Owners of California Real Estate who are having a tough time paying their mortgage (or even those who can forecast a hardship in the near future) are advised to seek the help of a Wachovia Fast-Track Trained Realtor® who can help them understand their options.

Benefits to the seller include:

•Quick approval of hardship (3-4 days)
•Quick approval of sale price and purchase offer (5-7 days)
•Offer approval good for 30 days
•YOU DO NOT HAVE TO BE DELINQUENT
•DEFICIENCY IS RELEASED
•May be eligible to receive “Cash for Keys” payout
•Okay for investor to purchase and rent back (But the investor may not be a family member.)
Qualifying loans may have been originated by one of the following lenders:

•Golden West Financial
•World Savings
•Wachovia
Contact Aim Real Estate Group to speak with a Wachovia Fast-Track Trained Realtor® and see if this might be the right option for you!
VERY IMPORTANT! DON’T WAIT UNTIL YOU ONLY HAVE 2 WEEKS BEFORE A FORECLOSURE DATE! IT WON’T GET APPROVED.
Fast Track Realtors know already that you have been denied for the Loan Modification program.
Contact The Cosgrove Rea Estate Investment Group @ Keller Williams Realty. www.cosgroverealestateinvest.com

It was designed to allow eligible mortgagees lower their monthly payments to 31% of their pre-tax income, or lower, through a loan modification.  Modifying the home loan must equal net more value than foreclosing would.

However, it has only resulted in 116,000 permanent loan modifications according to a Treasury Department report on February 17th.

Wait, wasn’t their goal 4 million by December 2012? They have some catching up to do!

According to the report, 57% of the permanent modifications were for borrowers who are suffering from unemployment or diminished income. The report also highlights 830,000+ trial loan modifications that are currently under way.

So, it took a year to modify only 2.9% of the goal. Boy, they have a long way to go. As far as refinancing programs go: Fannie Mae and Freddie Mac, according to the Treasury, have refinanced more than 4 million loans. One out of every 5 homeowners are “upside-down” or have negative equity according to Zillow’s report released February 10.

The refinancing program allows those with Fannie or Freddie loans who have this problem to lower their interest rates. Taking the country’s overall foreclosure stats into consideration in comparison to the few that have received assistance, there are millions of homeowners who need options besides modifications or refinance. A short sale may be the best alternative for one out of every 5 homeowners who find themselves in a “must-sell” situation.

In lieu of these findings, a new government push to clean up bad home loans could dent bank earnings because the industry may have to take losses on the assets sooner than some investors expect.

The new effort, called Home Affordable Foreclosure Alternatives, or HAFA, kicks in April 5. Some banking and real estate industry experts see it as a response to the limited success of HAMP

“The administration wouldn’t want to categorize it this way, but HAFA is an acknowledgement that a lot of loans won’t meet the criteria for a HAMP modification — even a trial one,” said Rick Sharga, senior vice president at RealtyTrac, which compiles data on foreclosures.

Slumping house prices and surging unemployment have triggered a wave of foreclosures that will continue washing over the U.S. banking industry for a few more years.

There could be foreclosure filings on 3 million to 3.5 million homes in 2010, according to RealtyTrac. There were a record 2.8 million homes with at least one foreclosure filing in 2009, the firm recently reported. Foreclosure activity will likely remain high until at least the end of 2012.

Foreclosures would probably have been higher last year if not for government and industry efforts to cushion the impact, including HAMP and state legislation extending the process.

HAMPered

Under HAMP, over 1 million homeowners have started trial modifications, which reduce monthly mortgage payments. However, less than 116,000 homeowners have a permanent modification under the program.

“HAMP hasn’t worked,” Nancy Bush, president of bank industry research firm NAB Research, said. “It’s just a massive expense of time and money.”

Wells Fargo /quotes/comstock/13*!wfc/quotes/nls/wfc (WFC 29.07, +0.09, +0.31%) has 15,000 people working on HAMP, she noted. In a recent meeting with Wells Fargo executives Bush said she asked when the program might end.

