MaryAlice Short - Short Sales, Foreclosure Sales, Buyer, Seller, and Leasing Representation

So you are in trouble with your mortgage and your lender is a credit union. That is both good news and bad news. Let’s start with the bad news.

• If you default on your mortgage the credit union chances are they will sue you for it. Yep, that’s right, they will take you to court and get a judgment that can be used to garnish your wages and lien other assets. The judgment will be reported to the credit unions, mess up your ability to obtain future mortgages indefinitely and generally make your life difficult.
• If the credit union forecloses via advertisement in MN they may have waived their right to obtain a deficiency judgment against the borrower

The Good News

• It is usually easy to get a credit union to work with you on a short sale. Most credit unions will accept the proceeds from a short sale and work out a settlement agreement on the remaining debt. Depending on your financial circumstances this could range from agreeing to forgive the remaining debt to setting up a payment plan for a portion or all of the debt.
• They are willing to talk to you. At a large lender it can be a a frustrating chore to find ANYONE who can knowledgeably talk to you about your options. At least at the credit union the phone number to a manager is not a closely guarded secret and they may even answer their phone.

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Most of the people prefer to invest in real estate as it is a well known fact that irrespective of the housing market condition, real estate investment can serve as a legitimate and viable way of wealth-building, if the investment is done for the long term. As an investor you will always want your prospect of good return to grow. But, not much people are aware of the fact that mortgage refinancing can effectively help your Real Estate Investment to generate much favorable returns. Here, we will discuss that how you can use Mortgage Refinancing on your real estate investment property in order to raise your monetary benefits.

*If you have invested in a real estate property, value of which has gone up considerably and you have already paid back the mortgage loan that you took to invest in the property, then it is natural for you to think about selling the property in order to earn high rate of profit. But, the truth is that you can gain even more if you go for Mortgage Refinancing instead of selling the property. This is because; if you sell the property then you will be required to pay a substantial amount of capital gains tax, which will ultimately lower the level of your profit. But, if you go for Mortgage Refinancing, then you will be able to get a large loan amount as the property has already accumulated enough equity and you will not be required to pay any taxes. So, through Mortgage Refinancing, actually you will be able to get huge funds through your Real Estate Investment without losing a large chunk of the home equity to taxes.

*Most of the people put their real estate investment property on rent. If you are also one of them then you are going to lose your monthly rental income, once you sell the property. But, if you go for Mortgage Refinancing then you will get lump sum money that you can use for any purpose you want and at the same time you will continue to get the monthly rental income. If you use a part of the refinance loan amount for renovating and upgrading your real estate property, then you can even raise the rent and earn more rental income than before.

*If you have not yet paid your mortgage loan amount in full, then you can use a part of the refinance loan amount to repay the first mortgage loan and the rest you can use for a retirement plan which will secure your future.

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That’s right! If you had a property under contract prior to the APril 30, 2010 deadline, you now have until September 30, 2010 to get the transaction closed. Anyone with half a brain saw this extension on the horizon. Lenders are overwhelmed with mortgage processing. Wells Fargo is particularly behind. I have at least five closings with Wells Fargo as the buyers lender. None of them have closed on time so far. Wells is running about 30 to 45 days behind.

If the back up at the lenders wasn’t enough of a problem, we also have the trouble associated with getting short sale approvals in a timely manner. Historically lenders are slow to process short sales. While they have gotten better over the last few years, their job performance is still poor at best. The September 30th deadline will help to hold many deals together where a foolish buyer is motivated solely by the tax credit.

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Fannie Mae and Freddie Mac  are now allowing struggling homeowners with loans backed by the government-sponsored enterprises, or GSEs, to sell their properties through a Short Sale or deed-in-lieu of foreclosure if they can’t get a loan modification, officials announced this week. Of course, tehy have always allowed this. But going forward the process will be streamlined. This is good news considering that they own about 75% of all the mortgages in the nation.
GSE loans were excluded from the Treasury’s Home Affordable Foreclosure Alternatives (HAFA) program’s guidelines, which went into effect in April. HAFA, which streamlines the Short Sale process, was created to help both homeowners and banks avoid foreclosure.
To be eligible for HAFA, Fannie and Freddie loans must first qualify for and enroll in the Home Affordable Modification Program (HAMP). GSE loans are eligible for HAFA only after HAMP and other home-retention options have failed.

Freddie Mac and Fannie Mae servicers must comply with the new HAFA procedures by Aug. 1; the program expires Dec. 31, 2012.
Fannie Mae’s HAFA servicing guide stipulates that, “All servicers must implement Fannie Mae’s HAFA for all conventional mortgage loans that are held in Fannie Mae’s portfolio, that are part of an MBS [mortgage-backed securities] pool that has the special servicing option, or that are part of a shared-risk MBS pool for which Fannie Mae markets the acquired property.”
Freddie Mac’s HAFA servicing bulletin specifies, “First-lien mortgages owned, guaranteed, or securitized by Freddie Mac that were originated on or before January 1, 2009.”
The GSEs will pay financial incentives to both servicers and borrowers who make use of a short sale or a deed-in-lieu to avoid a foreclosure on a HAMP-eligible loan. Servicers will receive $2,200 for every HAFA short sale and $1,500 for every HAFA deed-in-lieu completed. Borrowers are entitled to an incentive payment of $3,000 to assist with relocation expenses.

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As real estate agents all over the country have been holding their breath to see if the offers they accepted by April 30th will actually CLOSE by june 30th. Given that banks are WAY behind on processing buyer loans that need to close by June 30th and short sales always have uncertain timing, congress is considering giving buyers until September 30, 2010 to close.

As a MN short sale real estate listing agent, I have to agree that the extension for closing is a good idea. A surprising number of buyers are solely motivated by this tax credit (which is a silly reason to purchase real estate).

http://www.thinkbigworksmall.com/mypage/archive/1/51141

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GE Financial just released a mortgage product in the UK that is a zero down mortgage that allows a borrower to have up to two loan defaults (including mortgages) and one judgment. The UK was hit just as hard by the housing crisis as the United States was. I predict that sub prime loans will be available again in the USA within the next three years. If lenders never learn, why should consumers?

http://www.thinkbigworksmall.com/mypage/archive/1/50963

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