drags on a struggling economy, but it’s not necessarily playing out the way some pundits thought.”
TDs were also concentrated in more affordable neighborhoods. In areas where the sales price was below $200,000, 5.9 homes were lost for every 1,000 compared to zip codes with $800,000-plus median prices that had 0.8 foreclosures per 1,000 homes.
The most active banks in the formal foreclosure process for the 2012 first quarter were Bank of America (10,419), Wells Fargo (7,577), Bank of New York (5,380), and JP Morgan (5,343).
The trustees who pursued the highest number of defaults last quarter were ReconTrust Co (mostly for Bank of America and Bank of New York), Quality Loan Service Corp (Bank of America), NDEx West (Wells Fargo), and Cal-Western Reconveyance Corp (Wells Fargo).
DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
Thanks to
JPMorgan Chase completed short sales on 61% of its delinquent mortgage liquidations in 2011, the most of any servicer, according to data compiled by the bank’s securities research group.
JPMorgan Chase completed short sales on 61% of its delinquent mortgage liquidations in 2011, the most of any servicer, according to data compiled by the bank’s securities research group.
As the robo-signing freeze put a hold on the foreclosure process, the largest servicers turned to short sales over REO. By the end of last year, servicers were completing short sales on more than half of their inventory of home loans more than 60 days delinquent or in foreclosure, according to the report. In 2008, short sales took roughly 25% of all liquidations.
According to Chase analysts, short selling a property resulted in an average 56% loss on the loan, roughly 15% lower than an REO sale.
A recent story [4] in Bloomberg detailed how short sales peaked even as a percentage of overall home sales in January.
Analysts at Chase, using the same Lender Processing Services data, broke down which servicers were doing the most.
Following Chase, Bank of America completed short sales on 52% of its liquidations. Ally Financial and Wells Fargo both did short sales on more than 41% of their resolutions.
Even firms not involved in the robo-signing investigation from the attorneys general turned to short sales. While still under Goldman Sachs ownership, 43% of Litton Loan Servicing liquidations were short sales, followed by 43% atIndyMac and 39% of American Home Mortgage Servicing, according to the report.
Fannie Mae and Freddie Mac will hold servicers to stricter short sale timelines beginning in June. The AGs and federal prosecutors installed similar short sale standards in the $25 billion foreclosure settlement as well. A recent report from RealtyTrac showed 2012 could lead to even more short sales.
Chase analysts project servicers will have to liquidate roughly 2 million loans either through short sale or REO every year for the foreseeable future.
“Given that liquidation is inevitable for so many borrowers, investors in distressed assets should look to servicers who are more aggressive about pursuing short sales, where severities are lower,” analysts said in the report. “In general, there has been a trend of increasing short sales, and the percentage of all liquidations that goes through short sales is over 45% now.”
It’s the dreaded question real estate agents fear when speaking to the seller. “May I be present at the open house or showing?”
At this point, most agents will pause, take a deep breath and think of all the reasons why this is the worst idea possible. Having the seller present during an open house or showing of their property is almost always a bad idea. Here are three reasons why.
The presence of a seller can be off-putting.
Home buyers need to feel as comfortable as possible when looking at a potential new home. It’s a big investment, and they should feel welcome to open closets, look in cabinets, look behind the couch, or put their ears up the walls or windows. A serious buyer of a property needs to do whatever they can to learn about the home.
In the presence of a seller, the buyer may feel like a guest in a stranger’s home, a patron at a museum, or something in between. They spend too much time being cautious and not enough time really delving into the property. When buyers don’t feel completely comfortable to explore, they may miss the intricacies of a property. Or they might not give the home a fair chance. This means a missed opportunity for both the buyer and the seller.
Honesty is always the best policy, of course. But don’t forget that this is a “sales” process, and that less is usually more. Let’s say a potential buyer asks the seller about the neighbors. “Oh, we love our neighbors!,” the seller answers. “They drop by our house all the time and we do the same. They’ve got high school-age kids, too, who are a lot of fun. It’s one big, constant block party!” While some might like this idea, others who value their privacy will be turned off.
A seller may experience hurt feelings from questions or comments that buyers ask. This could lead to a negotiation that starts off on a bad note.
For example, a buyer touring a home with dark colored walls, floors and heavy window coverings asked his agent what it would cost to refinish the floors and paint the place. The seller, who preferred the dark, was insulted by the questions and immediately went on the defensive. When the low offer came in from that buyer, the seller couldn’t help but think that they were trying to discount the price to pay for those cosmetic changes. The seller refused to budge on price.
In this instance, emotions got the best of the seller. Ultimately, the seller lost a buyer and a good offer. The final sales price came in less than that offer by $7,500.
Every once in a while it helps for the seller to be present during an open house or showing.
After weeks on the market without any offers, especially with a property that needs serious cosmetic or staging work, it might be helpful for the seller to attend the open house anonymously. They can hear directly from buyers that the paint job is off-putting, how the place feels too much like a bachelor pad, and so on. The real estate agent may have been trying to tell the seller these things all along, but sometimes, independent confirmation is needed before the seller will take action.
