Is a Short Sale in your future?
Having the” Right Strategy” starts with the “Right” Realtor.
Time is the Enemy.
When you are a buyer or seller of a short sale home, choosing the right agent is very important; a professional licensed and certified agent who can set the right expectation for the buyer or seller right up front.
Beware of the agent who does not “deal in Short Sales.”
Most ‘Short Sales’ fail because the listing or buying agent’s inexperience in understanding and properly handling the Short Sale process.
For more information about the ‘Short Sale’ process, visit this link: http://realestate.aol.com/blog/guides/short-sale/
Whether you are planning to purchase a ‘Short Sale’ home or sell your own home, the strategy for a successful result begins with the interview. Ask the agent during your interview about their experience representing either buyers or sellers in the Short Sale process.
Refer to the Helpful information provided in this link as a guide when interviewing a Realtor to represent you in your buying or selling process:
http://homebuying.about.com/od/realestateagents/tp/Agentinterview.htm
The Listing Agent needs to have already been doing the research and preparing the paperwork for their client at the time they take the listing. This might be several weeks of gathering the right information from the client the bank requires to determine if they qualify for a short sale.
The bank will also need to perform a BPO to support the price of the short sale. Call or e-mail me and I can explain what a BPO is less than 90 seconds.
This pre-work will help prevent the short sale from dragging on or going to foreclosure.
Time is the Enemy.
Is there a negotiator involved?
There should be, as a successful Short Sale Specialist, I realized that as laws and regulations change (almost daily) that as a Realtor, I need to recruit the best negotiator to represent the seller and ability to work with the bank and facilitate the progress of the transaction.
Time is the Enemy.
The owner or seller who is ‘under-water’ with his home faces unique challenges and can experience many emotional highs and lows with issues including, but not limited to the credit impact of a Short-Sale and creating an ‘Exit Strategy’ that will enable him to plan a move to another home.
As a listing agent I prepare a plan for my client, a calendar of what will be happening, a plan that outlines what all parties must be doing, including the home owner. Then a follow up weekly to assess how things are progressing, where we are, and what we need to do to catch up if needed.
Time is the Enemy.
The process can be complex; Short Sales are different because it requires constant communication and coordination between the agents for both the buyer and the seller while negotiating with the bank.
If that’s not happening, then the agent may be dropping the ball. Many times it is helping the seller to understand what and why the banks require so much documentation and signatures on every piece of paper.
Time is the Enemy.
Many Short Sales have more than one loan. A plan has to be formulated involving seller and negotiating with the second mortgage lender as well.
The issue is that some listings are destined to foreclosure because of inexperience, fear, timing, but most because of bad planning and no strategy and execution of the plan.
Plan ahead. If you know you are in over your head with your mortgage, talk to specialist who can help you; your CPA, an attorney or a Certified Realtor. A good professional will take the time to listen (NOT TALK) and give you some guidance, some ideas to help you move forward.
If you are considering a ‘Short Sale’ or need to just explore the options, give me a call. I’ll be happy to help you understand the process and if plan your most effective strategy.
Time is the Enemy.
John Hacker
Real Estate Sales Manager – DRE Lic. #01313169
Unity West Realty Inc.
HAFA Certified
(949) 275-3247
jhackerleads@cox.net www.letsgobuyahome.com
Sunday, March 18, 2012
Sunday, March 4, 2012
NEW HARP Program ramping up?
HARP 2.0," the second version of the federal mortgage refinancing program, comes with streamlined processing, but some key issues could hinder borrower participation
Some inofrmation through LA Times indicated,
The most ambitious federal mortgage program to date aimed at millions of underwater homeowners is poised to take off in the coming two weeks.
There are some trip wires to be aware of and could hinder borrower participation.
One is “who was your mortgage insurer on your underwater loan?”
Most home owners do not Know.
Though it was announced by the Obama administration late last year, "HARP 2.0" — the second version of the Home Affordable Refinance Program — will finally hit full stride around the middle of this month, when Fannie Mae and Freddie Mac finish tweaking their automated underwriting systems to accept applications, and lenders and mortgage insurance companies start handling large volumes of requests.
The revisions are crucial for owners who have outstanding mortgage balances in excess of 125% of the current resale values of their homes.
Under the second version of HARP, there is no upper limit on permissible loan-to-value ratios (LTVs).
This means you can owe twice or even three times the value of your home and still qualify for a refinancing at today's LOW interest rates.
The earlier HARP program imposed a limit of 125%, which cut out millions of the hardest-hit victims of the real estate bust.
The latest HARP also comes with streamlined underwriting — no requirement for physical appraisals in many cases, speedy processing and elimination of some of the deal-breaker fees imposed by Fannie Mae and Freddie Mac in recent years.
The objective, federal officials say, is to get it right this time around by removing the previous obstacles to widespread participation by lenders and severely underwater borrowers.
Industry experts have published studies that estimate that as many as 6.9 million loans could fit the broad requirements for refinancing, but that far fewer — around 2 million borrowers — are likely to qualify on all the detailed eligibility criteria.
Among the key rules:
• Only loans owned or guaranteed by Fannie Mae and Freddie Mac are eligible. Underwater borrowers who have FHA, VA or other types of mortgages are not. Both companies' websites — http://www.fanniemae.com and http://www.freddiemac.com — offer "look up" features that tell you whether they own your loan.
