Before there can be a short sale, the lender must be persuaded that it is both necessary and possible.
For there to be a short sale the seller must ‘qualify’, ie, have a hardship.
A short sales’s selling price is all about the lender’s bottom line: meeting their net proceeds requirements for the property, which is a percentage of the current market value.
Ask the lender to report the short sale to the credit bureau as ‘Paid as Agreed.’ You want the lender to report it as settlement in full, with full release of lien
SANTA ANA, Calif. – Aug. 20, 2010 – CoreLogic, a provider of consumer, financial and property information and business services, released its 2010 Short Sale Research Study.
According to the study, lenders should continue to view short sales with a skeptical eye. CoreLogic says the estimated financial impact of short sale fraud is $310 million annually, with the risk of “unnecessary losses” occurring in one in every 53 short sale transactions. The average amount of unnecessary loss is $41,000 per short sale transaction. Continue reading ‘CoreLogic releases 2010 Short Sale Research Study’
WHAT IS A SHORT SALE?
A “Short Sale” or “negotiated settlement” or “short pay” occurs when a Lender agrees to accept less than the amount owed to payoff a loan as an alternative to foreclosure.If the property is worth less than the amount owed on the loan, then even if the Lender forecloses and takes back the property, they know they are going to take a loss. We can often convince a Lender that they will “do better” if they take less than what is owed now rather than taking the property backby foreclosure and trying to sell it later. Continue reading ‘Understanding the Short Sale Process’
Here is a FREE E-book detailing the ins and outs of acquiring short sale and foreclosed properties.
LOS ALTOS, Calif. – July 9, 2010 – Wealthy homeowners are defaulting on their mortgages at a higher rate than other segments of the population, according to the research firm CoreLogic.
More than one in seven borrowers with home loans of $1 million or more are seriously delinquent, according to research, compared to just one in 12 with mortgages for less than $1 million. The bottom line is the rich have stopped paying the mortgage on their residential, second home and investment properties at a rate that greatly exceeds the rest of the population. Continue reading ‘Well-heeled walking away from $1M+ mortgages’
According to mortgage daily news, the average cost of foreclosure is 50,000 to 70,0000 according to several sources. This is going to vary by state. I think the common sense explanation should be stop penalties, interest, attorney fees, marketing cost, defaulted mortgage amount today or let it accumulate. The key here is understanding that the longer a property is a short sale and gets closer to foreclosure auction the less likely they will accept the foreclosure. Why? At that point it doesn’t make financial sense because their so much debt associated with the property they can sell as an REO and get a default judgment for the deficiency against the homeowner for all amounts outstanding and then sell that on the secondary market. So if they got a default judgment for 150,000 the bank will sell it for 100,000 to an investor and the investor will go after the debt. HUGE business. Continue reading ‘The true cost of a short sale’
Written By Robert Herzog
As some of you may already know, I specialize in helping homeowners avoid foreclosure through the use of short sales. Recently, I dealt with a very interesting case involving Indymac/OneWest Bank, that I felt needed to be brought to the attention of all American taxpayers.
Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure. For the life of me, I couldn’t figure out why they were doing this. The BPO came in at the contract price of $275k, with a net to IndyMac of $241k. What advantage could there possibly be for them to proceed to foreclosure? Continue reading ‘Is The FDIC Killing Indymac OneWest Bank Short Sales & Loan Modifications?’
There are a lot of Realtors that don’t comprehend the whole idea of working with short sale investors. Here is my argument for short sale flips:
By keeping a home on the market that is delinquent and not having the short sale process begin is just as bad as low-balling the price. You see, when the home owner doesn’t pay the mortgage they not only rack up a deficiency but they also compound legal fees and late payment fees. With our approach the property automatically goes into short sale, negating all those excess fees and delinquency and putting the home owner in the best possible position with regards to evading foreclosure, which is the absolute goal. Continue reading ‘Argument for short sale flipping.’
While obstacles to short sales remain, real estate practitioners say the process is becoming more efficient. Rather than waiting six months or more to push through a deal, agents say banks are more willing to negotiate prices up front.
“My gut feeling is that short sales seem to be the preferred avenue for distressed property now,” says Cindi Hagley of San Ramon, Calif.-based Windermere Welcome Home. “It’s cheaper for [banks] to do a short sale than go all the way to foreclosure.” Continue reading ‘Fewer Short Sales Come Up Short’
NEW YORK – Aug. 10, 2009 – A February survey of 1,300 real estate agents by Campbell Communications reveals that only 23 percent of short sales close, and over 90 percent of respondents blame lenders for delaying the process.
Short sales are seen as a way to reduce foreclosures and associated costs by allowing sellers to unload their properties for less than the amount owed on the mortgage, but many of these homeowners wind up in foreclosure anyway as the prolonged waiting periods prompt buyers to walk away from their offers.
Lender delays often are the result of insufficient staffing levels, short sales experience and processing systems. The presence of second liens and home-equity lines of credit also complicate the process, because these lenders also must agree on the short sale.
Meanwhile, experts say agents who neglect to submit the necessary documents to lenders or do not inform buyers and sellers of the lengthy processing time for short sales cause delays as well.
Bank of America is among the banks looking to reduce short-sale approval times by appraising homes and setting a minimum price in advance. Moreover, the Treasury Department soon expects to provide standardized documents, lender incentives, and moving allowances to homeowners to quicken the process.
Source: USA Today (08/04/09) Armour, Stephanie
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