“They just shrugged their shoulders and said maybe never,” Bush said. “The expense of that is huge. HAMP may turn out to be the most expensive thing the banking industry has ever done.”

HAFA go

Under the new HAFA program, if a homeowner doesn’t qualify for a HAMP modification they must be offered a short sale. Borrowers can also be offered a deed in lieu of foreclosure.

Homeowners who qualified for a HAMP modification, but have missed two consecutive payments, will also be offered a short sale or deed in lieu through HAFA.

A short sale happens when the borrower and the mortgage servicer agree to sell a home for less than the value of the loan or loans. A deed in lieu of foreclosure occurs when a homeowner voluntarily gives the deed of the property to the servicer.

To kick-start HAFA, there are government incentives. Borrowers get $1,500 to help them move to a new home and up to $3,000 in short sale proceeds can be given to holders of second mortgages on the homes in the program

Taking a Closer Look at Short Sales

There was an interesting article that was posted on The KCM Crew fan page the other day titled: Surge in Short Sale Requests Unlikely to Impact Housing Market. In this article, it was reported:

–In the first half of 2009, only 40,000 short sales were completed, according to the most recent data available from the Office of the Comptroller of Currency shows.

–In addition, (the study) said only an estimated 8 to 12 percent of all homeowners who request short sales accomplish a completed transaction.

Though both of those points were true for 2009, they are based on past results. I believe the short sale process will change radically now that we are in 2010.  The change will create a surge in short sales. Let me give you the evidence from which I draw that conclusion:

1.) Short Sales are already increasing rapidly.

Though, according to the Office of the Comptroller of Currency, there were only 35,428 short sales completed in the first half of 2009, there were 30,766 completed in the third quarter alone which represents a 22.4% increase over the previous quarter. The fourth quarter numbers are not yet in, but they will show another major increase.

2.) The government has determined that short sales are the answer.

The administration announced new short sales guidelines (HAFA) that will go into effect on April 5, 2010. These guidelines address the major challenges to the process which negatively impacted close ratios.

The Inspector General of TARP, in his most recent report to Congress, said:

HAFA creates financial incentives for borrowers, servicers, and investors to avoid a foreclosure by utilizing a short sale or a deed-in-lieu of foreclosure. According to Treasury, these options generally provide borrowers, investors, and communities with a better outcome than a typical foreclosure sale.

In an article in Housing Wire this week, it was reported that Seth Wheeler, senior adviser to the US Treasury Department, while at the American Securitization Forum  2010 conference in Washington DC,  said the focus of the Administration is shifting somewhat away from modifications:

“Short sales, deeds in lieu are other ways to prevent foreclosures to help achieve [housing] stability,” he said. “Modifications are only for a certain subset of distressed homeowners.”

3.) Banks are realizing that they lose less money on a short sale than they do on a foreclosure.

In an article in the Las Vegas Sun titled: Short Sales Soar while Foreclosure Sales Slacken it was reported:

–In Las Vegas, banks make $80 per square foot on foreclosures but $130 per square foot on average in short sales, said Steve Bottfeld, executive vice president of Marketing Solutions.

“I think the bottom line is that short sales ultimately replace foreclosures because of the financial impact on the financial institutions,” Bottfeld said. “The banks are going to look at it differently and opt for more short sales.”

From the same article:

–Dennis Smith, president of Home Builders Research, said short sales will be the “story of the year” because of the effect they will have on the housing market.

“It should cause prices to increase a little,” Smith said. “We have seen prices flatten the last five to seven months, and one reason is because we haven’t been flooded with all these foreclosures. They are doing more short sales.”

4.) Companies are gearing up for the surge in short sales.

Wilshire Credit Corp., the mortgage servicer bought by IBM in October, is getting set to receive a substantial servicing portfolio (short sale possibilities) from the mortgage giant Fannie Mae according to industry sources. In the article announcing this, Housing Wire said:

–Any mortgage servicing put with Big Blue and Wilshire Credit, however, would not include management of bank-owned properties within the portfolio. REO Insider, a sister publication, broke the news Wednesday morning that Wilshire Credit would shed its REO operations by March 1 — seemingly to gear up for the weight of the Fannie portfolio.

