There was a popular springtime ditty when I was growing up. "Spring has sprung, the grass is ris, I wonder where the flowers is."  I hadn't heard that saying for quite a while, so I thought that it was no longer a trendy, humorous way to herald spring's approach, until I saw it on Facebook recently...from a college student, no less. For real estate professionals, spring not only brings a season of renewal--grass growing, flowers blooming, leaves budding on bushes and trees--but it also brings buyers, who, after a cold, snowy, icy winter, are ready to step into the sunshine and get serious about finding their dream home.  Let's face it, homes show better in the spring and summer--the weather is more favorable, yards look prettier and more inviting, and there's less wear and tear on the home--family members and ...

                                 Whether you have Irish heritage or not, on March 17th, we’re all Irish and we celebrate by the wearing of the green unless we want to risk being pinched. The legend behind St. Patrick’s Day is that he banished all snakes from Ireland by chasing them into the sea—a feat that was brave and benefitted the island's inhabitants.  For many of us, snakes are critters we avoid at all ...

    EXTRA, EXTRA, READ ALL ABOUT IT!” Despite what newspaper articles or headlines declare, foreclosures and short sales are still a major part of the real estate industry and will be with us for the next several years.  Just because new housing starts or home sales in some markets have experienced an uptick, doesn’t mean that real estate professionals can or should turn their backs on potential clients who are facing a foreclosure, and who need the help of a dedicated, knowledgeable real estate agent.  At SSAOA, we wonder if that isn’t a little like saying, “Let those homeowners fend for themselves!” And we don’t believe that agents and brokers are without compassion or don’t care what ...

  IT’S VALENTINE’S DAY…LET US SHOW YOU THE LOVE! Ever think that you’re like the proverbial gerbil in the wheel, running as fast as you can, but always ending up in the same place?  We have a new program designed just for you that will help you run less, focus more on your direct dollar-producing activities, get more done, and put more money in your pocket. Let our STAMP Marketing Program be your “wheel” of fortune—we’ll show you the love as we do all the legwork for you!   So what’s included with STAMP?  This offer is exclusive for our members: we’ll prepare up to 100 or 150 of your lead marketing letters for a flat fee, including inserting all your personal information—you’ll tell us what you want, and, to get a better response, we use a custom-made, handwritten font on the envelope, and a real ...

Abraham Lincoln was the 16th president of the United States, born 204 years ago today.  On his birthday, maybe it’s worth spending a few moments thinking about President Lincoln—what he accomplished, how he led our country through a very difficult and devastating period of history, and why it’s important to study the patterns and philosophy of his life. You’re probably asking, what does this have to do with real estate…or me?  The example he set has everything to do with what we each should incorporate in our personal and professional lives.  Abraham Lincoln was considered one of our greatest and most remarkable heroes.   He came from humble beginnings and reached the top of his “profession”.  He was self-educated, motivated, skilled intellectually, and he associated equally with the privileged as well as with common men and women, and, ...

Which Way Should I Go? This question is on the minds of millions of people in America.  And we’re not talking about turning right or left at an intersection or which path to take when we’re walking in the woods.  It is a question that, for many, has no safe answer, or, more often than not, has no answer at all. As real estate professionals, we should be able to provide options that can help distressed property owners have some control over their lives and be able to make a choice, rather than feeling that they’re on a proverbial slippery slope heading straight to foreclosure without anything to stop their fall.  We can act responsibly, become educated about the available options, and then help homeowners make timely and educated decisions about which option will be best for their personal ...

Thanks to Harris Real Estate University for their top 12 predictions for lucky 2013! This month we’ll focus on two of them—first, home price appreciation, which HREU is predicting will return to the real estate industry.  Most housing experts agree that home values hit bottom in 2012, and Zillow predicts that 67 of the 156 markets it covers will realize an increase in values this year of 1.1%. New buyers, investors and buyers wanting to “move up” will return to the housing marketplace in increasing numbers, with demand outpacing supply in many markets, especially for single-family houses below $729.5K.  This is good news for conventional transactions and short sales. Second, the Mortgage Debt Relief Act of 2007 has been extended through December 2013, with a possibility that ...

