Tagged : short sales

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…

The answer to that can be yes, no or maybe so.

While most lenders have not laid out specific rules saying you must be in default to qualify for a short sale, it has been traditionally more difficult to get a short sale approved for a paying client.

However I have noticed more flexibility in this, especially in the last several months. While some investors will still require a default in order to be approved into a short sale, many will not. Keep in mind your lender - Bank of America, Chase, GMAC, Wells Fargo, Nationstar , etc - usually just services your loan. An investor actually owns it and calls the shots. I have seen Fannie Mae and Freddie Mac owned loans be approved lately for current clients. If your loan is insured by the FHA, they…

Over the last few years here in CT it has become clear that short sales are here to stay – at least for several more years. The good news is there have been many changes in the short sale world as the economic slump continues. A few trends I’ve noted over the last few years as CT's top producing short sale Realtor:

• Short sales are getting faster and easier overall
• The big banks – Bank of America, Chase, Wells Fargo, GMAC and Citi have all made significant improvements to their short sale processing over the last few years. While there is no consistency in processing from lender to lender (or even within a single lenders loss mitigation department) – all have adopted predictable and fast(er) systems to get short sales approved. It’s…

• Hire any old realtor. Your aunt's best friend has a license. Surely she could use a commission check.
• Price the house based on what you owe, rather than what your home is worth in today’s market.
• Disregard your agents recommended price reductions. How dare they? It’s already a steal…after all you paid $X just 5 years ago. Don’t people know a good deal when they see one?
• Force severe showing restrictions – if they want your house they will just have to reschedule until it’s convenient for you.
• Be present for showings –no one can sell your home like you can!
• Refuse to make any effort to get your home to show well – it is “as-is” after all. Why should you clean up dirty dishes or vacuum the floor?
• Move out and then…

BB&T – Branch Banking and Trust Company is a rather small lender. This particular loan was an FHA loan, which has its advantages to the short sale seller.

We submitted the short sale packet as the property went on market. It took over two months for BB&T to take real action on the file, which happened to coincide with the time we secured a strong cash buyer for the home.  

To our surprise - the short sale approval arrived just over a week later, and shortly after we closed.

OWED: $200,000

APPROVED AND CLOSED WITH FULL DEBT FORGIVENESS: $83,000

FHA SELLER INCENTIVE: $1,000

TOTAL TIMEFRAME LIST TO CLOSE: 3 MONTHS

Single mortgage short sales for folks with significant hardships are the simplest short sales to close.  But more often than not, short sales come with complicating factors that will make it more difficult to get your short sale closed.

The most common complications to your short sale are:

• Second mortgages. These are very common, but present another party that needs to approve you short sale.  Second mortgages can make your short sale more complex.
• PMI. Private Mortgage Insurance companies are highly likely to complicate your short sale. Your MI company will be covering any loss to your lender, and will also have to approve your short sale. MI companies tend to be more demanding than second mortgages.
• Judgment liens.  Every cloud on…

Many folks who get a loan without putting 20% down have PMI (Private Mortgage Insurance).  If you are not sure you have PMI, if you make a small payment every month in addition to your regular mortgage payment, this is usually Mortgage Insurance.

Mortgage Insurance is insurance that you pay for, but that does not protect you. Mortgage Insurance protects your lender in case you default on the loan and the lender suffers a loss.

If you attempt to short sell your home, the mortgage insurance company will be paying out on the loss. So what does that mean to you? It means the mortgage insurance company must also approve your short sale. If there is a single party involved in your short sale that will make demands and make it more difficult for you to…

If there is a single short sale that I enjoy lately it’s a Bank of America Fannie Mae owned loan.  This is quite possibly the single most predictable servicer/investor combination and one I am more than happy to take on.  Most Bank of America short sales will go through their Equator system, including all their Fannie Mae owned loans.

Many of my clients are in the middle of a divorce leading to the unavoidable short sale of their home, as was the case here. My client was anticipating a long troublesome journey through the short sale process and was quite elated when his short sale proved to be quick and painless.

Within 5 weeks on market we secured a buyer for the home…and after submitting the package to Bank of America – a short sale…

THE STATISTICS:

Let’s discuss overall sales in CT first. 22,348 homes sold in CT - a 10% decline from 2010.  The average sale price of homes sold was $244,578 with an average marketing time of 100 days.

1,410 short sale homes sold in CT in 2011 - a 10% incline from 2010. While this number only makes up 6% of all sales, this is a 1% increase in total market share over the prior year. The average sales price of short sale homes sold was $180,618 with an average marketing time of 153 days.

While short sales still sell for less and take longer to sell than “regular” homes, short sales are definitely on the rise in Connecticut.

PERSONAL OBSERVATIONS:

As Connecticut’s highest producing short sale real estate agent, I have had the…

HAFA - Governments "streamline" short sale solution? I dont know about you, but to me 14 months and streamline sounds like an oxymoron.

I've never been a fan of HAFA, and this Seterus short sale certainly didn't sway my opinion. I originally listed this Middletown, CT property and immediately my clients applied for the HAFA program. 6 months later, my clients were approved for HAFA...at about 30% over market value. We were unable to find a buyer to pay 130% of market value....but we were able to find one to pay market value. We moaned and groaned and convinced the lender they were off base with their value...and they did reconsider several months later. Unfortunately by then the buyer was long gone and we had had the pleasure of starting all…