I suggest you start there.
• Your mortgage must have been purchased or securitized by either company no later than May 31, 2009, and must have an LTV ratio in excess of 80%.
• You must be current on your loan with no 30-day late payments during the six months preceding application and no more than one late payment during the last 12 months.
If you think you qualify, you can apply to your mortgage servicer and ask how to proceed.
Once you know you qualify for HAMP 2.0 and if your LTV is higher than 125%, you should also be able to shop around among other lenders who are large enough to run servicing operations of their own.
But be aware of a little-noticed glitch that has arisen in the program that could hamper your opportunity to refinance.
Some lenders may not want to proceed with your application solely because of a detail buried in your loan documents that was always beyond your control — the name of the mortgage insurer on your current loan.
If it is United Guaranty Corp., they may set your application aside because that firm alone has not agreed to adhere fully to the streamlined procedures other insurers accepted as part of the basic deal with the White House, Fannie and Freddie to kick-start the revised refi program.
The issue is technical and complicated — United Guaranty has refused to waive its rights to force lenders to repurchase what it considers badly underwritten loans, and is requiring additional underwriting in some cases.
All other private mortgage insurers have waived their rights.
The net effect of United Guaranty's policy, could disrupt the intended fast and efficient processing of HARP refi applications — potentially denying lower interest rates to many underwater borrowers who might otherwise qualify.
Some major lenders, such as Quicken Loans, said in interviews that they will have to either set aside or reject HARP applications if the original loan carries United Guaranty insurance.
United Guaranty, a subsidiary of giant insurer AIG, said in an email that it "fully supports the Obama administration's efforts" in revising HARP, and that only a "minority" of its insured mortgages should be affected by its policy disagreement with the rest of the industry.
Bottom line for you if you're deeply underwater and interested in a HARP refi: Proceed with your application anyway, but be aware there are tripwires and snares that could derail you.
John Hacker
Some inofrmation through LA Times indicated,
The most ambitious federal mortgage program to date aimed at millions of underwater homeowners is poised to take off in the coming two weeks.
There are some trip wires to be aware of and could hinder borrower participation.
One is “who was your mortgage insurer on your underwater loan?”
Most home owners do not Know.
Though it was announced by the Obama administration late last year, "HARP 2.0" — the second version of the Home Affordable Refinance Program — will finally hit full stride around the middle of this month, when Fannie Mae and Freddie Mac finish tweaking their automated underwriting systems to accept applications, and lenders and mortgage insurance companies start handling large volumes of requests.
The revisions are crucial for owners who have outstanding mortgage balances in excess of 125% of the current resale values of their homes.
Under the second version of HARP, there is no upper limit on permissible loan-to-value ratios (LTVs).
This means you can owe twice or even three times the value of your home and still qualify for a refinancing at today's LOW interest rates.
The earlier HARP program imposed a limit of 125%, which cut out millions of the hardest-hit victims of the real estate bust.
The latest HARP also comes with streamlined underwriting — no requirement for physical appraisals in many cases, speedy processing and elimination of some of the deal-breaker fees imposed by Fannie Mae and Freddie Mac in recent years.
The objective, federal officials say, is to get it right this time around by removing the previous obstacles to widespread participation by lenders and severely underwater borrowers.
Industry experts have published studies that estimate that as many as 6.9 million loans could fit the broad requirements for refinancing, but that far fewer — around 2 million borrowers — are likely to qualify on all the detailed eligibility criteria.
Among the key rules:
• Only loans owned or guaranteed by Fannie Mae and Freddie Mac are eligible. Underwater borrowers who have FHA, VA or other types of mortgages are not. Both companies' websites — http://www.fanniemae.com and http://www.freddiemac.com — offer "look up" features that tell you whether they own your loan.
I suggest you start there.
• Your mortgage must have been purchased or securitized by either company no later than May 31, 2009, and must have an LTV ratio in excess of 80%.
• You must be current on your loan with no 30-day late payments during the six months preceding application and no more than one late payment during the last 12 months.
If you think you qualify, you can apply to your mortgage servicer and ask how to proceed.
Once you know you qualify for HAMP 2.0 and if your LTV is higher than 125%, you should also be able to shop around among other lenders who are large enough to run servicing operations of their own.
But be aware of a little-noticed glitch that has arisen in the program that could hamper your opportunity to refinance.
Some lenders may not want to proceed with your application solely because of a detail buried in your loan documents that was always beyond your control — the name of the mortgage insurer on your current loan.
If it is United Guaranty Corp., they may set your application aside because that firm alone has not agreed to adhere fully to the streamlined procedures other insurers accepted as part of the basic deal with the White House, Fannie and Freddie to kick-start the revised refi program.
The issue is technical and complicated — United Guaranty has refused to waive its rights to force lenders to repurchase what it considers badly underwritten loans, and is requiring additional underwriting in some cases.
All other private mortgage insurers have waived their rights.
The net effect of United Guaranty's policy, could disrupt the intended fast and efficient processing of HARP refi applications — potentially denying lower interest rates to many underwater borrowers who might otherwise qualify.
