Friday, November 25, 2011

Not delinquent yet - NEW HOPE TO SAVE YOUR HOME

The government's expanded refinance program for underwater homeowners, dubbed HARP 2, looks better than expected for both borrowers and banks.

The Obama administration announced the broad outlines of the plan on Oct. 24. Fannie Mae and Freddie Mac filled in most of the details in guidance bulletins issued late Tuesday.

The new program greatly reduces or eliminates the risk-based fees Fannie and Freddie charge on many loans and virtually eliminates the chance that lenders will have to pay for losses on loans that go into default if they made underwriting mistakes. It also vastly streamlines the underwriting process.

Many borrowers won't qualify for the new program, but those who do could find it much easier and possibly cheaper to refinance than those who don't. Although lenders can begin taking applications Dec. 1, it could take several months before the new loans are made. Fannie Mae said it won't begin buying certain types of refinanced loans until March.

To qualify, your existing loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Your loan balance must be more than 80 percent of your home's market value. You can have no late payments on your existing mortgage in the past six months and no more than one late payment in the past 12 months. You are ineligible if you previously refinanced through HARP.

They've eased up on the qualifying factors over the HARP program.

The new program improves on the existing HARP refi program by letting borrowers refinance into a new fixed-rate loan no matter how much they owe. The existing program caps the new loan at 125 percent of the home's market value.

You can also refinance into a new adjustable rate loan that has a fixed rate for at least the first five years, but in this case your new first mortgage cannot exceed 105 percent of the home's value.

The new program greatly reduces or eliminates the fees Fannie and Freddie charge on loans based on risk characteristics such as the borrower's credit score and loan-to-value ratio. On a riskier loan, these fees sometimes exceed 3 percent of the loan balance and make refinancing uneconomical for many borrowers.

Under HARP 2, the fees will be capped at 0.75 percent on most loans and will be zero on fixed-rate loans with a term of 20 years or less.

In most cases, borrowers won't have to pay for a new appraisal (Fannie or Freddie will use their automated in-house appraisals) or have any particular debt-to-income ratio or credit score.

Borrowers who refinance through their existing loan servicer generally won't have to document their income or assets or have a particular credit score or debt-to-income ratio. The lender will only have to verify that one borrower on the loan has a job or other source of income, but not the amount of income.

If they refinance through a new lender, they will have to meet additional underwriting requirements, but not as many as people who are refinancing through traditional routes.

Effects on Second Mortgages.

Borrowers can have a second loan on the house of any amount and still qualify, as long as the holder of the second mortgage resubordinates it to the new loan. Most of the big lenders have agreed to do so, but there is no guarantee they or others will. "It's going to be case by case," says Brad Seibel, director of residential lending with Fremont Bank.

If borrowers have mortgage insurance on the existing loan, they must maintain it, but they should be able to transfer that insurance to the new loan at the old premium rate, according to Freddie Mac. The big mortgage insurers have agreed to allow this, but again there is no guarantee all will.

It's a big plus if they do. Normally refinancers must take out a new policy at today's rates, and rates have gone up significantly in the past few years. The higher cost has discouraged some homeowners from refinancing.

Although the original HARP program let homeowners take out a new loan of up to 125 percent of the home's value, many lenders were unwilling to make them up to that limit because if the borrower defaulted, the lender might have to pay for losses if they made any underwriting errors. And no lender wanted to run that risk on a deeply underwater home.

The new program, in many cases, will virtually eliminate the risk that lenders will have to pay for losses on either the existing or the refinanced loan under HARP 2. This could be a big incentive for lenders to refinance loans, especially ones they already own.

FBR analyst Edward Mills said the details on the liability waiver and the fee reduction were both better than he was expecting.

But there are still many questions about the program, such as what interest rates banks will charge, whether they will impose additional fees or underwriting requirements beyond what Fannie and Freddie require and whether investors will be willing to buy securities backed by these new HARP 2 loans.

Most lenders I spoke to said they are eager to make the new loans, but are still digesting the extremely complex details. (You can read Fannie's guidance at and Freddie's at

Mills says the program will definitely reach the government's target of refinancing 1 million loans, and possibly even 2 million.

There will be losses for some but seemingly only to profits

While borrowers will clearly benefit, the losers will be investors who own the guaranteed loans that are refinanced. They will be repaid, but will have to reinvest their proceeds, probably at a lower rate. These investors include Fannie and Freddie, the U.S. Treasury and the Federal Reserve - in other words, U.S. taxpayers.

The hope is that taxpayers as a whole will benefit if homeowners who lower their monthly payments under the program spend some of their savings (thus boosting the economy) and become more likely to stay in their underwater homes and not default.

Thursday, November 17, 2011

Paying a fee for Mortgage help? DOH! Even Homer Simpson won't ... well

For several years, every agency known to man from the Federal Government to the State Government to the major Lenders to your National, State and Local Associations of Realtors have been advising you that you need not pay a fee for assistance. There is more help out there that Carter's has pills, but the help you want to seek is not asking for a deposit, downpayment, retainer or anything at all. The the FTC further protected us with the Mortgage Assistance Relief Services Rule. none of this has stoppedcompanies form targeting people in dire times looking for a way to keep the boat afloat. Read today's story from the L. A. Times: Homeowners, beware of firms charging a fee for mortgage help

Plenty of companies are eager to exploit the uncertain economy and housing market by trying to separate property owners from their money. But services seeking high fees for foreclosure assistance seldom prove beneficial, housing experts say.

Joyce Thompson and her husband, Paul English, were understandably shocked to receive an official-looking letter with the words "foreclosure sale pending" on the envelope. The letter included the address of their Long Beach condo and an auction date. "At this point," it warned, "your home will be sold and you will be evicted from your property."

But all was not lost. The letter turned out to be from a company called Expert Legal Helpers, which declared that "we will have authorization to postpone the sale of your property once we are contacted."

So Thompson, 56, gave them a call. "It sounded like a boiler room — lots of people talking in the background," she said.

A boiler room, for those not in the know (or who haven't seen the movie of the same name), is a call center where salespeople typically pitch a questionable product, usually with high-pressure tactics.

Thompson listened to the salesman's pitch for a few minutes and then hung up. She suspected it was a scam.

"We've only owned the condo for about two months," Thompson said. "It would take a lot of effort at this point for us to be delinquent on our mortgage payments. We'd practically have to beg them to put us in foreclosure."

Needless to say, Thompson and English haven't missed any payments. According to their lender, JPMorgan Chase, there's no problem with their account.

The bogus foreclosure letter Thompson and English received serves as a reminder to all homeowners that there are plenty of companies out there that will try to exploit the uncertain economy and housing market to separate you from your money.

There's been more and more of this sort of thing as homeowners struggle to keep a roof over their heads. Foreclosure filings rose in the third quarter, with 1 in every 213 properties nationwide facing a default notice, auction or bank repossession, according to market researcher RealtyTrac.

"If you ever get something about your property that's not from your lender, contact your lender," said Gary Kishner, a Chase spokesman. "Always make sure before you do anything."

Thompson and English live in Tustin. They bought the condo in a short sale for their daughter, who's attending Cal State Long Beach.

The website for Expert Legal Helpers says the company "will negotiate with your lender to reduce your mortgage payments, reduce principal loan balance and stop your foreclosure!"

"Where other companies are using inexperienced representatives, we have highly qualified attorneys, agents and appraisers," it says. "We have a well-connected network to help you achieve the best possible result for your particular situation."

The first red flag, though, is that when you call the number provided for Expert Legal Helpers, you end up speaking with a company called Expert Home Relief.

"It's the same company," explained Maria Burks, who identified herself as the processing manager for Expert Home Relief and Expert Legal Helpers. "Mainly we are Expert Home Relief."

Expert Home Relief doesn't have its own website. Burks is listed as the registrant for the Expert Legal Helpers site.

But a record check for the Santa Ana address of Expert Legal Helpers turns up yet another name, Affordable Home Relief Center. "That's also our company," Burks acknowledged.

Confusing as these multiple identities might be, she insisted that the service being offered is legitimate.

"We're not the bad guys," Burks said. "Most of the people who receive our letters don't even know that they've been foreclosed on. We're just waking them from a deep sleep."

And if you decide to act on that wake-up call, she said, her company charges about $2,500 to help with document preparation and mediation to stop the foreclosure process dead in its tracks.

"Ninety percent of the time we can stop the sale," Burks said.


"There are many ways that we do it," she answered, declining to go into specifics.

Marisol Arzate, director of outreach and education for the Housing Rights Center, a Los Angeles advocacy group, said this didn't sound right to her.

"It's very unlikely that a bank will negotiate a foreclosure," she said. "You need to give them their money if you want to stop the process."

Burks said her company checks public foreclosure filings and sends out hundreds of letters to potential customers.

I asked about the letter sent to Thompson and English, whom I noted were in good standing with their lender.

Burks ran their address through her computer and maintained that the address of the condo is listed for foreclosure, perhaps as a result of the former owner missing payments.