As an example, a seller’s home was at the top of a hill. There was a steep walk from the driveway to the front door, which proved to be a major objection among potential buyers. The seller, a triathlete, just couldn’t grasp why buyers would object, and he wouldn’t budge on the price. By being present (briefly) at one open house, the seller witnessed buyers arriving breathlessly, saying snide comments like, “If I bought this home, I could cancel my gym membership.” He got the message and agreed to drop the home’s price significantly.
We appreciate that the US Government now owns over 50% of our homes in the US through Freddie and Fannie and the fact that they are getting on board with their own initiatives of accelerating short sales or get fined! Any how you slice it…this is good news! Thanks INMAN!
Fannie Mae and Freddie Mac will require loan servicers who need more than 30 days to make a decision on a short-sale offer to provide weekly status updates and give a thumbs-up or thumbs-down no later than 60 days after receiving an offer.
The new short-sale timelines, announced this week by Fannie and Freddie’s regulator, the Federal Housing Finance Agency, take effect in June as the first step in a broader effort to “develop enhanced and aligned strategies for facilitating short sales, deeds-in-lieu and deeds-for-lease in order to help more homeowners avoid foreclosure.”
FHFA said it expects additional changes to be in place by the end of the year that address borrower eligibility and evaluation, documentation simplification, property valuation, fraud mitigation, payments to subordinate lien holders, and mortgage insurance.
Freddie Mac issued more specifics on its new short-sale timeline, which applies not only to offers on properties in Freddie Mac’s traditional short-sale program, but to requests from borrowers to be considered for a short sale or deed-in-lieu of foreclosure under the Home Affordable Foreclosures Alternatives (HAFA) program.
Although Freddie Mac expects loan servicers to make a decision within 30 days, it recognizes that servicers may need more time to obtain a broker price opinion or approval from a private mortgage insurer before accepting a short-sale offer or approving a HAFA borrower response package (BRP).
If a loan servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.
Well…That’s lack luster! We anticipated Huge Short Sale #’s. However, who could have anticipated the story of “robo signing” and the massive amounts of fraud being committed by the banks? No one…except the bank executives that committed the fraud.
So…here are the numbers:
Short sale volumes may not have experienced the boom many predicted, but they’re certainly moving up.
Late last week, the Office of the Comptroller of the Currency issued a report on year-end loss mitigation activity for most of the mortgages serviced by the nation’s largest banks.
The 227,570 new short sales completed in 2011 was a 12% increase from one year ago and more than double the 112,000 measured in 2009, according to the report.
As the robo-signing freeze thaws, and new requirements under the attorneys general settlement are enforced, short sales may continue upward in 2012.
In California, the sale of distressed properties slowed down as equity sales picked up in February after two months of decline, the CALIFORNIA ASSOCIATION OF REALTORS (C.A.R.) reported Monday.
“A lack of inventory in the bank-owned (REO) and short sale market was a contributing factor to the decline in share of distressed sales in February,” said C.A.R. President LeFrancis Arnold. “In fact, REO inventory declined 24 percent in February from the previous year, while short sale inventory dropped 17 percent during the same period.”
The share distressed properties that sold statewide decreased to 48.9 percent in February, down from January’s 50.1 percent and from 55.2 percent a year ago in February 2011.
When looking at the types of distressed properties sold statewide, short sales were down in February at 23 percent compared to 23.8 percent in January, but still up from last February’s share of 22.9 percent.
The share of REO sales also made a slight downturn in February and stood at 25.2 percent, a drop compared to January’s 25.9 percent and down from the 31.9 percent reported last year in February.
After seeing a two-month decline, equity sales increased in February, making up 51.1 percent of home sales in February. Equity sales made up 49.9 and 44.8 percent of all sales in January 2012 and February 2011, respectively.
Based on signed contracts, C.A.R.‘s Pending Home Sales Index (PHSI) went up from a revised 102.3 in January to 127.8 in February. The index also was up from the 111.8 index recorded February 2011, the 10th month in a row pending sales were higher than the previous year. Pending home sales are forward-looking indicators of future home sales activity and provide information on the future direction of the market.
The HARP 2.0 refinance program will become widely available to underwater homeowners on Monday March 19, 2012 and is expected to bring mortgage relief to those who are current on their home loan, but have been unable to refinance into today’s historically low mortgage rates because of their negative equity status.
The full implementation of the revamped HARP 2.0 program, which was initially announced by President Obama in late October of 2011, has taken several months to come to fruition. And while in recent months it has been available on a manual basis and limited to just the homeowner’s current servicer, the series of changes that the computerized version of the program is undergoing this weekend, will dramatically increase the volume and speed of applications processed (think flying 100 people across the ocean versus 100 people swimming across it).
To be eligible for a HARP refinance, you can either use this HARP eligibility calculator with detailed eligibility explanations or follow the general guidelines below:
1. Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. If you are unsure, you can check both Fannie Mae and Freddie Mac’s websites or you can call their toll-free number for confirmation.
