On Friday July 15th 2011, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law. The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.
Making sense of the story
-- A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.
-- Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.
-- The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.
-- “The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”
From July 21, 2011. C.A.R's Market Matters
Reprinted with permission of the CALIFORNIA ASSOCIATION OF REALTORS®
Contact me if you have any questions or need any help,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
Thursday
Short Sale News for Homeowners: Treasury expands HAFA short sales program for vacant properties
The Treasury department recently announced several changes to the Home Affordable Foreclosure Alternatives (HAFA) program to make the program accessible to more borrowers and properties. With the lackluster numbers on permanent HAMP modifications and other widely reported problems, HAFA and short sales may become a bigger focus for policy makers, loan servicers, and REALTORS® in 2011.
One particularly notable change announced relates to HAFA eligibility of vacant properties. Previously, only properties which were vacant for 90 days due to employment-related moves of more than 100 miles were typically eligible. Under the new HAFA guidelines, previously owner-occupied properties which have been vacant or rented for up to 12 months are eligible as long as, among other things, the seller has not purchased another property in the interim.
The new guidelines are effective Feb. 1, 2011, and are not applicable for, among others, loans owned or guaranteed by government owned or sponsored entities including Fannie Mae, Freddie Mac, FHA and VA.
From January 26th, 2011. Market Matters Weekly Advisory
Reprinted with permission of the CALIFORNIA ASSOCIATION OF REALTORS®
Contact me if you have any questions or need any help,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
One particularly notable change announced relates to HAFA eligibility of vacant properties. Previously, only properties which were vacant for 90 days due to employment-related moves of more than 100 miles were typically eligible. Under the new HAFA guidelines, previously owner-occupied properties which have been vacant or rented for up to 12 months are eligible as long as, among other things, the seller has not purchased another property in the interim.
The new guidelines are effective Feb. 1, 2011, and are not applicable for, among others, loans owned or guaranteed by government owned or sponsored entities including Fannie Mae, Freddie Mac, FHA and VA.
From January 26th, 2011. Market Matters Weekly Advisory
Reprinted with permission of the CALIFORNIA ASSOCIATION OF REALTORS®
Contact me if you have any questions or need any help,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
How to Get More Real Estate Deals Tip 1: Legal Notices and Notice of Defaults
Legal Notices / Notice of Defaults
You can start to look for legal notices in small papers usually on weekdays. There are also legal newspapers in many communities that most of the general public is unaware of. Do a little research in your local community to find where you can find these free postings to prospect.
The County Records/Courthouse is another place to find these lists for free. Sometimes they can be a bit tricky to find so I'd recommend asking for help as soon as you get there.
The best place to go for the lists is the County Recorder’s Office or the County Clerk. Usually, there will be a computer or filing system that you can use to pull the most current recordings of default.
Purchasing NOD Lists: There are a lot of companies out there that can help you pull the list for you every day. These companies are great and they make your job a lot easier by pulling all the NODs for you as well as doing a reverse look up to find their numbers as well. Depending on the city of your choice you can find prices anywhere from $20-$140 per month.
If you decide to purchase these NOD lists it is important that they are selling you CURRENT filings. You do not want to be calling on NODs that are a month old. You also want to make sure that they include the Homeowner’s phone number. Some companies will sell you these lists without phone numbers. This is a big waste of time. Also, make sure they will send out new lists daily. You want to do your best to be the very first person to call the Homeowner. The early bird gets the worm. You will want this information as fast as possible every day.
For optimum results, combine your phone prospecting efforts with your mailing campaigns. Think about it... how powerful would it be to call or door knock a prospect AFTER they have already received a few of your marketing pieces. It will get you the deal every time and chances are no one else is doing it!
Make sure you track your NOD lists by date so that when you follow up on your mailings with a phone call or a door knock it is all organized in a manner to make your follow up easier. Write out your marketing plan for you list in advance and then follow it.
Remember...it can take up to 7 touches before you get the deal. Don’t stop short, keep calling, mailing and knocking your list.... The fortune is in the follow up!
Good luck, now go out there and get more deals.