"We didn't do anything wrong," she said. "You should go after the title companies that aren't updating the records."

Perhaps. But that doesn't excuse other firms that send out frightening letters based on those records, and then seek high fees for a service that housing experts say will seldom prove beneficial.

Moreover, it's good to remember that a recently enacted rule from the Federal Trade Commission forbids companies from charging up-front fees for mortgage assistance. The provision is called the Mortgage Assistance Relief Services Rule.

The FTC's website also has plenty of other info for homeowners who think they may be targeted by scammers for mortgage assistance. The bottom line is that no one can guarantee they can get you off the foreclosure hook.

"We always tell people to be very cautious about agencies that charge a lot and promise a high success rate," said Arzate at the Housing Rights Center. "If you can't give the lender the money that it wants, you're probably going to be foreclosed on."

And you can take that advice to the bank.

Saturday, September 10, 2011

Refinance assistance may be just a phone call away

Like so many homeowners across the country, you can start to sense a feeling of helplessness when attempting to refinance a loan which is higher than the current value of your home ... yes, you are underwater and looking for a fresh breath. Here's some info you may find helpful in your endeavor.

“A lot of people have been sitting and not doing anything,” said Cari Sweet-Kostoplis, a senior mortgage banker at Atlantic Home Loans in Lincoln Park, N.J. But they may qualify to refinance their loans through a variety of programs aimed at avoiding late or partial payments or foreclosure. “I don’t think a lot of people are aware that they have this option,” said Jeff Kinney, the vice president for innovation and development of Fannie Mae, who oversees refinancing activity. Because interest rates remain low, he said, refinancing may bring their payment “to a level that is sustainable to them and put money in their pockets.”

In the New York region, according to, some 17.1 percent of single-family homes right now are considered underwater, which means the owners owe more on the mortgage than the home is worth. (The national average of underwater properties is 28.4 percent.)

Those looking to refinance through programs offered by Fannie Mae and Freddie Mac, the government buyers of home loans, will first need to find out who holds or services their mortgage so they can determine whether they qualify. On their Web sites, both agencies provide links that show whether a particular address is in their portfolio.

Be careful, though, if you own an apartment. “Sometimes the system doesn’t recognize the unit” number, said Matt Hackett, the underwriting manager of Equity Now, a direct mortgage lender based in New York.

If your loan is owned by Fannie or Freddie, you may qualify for the Home Affordable Refinance Program, or HARP. Some 2.5 million to 3 million homeowners may be eligible to use HARP, according to government estimates — provided, among other things, that they have not been late on their payments more than once in the last 12 months.

Instead of the 80 percent loan-to-home-value required in most initial mortgages today (the remaining 20 percent comes from your down payment), HARP loans offer up to 125 percent, to cover the home’s shrunken value. That means a home appraised at $500,000 could warrant a loan of up to $625,000, if the owner’s income was sufficient to repay it, instead of the maximum $400,000 in most conventional mortgages.

Federal Housing Administration loans also have refinancing options. One of them, the F.H.A. Short Refinance option, requires the lender to write down at least 10 percent of the remaining balance of the loan and the homeowner to be current on payments, among other requirements. Still other programs are available for people who have lost their jobs.

If your loan is held by a bank or has been bundled up and sold to an investment group, your options may be more limited. “It is case by case,” Mr. Hackett said. You may need to call around to locate other lenders willing to refinance underwater loans.

Lenders like Atlantic Home Loans have started offering loans with lender-paid mortgage insurance, and will refinance at 95 percent of the value, Mrs. Sweet-Kostoplis said. She added that one of her clients reduced her mortgage payment by $850 a month when the rate came down to 4.5 percent from 6.7 percent.

When you meet with your mortgage officer, Mrs. Sweet-Kostoplis advised, don’t hide anything in your financial situation. “The mortgage person is on your team” and wants to help you stay in your home, she said. If you need help sorting out your options, HUD lists agencies and counselors whose advice is generally free.

Fannie Mae also has a broader umbrella, called Refi Plus, that can be used by people whose mortgages finance second homes and income properties. The programs have flexibility; most of them run through June 30, 2012.

Given where rates are, your immediate action could ring you the results you are looking for ... so pick up the phone and Good Luck to you.

Thursday, August 25, 2011

Fighting Short Sale Fraud

Those entrenched in nefarious thinking can find many ways to cheat the system for personal gains. That makes it all the more important to involve yourself with a reputable Realtor to represent your interests in not only Short Sales but all real estate related activities; in addition, testamonials from past clients say a lot more than just the Realtors description of their own advertising. Now speaking of short sales, here's some interesting information about fraud from the Freddie Mac perspective.

In a short sale, Freddie Mac agrees to accept less than a full payoff of a mortgage when the borrower is unable to sell their home for enough to pay off their entire loan. Freddie Mac short sales have risen from about 4 percent of completed workouts in 2000 to nearly 14 percent in 2010.

Short sale fraud, also on the rise, enters the picture when real estate professionals fail to disclose affiliations with other parties involved in the transaction to rig sales at a low price and hide better offers from Freddie Mac and the distressed home seller. Then, after the house is sold, the fraudster can flip it a few hours later for the better price and walk away with the profitable difference.

By concealing the higher offer, short sale fraud worsens losses to home sellers, Freddie Mac, and taxpayers. It also throws another wrench into the housing recovery by undermining the trust and transparency at the core of any real estate transaction.

Today, short sale fraud is the top priority for their fraud investigation unit. By working closely with real estate professionals and law enforcement agencies, their fraud unit has identified and stopped a number of fraudulent deals before closing. They have also added the perpetrators to our Exclusionary List – firms and individuals barred from conducting business with Freddie Mac – and worked with law enforcement agencies to prosecute them.

Since short sale fraud requires the cooperation of one or more real estate professionals involved in the transactions, they have begun reaching out to Realtor associations in target markets to educate them about the latest trends in short sale fraud, the red flags to watch for, and what actions they can take to stop it. We strongly believe responsible Realtors are America’s natural first line of defense against such scams.

Trends Freddie Mac has been alerting Realtors about include:

Falsely indicating on a new short sale listing that there is an offer on a property in order to discourage legitimate offers and protect an accomplice’s planned low bid.
Manipulating the short sale listing price by making the house look more distressed than it really is (“reverse staging”), inflating repair estimates, or using similar tactics designed to obtain an artificially low home value on the Broker Price Opinion. (Our requirements prohibit the buyer, buyer’s agent, buyer’s attorney, or a third-party short sale negotiator to be the contact point for the agents preparing the BPO.)
“Flipping” schemes where the fraudster “buys” a house at a short sale without putting down any of his own money and then sells it a few hours (or days) later to a legitimate buyer at a much higher price. These are complex multi-step schemes that use falsified title and/or loan documents to fool a lender into approving the ultimate buyer’s mortgage, which the fraudster uses to settle the earlier closing on the house he “acquired” at the short sale for a much lower price.
Manipulating the HUD-1 settlement statement so the fraudster can skim away net proceeds from the sale for himself or other parties in the transaction without the seller’s or investor’s knowledge. (The HUD-1 is the document that itemizes all fees, charges, and other funds involved in a home sale.)
As a result of the uptick in short sale issues, Freddie Mac now requires all of the parties involved to sign an affidavit attesting that it is a true arms-length transaction. These affidavits not only deter individual participation but also give us a stronger legal path to enforce our rights.

Fortunately, Freddie mac has allies in this fight. There are many conscientious real estate professionals who want to do the right thing. We often receive calls in our servicing, quality control, fraud investigation, outreach, and HomeSteps divisions from real estate agents who know they’ve seen something inappropriate and won’t look the other way. They understand that real estate fraud turns a shortsighted profit at the cost of the public’s long-term confidence in homeownership and the housing industry.

That’s why Freddie Mac reaching out to educate real estate associations through special seminars and Freddie Mac’s web site, where they post the latest fraud prevention information and best practices. If you see fraud being committed – or aren’t sure and want clarification – you aer encouraged to call the Freddie Mac Fraud Hotline at 1-800-4FRAUD-8 or 1-800-437-2838, as well as your local FBI office, state attorney general, and Real Estate Board.

Thursday, August 11, 2011

Bank of America distressed loan borrowers get second chance at loan mods, etc...

