How much does a short sale cost and what types of things do I have to pay for?

     First it’s important to understand that my services and fees are completely free to you and typically you do not have to pay anything out of pocket in order for a short sale to occur. Drilling down on that a little bit further, people ask “Well I want to do a short sale and pay absolutely no money whatsoever”. I have to explain to people that everybody’s case and circumstances are a little bit different and there at times certain things that you need to pay for in order for a short sale to occur.

     I’d like to list those things for you before you do into a short sale transaction of what those things may be.
The first thing is, if you have a homeowners association, one of the things I always recommend my clients that they do stay current on those fees because many times to the short sales process a bank will not pay for past due fees. Some people could look at that as a cost of doing a short sale. While they’re going through the process they would have to stay current and continuously make those HOA payments until the property is sold.

     The second thing the sellers have to be considerate of is the fact that they are required to provide certain things within the property in order for it to be sold. Things like smoke detectors, water heater bracing and the new one which is carbon monoxide detectors. Now if you already have these items then great there isn’t a problem, but if you don’t, these are the things that could be little expenses along the way that you’d have to go out and buy and put in the property.

     Another item sellers may have to pay for is if for any reason their utilities are turned off. We may need you have the utilities turned on in order for the buyer to do their appraisal and their inspection in a while for the short sale to occur or simply keep on the utilizes if you’re not living on the property throughout the process which could be looked at as an expense. But if you aren’t living there, obviously the fees aren’t going to be that tremendous. But it is something that does need to occur in a short sale and maybe an additional cost.

     Every now and then but it’s very rare with my clients there may be certain circumstances where a seller may have to come to the table with money to appease a short sale lender and this is more prominent when you do have tow loans on the property and one of them is a loan that you pulled money out of the property through the process of owning it. But these are very rare they are very case specific and that’s something that we can talk about when we assess your situation.

     It’s important to understand that you’re not going to pay for any real estate commissions to the short sale. Typically you’re not really paying any normal cost associated with the sale of a property such as title, escrow and closing costs etc. But I did want to address those little things that may come up through the process that you want to be aware of, things that you might have to pay for.

Thank You very much for watching my presentation of Little Things You Might Have to Pay For in a Short Sale

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

     The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.
Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).
Addressing real estate practitioners’ No. 1 complaint about short sales, FHFA directed Fannie Mae and Freddie Mac to establish a new uniform set of minimum response times that servicers must follow in order to facilitate more efficient short sale transactions.

     The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.

     If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.
According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale. All decisions must be made within 60 days.

     In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.
The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.

     Edward DeMarco, acting director of the FHFA, says the GSEs new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”
GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner.
“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales. “There is no question that this will help short sales and the market as a whole.”

     Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009. Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.

     One of the things I’ve been hearing quite frequently when I have a consultation one-on-one with people is that they do find my videos that I’ve put here on the website very informative and it’s actually help them gather a tremendous amount of knowledge about short sales before they speak with me. And then when I do talk to them, I’d talk about their particular situation and how it’s probably going to play out. And in the end I determine and we work with people, we determine sometimes that short sales aren’t always the best option for them. Maybe they want to keep their property and go through the process of doing a loan modification or a HARP refinance or something along those lines.

     In the end, they typically do see that the videos have been extremely immensely helpful for them and educational for them. And I always recommend that if they do know anybody else within their workplace or their neighborhood that is upside down or need some information or wants a free consultation to simply provide my contact information.

     The other thing that I would recommend is also send my consultation videos to them. They’re free for anybody to watch it anytime. You can send them the link just like I’ve sent to you and ask that they watch it and then they contact me if they do have any questions or concerns.

     Again, I offer free consultation for anybody who wants to speak and have me asses their situation and point them to certain resources that they may or may not need. We’re talking about a short sale if they feel that that’s best for them. I just want to make sure that people out there understood I’m more than happy with you passing on my videos, my information to anyone else that you may know whether it be a friend , family member, a co-worker or a neighbor. The more people that I can get information to the more people I can help.

Thank You very much for watching this presentation: Can I Share Your Videos?.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

What type of information does the bank have through the short sale process to be able to determine how much money I have or determine what my net worth is?

