Category: Mortgage Companies

Banks are becoming more experienced with Orlando short sales making things easier for realtors

Posted on by Jenny Zamora

Banks are getting much faster at the Orlando short sale process

Short sales have had a bad reputation in the Orlando real estate market for several years now. Realtors didn’t want to take on short sale properties either because they didn’t know what was involved and were afraid of getting in over their head or because they knew exactly what was involved and they didn’t want to commit to the hard work that’s involved in completing an Orlando short sale. Buyers didn’t like them because of the time that it would take to hear back from the bank about their offer that was submitted. Sometimes a potential buyer would submit a contract and have to wait three or four months just to find out that their offer wasn’t accepted, and all that time they spent waiting to hear back from the bank could have been utilized searching for other properties. This was extremely frustrating for everyone involved.

Lenders also must have felt frustrated because the truth is they just weren’t prepared to take on all these short sales. They weren’t prepared to handle short sales period… let alone hundreds of thousands of them coming at them at once. I believe that this is probably one of the reasons why loss mitigators would often tell agents that they didn’t receive certain documentation over and over again, or they would say things like we needed these docs in a certain order or a month later they would tell you to send everything again because it needs to be updated. Any experienced Orlando short sale realtors that are reading this post right know exactly what I’m talking about. In my opinion, these were stall tactics because lenders didn’t know how to get these short sales processed in an efficient manner.

Orlando short sales are being fast tracked thanks to experienced negotiators

Short sales are now being processed much faster than was the case just a year ago. Lenders have come a long way in putting systems in place to make things move more smoothly for the homeowner as well as the Orlando realtor processing the whole thing. I feel that the biggest change, however, is because of the short sale negotiators having much more experience in dealing with short sales now. At the end of the day, Big banks don’t run things, people do, and for some people, it’s easier to say that they didn’t receive something or come up with some other type of lame stalling tactic rather than to admit that they didn’t know what they doing.

Lately,  I’ve noticed a huge difference in the way that short sale negotiators handle short sale files. They’ve gotten better in every area; from ordering the BPO to negotiating with their investors and even getting extensions on payoff letters. I have about a dozen or so negotiators with several different lenders that I just love working with because “they get it”, they know how this business works and they will do whatever it takes to get the deal done.  Don’t get me wrong, I still have conversations with some short sale negotiators that frustrate me to no end because they are clueless about the Orlando real estate market or real estate in general yet they still try to tell me how much I should list an Orlando property for, but for the most part it’s gotten much much better.

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Fannie Mae Making great Strides in the Orlando Short Sale Process

Posted on by Jenny Zamora

Fannie Mae is taking the Lead on making short sales move even faster for Orlando homeowners

It’s amazing to see how far certain lenders have come in the way of helping homeowners to get their Orlando short sales approved. In the not-so-distant past, some of the major lenders were hell bent on making the short sale process a nightmare for not only the homeowners but also, the short sale realtors that had to work the entire process. Then even after you’ve submitted the complete package to the lender dotting every I and crossing every t, you would then have to re-submit the entire short sale package several times over either because it needed to be updated or the lender had lost it or claimed to have never received it. I know this may sound absurd to some of you but believe it or not, this used to happen on just about every single file at least once or twice.

It’s only been in the last year or so that we’ve seen a drastic change in the way that lenders handle Orlando short sales in General. There are systems in place such as HudHomes.Gov that some lenders use which make short sales move along a lot faster. And with systems like these in place, no longer can negotiators claim to have never received certain documents or that they’ve lost them. It’s as easy as logging into your account and uploading every page that they request. This was just one of the steps which began to streamline the short sale process.

Since then, there have been laws implemented by congress which require lenders to respond within 60 days of a short sale offer being presented, this was Huge! Even bigger, was when Lenders started giving homeowners large “Cash for Keys” incentives to complete short sales. Not only were homeowners able to get their debt forgiven, but they were able to receive enough cash at closing to start over in a new life.

