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Cheap Homes for Sale in 2010

Demolishing home values in 2010
By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education
Where are the cheapest homes for sale? Investors with deep pockets are picking up homes for 50% of current market value, regular home shoppers are looking for similar deals but do not want to pay all cash or in bulk. [...]

How to get a Loan Modification Approved

By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education
Many people do not understand what it takes to get qualified for a loan modification. The general rule of getting approved is that you must be able to afford it! What this means is that you should be able to show income and assets [...]

New California Laws for 2009-10 Affecting REALTORS(R)

By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education
The following information from the California Association of Realtors was provided to address the many new laws that affect California Realtors and their clients. These new laws were published in conclusion of the first half of the 2009-2010 legislative session. The laws mentioned are [...]

Top 10 Negotiation Strategies

Participating HAFA Lenders

Cheap Homes for Sale in 2010

February 23rd, 2010 No Comments

Demolishing home values in 2010

By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education

Where are the cheapest homes for sale? Investors with deep pockets are picking up homes for 50% of current market value, regular home shoppers are looking for similar deals but do not want to pay all cash or in bulk. You may want to sit on the fence as home values will most likely go lower in 2010.

The Los Angeles Times reported the following news headline Feb 16, 2010, “New wave of foreclosures by end of 2010 is feared” (http://www.latimes.com/business/la-fi-mortgage-mods17-2010feb17,0,7573498.story). This is just one of the many news articles reporting how further foreclosures will eventually occur in 2010 and the result would be lower home prices in many communities.

Moody’s Economy.com has reported that approximately 4 million homeowners are 90+ days late on their mortgage or are already facing foreclosure proceedings. This number was pulled from data analyzed from credit reporting agency Equifax.

There have been other news articles stating that the number of foreclosure filing are slowing down and a lot of market analysts are optimistic that recovery is near. But….Economy.com com estimated that 2.4 Million borrowers are expected to lose their home this year. 2009, there were 2.1 million foreclosures. With the job market still crawling with company’s trying to find new ways of surviving, it is assured that more homeowners will foreclose and the number of foreclosures that will occur this year will definitely lower home values in neighborhoods by 15-50% of current market values. All it takes is for one home in a neighborhood to sell below market value to bring all other home comparable values down.

The states to be hit the hardest is California, Florida, and Nevada. The one statistic I love to watch is California foreclosures. In December, Californians that were 90+ days late on their mortgage hit 11.4%, compared to 8.4% nationwide. California is definitely a state that is filled with frustrated homeowners that complain about the red tape of lenders and I suspect because of this fact, many of these homeowners will give up and just walk away.

If you can get a home at 80% of current market value, it should be safe even if the housing values pull back 20%. Obviously, the larger discount the better. Consider picking up fixer uppers that you can rent and fix up later to sell when the housing market improves. Based on current market activities, the best deals for 2010 will most likely be found at the end of the year after the floodgates open and foreclosures flood the market.

How to get a Loan Modification Approved

February 11th, 2010 No Comments

By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education

Many people do not understand what it takes to get qualified for a loan modification. The general rule of getting approved is that you must be able to afford it! What this means is that you should be able to show income and assets that will allow you to carry your mortgage with a low risk of re-defaulting. But, qualifying for loan modification is almost the same as qualifying for a traditional loan without pulling credit or getting an appraisal.

Lenders will qualify you for a loan modification if it makes sense. For example, if a lender has to reduce your mortgage rate to 1% in order to qualify you for a loan modification, you can forget getting approved. Here is a general rule of thumb to determine if you are wasting your time pursuing a loan modification:

Calculate ALL of your monthly expenses. If you pay your home insurance bi-annually, break this cost down on a monthly basis. Then calculate ALL of your income, to include interest, bonuses, commissions, etc. If you are positive or negative about $200, you have a good chance of getting a loan modification. If the lender is able to modify your loan so that you can save $700/mth then it is believed you would have a better chance of handling any financial setbacks and reduce the risk of you defaulting on your loan.

To better understand a homeowners chance of getting a loan modification, here are some truths to know:

1. It has been reported that candidates who received a loan modification defaulted again within 6 months

2. In order to get a loan modification approved, you need to have enough income to cover all of your monthly expenses. For example, if your current monthly expenses allow for $200 to savings, you may be able to qualify for a loan modification. The idea is that the loan modification would allow you to save more money and rebuild your financial status.