Some major lenders, such as Quicken Loans, said in interviews that they will have to either set aside or reject HARP applications if the original loan carries United Guaranty insurance.
United Guaranty, a subsidiary of giant insurer AIG, said in an email that it "fully supports the Obama administration's efforts" in revising HARP, and that only a "minority" of its insured mortgages should be affected by its policy disagreement with the rest of the industry.
Bottom line for you if you're deeply underwater and interested in a HARP refi: Proceed with your application anyway, but be aware there are tripwires and snares that could derail you.
John Hacker
Sunday, February 26, 2012
Tax Forgiveness Goes Away REAL Soon!
I Got a Secret!!
Remember way back in 2007, Congress passed the Mortgage Debt Relief Act.
The ACT allowed taxpayers to exclude from income, debt that is forgiven or canceled by their lenders.
This arises when the lender agrees to a short sale or foreclosure, when the amount is less than what is owed.
The amount or "difference" is forgiven.
This is only on personal residence not to vacation or investment properties.
There is also limits to the amount.
Ok, so now this ACT is ending December 31, 2012.
But evreyone I talk to seems like that is far away and there is still time.
I call that the "Alice in Wonderland" Syndrom.
The issue is that the Short Sale and foreclosure process can take over five months to complete. Add marketing to that and now you could be looking at Seven Months.
There is no sense of Urgency from Congress to extend the Tax Relief beyond 2012.
Of course they are not worried because they are far far away from the real world.
The bottom line is if one is facing the possibility of a short sale, they need to move forward. Contact a specialist, talk it over and start planning.
Understand the process and you are ahead of the game.
Alot is at stake, your finances,your credit, and your peace of mind.
Or
Just wait for Congress.
John Hacker
jhackerleads@cox.net
Remember way back in 2007, Congress passed the Mortgage Debt Relief Act.
The ACT allowed taxpayers to exclude from income, debt that is forgiven or canceled by their lenders.
This arises when the lender agrees to a short sale or foreclosure, when the amount is less than what is owed.
The amount or "difference" is forgiven.
This is only on personal residence not to vacation or investment properties.
There is also limits to the amount.
Ok, so now this ACT is ending December 31, 2012.
But evreyone I talk to seems like that is far away and there is still time.
I call that the "Alice in Wonderland" Syndrom.
The issue is that the Short Sale and foreclosure process can take over five months to complete. Add marketing to that and now you could be looking at Seven Months.
There is no sense of Urgency from Congress to extend the Tax Relief beyond 2012.
Of course they are not worried because they are far far away from the real world.
The bottom line is if one is facing the possibility of a short sale, they need to move forward. Contact a specialist, talk it over and start planning.
Understand the process and you are ahead of the game.
Alot is at stake, your finances,your credit, and your peace of mind.
Or
Just wait for Congress.
John Hacker
jhackerleads@cox.net
Friday, February 10, 2012
Banks Get A Pass! Politicians Takes Credit
In any out-of-court settlement for alleged wrongdoing, the test of whether prosecutors got a good deal rests on the answers to three questions:
Does it hold the miscreants accountable?
Does it make victims whole?
And does it prevent similar misconduct in the future?
Former UCLA economist Chris Thornberg told KPCC-FM that California's $18 billion share is a drop in the bucket considering that there are about $1.3 trillion worth of outstanding loans in the country.
"From my perspective, it's more gesture than reality," he said.
Orange County homeowners stand to get an estimated $1.1 billion from the multi-state foreclosure settlement reached between state attorneys general and five leading banks, the California Attorney General's Office reported Thursday.
Attorney General Kamala Harris told reporters she expects the state will get up to $18 billion in relief under settlement terms, of which an estimated $7.7 billion will go to Orange and three other Southern California counties – nearly $4 billion to Los Angeles and $2.7 billion to the Inland Empire.
California will get up to $18 billion in relief under a multi-state foreclosure settlement, of which an estimated $1.1 billion will go to Orange.
Nearly $4 billion will go to Los Angeles and $2.7 billion to the Inland Empire.
Thursday’s $25 billion agreement by five banks to end a 16- month investigation of abusive foreclosure practices fails on the first two counts.
And we won’t know for some time whether it is successful on the third.
Nonetheless, the deal is in the country’s interest because it clarifies the liabilities of banks that filed bogus court documents to speed up repossessions. That could clear the clogged foreclosure process and, more importantly, help bring a moribund real-estate market back to life.
The state has about 2 million homeowners who owe lenders more than their homes are worth. At least a third of those "underwater" homeowners may qualify for benefits under the settlement, an expert said.
California was one of four holdout states to join the settlement Thursday, bringing the total signed onto the deal to 49.
But many in Orange County and throughout the state complained that the amount of relief will be too little, especially for homeowners who already lost their homes through shoddy foreclosure practices called "robo-signing."
Stella Matadama, housing coordinator and foreclosure counselor at the Consumer Credit Counseling Service of Orange County, worried that principal reduction promised under the plan will fall short.
Matadama had read reports that the maximum benefit would be $20,000, while the average underwater homeowner owes $50,000 more than their homes are worth.
"It's way too little," Matadama said. "A $20,000 write down in Orange County, that's nothing. (And) those who went through the foreclosure process, they only get $2,000.
