Lenders that Sell Short Sales Faster and for Less, According to RealtyTrac

Pursuing a short sale is often thought of as a painstaking process, and it’s not uncommon to hear of complaints about slow responses from servicers and last minute rejections on offers. Fortunately, not all lenders/servicers are the same when it comes to dealing with short sales, and RealtyTrac compiled a list of data revealing which institutions tend to move through the process quicker and for less.

Fannie Mae, Freddie Mac, and FHA had the shortest timelines at 193 days in January 2012, a decrease compared to a year ago in January 2011, when short sales averaged 248 days. Ally Financial came in second at 321 days, reducing its timeline as well from 393 days a year ago.

PNC Financial Group was third, taking 353 days, though the bank takes longer than it did a year ago when the it took 206 days. Wells Fargo came in fourth (385 days). Bank of New York Mellon took the fifth longest (402 days), followed by Bank of America (403 days) and Sun Trust (404 days). The short sale timeline includes the time a property starts the foreclosure process to the time it’s sold as a pre-foreclosure property.

Recently, Fannie Mae and Freddie Mac announced new guidelines to take effect in June requiring servicers to respond within 30 days after receiving a short sale offer or a borrower application. Bank of America recently announced that its providing a decision on a short sale offer in 20 days.

In terms of pricing, Fannie Mae, Freddie Mac, and FHA sold homes for the least amount in January 2012, averaging $128,642, a drop from year ago prices in January 2011 when they averaged $160,982. Deutsche Bank’s average price was $132,996, followed by Sun Trust Banks ($144,024), and CitiGroup ($148,411), and PNC Financial Group Inc ($149,332). Bank of America Wells Fargo were the bottom two on the top 10 list, averaging $158,632 and $167,371, respectively, for January 2012.

As for the number of short sales, Bank of America completed the most in January 2012, with 5,276, followed by Chase (2,967), Wells Fargo (2,788), MERS (1,429), and Bank of New York Mellon (1,401).

From RealtyTrac

Portland Area Farmers Markets

Vancouver Area Farmers Markets

Nothing says spring time like a trip to the Farmers Market, when you see the fresh produce, the plant starts, and honey, you know that summer is right around the corner!

Here is a list of some markets in the area you can check out!

Portland Vancouver Garden Ideas

What’s not to love about a garden filled with edible fruits and vegetables?

You can grow your very own “edible garden” in a number of ways – from dedicated vegetable gardens to mixing herbs and veggies with your flowerbeds, to containers, trellises or raised beds of culinary delights.

If you live in the Pacific Northwest, you know that a garden can have challenges.  From the weather in the Portland Vancouver area, to space, and soil type, there can be some issues.

Here a few ideas to help you start small, inexpensively, and enjoy a great harvest!

Go Vertical!  Coffee cans attached to a vertical wall make a great herb garden.  Punch a few wholes in the bottom of the cans for drainage, then place an inch or so of  small pebbles in the bottom of each can and fill halfway with organic potting soil.  Add your herb, and fill to an inch below the rim of the can with more potting soil.

Go Horizontal!

Gutters hung with small chain and filled with flowers, herbs, and lettuce.

These stacked cinder blocks can make a great garden in a narrow area.  Heat loving plants thrive if you locate the garden on a south facing wall, and on a slab of cement.  The heat from the day will soak into the blocks and keep your heat loving plants like tomatoes, peppers, basil, oregano, marjoram, flat leaf chive, sage, thyme, rosemary, and strawberries happy and warm.

Short Sale: Will you pay taxes on your short sale?

The Mortgage Forgiveness Debt Relief Act is expiring in December 2012.

The act offers relief to homeowners who would formerly owe taxes on forgiven mortgage debt after facing a short sale or foreclosure on a primary residence.  With some short sales taking up to a year to close, time is of the essence in your decision.

For more information, please contact us immediately  or consult with your real estate attorney.

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.

Generally, the Mortgage Forgiveness Debt Relief Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.  Learn more here.