Recently the Consumer Federation of America (CFA) released their 2011 Consumer Complaint Survey Report. The report includes the results of a survey distributed to 22 states over a one-year period to help consumers be aware of common scams and complaints that have been reported nationally. I thought that I would share some of the highlights and discuss the ones that will help us be better service providers across all facets of real estate.  Let's take a look at the complaints that made the top 10: Auto Sales (misrepresentations, faulty repairs, etc.) Credit/Debt (this includes mortgage modifications, credit repair, and predatory lending) Home Improvement/Construction (bad work, failure to complete work, etc.) Retail Sales (defective merchandise, ...

One of my agents is in an awkward predicament with a short sale client. She sent me the following message last night about her client in Michigan trying to move to New Jersey: "Hi Jonathan, I have a client here in Michigan who is trying to move to NJ. They have not paid their mortgage for 3 payments. It of course, shows on their credit report. They try to explain that their lender wouldn't look at doing a short sale until they had missed 2 payments. However, the folks they would like to lease from in NJ act like they've never heard of a short sale and missing payments is sometimes the only way to get your lender to work with you. Is there anything in writing that I may send my client to aid them in substantiating this? thank you for any assistance you can point to me." I forwarded the email to one of my top ...

Are Banks Urging Real Estate Agentsto Use Short Sale Processing Centers?Read Below And Learn Where Banks Are Heading Well The Simple Answer is... ...YES. In order for banks to streamline the short sale process they have realized that in order to do this they are going to have to rely on national processing centers to be a mediator between the banks and real estate agents. For Example! Bank of America has two main vendors that they have been beta testing new short sale programs, including the most popular "The Cooperative Short Sale Program" The main two vendors running this program is DTS ...

I'll admit that over the past two weeks I have been glued to my television totally addicted to NBC's coverage of the summer olympics. I am an avid basketball fan, so watching the USA team has sort of felt like an extension of the NBA season. Of course, the swimming, diving, and gymnastics have been great too, but I can't wait to see USA basketball go for the gold.  The olympic coverage has been a distraction to some significant news in the distressed mortgage world. In the middle of this week, head of the Federal Housing Finance Agency (FHFA), Edward DeMarco, rejected a plan from the White House to use bank bailout funds to write down principal balances for underwater homeowners. Normally this type of information would simply get tweeted along with the endless list of news headlines, but there were some interesting comments made by both the FHFA and members of Congress that I think are worthy of a ...

Throughout the course of a conventional real estate transaction, home inspections and appraisals are utilized to help the buyer--and their lender--understand exactly what they are about to get into. Even though most states require homesellers to provide prospective buyers with a property disclosures form, inspections and appraisals help buyers understand property conditions that may not be apparent with the naked, untrained eye. It's hard to believe that most homebuyers in this day and age would even consider getting into a real estate deal without an inspection, but recent studies show that only 84 percent of buyers request an inspection as a part of their purchase contract.  While poor conditions exposed in an inspection may result in additional contract contingencies, repairs revealed in ...

On the way into the office this morning I heard a local news report that the number of foreclosures is expected to increase this month significantly. The talk show host then proceeded to explain to her listeners that doom and gloom is on the way and that we are never going to recover from the foreclosure crisis. I sent her a link from my previous blog post about shadow inventory. While I doubt that she will ever read the article, I wonder to what degree the media's negative attention to the real estate market will affect the opinions of consumers.  I rarely ever take the side of the banks, but I think it is safe to point out that their retaining of foreclosed properties from hitting the real estate market has given the home price index the ability to steadily creep upward over the past few years. ...

Usually this is the time of year where I get to do some landscaping around the house, improve my garden, and wrestle on the grass with my kids; but given the latest weather forecast, I think I'll work on my blog...for the next few weeks! I know hot weather is sweeping the U.S., but Louisville is experiencing record highs peaking in the lower 100s. Unfortunately for my office, we've decided to reschedule the annual Short Sale Association of America barbeque for fear of losing staff members to spontaneous combustion because they got too close to the grill.  Locked within the confines of my air-conditioned office, I began to do some research on trends affecting our business that might also cause ...