Most recently, Fannie has come out with new guidelines for loan servicers to follow.  The new guidelines are a part of the Federal Housing Finance Agency’s Servicing Alignment Initiative. The idea is to prevent more foreclosures and help neighborhoods to stabilize.

Fannie Mae’s new guideline changes

• Hardships. Servicers will now be permitted to approve a short sale for borrowers who have certain kinds of hardships but are still current on their loans. Also, in order to reduce paperwork, no documentation of hardship will be required for borrowers who are 90 days or more delinquent and have a credit score lower than 620.

• 2nd-lien payments limited to $6,000. Before, 2nd lien holders often attempted to negotiate higher payments. The loan servicer will be able to offer the maximum payment of $6,000 in order to facilitate the transaction. By setting a standard payout amount and a limit for every transaction, Fannie Mae is removing the guesswork in order to accelerate the short sale process.

• Servicers will have more authority to approve and complete short sales. All servicers will have the authority to approve and complete short sales that conform to the requirements without receiving individual approval from Fannie Mae. Sometimes this part of the process added several months to short sale negotiations.

Jenny Zamora Lic RE Broker, Orlando

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What Exactly is a “Charge Off” when it comes to Orlando Short Sales?

Posted on by Jenny Zamora

A “charge off” is not the same as debt forgiveness

In the world of Orlando real estate when you hear the words “charge off” coming from your lender, it basically means that they are throwing their hands up and giving up on collecting that particular debt, the debt that’s being charged off is also known as a “write off”.  It’s an internal accounting technique that companies use to balance their books by writing off the debt as uncollectible. When you’re working with short sales you hear this term quite often.

This is the part where it can get a little confusing. For example, a “HELOC” or “home equity line of credit” is a  second mortgage secured by your house in which the lender that gave you the “HELOC” thought it was a sound investment for them at the time. The term “charge off” in this case just means that the bank is no longer continuing to bug you with annoying phone calls and letters and they will take a charge off on their books.

However, this doesn’t mean that it ends there. Most of the time the lender will sell the bad debt for pennies on the dollar to a much more aggressive debt collector. If you thought the original bank was annoying, these companies are often 10 times worse. I’ve gotten reports from some of my clients about these companies calling at least once or twice a day, every day including weekends. I consider these companies to be in the same category as telemarketers.

There are only 3 ways to get mortgage debt collectors off your back

1- Bankruptcy 7 or 13

Bankruptcy Chapter 7 and 13. I’m not an attorney and I’m not about to go in-depth on the subject of Bankruptcy laws but in a nutshell, If you file for chapter 7 BK, you are pretty much surrendering all of your assets to the BK court with the exception of your homestead property as well as a vehicle as long as neither of them holds significant equity. This type of BK will end any pending lawsuits as well as any repossession debts.

Chapter 13 bankruptcy enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, debtors propose a repayment plan to make installments to creditors over three to five years. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time.

2- Loan modification

Loan modifications make sense when you are able to get the lender to not only adjust your payments but to reduce the principal balance of the loan. It just doesn’t make sense to me to agree to a loan mod if the terms only benefit the lender. Don’t get me wrong, for some people it works out, but in my experience lenders almost always try to design loan mods in a way that benefits them thus setting up the homeowner for failure…and the beat goes on.  Read the fine print!

3- Orlando Short Sale

Now, this is a subject that I am very qualified to talk to you about. Orlando short sales are the preferred method for most people to eliminate their underwater mortgage problem. Orlando homeowners usually come to me after they consult with a Bankruptcy attorney realizing that a short sale is by far their best option. By completing an Orlando short sale on their home, a homeowner is able to rid themselves of their largest debt by far,.. their mortgage. On top of that, homeowners are able to come away with cash from the closing of the transaction, sometimes up to $30,000.00. [not a typo] thirty thousand U.S. dollars.

A short sale also is the lender’s preferred alternative to foreclosure and is often the best option for everyone involved. The only people that don’t care for short sales are Bankruptcy attorneys because there’s no money in it for them.

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Avoiding the Orlando Loan Modification Mine Field

Posted on by Jenny Zamora

Loan modifications have helped thousands of Orlando homeowners to keep their homes.