The Department of Housing and Urban Development has reached a settlement with Bank of America that releases the company from liability for failing to adequately provide alternatives to foreclosure on 57,000 delinquent government-insured mortgages.
The agreement, a draft of which was obtained by American Banker, was previously undisclosed. It has been forged on a separate but parallel track from continuing settlement talks between Bank of America, state attorneys general and other regulators over alleged mortgage origination and servicing failures.
B of A's pact with HUD requires it to waive a minimum of $10 million in unpaid mortgage payments and vet each of the 57,000 delinquent borrowers for a possible loan modification, short sale or other foreclosure alternative.
"Our total costs for the program will be multiples of that" $10 million minimum, B of A spokesman Dan Frahm said. The deal calls for measures to "ensure these customers have every opportunity to stay in their homes," he added.
After such outreach, the settlement paves the way for B of A to foreclose on homes that borrowers could not afford even after a mortgage modification and those that have been left vacant by owners.
In forging the agreement, HUD decided to forgo steep monetary damages or admissions of error from the bank.
Instead, it pushed for the lender to implement steps that in most cases it was supposed to have already taken under the terms of its FHA-guaranteed loans, with the apparent aim of minimizing foreclosures and related insurance claims.
"We took the borrowers into account first," said HUD general counsel Helen Kanovsky. "We think that that's really the best thing for the FHA [insurance] fund as well."
The agreement is HUD's first involving settlement of claims in which a servicer failed to offer loss mitigation to borrowers. It does not, however, prevent HUD from seeking damages from B of A for unrelated origination and servicing failures.
"We fought for as narrow a [legal] release as possible and as much money as possible," Kanovsky said.
Under HUD's standard terms, borrowers must be less than 12 months delinquent to qualify for loan modifications. With the B of A settlement, the minimum of $10 million the bank agreed to pay will go to covering past-due arrearages and giving borrowers who are more than a year behind the possibility of qualifying for foreclosure alternatives.
The agreement was signed July 11 by B of A senior vice president Robert Gaither, who directed queries to a company spokesman.
All of the 57,000 borrowers covered by the agreement are 12 to 24 months delinquent. They account for only 4% of the total 1.5 million FHA loans that B of A services but a substantial portion of the company's seriously delinquent loans. B of A holds $19.8 billion in FHA-insured loans that are 90 days or more delinquent, and another $3.1 billion in FHA loans 31 to 89 days delinquent, the bank said in its second-quarter earnings release.
Under its terms with HUD, B of A will have to pay an independent monitor to review its modification work and report to HUD. It is also obligated to seek borrowers through database searches, letters, phone queries and visits to properties. Borrowers who fail to qualify for loan modifications, will receive from B of A $4,000 for a short sale and $7,500 for a deed-in-lieu of foreclosure.
The deal reflects the high levels of financial uncertainty surrounding such negotiations. In May, B of A agreed to pay $20 million, or double the minimum for the latest settlement, for improperly foreclosing on a relatively few 160 homes of military service members.
The settlement is "not a lot of money for the potential losses that the federal government may have to make good on," said Diane Thompson, an attorney for the National Consumer Law Center.
The minimum $10 million payment of borrowers' arrearages is unlikely to defray the FHA's losses on foreclosures, she said.
But if Bank of America is "able to identify the loans, and if people are still in the homes, and if they waive payments over past 12 months, then that's more valuable than a big fine for Bank of America," Thompson said. "But there are a lot of ifs there."
The largest banks hold billions of dollars of delinquent FHA loans on their balance sheets for which they have not yet filed claims. This may be because of concerns that they may have violated stringent HUD servicer requirements and could be held liable for treble damages related to false claims. One sticking point in settling such claims is that the FHA requires all servicers to have employees conduct face-to-face interviews with FHA borrowers once they become 60 days delinquent, a procedure most servicers either did not undertake or cannot document.
As part of the deal HUD has also agreed to pay any mortgage insurance claims and waive any pending administrative actions against B of A, its officers, directors or employees "in connection with servicing or loss mitigation deficiencies." The only exclusion is for allegations involving improper transfers of titles.
B of A also has agreed not to claim expenses on any FHA insurance claims for taxes, liens or property preservation incurred from November 2010 through July 2011.

Friday, August 5, 2011

Is your loan with BofA - read this before requesting a Short Sale

If you're a cash-strapped homeowner in California with a mortgage serviced by Bank of America, you may have a chance at getting your principal lowered through a state program that helps people stay in their homes.

The California Housing Finance Agency said earlier this week that Bank of America is now part of Keep Your Home California’s principal-reduction program, making it the largest loan servicer involved in lowering loan balances for those with economic hardships.

A servicer is a company homeowners make their mortgage payments to every month. Bank of America serves more than two million home loans in the state, agency officials said.

Other servicers involved are the California Department of Veterans Affairs, the California Housing Finance Agency, Community Trust/Self Help, GMAC, Guild Mortgage Company and Vericrest Financial.

Agency officials hope that list continues to grow.

"We believe principal reduction can be an appropriate tool for helping qualified homeowners obtain an affordable and sustainable modification," said Claudia Cappio, California Housing Finance Agency's executive director, in a statement.

Keep Your Home California’s principal-reduction program is one slice of a $2 billion effort to help struggling homeowners avoid foreclosure.

Qualified homeowners could be eligible for up to $50,000 in assistance from the Keep Your Home California program, which requires the mortgage investor to match dollar-for-dollar the amount provided by the program.

For instance, if the program agrees to reduce the principal by $50,000, then the mortgage investor must match that $50,000 reduction, resulting in a total $100,000 reduction.

Bank of America borrowers who don't qualify for the principal-reduction program will be evaluated by bank representatives to explore other options, including a loan modification.

Keep Your Home California is funded by the U.S. Treasury Department.

If you have questions, call 888.954.KEEP (5337) or visit

Wednesday, August 3, 2011

Short Sale Lenders performance worsens

More REALTORS® characterized closing short-sale transactions as “difficult” or “extremely difficult” than late last year, indicating that lenders’ and servicers’ short-sale procedures have shown little improvement in the past six months, according to the latest Lender Satisfaction Survey conducted by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).

More than three-fourths (77 percent) of California REALTORS® reported closing short-sale transactions as “difficult” or “extremely difficult,” up from 70 percent in December, according to the C.A.R. survey. The survey, a follow-up to a survey conducted in December 2010, gauges REALTORS®’ experience working with lenders in their most recent transaction. The majority of those surveyed dealt with short-sale transactions – transactions in which a homeowner with a demonstrated hardship negotiates with the lender or lenders to accept less than the balance owed on the mortgage.

“Despite promises by lenders to improve their short-sale processes, clearly, they are not doing enough,” said C.A.R. President Beth L. Peerce. “Instead of helping struggling homeowners who need to sell and willing home buyers who want to buy, lenders have created man-made roadblocks that have caused real estate gridlock and hindered a desperately needed housing recovery.”

REALTORS® continued to cite communication issues as the most frequent obstacles in working with lenders and servicers during the short-sale process. These communication issues include lenders’ slow response time to a short-sale package (cited by 66 percent of REALTORS®), poor communication with lender representatives (cited by 55 percent of REALTORS®), and repeated requests for documentation (cited by 51 percent of REALTORS®). More than 15 percent of REALTORS® indicated that the lender foreclosed on the home before the short-sale transaction could be completed.

Two-thirds (67 percent) of REALTORS® said it took more than 60 days for lenders or servicers to return a written response on the approval or disapproval of the short-sale agreement submitted. Additionally, 43 percent of REALTORS® said it took the lender more than five days to return any form of communication. Less than 20 percent said lenders responded “within one business day” or less.

Overall satisfaction with the lenders REALTORS® worked with in their most recent short-sale transaction remained extremely poor, with 75 percent saying they were “not satisfied” or “not at all satisfied,” up from 67 percent in December. Moreover, nearly eight in 10 REALTORS® (78 percent) said they were “not likely” or “not at all likely” to refer buyers to the lender for future home purchases.

“With short sales accounting for a fifth of all transactions in California, it’s crucial that lenders improve their short-sale process so that a meaningful recovery in the housing market and overall economy can occur,” Peerce added.

In an effort to educate consumers and its members about short sales, C.A.R. created a website ( earlier this spring to help clarify the process. The association recently polled its members via the website and asked them to rate which lender was the easiest to work with. Of the top four lenders, 40 percent said Wells Fargo was the easiest, while 23 percent cited Bank of America; 17 percent said JP Morgan Chase; and 11 percent said Citi.

C.A.R.’s Lender Satisfaction Survey was conducted in June 2011 to gauge REALTORS®’ experience in working with lenders or servicers during their most recent transaction, the majority of which were short sales. Most of the REALTORS® surveyed dealt with Bank of America, Wells Fargo, and JP Morgan Chase in their most recent transaction. The latest survey findings show that the situation has not materially improved in the six months since C.A.R. first surveyed its members.

As always - Keep the faith!

Tuesday, August 2, 2011

Debt Forgiveness on Short Sales in California

HAFA (Home Affordable Foreclosure Alternative) is a national short sale program adopted by major lenders and servicers that requires subordinate liens to fully forgive borrowers of their debt along with other requirements. Full debt forgiveness is now also required under SB458
for lenders of one-to-four residential unit properties doing short sales in California (unless an exception applies).

"The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment subsidize the difference," said C.A.R. President Beth L. Peerce.

Just as in the HAFA guidelines, SB 458 brings closure and certainty to
the Short Sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders - those in first and in junior positions - will consider the outstanding balance as paid in
full and the homeowner will not be held responsible for any additional payments on the property. HAFA is also the only short sale that helps
the homeowner with moving assistance funds.