It's kind of like a slap in the face."
"It is too little, too late," added Sean O'Toole, founder and CEO of ForeclosureRadar.com.
"There were $6 billion in loans foreclosed on (in California) last month alone, and that is down from a peak of $12.6 billion in July of 2008," O'Toole said. He added that there's been a total of $435 billion in California loans that have gone through foreclosure since the crisis began.
"The dollar amount considered here is insignificant, and though it may help some families, it won't turn the tide," he said.
State officials couldn't provide breakdowns of how the $1.1 billion would be distributed in Orange County. More than 98,000 Orange County homeowners, or 17.6 percent of all residential borrowers here, were under water, according to Santa Ana-based CoreLogic.
Although borrowers with loans held or backed by mortgage giants Fannie Mae or Freddie Mac don't qualify for relief under the settlement, it is estimated that only about 40 percent of local loans fall into that category.
More than 35,000 Orange County homes have gone through foreclosure since 2008, DataQuick figures show.
The settlement "is a step in the right direction," said Glenn Hayes, president of the Neighborhood Housing Services of Orange County, which helps homeowners trying to avoid foreclosure. "People have been hurt, and everybody, including the banks agree it wasn't handled the way it should have been."
"This will help homeowners currently under water on their mortgages to either reduce their loan amounts, refinance or complete a short sale," added Paul Scheper, my friend and regional manager for Greenlight Financial Services.
In a nut shell there's still too few details about how the money will be doled out to know if the plan will provide enough help.
Let’s hope they don’t mess up like they did with the loan modification process,there was no standardization of who gets the loan mod or not.
Last minute points;
The deal does have teeth.
It calls for an outside monitor and for heavy penalties if banks don’t make good on their commitments.
More important, banks will be given credit only for what they actually accomplish for homeowners -- and not for any refinancing offers that borrowers refuse.
This rightly gives the victims some leverage.
If a bank falls short of its agreed benchmarks, it must pay the difference plus a penalty. And it must meet all its obligations in three years.
The settlement also reverses the banks’ incentives to foreclose on families rather than keep them in their homes with loan forgiveness. Until now, banks had been loath to reduce principal amounts because it meant recognizing losses on their balance sheets.
This deal awards more credit for principal reduction and less for lowering interest rates or extending payment terms.
Banks have calculated that the settlement is in their interest, even though it means they may have to continue paying huge mortgage-related litigation costs. The deal enables them to predict their legal exposure.
Even better, it could help the housing market recover.
Banks own outright almost half a million homes and have 2 million more in various stages of foreclosure.
Such so-called shadow inventory has been a drag on the market, which after six years remains depressed, holding back the overall recovery.
With this settlement, banks can clear out their backlog of stalled foreclosures. In the short run, that may drive prices down, but it will also help the housing market find its bottom faster.
Only then can home prices, which have fallen by more than a third since 2007, begin to rise again.
Borrowers can finally start to rebuild equity.
But beware politicians put this together and you know we can trust them, right?
It takes an election year to get the politicians to think of us.
John Hacker Unity West Retention Manager
Does it hold the miscreants accountable?
Does it make victims whole?
And does it prevent similar misconduct in the future?
Former UCLA economist Chris Thornberg told KPCC-FM that California's $18 billion share is a drop in the bucket considering that there are about $1.3 trillion worth of outstanding loans in the country.
"From my perspective, it's more gesture than reality," he said.
Orange County homeowners stand to get an estimated $1.1 billion from the multi-state foreclosure settlement reached between state attorneys general and five leading banks, the California Attorney General's Office reported Thursday.
Attorney General Kamala Harris told reporters she expects the state will get up to $18 billion in relief under settlement terms, of which an estimated $7.7 billion will go to Orange and three other Southern California counties – nearly $4 billion to Los Angeles and $2.7 billion to the Inland Empire.
California will get up to $18 billion in relief under a multi-state foreclosure settlement, of which an estimated $1.1 billion will go to Orange.
Nearly $4 billion will go to Los Angeles and $2.7 billion to the Inland Empire.
Thursday’s $25 billion agreement by five banks to end a 16- month investigation of abusive foreclosure practices fails on the first two counts.
And we won’t know for some time whether it is successful on the third.
Nonetheless, the deal is in the country’s interest because it clarifies the liabilities of banks that filed bogus court documents to speed up repossessions. That could clear the clogged foreclosure process and, more importantly, help bring a moribund real-estate market back to life.
The state has about 2 million homeowners who owe lenders more than their homes are worth. At least a third of those "underwater" homeowners may qualify for benefits under the settlement, an expert said.
California was one of four holdout states to join the settlement Thursday, bringing the total signed onto the deal to 49.
But many in Orange County and throughout the state complained that the amount of relief will be too little, especially for homeowners who already lost their homes through shoddy foreclosure practices called "robo-signing."
Stella Matadama, housing coordinator and foreclosure counselor at the Consumer Credit Counseling Service of Orange County, worried that principal reduction promised under the plan will fall short.
Matadama had read reports that the maximum benefit would be $20,000, while the average underwater homeowner owes $50,000 more than their homes are worth.
