The HARP 2.0 refinance program is available starting today, Monday March 19, 2012…
The HARP 2.0 refinance program is available starting today, Monday March 19, 2012 and is expected to bring mortgage relief to homeowners who are current on their home mortgage, but have been unable to refinance because of their negative equity status.
The full implementation of the revamped HARP 2.0 program, which was announced by President Obama in October 2011, has taken five months to come into play. The HARP 2.0 refinance program was available on a manual basis for a homeowner’s current servicer, the series of changes that the computerized version of the program is undergoing will increase the volume and speed of applications processed.
To be eligible for a HARP 2.0 refinance program, you can either use this HARP eligibility calculator with detailed eligibility explanations or follow the general guidelines below:
1. Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. If you are unsure if you have a Fannie or Freddie loan, you can check both Fannie Mae and Freddie Mac’s websites or you can call their toll-free number for confirmation.
• Fannie Mae: http://www.fanniemae.com/loanlookup/ 1-800-7FANNIE (8 am to 8 pm ET)
• Freddie Mac: https://ww3.freddiemac.com/corporate/ 1-800-FREDDIE (8 am to 8 pm ET)
2. You must have closed your current loan on or before May 31, 2009.
3. You must not have made a late payment within the past six months and have had no more than one late payment within the past 12 months.
4. Your loan must fall under the current conforming loan limits. If you are unsure, you can find out here: http://themortgagereports.com/loan-limits/
If you mete the general guidelines, what’s next?
Contact your current loan servicer to see if you are eligible to see if your loan qualifies for the HARP 2.0 refinance program. Then ask them if they can assist you in applying for the program.
*Caveat: just like traditional refinancing…shop around and compare, fees, rates and lender service levels.
HARP Program specific contact information for major mortgage servicers with whom you already have a mortgage through (not for new loans or shopping for a new servicer):
Bank of America: 1-800-846-2222
Wells Fargo: 1-877-937-9357
Chase: 1-800-848-9136
Citi: 1-800-283-7918
US Bank: 1-866-932-0462
Foreclosures fall, but there’s a ‘rising tide’ ahead…
The number of homes entering foreclosure dropped in February, but a new up-turn may soon be on its way.
The reason? The $26 billion settlement between 5 major banks and state attorneys general over past foreclosure practices.
(Source: CNN Money)
After More Than a Month, $25B Settlement Filed in Court
State and federal officials and five of the largest servicers –Bank of America, J.P. Morgan Chase, Wells Fargo, Citigroup, and Ally Financial – settled on February 9, outlining an agreement to address faulty practices in the mortgage industry and to deal with issues regarding wrongful foreclosures.
$20 billion in relief will help homeowners through principal reduction and refinancing for underwater homes, principal forbearance for unemployed borrowers, short sales assistance, and additional benefits for service members.
(Source: DSNews)
Bank of America offers principal reductions in amounts exceeding $100,000
Some Bank of America borrowers may be in for principal reductions in amounts exceeding $100,000, according to the latest developments in the settlement the bank and four other large servicers made with state and federal regulators. While the other four servicers in the national settlement are being required to diminish principal so underwater borrowers have loan-to-value ratios of 120 percent or less, BofA will be reducing principal for about 200,000 homeowners to fall in line with current market values.
(Source: DSNews)
Top 10 Short Sale Myths Debunked!
Myth #1: The homeowner must fall behind on mortgage payments in order to qualify for a short sale.
Debunked: Years ago this may have been true, but not in 2012.
• A financial hardship must exist, such as the ARM (Adjustable Rate Mortgage) increasing in monthly payments.
• Loss of job or income.
• Health or medical issues.
• Extraordinary loss in home value (which may be considered a hardship).
Note: Agents should not advise a homeowner to miss a mortgage payment.
Myth #2: Banks would rather foreclose on a property than approve a short sale.
Debunked: Many still believe this myth to be true, but more accurately, banks would prefer not to foreclose on a property due to the $50-70k it may cost the bank per transaction. Banks lose less money on a short sale than on a foreclosure.
Overdue Mortgages Number 6,082,000
New data from Lender Processing Services (LPS) shows that as of the end of January, there were 6,082,000 mortgages in the U.S. going unpaid. That tally includes loans that are 30 or more days delinquent and loans in foreclosure.
For more information click here.
Resolve to Face the Facts!
Resolve to Face the Facts!
Since 2007, 8.9 million homes have been lost to foreclosure and millions more are headed in that direction.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to ensure that you or anyone you care about does not add to that statistic.
The unfortunate fact is that so many homeowners who have played by the rules and never imagined that they could be facing foreclosure are now in a very tough situation.
