The concerns about the negative do not point to worst-case scenarios; instead, the concerns are mostly related to long-term economic effects and the possibility of some homeowners taking unfair advantage of the principal reduction process, a situation that can be compared to strategic defaults whereby borrowers stop paying for mortgages they do not consider to be financially sound.

The Moral Hazard

One of the problems associated with the mortgage principal reductions is that some borrowers who might be underwater on their home loans, but have not fallen into default, will not qualify for a write down offer from their lenders. This could be considered as unfair to homeowners who have not considered strategic default, even in the throes of the global financial crisis that essentially eroded their home values in relation to their mortgages.

Analysts who believe that the mortgage principal reduction program created a moral hazard mention the probability of homeowners willfully falling behind on their payments just to qualify. The fact that this principal forgiveness gives an advantage to delinquent borrowers has not been entirely lost on the mortgage lenders involved, but since these banks essentially agreed to something they would not have done on their own, it is unlikely that they will extend the mortgage reduction benefit to borrowers who are current on their payments –even if the appraised values of their homes have taken a dive in the last few years.

The moral hazard concept comes from the difficulty that financial institutions would endure if they had to place their borrowers into categories; for example, homeowners who ended up in default due to hardship or just because market forces turned against them.

The Cost to American Taxpayers

Edward DeMarco, acting director of the Federal House Finance Agency (FHFA), has voiced his opposition to allowing government-sponsored mortgage giants Fannie Mae and Freddie Mac participate in the principal forgiveness program. His rationale has been that since Fannie and Freddie are essentially owned by taxpayers at this time, reducing the values of their mortgage portfolios boils down to demanding more assistance from taxpayers in order to keep them afloat.

DeMarco’s reasoning for shutting out thousands of Americans who could benefit from mortgage principal reductions has been widely criticized, but the losses he mentions could extend beyond taxpayers. Pension fund managers whose portfolios include investments in mortgage securities could also see some losses; something that in the end will affect their clients who invest in retirement accounts. This would be a long-term effect that could grow to very negative proportions if the overall economy does not improve.

Beginning April 13, 2012, Bank of America will require the following five forms to be submitted to initiate a short sale:

1. Bank of America Third-Party Authorization Form
2. IRS Form 4506-T – Request for Transcript of Tax Return
3. 60-day Estimated HUD-1 (or HUD-1 with closing date if shorter than 60 days)
4. Signed Purchase Contract including Buyers Acknowledgement and Disclosure
5. Bank of America Short Sale Purchase Contract Addendum

If you currently have a short sale file with Bank of America, you will need to complete any outstanding tasks in Equator before April 13. Look for the tasks titled “Submit Short Sale Offer,” “Upload Offer Documents,” and/or “Upload Supporting Documents.”

If these tasks are not complete by April 13, you may be required to re-upload all documents to match the new system (that means five new documents, even if you were only missing one). Your file may also be declined, depending on your open tasks time compared to average timelines.

In addition to these new requirements, Equator will change to allow tasks (after short sale is initiated) to happen simultaneously, rather than sequentially.

We don’t want anyone to be taken by surprise. For full coverage and to make sure you’re as prepared as possible for the changes, join us for an exclusive webinar “Bank of America Short Sale Alert: Changes May Result in Lost Files!”

Register now at http://www.cdpelive.com/120410-bofa

Last month, Bank of America announced a pilot program that will provide some distressed property homeowners with a new foreclosure alternative. This new “Mortgage to Lease” program will allow homeowners facing foreclosure to remain in their homes by converting from home ownership to rental.

In this program, participating homeowners will transfer their home titles to Bank of America for forgiveness of all outstanding mortgage debt. Then Bank of America will lease the home to the former homeowner for up to three years at a rental price less than their mortgage payments, making payments affordable. After the three-year rental period, Bank of America will sell the acquired houses to investors.

For now, the “Mortgage to Lease” program will only affect 1,000 specifically selected Bank of America customers in Arizona, Nevada, and New York. During this initial phase, Bank of America will explore customer, community, and investor reactions and assess the feasibility and practicality of expanding the program.

In order to qualify, the homeowner must meet the following criteria:

• Have a Bank of America loan without junior liens
• Be delinquent 60 days on their mortgage payments
• Be “underwater” on their mortgage
• Must have exhausted other foreclosure alternatives
• Foreclosure must be eminent
• And the homeowner must be occupying the home

Because this program has received national media attention, you may receive questions from homeowners about it. If you do, you can simply explain that this program is tiny and for now will affect less than one-tenth of one percent of all the homeowners with a problem. Remember, Bank of America will be hand-selecting and notifying homeowners for the initial launch.

UPDATE: Bank of America is adding new requirements to their short sale process starting April 13. Alex will give you all the details April 10 on a special, critical update broadcast. Register for the broadcast at http://www.cdpelive.com/120410-bofa.

ATTENTION Agents!

In October’s CDPE Industry Broadcast with Bob Hora, SVP Mortgage Servicing Executive at Bank of America Home Loans, Hora affirmed Bank of America’s commitment to streamlining their short sale process.

In keeping with this commitment, Bank of America is simplifying their third-party authorization process for short sales.

On March 20, Bank of America released a standardized Third-Party Authorization form to be used on all Bank of America short sales beginning April 14, 2012.

For CDPEs, we’ve uploaded the two-page document to the Resources section of the website. Just login, and go to: http://www.cdpe.com/resources/view/906/BofA3rdParty

Or you can download the form from Bank of America’s Agent Resource Center at http://www.bankofamerica.com/realestateagent.

Bank of America will accept other forms until April 14; however, we recommend implementing the form on your next Bank of America short sale!

For those of you who are CDPEs, you should continue to use the “CDPE Short Sale Authorization to Release Information Form” with home owners’ associations, second lien holders, or anyone else you need information from as our contains information specific to those types of organizations.

To watch a recording of CDPE’s exclusive industry broadcast with Bank of America, visit http://www.cdpelive.com/111026-bank-of-america/.

In recent news, major publications including USA TODAY and CNNMoney have spotlighted the incentives provided by banks. These incentive programs, which offer anywhere from around $2,000 to upwards of $35,000, are intended to provide homeowners with the resources and motivation to pursue a short sale.

As banks look to ramp up short sales, such incentives are becoming more frequent. JPMorgan Chase began their incentive program last year, for example, and Bank of America (which plans a 60-70% increase in short sales this year) piloted a program in Florida this past December. Wells Fargo offers incentives as well, though primarily in states where the foreclosure process is particularly lengthy.

For banks, short sales can be a cheaper alternative to foreclosure. The foreclosure process is lengthy and costly, so much so that providing up to a $20,000 alternative for a short sale is still a cheaper option.

In USA TODAY’s article “Lenders paying borrowers to do short sales,” Jim Gillespie, chief executive of Coldwell Banker, is quoted as saying “It’s a lot cheaper to shell out $10,000 or $20,000 to someone than it is to go through a long foreclosure.”

In addition to the cost of the foreclosure process itself, foreclosed properties sell for less than short sales on average. According to the National Association of REALTORS®, foreclosed properties sold for 22% less than conventional sales, while short sales sold for around 14% less.

We’ve said it before, and we’ll say it again: This year looks to be the year of the short sale. Make sure you’re prepared!

For more information on the distressed property market and tips for listing a successful short sale, watch a free preview of the CDPE course. Click here to watch!

The Obama administration announced its latest plan to help troubled homeowners, enabling an estimated 3.5 million underwater mortgage holders to refinance at today’s historically-low interest rates.