Good luck and as always - Keep the faith!

Friday, July 22, 2011

More protection for Short Sale property Owners

New law gives added protection to short-sale hopefuls
On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law. The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

•A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.

•Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

•The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.

•“The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

Read the full story:

Credit San Diego Union-Tribune for story and as always - Keep the faith!

Saturday, July 16, 2011


In a major victory for REALTORS®, Governor Brown signed into law today a C.A.R.-sponsored bill, Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or junior lienholder. Effective immediately for transactions closing escrow from this day forward, both senior and junior lienholders cannot require a borrower to owe or pay for a deficiency in a short sale. This law also prohibits any deficiency judgment to be requested or rendered for senior or junior liens after a short sale of one-to-four residential units. Any purported waiver of this rule shall be void and against public policy.

Although a lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval, the new law does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale. A lender is also permitted under the new law to negotiate for a contribution from someone other than the borrower, such as other lenders, agents, relatives, and the like.

Exceptions to the new law include a lender seeking damages for a borrower’s fraud or waste; a borrower that is a corporation, LLC, limited partnership, or political subdivision of the state; a lien secured by a bond as specified; a public utility lien; and additional rules apply if a note is cross-collateralized by more than one property.

Thursday, July 7, 2011

Got an FHA loan on your house and lost your job? Now hear this ....

FHA gives jobless homeowners one-year break
Beginning Aug. 1, the Federal Housing Administration will extend the period for unemployed homeowners to miss mortgage payments from four months to a full year, providing qualified homeowners with more time to find employment before the foreclosure process begins.

Making sense of the story

•The new Special Forbearance program falls under the FHA’s Loss Mitigation program, which FHA-approved servicers must participate in.

•The extended grace period only applies to FHA-backed loans and homeowners in the government’s foreclosure prevention program, the Making Home Affordable Program (MHA).

•In addition to extending the forbearance period and removing the up-front hurdles for borrowers, the FHA also reemphasized its requirement that participating servicers conduct a review at the end of the forbearance period to evaluate the borrower for all additional, applicable foreclosure assistance programs and notify the borrower in writing whether or not he/she qualifies for any other available option.

•If the borrower does not qualify for any foreclosure assistance option, the servicer must provide the borrower with the reason for denial and allow the borrower at least seven calendar days to submit additional information that may impact the servicer’s evaluation.

•Housing and Urban Development, which oversees FHA, hopes private lenders and government-controlled Fannie Mae and Freddie Mac will adopt a similar policy.

Read the full story here: and

•For additional information on the program, including eligibility and requirements, please visit

Thursday, June 23, 2011

Foreclosure myths, debunked ?

Although there are a number of programs available to help homeowners who have defaulted on their mortgages keep their home, the large amount of misinformation tends to result in troubled homeowners failing to contact their lender until it is too late.

Making sense of the story

•Some homeowners believe, incorrectly, that contacting their lender early in the process will draw attention to their situation and result in a quicker foreclosure. In reality, contacting the lender or servicer is an important first step, and the sooner, the better. Contacting the lender provides the homeowner with an opportunity to explain their situation and the steps necessary to deal with it.

•It is a common misconception that missing one mortgage payment will lead to foreclosure. However, the foreclosure process doesn’t begin until payments are 90 days delinquent. Lenders generally have a financial interest in keeping homeowners in their homes, so making contact as early as possible could help lenders modify terms of the mortgage or devise a repayment plan.

•Once homeowners are behind on their mortgage payments, it becomes challenging to dig out of the hole. Some homeowners try to solve this by depleting their savings or dipping into their retirement accounts to become current on the loan. Most financial experts advise against this.

•Delinquent homeowners may think they should stop making mortgage payments to get their lender’s attention, which often isn’t the case. When possible, homeowners should stay current on their mortgage payments and continue to contact their lender on a regular basis.

•Homeowners who have applied for assistance or loan modification programs in the past and were turned down are advised to reapply. Program parameters are constantly changing, so the rules might have been liberalized since the last time the borrower sought help.

•A number of free, government-sponsored housing services are available through the Dept. of Housing and Urban Development (HUD). A list of HUD-approved agencies can be found at

Read the whole story here:,0,7530880.story

Wednesday, June 22, 2011

New Short Sale Disclosure rules - MARS

M.A.R.S. - Mortgage Assistance Relief Services is a new FTC (Federal Trade Commission) ruling to help protect distressed homeowners from mortgage relief scams. Explaining the ruling, FTC Chairman Jon Leibowitz said, “At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results. By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.”

This ruling not only applies to loan modifications, but also to short sales. Fines of $11,000 per occurrence and $11,000 per day may be incurred for violations, so it is important that you understand the new regulations and are compliant. If you provide, or arrange for someone else to provide, short sale services, you need to be sure that all documents, correspondence and advertising are in compliance.

Highlights of the Mortgage Assistance Relief Services ruling include:
■ Advance fees are outlawed. You may not collect a fee until the homeowner has an offer in writing that they agree to accept.
■ Homeowner has the right to reject an offer, and no fees would be charged
■ Various disclosures must be included in the initial contact and throughout the process. They need to be in writing. These disclosures are designed to protect the homeowner from being mislead, and help them make better informed decisions. These disclosures include stating you are not associated with the government, and your service has not been approved by the government or their lender.
■ Homeowner has the right to stop doing business with the provider at any time, and no fee is involved.
■ False or misleading claims are prohibited in advertising or communication about services or performance.
■ If you tell the homeowner to stop paying their mortgage, you must also make them aware that they may damage their credit rating, and could lose their home.

Check out the entire ruling: or view the FTC’s November MARS press release: FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams

There has been a lot of hashing and re-hashing but the diclosure requirement remains, therefore, in any of my emails, flyers, mail, newspapers ads, website and/or phone conversations wherein Short Sales are mentioned/discussed ... you will see and/or hear the following:

If we discuss the topic of Short Sales at some point or I transmit information relative to Short Sales freely or at your request and your property is now, or in the future may be construed as, a Short Sale, I am required by law to tell you:

Neither Roger A. Sullivan, Realtor nor Windermere Real Estate is associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

The afore-mentioned is given in mandatory compliance with required M.A.R.S. (Mortgage Assistance Relief Services) disclosure requirements mandated for Real Estate professionals who assist those homeowners/borrowers who may be in need of Short Sale assistance. I do not provide Loan Modification services. You will never have to pay a fee UP-FRONT for any Short Sale services I may perform or you may request of me.

Can't be too careful these days ... as always - Keep the faith !!

Thursday, June 16, 2011

Tying to keep your home? More Mortage Servicers added to help just that

More loan servicers are taking part in a $2 billion state effort to help low-to moderate-income homeowners avoid foreclosure.

The number of mortgage-servicing companies has grown to 21 from the eight that were participating when the Keep Your Home California program began in February, said officials with the California Housing Finance Agency. The project does everything from cutting outstanding loan principals to offering financial assistance to the unemployed.

In April, the housing agency reported having to turn down about 30 percent of interested property owners, more than 8,000 Californians, because their servicers weren't yet in the program. The 21 banks who are participating service about 80 percent of the mortgages in California, officials said last week.

The 21 servicers include six of the major ones in the state: Bank of America, J.P. Morgan Chase, Wells Fargo, GMAC, CitiMortgage and EMC Mortgage. Only six take part in all four programs under the Keep Your Home California umbrella.

Read the full story from the San Diego Union-Tribune:

As always ... Keep the faith!

Wednesday, June 15, 2011 reports on Major Servicers Activity

Administration finds Bank of America, J.P. Morgan Chase, Ocwen Loan Servicing, Wells Fargo in Need of Substantial Improvement under Making Home Affordable Program; Begins Withholding Financial Incentives for Three Servicers

WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the May edition of the Obama Administration's Housing Scorecard. New to this month’s report are detailed assessments for the 10 largest mortgage servicers participating in the Administration’s Making Home Affordable Program, setting a new industry benchmark for disclosure on servicer assistance to struggling homeowners. In addition to providing greater transparency about servicer performance in the program, the new assessments are intended to prompt mortgage servicers to correct identified deficiencies to improve program implementation and more effectively reach eligible homeowners. “While we continue to get tens of thousands of new homeowners into mortgage modifications each month, we need servicers to step up their performance to meet the needs of those still struggling,” said acting Treasury Assistant Secretary for Financial Stability Tim Massad. “These assessments set a new benchmark by providing an unprecedented level of disclosure around servicer performance and will serve to keep the pressure on servicers to more effectively assist struggling families.”

