Short Sales

22August

Wait Times Shorten for Past Foreclosure Borrowers Seeking FHA Loans

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The financial crisis that began in 2008 affected most Americans in some big fashion or another.   Whether it was the loss of a job, home, savings and/or retirement fund, or mounting student debt loans with no job prospects for new graduates, Americans are slowly regaining the financial foothold they lost.

The economy has shown traction in job creation.  Unemployment claims have dropped to near 6 year lows and the housing market appears to be thriving; U.S. existing home sales, released this week, jumped to their highest level in over 3 years to 6.5% in July.  The slight bump in mortgage rates does not seem to be deterring homebuyers just yet as rates are still historically very low.

But some have not been able to take advantage of this opportunity of low rates.  Several CLose Up One Hundred Dollar BillAmericans are still dealing with the effects from the massive foreclosures that ensued.  As they work to rebuild their credit and finances, and once again attempt to lay claim to the American Dream of home ownership, a new change in the FHA loan rules should help make this easier to accomplish.

The Federal Housing Administration (FHA) has amended the waiting period for borrowers who foreclosed on their home and are seeking to qualify for an FHA loan.  Originally, the wait time to qualify was 3 years after a foreclosure and 2 years after the conclusion of a bankruptcy.  Now, borrowers who sought bankruptcy, foreclosure, short sale, or deed-in-lieu can hope to qualify for an FHA loan in as little as 12 months if they meet certain requirements.

Borrowers will have to show proof that household income fell at least 20% for the last 6 months and that this drop was attributed to unemployment or some other event out of the borrower’s control.  Also required, proof of 12 months of house payments made on time, documentation showing at least 1 hour of approved home counseling completed and evidence the borrower has fully recovered from the event.  This new change for FHA loans are applicable to case numbers assigned on or after August 15, 2013 and will be effective till September 30, 2016.

Upon announcement of these changes, Commissioner of the FHA, Carol Galante, stated that the “FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage.”

This may be the break that some borrowers were hoping to catch.  It will be interesting to see how much this contributes to new and existing home sales over the coming months, if at all.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT.  Like us on Facebook. Follow us on Twitter.

Source:http://www.dsnews.com/articles/fha-trims-waiting-period-for-borrows-who-experienced-foreclosure-2013-08-19

29February

Short Sales Rise Dramatically for Orlando Realtors

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Short Sales in OrlandoThe Orlando, FL, market is seeing a remarkable spike in short sales, an increase in overall median sales price for existing homes and increases in median sales prices for foreclosed properties.  Carrie Bay documented the developments in a January 17  DSNews.com article.

The Orlando Regional Realtor Association (ORRA) reported that in November 2011, short sales jumped 39.38 percent versus prior year sales.  Surprisingly, the accompanying median sales prices jumped by 7.07 percent; rising from $99,000 to $106,000.  Mike McGraw, ORRA chairman, stated “73 percent of homes under contract and pending closing are short sales.”

The news for non-distressed sales was mixed. Since January, the overall median price increased by 21.18 percent; however, in November non-distressed home sellers experienced a median price decrease of 7.5 percent as compared to November of the prior year.  Non-distressed sales made up 40 percent of transactions for the month.

Overall housing inventory is down by a third when compared to November 2010. At this pace, ORRA indicates they have only a 5.20-month supply of homes in Orlando’s entire sales inventory.

The performance stats for the Orlando market are encouraging, but not without challenges.

For additional information, please join us at FirstPrestonHT.com or on our Facebook and Twitter pages.

10August

$10K – $20K Short Sale Incentives Offered by Lenders

Several of the nation’s largest lenders have announced monetary incentives for short sales utilized as an alternative to foreclosure. The incentives include streamlined procedures for some and more generous relocation offers for others.

In the case of Wells Fargo, “enhanced financial relocation assistance offers” may apply to certain borrowers who agree to a short sale or to a ‘deed-in-lieu,’ in which the deed is transferred back to the bank.

Incentives may be considered for first-lien loans owned by the lender that is offering the incentive. Such enhancements are becoming more common in states where the foreclosure process has become extremely lengthy and complex.

