Breaking news.

Bank of America is rollling out the HPO Short Sale program…not sure what HPO acronym means?

The program also refered to as “Cooperative Short Sale Program“.

It’s a turnkey solution that:

1. Pays the seller up to $3,000.00 at close of escrow
2. Releases the seller from any liens or possible judgemtns for any unpaid balances.
3. Requires very little in the way of documentation or hardship
4. It’s a Strategic Short Sale…

More to come.

Kris

]]> http://shortsalesellit.com/bank-of-america-hpo-cooperative-short-sale-program-is-being-rolled-out/feed/ 0 http://shortsalesellit.com/sergei-fedorov-selling-his-detroit-mansions-on-short-sale/ http://shortsalesellit.com/sergei-fedorov-selling-his-detroit-mansions-on-short-sale/#comments Tue, 22 Jun 2010 15:52:35 +0000 Admin http://shortsalesellit.com/?p=1384

Sergei Fedorov, better known for scoring hat tricks than missing mortgage payments, is facing foreclosure on two of his Michigan mansions.

The ex-Red Wings star owes more than $2 million on two Bloomfield Hills properties, according to Detroit News.

The PrivateBank and Trust Company filed two notices on foreclosure against the hockey player today, compounding his financial woes.

One home, purchased in 1999 for $1.25 million, has a balance of nearly $1.2 million, and is currently being sold for $999,999, per Zillow.

It’s been on the market for more than two months.

Fedorov acquired another property from his parents in 2003, which has a $915,623 balance and is currently listed for $916,000 on Zillow.

It was last sold for $325,000 in 1980, and peaked in value at more than $2 million in 2006 before falling precipitously (I guess somebody refinanced at some point).

So it looks as if Fedorov is clearly underwater on one property and pretty close to selling for a loss on the other – perhaps a short sale can be arranged?

Fedorov apparently lost $60 million after investing his money with a financial adviser, who he has subsequently sued.

The Russian hockey great played 13 years with the Detroit Red Wings, and is one of their all-time leading scorers.

He is just one of the many ex-sports stars and celebrities dealing with foreclosure, either by necessity or choice.

Zillows report shows that 1/3 of all homes sold in February 2010, were sold for less than the orginal loan amount or, Short Sale.

In the Forbes video below, Amy Bohutinsky, Zillow VP of Communications, describes the difficulties that Celebrities are having selling there homes despite their famous or “infamous” (Bernie Madoff)  reputations.

It appears that even the most famous of figures (Obama’s) have a percieved value, often less than what was once perceived.

o
o
Email Buttons

As real estate professionals we have spent the last several years helping homeowners avoid foreclosure in this ever changing economy….

We can finally say____Washington DC is waking up!

The major networks and newspapers are advertising Short Sales…..could it be because……

As of the first of the year 24% of homes in America with mortgages were underwater….negative equity.  1 in 4 homes are upside down in equity.  Simply put, if you walk outside your front door and turn either way, every 7th house=homeowner  is in default.  Better know as pre foreclosure!

Here’s another startling fact:  80% of homes that go to foreclosure were never listed for sale!  Some of you reading this right now are facing tough choices.  Think about it, most of those 80% of homeowners never expected to loose their home.  Most likely there were factors that made them believe somehow it would work out.

• Applied for a loan modification and found out too late that the loan modification offered did not lower the payment enough to keep the home.  *Keep in mind that during the modification process the foreclosure process does not stop.  Unfortunately, by the time the lender gets back to you about the results of the loan modification in many cases the sale date for foreclosure is pending.
• Homeowner accepted a loan modification and was not able to maintain the agreed payments.  *Again, these lenders proceed with foreclosure process simultaneous with loan modification process.  The foreclosure process is accelerated do to this and when payment arrangements are not kept the foreclosure moves forward.
• Homeowner entered into a forbearance agreement with lender and was not able to make just one payment.  At this time the lender does not have to notify the homeowner of foreclosure sale.  Home is sold.
• Denial….something that most of us can identify with.  First comes the notice of default, then the trustee sale and then the sale date.  During this period of time, you have every intention of working this out, somehow, you just know you can save your home.
• Pride….another personality trait that most of us have experienced in our lives.  The fact that for whatever valid reason you were not able to save your home, you could not face talking to someone about alternatives to a foreclosure.  *Did you know that foreclosures are public record.  Your names are posted in the local newspapers, a Short Sale is just a regular sale in the eyes of neighbors, family and friends.  You don’t even need a for sale sign on the property.  In fact, 99% of our sales never have a sign posted on the property.