Since the inception of the Making Home Affordable Program, Treasury has required participating servicers to take specific actions to improve their servicing processes. The new Servicer Assessments summarize performance for the 10 largest Making Home Affordable participating servicers from reviews largely conducted throughout the first quarter of 2011 on three categories of program implementation: identifying and contacting homeowners; homeowner evaluation and assistance; and program reporting, management and governance. Based on the reviews for this quarter, four servicers have been identified as needing substantial improvement and six servicers have been identified as needing moderate improvement. The servicers identified as in need of substantial improvement are:

•Bank of America, NA;
•J.P. Morgan Chase Bank, N.A.;
•Ocwen Loan Servicing, LLC; and
•Wells Fargo Bank, N.A.
While servicers are required to address all instances of non-compliance, beginning this month, the Treasury Department is withholding financial incentives for three servicers: Bank of America, NA; J.P Morgan Chase Bank, NA; and Wells Fargo Bank, N.A. Treasury will not withhold financial incentives owed to Ocwen Loan Servicing, LLC for this quarter as their compliance results were substantially and negatively affected by a large servicing portfolio acquired during the compliance testing period.

Read the full story:

Keep the faith!

Tuesday, June 14, 2011

Have you been denied a HAMP Modification???

Getting Started With

Overview is a free tool provided by the United States Department of the Treasury, and the Department of Housing and Urban Development in conjunction with the Obama Administration's Making Home Affordable Program. is designed to assist homeowners in conducting a net present value (NPV) evaluation of their mortgage for the Home Affordable Modification Program (HAMP. Need more information about NPV? can be used by homeowners who have been denied a HAMP modification because of their NPV result. Homeowners can enter the NPV input values listed in the HAMP Non-Approval Notice received from their mortgage servicer, or substitute with estimated NPV input values, to compare the outcome provided by against that on the Non-Approval Notice.

This tool can also be used by homeowners prior to applying for a HAMP modification to help them better understand the NPV evaluation. provides only an estimate of a mortgage servicer’s NPV evaluation. While the NPV formula used on is required to be the same as that of your mortgage servicer’s, differences in input data and other industry-related data may result in different outputs. After using, it is recommended that you save a copy of the evaluation and share it with your mortgage servicer to discuss options available to you.

check out the site yourself:

Good luck and as always ... Keep the faith !!!

Thursday, June 2, 2011

S. F. Chronicle reports all foreclosure victims are not deadbeats and ...

S. F. Chronicle reports all foreclosure victims are not deadbeats and ... gives tips on credit repair, etc...

Popular wisdom holds that people who lose their homes to foreclosure must be irresponsible deadbeats who can't handle money.

But a new study shows that many homeowners who defaulted on their mortgages during the economic downturn subsequently proved to be responsible consumers and good credit risks.

"Certain consumers who defaulted on a mortgage in the recent recession only did so because of the recession - they are otherwise good credit risks," the report said.

The study doesn't come from a pro-consumer advocacy group but from TransUnion, one of the three national credit bureaus (along with Equifax and Experian) that collect information on Americans' borrowing and bill-paying habits.

As such, it carries significant weight and could influence how lenders view defaulting homeowners. While it's unlikely to change how mortgage delinquencies affect consumers' credit scores, it provides guidelines for lenders to consider mitigating circumstances such as job loss in extending credit to people who fell behind on their home loans.

"Lenders always try to distinguish a one-off, life-crisis event like divorce or a medical catastrophe versus people who are just ineffective at managing credit," said Ezra Becker, TransUnion vice president of research and consulting, and one of the study's authors. "Our argument is that this economy disproportionately affected certain people in a way akin to a one-time crisis. Those consumers have not in fact forever changed their personal philosophy on repaying debt. It was a one-time event because of the specific and personal circumstances of the recession, and they otherwise would be good credit risks."

TransUnion reviewed data from 5 million randomly selected mortgage holders to find 129,000 people who were 120 days or more behind on home-loan payments, and who had additional lines of credit, such as car loans, credit cards and student loans, including lines opened both before and after missing the mortgage payments. It followed their loan performances over 12 to 17 months.

It found that consumers whose only delinquencies were on their mortgage (as opposed to ones who previously were late on credit card payments and other loans) "do indeed present less credit risk," Becker said. "It's the environmental impact (of the recession and high unemployment) that has come into play for those consumers."

Trying to improve scores
Advocates who work with defaulting homeowners said the report confirms their perceptions.

"Most people I've talked to (who lost their homes to foreclosure) were very sensible, had saved a long time, worked very hard and figured out what they could pay," said the Rev. Lucy Kolin, pastor at Oakland's Resurrection Lutheran Church and co-chair of the faith-based Oakland Community Organizations network. After foreclosure "they went back to their regular fiscal practice of making a budget, paying their bills and keeping current."

At Sunnyvale's Project Sentinel, Sharleen Kilgore, deputy director of housing counseling, said: "What I find typically is people who've been through a foreclosure have taken a significant hit on their credit and are very anxious to improve their credit score because credit rules our lives - you can't rent, buy a car, or do a lot of things without it. Once that heavy burden of the mortgage payment is no longer on their shoulders they have the ability to meet their obligations and save for the first time in many years."

Sheri Powers, director of the homeownership center at Oakland's Unity Council, said that foreclosures are so common now that many landlords are willing to overlook that blemish on people's credit records.

"We find that more landlords are open to renting to people who had a foreclosure," she said. "I suggest they offer an additional deposit with a stipulation on the lease that after 12 months of paying on time it gets refunded back or applied to the rent."

2 waves of foreclosures
Many experts point out that while the first wave of foreclosures hit people who got unsustainable subprime loans, the current wave of foreclosures is mostly among people who underwent job loss or reduced income.

Oakland's Lilian Cabrera fits both categories. The economic downturn cut into her earnings from the insurance agency she owns in the Fruitvale district. At the same time, she had an adjustable mortgage that increased significantly. She got a temporary loan modification and made 14 payments, but never received a permanent modification. No longer able to keep up, she is contemplating either selling the house for less than she owes or letting it go to foreclosure.

"I still pay all my other bills," she said. "It's just this one; I couldn't pay an extra $1,000 a month."

She is determined to recover her profile as a reliable consumer.

"I'm going to rebuild my credit and keep it up," she said. "I'll keep everything current."

Tips to restore damaged credit
-- Pay your debts consistently on time every month, even if it's only the minimum payment.

-- Be patient. Companies offering quick-fix solutions generally are ineffective. Building a positive credit profile takes many months of regular payments.

-- Be proactive when you're in a cash crunch; contact lenders before going delinquent to ask for forbearance or temporary lower payments.

-- Keep your credit-card balances below 30 percent of your allowable maximum. For instance, if your Visa card has a $1,000 limit, don't run up more than $300 of debt on it.

-- Check your credit reports. lets you order reports for free.

Read more:

Monday, May 23, 2011

Another means of help towards keeping your home ...

I've mentioned this website before but you rally need to look through it and investigate all the options that may be available. Don't just scan it, read through all th menu items thoroughly ... You can trust me that you'ee never regret a little reading if it saves your home or puts some cash in your pocket

Keep the faith!

Thursday, May 19, 2011

Why are short sales so long and drawn out?

Why are short sales so long and drawn out? This is a question that many ask but no answers seem to be forthcoming. Here's the latest:,0,1753173.column

Keep the faith!

Wednesday, May 11, 2011

Legislation Introduced For 45-day Short Sale Decision

Last month, Representatives Tom Rooney (R-FL) and Robert Andrews (D-NJ) introduced H.R. 1498, the "Prompt Decision for Qualification of Short Sale Act of 2011". This legislation makes it mandatory for mortgage servicers to reply to a short sale application within 45 days of submission. If the servicer fails to provide a decision to the short sale applicant within that time period, the application is deemed approved. NAR has heard from many of our members nationwide that the length of time for a decision on a short sale application remains a significant impediment for this foreclosure mitigation option. It is the NAR's hope that this legislation will not just shine a light on the short sales issue, but establish a mechanism for the development of an appropriate solution.

Sunday, May 1, 2011

Now hear this ....... and read the link

At some point in the process, your Lender is going to have a conversation with you about modifying your loan, whether you qualify or not. You can be sure that you will need to provide the Dodd-Frank certification in which you certify that you have not been convicted, within the last 10 years, of any one of the following: (A) felony larceny, theft, fraud, or forgery, (B) money laundering or (C) tax evasion.

Thursday, April 7, 2011

The State may be your new 'Knight in shining armor" and don't forget BofA

California has decided that people who stripped equity out of their homes deserve taxpayer help after all.

The California Housing Finance Agency said Tuesday that people will no longer be excluded from three of the four Keep Your Home California programs just because they took out a home equity line of credit or did a cash-out refinance.

Keep Your Home California is a state-run program getting $2 billion from the U.S. Treasury's Hardest Hit Fund. It is designed to help low- and moderate-income people who are unemployed or owe more than their home is worth pay their mortgage.

There are four individual programs under the umbrella program. Eligible homeowners can get up to $50,000 in assistance from one or more of the four programs combined.

When Keep Your Home started taking applications in early February, it barred people from all four programs if they had tapped the equity in their homes.

"We knew we didn't have enough money to serve everyone," says Diane Richardson, CalHFA's director of legislation. "We wanted to help people who were in some kind of trouble through no fault of their own, who weren't upside down because they had taken out equity."

