10 Tips to avoid delays in Short Sales
The short sale process is complex and involves many different parties who must all agree to take a loss on an outstanding debt (for example, investors, additional lien holders, and mortgage insurance). This leads to a longer timeline than a traditional home sale. Here are some key factors that you can influence to help minimize delays.
1. Set appropriate expectations with sellers, buyers and buyer’s agents so that they understand the complexity and resulting length of time a short sale can take.
2. Have the homeowner call the Short Sale Customer Service (866-880-1232) to start the process and register in Equator. Prepare the homeowner to provide the complete financial hardship documentation, including all sources of income, assets and liabilities and have it updated regularly to Equator.
3. Ensure that the property is listed on MLS, and actively marketed for sale.
4. Negotiate external 3rd party fees prior to submission of HUD (for example, the following fees are typically not approved by investors: short sale negotiation, reconveyance, document preparation, notary, recording, courier, processing). Supply the complete HUD-1 that is valid for at least 60 days and includes all fees.
5. Review all documents & document images for accuracy and clarity prior to upload.
6. Ensure that the customer and agent tasks are completed as timely as possible (for example, accepting short sale assignment, submitting short sale offer, and uploading offer documents must be done within 7 days).
7. Work to get a purchase offer representing the best possible fair market value (with current detail on the market and activity) and highest net proceeds for the investors.
8. Submit fully executed purchase offers with all appropriate addendums signed by both buyer and homeowner, and include all supporting documentation.
9. Work to get a release on outside liens as early as possible.
10. The following situations will cause delays. Please notify us as soon as possible if:
Change in buyer or agent or terms at any time during the process
Customer files bankruptcy/divorce
Any changes after the approval letter is issued (be conscience of the expiration date)
Tuesday, June 22, 2010
Monday, June 21, 2010
Is the Market Improving?
'Double dip' decline seen for housing
2010-06-17 16:06:05
Christopher Cagan is a veteran Southern California economist who is perhaps best known for his real estate analysis with title insurer First American. He now consults and operates the InvestmentMeasures.com investment-management Web site. We asked him what he's seeing in the cards for the real estate market ...
Q: What are your thoughts on real estate going forward?
A: In the short to near term, I expect a double dip. This is the logical aftermath of the sugar shot from the federal first-time buyer tax credit. It borrowed buyers from the future, and we are now going into that future. Also, we are not too far from the end of the traditional SoCal buying season. I have already seen asking prices reduced 5 percent or so in May from April.
But I don't expect a catastrophic drop. To a great extent, prices and mortgage rates are now governed by the authorities -- Fed, government, etc. This used to be called a "socialist" model. I really don't see how 30-year mortgage rates can stay at 5 percent, but there they are. But 96 percent of all mortgages are now made/guaranteed by the government in one form or another. Mortgage rates are low, what I would consider a steal. Hence social policy has supported home prices and insisted that interest rates be low. Since we're largely operating on a socialist rather than a market model, I don't see home prices going down much more.
Q: Will this hold up all values?
A: The only exception is the high end, which I expect to keep falling, because jumbo mortgages can't be passed on to Fannie Mae/Freddie Mac -- and also because there are fewer move-up buyers. For instance when someone buys a foreclosure there is no seller to move up. But I do see a long, draggy, and bumpy bottom, extending through 2011 or even 2012. This will be an inventory-driven bottom, as the current and especially shadow inventory gets worked through. It will take a while to work through all of this and get back to "normal" market conditions.
Q: And Orange County?
A: I believe that Orange County will be the first to recover in real estate. It is the "first choice" area, and recovered early last time. People only went to the Inland Empire after they were priced out of OC, and the inland areas didn't really catch on fire until 2003. That is, Orange County is the canary in the coal mine. A successful project will signal the beginnings of the next upturn. But we're not there yet.
Q: So when does the ugliness end?
A: I see significant price rises starting in -- or near -- 2013 and going on for several years after that. It will begin in first-choice areas such as Orange County in particular, with second choice areas (Inland Empire) not catching on until later.
There are two reasons for this upcoming bull market. First, home prices in Southern California are cyclically undervalued. They were clearly overvalued in the boom -- kept especially high by generous lending, which made such prices possible) --but now they are below the 20 to 30 year trend line. I am telling my friends to buy. For some of them, if they don't buy 2010-2012 they never will be able to buy.
Second, I see the return of inflation. With our huge budget deficits and outright money creation, not to speak of rising senior and other entitlements, inflation has to rise (that is, the dollar has to depreciate). Inflation, of course, will raise real estate prices.
Many people will simply not believe that good things will happen to real estate any time soon, if ever. They are burned out on that. They see bad news all the time. So I don't want to sound like "Here is that cheerleader again!" but there will be a recovery down the road.
Q: Don't you worry about mortgage rates?
A: True, mortgage rates will go up. But history tells us that home prices -- again, coming out of a deep bear situation, coming out of an undervalued situation -- will outpace inflation. Think of the 1970s, an inflationary period, when for six years in a row California single-family resale prices rose at 20%-plus per year, outpacing inflation every time. So by 2020 we could see some really high home prices, higher than 2006-07 boom prices, admittedly in inflated dollars.
Q: How bad could it get before recovery?
A: I think our general economy could well have a Japanese-style "lost decade." Some have argued that we have already had one -- stocks no higher than ten years ago, lower after inflation -- and that we are now going into a second one. Where are the engines of growth? Where are the jobs? I see a slow recovery and I also see inflation down the road.
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