I’ve got that Rebecca Black “Friday” song going through my head. That’s because, the Friday, June 1, there will be some changes to the processing of short sales.

First off, changes to the HAFA program begin this coming Friday. These changes will now allow non-owner occupied properties to be considered, and there may also be opportunities for certain short sale sellers who are current on their mortgages to now participate in the HAFA program. Lastly, certain lenders may elect to pay up to $8500 to second lien holders.

Second, Fannie Mae, Freddie Mac and others will now be required to respond more quickly to a short sale request or a short sale package. But, how do you know whether your short sale seller’s loan is owned by Fannie Mae or Freddie Mac? That’s easy! Go to the Fannie Mae website or the Freddie Mac website and enter in the borrowers information. Click submit, and you may be on your way to a quicker short sale processing time.

Not HAFA? Not Fannie Mae? Not Freddie Mac? Don’t’ despair. There’s still hope. (Sounds like alphabet soup, huh?)  There are a bunch of short sale incentive programs available for borrowers, and even Bank of America has a new one that pays up to $30000 to certain short sale sellers at closing.

In a nutshell, there’s lots to know and a ton of stuff happening effective this Friday. Just don’t catch yourself humming the tune of the Rebecca Black song!

Sidebar: Short Sale Expeditor® is extremely grateful to the families of the Americans who have given their lives in defense of our wonderful country. Oour thoughts are with you on this important day of remembrance. And, we are also proud supporters of the troops.

Here’s a recap of some of the interesting stuff that went on this past week in the distressed property arena:

REO Rental Plan Gets a Thumbs Down in California I gave this plan a thumbs down weeks ago, but it seems that the bipartisan California bill which also wants to put an end to this harebrained scheme has just become a topic of conversation.

Latest Foreclosure Filings This interesting article discusses the way in which decreased foreclosure filing stats in three states (one being California) have masked some of the increased filings in other states. Have all of the California homeowners that were going to lose their homes already done so?

New Relocation Assistance on B of A Short Sales Nationwide  Here’s the latest news about a new relocation assistance program that will provide certain short sale sellers (with Bank of America loans) with relocation assistance up to thirty thousand dollars. How about them apples?

There’s lots going on in the distressed property arena. And, if you are actively working with ‘distressed’ borrowers, it’s important to keep up with all of the changes in the industry. Sometimes that’s hard, which is why we’ve provided you with a weekly recap right here.

Are you having trouble getting your short sales closed? Do you think that they take forever to process? Do your buyers walk when you have finally obtained your approval letter?

This is article number six in a series of 10 articles about the Top Ten Tips for Getting Your Short Sales Closed.

Tip 1: Get Educated About the Short Sale Process.

Tip 2: Set Expectations Accordingly.

Tip 3: Prepare Your Short Sale Package With Care.

Tip 4: Get Non-Institutional Liens Released Early.

Tip 5: Follow Up Quickly to Avoid Delays

And here is Tip #6: Sell the Property at Fair Market Value

I cannot begin to count the number of calls that I receive each week from an agent representing an investor looking for the deal of a lifetime. Or, I get calls directly from so-called investors looking to pick up pre-foreclosures for 60 cents on the dollar. They want me to do the short sale negotiating and they think that the banks would be crazy if they didn’t take their cash (40% below market value) over the current offer on the table from a first-time homebuyer obtaining a loan and paying fair market value.

Remember this if you remember nothing else: To the short sale lender, no matter whether the buyer pays cash or obtains a loan, the bank still receives cash at the end of the day. So, all things being equal, would you rather have 60 cents or one dollar?

Do your best to sell the short sale property at fair market value. You see, the investor (note holder) wants to recoup as much of their original investment as possible, and so-called ‘lowball’ offers are often rejected.

Here are a few ideas for how to accomplish a quick and efficient short sale:

Always submit your highest and best offer to the short sale lender, keeping in mind that the highest may not be the best (especially if the highest offer comes from someone asking for termite repairs, septic work, a home warranty, and 3% in closing cost concessions).