However, experts speculate the proposal—which is expected to cost up to $10 billion and would be paid for by imposing a fee on major banks—could have a difficult time getting Congressional approval.

This proposal follows a string of government-initiated programs that have had mixed success, including the Making Homes Affordable Program. The difference is, Obama’s latest plan would assist borrowers with private (non-government backed) loans.

Under the current proposal, to be eligible borrowers must:

• Have not missed a mortgage payment in the past six months, and have no more than one late payment in the six months prior;
• Have a credit score of 580 or higher;
• Have a current mortgage balance within loan limits for FHA-insured loans in their communities; and
• The property must be their primary residence

As an agent, it’s important to understand the details and restrictions of the program so you can effectively advise your clients on their options. This proposal is already getting a lot of attention by the media, and distressed homeowners may view this as a viable solution to their problems.

However, it’s important to remember that this program would require Congressional approval, which may never happen. If you have clients who are on the edge, if they are facing foreclosure and desperate for help, don’t let the media talk of this proposal distract them from finding a real solution.

Are you well versed on foreclosure alternatives, such as short sales? Test your knowledge with our brief quiz!

The settlement, worth $25 billion dollars, was the largest government negotiated industry settlement since the Tobacco Industry settled in 1998.

In the Settlement, $5 billion is earmarked for $2000 payments to be distributed to borrowers who were illegally foreclosed on between January 1, 2008 and December 31, 2011. The remaining $20 billion will be used to help homeowners who are currently in danger of losing their homes by helping with loan modifications, principle reductions, refinancing, short sales, relocation assistance and other alternatives.

Join us on February 16th, 2012 for an Industry Broadcast, which will give you all the details of the agreement and what it means for agents and their clients. Click here to register!

Current studies show that over 6 million homeowners in the country are potentially facing foreclosure. However, initiating the conversation to find out if a homeowner needs your services can sometimes be uncomfortable or even offensive.  That’s why we have a refined a script that works well in any situation, whether you are on the phone or in person, and we call that script the “Distressed Property Rescue Script.”

It’s simple, effective and most importantly it makes homeowners feel comfortable to open up about their situation.  This is not a sales call, or a referral call; it’s a rescue call.

Here’s the script:

“Do you, or someone you know, owe more on your property than what it is worth and you don’t know what to do?”

This may sound like a simple question, but each word is designed to elicit a specific response.

Let’s take a look at this script and explain why each section is important.

“Do you, or someone you know.” Adding the part “someone you know” is non-accusatory and let’s the person off the hook.  It may also trigger a memory of someone they know who is in trouble which allows you to connect to their market.

“owe more on your property than what it is worth.” Leaving out the words “foreclosure” or “short sale” are important because studies have shown that 65% of homeowners do not understand these terms or know what they mean.  They do understand, however, that they are late on payments and that is something they can definitely relate to.

“you don’t know what to do?” This last section is the most important part.  Foreclosure is an ambiguous term, one the homeowner may not relate too or even understand.  Not knowing what to do has personal implications that every person can recognize, so by communicating in a way that has meaning you help people open up.

When CDPE’s call qualified clients and use this script they report 5 out of 10 and in some cases 10 out 10 calls resulting in referrals.

Begin calling past clients today.  Use this script to generate more listings and, more importantly, help someone in your database that already knows you.

Watch the Rescue Script video on You Tube.

The good news? According to RealtyTrac’s Year-End 2011 U.S. Foreclosure Market Report™, total U.S. foreclosure activity and the foreclosure rate were both at their lowest annual level since 2007.

The bad news? Foreclosure levels were artificially lowered due to delays following the robo-signing scandal. However, those delayed foreclosures will likely reappear in 2012.

“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011,” said Brandon Moore, chief executive officer of RealtyTrac.

Fortunately, both the financial and government sectors are more committed than ever to finding alternatives to foreclosure, including short sales. In fact, Bank of America expects a 60-70% increase in short sale closings this year.

Agents need to be prepared to assist distressed homeowners during the upcoming surge in foreclosure filings. If you’re not already a Certified Distressed Property Expert®, you’re missing out on an incredible opportunity to serve your community while growing your real estate commissions. Click here to watch a FREE PREVIEW of the CDPE Designation Course to find out how you can get started today!

It’s important to note:

• This applies to Freddie Mac-owned or guaranteed loans only.
• There is ACTION required. The homeowner must contact the servicer to request the forbearance.
• Delinquent borrowers in an existing short-term forbearance plan can be evaluated for an extended forbearance term under the new policy. Again, homeowners will need to contact their servicer to apply.

For more information, watch Alex Charfen’s latest Video Blog Post!

In an effort to shorten overall cycle times, Bank of America has reduced the window for submitting a backup offer on a short sale from 14 days to eight days after the initial offer becomes invalid.

Once a backup offer becomes necessary:

• Contact your short sale specialist immediately to let him or her know you have a backup offer to submit.
• Within eight calendar days, resubmit the listing data, submit the short sale offer, and upload the offer documents and supporting documents.

Note: All backup offers will require approval, regardless of similarities to the previous offer.

If no backup offer is available:

• The short sale will be closed in Equator by your short sale specialist.
• You should return to marketing the property.
• You may initiate a new short sale in Equator when you receive a new offer on the property.

For more great tips on getting Bank of America short sales approved, download our FREE report!

Among the key findings on current market conditions:

• Housing prices remain 33% below their early 2006 peak
• Currently, 1 in 5 mortgage holders are underwater (12 million homeowners)
• In states with the price declines (i.e. Nevada, Arizona and Florida) roughly half of all mortgage borrowers are underwater on their loans
• The number of properties currently in the foreclosure process is more than four times larger than the number of properties in REO inventory

The white paper suggests that no single solution exists and that progress will come through “persistent and careful efforts to address a range of difficult and interdependent issues”—a position we have always stressed.

Among these efforts, the paper strongly recommends incentives for alternatives to foreclosure, namely a short sale or deed-in-lieu.

The white paper also emphasizes a fact we are all too aware of: foreclosures drive down property values in the surrounding area and lead to a “ripple-effect” that harms homeowners, lenders and taxpayers alike.

Watch my Video Blog Post to hear more insights on the Federal Reserve’s recommendations.

A great place to start your outreach campaign is a list of NODs. Notices of Default, or NODs, are legal notices sent by a mortgage servicer to a homeowner who is 90 days late on their mortgage.

With a few simple modifications, you can use many of the same marketing techniques with NODs that have yielded you results when prospecting for traditional listings. For maximum impact, utilize the following:

Multi-touch Approach

Don’t expect results after one call, mailing or door knock. The foreclosure process can take months, and many distressed homeowners will refuse to face the reality of their situation until their time has run out.

As with any effective outreach campaign, follow the “Rule of 7,” which states that the majority of prospects need to be contacted a minimum of seven times before they notice your message. Distressed homeowners, who are often in denial of their situation, may require even more touches. Stick with it; persistence is key when marketing to NODs.

Multi-method Approach

Not all homeowners will respond to the same type of messaging. A consistent but varied approach to outreach will often yield the best results.

Include the following elements in your NOD outreach campaign:

• Letter
• Postcard
• Free Report
• Door Knock with Flyer or Door Hanger
• Handwritten Note
• Foreclosure Avoidance Seminar Invitation

Be sure to include your contact info, including a website address where they can download informative resources (such as a free report with foreclosure avoidance tips) in exchange for their name, email and phone number. This will help you track the success of your outreach and enable you to follow up with interested leads.

Get in a “Saving” Mindset (not a “Selling” One)

Before you begin your outreach, get centered and set the intention that you are going to help the person you are contacting.

