Orange County Short Sales
Happy Memorial Day!! We hope you have a nice and relaxing long weekend planned Here’s an interesting email we received about homebuyer recovery from the folks at FirstTuesday.us and Barry Zanck, one of our preferred lenders. What do you think?
California Home Buyer Recovery
2005-2009 California economic development stagnates.
2007-2009 The Great Recession
2009-2010 The Federal Reserve takes direct control of long-term interest rates – all new mortgages are Fed funded by bonds.
2009-2016 The Lesser Depression, characterized by persistent slow job growth and low demand from home buyers, while dominated by speculators.
2010-2015 Home sales remains on a “bumpy plateau” recovery approximating their 2010 numbers. The state’s homeownership rate drops below 55% (state’s historic point of stability) to near 50%. Collectively, short sales, foreclosures sales and REO resales remain high.
2012-2013 The most likely bottom for home sales volume to users, followed by an extremely gradual sales volume recovery for lack of user demand. Apartment construction begins to rise noticeably in response to tenant demand.
2014-2015 Prior low pricing and low interest rates spark a bounce in home sales volume. This bounce is short-lived, as the Federal Reserve raises rates to control the pace of recovery and prevent momentum buying. Property prices keep pace with the rate of consumer inflation. Speculators holding SFRs acquired two or three years earlier begin to dump them
2014-2016 Home sales stabilize. Shortsales, foreclosures, bankruptcies and REOs remain high. 300,000-400,000 new jobs are created annually for a return to the December 2009 peak level. Generation Y begins to come of age and buy homes.
2016-2017 Full recovery mode for employment, home sales, then pricing. SFR construction rises, though no where near Boom-time heights.
2017-2018 Interest rates rise again.
2018-2020 Excess inventory of vacant homes finally returns to pre-recession levels. Generation Y begins to pick up homebuying activity en masse. Homeownership in California is at 50%.
2020-2025 Negative equity homeowners who refused to strategically default finally work their way out of debt and return to a stable financial status, the poorer for it.
2025+ Home prices return to peak levels of 2006. The lessons of the Great Recession forgotten, and home sales hedonism returns. The mistakes of the past are repeated and the cycle continues.
We agree that we are probably at the bottom right now, as we’re already seeing an uptick in California homebuyer interest, and a decrease in inventory. We disagree that interest rates will stay low until 2017…..although wouldn’t that be nice???! We also agree (unfortunately) that the lessons of the past will be forgotton by 2025, and the market will again cycle. It always does!
What do you think? Please comment below or tweet us @angieweeks or @weeksteam. Should you be interested in buying ‘at the supposed bottom’, please call us at 877-230-3211, and we’re happy to show you homes over this Memorial weekend!Read Full Post | Make a Comment ( None so far )
If you’re involved with a short sale for an Orange County home, the last thing you need is a mountain of delays. Fortunately, there are 10 steps you can take to help minimize logjams and power through the sale at a reasonable pace.
- Make sure buyers, sellers, and agents are all on the same page as far as expectations go. Everyone needs to understand that the process is complex, and things don’t exactly happen overnight.
- Homeowners should complete all necessary financial hardship documentation. It is important to update these docs on a consistent basis.
- Get the sale property up on MLS and market the heck out of it.
- Come to an agreement regarding any external third party fees before submitting HUD (agreement should be valid for 60 days). Possible external fees include short sale negotiation, reconveyence, document preparation, and notary.
- Before submitting short sale documents and/or images, go over them with a fine tooth comb for accuracy.
- Lagers can cause some serious delays. So make sure customers and agents complete all necessary tasks in a timely manner.
- Do your best to get a purchase offer that reflects the best possible fair market value and highest return for investors.
- Submit fully executed purchase offers, making sure all addenda have been signed by buyer and homeowner. Provide any supporting documentation with offers.
- Get busy and obtain a release on outside liens as early in the process as possible.
- Be on the lookout for any of the following situations, as they invite delays:
a) A change in buyer, agent, or terms
b) Customer files for bankruptcy or divorce
c) Changes after approval letter is issued (please note expiration date)
If you’d like to learn more about short sale opportunities in the Orange County Real Estate market, I’ll be delighted to help. You can connect with me at 949.338.7408 or email@example.com, @AngieWeeks or @WeeksTeam.Read Full Post | Make a Comment ( 1 so far )
The present foreclosure stats tell a grim story. Hard-working folks are losing their homes in alarming numbers. Fortunately, people facing foreclosure in Orange County are not as defenseless as they think. That’s why I’ve started this informative new blog series — Fighting Foreclosure. It’s all about helping people discover the options and resources they have when facing the prospect of losing their home.
