Westlake Village Real Estate Blog

Posts Tagged ‘short-pay’

Many people think that if their mortgage balance equals or exceeds the market value of their home, they cannot get new financing. Actually, they may be wrong. If your loan is owned by one of the three big government entities – FHA, Fannie Mae or Freddie Mac – you might be eligible for a “streamline refi.” (Remember: these programs do not hold loans that are higher than $417,000 or $729,750, depending on when you got your loan.)

Questions to ask yourself: First of all, are you a mortgage holder in good standing? If you have never missed a payment, have excellent credit and the underlying owner of your loan is one of these government programs, you may be in good shape. If you have one of these loans plus a second trust deed, the task may be tougher or impossible.

What to do: Call your loan servicer – the company you make your payments to – and ask if Fannie, Freddie or FHA holds your loan. If so, ask to speak with the department that could discuss refinancing.

Next, ask if FHA, Fannie or Freddie is the underlying owner of your loan. You have a legal right to know this. If the answer is yes, discuss refinancing the loan. You cannot “shop’ the loan between servicers (again, the name of the company on the mortgage statement) but you may be able to do a streamline refinance without an appraisal.

What NOT to do: Do NOT ask for a loan modification if you want to find out about refinancing. These two departments don’t know what the other is doing, and the “loan mod” folks have no incentive to forward your inquiry. (In fact, they have very little incentive to process your loan modification, which explains why only some 1,350,000 loan modifications had been approved by March of last year.)

Botton line: A streamline refi is worth a try if you meet the basic criteria.

It’s official: I am pleased to announce that I have earned the nationally recognized Short Sales and Foreclosure Resource certification. The National Association of REALTORS® offers the SFR certification to REALTORS® who want to help both buyers and sellers navigate these complicated transactions, as demand for professional expertise with distressed sales grows.

According to a recent NAR survey, nearly one-third of all existing homes sold recently were either short sales or foreclosures. For many real estate professionals, short sales and foreclosures are the new “traditional” transaction. REALTORS® who have earned the SFR certification know how to help sellers maneuver the complexities of short sales as well as help buyers pursue short sale and foreclosure opportunities.

“As leading advocates for homeownership, REALTORS® believe that any family that loses its home to foreclosure is one family too many, but unfortunately, there are situations in which people just cannot afford to keep their homes, and a foreclosure or a short sale results,” said 2009 NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “Foreclosures and short sales can offer opportunities for home buyers and benefit the larger community, as well, but it’s extremely important to have the help of a real estate professional like a REALTOR® who has earned the SFR certification for these kinds of purchases.”

The certification program includes training on how to qualify sellers for short sales, negotiate with lenders, protect buyers, and limit risk, and provides resources to help REALTORS® stay current on national and state-specific information as the market for these distressed properties evolves. To earn the SFR certification, REALTORS® are required to take one core course and three Webinars. For more information about the SFR certification, visit www.REALTORSFR.org or call 1-877-510-7855.

I am happy to report that I have just completed all coursework for a certification from the National Association of Realtors in Short Sales and Foreclosures. For homeowners facing either of these situations, there are a number of resources on the Internet that discuss federal assistance programs. These include:

Making Home Affordable. You can click here to find out if you are eligible for various governnment programs.

The Basics: Short Sales will give you additional information as well as updates on various initiatives by mortgage holders.

And here is a link to a recent newsletter, courtesy of Buffini and Company, that presents a chart (page 2) comparing the impact of a short sale to that of a foreclosure:

Options for Homeowners to Avoid Foreclosure

In addition, there may be legal and tax issues, so if you are contemplating a short sale, or foreclosure be sure to seek advice from your legal, accounting and tax advisors. After seeking such advice, if you decide to move forward with a short sale, be sure your Realtor has the experience and knowledge to guide you through the process. Folks, this is not for amateurs! I work with an experienced short sale agent-negotiator, Emill Hartoonian, to the benfit of my clients.

If you are a home buyer, make sure your agent confirms that the listing agent has a level of expertise with short sales and that your agent has briefed you on what to expect. These are not “typical” home sales! If you and your agent do not have confidence that the listing agent can close the deal, it may be best to move on to another property.

From Trulia today comes this excellent piece on short-sales.

5 New Short Sale Myths – Busted!

On April 5th the federal government launched revisions to the Home Affordable Foreclosure Alternative (HAFA) program.

Cold Springs Tavern

I enter California 154 off the 101, and am confronted with a panorama of hills greener than the Scottish Highlands. The roadside is dotted with bursts of color: yellow, gold, purple cream. Rain dances lightly on my windshield. Beyond the wildflowers, black cattle much on the green carpet beneath them. Vineyards form a checkerboard across the foothills.

I am driving from Westlake Village to Santa Maria for a day-long workshop on managing short-sale transactions. It is an eye-opening day, to say the least. The presenter is Sherman Smith, of Sherman Smith and Associates in Tustin. Since 1992 Sherman has handled hundreds, perhaps thousands, of short-sale transactions. His approach is systematic, practical and persistent. “You are looking for the person (at the lending institution) who will say Yes, he counsels. He gives us more than 40 pages of forms to use in the process: He is comprehensive too.

On the drive home, I stop at the Cold Springs Tavern, at one time a stagecoach stop for cappuccino. This place is akin to a frontier cabin. The lighting is dim the fireplace ablaze and the walls sport heads of deer and bear. There is no cappuccino.

I continue on, an unhappy wayfarer. Fog descends into the San Marcos Pass – thick, cottony and blinding. I imagine homeowners, many of them weary from long months of trying to do a loan modification, now turning to the short-sale process so they can move on with their lives. They are exhausted, floating like octopi in the pea soup of fog. Then I glimpse a few real estate agents, trying to swim through the grayness. Their strokes become more hurried and then random – flailing. It is a zoo – or an aquarium out there — in the world of short-sale transactions.

Finally, just a few miles before Santa Barbara, I escape the fog. I am listening to a Wyndam Hill recording, because I find it impossible to drive the California coastline and hills without hearing George Winston’s fingers skip along the keys. It has been a satisfying day. I am more confident now that I have the dialog, tools and systems, to negotiate short sales.

The ocean, also gray, with glimpses of brilliant white, passes by on my right. The rain continues. The traffic gets heavier.

I am home.