We have clients that need to sell for various reasons, some due to hardship and others making well thought out business decisions regarding their future and the negative equity they are facing if they choose to continue holding onto a property that mirrors the neighbors home that just sold for $150,000 less than they currently owe.

If your home is upside down in equity, and you need to find out more about a short sale contact us.  We can help you by finding all of your options.

Not only has the United States Treasury stepped in to help homeowners with a new program called HAFA, Bank of America has announced they are going to be implementing what they refer to as “Cooperative Short Sale”  this will mirror the HAFA program but have less stringent guidelines for participants.

This is huge coming from Bank of America, as they originated one in every two loans on mortgages in America!  We have identified “like” programs with other lenders such as,  Wells Fargo, Wachovia, HOMEQ, etc…..

You will be hearing more about Strategic Default as the days move on, many lenders are accepting of these types of sales.  Basically, homeowners who have negative equity of $70,000 or more are looking at their home much like an investor looks at their portfolio…time to cut your losses.

Listen to Jeff Lischer Top NAR Executive Talk Candidly About HAFA Short Sales

This much needed tax break falls lock step in with the IRS planned relief that was approved by President Bush in 2007.

What does it do?

• Gives relief to the 1099c that you may have received or may receive if you short sell your home.
• Fore gives tax debts that would have resulted…up to $500,000 per primary residence.
• The debt is aligned with monies that were either used to purchase the primary residence or substantially improving the residence.
• Not for the folks who cahsed out the equity and bought a Lambo or new Suburban…or traveled the Middle East to see family members…you got it.
• Not for “Investors” or 2nd homes, rental properties, etc…

Take advantage of a good thing and uload that burdensome debt today.

Call us…we can help!

Kris & Kim

Check this out…according to Sacremento Bee (april 9, 2010)…The Governator is going to sign SB 401 as soon as this week.

SB 401 is “lock step” in line with IRS Mortgage Debt Relief Act of 2007 forgiving any tax liabilities afforded Californians that took advantage of a Short Sale in 2009. 

Who is affected:

• Those who Short Sold or will Short Sale their homes from 2009 to 2012.

What Do You Have to Do to Participate?:

• According to the Sacramento Bee…Nothing!If you qualify for the IRS Mortgage Debt Relief Act…then you qualify for SB 401.

What Californians Should do when filing their taxes?

• The Franchise Tax Board says: “Once the governor signs this into law, California taxpayers will not have to do anything. If they qualify for federal relief on the mortgage debt forgiven, then they will also qualify for state income tax purposes. California Form 540 starts with federal adjusted gross income so there will be no adjustment necessary to properly reflect the state adjusted gross income amount for this issue.”

  Read more: http://www.sacbee.com/2010/04/09/2666095/california-wont-tax-forgiven-home.html#ixzz0kuN6nZxH

This is great news for all of us using Short Sales to solves America’s Housing Troubles!

More to come…

Best,

Kris

Real estate specialist Kris Darney on Thursday walks through a Rancho Cucamonga home whose owners are hoping it will be purchased in a short sale instead of being lost to foreclosure. (Mediha Fejzagic DiMartino/Staff Photographer)

Read more:http://www.dailybulletin.com/news/ci_14814460#ixzz0k9pQ41gK

Feds aim to ease pain

New U.S. program to start Monday
Sandra Emerson, Staff Writer
Created: 04/03/2010 07:08:53 AM PDT

Short sales have become more appealing to homeowners who are underwater on their mortgage and are looking to get out without going into foreclosure. But the time it takes to process these type of sales has been thought of as long rather than short.
A new federal program goes into effect Monday and will provide more guidelines to allow the stressed homeowners to enter into a short sale and more quickly get on their way to a more affordable living arrangement.