     It’s important for me to explain to the clients how this particularly works. First that you have to understand is that if you’re engaged in the short sale process, one of the things that the banks can do is that they can pull your credit. Typically you sign off on your loan documents that they’re allowed to do this. And when they can pull your credit, what typically the credit report is going to show is you’re other debts. It’s not going to show bank accounts or what’s in them. But for example if you do have multiple properties, it will show with loans on there and the bank might be able to determine that you own other properties and valuate those properties to see if there’s any equity in them. It’s not going to show checking or banking accounts or money that’s in them.

     The second thing that banks can use to determine what you have or what assets you have is any information that you provide to them. Understand that in a short sale process you will be filling out a tremendous amount of paperwork and you’re going to be asked to supply things such as bank statements. So if you provide them with these bank statements they are going to see what’s in there. If you provide them with tax returns, it may show on your tax returns any assets that you have, any income property or one case, stocks, anything that you’re receiving dividends on etc. Also in the paperwork many times is what’s called a financial worksheet that the bank provides at which place you’re going to go through enlist and itemize all of your assets and all of your debts.

     The third thing is if you are banking for example with the same bank that you are dealing with on your short sale that is servicing it. For example, you bank with Chase and at the same time worked doing a short sale with the servicer of Chase, it’s going to be easy for them to look into your account and to see what is in those particular accounts ad how much money you have.

     They don’t however have the ability for example, for working with Chase to go into any other bank accounts such as Bank of America or maybe a small credit union and determine what money is in there and what assets that are in there. You have to provide that information to them.

     So again to recap very quickly the three ways the banks can determine what you have and what assets you have. One, they can pull your credit which is typically going to show your other debts. Secondly, any information that you provide to them with the paperwork such as bank statements, tax returns, financial worksheet. Third, if you do bank with the same servicer they can very easily and quickly look into those accounts.

Thank You very much for watching to presentation: Which Assets Of Yours Do The Banks Know About?.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     I wanted to mention briefly about some of the new updates to the government short sale program known as HAFA. This program is continuously changing and they are always making little tweaks and adjustments to it and they just did recently and released some of the new guidelines back here on March 9, 2012.
I just wanted to address those and go over some of the changes so that you’re familiar with them and see if perhaps they do affect you.

     The first thing is that rental properties are now eligible for short sale to actually get $3000 for relocation fees for the tenants or anybody who is living on that property. And that could help out with transactions that we do deal with many times are investment properties where tenants aren’t simply willing or able to move out, that it does offer $3000 for them.

     The next thing that had changed is that they have increased the amount of money that can be paid out to second lien holders to $8,500. This is extremely important here in California with there no longer be recourse in second loans. Banks are many times asking for more money if they are in second position to allow a short sale to occur. So this will give some more flexibility for homeowners to able to participate in HAFA and be able to get the $3000 dollars for relocation expenses.

     The next is change is borrows can now actually be current and still qualify for the short sale. They are going to look at your income and expenses but it’s not a requirement any further that you have to be behind.
The other thing that they have changed is they will allow homeowners to make full payments during the process of the short sale if they want to. Whereas before they did ask in some certain instances to make partial payments that’s not a requirement if the homeowner wants to make payments they can so they can protect and preserve their credit a little bit further.

     The next change that they have also made is they’re very specifically pointing out which codes are going to be dictated and how it needs to be reported by the servicer in their credit when the short sale occurs. So they have changed and made up some new status account codes. One is 13 which simply states that the property has been paid or the account has been closed with zero balance or that they can be reported as code 65 meaning the account is paid in full and foreclosure was started whichever is applicable.

     All of these new changes do go in effect starting in June 1st of this year 2012. The guidelines have already been set forth, it’s just a matter of getting them implemented and initiated.

     Many times we do see changes like this it does take the bank a couple of months if not weeks to get adapted to these new changes but it is important for homeowners to understand that if they are looking for relocation and moving expenses that the guidelines have been extended and enhanced a little bit further.
Thank you very much for watching my video about the New HAFA Program updates.

