Short Sale IQ Revealed

Short Sale Daily News recently performed a survey to find out the current thoughts of industry professionals on short sales. Over 600 real estate professionals participated, and the results are on par with what we at Short Sale ProLogic have been saying all along: THE SHORT SALE MARKET IS NOT A FAD. Short Sale Daily News asked and you, Realtors and investors, responded. Here’s what was said about the following short sale questions:

Doing a short sale is not much different than a traditional sale.

True     14.1%

False    85.9%

Representing the buyers on a short sale takes about the same amount of time as a traditional sale.

True     12%

False    88%

“When I show properties to buyers on a time constraint, I don’t tell them if any are listed as short sales because it doesn’t matter.”

True     2%  (shame on you!)

False    98%

You have to cut your commission every time on a short sale.

True     5%

False    95%

Short sales require more work than traditional real estate sales.

True     97%

False    3%

I hate showing short sale properties.

True     25.5%

False    74.5%

Short sales are just a fad and will be gone in the next couple years.

True     6.1%

False    93.9%

I have worked at least 6 short sale transactions, on either the buyer or seller’s side.

True     82.7%

False    17.3%

I try not to call the banks and other parties involved very often because I don’t want to be a pest.

True     7%

False    93%

Expediting a short sale doesn’t do any good. It will close when it closes.

True     6%

False    94%

 

Only a couple surprises with these results. A quarter of you do not like to show short sale properties, which was much higher than we anticipated. We were also surprised that 7% of the quiz takers did not want to call and follow up with the banks and other parties in the hopes of getting a short sale closed sooner. Sadly, you often have to be the squeaky wheel to keep things moving with a short sale.

And finally, we were pleased to see that a whopping 82.7% had worked at least six short sale transactions. That statistic is quite telling. If you were on the fence about the trend in short sales, that stat alone should convince you of the substantial market share that short sales have cornered.

All of this is reflective of what is happening in the real estate market. Short Sales are not a fad and are something every single Realtor is going to have to learn to deal with. The good news is that there are so many great resources out there to help guide Realtors through the process painlessly, so don't just sit there. Do something about it!

Homeowners Frustrated With Home Loan Modification Process

From 9news.com:

DENVER - When many of you told 9NEWS you were frustrated with how banks were treating foreclosures in Colorado, we heard you.

The process is frustrating. The banks don't return phone calls or deny your modification without giving you a clear reason. So we decided to investigate how the system works.

Judy Landrum recently went through a home modification. She calls the experience a big game. Medical bills made it tougher and tougher to pay her mortgage. Like so many Americans, she'd heard of Obama's plan to help Americans avoid foreclosure. She thought her hardship would make her eligible to get help from her bank.

"I've learned that doesn't matter at all. It comes down to numbers," Landrum said.

Housing counselor Caleb Anderson sees that misconception every day.

"The lenders are looking at their bottom line. They aren't looking at hardship, you know," Anderson said. "They are looking at situations that are sustainable. Those are the types of homeowners who are going to get help."

If you are facing foreclosure, there are people who can help. You don't need to pay for help from a free HUD approved counselor. The Colorado Foreclosure Hotline can put you in touch with one. Their phone number is 877- 601-4673.

Read more on 9News.com.

Foreclosure Friday Report

Foreclosure Friday Report

Using Short Sale ProLogic, this morning we took a peek at Golden, Colorado, where there are only 8 properties that are actually listed out of the 188 that are going through the foreclosure process!

Foreclosure vs. Short Sale

Take a look at some of the surprising information in the table below from Fannie Mae about the benefits of short sales vs. foreclosures:

