Some people sing praises of how wonderful HAFA is.  I’ve heard that it has sped the process up significantly.  You get a pre-approved short sale price in only 10 days!

In my experience, HAFA has hurt a few of my short sales.  After getting approval on a short sale from the bank that buyer, seller, and bank were all happy with, we were about to open escrow.  It all came to a screeching halt when we heard the words, “Congratulations, you are approved for HAFA.”  It’s been three weeks since, and now nobody knows what’s going on.

In another one of my listings, we got another HAFA approved short sale.  Guess what?  It’s been three months, and the bank is still reviewing the documents.  It’s not that I’m angry for the government trying to fix what problems we have.  It’s just that if they would stop helping, we’d be fine already.  Anyhow, that’s just one little guy’s feeling.  So much for 10 days, huh?

To read more about the HAFA article by Anderson, you can go to http://www.azcentral.com/business/realestate/articles/2010/07/15/20100715biz-shortsalebonus0715.html

Cheers!

In the news again is a post from: Tempe Real Estate and Homes for Sale

Unfortunately, a recent client of mine had the misfortune of dealing with this awful BoA/Fannie combo.

From the BoA CEO’s office this morning.  They had to research this file since it was being mishandled by BoA so badly. This is what the person who was helping me has explained:

1)      The closing officer, and the negotiator, did not do their diligence, and their jobs by not helping to correct the approval.  I spoke to the closing officer yesterday who informed me that she sent the correct approval letter a couple of weeks ago. I asked her to show me where she sent it, and I then proved to her that she forgot to send it. She told me that she thought my next plethora of emails were just duplicates…. Her managers are holding her accountable for this, I assure you.

2)      The negotiator did not put in the foreclosure request in time even though I was personally told that it was in, and that everything was being taken care of. He too is being held accountable for his lack of actions. The CEO’s office person has assured me of this.

Fannie Mae is taking just about everything to sale when it comes to short sales. The government is telling us that they are helping homeowners, but having their companies send everything to sale.

This is pretty awful news.  Fortunately, we can still help you if you have a Fannie mortgage, but we need to start quickly, because Fannie will not postpone the sale date.

Fannie Mae to Homeowner: Drop Dead is a post from: Tempe Real Estate and Homes for Sale

1)      It’s a government program.  Name one that works correctly and efficiently…do you need more elaboration?  Oh good because we’re going to.

2)      The seller must make mandatory “minimum” payments during the process.  Last time I checked the reason you do a short sale is because you have a hardship (I.E. no money, loss of income, etc.).  This is one of the key components of it where the seller makes the payments, the bank doesn’t get an offer (because of their idiot valuation techniques, see below) and then they foreclose.  Good thing they got a minimum payment from that seller for 3 months though (or longer).

3)      The “pre-approved” price – ah the golden ticket that makes life great for a realtor again right??? WRONG!!!! The pre-approved price has parameters (known as investor contractual restrictions) that state certain criteria such as, but not limited to, commission can only be 2% total (yes this is one investor that is participating guideline), no money for 2^nd liens, they won’t pay recording fees, courier fees, HOA dues, HOA transfer, taxes, etc.  So who ends up paying this?  The seller with their 3k “incentive” (this most likely will just cover HOA dues or possibly the junior lien) and then the good ole greedy agents out there can pay the rest out of their commission (always a fun time).  Pre-approved…ha we were better off with the guessing game.  One other great investor contractual restriction (I wish I was making this up) is: The preapproved value must be 150% of what the fair market value is.

4)      Streamlined paperwork – government forms at their finest! 52 pages of government forms for the realtor and homeowner to fill out! Oh and don’t forget to send us all the other standard documentation (wow so streamlined).  And then there is the mighty catch….we lost a paystub, your file is declined. We lost the cover sheet to the fax, your declined.  Oh and here is the best part…if the seller doesn’t pick up the phone when the bank calls, the file is declined! Ain’t that rich! No wonder this will be streamlined, no short sales will ever be approved! Yay REO central here we come!

5)      The program will not work because there are too many variables, just like it’s very unsuccessful brother HAMP (the modification program). Through an investor, an investor’s investor, Mortgage Insurance (which may or may not participate…more to come on that later) and then Pool Mortgage Insurance and guess what….you have 4 cooks in the kitchen and the meatloaf was just burnt.

