Short Sale Negotiator Specialist Agent

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Wed, 09 May 2012 21:43:30 GMT

Bank of America extends modification offers - Stockton Lodi Tracy Short Sale Specialist Agent Negotiator

Bank of America Home Loans has begun reaching out to customers who may be eligible for forgiveness of a portion of the principal balance on their mortgage under terms of a recent settlement among five major banks, 49 state attorneys general, and the federal government.

The first letters in a targeted outreach to more than 200,000 potential candidates for this assistance are arriving in homes this week; most of the letters will be mailed by the third quarter of this year. The bank estimates average monthly savings of 30 percent on mortgage payments of customers who qualify for this program.

Bank of America began making principal reduction offers under the program guidelines in March, initially concentrating on homeowners who were already in the modification review process. So far under this early initiative, about 5,000 trial modification offers have been mailed, providing a potential total of more than $700 million in forgiven principal. Homeowners are required to make at least three timely payments before the modification can become permanent.

The wave of mailings beginning this week will reach a broader base of customers who may be eligible for this principal reduction program. The letters provide each homeowner with a description of the program and an invitation to provide financial information to begin the review process.

To be eligible for this program, a homeowner must meet certain criteria, including:

Owes more on the mortgage than the property is worth today.

Was at least 60 days behind on payments on January 31, 2012.

Has a contractual monthly payment for principal, interest, property taxes, hazard insurance, and any applicable homeowner association fees totaling more than 25 percent of gross household income.

Has a loan that is owned and serviced by Bank of America, or serviced for another investor that has given the bank delegated authority to do such modifications.

For further information on the settlement programs, call Bob Peralta @ 209-957-1858

Bob Peralta
25 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Tue, 08 May 2012 11:30:01 GMT

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

A select group of struggling mortgage borrowers are about to get an offer that sounds too good to be true. Executives at Bank of America say they will begin mailing 200,000 letters offering certain customers mortgage principal reduction.

“If people get these things and toss them, they won’t be eligible,” says Ron Sturzenegger, the Bank of America executive charged with providing solutions to borrowers in need of mortgage assistance.

But the offer is real, and eligible borrowers could get as much as $150,000 knocked off the balance of their mortgages. It is all part of the $25 billion settlement reached this year between federal and state agencies and the nation’s five largest mortgage servicers over fraudulent foreclosure document processing (so-called “robo-signing”).

Bank of America , in a deal with state attorneys general and the U.S. Department of Justice, committed $11 billion to mortgage principal reduction, but executives say they will go beyond that if enough borrowers respond to their offer. Five thousand borrowers have already received a collective $700 million in principal reduction through a pilot program for those already in a modification negotiation. The 200,000 borrowers being targeted now may have already exhausted modification options or may have yet to contact the lender.

Executives say borrowers receiving the letters are eligible, but they still have to prove they qualify. In order to be eligible, a borrower must be 60 days late on the mortgage payment as of Jan. 31, 2012. The borrower has to owe more on the mortgage than the home is currently worth, commonly known as being “underwater” on the mortgage, and the borrower’s loan must either be owned by Bank of America or serviced by Bank of America for an investor who is allowing the modifications.

In order to qualify for the modification, the borrower must answer the letter with full documentation of income, showing that under the terms of the modification they can still make the monthly payment. A borrower with no income would therefore not qualify. A borrower’s current monthly payment must be more than 25 percent of gross income, and the borrower must show they are unable to afford that.

“If you can afford to make your monthly payment and are choosing not to, you will not get this principal modification,” says Sturzenegger.

If the borrower qualifies, Bank of America will bring the monthly mortgage payment down to 25 percent of the borrower’s gross income. That could mean principal forgiveness well over $100,000, as there is no limit to the amount of the mortgage. If enough borrowers respond, it could cost Bank of America far more than it committed to in the settlement.

“Yes, we have the capability to go well beyond the $11 billion,” adds Sturzenegger.

Bank executives say that before choosing which borrowers will get the offer, they performed a net present value test on each loan, making sure that the principal reduction modification would net Bank of America or the investor who owns the loan more than foreclosing on the home. “It has to be fair to the investor as well,” says Sturzenegger.

Not all of the 200,000 borrowers who receive the letters are expected to respond. Executives say there is a level of fatigue among delinquent borrowers who have already received several notices or who may have gone through a failed modification process already. Some borrowers simply don’t want to stay in their homes, while others may think the offer is a scam.

“They have been contacted by a lot of other people, and this offer may appear too good to be true,” says Sturzenegger.

That’s why Bank of America is sending the letters by certified mail and trying to make the language as simple as possible. A sample letter obtained by CNBC shows a bring red box in the top corner labeled, “IMPORTANT” and simple language stating, “Qualifying customers may reduce their monthly payment by an average of 35 percent.”

Some 6,500 letters should be arriving in mailboxes across the country this week, with a wave of new letters going out every week until the end of the summer, when all 200,000 should have been mailed. Bank of America is staggering the mailings in order to handle the expected response. The bank has staffed up to handle the task, with 50,000 employees manning servicing desks, but the process will clearly take a lot of time. That’s why Bank of America has suspended any foreclosure actions against these 200,000 borrowers until the process is complete.

There are currently 5.59 million U.S. loans that are either delinquent or in the foreclosure process, according to Lender Processing Services. Bank of America services one million of those loans, but many of them are owned by Fannie Mae and Freddie Mac. Their regulator, Edward DeMarco of the Federal Housing Finance Agency, has yet to agree to principal reduction in loan modifications, despite harsh criticism from some lawmakers on Capitol Hill and increasing pressure from the White House.

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Tue, 08 May 2012 11:30:00 GMT

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

“If you can afford to make your monthly payment and are choosing not to, you will not get this principal modification,” says Sturzenegger.

“Yes, we have the capability to go well beyond the $11 billion,” adds Sturzenegger.

“They have been contacted by a lot of other people, and this offer may appear too good to be true,” says Sturzenegger.

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

FHFA Explains Intentions of REO-to-Rental Initiative

Tue, 08 May 2012 08:36:25 GMT

FHFA Explains Intentions of REO-to-Rental Initiative ... Stockton Lodi Tracy Short Sale Specialist

(DSmews.com - May 7, 2012)

Clarification was offered Monday on misconceptions regarding the REO-to-Rental Initiative, currently in pilot stages. Meg Burns, FHFA’s senior associate director for housing and regulatory policy, explained in testimony to lawmakers the purpose and intent of the pilot program, which involves the bulk sale of Fannie Mae REO properties to investors who will then convert their purchases into rental units.

Calling the initiative “highly inappropriate on a national scale,” Burns said the “markets are carefully selected, based on obvious market characteristics – an oversupply of single family homes for sale and a strong demand for rental housing.”

Burns also added that “the pilot will not result in severely discounted sales,” and said the properties won’t be sold to investors if they aren’t purchased at prices close to what Fannie Mae can get through a retail execution.

As a pilot program with many unknowns, deliberate decisions were made regarding the selection of just one company and the sale of already occupied properties.

Burns said “uncertainty surrounding the outcomes of the pilot” led to the involvement of just Fannie Mae.

And why Fannie Mae properties? For one, the GSE holds a concentration of homes in specific markets. Also, FHFA decided only one company should use its resources to test the new model, and three, “legal and operational challenges associated with bundling a group of properties in any given market” led to the decision to have just one company.

This “uncertainty” is also why Burns said a decision was made to sell already renter-occupied homes. When Fannie Mae first announced it put up 2,490 REOs up for sale earlier this year, about 85 percent of them were already occupied by tenants.

“Fannie Mae and FHFA decided to assemble pools composed mainly of rental properties to ensure that large numbers of vacant properties were not held off-market for the significant period of time required to execute a sale,” said Burns.

As for the program’s ability to increase the supply of affordable rental housing that’s available or improve the rental housing stock through “green” home improvements, Burns said this was never the intention of the program, but those outcomes could become an indirect result.

As part of the first transaction announced in February, the nearly 2,500 REOs up for sale are divided into eight sub-pools, located in Las Vegas, Nevada; Phoenix, Arizona; various communities in Florida; Chicago, Illinois; Riverside and Los Angeles, California; and Atlanta, Georgia. The window for completion of the first pilot is sometime in the next few months.

While the program has been well received by many, in California, some lawmakers and the California Association of Realtors (C.A.R.) expressed a lack of support in seeing the program in their state.

In April, 19 California lawmakers sent a letter to FHFA Acting Director Edward DeMarco asking that California be excluded from the Initiative, stating housing inventory throughout the state is “extremely low and demand is high.”

According to data from C.A.R., 600 of the bulk REOs are located in Los Angeles and Riverside counties, and bank-owned homes are already closing in an average of less than 60 days, often above the list price.