According to a DSNews.com account, Wells Fargo stated that relocation offers can be as much as $10,000 or $20,000. A Florida agent reportedly confirmed that Chase offered $20,000 to a borrower he represents.

The average incentive offered by Citi has been confirmed at $12,000 – provided that Citi owns the loan.

Bank of America has reportedly implemented procedural revisions designed to minimize ‘red tape’—saving time for agents who are attempting to complete short sales.

According to DSNews.com, JPMorgan Chase is offering a range of incentives to borrowers who agree to a pre-foreclosure sale “because if we can’t work out a modification, a short sale is a better result for the borrower, the servicer, the investor, and the neighborhood than a foreclosure.”  In all cases, lenders indicate that incentive decisions are made on a case-by-case basis, depending upon a variety of circumstances.

Question: How will this trend influence distressed borrowers?

For more information about real estate, join us at FirstPrestonHT.com or on our Facebook page.

13January

Short sales in the spotlight

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Finally!  It took a while, but the guidelines issued by the Treasury have placed the spotlight on short sales giving their nod to a viable alternative for homeowners who continue to struggle in this never ending housing crisis.  It comes as no surprise to some.  HomeTelos, who debuted its pre-approved short sale program in 2008, has achieved great success and received positive feedback from homeowners.

A recent article in Managing REO, Treasury Effort May Boost Short Sale Usage, highlights the benefits of these new guidelines for homeowners and servicers alike.  No single decision will undo what has been done, so embracing short sales is a positive sign.

8January

Marketing a house (part 3/3)….

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The Realtor representing the seller will place the house in a Multiple Listing Service (MLS), which allows a network of other local Realtors to pull up properties for sale by certain specifications. In addition to the local MLS, a home may be placed on a variety of websites for maximum exposure, many of which will offer detailed property information and contact information to set up a showing. Although a house may be marketed well, it does not mean that a sale is imminent if the home is overpriced.

25December

It made a difference to that one!

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“Once a man was walking along a beach. The sun was shining and it was a beautiful day. Off in the distance he could see a person going back and forth between the surf’s edge and the beach. Back and forth this person went. As the man approached he could see that there were hundreds of starfish stranded on the sand as the result of the natural action of the tide.

The man was struck by the the apparent futility of the task. There were far too many starfish. Many of them were sure to perish. As he approached, the person continued the task of picking up starfish one by one and throwing them into the surf.

As he came up to the person he said, “You must be crazy. There are thousands of miles of beach covered with starfish. You can’t possibly make a difference.” The person looked at the man. He then stooped down and picked up one more starfish and threw it back into the ocean. He turned back to the man and said, “It sure made a difference to that one!”

I think about this story every day as we walk back and forth along the massive real estate beach looking at all the distressed properties.  There are so many – how can we possibly make a difference with so many people in danger of losing their home to foreclosure or wondering how they can continue to make payments on a property that has thousands of dollars in negative equity? 

I know that we have all talked about volume and waiting for the onslaught of short sales that we know are out there waiting.  But we need to remember that the only way to really help all the distressed homeowners and would-be homeowners out there is one at a time. 

At this holiday season, I am thankful that the HomeTelos LEO program has achieved such resounding success!  We are making a difference – one homeowner at a time.

26October

HomeTelos LEO Program Achieves Market Success as Foreclosure Alternative

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US-TX, Dallas, October 21, 2009 – HomeTelos Loan Exit Option (LEO) program has demonstrated market success as an effective approach in avoiding foreclosure for borrowers, investors, and mortgage servicers.  The LEO pre-foreclosure home sale program is faster and has significantly higher closing success rates than traditional short-selling programs. The HomeTelos LEO system aligns the interests of borrowers, servicers and other interested parties through its unique workflow management system, which qualifies properties for pre-foreclosure sale.  When qualified, LEO then facilitates property sales through its dynamic online marketplace that brings motivated sellers & buyers together.   Mortgage servicers can better help borrowers avoid foreclosure through HomeTelos’ integrated and streamlined LEO system and processes.  Costly, frustrating, and ultimately unsuccessful sales efforts are avoided without heavy staff demands being imposed on servicing operations.    