The series kicks off with some valuable information from Shaun Smith, a specialist in foreclosure delay in Orange County. According to Shaun, the first thing you should understand is that banks don’t actually carry out the foreclosure action. They appoint a trustee to do the dirty work, including getting your home sold at auction. Now here’s the really crazy part. Unlike other states, California has no judicial-monitoring system in place to oversee trustee actions. So guess what? In order to expedite the process and maximize both bank and personal benefits, trustees invariably commit violations. Sometimes a lot of them. And who loses? Of course — the beleaguered homeowner.
Shaun’s service, Mortgage Crisis Remedies, combats these abuses and basically buys the homeowner time so they can remedy their non-performing loan. That could mean everything from continuing with a loan modification, short sale, or walking away with the cleanest possible credit record.
How does Shaun’s service accomplish all of this? By conducting in-depth investigations to discover trustee violations, then offering the trustee the choice of either delaying the home sale or facing sanctions that would result in loss of license. And guess what? That’s right. In a supreme act of self-preservation, the trustee invariably postpones the sale — usually by 1-4 months. This gives the homeowner leverage to bring the bank back to the negotiating table. In a nutshell, Shaun ensures that all legal requirements are met before the house is sold. A judge sure isn’t going to do it.
If you’d like to learn more about foreclosure delay in Orange County, Shaun or any team member on our TEN Dimensions team will be happy to help. Reach out to him at 949.241.0218 or firstname.lastname@example.org. And breath a lot easier.Read Full Post | Make a Comment ( None so far )
Today I’m taking a few hours out of the busy day to listen to Allen Seelenbinder, a VP with Bank of America, tell Realtors how to work better with B of A to get our short sales closed quicker. Definitely good use of time, because short sales take waaaaay too long!!! For Realtors looking for Equator tips, check this post.
Allen said the goal of the bank is to help preserve homeownership, they WILL attempt to modify your loan & help you stay in your house if you want to. It’s part of being on the HAFA program, and you can even try multiple times if you get denied on your first loan mod request! Good news if you’re late on the mortgage & want to keep your home, but you have to keep communicating & trying.
BUT…Did you know 60 percent of all loan modifications fail in the first 9 months? Yikes, make sure you are working with a professional modification specialist so you are not a statistic! Most times if you default on your modification, you’re not going to get another one, and its time to short sale.
For those who can’t afford the mortgage, & don’t see light at the end of the tunnel soon, you have options…
1. Deed in lieu – leaving your home and giving the deed back to the bank willingly
2. Foreclosure – defaulting on payments until the bank is forced to take your property back
3. Short sale – selling your property for less than it is worth
Short selling your property will allow you to buy again sooner than if you get a foreclosure, so its a good option. BUT, its complicated, so you need a good Realtor who knows what they are doing to help.
If you’re drained on the process, please keep trying. If you allow foreclosure, your credit will have a huge hit, and you know how important your credit is! Allen warned many times employers are looking at your credit as a gage on your responsibility, fight to keep it in tact as best you can!!
Short sales are the new normal! Buyers, sellers, investors, Realtors, & banks need to work together There are over 6 million homeowners late on their mortgage right now, and many more projected in the upcoming months. Short sale will continue to be a household term for the next few years, unfortunately.
Why is the short sale process so long? Well…theres a lot of hoops to jump through:
- the process doesn’t begin until an offer is received, you could have a sign in the yard for months.
- an appraisal & bpo must be done
- the offer must reasonably meet current market value
- the buyer must qualify
- the seller must demonstrate hardship & provide documentation
- arms-length has to be proved (that means sellers aren’t in cahoots w buyers)
- the mortgage investor must approve the offer
- 3rd party approvals (mortgage insurance, helocs, second liens.)
Unfortunately, there is a lot of red tape to untangle. Buyers need to be prepared for at least 60-120 days for close, and agents from both sides need to constantly keep communication lines clear and all parties in the transaction updated.
What is financial hardship? Its better to say what it is not. Financial hardship is NOT that you are under water on the property, that is simply a bad investement. Its also not hardship if you can’t get a renter. If you are widowed, but have assets, death is not financial hardship, its emotional hardship there are a lot of people now trying to claim hardship when they do not have truely have one. You need to be able to show your hardship on paper.
One of the biggest challenges right now is getting 2nd loans, liens, and MI to reasonably come in line with the short sale loss. Sellers, be prepared for agents to ask questions about ALL loans & liens on the property, and please offer up front and honest answers. There’s going to be some back & forth necessary between the parties you owe $$ to.
Want to know if you are eligible for HAFA? Check bankofamerica.reo.com/hafa to make sure you qualify! B of A is also working on a program similiar to HAFA, but with better guidelines, called the Cooperative Short Sale.
B of A Cooperative short sale
Yes, its still in the works, but its pretty good!! It will:
- proactively outreach to customers
- offer preapproved short sale pricing
- promise offers reviewed/approved within 2 weeks
- be similiar to hafa, but wider scope
- rollout hopefully August 1st
Banks including B of A are all trying to make the best of our current market, and short sales are a huge percentage of it. Look for more posts (and videos!) soon to help you through the short sale process. If you or someone you know is late on their mortgage, The Weeks Team keeps everything confidential and we will be happy to discuss options! 877-230-3211 or email@example.comRead Full Post | Make a Comment ( None so far )
I went to a seminar today on using Equator, here are some tips for all!
Equator has 5 stages:
1. Initiation – seller calls & signs up to initiate
2. Document collection – seller uploads hardship docs & Realtors upload offers
3. Valuations – BPO & appraisal is done
4. Negotiations – counter offers & 3rd party investor approvals
5. Closing – handling escrow & title transfer
To better step (um, jump) through through them, check out bankofamerica.reo.com/shortsaletraining
Realtors, make your short sale process shorter:
- have the seller contact the loan servicer asap to advise s/he is trying to sell
- ensure your customer financials are in pdf format
- confirm all requested documents & tasks are accurate & completed asap
- double check purchase offer is legitimate & @ fully executed
- make sure the purchase offer is the best possible at fair market value
- include listing information & comparables to support price w/your purchase offer
In Equator you can add attachments when you email negotiators.. Listing agents, email your COMPS; they WILL be reviewed. Help the bank help you. Show them you’ve done everything possible to get the best value. Tell the bank how many offers you had, your open houses, your marketing, so they know you’ve minimized their loss. Remember, the bank is losing $$ here so offers need to be reasonable.
NEVER, ever, for the love of God, use the reject button in Equator. It closes your file!!!! There is a button to submit with changes, use THAT instead
Itemize your escrow items, too. Don’t forget to include buyer credits, this happens too much & causes deals to blow up!!
When you submit your counter offer in equator, push the close date out 60 days. If you pass approval date, then a new BPO & approval usually need to be done, and that can set you back 3 whole weeks! This can make any deal crumble, so just get the extra padding upfront. *note* if property is going to auction, that won’t work, so set the closing to be the day before scheduled sale.
Stop clogging up the phones, B of A has a rule ‘if its not in Equator, it didn’t happen’…so use Equator to give you the paper trail you need. You can escalate right there through the system, copy a manager if necessary. ***ANGIE TIP*** if a conversation is necessary, and you’ve tried 3 emails through the system, tweet @bofa_help . I always get a call back within 48 hrs
Say ‘actionable item’ in the subject, not urgent. Everyone says urgent. What many consider urgent is truly not urgent, but actionable items=urgent to B of A, ok?
Today a VP at Bank of America, Allen Seelenbinder, advised us cash offers mean nothing. B of A doesn’t care about your quick close, they care about minimizing their loss. Present your highest & best offers as opposed to lowball quick close cash.
Also, write your repairs into the contract, the bank doesn’t play well with new terms after appraisals! How will you know? Bring your trusty B of A local lender to the property, they can help advise you on standard repairs B of A is willing to do.
Realtors Pelt Bank of America with questions
What if the buyer walks? Why do you automatically close my file? Unfortunately, we have to completely start over including submitting the sellers info again into equator. Its for privacy purposes, so its not gonna change. There is a 5 percent chance you can pull a switcheroo: upload a NEW, better offer FIRST. Then the next day, email the negotiator the cancellation of the first offer and request the switch out for the better offer. In some cases this is allowed.
Will B of A pay a negotiation fee? NO, agents or buyers need to absorb.
Will B of A allow closing cost credits? YES, but submit everything correctly in equator.
How can we escalate a file in equator? CC the manager or team leader on an actionable item!! (for our technically clueless that means CTRL+click all titles you want to copy) OR, worst case, you can call your local B of A loan offer and they can talk to the OC approval head. There is such a person, however, Allen would not release his/her name to the ‘dogs’
Will B of A reduce Realtor commissions? Tax us for dual agency? Contrary to popular belief they try not to…commission can be 6 percent for properties up to 250k, 5 percent for 500k, higher than that your commissions can be reduced more. Allen jokes…You can always ask the seller to pay the rest…the bank is taking a loss too. Now Angie must joke…sure, how about we charge per phone call, email, and walked buyer then, cool? Seriously, this process is a B for all of us.
Allen, way to let yourself get on the hot seat. I’ve done customer service for Realtors before… they can be a mean, loud, unhappy bunch. You handled yourself with class, and taught us how to work with B of A better.
Hopefully this post will help some struggling agents – tweet @angieweeks or @weeksteam your Equator tips, or comment them below!!Read Full Post | Make a Comment ( 1 so far )