With the number of real estate transactions on the upswing here in the Auburn, WA, south King County, and Pierce County areas, it only makes sense that we’ll also see more short sale transactions.

Around the water cooler, I’m hearing that some real estate brokers are fed up with the lengthy and time consuming process of working with short sale clients and have decided not to work with short sales any longer.

I can sure understand that attitude! Short sales are difficult, at best, and so many short sale listings never manage to close, whether due to unrealistic price expectations on the part of lenders, the physical condition of so many homes, buyers that get tired of waiting and walk away, or lenders that refuse to even look at offers (let alone counteroffer) thus letting a house ultimately go to auction.

Working short sales requires a team of experts that know what they’re doing and can address objections and legal issues as they arise. Agents must know the various programs involved, what the various banks require as far as what and when paperwork must be obtained, and how to counsel their clients. My team of experts, including lawyers, title reps, and escrow officers, know what they’re doing. We’ll be here during this upcoming 2012 year to answer your questions about short selling, listing your home at a price attractive to short sale buyers and to the banks involved in the process.

Call me when you have questions. I’ll do my best to answer them so that you can develop a strategic plan for moving forward – whether that involves short selling your house, keeping it, or allowing it to go through foreclosure.

*photo credit Jeff Turner via Flickr

Yesterday I posted information about

Ideally, the outcome of mediation might allow you to restructure your loan, save your home, or agree to sell it as a short sale. In fact, a decision maker for the bank is required to be present at the Mediation meeting – at least by phone. Of course, if no agreement is reached, the ultimate outcome might be to allow your home to proceed through Foreclosure.

This mediation step is a bit more complex than the informal meeting to which you are entitled right away (see yesterday’s post). Mediation must be requested by an attorney or housing counselor within 30 days of the bank or Trustee filing of the Notice of Default and must be held within 45 days of the referral to Mediation by the attorney. You’ll also be required to pay your half ($200) of the cost of Mediation hearing ($400).

Prior to Mediation meeting, both you, as the owner-occupant, and the bank will need to assemble a list of documents – yours will include financial documents such as tax returns, pay stubs, and so on. It’s an extensive list, but not difficult. Since you will be working with an attorney or counselor, they’ll assist you in determining exactly what documents you’ll need.

Note that the Foreclosure Fairness Act took place on July 22, 2011. If you received a Notice of Default prior to that date and foreclosure of your home has not yet been completed by the bank, you are also entitled to Mediation. You’ll want to contact an attorney experienced in the Foreclosure Fairness Act as soon as possible! Doing so can delay a scheduled auction!

As usual, you should also contact your Realtor© so that you are fully aware of your options and for the name of an attorney that is experienced in Foreclosure work.

In Washington State, folks that get behind on their house payments have options as described in the

One of the first steps a lender must take for a home in Washington is to send a letter to the homeowner describing their options – the first of which is the right to request an informal meeting with the lender before a Notice of Default is filed.

But here’s the thing … the homeowner has to make the request within 30 days from the date of the options letter.

• So … open every piece of mail that comes from your lender.
• Read it carefully and then  exercise your option to meet with the lender to discuss the situation.
• Do it by phone and ask insist that they confirm your request in writing.
• Follow up with a letter to them in writing — maybe even registered mail so that you have a record of your request.
• Keep copies of anything and everything you send and notes about every conversation you have with them.
• Get the names of the people with whom you talk … and write down the phone numbers and dates you make any calls.

and finally …

Engage an attorney to represent you at the meeting. Talk everything through with him/her … and with your real estate agent so that you know what your options truly are.

But first … Just Open the Mail!

The Washington State attorney general’s office recently released three videos that explain your rights and options should you be facing a foreclosure or short sale of your home.

As an active Realtor®, I frequently receive phone calls from people that are already behind on their payments, or feel as though they will soon be in trouble with their mortgage. Sometimes, the call is from someone that is trying to get out from under a home that has lost significant value and is now worth far less than what they owe. Each of these types of calls requires a knowledgeable response and action. Sometimes the best response is to refer the person to an attorney. Most often, however, it’s a chance to help education the caller as to their possible options based on their personal situation.

The three videos provided by Rob McKenna (Washington State Attorney General) and his staff explain some of the options available and the impact of these options on the consumer who may be facing a foreclosure or short sale of their home.

Each of the videos is moderated by Annie Fitzsimmons, the legal counsel for Washington Realtors. They are easy to understand and just a few minutes long. If you are facing a foreclosure or short sale, I urge you to take the time to view these videos, then give me a call if you have any questions or if you would like to discuss them.

In Part One, Mr. McKenna provides an overview of the options that are available:

In Part Two, Marc Cote, a Certified HUD Housing Counselor, discussses what will happen when you meet with a HUD Housing Counselor, what you need to be prepared for the meeting, and the options available when working with a HUD Counselor:

Part Three, presented by Rob Dickson, Lawyer and Short Sale Negotiator, discusses the short sale process, along with some of the difficulties that are faced when negotiating a short sale.

Obviously, at this moment many of us that are homeowners are facing significant loss of value in our homes and sometimes it takes just the smallest event to trigger an inability to make mortgage payments. Should that happen to you, please contact me at 206.300.8421 or gabrielle@gabriellenemes.com just to talk … and take advantage of the resources outlined in these videos.

Being held from 11am – 5pm at the Chase Homeownership Center, 16400 Southcenter Parkway, Suite 200 in Tukwila, homeowners should bring their most recent tax returns, W-2s, monthly bank statements, pay stubs and proof of tax, insurance, and homeowner association payments.