"It's way too little," Matadama said. "A $20,000 write down in Orange County, that's nothing. (And) those who went through the foreclosure process, they only get $2,000.
It's kind of like a slap in the face."
"It is too little, too late," added Sean O'Toole, founder and CEO of ForeclosureRadar.com.
"There were $6 billion in loans foreclosed on (in California) last month alone, and that is down from a peak of $12.6 billion in July of 2008," O'Toole said. He added that there's been a total of $435 billion in California loans that have gone through foreclosure since the crisis began.
"The dollar amount considered here is insignificant, and though it may help some families, it won't turn the tide," he said.
State officials couldn't provide breakdowns of how the $1.1 billion would be distributed in Orange County. More than 98,000 Orange County homeowners, or 17.6 percent of all residential borrowers here, were under water, according to Santa Ana-based CoreLogic.
Although borrowers with loans held or backed by mortgage giants Fannie Mae or Freddie Mac don't qualify for relief under the settlement, it is estimated that only about 40 percent of local loans fall into that category.
More than 35,000 Orange County homes have gone through foreclosure since 2008, DataQuick figures show.
The settlement "is a step in the right direction," said Glenn Hayes, president of the Neighborhood Housing Services of Orange County, which helps homeowners trying to avoid foreclosure. "People have been hurt, and everybody, including the banks agree it wasn't handled the way it should have been."
"This will help homeowners currently under water on their mortgages to either reduce their loan amounts, refinance or complete a short sale," added Paul Scheper, my friend and regional manager for Greenlight Financial Services.
In a nut shell there's still too few details about how the money will be doled out to know if the plan will provide enough help.
Let’s hope they don’t mess up like they did with the loan modification process,there was no standardization of who gets the loan mod or not.
Last minute points;
The deal does have teeth.
It calls for an outside monitor and for heavy penalties if banks don’t make good on their commitments.
More important, banks will be given credit only for what they actually accomplish for homeowners -- and not for any refinancing offers that borrowers refuse.
This rightly gives the victims some leverage.
If a bank falls short of its agreed benchmarks, it must pay the difference plus a penalty. And it must meet all its obligations in three years.
The settlement also reverses the banks’ incentives to foreclose on families rather than keep them in their homes with loan forgiveness. Until now, banks had been loath to reduce principal amounts because it meant recognizing losses on their balance sheets.
This deal awards more credit for principal reduction and less for lowering interest rates or extending payment terms.
Banks have calculated that the settlement is in their interest, even though it means they may have to continue paying huge mortgage-related litigation costs. The deal enables them to predict their legal exposure.
Even better, it could help the housing market recover.
Banks own outright almost half a million homes and have 2 million more in various stages of foreclosure.
Such so-called shadow inventory has been a drag on the market, which after six years remains depressed, holding back the overall recovery.
With this settlement, banks can clear out their backlog of stalled foreclosures. In the short run, that may drive prices down, but it will also help the housing market find its bottom faster.
Only then can home prices, which have fallen by more than a third since 2007, begin to rise again.
Borrowers can finally start to rebuild equity.
But beware politicians put this together and you know we can trust them, right?
It takes an election year to get the politicians to think of us.
John Hacker Unity West Retention Manager
Monday, February 6, 2012
Short Sales needs the right Team Work!
Find an experienced and certified Short Sale Agent, and then ask them questions!
When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves. “Lew Sichelman”
But a good number of cases are brought by disgruntled buyers or sellers.
To be fair, the vast majority of real estate deals go off without a hitch, or at least without problems that leave buyers or sellers feeling so wronged that they are willing to spend the time and money to take someone to court.
If the latest edition of "Legal Scan" tells us anything, it is that a handful of agents and brokers and their clients either don't know the law or don't care to follow it.
"Legal Scan" is a biennial research report by the National Assn. of Realtors. Combining surveys of state real estate commissions and other key people in the business with a close analysis of case law and recently enacted statutes, the document identifies potential pitfalls that can ensnare anyone.
Property condition disclosures, are a significant source of disputes, particularly when the house involved is either a foreclosure being resold by the bank or a short sale in which the seller owes more than the place is worth.
Disclosure problems involving underwater owners were deemed the most significant of all legal issues discussed in the 63-page report. Two-thirds of the respondents expect the level of disputes to rise, if only because short sales are not expected to go away any time soon, says Lew Sichelman.
Often, according to the report, the upside-down seller "sees no benefit" in giving up any information about the property. And sometimes, because the short-sale process takes so long, the property's condition changes while the contract is pending.
Lenders are blamed for much of the tumult because, as one respondent put it, "they are unresponsive and do not approve transactions in a timely manner."
But real estate agents can be harmful,
"Too many agents are dabbling in short sales without training and are not properly advising sellers of options and recommending legal counsel."
The message here:
Sellers should work only with agents who are experienced and trained in handling short sales. So should buyers, because other respondents say many uninformed agents tend to give advice outside the scope of their expertise.
Successful agents will have data to show clients of their training and references to their past work with short sales.
Many agents I know “talk the talk” but cannot show that they can actually “walk the talk.”
Check their stats, I have prepared an overview for my potential clients and I even encourage them to talk to other agents.
If your agent is qualified then they have nothing to fear from the other agents.
The situation is much the same when the house is a foreclosure and the seller is the bank.
