Connecticut Short Sale Blog

Bank of America FHA short sale success after 6 long months

Minna Reid — Tue, 24 Jan 2012 19:32:06 +0000

A happy ending to a long story….BUT….what I don’t quite understand is why Wells Fargo and GMAC can process their FHA short sales through Equator (a fast and efficient online platform), yet Bank of America still requires all FHA short sales to be processed manually.

A regular Bank of America short sale processed through Equator will generally take about 3-6 weeks….BUT this FHA MANUALLY PROCESSED short sale with Bank of America took a whopping 6 months to make it through the system.

Why BofA? It doesn’t need to be this way.

There wasn’t even any good reason the short sale took 6 months to get approved…forcing sellers through endless qualifying, repeatedly losing paperwork and unresponsive negotiators are the only reasons this short sale took as long as it did. Thankfully after 6 very long months there was light at the end of this long tunnel and the short sale actually CLOSED.

OWED:Bank of America First Mortgage: $620,000, NFCU Second Mortgage: $40,000

APPROVED AND CLOSED: $502,000

TIMEFRAME: 6 excruciatingly painful months

TIME TO PICK UP THE SPEED BofA!

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Minna Reid is a full-time, full-service, Connecticut REALTOR®, specializing in short sales, serving Hartford, Tolland, Middlesex and New Haven Counties including, but not limited to; Andover, Avon, Berlin, Bloomfield, Bolton, Cheshire, Columbia, Coventry, Cromwell, Durham, East Hartford, East Hampton, East Windsor, Ellington, Enfield, Farmington, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Meriden, Middlefield, Middletown, Newington, Portland, Rocky Hill, Somers, South Windsor, Southington, Stafford, Tolland, Vernon, Wallingford, West Hartford, Wethersfield and Willington.

Situations that will complicate your short sale

Minna Reid — Mon, 16 Jan 2012 14:27:07 +0000

Single mortgage short sales for folks with significant hardships are the simplest short sales to close. But more often than not, short sales come with complicating factors that will make it more difficult to get your short sale closed.

The most common complications to your short sale are:

Second mortgages. These are very common, but present another party that needs to approve you short sale. Second mortgages can make your short sale more complex.
PMI. Private Mortgage Insurance companies are highly likely to complicate your short sale. Your MI company will be covering any loss to your lender, and will also have to approve your short sale. MI companies tend to be more demanding than second mortgages.
Judgment liens. Every cloud on title needs to be resolved in order for clean title to pass to the buyer. Collectors for credit card companies can be very nasty to deal with and are generally very demanding. Be prepared to have to fork over cash to resolve some of these judgment liens. If you’re facing severe debt problems, it’s better to take action before your collectors do.
Lack of documentation. Haven’t filed tax returns for two years? This will be a problem. Your short selling lender will want full financial documentation in order to process your short sale application.
Unheated, unpowered home. This makes your home almost impossible to sell. Most buyers won’t pick up utilities in their name or pay your back due fees in order to have a functional home for inspections and approval. Take measures to keep your protected and sellable before moving out.
Uncooperative title holders/mortgagors. This would be the ex who is on title with you but has gone MIA or Mom who went on the mortgage with you to help you qualify. Anyone on title or mortgage will have to get on board with your efforts to short sell, or it won’t happen.
Having assets/good credit. The better off you are financially, the harder your short sale will be. You don’t have to be destitute to get a short sale approved, but the more you have – the higher the odds that you will be required to contribute to your short sale.
Being current on your payments. While most investors do not have a requirement that you be in default to qualify for your short sale, current borrowers can expect more scrutiny of their financials and have a higher likelihood of being asked for a cash contribution.

GET THE RIGHT HELP! You’ll have the best odds of getting through your short sale successfully and with the least damage by having the right professionals represent you. Choose your short sale agent carefully.

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Can I get cash back from my short sale?

