The buyer is prohibited from selling the property for any sales price for a period of 30 days from the date of the deed.

After the 30 day holding period has elapsed, the buyer is further prohibited from selling the property for an additional 90 days from the date of the deed for a sales price which would be greater than 120% of the short sale price.

So if the purchase price is $100,000. 120% would be $120,000

These restrictions are on all GSE loans, which means all Fannie Mae and Freddie Mac loans.

You can look them up here so you know for sure.

Fannie Mae: https://www.knowyouroptions.com/loanlookup
Freddie Mac: https://ww3.freddiemac.com/corporate/?intcmp=LLT-HPimage

The limited time offer has received little promotion from the Charlotte, N.C.-based bank, which sent emails to select Florida Realtors earlier this week outlining basic details of the plan.

Only homeowners whose short sales are submitted for approval to Bank of America before Nov. 30 will qualify. The homes must have no offers on them already and the closing must occur before Aug. 31, 2012.

This signals, in our opinion, the pressure they are feeling in Florida as the housing market continues to languish and the continued pressure to clear up these loans that are facing imminent foreclosure. Other interesting facts in the article include the fact that the current foreclosure timeline is almost 676 days – almost two years!

“I think this is a positive sign that the bank is being creative to try and help homeowners and get things moving,” said Paul Baltrun, who works with real estate and mortgages at the Law Office of Paul A. Krasker in West Palm Beach. “With real estate attorneys handling these cases, you’re talking two, three, four years before there’s going to be a resolution in a foreclosure.”

Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, called the short sale payout a “bribe.”

“You can call it a relocation fee, but it’s basically a bribe to make sure the borrower leaves the house in good condition and in an orderly fashion,” Cecala said. “It makes good business sense considering you may have to put $20,000 into a foreclosed home to fix it up.”

Bank of America says that if the program shows promise in Florida, it could be expanded to other states. Other companies, including Wells Fargo and J.P. Morgan Chase also have similar programs.

More details:

Bank of America’s plan excludes Ginnie Mae, Federal Housing Administration and VA loans.

Similar to the federal Home Affordable Foreclosure Alternatives program, or HAFA, which offers $3,000 in relocation assistance, the Bank of America program may also waive a homeowner’s deficiency judgment at closing.

A deficiency judgment in a short sale is basically the difference between what the house sells for and what is still owed on the loan.

HAFA, which began in April 2010, has seen limited success with just 15,531 short sales completed nationwide through August.

In our opinion, this is just again a math decision a bank makes that falls in line with the bank’s decision. How does the bank minimize their lost? Short sale with a $20k kicker; or something else?

Post your thoughts in the comments!

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How do you get all these packages? Sign up for Short Sale Artisan (with a free 7-day trial!) and visit our document repository!

Anyone who’s followed the Art of Short Sales for any period of time knows that we have not been a huge fan of the HAFA, HAMP, and other government programs designed to ease the short sale process.

This week’s CNN article by Diana Olick continues to prove that over a year after its inception, the program continues to draw poor numbers.

HAFA provides financial incentives for servicers and borrowers to do short sales (selling the property for less than the value of the mortgage) and deeds in lieu of foreclosure (basically just giving the property back to the bank). The program launched in April of 2010 and was later streamlined in December, 2010, based on feedback from mortgage servicers, real estate agents and homeowners.

So far, HAFA has completed 7,113 short sales or DIL’s. In April, however, HAFA saw 1,666 completed, up 74 percent from the 959 done in March.

The government is touting this is a huge success – “a 74% growth!” – but as Diana points out, a 74% growth of nothing is still pretty close to nothing.

According to the article, JP Morgan Chase alone does close to 5,000 short sales a month -and that’s just one bank. The expectation is that the top few banks are likely doing in excess of over 20,000 short sales a month – in that light, HAFA is still producing inconsequential results.

Similarily to what we’ve said here, HAFA’s targeted audience limits the exposure it could potentially have.

