No Deficiency Judgments after Short Sale due to Senate Bill 458?

There is good news for home owners who are considering short sales in California. Governor Brown signed Senate Bill 458 into law today. This new law prohibits servicers, lenders and investors from pursuing deficiency judgments against home owners of 1 to 4 unit residential property.

Deficiency judgments on similar properties were prevented by CCP 580e last year, but only on first mortgage. Senate Bill 458 extends this protection to second mortgages and other mortgages as well.

The protection of Senate Bill 458 shall not apply to home owners who commit fraud or waste or to LLC, corporations, limited partnerships, political subdivision of the state, lien secured by a bond as specified, or public utility lien. There are additional rules for notes that are cross collateralized with more than one property.

Disclaimer: This article is not intended as tax or legal advice. Those considering a short sale are advised to consult an attorney and/or tax professional regarding any potential liability. This article is not intended to solicit listings currently listed with another broker.

Originally posted at No Deficiency Judgments After Short Sale?

Can I Do a Short Sale if I'm in Foreclosure in Orange County?

 

The short answer is maybe, maybe not.

Not clear enough? Read on.

In California, most foreclosures are done as non-judicial foreclosures, meaning that they do not require that a lawsuit be filed.

California Non-judicial Foreclosure Process

 

1. Notice of Default (NOD) is filed
2. Trustee must wait at least 90 days after the NOD is filed to file a Notice of Trustee Sale (NTS)
3. 21 days after NTS is filed, trustee can hold an auction sale

 

 

 

The process can take longer than this, and frequently does, but the speed at which the trustee moves is typically up to the bank/servicer/investor.

 

So, back to the question, can I do a short sale if I'm in foreclosure?

 

The likelihood of being able to successfully complete a short sale depends upon several things:

1. When in the foreclosure process you start your short sale.
2. How quickly you receive an offer.
3. How quickly you provide a short sale package to your agent to submit to the lender.
4. Which lender/servicer/investor you have.
5. How many liens there are against the property.
6. How knowledgeable your agent is about short sales and the process of completing them successfully.

If you have waited until the foreclosure process has begun, the best bet for a succesful short sale is to find a knowledgeable short sale agent and start the process immediately. Waiting or sticking your head in the sand and hoping it will get better is likely to result in foreclosure.

There are options, and the best thing you can do is talking to a knowledgeable short sale agent as soon as possible to discuss your option.

We have successfully completed short sales where a notice of trustee sale has been filed, but it can result in additional anxiety and nail biting for the seller.

If you are concerned that you may be in danger of foreclosure or are in foreclosure and have questions, please contact me at 714-319-9751 for a free consultation.

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Federal Government Disclaimer (MARS)

1. You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject or accept the offer, you do not have to pay us.
2. Christine Donovan, DonovanBlatt and Donovan Group are not associated with the government, and our service is not approved by the government or your lender; and
3. Even if you accept this offer and use our service, your lender may not agree to change your loan.

Do Costa Mesa Short Sales Come with Wannabe Prices?

 

For a discussion of why Costa Mesa short sales are often priced well under fair market value, please see Orange County Short Sale Prices.

 

This post is about managing your expectations regarding price when you buy or sell a Costa Mesa short sale and also understanding why pricing is so important.

 

Pricing a short sale way under market or making an offer to purchase a Costa Mesa short sale way under fair market value (the value at which a willing and able buyer would purchase it from a willing and able seller) may seem like a great idea in some ways, (after all pricing low may result in getting a quick offer, and buying a home cheap seems like a perfect idea) but the banks may see it differently.

 

Before approving  Costa Mesa short sales, the bank will order at least one, and usually several, BPOs (Broker Price Opinions) when trying to decide whether or not to accept the offer.

 

The BPOs are usually done by real estate agents or by licensed appraisers who will look at similar homes that have sold recently in the same area. They may also consider the condition of the home and similar factors.  Once they have reviewed everything, they give their opinion to the bank of the fair market value of the home.

If the BPO shows that the listing price and/or the offer are significantly below the fair market value, they are unlikely to accept the offer as they don't want to "give" the home away.

This is why I refer to these under priced homes as having "wannabe prices".  They are not realistic prices in that they are not prices that the banks are likely to accept when they are asked to accept the Costa Mesa short sale because they are too far below market value.

Pricing a home whether as a buyer or seller is an important part of completing a Costa Mesa short sale.  Though it may seem like a great idea to under price your short sale home or to make a "low ball" offer, both of these tactics may limit your ability to actually buy or sell the home.

If you see Costa Mesa short sales that appears to be unbelievably below the price of similar homes in the same area, you may wonder if this is a wannabe price that will never sell near that list price.

If you are considering buying or selling a Costa Mesa short sale and have questions or  want to make a successful sale or purchase more likely by obtaining the advice of a real estate broker who has successfully closed many short sales, please call me at 714-319-9751.

Please see one of our successful short sale sellers below and homes for sale in Costa Mesa below that.

 

 

 

Originally published at Do Costa Mesa Short Sales Come with Wannabe Prices?

What Takes Us 2 Days, Takes the Banks 6 Months for Short Sales and Loan Modifications

 

Do you ever wonder why it takes so long to get a short sale or a loan modfication completed?  It can take months or even years to to get a short sale or a loan modification done.  Why?

 

There are any number of reasons:

1. Hard to collect all necessary documents from borrower/owner.
   • This may be because the banks never seem to receive the documents until they've been faxed in 5 or 6 times.
   • It may be because it takes the borrower/owner or agent some time to respond to requests for documents.
2. Several different departments must touch the file in most short sales and loan modifications.
3. Often, borrower/owner or agent can't speak to person in charge of file.
4. Investors make the decision though the borrower/owner and agent may never speak to investors.
5. Short sale and modification departments are overwhelmed by huge numbers of files.
6. Many short and modification departments constantly have new employees due to turnover and or hiring because of large number of files.
7. Listing agent may not understand what needs to be done.
8. Nobody is following up consistently with anybody else.
9. The system is inherently broken and needs to be revised.

How long does it take for an agent or mortgage broker to gather the necessary information to put together an offer or a mortgage broker to put together an entire file?  It seems to me these can generally be completed in about two days, with the cooperation of all parties.  Sure it takes longer to get the deal completely closed, but not months.

My questions is, if it only takes us 2 days, why does it take the banks 6 months?

 

What say you?  What can we do to effectuate a change?

 

 

 

 

 

Can I Afford Your Services?  How is my Agent Paid in an Orange County Short Sale?

 

In a typical equity sale, the seller signs an agreement to pay a commission to the listing agent, and the listing agent then shares this commission with the buyer's agent.

When I meet with sellers who are considering a short sale, which occurs when they owe more on their home than it is worth, they are concerned that they will have to pay an agent commission.  Most can't afford to make their mortgage payments and do not know how they will pay a commission.

I explain to them that any offers they accept will be conditional upon their lender's agreement to pay some or all of the closing costs that are typically paid by a seller as part of the short sale agreement.

Costs that May Be Paid by a Short Sale Seller's Lender

• Agents' commission
• Contribution to second mortgage
• Escrow fees
• Title insurance policy
• Seller contribution to buyers' closing costs
• Termite repair
• Hazard disclosures
• Home warranty
• Seller moving costs
• Messenger fees
• Notary fees
• Past due real property taxes
• Past due home owner's association dues
• County tax stamps
• Miscellaneous fees

Not all lenders will pay all of these costs on a short sale.  Some will cut the costs entirely or pay some percentage of them.

Part of the negotiation with the lender will be what costs will be paid and what costs won't be. 

In general, most short sale lenders will agree to the following if they agree to a short sale:

• Agents' commission (may be reduced)
• Contribution to second mortgage (often a few thousand dollars; sometimes more)
• Escrow fees
• Title insurance
• Hazard disclosures
• Messenger fees
• Notary fees
• Past due real property taxes
• Past due association dues (may pay a portion)
• County tax stamps

 

Different lenders have different requirements and different items they will agree to pay from the proceeds of the purchase price.  What a lender will agree to on a short sale often depends upon who the final investor is as many lenders are actually servicing companies for the final investor.

If you believe you need to do a short sale on your home, but are concerned about having to pay many of the typical fees, please contact me at 714.319.9751 to discuss your options.

 

How Many Times Do I Have to Sell a Home?

 

Are you wondering if this is one of those trick questions you hated in school? Maybe you're thinking you only have to sell a home once. 

This is not the case in today's Orange County real estate market.

With many homes being distressed and short sales (meaning people owe more on their home than they are worth), it means a house may have to be sold many times before it is sold.

In a typical sale, the home must be "sold" to three people.

1. The seller of the home - when they agree to the listing price and/or accept the buyer's offer.
2. The buyer who offers to buy the home.
3. The appraiser - who verifies value for the bank.

In a short sale the number of times a home has to be sold is multiplied significantly.

1. The seller of the home - when they agree to the listing price and/or accept the buyer's offer.
2. The buyer who offers to buy the home.
3. The seller's lender's appraiser or agent who values the home for a potential short sale.
   • It can take months to get this person out to do a value, and during a declining market this is not good for getting the home sold.
4. The appraiser for the buyer's lender.
5. A new buyer, when the first one gets tired of waiting for the seller's lender to make a decision on the short sale.

 

In a time when it can take an average of 2 to 6 months to get a short sale approved, it is not uncommon for values to drop or buyers to get tired of waiting and simply walk away from a home they once wanted to own.

So, how can we avoid selling a home over and over again during the short sale process to one buyer after another?

1. Communicate with the buyer's agent once a week and make sure that he communicates with his buyer.
   • A buyer is much less likely to walk away in frustration if they know what is going on with the shor sale.
2. Make sure the buyer and the buyer's agent understand the nature of the short sale process and that the buyer is willing to wait while the seller's lender makes a decision.
3. Communicate with the seller's lender frequently to see where they are in the process, and if they need any documentation.
4. If the seller's lender request documentation, provide it quickly so that your file doesn't go back to the bottom of the pile.
5. Price the property reasonably and accept a reasonable offer so that the seller's lender is more likely to accept the offer.

 

Do you owe more on your home than it's worth?  Do you have questions about your options, please call me at 714.319.9751 or e-mail Me!

 

Click for a free list of Orange County foreclosures or a free list of Orange County short sales or e-mail Me!

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale.

Copyright © 2009 by Christine Donovan, All Rights Reserved. How Many Time Do I Have to Sell A Home?

Short Sales - What Are They & Can You Get One? - You Owe More on Your Orange County, CA Home

than It's Worth & You Don't Know What to Do - Option 4

 

This is a series for people who are "upside" down in their homes and looking to learn about their options.  For the the first 3.5 posts see You Owe More on Your Orange County, CA Home than It's Worth & You Don't Know What to Do

You Owe More on Your Orange County, CA Home than It's Worth & You Don't Know What to Do -  Options 1 and 2 - Reinstatement & Forbearance and

You Owe More on Your Orange County, CA Home than It's Worth, & You Don't Know What to Do - Option 3 - Loan Modifications and Obama's Making Home Affordable.

You Owe More on Your Orange County, CA Home than It's Worth, & You Don't Know What to Do - Option 3.5 - Obama's Making Home Affordable Refinance Program.

 

Perhaps you've heard the term short sale bandied about the past several months, and you kind of know what it means, but you're not really certain. If so or if you just want more information on short sales, this post is meant for you.

WHAT IS A SHORT SALE ANYWAY?

In simple terms, a short sale occurs when the bank who currently holds the mortgage on a property agrees to accept less than it's owed when the house is sold.

This is known as "shorting" the bank; thus, the term "short sale".

Many Orange County, CA homes are short sales at the moment because of a 40% drop in median values in the last couple of years.

 

HOW DO YOU QUALIFY FOR A SHORT SALE?

 

1. Hardship - the borrower/owner must have experienced a material change from the day the loan was received.

• Job loss
• Too much debt
• Death
• Divorce
• Change in mortgage payment

Wanting to walk away from an Orange County, CA home that is upside down is not considered a hardship.

2.  Monthly short fall

• Bank wants to see the borrower is having a very difficult time making the mortgage and other expenses each month.
• If you have a lot of money left over, the bank's are unlikely to consider a short sale.
• You will need to complete a financial worksheet to determine this.

3.  Insolvency

• Occurs when debts and liablities exceed all assets.
• Borrower doesn't have liquid funds to pay down the mortgage.
• Banks may choose not to use retirement accounts when considering this.

WHY WOULD A BANK AGREE TO "SHORT SALE" AN ORANGE COUNTY, CA HOME?

If a person qualifies for a short sale and is facing foreclosure, the bank may choose to accept a short sale for basic business reasons. 

• They may net more money from a short sale than a foreclosure.
• If the short sale is completed, the bank may not have a non-performing asset on its books for as long.
• The property is likely to be in better condition than if it were a foreclosure because the seller is more likely to take care of the property while attempting to sell it as a short sale.

Next time, we'll discuss foreclosure and deed in lieu. 

We know what your options are when you owe more on your home than it's worth and don't know what to do, and we will share it with you over the next few weeks.

If you want to make sure not to miss any of this series, please subscribe to this blog to learn your options.

If you have questions in the meantime, please contact Christine Donovan at 714-319-9751 or e-mail Me!

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Do you owe more on your Orange County home than it's worth, and you don't know what to do? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about our system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale.

Copyright © 2009 by Christine Donovan, All Rights Reserved. Short Sales - What Are They & Can You Get One? - You Owe More on Your Orange County, CA Home than It's Worth & You Don't Know What to Do - Option 4

A couple months ago, I posted a new listing for a short sale home in Rancho Santa Margarita. 

This last week, we successfully closed the short sale.  The home sold for about 50% of what was owed on the two loans.  The bank accepted the deal, believing that fair market value would allow approximately the amount of our purchase offer.

Who benefits from a short sale?

The Seller benefits. When a seller who is in danger of losing a home to foreclosure is able to short sale instead, there are several benefits.

1.  The seller may take a less of a hit to his credit score.

2.  Foreclosures remain on credit reports for 7-10 years, as a special category.  There is no category for short sales, and so most stop damaging the seller's credit in 2 years.

3.  Under Fannie Mae guidelines, a seller who had a short sale may be qualified to obtain a new home loan in as little as two years.  If there is a foreclosure, the seller may qualify in five years.

These are just a few of the benefits.

Click the video below to see what one of our short sale sellers has to say about us.

The Buyer benefits. When a buyer is able to purchase a short sale home, he benefits in several ways.

1.  He may obtain a home for slightly or more under market value.

2.  He is likely to obtain a home that has not been damaged from previous residents.

3.  A short sale is more likely to have been maintained by the previous resident.

4.  A short sale has often been occupied and not received the neglect of a foreclosure/REO property.

5.  A buyer of a short sale may benefit from disclosures of the seller unlike with a bank owned REO           where the bank knows little or nothing about the history of the home.

The Bank benefits. 

1.  By getting a non-performing asset off of its books.

2.  By not having to spend additional money on attorneys and other costs for the foreclosure.

3.  By not having to hold the property for additional time for removing the previous owner and remarketing the property while continuing to maintain it.

Do you owe more on your home than it's worth?  If you would like to obtain more information on a free seminar to see what you can do, please click You Owe More than Your Home Is Worth for more information.

Are you interested in obtaining a list of short sale homes? 

Click for a free list of Orange County foreclosures or a free list of Orange County short sales or e-mail Me!

For more information, please see:

What is a Short Sale, and Do I Qualify for One?

 

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

For more information, please visit Costa Mesa real estate. For more information on Costa Mesa homes or the value of a particular home please visit Costa Mesa home values

Click for a free list of Orange County foreclosures or a free list of Orange County short sales or e-mail Me!

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale. Copyright © 2009 by Christine Donovan, All Rights Reserved. Short Sale - Approved and Closed - Benefits Seller, Buyer and the Bank.

A short sale occurs when a homeowner asks a bank to accept less upon the sale of a home than it is owed because the value of the home has dropped - the owner is upside down in the home.

To qualify for a short sale, the homeowner must:

 

1.  Have a hardship.

2.  Have a monthly short fall.

3.  Be insolvent.

 

For more information on short sales see Is Your Home Fading Away or see the video below.

 

 

Click for a free list of Orange County foreclosures or a free list of Orange County short sales or e-mail Me!

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Copyright © 2009 by Christine Donovan, All Rights Reserved. Do You Know What a Short Sale is and How or Why You Would Qualify for One?

This week, Sara left her first home for the last time. 

Her castle was no longer a refuge.

It was a prison from which she was eager to escape

.

Two years ago, when she realized she was overburdened, she tried to do the smart and responsible thing and sell her home.  The first time her home was listed, it was on the market for 4 months.  The second time it was put back on the market at the beginning of this year for six months.

Both times it was listed at a price high enough to pay off the bank loans and pay all costs associated with the sale.

The problem was that during more than 10 months on the market, no more than 1 or 2 buyers came to see the home. Why?? It was over priced in the market. In Orange County, the home values of most homes have fallen in the last few years. Why would a buyer come look at it when there were so many cheaper homes from which to choose?

Fortunately, the third time was a charm.  Sara was introduced to a real estate consultant who could help her solve her problem and free her from her prison.

The house was re-listed at a price that was reasonable in the current housing market.  This time, many potential buyers came to see the home, and several offers were made to purchase it. After much negotiation and follow up, the bank agreed to accept one of the offers.

Now Sara is freed from the burden of a home she could no longer afford after she had taken a pay cut and her husband's work had slowed down.

If you or a friend, family member or neighbor needs to sell a house, but can't sell it for enough money to pay off the bank loans, please contact me to discuss a possible "short sale".

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Click Orange County homes for sale to view all OC homes for sale. Copyright © 2008 by Christine Donovan, All Rights Reserved. Short Sale Complete, and Seller Breathes Sigh of Relief.