Networking with professionals within the distressed property industry is essential to staying on top of the latest news. I recently received information from a friend that the Home Affordable Foreclosure Alternatives Program (HAFA) introduced some exciting new revisions that will be effective June 1, 2012. For all homeowners who may not be aware, HAFA is a government-backed foreclosure alternatives program that provides distressed homeowners with options to either stay in their homes or to sell them via short sale.  Before I reflect on the changes, let's list them: Former: owner must have resided in the property within the last 12 months Revision: no occupancy requirements, but the borrower cannot have purchased ...

Distressed homeowners that made decisive action regarding their financial situations in the beginning of the foreclosure crisis are steadily working their way back into homeownership. Although I have assisted homeowners nationwide with their distressed real estate problems, the majority of transactions I have completed were short sales in Louisville. Over the last decade, I have had the pleasure of watching my clients recover from foreclosure and make it back into their own homes, some of them in less than 2 years.  One of the main messages I try to convey in my consultations with distressed homeowners is the importance of recognizing the severity of their current ...

It is helpful from time to time to take a step back and investigate our nation's distressed property pulse. It is easy for us to get sidetracked and lose sight of the looming problem that has plagued our industry since 2008. I was doing some snooping around on some of my favorite news sites and came across the following figures about our nation's current foreclosure climate:  There were 69,000 completed foreclosures in March 2012; compare that to 85,000 in March 2011 There were 66,000 completed foreclosures in February 2012 There were 198,000 in the first quarter of 2012; compare that to 232,000 through the first quarter of 2011 At ...

I wanted to be sure and spread the word on a few changes to Bank of America's short sale processing arm, Equator, that was released last week. Changes often take place and many agents never realize it until they are weeks along in the process and end up having to resubmit all of their paperwork. Hopefully this message will reach those of you processing short sales for clients with Bank of America before you've spent too much time on it.  The first change is in regards to their 3rd Party Authorization Form. Effective last Friday, Bank of America will require all agents to use their new 3rd Party Authorization Form for all of their short sales. You can download this form through Equator or by contacting Bank of America.  ...

Last week we featured a letter from a homeowner who decided to hide instead of act when his family was being threatened by foreclosure. Many homeowners across the nation have either experienced the same situation or find themselves staring into the face of foreclosure without a clue as to what they should do next. In a survey conducted by Freddie Mac, results show that 8 out of 10 homeowners do not call their mortgage servicer when faced with foreclosure for fear that it will only make their situation worse.  With statistics like that, it's obvious why so many homeowners resort to inaction during the foreclosure process. In fact, as real estate professionals, we know that calling their mortgage company will not make their situation worse; it's the only way they can prevent foreclosure ...

Help! I didn’t do anything but hide and boy now do I regret it! I built a million dollar house and then refinanced it with one of those 1.9 variable loans. When the monthly payments were increased after two years, it became difficult to make the mortgage payments. Not only that, but I was in an automobile accident and my own business began to suffer as I recovered from the accident. It wasn’t a year later that I couldn’t pay the mortgage payment at all. That is when I started to see the handwriting on the wall. I owed more than what the property was worth. I owed around one million dollars and the house was only worth around $700,000. We tried to sell the house but we had no offers. Of course, we wanted into sell it for what we had put into it but the fair market value ...

Since the foreclosure crisis began about 5 years ago, distressed homeowners have been left to fend for themselves in a down-spiraling economy. Many homeowners acknowledge their responsibility in a foreclosure, realizing that they should have been more diligent about their loan paperwork before they purchased a new home. Over the past year, lenders are being forced to acknowledge their ongoing responsibility for the mortgage mess as well.  When I first got into short sales, I used to say things like, "The homeowner got in over their heads," or, "They shouldn't have bought the house in the first place." With thousands of short sales under my belt since then, my attitude has changed drastically. Case by case, hardship by hardship, and family by family my sympathy for the lending institutions that are in the ...

Occasionally I receive phone calls from family and close friends asking questions about why they should--or should not--place an offer on a particular home. A similar experience happened this weekend with a family member living near the Pacific coast. He called me while I was in a meeting and left me the following voicemail, "Jonathan, I'm thinking about placing an offer on a Freddie Mac property. What do I need to know about buying a Freddie Mac property?"  As I listened to the message, I thought "Where is his real estate agent?" It's not that I was mad or irritated with the call, I just legitimately wondered if he had asked his real estate agent the question and, if so, did the agent know how to ...

Finding a new place to live can be a painstaking process for displaced homeowners who have either lost their homes to foreclosure, or sold them through a short sale. Short Sale Association of America is dedicated to assisting homeowners in all stages of their distressed situations, including those who are now faced with seeking short-term and long-term residency solutions. Due to the negative impact missed mortgage payments have on credit, many homeowners wonder how they will convince a prospective landlord to approve their application for tenancy. What many of them need to understand, is that most landlords are fully aware of the prevalence of displaced residents with poor ...

The Obama administration announced a $25 billion deal with five of the largest mortgage servicers in the country, including Bank of America and Wells Fargo, that claims to provide financial relief to distressed-mortgage homeowners. This isn't the first time the government has stepped in over the past four years to make an attempt at slowing down the foreclosure crisis and I have a feeling it won't be the last. While some have benefited from the government's most recent assistance through Making Home Affordable, there's still an overwhelming number of homeowners losing their homes to foreclosure. In fact, the latest statistics say that one in four borrowers owe more on their mortgages than what their homes are worth. Details regarding this most recent pact between the government and mortgage servicers are few and far between, but one thing is certain: real estate agents must ...

On a number of occassions in the past year, I've heard agents ignorantly state "I can't find a distressed homeowner anywhere." My initial reaction is to grab the individual by the shoulders and shake some sense into them screaming, "Are you serious! Look around! There are over 7 million homeowners in default in the U.S.! Knock on your neighbor's door!" Obviously, I can't do that; however, I can help these individuals systematically find distressed homeowners who need assistance.  To the individual who said, "I can't find a distressed homeowner anywhere," here's my response: Where have you been looking? There are a number of sources that can give you the names and ...

I have been seeing a lot of ads around Activerain and real estate listing sites for agents to purchase leads. One says "Leads! Unlimited leads! A wish come true!" There's another one that says you should "trust" their 10+ years of experience and buy "real-time" leads. What kind of leads are they offering? To be quite honest, I'm always leary about clicking on gimmiky ads.  SSAA has been offering leads to real estate agents for quite some time now, but we have yet to try out this whole notion of sidebar ads. We have fortunately been able to rest our laurels on word-of-mouth marketing. For example, we've been able to trace most of our lead purchases back to our original customers ...

According to the U.S. Bureau of Labor Statistics, sales commissions have plummetted since 2004-2005 for real estate agents and brokers. Real estate professionals everywhere are making attempts to adapt to current market demands in order to account for dropoffs in income, but many of them are figuratively throwing dirt up against the wall without proper direction. As referenced in the chart below, fewer agents are spending money on marketing ...

Everyday we hear more stories about how the economy continues to worsen. As you know, millions of homeowners are upside-down on their mortgages and defaults have deflated home values across the U.S.; thousands of agents are going out of business due to a general failure to adapt to current market demands. Many of our comrades fell by the wayside because they were never properly trained to work with distressed properties. In my opinion, real estate agents were never intended to be short sale negotiators. When I got started in short sales, the distressed market was almost ...

Let's continue our discussion about foreclosure basics: Even though the loan is purchased by an Investor, the original Lender will oftentimes sign an agreement with either the Investor or the Issuer to become the Servicer of the loan. The Servicer agrees to perform basic customer service, collect monthly payments, and even handle foreclosure alternatives and foreclosure proceedings for the Investor. In other words, when a Borrower receives a loan from Bank of America, the loan is usually sold to a third party, and the Bank becomes the middle man between the homeowner and the owner of the loan, the Investor. Hopefully the diagram below will help illustrate the process even further: When a Borrower ...

SSAA receives questions from time to time regarding foreclosure basics and the impact foreclosure will have on distressed homeowners. Foreclosure is the removal of a homeowner’s right to redeem their mortgage due to their inability to continue making their mortgage payments. It’s important to help homeowners understand that foreclosure is not an event, but rather a legal process that is inevitable unless alternative steps are taken to prevent it from occurring. Homeowners can receive more information using www.SSAAHelps.com.  There are Two Different Foreclosure Processes States use either a judicial or non-judicial foreclosure process when a homeowner goes into default. Some states use both types depending on the way the mortgage was written (see chart ...

Earlier today as I was reading the news, I was reminded of an Activerain featured post about the dangers of allowing the media to skew our outlook on the real estate market (posted late last week). In one news story, a journalist insisted that more bad news was on the way as new-home sales fell an entire 1 percent in July; this is less than half of the 700,000 that economists say should represent a healthy market. He quoted economist Paul Dales saying, "I think there will be very little chance that the housing market will recover in the second half of the year or even the next few years." So, where's the silver lining? I'm not going to propose an economical resolution in this post; however, I would like to relate a story that I hope will apply to each of you on a ...

We are always on the lookout for positive trends in today's market that will help us look to the future with hope and encouragement. Once in a while we come across some statistical gems that standout in our journey for bright-side information.  According to the National Association of Realtors, single women made up 20 percent of all home buyers, compared to only 12 percent of single men. Have you noticed an increase in the number of single women purchasing homes in your area?  One of our short sale trainers related a story to us recently about his brother's home in Indianapolis that has been on the market for nearly a year. He desperately tried to rent out the ...

  The short sale process is different for each bank, but most of them still follow the same basic pattern: the Authorization to Release Information is sent, then the short sale package and the loan is assigned to a negotiator in the Loss Mitigation Department. The negotiator orders a Broker’s Price Opinion or BPO to determine the as-is value of the property. The completed BPO is reviewed by the negotiator and compared to the buyer’s offer and then the investor reviews the offer as well to see if the deal falls within their terms.  Agents who decide to do their own short sales are not only responsible for faxing the initial paperwork to the bank, but are also responsible for confirming the bank’s receipt of the paperwork, ...

The Federal Trade Commission (FTC) issued a press release July 15th that included exemptions for real estate brokers in regards to the Mortgage Assistance Relief Services (MARS) rule. Ever since the rule was originally released, SSAA has made efforts to ensure each agent understands the MARS rule and complies by its imperatives in order to build their businesses on a firm foundation of honesty and trust with potential clients.  The MARS rule prevents foreclosure rescue companies from charging advance fees until the client is satisfied with the services they have provided. All mortgage relief companies have been ...

Short Sale Association of America (SSAA) has recently released an ebook real estate agents can access and view online that is designed to help distressed-mortgage homeowners do the following: Come to a realization that the mortgage crisis is being felt nationwide Face the reality of their circumstances Objectively assess their situation using facts and reputable educational resources Clearly understand their rights and options Know how to discern foreclosure rescue scams from true professionals Execute a plan that will result in a long-term resolution The book, "The Distressed Homeowner Guide," has been released in response to multiple requests to SSAA by real estate agents to have something tangible, professional, and informative to hand to distressed homeowners during a listing consultation. ...

Recent data suggests it would take banks in New York State 62 years to repossess the 213,000 houses now in default or foreclosure. In New Jersey, another judicial foreclosure state, it would take 49 years. Florida, Massachusetts, and Illinois would take a decade.   Even though there are so many homes in these states--and in many others nationwide--in line for repossession, foreclosure cases are down nationally by about a third since last fall, according to LPS Applied Analytics. Does it seem like major lenders are strategically delaying the foreclosure process in order to get caught up?  Perhaps ...

What percentage of all home sales will be short sales in the coming months? What about in one year? 40%? 50%? Short sales rose from 17 percent in February to a record-high 19.6 percent in March. This is a chart that was included in the Housing Pulse Survey from Campbell Surveys and Inside Mortgage Finance: Pay close attention to the sudden decrease in Damaged REO properties (red line) compared to short sales (blue line), which is drastically on the rise. How ...

Did you know that lenders can detect double-closings on short sale deals AND find out if a short sale property was sold again in the months following a closing? They can! I was doing some research today on some of the latest short sale facts and trends and came across a research article with some great information:   The number of short sales has nearly tripled in the last eight quarters 23 percent of all mortgages in the United States have negative equity (upside-down) The number of short sales is expected to increase by another 25 percent in 2011 Here are a couple of neat graphs I found on Core Logic's site that illustrate these trends: ...

Listing a short sale can be broken down into the following three steps: identify, sign, and pursue. Identify: Most real estate professionals might say that a short sale will occur when the value of a property is lower than the principle loan balance on a mortgage. This is true in most cases. A short sale can also occur when the net payoff to the first mortgage on the sale of a property is ...