“HAFA is a taxpayer funded program, so it has eligibility requirements targeted at a certain segment of the population,” says Risotto, noting that the program is for owner occupants who can demonstrate financial hardship and whose first mortgage is less than $729,750. “HAFA is not meant to be for every person looking to do a short sale,” she adds.

That knocks out investors, jumbo loans and borrowers who don’t meet the “hardship” requirements of the Treasury. The big banks are likely more lenient on that last one, again knowing that a short sales will be cheaper in the end than a foreclosure.

What are your thoughts? Had any success with HAFA? Post in the comments and let us know about it!

The treasure department says the following

“While HAFA has been widely credited with streamlining the short sale process by setting clear timelines, documentation requirements and procedures, feedback from various stakeholders including servicers, housing counselors, realtors and others supported that additional enhancements could be made to further streamline short sale transactions, to the benefit of homeowners.”

As a result, HAFA rule changes include the following:

A recent report from the folks who oversee the TARP (the Congressional Oversight Panel) said that the Treasury has spent just $4.3 million on HAFA for 661 short sales. So Treasury, last week, decided to change the rules a bit:

• HAFA no longer requires that servicers verify the borrowers finances
• HAFA no longer requires servicers to determine if the borrowers monthly payment is higher than a 31 percent debt-to-income ratio.
• HAFA no longer requires second-lien holders to agree to accept 6 percent of the unpaid principal balance owed them, up to $6,000. Servicers now decide who gets paid how much, with a cap still at $6000.
• HAFA now requires borrowers seeking a short sale get an answer/agreement within 30 days.

We have criticized HAFA since its inception and are not surprised at all to see it faltering. That said, the guidelines mentioned above look like they provide marginal improvements, but not enough to drastically change anything. In particular, one we wrote about in an earlier blog post:

Removing the case-by-case analysis that short sales need: Every short sale transaction is different, and lender should approach them as such. HAFA requires lenders to identify their minimum net proceeds ahead of time, and the guideline requires 120 day period to change that value. This means that if a property falls outside of the minimum net proceeds, it isn’t eligible under HAFA. That’s a shame; because the house is worth what the house is worth, and even in the span of 120 days the criteria used can change. It removes flexibility from the process, which is critical when handling these transactions.

This was not adjusted and really makes it difficult for lenders to truly handle transactions on a case by case basis.

What are your thoughts on the market forecast and the HAFA program?

Well, 2011 sure is off to a heck of a start, isn’t it? As we predicted here over and over again, the short sale marketplace is going to continue to be an important part of the still-stagnant housing recovery for the foreseeable future. So if you aren’t up to par on what you are doing, it’s time to get on board!

This recent article from Inman expands on what we have been saying, and predicts 5- 8 years of high short sale volume. What does this mean to you? You need to be competent in managing your short sales, and Short Sale Artisan helps you do exactly that! Even to 2020 and beyond!

The short-sale marketplace is not failing down anytime soon, and if genuine estate professionals wish to excavate into that niche, they should teach themselves thoroughly. That was a summary from dual short-sale specialists who spoke during Real Estate Connect Thursday.

“We’re looking during 5 to 8 years conservatively (of high short-sale volume),” pronounced Holly Maloney, a authorized short-sale dilettante and a Realtor during Huff Realty in Cincinnati, Ohio. “It’s a marketplace that’s going to be there. You possibly learn how to do it, teach yourself or work with someone who knows how to do it, differently you’re going to be giving business away.”

5 – 8 years is their conservative estimate!

Travis Waller, a authorized residential dilettante during RE/MAX Advantage Plus in Teaneck, N.J., expects disastrous equity to trigger a second call of foreclosures “that no one is even vocalization about.”

More than one in 5 homeowners with mortgages — scarcely 11 million borrowers — due some-more than their homes were value during a third quarter, according to a latest numbers from debt information aggregator CoreLogic.

