Loan servicers will have 30 days to send a borrower a short-sale agreement that includes the list price or acceptable sales proceeds under recent changes made to the Home Affordable Foreclosure Alternatives Program, aimed at distressed borrowers who don’t qualify for other government loan modification programs.

Once a sales contract has been initiated, loan servicers then have 30 days to approve or reject the transaction.

The stricter timelines are believed to help speed up the short sale process, which has faced numerous complaints for how long it takes lenders to review and approve short sales often causing buyers to walk away.

The stricter timelines were apart of several revisions the Treasury Department recently announced to its HAFA program — the second major revision to the program since its launch in 2009.

Another big change: Loan servicers will no longer be restricted on paying second-lien holders, allowing them more freedom particularly when dealing with second-lien holders when borrowers owe less than $100,000. Loan servicer used to be restricted to paying second-lien holders no more than 6 percent of outstanding loan balance (with an overall limit of $6,000) in exchange for releasing subordinate liens. Second-lien holders have been another big obstacle to completing short sale transactions.
HAFA’s new directives also now forbid loan servicers from deducting vendor expenses from commissions paid to real estate brokers.

The rules are effective Feb. 1. It does not apply to mortgages owned or guaranteed by Fannie Mae or Freddie Mac, or insured or guaranteed by a federal agency such as the Federal Housing Administration (FHA).

Look for more Colorado Springs Real Estate news.

CAN I GET MONEY BACK FROM A SHORT SALE?
As of April 2010 – the answer is YES! The government approved the Home Affordable Foreclosure Alternative (HAFA) program.  Among other things, HAFA allows homeowners to receive up to $3,000 at closing for relocation assistance.  Like all government programs, there are eligibility requirements and your lender must be participating.  Most lenders are!

CAN ANY AGENT DO A SHORT SALE?
Technically, yes – Realistically, not likely.  When surveyed by their own National Association of Realtors (NAR), only 1% claimed they were comfortable working with short sales or distressed properties.  Short Sales are notoriously complicated.  Without specific expertise in dealing with banks it’s easy to get lost in red tape, and the home falls into foreclosure.  This is definitely a case where seasoned professionals prove their worth. We insist upon Realtors who are also Certified Distressed Property Experts (CDPE) and familiar with your bank’s Loss Mitigation Department.

DO I QUALIFY?
Every lender has their own way of deciding whether or not to accept a Short Sale. Generally speaking, they’ll look for:
• Evidence of Financial Hardship – Some situation is causing you to have trouble affording your mortgage.
• Income Shortage - “Your money runs out before the month does”.  Mortgage payments are, or will soon become, unaffordable.
• Insolvency – There’s no safety net. No savings account, CD, or lotto winnings that would allow you to pay down the mortgage.

HOW LONG WILL IT TAKE?
You’d think something called a “Short Sale” would be a short process.  Typically not.  Most transactions take 3-4 months, others longer. Lenders have become logjammed, sometimes even missing dates while a home is under contract. We only work with Realtors who know the tricks of the trade, and deal directly with the bank’s Asset Managers to get the quickest results possible.

HOW MUCH WILL IT COST ME?
Nothing. Seriously. Nothing — And anybody you talk to better give you the same answer!  If a mortgage is keeping you up at night, how can there be extra money (or energy) for selling a house too?  Realtors in our network become advocates for homeowners and will not charge you for their services – they must agree to that upfront.  We negotiate commissions, closing costs, title fees, and all other selling costs directly with the bank and you will never be asked to pay a penny.

WHY WOULD MY LENDER AGREE TO THIS?
Simple: It pays down most of your loan and saves them a huge hassle. It used to be lenders rarely agreed to short sales. But now, with so many people behind on payments, banks are overwhelmed by expensive foreclosure proceedings, then ongoing costs of maintaining, marketing, and selling those properties in a depressed market. Even if you’re behind on payments, to a lender it makes good business sense to work with you on a price that will help you sell.

WHAT IF I HAVE TWO LOANS?
Most people do. A short sale is still possible. It means getting approval from 2 banks, dealing with 2 Asset Managers, double everything – you get it.  Normally we can get both lenders to cooperate, even if the value of your home is below the balance of the 1st mortgage.  Here’s why: The lender with the 1st loan doesn’t want to foreclose, so they’re usually willing to pass a little money to the 2nd lender to get them on board. For the 2nd lender this is the best thing going because the fact is, they stand to make absolutely nothing if the 1st is forced to foreclose.  Really, neither lender wants to deal with owning another property.

