Short Sale Questions

Joy Elliott, RealtorCalifornia License #01088147PEOPLE’S CHOICE BROKERS : 

Joy Elliott, RealtorCalifornia License #01088147PEOPLE’S CHOICE BROKERS ShortSaleQuestions.com Joy Elliott, Realtor Your “Joy” in Real Estate People’s Choice Brokers joy@joyelliott.com www.joyelliott.com 510-326-2716

Who is Joy Elliott, Realtor® : 

Who is Joy Elliott, Realtor® 1. Joy Elliott is a San Francisco Bay Area native and has extensive knowledge of all the particular neighborhoods in San Leandro, Castro Valley, Hayward and Hayward Hills, Pleasanton, Dublin, San Ramon and Danville/Alamo area Joy also practices in some areas of Oakland. 2. Joy Elliott has been licensed to sell real estate since 1990 and has experienced both good and bad markets and is very familiar with the short sale and foreclosure process and the ever-changing legislation regarding this process Find an experienced Short Sale Realtor® who aligns themselves to the Realtor® Code of Ethics, as does Joy Elliott and who belongs to your area Multiple Listing Service and is a member of the National Association of Realtors® and the California Association of Realtors® 3. As a Realtor with People’s Choice Brokers I sell residential and residential income property and financing or re-financing saving you money by discounting loan closing costs.

F.Y.I. : 

F.Y.I. Joy Elliott is a Realtor, not a tax accountant or a lawyer. You should discuss any particulars with a consultant of your choice Bankruptcy is the ultimate protection from collections. It should always be handled with the aid of an attorney.

What is a Short Sale? : 

What is a Short Sale? What is a short sale?" is a commonly asked question amongst homeowners struggling to pay their mortgage payment Word has gotten out that short sales can help borrowers avoid foreclosure. While this is true, the process is complex and requires authorization from the originating mortgage lender There is no simple explanation of what is a short sale. At present, the Obama administration is drafting new unified protocol , although lenders must abide by certain criteria. Not all properties or borrowers qualify for short selling their property. Nor, are all lenders required to offer this transaction. Short sale criteria require borrowers to be a minimum of 31 days delinquent on their mortgage note or continue to pay on the note until they have proved insolvency. The appraised property value must be less than the balance due on the loan and borrowers cannot own assets which could be used to repay the debt.

New program will help homeowners facing foreclosure with short sales : 

New program will help homeowners facing foreclosure with short sales As foreclosure prevention efforts struggle to make an impact, the Obama administration will launch a program April 5, 2010 encouraging lenders to allow more distressed homeowners to sell their property for less than they owe on their mortgage. Government efforts so far have focused on mortgage relief that helps borrowers avoid foreclosure. But the latest push reflects a growing realization that many troubled homeowners cannot qualify for help or would rather move on. So officials are focusing attention on efforts to ease borrowers out of their home without the stigma of a foreclosure.

Under the new program…… : 

Under the new program…… Under the new program, which has been in the works for nearly a year, lenders are paid if they agree to a short sale, which involves selling a home for less than the balance on the mortgage The lender must forgive the difference, allowing borrowers to walk away from the rest of the debt. This is potentially cheaper and faster for the lender than a foreclosure and keeps distressed properties from lingering on the market for a long period and bringing down values of neighboring homes.

Obama’s New Plan for Short Sales : 

Obama’s New Plan for Short Sales The Obama administration is set to implement a new plan that will pay an incentive mortgage lenders and borrowers to complete short-sale transactions. The new program, tabbed Home Affordable Foreclosure Alternatives (HAFA), is scheduled to take effect on Monday, April 5, 2010 and will alleviate the unfortunate setback for distressed homeowners. Some details surrounding the new HAFA program include: •    $3,000 for borrowers to assist in relocation •    $1,500 for mortgage services to pay for associated costs of processing the short sale •    Up to $2,000 to investors that permit up to $6,000 in proceeds from a short sale to be allocated to subordinate lien holders

Plan for Short Sales Cont’d…. : 

Plan for Short Sales Cont’d…. Mortgage lenders must inform distressed home owners of the lowest price they are prepared to accept Homeowners must present the mortgage lenders with a valid offer, requisite financial package and the mortgage lender must respond within 10 days.

Alternative to Loan Modification : 

Alternative to Loan Modification This program will provide an alternative to homeowners when a modification is not the best option," said Treasury Department spokes-woman Meg Reilly. But short sales have traditionally been a long, cumbersome process with lenders who are suspicious of lowball offers dragging out negotiations for months. In some cases, borrowers have second liens on the property and the holders of those liens can block a deal if they don't like the terms

Making Homes Affordable Program(H.A.M.P. act.) : 

Making Homes Affordable Program(H.A.M.P. act.) The Obama Administration’s Making Home Affordable Program includes opportunities to modify or refinance your mortgage to make your monthly payments more affordable. It also includes the Home Affordable Foreclosure Alternatives Program for homeowners who are interested in a short sale or deed-in-lieu of foreclosure.

HAMP Loan Modification Guidelines : 

HAMP Loan Modification Guidelines Are you the owner of a one- to four-unit home? Do you have a loan owned or guaranteed by Fannie Mae or Freddie Mac ?(Government Backed Loans) Are you current on your mortgage payments? “Current” means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months.

What loans are eligible for the new Obama Guidelines : 

What loans are eligible for the new Obama Guidelines If your mortgage loan is owned by Fannie Mae or Freddie Mac, you may be eligible for a Home Affordable Refinance to take advantage of lower interest rates. Only loans owned or guaranteed by Fannie Mae or Freddie Mac are eligible. Your mortgage company can tell you who owns your loan, or you can contact Fannie Mae and Freddie Mac directly by clicking on the links below and completing the forms for each company. Your mortgage servicer can also provide more information. Find their contact information Fannie Mae 1-800-7FANNIE (8am to 8pm EST) www.fanniemae.com/loanlookup Freddie Mac 1-800-FREDDIE (8am to 8pm EST) www.freddiemac.com/mymortgage

When is a Short Sale possible? : 

When is a Short Sale possible? The home must be your principle residence You must already be delinquent or able to prove that you are insolvent and default inevitable The total monthly mortgage payment must exceed 31% of your before tax income

Short Sale Process : 

Short Sale Process 1. Determine your financial eligibility to participate in short sale transaction with your Realtor® 2. Find an experienced short sale Realtor® who aligns themselves to the Realtor® Code of Ethics, as does Joy Elliott and who belongs to your area multiple listing service and is a member of the National Association of Realtors® and the California Association of Realtors® 3. Gather information for your short sale/hardship package as directed by your Realtor® 4. Properly determine the price with Joy Elliott, Realtor® and have the asking price substantiated for submission to Lender for approval

Seller’s Documentation for Short Sale Request to Lender : 

Seller’s Documentation for Short Sale Request to Lender The sellers’ submission package should include W-2 forms from employers (or a letter explaining the seller is unemployed) Last 2 months of bank statements Two years of tax returns Last 2 Payroll Stubs Financial documents outlining income and debt obligations. The bank will also need comps or a broker’s price opinion showing your estimate of value. In addition, the sellers should submit a “hardship letter,” explaining the circumstances that make it impossible for them to pay the full amount of the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered, say most interviewees. Homeowner Association Dues Status and/or arrears