We put in an offer on a Wells Fargo REO on Sat June 14. It was listed on June 13. The offer was $6,500 more than the asking price. We are doing 100% financing…97% through FHA (we are pre approved) and the down and closing costs are through the HART PROGRAM. We also can do a 30 day or less escrow. The bank is putting a 5 day hold on all offers. So now there are several offers on this house.

I noticed on Zillow that the same house was recently sold on 06/04/2008 for $198,000 which is about $30K less than the asking price. Did the bank buy this house for that price? I thought Wells Fargo owned this home already…so where did this price come from?

Also is our offer a good enough offer?

We absolutely LOVE this house!!!!
We are paying the fee for the Hart programm

Good News For Homeowner Short Sales In 2011

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Home Page > Finance > Good News For Homeowner Short Sales In 2011

Good News For Homeowner Short Sales In 2011

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The Home Affordable Foreclosure Alternative Program (HAFA) has not met up to its expectations with regard to providing a viable alternative to a full blown foreclosure for distressed homeowners wanting to sell properties that are underwater rather than have a foreclosure on their record.

The HAFA program’s intent from the inception was intended to allow a homeowner facing foreclosure to short sale the property and also provide the possibility of a stipend of money for relocation purposes, once the is was complete. It also provides for monetary incentives for the servicers to administer the program to help facilitate short sales.

Unfortunately, the program also created loopholes for servicers to take advantage of the guidelines to make them work primarily in favor of the the servicer, representing the investor, to the disadvantage of the homeower. Some of the loop holes in the orginal HAFA program that made for sometimes insurmountable obstacles are:

(a) the inordinate amount of time it takes for servicers to respond to a borrower when electing to short sale a property and the fact that approval or disapproval of short sales, commonly take 90 or more days. During this time, most buyers who have made an offer on the property are discouraged and lose interest and move on. Thus, the homeowner loses the short sale opportunity. This results in the homeowner often needlessly being forced in to foreclosure and thus defeating the intent and purpose of the HAFA program.

(b) HAFA presently has no guidelines addressing the practice of servicers to completely ignore the underlying property listing agreement between the homeowner as seller and the prospective buyer of the property. Servicers more often than not unilaterally dictate the amount of commission that will be paid to the listing real estate broker. Most listing contracts have a six percent (6%) commission set for payment to the listing real estate broker.

This commission is the thing that motivates the real estate broker to list the property and work very hard to accomplish a sale on a very difficult property. Arbitrarily reducing the commission by servicers because they must approve the sale, often occurs and this knowledge has discouraged the real estate industry from embracing the concept of short sales and thus affects the entire real estate industry in a significant way.

The two obstacles described above account for a significant failure of short sales that otherwise could be successful and benefit the servicer, the homeowner and the real estate industry, which desperately is trying to right itself.

Finally there are new HAFA guidelines proposed that will take place effective February 1, 2011 that removes the obstacles described above along with several others. Here are some of the most important changes that will become effective:

1. No more need to verify income. Only a hardship letter or request for modification via short sale is required.

2. The property being short sold can be vacant or rented out up to 12 months prior to requesting the short sale without regard to whether the borrower has lived in the property so long as it was the borrower’s principle place of residence within last 12 months.

3. Servicers are no longer limited to the 6% cap on extinguishing second, third or other subordinated loans during the short sale process.

4. Servicers are required to respond within 30 days to a borrower’s request for a short sale. Servicers are required to approve or disapprove an offer submitted by a buyer of the property within 30 days of receipt or alternatively to respond with a counteroffer within that 30 day period of time.

5. Servicers must honor the amount of commissions agreed to be paid to the listing real estate broker up to six percent (6%) if that is what is agreed to between the listing broker and the borrower. No offset is allowed by the servicer. This is huge toward getting the real estate sales industry to engage more actively in short sales.

While one should be optimistic and excited about these new guidelines, the reality is that many of the servicers will not take heed and will continue their ways in ignoring rules and regulations. Therefore, it will be necessary for all parties involved in these short sales to be diligent and hold the servicer’s feet to the fire. The difference this time around is that the regulations specifically include language like “the servicer “must” or “shall” follow specific guidelines.These terms “must” and “shall”, although small, make all the difference. The effect is that the guidelines now have muscle that the courts will ultimately enforce under federal regulations and this message is now loud and clear to the servicers.

Real estate brokers, homeowners and others who understand the power of this new “language” change and who let the servicers know that they know the significance will meet with substantial success in the future. Homeowners and persons representing them should keep a copy of the Supplemental HAFA regulations handy when communicating with lender servicer negotiators.

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Roy Landers -
About the Author:

Roy Landers is a California attorney/real estate broker with over 25 years experience in real estate matters.He maintains two real estate blogs at http://www.therealestateinstitute.net, a real estate education site and http://www.renegadeforeclosurefighter.A FREE Newsletter-The Real Estate Playbook is also available at these sites.

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I was denied a Hamp mod due to NPV caculations. My lender will not explain these terms to me. They said they cannot help me. I need to short sale and get out. Can u please help me
What are tax implications of short sale ?
What are the repercussions of a short sale ?

