Category: Orlando Short Sales

Cash Incentives for Short Sales Continue

Posted on by Jenny Zamora

 Cash Incentives for Short Sales

It appears that new short sale guidelines that have been put into place continue to make it easier for distressed homeowners to get relocation assistance after completing the short sale on their distressed property. Mortgage companies Freddie Mac and Fannie Mae have launched a new short sale program allowing the homeowner to complete a short sale and receive cash incentives without missing any mortgage payments….It’s about time!

I don’t know why this hasn’t always been the case. I believe that as long as the homeowner can prove a valid hardship, then why force them to miss payments if they’re willing to work with the bank sooner than later. For one thing, the lender loses less money. Why would you want the homeowner to miss at least one or two payments before allowing them to start the process if they’re willing to start the process while continuing to make the payments? I think that if this were the case then there would be a lot less distressed homeowners doing a strategic default.

[HAFA] The Home Affordable Foreclosure Alternatives Program provides distressed homeowners with cash relocation incentive of $3,000.00. The problem is that the guidelines have several restrictions that many times kept distressed sellers from getting the assistance they so desperately needed.

B of A, The nation’s largest loan servicer offers the HAFA program in addition to several other in-house programs. Its most popular program is the “Cooperative Short Sale Program” which has an “Enhanced Relocation Assistance” that ranges anywhere from $2,500 to $30,000. Just this past year we were able to qualify 3 of our Orlando short sale clients for the $30,000.00 cashback at closing. Bank of America has recently launched the enhanced program on a national level. This program applies to pre-approved short sales, these are short sales that are started without there being an offer to purchase. The amount of the incentive is based on the value of the home.

 

WILL YOUR LENDER COOPERATE?

There are some who will tell you that banks would rather take a house to foreclosure or modify the loan than approve a short sale. This just isn’t true, it costs a lender a lot of time and money to take a house through the foreclosure process and at the end of the day, it’s just a numbers game.

The truth is that short sales net lenders twelve to twenty-five percent more than they would make from foreclosure because of the time and money that it takes to not only regain control over the property, but to make any repairs, market and finally resell the house. And as far as loan modifications are concerned, over half of them default within the first year then ultimately turn into short sale or foreclosure.

Lenders have finally figured this all out and that’s why they are constantly streamlining there process and continue to create enticing offers to help out distressed homeowners. By completing a short sale, a distressed homeowner can avoid going through a foreclosure and limit the damage done to their credit.

 

 

 

Realtor in Orlando, FL

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

The Root of All Short Sales is a Valid Hardship

Posted on by Jenny Zamora

 

A borrower’s hardship still remains the main criterion in order for a lender to approve a short sale on a home. The simple explanation or definition of “hardship” is when someone is in “a state of affliction or misfortune” meaning that the borrower has gone or is going through something in their life whether it’s personal or financial that has affected their ability to continue paying their mortgage. There could be countless reasons that someone could be going through hardship but there always seems to be a handful that we hear about over and over again.

Working as an Orlando short sale realtor for the past 8 years, I’ve heard hardship stories that have literally brought tears to my eyes. However, listening to some of these stories has only fueled my passion for wanting to help these people that are going through a valid hardship. I also help investors that are facing foreclosure on their Orlando investment properties for whatever reason, but there’s a world of difference between losing an investment property or two or three as compared to face losing the home that you live in with your family.

Generally speaking, it’s much harder to get a short sale approved on investment property, than it is on someone’s primary residence. The truth is that some lenders are just not interested in approving a short sale on a property unless there’s a legitimate hardship at the root of it. OMG!… Does this mean that some of these loss mitigation negotiators actually have compassion for people that really need and deserve it? I’m happy to say that, yes it does. In my experience, the majority of loss mitigation reps will actually read the hardship letter and factor it into their decision of whether or not to approve a short sale.

Here are some of the main reasons why people are facing financial hardship.

1. Reduction of income

2. Loss of employment

3. Medical problems

4. Divorce

5. A death or serious injury in the family

6. Having to relocate because of employment or school.

7. Business going under

8. Drug addiction

Financial hardship alone, however, is just not enough to get a short sale approved. The biggest reason is that the home must be worth less than the full payoff of the mortgage. If not, then the home could typically be sold as a traditional listing providing that there’s enough equity to cover the closing costs of the transaction.

Here’s a basic example that can be used as a template to create a hardship letter.

Dear Lender,

I’m writing this letter to explain why I am no longer able to continue making my mortgage payments to you.

[Here is where you want to write about your personal hardship in detail]

Also, current market conditions in my area have significantly deteriorated causing my home to be worth substantially less than what is owed on my mortgage balance. As a result, I’m asking that you please consider allowing me to sell my house as a short sale.

Kindest Regards,

Distressed homeowner.

Cash Back to the Seller at Closing

Assuming that all of the other criteria of the lender are met to proceed with the short sale, the borrower may also be eligible for relocation incentives from the lender. Programs such as HAFA [Home Affordable Foreclosure Alternatives] will actually pay the seller anywhere from $3,000 to $30,000 back at the closing depending on the situation.

 

 

 

 

Orlando short sale expert

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

Short Sales Run Parallel to Foreclosure

Posted on by Jenny Zamora

There is a common myth in the world of short sales that once you begin the short sale process, it stops the foreclosure process. I’ve been doing short sales in Orlando since 2005 and I can tell you from experience that it’s just not true. Don’t get me wrong… in some situations, it can happen and often does happen, where the lender suspends foreclosure proceedings if a house is in the short sale process and they want to see how it plays out. However, some people have the impression that starting a short sale with their lender will automatically stop the foreclosure process and the truth is that nothing can be further from the truth. The fact of the matter is that the foreclosure process and the short sale process run parallel to each other and sometimes it just comes down to a race to see which situation arrives first.

