Archive | Foreclosure
As you may know Assembly Bill 284 took affect on 10/1/2011 and requires that lenders have proof of ownership prior to filing a Notice of Default on delinquent mortgages in Nevada. This legislation intended to put an end to the nasty “robo-signing” issue. Well it certainly has done that and then some. We’re nearly three months into this and NOD’s have virtually come to a halt. Is this what our legislators intended? I hope not….
First of all, is this legislation a direct challenge to MERS? (the Mortgage Electronic Registration System). An explanation of that system follows below and has been copied directly from their web-site:
MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.
Simply put, MERS allows banks and investors to exchange mortgages without the typical title and escrow work we’re all familiar with when we buy, sell or refinance our homes. While your home may have stayed with you all these years, your mortgage has likely changed hands many times. This system has served the banks well for many years. However, at this point bankers are clearly lacking in confidence when it comes to risking a felony offense.
Secondly, this will no doubt have an affect on housing inventory in Nevada. At some point in the near future the inventory of available bank owned homes will drop dramatically. Short sale home sellers may delay their plans. Why rush to sell short if the lender isn’t going to rush to foreclose? I’m very concerned that this will create a false sense of demand in the market. Prices may rise due to scarcity but there’s no doubt reality will roar into the market someday soon.
Last but not least, why would any bank want to lend in Nevada? Let’s think about this… High unemployment, declining home values, state mandated foreclosure mediation and now this. Seriously, I’m no big fan of the banks but common sense would seem to dictate that Nevada is not a great place for banks to do mortgage business. Home financing is already tough in our market. No doubt this will only make things tougher in the long run.
Let’s hope our legislators do a little more homework before they pas the next round of laws intended to protect us all.
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Now that the busy summer buying season is here in the Lake Tahoe/Truckee area as well as in Plumas & Sierra Counties, there is a huge amount of activity for well priced homes and by huge amount, I mean fiercely competitive, with buyers grabbing for bank owned properties with increased knowledge, ready to strike. Buyers need to know that activity levels are strong and that they are not the only ones looking for the best deals out there.
Ideas To Get Your Offer Accepted
1) Price: Anticipate multiple offers and come in strong. Make sure your Realtor® analyzes all comparable properties and advises you on the value range for the subject property. If a given property has a value range of $600K-$650K and it is listed for $580K, do not be afraid to come in over asking price and strong within the value range.
2) Close Of Escrow Period: With bank owned assets, the bank wants to close escrow quickly. For cash buyers, reduce the close of escrow date to the fewest days possible for inspections and to close escrow. If you can make this happen in 10 days, then do it. Your offer will be much stronger than another similar offer with a 30 day escrow. But don’t despair if you are getting a loan; make the offer as strong as possible.
3) Costs: If you want your offer to be strong, then minimize the seller’s costs. Each time you ask to split a cost with the seller or ask the seller to pay for an item, you are flagging your offer as not that strong/desirable.
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Not if I have anything to say about it!
The FBI reported a jump of 71% in mortgage relief fraud investigations from 2008-2009, and expects this number to have grown in 2010.
That’s why it’s my duty to educate homeowners in my community on the cautions they need to take, and what the government has recently done to protect you from unscrupulous individuals and companies who want to take advantage of their desperate situations.
What you need to watch out for if you are looking for mortgage relief assistance:
- Upfront fees—just don’t pay them! In fact, they are now illegal!
- A request to sign over your deed (this only spells trouble)
- Lots of paperwork without the opportunity for review
- The claim of government-affiliation
These are just a few red flags you need to be wary of. I’ve created a free report on the homepage of my website that details more of what you need to watch for.
I f you are struggling with an unaffordable mortgage and are looking for help, educate yourself. These scammers can be very shrewd and will say almost anything to steal your money.
The Federal Trade Commission has required disclosures of anyone offering mortgage relief services. If you’d like to see an example, check out any of the pages of my website. If a company you are dealing with has not provided these disclosures, please ask why they are not compliant, and proceed with caution!
As a CDPE and a Dickson Realty agent, you can trust that I have the tools to be in full compliance of FTC regulations, and will always work with your best interests at heart.
CLICK HERE FOR FORECLOSURE ALTERNATIVES
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What You Need To Know!
1. Buying a foreclosure involves hidden costs
2. The home may continue to lose value after purchase
Consider the following prior to purchasing a foreclosure or REO property:
AS IS – what this means to a bank is just as written. Most banks have no interest in providing repairs even if they are safety and health issues. If the property you are considering appears to have problems make certain you get the appropriate inspections. Often times utilities are turned off at bank owned properties but sometimes you can get the utilities turned on for inspections by asking the listing agent or paying for this yourself.
DISCLOSURES – In the course of a standard sale, the sellers are required to provide you with all information regarding the property that they are aware of, as is the listing agent. The bank has no such obligations and most of the time might not be aware of any problems, so again, get the utilities on and get the property inspected.
CONTRACTURAL OBLIGATIONS – Contracts written by banks do not necessarily protect you from losing your deposit as in a standard sale. Be certain your real estate agent understands the timeframes in the bank contract so your deposit is safe should you decide to back out of the purchase.
EXPECT SOME CHAOS – Typically banks like to work with their own escrow and title companies and might hurry you on deposits and then take what seems like forever to get the necessary signatures on documents for you. Again, make certain your real estate agent understands the system and will always be prepared for the unexpected to keep the deal on track.
Above all, be patient and know your buyer agent is doing everything to close the escrow for you.