3. Proof of a stable job will also be counted towards qualification. The number of years you have worked consistently and what company you work for are taken into consideration. Also, having significant savings in a retirement account can help as well.

4. If you are not late on your mortgage, it will be harder to get a loan modification approved. Lenders may not state it, but being late is proof that you are having financial issues and are more willing to help when you are in this position. This is the same for short sales and is a reason why some homeowners have been advised to miss payments prior to requesting a loan modification.

5. Loan modifications can take anywhere from one to twelve months to complete, depending on your situation.

6. Many loan modifications that can be done quickly are changes in the mortgage terms to reduce the monthly payment, but this is usually for a short term 2-3 years. After this period, the rates will go up and so will the payments.

7. It is possible for some lenders to offer a loan modification of a new fixed rate over 30 years.

8. Attempting a reduction in rate and principal is generally more difficult to obtain. A lender would rather give you a lower rate for a longer period than reduce principal.

9. If you have multiple liens on your property, it is more important to get a loan modification on the loan with the higher balance.

10. Many loan modifications do not get approved. If you are at risk of being late, or are already late, start your loan modification immediately to allow time for you to pursue other options if needed, such as a Short Sale or Bankruptcy.

Is it Legal for a Foreclosure Consultant to collect Advanced Fees?

In California, anyone that falls under their definition as a “foreclosure consultant” is not allowed to collect any advanced fees up, even if it is an attorney. Previously, California licensed lawyers who are providing these same services were exempt from this law. All services must be performed and completed before collecting any fees.Check your state laws for rules against advanced fees.

Non-profit agencies that can help you with your situation and can represent you for a fee AFTER work has completed are as follows:

* Federal Housing Administration
* Hope Alliance Web site

New California Laws for 2009-10 Affecting REALTORS(R)

February 11th, 2010 No Comments

By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education

The following information from the California Association of Realtors was provided to address the many new laws that affect California Realtors and their clients. These new laws were published in conclusion of the first half of the 2009-2010 legislative session. The laws mentioned are a interpretations and full legislation details on the new bills passed can be found on the internet www.leginfo.ca.gov.

REAL ESTATE
REO Buyer Can Select Escrow and Title: Effective October 11, 2009 to January 1, 2015. Assembly Bill 957.
The buyer in an REO transaction is free to select their own escrow and title company. A lender that subjects the buyer to use a specific company will be held liable.

MORTGAGES
No Advance Fee Loan Modifications: Effective October 11, 2009 – January 1, 2013. Senate Bill 94.
This law addresses the high number of scams asking for upfront fees by prohibiting any compensation for performing a loan modification until all services are provided as promised. This law applies to any real estate agent and attorney.

Mortgage Loan Originators Regulated: Effective December 2010. Senate Bill 36.
Mortgage loan originators that negotiate terms for a mortgage loan for compensation are now regulated by the Mortgage Licensing System, this includes finance and residential mortgage lenders. What this means is more laws and restrictions will be applied to these professionals.

Mortgage Broker Activities Restricted: Effective January 1, 2010, Assembly Bill 260.
It is a mortgage broker’s fiduciary duty to put a borrower’s financial interest first. It puts restrictions on the arrangement of high-priced mortgage loans, pre-payment penalties, yield spread premiums, and negative amortization loans.

Mortgage Fraud Becomes a State Crime: Effective January 1, 2010, Senate Bill 230.
Any activities of mortgage lending processing with an intent to influence the process is seen as mortgage fraud under CA law. If found guilty, the crime is punishable with one-year in prison.

Reverse Mortgages: Effective January 1, 2010, Assembly Bill 329.
There are now new disclosures along with other requirements under the Reverse Mortgage Elder Protection Act that must be followed in any reverse mortgage transaction.

INVESTORS
60-Day Notice to Terminate Tenants Extended: Senate Bill 290.
60 day notice from a monthly residential tenant will still be law indefinitely. If a tenant has lived in a property for less than one year or is on a termed lease, a 30 day notice is sufficient. Other tenant laws were also addressed in this bill.