Contact Denice at 360-607-4226

or Denice@DeniceNeddo.com

Short Sales:  Lenders Are Paying Borrowers to do Them!

Lenders are allowing more short sales by financially strapped homeowners and a few people are even getting cash to complete the sale.

A short sale is when a lender allows a home owner to sell their home for than they owe on the unpaid mortgage.  A short sale is a newly popular alternative to foreclosure.

We have seen an increase in short sales for the past several months, but the financial incentives — which we have seen randomly and infrequently, are starting to appear more and more often.

Here are a few of recent examples:

CHASE went national with their short-sale incentive offers last year, paying up to $35,000 in some cases. We have seen $20,000 here locally, and not just on high dollar mortgages either.

Bank of America seems to be  testing their program with incentives from $5,000 to $25,000 in Florida to see if they should be expanded to more states. The Florida program began last fall, spokesman Richard Simon says.

Wells Fargo is offering incentives from less than $3,000 to $20,000, spokesman James Hines says.

Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures.  Especially in states that foreclose through the court system. (In Washington and Oregon, most foreclosure are done through a Trustee Sale, not via judicial foreclosure).

In states such as Florida where foreclosures go through the courts, 50% of loans in foreclosure are more than two years past due, says a January report by mortgage tracker LPS Applied Analytics.  TWO YEARS!!

Banks are becoming more and more willing to do short sales now than in the past, but they still take time to complete the process.  Cash incentives appear to be limited, and borrowers are not sure if the offers they are receiving are real or fraud.  When the media is reporting about scams, it is difficult to believe a letter from the lender offering cash to complete a short sale could actually be legitimate

When a loan modification isn’t possible and more times than not, it is not an option for most borrowers,  a short sale may be a better and faster solution  than foreclosure.  The lenders won’t say how often they extend such incentives. The offers are random.  It is difficult to understand how the borrowers are selected to receive these incentives.

It appears that these short sale incentives are more common for loans in states where foreclosures take more time, and in states that are experiencing a very high number of defaults.

In November, short sales accounted for more than 9% of single family home sales and were up 32% from the year before, according to CoreLogic.

Market researcher Dataquick also shows short sales increasing from January 2011 through last month throughout California and in Phoenix, Miami and Seattle.

The federal government’s HAFA foreclosure prevention program also offers short sale incentives, at least $3,000 for sellers, but far more short sales are being done outside the government program.

Through December, just 26,901 short sales had been completed through the Home Affordable Foreclosure Alternative (HAFA) program.

In contrast, Bank of America, the largest servicer of home loans, did 107,000 short sales last year. That was up from 92,000 in 2010, which was double the 2009 volume, it says.

For more information on short sales, call Denice at 360-607-4226

Do’s and Don’t of a Short Sale – what you need to know

Don’t wait until it’s too late. If you drag your feet and hide from the fact that you’ve stopped making mortgage payments, it will cost your credit rating and it will put any chances of a short sale in risk.

Don’t rent your home out. In these economic times there are unsavory renters, many of them lost their own homes, that don’t mind giving you the first month’s rent and a security deposit, only to never pay you another payment. You lose the house to foreclosure, but they live rent free for the foreseeable future.

Don’t stop taking care of your home. Yes, you will be moving, but if you stop mowing the lawn or keeping the place tidy, messiness will discourage potential buyers.

 Don’t think that you need a real estate agent that knows your neighborhood to short sale your home. In a short sale transaction, it’s about the short sale negotiation and working relationship with your lender(s), not that your home’s location is special compared to the listing around the corner. Out-of-area agents easily price properties using a Comparative Market Analysis (CMA). In fact, banks regularly pay agents and real estate brokers a minimal fee, usually $50 or $75, to price out-of-area properties for them. Your local neighborhood real estate agent may not be the right person. You need a tough and knowledgeable short sale specialist.

 Don’t stop paying your water bills, sewer bills or trash bills! Any unpaid bills may slow down or stop the short sale process.

