Bank of America has stated that they are relaxing it's policy of payoffs of short sales connected with second liens on homes facing foreclosure.  This is good news for many Realtors and homeowners who have had an incredible amount of trouble completing a short sale transaction due to second lien holders demanding more money for equity loans and second mortgages. 

Bank of America has been one of the least cooperative institutions to deal with.  In the past, they have demanded 10 percent of what the homeowner owed on the equity line.  If they did not receive it, they would not sign off on the short sale.

Bank of America is now asking for five percent of the sale proceeds on the short sale, net of realty commissions, closing and other costs. Bank of America feels that this change will open the door for more short sales to be processed and close.
Raffi Tal, CEO of Los Angeles-based I-Short Sale, Inc., one of the largest players in the field, says Bank of America's new policy "will still jeopardize" many short sales that involve its second liens. 5 percent of an equity line can still jeopardize some deals if the mortgage is really upside down.
You will still need a strong negotiator to work your short sale deals.  Bank of America along with other lenders still have strong rules regarding seller concessions to buyers, some require the buyer to pre-qualify with their institution.
The bottom line, work the numbers and see how this change can move your short sale from paper to the closing table.

Is there such a phrase as "approved short sale"? 

Maybe for some it is when the lender has started the foreclosure process on a property.  It may be for some when the homeowner calls the lender asking for a "short sale" package to include what will be needed to justify short paying the loan.  For some Realtors, usually those unfamiliar with short sales, it is when a homeowner calls and says "I'm upside down on my mortgage and can't pay it", "please list my property as a short sale".  There are too many properties within our Multiple Listing Service with days on market over 200 days.  The average foreclosure process within North Carolina is 270 days.

Establishing Your Short Sale Situation

As a homeowner, you need to establish that you are in a legitimate short sale situation.  Evidence has to be shown that:

• The borrower can not make payments on the loan
• The house is equal to or less than the mortgage owed
• There are no other assets owned by the borrower
• There is a contract and valid and able buyer willing to purchase the property.

Is it Worth it to the Bank?

The bank has to see if foreclosing or accepting a short sale will result in a higher return.  Values have been given to the bank by broker price opinions and desktop appraisals better known by Automated Valuation Modules.  Different discount percentages will be given based by geographic location and foreclosure fees standardized by Fannie Mae by state will be inserted.  These fees include taxes, closing costs, commissions, repairs, etc.  An equity analysis and short sale analysis will give the bank an economic decision on the property. 

If you would like more information on buying one of our short sale listings or see if your home is a candidate for short sale, please give us request information here. You can also call us 24 hours a day at (704) 559-5988.

    On December 24^th, 2008 the Department of Housing and Urban Development (HUD) released "Mortgage Letter 2008-43".  This new information was sent to the attention of single family servicing managers in reference to the PFS Program, Pre-foreclosure Sale Program.  The FHA still remains committed to helping families avoid foreclosure.  The PFS loss mitigation option allows mortgagors in default to to sell his or her home and use sale proceeds in satisfaction of the mortgage debt when the proceeds of the sale or less than what is owed. 

Major changes for 2009 include:

1. Elimination of the clause calling for 63 percent or greater property appraisal versus debt. Now properties can appraise at any value and still be eligible for the program.
2. Increased Net. Instead of the former 82 percent net based upon appraisal value the new limits will be 88 percent if sold with 30 days, 86 percent if sold within 60 days and 84 percent thereafter.
3. Increased Closing Costs on Short Sales. Although not a lot FHA will now allow up to 1 percent of closing costs rather than the former zero.
4. Increased Seller Incentives. Again, although not a lot this will at least allow sellers a reasonable down payment toward a rental home by putting up to $1,000 in their pocket at closing.
5. Increased Lien Allocations. Junior liens up to $2,500 are now allowed just one more tool that helps sweeten the pot for short sale investors interested in pursuing FHA/HUD homes.
6. Removal of Repair Limitations. This is one change that could potentially add up to thousands depending upon the required maintenance on the home. This opens the doors to many homes that would otherwise be ignored due to excessive damage.
7. Exceptions to Non-Owner Occupant Requirements. This is on a case by case basis but opens to the door to rental properties formerly excluded from the program.

If you have a property with or without an FHA loan in need of a short sale, we can help.  Please request information here and a short sale specialist will be in touch with you within 24 hours.

Good news for Charlotte as the unemployment rate rose to 10.5 in January 2009.  Over 200 new jobs are expected to be added in the Charlotte area by GMAC Financial Services LLC.

GMACs incentives from the state of North Carolina and Charlotte, Mecklenburg County include 4.5 million dollars from the state Job Development Investment Grant over a nine year period and $237,000 over three years from the county. 

"We are excited about growing our presence in Charlotte. This is a great city with a deep talent pool," GMAC chief executive officer Alvaro de Molina said in a statement.  The deal does not call for moving GMACs headquarters from Detroit, said John Lassiter, who chairs the city councils economic development and planning committee. "GMACs headquarters is in Detroit, Mich., and we have no plans to change that," GMAC spokeswoman Toni Simonetti said in an email.

There are currently 265 GMAC workers in the Ballantyne area.  Once office space is found in the uptown area, existing employees will relocate to the new office.  GMAC is an auto finance and mortgage company.  In December it became a bank holding company, allowing it to receive 5 billion dollars from the Treasury Departments $700 billion financial bailout fund.

GMAC promised to hire at least 130 people by the end of the year and add at least 200 by the end of 2010, under the terms of a state incentives deal agreed to Friday. The average salary for the jobs expected to include finance, risk management, accounting and corporate administration will be $96,600 a year

The U.S. Senate has approved an amendment to the economic stimulus package that would provide a tax credit of up to $15,000 for homebuyers who purchase a primary residence in the upcoming year. 

Senate added to the $900 billion stimulus bill on Wednesday a home purchase tax credit of $15,000, or 10% of the purchase price.   Also on tap is a proposal being pushed by Senate Republicans for a federalized 4% interest rate on 30-year fixed mortgages.   They believe this will spur home sales and help homebuyers, homesellers, builders and all alike. 

A Hike in FHA and VA Loan Limits?
The stimulus bill that passed included provisions to increase limits on loans eligible for financing from government-backed mortgage entities as high as $729,750 in the nation's most expensive housing markets.
Will it Work?
Some economist argue that throwing the "kitchen sink" in incentives to buyers will encourage builders to start doing what they love to do, build.  Therefore increasing our already oversupply of inventory on the market. 

What I believe
I believe that believing in our government and having a bit of consumer trust will spur home sales. It's like having an addict as a friend or family member. You want to invite them back into your life, but they not only need to talk the talk they have to walk the walk. Even though the country seemed to have had confidence that change was coming, it did not take away the continued job loss, home sales decline and lack of a plan to help the masses. This administration is doing a lot to help our economy, but it takes a lot to help our ecomony. Home prices are still TOO high in most housing markets for those who have experienced job loss, pay decreases and higher living expenses to afford a home and all that comes with maintaining it. Many foreclosures enter the market at fair market value within 90-120 day marketing modules instead of "quick sale pricing". Why? Why not? If there is an offer generated within 1-90 days to help the investor recapture some of the possible loss of the foreclosure, why not take that risk. Especially if the property is located in a stable to mildly depreciating market area. We need to push short sales more on Capitol Hill. It creates a better market for homes to be priced as they should, helps the buyer afford what he or she can, and allows the homeowner to have piece of mind for an upside down mortgage if they can not qualify for a loan modification.