"Real estate owned" (bank-owned) properties are already the basis of a significant number of disputes, and it is estimated that disputes over REOs is likely to increase over the next two years, writes Lew Sichelman.
Here is a great question to ask a short sale/Reo specialist, “Who is on your team?, and tell me a little about them.”
Generally, banks believe they have no duty to disclose anything about the property. As far as they are concerned, an REO is sold as is. Often, they do little or nothing to prevent damage to houses during the long, drawn-out repossession process.
A qualified Short sale REO agent will have this checked by just a simple AVID report.
But although folks understand the 'as is' clause, when the property is bank-owned, buyers and agents still expect banks to fix issues that are a threat to health and safety.
Banks are not doing that.
Even when the house is not a short sale or foreclosure, property condition disclosure is a big bugaboo. These issues is the basis of either a moderate or high number of legal disputes.
Especially bothersome are structural defects discovered after the deal is done. Mold and water intrusion claims are also big.
In case like that, the buyer will want to blame someone else.
Administrative fees are another topic being litigated. These are fees over and above the sales commission that cover things like the need to store documents for a number of years, and the fees are supposed to be disclosed when the house is listed.
But when sellers aren't told, or when they don't pay attention, they go to court.
Frivolous? Perhaps.
Many cases there is no basis in law are a significant problem in and of themselves.
Sometimes plaintiffs are looking for a "deep pocket," with the mentality that "everything is someone else's fault." Excerpts from Lew Sichelman
www.letsgobuyahome.com John Hacker HAFA Certified
Unity West Realty 949-275-3247
When it comes to lawsuits, real estate agents and brokers tangle mostly among themselves. “Lew Sichelman”
But a good number of cases are brought by disgruntled buyers or sellers.
To be fair, the vast majority of real estate deals go off without a hitch, or at least without problems that leave buyers or sellers feeling so wronged that they are willing to spend the time and money to take someone to court.
If the latest edition of "Legal Scan" tells us anything, it is that a handful of agents and brokers and their clients either don't know the law or don't care to follow it.
"Legal Scan" is a biennial research report by the National Assn. of Realtors. Combining surveys of state real estate commissions and other key people in the business with a close analysis of case law and recently enacted statutes, the document identifies potential pitfalls that can ensnare anyone.
Property condition disclosures, are a significant source of disputes, particularly when the house involved is either a foreclosure being resold by the bank or a short sale in which the seller owes more than the place is worth.
Disclosure problems involving underwater owners were deemed the most significant of all legal issues discussed in the 63-page report. Two-thirds of the respondents expect the level of disputes to rise, if only because short sales are not expected to go away any time soon, says Lew Sichelman.
Often, according to the report, the upside-down seller "sees no benefit" in giving up any information about the property. And sometimes, because the short-sale process takes so long, the property's condition changes while the contract is pending.
Lenders are blamed for much of the tumult because, as one respondent put it, "they are unresponsive and do not approve transactions in a timely manner."
But real estate agents can be harmful,
"Too many agents are dabbling in short sales without training and are not properly advising sellers of options and recommending legal counsel."
The message here:
Sellers should work only with agents who are experienced and trained in handling short sales. So should buyers, because other respondents say many uninformed agents tend to give advice outside the scope of their expertise.
Successful agents will have data to show clients of their training and references to their past work with short sales.
Many agents I know “talk the talk” but cannot show that they can actually “walk the talk.”
Check their stats, I have prepared an overview for my potential clients and I even encourage them to talk to other agents.
If your agent is qualified then they have nothing to fear from the other agents.
The situation is much the same when the house is a foreclosure and the seller is the bank.
"Real estate owned" (bank-owned) properties are already the basis of a significant number of disputes, and it is estimated that disputes over REOs is likely to increase over the next two years, writes Lew Sichelman.
Here is a great question to ask a short sale/Reo specialist, “Who is on your team?, and tell me a little about them.”
Generally, banks believe they have no duty to disclose anything about the property. As far as they are concerned, an REO is sold as is. Often, they do little or nothing to prevent damage to houses during the long, drawn-out repossession process.
A qualified Short sale REO agent will have this checked by just a simple AVID report.
But although folks understand the 'as is' clause, when the property is bank-owned, buyers and agents still expect banks to fix issues that are a threat to health and safety.
Banks are not doing that.
Even when the house is not a short sale or foreclosure, property condition disclosure is a big bugaboo. These issues is the basis of either a moderate or high number of legal disputes.
Especially bothersome are structural defects discovered after the deal is done. Mold and water intrusion claims are also big.
In case like that, the buyer will want to blame someone else.
Administrative fees are another topic being litigated. These are fees over and above the sales commission that cover things like the need to store documents for a number of years, and the fees are supposed to be disclosed when the house is listed.
But when sellers aren't told, or when they don't pay attention, they go to court.
Frivolous? Perhaps.
Many cases there is no basis in law are a significant problem in and of themselves.
Sometimes plaintiffs are looking for a "deep pocket," with the mentality that "everything is someone else's fault." Excerpts from Lew Sichelman
www.letsgobuyahome.com John Hacker HAFA Certified
Unity West Realty 949-275-3247
Tuesday, January 17, 2012
Tax Deductions for Homeowners GO AWAY!!