To your success,
Oliver Graf
Real Estate Expert
You can start to look for legal notices in small papers usually on weekdays. There are also legal newspapers in many communities that most of the general public is unaware of. Do a little research in your local community to find where you can find these free postings to prospect.
The County Records/Courthouse is another place to find these lists for free. Sometimes they can be a bit tricky to find so I'd recommend asking for help as soon as you get there.
The best place to go for the lists is the County Recorder’s Office or the County Clerk. Usually, there will be a computer or filing system that you can use to pull the most current recordings of default.
Purchasing NOD Lists: There are a lot of companies out there that can help you pull the list for you every day. These companies are great and they make your job a lot easier by pulling all the NODs for you as well as doing a reverse look up to find their numbers as well. Depending on the city of your choice you can find prices anywhere from $20-$140 per month.
If you decide to purchase these NOD lists it is important that they are selling you CURRENT filings. You do not want to be calling on NODs that are a month old. You also want to make sure that they include the Homeowner’s phone number. Some companies will sell you these lists without phone numbers. This is a big waste of time. Also, make sure they will send out new lists daily. You want to do your best to be the very first person to call the Homeowner. The early bird gets the worm. You will want this information as fast as possible every day.
For optimum results, combine your phone prospecting efforts with your mailing campaigns. Think about it... how powerful would it be to call or door knock a prospect AFTER they have already received a few of your marketing pieces. It will get you the deal every time and chances are no one else is doing it!
Make sure you track your NOD lists by date so that when you follow up on your mailings with a phone call or a door knock it is all organized in a manner to make your follow up easier. Write out your marketing plan for you list in advance and then follow it.
Remember...it can take up to 7 touches before you get the deal. Don’t stop short, keep calling, mailing and knocking your list.... The fortune is in the follow up!
Good luck, now go out there and get more deals.
To your success,
Oliver Graf
Real Estate Expert
Tuesday
Understanding the Real Estate Foreclosure Process (3 Steps)
In this market, housing values are declining as unemployment is increasing. For a homeowner, that means that the value of the house will be “upside-down”, and the market value of the home is actually less than the loan amount. Due to high unemployment we have seen a rise of foreclosures, where the bank takes back the property.
Foreclosure is the proceeding in which a bank or other secured creditor sells or repossesses a real property after the Homeowner has failed to comply with an agreement between the lender and the borrower (a mortgage or a deed of trust).
This happens when a property owner stops making their mortgage payments. After consistently missing payments the lender will usually consider the loan in default and begin with the foreclosure proceedings. The Lender at this point has the right to sell the property or even call the loan due.
All short sale / foreclosures have 3 steps in the timeline towards the property being sold.
1. Notice of Default (NOD):
A Notice of Default is a public notice given to the homeowner. In some states the notice is posted on the window or door. When a borrower is in default, or behind in mortgage payments, the lender will seize the home. In California lenders usually do not file an NOD until the homeowner is at least 90 days behind in payments.
2. Notice of Trustee Sale (NOTS):
A Notice of Trustee Sale is a public notice, published in a newspaper communicating a date for auction. This is also generally posted on the door; it will be a minimum of 21 days before the sale takes place.
3. Auction:
An auction is a public place where properties are auctioned to the highest bidder.
To your success,
Oliver Graf
Real Estate Expert
Foreclosure is the proceeding in which a bank or other secured creditor sells or repossesses a real property after the Homeowner has failed to comply with an agreement between the lender and the borrower (a mortgage or a deed of trust).
This happens when a property owner stops making their mortgage payments. After consistently missing payments the lender will usually consider the loan in default and begin with the foreclosure proceedings. The Lender at this point has the right to sell the property or even call the loan due.
All short sale / foreclosures have 3 steps in the timeline towards the property being sold.
1. Notice of Default (NOD):
A Notice of Default is a public notice given to the homeowner. In some states the notice is posted on the window or door. When a borrower is in default, or behind in mortgage payments, the lender will seize the home. In California lenders usually do not file an NOD until the homeowner is at least 90 days behind in payments.