6)      Valuation for pre-approval/approval of short sale – they use ZILLOW!!! This is considered a “fair market value” appraisal technique.  Are you kidding me???  According to Zillow we would be rich…guess what we’re not rich!

7)      Once the home sits there for 90 days with no offers, bloop next day it can go to foreclosure! Yay America….we are on the road to recovery. What a joke.

Here is our most recent HAFA short sale (in all its streamlined glory)

Didn’t know this one was HAFA, sent all documentation like a normal short sale. Got everything in, reviewed, assigned to a processor, BPO ordered (on 4/9/10).  Called on 4/12/10, 4/15/10 and 4/19/10 and was told “This loan is HAFA congratulations.”  To which I respond “Oh god what does that mean for this investor?”

Here is what we are facing now:

Have an offer of 260k, according to their valuation technique (ZILLOW) the home is worth 315k.  Last sold comps are 240k, 250k, 270k, offer is within line.  They also tell us “Seller must make a minimum payment” (I’m thinking maybe 10% of mortgage around 200 bucks).  They tell us “This investor requires the seller to make their full payment every month during the short sale process (umm hello….really?? where is the incentive for the investor to take a short sale if the seller is paying their full mortgage payment every month).  Luckily on this one I don’t have a junior lien but there is HOA…and guess who is going to pay for it????

Needless to say, we are not impressed with this joke of a program.  I want to go back to the old days of banging my fist against the desk, not my head.  More to come on this late breaking government catastrophe.

If you’ve been “selected for HAFA” please contact me to fix your situation.

HAFA – Home Affordable Foreclosure Alternatives – 100% Disaster Guarantee is a post from: Tempe Real Estate and Homes for Sale

So what is an Angel Investor? Housing angels come in to buy homes from distressed home owners and allow the sellers to stay in the house at market rent.  They purchase the properties through the short sale process.  The terms can vary, but generally, the distressed sellers typically sign 2 or 3 year leases at market rent.  At the end of the lease, they agree to buy the home back at appraised value.

It may seem odd that such a simple solution exists for distressed home owners.  Many people find it suspicious when others are willing to help for what seems little gain. In reality, these investors are buying these homes at incredible discounts.  Even some of the homes I helped investors buy last year for $30k and $50k are now at $70k and $80k.  In addition, with inflation coming around the corner, buying these homes for cash are the safest investment where they often collect over 12% ROI every year.  Even if they sell the home at the same price they bought it for, they will still come out ahead on the monthly cash flow.

So this turns out to become a win-win-win situation.  The home owners don’t have to move and stay at market rent if they like, with the option to buy back later.  The investor makes money on the deal any way you slice it.  And finally, the investors keep the real estate market from going any lower.  As the investment vehicle appears better, more and more investors come in.

Angel Investors aka Housing Angels is a post from: Tempe Real Estate and Homes for Sale

Why bulldoze when you can short sale?

Well, it turns out that he fell out of luck with the IRS, and as a result he fell out of luck with his bank.  I can certainly feel sympathy for the guy.  According to the story at http://www.wlwt.com/news/22600154/detail.html, he had an offer that would have allowed him to pay his debt off in full.  The bank decided that they could get more money at a foreclosure auction, and they decided to move forward with the foreclosure process.  Certainly the greed here was a major factor.

So what do we learn from this story?  Well, this guy is probably going to face some major jail time.  I can’t speak of Ohio laws, but in Arizona, we sign a contract stating that we will do our best to maintain the property’s value.  Last I checked, only in Michigan does scraping a house improve the property’s value.

The best thing to do if you’re facing a looming foreclosure is to avoid jail time.  That means that you should seriously consider a short sale instead of bulldozing your house.  Remember, you learned that lesson here.

Don’t forget to bulldoze your house is a post from: Tempe Real Estate and Homes for Sale

There is also a big lesson in this story.  Do NOT touch your retirement to placate the lenders.  The banks cannot touch your retirement in a short sale or a foreclosure, so why ruin your future?  As long as we are working towards your short sale, they will not foreclose on your home.  I hope that this provides some insight into the business, and if you need help, I want to help you.

