Archive for Short Sale Tips
7 Tips for Short Sale Success
Posted by: | Comments7 Tips for Short Sale Success
Article From BuyAndSell.HouseLogic.com
By: G. M. Filisko
Published: March 19, 2010
Have to sell your home for less than it’s worth? Our seven tips will help you get the best price. When you owe more on your home than it’s worth, but you have to sell, you need to squeeze every dollar possible from the sale. Here are seven tips for navigating the short-sale process.
1. Know who you owe
A short sale has to be approved by any company that has a mortgage or lien against your home. That includes your first, second, or even third mortgage lender, your home equity line lender; your homeowners or condominium association; and any contractors who’ve placed a lien on your home. Make a list and start talking to everyone early in the process. Ask what documents they’ll need from you.
2. Pick your short sale team
You’ll need to work with a team of short sale experts, including a real estate agent, real estate attorney, and your accountant. Look for agents and attorneys who advertise themselves as short sale experts. Interview at least three, and listen carefully for signs that they understand the complexities of the short sale process.
Agents should explain how they’ll arrive at a suggested price for your home. Ask them to show you a sample short-sale package or for an example of a prior short-sale success.
3. Get your documents ready
Gather the paperwork your creditors and mortgage lenders asked to see, like your listing agreement and a hardship letter explaining why you need to do a short sale. You’ll also need proof of what you earn and what you owe as well as copies of your federal income tax returns for the past two years.
4. Expect delays
Despite a federal rule saying banks participating in the federal government’s Making Home Affordable loan modification program must respond to short-sale offers within 10 days, it may take weeks or months for your lender to decide whether to allow you to sell your home in a short sale–and even longer if you must negotiate with more than one lender or lienholder. Your lender and lienholders don’t have to agree to your proposed short sale. They can reject your terms or make a counteroffer, which can create further delays.
5. Anticipate demands
Discuss with your short-sale team how you should respond to common short-sale demands from lenders. For example, are you willing to sign a promissory note agreeing to pay outstanding amounts after the sale is complete?
6. Know the tax implications
Any unpaid amount of your mortgage “forgiven” by your lender through a short sale may be considered income to you under federal tax rules. Ask your attorney or accountant whether you qualify to exclude that amount as income on your tax returns under the Mortgage Forgiveness Debt Relief Act and Debt Cancellation Act. Also ask if you’ll be required to report amounts “forgiven” by other lienholders, if applicable.
7. Consider how the short sale will affect your credit and what you must pay
Ask whether your lender will report the short sale to credit-reporting agencies. Having a portion of your debt forgiven may negatively affect your credit score, but a short sale typically damages your score less than a foreclosure or bankruptcy. Ask you lawyer whether you’ll be responsible for paying back the lenders’ loss. If the lender says it will forgive any losses on the sale of your home, get that promise in writing.
Other web resources
More on short sales
IRS information on the Mortgage Forgiveness Debt Relief Act and Debt Cancellation
This article includes general information about tax laws and consequences, but isn’t intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Consult a tax professional for such advice; tax laws may vary by jurisdiction. G.M. Filisko is an attorney and award-winning writer. A frequent contributor to many national publications including Bankrate.com, REALTOR Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.
Visit Houselogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.
Fannie Mae’s New Rules Could Impact Las Vegas Short Sales
Posted by: | CommentsFannie Mae has announced some new rules that will affect our Las Vegas Short Sale market. 
The new stipulation is that homeowners who can make their mortgage payments but choose to do a strategic default will have to wait 7 years until they can apply for a new Fannie Mae loan. This is a change from the two year waiting period that was previously in place.
It has been estimated that almost 75% of all Las Vegas homeowners are under water, in other words they owe more on their homes than they are worth. Furthermore, Fannie Mae has also announced that they will pursue all deficiencies allowed by law, and Nevada is a recourse state. For more information on deficiency judgments and other common questions, read these posts:
Short Sales vs. Foreclosures in Nevada – Answers to Common Questions
Protecting the Short Sale Seller in the Purchase Agreement
If you would like to know what your options are, please contact us, we are Certified Short Sale Professionals with a team of experienced Las Vegas real estate agents, short sale negiotiators and attorneys who can help.
Call Kathryn at 702-348-7191.
What Every Las Vegas Short Sale Seller Should Know about Costs
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In the Las Vegas Short Sale market there are several costs that a seller should be aware that he or she might have to pay in order to successfully close the short sale transaction.
These costs will be above and beyond the “deficiency“ that the bank may want you to pay and any third party negotiating fees.
