Short Sales Process Has Been Aided By 45-Day Requirement For Banks To Respond To Short Sale Requests; Sellers Eligible For Up To $3,000 In Aid (Video)

22 08 2011

The short sale system has been simplified by the Obama Administration. The Treasury Department unveiled rules requiring banks to respond to homeowner short sale requests within 45 days. Short sale sellers are also eligible for up to $3,000 in aid to move. By some estimates up to 275,000 foreclosures could be prevented by these efforts.

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Homebuyers Should Not Avoid Short Sales But Have Patience And Few Contingencies With Purchase Financing

19 08 2011
  • Typically with a short sale, the homeowner is underwater and has experienced a financial hardship such as a job loss.  To limit the damage to his credit rating, a homeowner may attempt to work with his lender to negotiate a short sale.  Not only must the bank approve of the short sale itself, it also must agree to the price, since the bank will accept the difference as a loss.
  • Unlike foreclosures, in which the owner has walked away and the bank is looking to unload a vacant – and sometimes vandalized – property, a short sale isn’t a distressed home that will sell at an extremely low price.  According to data from RealtyTrac, short sales typically sold for nearly 10 percent less than the market price in the first quarter of 2011, whereas foreclosures sold at an average discount of 35 percent.
  • Home buyers wanting to purchase a short sale must have patience.  In most cases, when a buyer makes an offer on a house, he receives a response from the seller within a few days, or even hours.  With a short sale, the bank must approve of the sale and bank representatives are overloaded with cases.  It may take 30 days or longer for a buyer to receive a response from the bank.
  • In a traditional real estate transaction, it is common for a home buyer who currently owns his home to make his offer contingent on selling his current home.  In short sales, most banks will not approve an offer that is contingent on the buyer selling his current home, as too many things can go wrong.
  • Banks also typically won’t consider short-sale offers that have inspection contingencies in them, so buyers can either do an inspection prior to making an offer or forego an inspection altogether.
  • Even with the challenges associated with short sales, buyers should not avoid these transactions. 

For more:  http://realestate.aol.com/blog/2011/08/11/short-sales-are-they-worth-the-trouble/





Morgan Stanley Housing Report Sees Restrictive Lending Limiting Owner-Occupied Purchases, Rental Costs Rising As Home “Effective Home Ownership Rate” May Drop Below 60%

8 08 2011
  • There are about 2.2 million vacant homes available for sale in the U.S.
  • 7.5 million homes are facing foreclosure that would add to the excess housing supply
  • This will continue to cause home values to drop further
  • The homeownership rate fell to 65.9 percent as of June 30, the lowest level in 13 years
  • Home ownership peaked at 69.2 percent in June 2004, the Commerce Department reported July 29
  • The effective homeownership rate would drop below 60 percent if delinquent buyers who are expected to lose their houses to foreclosure are removed from the total
  • “Mortgage credit remains tight, making home purchases more difficult, while rental demand is accelerating, causing rents to rise quickly,”
  • “If nothing is done soon, we will find ourselves in a situation where owner-occupied housing becomes unobtainable due to lack of credit, while rental housing becomes unobtainable due to rising costs.”

For more:  http://www.bloomberg.com/news/2011-08-08/bulk-buying-would-ease-u-s-housing-crisis-morgan-stanley-analysts-say.html





“Short Sale Or Foreclosure”: Homeowners Will See FICO Scores Fall To 570-595 Range With Either Strategy; Credit Scores Will Take Up To 7 Years To Increase Back To Previous Levels

25 04 2011

 

 

  • FICO will not be higher if homeowners choose “short sale” over foreclosures
  • Mortgage delinquency data from the nation’s three major credit bureaus was used to make this decision
  • Potential borrowers with short-sales will have FICO scores in the 575-to-595 range at one credit bureau
  • This is  the same as having a foreclosure on their credit report
  • FICO scores will be either in the 570-to-590 range or the 620-to-640 range at the two other credit bureaus
  • Short sales and foreclosures will remain on credit reports for three-to-seven year credit restoration

For more:  http://www.housingwire.com/2011/04/22/short-sales-and-foreclosures-equally-degrade-fico-scores





FHA 203k Streamline Renovation Loans Are The Perfect REO And Foreclosure Purchase Loans

10 04 2011

 

  • FHA 203k Streamline Home Renovation loans allow homebuyers to finance qualified repairs to produce a “new home” feel with one loan at closing
  • The loan may be used to purchase or refinance a 1-4 unit residential property
  • Renovate and update a home, correct health and safety issues
  • This program is ideal when making an offer on a Foreclosure or Bank Owned home in need of repairs that the seller or bank will not make
  • Rehabilitate up to $35,000 worth of the following, qualified items:
  1. Repair/replacement of roofs, gutters & downspouts
  2. Repair/replacement/upgrade of existing heating, ventilation & air conditioning
  3. Repair/replacement of plumbing & electrical systems
  4. Repair/replacement of flooring
  5. Minor remodeling that does not involve structural repairs
  6. Weatherization, including storm windows & doors, insulation and weather stripping
  7. Purchase & installation of appliances, including free-standing
  8. Improvements for accessibility for persons with disabilities
  9. Lead-based paint stabilization or abatement of lead-based paint hazards
  10. Repair/replacement/addition of exterior decks, patios & porches
  11. Basement finishing & remodeling that does not involve structural repairs
  12. Basement waterproofing
  13. Replacement of windows, doors, and exterior wall re-siding
  14. Well/septic repair
  15. Pool repair for health and safety only, such as an empty pool on a foreclosure sale




“REO King” Mike Potier Of Boardwalk Properties Markets Long Beach, CA Listing Using “Government Renovation Financing” EFlyer From Skip Schenker Of iMortgage And Renovation Lending Institute

2 04 2011

CLICK ON "SKIP SCHENKER" TO VIEW INTERACTIVE FLYER

 

http://www.reoking.com/





California “Short Sales” Continue To Be A “Difficult” Homebuyer Process As Only 60% Close While Typical Response Time Exceeds 60 Days And Can Be Up To 6 Months

10 03 2011

 

  • Fewer than three of five short sales close in California according to the California Assoc. Of Realtors (C.A.R.)
  • 94% of the Realtors in the survey participated in a short sale transaction during 2010
  • They cited lenders and servicers unresponsiveness, onerous procedures, and long processing delays
  • 70% of Realtors said closing their most recent short sale transaction was “difficult” or “extremely difficult,”
  • Reasons for this included:
  1. Lack of standardization
  2. Long approval process
  3. Lack of lender approvals
  • The process should be 45-days
  • Typical response time for lenders is at least 60 days
  • Many times their response time exceeds 6 months
  • 63% of Realtors said that lenders took more than 60 days to return a written response of the approval or disapproval
  • Only 4% said they received a written response in less than 14 days