When you have a long list of NODs to tackle, it’s easy to forget there’s a real family on the other end, and they are probably going through one of the most difficult times in their lives. The threat of losing your home is frightening and highly emotional. Be respectful, and always set out with the intention of helping instead of selling.

Additionally, don’t imply that you know the homeowner themselves is in financial distress. For example, when door knocking say, “I’m out here today to let my neighbors know that if they or someone they know is behind on their mortgage payments and doesn’t know what to do, I am here to help.”

Now that you’ve connected with homeowners in your area who need help, make sure you’re listing their property the RIGHT way. Download our FREE report: The 5 Steps to Listing a Successful Short Sale!

The number of new foreclosures increased by 21 percent during the quarter, partly due to servicers lifting the voluntary “foreclosure freeze” implemented in late 2010 as a result of the robo-signing scandal.

The overall increase has resulted in the number of foreclosures in process increasing to 4.1 percent of the overall portfolio, or 1,327,077 loans, at the end of the third quarter of 2011.

This supports RealtyTrac’s latest data, which also predicts increased foreclosure activity in 2012.

“November’s numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs (bank-owned homes) or short sales sometime early next year,” said James Saccacio, co-founder of RealtyTrac, in a statement.

Agents can help stem the tide of foreclosures in their market by educating distressed homeowners on alternatives, such as short sales.

Click here to learn more about how you can save families from foreclosure while growing your real estate business in 2012.

Fannie Mae and Freddie Mac offered some relief to such families by announcing an “Eviction Moratorium” through January 2, 2012. During this time, families living in foreclosed homes will not be forced to leave, though legal proceedings may continue as scheduled.

Undoubtedly, Fannie and Freddie’s efforts will prove comforting to homeowners who find themselves in this situation. However, the relief is short lived.

Remember, the “eviction moratorium” is only a short reprieve, so we urge you to continue reaching out to homeowners during the holiday season. Simply knowing that options exist can provide them with peace of mind. And during the holidays, a little peace of mind is an invaluable gift.

If you are not yet a CDPE and would like to learn how you, too, can help homeowners in distress, watch our FREE PREVIEW of the CDPE Designation Course.

Highlights include:

• When a short sale is submitted with an offer and the homeowner is HAFA eligible, BOA will no longer halt work on the file while waiting to contact the homeowner.
• Short sales initiated on Equator.com that receive a HAFA eligibility message no longer require homeowners to call Customer Care to confirm their interest.
• If homeowners wish to participate in HAFA, agents must submit the requested documents within 14 days.  (Note: the 14-day period begins the day the HAFA solicitation letter is mailed to the homeowner. Agents can obtain the date of the letter from the homeowner.)

These changes impact all short sales submitted with an offer in which the homeowner is eligible for the HAFA program.

Want more info on incentives available to homeowners through the federal government’s HAFA Program? Access our FREE video and report for all the details!

The article references major lenders—including Bank of America, JPMorgan Chase and Wells Fargo—that are offering cash incentives at closing for distressed homeowners who successfully close on a short sale.

In many markets, these attractive incentives have helped short sales outpace foreclosures, resulting in a “win-win” situation for the banks, homeowners and community at large.

Get the inside scoop on Bank of America’s new program to increase short sale closings by 60 to 70% in 2012. Click here to watch our exclusive interview with Bank of America SVP Bob Hora!

(Photo courtesy of IowaPolitics.com)

In a recent blog post, CNBC’s Diana Olick slams the Republican presidential candidates’ plans for solving the nation’s housing crisis.

Political beliefs aside, Olick makes some astute observations regarding the bank’s preferences for short sales over foreclosures and the important role that Fannie Mae and Freddie Mac play in keeping the market liquid.

Given the major impact housing has on the overall U.S. economy, it’s vital that our political leaders have a thorough understanding of these issues.

The biggest mistake we see politicians make, however, is to claim they have a new plan or program to fix the housing crisis. The reality is, no such “magic bullet” exists. What’s needed is a series of rational financial decisions that will eventually return us to a rational housing market.

Little by little, the housing market is coming back. It’s not going to happen overnight, and it shouldn’t. While creating temporary relief, a return to the irrational housing boom of the past decade would only create future instability.

Educated and experienced real estate agents are playing a crucial role by getting homeowners out of houses they can’t afford, and qualified buyers into existing inventory in a responsible way. Savvy investors have already returned to the market and are helping to relieve oversaturation and fill the increased need for rental units.

If we can change the misconception that housing is a risky investment, we will also see the return of primary homebuyers, and a return to stability in the market.

*************

Learn more about the role of Fannie Mae and its new Short Sale Assistance Desk, created to help agents get short sales closed faster. Watch our exclusive interview with Fannie Mae VP Marcel Bryar or download our free report.

Courtesy of The Palm Beach Post, comes some fresh news for Florida, offering up to $20,000 to short sale vs. foreclosure.

The limited time offer has received little promotion from the Charlotte, N.C.-based bank, which sent emails to select Florida Realtors earlier this week outlining basic details of the plan.

Only homeowners whose short sales are submitted for approval to Bank of America before Nov. 30 will qualify. The homes must have no offers on them already and the closing must occur before Aug. 31, 2012.

This signals, in our opinion, the pressure they are feeling in Florida as the housing market continues to languish and the continued pressure to clear up these loans that are facing imminent foreclosure. Other interesting facts in the article include the fact that the current foreclosure timeline is almost 676 days – almost two years!

“I think this is a positive sign that the bank is being creative to try and help homeowners and get things moving,” said Paul Baltrun, who works with real estate and mortgages at the Law Office of Paul A. Krasker in West Palm Beach. “With real estate attorneys handling these cases, you’re talking two, three, four years before there’s going to be a resolution in a foreclosure.”

Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, called the short sale payout a “bribe.”

“You can call it a relocation fee, but it’s basically a bribe to make sure the borrower leaves the house in good condition and in an orderly fashion,” Cecala said. “It makes good business sense considering you may have to put $20,000 into a foreclosed home to fix it up.”

Bank of America says that if the program shows promise in Florida, it could be expanded to other states. Other companies, including Wells Fargo and J.P. Morgan Chase also have similar programs.

More details:

Bank of America’s plan excludes Ginnie Mae, Federal Housing Administration and VA loans.

Similar to the federal Home Affordable Foreclosure Alternatives program, or HAFA, which offers $3,000 in relocation assistance, the Bank of America program may also waive a homeowner’s deficiency judgment at closing.

A deficiency judgment in a short sale is basically the difference between what the house sells for and what is still owed on the loan.

HAFA, which began in April 2010, has seen limited success with just 15,531 short sales completed nationwide through August.

In our opinion, this is just again a math decision a bank makes that falls in line with the bank’s decision. How does the bank minimize their lost? Short sale with a $20k kicker; or something else?

Post your thoughts in the comments!

• Nationpoint Mortgage
• Wells Fargo Short Sale Package
• NationStar Financial Short Sale Package
• PNC Short Sale Package
• Titanium Short Sale Package
• Sun Trust Short Sale Package

How do you get all these packages? Sign up for Short Sale Artisan (with a free 7-day trial!) and visit our document repository!

Anyone who’s followed the Art of Short Sales for any period of time knows that we have not been a huge fan of the HAFA, HAMP, and other government programs designed to ease the short sale process.

This week’s CNN article by Diana Olick continues to prove that over a year after its inception, the program continues to draw poor numbers.

HAFA provides financial incentives for servicers and borrowers to do short sales (selling the property for less than the value of the mortgage) and deeds in lieu of foreclosure (basically just giving the property back to the bank). The program launched in April of 2010 and was later streamlined in December, 2010, based on feedback from mortgage servicers, real estate agents and homeowners.