If you live in a neighborhood with a Homeowner’s Association (HOA), you will want to keep your monthly dues up to date to avoid late fees and fines. You will also want to maintain your landscaping which will include water and electric for the same reason – to avoid costly fines. Also, there will be a cost of the HOA documents that you are required in the state of Nevada to provide to the Buyer. The fee is mandated not to exceed $160.00 plus copy fees. And most Real Estate companies will charge a Broker Administrative Fee (BAC) which will range from $350.00 up to $600.00 depending on the company.
You will also want to make sure that your homeowners insurance is current, this can be done by contacting your insurance company. Be aware that many insurance companies will not insure a vacant home after a certain period of time, usually 30 days. There may be additional fees associated with your short sale, please check with your Certified Short Sale Professional for more details.
Kathryn Bovard is a Certified Short Sale Professional and experienced with the often lengthy and stressful Las Vegas short sale process. If you are contemplating a Las Vegas short sale , she can assist and navigate you through the entire process.
Call Kathryn direct at 702-348-7191 to schedule a short sale consultation today.
Are Your Considering a Short Sale with Bank of America?
Posted by: | CommentsBank of America services approximately one-third of Nevada mortgage loans.
- Are you a Las Vegas Homeowner with a Bank of America loan struggling to make
your payments or facing a possible foreclosure? - Have you considered all of your options to foreclosure – to include a Las Vegas short sale?
- Have you tried a loan modification and experienced frustration with the process?
- Do you qualify for a HAFA short sale with BofA?
- Are you familiar with the eligibility requirements and the HAFA short sale process?
Here are some options and recommendations to ensure you get the answers to these and other important questions:
1. Start your personal research and gather information.
- Visit BofA’s Home Affordable Foreclosure Alternatives web page for more info, FAQs, and the process
- DSNEWS.com reported on June 2, 2010: BofA Opens Homeowner Outreach Center in Nevada – here is an excerpt:
Bank of America has opened the first of three outreach centers to serve Nevada mortgage customers who are seeking loan modifications or other foreclosure prevention assistance.
With the acquisition of Countrywide in 2008, Bank of America services about one in three mortgage loans in Nevada. The lender says its home retention efforts have resulted in completed mortgage modifications for more than 15,000 Nevada homeowners since January 2008, with another 7,500 currently in active trial modifications as part of the federal government’s Home Affordable Modification Program (HAMP).
2. Contact us today for a free consultation to discuss your options to foreclosure.
The Serra Group is qualified and experienced with the often lengthy and stressful Las Vegas short sale process. We will be happy to guide you to other professionals to discuss both the legal and tax ramifications when considering a short sale or any other option to include a foreclosure. Should a Las Vegas short sale be the best option for you, we are prepared to assist and navigate you through the entire process.
Kathryn Bovard 702-348-7191
Las Vegas Short Sales Now Possible for Fannie Mae & Freddie Mac Mortgages
Posted by: | CommentsHAFA is the Home Affordable Foreclosure Alternatives program from the U.S. Treasury that became effective on April 5, 2010 designed to streamline and standardize the short sale process for qualified homeowners. Read our 5 part series to learn more about the HAFA program.
HAFA excluded all Fannie Mae and Freddie Mac loans with the understanding that these GSEs (Government Sponsored Enterprises) would publish their own guidelines at a later date. Well that date has arrived… on June 1, 2010 both GSEs announced their guidelines for HAFA short sales. These programs will allow homeowners with GSE loans to pursue a short sale or deed-in-lieu of foreclosure if they are unable to secure a modification under the government’s foreclosure prevention program.
Do you have a Fannie or Freddie mortgage? Find out by looking your loan up at this site: Fannie or Freddie Loan Lookup
Both programs are almost identical to the Treasury’s HAFA program for non-GSE mortgages. The borrower must first be evaluated and denied for a Making Home Affordable Program (HAMP) workout plan. The GSE HAFA programs take effect Aug. 1, 2010, but servicers are allowed to use HAFA immediately.
Here are some minor differences from the Treasury HAFA program:
- Servicers are eligible for a $2,200 cash incentive for each completed short sale (it is $1,500 for non-GSE HAFA) and $1,500 for each completed deed-in-lieu.
- Freddie Mac Eligibility: 60 days late and have cash reserves less or $5,000 or 3 times their monthly mortgage. Borrowers may be in foreclosure, in pending litigation involving the mortgage, or in active bankruptcy.
- In addition, Freddie said it does not require or accept cash contributions or promissory notes from the borrower.
All the details of the programs can be found at the respective websites:
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a Las Vegas short sale?
The Serra Group is here for your confidential, no obligation consultation regarding your options – there are solutions and we are here to help you navigate the distressed property process.
Call Kathryn at 702-348-7191.
Strategic Default..Is it right for you?
