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Wednesday, February 26, 2014

Bank foreclosures selling properties they don't own yet

In the past 6 months it has come to my attention that banks, loan service companies, and government run agencies are selling homes to buyers knowing in advance that they do not have clean title with the deed officially in their name. If a normal seller were do list a home that they don't have title too they would be fined and prosecuted. Why is it that banks and government run agencies are allowed to list, market, and execute a contract on a home when they have still yet to record the sheriff sale or deed in their name? This is a shame and it is primarily the fault of the third party REO management company that they hire to manage the asset. I recently had a deal with a government agency as the seller here in Downers Grove, IL. We were supposed to close 2/20/14. I asked and received title on 2/3/14 that still showed the original owners name on title that was foreclosed on. Please note, I primarily deal with mortgages for my buyers and this is what I have seen a lot of lately. This will also effect your cash buyer. Again, why would any buyer want to buy a home that does not have clean title in the sellers name who is on the contract. If anyone else has run into this issue lately please post a comment. There has to be some kind of law against this kind or practice. If I were to list and go under contract for a property I did not own, I would be prosecuted and thrown in jail. Why do these banks, loan servicing companies, and government run agencies continue to do this. Are they really that lazy that they can't hire someone to walk the deed into the county and pay the $20 to record it? Very disappointing. It's not 2006 anymore let's get with the program. Stop hiring out of state discount management companies who have zero accountability to take care of your foreclosure assets. You are hurting the first time home buyer who just wants to get a good deal on a home that has been vacant for years.

Wednesday, April 20, 2011

Foreclosures and Short Sales make up 40% of the sales for March

Sales of previously owned U.S. homes rose more than expected in March, a trade group said on Wednesday, suggesting the housing market's downward trend may be close to hitting a bottom.

AP

The National Association of Realtors said sales rose 3.7 percent month over month to an annual rate of 5.10 million units after an upwardly revised 4.92 million unit pace in February.

Economists polled by Reuters had expected sales to rise 2.5 percent to a 5.0 million-unit pace from the previously reported 4.88 million unit rate. Sales have now risen in six of the past eight months.

"It's slow, steady progress, but you cannot not be disturbed by the slow pace of recovery," said Pierre Ellis, an economist at Decision Economics in New York. "Demand is rising even with higher mortgage rates so that's encouraging."

The housing market is struggling to find its footing as a wave of foreclosed properties keeps supply elevated and prices depressed.

Last month, foreclosures and short sales, which typically occur at about 20 percent below market value, accounted for 40 percent of transactions. That was the highest since April 2009 and was up from 39 percent in February.

The median home price fell 5.9 percent in March from a year earlier to $159,600. Compared with March last year, sales were down 6.3 percent.

"A sustained turnaround in the housing market is still far off based on earlier-released depressed readings for housing starts, building permits and builders' confidence indices," said Krishen Rangasamy an economist at CIBC World Markets in Toronto.

Sunday, March 20, 2011

How does a shortsale show up on your credit report?

A short sale will show up on your credit report as a closed account. Sometimes it will show "Creditor Settled For Less Than Amount Due" on the account. This is very rare. In most cases the short sale will just show a zero balance and will end reporting with how many days you were late when the short sale closed.

Monday, January 24, 2011

DEBT

50% of the 75 million homeowners in the USA either have an outstanding mortgage balance on their primary residence that is less than 50% of their home’s current fair market value (e.g., mortgage debt of less than $100,000 on a $200,000 home) or they have no outstanding mortgage debt at all (source: Census Bureau).

MORE THAN A MILLION

1,046,762 homes were seized by lenders in calendar year 2010 as a result of foreclosure, an average of 2,868 per day. There are 75 million homeowners in the USA, 24 million of which do not have any mortgage debt on their homes (source: RealtyTrac, Census Bureau).

Monday, January 17, 2011

Documents needed for a short sale

Whether we are talking about Chicago Short Sales, Naperville Short Sales or Skokie Short Sales, the one thing that all of these have in common is PAPERWORK!!! There are several documents needed when attempting a short sales.