So far, HAFA has completed 7,113 short sales or DIL’s. In April, however, HAFA saw 1,666 completed, up 74 percent from the 959 done in March.

The government is touting this is a huge success – “a 74% growth!” – but as Diana points out, a 74% growth of nothing is still pretty close to nothing.

According to the article, JP Morgan Chase alone does close to 5,000 short sales a month -and that’s just one bank. The expectation is that the top few banks are likely doing in excess of over 20,000 short sales a month – in that light, HAFA is still producing inconsequential results.

Similarily to what we’ve said here, HAFA’s targeted audience limits the exposure it could potentially have.

“HAFA is a taxpayer funded program, so it has eligibility requirements targeted at a certain segment of the population,” says Risotto, noting that the program is for owner occupants who can demonstrate financial hardship and whose first mortgage is less than $729,750. “HAFA is not meant to be for every person looking to do a short sale,” she adds.

That knocks out investors, jumbo loans and borrowers who don’t meet the “hardship” requirements of the Treasury. The big banks are likely more lenient on that last one, again knowing that a short sales will be cheaper in the end than a foreclosure.

What are your thoughts? Had any success with HAFA? Post in the comments and let us know about it!

We just closed another short sale in Oceanside California!

Amazingly, our client asked that we tell her story and share it with other people in her situation.

About 18 months ago our client and her husband experienced a medical hardship, and after exhausting their savings , they found themselves unable to make their mortgage payments. Once they could no longer make the payments they decided to call the lender and ask for help. Time and time again, they felt ignored and unsure of the process. Without anyone to refer them they decided to google it. Our client did some research online and found a company that told them they could help them with a deed in lieu for $2,500.

This was serious money for them but they felt that it was there only choice to settle with the bank. Even though a deed in lieu is a voluntary foreclosure they were told that it was better for them to go this route. Many months passed and eventually they realized that the money was gone. Worse yet, almost 10 months had passed and still nothing had been resolved. She then heard about an attorney who claimed he had the power to help people in foreclosure. So, $4,000 later, all they had learned is that she could do a short sale or wait for the bank to foreclose.

Does this sound like your situation ?

During this time the home across the street was also in foreclosure, and they too had left the house vacant. This home was broken into by teenagers who burned it to the ground. Frustrated and worried, she looked online once more and searched for Carlsbad Short Sale Expert, this is how she found me, how I am not sure but she did.. She liked the information on my site www.shortsalemc.com and decided to let me help her.

When I looked at the file I felt that this file was doomed, the file had the following red flags:

• The second had not been paid and the loan was sold to a credit company.
• The HOA had not been paid and the lender (Bank of America) does not pay these fees.
• 18 months had passed with no payment.
• The home was vacant.
• The seller had no money to contribute towards a short sale settlement.

Every possible bad scenario played out here, so why did I take the file? We had a client that did want to avoid foreclosure and trusted me. The other reason was that we had a plan …after the financial review we designed a planned to get this done that involved another important piece …Buyer COOPERATION.

We set out to find a buyer that would follow the process and help settle the debt. In return we got them an awesome price ($30k under market value).

We were able to:

• Negotiated the second lien payoff so they would not go after our client.
• Paid off the HOA thru strong negotiations with buyers agents.
• Had the clients move back in to take care of the property.
• Got seller $2,500 from the lender to relocate.
• Only worked with the strongest buyers, not just any offer.

I am glad to have been able to help them. I am also glad that she did not give up and tried one last time. She said the last time she prayed that God would help her find someone and said I was the answer to her prayers. Wow, I did’t know what to say to that! That was by far the best compliment I had ever been given!

Are you in a similar situation? Do you need help to avoid foreclosure?

Let me help you…

www.shortsalemc.com

www.mikerebroker.com

Came across this article from CNBC last week discussing the impact HAFA has had (read: not what was expected!)

The treasure department says the following

“While HAFA has been widely credited with streamlining the short sale process by setting clear timelines, documentation requirements and procedures, feedback from various stakeholders including servicers, housing counselors, realtors and others supported that additional enhancements could be made to further streamline short sale transactions, to the benefit of homeowners.”

As a result, HAFA rule changes include the following:

A recent report from the folks who oversee the TARP (the Congressional Oversight Panel) said that the Treasury has spent just $4.3 million on HAFA for 661 short sales. So Treasury, last week, decided to change the rules a bit:

• HAFA no longer requires that servicers verify the borrowers finances
• HAFA no longer requires servicers to determine if the borrowers monthly payment is higher than a 31 percent debt-to-income ratio.
• HAFA no longer requires second-lien holders to agree to accept 6 percent of the unpaid principal balance owed them, up to $6,000. Servicers now decide who gets paid how much, with a cap still at $6000.
• HAFA now requires borrowers seeking a short sale get an answer/agreement within 30 days.

We have criticized HAFA since its inception and are not surprised at all to see it faltering. That said, the guidelines mentioned above look like they provide marginal improvements, but not enough to drastically change anything. In particular, one we wrote about in an earlier blog post:

Removing the case-by-case analysis that short sales need: Every short sale transaction is different, and lender should approach them as such. HAFA requires lenders to identify their minimum net proceeds ahead of time, and the guideline requires 120 day period to change that value. This means that if a property falls outside of the minimum net proceeds, it isn’t eligible under HAFA. That’s a shame; because the house is worth what the house is worth, and even in the span of 120 days the criteria used can change. It removes flexibility from the process, which is critical when handling these transactions.

This was not adjusted and really makes it difficult for lenders to truly handle transactions on a case by case basis.

What are your thoughts on the market forecast and the HAFA program?

Well, 2011 sure is off to a heck of a start, isn’t it? As we predicted here over and over again, the short sale marketplace is going to continue to be an important part of the still-stagnant housing recovery for the foreseeable future. So if you aren’t up to par on what you are doing, it’s time to get on board!

This recent article from Inman expands on what we have been saying, and predicts 5- 8 years of high short sale volume. What does this mean to you? You need to be competent in managing your short sales, and Short Sale Artisan helps you do exactly that! Even to 2020 and beyond!

The short-sale marketplace is not failing down anytime soon, and if genuine estate professionals wish to excavate into that niche, they should teach themselves thoroughly. That was a summary from dual short-sale specialists who spoke during Real Estate Connect Thursday.

“We’re looking during 5 to 8 years conservatively (of high short-sale volume),” pronounced Holly Maloney, a authorized short-sale dilettante and a Realtor during Huff Realty in Cincinnati, Ohio. “It’s a marketplace that’s going to be there. You possibly learn how to do it, teach yourself or work with someone who knows how to do it, differently you’re going to be giving business away.”

5 – 8 years is their conservative estimate!

Travis Waller, a authorized residential dilettante during RE/MAX Advantage Plus in Teaneck, N.J., expects disastrous equity to trigger a second call of foreclosures “that no one is even vocalization about.”

More than one in 5 homeowners with mortgages — scarcely 11 million borrowers — due some-more than their homes were value during a third quarter, according to a latest numbers from debt information aggregator CoreLogic.

“Until stagnation gets better, a market’s not going to get better,” Waller said.

Again making the case that volume and low home sales, and further depressing home values, as well as a jobless recovery, are contributing to home sales lagging some of the other gains that have been made throughout this economic “recovery”.

“It unequivocally comes down to display of your papers to a banks. The banks commend who has knowledge and who doesn’t,” he said. He generally represents sellers and carries between 15 and 25 listings in a month.

