If you are under the 3 year mark and would like to repurchase when time allows, you may want to consider visiting with a credit counselor to gauge where your credit is at this time and what you might need to work on.  I recommend Consumer Credit Affiliates .  They can assess your situation and help you formulate a plan to get back on the path to home ownership.   

If you are planning to purchase you will need to save a minimum of 3.5% for an FHA down payment and money for closing costs.  In some cases you can get assistance from the seller with your closing costs which typically are about 3% of the purchase price.  If you need a recommendation to a good local lender contact me.

Many of the banks have continued to work on their short sale process and make improvements to speed the process.  Many are also starting to roll out new programs where sellers can get “pre-approved” short sales prior to listing the property so that once the property is listed the timeline is significantly reduced which greatly benefits the buyers.   (These are programs in additon to the Government HAFA program.)

We still see obstacles when there are multiple liens, mortgage insurance and bond program loans.   It is important to know what type of loan you have and if your lender took out mortgage insurance on your loan.  Homeowners also need to know that banks are still looking for you to be in default or in danger of default in the immediate future.  There has to be a hardship or reason that you can no longer afford your payments. 

There appears to be a trend toward more deficiency waivers from servicers, but in some cases it doesn’t come without a cash contribution or promissory note on the part of the homeowner.  Many servicers are looking at the seller’s overall financial picture – credit score, other debts, monthly income, other assets etc. to determine if the seller might be required to contribute.

The key is still to seek the assistance of an experienced short sale listing agent as early in the process as possible.   It’s best not to wait until a Notice of Default is filed to consider short sale as an option.

From the bank’s perspective, the homeowners who are delinquent have the most immediate need to receive their assistance.   In addition, if you are able to continue making your payments they may request a cash contribution or promissory note from you at the closing of the short sale in order to approve the short sale.   Your lender will consider your entire financial situation when making this determination. 

There is an exception.  If you have an FHA loan on your home and you want to do a short sale you will be required to be 31 or more days delinquent at the closingof the short sale.  You do not have to be delinquent at the time you apply to the FHA Pre-Foreclosure Sale Program. 

Working with an knowlegable short sale listing agent is key.

The benefits is that once a buyer has made an offer they no longer will wait 60-90 days to get an answer as the underlying approval process was completed prior to listing the property for sale.   This will greatly increase the stigma that has been placed on short sales and make these listing more attractive to buyers. 

There are several other programs that follow a similar model.  The HAFA program designed by the US Treasury is available to borrowers who qualify and provides for an upfront approval.  Also, if your mortgage is FHA insured the FHA Pre-Foreclosure Sale Program requires homeowners to get approved into the program and sets the list price prior to the marketing/listing of the property. 

The key for homeowners in the Reno-Sparks market is to contact an experience agent who can make you aware of all your options when facing a possible foreclosure.  When a short sale is the best solution for a homeowner, hiring an agent who is knowledgable about all the programs available to them is crucial. 

For more information on the Bank of America Cooperative Short Sale please contact me.

Sellers should be receiving a copy of the form when they list their property so that the form can then be provided to the buyer.  The form can be waived if agreed upon by both the buyer and the seller.

Here are the key changes:

