Short sales san diego - the real story behind short sales

Here is a link to an article which may explain why some of these large banks can't seem to review a short sale offer in timely manner. (without threats from an attorney).



Bloomberg.com: News: "itigroup, Wells Fargo May Loan Less After Downgrades (Update3)

By Mark Pittman, Alan Katz and David Mildenberg"

I have suspected all along Wells and BofA are pains in the ass because they do not want to have to acknowlege how truly screw up their books are.

In my opinion the short sale process seems to be designed to let the air out of the market as slowly as possible. It is quite possible if short sales were easier, prices would be lower and the banks would all be upside down.

Mortgage ads may still be deceiving consumers, FTC says - MarketWatch

Before negotiating with a bank - you may wish to inquiry into this are of the law. It may give you a great deal leverage when negotiating a short sale


Mortgage ads may still be deceiving consumers, FTC says - MarketWatch: "CHICAGO (MarketWatch) -- Some of the mortgage advertisements currently appearing in Web sites, newspapers, magazines, direct mail and unsolicited email and faxes may be violating federal law, and on Tuesday the Federal Trade Commission said it was sending warning letters to more than 200 advertisers and media outlets informing them of the possible violations. Some of the claims made in the ads are 'potentially deceptive,' or violating the Truth in Lending Act, according to a FTC news release. The advertisements were identified in June during a review of claims that touted very low monthly payments or interest rates without fully disclosing other important loan terms."

Short sale - will you still be on the hook?

Short sales are very common in San Diego California and becoming increasingly common in Sarasota and Bradenton Florida. However, I have been contacted by multiple homeower's concerned that the bank is going to seek a deficiency against them (after a short sale). How can that be when so many real estate professionals have been trained to believe the short sale means settlement in full. Many people homeowners are under the same impression that that a short sale will automatically release them from deficiency liability so they just go ahead with the process.

I can understand the confusion. Lots of short sale advisors on the internet say the owner sells the property in exchange for a settlement in full. What these advisor can not say is that they must negotiate the deals and review the legal documents. Why don't they say it? If you have been reading my blog, you know.

Some banks state expressly in in their documents that the short sale is a release of deedonly and then state in the instructions to the closing agent that the homeowner is responsible for note. It is my understanding they make the borrower sign this document at the closing table.

At least in some instances Countrywide tells the closing agent it will not seek a deficiency under certain circumstances. However, if Countrywide were to go into a reorganization is that document binding as to the borrower.

My advice to homeowners: do not agree to a short sale unless your are satisfied that you will not be responsible for a deficiency and/or tax liability.

My other advice to homeowners - do not go to the short sale closing table unless you are with an attorney licensed in your state.

san diego refinance foreclosure info

Should a San Diego or California homeowner refinance their loan in this market.

Questions

Is the loan you will retire a purchase money loan?
Is there a risk your property is upside down or will go upside down
Is there chance you will not be able to make payments
Do you have other assets to protect
Would you worry about a the potential for tax liability for loan forgiveness
Do you have second loan or a heloc as well?

These a just a few of the questions that need to be considered.

Why?

If you have a non recourse loan in California you would be giving up some of your protections against deficiency judgments and protection from tax liability for loan forgiveness. Therefore, you have to do a cost benefit analysis.

I remember a time when my old lender countrywide would call my house and ask us if we wanted to refinance our mortgage. I never remember them advising me I might be losing very vital protections.

If you have refinanced out of a purchase money loan and now you are upside down you might want to speak with an foreclosure attorney before you take any further action.

The more I work with upside down homeowners the more I realize that the predatory lending and the related disputed debt argument must be considered as part of your deed in lieu or short sale negotiations with the lender.

Loss Mitigator: The Ins and Outs of Short Sales & Understanding Credit Reports/ Q&A

Real Estate Blog - Loss Mitigator: The Ins and Outs of Short Sales & Understanding Credit Reports/ Q&A

The author of the article gives us his notes after going to a lecture from a "Loss Mitigator".

Please be aware the information regarding deficiency and tax liability does not apply to many California real estate owners. California has a complex web of consumer protection statutes which protect many California homeowners from deficiency judgments. (Tax liability is another complex area of law. It should only be tackled by a lawyer with the tax regulations in front of him (or her), and understanding of the anti-deficiency statutes and case law.) Finally, it is my opinion a short sale is rarely the best option for a California homeowner. In fact from my perspective the Lender is the party who should be suggesting the short sale and making the concessions if the homeowner negotiates properly.

Here is my condensed version of the "notes" for the lecture.

Credit Reports

A credit history which shows a history of making mortgage payments is important. Lenders may forgive missed payments if the applicant had a very good reason for the missed payments.

The above information about credit may not apply during our current credit squeeze. (I think there is a strong chance this will hold true in the future.)

Short Sale Negotiation

The negotiator should convey the following:

- We want to work with with you (the lender) to minimize your loss.
- We have determined reason for delinquency. (What factor did the lenders miss during underwriting which should have tipped the bank off to the increased risk.

- Ask the bank if it is willing to give up some of the fees and penalties to get a sale done.
- Also ask the bank if they are willing to reduce the principle.

- At the time of the lecture the loss mitigator stated the banks did not want to believe their appraiser would have let the borrower pay too much for the real estate. (Banks no longer suffer from this illusion.)

- It is helpful to have the listing aged and to show the property has zero interest at a higher price.

- The loss mitigator does not make the decision, he packages it up for a supervisor or officer at the bank.

- And now perhaps for my favorite piece of advice which I have suggested before. Attorneys have options which bring the loss mitigators or the foreclosure departments to the negotiating table. If your home is in danger of becoming upside down, you should work with a San Diego attorney who understand this area of the law. Your short sale team should have a licensed California attorney and a licensed California real estate agent.

"Again, banks do not want to believe they made a mistake by approving your homeowner. However, they want to minimize losses. They also want to avoid a bankruptcy filed by the homeowner at the very last minute right before the forced sale. If you can document your homeowners desire to file bankruptcy (via attorney letterhead) then you may have a better chance at getting the short sale done according to your terms."