Minna Reid — Tue, 10 Jan 2012 21:52:49 +0000

Usually the answer is no. As a condition of any short sale approval, the lender will usually require the seller have no proceeds from the sale. However – there are a few instances where the seller can in fact be paid an incentive from a short sale. These are:

FHA short sales. In an FHA short sale the seller is allowed an incentive of $1,000 during the first 90 days of the ATP, and $750 thereafter. If there are unapproved closing costs, these funds may used and any payments to junior lien holders (if any) must first be paid through the use of this incentive, before it will be paid to the seller.

HAFA short sales. HAFA promises $3,000 to the seller, however these funds may also be distributed towards unapproved closing costs. As a general rule, I have found HAFA is just not worth pursuing even considering the $3,000.

Traditional short sales. Some lenders in-house short sale programs will allow the seller some type of incentive. These are not exactly common, but they are allowed in some case, so it is always worth asking during the course of the short sale.

Overall, you can most likely assume you will not receive any cash out of your short sale closing and if you do it will be a pleasant surprise.

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Bank of America short sale approved in just 3 weeks!

Minna Reid — Mon, 09 Jan 2012 14:06:54 +0000

If there is a single short sale that I enjoy lately it’s a Bank of America Fannie Mae owned loan. This is quite possibly the single most predictable servicer/investor combination and one I am more than happy to take on. Most Bank of America short sales will go through their Equator system, including all their Fannie Mae owned loans.

Many of my clients are in the middle of a divorce leading to the unavoidable short sale of their home, as was the case here. My client was anticipating a long troublesome journey through the short sale process and was quite elated when his short sale proved to be quick and painless.

Within 5 weeks on market we secured a buyer for the home…and after submitting the package to Bank of America – a short sale approval letter with full debt forgiveness and a deficiency waiver was produced just 3 short weeks later. Less than 5 weeks later this Bank of America short sale closed.

TOTAL TIMEFRAME FROM LIST TO CLOSE: 3 MONTHS

OWED: $220,000

SETTLED IN FULL: $130,000

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A YEAR IN CONNECTICUT SHORT SALES: 2011 IN REVIEW

Minna Reid — Thu, 05 Jan 2012 20:06:13 +0000

A YEAR IN CONNECTICUT SHORT SALES: 2011 IN REVIEW

THE STATISTICS:

Let’s discuss overall sales in CT first. 22,348 homes sold in CT – a 10% decline from 2010. The average sale price of homes sold was $244,578 with an average marketing time of 100 days.

1,410 short sale homes sold in CT in 2011 – a 10% incline from 2010. While this number only makes up 6% of all sales, this is a 1% increase in total market share over the prior year. The average sales price of short sale homes sold was $180,618 with an average marketing time of 153 days.

While short sales still sell for less and take longer to sell than “regular” homes, short sales are definitely on the rise in Connecticut.

PERSONAL OBSERVATIONS:

As Connecticut’s highest producing short sale real estate agent, I have had the pleasure of helping many clients get through their short sale this past year and will add a few interesting points I have observed over the year:

95% of all short sales are approvable (Here I speak for my own short sales, as the industry average is much, much lower). A few more clients may opt out of the short sale and instead pursue some other workout leading to a CLOSE rate of closer to 85%, but for those willing to see the short sale through 95% will be approved. That is very encouraging.
6% of my clients were approved and closed their short sale without missing any payments.
40% of all my clients in 2011 could be classified as “strategic”. My definition of strategic is that the client short sold more out of desire than necessity. They had the ability to continue on with the loan, but simply chose not to.
Only 20% of my clients were actively facing foreclosure.

TRENDS WITH LENDERS:

While much improvement is still needed, most lenders have made great strides in their short sale processing, leading to easier short sale approvals and shorter approval time frames….which I currently estimate at 4-7 weeks ( ON AVERAGE!! ) . Bank of America, GMAC, Nationstar and Wells Fargo have all moved to online platforms for short sale processing. HAFA – Governments short sale program, which was introduced in 2010, has proved to be a dismal failure for the second year on a row. This poorly managed, poorly executed program offers unbelievably long processing timeframes and unbelievably low chances of approval. I believe this program has been the single largest setback to the short sale industry in 2011. Besides HAFA – it’s all good news.