“Until stagnation gets better, a market’s not going to get better,” Waller said.

Again making the case that volume and low home sales, and further depressing home values, as well as a jobless recovery, are contributing to home sales lagging some of the other gains that have been made throughout this economic “recovery”.

“It unequivocally comes down to display of your papers to a banks. The banks commend who has knowledge and who doesn’t,” he said. He generally represents sellers and carries between 15 and 25 listings in a month.

That is what we have been saying at Short Sale Artisan for well over a year. Formulating an ironclad short sale package is crucial to your package getting accepted. That isn’t going to change in the future, as you are always making the case to the bank that the short sale is the best way for the lender to mitigate their loss.

Both also offering agents this tip: Get a e-mail residence for a detriment slackening officer you’re traffic with. “It expedites a routine since during that indicate we can start e-mailing (him or her) PDFs,” instead of promulgation them faxes, Waller said.

This is a very key statement and underpins the importance of building relationships with loss mitigation representatives and banks you work with. If you are a high volume customer, they recognize you, and your offers are reasonable; you will dramatically improve the likelihood of speeding up your short sale offer and getting to approval.

Short sales will continue to play an important role for the foreseeable future – so you need to know them! What are you plans and predictions for the future of the short sale marketplace?

Google Maps keeps evolving, expanding the ability to drill down into granular detail. The latest updated trick? Mapping foreclosures for sale.

Our friends at Chart Porn — a blog that got its name from one of our posts (honest!) — remind us of this, with a step-by-step lesson of how to use Google maps:

Google Maps Foreclosure Listings

1. Punch in any US address into Google Maps.

2. Your options are Earth, Satellite, Map, Traffic and . . . More. (Select “More”)

3. The drop down menu gives you a check box option for “Real Estate.”

4. The left column will give you several options (You may have to select “Show Options”)

5. Check the box marked “Foreclosure.”

I wanted to demonstrate the full extent of Foreclosures in the US, so after setting GMaps on foreclosure listings, I slowly zoomed out of the map. Voila! Most foreclosures that are for sale in the USA are now showing on your screen.

Note: This map does not reveal any of the millions of REOs that have already been sold by the banks that hold them.

But the maps do reveal an entire nation littered with foreclosure sales. It is an ugly and graphic depiction of how much inventory is out there, and why housing is stillmany years away from being healthy.

Take a look at this example from Las Vegas:

Unfortunately, it can’t help you find underwater homeowners (you are better off reading our blog post on keeping your pipeline full of short sale leads for that) but it’s still quite an interesting look and when you view the map nationwide, you can see the trouble areas of the country pretty easily.

New home sales dropped to an annual pace of just 283,000, according to the Commerce Department. That was down 8.1% from a slow September and 28.5% from 12 months ago when the annualized sales rate was at 430,000.

Sales are off nearly 80% from the housing boom peak pace of 1.4 million, set in July 2005. Sales have remained near historic lows this year despite very attractive mortgage interest rates that slash the monthly costs of homeownership.

The Commerce Department also revised August sales figures downward to 275,000, which represents the record low point for new homes sales since it started tracking figures in 1963.

There’s a major factor depressing home sales of all kinds, according to David Crowe, chief economist for the National Association of Home Builders.

This likely has partially to do as well with the expiration of the homeowner tax credit. Many economists were predicting a rebound in the near future but this news puts the housing market in worse condition than anyone anticipate; which in turn means that loan modifications, short sales, and foreclosures will continue to play an enormous influence as people continue to remain underwater on their homes.

“So much bargain-priced, ‘used’ home inventory is available that the builders just can’t compete,” he said. “Over time, we’ll work through that mountain of existing home supply. But the key words are ‘over time.’ New home builders won’t have much to be thankful about any time soon.

The median price for existing homes sold in October was just $170,000, compared with $194,900 for new homes. That’s the lowest median price for new homes sold in seven years and down 13.9% from September.

