Short Sale vs. Foreclosure What are My Options?

Anyone who is facing foreclosure should understand exactly what it's implications are, and what other options are available. Confused about what options are available to you? Make sure you explore All of your options before you do not have any left to choose from. As Santa Clarita's Certified Distressed Property Experts we pay close attention to the changes as they happen, so that you can get the most relevant, current information, and the best possible service. If you would like to find out more about HAMP or HAFA programs, or someone you know needs assistance in avoiding foreclosure, please don't hesitate to call us we are here to help.

To request your FREE copy of this report

•Short Sale vs. Foreclosure

or past reports click the link below:

•Hidden Costs of Bankruptcy
•Credit Score Issues
•Foreclosure vs. Short Sale
•7 Short Sale Myths
•The Truth About Mortgage Modifications
•Short Sale & Deed-In-Lieu
•Your First Steps To Avoid Foreclosure
•Strategic Defaults are NOT Strategic
•Avoiding Mortgage Modification Fraud
•Government Program Surveys
•Options and Solutions
•Cash For Short Sales
•A Dignified Solution

Click on the report you wish to request or go to: www.SantaClaritaPreForeclosureSpecialists.com click on the resources tab then simply choose the report and it will be emailed to you promptly. This is for homeowners only please.

Jennifer & Gary Ricco CDPE, PSC

Keller Williams VIP Properties

25124 Springfield Court Suite 100 Valencia, Ca 91355

661.290.3837

'Quality Consulting Through Continuous Improvement'

Jennifer just was awarded the LA Daily News Readers Favorite Realtor Choice for 2010

www.SantaClaritaPreForeclosureSpecialists.com

Serving The Greater Los Angeles Area & Ventura County

License numbers 01461940, 01803395

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Santa Clarita Pre Foreclosure and Bank Owned Properties For Sale, Did Prices Stabilize? A Year In Review 2009-2010

As your Santa Clarita Certified Pre Foreclosure Specialist team we are here to provide you with the most current short sale (pre foreclosure) and bank owned (REO) property statistics in the Santa Clarita Valley, SCV. Whether you are thinking about buying a home, you need to short sale your home, or are just looking to be educated about the current Santa Clarita real estate market which includes the Stevenson Ranch, Valencia, Saugus, Newhall, Canyon Country, and Castaic areas. Many agents will cut and paste the daily numbers from someone else who has posted them without doing a in depth analysis This only gives you a snapshot, it's not giving you a true picture of what is happening in The Santa Clarita Valley market. I usually do a monthly break down of the bank owned listings vs. the short sale listings, this is my year in review. I have broke down the Santa Clarita Pre Foreclosure & Foreclosure Real Estate Market from January 2009 thru today January 13, 2010 with an in depth analysis. Is it better to buy a bank owned property or a short sale? Look at the numbers, you decide.

BANK OWNED LISTINGS IN STEVENSON RANCH JANUARY 13, 2010:
There are 2 active bank owned (REO) single family homes for sale in Stevenson Ranch, 1 in back up 2 pending. 5 total bank owned listings in Stevenson Ranch.
Average pending list price: $499,900
Average sale price: $517,760 from 12/13/2009 - 01/13/2010 5 homes sold.
The past 30 day period bank owned homes sold $17,860 above the current average pending list price.
BANK OWNED LISTINGS IN STEVENSON RANCH JANUARY 10, 2009:
There were 10 active bank owned (REO) single family homes for sale in Stevenson Ranch, there were 6 homes in back up or pending status. 16 total bank owned listings in Stevenson Ranch.
Average pending list price: $535,800
Average sale price: $549,780 From 12/13/2008 - 01/10/2009 5 homes sold.
The bank owned homes sold $13,980 above the average list price.