However, you must be aware of the fine print and know exactly what it will mean to you. Sometimes the terms of a loan modification are often worse than the original mortgage. The best loan modifications are when you are able to not only reduce your payment but reduce the principal balance of the loan. Many loan mods are structured so that your payment gets reduced but you still have to pay off the entire amount of the original mortgage plus penalties. In my opinion, these types of loan modifications are just not worth agreeing to. If your house is only worth $100,000.00 and your loan amount is $200,000.00 why on earth would you want to end up paying that entire amount?

Push for a loan modification with principal balance reduction

Banks will always try to get you to agree to what suits them better, this is why you have to be a tough negotiator, don’t just agree with the first proposal that they put in front of you. You have to remember that banks also want to come to an agreement. It costs lenders a lot of time and money to take someone through the foreclosure process. The best thing you can do is hire an Orlando real estate attorney that specializes in loan modifications. If you try to go at it alone with your lender, it could end up costing you a lot more money in the long run. Sure, a good Orlando real estate attorney may cost you a couple of grand upfront, but you’ll have a much better chance if you have an experienced negotiator in your corner.

5 things to watch out for when negotiating an Orlando loan modification

1- Your lender has the option of dropping all penalties. Don’t be bullied into a take-it or leave-it trap where they give you the option to pay off the penalties upfront or have them roll the penalties into the balance. You should demand that they wave all penalties as part of the deal.

2- Sometimes lenders will try to get you to agree that if they lose the original loan documents, you must assist the lender in reproducing them. As ridiculous as this may sound, it’s true and you should never agree to something like this. It comes down to the lender having additional legal protection if they screw up. A clause like this has absolutely no benefit to you.

3- Step by step rate increases that are too steep for you to afford or balloon payments that become due before you have time to be prepared for them.

4- Don’t agree to payments that you really can’t afford. When doing a loan modification, the idea is to make the loan affordable to you and your family. Be realistic, don’t put yourself into a position where your budget is soo tight that you’re only one major car repair away from being in default again.

5- Don’t agree to an interest rate that can automatically adjust based on an index over which you have no control.

An Orlando Short Sale may be your best option

As you can see, there are a lot of things that you need to watch out for when entering into a loan modification with your lender. The fact of the matter is that even when you have the bank’s best offer on the table, it still may not be good enough.

You may be much better off doing an Orlando short sale.  At the end of the day, it’s just a house, it’s not part of your family. By doing an Orlando short sale, not only will you be free of your lender forever, but you can get enough cash back to start over and get yourself into a much better situation than you would be agreeing to the terms of a loan modification.

As always, if you have questions about anything to do with Orlando real estate. Call us and set up a free consultation with an Orlando real estate expert.

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The world of Orlando Short Sales may be coming to a screeching halt

Posted on by Jenny Zamora

What will happen to Orlando short sales if the Mortgage debt relief Act of 2007 is not extended?

Short sales have been very popular since the market crashed in 2007,  mainly because sellers have the benefit of not being taxed for the deficiency between the mortgage amount and the actual payoff. What people worry about now is that the  Mortgage Forgiveness Debt Relief Act of 2007  is about to come to an end at the end of  2012 and so far we haven’t anything about the government extending it.

What do you think would happen if the law doesn’t get extended? In my opinion, this would be the end of Orlando short sales as we know them.

When you think about it, what incentive would a seller have to do an Orlando short sale if they end up with a massive deficiency when it closes?  That’s right… there would be no incentive. In fact, I think that most people will just end up letting it go to foreclosure. This means that Orlando REO realtors would be busier than ever.

Deep down I truly believe that this law will be extended, it just makes good business sense for everyone involved… sellers buyers, and lenders. Orlando real estate is moving right now and a big part of that is because of the short sale inventory.

If you are considering an Orlando short sale on your house, don’t take a chance on the mortgage debt relief act of 2007 being extended. Consult with an Orlando short sale specialist and find out what your options are now or you might regret it.

Jenny Zamora, Lic RE Broker. Orlando Short Sale Specialist

Orlando short sale expert

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