Since LEO’s launch last year, LEO properties upon listing have averaged 37 days on market, 4 offers per property and sales prices that average 96 percent of list price.  A key to this success is real-time communication between real estate brokers, servicers and investors, allowing LEO to average only 3 days from  buyer’s offer submission to servicer’s acceptance or rejection.  According to a Florida borrower, “we were getting nowhere, losing our job then our home.  We appreciated the quick action in getting our short sale resolved in this market”.  LEO provides loan servicers with assurance that the property is widely marketed, offers represent real market value and that closing issues are resolved in advance.  Borrowers avoid foreclosure proceedings, critically damaged credit ratings and the threat of lender recourse for loan payment shortfalls. 

According to HomeTelos President Stephen Polley, “LEO’s success is driven by its breakthrough combination of innovative technology and re-engineered workflow processes for achieving the combined critical objectives of servicers, borrowers and other interested parties.  LEO provides a way for families under financial stress to have a mortgage option that allows them to relocate with dignity.”  

The Loan Exit Option (LEO) system process is patent pending.  

About HomeTelos, L.P.:  HomeTelos is headquartered in Dallas, Texas and specializes in the development and support of web-based solutions which support the management and marketing of real estate assets, including pre-foreclosures and foreclosures.  For more information, visit www.hometelos.com or call (888) 676-9200.

26October

Treasury Department to offer incentives for short sales

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The Treasury Department announced this month that it is close to finalizing an incentive program to encourage lenders and servicers to rely more on short sales as an alternative to foreclosure. 

There are two reasons that the government is looking at rewards for short sales – the high cost of the foreclosure process and the prospect of a new housing crash created by the lack of modifications that have been implemented under the Home Affordable Modification Program.  According to most figures, only 12% of troubled homeowners have been helped by the modification program. 

The incentive to push short sales as an alternative to the possibility of a new foreclosure avalanche is at the heart of the Treasury plan.  Because the homes are sold for current market value, the new owner is less likely to get “underwater”; owing more than the mortgage is worth.  That’s a key predictor of a borrower’s likelihood to default. 

Details of the plan continue to be worked out, but one proposal has been to offer lenders $1000 for the short sale, and the same amount for deed-in-lieu transactions.  Additionally, borrowers would also be in line for incentives, possibly as much as $1,500 in closing fees, and 2nd lien holders could receive up to $1,000.

5October

HomeTelos LEO: On the Cutting Edge of Something Great!

Comment from a Platinum performing agent in Los Angeles, CA:  “Nothing is forever in this business and your ability to adapt to the changing marketplace will ensure your survival.  I think the move to focus on LEO is a brilliant move.  I think your company is on the cutting edge of something great.  I don’t see REOs flooding the market.  I see a measured pace for REOs especially as the number of workouts and short sales continue to increase.  I think the LEO program will be a great success in California.  I recognize that it’s a privilege to work with your company.

25September

HomeTelos LEO Program Announcement

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HomeTelos LEO launched its pilot program in 4Q 2008.  The pilot results have been extremely encouraging.  Participating brokers have sold most of the properties assigned at current market prices, while averaging only 29 days on market!  Most exciting have been the positive responses we’ve received from homeowners, brokers and title companies who have experienced the successful results of a completed short sale.  Here are a few of their comments…

  •  “The homeowner was cooperative.  The property was well maintained, the pricing was in line with my BPO and, the sale occurred quickly…I think this program is great”!!! 
  • “Overall experience was very good. Communication from the HomeTelos team was great”!
  • “The ease in which we were able to get answers from the lender via HomeTelos exceeded my expectations”!

Expansion of the HomeTelos LEO Program is imminent, but for good reason lender resources have been focused on keeping people in their homes over the past few months, delaying the referral of many potential leads.  In the meantime HomeTelos plans to add an additional loan servicer and continue expansion of the program in the months ahead.

Working together, we will help families, lenders and our markets achieve better outcomes by avoiding foreclosures.  Visit www.hometelos.com for additional information on the HomeTelos LEO Program and pre-approved short sales.