Don’t think that you must have a real estate attorney to execute your short sale. Most times these lawyers don’t understand real estate or the short sale process as well as an experienced short sale agent does. In fact, many if not most of these lawyers offering short sales require an upfront fee to process your short sale.  real estate agents and brokers only collect commissions from the proceeds of the sale, which comes out of the bank’s pocket, not yours.

Don’t make viewing appointments unavailable and hard on buyers and their agents. The more potential buyers that see your home the better chance of short selling it and avoiding foreclosure. Make that home as available to buyers as possible!

Don’t apply for a home equity line of credit or any other type of credit. If you own other properties that have equity, refrain from pulling money out of any of them during a short sale approval. Your bank and any of your bank’s back-end investors will dig deep into your credit history and find this activity. This kind of action says you are just out for your own financial bottom line, and yes, they will take offense to that.

Don’t make the mistake of thinking a foreclosure is not much worse than a short sale. It is. A foreclosure will decimate your credit; it will keep you from owning another home for years and it will be a part of your financial incompetence far more than you hope it won’t.

Don’t strip the house of its fixtures or other potentially valuable assets. Taking the pool system, or the ceiling fans or the beloved touch-action faucets will degrade your home’s marketability, and for what? A few hundred bucks will not make the financial blow of foreclosure any softer.

Don’t use a short sale negotiating company. They will charge you large upfront fees that they don’t have to return to you even if they do not complete the short sale. And these companies aren’t held up to the same Department of Real Estate code of ethics that real estate agents and REALTORs are. In fact, some banks will not work with them!

Don’t violate the bank’s At Arm’s Length requirement for the short sale. The Arm’s length agreement required from the short sale lender prevents you from “renting the house back”. To avoid any fraud or risk that can result in the bank coming back at you for the balance of your loan. Do it by the book and follow the rules. The risk is not worth it.

 Don’t think you can’t short sale if you own other properties. This is a common mistake many investors with multiple properties make.  Some banks will gladly consider a short sale, even if you own two or more homes.

Don’t assume the information about short sales you read on the internet is always correct. There are many real estate professionals, and many not-so-professional individuals, giving advice regarding short sales. Some do not have a clue how to handle a short sale, let alone give advice on the subject. Your best bet is to call and talk to any prospective short sale experts. Get a feel of their knowledge base and real estate confidence, and above all else only hire a real estate short sale agent with experience.

Do educate yourself. This is THE most important thing you can do.  Short sales can be complicated. You need every bit of information you can get when you jump into the short sale process, want more information, call or email today Denice Neddo (360) 607-4226 or denice@deniceneddo.com .

Do all your paperwork and return to your real estate agent in a timely matter.  Short sales can die if the proper paperwork is not supplied.  It’s a silly way to screw up your short sale, but it happens all the time.

Do yourself a favor and remember that millions of Americans are going though their own short sale, or unfortunate foreclosure. This economy is dreadful, and many are experiencing financial hardships and your particular situation is nothing to be ashamed of… go easy on yourself.

Do be diligent. There have been very closable short sales that fail because the homeowners either stop responding to their agents, stop returning paperwork, stop returning phone calls, stop caring, etc.  A short sale can be a difficult process, but at the end of it you will be free of the mortgage, free of the upside-down house and your financial future will have a better foundation.

Do keep your hardship letter short and sweet. Explain your situation a as-matter-of-fact.  Your bank will look at your finances, tax returns and other important documents to verify and support your story. But DO NOT state  in your hardship letter that you bought your home for more than it’s worth.  The bank does not care your home is underwater. The bank is losing money too.

Do keep paying your HOA dues! Any unpaid HOA dues will need to be settled either before or at the close of a short sale escrow. Sometimes the buyer or the first lien mortgage bank will contribute to these outstanding bills, but not every time. And Home Owner Associations will send your defaulted HOA bill to a collection lawyer who will slap you and your property with their own outrageous charges.