More than one in four homeowners owes more on their mortgage than their home is worth. On top of that staggering statistic is the fact that millions of homeowners are unemployed, or underemployed and falling further behind every month.
Sound familiar? Rest assured you are not alone.
If you feel that you are headed toward foreclosure, or if you are avoiding facing that fact, the sooner you reach out for help, the better your options.
As a CDPE agent, I help distressed homeowners to work through every aspect of the denial and discouragement that accompanies a mortgage which is no longer manageable, and in the process, to move toward financial solvency.
If you or someone you care about is ready to tip the scales back toward financial solvency, contact me today and let’s get started.
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Lydia Puller is a Luxury Short Sale Specialist. She is CDPE and CIAS certified Realtor and author who specializes in “strategic” and “hardship” short sales in the San Francisco Bay Area. Lydia’s short sale team covers Marin County, Sonoma County, San Francisco County, Alameda County and Contra Costa County.
To learn more about short sales, go to http://www.LuxuryShortSale.com or http://www.ShortSalesMarinCounty.com. To search all short sale and pre-foreclosure listings visit www.LydiaPuller.com
Can You do a Short Sale with Federal AND State Tax Liens?
Yes! You can absolutely short sale your home if you have Federal and State tax liens. Although the process can be a bit more challenging it’s done successfully every day!
Short sales as you know take quite a bit of time to close because you need to get lender approval before you can close escrow. Whereas the traditional or “organic” real estate transaction can take 30-45 days to close, a short sale with one or two liens can take up to 2-3 months to get short sale approval. Throw in a federal and/or state tax lien and it can take an additional 30-45 days before you can close the sale.
Getting the lender to approve your short sale is the first step in the process, getting the state and feds to remove the tax liens from the property is the next step. You can work on removing the federal tax liens in conjunction with the lender short sale approval process, however if you are in California, you must wait until you have written lender approval and an appraisal before you can get the state tax liens removed.
Because of the varying time constraints between federal and state tax lien release make sure to set expectations with all parties involved. If you are using a short sale addendum, as is required in California, make sure that you have a long expiration date (boilerplate is 45 days) but when a tax lien is involved make sure you have at least 90-120 days for the short sale addendum expiration date.
Working with short sales and tax liens can seem daunting to many agents but once you’ve been through the process you will know what is required of you…look at it as just one more hurdle you have to jump through in the short sale process.
Your mission when working with a short sale that has a federal or state tax lien is to release the lien(s) from the property so you can close the sale. This means that you need to compile information, submit forms to the appropriate departments, and get the lien released from the property. Although it seems daunting in reality, with a little patience, perseverance and know how it can be done.
Federal Tax Liens
The first step is to find out what is expected of you and what the time frames are for releasing the federal tax lien. First read IRS publication 783 entitled “How to Apply for a Certificate of Discharge of Property from the Federal Tax Lien”. Then download IRS form 14135, http://www.irs.gov/pub/irs-pdf/p783.pdf. Both are easy to read and easy to follow with complete instructions.
Not clear enough and need more assistance? Then take a look at the videos that the IRS released to help you through the process. http://www.irsvideos.gov/Individual/IRSLiens/
Other publications that will be useful to you are: “Guidelines for Notices of Federal Tax Liens”, http://www.irs.gov/pub/irs-pdf/p1468.pdf and Power of Attorney and Declaration of Representative”, http://www.irs.gov/pub/irs-pdf/f2848.pdf
State Tax Liens (California)
With a federal tax lien you can submit the paperwork for release of liens prior to getting the short sale approval from the lender(s). However, if you are in California and you have state tax liens you must have written short sale approval letters prior to submitting your application for the release of the state tax lien. You also need to submit an appraisal report with your application whether it’s the appraisal from the short sale lender(s) or from the buyer’s lender.
If you don’t have the appraisal you can write a letter indicating that the appraisal report is forthcoming but please note that if you do not submit the appraisal with your application your release of the lien will be contingent upon the State receiving the appraisal. (Caveat: in lieu of the appraisal report you can submit a thorough CMA. Although the guidelines state that an independent appraisal is needed from licensed appraiser there have been instances where the CMA provided is sufficient to garner lien release).
The instructions for “Partial Release of Lien and Subordination of Lien” can be found at the following link, https://www.ftb.ca.gov/individuals/liens/rlslien.shtml
While the Feds have a form for third party authorization (form 2838) the State of California does not give agents authorization to speak on behalf of their clients. A real estate agent can gather all of the supporting documents and submit the application but it is your title officer who will have access to the seller’s file. You will only be able to track the file/package through your escrow officer.