The enormous inventory, coupled with continued downward price pressure (although we do believe the bottom is somewhere nearby!) means you need to make sure when making your short sale pitches to the banks you mention the status of the economy and the recovery that seems so distant in the future.

Crowe said that indicates many of the buyers were first timers. They’re less constrained than older potential buyers because they don’t have to worry about selling their existing homes in order to purchase new ones. One light at the tunnel, however, is a slightly shrinking inventory:

One encouraging aspect of the report for home builders is that inventory continued to wane. The number of new homes for sale at the end of October was about 202,000, less than nine months’ supply at the current rate of sales. The number of homes on the market has dropped about 20% since October 2009.

As we have been saying for some time, we think there is at least 3 – 4 more years of strong short sale potential in the marketplace. Conflicting information about economic recovery makes us believe that the optimism about rebounding home prices is, well, a little too optimistic.

What are your thoughts? Post ‘em in the comments!

Top mortgage servicers have completed 91,827 short sales or deeds-in-lieu of foreclosure on canceled trial or declined modifications through the Home Affordable Modification Program as of September, up 27% from the previous month, according to data from the Treasury Department.

This is pretty fascinating news. The HAMP program continues to fail such that there has been a 27% increase in the number of attempted modifications that proceed on to deed in lieu or short sale. Although, we have been saying for close to a year that HAMP and HAFA have been incredibly poorly executed.

The Treasury started HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. Through October, those servicers have started 1.4 million three-month trials and converted 519,648 of them into permanent status, though conversions have been going down in recent months.

The top eight servicers — have canceled 551,821 trials either due to a redefault, lack of documentation, or the borrower was deemed ineligible. Those same servicers have declined 842,436 homeowners from entering a trial, according to the latest Treasury data through September.

Of the canceled trials in that time, 47,001 have been liquidated through a short sale or the homeowner gave up the deed-in-lieu of foreclosure. Of the mortgages that were denied from a trial, 44,826 went into short sale or deed-in-lieu for a total of 91,827.

Most of the short sales, however, are reportedly not being done through the Home Affordable Foreclosure Alternatives program, which was launched by the Treasury in April to incentivize servicers to conduct short sales and DILs on loans that fell out of HAMP.

All that hullaballoo about HAFA saving the day and the majority of them aren’t even being processed through HAFA (which was intended to be a relief program for those who couldn’t maintain payments even on a modified loan).

Even though the Treasury pays the servicers for a transaction done through HAFA, the Special Inspector General for the Troubled Asset Relief Program reported 342 short sales and DILs completed through HAFA as of Sept. 30.

The Treasury has not released official numbers on HAFA, but has said it expects to before the end of the year.

We can hardly wait to see what those numbers look like! 342 short sales through HAFA as of Sept 30th!!

The Cook’s Source debacle, in a nutshell, involves an author, Monica Gaudio (who’s account of the entire debacle can be found here), who published a recipe with a corresponding article on her own website nearly five years ago. Cook’s Source magazine then blatantly copied it, verbatim, and used it in their advertiser-supported publication. Now, because they did use Monica’s name in the article; it certainly is not plagiarism. However, it IS very clearly a copyright violation, since Monica was never approached or asked for permission to use her article.

Monica was made aware of this and contacted the magazine’s editor, Judith Griggs. Ms. Grigg’s response needs to be quoted word for word, and I can’t do it justice by paraphrasing:

“Yes Monica, I have been doing this for 3 decades, having been an editor at The Voice, Housitonic Home and Connecticut Woman Magazine. I do know about copyright laws. It was “my bad” indeed, and, as the magazine is put together in long sessions, tired eyes and minds somethings forget to do these things.
But honestly Monica, the web is considered “public domain” and you should be happy we just didn’t “lift” your whole article and put someone else’s name on it! It happens a lot, clearly more than you are aware of, especially on college campuses, and the workplace. If you took offence and are unhappy, I am sorry, but you as a professional should know that the article we used written by you was in very bad need of editing, and is much better now than was originally. Now it will work well for your portfolio. For that reason, I have a bit of a difficult time with your requests for monetary gain, albeit for such a fine (and very wealthy!) institution. We put some time into rewrites, you should compensate me! I never charge young writers for advice or rewriting poorly written pieces, and have many who write for me… ALWAYS for free!”