Federal tax deduction for mortgage insurance premiums expired, Thanks to Congress.
The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively increase the costs of homeownership this year
Though its demise drew little attention because of the partisan year-end brawl over the payroll tax cut extension in Congress, a key mortgage financing benefit disappeared at the end of December: the ability of large numbers of home buyers and owners to write off the premiums they pay for mortgage insurance.
The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively increase the costs of homeownership this year.
The expiration of mortgage insurance deductibility will hit many low-down-payment conventional loans originated since 2007, plus virtually all new mortgages closed this year whose down payment is less than 20%.
Though industry experts do not have precise numbers, their estimates range into the millions for existing owners and new buyers potentially touched by the deductibility termination.
Borrowers using guaranteed veterans (VA) and rural housing loans, whose down payments can drop to zero, also are affected.
The change in the law took effect Jan. 1 along with the expiration of 58 other tax code benefits that Congress failed to renew, such as credits for home energy improvements, credits for builders of energy-efficient houses and deductions for state and local sales tax payments.
They were all components of what would have been an annual "tax extenders" bill authorizing continuation of relatively noncontroversial expiring benefits for another year or more.
Congress could still reauthorize all or some of the write-offs retroactively this year, but the political atmosphere on Capitol Hill raises doubts about the timing of that scenario.
The mortgage insurance premium deduction dates to legislation enacted in 2006. It allows buyers and refinancers who use either private mortgage insurance or federal insurance or guarantees, and who itemize on their federal tax returns, to write off their premiums.
Borrowers who are single or married and filing jointly with adjusted gross incomes of $100,000 or less can write off 100% of their annual mortgage insurance premiums.
Married homeowners filing singly can write off 50% of premiums. Borrowers with incomes above $100,000 may qualify for partial deductions on a sliding scale.
In many cases, the post-tax savings for these borrowers are significant.
New buyers with an income around $100,000 and a mortgage of $200,000 would save between $600 and $1,000 a year, depending on their credit score and loan-to-value ratio.
For households with lower incomes, the effect would be less, depending on their marginal federal tax brackets.
David Stevens, who served as Federal Housing Administration commissioner and is now chief executive of the Mortgage Bankers Assn., says the loss of deductibility of mortgage insurance hits a segment of consumers — middle-income and first-time buyers — "where affordability is especially important."
But mortgage insurance was not the only housing-related casualty of the pre-Christmas skirmishing.
As part of the temporary extension of the payroll tax cut, negotiators tacked an unusual provision that raises fees on most conventional mortgages — those originated for sale to or guarantee by Fannie Mae and Freddie Mac.
Starting in April, Fannie and Freddie will impose a surtax on the guarantee fees they charge private lenders equal to one-tenth of 1%.
Lenders are virtually certain to pass those fees to consumers in the form of a higher note rate or loan charges upfront. Industry estimates suggest that the surtax could add an eighth of a percentage point to rates and raise costs to borrowers over the life of the loan by more than $4,000 on a $200,000 mortgage.
Unlike standard guarantee fees, which are used by Fannie and Freddie to defray loan-default expenses, the new consumer funds will be sent directly to the Treasury to help pay for the $36-billion cost of the temporary payroll tax cut.
At a time when the Federal Reserve is warning that there can be no broad economic improvement until housing recovers, it may strike the public as odd policy to raise costs for home buyers and refinancers to fund unrelated, temporary tax relief.
But that's not the way they saw it on Capitol Hill in the rush to holiday recess.
Bottom line: The mortgage insurance deductibility problem may disappear if mortgage insurance gets included in an election-year "extender" package.
But the fee hikes on most new mortgages are here for the foreseeable future.
I warn you, keep an eye on the Government who is trying to reduce the debt, someone must pay,
and usually it is the homeowners who get tagged with the bill.
gathered up by John Hacker
The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively increase the costs of homeownership this year
Though its demise drew little attention because of the partisan year-end brawl over the payroll tax cut extension in Congress, a key mortgage financing benefit disappeared at the end of December: the ability of large numbers of home buyers and owners to write off the premiums they pay for mortgage insurance.
The loss of that tax deduction — plus mandatory new fees imposed by Congress on all new conventional and FHA loans — could effectively increase the costs of homeownership this year.
The expiration of mortgage insurance deductibility will hit many low-down-payment conventional loans originated since 2007, plus virtually all new mortgages closed this year whose down payment is less than 20%.
Though industry experts do not have precise numbers, their estimates range into the millions for existing owners and new buyers potentially touched by the deductibility termination.
Borrowers using guaranteed veterans (VA) and rural housing loans, whose down payments can drop to zero, also are affected.
The change in the law took effect Jan. 1 along with the expiration of 58 other tax code benefits that Congress failed to renew, such as credits for home energy improvements, credits for builders of energy-efficient houses and deductions for state and local sales tax payments.
They were all components of what would have been an annual "tax extenders" bill authorizing continuation of relatively noncontroversial expiring benefits for another year or more.
Congress could still reauthorize all or some of the write-offs retroactively this year, but the political atmosphere on Capitol Hill raises doubts about the timing of that scenario.