Remember that each time you submit an offer, all of the supplemental information needs to be complete and the supporting documents need to relate to the new buyer (settlement statement, pre-qualification, Bank of America addenda, etc.)

Keep in mind that the valuation needs to be current. Certain investors require a new BPO every 90-120 days. If you have had a short sale approval in the past for the subject property and are seeking one for the same property but with a different buyer, the terms may be different—especially if the BPO is over 90 days old.

There are lots of details that help to make the short sale a more efficient transaction. The tips provided here are just a few ways to see more closings this year and beyond!

That’s right folks. Bank of America is now among the ranks of lenders offering additional relocation assistance money to certain short sale sellers. In addition to programs such as HAFA or other short sale incentive programs offered by other lending institutions, Bank of America announced last week that they are now offering certain short sale sellers up to $30,000 in short sale incentive money. Many of those that are eligible will receive a letter in the mail advising them about the program and yes, the letter does state that a 1099 will be issued to each short sale seller who receives relocation assistance.

Here are the FAQs (courtesy of our folks at Bank of America):

Q: How can I find out if my client qualifies for this limited time offer?
A: Call a Bank of America short sale specialist at 1.866.880.1232

Q: Do I have to do anything special when initiating or completing the short sale?
A: No. But act quickly by initiating the short sale into the Equator system.  This is a limited-time offer that your clients won’t want to miss out on.

Q: If a short sale is initiated with an offer, will it qualify for this relocation assistance?
A: No. This relocation assistance is only available on preapproved price short sale programs.  Short sales initiated at the time an offer is received do not qualify for the enhanced relocation assistance funds.

Q: Will the relocation assistance funds be reported on the HUD-1?
A: Yes, funds received at closing will be documented on the HUD-1, and a 1099-MISC will be issued.

Q: Can the relocation assistance funds be used to pay off existing liens?
A: Yes, the homeowner may use funds to pay off existing liens or to help with relocation expenses.

Q: Is the relocation assistance added to any other incentives, such as the HAFA or Bank of America proprietary program incentives?
A: The homeowner incentive will be inclusive of the $3,000 HAFA incentive.  For example, if the homeowner is eligible for a $5,000 homeowner incentive, $3,000 will be from the HAFA incentive, and $2,000 will be from the homeowner incentive.

Q: Is the enhanced relocation assistance available for other programs?
A: Currently, the enhanced relocation assistance is only available to short sale programs initiated without an offer. However, as we gauge the success we may extend this incentive to other programs.

Here’s a recap of some of the interesting stuff that went on this past week in the distressed property arena:

More Bills that Could Aid ‘Upside Down’ Borrowers  Just like the word ‘chad’ took on meaning a few years back, this article and Obama’s proposed refinancing initiatives have provided a new word, ‘re-HARPing.’ Read this article to learn more about all of the proposed bills currently out and about.

California and Principal Reductions  This Keep Your Home California Program is as foggy as North San Diego County in June. (If you have never been to San Diego in June, know that there are days of fog and often the sun never shines.) But, apparently, there may be some upcoming opportunities for the fog to lift and for sellers to receive small principal reductions. Read the article to learn more.

Listing a Tenant-Occupied Short Sales  Wanna know how to make a tenant really, really angry? Try collecting rent and not making the mortgage payment on the property for which the rent was collected. If you have a short sale seller for a tenant-occupied property, then this is a great article for you. There are tons of tips here for dealing with tenants and effectively closing a short sale on a rental unit.

There’s lots going on in the distressed property arena. And, if you are actively working with ‘distressed’ borrowers, it’s important to keep up with all of the changes in the industry. Sometimes that’s hard, which is why we’ve provided you with a weekly recap right here.

Are you having trouble getting your short sales closed? Do you think that they take forever to process? Do your buyers walk when you have finally obtained your approval letter?

This is article number five in a series of 10 articles about the Top Ten Tips for Getting Your Short Sales Closed.

Tip 1: Get Educated About the Short Sale Process.

Tip 2: Set Expectations Accordingly.

Tip 3: Prepare Your Short Sale Package With Care.