Of the roughly 28,000 people who have called the program seeking assistance, about 10,000 were found ineligible. Of those, about 40 percent or 4,000 were turned down because they had taken equity out of their homes.

CalHFA has now decided that people who can't pay their mortgage because they are unemployed or suffered a financial hardship shouldn't be penalized just because they robbed their homes of equity.

Under the new rules, people who took equity out of their homes will be eligible for the unemployment mortgage assistance, mortgage reinstatement assistance and transition assistance programs if they meet all the other program requirements.

These same programs have also been expanded to include mortgages that were originated after Jan. 1, 2009.

The program originally excluded mortgages originated after that date because they also are excluded under the federal Home Affordable Modification Program. "We wanted to be consistent with HAMP," Richardson says.

But CalHFA found that a lot of homeowners in trouble had refinanced after that date and it did not want to exclude them.

Homeowners who took cash out of their homes or whose mortgage was originated after Jan. 1, 2009, remain ineligible for the fourth program, which offers principal reduction.

To qualify for any of the four programs, homeowners must fall below certain income limits ($119,300 in San Francisco, San Mateo and Marin counties; $108,350 in Contra Costa and Alameda counties).

They also must be living in the home and cannot own a second home, but there are no other asset limits. Applicants will not be asked how they spent any cash they took out of their homes or how much they have in bank or investment accounts.

For other requirements, see

Richardson says that "a couple hundred" people have received help from the program and that about 2,000 more are in the final stage of confirming their eligibility.

CalHFA is contacting people who were previously disqualified but would qualify under the new rules. These homeowners can also contact the program at (888) 954-5337.

Some people have been turned down because their loan servicer is not participating in one or more of the programs.

All of the major private-sector servicers - Bank of America, Wells Fargo, Chase, CitiMortgage and GMAC - are participating in the unemployment mortgage assistance plan, which makes mortgage payments on behalf of unemployed homeowners in imminent danger of foreclosure. The plan will pay 100 percent of the borrower's payment, up to $3,000 a month, for six months.

None of those servicers are participating in the principal reduction program, but BofA has agreed to join a pilot program that will start in a few weeks, Richardson says.

This program will provide capital to reduce the principal balances of qualifying borrowers who are underwater, or owe more than their homes are worth. For every dollar the program contributes, BofA will also reduce the borrower's principal by a dollar, Richardson says.

For borrowers who have received no other assistance from Keep Your Home California, this program could reduce their balance by up to $100,000 - $50,000 from the program and $50,000 from BofA.

However, the program cannot reduce loan balances to less than 115 percent of the home's market value and it won't reduce the borrower's debt-to-income ratio to less than 31 percent, Richardson says.

California is one of 18 states receiving money from the Hardest Hit Fund. Each state could set up its own program, within limits. Many never prevented homeowners from receiving assistance because they had withdrawn equity from their homes. However, many also have much less generous payouts than California.

To learn more, go to, then click on Programs.

Reprinted from the official website of the S. F. Chronicle

Wednesday, April 6, 2011

California Association of Realtors unveils it's Short Sale website

In the latest of C.A.R.'s efforts to address the difficulties of completing short sales, the association is proud to launch a new website, California Short Sales. This website helps members and consumers stay on top of all the latest news and insider tips on the ever-changing short sale process.

With information for both consumers and REALTORS®, the website is full of need-to-know resources about short sales, and provides up-to-the-moment news, legislative information, legal tips, and lender requirements.

Short Sales California is also a place to stay up-to-date on C.A.R.'s activities to enable more families to arrange a short sale.

Monday, April 4, 2011

Short Sale Terminology


Short Sales are a hot topic today in real estate.

Short Sales are a distinct process supported by its own terminology. We often forget sometimes that not everyone is in the real estate business, and the language can seem confusing! The following is a summary of the most common terms that a buyer and seller should be aware of when purchasing or selling a short sale property:

•Short Sale: When a lender agrees to accept less than what is owed on the mortgage and release its lien on the property.
•The Property is "upside down": This phrase is commonly used to describe a situation where the amount due on the existing loan is higher than what the property is appraised for or will sell for.
•Loss Mitigation Department: The department at the lender that is responsible for reviewing all short sale documentation, ordering a BPO, and approving or denying short sale.
•BPO: Brokers Price Opinion (BPO), typically ordered by lender, is a property valuation report to help determine what the property might sell for.

Friday, April 1, 2011

Department of Real Estate says "Protect yourself from getting ripped off...."

Consumer Alert: What You Can Do to Protect Yourself from Getting
Ripped Off in Real Estate and Home Loan Relief Scams
By Wayne S. Bell Chief Counsel – California Department of Real Estate

I. Introduction.
The New Year has unfortunately not brought about the end to real estate and mortgage
relief scams. While a deep recession continues to affect the national and California
economies, the business for swindlers is very good.
They continue to sell false hope to and prey on vulnerable and unsophisticated
consumers, and the bad players far outnumber those of us in the government who
prosecute them.
They advertise and cast their nets widely, using the Internet, newspapers, magazines,
mail pieces, and radio and television,
This alert is written to remind you to be continually cautious and vigilant, and to give you
some important tools and red “warning” flags so that you do not fall victim to real estate
and home loan relief scammers.
The California Department of Real Estate (DRE) has issued prior topical warnings and
alerts to consumers about the rise of fraud in connection with pre-foreclosure and
foreclosure-related rescue, forbearance and forgiveness services, including loan
modifications, forensic loan audits, and short sales.
The DRE has also written about problems with “Cash for Keys” programs, imposter
landlords using bogus and absurd evidence of ownership to take advantage of
unsuspecting renters, and the increased use of questionable and possibly misleading
terms such as "expert", "certified", and "specialist" in the marketing and advertising of
assistance to anxious homeowners and other real estate and mortgage consumers.
The fraud comes in many shapes and sizes, and there seems to be absolutely no
shortage of ingenuity, creativity, marketing ploys and tricks used by unscrupulous
fraudsters to capitalize on the desperation and vulnerability of unsophisticated and/or
financially strapped California consumers.

II. What You Can and Should Do to Avoid Becoming a Scam Victim.

In addition to telling you that you really need to always be wary and cautious when
thinking about retaining the services of people and companies offering assistance in the areas of mortgages, foreclosure rescue, and real estate, you should check out and read
prior alerts and warnings of the DRE.
Also, and importantly, you are wise to never pay for such services or assistance in
advance of seeing results. It is extremely risky to do so, and it may be illegal for the
“service provider” to ask you for or to collect fees in advance for some services, like
loan modification, short sale, and mortgage forbearance services.
Further, you may be able to do some of the advertised services yourself, especially in
the area of loan modifications. In other cases, such as with forensic loan audits, there is
a serious question about the value of such services. In still other cases, there are free
services that might be available to you through HUD-certified housing counselors.
If you choose to use the real estate and/or mortgage related services of third parties for
a fee(s), ask them questions, lots of questions, and then verify, verify, and still verify
some more.
Check them out on the DRE website, at Make certain that they are
licensed by the State of California. If they are licensed, see if they have been
disciplined. If they are lawyers, check them out on the State Bar's website, at Again, look at their disciplinary record, if one exists.
Check them out through the Better Business Bureau.
Check them out through a Google or related search on the Internet. You may be
amazed at what you can and will find out doing such a search. Often consumers who
have been scammed will post their experiences, insights, and warnings long before any
criminal, civil or administrative action has been brought against the scammers.
The purpose of the next section is to give you some specific, detailed questions that you
can ask of those people and entities who/which have offered to assist you. Remember
that legitimate service providers will not mind the questioning and scrutiny.