The mortgage insurance premium deduction dates to legislation enacted in 2006. It allows buyers and refinancers who use either private mortgage insurance or federal insurance or guarantees, and who itemize on their federal tax returns, to write off their premiums.
Borrowers who are single or married and filing jointly with adjusted gross incomes of $100,000 or less can write off 100% of their annual mortgage insurance premiums.
Married homeowners filing singly can write off 50% of premiums. Borrowers with incomes above $100,000 may qualify for partial deductions on a sliding scale.
In many cases, the post-tax savings for these borrowers are significant.
New buyers with an income around $100,000 and a mortgage of $200,000 would save between $600 and $1,000 a year, depending on their credit score and loan-to-value ratio.
For households with lower incomes, the effect would be less, depending on their marginal federal tax brackets.
David Stevens, who served as Federal Housing Administration commissioner and is now chief executive of the Mortgage Bankers Assn., says the loss of deductibility of mortgage insurance hits a segment of consumers — middle-income and first-time buyers — "where affordability is especially important."
But mortgage insurance was not the only housing-related casualty of the pre-Christmas skirmishing.
As part of the temporary extension of the payroll tax cut, negotiators tacked an unusual provision that raises fees on most conventional mortgages — those originated for sale to or guarantee by Fannie Mae and Freddie Mac.
Starting in April, Fannie and Freddie will impose a surtax on the guarantee fees they charge private lenders equal to one-tenth of 1%.
Lenders are virtually certain to pass those fees to consumers in the form of a higher note rate or loan charges upfront. Industry estimates suggest that the surtax could add an eighth of a percentage point to rates and raise costs to borrowers over the life of the loan by more than $4,000 on a $200,000 mortgage.
Unlike standard guarantee fees, which are used by Fannie and Freddie to defray loan-default expenses, the new consumer funds will be sent directly to the Treasury to help pay for the $36-billion cost of the temporary payroll tax cut.
At a time when the Federal Reserve is warning that there can be no broad economic improvement until housing recovers, it may strike the public as odd policy to raise costs for home buyers and refinancers to fund unrelated, temporary tax relief.
But that's not the way they saw it on Capitol Hill in the rush to holiday recess.
Bottom line: The mortgage insurance deductibility problem may disappear if mortgage insurance gets included in an election-year "extender" package.
But the fee hikes on most new mortgages are here for the foreseeable future.
I warn you, keep an eye on the Government who is trying to reduce the debt, someone must pay,
and usually it is the homeowners who get tagged with the bill.
gathered up by John Hacker
Saturday, December 24, 2011
Home Owners Pay for Payroll tax Cut
The Government Giveth, and The Government Taketh Away!
I was walking past the City Hall in Irvine and realized I was in the midst of the “OCCUPY IRVINE” group.
I smiled and walked on, then a gentleman stepped in front of me and TOLD me,
“I bet you are part of the 1%,”
“Actually”, I smiled, “I am part of the bottom 30%”,
He thought about that as I walked around him.
“I thank you for the extra expense you added to my home mortgage.”
I turned toward him as walked on by.
He still looked confused.
Here is how it works,
On Friday Congress unanimously approved the two month extension of the 2% reduction in the employee contribution to Social Security as well as a temporary extension of the 99 weeks of unemployment benefits.
Ok that sounds good.
But what the Government giveth, it will also taketh away.
Homebuyers will pay the cost of this program, ($33 Million estimate).
The cost was added to the “Fees” lenders PAY on Freddie Mac and Fannie Mae loan guarantees.
Lenders pay about 27 bases points for the loan guarantee.
The new payroll tax bill would add 10 more basis points to the process, this according to the Mortgage Bankers Association.
Ok, Occupy folks would say “Hey it’s a small price, about $12 a month or $4000 over the life of a $200,000 loan.”
This will be imposed on Freddie and Fannie loans until 2021.
Once again homeowners get stiffed.
Living in Tent, maybe the next step.
John Hacker
and info from the OC Register.
I was walking past the City Hall in Irvine and realized I was in the midst of the “OCCUPY IRVINE” group.
I smiled and walked on, then a gentleman stepped in front of me and TOLD me,
“I bet you are part of the 1%,”
“Actually”, I smiled, “I am part of the bottom 30%”,
He thought about that as I walked around him.
“I thank you for the extra expense you added to my home mortgage.”
I turned toward him as walked on by.
He still looked confused.
Here is how it works,
On Friday Congress unanimously approved the two month extension of the 2% reduction in the employee contribution to Social Security as well as a temporary extension of the 99 weeks of unemployment benefits.
Ok that sounds good.
But what the Government giveth, it will also taketh away.
Homebuyers will pay the cost of this program, ($33 Million estimate).
The cost was added to the “Fees” lenders PAY on Freddie Mac and Fannie Mae loan guarantees.
Lenders pay about 27 bases points for the loan guarantee.
The new payroll tax bill would add 10 more basis points to the process, this according to the Mortgage Bankers Association.
Ok, Occupy folks would say “Hey it’s a small price, about $12 a month or $4000 over the life of a $200,000 loan.”
This will be imposed on Freddie and Fannie loans until 2021.
Once again homeowners get stiffed.
Living in Tent, maybe the next step.
John Hacker
and info from the OC Register.
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