Short Sales

The rising costs of living and long daily commute left these CT homeowners tired and scraping change to make ends meet until they decided they had enough. Realizing they would likely never pay their way out of the upside down home they decided to cut their losses and short sell their home to move closer to work.

Originally a Bank of America first and second mortgage, the week we listed the home the first loan got sold to Nationstar, making the process a little more complex than originally anticipated.

It took two months to find a buyer for this home in the dead of winter. A short sale package headed to the lender. Nationstar is hit or miss. They have been known to be on the ball and approve in a few short weeks, and I have also seen the…

Should I short sell or just wait for my equity to come back?

While every situation differs I decided to take a very common scenario here in CT and run the numbers just to see how they look:

Lets say you bought (or refinanced) an average Connecticut starter home for $250,000 5 years ago.

Lets take an average overall 30% loss in values since those peak years.

The current value of your home: $175,000.

The current balance on the $250,000 loan with regular payments over the last 5 years (at 5% interest): $230,000.

YOU ARE NOW $55,000 UPSIDE DOWN

LETS ASSUME DEPRECIATION STOPS TODAY AND REAL ESTATE IN CT STARTS APPRECIATING IMMEDIATELY AT 4% ANNUALLY (THE HISTORICAL RATE)

SCENARIO #1: STAY AND PAY. You wish to sell your…

Q: Will I still owe the difference after my CT short sale?

A: It all depends on what your short sale approval letter says.

Connecticut is a deficiency state. What that means to any CT homeowner is that your lender can pursue you for a monetary loss resulting from a foreclosure or short sale of your property - unless your short sale approval letter says otherwise. Many people mistakenly believe that letting the home foreclose, walking away or simply sending in the keys absolves them of their responsibility for their mortgage - however this is absolutely not the case.

When you signed up for the loan you agreed:

• To pledge the property as collateral for the loan
• To sign a promissory note to pay back the loan

IN A FORECLOSURE the…

This Colchester, CT homeowner was at the end of her rope as even FSBO efforts to sell while saving money had not ended in a successfull sale of her upside down property.

Little did we know that this particular short sale would be among the simplest and smoothest I have ever seen.

Since the loan was FHA (which offers short sale preapproval) we sent a complete short sale package at the same time we entered the market at an aggressive price. Just 18 days passed until we secured a strong buyer. Less than two weeks later we had the ATP - Approval to Participate - in the FHA short sale program.

We quickly sailed through inspections, appraisal and final approval...and this Wells Fargo FHA short sale closed 5 weeks later.

OWED: $180K

APPROVED…

Although Bank of America is generally pretty easy and quick in their short sale processing as of late - there are always exceptions.

The property was well priced and agressively marketed and went under contract in just over 8 weeks. A full short sale package headed to Bank of America, where negotiators fumbled around with the file for several weeks - insisting my seller go HAFA even though he did not qualify for the program. My client was eventually able to pull out of HAFA and go with a traditional short sale.

It took another few months and two negotiators for Bank of America to reach a state of decision on the file. The property was considered an investment property and the loan had private mortgage insurance (PMI). This particular PMI company…

Bank of America is really on the ball lately with getting short sales approved rather painlessly ( for the most part anyway...) .

I originally listed the Mansfield, CT home after a fellow Realtor referred her foreclosing client to me. The property went on the market...and stagnated. The owner was reluctant to reduce the price of the property aggressively and as a result it took 4 solid months of marketing and 5 price reductions to finally secure a buyer.

It took Bank of America about 6 weeks to counter the purchase and ultimately the sale fell apart over a difference iof $2,500. We ended up back on market again.

A month later the buyer had second thoughts and agreed to up his offer by the required $2,500. Bank of America took just a few weeks…

GMAC - now my very favorite lender to work short sales with - delivers again.

When this Connecticut homeowner first called me, he seemed quite skeptical that a short sale was a possibility for him. Given his circumstances he was sure that his only option was to simply walk away and let the home foreclose as he believed he would never be approved for a short sale. I believed otherwise.

As the FHA PFS (pre-foreclosure sale) program allows preapproval, we immediately sent a full short sale package to GMAC and the home went on market. 7 weeks later a buyer was secured, which coincided perfectly with the timing on my sellers approval into the FHA PFS program. Unfortunately our FHA appraisal came in a tad high and the home had some inspection issues so…

MetLife...The only positive thing I can say about this bank is that I am overjoyed they are no longer writing new loans since January 13, 2012. They truly do not belong in the mortgage servicing business.

I listed my clients home in June of 2011. Since they had an FHA insured loan, and the FHA short sale process is rather simple and predictable, I mistakenly assumed we were in for a smooth ride.

Boy, was I wrong. MetLife has one of the worst and most unresponsive loss mitigation departments I have ever seen. Not only did they blatantly disregard our file for weeks and months on several occasions, they even failed to follow FHA guidelines. On several occasions we were forced to get HUD to intervene to keep the file moving along.

One very…

McCue - Where did you go wrong?

McCue Mortgage used to be a pleasure to deal with and was generally efficient in their short sale processing...and then something happened. Some new folks showed up in loss mitigation...and the rest was all downhill.

This Meriden CT home first sold within a month on market in a multiple offer situation. The buyers were paying over market value. A full short sale package and high hopes headed over to McCue.

Four months passed as McCue's new loss mitigation staff fumbled around with our short sale file, ultimately declining the file. McCue cited lack of default as the reason for the decline, despite the fact FHA guidelines do not call for a default in order to get approval into the FHA Pre-foreclosure Sale…

So it seems at least a few lenders are successfully incorporating HAFA into their short sale processing. Despite massive delays in HAFA processing with most lenders, at least Nationstar seems to have this HAFA thing down.

Back in May of 2011, this Plainville, CT property was first listed. Two months later we secured a buyer for the property. The file headed off to Nationstar. Unfortunately the first time around the file lagged at Nationstar so long that Hurricane Irene came to Connecticut and sent most of my clients street underwater.

The property flooded, became uninhabitable and the buyer walked. In September we went back on market. Soon after we secured a cash buyer...however yet again Nationstar took their sweet time and by January our…