The Home Affordable Foreclosure Alternatives program will provide certain incentives to lenders, and to home owners who chose to do a short sale, rather than wait until the bank takes the property.

The program is part of the Home Affordable Modification

Real estate specialist Kris Darney on Thursday walks through a Rancho Cucamonga home whose owners are hoping it will be purchased in a short sale instead of being lost to foreclosure. (Mediha Fejzagic DiMartino/Staff Photographer)
Program, which was implemented in February 2009 to modify homeowners’ loans to avoid foreclosure. Both programs are funded through $50 billion from the bank bailout.
The government “wanted to basically create a streamlined process as an alternative to the foreclosures going on right now,” said Kris Darney, an Ontario-based real estate, short sale, loss mitigation specialist with his wife Kim Darney.

“Of course short sales have gotten a bad rap.”

Darney counted 3,500 short sales on the market in the Inland Empire as of Tuesday.

Due to the high volume of offers made on short sales, banks can take months to respond. Discouraged buyers will often drop out of the offer.

Timelines have been put into place through the new program in order to speed up the short sale process.

The short sale transaction must be completed within 120 days. The time can be extended up to 12 months if necessary.

Short sales take up to six to nine months to get approved, Kris Darney said.

“It’s getting reduced to 10 days, so a bank will have to give a response to a buyer’s offer within 10 days,” Kris Darney said. “It may not be an approval, it may be a rejection or it may be a counter offer.”

Through HAFA, lenders will be required to give the homeowner preapproved short sale terms before going to market. This will include a listing price and an amount of sale proceeds the lender is will to accept.

“What this new program is doing is streamlining the process and allowing for all banks to have consistent forms and a consistent number of items that can be requested,” Darney said.

With a short sale, a buyer will make an offer and the lender will have to review it and respond, said Raffi Tal, chief operating officer for I Short Sale, a Los Angeles-based short sale and loss mitigation firm.

“Everything has to go to the investor, Fannie (Mae)or Freddie Mac), that’s why the sale is stretching the process by at least two months,” Tal said. “Every little change has to go through the investor.”

Banks are not required to participate, but Dustin Hobbs, communications director for the California Mortgage Bankers Association, said most banks will likely participate.

“Everyone is realistic in the sense there is no silver bullet, not one program that is going to come along and solve everyone’s problem,” Hobbs said. “I think everyone is optimistic that this program will help and will be another tool in the toolbox for service to help homeowners.”

Homeowners can receive up to $3,000 to pay for moving costs after the sale is completed.

“It’s the government’s way of offering a little bit of help, a soft landing to allow you to hire a moving van or rent a U-Haul truck, help with first months rent payments,” Sorensen said.

The servicer, the organization responsible for collecting monthly loan payments, will receive up to $1,500 per short sale to cover administrative fees.

The program only applies to homeowners with one mortgage.

Many people in Southern California took out second mortgages on their homes either because they needed the money or wanted to make large purchases, said Laurel Miller Starks, a real estate agent with Keller Williams Realty in Rancho Cucamonga.

“So you might have a first mortgage that gets approved and can close very quickly, but then you’ve got this second mortgage hanging around that may take a long time,” Starks said.

The actual impacts of the program may not be seen for a few more months, said Kim Darney.

“We won’t see it overnight, but I think we’ll see a decrease in foreclosures because I believe a lot of banks are going to hold off on processing foreclosures while getting acclimated to this process,” Kim Darney said.

The program will not be automatic. Homeowners have to call their lender to request a short sale through HAFA.

Banks may be inundated with calls once the program starts Monday.

Kim and Kris Darney have already been getting calls from homeowners who have heard the program is coming.

“It’s really a wonderful thing being afforded to us as Americans right now,” Kris Darney said. “I know there’s a lot of naysayers out there, but if 10 percent of the homes are impacted by HAFA it’s a phenomenal result, it’s actually a phenomenal result.”

Why Short Sale?

Entering into a short sale agreement provides more benefits to homeowners than foreclosure, on which the HAFA program is attempting to capitalize.

