Distressed Sale Options

ChangingStreets.com: specialists in distressed sales options.

ChangingStreets.com has a great deal of respect for family and home. In todays economy, situations have been created the America has never seen before. There is a lot of missinformation in regards to short sales, foreclosures, and other options in todays market place. We have experienced these types of conditions for years in other markets. We have seen the good, the bad and the ugly, we work very hard to stay ahead of the trends and on top of the education to serve you better. Below are some blogs and links to more information regarding your options and we would love to discuss these options with you on the phone or face-to-face. Please contact us at 919.219.1214 or email at raleigh@changingstreets.com. We would be happy to guide you through the process and try and find silver linings, options and ways to benefit your family. Time is of the essense we are ready to help you now, please contact us and we will arrange to get you the paperwork your bank needs to get started.

 

Links that maybe useful:

http://www.financialtrustindex.org/images/Guiso_Sapienza_Zingales_StrategicDefault.pdf

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/04/AR2010030405455.html

http://www.judgmentdeficiency.com/

And some good news, did you know you may actually get money to relocate after the sale of your home?

https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf

This is a lot of information but we are here to help.

 

Short Sales vs. Foreclosures

Despite the efforts of many people the number of distressed mortgage holders is growing in America. Over seven million home owners are now delinquent on their mortgage, some estimates say 25% of homeowners are underwater. It is time to face the reality that is good people are in bad spots.

Being behind on your mortgage is not a shameful thing anymore. How many homeowners can take the blame for massive job loss? What is important is that homeowners in this position are making educated decisions.

Here are a couple facts about foreclosures that should freak anyone out that may be heading in that direction.

1. A foreclosure will keep you from purchasing another home for 5 years, minimum.
2. A foreclosure can come with a deficiency, meaning the lender or their assigns may come after you for the difference between what you owe and what they sell for.
3. A foreclosure will further erode your neighbors value.

A short sale will avoid number 2 above which in my opinion is good enough. President Bush passed an act that let banks and borrowers do a short sale without having to pay the IRS for the amount forgiven or having to face a deficiency judgement down the road.

The other benefit is that a short sale or pre-foreclosure sale will harm your credit, but you will recover quicker and be allowed to purchase a home with a Fannie May mortgage after two years.

The fact that the home will not be sitting vacant (in most cases) will help maintain neighborhood values.

There really is less stressful way to handle a distressed mortgage, and we can help. We will try and take the stress out of the situation for you and your family by facilitating a short sale on your property. As always you can feel confident in speaking with ChangingStreets.com. For more information on how we can help you avoid foreclosure please give us a call at 919.219.1214.

Short Sales

There are a lot of questions when it comes to short sales. The following is an email I received yesterday as an FYI from the North Oakland County Association of Realtors. It is from someone who has experienced a short sale and how it has affected them:

Hey guys, I thought you might be interested to learn how going through the short sale impacted our credit reports. You are welcome to share the general information, but please do not share our names, nor our personal details. Prior to the layoff, and the short sale process, we were at, or very near 800 rating. The last report we pulled was probably a year prior, when we purchased a camper, and it was around 795. In April, we were running 60 days late on payments (for 2 months running), and had 1-90 day late listed (we are challenging this, as we were never 90 days late, but that is what was listed). But EVERYTHING else was current and no payments were missed. The reports show concern over Amount owed on Delinquent Accounts, and Amount Past Due. Now we have the short sale listed, and the delinquent accounts closed (both GMAC and BOA are listed as: Closed, Settlement Accepted on this Account). They are showing 3-90 days late on the BOA account (we are going to challenge this).

Yes, that is right, our credit score actually went up slightly after the short sale. The middle score in April was 644, and in August 658. Overall, missing payments, and short selling the home cost us 140 pts on our report. We are pursuing financing for a new home in Knoxville, and the biggest issue is the 90 day lates. It seems the settlement can be worked around fairly easily by a knowledgeable mortgage broker. I would suggest that a short sale is a good method to get away from a large burden, but try to avoid 90 day lates if at all possible, 60 days does not seem to be a problem, but 90 is an issue. I am told that even with a 90 day late, we can get financed 12 months after the late occurred, through an FHA loan.

 

 

Short Sales Transaction From a Buyer Side

It was not more than  two or three years ago that I sat in a sales meeting where short sales quickly took over the conversation.  By that time, we had all lost countless hours put in on a number of short sale transactions that never closed.  We lost buyers, too. As well as our patience.  In the end, agents just decided to avoid them whenever possible. Things are a little different today, but to give you an idea of how these deals can turn out, here’s a brief accounting of my history with short sales, scanning the last three years.

My first experience with a short sale took place just before the market took a dive. We had received an offer that was $5,000 short of what was owed on this house I had listed for a client. Because they had already missed payments, someone suggested looking into short sale. We had less than two weeks to closing and the buyer did not have time for extensions. It wasn’t easy but the buyer and I were diligent in keeping up with the bank and they managed to pull it together and we closed on time. Can you believe that?If only…

My next transaction went on for three months with no reply from the bank. The listing agent finally said, “Oh my God I am so sorry, but the the asset manager told me your offer was thrown away because it was too low. They had no intention of countering or responding at all because they are too busy.”  That buyer bought a home the following weekend from a builder at an open house. Too bad for me.

My next 2 short sales took 5 weeks from purchase agreement to close – the same time as any other deal. Those buyers were very happy.So was Mama.

After that I had 4 short sale deals that died. Two of the buyers disappeared afterward and two went on to buy something else with me. In all four cases the bank FINALLY responded within a week of either the buyer walking away or closing on an alternate property.  Crazy, right?

Side note here: One of the deals above that died was a full price offer that went on for several months with no reply from the bank. The agent confirmed that it had been received and that the asset manager was aware of the offer, but we had to wait our turn.  The problem with all that waiting is that the paperwork on file is ticking and by the time it is finally your turn, that paperwork is expired, causing more delays as everything is refreshed and resubmitted. In the unfortunate case of this particular house, my homeless stressed out and confused (yet amazingly gracious and patient) newlywed buyers were not the biggest losers. While the bank took its sweet time, the house went into foreclosure, having missed out on our full price offer.

As much as we wanted to avoid short sales because of the risks and nonsense, and headaches, and wasted time with no commission, the core of our buyer’s agency is that we act in the best interest of the client, not our own or anybody else’s.  And sometimes you just had to face the fact that the best house for the client was one that happened to be a short sale.  We just sort of learned the hard way to prepare our potential short sale buyers for the very worst.

We learned that 3 to 6 months to close is too optimistic to predict. Better make it 6 months to a year.  Whether they choose a different house because they don’t have that kind of time to wait, or they decide to give a go because they are in no hurry, we know that we have set aside our own negative feelings about short sale negotiations and have helped the buyer make an informed decision and acted according to their best interests.

The market is now flooded with so many short sales, it would be hard to avoid them if you wanted to. Luckily over the years the negativity has worn off a little bit and all parties are learning to handle them more efficiently and maintain more realistic expectations. We are even finding that the process is more beneficial to sellers than we originally thought, whereas before there were concerns about future ramifications. Be sure and check out The Seller’s Short Sale Transaction to get a better idea from a seller’s view.