That is what we have been saying at Short Sale Artisan for well over a year. Formulating an ironclad short sale package is crucial to your package getting accepted. That isn’t going to change in the future, as you are always making the case to the bank that the short sale is the best way for the lender to mitigate their loss.

Both also offering agents this tip: Get a e-mail residence for a detriment slackening officer you’re traffic with. “It expedites a routine since during that indicate we can start e-mailing (him or her) PDFs,” instead of promulgation them faxes, Waller said.

This is a very key statement and underpins the importance of building relationships with loss mitigation representatives and banks you work with. If you are a high volume customer, they recognize you, and your offers are reasonable; you will dramatically improve the likelihood of speeding up your short sale offer and getting to approval.

Short sales will continue to play an important role for the foreseeable future – so you need to know them! What are you plans and predictions for the future of the short sale marketplace?

TALEGA REAL ESTATE INFO

San Clemente Real Estate | Helping you find a home in Talega

Search for Talega Real Estate with Michael-Edward Cruz

My name is Michael-Edward Cruz 01758933, and I work with a vast network of agents to help you find a home in the San Clemente neighborhood of Talega. From San Clemente to Del Mar, I specialize in beautiful Coastal and Master Planned Communities. Talega is one of those master planned communities.

I Work with Buyers looking for Talega Real Estate.

ABOUT TALEGA

(Source Wikipedia)

Talega is the name of a tract housing project in the city of San Clemente in Orange County, California. It began construction in 1999.

It is located near the Northrop Grumman Capistrano Test Site (formerly TRW), active today and where the Lunar Module Descent Engine (LMDE) engines were developed in the 1960s for the moon landing. It is about 8 miles (13 km) from the San Onofre nuclear power plant and east of the Marine Corps Base Camp Pendleton.

There is an 18 hole golf course, 2 elementary schools, and a middle school. It is served by the Capistrano Unified School District, and was recently annexed to San Clemente from the unincorporated territories it existed in upon the beginning of construction.

Talega is home to 9,000 residents and, when completed, will have a total of 3,500 residential units. Most are tract houses, with apartments, condos and a low-income project that share the same master pools and facilities. There are no full-custom homes. The community has a predominant Spanish/Tuscan architecture, which is carried out in almost every home, and all the public spaces and buildings within the community.

Talega is a master planned community in San Clemente. It consists of 19 neighborhoods which are mostly single family homes, some condominiums and a few apartments. The Talega Specific Plan area encompasses a total of 3,510 acres (14.2 km2) in the Northeastern portion of the City. The major streets within the Talega Specific Plan are Avenida Pico, Camino La Pedriza, Avenida Vista Hermosa and Avenida Talega.

Talega is located about 3 miles (4.8 km) from the coast and 2 miles (3.2 km) east of the 5 freeway, between the streets of Avenida Pico and Camino De Los Mares. Some of the homes offer views of the ocean, their local golf course, mountains and it’s parks. There is a swim and Athletic Club also.

Parks

City Maintained Parks:

• Talega Park
• Liberty Park
• Tierra Grande Park

Talega HOA Maintained Parks:

• Altea Park
• Pacifica Summit Park
• Portofino Park
• Sansol/Mirador Park
• Lucia Park

Communities

• Alora (Single Family)
• Alassio by Standard Pacific Homes (Townhomes)
• Alta by Standard Pacific Homes (Single Family)
• Amalfi by Standard Pacific Homes
• Bella Vista by Manning Homes (Single Family)
• Careyes by Brookfield Homes (Single Family-Gated)
• Carillon by Standard Pacific Homes (Single Family)
• Cantabria (Single Family)
• Caprizi (Single Family)
• Catania by Standard Pacific Homes (Single Family-Gated)
• Cazadero by Shea Homes (Single Family)
• Escala by Standard Pacific Homes (Single Family)
• Farralon Ridge (Single Family)
• Lucia by Laing Luxury Homes (Single Family)
• Mirador by William Lyon Homes (Single Family)
• Miraleste (Single Family)
• Monterey by Standard Pacific Homes (Single Family)
• Pacifica by Standard Pacific Homes (Single Family)
• Portomarin (Single Family)
• Ravenna (Single Family)
• Sabella by Pulte Homes (Single Family)
• San Lucar by Brookfield Homes (Single Family)
• Sansol by Standard Pacific Homes (Single Family)
• Santalana by Standard Pacific Homes (Townhomes)
• Seaside by Shea Homes (Single Family)
• Solana (Single Family)
• Stella Mare by Standard Pacific Homes (Single Family)
• Verano by Lennar Homes (Townhomes)
• Vittoria by Standard Pacific Homes (Single Family-Gated)
• Vizcaya (Single Family)

There is also an area called The Talega Gallery that is a 55+ Community consisting of the following communities:

• Seagarden
• Sandbridge
• Waterleaf
• Wavecrest

Even though Talega sits within the city limits of San Clemente, some long-time residents do not consider Talega to be a part of the San Clemente `Spanish Village by the Sea’ atmosphere. In December 2007 the Southern California Multiple Listing Service moved Talega out of San Clemente and made it its own city. This move by MLS provoked such an uproar among San Clemente real estate agents that the MLS eventually put Talega listings back into San Clemente.

Due to its location tucked into the hills, Talega faces several transportation issues. As of March 2009, there are only two main roads out of the community. There is a proposed extension of La Pata that would bridge the 1.5 mile gap between Talega and the point where the road currently ends in San Juan Capistrano. The current Orange County Master Plan places the location of this extension very close to homes in Talega which is a concern to adjacent homeowners. A suggestion to relocate the route to a path halfway between Talega and the adjacent Forester Ranch community would involve relocating power lines and would be the most expensive option. However, the county does not currently have the fund to complete this extension and it will be many years before work is completed there.

In December 2008, the US Commerce Department suggested relocating the controversial 241 Toll Road extension along a path that would route this major highway directly into Talega, eliminating 176 homes and dumping the freeway onto city streets. The transportation authority (TCA) had not previously considered this path and is not likely to pursue that option.

“No Cooperation”

This is the BIGGEST reason why short sales fail. Why do I know this? Because when I jumped into this game I was working on these deals ‘alone’. Yes I was working on short sales alone because no one was willing to do anything to close these deals but me. I was working with the lender, I was cutting my commission, I was calling and calling to get paperwork from sellers who would take weeks to send it, I was trying to keep the buyer on board. Man, it’s no wonder agents hate short sales. Some will not even touch them! That was the way it used to be, before I learned from one of the best short sale negotiators in my area, his name is Troy Huerta. He became instructor for the PSC certification and everything he taught I lived through with his team and it was all true. I met him when I introduced him to my short sale management software 2007 to help him manage multiple short sale transactions. He has been using it ever since to close almost 250 short sales and I was able to learn his secrets in return.

Let me break down the single greatest issue that if confronted up front will steer you away from nightmare deals. If you are going thru a short sale and you notice that these points have not been addressed don’t be surprised later on when they become an big issue.

Here we go!

SELLERS

Many times we will work with sellers that are not really committed to short selling the home, even though lenders have already proven that modifications are hardly ever successful, many sellers naturally wish that they were not having to sell. While this is understandable it makes sellers less likely to contribute to the close. Many, many times $1,000 bucks has been the difference between short sale and foreclosure. Why? Well because sometimes it is required that sellers make a cash contribution to settle their home loans. They may owe 500k, 600k even 100k and some sellers refuse to pay any settlement amount to avoid foreclosure. Sometimes lenders will even allow for non-interest promissory notes and payments of 150 bucks for 5 to 10 years. These arrangements help your credit score and help you avoid a foreclosure.