2. Notice of Trustee Sale (NOTS):
A Notice of Trustee Sale is a public notice, published in a newspaper communicating a date for auction. This is also generally posted on the door; it will be a minimum of 21 days before the sale takes place.
3. Auction:
An auction is a public place where properties are auctioned to the highest bidder.
To your success,
Oliver Graf
Real Estate Expert
Wednesday
How to work with Homeowners (for Agents Real Estate and Investors)
Currently over 25% of mortgages are over-leveraged,
meaning these properties are worth LESS than the amount
of the mortgage.
There is an estimated 7 MILLION foreclosures coming
down the pipe over the next few years, and right now
luxury homes are going into foreclosure twice as fast as
the medium-priced homes.
THIS IS A PERFECT STORM FOR YOUR
REAL ESTATE BUSINESS!!
Once you locate a potential short sale deal and you set
the appointment with the homeowner, there are three
major factors to understand...
1) Homeowners can be skeptical. Many of these homeowners
are in a short sale situation because of a loan officer that put
them into a bad loan, they were tricked into terms they did
not understand, or they got in over their heads.
2) They are most likely in some sort of hardship. It could be
anything from Job loss, to death of a spouse, medical issues.
3) They have a lot going on in their heads, particularly fear
of making a bad decision.
Learn to be there for them and come from a place of service.
Be real with them and educate them on what their options
are. When you put their interests first and show a strong
knowledge you will get the deal every time!
To your success,
Oliver Graf
Real Estate Expert
meaning these properties are worth LESS than the amount
of the mortgage.
There is an estimated 7 MILLION foreclosures coming
down the pipe over the next few years, and right now
luxury homes are going into foreclosure twice as fast as
the medium-priced homes.
THIS IS A PERFECT STORM FOR YOUR
REAL ESTATE BUSINESS!!
Once you locate a potential short sale deal and you set
the appointment with the homeowner, there are three
major factors to understand...
1) Homeowners can be skeptical. Many of these homeowners
are in a short sale situation because of a loan officer that put
them into a bad loan, they were tricked into terms they did
not understand, or they got in over their heads.
2) They are most likely in some sort of hardship. It could be
anything from Job loss, to death of a spouse, medical issues.
3) They have a lot going on in their heads, particularly fear
of making a bad decision.
Learn to be there for them and come from a place of service.
Be real with them and educate them on what their options
are. When you put their interests first and show a strong
knowledge you will get the deal every time!
To your success,
Oliver Graf
Real Estate Expert
Monday
Why Invest in Real Estate Now?
Now more than ever Residential real estate ownership is gaining ever-increasing interest from retail investors for many of the following reasons:
--The current market can provide incredible deals and even in a "bad market" Real estate provides more predictable returns than stocks and bonds.
--Real estate provides an inflation hedge because rental rates and investment cash flows usually rise by at least as much as the inflation rate.
--Real estate provides an excellent place for capital in times when investors are unsure of prospects in the stock and bond markets or when investors expect long-term returns in stocks and bonds to be inadequate.
-- Cash Flow, Cash Flow, Cash Flow
--The equity created in a real estate investment provides an excellent base for financing other investment opportunities. Instead of borrowing from a 401(k) or family member to get the capital, investors can borrow against their equity to finance other projects. The relative ease in borrowing against a real estate investment combined with the deductibility of the mortgage interest makes this option a less-expensive method for financing other opportunities for investors who are comfortable taking on the additional financial risk.
Feel free to contact me if you have any questions.
To your success,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
--The current market can provide incredible deals and even in a "bad market" Real estate provides more predictable returns than stocks and bonds.
--Real estate provides an inflation hedge because rental rates and investment cash flows usually rise by at least as much as the inflation rate.
--Real estate provides an excellent place for capital in times when investors are unsure of prospects in the stock and bond markets or when investors expect long-term returns in stocks and bonds to be inadequate.