Landlord Utilities: Senate Bill 120.
This bill requires some utility companies to notify residential tenants if the landlord has been past due on bills which would result in the discontinuation of services. This protects the tenant form not have basic services and allows the tenant to put the utilities in their names to avoid an interruption in service.

Mobilehome Parks: Senate Bill 804
Management cannot make a homeowner use a specific broker or dealer to replace a mobilehome or manufactured home on a space in a mobilehome park.

OTHER AREAS OF REAL ESTATE
Appraisal Industry Oversight:Effective January 1, 2010, Senate Bill 237.
Background checks on all certified appraisers. Further expands the definition of what is considered appraisal fraud, including promotions, promises, threats, compensations.

Increase in Homestead Exemptions: Effective January 1, 2010, Assembly Bill 1046.
Homestead exemptions increase $75,000 for individuals, $100,000 for married couples, and $175,00 for persons over 65, disabled or 55 with limited income. The homestead exemption is to protect a homeowner’s equity from judgment creditors.

Swimming Pools: Assembly Bill 1020
This bill states that owners of apartment buildings, condominium complexes, and others, must place anti-entrapment devices for swimming pools. Also required is additional filing of compliance statements.

Mechanic’s Liens: Assembly Bill 457
New guidelines and processing, filing, and enforcing a Notice of Mechanic’s Lien.

Disposal of Records: Assembly Bill 1094
Liability business are now shielded if they property dispose of abandoned records via shredding or erasing the information. It is also legally presumed that a tenant shall own their records on the premises even after their lease has been terminated.

Plumbing Fixtures: Effective on or after January 1, 2014, Senate Bill 407
New disclosure requirements for the installation of water-conserving plumbing fixtures.

Top 10 Negotiation Strategies

February 10th, 2010 No Comments

Negotiating with the foreclosing lender is the best option to stop a foreclosure. Lenders are in the business of loaning money, not owning homes. Many Real Estate Agents shy away from working on Short Sale transactions because they get frustrated with their mediocre results. Instead of complaining about why negotiating with a lender is so difficult, it is more important to find a way that will make negotiations easier. The following are the Top Ten Negotiating Strategies when dealing with a foreclosing lender.

1) Communication – Lenders do not like to talk to people who are rude or who are disorganized when on a call. Be courteous and efficient when making calls. Have all information and paperwork in front of you and be well prepared time is not wasted. Lenders have to field calls all day and it can be frustrating for them to talk to people who are fumbling for questions and information.

2) Sense of Urgency – If you show a sense of urgency to the lender and respond to all calls, letters and emails in a prompt fashion, the lender will most likely treat your file the same way. They know you are on top of your file and are doing everything you can to make sure the process is moving along. It will be much appreciated as they know they won’t have to spend much time tracking you down if they need something from you.

3) Create a Proposal/Solution: Lender have so many short sale files to process, it really helps when you help them see the light but it must be reasonable. Do not expect that the bank is desperate to give a huge discount. Create a Net Sheet showing what they would get if the home went to foreclosure, then show the current estimated value through comparables and days on the market plus realtor commissions, past taxes, etc. Then show the different offer amounts and show that you are submitting the highest one.

4) Create Feeling of Cooperation – Create a sense of cooperation with the lender that everyone involved is trying to work together to come to a solution. Whether this is the listing and buying agent cutting commissions ½ percent or showing the buyer to agree to pay a little extra to close the deal.

5) Talk the Same Language as the Lender – The lender doesn’t need to hear another sob story about how the homeowners are good people and really tried to pay their mortgage. Talk their language and give them solutions that will work and do not demand they stop the foreclosure. Understand how the lender will see the deal and what needs to happen to get a short sale approved. This is where the Net sheet comes into play as it is exactly what they need to be looking at in order to make a decision.

6) Knowledge of your File – Make sure you know all the details of your file as the negotiator does not have time to wait for your answers and if can answer all of their questions, they will be more willing to work with you as they know conversations can be expedited. This is where you should have your file in front of you every time you make a call so you are well prepared with any questions they may have.

7) Learn about the Lender – Different lenders will look at your short sale file differently. An institutional lender will handle the foreclosure differently than a private lender. Typically, a private lender would be less willing to budge or make things happen, especially if they are a second lien holder. The type of lender will determine how you will negotiate with them.

Mention the Loss to the Lender – Even though a Net sheet is put together to show the costs they will incur if the property goes back into their inventory, but do remember to point out things such as they will lose money due to the costs of the foreclosure, back payments, wear and tear to the property, marketing costs to sell the property, etc. This will prove to them that the costs to do nothing will be much higher.

9) Create an effective hardship letter – Make sure that when the homeowner creates a hardship letter is provides a clear understanding of why the homeowner can no longer carry the mortgage. Do not provide a 5 page report of the hardship, but point out key points that tie into the financial hardship and how it will not be resolved in the near future.

10) Stay on top of your files – Do not expect that the lender’s loss mitigation department is running on 100% efficiency. Many negotiators have hundreds of files to work on and it is easy for them to lose track of progress on any given file. If you requested to stop a foreclosure from going to auction, you need to call the court to make sure it has been stopped. If the court says they received no word from the lender, call your lender back and inform them nothing has been done. If you don’t do this, you may find yourself working months on a short sale transaction and having it lost because you assumed the negotiator did their job.

Participating HAFA Lenders

February 9th, 2010 No Comments

On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA). HAFA is part of the Home Affordable Modification Program (HAMP). HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. A list of servicers participating in HAMP is available at MakingHomeAffordable.gov.

HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.

HAFA is a complex program, with 43 pages of guidelines and forms, designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure. HAFA:

* Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
* Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
* Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
* Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).
* Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
* Uses standard processes, documents, and timeframes/deadlines.
* Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).
* Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

http://activerain.com/blogsview/1367505/here-is-the-list-of-lenders-participating-in-mha-hamp-and-hafa Dawn Uselding

Create a Sense of Urgency = Faster Lender Response Times

February 8th, 2010 No Comments

When a loss mitigation negotiator has 500-1000 files to work on, almost every one of those files is seen as urgent. Foreclosure timelines may seem long but getting an approval from the lender and then waiting another 30-45 days for the deal to close, there isn’t much time at all. When you first get a short sale transaction, you must be on top of that file from start to finish. There is some waiting period but that does not mean you sit around wondering if the lender has looked at your short sale submission. It is important that you follow up with every activity that needs to happen.

If you show a sense of urgency to the lender and respond to all calls, letters and emails in a prompt fashion, the lender will most likely treat your file the same way. They will see that you are on top of your file and are doing everything you can to make sure the process is moving along. It will be much appreciated as they know they won’t have to spend much time tracking you down if they need something from you.

As a best practice, every time you send something over to the lender, call to confirm that it was received. Every time you get an email or phone call, respond to it immediately. If the lender says they will do something, call back to make sure it has been done. Even if the lender is in processing mode and you have given them everything they need, check back twice a week to check status on the file. If the lender thinks you are calling too often, just ask them when is the best time to call back to check on the file. Do not be surprised if the lender says they are going to do something and they don’t.

Here is a real life proof of concept of how showing urgency is requires when working with a short sale submission:

A Real Estate Agent submits a short sale file and there is sixty days until the estimated trustee sale date. The file is processed but no approval and there is only one week left before it gets sold at the courthouse auction. Typically, lenders will not postpone a trustee sale until a few days before. The Real Estate Agent calls the lender for a status update and is told that the file is being reviewed by the investors and a decision should be made in ten days. The lender says they will postpone the trustee sale. A few days past and the Real Estate Agent picks up a call from the homeowner to hear they are being evicted as the house was been sold.

What the Real Estate Agent should have done was to call the county courthouse before the trustee sale to confirm it has been postponed. If it has not been postponed, a call should have been made to the lender to notify them the postponement notice was never sent. In this case, urgency and persistence was required as calls should have been made to between the courthouse and lender until confirmation is received from the courthouse.

You must also create a sense of urgency with everyone involved in the short sale transaction. If documentation needs to be collected from the buyer’s agent or from the homeowner, make sure you give deadlines and follow up on delivery. The faster you are able to turn things around the smoother the transaction will go.

Try to be proactive and identify any issues that may arise and try to act accordingly to avoid them. For example, check with the buyer’s agent to ensure that the buyer has been prequalified, so that when an approval is made, the loan process will move along much quicker to close. Ask for an approval letter, which can then be handed over to the lender. If the lender sees a buyer is ready to move forward with financing, they will be more willing to make the deal happen.

Collect any documentation that may be useful in helping the lender make their decision. If a couple of months have passed since the short sale submission, collect updated copies of the homeowner’s financial documentation as the lender may ask for these because they want to make sure their situation has not improved. Also, if the financial documentation shows additional hardship, that will certainly help with your approval.

If the comparable values have further decreased, that would be something you would want to send to your lender so they can see they need to expedite the approval process before things get worse. If they see values continuing to go down, they will see this as additional money lost, especially if the property goes back into their REO inventory for sale.

21 Types of Property Liens

February 5th, 2010 No Comments

Avoid Short Sale Pitfalls

By Art Lee
WHB Solutions, Certified Distressed Property Expert & Short Sales Education

In any short sale transaction ALWAYS run a title report to view all the liens attached to a property. You must account for all liens on a property to qualify whether or not it is a short sale worth pursuing. Not understanding the different types of liens that can be attached to a property can cause issues when attempting to work short sale deals. Each lien will need to be dealt with differently and knowing the type of liens on the property will allow you to determine if you have enough time to clear these liens in order to close a short sale deal.

At WHB Solutions we always review a preliminary title report to look at the number of liens on a property and who holds those leans in order to determine whether or we want to pursue a short sale. We have found that in grading our deals, we were making the best use of our times working on deals that had a high chance of closing.

In general, the more liens you have the more time you will need to resolve each lien. Most of the times these liens would not be paid by the foreclosing lender but the buyer or seller. If you have multiple liens on a property you are trying to short sale, you will have understand what the liens are and how difficult it will be to get them satisfied in order to close a short sale.

Understanding Liens

There are a number of liens that can be attached to a property and it is important to understand these liens when you are working any short sale deal.

* Bail Bond Liens – When posting bail, a bond is purchased where a percentage is paid in cash and a home is used as collateral for the rest of the bail. The bond is to guarantee that the person being bailed shows up to court and if they don’t a lien on the property will pay the bond.

* Child Support Liens – Liens that are related to unpaid child support, which the state or federal government can place a child-support lien against the property.

* Code Enforcement Liens – If a property is not up to the building codes, which many times happens when work is done on a house without permits, the local or county government initiate a fine, which if not paid turns into a code enforcement lien.

* Consensual Liens – A lien that the owner of the property agrees and provides consent. This lien does not have to be recorded although proof of consensual lien is harder to prove without being recorded.

* Corporate Franchise Tax Liens – If corporate franchises taxes are past due, the state can put a lien on any property that is owned by the corporation.

* Equitable Liens – An implied (determined by a court) or expressed (a written contract) lien to satisfy a debt that is owed to a debtor, in which the debtor has no rights to foreclose.

* Federal Tax Liens – A tax lien that is placed on a property due to non -payment of federal taxes. The federal government can force a foreclosure in order to satisfy the outstanding taxes owed.

* Fraudulent Liens – Any lien that is unlawfully placed on your property, which is based on information that is not true.

* General Liens – These liens are usually generated by use of general businesses such as an accountant or attorney. An example would be for an accountant to create a lien against a property for performance of work. The lien can be removed if the paid in full.

* Homeowners’ Association Liens – Unpaid homeowners’ association dues is cause for foreclosure on the property in order to collect the debt.

* Inheritance Liens – Inheritance taxes that are owed on estates of a deceased person and are not paid is cause for a lien to be put on a property within an estate.

* Judgment Liens – This type is lien is awarded by a court which places the lien in order to satisfy a debt or award of damages.

* Marital Support Liens – The state or federal government is able to put a lien on a home-owner’s property for the collection of unpaid marital support payments.

* Mechanic’s Lien – If a property had work done by a contractor or similar tradesman and the bill is not paid, a mechanics lien can be placed against the property at the county courthouse.

* Mortgage/Deed Of Trust Liens – These liens are voluntary and placed on a property as security for a repayment of moneys loaned to purchase the property.

* Municipal Liens – Unpaid municipal services such as water or garbage can cause a lien on a property, which is filed by the city or county.

* Public Defender Liens – Unpaid services of a Public Defender, which can be placed by the local, state, or federal government.

* Specific Liens – A lien place on a specific property, such as a property tax lien, mechanics lien, or lis pendens.

* Statutory Liens – Creditors that obtain security interest in a property to satisfy a debt established by state or federal laws. Examples are a mechanics or tax lien.

* Real Property Tax Liens – A city or county government can place a lien on a property that has not fulfilled it’s property tax obligations.

* Welfare Liens – The unlawful receipt of welfare payments can be collected through placing a lien on a homeowners property.

Why Homeowners Need to Consider Short Sales

February 3rd, 2010 No Comments

There have been so many news articles about homeowners walking away from the financial obligation to their mortgage. In response, there has been a lot of opinions about how these homeowners are not taking an ethical stance and avoiding their responsibilities. The result will be billions of dollars spent by the U.S. government to aid lenders and homeowners until the housing market stabilizes. Ultimately, this means the nation as a whole will be responsible to helping the housing market through higher taxes.

Besides the ethical attempt of meeting your financial obligation to the lender, there are considerable benefits a homeowner who completes a short sale.

1. Get $1500 – A new law has passed that allows some homeowners receive $1500 from the government from a successful short sale. The transaction would need to qualify under Obama’s new legislation published January 2010.

2. Improved Tax consequences – A lender may exercise the right to issue you a 1099 to collect the uncollected mortgage amount of a short sale. If the homeowner qualifies, they could be exempt from this 1099 under the Mortgage Forgiveness Debt Relief Act of 2007. Some lenders have stated that a 1099 most likely would not be sent out if the financial status reported in a short sale submission proves to be difficult to collect any future debt. Keep in mind that collecting the debt is costly and sometimes these bad debts are sold off to collection agencies for pennies on the dollar. Sometimes the deficiency can be reduce by the lender or the collection agency.

3. Protect your Credit History – There have been ongoing debates on how a short sale will actually affect your credit report. The fact that a short sale was concluded instead of a foreclosure should show that the borrower did something to redeem themselves. The stance of the major credit bureaus is that they are likely to see a short sale the same as a foreclosure. The reality is each persons credit history depends on how the creditor reports your credit performance. Some homeowners have reported getting a “Paid in Full” or “Satisfied” on their credit report after a short sale. When negotiating a short sale, it is possible to request removing any mortgage lates as a condition of the short sale.

The importance of credit is many times overlooked in the eyes of a financial distressed homeowner. Most of the time if they are about to lose their home, other bills aren’t getting paid because they are trying to save money to move out of the home and find a new home. Protecting your credit score allows you a short time to wait for your score to increase, also, it affects any reliance on credit cards, auto loans, getting approved to rent an home, etc.

It is recommended to always seek professional advice before making a decision to go through with a short sale. Every situation is different and decisions must be well thought out to receive the best outcome. Seek a Bankruptcy Lawyer if you are considering bankruptcy. Seek a Tax Attorney or Real Estate Attorney to understand your legal rights and tax consequences. Real Estate agents can help you list your short sale but they are usually not qualified to provide tax and legal advice.

Approved Short Sale Qualifications

February 1st, 2010 No Comments

The most important activity when deciding to pursue a short sale deal is to determine whether or not the homeowners situation would qualify for a short sale approval. If this task is not done, you could be working on a “dog” deal that has no chance of closing, therefore wasting your precious time you could be spending on a deal that has a high chance of closing. WHB Solutions has implemented this very important task within their pre-qualification strategies that has been proven to get 90% lender approvals on short sales.

WHB Solutions started focusing their efforts on short sales over three years ago when short sales were even harder to close and fewer short sale opportunities. Therefore, we took all deals that came in to our office. On the one hand we wanted to work every short sale deal we could get our hands on to understand what it takes to close a short sale deal in today’s market. In the process of working every deal, we learned that some deals were worthless to spend our time on and now select deals that have a high chance of closing.

The fact is that there are and will be too many pre-foreclosures to save and there just isn’t enough qualified people to help these troubled homeowners. Therefore, all we can really do is to help the ones we know we can help. The homeowners we cannot help are referred to a professional that can help find other options such as bankruptcy.

One step of our proven pre-qualification strategy that gets our 90% lender approvals, is qualifying the homeowners situation. About a year ago, lenders would not consider a short sale of your home unless you were late on your mortgage. Now more and more short sales and getting approved with the borrower still being on time. Also, lenders were only considering properties that were of primary occupancy, whereas now they are considering investment properties.

To qualify the homeowner for a short sale, their situation must meet one of the following:

Property hardships
These are reasons that related to the home. Being in a dangerous neighborhood does not qualify as a hardship.

* Value of home has dropped below the balance of the mortgage
* Damage to Property (natural disaster or unnatural)

Seller has experienced financial hardships
Any reason that will cause the Homeowner to be in or soon be in default of their mortgage.

* Adjustable Rate Mortgage Reset- Payment Shock
* Loss of Job
* Reduced Income
* Failed Business
* Medical Bills

Seller has experienced personal hardships
Reasons that affect their ability to continue making their mortgage.

* Illness
* Job Relocation
* Death of Borrower, Spouse or Co-Borrower
* Incarceration
* Divorce or Marital Separation
* Military Duty

Here are examples that would not qualify for a short sale.

* Overextending your investments purchases
* Having a co-borrower that such as a father or mother, who have income and assets to cover the mortgage
* Property being in a dangerous or poorly developed neighborhood
* Wanting to buy another home of lower value
* Wanting to rent and save money
* Being pregnant

The above mentioned hardships are mentioned as a guideline to use with most lenders. They are not the only ones that can be used to get a short sale approved. If you feel you have a unique hardship situation, you may try selling the lender on the hardship to see what happens. Sometimes a lender may make a decision to approve a short sale other than the provided hardship reason. For example, if the net loss to the bank is acceptable and the company is in a position to recover funds to continue operations, they may approve the short sale to recover their money and use it for a purpose with a higher return in value.

If you would to learn WHB Solutions’ complete proven pre-qualification strategies that get us 90% lender approvals, visit www.whbsolutions.com.

Top Ten Tips to Buying Foreclosures

January 28th, 2010 No Comments

The numbers of reported foreclosures nationwide hit 2.8 Million in 2009. The number of foreclosures for sale is astounding and although there are many opportunities to purchase a foreclosure for a huge discount, buyers should be aware of the issues that may come from these distressed properties. Any buyer of a foreclosure should practice sound investment practices otherwise they may be putting their money into a potential money pit.

If you are looking to purchase a property via a short sale, here are the top tips to following while you are shopping for a foreclosure.

1. Do not catch yourself in the foreclosure craze
Every foreclosure is not a good investment. Do your research and make sure you set an offer price that is still under current market rate, with adjustments to its condition.

2. Determine the type of foreclosure you can buy
The ability to determine what type of foreclosure you can purchase is based on your financial constraints. There is the choice to purchase through traditional financing, all cashed, or owner financing.

3. Get your finances in order
When deciding to purchase a foreclosure, you should always have your finances in order for the fastest close possible. Doing so will allow you the best position over other offers.

4. Join with Contractors to Find fixer uppers
That fact that foreclosures can yield significant discounts; it is a great opportunity to look for fixer uppers that can be turned around for a profit. It is highly advised to partner with a contractor so that you are assured that you are being provided the proper inspections and accurate costs to fix up the property.

5. Get professional advice
Never take any short cuts when purchasing a high valued investment such as a home. Do not try to cut corners and get free advice as it could lead to costly mistakes.

6. Make an offer below Market Price
Don’t get caught up in a bidding war and over pay for a home no matter how much you like the home. If there is a bidding situation, you will never be able to beat an unrealistic buyer.

7. Verify a clean title
If you are purchasing a home through a public auction, you will not have enough time to research whether or not the property has a clear title.

8. Contact banks or agents
If you are interested in purchasing a foreclosure, build your network of real estate professionals to help you identify foreclosures in the areas you are interested in buying.

9. Inspect the property
Always, always inspect a property before purchase. Distressed homeowners are also known to defer maintenance on their homes and sometimes commit damage to the home before leaving.

10. Have patience
Do not get discouraged if you are not able to purchase a foreclosure immediately. Do not rush any transaction without performing the proper due diligence.

To read the full article, visit www.whbsolutions.com/members

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