HURRY!

The business of real estate … and more specifically at this current time, the business of short sales affects everyone. Not just current homeowners, but home buyers, home sellers, renters. Everyone. We all are touched by housing prices, banking practices with regard to home mortgages, interest rates, etc. I’m sure it comes as no surprise to realize that our economy is hugely affected by whatever is going on in the real estate market.

Short sale listings and purchases will continue to be part of our local economy for another few years. As I write this post on September 17th, I can see that of the 497 active single family residential listings with Auburn addresses, 138 of them are short sales! Almost 28%!

If you need an agent with unparalleled business standards to help you with the process of a short sale … or just to talk through your options should you be facing an inability to make your current mortgage payment for whatever the reason … please don’t hesitate to let me know. I’ll do whatever it takes to be of assistance to you.

Note: If your home is currently listed or if you are working with another licensed real estate broker, this post is NOT intended as a solitation.

No foreclosure!

A Deed-in-Lieu of Foreclosure is a process where the lender agrees to take the deed to your home rather than pursue a foreclosure action against you for nonpayment of your loan. This option is easiest where there is only one mortgage, and where there are no other liens.

Depending on your lender, a payment might be offered to the holder of a second mortgage or home equity loan, but that lienholder must also agree. Further, if you have yet additional liens against your home, such as tax or utility liens, your bank will likely not even consider this option. Your bank wants your home with “marketable title” … i.e., a clean and clear title without other encumbrances.

While this seems as though it might be an easy and logical solution, what’s important to remember here is that a bank isn’t in the business of owning real estate. They don’t want your home, especially if there’s no equity to be gained in taking it.

While definitely a generalization, there’s certainly truth to the statement that where banks readily accept Deeds-In-Lieu is where a home has equity in the current market and can be quickly liquidated at a profit to the bank. Great if you’re behind in your payments and absolutely must leave the loan obligation and there’s equity in the house. However, if there IS equity, why not try to refinance or pursue a loan modification first?

It’s also important to know that some banks won’t even consider a Deed-In-Lieu of Foreclosure unless you’ve already been rejected for a Loan Modification and/or were also unsuccessful selling your home as a Short Sale.

The information presented on this Site should not be construed as legal or financial advice. You are advised to seek consultation with a qualified Attorney and Accountant. ©Gabrielle Nemes, 2010

Recently I had an opportunity to meet with a wonderful couple that were truly truly trying to do “the right thing,” as they phrased it. We met for a couple of hours while they showed me around their home.

Their pride was obvious. This house was their baby. They’d improved and lovingly planted almost every inch of the yard … and the inside was eat off the floor clean. Every room was polished and tidy. They were devasted that life had taken an unfortunate turn and they just couldn’t figure out how to hang on any longer.

After talking through the options, I sent them to talk to the other necessary experts — the attorney and the accountant.

Yesterday the husband called me back with an apologetic voice: “The attorney said that it would make absolutely no difference whether we let the bank just have the house, or short sale it. We’ve decided to just walk away.” He was distraught, thinking he’d “wasted my time!”

Heavens. Sometimes a short sale is just NOT the right answer. I reassured him that I was so happy to have met him and his family and wished them well.

One excellent option might be a loan modification, which is designed to reduce the amount of your mortgage payment to no more than 31% of your gross income.

Unfortunately as of this time, it appears that most loan modifications are unsuccessful, with something less than 5% of all applicants successfully completing the loan modification program being reported by some analysts.

However, don’t be deterred! Perhaps you’ll be able to complete  a loan modification and be able to remain in your home. According to some reports, the biggest issue with unsuccessful loan modifications is that homeowners do not adequately complete the necessary application, or do not provide sufficient documentation as required by the lender. Of course, there are also reports that lenders don’t recognize that a homeowner has completely required with all requirements. In any event, it doesn’t appear to be an easy or guaranteed process.

The first step is to determine whether or not your lender will change your existing loan to more favorably meet your financial requirements. This process is formally termed “loan modification.” Under the terms of the federal program, HAMP (Home Affordability Modification Program), essentially lenders are encouraged to offer loan modifications to homeowners that are either already behind in their payments or who face the prospect of soon being so.  

Be sure to contact your lender and ask for their loan modification package. You should receive, at a minimum, a list of exactly what they require, and how to proceed and apply.

The information presented on this Site should not be construed as legal or financial advice. You are advised to seek consultation with a qualified Attorney and Accountant. ©Gabrielle Nemes, 2010

By refinancing, you may be able to remain with your existing lender, or perhaps take advantage of better terms offered by another.

In addition to examining the current interest rates, the next question a homeowner must face when pursuing a refinancing option surround the property itself: Is the value of the property sufficient to support a new, replacement loan? Remember that an appraisal for the property will be done by your lender and must reflect that the loan amount sought is no more than the current guideline for lending. In a conventional loan, that generally means that the loan can be for no more than about 95% of the appraisal amount, based on your particular loan. At the moment, FHA will loan up to 96.5% of the home’s value.

Finally, you must determine whether your current credit position will support a new, replacement, loan. If you’ve fallen behind in your payments on your mortgage or perhaps on other debts, it may be difficult to qualify for a refinance mortgage.

The information presented on this Site should not be construed as legal or financial advice. You are advised to seek consultation with a qualified Attorney and Accountant. ©Gabrielle Nemes, 2010