Posted by: | CommentsIf you voluntarily walk away from a home does that make you a bad person or is it a smart business decision?
I recently had lunch with someone who I consider a very astute businessman who has business concerns all over the world.
Here is his scenario: home was purchased 3 years ago for $600,000 and his mortgage payments are about $4,500, including HOA, etc. The home is now worth about $300,000 and he is planning on retiring in the next ten years. Now for a little forecasting. Let’s use a 5% appreciation each year for the next 10 years and the home would be worth in 10 years about $465,000. Still considerably less than the original purchase price and not to mention the $540,000 in additional mortgage payments for the 10 years. Sounds like a no-brainer when you do the math but let’s look at the other issue.
Does a strategic default make you a “bad” person? Read the linked article from a University of Arizona Law Professor advising consumers to stop paying underwater mortgages. We have somehow bought into the myth that buying a home involves other intrinsic values when truly it is just a business decision. Sure your going to take a credit hit, but that is usually completely repairable after about two years.
The decision is yours to make, just make sure it’s a good business decision for you. And as always before you make your decision, always seek competent legal advice.
3 Tips for Buying a Short Sale in Las Vegas
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Available short sale listings in the first week of May comprised 44% of our total market for available homes for sale. Traditional homes were up to 45% and foreclosure/reo fell to just 11% of the total available in Las Vegas. Obviously with almost half of the homes for sale falling in the short sale category, knowing some of the basic tenets for success will be important.
Tip #1. Make sure that the agent who represents you the buyer, is a certified or designated short sale professional. If they are, they will be far better equipped to guide you through the sometimes lengthy and complicated process.
Tip #2. Don’t make the mistake of thinking that you can automatically underbid a short sale price. Do your homework, get the comparable closed home pricing and listen to the advice of your Realtor.
Tip #3. Right now homes sales are very competitive. Our existing inventory of available homes is down over 50% from last year. Be prepared to be aggressive in your Earnest Money Deposit amount and to let the seller know that you will deposit (EMD) immediately into escrow upon his acceptance.
Although many banks have streamlined the short sale process, we are still seeing an average of 120 to 180 days to closing so be prepared to be patient for the house of your dreams.
Start your Las Vegas Home Search Now!
Call Kathryn at 702-348-7191
HAFA Series Part 5 – Can I Request a HAFA Short Sale without doing a HAMP modification?
Posted by: | CommentsThis is part 5 in a 5 part series on HAFA. HAFA is the Home Affordable Foreclosure Alternatives program from the U.S. Treasury effective April 5, 2010. HAFA is designed to complement the HAMP program and is expected to streamline and standardize the short sale process for qualified homeowners.
The previous posts covered the eligibility, participating servicers/lenders, and the procedures and time-frames for HAFA for a borrower who has already started the HAMP process.
This post will answer the question Can I Request a HAFA Short Sale without first applying for HAMP (the loan modification program)?
The short Answer – Maybe Yes… with the Alternative Request for Approval of Short Sale (Alternative RASS)
Here is the scenario:
You are a homeowner who did not know about the HAMP program or possibly can not or do not want to pursue a loan modification. The property is your primary residence and you have a hardship that can be documented and are considering a short sale as an option. To qualify for HAFA, you will have to meet all the basic eligibility requirements outlined in this previous post.
Your next step is to contact a licensed real estate agent (we can help!) and review all of your options including the Alternative Request for Short Sale Approval through the HAFA program. If your decision is to do the short sale, we list the property and help you negotiate an offer to purchase from a qualified borrower.
Here are the highlights of the Alternative RASS directly from the Supplemental Directive:
If the borrower has an executed sales contract and requests the servicer to approve a short sale under HAFA before an Short Sale Agreement (SSA) has been executed, then the borrower must submit the request to the servicer in the form of the Alternative Request for Approval of Short Sale (Alternative RASS), Exhibit B. To download and review an example of the documents got to the HAMP Admin site and scroll down to Borrower Documents.
Upon receipt of the Alternative RASS, the servicer must determine the basic eligibility of the borrower as described in the HAFA Consideration section of the Supplemental Directive…..HAFAsd0909r_Mar26_2010.
If the borrower appears to be eligible and was not previously considered for a Trial Period Plan, the servicer must notify the borrower verbally or in writing of the availability of a HAMP modification and allow the borrower 14 calendar days from the date of the notification to contact the servicer by verbal or written communication and request consideration for a HAMP modification.
In addition, the servicer must verify the borrower’s financial information through documentation and obtain a signed Hardship Affidavit from the borrower prior to approving the short sale.