HOW WILL A SHORT SALE AFFECT MY CREDIT?
It affects everyone’s credit differently. The more solid your credit is already, the less impact a short sale will have on your score. Whether or not house payments get missed has a far greater impact on your credit than the short sale itself, which is recorded as “paid in full-settled”.  So, the big key here is to avoid Foreclosure.  By nearly any measure, a foreclosure is the single most damaging event your credit can encounter. Borrowers with a foreclosure are not able to qualify for a home loan for 7 years, and have trouble getting any other kind of credit. Those who do a short sale are allowed to borrow again after 2 years.

WILL A SHORT SALE STOP FORECLOSURE?
In a word: NO.  However, lenders normally work with a homeowner and will delay foreclosure once they know a Short Sale is in the works. Successful agents stay in good communication with the bank’s Asset Managers throughout the process, keeping them posted about marketing efforts, showings, etc.  If the mortgage company gets the idea no progress is being made toward finding a buyer, they will ultimately foreclose.

CAN I DO A SHORT SALE IF MY LENDER HAS ALREADY STARTED FORECLOSURE?
Absolutely. In fact, your lender would rather YOU sell the property than allow the foreclosure to continue, which puts the burden on their overwhelmed departments to do it. That’s precisely why lenders agree to Short Sales and accept a discounted payoff.

DO I NEED TO BE BEHIND ON PAYMENTS?
No. That’s a common misconception. You don’t need to be behind or late on payments to get your bank’s approval, although they’re more inclined to agree when they see you are struggling to stay current.

WHY NOT JUST LET MY HOME GO TO FORECLOSURE?
Well, for one, if the bank files a ‘Judicial Foreclosure’ they can keep you on the hook for the debt. So, while your home went away your mortgage didn’t. In some cases, you may be liable for income taxes on the foreclosed amount. The main perk of doing a short sale is that the loan gets settled — it is even tagged “paid in full-settled” on your credit report – and you no longer owe the bank any money. Speaking of credit, thanks to revised guidelines in Aug.2008, people who go through Foreclosure are now severely penalized, while those who pay their mortgage through a short sale are viewed more favorably. Borrowers hit with a Foreclosure must wait up to 7 years to buy another home, and have major trouble trying to pass a credit check for anything else. By contrast, there is now only a 24 month blackout after a short sale and borrowers can usually resume normal purchasing habits.

CAN I KEEP LIVING IN MY HOME?
Yes! You own the home. You will rightfully own it until the day of closing.  There is no reason for you to move out, and the bank will not expect you to.

DO I HAVE TO SIGN MY DEED OVER TO SOMEONE?
No.  Your home is yours throughout the entire short sale process. Everything remains in your name, with you as the legal owner until closing.  Be extremely cautious of any third party who wants your deed! Signing your deed to someone else gives them ownership control over your property. They can rent it, sell it, keep you in, kick you out – whatever – and you have no ownership rights whatsoever. You will however, still have your mortgage debt.  That doesn’t transfer unless paperwork was filed to specifically transfer the mortgage balance – and most loans are set up to be Non-Transferrable. ]]> http://www.bestspringshomes.com/blog/?feed=rss2&p=8 0 http://www.bestspringshomes.com/blog/?p=1 http://www.bestspringshomes.com/blog/?p=1#comments Tue, 04 Jan 2011 06:48:46 +0000 admin http://localhost/randyblog/?p=1 Are you looking for your Dream home to come true? Come to Colorado Springs. It is the perfect spot where you can find everything you want in your dream home. Colorado Springs is located near the famous rocky in center of USA. There are some facts that one will surely think of before buying a new home. For Example Climate, Basic facilities, Transportation availability etc. Colorado Springs is the perfect city which fits in all these categories. Colorado springs is a developing city which is recovering economically, so it is the best time to invest in the market either for business purpose of for living in Colorado.

Buying home is very easy now because of the convenience of the real estate agents to perform the project. Randy Ferguson is the most trusted real estate agent in spring’s area. We are successfully serving people since last 15 years in the same field. We are having the vast experience in the field with all aspects including the legal issues. Client specification is the goal of randy’s work and he is achieving it since he has started working with the people. We provide our services to home buyers as well as the home sellers too. Anyone can contact us for any Colorado Springs Real Estate query. We will be happy to be helpful to you.

I will get back to you with more updates from Colorado Springs and the Colorado Springs Real Estate market; till then waiting for comments, updates and suggestions….