-- Cash Flow, Cash Flow, Cash Flow
--The equity created in a real estate investment provides an excellent base for financing other investment opportunities. Instead of borrowing from a 401(k) or family member to get the capital, investors can borrow against their equity to finance other projects. The relative ease in borrowing against a real estate investment combined with the deductibility of the mortgage interest makes this option a less-expensive method for financing other opportunities for investors who are comfortable taking on the additional financial risk.
Feel free to contact me if you have any questions.
To your success,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
Tuesday
Options for Property Owners struggling with their mortgage
Owners of distressed or “up-side-down” properties are face with many choices on both a financial and emotional level. For the struggling homeowner it is important to understand that when they are in a “distressed” position any of the following could have negative credit / tax consequences.
1) Loan Modification: This is where the homeowner and the lender come to an agreement. A modification can involve reducing the interest rate, deferring payments on the loan, an extension of time to pay back the mortgage, reduction in balance, or a combination of all of these possibilities.
Note: According to the Treasury Department, only 9% of home owners eligible for mortgage modifications have actually had their payments reduced, Only 1 in 50 have had any debt reduced, 78% see their debt increase as a result of late charges / attorney fees / missed payments, 63% of modified loans end up back in default within 1year. So while this option can sound really great, most banks and lenders are not actually helping the majority of people who apply for a loan modification.
2) Foreclosure: Foreclosure is a legal process through which the mortgage holder gains title to the property form a homeowner show has stopped paying their mortgage. After certain time periods, the lenders can foreclosure with or without the consent of the property owner.
3) A deed in lieu: Also known as cash for keys. A deed in lieu can happen when the homeowner offers to “give back” the property to the lender before the foreclosure date. The lender gets the property back without having to go through the entire foreclosure process and agrees to accept title to the property from the homeowner. In exchange they forgive the loan, and can give the homeowner a small amount of money to walk away. The deed in lieu must be agreed to by the lender and the homeowner.
4) Bankruptcy: A legal action generally filed by a homeowner to have debt (s) discharged. An “automatic stay” happens once someone files bankruptcy, “staying” all actions against the person. While petitioning for bankruptcy can cause delays in the foreclosure process. It does not necessarily prevent a foreclosure from eventually occurring.
5) Short Sale: Many people consider this the best option because the lender agrees to let a homeowner sell the property at today’s market values as opposed to what is owed on the mortgage.
What options have you tried / seen work best?
To your success,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
1) Loan Modification: This is where the homeowner and the lender come to an agreement. A modification can involve reducing the interest rate, deferring payments on the loan, an extension of time to pay back the mortgage, reduction in balance, or a combination of all of these possibilities.
Note: According to the Treasury Department, only 9% of home owners eligible for mortgage modifications have actually had their payments reduced, Only 1 in 50 have had any debt reduced, 78% see their debt increase as a result of late charges / attorney fees / missed payments, 63% of modified loans end up back in default within 1year. So while this option can sound really great, most banks and lenders are not actually helping the majority of people who apply for a loan modification.
2) Foreclosure: Foreclosure is a legal process through which the mortgage holder gains title to the property form a homeowner show has stopped paying their mortgage. After certain time periods, the lenders can foreclosure with or without the consent of the property owner.
3) A deed in lieu: Also known as cash for keys. A deed in lieu can happen when the homeowner offers to “give back” the property to the lender before the foreclosure date. The lender gets the property back without having to go through the entire foreclosure process and agrees to accept title to the property from the homeowner. In exchange they forgive the loan, and can give the homeowner a small amount of money to walk away. The deed in lieu must be agreed to by the lender and the homeowner.
4) Bankruptcy: A legal action generally filed by a homeowner to have debt (s) discharged. An “automatic stay” happens once someone files bankruptcy, “staying” all actions against the person. While petitioning for bankruptcy can cause delays in the foreclosure process. It does not necessarily prevent a foreclosure from eventually occurring.
5) Short Sale: Many people consider this the best option because the lender agrees to let a homeowner sell the property at today’s market values as opposed to what is owed on the mortgage.
What options have you tried / seen work best?
To your success,
Oliver Graf
Real Estate Expert
Follow me on Twitter: Twitter.com/OliverGraf360
Subscribe to:
Posts (Atom)
Posts