Chris Sorensen, a former mortgage banker and founder of the non-profit Homeownership Education Learning Program, works with many homeowners who are behind on their payments and aren’t sure what to do.

Many of the people he meets are already leaning toward a short sale but are still unsure why.

“Those people want to know what’s in it for them,” Sorensen said. “How does this impact their credit good and bad? They want to know will this satisfy my lender for any further action against them. They want to know what are the tax ramifications surrounding short sales and foreclosure. And they want to know, believe it or not, this is very important, they want to know `when will I be able to buy again?’ ”

Upon the closing of a short sale through the HAFA program, the homeowner will be released from all liability for the debt of the first mortgage.

However that does not necessarily protect them from the tax ramifications, Sorensen said.

“The benefits of HAFA is that it requires the lender to disclose this fact that by cooperating in pre-foreclosure or a short sale may have tax implications,” Sorensen said.

Through HAFA lenders are required to divulge all information relating to tax consequences and credit score impact to the homeowners considering a short sale.

“It is now being required that lenders disclose that there are serious tax implications when one cooperates in a short sale or losing their home to foreclosure,” Sorensen said. “That now must be disclosed in writing for the first time ever.”

The homeowner will take a hit to their credit score, but not as much as with a foreclosure, Starks said.

“A short sale is not going to lower a credit score nearly like what a foreclosure will. A foreclosure can be a few hundred points. Usually a short sale is 100 or less,” Starks said.

Homeowners can recover from a short sale more quickly and can often head out to purchase a new home in a couple of years, Starks said.

Banks also view short sales as a more favorable option over foreclosures.

On average, a bank will lose up to 40 percent on a foreclosed loan, but up to 19 percent on a short sale, Sorensen said.

Short sales tend to have less of an impact on surrounding home values, Kris Darney said.

“The short sale is a much better impact on the neighborhood because the short sale property value will be more in-line with the current market value,” Kris Darney said. “It will not have been bought at a rock-bottom price at an auction on the court house steps, which is what happens to may of these foreclosed homes.”

The HAFA program is expected to alleviate the burden of foreclosures on homeowners hoping to enter a regular home sale.

“It puts homeowners back into the community generating taxes again instead of another boarded up house,” Kim Darney said. “Every house that’s boarded up and foreclosed upon drops other home values up to $9,000 for each foreclosure.”

QUALIFYING FOR HAFA
Homeowners eligible under HAMP must be considered for the HAFA program before the loan goes into foreclosure if the homeowner:

Does not quality for a Trial Period Plan. HAMP requires homeowners enter a Trial Period Plan for their modified mortgage before getting a modification.

Does not complete the Trial Period Plan.

Is delinquent on a HAMP modification by missing at least two consecutive payments.

Requests a short sale or deed in lieu.

Short sale process under HAFA:

Before a homeowner can be approved for a HAFA short sale, the lender must provide a listing price or a minimum amount it will accept for the sale.

A fixed termination date at least 120 days from the date the short sale agreement is given to the homeowner. The servicer may extend the agreement up to 12 months if agreed to by the homeowner.

Property must be listed with a licensed real estate professional who is regularly doing business in the community.

The servicer must determine the amount of closing costs and other expenses they will allow to be deducted from the gross sale proceeds. This must be a dollar amount, percentage of the list price or a list by category of reasonable costs.

The amount of the real estate agent’s commission must be determined and cannot exceed 6 percent of the contract sales price.

The homeowner will need to give a statement allowing the services to communicate the homeowner’s personal financial information to other parties as necessary to complete the transaction.

Cancellation and contingency clauses must be included in the listing notifying potential home buyers that the sale is subject to approval by the servicer and/or third parties.

The home buyer may not sell the property within 90 days of closing.

After the sale is completed, the homeowner is released from all liability for repayment of their first mortgage debt.

After the sale, the homeowner can receive up to $3,000 for moving costs.

The homeowner must be informed of income tax consequences and a possible hit to their credit score.

The homeowner’s mortgage payment during the short sale process cannot exceed 31 percent of their income.