Do consult your CPA or attorney when considering a short sale. Even the best short sale real estate agents are not allowed to advise on you on tax implications and the best short sale real estate agents don’t and won’t.  A CPA or real estate attorney has a better understanding and the legal right to advise you on such matters. When you work with Denice, you will have opprotunity to talk with our attorney, and we have arranged low and no fees.

Do your homework when choosing a real estate agent or broker when you list your house for a short sale. The wrong short sale agent can ruin your chances of avoiding foreclosure.  Short sales require diligence, confidence and an unmatched work ethic. Find that short sale specialist REALTOR that knows their stuff,  knows how to work and knows exactly what the banks want to approve your short sale.

Do call and communicate with your bank(s) and let them know you are attempting a short sale. They have thousands of mortgages defaulting, and if they don’t know you are pursuing a short sale, your property may automatically be classified as a pre-foreclosure. Not keeping your mortgage holder informed of the status of your short sale can help expedite your house to foreclosure which will not help your short sale.

 Do let your real estate agent put a yard sign in the yard. Yard signs tell buyers trolling streets looking at neighborhoods and houses that yours is a possible candidate.

Do a quick pick up of toys, laundry and any other items lying around when a buyer’s showing appointment is scheduled. Buyers will criticize your messiness more than your mother-in-law maybe even worse, it will affect their offer which in turn could affect your short sale!

Do expect to move soon, or not for months. When you receive an offer from a buyer, this is  just the start for your short sale transaction. The bank could decide to approve your short sale right away, which means you may only have 30 to 45 days to relocate.  Or, the approval process could take up to three to six months!  Don’t move prematurely. It makes no sense to pay rent while your home sits empty. Communicate with your agent and make sure you are frequently updated on the short sale process.

Do clean your home and property when you move out. Don’t leave a mess for someone else to take care of. Remove all the trash and debris and take or dispose of any of your personal belongings. The condition of the property before transfer can have a negative effect on prospective buyers, and give them a reason to back out before the short sale is even approved. Cleanliness is next to Godliness, and is totally the case with Short Sales!

Do know that credit card companies may decide to pull your credit due to foreclosure. When a foreclosure shows up on your credit, it says that you are in financial distress and your credit risk increases dramatically.

 Call our office for a no-obligation review of your situation, we can help or direct you where to get the right help for you!

Denice Neddo, Broker   (360) 607-4226

Windermere Real Estate    Denice@DeniceNeddo.com    

Are you ready to take advantage of the low interest rates and buy new construction? Bella Villa Homes is a new construction home builder in the Vancouver, Washington area, and they offer a quality product.

New Bath at a Bella Villa Home Light and Bright New Construction Great Room

Here are a few tips:

Hire Your Own Agent

The builder’s sales agents are paid to represent the builder, regardless of what they may tell you. Many will use high pressure tactics to persuade you to sign the contract. Due to the high volume nature of brand new home sales, lots of builder’s agents are paid less than a traditional commission; some earn a salary plus incentives, so turnover is important to their livelihood.

Hire a Buyer’s Agent to represent you.

99.9% of the time, your agent will be paid by the seller, but sometimes the responsibility for the agent’s fee is open for discussion. Even if you have to directly pay your agent, you can probably add that fee to the sales price, and it would be worth it because a good negotiating buyer’s agent can save you thousands more than the commission.

Your own agent will represent you, be your fiduciary and is required to disclose the positives as well as the negatives about the transaction. Builder’s agents don’t discuss drawbacks.

If your contract contains a contingency to sell your existing home before buying, again, don’t use the builder’s agent to sell your house, hire your own to list your home.

Be aware that buying before selling is not always in your best interest because hard bargaining goes out the window when you’ve emotionally moved out of your home.

Read more at “Buying New Construction from a Builder”

Come by and visit me at Bella Villa’s Velveteen Meadows most weekends from 1:00PM – 5:00PM. I am a buyer’s agent working cooperatively with the builders agent, I represent you: The Buyer! 

Bella Villa Homes