ACTIVE SHORT SALE LISTINGS IN STEVENSON RANCH JANUARY 13, 2010:
There are 10 active short sale, pre foreclosure single family homes for sale in Stevenson Ranch, 15 in back up 10 pending. 35 total short sale listings in Stevenson Ranch.
Average list price: $673,459
Average sale price: $503,166 from 12/13/2009 - 01/13/2010 3 homes sold.
The short sale homes sold for $170,293 below the current average list price.
SHORT SALE LISTINGS IN STEVENSON RANCH JANUARY 10, 2009:
There were 26 active short sale, pre foreclosure single family homes for sale in Stevenson Ranch, there were 8 homes in back up or pending status. 34 total short listings in Stevenson Ranch.
Average pending list price: $537,987
Average sale price: $490,500 From 12/13/2008 - 01/10/2009 2 homes sold.
The short sale homes sold $47,487 below the average list price.

1 YEAR SALES SUMMARY FOR STEVENSON RANCH BANK OWNED LISTINGS:
Active Inventory comparison: then, 01/10/2009: 16 now, 01/13/2010: 5 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $549,780 now, 01/13/2010: $517,760
Sale prices have declined $32,020 over the past year.
1 YEAR SALES SUMMARY FOR STEVENSON RANCH SHORT SALE LISTINGS:
Active Inventory comparison: then, 01/10/2009: 10 now, 01/13/2010: 26 inventory has significantly increased.
Average sale price comparison: then, 01/10/2009: $503,166 now, 01/13/2010: $490,500.
Sale prices have declined $12,666 over the past year.
Stevenson Ranch Short sale listings are now selling on average $27,100 less then bank owned.

BANK OWNED LISTINGS IN VALENCIA JANUARY 13, 2010:
There are 10 active bank owned (REO) single family homes for sale in Valencia, 3 in back up 19 pending. 32 total bank owned listings in Valencia.
Average pending list price: $484,231
Average sale price: $492,203 from 12/13/2009 - 01/13/2010 7 homes sold.
The past 30 day period bank owned homes sold $7,972 above the current average pending list price.
BANK OWNED LISTINGS IN VALENCIA JANUARY 10, 2009:
There were 10 active bank owned (REO) single family homes for sale in Valencia, there were 6 homes in back up or pending status. 16 total bank owned listings in Valencia.
Average pending list price: $532,800
Average sale price: $442,730 From 12/13/2008 - 01/10/2009 34 homes sold.
The bank owned homes sold $90,070 below the average list price.

ACTIVE SHORT SALE LISTINGS IN VALENCIA JANUARY 13, 2010:
There are 36 active short sale, pre foreclosure single family homes for sale in Valencia, 54 in back up 45 pending. 135 total short sale listings in Valencia.
Average list price: $471,777
Average sale price: $462,846 from 12/13/2009 - 01/13/2010 13 homes sold.
The short sale homes sold for $8,931 below the current average list price.
SHORT SALE LISTINGS IN VALENCIA JANUARY 10, 2009:
There were 85 active short sale, pre foreclosure single family homes for sale in Valencia, there were 36 homes in back up or pending status. 121 total short listings in Valencia.
Average pending list price: $457,265
Average sale price: $391,266 From 12/13/2008 - 01/10/2009 9 homes sold.
The short sale homes sold $65,999 below the average list price.

1 YEAR SALES SUMMARY FOR VALENCIA BANK OWNED LISTINGS:
Active Inventory comparison: then, 01/10/2009: 16 now, 01/13/2010: 32 inventory has significantly increased.
Average sale price comparison: then, 01/10/2009: $492,203 now, 01/13/2010: $442,730
Sale prices have decreased $49,473 over the past year.
1 YEAR SALES SUMMARY FOR VALENCIA SHORT SALE LISTINGS:
Active Inventory comparison: then, 01/10/2009: 85 now, 01/13/2010: 36 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $391,266 now, 01/13/2010: $462,846.
Sale prices have increased $71,580 over the past year.
Valencia Bank owned listings are now selling on average $20,116 less the short sales.

BANK OWNED LISTINGS IN SAUGUS JANUARY 13, 2010:
There are 9 active bank owned (REO) single family homes for sale in Saugus, 3 in back up 11 pending. 23 total bank owned listings in Valencia.
Average pending list price: $401,091
Average sale price: $402,271 from 12/13/2009 - 01/13/2010 7 homes sold.
The past 30 day period bank owned homes sold $1,180 above the current average pending list price.
BANK OWNED LISTINGS IN SAUGUS JANUARY 10, 2009:
There were 20 active bank owned (REO) single family homes for sale in Saugus, there were 25 homes in back up or pending status. 45 total bank owned listings in Saugus.
Average pending list price: $378,530
Average sale price: $420,155 From 12/13/2008 - 01/10/2009 14 homes sold.
The bank owned homes sold $41,625 above the average list price.

ACTIVE SHORT SALE LISTINGS IN SAUGUS JANUARY 13, 2010:
There are 22 active short sale, pre foreclosure single family homes for sale in Saugus, 37 in back up 23 pending. 82 total short sale listings in Saugus.
Average list price: $429,626
Average sale price: $355,571 from 12/13/2009 - 01/13/2010 7 homes sold.
The short sale homes sold for $74,055 below the current average list price.
SHORT SALE LISTINGS IN SAUGUS JANUARY 10, 2009:
There were 66 active short sale, pre feclosure single family homes for sale in Saugus, there were 25 homes in back up or pending status. 91 total short listings in Saugus.
Average pending list price: $456,980
Average sale price: $425,833 From 12/13/2008 - 01/10/2009 6 homes sold.
The short sale homes sold $31,147 below the average list price.

1 YEAR SALES SUMMARY FOR SAUGUS BANK OWNED LISTINGS:
Active Inventory comparison: then, 01/10/2009: 20 now, 01/13/2010: 9 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $420,155 now, 01/13/2010: $402,271
Sale prices have decreased $11,884 over the past year.
1 YEAR SALES SUMMARY FOR SAUGUS SHORT SALE LISTINGS:
Active Inventory comparison: then, 01/10/2009: 6 now, 01/13/2010: 22 inventory has significantly increased.
Average sale price comparison: then, 01/10/2009: $425,833 now, 01/13/2010: $355,571.
Sale prices have increased $70,262 over the past year.
Saugus Short sale listings are now selling on average $46,700 less then bank owned.

BANK OWNED LISTINGS IN NEWHALL JANUARY 13, 2010:
There are 8 active bank owned (REO) single family homes for sale in Newhall, 2 in back up 10 pending. 20 total bank owned listings in Newhall.
Average pending list price: $379,290
Average sale price: $259,750 from 12/13/2009 - 01/13/2010 4 homes sold.
The past 30 day period bank owned homes sold $119,540 below the current average pending list price.
BANK OWNED LISTINGS IN NEWHALL JANUARY 10, 2009:
There were 14 active bank owned (REO) single family homes for sale in Newhall, there were 15 homes in back up or pending status. 29 total bank owned listings in Newhall.
Average pending list price: $360,189
Average sale price: $330,700 From 12/13/2008 - 01/10/2009 4 homes sold.
The bank owned homes sold $29,489 below the average list price.

ACTIVE SHORT SALE LISTINGS IN NEWHALL JANUARY 13, 2010:
There are 11 active short sale, pre foreclosure single family homes for sale in Newhall, 21 in back up 15 pending. 47 total short sale listings in Newhall.
Average list price: $376,254
Average sale price: $380,475 from 12/13/2009 - 01/13/2010 7 homes sold.
The short sale homes sold for $31,147 below the current average list price.
SHORT SALE LISTINGS IN NEWHALL JANUARY 10, 2009:
There were 33 active short sale, pre feclosure single family homes for sale in Newhall, there were 13 homes in back up or pending status. 46 total short listings in Newhall.
Average pending list price: $418,599
Average sale price: $319,000 From 12/13/2008 - 01/10/2009 2 homes sold.
The short sale homes sold $99,599 below the average list price.

1 YEAR SALES SUMMARY FOR NEWHALL BANK OWNED LISTINGS:
Active Inventory comparison: then, 01/10/2009: 14 now, 01/13/2010: 8 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $330,700 now, 01/13/2010: $259,750
Sale prices have decreased $70,950 over the past year.
1 YEAR SALES SUMMARY FOR NEWHALL SHORT SALE LISTINGS:
Active Inventory comparison: then, 01/10/2009: 33 now, 01/13/2010: 11 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $319,000 now, 01/13/2010: $380,475.
Sale prices have increased $61,475 over the past year.
Newhall Bank owned listings are now selling on average $120,725 less then short sales.

BANK OWNED LISTINGS IN CANYON COUNTRY JANUARY 13, 2010:
There are 15 active bank owned (REO) single family homes for sale in Canyon Country, 5 in back up 24 pending. 45 total bank owned listings in Canyon Country.
Average pending list price: $397,878
Average sale price: $409,812 from 12/13/2009 - 01/13/2010 16 homes sold.
The past 30 day period bank owned homes sold $11,934 above the current average pending list price.
BANK OWNED LISTINGS IN CANYON COUNTRY JANUARY 10, 2009:
There were 39 active bank owned (REO) single family homes for sale in Canyon Country, there were 59 homes in back up or pending status. 98 total bank owned listings in Canyon Country.
Average pending list price: $343,562
Average sale price: $340,813 From 12/13/2008 - 01/10/2009 33 homes sold.
The bank owned homes sold $2,749 below the average list price.

ACTIVE SHORT SALE LISTINGS IN CANYON COUNTRY JANUARY 13, 2010:
There are 36 active short sale, pre foreclosure single family homes for sale in Canyon Country, 65 in back up 45 pending. 146 total short sale listings in Canyon Country.
Average list price: $378,079
Average sale price: $352,300 from 12/13/2009 - 01/13/2010 10 homes sold.
The short sale homes sold for $25,779 below the current average list price.
SHORT SALE LISTINGS IN CANYON COUNTRY JANUARY 10, 2009:
There were 117 active short sale, pre foreclosure single family homes for sale in Canyon Country, there were 40 homes in back up or pending status. 157 total short listings in Canyon Country.
Average pending list price: $388,882
Average sale price: $463,583 From 12/13/2008 - 01/10/2009 6 homes sold.
The short sale homes sold $74,701 above the average list price.

1 YEAR SALES SUMMARY FOR CANYON COUNTRY BANK OWNED LISTINGS:
Active Inventory comparison: then, 01/10/2009: 39 now, 01/13/2010: 15 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $340,813 now, 01/13/2010: $409,812
Sale prices have increased $68,999 over the past year.
1 YEAR SALES SUMMARY FOR CANYON COUNTRY SHORT SALE LISTINGS:
Active Inventory comparison: then, 01/10/2009: 117 now, 01/13/2010: 26 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $463,583 now, 01/13/2010: $352,300.
Sale prices have decreased $111,283 over the past year.
Canyon Country Short sale listings are now selling on average $57,512 less then bank owned.

BANK OWNED LISTINGS IN CASTAIC JANUARY 13, 2010:
There are 2 active bank owned (REO) single family homes for sale in Castaic, 2 in back up 9 pending. 13 total bank owned listings in Castaic.
Average pending list price: $319,450
Average sale price: $348,182 from 12/13/2009 - 01/13/2010 8 homes sold.
The past 30 day period bank owned homes sold $28,732 above the current average pending list price.
BANK OWNED LISTINGS IN CASTAIC JANUARY 10, 2009:
There were 15 active bank owned (REO) single family homes for sale in Castaic, there were 11 homes in back up or pending status. 26 total bank owned listings in Castaic.
Average pending list price: $509,136
Average sale price: $344,416 From 12/13/2008 - 01/10/2009 6 homes sold.
The bank owned homes sold $164,720 below the average list price.

ACTIVE SHORT SALE LISTINGS IN CASTAIC JANUARY 13, 2010:
There are 26 active short sale, pre foreclosure single family homes for sale in Castaic, 34 in back up 14 pending. 74 total short sale listings in Castaic.
Average list price: $407.676
Average sale price: $408,333 from 12/13/2009 - 01/13/2010 3 homes sold.
The short sale homes sold for $657.00 above the current average list price.
SHORT SALE LISTINGS IN CASTAIC JANUARY 10, 2009:
There were 44 active short sale, pre foreclosure single family homes for sale in Castaic, there were 21 homes in back up or pending status. 65 total short listings in Castaic.
Average pending list price: $380,289
Average sale price: $384,966 From 12/13/2008 - 01/10/2009 3 homes sold.
The short sale homes sold $4677.00 above the average list price.

1 YEAR SALES SUMMARY FOR CASTAIC BANK OWNED LISTINGS:
Active Inventory comparison: then, 01/10/2009: 15 now, 01/13/2010: 2 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $348,182 now, 01/13/2010: $344,416
Sale prices have decreased $3,766 over the past year.
1 YEAR SALES SUMMARY FOR CASTAIC SHORT SALE LISTINGS:
Active Inventory comparison: then, 01/10/2009: 44 now, 01/13/2010: 26 inventory has significantly decreased.
Average sale price comparison: then, 01/10/2009: $384,966 now, 01/13/2010: $408,333.
Sale prices have increased $23,367 over the past year.
Castaic Bank owned listings are now selling on average $63,917 less then short sales.

You may have noticed we have reached historic low levels of inventory the past several months here in the Santa Clarita Valley, as of today there are 660 active listings, when in a normal market we have anywhere from 1500-2000. with these number it's our opinion the government/banking institutions created a seller's market. They are taking advantage of a basic supply vs. demand market by cutting off the supply, releasing very few bank owned listings and taking extensive time to approve short sales they have slowed the decline of property values. You can clearly see that President Obama's pressure on the banking industry to streamline loan modifications and short sales is starting to take effect with some banks. If you look closely at my statistics you will see home prices have gone down but some areas are on the rise. It will be interesting to see how this year, 2010 will unfold. How much more will properties loose their values?Will interest rates stay below 5.5%? Will the market be flooded with bank owned properties? Will the banks be more cooperative with short sales, streamlining them? How much more will properties loose their values?

This is a constantly changing housing market, education is Key. As potential buyers or sellers these numbers help you to understand what the price ranges are for bank owned and short sale properties for sale. There is a big misconception when it comes to bank owned properties (foreclosures) and short sales (pre foreclosures). Many are led to believe that there is a fire sale going on, that the banks are giving deep discounts. Banks at this point are in the business to minimize their loss severity, they want to see offers as close to fair market value as possible. In some instances there are listings that are generating multiple offers which results in a higher sale price. Here is where an experienced agent can guide you with these purchases.

You as a buyer need an agent who truly understands this market and can help you get your desired home whether it is a bank owned or short sale listing. With so much information and misinformation you need an above average agent to guide you through these investment opportunities.

My husband and I are Santa Clarita's Certified Pre Foreclosure Specialists, PSC with a Certified Distressed Property Experts designation, CDPE. By dealing with a Realtor who has earned the PSC and CDPE designations, buyer's and seller's ensure that they are working with an experienced Santa Clarita Short Sales Expert that is equipped to handle their specific needs. We want to be the number one real estate agent you call when looking to buy or sell in today's market.

This real estate market has caused unbearable stress and heartache. As a Pre Foreclosure Specialist with a Certified Distressed Property Expert designation we have the training and expertise necessary to minimize our clients financial loss and limit the damage to their credit. We feel that education is key in this market with so much misinformation and foreclosure scams out there, we sought out this education to ensure we could properly help Santa Clarita families get on the path to recovery.
There is a difference between a pre foreclosure and a foreclosure. The time period between the first missed payment and the final bank sale is called the pre foreclosure phase. Foreclosure is a legal process that is initiated whenever a homeowner defaults (stops making payments) on their mortgage(s). When the foreclosure is completed the home is either sold at auction or becomes real property of the lender and is now owned by the lender REO, Real Estate Owned. Many of you have heard these terms on the news lately or see these types of homes in your communities. Would like to know what these terms mean or understand how the short sale process works? Go to short sale, pre foreclosure definitions.

If you or someone you know are in a difficult situation with your property consider us. Homeowners who are in the pre foreclosure process need to speak with an educated agent as quickly as possible. For many homeowners foreclosure is not the only option however most do not get the opportunity to explore solutions. We are Santa Clarita's short sale specialists and would like opportunity to sit down with you and give you a free, no obligation, consultation on this process. We want to be the number one short sale agent you call, we are here to help you avoid foreclosure.

If you would like to search specifically for bank owned or short sale listings in Santa Clarita, or any other areas of Southern California go to: Search the MLS like a Realtor

License number 01461940
*statistical information is reliable but not guaranteed, based on averages

Are Promissory Notes Good Or Bad For Homeowners During A Short Sale Negotiation?

Are promissory notes on 2nd liens good or bad for clients during a short sale? It's common knowledge that a foreclosure, deficiency judgment or debt being sold to a collections company will have a serious negative impact on an individuals credit history, but what about an unsecured promissory note that is required by a 2nd lien holder in order to get a short sale approved?

During a recent conversation with my credit repair expert, Doug Minor http://www.easycreditrelief.com/, Doug informed me that promissory notes for 2nd lien holders during the short sale actually help establish and repair the credit score quicker. Doug stated making payments on a promissory note will establish a new trade line, which often leads to additional credit being issued by other creditors. In my experience most homeowners are unaware of this and this information could be the information the homeowner needed to decided whether or not to agree to the promissory note.

Promissory Note: A promissory note is also an unsecured note and a contract between the lender and borrower where the borrower agrees to pay the difference (or a percentage of the difference) between the amount owed and the sales price of the property. This is usually presented during a short sale and can only be enforced if the borrower agrees in writing. These notes are also negotiable after the short sale.

If your a homeowner or Realtor looking for information on how a short sale, foreclosure, bankruptcy or debt collections effect credit, I highly recommend Doug Minor from http://www.easycreditrelief.com/

What Are The Benefis Of Doing A Short Sale vs. Letting The Property Go Through Foreclosure? Realtor's Jennifer & Gary Ricco Explain

We are continually asked by clients on our listing appointments, "what are the benefits of doing a short sale vs letting the property go through foreclosure?" Without knowing the seller's financial situation, this can be difficult to answer because sometimes it's better to let the property go to a foreclosure because of California's Anti Deficiency laws and the protections they provide.

With that being said, in summary a seller can benefit from a short sale in the following ways.

* The most important, a seller can avoid having a "foreclosure " on their credit report.
*According to recent Fannie Mae lending guidelines, you can be eligible to qualify for a Fannie Mae backed loan two years after the short sale completes.
*Assuming the seller is already not making mortgage payments, they can continue to live in the property and not make payments during the short sale. The lender of Record actually prefers that the borrower continue to live in the property. Statistically, occupied homes tend to be better maintained then vacant properties, making the property more marketable.
*Most lenders feel that staying in the house is the "right thing to do" when in default. They tend to feel walking away from the house is irresponsible and unfair to the lender.
*Sellers often do not understand that when doing a short sale, the senior lien holder will pay for the costs of the sale.(i.E, commissions,escrow fees, title insurance, deliquent property taxes, ect.)

Here are the risks associated with Vacancy that lenders are faced with and why they prefer the borrower to stay in the home during the short sale process.

Vacancy risks can be broken down to three (3) primary categories.

1. Maintenance:
Maintenance issues on vacant properties stack up quickly. Lenders take on the expense of securing & maintaining the the property ahead of the foreclosure. Lenders hire costly preservation companies to maintain the property.

2. Theft & Vandalism:
Vacant properties are easy target for thieves looking for appliances and/or for the copper out of A/C units and pipes. Also vacant properties are a magnet for squatters and or juveniles that cause thousand of dollars of damage, all costs the lenders assumes in a foreclosure. Municipal fines can run as high as $1000 per violation, per property, per day for properties not maintained.

3. Vacant Property Ordinances:
Cities and counties across the country have drafted vacant property ordinances aimed at two things:
a) Reducing neighborhood blight by pushing lenders with the threat of financial penalties, to secure, monitor and maintain vacant bank owned properties.
b) Generating revenue, municipalities are looking for ways to make up for revenue short falls they face.

Each vacant property ordinance is different. It is estimated that there are over 5,000 distinct & separate vacant property ordinances across the country.