Although we have an outstanding track record when it comes to getting short sales done, even with a pending auction date, I will still tell my clients that nothing is guaranteed. And anyone who tells you differently is either lying or they’re just ignorant on the subject. The problem occurs when a real estate agent tells someone that they guarantee to complete their short sale just to get them locked in as a client and the property ends up getting sold at the auction anyway.

When I hear about this happening to someone, it makes me absolutely furious because a short sale is only one of many options to avoiding foreclosure. Not only that but sometimes it’s not even the best option for someone, especially if the seller wants to try and keep the house. It’s true that realtors get paid a commission when they complete a short sale but this is no reason to try and steer somebody into this situation when they know that another option may suit them better.

Here are some alternatives to short sales.

1- Loan Modification- This is when we try to get the terms of your loan adjusted thus making it more affordable to the homeowner.

 

2- Deed-in-Lieu- A deed-in-lieu occurs when you sign the house back over to the lender as opposed to going through the foreclosure process.

 

3- Bankruptcy Chapters 7 or 13– This will offer the homeowner the opportunity to either buy some time and try to get reorganized or eliminate their debt as well as their assets in order to satisfy their outstanding debts once and for all. Bankruptcy situations should be discussed with a bankruptcy attorney.

I learned 9 years ago when I first started in the real estate business, that to be a successful real estate agent you should always, always do what’s best for the client that you’re representing and not what’s best for your bank account. This mindset has always served me well and I truly believe that I am more successful because of it.

 

 

 

Orlando short sale expert

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

The Best Short Sale Realtors in Orlando

Posted on by Jenny Zamora

 Orlando is one of the prime destinations for home seekers in Florida and attracts home buyers from all over the country. It has a very hot real estate market right now. If you are looking to buy or sell a home in Orlando, you will be helped a great deal by the services of a top brokerage like Orlando Realty Consultants. They have been in the business for a very long time now and have gained a lot of experience. Being a full-service brokerage, they provide a range of services to their customers.

 Orlando Short Sales

A Short sale is a situation when a home needs to be sold for less than the full payoff of the mortgage note. This can happen due to a number of reasons, which mostly include some kind of financial hardship. In the case of a short sale, it is best to enlist the help of a short sale realtor. This is a real estate agent that specializes in doing nothing but short sales which means that they are very experienced in the short sale arena.  They have the resources needed to get the short sale done and usually have a buyer lined up to buy the house as soon as the short sale is approved.

 The end result of the short sale is that the buyer gets the house at a discounted price while the seller is able to sell his house and avoid having a foreclosure on his or her record.

 Short sale negotiation

 The negotiation of a short sale of a home can be a long and arduous process. It involves a lot of legal as well as paperwork. It can get very complicated for someone to do it themselves and is best to take the advice of an expert. Even if a seller wants to do their own short sale, they would still need to have a licensed real estate agent list the property for them as part of the bank’s criteria. Short sale negotiators provide all the necessary advice and bring know-how as well as experience to these situations.

 Depending on the actual situation at hand and the condition of the house, the short sale can typically be completed in a few months.  Experienced short-sale realtors do their best to finish it as soon as possible. They try their best to uphold the interest of the seller. However, in certain cases, delays might occur because of several reasons such as a clouded title or renovations needed to make the house habitable.

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*

FHA’s Back To Work Program Giving 2nd Chances

Posted on by Jenny Zamora

 

 

FHA’s Back To Work Program

As an Orlando realtor, part of my job is to help potential home buyers get approved for a mortgage. Unfortunately, aren’t always able to qualify for the best mortgage programs like an FHA [Federal Housing Administration] loan because of negative credit events like having a foreclosure or short sale on their record.

Recently there’s been some great news for ex-homeowners that find themselves in this situation. FHA, formed in 1934 and part of the U.S. Department of Housing and Urban Development is waiving its 3-year foreclosure awaiting period. All homeowners with FHA case numbers assigned after Aug. 25th of 2013 that have gone through a bankruptcy, short sale, foreclosure, loan mod, or a deed-in-lieu can now apply and potentially get approved for an FHA mortgage.

The FHA has the role of being the insurer of mortgages made by lenders that are FHA approved. Since the FHA’s inception, it has insured loans in the entire U.S. in addition to U.S. territories as well as the District of Columbia and holds the record as the world’s largest insurer of loans at thirty-four million loans.

Basic FHA Mortgage Guidelines:

1- Loans must be made by an FHA approved lender

2-Borrowers must be U.S. citizens

3-Borrowers must have a  minimum credit score of  at least 500

4- A down payment of at least 3.5% of the contract price is required on a purchase

5- Income is verified via W-2 or federal tax returns

Within the last several years the FHA has been steadily tightening their requirements since the housing downturn. However, since August 15 of 2013, the FHA has made the decision to ease up on their requirements when it comes to borrowers that have ” experienced periods of financial difficulty due to extenuating circumstances”. Now known as the “Back to Work Program”, the FHA has gotten rid of it’s former waiting periods that were typically followed after a negative credit event.   Here are some examples of negative credit events that can affect someone trying to get approved for an FHA mortgage loan.

* Foreclosure

* Short Sale

* Deed-in Lieu

* Bankruptcy Chapter 13

* Bankruptcy Chapter 7

* Loan modification

* Forbearance agreements

It seems that there are actually some compassionate people running this company. The FHA has come to the realization that sometimes bad credit situations are beyond the homeowner’s control and that someone’s credit doesn’t always reflect a person’s willingness or ability to pay there mortgage. One can only hope that other lending organizations will follow the FHA’s lead.

 

 

Orlando short sale expert

Let's Keep In Touch!

New ORC Form Lead

"*" indicates required fields

This field is for validation purposes and should be left unchanged.
TOC*