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Effective Februray 1, 2011 updates to the Home Affordable Foreclosure Alternatives (HAFA) Program will take affect. These guidelines may help increase the number of approvals for homeowners seeking assistance under this program.
Here are the key changes:
- 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.
- 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.
- 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.
- 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.)
- 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.
- 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.
- 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.
- 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.
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New statistics show that 1 in 7 homeowners are facing difficulty paying thier mortgage. Homeowners facing these issues often wonder how they can afford to get help. I am here to tell you that you can get the help you need from an experienced short sale real estate agent and most, if not all, of the costs will be deducted from what is recieved from the sale. There is no need to pay a short sale company or attorney to faciliate a short sale for you. In most cases your lender will agree to pay all the typical seller closing costs and the comission to the agents as part of the short sale approval. In most short sales the homeowner is not responsible for these costs and in turn is not allowed to recieve any proceeds from the sale. The key is making sure you are working with an experienced short sale real estate agent.
Does this mean that homeowners are completely off the hook and won’t have any costs? No, in some cases depending on your financial situation the lender may ask the homeowner to contribute to the loss with a cash contribution or promissory note. An experienced short sale real estate agent can assist you in minimizing these and working on a win-win solution for both the homeowner and the lender. In some cases the cash contribution or promissory note can be the key to having the lender release the homeowner from any future liability.
How can you afford not to do a short sale? When the alternative is foreclosure which can be devastaing to your credit, your future ability to purchase a home again, and result in larger tax consequences – how could you afford not to consider a short sale?
If you are a homeowner facing difficulties making your mortgage payment, consult an experienced short sale agent as soon as possible.
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According to data from the Northern Nevada Regional MLS, sales in the Sparks area (which includes Spanish Springs and Wingfield Springs) had short sales leading in the 3rd Quarter of 2010. Short sales accouted for 35.4% of the sales in the quarter, traditional sales 34.9% and bank owned 29.8%. Compared to 3rd Q 2009 when bank owned sales topped the charts at 41.43%, traditional sales at 26.7% and short sales at 26.5%
The total number of sales for the Sparks area (MLS area 108) dropped slightly from 2009 to 2010, down about 6.1%. In addition, the median price also fell from $170,000 in 3rd Q 2009 to $160,700 in 3rd Q 2010, a drop of 5.5%.
There are currently (as of 10-22-2010) 568 active listings available to buyers in the Sparks area market. Of these 48.6% are short sales, 34.4% are traditional sales and 16.9% are bank owned. Key here for buyers is to make sure you have a buyer’s agent working for you that knows the ins and outs of short sales – doing your homework before making an offer on a short sale is key.
Bank owned properties continued to earn the highest list to sale price ratio. In 3rd Q 2010 bank owned lisitngs got an average of 99.6% of the asking price, short sales 98.9% and traditional sales 97.4%. Fewer foreclosed properties at low prices, continued mis-understanding of short sales and over-priced traditional listings drive these numbers.
As expected short sales have the highest average number of days on market. For 3rd Q 2010 short sales averaged 184 days on market, bank owned 79 and traditional sales 77. As a note the average number of days to close a short sale is relatively the same between 2009 and 2010. We keep being told by the banks that they are improving their processes. Hopefully this will reflect soon in our average days to close a short sale.
According to a Yahoo.com report on 10-20-2010 more than 55% of the active mortgages in the Reno-Sparks area are upside down. I think we will continue to see more and more short sales as homeowners become more educated about short sales as an option to foreclosure. The key is making sure that you select an agent that is highly skilled in the short sale areana and get legal and tax advice as well.
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There is a lot of news out there about the recent foreclosure “freezes” or moritoriums. What does this mean to homeowners in Reno-Sparks area? Nevada is a non-judicial foreclosure state. What this means is that in order for a bank to foreclose in Nevada they do not have to go through a judicial process (go before a judge) to foreclose. When you take out a mortgage in Nevada you sign a Deed of Trust which says you agree to pay and if you fail to pay the lender can foreclose by simply filing a Notice of Default and subsequent Notice of Sale within the State laws. Many of the banks that instititued these foreclosure freezes have lifted in them in the 23 states that use the judicial process because these foreclosure are reviewed by the courts prior to being approved.
These freezes do not mean that homeowners are going to get off the hook. It simply means that you may have a bit more time to pursue alternative options, such as a short sale. Don’t be fooled into thinking that you can hold off until after the holidays to look into your options. If you are facing difficulty paying your mortgage please seek help of a qualified real estate professional as soon as possible. The one thing you don’t have is TIME.
Over the past several years we have seen the lenders institute foreclosure freezes in the 4th quarter simply because it is not good press to foreclose on homeowners during the holiday season. Although the issues seems to be more focused on “robo-signing” for the current freezes, historically this isn’t uncommon.
Again, call an experience real estate professional today…
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Introducing Dickson’s Fresh Start – a program to help restore your financial stability and buying power.
We understand the devastating effect that being forced to leave a home has on families in our community, both financially and emotionally. If you’ve lost your home through a short sale or foreclosure, or have recently gone through bankruptcy, we can help.
Dickson Realty has partnered with The Grupe Company as the exclusive provider of Fresh Start in the area.
- Rent-to-own program designed to help families get back on the home ownership track
- Lease for up to 5 years in the neighborhood you want to live
- Re-establish credit and financial stability
- Buy in 3 to 5 years at pre-set pricing
Contact Dickson Realty today and speak with one of our Fresh Start specialists to find out how we can help you with your Fresh Start.
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Thursday, December 22, 2011 By: Amy Thyr
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