If your struggling with your mortgage, you owe it to your self to understand what pre foreclosure options you have. Jennifer and I have the training & experience to educate homeowners on the options they qualify for. If your looking for ways to minimize your financial loss and limit the damage to your credit history you need a trusted professional, trained in the pre foreclosure process. Jennifer and I have obtained our Pre Foreclosure Specialists certification and the Certified Distressed Property Expert designation.

Also, if you are struggling with a Wachovia, World Savings and Golden West mortgage Jennifer and I have a short sale manager we can put you in direct contact with that will explain your pre foreclosure options with these loans. Give a call at 661.290.3837 or contact us through our website http://www.santaclaritavalleyhomesonline.com/contact.htm.

Realtor Stopping Santa Clarita Foreclosure's Obama Admistration Announces Financial Incentives and Uniform Process for Short Sales

This announcement comes directly from the National Association of REALTORS® Government Affairs Division 500 New Jersey Avenue, NW, Washington DC, 20001

Responding to the call of the National Association of REALTORS®, on May 14, 2009, the Obama Administration announced incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP). For borrowers who are unable to retain their home under the Making Home Affordable Loan Modification Program, the servicer may consider a short sale or, if that is not successful, a deed-in-lieu of foreclosure. Participating servicers must comply with program requirements so long as they do not conflict with contractual agreements with investors. Late July is the Treasury Departments current target for issuing guidelines and forms necessary to start the program.

-The problem with this is the servicers participating in this program still have control over the short sale process, they will still be able to delay and control the process without any accountability.

Borrowers (Homeowners).

Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program (Streamlined Modification Program) but do not qualify for a modification or do not successfully complete the three month trial period. Before proceeding with a foreclosure, the servicers must determine if a short sale is appropriate.

Incentives.


Incentives include: (1) $1,000 for servicers for successful completion of a short sale or deed in-lieu of foreclosure; (2) $1,500 for borrowers/homeowners to help with relocation expenses; and (3) up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).

-This is a great incentive for the servicers, it will also help struggling homeowners with moving expenses. This will also help negotiations with junior lien holders because most junior lien holders are requesting 10% of the amount owed.


Standardized Documents.

The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.

-These documents are already standardized, here in California a short sale transaction is no different then any other transaction, it only has one additional contingency. (lender approval of short payoff) CAR has also provided a short sale addendum/short sale agreement.


Property Valuation by Appraisal or BPO.

Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.

-This has been a big problem, since the HVCC (Home Valuation Code of Conduct) went into effect the servicers and lenders set the property value, which is often above what Far Market Value is. This can cause appraisal issues as lenders/investors try to drive home values higher in a declining market.


Time-line.

In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.

-This is another step in the right direction for struggling homeowners who have received a NOD & NOTS, it affords Realtor's familiar with the area extra time to find a buyer. The problem I still see with the short sale process, with regards to time-lines is the amount of time the servicers take to approve the transaction. The amount of time a short sale proposal takes is still a deterring factor for buyers.


Commissions.

The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received.


No Borrower Fees.


Servicers may not charge fees to borrowers/homeowners for participating in the FAP. Program Expiration. The program is in effect through 2012.

Deed-in-Lieu of Foreclosure Option.

Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions)

-Deeding the property to the servicers may be a good option for primary residence homeowners. The borrower must make sure they are released from all the debt, clarify how this will be reported on their credit report and the shortages fall under tax relief from the Mortgage Debt Relief Act, which investment properties do not.

If your a Santa Clarita Homeowner struggling with your mortgage payment or facing foreclosure, Jennifer and I are here to show you what options you have. Don't pay additional fee's, our consultations are FREE, as a community service we will show how to request a loan modification from your lender, should you meet the guidelines.

As Santa Clarita Realtor's Specializing in short Sales we have the experience and training to provide you with solutions that will minimize your financial loss and limit the damage to your credit history. Contact Jennifer and Gary Ricco, at Keller Williams VIP Properties to schedule a consultation today. 661.290.3837


For Short sale facts follor this link http://www.santaclaritavalleyhomesonline.com once there click on Short Sale FAQ's