Unfortunately there are situations where some folks are completely financially devastated. Still 90% of the time they are not paying for housing so asking for a contribution of at least $1,000 or $2,500 IS reasonable to help settle a debt of hundreds of thousands of dollars. Sellers need to have a genuine effort want to settle these debts.

So # 1 Cooperative Sellers, next

BUYERS

In 2008 I had my lowest ratio for closed short sales, But I was doing everything I could. Picking my sellers carefully, reviewing the lien types. Getting offers and marketing my properties for sale. Then I would get my approval letter and with all the excitement in the world I would call the buyer’s agent and say CONGRATULATIONS! THE LENDER APPROVED YOUR OFFER! …… and then I would begin to hear. “Oh, thanks, but actually my buyer is actually in escrow for another house now and well sorry.” As all the air would escape my body I would walk to my file cabinet with my head down and pull up my software to find the next offer in line. As I would scramble to find another buyer, my approval letters were begin to expire and when I finally found that new buyer, the lender would require us to “start over”! Man short sales suck right, wrong! I just didn’t find the right buyer!

I need a cooperative and qualified buyer. I need a buyer who has skin in the game and will start working on his loan approval right away. Buyers need to know that a purchase contract whether a short sale or not needs funds in escrow in order to be a valid contract. And yes I know, short sale addendums allow for checks not to be cashed until approval but believe me, the last thing you want to do is play the extension game with short sale approvals. Once you get a short sale approval you should be ready to close in less than 20 days. Meaning that when you buy one of my short sales you have money in escrow and your loan is ready in 45 days later. Plenty of time to work out last minutes issues that do arise. We usually get short sale approvals within 45 to 90 days after being submitted so buyers should be ready to close by the time the approvals come in. Tell your short sale negotiator you can close in 10 days and they will love working with you. I have had sellers accept buyers that do not go into escrow and every time it has been a mistake that has cost everyone time and has put them in jeopardy of foreclosure.

Don’t do it! Don’t work with uncooperative buyers !!!!! No No No No No.

So number # 2, Cooperative Buyers, next

LENDERS

Thinking that Jr Lien holders (2nd or 3rd loans) have to cooperate with you because they will get wiped out in a foreclosure if they don’t is a mistake that will cost you a foreclosure. Sometimes after 180 days of not paying on your second loan, investors will sell these loans to companies like GC Credit Services and Old Republic Credit Services. If this happens you can pretty much cut the chances of a successful short sale in half. Their motto according to an employee I spoke to is “everybody has to lose in order for us to approve the short sale” WOW! Companies like these do not care if your home goes into foreclose. If they do not collect a certain % of money from all parties involved they will not help, they even have “allegedly” been known to try and have agents pay them a % of commissions which is NOT legal since they are not licensed brokers in the transaction. In recent news stories, companies like these have “allegedly” been known to ask agents to pay money out of escrow to “approve” the short sale. A request that constitutes mortgage fraud and should never done, but still they”allegedly” try.

So can you close the short sale if you are working with a jr lien like this? Maybe, but they will lower the % of probability and should be avoided if possible. Unless you have large reserve of cash or have a buyer who is willing to pay the settlement amount, you will probably not get these type of companies to release the lien causing your home to go into foreclosure. This goes back to buyer/seller cooperation. If the buyer and seller cooperate then the probability goes way up. But if both parties are unable to settle jr lien demands then the chances are slim.

Another common short sale killer is a second loan insured by mortgage insurance. Mortgage insurance protects second mortgages for up to 20% to 25% of the loan amount. If your home is severely “underwater” you are probably not going to be able to pay the second what the insurance could and therefore there is no incentive for the second to cooperate at all. Why would they accept $3,000 if the insurance will pay them $25,000? So have your Realtor check this out for you BEFORE getting involved.

So # 3, Cooperative Lenders, can you begin to see the light here??

Whether you are a buyer, seller, or agent for that matter, knowing this information will help you assess whether you should buy, sell or list a certain property.

So let’s give three examples here and with what you have learned tell me if you think you should be part of the deal.

EXAMPLE # 1 (pretend you are the agent representing the seller)

The home is worth $200,000, the seller owes $480,000 and the lender has both loans. The seller will contribute $1,000 and may sign a prom note for a max of $5,000. The buyer does not want to open escrow and work on loan approval until after the short sale is approved. The home is already in foreclosure and the foreclosure auction is in 60 days.

EXAMPLE # 2 (pretend you are the agent representing the seller)

The home is worth $200,000, the seller owes $480,000 and the lender has both loans. The seller will contribute $1,000 and may sign a prom note for no more than $5,000. The buyer opens escrow and will work on loan approval and do home inspections so they are ready for the approval letter. Once they get approval they will be able to close in 10 days. The home is already in foreclosure and the foreclosure auction is in 60 days.

EXAMPLE # 3 (pretend you are the agent representing the seller)

The home is worth $200,000, the seller owes $480,000 and the lender has both loans. The seller will contribute $1,000 only. The buyer opens escrow and will work on loan approval and do home inspections so they are ready for the approval. Once they get approval they will be able to close in 10 days. The second lien was charged off and sent to a collection attorney, they will want $20,000 to release the lien. This is 2 times more than they would get on a normal short sale and 100% more than they would get if the home foreclosed. The home is already in foreclosure and the foreclosure auction is in 60 days.

Which would you choose? I would chose #2 and only proceed with #3 if the buyer was willing to pitch in some $$$ to settle the second loan.

Knowing these details begin to open your eyes to what short sales are, yes they can be a pain when you are swimming against the current. This is a tough market for everyone just look at the these other transaction types and there issues.

BANK OWNED PROPERTIES: ISSUES GETTING OUTBID, DEALING WITH AGENTS WHO NEVER CALL BACK, PAYING HIGHER THAN LIST, LOOKING AND SENDING OFFERS FOR MONTHS, ISSUES WITH THE PROPERTY THAT ARE UNKNOWN ECT ECT!

NEW HOMES: APPRAISAL ISSUES, WAITING FOR YOU HOME TO BE BUILT (MONTHS), BUILDER GOING BANKRUPT, UPGRADE COSTS ECT ECT.

There isn’t a “better” option, there is only an educated approach to buying and selling homes.

If you are in this situation and need a FREE CONSULTATION CALL US and we will be happy to tell you the truth about your situation. No BS just what will help you achieve your goals and what challenges we can help you overcome and what needs to be done.

Stay tuned as we spend more time on JR LIENS tomorrow. We will try and have TROY HUERTA on our blog to share some of his insight to dealing with JR Liens. And how you can avoid most common issues with JR liens.

New home sales dropped to an annual pace of just 283,000, according to the Commerce Department. That was down 8.1% from a slow September and 28.5% from 12 months ago when the annualized sales rate was at 430,000.

Sales are off nearly 80% from the housing boom peak pace of 1.4 million, set in July 2005. Sales have remained near historic lows this year despite very attractive mortgage interest rates that slash the monthly costs of homeownership.

The Commerce Department also revised August sales figures downward to 275,000, which represents the record low point for new homes sales since it started tracking figures in 1963.

There’s a major factor depressing home sales of all kinds, according to David Crowe, chief economist for the National Association of Home Builders.

This likely has partially to do as well with the expiration of the homeowner tax credit. Many economists were predicting a rebound in the near future but this news puts the housing market in worse condition than anyone anticipate; which in turn means that loan modifications, short sales, and foreclosures will continue to play an enormous influence as people continue to remain underwater on their homes.