Thank You very much for listening to presentation: What about the NEW HAFA Program Update 3-19-2012.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     One of the things that I do like to tell about my clients is a service that I provide is the ability to help get the short sale deleted from your credit. I have service providers that I’ve worked with in the past but I do have a brand new one that I’m very excited about. Once you go through the process with me, then for my clients I do afford this resource to be able to the short sale deleted from your credit.

     This is from a very reputable company that is me myself. The one thing that is very nice about this is it does not cost you any money upfront. You don’t pay any upfront fees and you only pay for if they are successful in doing so. In fact they will actually do a full audit on your credit report and tell you exactly what the costs are going to be before you decide to move forward so you have a complete understanding as to what that’s going to be. Not only that, it’s computerized and your system and progress is tracked in the entire way. And if you are my client, I will also be able to track the progress as the credit deleting is going through and I’ll be able to track and see how everything is going for my particular clients. And again if you are one of my clients, I actually pick up the cost to have one of the short sales deleted from your credit.

     This thing is not new but this particular service provider and this technique in this system is extremely new in reference to my clients and I feel it’s an absolute valuable resource to go through after the short sale to get your credit cleaned up and get the short sale deleted so that you can move on with your life.
If you are interested in hearing more about this, we can do so in a free consultation with myself, just feel free to fill out the form here on my website or give me a call.

Thank You very much for listening to presentation: I Can Help Get the Short Sale Deleted From Your Credit.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     I want to talk to you about a program that I have been made aware of that would actually help you get a principal reduction or pay you a large amount of money in order to do a short sale on your property and not have it reported as a short sale on your credit through the process.

     This is a new program that I have access to and it’s a resource available to you if you are interested. This program is not only for people who want to keep their property but people who also want to get rid of it but want to avoid having the short sale reported on their credit.

     If you want to sell your property, I can help you get potentially 1% up to 5% of the sales price of your home and it will not be reported as a short sale on your credit. If you want to stay in your home, I can help you get principal reduction reduced to the amount of the current value of your home.

     This is a brand new program. This is not a government program or a bank program. It is only for very specific people who do qualify and who are willing to participate in this program. If you are interested in hearing more about this the best thing to do would be to contact me and setup a consultation so I can assess your situation and go over the guidelines with you and talk to you about if you qualify for this program or not.

Thank You very much for listening to presentation: I Can Help You Get a Principal Reduction!

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     It was newly announced in February and what it was, was a lawsuit settlement between the Justice Department, HUD and 49 States and their District Attorneys excluding Oklahoma. What they did in this lawsuit or settlement is they have set aside $26 billion from 5 of the largest banks for people who are underwater or have been foreclosed upon. The 5 banks or servicers are Bank of America, Chase, Citi Group, Wells Fargo and Ally or GMAC.

     People are asking what’s going to happen to this money where is it going to go. For the time being they have basically $17 billion who will go to people who are underwater and behind on payments in the hopes of reducing their principal reductions. This would result in about a $17,000 per household in principal reduction for over 1 million homeowners that are upside down and struggling to make payments. Another 3 billion are going to people who want to refinance their home to lowest interest rates. People who are upside down but have high interest rates but want to do a traditional refinance a lot of that money is going to go towards subsidizing being able to buy down those rates. Another 1.5 billion will go people who have lost their homes and have already been foreclosed upon in a form of a $2,000 check settlement. And then lastly, there’s about $5 million in fines and fees that the banks are going to have to pay for. There are talks to expand this settlement to about $30 billion which may include 9 other banks but we are waiting to hear on this news.

     What does this mean for people in San Diego? First you have to understand that the money is finite meaning it will run out. A lot of people in San Diego are further underwater than the $17,000 that most analysts have predicted that this would allocate to all of people out there in distress. But, I would be willing to talk with you a little bit further about how it may affect you or your particular situation if you want to set a consultation. I can also instruct you on how to go to the bank and ask your bank to find out if you are eligible for any of these programs. But it’s something I wanted to address and go over and highlight some of the bullet points for people who are asking me quite frequently about the government lawsuit with banks.