Need help with your CT short sale?

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14 months to a Seterus HAFA short sale approval

Minna Reid — Tue, 03 Jan 2012 14:07:23 +0000

HAFA – Governments “streamline” short sale solution? I dont know about you, but to me 14 months and streamline sounds like an oxymoron.

I’ve never been a fan of HAFA, and this Seterus short sale certainly didn’t sway my opinion. I originally listed the property and immediately my clients applied for the HAFA program. 6 months later, my clients were approved for HAFA…at about 30% over market value. We were unable to find a buyer to pay 130% of market value….but we were able to find one to pay market value. We moaned and groaned and convinced the lender they were off base with their value…and they did reconsider several months later. Unfortunately by then the buyer was long gone and we had had the pleasure of starting all over.

A few months later we were able to secure a second buyer. Once again the lender insisted on more than market value for the home. We persisted in pushing for yet a third valuation of the property, which of course came in higher than market value. Fortunately this time, we were able to reach a happy medium with the buyer and lender…and a workable short sale approval surfaced.

A few more months passed as the buyer pulled their loan together, and 14 months after starting their journey, my clients closed their HAFA short sale and collected their $3,000.

OWED: $205,000

SETTLED IN FULL WITH $3,000 SELLER RELOCATION ASSISTANCE: $143,000

TIMEFRAME: 14 EXCRUCIATINGLY PAINFUL MONTHS

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A CT Provident Short Sale Success

Minna Reid — Mon, 02 Jan 2012 14:58:54 +0000

Its always a good day when a short sale gets approved and my clients never miss a single a payment and they get to retain their excellent credit.

Such was the case for this CT couple. When his job was moved to the midwest, my clients were forced to face the fact that they could not possibly sell their house without coming to closing with close to $60,000 that they unfortunately did not have. Renting the property was not an option as this would have created a huge monthly loss that was unaffordable.

We priced the house aggressively and it was under contract within 2 weeks of going on market. Provident, as usual, proved to be a delight to work with. Our negotiator was reasonable, prompt and responsive. The only hitch was the Mortgage Insurance Company – MGIC. MGIC, as always, proved to be a huge pain. They originally demanded $11,000 and a $26,000 promissory note. Over a weeks worth of negotiations followed and MGIC agreed release for $2,000 and $5,000 promissory note, which was agreeable to my sellers.

Six weeks from the day the buyer was secured the short sale approval was in hand and we closed soon thereafter. My sellers moved to the midwest and with their credit intact and having settled their mortgage debt for pennies on the dollar.

OWED: $175,000

SETTLED: $116,000 from sales proceeds, $2,000 cash contribution and $5,000 promissory note from my sellers.

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A CT short sale success with Provident and Citimortgage

Minna Reid — Mon, 02 Jan 2012 14:56:43 +0000

Out of all the lenders I work with, Provident lands towards the top of my list of favorites.

When this CT seller first called me, I had never even heard of Provident and feared for the worst. Smaller lenders can be be very disorganized and difficult to work with, however Provident proved to be the opposite. We did face a few delays though. First the property proved to be a tougher sell than I imagined…the market here in CT seems to be declining at a tremendous pace and sometimes it is simply hard to keep up. Second – my seller committed the cardinal sin of short sales - not providing documentation in a prompt fashion !!!!!.

If there’s one thing you can do to help yourself as a CT short seller – it is to get all your documents in order quickly and keep your CT short sale Realtor updated with current docs!

Once provided with a full set of documentation, Provident quickly ordered a BPO and within a few weeks we had an approval. Citimortgage, another one of my favorite short sale lenders followed quickly behind with an approval of their own and this short sale closed soon thereafter.

OWED:

First mortgage with Provident: $90,000

Second mortgage with Citimortgage: $42,000

SOLD:

Approved and closed: $64,000

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HAFA TO THE RESCUE? A 15 month HAFA story with no end in sight.

Minna Reid — Wed, 09 Nov 2011 19:51:17 +0000

HAFA TO THE RESCUE? A 15 month HAFA story with no end in sight.

July, 2010 I took a new Connecticut short sale listing. This was a Fannie Mae Bank of America loan. Fannie Mae had just gotten on board with HAFA and my new clients wanted to go with the program.

HAFA was supposed to be governments solution to “streamlining ” and “simplifying” the short sale process.

A summary of the last 15 months:

July 2010 – I met with my new clients and their property went on market

October 2010 – After about 6 weeks Bank of America finally acknowledged our requests and a HAFA short sale file was opened.

December 2010 – A HAFA approval letter arrived with a GROSSLY EXAGGERATED valuation of the property that could NEVER be reached. We started the value dispute process.

April 2010 – After 5 months of efforts to get a revision on the HAFA approval and getting nowhere, the clients finally decided to give up on the short sale and pursue their deed in lieu option. I took the property off market.

November 2011 – Despite the fact that I no longer have this property listed, the file is in my Equator queue. As of today November 9 , 2011 – 15 months later – the file is STILL BEING REVIEWED FOR THE DEED IN LIEU.

Maybe in 2012 my former clients can look forward to seeing the end of their HAFA Processing?

HOWS THAT FOR A STREAMLINE SOLUTION???

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Minna Reid is a full-time, full-service, Connecticut REALTOR ®, specializing in short sales, serving central and eastern CT including, but not limited to; Andover, Ashford, Bolton, Chaplin, Columbia, Coventry, East Hartford, Eastford, East Windsor, Ellington, Enfield, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Somers, South Windsor, Stafford, Tolland, Union, Vernon, Willington and Windham.

AVOID CT FORECLOSURE

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Questions to ask the Realtor you are considering for your short sale:

Minna Reid — Tue, 25 Oct 2011 14:57:34 +0000

Questions to ask the Realtor you are considering for your short sale:

How long have you been doing short sales? Even today, many real estate agents simply do not understand short sales, though they may volunteer to take yours on. Make sure the agent you are choosing has plenty of experience in this area.

How many short sales have you personally closed on the listing side? Representing buyers in a short sale is a totally different ballgame than representing a seller in one. You are looking for someone who has closed multiple short sales on the seller side.

Out of short sales listed, how many have you closed? This is critical. Listing short sales does not mean closing them. You are looking for someone with a good track record of actually closing their short sales.

Who does your negotiating? Is the agent negotiating the short sale? Is negotiation being outsourced to a third party? Is the Realtor expecting YOU to negotiate your own short sale? Best to find out now.

Do you have experience with my lender? Ideally your agent will have closed many short sales with your specific lender(s). If your loan is with one of the big 5 – Bank of America, Chase, GMAC, Wells Fargo or Citi – you can definitely expect to find an agent experienced with those specific lenders. If you have a small unknown- this may be more difficult.

What kind of a timeline can I expect? Although no short sale timelines are set in stone, an experienced agent with a track record of success will be able to give you a general timeframe as to how your short sale will go.

What will happen with my second mortgage? A second mortgage adds some variables to the mix…if you have a second mortgage it is critical to find someone with experience working with multiple lienholders, and they will be able to prep you in advance for what to expect.

What is the difference between HAFA and a traditional short sale? Which would be more suitable for my situation? There are HUGE differences here. A solid short sale agent can explain the differences and set you up with the right expectations.

Looking for a CT Short Sale Specialist?

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Minna Reid is a full-time, full-service, Connecticut REALTOR®, specializing in short sales, serving central and eastern CT including, but not limited to; Andover, Avon, Ashford, Berlin, Bloomfield, Bolton, Columbia, Coventry, Cromwell, East Hartford, East Hampton, East Windsor, Ellington, Enfield, Farmington, Glastonbury, Hebron, Lebanon, Manchester, Mansfield, Marlborough, Meriden, Middlefield, Middletown, Newington, Portland, Rocky Hill, Somers, South Windsor, Southington, Stafford, Tolland, Vernon, Willington, Wallingford, West Hartford, Wethersfield and Willington.

AVOID CT FORECLOSURE

Contact Me

Visit My Website