As long as the homeowners follow the criteria for the short sale, the servicer will not send them to foreclosure.

Servicer can receive up to $1,500 to cover administrative and processing costs for the short sale or deed-in-lieu

SOURCE: U.S. Department of the Treasury

Glossary
SHORT SALE: A homeowner can enter into a short sale when they owe more on their mortgage than the home is currently worth.

In a short sale, the servicer allows the homeowner to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the first mortgage.

DEED-IN-LIEU OF FORECLOSURE: With a deed-in-lieu, the borrower voluntarily transfers ownership of the property to the servicer.

SERVICER: A mortgage servicer is responsible for collecting monthly loan payments as well as escrow accounts.

DELINQUENT: A homeowner is delinquent on their loan when they fail to make payments.

DEFAULT: A homeowner can default when they are unable to pay their debt.

FORECLOSURE: A foreclosure occurs when the homeowner’s right to the property is terminated. A home can be foreclosed upon when the homeowner defaults on their mortgage payments.

Annual total home sales
San Bernardino County

2007 20,544

2008 24,455

2009 35,625

Los Angeles County

2007 62,316

2008 60,683

2009 77,037

Pomona

2007 863

2008 990

2009 1,447

Claremont

2007 351

2008 266

2009 277

Riverside County

2007 29,952

2008 40,870

2009 49,115

Monthly total home sales

COUNTIES (20)

January

Los Angeles: 5,228

Riverside: 3,162

San Bernardino: 2,252

February

Los Angeles: 5,034

Riverside: 3,199

San Bernardino: 2,095

2009:

January

Los Angeles: 4,532

Riverside: 3,320

San Bernardino: 2,532

February

Los Angeles: 4,590

Riverside: 3,420

San Bernardino: 2,324

March

Los Angeles: 5,971

Riverside: 4,409

San Bernardino: 2,897

April

Los Angeles: 6,425

Riverside: 4,469

San Bernardino: 3,130

May

Los Angeles: 6,521

Riverside: 4,414

San Bernardino: 3,134

June

Los Angeles: 7,636

Riverside: 4,694

San Bernardino: 3,438

July

Los Angeles: 8,082

Riverside: 4,699

San Bernardino: 3,549

August

Los Angeles: 7,189

Riverside: 4,145

San Bernardino: 3,276

September

Los Angeles: 7,138

Riverside: 4,312

San Bernardino: 3,023

October

Los Angeles: 7,409

Riverside: 4,197

San Bernardino: 3,176

November

Los Angeles: 6,257

Riverside: 3,745

San Bernardino: 2,751

December

Los Angeles: 7,679

Riverside: 4,282

San Bernardino: 2,934

2008:

January

Los Angeles: 3,398

Riverside: 1,939

San Bernardino: 1,111

February

Los Angeles: 3,468

Riverside: 2,147

San Bernardino: 1,242

March

Los Angeles: 4,263

Riverside: 2,691

San Bernardino: 1,534

April

Los Angeles: 5,016

Riverside: 3,186

San Bernardino: 1,667

May

Los Angeles: 5,445

Riverside: 3,444

San Bernardino: 2,075

June

Los Angeles: 5,678

Riverside: 3,757

San Bernardino: 2,215

July

Los Angeles: 6,592

Riverside: 4,116

San Bernardino: 2,521

August

Los Angeles: 6,138

Riverside: 4,078

San Bernardino: 2,439

September

Los Angeles: 6,274

Riverside: 4,551

San Bernardino: 2,831

October

Los Angeles: 6,824

Riverside: 4,619

San Bernardino: 2,856

November

Los Angeles: 5,037

Riverside: 3,719

San Bernardino: 2,385

December

Los Angeles: 5,848

Riverside: 4,435

San Bernardino: 2,862

2007

January

Los Angeles: 6,805

Riverside: 3,089

San Bernardino: 2,373

February

Los Angeles: 6,300

Riverside: 3,057

San Bernardino: 2,274

March

Los Angeles: 8,353

Riverside: 3,680

San Bernardino: 2,476

April

Los Angeles: 7,225

Riverside: 2,987

San Bernardino: 2,049

May

Los Angeles: 7,426

Riverside: 3,307

San Bernardino: 2,220

June

Los Angeles: 7,580

Riverside: 3,359

San Bernardino: 2,190

July

Los Angeles: 6,809

Riverside: 2,769

San Bernardino: 2,008

August

Los Angeles: 6,647

Riverside: 2,834

San Bernardino: 2,096

September

Los Angeles: 4,361

Riverside: 2,208

San Bernardino: 1,509

October

Los Angeles: 4,368

Riverside: 2,371

San Bernardino: 1,603

November

Los Angeles: 4,468

Riverside: 2,503

San Bernardino: 1,719

December

Los Angeles: 4,430

Riverside: 2,503

San Bernardino: 1,518

Monthly total home sales in Southern California

2010

??

??

2009

Jan. 15,227

Feb. – 15,231

March – 19,486

April – 20,514

May – 20,775

June – 23,262

July – 24,104

August – 21,502

Sept. – 21,539

Oct. – 23,745

Nov. – 19,181

Dec. – 22,328

2008

Jan. – 9,983

Feb. – 10,777

March – 12,808

April – 15,615

May – 16,917

June – 17,424

July – 20,329

August – 19,366

Sept. – 20,497

Oct. – 21,532

Nov. – 16,720

Dec. – 19,926

2007

Jan. – 18,128

Feb. – 17,680

March – 21,856

April – 19, 269

May – 19,874

June – 20,166

July – 17,867

August – 17,755

Sept. – 24,460

Oct. – 12,999

Nov. – 25,578

Dec. – 13,240

Out of the total home sales each month in Southern California a certain percentage were foreclosures. Here are the percentages for each month for the last three years:

2010

Jan. – 42.1%

Feb. – 42.3%

2009

Jan. – 60%

Feb. – 56.4%

March – 55.4%

April – 53.6%

May – 50.2%

June – 45.3%

July – 43.4%

August – 38.8%

Sept. – 40.4%

Oct. – 40.6%

Nov. – 39.1%

Dec. – 39.6%

2008

Jan. – 29.6%

Feb. – 33.5%

March – 38%

April – 37.5%

May – 37.4%

June – 39.2%

July – 41.8%

August – 45.5%

Sept. – 50%

Oct. – 51%

Nov. – 54.6%

Dec. – 55.7%

2007

April – 8%

May – 5.5%

June – 7.3%

July – 7.9%

August – 10%

Sept. – 12.6%

Oct. – 16%

Nov. – 18.8%

Dec. – 24.3%

Return to Top

Selected for you by a sponsor:
Bank of America will cut loan amount for underwater homes (USATODAY.com)
As Deadline fast approaches, Homebuyer Tax Credit comprises 50% of Sales (Tampa Coastal Homes)
You might also like:
BofA, Wells Fargo to fix 2nd mortgages (this site)
How the new mortgage relief plan works (this site)
Hoarder now homeless (this site)
Pomona police arrest four people (this site)

Read more: http://www.dailybulletin.com/news/ci_14814460#ixzz0k9p7W5SJ

Cara Heiden
Co-President
Wells Fargo Home Mortgage

California SB 401is on its way to The Governator’s office for a signature…according to his staff.

This law protects California Home Owners against taxation on presumed “gains” from Short Sales.

What do we mean by this?

• Homeowners that sold their homes via Short Sale may or will receive a 1099c at years end.
• Why?  The difference between what was owed to your lender and what it was sold for is taxable!
• Example: Mortgage Amount of $500,000.  You Short Sale for $300,000.  You may/will receive a 1099c at years end showing a $200,000 gain in income! 
• This 1099c is looked at as gain because you “benefited” from these monies, but did not pay them back.

This and like bills are not unique.

In November 2007, President Bush signed the Mortgage Debt Relief Forgiveness Act of 2007.  The IRS has adopted this bill and it is good through December 31, 2012. 

What do these laws do for you?

If you are a homeowner…primary residence, you are protected from further penalties.

We will remind you that we are not CPA’s so talk to yours for the skinny!

Best,

Kris