“So much bargain-priced, ‘used’ home inventory is available that the builders just can’t compete,” he said. “Over time, we’ll work through that mountain of existing home supply. But the key words are ‘over time.’ New home builders won’t have much to be thankful about any time soon.

The median price for existing homes sold in October was just $170,000, compared with $194,900 for new homes. That’s the lowest median price for new homes sold in seven years and down 13.9% from September.

The enormous inventory, coupled with continued downward price pressure (although we do believe the bottom is somewhere nearby!) means you need to make sure when making your short sale pitches to the banks you mention the status of the economy and the recovery that seems so distant in the future.

Crowe said that indicates many of the buyers were first timers. They’re less constrained than older potential buyers because they don’t have to worry about selling their existing homes in order to purchase new ones. One light at the tunnel, however, is a slightly shrinking inventory:

One encouraging aspect of the report for home builders is that inventory continued to wane. The number of new homes for sale at the end of October was about 202,000, less than nine months’ supply at the current rate of sales. The number of homes on the market has dropped about 20% since October 2009.

As we have been saying for some time, we think there is at least 3 – 4 more years of strong short sale potential in the marketplace. Conflicting information about economic recovery makes us believe that the optimism about rebounding home prices is, well, a little too optimistic.

What are your thoughts? Post ‘em in the comments!

Top mortgage servicers have completed 91,827 short sales or deeds-in-lieu of foreclosure on canceled trial or declined modifications through the Home Affordable Modification Program as of September, up 27% from the previous month, according to data from the Treasury Department.

This is pretty fascinating news. The HAMP program continues to fail such that there has been a 27% increase in the number of attempted modifications that proceed on to deed in lieu or short sale. Although, we have been saying for close to a year that HAMP and HAFA have been incredibly poorly executed.

The Treasury started HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. Through October, those servicers have started 1.4 million three-month trials and converted 519,648 of them into permanent status, though conversions have been going down in recent months.

The top eight servicers — have canceled 551,821 trials either due to a redefault, lack of documentation, or the borrower was deemed ineligible. Those same servicers have declined 842,436 homeowners from entering a trial, according to the latest Treasury data through September.

Of the canceled trials in that time, 47,001 have been liquidated through a short sale or the homeowner gave up the deed-in-lieu of foreclosure. Of the mortgages that were denied from a trial, 44,826 went into short sale or deed-in-lieu for a total of 91,827.

Most of the short sales, however, are reportedly not being done through the Home Affordable Foreclosure Alternatives program, which was launched by the Treasury in April to incentivize servicers to conduct short sales and DILs on loans that fell out of HAMP.

All that hullaballoo about HAFA saving the day and the majority of them aren’t even being processed through HAFA (which was intended to be a relief program for those who couldn’t maintain payments even on a modified loan).

Even though the Treasury pays the servicers for a transaction done through HAFA, the Special Inspector General for the Troubled Asset Relief Program reported 342 short sales and DILs completed through HAFA as of Sept. 30.

The Treasury has not released official numbers on HAFA, but has said it expects to before the end of the year.

We can hardly wait to see what those numbers look like! 342 short sales through HAFA as of Sept 30th!!

Are you in foreclosure? Do you want to know your options but don’t want swim with the sharks?

This website may have the information you need to help you save your home. FANNIE MAY WEBSITE

If keeping your home is not an option and you need to short sale, then call us. We are certified with two major short sale designations ( CDPE and PSC ) and have invested a lot of time and money in our education in order to help you get your short sale approved.

Call now to see if you qualify for a short sale. 800-374-9110 Ext 1

Late last week; there was quite a ruffle up in the Internet about copyright violation and plagiarism related to Cook’s Source Magazine. It’s quite an interesting story and speaks to the understanding of copyright and content ownership on the Internet. The reason I bring it into the Art of Short Sales blog is that many of us write our own blogs about short sales or real estate, and these are frequently ripped off without the appropriate acknowledgment or credit.

The Cook’s Source debacle, in a nutshell, involves an author, Monica Gaudio (who’s account of the entire debacle can be found here), who published a recipe with a corresponding article on her own website nearly five years ago. Cook’s Source magazine then blatantly copied it, verbatim, and used it in their advertiser-supported publication. Now, because they did use Monica’s name in the article; it certainly is not plagiarism. However, it IS very clearly a copyright violation, since Monica was never approached or asked for permission to use her article.

Monica was made aware of this and contacted the magazine’s editor, Judith Griggs. Ms. Grigg’s response needs to be quoted word for word, and I can’t do it justice by paraphrasing:

“Yes Monica, I have been doing this for 3 decades, having been an editor at The Voice, Housitonic Home and Connecticut Woman Magazine. I do know about copyright laws. It was “my bad” indeed, and, as the magazine is put together in long sessions, tired eyes and minds somethings forget to do these things.
But honestly Monica, the web is considered “public domain” and you should be happy we just didn’t “lift” your whole article and put someone else’s name on it! It happens a lot, clearly more than you are aware of, especially on college campuses, and the workplace. If you took offence and are unhappy, I am sorry, but you as a professional should know that the article we used written by you was in very bad need of editing, and is much better now than was originally. Now it will work well for your portfolio. For that reason, I have a bit of a difficult time with your requests for monetary gain, albeit for such a fine (and very wealthy!) institution. We put some time into rewrites, you should compensate me! I never charge young writers for advice or rewriting poorly written pieces, and have many who write for me… ALWAYS for free!”

What is very fascinating about this is that this editor of a regional magazine actually believes that the web is public domain. It’s an interesting story even beyond this from the social manifestations of this incident: the topic exploded on Twitter and Cook’s Source Facebook page was essentially over-run by Internet users who were furious at her blatant disregard of basic journalistic principles.

Again, the reason I bring this up is that the Internet makes it so easy to be taken advantage of. Many bloggers, including us at Short Sale Artisan, spend a significant amount of time writing custom content and trying to appeal to our readership. It’s great being linked and even re-use our articles where we can (we frequently syndicate our blog content on Articlesbase and E-Zine articles, for example). But then, there are always those who rip off content and re-use it on their site (or slightly tweak it) without providing the appropriate credit or asking for permission. I found at least three instance this week alone of our blog posts being used without permission. In each case, I notified the owner and of the blog and demanded at a minimum a backlink to the original source with a credit to the author.

A recent example; last week, Alexis McGee (UPDATE: The link was removed and the rip-off was fixed) blatantly ripped off my content on her own blog. Despite my repeated e-mails to her; she has still not removed the post. This type of behavior is not acceptable. It’s one thing to have someone contact us, provide a backlink, and mention Short Sale Artisan as the author; but Alexis used our article to advertise her own webinar and removed all links and references to Short Sale Artisan, without asking our permission. Alexis McGee is a thief, plain and simple, and her lack of response to our requests to appropriately credit or otherwise reference the author signifies a complete disregard for copyright and is clearly plagiarism.

Take a look at some of these excerpts:

Here is our post on Short Sale Artisan:

The question for short sale professionals is; does this adjust the bank’s motivations for a short sale? We think it does provide  abit more incentive to clear them up sooner – but on the flip side; also means there will be more attention paid to the value proposition a short sale offer presents. This means it is more critical than ever to provide an ironclad short sale package and bulletproof documentation – don’t give the bank any reason to dismiss your offer!

Here is Alexis McGee’s ripoff of our content:

Bottom Line – The Foreclosure Freeze changes the bank’s motivations.

But it’s more critical than ever to provide an ironclad short sale package and bulletproof documentation with your deal so don’t give the bank any reason to dismiss your offer.

Our Post:

This is positive news for the banks, although we still find it unbelievable that the banks did such a poor job auditing their foreclosure process that they literally had to stop processing them while they lined their ducks up in a row.