So far, Burns said an independent third party has been hired to review applications and the process should be finished in the next few weeks. Then, eligible bidders will be notified and the bid process will begin.

As for involving others, Burns said, “the Enterprise portion of the REO market is limited, so the future benefit of the program may be more applicable to private financial institutions that choose to sell their inventory in this manner.”

Pilot Objectives

Gauge investor appetite for a new asset-class – scattered site single family rental housing – as measured by how much investors are willing to pay.

Determine whether the disposition of properties in bulk presents an opportunity for well-capitalized investors to partner with regional and local property management companies and other community-based organizations to create appropriate economies of scale, yet provides civic-minded approaches that can stabilize and improve market conditions.

Assess whether the model can be efficiently replicated to make it a worthwhile addition to the standard retail and small-bulk sales strategies in place at the Enterprises and other financial institutions with large inventories of properties to sell.

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

Couple admit taking items from, vandalizing their former home - Stockton Short Sale Specialist

Sat, 05 May 2012 20:37:19 GMT

Couple admit taking items from, vandalizing their former home - Stockton Short Sale Specialist

By The Record

April 23, 2012 12:00 AM

STOCKTON — A Stockton couple pleaded guilty to stealing and vandalizing more than $20,000 worth of fixtures from the home they lost in foreclosure.

Greg Alan Wright, 41, and his wife, Sandy Wright, 48, were in default on their two mortgages for nearly two years and were unable to sell their home in a short sale, selling the home for less than the loan amount.

Greg Wright was sentenced to five years' felony probation and 270 hours of community service after pleading no contest to removal of attachments or fixtures from mortgaged or encumbered real property, a felony that carries a maximum prison term of three years. He also pleaded guilty to a vandalism misdemeanor.

Sandy Wright was sentenced to three years' probation and 270 hours of community service after pleading no contest to a vandalism misdemeanor.

Real estate fraud prosecutor James Lewis said homeowners risk criminal prosecution if they vandalize the home or take the fixtures once it is no longer theirs.

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

Mortgage Debt Relief Action extension? - Stockton, Lodi, Pleasanton Short Sale Negotiator Specialist

Tue, 01 May 2012 11:36:16 GMT

What an Extension of the Mortgage Debt Relief Act Could Mean

04/27/2012 BY: ESTHER CHO (DSNews.com)

According to a preliminary report released by LPS, 2,060,000 properties are in foreclosure inventory. As of the end of the 2011 fourth quarter, 11.1 million borrowers were reported to be underwater, according to CoreLogic.

That’s a lot of potential debt to be forgiven, and through the Mortgage Debt Relief Act of 2007, homeowners get a break from paying taxes on their forgiven debt – whether it was forgiven through a short sale, foreclosure, or a modification. The act though, is set to expire at the end of this year.

“The scheduled expiration of the mortgage debt relief law means a whole lot of uncertainty for a whole lot of underwater homeowners who are in the process of foreclosure,” said Lance Denha, Esq., of the Law Offices of Lance Denha.

If extended, this could lead to thousands in savings for the individual borrower. For example, depending on one’s tax bracket, every $10,000 in forgiven debt could incur as much as $1,500 to $3,500 in federal taxes. Thus, if $100,000 in mortgage debt is forgiven after a foreclosure, this could mean $15,000 to $35,000 in taxes owed for the borrower.

The Law Office of Lance Denha warned that rushing to hand over a deed before the December 31 expiration date could become a mistake though if Congress ends up extending the debt relief act, which it may.

“Obama did include it in his budget, to extend it to 2014,” said Mark Luscombe, a principal analyst for tax research firm CCH, in a statement. “Congress….. might decide it’s not as crucial as extending the tax breaks that already expired at the end of last year.”

That doesn’t mean Congress won’t eventually act to extend the relief, Luscombe said.

“Usually the only fight about these things is finding a way to pay for it,” he said.

The administration is proposing to extend the act until January 1, 2015.

The criteria to have forgiven debt excluded as taxable income is the debt must be from a primary residence, and the debt must be used to buy, build or substantially improve a primary residence.

Also, the exclusion applies only to acquisition debt up to $2 million, or $1 million for married taxpayers filing separately.

The Law Office of Lance Denha is a multistate law firm that helps defend wrongful foreclosures against homeowners.

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

City of Stockton, California worst foreclosure rate in the nation

Mon, 30 Apr 2012 08:56:07 GMT

City of Stockton worst foreclosure rate in the nation ... per RealtyTrac. Stockton Short Sale Negotiator Specialist

With one out of every 60 homes in some level of foreclosure, the Central Valley city of Stockton has the worst foreclosure rate of any city in the nation, according to real estate information company RealtyTrac Inc. of Irvine.

It’s not the first time the inland seaport has held the dubious honor; it is the epicenter of the nation’s housing meltdown. Stockton’s foreclosure rate in the first quarter was three times the national average, says RealtyTrac. There were a total of 3,912 Stockton properties with foreclosure filings in the first quarter.

There is some good news, however. The number of foreclosures was down 13 percent from the fourth quarter of 2011 and down 19 percent from the first quarter of 2011.

Nearby Modesto posted a foreclosure rate that was fractionally lower than the foreclosure rate in Stockton -- giving Modesto the nation's second highest metro foreclosure rate.

Ten other California cities joined Stockton and Modesto among the nation's Top 20 metro foreclosure rates: Riverside-San Bernardino (No. 3), Vallejo-Fairfield (No. 4), Merced (No. 5), Sacramento (No. 6), Bakersfield (No. 7), Visalia-Porterville (No. 10), Fresno (No. 12), Oxnard-Thousand Oaks (No. 14), Chico (No. 18), and Santa Rosa-Petaluma (No. 20).

Reporting one in every 82 housing units with a foreclosure filing in the first quarter, the foreclosure rate in the Las Vegas-Paradise metro area dropped to eighth highest nationwide thanks to a substantial drop-off in foreclosure activity, says RealtyTrac. A total of 10,192 Las Vegas properties had a foreclosure filing during the quarter, down 26 percent from the fourth quarter and down 61 percent from the first quarter of 2011.

A total of 20,787 properties in the Phoenix-Mesa-Scottsdale, Ariz., metro area had a foreclosure filing in the first quarter, down 5 percent from the previous quarter and down 43 percent from the first quarter of 2011. That gave Phoenix the nation's ninth highest metro foreclosure rate for the quarter: one in every 87 housing units with a foreclosure filing.

Other metro areas with foreclosure rates among the Top 20 included Atlanta (No. 11), Miami (No. 13), Orlando (No. 15), Rockford, Ill. (No. 16), Chicago (No. 17), and Prescott, Ariz. (No. 19).

First quarter foreclosure activity nationally increased from the previous quarter in 114 out of the nation's 212 metropolitan areas with a population of 200,000 or more.

First quarter foreclosure activity increased from the previous quarter in 26 out of the nation's 50 largest metro areas, led by Pittsburgh (up 49 percent), Indianapolis (up 37 percent), Philadelphia (up 30 percent), New York (up 24 percent), Raleigh, N.C. (up 23 percent), and Virginia Beach, Va. (up 22 percent).

The biggest quarterly decreases in foreclosure activity among the 50 largest metro areas were in Portland, Ore. (down 28 percent), Las Vegas (down 26 percent), Providence, R.I. (down 24 percent), Salt Lake City (down 22 percent), Boston (down 21 percent), and San Jose (down 21 percent).

"First quarter metro foreclosure trends were a mixed bag," says Brandon Moore, chief executive officer of RealtyTrac. "While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter -- an early sign that long-dormant foreclosures are coming out of hibernation in many local markets."

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

Mortgage Default Options - Stockton, Lodi, Pleasanton Short Sale Negotiator Specialist

Sun, 29 Apr 2012 09:38:47 GMT

Mortgage Default Options - Stockton Lodi Tracy Pleasanton Short Sale Negotiator Specialist

Escape Your Unmanageable Mortgage: Getting free doesn’t have to mean running away.

Perhaps you have heard about it.

On the news, a reporter tells a story about how the housing crisis has caused some homeowners to simply walk away from their homes. It sounds crazy, but many people are being led to believe that walking away from their home is a good (or even the best!) option.

It is called Strategic Default. For distressed homeowners who believe that they have no good choices left, the idea of walking away free of consequence may sound like a relief. The reality, however, is that choosing strategic default has serious repercussions on your credit.

THERE ARE BETTER OPTIONS AVAILABLE!

As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially-challenged homeowners with options to escape from unmanageable mortgages without running away.

Facing your problems head-on is always the best solution. Let me help.

Bob Peralta
24 Years as a California Licensed Real Estate Broker
A+ Reliability Rating with the Better Business Bureau

Housing Short Sale Negotiator Agent
Certified Distressed Property Expert (CDPE)
Making Homes Affordable Specialist (HAFA)

Cancelled Debit is Income - Short Sale Foreclosure

Mon, 02 Apr 2012 23:18:55 GMT

Cancelled Debt is Income - Mortgage Debt Relief Act of 2007 - posted by Stockton Lodi Short Sale Negotiator Specialist Agent

Canceled debt is income

Many people lost their jobs during the recession, and that, coupled with the large decreases in home values, has caused a great number of borrowers to default on their debts.

When a person fails to pay their mortgage, car loan, credit card or other debt, and the lender cancels the debt, it often has tax consequences for the borrower. Except for under certain circumstances, canceled debt is considered income. It is very important to give an accurate account of any debt cancellation when filing your income tax return, and to understand which circumstances trigger tax liability.

When a financial institution cancels a debt of $600 or more, by law it must send you and the IRS a 1099-C tax form, which contains information regarding the canceled debt. If the canceled debt in question is a mortgage, you may be in luck. Under the Mortgage Debt Relief Act of 2007, if your mortgage debt on your primary residence was canceled in the years 2007 through 2012, the forgiven amount will not be counted as income. Note: This law applies only to primary residences, not to second homes, credit card loans, car loans or any other loans.

The act allows you to exclude the canceled debt from your income if the financial institution modified the terms of your mortgage, or has foreclosed on your principal residence. The act applies only to forgiven or canceled debt to buy, build or substantially improve your primary residence, or to refinance debt incurred for these purposes. (In other words, if you refinanced your house and used the money to pay your kids’ college tuition, that debt, if canceled, is not exempt under the law.) The maximum amount of indebtedness that can be excluded is $2 million per year, or $1 million for separate filers.

The amount of foregiven debt must be reported on IRS Form 982. Instructions for filling out the form is contained in Publication 4681.

There are situations, aside from those provided for in the Mortgage Debt Relief Act, in which you do not have to report the canceled debt as income. If you filed for bankruptcy under title 11, nonbusiness debts incurred can be excluded from income. Another exception is if you were insolvent at the time the debt was canceled. According to the IRS, you are insolvent “when your total debts exceed the total fair market value of all of your assets. Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts.” To demonstrate that you were insolvent, you need to enter the relevant information on Form 982. You should seriously consider using an experienced tax professional such as a CPA or enrolled agent to assist you regarding submitting Form 982.

According to IRS Taxpayer Advocate Nina Olson, there have been a significant number of errors in 1099-C forms issued to taxpayers. In her 2010 report to Congress, Olson indicated that inaccurate reporting of canceled debt to taxpayers was a serious problem. If you receive a 1099-C that you believe is inaccurate, you should definitely write to the lender, by certified mail requesting receipt of delivery, documenting why you believe the 1099-C is inaccurate. In the event that the creditor does not correct the form, you will need that information when you file Form 982 to the IRS. In addition, you should compile and maintain all documentation that you will need to satisfy IRS requirements. Specifically, this should include bankruptcy records, and/or all records that would document that you were insolvent at the time the debts were canceled.

If you did receive a 1099-C, make sure you file the proper forms with the IRS. The IRS receives the 1099-C also, and if you do not include that information on your tax return, the IRS will certainly question why you ignored it.

$25 Billion National Mortgage Settlement - $2,000 - Short Sale Negotiator

Sat, 24 Mar 2012 17:43:39 GMT

$25 Billion National Mortgage Settlement - posted by Stockton Short Sale Negotiator

Which Line is for the $2,000 Payment?

In February, US Attorney General Eric Holder announced the unprecedented $25 billion national mortgage settlement with the five largest banks in the US. One of the provisions of the settlement is a $2,000 payment to homeowners who lost their homes to foreclosure.

A month later, people are asking, “When am I going to get my check?”

The answer is, “It depends.”

One thing is for certain. It won’t be this week or this month. It will take up to two months to select an administrator and six to nine months to actually get the ball rolling.

Then you have to meet a few other requirements.

Did Bank of America, Citigroup, JPMorgan Chase, Wells Fargo or Ally Financial service your loan? If so, good, because the settlement only applies to them. But even then, you’ll only qualify if your loan was NOT a government-backed mortgage (such as FHA, VA, Fannie Mae and Freddie Mac loans), and which account for over half of home mortgages.

Did you lose your house between Jan 1, 2008 and Dec 31, 2011? If so, good, because the settlement only covers those four years. (This period is for when the house went back to the bank or an investor, not the loan origination date, as some reports indicate.)

Are you feeling lucky? The $1.5 billion set aside for these payments will cover 750,000 borrowers. We have no numbers on how many foreclosures these five lenders completed from 2008 to 2011, but there were roughly 3.8 million foreclosure sales during that period, over five times as many as will receive payments.

According to the national mortgage settlement site, eligible borrowers will be contacted. Given that everyone who is entitled to these checks has lost their home and have now moved, it will be interesting to see if they can actually find you. Hopefully you filled out a Change of Address with the US Postal Service.

Other provisions of the settlement include:

$3 billion for refinancing lower interest rates for homeowners who are current on their payments but are underwater on their loan.

$17 billion for principal reduction and short sale assistance for homeowners who are in default.

While this “unprecedented” settlement will certainly help a few individuals, it is, as we’ve said before, an absolutely meaningless amount of money when compared to the $4 Trillion in excess mortgage debt that created during the credit bubble.

Major Changes Announced for HAFA - Pleasanton Livermore Short Sale Negotiator Agent

Wed, 21 Mar 2012 13:52:59 GMT

Major Changes Announced for HAFA - Pleasanton Livermore Short Sale Negotiator Agent

Major news in the short sale and housing industry! On Friday, March 9, the Obama Administration announced updates to the Home Affordable Foreclosure Alternative (HAFA) program. Created in 2009, HAFA is a government-sponsored initiative assisting all Home Affordable Modification Program (HAMP) eligible homeowners in avoiding foreclosure through short sales and deed-in-lieus.

The HAFA updates will go into effect on June 1, 2012, and will allow more distressed homeowners to seek assistance. Most importantly, the deadline for submitting for HAFA eligibility will be extended a full year, from December 31, 2012, to December 31, 2013.

Other major changes from March’s updates to the HAFA program include:

The removal of occupancy requirements. Previously, HAFA required homeowners to have lived in the property within the last 12 months.

$3,000 relocation incentives will be limited to properties occupied by an owner or tenant at the time of the short sale.

Mortgage payments will be allowed to exceed 31% of the homeowner’s gross monthly income. This update will allow a homeowner to stay current on her mortgage and still qualify, minimizing the overall impact to her credit.

Secondary lienholders may receive up to a maximum of $8,500, up from $6,000 previously.

And one of the most dramatic changes: The Credit Bureau Reporting will be Account Status Code 13 (paid or closed account/zero balance) or 65 (account paid in full/a foreclosure was started), as applicable.

With these updates, a homeowner can be current on their mortgage, qualify for HAFA, continue to make their payments, and execute a short sale with minimum impact on their credit!

First and Second Lien Holders to Share Losses Through Settlement

Wed, 21 Mar 2012 09:38:36 GMT

First and Second Lien Holders to Share Losses Through Settlement

Details of the $25 billion settlement involving state and federal officials and the five largest servicers will change how liens are prioritized, and in turn, opponents say, will benefit banks but hurt investors.

Typically, in cases involving delinquent loans, the second liens are written off before a first lien takes any losses. Under the settlement, first and second liens will share in the losses equally, with both getting written down proportionally instead of wiping out the second lien, which tends to yield a higher return since it includes a higher risk.

“Efforts to modify first liens only, or to modify firsts and seconds in proportion, are, in effect, transfer from the first lien holder to the second,” said Mark Calabria, director of financial regulation studies at the Cato Institute in his written testimony during a hearing Thursday. “We should reject such transfers, as they violate the basic principles of contract and property.”

Citing a CoreLogic report, Calabria said 11.1 million borrowers are underwater, and of those, 4.4 million have both first and second mortgages.

“The average LTV [loan-to-vale] of these borrowers is 138 percent, implying that in the event of a foreclosure, the second lien would likely have little, if any value,” Calabria said in his testimony.

More often than not, Calabria said the first lien holders are the investors, whether its pension funds and such, and second lien holders tend to be banks.

Although a proponent of principal reduction, Laurie Goodman, senior managing director of Amherst Securities, said she agreed with what Calabria had to say about the issue during the hearing.

“The attorney general settlement scares me a great deal because essentially banks are getting credit for writing down investor loans,” said Goodman.

Foreclosure Roulette - A game of extend and pretend

Mon, 19 Mar 2012 21:33:50 GMT

Foreclosure Roulette – A game of extend and pretend

By Sean O'Toole | Aug 12, 2010

Posted by Livermore Tracy Pleasanton Short Sale Negotiator Specialist Agent.

(This opinion was posted over 17 months ago yet it still is indicative of what is going on in the housing market).

I spoke last week at a real estate investment club and shared with the audience my belief that foreclosures will trickle out over a very long time rather than come as a wave of foreclosures as others continue to inaccurately predict.

I do however, understand the nature of those predictions. Given the number of households that aren’t paying their mortgage (delinquencies) we should be seeing a massive wave of foreclosure notices, and ultimately foreclosure sales. It’s a logical conclusion. But this has become a political problem in a world of financial fantasy, so I don’t believe that simple logic applies.

The reality is that through financial engineering (interest only, subprime, swaps, option ARMs, negative equity, stated income, etc.,) we created trillions in excess mortgage debt that has left millions of homeowners underwater, financial institutions on the brink of collapse, and the FDIC nearly insolvent. Back in September 2008 it became clear that financial collapse was imminent, and the federal government did what it does best – bailed out those who caused the crisis while leaving taxpayers holding the bag for the losses. Pulling this hat trick off required one simple ruse – getting everyone to believe that those losses ultimately wouldn’t be very big.

To do this the government changed the rules. The FDIC who previously forced banks to get bad assets off their books became a leading proponent of saving homeowners with loan modifications that likely just delay the inevitable. With a little government pressure, the supposedly independent Federal Accounting Standards Board was pressured into letting banks account for loans at theoretical values based on computer models rather than current market value.

Next they began rolling out an acronym soup of programs, which they promoted as being help for America’s homeowners – HAMP, HAFA, HARP, 2MP and more. But the reality is that to date these programs have resulted in little more than delays. The government and lenders say that these failures are due to complexities of implementation, difficulty reaching homeowners and a sundry other things. But what if these programs were never intended to succeed? What if they were simply intended to create delays, provide false hope, and maybe get the banks a bit more cash out of homeowners in the form of trial loan modification payments?

Sounds like a crazy conspiracy theory, I know, but hear me out.

The problem faced by both lenders and the government is that they can neither afford to kick homeowners out, or bail them out. For lenders, either scenario forces losses to be recognized, while thanks to mark-to-model accounting rules, and little or no pressure to foreclose from the FDIC, they can instead leave non-paying homeowner in place and push those losses into the future. Many believe that most major corporations manage earnings, what could be more perfect than getting to choose when, and if, they recognize mortgage related losses. For the U.S. government either scenario is political death. Politicians have no appetite for allowing banks to put families on the street en masse through foreclosure, nor forcing banks to deal with the problem through bankruptcy cram-downs or other means. At the same time they realize their constituents who do pay their mortgage (or rent) simply won’t stand for a taxpayer funded bailout of their upside down neighbor. Instead, it seems they believe bailouts should be saved for the truly deserving like the executives and corporate shareholders of banks, AIG, GM, etc.

If we aren’t willing to either kick non-paying homeowners out of their homes, or bail them out, what other option is there? The answer is clear. It’s the same thing we’ve done with national deficits for years. Trade tomorrow for today, with a policy of extend and pretend. I have no doubt this is the present policy, and that this will be the policy for years to come as we work through wiping out the trillions in excess negative equity that was created during the bubble.

A member of the audience during my talk asked if this policy was really possible, after all we can’t just let non-paying homeowners stay in their homes forever. If paying homeowners figured that out, everyone would stop paying, and then our financial system would crumble. I agree, and it’s clear the banks realize this too. But it is a problem that is easily solved by the diabolical game of Russian roulette. So long as lenders continue to foreclose on at least a handful of homeowners each month, in what from all appearances is a completely random game of chance, they’ll keep those willing and able to pay their mortgage doing so. Those who decide not to pay their mortgage will find themselves playing today’s update on the Russian game, Foreclosure Roulette, wondering each month whether they’ll get another free month in their prison of debt, or finally be shot and forced to move.

Bank of America to reduce loans for homeowners - Tracy, California Short Sale Specialist Agent - Bob Peralta

Sun, 11 Mar 2012 08:35:17 GMT

Bank of America to reduce loans for homeowners - posted by Tracy, California Short Sale Specialist Agent Negotiator - Bob Peralta

NEW YORK (AP) — Bank of America is providing mortgage relief to about 200,000 homeowners. March 09, 2012 9:15 AM

Homeowners that qualify are those whose home values have fallen below what they owe on their mortgages. Bank of America will reduce the amount owed by the homeowners by as much as $100,000 in some cases. Only mortgages that are currently owned by Bank of America will qualify. Those that are owned by government entities Fannie Mae and Freddie Mac, or backed by the Federal Housing Administration will not be eligible.

The move will help the bank reduce the amount of penalties it owes to the government's Housing & Urban Development agency by $850 million.

The penalties were part of a broader $25 billion settlement announced Feb. 9 by federal and state attorneys general and the largest mortgage lenders in the country to resolve investigations into abusive home lending and fraudulent foreclosure practices.

About 11 million American households are "underwater" on their mortgages, meaning they owe more than their homes are worth. The broader settlement with five mortgage lenders is expected reduce loans for only about 1 million of those Americans and send checks to others who were improperly foreclosed upon.

Of the five major lenders, Bank of America's penalties were the highest: $11.8 billion.

The settlement ended a painful chapter of the financial crisis, when home values sank and millions edged toward foreclosure. Lender abuses exacerbated the crisis. Many companies processed foreclosures without verifying documents. Some employees signed papers they hadn't read or used fake signatures to speed foreclosures, a practice known as robo-signing.

In the fall of 2010, Bank of America along with other large lenders temporarily halted foreclosures after a furor over robo-signed documents.

Details of Bank of America's and other mortgage lenders' plans to help homeowners as part of the settlement will be contained in court documents that are expected to be filed Friday.

Bob Peralta
24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
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Foreclosures made up one in four home sales

Mon, 05 Mar 2012 08:32:45 GMT

Foreclosures made up one in four home sales - published by Bob Peralta, Short Sale Housing Negotiator - Stockton, Tracy, Lodi, Livermore, Pleasanton, Modesto

NEW YORK (CNNMoney) -- Homes in some stage of foreclosure accounted for nearly one in four homes sales during the fourth quarter, according to RealtyTrac.

During the three months that ended December 31, homes that were either bank-owned or going through the foreclosure process accounted for 24% of all home sales, up from 20% in the previous quarter and down only slightly from a year earlier when foreclosures accounted for 26% of sales, RealtyTrac said.

In total, 204,080 distressed properties were purchased during the fourth quarter, down 2% from the year-ago quarter. For all of 2011, foreclosure-related sales were down 2% year-over year to 907,138, accounting for 23% of all home sales.

"Sales of foreclosures in the fourth quarter continued to be slowed by questions surrounding proper foreclosure paperwork and procedures," said Brandon Moore, chief executive officer of RealtyTrac, referring to the delays cause by the robo-signing scandal that broke in late 2010. "Even so, foreclosures accounted for nearly one in every four sales during the quarter and for the entire year."

"We expect to see foreclosure-related sales increase in 2012, particularly pre-foreclosure sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage servicing gridlock over the past 18 months," said Brandon Moore, CEO of RealtyTrac.

Short sales on the rise

Short sales are starting to become the preferred method for banks to dispose of properties in default. In short sales, borrowers who owe more on their mortgages than their homes are worth agree with their bank to sell their homes at the lower market value. In return, the bank agrees to absorb the loss.

During the last quarter of 2011, there were more than 88,000 short sales, up 15% compared with a year earlier, according to RealtyTrac. Short sales comprised 10% of all homes sold during the quarter.

Meanwhile, sales of bank-owned homes fell 12% year-over-year to 116,000, comprising 13% of all sales during the quarter.

Steal this house: 7 foreclosure deals

"That trend will likely show up in more local markets in 2012 as lenders recognize short sales as a better option for many of their non-performing loans," said Moore.

Short sales have become a more attractive option since all parties agree on the terms, leading to fewer legal issues, said Daren Blomquist, RealtyTrac's director of marketing.

They also offer better returns. During the quarter, the average short sale sold for $184,221, while the average foreclosure sold for $149,686. And banks typically don't have to spend a mint maintaining a short sale home like they do a foreclosure, where they have to pay more in legal fees, property taxes, maintenance and insurance, said Blomquist.

Short sale deals also get completed more quickly. During the fourth quarter, it took an average of 308 days, to complete a short sale. Foreclosures, meanwhile, can take years to complete.

Quicker approvals mean fewer buyers get discouraged and withdraw their offers. Blomquist said some banks even pre-approve prices so deals close very fast.

Short sales already outnumber REO sales in several "bellwether markets," including Los Angeles and Phoenix, where, in both cities, they exceeded 20% of all sales.

Million-dollar foreclosures rise as rick walk away

Some lenders have even incentivized short sales in Florida and other hard-hit foreclosure states. They offer large cash rewards -- as much as $35,000 -- to delinquent borrowers in return for co-operating on these transactions.

Distressed properties continue to make up a large portion of the sales inventory in many housing markets. In Nevada, they accounted for 56% of all sales during the quarter, the highest percentage of any state.

California foreclosure-related sales claimed a 43% share, Georgia 39%, Arizona 38% and Michigan 33%.

Bob Peralta
24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
Email

Does Fannie or Freddie Own Your Loan?

Wed, 08 Feb 2012 07:33:53 GMT

Does Fannie or Freddie Own Your Loan?

If your mortgage is owned by Fannie Mae or Freddie Mac, you may be eligible for a Home Affordable Refinance and take advantage of lower interest rates.

You can find out if Fannie Mae or Freddie Mac owns your loan directly by clicking on the links below.

1-800-7FANNIE (8am to 8pm EST)
www.fanniemae.com/loanlookup

1-800-FREDDIE (8am to 8pm EST)
www.freddiemac.com/mymortgage

Your mortgage company can also tell you who owns your loan.Click here to contact your mortgage company.

After finding out whether your mortgage is owned by Fannie Mae or Freddie Mac, see if you may be eligible for a Home Affordable Refinance by clicking on the links below.

Find out if you may be eligible
Understanding your mortgage statement

Bob Peralta

24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
Email

Avoid Foreclosure: Know Your Options

Wed, 01 Feb 2012 09:15:51 GMT

Avoid Foreclosure: Know Your Options - Bob Peralta, a California Licensed Real Estate Broker for over 24 Years, helps homeowners and investors avoid foreclosure anywhere in California including Stockton, Lodi, Tracy, Mountain House, Livermore, Pleasanton, etc.

Click here to verify Bob Peralta's A+ Reliability Rating with the Better Business Bureau. Call Bob Peralta @ 209-401-3572 for a free confidential assessment of your particular situation.Bob Peralta

24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
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Appraisal Institute Offers Guidance on Distressed Comparables

Wed, 01 Feb 2012 08:22:17 GMT

Foreclosures Short Sale Comparables

The Appraisal Institute recently released guidelines to instruct its members on how to deal with distressed sales and foreclosures when seeking comparables.

According to the Institute, some homeowners claim appraisers have undervalued their homes by relying on nearby foreclosed homes and distressed sales as comparables to their properties.

In a recent announcement about the new guidance, the Appraisal Institute states that qualified appraisers “know what adjustments to make, if any, when using distressed sales as comparables, for such methods are taught in basic coursework and updated seminar materials available to professional appraisers.”

Regardless, because the issue is “particularly crucial” in the current market where distressed sales are common, the Institute is offering additional guidance.

The new guide instructs appraisers to rely on less recent sales and broaden their geographic parameters when they cannot find an appropriate comparable within the traditional boundaries.

In general, “foreclosures and short sales usually do not meet the conditions outlined in the definition of market value,” the Institute says.

Short sales may involve “atypical seller motivations,” and foreclosed properties may be damaged or deteriorating. However, “appraisers cannot categorically discount foreclosures and short sales as potential comps in the sales comparison approach,” the institute states.

“As is always the case in selecting sales to use as comparables, appraisers must investigate the circumstances of each transaction, including whether atypical motivations were involved, sales concessions were involved, the property was exposed on the market for a typical amount of time, the marketing program was typical, or the property condition was compromised,” the guidelines state.

When using distressed sales as comps, appraisers must assess all aspects of the sale and decide whether it is appropriate to make an adjustment due to uncommon conditions.

Bob Peralta

24 Years as a California licensed Real Estate Broker

click here to verify A+ Reliability Rating with the Better Business Bureau

Member of the National Association of Realtors

Member of the California Association of Realtors

Member of the Lodi Association of Realtors

Certfied Short Sale Negotiator Specialist (HAFA)

Certified Distressed Property Expert (CDPE)

Certified Investor Agent Specialist _ (CIAS) designation

Email

California Foreclosure Process - Stockton Lodi Real Estate Short Sale Specialist

Sat, 17 Dec 2011 09:50:58 GMT

California Foreclosure Process posted by Stockton Lodi Tracy Short Sale Specialist Agent Negotiator Bob Peralta at Grupe Real Estate

Start of foreclosure process. Initial notice recorded after borrower fails to meet the terms of their loan.
CC 2924c.(a)(1)

Sets auction date. Can be recorded 3 months after Notice of Default
CC 2924 c. (b)(1)

Initial auction date can be just 20 days after Notice of Trustees Sale is recorded.
CC 2924 f. (b)(1)

Auctions can postpone for up to one year.
CC 2924 g. (c)(1)

More information on Postponement Reasons

Transfers property to winning bidder. By default this will be the lender if no bid higher than the lender's opening bid is received.
CC 2924 h. (c)

Properties are considered to be in Preforeclosure from the filing of the initial Notice of Default until the property is sold at auction. During this period investors can purchase the home directly from the owner, Realtors can list the home, and Lenders can help them refinance.

Auction properties have had a Notice of Trustee Sale filed setting an auction date, and have not yet been sold or cancelled. Investors can purchase the home at auction; and Realtors® and Lenders can monitor their client's properties, to ensure their listing and loan activities are completed before the auction.

Bank owned properties received no bid at auction, resulting in the bank taking ownership. These properties are commonly referred to by the banks as REO's (Real Estate Owned). Investors can purchase these properties directly from the bank; and Realtors® can solicit the listing, since banks will almost certainly market the property for sale.

Opportunity	Traditional Financing	Subject-To Financing	Title Insurance	Inspections	Eviction Required	Overall Risk
Preforeclosure	Yes	Yes	Yes	Yes	No	Low
Auction	No	No	No	No	Maybe	High
Bank Owned	Yes	No	Yes	Yes	No	Very Low

Start of foreclosure process. Initial notice recorded after borrower fails to meet the terms of their loan.
CC 2924c.(a)(1)

Sets auction date. Can be recorded 3 months after Notice of Default
CC 2924 c. (b)(1)

Initial auction date can be just 20 days after Notice of Trustees Sale is recorded.
CC 2924 f. (b)(1)

Auctions can postpone for up to one year.
CC 2924 g. (c)(1)

More information on Postponement Reasons

Transfers property to winning bidder. By default this will be the lender if no bid higher than the lender's opening bid is received.
CC 2924 h. (c)

Bob Peralta

24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation

Email

Stockton retains dubious No. 1 foreclosure ranking

Thu, 15 Dec 2011 20:07:07 GMT

Stockton retains dubious No. 1 foreclosure ranking - posted by Stockton - Lodi Short Sale Specialist Real Estate Agent Negotiator Broker

Median price falls 8% to $150,000

The Record

For the second month in row, Stockton had the nation’s highest metro foreclosure rate.

One in every 120 housing units was hit with a foreclosure filing during November. Stockton’s level of foreclosures is nearly twice the rate for the state, according to figures released Wednesday by RealtyTrac, which follows foreclosure activity nationwide.

There were 1,913 Stockton properties with a foreclosure filing in November, up 20 percent from the previous month and up 9 percent from November 2010. The increase in Stockton was driven largely by a 65 percent monthover- month increase in scheduled foreclosure auctions.

Distressed-property sales — the combination of foreclosure resales and short sales — continued to make up more than half of California’s resale market, according to DataQuick, which monitors real estate activity nationwide.

In San Joaquin County, 877 new and resale homes and condos were sold last month, up 2 percent from a year earlier, DataQuick said, but the median price dropped 8 percent to $150,000. Of the total sales, 767 were existing homes.

The eight other California cities with foreclosure rates ranking among the top 10 all posted double-digit percentage increases in scheduled foreclosure auctions in November, ranging from a 37 percent month-over-month increase in Modesto to a 100 percent increase in Fresno.

Nationwide, new foreclosure filings last month fell 3 percent from October and were down 14 percent from November 2010. That’s not the trend in California and other states hard hit by the real estate meltdown. According to RealtyTrac co-founder James Saccacio, the respite is not a trend.

“Despite a seasonal slowdown similar to what we’ve seen in each of the past four years, November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year,” Saccacio said. The term REOs stands for real estate owned, which are properties that go back to a lender, typically a mortgage company, after an unsuccessful foreclosure auction.

“Scheduled foreclosure auctions reached a nine-month high in November, corresponding to a recent surge in default notices that began back in August,” he added. “Many of the new defaults that started the foreclosure process over the past few months are now being scheduled for public foreclosure auction.”

An estimated 32,669 new and resale houses and condos were sold statewide last month. That was down 4.2 percent from 34,087 in October and up 4.0 percent from 31,403 for November 2010, DataQuick reported Wednesday.

Bob Peralta
24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
Email

Bank of America - Transitioning From Your House

Wed, 30 Nov 2011 02:15:23 GMT

Bank of America - Transitioning From Your House

Print page

Although you’ll be transitioning out of your house, that does not necessarily mean going through foreclosure. Other solutions are available that may help you avoid eviction from—and the sale or auction of—the house that can occur during foreclosure. We can help you explore your options, as well as provide resources to help guide you through the transition.

Step 1. Understand the ways to avoid foreclosure

Short Sale

In a short sale, you sell your home and settle your mortgage debt for less than the amount you owe.

Generally takes less time to complete than a foreclosure, so your reported delinquency could be shorter
Credit may improve faster
You may be eligible for money to assist in relocation

Speak with a specialist
1.877.447.3994

9am - 5:30pm EST Mon-Fri

Get details

If you are unable to sell your home in a short sale, there's another option.

Deed in Lieu of Foreclosure

With a deed in lieu of foreclosure, you give your property's deed to the bank instead of going through foreclosure. It's often an easier process than a foreclosure, but it will still have a negative impact on your credit.
Learn More »

Track your progress with this checklist »

Step 2. Transitioning from your house

Community Resource Directory

There are thousands of non-profit groups and government agencies across the country ready to assist you with utilities, food and more.

Search by ZIP code

Resource Index

All the resources found in the Home Transition Guide are brought together for easy reference.

View now

Managing Your Budget

Transitioning out of your house means your financial picture will change considerably. Plan for your new situation more effectively.

Plan your budget

Track your progress with this checklist »

Bob Peralta
24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
Email

Suze Orman - Short Sale Information

Tue, 29 Nov 2011 09:23:30 GMT

Short Sale Information - Suzie Orman

New Tax Rules for Short Sales - Foreclosures

What is and is not a Short Sale?

There are a lot of words being thrown around today that require clarification. These include short sales, pre-foreclosure, foreclosure, sub-prime loans, deficiency judgments and taxes on the debt or deficiency.

The information below defines these terms and explains ways to deal with financial distress through short sales. Also outlined are the real differences between short sales and foreclosures so that homeowners can see the true benefits of a short sale.

A bank-owned house, or Foreclosure, is not a short sale. A seller deciding to lower their price and take less profit is not a short sale. To have a short sale, one of the parties has to be “shorted;” either the seller or the bank, and for the owner to qualify, a number of criteria must be met (see below).

A “short sale” occurs when the homeowner gets an agreement from the mortgage company to accept less than the full balance of the loan at closing. The homeowner closes on the property and the property is “sold short.” This occurs prior to a property entering the foreclosure process.

How Does A Homeowner Qualify for a Short Sale?
There are four criteria a homeowner must meet to qualify for consideration by the lender for a short sale. These are:

There must be a demonstrable financial hardship, e.g., a lost job or material change in the financial situation;
There must be a monthly shortfall;
There must be insolvency, meaning that the owner does not have the money to pay down the mortgage; and
The owner does not have any assets to sell to pay for the shortfall.

What is Considered an Acceptable Hardship to Qualify for a Short Sale?

There must be a hardship that is preventing the owner from being able to pay their mortgage. Examples include:

Loss of job
Business failure
Damage to property
Death of a spouse
Death of family members
Severe illness
Divorce
Mandatory job relocation,
Medical bills
Military service
Payment increase or Mortgage adjustment
Insurance or tax increase
Reduced income
Separation
Too much debt
Incarceration

What is the Insolvency Requirement to Qualify for a Short Sale?

The owner must not be able to pay down their mortgage. To qualify for a short sale, the homeowner must be financially insolvent. This means that they owe more than they have or that they do not have liquid cash or assets that could be used to buy-down their mortgage.

If the owner does have liquid cash or assets they will be expected to use them to pay down their mortgage. There could be a scenario where an owner made a contribution towards the sale of the property and the lender covers the shortfall.

A short sale is not a way to get out of a mortgage. It is a tool for a borrower to use when they truly can’t pay their mortgage.

Short Sales vs. Foreclosure: The Short Sale Option

Short Sales offer the homeowner many more benefits than going through a Foreclosure. In the case of a short sale, the benefits to the homeowner are:

Only late payments on the mortgage show on a credit report and after the sale of the home, the mortgage will be reported as paid or negotiated. This could lower a homeowner’s credit score by as little as 50 points if all other payments have been made. The affect of a short sale can be as brief as 12 to 18 months.
A Short Sale is not reported on a credit history. There is no specific reporting item for ‘short sale.’ The loan is typically reported as ‘paid in full, settled.’
A Short Sale on its own does not challenge most security clearances whereas a foreclosure does.
A Short Sale is not reported on a credit report and is therefore does not present a challenge to employment.
In some successful short sales it is possible to convince the lender to give up the right to pursue a deficiency judgment against the homeowner, (i.e., payment of the shortfall or the difference between what was owed and what the bank received.)
Under the Mortgage Forgiveness Debt Relief Act of 2007, if a deficiency is forgiven or cancelled, the home is a principal residence, and it is worth less than $2 million, the tax on the deficiency will be forgiven. This benefit applies to homes that are the subject of a Short Sale and a Foreclosure.
A homeowner who successfully negotiates and closes a short sale may be eligible for a Fannie Mae backed mortgage after only 2 yrs.
An Investor who successfully negotiates and closes a short sale may be eligible for a Fannie Mae backed investment mortgage after only 2 years.

Short Sales vs. Foreclosure: The Foreclosure Option

In a Foreclosure, homeowners fall behind in their payments and the bank typically repossess the house and sells it. In almost all cases, the bank pursues the homeowner for the deficiency. The only real way out of this type of situation is to file bankruptcy.

The Foreclosure process begins with the homeowner missing a payment. In fact, default on payment of the mortgage is the only way that a property can be subject to the foreclosure process. Once the lender decided to foreclose on the property, they must notify the homeowner that the process has been initiated. This can be done through the service of the document on the homeowner or by publishing the information in a legal journal. The notice tells the homeowner that the property will be put up for bank sale or auction and the date that this will occur.

In the case of a foreclosure, the homeowner:

Is ineligible for a Fannie Mae backed mortgage for a period of 5 years. (For an investor, this period is 7 years).
In any future loan application, the borrower has to disclose if they had a foreclosure in the last 7 years.
Foreclosure affects a homeowners credit score significantly. It can lower the score anywhere from 250 to 300 points and this can last for over 3 years.
Foreclosure remains as a matter of public record on a person’s credit history for 10 or more years.
Foreclosure can cause a person’s security clearance to be taken away and potentially their employment terminated.
Employers have the right to check an employee’s credit history. A foreclosure can be grounds for immediate reassignment or termination.
Employer’s ability to check an employee’s credit history can also affect a person’s ability to get employment.
In most foreclosures, the bank has the right to pursue a deficiency judgment or collection of the difference between what the homeowner owes and what the bank gets as a result of the sale. The one benefit today is that in the past, the shortfall was reported as income on a homeowners taxes, significantly increasing their tax burden. Due to the Mortgage Forgiveness Debt Relief Act, the tax burden is being forgiven for primary residences valued at less than $2 Million.

It is important to understand that if one payment is missed, this does not mean the foreclosure process will begin immediately. Foreclosure is a legal process process the lender must go through in order to take possession of the property. This process takes time and there are options.

Pre-Foreclosure – The Time for Opportunity

Pre-Foreclosure is the period of time between when a home owner has missed their first payment and the final bank sale date. This is the point at which a home owner is in the process but they have not yet lost control of the property. “This time period is critical since the owner can list the property for sale, sign contracts, and do what they can to avoid foreclosure.” (Certified Distressed Property Institute, 2008)

As outlined in the list above, there are numerous important reasons to avoid foreclosure. Don’t lose control of your property, serious affect your credit or adversely affect your employability. Once you know you are in distress, contact a Real Estate professional that is knowledgeable about Short Sales and working with the banks to help you avoid the impacts of foreclosure.

How I Can Help!

Even if you owe more than your home is worth, I can work with you and your mortgage lender to negotiate the sale of your home. This is called a Short Sale and I am experienced in the Short Sale process.