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short sale, short sales, hafa, loan modification help, help with foreclosure, avoiding foreclosure, deed in lieu of foreclosure, home affordable foreclosure alternative, mortgage modification, how to negotiate a short sale

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I am facing a short sale now. The bank has already accepted an offer and there is a buyer who wants to close by Jan26h. i bought this property and refinanced for 480K , the approved short sale goes for 130K. There is a huge difference. How good or bad is the short sale?/ Since I am accepting the 130K and the bank could go after for the remaining balance or a foreclosure should be the way to go??. How does this works, i am clueless to this whole situation since I am giving away my property to this individual who is getting the whole cake for a penny.

question # 1
if i purchase a condo via short sale ” already aproved by bank”, and the price is $100,000 and the assesed price is 200,000 does this means that the equity in the property is $100,000?

2. how long would i have to weit in order to be bable to take out equity.
is there a waiting period?

could you explain how equity works in this case?

The house is owned by CHASE, asking price is 75,000. I made my offer today, I was pre-approved through them (chase) for 79,000 plus I am putting 10% down and offered to pay the closing costs. There are three other offers on the table, is mine competitive enough?!
I really have my heart set on this house

If you can no longer meet the expense of the mortgage payments on your property, a short sale may aid you in avoiding a declaration of bankruptcy or keep your lender from foreclosing on your home. A short sale takes place when your home loan’s lender releases your property’s lien and agrees to accept less money than you owe on the mortgage as a payoff. For instance, if you owe $200,000 on your home, and it sells for $190,000, the lender may consent to $190,000 as payment in full. Keep in mind, though, that some lenders will not agree to a short sale, especially if foreclosure is the better option for them.

What You Should Know About Short-Selling Your Home

Most lenders have particular requirements concerning precisely what documentation they require from those looking for a short sale, though the majority will require a letter of authorization, wherein you give them authority to disclose your personal information. Consider writing your lender a memo granting your permission to consult with others about your loan. Include your full name, the date, the property address, your mortgage number, and the name and number of the real estate agent who is helping you.

Your closing agent or lawyer should additionally prepare for you a initial net sheet. This contains the estimated closing statement with the sale price for your home that you assume you will receive, all the normal costs of sale, the unpaid loan balance, your late payments and fees, and any commissions your real estate agent will accept. You will need to convey this to your lender as well. Send with it a hardship letter that describes exactly how you fell behind in your payments, an honest report of your income and assets, accounting for any savings accounts, stocks, other properties, or articles of real value. Include copies of your bank statements, a comparative market analysis, if required, and a copy of your listing and purchase agreements when your home is put up for sale, and later when you receive an offer. Once your lender has all of your documentation, they will determine whether or not to sanction your short sale.

Understand Risks of Purchasing a Short Sale Property

While the enticement of getting a super deal on a short sale is quite strong, make sure to make inquires on the property before making an offer. To start with, a lender is under no obligation to accept your offer on a short sale listing, even when the seller accepts it, even though the property is listed with short-sale terms. Remember that a lender may have given permission for the short sale to the seller because the seller currently owes more money than the home’s value. This would not make the asking price lower than market value, but instead bring the price of the home in line with other properties in the market. Do some public-records research in order to discover whether the home is being foreclosed, and learn how much the seller owes the lender. This will help figure out how much to offer. When a seller consents to your offer, send a copy of it to the lender for approval and make your offer conditioned upon the lender’s approval. Also, make certain you have the property inspected making your offer contingent upon an acceptable inspection.

You are behind on your mortgage payments and you know that you’re not going to be able to play catch-up before the bank begins the dreaded foreclosure process. If there are no other options for you at this point, you may consider arranging a short sale instead of going through the stressful experience of a foreclosure.

Short sales occur when a homeowner is in default on their home loan, but the property has not yet reached the foreclosure stage. These are sales in which the lender and the owner both agree to sell the property for less money than is owed to the bank.

A short sale can do much less damage to one’s credit rating than an actual foreclosure can. This is a huge benefit for sellers because the black mark of a foreclosure can seriously affect a person’s ability to rent property, obtain credit cards, or be approved for loans of any kind.

In addition, short sales can help a seller to feel more in control of the situation. While it is inevitable that he or she will lose their home, they are pro actively trying to find a solution that will satisfy all parties involved. By taking charge of the selling process prior to a foreclosure, a seller can feel more at peace and empowered during an extremely difficult time.

Short sales also benefit buyers of these properties because they can purchase a home for much less than its market value, and end up with a fabulous property for a steal.

Lenders benefit from short sales because they are able to avoid the foreclosure process, which is both costly and time consuming. They may also get more money from a short sale than they can at a foreclosure auction, and they don’t have to worry about having a house sitting on their lap and losing value every day.

Short sales can in fact benefit all parties involved, but there are many short sales that never reach closing. The main reason for this is that a short sale is a transaction that involves more than just the buyer and seller; the lending company must approve the sale before it can go through.

Getting approval for a short sale is difficult because lenders want to recoup as much of their money as possible. A lender must determine if the amount they are being offered is more than they are likely to get at auction. If they believe they can get more money by proceeding with the foreclosure, they will refuse the short sale.

Waiting for the lender to approve or refuse the short sale can be an exhausting process for everyone. On average, it can take over a month for the lending company to even respond to an offer, which leaves buyers and sellers in a terrible state of limbo. In fact, many buyers walk away from short sales because they can’t take all the waiting and red tape that is involved. After all, a buyer could make an offer, hand over a deposit, wait six weeks, and then have their offer be flatly rejected. Unlike regular real estate sales, lending companies often don’t even respond with a counter offer; they simply refuse the sale, and leave both the seller and the buyer back at square one.

Because the short sale process is not without its difficulties, many buyers don’t feel that it’s worth their time looking at short sale properties. For those who can stomach the waiting involved, short sales can provide a buyer with a great deal on a home, and a positive solution for the seller.