Entries Tagged 'Uncategorized' ↓

Short Sales Changes April 2010

meta name=”description” content=”Short Sales Changes April 2010″>

I have been waiting to get more information on the new short sales changes April 2010. According to HAFA, Home Affordable Foreclosure Alternatives, the new Short Sale Process will be crucially important in 2010.

The Treasury department has released new rules to help simplify the “short sale” process, which isn’t “short” at all. For months, the real estate community has been preparing these new changes. The purpose of HAFA guidelines is much like other failed attempts at helping the real estate industry - one is to have less foreclosures in 2010 and two, get the real estate market back in the appreciation mode.

The key short sales changes appear to be the following:

      Mortgage servicers have 10 days to accept or deny a short sale request. After a sale is completed, the borrower could be completely released from debt.
      Borrowers are eligible to receive a $1,500 moving allowance, if they sell their home through a short sale.
      Mortgage servicers will receive $1,000 for each completed short sale.
      Investors who hold first mortgages can get as much as $1,000 for allowing second lienholders to release their liens.
      Second lienholders can get only as much as $3,000 in proceeds from short sale to release their liens.
      The property must be the homeowner’s principal residence.
      The homeowner is delinquent on the mortgage or default looks likely.
      The loan was made before Jan. 1 this year and is less than $729,750
      The borrowers’ total monthly mortgage payment exceeds 31 percent of their before-tax income.

The following changes only apply to banks that took TARP money (Troubled Asset Relief Program). Because they took TARP funds, the treasury will be requiring these banks to follow these new guidelines.

I will continue to update information on these short sale changes as they become more definite.

Should you have any questions, please do not hesitate to contact me at 631-831-9048. If you are behind on your mortgage and have questions about your options to avoid foreclosure, you can email me here.

(c) Copyright 2010 www.tommcgiveron.com
By Thomas McGiveron, LSA

Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon
Sign up for our Email Newsletter


For Email Marketing you can trust

A Closer Look At The Impact Of Foreclosures In 2010


Share

These videos will explain what’s behind the impact of foreclosures in 2010. The unemployment rate is staggering and is the new challenge for the real estate market. While the Long Island real estate market has seen some improvements (small steps toward recovery), foreclosures and other distressed sales will be the topic of 2010.

cure-rate.jpg


cure-rate-graph.jpg

For the website with the report on the impact of foreclosures throughout New York, you can visit http://data.newyorkfed.org/creditconditions.

Should you have any questions you can reach me at 631-587-1700, ext. 51.

(c) Copyright 2009, www.tommcgiveron.com
By Thomas McGiveron, LSA

Long Island Short Sales: Update, November 2009

When it comes to Long Island short sales, having completed several this year, let me say that throughout the course of 2009, the process has improved…but has a long way to go. I came across some very interesting information about the process of how “banks” determine whether or not to move forward with a short sale negotiation.

I put the word “banks” in quotations because it’s not necessarily banks that are handling the short sales. During the course of the past several years, Loan Servicing companies have become increasingly popular.

80-percent-hike-service-companies.jpg

There are two basic elements to a mortgage loan. They are Processing and Servicing. Keeping in mind that any business must function with the intent on making a profit.

effect-of-servicer-incentives-on-default-outcomes.jpg

In order to explain this slide simply, anything that says “negative” would mean that the loan service company would lose money on that aspect of a short sale. Without incentives to go through with a short sale, loan service companies have no choice but to lean in the direction of foreclosure. Hence, where it says “positive”, that’s where the companies will make money, rather than lose.

Now the Treasury Department has come up with a viable plan to actually encourage banks and loan service companies to consider short sales over foreclosure, many homeowners may be saved from foreclosure.

treasury-department-incentive-program.jpg

So what does this mean to buyers?

It means that a short sale may very well be an excellent opportunity to purchase a home and help a struggling homeowner to avoid foreclosure.

For sellers, it’s simple, if you want to ever buy a home again or at least within the next 3 to 4 years, cooperating with your “bank”, may very well put you and your family in a position to buy again sooner than you think.

fannie-mae-2-years-short-sale.jpg

If you are struggling to make your mortgage payment, please call me at 1-877-765-3123, ext. 51, immediately.

If you’re a buyer, it is imperative that you find a qualified real estate agent to help you through the process of buying a short sale. They can be very good opportunities, but know which ones are good and which ones are not is the key to successfully purchasing a short sale. You can visit www.islandforeclosures.org and contact me there by signing up to receive email updates on properties for sale throughout Long Island or call me at the number above.

(c) Copyright, 2009
By Thomas McGiveron, Licensed Real Estate Salesperson

Short Sales: Banks Are Learning

Banks are beginning to see that short sale transactions are a viable option and are generally preferrable to loan modification. Banks are finding in studies that more than 30% of delinquent borrowers lift themselves up to current payments without a modification. This means that 30% of the money spent on modification is then wasted on this “self-cured” risk.

That’s a cost the bank doesn’t need or want. If they work on 100 loan modifications, and 30 of these modifications correct themselves without the need for modifying the loan, then that’s time wasted.

The second cost comes from re-default. About 40–50% of all modifications fall back into delinquency within six months. For them, foreclosure was simply postponed. And this is a tremendous waste of time for the banks.

According to the Office of Thrift Supervision and the Office of the Comptroller, the number of short sales completed jumped 208 percent during the first quarter of this year compared with the same period in 2008.

So if you’re behind on your mortgage and want to learn more about all your options, call me 1-877-765-3123, ext. 51.

Long Island Foreclosures: Long Island Hardest Hit

I have been plugging away in the past month about Long Island foreclosures. The recent article in Newsday entitled, Mortgage Defaults on LI Among Worst In State puts things in perspective.

What’s happening is astounding and I really believe that homeowners have no idea what’s in store down the road. The main “theme” of my content for homeowners is, if you want to or need to sell, now is the time. I know this is like a dull drum beat for those of you who frequent my website, but it’s just the truth.

But it’s the truth that I don’t think homeowners are hearing. I know many different people who really need to sell. They want to move on in their lives but just “can’t give their home away.”

It’s not about “giving it away.” This real estate market from 2002 through 2006, helped people acrue an unbelievable amount of equity in their home. And while it’s hard to swallow a 30% reduction in that equity, it’s better than the alternative (losing another 20% over the next 12 to 18 months).

Read the rest - CLICK HERE.

Short Sales On Long Island: Dodging The Inevitable

The ever-increasing number of short sales on Long Island doesn’t really surprise me anymore.  In fact, nothing really does. With major banks like Citi trading at under $5.00 (as of this day) and as low as .97 in the last 3 months, what’s there to be surprised about?

Well, in order to achieve some shock value (because that’s what good writing is all about), I’m going to focus on what we know about the local Long Island real estate market and how short sales are shaping up to be a great challenge. Below is a chart of short sales on Long Island.  The chart is split into each respective zone, showing how many short sales there are as of April, 2009 (note: this is all from the Multiple Listing Service of Long Island - if a short sale is marked, as it should be with a Y for Yes in the listing, that’s what these numbers represent. What these numbers may not represent is real estate agents who don’t know their listing is a short sale or they don’t correctly upload the listing and check of Y for short sale).  Another words, figure these numbers are larger.

CLICK

IMAGE

TO

ENLARGE

If you do not know which zone your town is located, feel free to call me at 631.587.1700, ext. 51.

What we see in this chart is clear, with over 3700 short sales on Long Island and only 262 sales in the previous 90 days (that’s only 87 short sales sold per month), sales are lagging.  So I’ll use the stats from this chart and divide the short sales available with the short sales sold over a time period of 90 days, and the scary thing is, there is over a 43 month supply of short sales on Long Island.

That means, at the current rate of sales, it would take 43 months (3 and half years) to sell off all the short sale inventory currently on Long Island. Now of course, the economy will change by then and things will get better….ENTER DOOM SLIDE:

CLICK

IMAGE

TO

ENLARGE

Option ARM (Adjustable Rate Mortgage) loans are the riskiest loans that banks wrote during the “anyone can buy a home” period of 2002 through 2006.

These loans are notoriously called, “NINJA” loans or No Income, No Asset loans. Nothing checked on the buyer at all. It’s like passing high school in many public schools throughout the country, if you’ve got a pulse, you pass. Well in the case of Option ARM loans, sometimes the person getting the loan, dididn’t even need to have one!
That orange mountain in that slide shows the reset schedule of these aweful loans, many of which have borrowers on the other side of them, that are behind on the mortgage payments already. The key issue here is, the government cannot help millions of people just simply keep their homes (homes they shouldn’t have owned in the first place).
Of course I always have to provide the entire picture:

CLICK

IMAGE

TO

ENLARGE

This slide shows us that as that throughout 2008, prime borrowers are defaulting at higher rates than all other category loans, including sub-prime, options and other type of mortgage borrowers.
A prime borrower is considered to be one of the best for lenders to invest their money with. Prime borrowers have loans that are fully documented. These are buyers who had good jobs, assets, credit scores, etc. Hence the term “prime”.
So where am I going with this?
If prime borrowers, the best borrowers, are defaulting at high rates, then what is the logical assumption for the “NINJA” borrowers?

If the dots are not connecting, please call me at 631.587.1700, ext. 51.

Long Island Short Sales: Foreclosure Websites

For buyers looking for Long Island short sales or who are looking for foreclosure websites, coming soon www.islandforeclosures.org will be a one-stop-shop for finding and purchasing foreclosures on Long Island. Featuring a search engine for finding foreclosures on Long Island as well as direct contact with Licensed Salesperson’s for showings and bidding.

Additionally, search sites like www.lispendenslists.com and www.lispendensbytown.com are good sources for finding foreclosure websites that are free as well as fee-based.

Financial Hardship Letter


Share
A financial hardship letter is written by a homeowner who is attempting to negotiate with their respective lender(s). The purpose of the financial hardship letter is to be apart of the packet a homeowner will submit to their respective lender(s).

It is an explanation for late/missed payments or how paying for the mortgage is becoming a problem. Uncontrollable events are a good reason (not financial mismanagement).
Acceptable hardships include:
1. Loss of Life: Borrower or co-borrower.
2. Loss of Marriage, with proof.
3. Loss of Health, sickness.
4. Involuntary loss of income.

The importance of the financial hardship letter is for the lender(s) to be aware of the circumstances which are faced by their borrower. It is one of the most important documents that will be submitted with the packet sent to the bank while negotiating with them.

For more information on financial hardship letters, visit www.financehardshipletter.com.

(c) Copyright, 2009 www.shortsales.tommcgiveron.com
By Thomas McGiveron, Licensed Salesperson
Coldwell Banker Matherson

Foreclosed Homes: Are They Really A Good Buy?


Share
Time and time again, I have people calling me or emailing me about foreclosed homes. I reply to alot of posts on trulia.com, where home buyers and sellers can ask questions about real estate and I find alot of people asking about foreclosures. So what’s all the hub-bub about anyhow? Are foreclosed homes a good buy or not?

I’ll provide an example. In Deer Park, there is a very nice colonial, priced at $319,000. It is a foreclosure, which means that it is bank-owned. Please note that a foreclosure is an “as-is” sale, where the bank is making no representations and is not going to do anything to rectify any problems with the property, whatsoever.

Now this nice colonial for $319,000 compares with other colonials in the area and they are priced in the upper $380,000 to $450,000. That’s a big difference.

But let’s take a closer look. This is where I like to really help potential buyers get the full picture. Now, at $319,000, this house, without getting into too many details, needs about $40,000 worth of work…that we can see. This doesn’t include any c/o (certificate of occupancy) issues or unseen problems with plumbing or heating systems.

If the asking price is $319,000 and we assume that we can purchase the property at $300,000, with the additional $40,000, plus another $15,000 just to be safe, this would put the total cost at $355,000. Since we assumed a $19,000 negotiable range on this foreclosure, lets apply that to a “normal” house for sale at $380,000. So a “normal” colonial, with only minor updates needed, would cost $361,000, assuming the negotiable price range of $19,000 (same as the foreclosure).

That’s a difference of $6000.

I am not trying to discourage any buyers from considering a foreclosure purchase. Not at all. However, the majority of foreclosure listings are still priced along with the rest of the market. When all is said and done, a foreclosure may not be any different from your average regular listing.

A number of issues should be understood by any buyer who considers purchasing a foreclosed property. Should you have any questions, please feel free to leave a comment or contact me directly at 631.831.9048.

(c) Copyright, 2009 www.tommcgiveron.com
By Thomas McGiveron, Licensed Salesperson

Long Island Short Sales Listing: 16 Lockwood, Bay Shore, New York

Long Island Short Sales Listing: 16 Lockwood, Bay Shore, New York
Great Investment Property Or Starter Home. Cape Features 4 Bedrooms, 2 Baths, 2 Kitchens, and a 2 Car Garage.  Priced At $234,126 $214,126 [PRICE REDUCED].  Call for details.  Buyer using services of qualified attorney who specializes in short sale negotiations. Contact me at Coldwell Banker Matherson, 631.587.1700, Ext. 51.

Share