Short Sales

(eff. Jan. 1, 2011)
Discharge of balance of loan indebtedness after a short sale for residential 1-4 real property by holder of a first deed of trust

This new law prohibits a lender holding a first deed of trust (purchase money or refinance) for a dwelling of 1-4 units to demand a deficiency judgment (unpaid balance due on the loan) from the trustor or mortgagor (owner) who sells the dwelling for less than the remaining amount of the indebtedness due at the time of the short sale to which the lender has consented in writing.

However, if the owner commits either fraud with respect to the short sale, or waste with respect to the secured real property, then the lender may seek damages and use existing rights and remedies against the owner or any third party for fraud or waste.

Note that this law doesn't apply if the trustor or mortgagor is a corporation or political sudivision of the state.

Adds Section 580e to the Code of Civil Procedure.

Short Sale v. Judicial Foreclosure
Homeowner (1 to 4 units) Generally Protected Against Deficiency

Type of Loan	After Short Sale	After Judicial Foreclosure*
First Trust Deed	Yes	Yes, if purchase-money and owner-occupied
Second Trust Deed	No	Yes, if purchase-money and owner- occupied
Purchase Money Loan	Yes, if first trust deed	Yes, if owner-occupied
Rate-and-Term Refinance	Yes, if first trust deed	No
Cash-Out Refinance	Yes, if first trust deed	No
Owner-Occupied Home	Yes, if first trust deed	Yes, if purchase money
Nonowner-Occupied Home	Yes, if first trust deed	No

Bob Peralta
24 Years as a California licensed Real Estate Broker
A+ reliability rating with the Better Business Bureau
Member of the National Association of Realtors
Member of the California Association of Realtors
Member of the Lodi Association of Realtors
Certfied Short Sale Negotiator Specialist (HAFA)
Certified Distressed Property Expert (CDPE)
Certified Investor Agent Specialist _ (CIAS) designation
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New Ways to Use Less Energy at Home Concrete countertops? Blown fiberglass insulation? The payback may be quicker than you think.

Sat, 26 Nov 2011 21:06:23 GMT

New Ways to Use Less Energy at Home posted by Stockton Lodi Tracy Certified Investor Agent Specialist.

Concrete countertops? Blown fiberglass insulation? The payback may be quicker than you think.

By JIM CARLTON

For new-home buyers, green is the color of money.

More in Environment

The share of homes being built in the U.S. with environmentally friendly features jumped to 16% of single-family starts last year from 2% in 2006, says McGraw-Hill Construction, a market-research firm in New York. Fueling the trend, industry officials say, is a desire to save energy at a time of high fuel costs. Indeed, in a recent survey, 93% of builders named increased energy efficiency as an important green practice—far more than cited any other benefit.

"People understand energy efficiency because it's easy to measure," says Michele Russo, director of green content at McGraw-Hill, a unit of McGraw-Hill Cos. "They get that bill all the time."

Green homes generally cost anywhere from 2% to 10% more than a typical home, depending on the features included, though the difference is shrinking. About 4%, or $14,000, of the cost of a $398,000 home purchased last year by Keith and Rebecca Sorensen was for green features, including a solar water heater and added insulation, says Michael Chandler, who built the three-bedroom residence in Chapel Hill, N.C. But the couple says their energy bill has been cut by two-thirds from their previous home. The roughly $200 a month in savings means the Sorensens' green premium will be paid off in about six years.

"We're kind of tree-huggers, if you want to call us that, but I hate spending a lot of money hurting the environment," says Mr. Sorensen, 38, an accountant.

Many of the latest practices in green building revolve around ways to make homes use less energy. Here's a look at some recent innovations.

Blown Fiberglass Insulation

Blowing fiberglass between walls, rather than installing matted sheets, is a relatively new technique for addressing one of the best ways to improve the efficiency of a home: making sure it's properly insulated.

Johns Manville

Blown fiberglass insulation is more effective than traditional batts

"After all, it doesn't make any sense to outfit a home with all of these great new, highly efficient technologies and then have it in a home that leaks like a sieve," says Michelle Desiderio, director of the green buildings program at the NAHB Research Center, part of the National Association of Home Builders, in Upper Marlboro, Md.

The old standard in walls was fiberglass sheets, or "batts," but they often didn't keep rooms sealed very tightly. That led to a slew of competing products in recent years, such as cellulose, or recycled paper, and polyurethane spray foam, which provide more insulation because they are blown in to fill all the nooks and crannies between walls, Ms. Desiderio says.

The fiberglass industry has fought back with new products that have insulation values rivaling cellulose and spray foam, without the potentially harmful chemicals they may contain. (Officials of those latter two industries say that toxicity is an issue only when the materials are being installed, and that workers are instructed to wear appropriate safety equipment to avoid exposure.) One technique has been to design a system of blowing fiberglass into wall cavities, such as the JM Spider Custom Insulation System from Denver-based Johns-Manville Corp.

Builders who have switched back to fiberglass say that while the blowing technique costs as much as 40% more than using the batts, it's up to 50% cheaper than using spray foam. Cellulose costs about the same as blown-in fiberglass, but unlike the Spider fiberglass it can hold moisture, says Stephen Crouch, a residential market manager for Johns-Manville.

Green-building experts say the higher insulation costs will eventually be offset by the home's overall energy savings, which can vary widely depending on what other green features are included.

Mr. Crouch says Johns-Manville's Spider sales have continued to increase during the housing slowdown.

Cellulose and spray foam have both continued to gain share in the home insulation market, say officials of the two industries. And cellulose has "superior" moisture-handling capabilities, says Daniel Lea, executive director of the Cellulose Insulation Manufacturers Association, in Dayton, Ohio. Mr. Lea adds that cellulose is the "greenest of green" insulation, in part because it has such a high content of recycled materials including newspapers.

Spray foam, meanwhile, has added benefits such as being able to reinforce the structural integrity of a house, says Kurt Riesenberg, executive director of the Spray Polyurethane Foam Alliance in Fairfax, Va.

Heat Pump Water Heaters

Heat pump water heaters have hit the residential market over the past two years as a way to slash bills on electric water heating. Made by companies including General Electric Co. and Rheem Manufacturing Co., the water heaters suck heat out of the air such as in a garage or basement, like a refrigerator running in reverse, and use it to help heat water in a house.

The savings can be significant: In the case of the Rheem HP-50 heat pump water heater, Rheem officials say the average annual operating cost of the device is between $225 and $280, or about half that of standard electric water heaters.

But the heaters aren't cheap. They cost up to $1,500 for a 50-gallon model, or three times as much as a comparable conventional electric water heater and five times as much as natural-gas-powered units (though natural gas isn't available everywhere). To pay back the higher investment would take three to four years, based on the annual savings.

Another issue with the heat pump units is that homeowners could inadvertently end up paying more to heat the home if one is installed in the wrong place. "If you put it in the garage, that's OK, but if you put one in your basement, that will pull heat out of the basement—forcing you to put more heat back in," says Joe Wiehgen, a senior research engineer at the NAHB Research Center. He suggested that wouldn't be as much of an issue in more temperate climes.

Electronic Monitoring

Several companies have come out with home monitoring systems over the past year that let homeowners track their energy use so they can turn off electricity where it isn't needed.

In February, France's Schneider Electric SA introduced the Wiser Energy Management System, which lets homeowners see a computerized display of their power consumption so they can make adjustments, such as shutting down power to unused appliances. Costing about $600 with installation, the Wiser system can take $60, or 20%, off a $300-a-month power bill, meaning a payback period of as little as a year, says Jeff Drees, president of Schneider's U.S. division.

Similarly, Newton, Mass.-based Powerhouse Dynamics Inc. last year introduced the eMonitor, which costs about the same and advertises a comparable payback period. At the Sorensen residence in North Carolina, the builder, Mr. Chandler, says he included an eMonitor system in the home and has agreed to monitor power use for the family.

"It shows you in a graphical format where there are spikes and stuff," says Mr. Sorensen, who shares the home with his wife and their three children.

Concrete Countertops

At least one green building technology costs less right out of the gate: concrete countertops.

Inspired by "Concrete Countertops: Design, Forms and Finishes for the New Kitchen and Bath," a book by designer Fu-Tung Cheng of Berkeley, Calif., builders around the U.S. have taken to making countertops by mixing their own concrete on a home site. The technique is considered both greener and cheaper because the concrete doesn't have to be shipped like the more prevalent granite counters, says Mr. Chandler, who began building them last year.

According to online calculators, it costs around $1,100 to make 50 square feet of concrete countertop, compared with $2,000 for granite.

But the do-it-yourself approach has its drawbacks. "The challenge is getting the right training for your crew," Mr. Chandler says. "You have to know how to reinforce steel in the right way. It's not intuitive."

Mr. Carlton is a staff reporter in The Wall Street Journal's San Francisco bureau. He can be reached at jim.carlton@wsj.com.

Bob Peralta
209-955-5572
your California Certfied Short Sale Negotiator Specialist
Certified Distressed Property Expert
Certified Investor Agent Specialist (CIAS) designation
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Mistakes housing investors make posted by Stockton Lodi Tracy Certified Investor Agent Specialist

Sat, 26 Nov 2011 20:58:18 GMT

The Wall Street Journal

Mistakes housing investors make

With traditional investments delivering low returns, some are considering buying rental housing. However, potential investors should do their homework and avoid the following common mistakes.

Making sense of the story

Investing in real estate right now can be profitable, if everything goes as planned. Rents are increasing in many areas, and more properties may be coming on the market.
Last month, the Obama administration asked for proposals on how to convert at least some of Fannie Mae’s and Freddie Mac’s inventories of foreclosed homes into affordable rentals.
Traditionally, investors rented out properties for 1 percent of the purchase price per month. However, according to one property management firm, today, some investors are receiving as much as 2 percent of the purchase price.
While it may be true that in some areas home prices are relatively low, that doesn’t mean the property can be rented out. Homes in deserted subdivisions aren’t any more appealing to renters than they are to buyers. The same is true for less-attractive properties or those in less-desirable school districts.
Prior to purchasing a property, investors should also factor in closing costs of 3 percent to 6 percent, the costs to fix up the place and maintain it, and the holding costs.
Investors become landlords, and as such, need to keep in mind that, just like homeowners, tenants may not always be able to pay rent. Evicting tenants can take several weeks.
It’s also important to remember that owning a rental is not the same as owning a home. An owner may put up with flaws in a home that a renter wouldn’t tolerate. Additionally, many states and communities have strict laws for landlords, even for those who own only one property.

Bob Peralta
209-955-5572
your California Certfied Short Sale Negotiator Specialist
Certified Distressed Property Expert
Certified Investor Agent Specialist (CIAS) designation
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The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.

Thu, 27 Oct 2011 21:41:29 GMT

Troubled homeowners get a lifeline
The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.

Making sense of the story

Although HARP has helped more than 890,000 homeowners nationwide by reducing their monthly mortgage payments, there are still millions of homeowners who are too far underwater to participate.
Under the new rules, homeowners who owe more than 125 percent of the market value of their homes will be allowed to refinance into new loans.
The program also streamlines the refinancing process for homeowners who are current on their mortgage payments and reduces or removes fees that previously hindered them from refinancing.
Fannie Mae and Freddie Mac also will reduce the fees they charged in the past to enable borrowers to better afford the new loans. Among the fees that will be reduced or eliminated are those for appraisals, title insurance, and closing costs.
Fees also will be waived for some underwater borrowers who are refinancing into 20-year or shorter-term loans.
HARP is only open to borrowers who are current on their payments for the past six months with no more than one missed payment in the past 12 months. The loans must have been originally issued before May 31, 2009, and purchased by Fannie Mae or Freddie Mac.

Read the full story

Bob Peralta
209-955-5572
your California Certfied Short Sale Negotiator Specialist
Certified Distressed Property Expert
Certified Investor Agent Specialist (CIAS) designation
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Short Sale Negotiator Specialist Agent

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Bank of America extends modification offers - Stockton Lodi Tracy Short Sale Specialist Agent Negotiator

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

Bank of America Offers Principal Reductions to 200,000 Homeowners - Stockton Lodi Tracy Short Sale Specialist Negotiator

FHFA Explains Intentions of REO-to-Rental Initiative

FHFA Explains Intentions of REO-to-Rental Initiative ... Stockton Lodi Tracy Short Sale Specialist

Couple admit taking items from, vandalizing their former home - Stockton Short Sale Specialist

Couple admit taking items from, vandalizing their former home - Stockton Short Sale Specialist

Mortgage Debt Relief Action extension? - Stockton, Lodi, Pleasanton Short Sale Negotiator Specialist

What an Extension of the Mortgage Debt Relief Act Could Mean

City of Stockton, California worst foreclosure rate in the nation

City of Stockton worst foreclosure rate in the nation ... per RealtyTrac. Stockton Short Sale Negotiator Specialist

Mortgage Default Options - Stockton, Lodi, Pleasanton Short Sale Negotiator Specialist

Mortgage Default Options - Stockton Lodi Tracy Pleasanton Short Sale Negotiator Specialist

Cancelled Debit is Income - Short Sale Foreclosure

Cancelled Debt is Income - Mortgage Debt Relief Act of 2007 - posted by Stockton Lodi Short Sale Negotiator Specialist Agent

$25 Billion National Mortgage Settlement - $2,000 - Short Sale Negotiator

$25 Billion National Mortgage Settlement - posted by Stockton Short Sale Negotiator

Major Changes Announced for HAFA - Pleasanton Livermore Short Sale Negotiator Agent

Major Changes Announced for HAFA - Pleasanton Livermore Short Sale Negotiator Agent

First and Second Lien Holders to Share Losses Through Settlement

First and Second Lien Holders to Share Losses Through Settlement

Foreclosure Roulette - A game of extend and pretend

Bank of America to reduce loans for homeowners - Tracy, California Short Sale Specialist Agent - Bob Peralta

Bank of America to reduce loans for homeowners - posted by Tracy, California Short Sale Specialist Agent Negotiator - Bob Peralta

Foreclosures made up one in four home sales

Foreclosures made up one in four home sales - published by Bob Peralta, Short Sale Housing Negotiator - Stockton, Tracy, Lodi, Livermore, Pleasanton, Modesto

Does Fannie or Freddie Own Your Loan?

You can find out if Fannie Mae or Freddie Mac owns your loan directly by clicking on the links below.

1-800-7FANNIE (8am to 8pm EST) www.fanniemae.com/loanlookup

Bob Peralta

Avoid Foreclosure: Know Your Options

Appraisal Institute Offers Guidance on Distressed Comparables

Foreclosures Short Sale Comparables

24 Years as a California licensed Real Estate Broker click here to verify A+ Reliability Rating with the Better Business Bureau Member of the National Association of Realtors

Member of the California Association of Realtors

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Certfied Short Sale Negotiator Specialist (HAFA)

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California Foreclosure Process - Stockton Lodi Real Estate Short Sale Specialist

California Foreclosure Process posted by Stockton Lodi Tracy Short Sale Specialist Agent Negotiator Bob Peralta at Grupe Real Estate

24 Years as a California licensed Real Estate Broker

A+ reliability rating with the Better Business Bureau

Member of the National Association of Realtors

Member of the California Association of Realtors

Member of the Lodi Association of Realtors

Certfied Short Sale Negotiator Specialist (HAFA)

Certified Distressed Property Expert (CDPE)

Certified Investor Agent Specialist _ (CIAS) designation

Stockton retains dubious No. 1 foreclosure ranking

Stockton retains dubious No. 1 foreclosure ranking - posted by Stockton - Lodi Short Sale Specialist Real Estate Agent Negotiator Broker Median price falls 8% to $150,000

Bank of America - Transitioning From Your House

Bank of America - Transitioning From Your House

Step 1. Understand the ways to avoid foreclosure

Step 2. Transitioning from your house

Community Resource Directory

Resource Index

Managing Your Budget

Suze Orman - Short Sale Information

Short Sale Information - Suzie Orman

New Ways to Use Less Energy at Home Concrete countertops? Blown fiberglass insulation? The payback may be quicker than you think.

New Ways to Use Less Energy at Home posted by Stockton Lodi Tracy Certified Investor Agent Specialist.

Concrete countertops? Blown fiberglass insulation? The payback may be quicker than you think.

By JIM CARLTON

More in Environment

Blown Fiberglass Insulation

Heat Pump Water Heaters

Electronic Monitoring

Concrete Countertops

Mistakes housing investors make posted by Stockton Lodi Tracy Certified Investor Agent Specialist

Mistakes housing investors make

The government is changing its Home Affordable Refinance Program (HARP), making it easier for homeowners to refinance their underwater, high-interest mortgages.

1-800-7FANNIE (8am to 8pm EST)
www.fanniemae.com/loanlookup

24 Years as a California licensed Real Estate Broker

click here to verify A+ Reliability Rating with the Better Business Bureau

Member of the National Association of Realtors

Stockton retains dubious No. 1 foreclosure ranking - posted by Stockton - Lodi Short Sale Specialist Real Estate Agent Negotiator Broker

Median price falls 8% to $150,000