Tip #4: Get Non-Institutional Liens Released Early.

And here is Tip #5: Follow Up Quickly to Avoid Delays

It never fails. You are laying in bed at 5:00 a.m. and your cell phone rings. You hear it even though the phone is plugged in and charging down the hall. Who is it? Well, it’s a short sale lender and s/he needs an item in order to complete or update the short sale package. Or perhaps the lender has a question or needs a change to the estimated settlement statement.

In order to avoid delays in the processing of your short sale, assigned tasks (either in the Equator system or received via telephone or email) must be completed quickly and efficiently. Some delays can slow or even halt the processing of your short sale transaction.

• Check your phone and email messages regularly (including your spam or junk box) in order to assure that you have all your messages.
• Log into Equator daily (if you are working in that system) in order to verify that you have no open tasks.
• Make sure to learn about deadlines and be sure that all requested responses are addressed prior to their deadlines.
• Encourage the homeowner to read and review all mail regularly. Many items pertaining to programs such as HAFA, will be sent to the homeowner directly and may not be available directly to the agent processing the short sale.

Completing tasks or activities immediately upon request will help you to help your seller avoid foreclosure and will also help your short sale to move along efficiently.

It does not take Albert Einstein or Isaac Newton to process a short sale. There are very simple steps, that when completed methodically and efficiently can lead to a successful short sale closing. Responding immediately to all requests is just one of those things that can result in an effective short sale closing.

If you have completed more than a handful of short sales, then you have no doubt faced the music with respect to property value.  During the course of the short sale, the short sale lender sends out another Broker to complete a Broker Price Opinion (BPO) for the short sale listing. The bank then, in most cases, bases their price on the value stipulated in the BPO. However, often times, there is a slight discrepancy between the value stipulated in the BPO (what the bank wants) and the offer amount (what the buyer wants to pay). In many cases, what comes next is a valuation dispute. And, at some lending institutions, this is much easier to complete than at others.

Bank of America has recently revised their process for valuation disputes during the short sale transaction.

Here is an outline of the new process (courtesy of our friends at Bank of America):

• Tell your short sale specialist that you would like a reconsideration of the value.
• Receive an investor-specific, easy-to-complete form from your short sale specialist that specifies all requirements for a successful value dispute.
• Fill out the form and attach specified evidence.
• Stay in touch with your short sale specialist for results.
• Expect a value dispute review within 10-12 business days once all required information has been received.

Here is the evidence you will need in order to support your valuation dispute:

Provide comparables that are recent, proximate (nearby) and similar to the property in question.

• “Recent” means sold within 90 days of the actual value document date.
• “Proximate” varies by location. In a rural area, for example, a home five miles away could be considered proximate.
• You will be able to provide additional notes to highlight characteristics of the comps.

When the dispute centers on property condition or hazards:

• Provide an itemized estimate from a licensed contractor on the contractor’s letterhead.
• Provide photos to illustrate the repair, condition issue or hazard you want to highlight.

If your valuation dispute relates to condition and significant repairs are required (which in turn, lower the subject property’s value), it’s best to have multiple bids in order to support you position. But, don’t expect the bank to pay for all new carpet when there is a small stain in the living room.

Here’s a recap of some of the interesting stuff that went on this past week in the distressed property arena:

HAMP Modifications Down 33% from Last Year  This article provides information on the decline in HAMP loan modifications. What does it mean? Are we winding down in the distressed property arena or are the banks just not that efficient? Read more to find out.

Are We Really at the Bottom?  We’ve seen some big changes in the market lately? Is the bottom behind us and will this bottom actually stick? Read more in this dsnews.com article.

How to Command the Short Sale Lender’s Attention  While it is feasible for Lady Gaga to wear a meat dress to her job to command attention, a short sale takes much more specific finesse in order to get a deal done. Here are some ways to do just that.

There’s lots going on in the distressed property arena. And, if you are actively working with ‘distressed’ borrowers, it’s important to keep up with all of the changes in the industry. Sometimes that’s hard, which is why we’ve provided you with a weekly recap right here.

(photo credit)