Suggested Questions to Ask (This List is Not Exhaustive, But It Will Give You
Information on Which You Can Make a Reasoned Decision) –

1. Are you licensed by the California Department of Real Estate? If not, why not?
What exemption from the licensing laws do you claim? Remember that most real estate
and mortgage related services require a license issued by the DRE. There are some
exceptions for California licensed lawyers who are engaged in the practice of law, and
some other very limited exceptions. If they are licensed, ask them for their DRE Real
Estate License Number, and check to see if they have been disciplined by the
Department (go to
It should be noted that certain mortgage lending and mortgage related activities require
a special Mortgage Loan Originator (MLO) endorsement, and that requires the issuance
of a unique identifying number. So ask the service provider if he or she has an MLO
endorsement number as well, and then verify that information with the DRE.
If the person is a real estate salesperson, he or she must work through a real estate
broker. Therefore, you will want to question the salesperson about the identity and
experience of his or her broker, and then check on the broker’s license at the DRE
website shown above. If the salesperson says that he or she can do the work
independent of a broker, do not work with or hire that person.
2. How many transactions or services of the type you are advertising or offering have
you successfully performed? If they have offered to perform loan modification services,
ask them how many “permanent” loan modifications they have negotiated. Make
certain to get specifics and contacts, and do further checking.
3. Do you have a list of current and past “satisfied” customers? If so, get it and call
them. Ask them if they would use this person or entity again. Do your own background
check. And note that even if the person or company is "highly recommended" by socalled
satisfied customers, the risk of a scam is not eliminated entirely.
4. Do you have a list of business and banking references? If so, get the list and check
them out.
5. How long have you been providing loan modification, short sale, mortgage relief, or
other relevant services? Alternatively, you can ask, how long have you been in this
6. Are you a specialist in this area? If the answer is yes, ask what specialist
qualifications do you have and what does that mean? And what course of study did you
undertake to become certified or specialized?
7. What are you actually going to do for me? (What specific services will you be
providing?) Get that in writing, and take the time to fully understand what the contract
says and what the end result will be before proceeding with the services.
Remember to always ask for and demand copies of all documents that you sign.
8. Where and when was your business formed? (Ask this question where there is a
corporation or other form of business entity involved). You can then look at the website
of the California Secretary of State to verify that information and/or to determine if the
business is able to operate in the State of California. You can also check on the agent
or agents for service of legal process, and the current status of that business entity.
The Secretary of State’s website is

III. Are there Surefire Ways or Red Flags to Detect Fraud?

Fraudsters are good at what they do. Many are sophisticated rings using fake websites
and important sounding names. Others are just rogue criminals on their newest scam.
They all continue to adapt and modify their schemes as soon as their last ones became
It is really difficult to identify a “surefire” way to detect fraud in the area of real estate
and mortgage relief services. But there are some red warning flags to look out for so
that you do not become the latest casualty of the scammers. Those things include:
1. Advice that you can “walk away” from your home loan and repair your credit by quitclaiming
your property to some third party.
2. Assertions that you can “delete” or fully satisfy your mortgage by assigning it to a
third party.
3. Claims that you can get your home “free and clear” by suing your lender for
something like failing to get your approval to assign the loan to some other party.
4. Letters that appear to be from a government agency claiming to help you obtain
mortgage relief assistance, or offers of “official government assistance” or “government
approved” mortgage relief.
5. Requests that you pay only in cash, or by wire transfer or a cashier’s check.
6. Discussions of “side deals”, paying for something “outside of escrow” or “after
7. An unwillingness to meet in person.
8. “Attorney-backed” or “attorney affiliated” entities that do not disclose the name or
names of California licensed lawyers who are responsible for those entities.
9. The use of more than one contract for the same services.
10. Advice that you do not need to read an agreement that you have been asked to
sign. Always remember that you should not be pressured into entering into an
agreement that you do not read and understand.
11. Unsolicited help, such as people showing up at your home, or cold-calling you and
professing their expert services. You need to fully research all of those who you
consider paying for real estate and mortgage relief services.
12. Unqualified guarantees or promises that the service provider can get your loan
modified, that they can get a short sale approval for you, or that they can stop a
foreclosure action.
13. Requests that you provide personal financial information over the phone or over the
14. Requests for upfront payment before any services have been provided.
15. Requests giving the service provider a power of attorney.
16. Statements that you must act immediately, or without any delay.
17. Requests that you must sign a deed of trust, grant deed, quitclaim deed, or any
document that has not been fully completed (such as where lines are left blank).
18. Advice that you should not talk with your lender, servicer, attorney, accountant,
and/or anyone else.
19. The use of lofty language that you cannot understand.
20. Advice that you can make some false statements in documents to get mortgage
relief since “everybody is doing it”.
21. Assertions that they have found some secret loophole in the banking laws that will
help you eliminate or modify your mortgage.
22. Assertions that you can avoid foreclosure by giving “fractionalized” interests in your
property to persons or entities that are in bankruptcy.
23. Assertions that you are a “sovereign person” not subject to the laws of California or
the United States.
24. Assertions that bankruptcy is an easy fix and will save your home from foreclosure.
Filing for bankruptcy is a major event, with large implications for your life and credit, and
it does not wipe out your secured mortgage lien. Bankruptcy should not be taken lightly,
or commenced without serious contemplation and the advice of a credible and reputable
bankruptcy specialist.
IV. Conclusion.
Fraud by predators in the area of real estate and mortgage relief scams requires that
you be skeptical, proceed cautiously and do your homework. There are legitimate,
reputable, licensed and competent professionals in the real estate and mortgage field.
If you need or want their assistance, you need to do some homework.
Ask questions, get referrals from people you know and trust, and always remember the
following points. If it seems too good to be true, it probably is not true. Do not abandon
your common sense. And if you feel alarm bells going off inside of you (and something
does not feel right – the “uh-oh” feeling), you should pay close attention and rethink
moving forward.

Thursday, March 24, 2011

California Association of Realtors to launch Short Sale website

C.A.R. to launch short sale website
With fewer than three of five short sales closing in California, C.A.R. is well aware of the complexity and difficulty of navigating lenders’ and servicers’ short-sale procedures. To assist both REALTORS® and consumers, C.A.R. will launch a website specifically focused on short sales.

On the new site, which launches tomorrow, visitors will find information ranging from short sale news, foreclosure timelines, and red flags to watch for, to legal Q&As, a short-sale glossary, and much more.

Additionally, consumers can find a REALTOR® to assist with their short-sale transaction ( I might suggest in the desert area), what to expect as a buyer or seller of a short-sale property, and whether they qualify for government programs to keep their home.

For additional information, and to get the URL for the short sale website, check the homepage of on Friday, March 25.

Sunday, March 13, 2011

Listingbook - the people's champ for property searches in the desert

Here's a re-post of an article from my Real Estate Blog. It talks about a new site to search property that is on the cutting edge.

"Listingbook is a new product available to Realtors. I happen to subscribe to it so that I am able to offer it to my clients and friends. Whether a Seller, Buyer or just interested in property trends, you can enter the site and request an account or receive an invitation from a subscribing Realtor. Account setup is real simple. Some Realtors will restrict account approval by requiring you to include your phone number when signing up - here is one that doesn't require that ...

The property data is solely for available properties / active listings and is updated every 15-30 minutes so no bothering with properties that are already in contract or sold. Other than the Multiple Listing Service 'MLS' is has the most photos of any search site and includes: days on the market, price history, map reports, price reduction notifications, new listing alerts, virtual tours and property favorites folder (You can keep data on properties that interest you ... along with keeping multiple separate searches). With the MLS, you can't keep all the search data and results for future review.

Upon successfully opening you account, you will find that the sign-in scenario is not too cumbersome and I think you may find the results help you immensely. So, whether you are Selling, Buying, or curious about neighborhood activity (what your neighbor has listed their property for), this is the cream of the crop in property data websites.....

more free listingbook domains:,,,,,,,,,,,,,, along with your future search efforts for Desert property should be much improved.

Wednesday, March 9, 2011


Tomorrow morning the following letter will appear in major newspapers throughout the state...the Bakersfield Californian, Fresno Bee, Los Angeles Times, Mercury News, Sacramento Bee, San Diego Union-Tribune and San Francisco Chronicle.

March 10, 2011

An important message from the CALIFORNIA ASSOCIATION OF REALTORS®:

I write on behalf of the CALIFORNIA ASSOCIATION OF REALTORS®, whose 170,000 members continue to witness the devastating consequences the home foreclosure crisis is having on California’s families, neighborhoods, and communities on a daily basis.

The number of families affected by foreclosure is staggering. During the past three years, more than 640,000 Californians have lost their homes. With the number of homeowners who owe more than their home is worth hovering at 30 percent, experts predict there will be many more foreclosures in 2011 and 2012. Unless we take immediate, aggressive action to assist these homeowners, any meaningful recovery in the housing market and overall economy will continue to be delayed.

Tragically, only a fraction of those who face foreclosure will remain in their homes when all is said and done. Those whose incomes and financial circumstances meet strict guidelines may qualify for a loan modification that will reduce their monthly payment to more affordable levels. Yet the federal Home Affordable Modification Program (HAMP) is expected to prevent only 700,000 to 800,000 foreclosures nationwide before it expires at the end of 2012, and the program does little to help those homeowners who are unemployed or otherwise no longer able to meet their financial commitments. Their last hope is to sell their home, which often means convincing their lender or the investor who “owns” the loan (and, in many cases, the holder of a second mortgage lien and the mortgage insurer) to accept a “short sale.”

With a short sale, homeowners with a proven hardship negotiate an agreement to sell their home for less than the balance owed. Although not every homeowner or mortgage is eligible, those who are able to finalize a short sale avoid a foreclosure on their credit record and can move on with their lives. Last year, 20 percent of home sales in our state involved short sales.

Short sales can play an important role in our state’s economic recovery by accelerating the pace of home sales and reducing the inventory of bank-owned homes on the market. There are other benefits as well. Homebuyers who can qualify for a mortgage at today’s low interest rates also are able to purchase a home at below-market prices. Banks get a nonperforming asset off their books and avoid the headaches associated with disposing of assets they don’t want to own in the first place. Neighborhoods have fewer abandoned homes, and local businesses have more customers with money to spend.