If the borrower does not wish to be considered for a modification, the servicer may consider the Alternative RASS in accordance with this Supplemental Directive without first having to enter into an SSA with the borrower. If the servicer approves the short sale, then the loan will qualify for the HAFA program.
A borrower may not participate in a HAMP Trial Period Plan and agree to a HAFA SSA simultaneously.
Read the rest of the series on HAFA:
- HAFA Series Part 1 – What is the Home Affordable Foreclosure Alternatives Program?
- HAFA Series Part 2…Who is eligible for HAFA?
- HAFA Series Part 3 – Which loan servicers are participating and review of the timeframes
- HAFA Series Part 4 – What else should I know about Home Affordable Foreclosure Alternatives?
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale? Contact us today to discuss your options and/or to see if you qualify for HAFA.
Call Kathryn at 702-348-7191 or Stephanie 497-7705.
Negotiating Short Sales in Las Vegas Nevada
Posted by: | CommentsIn the State of Nevada, short sale negotiating falls under the category of “loan modification or foreclosure consultant” as defined in Assembly Bill 152 which modified NRS Chapter 645F. You can read AB152 here: Download AB152_LoanMod_ForeclosureConsultant
In summary there are three options for negotiating short sales in Nevada
- Attorneys may handle short sale negotiations because they are exempt under NRS645.380(1).
Here is a list of recommended Real Estate Attorneys. - A licensed real estate agent as a part of a real estate transaction and as evidenced by being on the “Duties Owed.”As excerpted from the RE Division position statement:
Download NVRED_MortgageLending_Position Statement_101509
There may be no separate or distinct payment or compensation for performance of activities defined as loan modification, foreclosure consulting or providing of covered services outside of a real estate transaction.Activities that by definition might include aspects of “Loan Modification Consultant,” “Foreclosure Consultant,” or “Provider of Covered Services” must be part of a real estate transaction. As such, a commission paid to a licensee through a real estate brokerage as a result of those activities defined in NRS 645.030 and/or NRS 645.040 shall serve as evidence that the activities engaged in by the real estate licensee were “acting under the authority of their license. - Properly licensed companies/3rd party negotiators per the Mortgage Lending Division
Click Here for Licensing Requirements.
Check Here for the List of licensees and applicants who are eligible for conducting Pre-Foreclosure and Loan Modification activities, according to the Nevada Mortgage Lending Division
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale?
The Serra Group is here for your confidential, no obligation consultation
regarding your options – there are solutions! Call Kathryn at 702-348-7191.
Looking to buy property in the Las Vegas Area? Start your free property search now.
This is part 4 in a 5 part series on HAFA. HAFA is the Home Affordable Foreclosure Alternatives program from the U.S. Treasury effective April 5, 2010. HAFA is designed to complement the HAMP program and is expected to streamline and standardize the short sale process for qualified homeowners.
Here are some other HAFA program guidelines to understand:
- The deal must be “arms length.” Borrowers can’t list the property or sell it to a relative or anyone else with whom they have a close personal or business relationship.
- The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring at the end of 2012, however, the tax may not apply. Forgiven debt will not be taxed if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence. Check with a tax advisor.
- The servicer will report to the credit reporting agencies that the mortgage was settled for less than full payment. There will be a negative effect on credit scores.
- 90 day “No-Flipping” term: Buyers may not sell and transfer title of the property within 90 days after closing.
The U.S. Treasury announced new enhancements to the HAMP and HAFA program on March 26, 2010:
Enhancements to the Incentives portion of HAFA:
- Increases incentives to provide more homeowners with foreclosure alternatives
- Doubles the relocation assistance payment for borrowers successfully completing a foreclosure alternative (HAFA short sale) to $3,000 from $1,500.
- Increases servicer incentive payments from $1,000 to $1,500 to increase use of foreclosure alternatives and encourage additional outreach to homeowners unable to complete a modification.
- Increases payoffs to subordinate lien holders who agree to release borrowers from debt. The new payoff schedule allows servicers to increase the maximum payoff to subordinate lien holders to 6 percent (it was 3%) of the outstanding loan balance and doubles from $1,000 to $2,000 the incentive reimbursement that is available to investors for subordinate lien payoffs, subject to an overall cap of $6,000.
Read the rest of the series on HAFA:
- HAFA Series Part 1 – What is the Home Affordable Foreclosure Alternatives Program?
- HAFA Series Part 2…Who is eligible for HAFA?
- HAFA Series Part 3 – Which loan servicers are participating and review of the timeframes
Are you a Las Vegas Homeowner facing a possible foreclosure or considering a short sale? Contact us today to discuss your options and/or to see if you qualify for HAFA.
Call Kathryn at 702-348-7191 or Stephanie 497-7705.