ABC news says to walk away from your home is a post from: Tempe Real Estate and Homes for Sale

Gorgeous Short Sale – 8234 W Beaubien Dr, Peoria – $179,900 is a post from: Tempe Real Estate and Homes for Sale

It’s unfortunate that my name was not before the fold, so to speak.  Here’s the part I was honored to contribute:

Steve Trang, a Realtor with Occasio Realty in Tempe, said having someone waiting in the wings for a short-sale deal is not always bad, because it can expedite the process and keep the home from going into foreclosure. He said lenders always can turn down suspicious offers.

Anyway, it’s always great to see all your hard work pay off.  If you have any short sale questions, I would be happy to answer them for you.

Phoenix Business Journal thinks I’m an Authority is a post from: Tempe Real Estate and Homes for Sale

Chandler Short Sale

Approved already at $500,000! Immaculate TW Lewis home located in the Gorgeous Gated Community of Andorra at Valencia! Home includes many upgrades; 4 Bedroom 4.5 Baths,3 Car Tandem Garage, Gas Fireplace. Custom Red Dragon Granite on Kitchen Island custom dark cherry cabinets throughout. All Baths have custom granite, Basement has complete media area and also a master bedroom perfect for mother-in-law quarters or student.Back yard is amazing with sparkling pool,fire pit, built in bbq,full regulation pitching mound!Too much to mention. Must see!

Chandler Short Sale – 3791 E San Mateo Way is a post from: Tempe Real Estate and Homes for Sale

You don’t have to wait 2 years to buy after completing a short sale on your home

Yes, you read that correctly.  Of course qualifying for this program is quite strict, but the idea that HUD has considered this is a fantastic idea.  Essentially, with every foreclosure that has occurred, inventory has been hurt twice.  First, we add one more home to our long list of homes, and second, we take one more buyer off the market because their credit is ruined.  Likewise with a short sale, with every short sale that is completed, we lose one more potential buyer.  Now with this program around, the person that short sold their home can now step up and buy another one immediately.  Here is the summary of the program:

Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on his or her principal residence simply to
• take advantage of declining market conditions, and
• purchase, at a reduced price, a similar or superior property within a reasonable commuting distance.

Borrowers are considered eligible for a new FHA-insured mortgage if
• they were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and
• the proceeds from the short sale serve as payment in full.

That sounds simple enough.  What’s the catch?  Well, good luck getting your short sale approved while you are current on ALL of your debts.  Put yourself in the bank’s shoes.  Would you forgive a debt if the borrower has made all their payments on time?  It seems like the people best able to take advantage of this program are those that are relocating or are currently commuting to work.  For example, if you live in Maricopa, Queen Creek or Surprise and you work in Phoenix or Tempe, you may qualify for this program.  It’ll be interesting to see one of these through to the end.  Read more from HUD: http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf

Updated FHA loan requirements

FHA commissioner made an important announcement this morning.  Effectively, HUD is losing a lot of money when they foreclose, and to offset their losses, they have become more strict.  To summarize the letter, here are the changes:

• 10% minimum down for ficos less than 580.
• Upfront MIP raised to 2.25%
• Right to raise the monthly MI payment
• Lowering max seller concessions to 3% to conform to industry standards
• Compliance enforcement efforts increased

The 10% minimum down payment is an increase from the current 3.5%.  Of course, this is really a moot point because NOBODY is lending to anybody less than a 580.  In fact, if you deal with a mortgage broker today, they won’t talk to you unless you have a 620.  I do have a lender that I use, though, that will get a 600 score done.  Maybe when they require 10% these bankers will change their tune.

MIP is currently at 1.75% of the loan.  So it looks like they had to raise it half a point in order to recapture all the money they have lost.  Don’t fret with the MIP as it is rolled into the loan.  The right to raise the monthly insurance premium is a scary prospect.  Let’s hope that they don’t act like the banks that send you a fine print brochure telling you that your interest rate has been raised, again, for the 3rd time this year, and for absolutely no reason.  Lowering max concession to 3% is not really an issue.  Most sellers won’t do more than 3% anyway.  Although a little known secret is that we can ask for 10% concessions, so that is a huge reduction.  But like I said, no seller was agreeing to that.  Read more from HUD: http://portal.hud.gov/portal/page/portal/HUD/press/speeches_remarks_statements/2010/Speech_01202010

Anyway, it’s exciting to see that HUD is doing everything in their power to help us little people.

Flurry of FHA changes is a post from: Tempe Real Estate and Homes for Sale