Unfortunately, many homeowners are unable to successfully negotiate a short sale. According to a recent survey of 2,150 California REALTORS® who have assisted clients with a short sale, only three out of five transactions closed – even when there was an interested and qualified buyer.

What’s the problem? For one, no two mortgage agreements are the same, so it can be difficult to standardize short sale processes and procedures. Many homeowners have second mortgages, which further complicate matters. Then there’s the challenge of convincing multiple parties to take a financial loss or, in the case of loan servicers, to forego fees they otherwise might earn during the course of the foreclosure process. Poor and slow service by many banks and servicers has only exacerbated the problem. Horror stories abound from potential homebuyers and REALTORS® forced to wait 90 or more days for a response to a purchase offer or being required to fax short sale applications or other paperwork as many as 50 times. These delays discourage potential homebuyers from considering a short sale purchase and undermine the process for those who short sales are intended to benefit – the hundreds of thousands of families facing foreclosure.

Increasing the number of closed short sales by speeding up and streamlining the short sale process is one important way we can help California families avoid foreclosure and move our economy closer to recovery. That’s why the California Association of REALTORS® is taking steps to enable more families to arrange a short sale. Recently, we advocated for improvements to short sale guidelines established under the federal Home Affordable Foreclosure Alternative (HAFA) program. We’re meeting with major banks, U.S. Treasury officials, government-sponsored entities (including Fannie Mae and Freddie Mac), and others to urge them to standardize processes, comply with federal guidelines, improve communication with other stakeholders and increase staffing with the goal of eliminating service issues. We’ve also offered our members training in every aspect of the short sale process so they can assist their clients.

But we can’t do it alone. That’s why we’re focusing the spotlight on short sales and calling on regulators, elected officials, nonprofits, business organizations, companies, and individuals with a stake in California’s economic future to resolve this issue and others that get in the way of a recovery. It won’t be easy, and some compromises will be required. The important thing is that we need to act today. Our families and our communities can’t wait any longer.


Beth L. Peerce

Thursday, March 3, 2011

FTC brings more protection for Short Sale homeowners

FTC Issues Final Rule to Protect Struggling Homeowners from Mortgage Relief Scams
Rule Outlaws Advance Fees and False Claims, Requires Clear Disclosures
Homeowners will be protected by a new Federal Trade Commission rule that bans providers of mortgage foreclosure rescue and loan modification services from collecting fees until homeowners have a written offer from their lender or servicer that they decide is acceptable.

“At a time when many Americans are struggling to pay their mortgages, peddlers of so-called mortgage relief services have taken hundreds of millions of dollars from hundreds of thousands of homeowners without ever delivering results,” FTC Chairman Jon Leibowitz said. “By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.”

The FTC is issuing the Mortgage Assistance Relief Services (MARS) Rule to protect distressed homeowners from mortgage relief scams that have sprung up during the mortgage crisis. Bogus operations falsely claim that, for a fee, they will negotiate with the consumer’s mortgage lender or servicer to obtain a loan modification, a short sale, or other relief from foreclosure. Many of these operations pretend to be affiliated with the government and government housing assistance programs. The FTC has brought more than 30 cases against operations like these, and state and federal law enforcement partners have brought hundreds more.

Advance fee ban

The most significant consumer protection under the FTC’s new rule is the advance fee ban. Under this provision, mortgage relief companies may not collect any fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge.


The Rule requires mortgage relief companies to disclose key information to consumers to protect them from being misled and to help them make better informed purchasing decisions. In their advertising and in communications directed at individual consumers (such as telemarketing calls), the companies must disclose that:

they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
the lender may not agree to change the consumer’s loan; and
if companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.
Companies also must explain in their communications to consumers that they can stop doing business with the company at any time, can accept or reject any offer the company obtains from the lender or servicer, and, if they reject the offer, they don’t have to pay the company’s fee. The companies also must disclose the amount of the fee.

Prohibited claims

The MARS Rule prohibits mortgage relief companies from making any false or misleading claims about their services, including claims about:

the likelihood of consumers getting the results they seek;
the company’s affiliation with government or private entities;
the consumer’s payment and other mortgage obligations;
the company’s refund and cancellation policies;
whether the company has performed the services it promised;
whether the company will provide legal representation to consumers;
the availability or cost of any alternative to for-profit mortgage assistance relief services;
the amount of money a consumer will save by using their services; or
the cost of the services.
In addition, the rule bars mortgage relief companies from telling consumers to stop communicating with their lenders or servicers. Companies also must have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.

Attorney exemption

Attorneys are generally exempt from the rule if they meet three conditions: they are engaged in the practice of law, they are licensed in the state where the consumer or the dwelling is located, and they are complying with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorneys must meet a fourth requirement – they must place any fees they collect in a client trust account and abide by state laws and regulations covering such accounts.

All provisions of the rule except the advance-fee ban will become effective December 29, 2010. The advance-fee ban provisions will become effective January 31, 2011.

The FTC rulemaking proceeding was conducted pursuant to Congressional legislation sponsored in 2009 by Senators Jay Rockefeller and Byron Dorgan. The Final Rule applies only to entities within the FTC’s jurisdiction under the Federal Trade Commission Act, which excludes, among others, banks, savings and loans, federal credit unions, common carriers, and entities engaged in the business of insurance. In June 2009, the FTC issued an Advance Notice of Proposed Rulemaking seeking comment on the practices of for-profit mortgage relief companies. In February 2010, the FTC announced a Notice of Proposed Rulemaking and sought comments from interested persons, including advocates for consumers, the business community, and the legal profession.

Click here for facts about mortgage consumers’ rights.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.

Office of Public Affairs
Laura Sullivan or Evan Zullow
Bureau of Consumer Protection
(FTC File No. R911003)

Friday, February 11, 2011

What do I need to start a short sale?

So you've come to the realization that your financial ship is taking on water. So who do you call?...the Coast Guard to rescue you or a tugboat to rescue the ship? Rescuing the ship would be getting a loan modification or winning the Lotto to allow you to continue to make your payments...Calling the Coast Guard would be consulting with your legal/tax counsel to discuss your tax situation and options available to you.

You ask why do I have to do this...Well...There are nunmerous questions to be answered to determine if you and your property qualify for a short sale and selling real estate short is a legal and financial matter, not a real estate matter.

Selling your home and getting the contract is the easier of the two parts. The most tedious and frustrating is processing the paperwork with the Short Sale Lender. The major goal here is to provide everything they need, upfront without exception, and be prepared to provide the addtional documentation and updates they will request from time to time, which will happen.

An experienced Short Sale Agent will have a list of documentation that the Lender's normally ask for and/or you will have a list from your specific Lender. If one is not available, then I offer this list as a starting point of items definitely needed and some things you may encounter over the term of the Short Sale approval process:

1. Signed and dated listing agreement with commissions listed.

2. Full Multiple Listing Service 'MLS' report from your real estate agent.

3. A Third Party Authorization form - seller signed authorization form for the agent and/or authorized to negotiate with the lender on seller’s behalf.

4. Handwritten hardship letter signed and dated telling your story.

5. A financial statement, basically an income and expense statement.

6. Two (2) months most recent bank statements.

7. Two (2) months of mosdt recent pay stubs or copy of pension/social security award letter.

8. Two (2) years of seller’s most recent tax returns.

9. Complete copy of the signed and dated Purchase Agreement — contract.

10.Pre-approval letter from the Buyer’s new Lender

11.Three recent, like-kind, comparable sales.

12.Estimated HUD1 or pro-forma closing statement provided by escrow.

This should get you onto the 'Yellow Brick Road' but it takes a ral specialist to monitor the Short Sale and keep it moving and I suggest you consult a Realtor to make this a more palatable process ... Short Sale could be a great place to start

Friday, February 4, 2011

Anti-Deficiency Protection for Short Sales

Senate Bill 931, providing California Short Sale Deficiency Protection, will go into effect on January 1, 2011. This new law states that existing lenders of record who have approved and agreed upon a short sale will not be able to obtain a deficiency judgment against the seller after the short sale is completed. After providing written consent to a short sale on a first mortgage or first deed of trust, the lender must accept the proceeds of the sale as full payment and must fully dismiss the remaining balance due on the loan. This law applies only to first mortgage loans secured by one to four residential units. However, this law would not apply if the lender is seeking damages for fraud or waste by the borrower.

Section 580e of the bill reads:

(a) No judgment shall be rendered for any deficiency under a note secured by a first deed of trust or first mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage. Written consent of the holder of the first deed of trust or first mortgage to that sale shall obligate that holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage.

(b) If the trustor or mortgagor commits either fraud with respect to the sale of, or waste with respect to, the real property that secures the first deed of trust or first mortgage, this section shall not limit the ability of the holder of the first deed of trust or first mortgage to seek damages and use existing rights and remedies against the trustor or mortgagor or any third party for fraud or waste.

(c) This section shall not apply if the trustor or mortgagor is a corporation or political subdivision of the state.