ISSUE	FORECLOSURE	SUCCESSFUL SHORT SALE
Future Fannie Mae Loan – Primary Residence (1)	A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae-backed mortgage for a period of 5 years	A homeowner who successful negotiates and closes a short sale may be eligible for a Fannie Mae-backed mortgage after only 2 years
Future Fannie Mae Loan- Non Primary (2)	An investor who allows a property to foreclose is ineligible for a Fannie Mae-backed investment for a period of 7 years	An investor who successfully negotiates and closes a short sale may be eligible for a Fannie Mae-backed investment mortgage after only 2 years
Future Loan with any Mortgage Company	On any future loan application, you will have to answer “yes” to the question that asks “Have you had a property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” This will affect the interest rates you receive in the future	There is no similar declaration or question regarding a short sale.
Credit Score	Score may be lowered anywhere from250 to more than 300 points. Typically will affect a credit score for over 3 years.	After a short sale the mortgage is usually reported as “settled”, “paid as agreed” or “paid as negotiated”.  This is still a negative reporting, but can lower the score by as little as 50 points, if all other payments are current.  In this case, a short sale’s effect can be as brief as 12 to 18 months. Unfortunately, most short sales are accompanied by multiple late payments and those will be reported, further reducing the score and lengthening out the recovery time.
Credit History	Foreclosure will remain as a public record permanently, and on a person’s credit history for 10 years or more.	A short sale is not expressly reported on a credit history. There is no specific reporting item for a “short sale”.  The loan is typically reported “paid in full”, “settled”. Though this will show as derogatory history, it doesn’t have the same punch as foreclosure, and typically won’t last as long.
Security Clearance	Foreclosure poses a significant challenge to a security clearance, second only to a felony or serious misdemeanor conviction.  A person who is employed as a police officer, firefighter, military personnel, CIA, FBI or any other profession requiring a security clearance being revoked and the position being terminated.	On its own, a short sale does not challenge most security clearances. (3)
Current Employment	Employers have the right to check the credit of all employees who are in sensitive positions and may do so regularly.  In many cases, a foreclosure is reason for immediatereassignment or termination.	A short sale is not expressly reported on a credit report and is therefore not a direct challenge to employment. (4)
Future Employment	Many employers require credit checks on their job applications A foreclosure is one of the most detrimental credit items an applicant can have and inmany cases will challenge employment opportunities.	A short sale is not reported on a credit report and is therefore not a direct challenge to employment. (5)
Deficiency Judgment	In 100% of foreclosures (except in those states where there is no deficiency), the bank has the right to pursue the deficiency judgment.	In s few short sales, it is possible to convince the lender to give up the right to pursue a deficiencyjudgmentagainst the homeowner.
Deficiency Judgment (amount)	The process of foreclosing, holding, marketing and selling a house is very costly for the bank.  Unless it sells at the public auction, the resultingdeficiency will almost always be higher than if the property were sold short.	In a property managed short sale, the home is sold at a price that should be close to market value, and in almost all cases will be better than an REO sale resulting in alower deficiency.

1. Fannie Mae Announcement 08-16: Michael A. Quinn, Senior VP, Single Family Risk Officer
2. Fannie Mae Announcement 08-16: Michael A. Quinn, Senior VP, Single Family Risk Officer
3. The term “short sale” does not expressly appear on a credit report. –May 14, 2008, Experian.com
4. The term “short sale” does not expressly appear on a credit report. –May 14, 2008, Experian.com
5. Short Sales are currently not explicitly reported on a credit report.

Foreclosure Friday Report

FORECLOSURE FRIDAY REPORT from  Short Sale ProLogic:  

Today Short Sale ProLogic took a look at Littleton, Colorado and found some very shocking, very disturbing results. Currently, there are a total of 1,152 homes going through the foreclosure process in Littleton. Of those same homes, only 56 of those homes are actually listed, which is a mere 4%.

What most people don't understand is that there is something that can be done. If you are facing foreclosure and can no longer afford your home, you may qualify for a Short Sale—even if you don’t think you can (or haven’t been able to) sell your home.

So, what are the benefits of a Short Sale? Take a look:

• Eliminate or reduce your mortgage debt
•  Avoid the negative impact of a foreclosure 
• Start repairing your credit sooner than if you went through a foreclosure 
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)

 

With the help of Short Sale ProLogic, Realtors are given the tools to not only find out the exact status of each home that is going through the foreclosure process, but also the training needed to approach the homeowners to begin helping them get their home listed and save them from foreclosure.

More Help Available To Coloradans Facing Foreclosure

From 9News.com:

Colorado Attorney General John Suthers has awarded a two-year, $600,000 grant to the nonprofit Foreclosure Hotline in hopes of helping more homeowners trying to avoid losing their homes. "The Colorado Foreclosure Hotline is the best resource available for consumers facing foreclosure," Suthers said in a Tuesday news release. "It is free and has a proven record of helping homeowners in distress assess their options and make an informed choice." 

The grant will allow the hotline to continue its work for the next two years. The grant money came from fines and penalties from Countrywide Financial Corporation and Wells Fargo. The money was gained in a settlement to resolve allegations related to mortgage fraud by the Colorado Attorney General's Office.

The hotline is managed by the nonprofit Brothers Redevelopment. It serves as a network of more than two dozen HUD-approved housing counseling agencies who work with homeowners in or facing foreclosure.

The hotline averages 3,000 calls per month with more than 132,000 Coloradans seeking help since the hotline was established in 2006.

Consumers can reach the Colorado Foreclosure Hotline at 1-877-601-4673 or visit the website at www.coloradoforeclosurehotline.org. 

Just another confirmation that the short sale market will be around for a long time to come. Visit www.shortsaleprologic.com to see how you can help.

Foreclosure Friday Report

FORECLOSURE FRIDAY REPORT: Highlands Ranch, Colorado. As of this morning, 740 properties are going through the foreclosure process.