What is very fascinating about this is that this editor of a regional magazine actually believes that the web is public domain. It’s an interesting story even beyond this from the social manifestations of this incident: the topic exploded on Twitter and Cook’s Source Facebook page was essentially over-run by Internet users who were furious at her blatant disregard of basic journalistic principles.

Again, the reason I bring this up is that the Internet makes it so easy to be taken advantage of. Many bloggers, including us at Short Sale Artisan, spend a significant amount of time writing custom content and trying to appeal to our readership. It’s great being linked and even re-use our articles where we can (we frequently syndicate our blog content on Articlesbase and E-Zine articles, for example). But then, there are always those who rip off content and re-use it on their site (or slightly tweak it) without providing the appropriate credit or asking for permission. I found at least three instance this week alone of our blog posts being used without permission. In each case, I notified the owner and of the blog and demanded at a minimum a backlink to the original source with a credit to the author.

A recent example; last week, Alexis McGee (UPDATE: The link was removed and the rip-off was fixed) blatantly ripped off my content on her own blog. Despite my repeated e-mails to her; she has still not removed the post. This type of behavior is not acceptable. It’s one thing to have someone contact us, provide a backlink, and mention Short Sale Artisan as the author; but Alexis used our article to advertise her own webinar and removed all links and references to Short Sale Artisan, without asking our permission. Alexis McGee is a thief, plain and simple, and her lack of response to our requests to appropriately credit or otherwise reference the author signifies a complete disregard for copyright and is clearly plagiarism.

Take a look at some of these excerpts:

Here is our post on Short Sale Artisan:

The question for short sale professionals is; does this adjust the bank’s motivations for a short sale? We think it does provide  abit more incentive to clear them up sooner – but on the flip side; also means there will be more attention paid to the value proposition a short sale offer presents. This means it is more critical than ever to provide an ironclad short sale package and bulletproof documentation – don’t give the bank any reason to dismiss your offer!

Here is Alexis McGee’s ripoff of our content:

Bottom Line – The Foreclosure Freeze changes the bank’s motivations.

But it’s more critical than ever to provide an ironclad short sale package and bulletproof documentation with your deal so don’t give the bank any reason to dismiss your offer.

Our Post:

This is positive news for the banks, although we still find it unbelievable that the banks did such a poor job auditing their foreclosure process that they literally had to stop processing them while they lined their ducks up in a row.

Her Post:

This is positive news for the banks, although we still find it unbelievable that the banks did such a poor job auditing their foreclosure process that they literally had to stop processing them while they figured out what they did wrong.

In case you missed English class in high school; this slight tweaking is still plagiarism.

From Wikipedia:

Plagiarism is defined in dictionaries as “the wrongful appropriation, close imitation, or purloining an publication, of another author’s language, thoughts, ideas, or expressions, and the representation of them as one’s own original work.

The lesson here is not one of self-pity. It’s to help you avoid this type of plagiarism and how to deal with it in the real estate blogging realm.

So, how do you identify these types of theft? I use Google Reader’s feature to subscribe to certain key words in search results. In the above case from Alexis; I have a Google Alert setup that searches for Blogs with the words, “Short Sale” in them. Alexis’ blog came up in my daily search and I immediately recognized from her headline that it sounded similar. When I went to go read her blog post, it immediately rang a bell.

The Cook’s Source story is not alone out there, unfortunately, even though it gathered the fury of the Internet this week. Just pay attention to what is out there and, if you put time into your posts, you will need to pay attention to those that rip off your content.

Thoughts? Comments? We’d love to hear about it in the feedback!