Loss Mit Services

Short Sale Tip of The Week 9-2-09

Posted on 02. Sep, 2009 by ctlms in Short Sale, foreclosure

Setting Buyer Expectations is Key!

There are many pot holes to avoid in a short sale transaction.  Obviously dealing with the lender is the biggest, but buyers and their agents, attorneys, and loan originators can be pretty big obstacles as well.

From the time an offer is submitted there can be months before an approval is received from the lender(s) on a short sale offer.  This is plenty of time for a buyer to get there mortgage commitment.  But often the buyers and their agents are reluctant for the buyer to spend money on an appraisal before the offer is approved.  This is understandable.  Who wants to pay for an appraisal on a house you may not be able to buy.  Yet that does not prohibit the buyer from getting themselves fully approved.

A buyer can apply for a mortgage even without a fully approved contract.  They can received a commitment contingent on the property appraising and passing the required title search.  So by the time the offer is approved, the buyer only need tell his lender to get the appraisal ordered.  In today's environment that alone can take weeks.

But if the buyer has not already had their income and assets verified, that can stretch it out even longer.  Some lenders are not ordering appraisals until the buyer has every scrap of paper required turned in.  Rather than working more efficiently and having the appraisal conducted simultaneously to the paperwork gathering.

Most short sale approvals are only good for 30 days.  If the buyer cannot close within the 30 days we must request an extension which can often require additional money to the lender for approval.  Yet if the buyer can close within the alloted 30 day time frame, everyone is happy.

This is especially important if a foreclosure is involved.  Lenders can be reluctant to grant an extension when the foreclosure date is near.  They would then have to postpone the foreclosure as well.  This would lengthen the time before they could acquire the property through foreclosure if the buyer ends up not closing. Unfortunately the number of short sales that are approved but never close is staggering and the lenders know this.

The take away here is to set the proper expectations with the buyer's and their representatives right at the beginning.  Let them know it is in their best interest to do their home inspection before the offer is submitted.  Negotiating a reduction in the purchase price later is more difficult and time consuming than submitting that lower price up front with the inspection report.  Also the importance of the buyer proceeding to get a mortgage commitment contingent on the appraisal so the appraisal is all that will be required after the short sale approval is received.  Better yet, if the buyer is confident in their offer and wants to move forward with the appraisal as well, they can do that to.

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As always Visit the Ask The Expert Page to leave your questions or contact me directly if you need immediate assistance at [email protected] or visit www.CTLMS.com

Short Sale Tip of The Week 8-19-09

Posted on 20. Aug, 2009 by ctlms in Short Sale, foreclosure

Loan Modifications.  How can they benefit the Realtor?

So it has been two weeks since my last post.  I have been very busy with all my existing and new short sale and loan modification customers.  So I thought that this week I would talk a little about loan modifications.

Along with short sale processing I also offer loan modifications to my clients.  Not everyone in financial distress wants or needs to sell their home.  Or at least they have not come to the realization that they need to sell.  Many have tired the Making Home Affordable options and been very disappointed by the results.  Some people who would qualify for a loan mod the "old fashioned" don't qualify the MHA way because the guidelines are black and white and there are no exceptions.

This is where our loan modifications come into play.  Homeowners that can save their homes deserve a chance to do so.  Those homeowners that cannot save their homes but haven't realized it yet need to SEE it for themselves.

You may have past clients call you and ask if you know someone that can help them.  They may already be behind on payments or may have just lost a job and will soon be behind.  There are many scenarios that can happen.  But if you are successfully able to point them in the right direction, they will love you forever.  Plus, if they later determine that they cannot afford the home any longer, they will surely call you back to list the house and at that time they will probably need a short sale as well.

Many agents that we work with for the first time tell us that until they found out about us, they would just tell their leads that they were unable to help them because they owe more than their homes value.  With the help of our service they are able to make that lead a client and eventually close the transaction and get paid.

So knowing where to direct your clients that are not yet ready to sell is just another tool in your belt to assist your clients.  Unfortunately most people do not qualify for loan modifications.  But the homeowners need to see the documented reasons why they cannot afford the home on paper before they come to the realization that they have no choice but to sell in order to avoid foreclosure.  Most people have never before filled out a budget on paper and seen where their money actually goes.  For those that do qualify for a loan mod, they have a new chance to get back on their feet.  And you know who they will call when they are ready to sell?  You.

In case you are wondering, we do not charge a client to determine if they have a chance at a loan mod.  We have them fill out a detailed financial questionnaire and we get back to them within 48 hours and let them know if it looks like their is a chance at a successful loan mod.  If their information makes it clear that they will not qualify, we let them know why and suggest that selling may be a good option.  Most homeowner facing possible foreclosure do not have months to wait around only to find out they never qualified in the first place.  By that time it is probably to late to avoid foreclosure.

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As always Visit the Ask The Expert Page to leave your questions or contact me directly if you need immediate assistance at [email protected] or visit www.CTLMS.com

Short Sale Tip of The Week 8-5-09

Posted on 05. Aug, 2009 by ctlms in Short Sale, foreclosure

Today's NEED can be your Opportunity.

There has never been a time where your community needs you more than they do now.

Where NEED meets OPPORTUNITY:

• The U.S., as a whole has seen a 21.9% decline in home values for properties purchased by homeowners within the last 8 years. As a national average, homeowners who bought before then could have equity in their home provided they did not perform a cash-out re-fi. (NAR)
• The # of US households on the verge of losing their homes has soared with nearly 15% of all-use homes—more than 1.5 million homes in the 1st half of the year going into foreclosure.
• Nationally, 1 in every 380 homes received a foreclosure notice in June.
• Nationally, 1 in every 84 homes received a foreclosure filing sometime in the first half of the year.
• Foreclosure filings were up 33% last month over June of 2008 and 5% greater than in May. (RealtyTrac)
• There are proportionately more ARMs given to strong credit buyers that are facing foreclosure than sub-prime loans given to the credit unworthy.
• Of the 4 million homes targeted by Obama’s plan for modification assistance, only 325,000 have made it and some lenders are saying it is less costly to foreclose than modify.
• Reports have the unemployment rate reaching 10% by years end and is measured as high as 20% if you consider more accurate measuring methods.
• Some states have hit unemployment rates not seen for 25 years. (WSJ)
• The Federal Reserve has projected that there will be no return to full employment until 2015. (AJC)
• The Cap-n-Trade Bill is set to eliminate even more jobs, erode more disposable income, blow-up the appraisal process, and throw increases in costs and time-lines into the housing crisis.

On a positive note: the tax credit has stimulated home-buyers and there is still time to take advantage, interest rates are still low, and lending restrictions are lessening.

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As always Visit the Ask The Expert Page to leave your questions or contact me directly if you need immediate assistance at [email protected] or visit www.CTLMS.com