2. You must have closed your current loan on or before May 31, 2009.
3. You must not have made a late payment within the past six months and have had no more than one late payment within the past 12 months.
4. Your loan must fall under the current conforming loan limits. If you are unsure, you can find out here: http://themortgagereports.com/loan-limits/
If you met the general guidelines, what’s next?
Zillow’s Director of Mortgages, Erin Lantz, recommends you start by contacting your current loan servicer to see if you are eligible. “You current servicer should be able to tell you if your loan qualifies for a HARP refinance and can help you apply for it. However, just like a regular mortgage program, it makes sense to shop around and compare rates, fees and lender service levels. So start with your current servicer, but it is also a good idea to check out at least one other lender.”
HARP Program specific contact information for major mortgage servicers with whom you already have a mortgage through (not for new loans or shopping for a new servicer):
Bank of America: 1-800-846-2222
Wells Fargo: 1-877-937-9357
Chase: 1-800-848-9136
Citi: 1-800-283-7918
US Bank: 1-866-932-0462
As if Nevada hasn’t been plagued enough with massive property declines. A new law that impacted the foreclosure filings procedure placed a virtual stop on all filings. The new law requires much additional paper work from entities that are filing. Including full disclosure of investors.
Mortgage servicers are slowly easing into the Nevada foreclosure process again.
Notices of default, the first step in the foreclosure process, plunged in October after a new law passed requiring servicers to file a copy of the deed of trust, the mortgage note and each assignment of the note.
Servicers filed roughly 5,000 default notices in September, then the new law went into effect, forcing new filings down to less than 40 statewide, said Verise Campbell, deputy director of the Nevada foreclosure mediation program, at a House subcommittee hearing Thursday.
But new foreclosure filings did increase to 400 in February, according to the most recent data from Campbell.
And servicers are planning to reboot the process soon, she said.
“Bank and beneficiary representatives have indicated in recent weeks they will soon begin filing notices of default again in Nevada after a review of their documentation and the announcement of the federal agencies and state attorneys general historical mortgage servicing settlement in February,” Campbell said.
Various reports surfaced this week, one in particular fromForeclosureRadar, which said foreclosure starts in Nevada werestill dropping by as much as 14% from January.
RealtyTrac showed foreclosures in Nevada were down 89% from February 2011. The state has held the highest foreclosure rate in the country for 62 straight months.
Janis Grady, director of the Nevada Association of Mortgage Professionals, testified about the state’s still grim outlook. Where there were 2,200 mortgage broker shops at its peak, there are now roughly 161 licensed brokers today. More than 60% of Nevada homeowners are underwater with some in as much as 200% negative equity, meaning they owe twice as much on the loan than the house is worth.
Mortgage Bankers Association numbers released in February showed the amount of homeowners turning 90 days or more delinquent was growing, a sign the market was in serious need of a foreclosure restart.
According to Leonard Chide, of the nonprofit Neighborhood Housing Services of Southern Nevada, servicers will still need time to adapt to new requirements both under old federal programs and the wider foreclosure settlement guidelines.
Negative equity is so bad in the state, Chide said, modifications without principal reduction were no longer enough to keep borrowers from walking away.
“When the clients are informed the lender will not provide a principal reduction, they opt for a short sale instead of a modification,” he said.
To avoid losing homes to foreclosure due to long response times for short sale transactions, three senators introduced legislation to speed up the short sale process.
Senators Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales timelines on February 17. A short sale is a real estate transaction where the homeowner sells the property for less than the unpaid balance with the lender’s approval.
“There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” said Murkowski. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is ‘yes,’ ‘no’ or ‘maybe?’”
The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.
The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer will be limited to one extension of no more than 21 days.
The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.
According to a release from Short Sale New England, short sale homes do not bring down neighboring home values like foreclosed homes do, and 83 percent of short sale buyers are satisfied with their purchase, according to a 2012 Home Ownership Satisfaction Survey conducted by HomeGain.
“The current short sale process can be time consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a homeowner from foreclosure,” said Moe Veissi, president of the National Association of Realtors. “As the leading advocate for homeownership, realtors are supportive of any effort to improve the process for approving short sales.”
Equi-Trax released a survey last year on the issues real estate agents face when completing short sales. Guy Taylor, CEO at Equi-Trax, said 71.9 percent of respondents reported that a short sale can take four to nine months to complete, and they think that is simply too long.”
The survey also found that 18.2 percent of deals require less than three months to complete, with 10 percent requiring more than 10 months.
When agents in the survey were asked to how the short sale process can be improved, 57.6 percent said lenders should take less time to close transactions, 14 percent said borrowers should be better educated about short sales, and 40.4 percent said both of these changes are necessary to improve the process.
In April 2011, a similar bill was introduced by Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey), but this version requested a response deadline of 45 days instead of 75 from lenders. The legislation never came up for debate before a House committee.
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