Every bank has their own specific addendums and forms that they want to be completed by the home owner, but just about every bank out there is going to ask for the same Basic and Essential paperwork needed to get the short sales process going... Lets see exactly what I am talking about

DOCUMENTS NEEDED WHEN PREPARING A SHORT SALE

1) AUTHORIZATION TO RELEASE
Signed and Dated by the Seller, the Authorization To Release Form is required if you are having a Chicago Short Sales Realtor or Attorney involved in the short sales process. This letter basically states that you as the homeowner are allowing the bank to release confidential information about your mortgage to a third party and are allowing the third party to negotiate on your behalf. A bank WILL NOT SPEAK to your realtor or attorney until this is signed

2) LISTING AGREEMENT

3) SIGNED COPIES OF THE HOMEOWNERS LAST 2 FILED 1040 TAX RETURNS

4) TWO MOST RECENT MONTHS OF HOMEOWNERS PAY STUBS
If the homeowner is unemployed, then proof of unemployment must be sent in place of pay stubs

5) IF HOMEOWNER IS SELF EMPLOYED, THEN A YEAR TO DATE, PROFIT AND LOSS BALANCE SHEET MUST BE SENT

6) TWO MOST RECENT BANK STATEMENTS

7) SALES CONTRACT SIGNED BY SELLER AND BUYER

8) PRELIMINARY HUD 1 STATEMENT
A Hud 1 Statement is a breakdown of what the bank is actually going to walk away with on the property. This is not an exact Hud 1, but it is fairly close. Getting an attorney to handle this is a wise choice.

9) HARDSHIP LETTER
The hardship letter is written by the homeowner and it explains what has happened for the seller to have fallen in arrears on their loan.. Be thorough but brief in this letter

Thursday, January 13, 2011

Bank of America is the worst?

Bank of America has changed the verbiage of their standard short sale approval letter, deleting verbiage referring to the bank’s right to pursue a defiency judgement against a homeowner.

Online PR News – 09-January-2011 –Las Vegas, Nevada – Nevada Real Estate Agents will soon notice major changes to the short sale approval letter issued by Bank of America. Bank of America has changed the verbiage of their standard short sale approval letter, deleting verbiage referring to the bank’s right to pursue a defiency judgement against a homeowner.

A deficiency judgement is a lawsuit which a bank may file against a homeowner whose mortgage foreclosure sale did not produce sufficient funds to pay off the loan in full. Since each state has different laws pertaining to short sale and foreclosure, banks have created different short sale approval letters for each state. For example, a Bank of America short sale approval letter issued to a California homeowner may contain completely different verbiage than a letter sent to a homeowner in Nevada.

Most Nevada Realtors and Real Estate Attorneys will agree that the short sale approval letter which Bank of America has used in the past contained verbiage which intimidated many homeowners from pursuing a short sale on their home. According to Bill Myers, Nevada’s top short sale Realtor and owner of The Myers Team with Century 21 MoneyWorld, “Bank of America’s new approval letter changes everything for homeowners considering a short sale. This is a huge victory for Nevada homeowners.”

While Bank of America’s new short sale approval letter is much better for Nevada homeowners, the fact remains that Bank of America has been slow to react compared to other financial institutions. According to Myers, “Most major banks no longer include deficiency verbiage in their approval letters. We are very pleased that Bank of America has revisited their policies and made a decision which actually helps Nevada homeowners in distress. The verbiage of the old letter was intentionally harsh, and designed to intimidate homeowners considering walking away from their home. We assume that the attorneys who wrote the original Bank of America letter were hoping that harsh verbiage would scare a homeowner into making their mortgage payment, however, this is not reality.”

It is believed that the recent surge in Nevada bankruptcies has played a role in Bank of America’s decision to change the verbiage of their approval letter. Homeowners are unsure of their options, and many have chosen to file bankruptcy for protection from the bank, however, according to Myers, “Filing bankruptcy only makes things worse.” Myers said, “Filing bankruptcy to protect yourself from the bank is like cutting off your hand because of a hangnail.”

According to Myers, “The reason to do a short sale is to minimize damage to your credit and avoid being sued by your bank.” If you file bankruptcy, your credit is destroyed. We have closed hundreds of short sale transactions, and have yet to see a bank file a deficiency judgement lawsuit against one of our clients. Unfortunately, some bankruptcy attorneys have capitalized on the fear of Nevada homeowners, and convinced people that bankruptcy is their best option. This could not be farther from the truth.” Myers said.

The Myers Team is ranked the #1 Short Sale Team in Nevada. In 2010, they closed more short sale listings than any Realtor or Broker in Nevada. For additional information, please visit www.NevadaShortSaleInfo.com