The link for title and escrow instructions is, https://www.ftb.ca.gov/individuals/liens/title_escrow_companies.shtml
The entire package needs to be sent either via FedEx or UPS (overnight) and once it is received the file will be assigned to a representative who will review the package. Thereafter it will take approximately 21 days to get the release so if your approval letter has a close of escrow date make sure to ask for an extension to allow time for the release of liens.
As I mentioned in the beginning of this article, make sure to set expectations with the Buyer’s Agent, the Buyer’s and your Seller. Remind them that while you have a few more steps in the process of getting the short sale approved because of the tax liens, it can be done!
Lastly, make sure that you let the Seller know that just because you have removed the tax liens from the property in order to complete the sale their debt to the Stated and Feds is not forgiven. The outstanding federal and state debt still needs to be repaid. For more information about that its best that the Seller contact their CPA and/or start their search with the IRS or Franchise Tax Board.
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Lydia Puller is a Luxury Short Sale Specialist. She is CDPE and CIAS certified Realtor and author who specializes in “strategic” and “hardship” short sales in the San Francisco Bay Area. Lydia’s short sale team covers Marin County, Sonoma County, San Francisco County, Alameda County and Contra Costa County.
To learn more about short sales, go to http://www.LuxuryShortSale.com or http://www.ShortSalesMarinCounty.com. To search all short sale and pre-foreclosure listings visit www.LydiaPuller.com
Fannie Mae says Consumers are Optimistic About Home Prices
“Due to an improved economy consumers remain optimistic that home prices will increase”, says Fannie Mae in their latest National Housing Survey (Federal National Mortgage Association).
Fannie Mae also indicated that a large number of consumers believe that home prices will improve within the next year. However, many of those surveyed continue to adopt a “wait and see” attitude, while others continue to believe that home prices will continue to drop.
To be more specific, out of the consumers Fannie Mae surveyed, 22% believe home prices will improve in the next year home prices to stay the same, and 22% expect it home prices to continue to decline.
Although the survey focused on an improvement in consumer expectations many are still very concerned about the country’s overall economy and the trajectory of housing prices.
Fannie Mae also said that the market will continue to adjust within the next five years, due largely to changes in housing policy. Fannie Mae anticipates major improvements in the real estate market as most policies changes will be implemented within a 5 years
In related news, a new bill called The Fairness in Foreclosure Act (H.R. 3566) has been introduced that aims to limit the time in which a bank can bring deficiency judgments against foreclosed properties. At present, the time frame where a bank can bring a deficiency judgment varies from six months to six years.
If enacted, The Fairness in Foreclosure Act would prohibit banks from pursuing deficiency judgments more than 12 months after foreclosure and restrict deficiency judgments against all low-income families. Hopefully, this bill will help give consumers greater optimism over real estate and home prices.
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Lydia Puller is a Luxury Short Sale Specialist, a Certified Distressed Property Expert (CDPE), CIAS certified Realtor and author who specializes in “strategic” and “hardship” short sales in the San Francisco Bay Area. Lydia’s short sale team helps homeowners in Marin County, Sonoma County, San Francisco County, Alameda County and Contra Costa County.
To learn more about short sales, go to http://www.LuxuryShortSale.com or http://www.ShortSalesMarinCounty.com. To search all short sale and pre-foreclosure listings visit www.LydiaPuller.com
Short sale tools and tips…
C.A.R. offers you access to the largest collection of short sale and distressed property tools and tips. With 48% of California home sales as distressed sales in April 2011, the California Association of Realtors has specifically created a number of resources to help navigate short sales and REO (bank owned) transactions, including the 6 below:
1. Short Sales Website: Short sales articles, tips, news items, and more for members and consumers at www.shortsalescalifornia.org.
2. Legal Q&As: Access C.A.R.’s library of more than 200 legal articles, charts, and timelines, including many that pertain to short sales and foreclosures.
3. Short Sales Overview: Created by the C.A.R. Member Legal Services department, this five-part article provides Q&A information on topics like Effects on Borrowers of Short Sales, Licensing Requirements, and Disclosure Requirements, available at http://www.car.org/legal/foreclosure-short-sale-folder/short-sales/.
4. REO Disclosure Chart: This chart lists the disclosures required for the sale of a property that has been acquired by a lender through foreclosure and can be used as a check list for an REO transaction.
5. Red Flags for Foreclosure Scams: this one-page PDF document for distressed homeowners to help protect them against foreclosure-related scams at http://www.car.org/tools/smart/clients/foreclosurescams/. Also available in Spanish.
6. Scam Watch: This special online feature rounds up the recent short sale and foreclosure scams from news sources in California and across the country.
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