Her Post:

This is positive news for the banks, although we still find it unbelievable that the banks did such a poor job auditing their foreclosure process that they literally had to stop processing them while they figured out what they did wrong.

In case you missed English class in high school; this slight tweaking is still plagiarism.

From Wikipedia:

Plagiarism is defined in dictionaries as “the wrongful appropriation, close imitation, or purloining an publication, of another author’s language, thoughts, ideas, or expressions, and the representation of them as one’s own original work.

The lesson here is not one of self-pity. It’s to help you avoid this type of plagiarism and how to deal with it in the real estate blogging realm.

So, how do you identify these types of theft? I use Google Reader’s feature to subscribe to certain key words in search results. In the above case from Alexis; I have a Google Alert setup that searches for Blogs with the words, “Short Sale” in them. Alexis’ blog came up in my daily search and I immediately recognized from her headline that it sounded similar. When I went to go read her blog post, it immediately rang a bell.

The Cook’s Source story is not alone out there, unfortunately, even though it gathered the fury of the Internet this week. Just pay attention to what is out there and, if you put time into your posts, you will need to pay attention to those that rip off your content.

Thoughts? Comments? We’d love to hear about it in the feedback!

Supplemental Directive 09-09 November 30, 2009

Introduction of Home Affordable Foreclosure Alternatives – Short Sale and Deed-in-Lieu of Foreclosure

CLICK HERE TO DOWNLOAD YOUR FREE COPY

Michael-Edward Cruz
California Real Estate Broker
01758933

Many Americans are Hoping for a Loan Modification

HOPE!

wikipedia defines hope as:

“A belief in a positive outcome related to events and circumstances in one’s life. Hope is a feeling that something desired may happen, when the outlook may or may not warrant it.”

When I traded stocks I was taught that four letter words hurt you as a trader more than they helped you. The main bad words were FEAR and HOPE.

FEAR kept you from fully maximizing on your trades and HOPE kept you in them long enough to pay the hefty price.

Now as a Real Estate Broker I meet people who are in danger of losing their home to foreclosure. Like stocks, the real estate market has its ups and downs. And like stocks the same emotions play out. Fear and Hope are prevalent. Of those I think HOPE is worse,  its hurting people more than just having a foreclosure.

EXAMPLE

We will call this person Tom,

Tom was behind on his mortgage three months and $14,000 in back payments not including fines and looming legal fees. Based on public record I knew he was in need of my services and offered to do a short sale on his property. He told me that he was working on getting a loan modification. It made sense, he was working but went thru a divorce and this hurt his ability to stay current. He just had to prove to the lender that since the property had lost 50% of its value it would be in their best interest to work with him.  So he had his buddy refer him to an attorney who was going to work on the loan  mod. The attorney charged him $4,000 to work on his file and off they went.

Five months later the banks responded… DENIED! Tom thinking that his attorney didn’t know what he was doing  fired his loan modification company and hired another one he heard on the radio, they charged him $4,500.

One month later after the loan mod company didn’t return any phone calls or emails he decides to visit the location only to find out that the business had gone bankrupt, Ouch!  (people still think radio and tv add credibility!)

But he was still hopeful so he paid a third company $3,000 to help him. This company did work on it like the first had and three months later he got his answer. DENIED! What!! how could this happen, it doesn’t make sense. The government said that programs exist and that banks had to help people!! Arrrrgh!! How could this happen you say, it doesn’t make sense, banks took tarp money!!!!

Well what happened is the investor sold the note the moment that Tom’s loan went into default. Huh? what does that mean you say? That means that the servicer or bank as most people know them (Bank of America, Chase, Citi) don’t own the loans. Investors do,banks hold a small number of loans but not many. So the many investors who do own these loans sell them to other investors who buy bad debt. Sometimes the same attorney who helped your on the loan mod is buying bad debt to resell. (yes it happens, I have had bank reps tell me that attorneys are there best note buyers, especially on second loans.) Don’t act surprised, these are the waters you enter when in these situations.

Most investors don’t know the homeowner and yes they don’t care. All they know is that they lent money for the purpose of collecting a profit, short or long term the word is PROFIT. Like your 401k at work, you save to be able to retire and live off the interest. Some of these loans were actually purchased with other peoples retirement money but that is a whole other topic for another day.

So again, without the homeowner even knowing, the investor sold that $380,000 note for $90,000 (property worth 180,000) The new investor has purchased the note for ONE REASON, LIQUIDATION. The old investor probably did it for tax breaks , or maybe his buddy buys it to resell, who knows, the point is money is moving. and Toms house is the prize!

Not FAIR right, well there’s another four letter word for you. Maybe they have LUCK, and Tom needs real HELP, see a pattern here?

We spoke with an exec at Bank of America who admitted that only 10% of loan mods have been made permanent. Of those 10% they did, 80% re defaulted.  So why are the banks pushing them if they really don’t help??? Well like we said earlier, gov programs! They have to try and help even though many people will be denied, its called Public Relations!

But back to Tom…

So after Tom paid $11,500 of hope money he was told SORRY. We are foreclosing next week!  So again hopeful Tom sues the bank which delayed the foreclosure for a week.  And then the day came, FORECLOSURE! No stopping the train, this was done and done. Right?

Well hope reared its ugly head again, this time he hoped that he could reverse the foreclosure and hope that the bank could not make him leave his home. After a couple of misfiled court documents and other delay tactics he was eventually evicted.

So hope won him

$11,500 in fees, foreclosure and finally eviction, all in his credit record for him to keep for 10 years. From here on he can HOPE to get cell phone or lease on apartment in the near future.

This is a real scenario by the way.  I have been in situations where the banks have screwed up and this was the only tactic left. But this was not Tom’s case at all.

Tom should have short sold the home. He owed about $400,000 for a home that was worth $180,000. What if he was successful with the loan mod? What did he actually accomplish? He would really be renting his home without a landlord. It would be a temporary fix at best.  He would be responsible for repairs, insurance, and taxes only to have issues with the loan in 2 to 5 years. He could have rented a MUCH, MUCH NICER HOME while his credit improved.

The WORST PART OF THIS STORY is he would be ready to buy right about NOW because this happened 2 years ago. He would have been eligible to buy again. And those 11k would have been perfect for a down payment.

I guess when it comes to business, hope and money don’t mix!

Michael-Edward Cruz
California Real Estate Broker 01758933
760-689-BANK (2265)

http://www.mikerebroker.com

http://facebook.com/mikerebroker

They are working the short sale market and giving homeowners options to avoid foreclosure. They do not charge any ridiculous “fees” to get your process started. With a high success rate, they are looking for sales that can be completed. To find out if you qualify send a request on the home page by clicking the link www.shortsalemc.com

Here is an article from the California Association of Realtors with some news on Real Estate Financing for 2010. To subscribe see the links above under POST for the link.

Conforming loan limits extended through 2010

For release:
Friday, Oct. 30, 2009

Extension of conforming loan limits through 2010 earns praise from C.A.R.

LOS ANGELES (Oct. 30) –The U.S. Congress late yesterday passed a congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California. President Obama is expected to sign the resolution today or tomorrow as part of a broader piece of budgetary legislation that will prevent a government shutdown.

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $625,500 in high-cost areas to $729,750 and extending the limits through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.

“There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California’s housing market over the last year,” said C.A.R. President James Liptak. “C.A.R. applauds our congressional representatives for their actions to extend the higher loan limits through 2010. They now should focus on making higher loan limits permanent.”

The conforming loan limit determines the maximum size of a mortgage that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 163,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles