Loss Mit Services

Short Sale Tip 7-5-10

Posted on 05. Jul, 2010 by ctlms in Blog, Foreclosures, My Blog, News, Real Estate, Short Sale, foreclosure

Does the seller sign the contract before bank approval?

I have heard this question a ton of times and have seen agents argue over it.

The answer is always YES!

Let's look at the issue.

1. There is no Contract until the Offer is signed.  So if the buyer's offer is never signed, there is no binding contract holding the buyer to the purchase or the seller to the sale.  This means the buyer has not deposited an earnest money check and can walk at any point.  This also means the seller is free to accept any other offers that come in without first having to be released from the original buyer.  Not a smart thing for either party.

2. More importantly, most lenders will not accept an offer.  There must be a fully executed contract.  Many of the larger lenders such as Wells Fargo and Bank of America even require closing date extensions and other addenda to the contract and the dates must always be current.  So if something expires, it must be updated with an addendum or the short sale review stops.  Going even further, some lenders even want to see a copy of the earnest money check.  The requirements are getting more and more thorough.

In summary, Yes the contract must be signed.  It makes sense for both the seller and the buyer and with very few exceptions, the lender will require it anyway.

Sean Wilder

Short Sale Update 7-2-10

Posted on 02. Jul, 2010 by ctlms in Foreclosures, My Blog, News, Real Estate, Short Sale

The Good the Bad and the Holiday

In this issue I have a few industry updates.

The Good

1. President Obama today signed into law the extension to the closing deadline for the first time home buyer tax credit extending the deadline to the end of Sept that were under contract by 4/31/10.  According to NAR this will save nearly 180,000 buyers from the losing the credit due to financing and short sale review delays.

1. Short sales still prove to be a better alternative to foreclosure for the lenders bottom line.  According to a resent RealtyTrac report Short Sales net and average 19% higher return to the lender than foreclosure.  Short sales averaged sales prices of 15% below market value while foreclosures net 34% below market value usually due to the deteriorated condition of the property after it has been foreclosed and vacant for some time.

The Bad

1. Pending home sale tumble 30% in May.  That's right, in the month after the first time home buyer credit expired, pending home sales dropped 30%.  This shows just how important this incentive has been to the real estate market.  Keep in mind though that some of May's sales we stolen by April by buyers trying to meet the deadline.

2. So far we have seen virtually no change from the implementation of the HAFA short sale process.  In fact of the 70 short sales we are current negotiating, only 2 qualify for HAFA.  The biggest reason is that FHA, VA and until just a couple weeks ago, Fannie Mae and Freddie Mac loans did not qualify.  Fannie and Freddie do now participate in their own version of the HAFA program but their servicers do not have to begin accepting those applications until 8/1/10.  Also the 2 short sales that we are working through this program have already shown to be taking longer than that lenders normal short sale review process.  One of the biggest selling features of this new program was supposed to be the reduced review time they take.  NOT!

The Holiday

Enjoy it.  Take a break.  Relax.  I have no choice in the matter, as Bank Holidays are my holidays, for the most part.  I have some paperwork to do on Monday to prepare for the short week.

Remember to thank your service members.

Have a great Independence Day!

Sean Wilder

Short Sale Update 6-10-10

Posted on 10. Jun, 2010 by ctlms in Foreclosures, Real Estate, Short Sale

Well it has been quite a while since my last post. We have been very busy with all the short sale files we have and I just have not had the time to blog.

Notice my Blog is now Part of our new website and short sale processing system. They are no longer separate sites.

There have been a few changes in the industry since my last post. Kinda..

The new HAFA program for short sales has been in effect since early April and I have to say that of the over 60 active files I have, only 1 has qualified for that program so far.

As of Tuesday June 1 Fannie Mae and Freddie Mac loans now qualify for a slightly altered HAFA program but servicers are not required to implement until 8/1/10. As of Yet the national servicers that are accepting HAFA short sale applications for the other qualified loan types are not doing so for Fannie and Freddie loans, yet.

So I cannot report on the "success" of this new program because I have seen none.

Also there seems to be more and more short sale files being submitted to the lenders as with nearly every lender we deal with, the hold times, assignment times and processing times are getting longer and more arduous, not shorter and more streamlined.

It's business as usual at the lenders.

So as always, expectations are huge with short sales. We cannot sugar coat the facts to get a buyer to make an offer on a short sale. We cannot tell them it will be quick when we know it will most likely be at least 90 days with most servicers. But if we are clear with the buyer and they are on board with waiting because they want the house, then there should be no reason the them to get antsy and bail out after only a few weeks. Though unfortunately that does still happen.

On another note. For those agents we are actively working with, and those submitting short sales to us in the future. Our new website has some added benefits to you and your clients.

Our website is integrated with www.PropMapr.com. When submitting a file to us through our site you can add all the property information and pictures. And listing the status of the property as "for sale" your property will display on PropMapr.com. In the next few weeks this site will start syndicating out to other sites such as zillow, trulia, etc and a host of other sites. So get those details updated and you and your client will benefit from this free extended internet advertising.

If you don't know or remember your login information for our site, because you have always just emailed or faxed in the documents, send me an email and I will get it to you.

That's all for this update. Have a great Fourth of July.

Sean Wilder