Even the banks are getting ready. According to an article  in DS News:

–Major banks are preparing for an influx of short sales. Many claim to have hired extra staff to handle short sales, and some have purchased new software to assist in the process. JP Morgan, with one of the highest default rates in the industry, says it has hired 5,000 new employees to handle distressed sales.

–Bank of America services about 14 million mortgages, including millions of troubled loans it acquired in the purchase of failed Countrywide Home Loans. The lender says it has also taken steps to prepare for an increase in short sales by upgrading its system to handle these types of transactions.

For these four reasons, I believe short sales will have a major impact on the housing sector in 2010.

If you are a homeowner who finds themselves underwater on their mortgage, it is a much better alternative to foreclosure. Call me today and find out how I can help you. You can also visit my website and click on Short Sale FAQs to get more information and request a Short Sale package.

If you are a buyer (and you have some patience), you have a fabulous opportunity. I can help you find a great deal on a Short Sale home in your area.

And finally, if you are in real estate or mortgaging, educate yourself to the process so you can help as many families as possible!

Here are a few things you should know about the process of a short sale before you decide if you want to pursue a purchase:

-A seller must disclose if the home is a short sale

-A short sale MUST be approved by the seller’s lender. Even though a seller might accept your offer, it will be subject to approval by the lender

-The listing agent is required to put together an extensive package for the seller’s lender. It is a comprehensive folder with a lot of the seller’s info, as well as agreements you and the seller must sign once you make an offer, your pre-approval letter from you bank, a copy of the deposit check, etc. The listing agent is also most likely going to put together a Comparative Market Analysis as well for the seller’s lender. Putting this package together can take some time, but it is in everyone’s best interest to get it done as swiftly as possible.

-If your offer is approved, the seller’s lender will (likely) send out an appraiser to evaluate the property in light of recent sales – they are looking for market value, too (i.e., it may not be a great deal after all)

-The seller’s lender will likely request that the sale be “as is” and due to hardship will probably not approve any credit for repairs

-Despite its name, be prepared for a short sale to take anywhere from 45-60 days after the package is submitted

If you are making an offer:

-Make sure you make the offer contingent on the short sale being approved by the lender and set a time frame for approval

-An addendum form is advised in the state of California to outline the short sale contingency terms and conditions

-Know that there is a good chance there will be more than 1 offer

-It is still prudent (I would say it is ESSENTIAL) to conduct a home inspection even though the lender will probably require an “as is” sale – you still want to know what you are buying and what repairs need to be made. This home inspection is optional, but it is popular with home buyers and gives them peace of mind in a very important purchase

-It is possible the seller will not be able to do any Section 1 repairs resulting from the Wood Destroying Pest Inspection (e.g., termites) due to hardship of funds. This is important to know if you are buying a property through a VA loan. Many VA loans have certain requirements on a home they’re finding, such as a termite inspection, that the seller’s lender will not fund. Ask your lender about this.

-Be sure to discuss issues and questions with your agent before proceeding, preferably someone who has some experience with short sales

Important Note: I would not recommend taking on a short sale purchase without representation by a qualified, knowledgeable licensed agent. There is too much at risk for you, the buyer.

Even more interesting is the average sales price of a house in San Joaquin, CA was $95,000 in December 2009, up 0.78% from November 2009. Homeowners can use average sales price to help them determine a price point for their home.  Conversely, home buyers can use average sales price to estimate the price they could expect to pay.  Higher average sales prices may indicate better than average homes, while lower average sales prices may indicate homes in less demand (discounting special circumstances such as foreclosures).

According to the present market condition, the valley has made certain progress. Although the market condition of San Joaquin county is going up, the difference between sale price and sold price is big. There are heavy negotiations done over the market and as a result of which there is much difference between sale and sold price. Some of the important points to be noted are as follows:

-Inventory has fallen in the valley.

-Pending and selling activity has grown up to a higher extent as compared to the past 7 years.

-There is a moratorium on REOs / Bank Owned Foreclosures.

For home buyers, it is a great opportunity to buy homes as there are a lot of bargain is going on at the market. In addition to that, the interest rates have become very low. They are as low as 5%, so the buyers can now take the advantage of market. Now home buyers will see an increase in the bidding on more desirable homes.

This is the right time for the investors to invest in San Joaquin County. There are lots of homes availablein which the price tag is less than 100K, so this is the perfect time for the investors to invest. Since the supply and demand continue to converge, it proves to be more beneficial for the home owners. The present day real estate market is very beneficial for the investors, home buyers and home owners.

RIVERSIDE, CA – October 1st, 2009 – PartnerFirst announced today its growing success in building a nationwide pre-foreclosure agent network. PartnerFirst has certified 600+ real estate agents in CA within six weeks of its July 2009 launch. PartnerFirst’s Pre-Foreclosure Specialist Certification (PSC) is one of the fastest growing and recognized short sale education training programs in the United States. PartnerFirst is rapidly filling its calendar to certify agents in handling pre-foreclosure properties across America.

Many mortgage servicers are embracing the “avoid foreclosure” message from the government by focusing their attention and resources on providing defaulting homeowners with pre-foreclosure options instead of sending the property straight to foreclosure.

The new face of default real estate will require servicers and real estate professionals to clearly communicate and work closely to provide homeowners help in every phase of the default process.

“As the shift from foreclosure to pre-foreclosure becomes more prevalent, servicers will rely on the expertise of real estate professionals,” said Son Nguyen, Co-Founder and Sr. Vice President of PartnerFirst. “A Certified Pre-Foreclosure Specialist Agent Network will be the key in connecting defaulting homeowners to loss mitigation departments to explore all pre-foreclosure options including handling short sales as an alternative to avoiding foreclosure.”

Servicers would refer defaulting homeowners to the PartnerFirst agent network to list their short sale property. Homeowners know they are working with a certified pre-foreclosure specialist, giving them peace of mind. Servicers trust the PartnerFirst network because each of the specialists knows the specific requirements of the servicer, therefore streamlining the short sale process for all parties.

PartnerFirst has teamed with Keller Williams Realty nationwide to offer servicers and default providers the strength of 74,000+ agents, coverage of 720+ offices, and the ability to process short sales in all 50 states. They are currently partnering with other national brokerages to give homeowners more choices and servicers broader coverage.

“I don’t know all of the answers to the housing crisis, but I do know that the next generation of short sales is going to take an ‘all hands on deck’ approach from GSEs, mortgage servicers, and homeowners. I believe it starts with having a well-trained and certified pre-foreclosure agent network to educate the defaulting homeowner about their pre-foreclosure options while connecting them to the servicer’s loss mitigation department in trying to save their home” said Son Nguyen, Sr. Vice President of PartnerFirst. “Our agent network is ready to handle the next generation of pre-qualified short sales.”

About the PartnerFirst Nationwide Real Estate Network Inc.

The PartnerFirst Nationwide Real Estate Network’s mission is to be the industry leader in providing solution-based relationships and strategies to our members and clients. Our Pre-Foreclosure Specialist Certification (PSC) is designed to train real estate agents to effectively educate homeowners about pre-foreclosure options while connecting them with mortgage servicers to see if a viable pre-foreclosure solution can be an option. Members of the agent network hold a high standard of excellence, compassion, integrity, and commitment to bringing stability back to the housing market one pre-foreclosure solution at a time.

There was an article published in the San Francisco Chronicle on Oct 22,2009 talking about how banks are now more than ever willing to work with sellers on a “short sale”.  They are saying “But now real estate professionals and banks say the logjam is starting to ease, with decisions coming more quickly, more short sales trading hands, and the prospect of a new Treasury plan that will further lubricate the process.” 

Most agent and buyers a year ago would not touch a “short sale” but now with the banks more willing to work with the sellers, investors are starting to move towards making offers on the “short sales”. 

www.cosgroverealestateinvest.com

Thanks for listening
Julie Cosgrove
Keller Williams Realty

http://cosgroverealestateinvest.com

Julie Cosgrove, Keller Williams Realty, Central Valley. www.cosgroverealestateinvest.com