Thursday, September 26, 2013

Still haven't started your Short Sale? Change is in the air ...

If you have yet to commence your Short Sale endeavor, be prepared because change is in the air ... Bank of America has announced some changes to their program to take effect October 1, 2013 ... •New or different documentation requirements for verifying assets, income, and expenses •Deficit Income Test (DIT) will be used to determine a homeowner's financial hardship •Possible elimination of the financial hardship/deficit income preforeclosure sale requirement for: ◦service members who have received Permanent Change of Station (PCS) Orders, or ◦homeowners who are deemed eligible for a streamlined preforeclosure sale option •New validation requirements for appraisals •Different dual agency/brokerage requirement: to meet the new short sale purchase contract addendum requirements, brokers and their agents may represent either the buyer or the seller, but not both parties While you're considering all this and how it affects you, please remember that the Federal Debt Relief Act of 2007 ran through 2012 and quite close to year end finally it was extended thru 2013. There is no conversation about it at this time. The fact that you might miss out on the largest benefit of the Short Sale process should not make you think twice about a Short Sale, it should make you call a qualified Realtor who is a Short Sale expert. looks for designations like mine ... SFR - Short Sale Foreclosure Resource and CDPE - Certified Distressed Property Expert (The better of the two). Best of luck to you and Keep the faith !!!

Tuesday, September 10, 2013

Relocation fund assistance after Short Sale/Deed-in-lieu

Reproduced directly from The Transition Assistance Program (“TAP”) is one of CalHFA MAC’s federally-funded programs developed to provide eligible homeowners with transition assistance when it is determined that they can no longer afford their home. TAP will be used in conjunction with short sale and deed-in-lieu programs to help homeowners make a smooth transition to housing. Homeowners will be required to occupy and maintain the property until the home is sold or returned to the lender as negotiated. Program funds will be available on a one-time only basis up to $5,000 per household and can be used or layered with other CalHFA MAC HHF programs. Funds will be sent to the servicer or homeowner after or in connection with the short sale or deed-in-lieu of foreclosure closing. Funds are intended to help the homeowner secure new housing (e.g., rent, moving expenses, and security deposits) and will also be available for transition assistance counseling services. CalHFA MAC envisions that these monies would be used to complement other federal or lender programs designed specifically to stabilize communities by providing assistance to homeowners who have suffered a financial hardship and as a result are no longer financially able to afford their mortgage payments. TAP is designed to target low-to-moderate income homeowners and address the needs of a homeowner’s specific situation in lieu of targeting certain regions or counties. 4. Program Allocation (Excluding Administrative Expenses) $2,300,000.00 5. Borrower Eligibility Criteria • Homeowner must qualify as a low-to-moderate income house hold, as follows: ◦ Low-to-moderate income of 120% or less of the HCD Area Median Income (as defined by the California State Department of Housing and Community Development), for a family of four, in the county where homeowner resides. Transition Assistance Program Summary Guidelines 2 TAP 06/2013 • Homeowner must complete and sign a Hardship Affidavit / 3rd Party Authorization to document the reason for the hardship. • Homeowners who have recently encountered a financial hardship due to their military service are eligible. • Homeowner must agree to provide all necessary documentation to satisfy program guidelines established by CalHFA MAC. • Mortgage loan is delinquent or at risk of imminent default as substantiated by homeowner’s hardship documentation. Loans in foreclosure are eligible. • General program eligibility is determined by CalHFA MAC, the housing counselor or servicer based on information received from the homeowner. Program-specific eligibility is determined by CalHFA MAC on a first-come/, first-approved basis until program funds and funding reserves have been exhausted. Loan servicer will implement the HHF program based on participation agreement terms and conditions. • Funding allocation will be tracked, monitored and performed by CalHFA MAC in a centralized processing operation. 6. Property/Loan Eligibility Criteria • Current unpaid principal balance (“UPB”) of the first-lien mortgage loan is not greater than $729,750. • The property securing the mortgage loan must not be abandoned, vacant or condemned. • The applicant must own and occupy the single family, 1-4 unit home (an attached or detached house or a condominium unit) located in California and it must be their primary residence. Mobile homes are eligible if they are permanently affixed to the real property that is secured by the first lien. 7. Program Exclusions • Homeowner in an “active” bankruptcy is ineligible for TAP assistance consideration. Homeowners who have previously filed bankruptcy are eligible for consideration with proof of court order “Dismissal” or “Discharge”. • Short Sales or Deed in Lieu that are closed prior to homeowner request to the KYHC CPC are ineligible for TAP assistance. Transition Assistance Program Summary Guidelines 3 TAP 06/2013 8. Structure of Assistance TAP assistance will not be structured as a loan. After December 31, 2017, any remaining or returned funds will be returned to Treasury. 11. Estimated Number of Participating Households 12. Program Inception/ Duration 13. Program Leverage with Other HFA Programs 14. Program Interactions with HAMP 15. Program Leverage with Other Financial Resources Approximately 460. This figure is based on loans with unpaid principal balances ranging from $200,000 to $400,000 with an average funding of $5,000.00. The statewide launch of TAP was February 7, 2011 and it will continue up to five (5) years or until funding is fully reserved. TAP benefits may be available to the homeowner even if UMA, MRAP and/or PRP benefits have been utilized, subject to the HHF program maximum benefit cap of $100,000. TAP complements HAMP and HAFA. The funds will leverage monies being made available through HAFA. Servicer is required to follow HAFA guidelines for allowable costs. In cases where the servicer has approved the homeowner for a HAFA transaction, TAP dollars will be limited to $2,000 in order to maintain the $5,000 HHF program maximum per household. None. 9. Per Household Assistance 10. Duration of Assistance Up to $5,000 per household (average funding of $5,000.00). Available on a one-time only basis, per household. 16. Qualify as an Unemployment Program  Yes  No

Short Sales May Lose Favor in California

As reported in the Daily Real Estate News | Friday, September 06, 2013 Home owners in California may be less likely to consider a short sale now that the state failed to take action on legislation that would have given a tax break on short sales. The Assembly Appropriations Committee in the California legislature did not move Senate Bill 30 out of the committee. The California Association of REALTORS® warns that inaction on the bill means that home owners who sold their homes in a short sale will have to pay state income tax on money they didn’t even receive. The bill sought to conform California law to federal tax law. Federal tax law states that sellers cannot be taxed on forgiven debt. However, California’s current laws state that sellers must pay state income tax on the mortgage debt that lenders forgive in a short sale. An exemption in the state did exist to this rule, but the exemption lapsed at the end of 2012 and has yet to be renewed. CAR supported the bill and CAR officials say they were disappointed at the legislature’s lack of response on the matter. "These are real families in real financial need who may well be forced into bankruptcy by an unresponsive legislature," says CAR President Don Faught. "We hope that that the legislature will rectify this in the closing days of the session." Source: “Short sales could lose their appeal in California,” HousingWire (Sept. 5, 2013)