1. Monthly Gross Income Requirements- Servicers are no longer required to verify any financial information to determine if the borrower’s total monthly mortgage payment exceeds 31% of the borrower’s monthly gross income.  This being said, the servicer is still required to verify the borrower’s hardship and may request financial documents to evaluate the hardship.
2. Vacant Property Requirements – Properties can now be vacant or rented up to 12 months prior to the Short Sale Agreement as long as the borrower can prove that the residence was their primary residence and they have not bought another home in that time.  Relocation no longer is limited to work related relocation and the relocation distance requirement has been removed.
3. Release of Subordinate Liens (Paying Off Second/Junior Liens) -  the 6% cap to pay off junior liens has been eliminated.  The servicer determines the percentage going to each junior, but the $6,000 cap is still in place.
4. Timing For Issuance of Short Sale Agreement – now for both HAFA short sales initiated by the servicer  and those requested by the borrower, the time line for the servicer to respond to the borrower is 30 calendar days. (Please note that many servicers are not adhering to this guideline simply because of the volume of HAFA requests.  There does not appear to be any penalty to the servicer for not meeting this timeline.)
5. Timing For Response To Alternative Request For Approval of Short Sale – if the borrower submits an executed sales contract, Alternative RASS and signed Hardship Affidavit or RMA, the servicer must communicate approval or disapproval, or a counter within 30 calendar days. 
6. Real Estate Commissions – the 6% cap remains, but servicers must now include a statement in the Short Sale Agreement that they will not deduct 3rd party vendor fees from any agent commission.
7. Alternative Deed-In-Lieu (Deed for Lease) Programs – these programs did not previously qualify for the borrower to receive relocation incentives.  They now are included but only when the DIL is final.
8. Borrower Notices – Servicers can now consider a borrower for HAFA while the borrower is considering HAMP.

Servicers are not required to, but may re-evaluate borrowers who were previously ineligble before the guideline were changed. 

For more information contact me for the full Supplemental Directive 10-18.

Short sales accounted for 39% of November sales.  The median sales price for short sales was $159,900 and the average days on market was 180. 

Bank owned proeprties accounted for 35.1% of November sales.  The median sales price for bank owned sales was $128,000 and they averaged 95 days on market. 

Traditional (equity position) sales accounted for 25.7% of November sales.  The median for these sales was $192,000 and they averaged 82 days on the market. 

Buyers used FHA financing for 42.9% of these purchases.  Conventional financing accounted for 28.9%, 19.5% were purchased with cash and 7.8% using VA financing.

Being a REALTOR has taken on a whole new meaning for me.    I have gone from a salesperson who specialized the marketing of property for sale and helping buyers find their new home, to so much more than that.   Helping homeowners avoid foreclosure by successfully finding alternatives such as short sale has made me so much more than a salesperson.  I am a problem solver, listener, helper, and facilitator.    I am genuinely helping people and making a real difference in their lives.  For buyers I am assisting them in navigating the more complicated web of purchasing short sales and REOs.  Helping them avoid the obstacles that arise in these types of purchases.  It has become harder than ever to be a buyer with tighter lending standards, distressed properties and long wait times. 

We look around in this industry and are often hard pressed to find positives and things to be thankful for.   But, there is plenty that I am thankful for.  The challenges of this market have made me a better REALTOR.  I have been given the opportunity to not only help my neighbors buy and sell homes, but help them improve thier lives.  By necessity I have been motivated to learn more, so I can help more. 

This REALTOR is thankful… 

Happy Thanksgiving to Everyone!

Bank owned or REO sales accounted for 32% of the sales in October.  The median was signifcantly lower at $1390,950.  These properties saw the fewest days on the market with an average of 96 days.  These listing received on average 99% of asking price.  The median sales price wasn’t helped much which only 3 homes sold over the $500,000 mark and almost 80% of the sales at the $200,000 or below price point.

Short sales accounted for 27.9% of the sales in October.  They brought in a higher median sales price than the REO properties at $161,000.  They unfortunately average the longest market times of 199 days.  Short sale listings received an average of 99.1% of their asking price.  The short sale median sales price was definitely bolstered by a $1,200,000 sale.  There were 4 sales over the $500,000 mark.  70% of the short sales were under the $200,000 price point.

What does all this mean???  Sellers with equity can successfully sell their homes in a distressed market given that they have realistic expectations of the price.     Bank owned/REO sales net the banks less than short sales, a continued argument that banks seem to be getting finally.  And lastly, short sales aren’t just for homes in the lower price points.  You can do a short sale on a $1 million home.  You just have to prove to the bank that you have a hardship and that it’s in their best interest to not take the property back onto their books.  It can be done.