Thank You very much for listening to presentation: What about the Government Lawsuit Settlement with the Banks.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     A couple of tips about that, one, I always recommend that homeowners are honest and up front with their renters. Don’t hide anything from them, let them know from the get go that the property is going to be sold and that they are eventually going to move out. Secondly it’s up to you to determine whether or not you want to tell them if it’s a short sale or not. It’s not required but it does provide some benefit in a sense that tenants understand that the short sale process take some time.

     With that being said, many times we as a real estate brokerage will communicate with the tenants and let them know where we are at the transaction. We will let them know that we are looking at 3 months out, 2 months out and then eventually when it is 30 days that it is that they need to move out. It can be beneficial from that stand point and they may choose to stay on that property while the transaction is going on.

     Sometimes tenants don’t want to be cooperative, at the particular juncture you have a couple of different options. One is to kick them out if they are not on a lease and ask them to leave before the transaction is completed or you might do a something a little bit softer such as seeing if you can give any concessions to them. Many people I’ve worked with before have offered their tenants a reduction in rent maybe a 100, 200 or 300 dollars, whatever it is on a monthly basis so that the tenants are cooperative in having showings and that they move out in the time that they are supposed to. That can many times incentivize them to cooperate with the process. They are getting a reduced below market value rent and it’s beneficial to them and everybody else involved. If they are going to be uncooperative then it’s in your best interest to try to get them out of the property as soon as you can so that there are no problems.

     If we do structure a short sale deal and get an approval but then the renters don’t move out then it causes a lot of complications with the transaction. Such that the buyers might not be willing to move forward while the tenants are still in the property and you might lose your opportunity to do a short sale and it might result to getting a foreclosure. So structuring these things and speaking with your tenants from the very beginning is probably one of the most important things to consider. The next thing you need to look at whether you have a lease in place. If they have a lease in place that does extend to several months pass the possibility of getting these transactions completed. Then they are legally allowed to stay in the property and any prospective buyer would have to inherit those tenants. So a couple of things about that again, one, you could wait to do a short sale. Two, we could attempt to do a short sale but we have to find buyers that are agreeable to keep those tenants in there through the end of the lease or three, you can try to incentivize them. Maybe give them a month free. Maybe give them a reduction of rent or something along those lines in order to break their lease and move out a little bit quicker.

     You as a homeowner are going to know your tenants better than myself or anybody else and so you are going to know a little bit more on how deal with them and how to approach them. If you have a property manager involved, then you have to leave this to them as far as negotiating any of the contract, getting them to move out to reduction of rent and all of those things.

     If you have any further questions about the situation give me a call. I will give you a free consultation. We can talk about the matter and come up with a game plan about how are going to deal with your particular tenants. Those are some of the basics to take in to consideration.

Thank you very much for watching this video on, What To Do When You Have Tenants In A Short Sale?

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com

     From there, in this real world environment, is that happening all the time? No. Every bank is a little bit different in regards to foreclosure process and their timelines. That is because they are dealing with numerous different variables such as people who want to apply for loan modification, for short sales etc. Every bank has their processing timeline right now in this real world scenario. I can state to you for example that there are banks like Bank of America who probably who probably averages about 8 to 10 months. But then again, there are some banks like Wells Fargo who are still very strict to stick to that 6 and ½ month timeline.

     What does that mean to you? If you are considering a short sale, my advice to anybody considering it is starting it as soon as possible even if you only missed 1 payment. That affords you the highest probability of success on getting the short sale done before a foreclosure occurs. If you try to do a short sale a week or a few days or even a month before the foreclosure date, there is an opportunity where the bank may typically say “We are sorry, we’ve waited too long. We have simply decided to move on with the foreclosure process” and not entertain the short sale scenario. That’s definitely something to consider if you are thinking about a short sale, if you’ve missed any payments anything like that.

     We can go into a little bit more in depth if you and I talk about your particular case and what might be done and the actual foreclosure timeline of your specific bank. But again, the average timeframe is about 6 and ½ months which means you need to get your short sale done in that timeframe in order for your short sale to be successful and to avoid foreclosure.

Thank you very much for listening this has been my presentation on How Long Does The Foreclosure Process Take.

Kurt Wannebo
San Diego Real Estate and Investments
www.shortsaleinsandiego.com