ATTENTION REALTORS: of the 740 properties only 43 are actually listed- that is just 5.8%. You have an opportunity to help solve this crisis. What are you waiting for?

www.shortsaleprologic.com

Short Sale Option As An Alternative To Foreclosure

Realtors: by now, you probably already know that by using Short Sale ProLogic, you will be able to discover the names of homeowners whose homes are in pre-foreclosure or in foreclosure in your area. The hard part is how to approach those homeowners to explain to them the benefits of doing a short sale versus letting their home go back to the bank. There are some tips below that can help both Realtors and homeowners make sense of the foreclosure process and how valuable a short sale can actually be. 

Fannie Mae:

If you are facing foreclosure and can no longer afford your home, you may qualify for a Short Sale—even if you don’t think you can (or haven’t been able to) sell your home.

What is a Short Sale?

A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and DIL options.


A short sale is an alternative to foreclosure and may be an option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are behind on your mortgage payments
• You owe more on your home than it’s worth
• You have not been able to sell your home at a price that covers what you still owe on your mortgage
• You can no longer afford your home and are ready or need to leave
  
  

What are the benefits of a Short Sale?

• Eliminate or reduce your mortgage debt
• Avoid the negative impact of a foreclosure
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)
  
  

What is the process for a Short Sale?
If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

• set the sale price (based on current market value),
• collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
• review acceptable offers,
• agree to the terms of the sale once a buyer is in place, and
• work with the buyer’s real estate agent and mortgage lender to finalize the sale.
  
  

In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Deed-in-Lieu of Foreclosure).

 
Next steps

	Gather your financial information—Make sure you have your basic financial and loan information on hand when you call your mortgage company. You’ll need: your mortgage statements, including information on a second mortgage (if applicable) your other monthly debt payments (e.g., car or student loans, credit card payments), and your income details (paystubs and income tax returns).
	Explain your current situation—Be ready to outline your current hardship and explain why you are having trouble making your mortgage payment, the reasons why this is a long-term problem and inform your mortgage company that you want to sell your home to avoid foreclosure. Your mortgage company will need to understand the reasons why you are having difficulty in order to find the right solution for you.
	Contact your mortgage company—Tell them you are interested in a Short Sale and you want to see if you qualify.
	Contact a licensed real estate agent—Tell them you are interested in listing your home for sale (if you have not already done so).

Your mortgage company wants to help you avoid foreclosure and, in most cases, will be willing to work with you. The biggest mistake you can make is to wait any longer to take action. Contact your mortgage company today to determine if you are eligible for a Short Sale.

Real Estate Investing With Short Sales

From Short Sale Daily News:
Now is the time for folks who can take advantage of today's real estate market to beef up their investment portfolios with short sales. Banks are closing them faster than ever before and, from start to finish, it’s not as painful anymore. There are plenty to choose from, and short sale homes make good investments because they are priced at or below market. As a general rule, short sales take a little longer to buy than the foreclosed homes (but not always) and they are in much better condition most of the time.

As agents, it’s important to remind our buyers not to be afraid of short sales. In many cases, the banks will pay closing costs and an HOA transfer fee. This is not always the case in a foreclosure sale. Some of the home foreclosures are in pretty rough condition and they will cost some cash to fix up enough to be rented or lived in.

Consider talking to your investors and buyers about short sales as we’ve seen a jump in short sale purchases by investors which is great news for short sale agents.

Sellers complete a successful short sale and stay current on your loan and you can BUY another home – no kidding.

There is a new government program that allows people to do a short sale and move to another more affordable home, with no penalty, so long as their payments are current.

Right now one out of every three homes is upside down in our state, Colorado, and statistics show this is going to continue for up to 10 more years. Numerous other states like Nevada and Florida have similar issues.

The next decade of housing will be suppressed and how exciting that the government is doing something about it. Keep in mind, the program only applies to homeowners who are current and have no late payments. Also, make sure your sellers get pre-approved. It requires a minimum 620 credit score. The program is limited to sales prices of about $360,000 and require at 3.5% of the home price as a down payment. Contact lenders in your area for more information on this new program. Then be sure to educate and inform your clients of this program.

CLAREMONT INFORMATION SYSTEMS LAUNCHES SHORT SALE PROLOGIC IN NEVADA

Software service provides real estate professionals with access to real time data for thousands of unlisted distressed properties across Nevada

(Las Vegas, NV)– March 7, 2011– Claremont Information Systems, the real estate industry’s leading provider of distressed real estate data, today announced the launch of its online software system, Short Sale ProLogic. Recently launched in Colorado, this powerful online distressed property tracking tool is now available to real estate professionals in Nevada. It allows first access to nearly 8,039 foreclosures and pre-foreclosures in Nevada.

“For the fourth consecutive year, Nevada has the highest foreclosure rate in the country with one in nine homeowners in Las Vegas receiving a foreclosure filing in 2010,” said Ryan Lantz, managing director of Claremont Information Systems. “We launched Short Sale ProLogic in Nevada to help real estate professionals accurately assess the market to retool their businesses to meet the changing needs of the market while also providing the best possible assistance to homeowners facing the stress of foreclosure.”

Powered by Short Sale ProLogic’s ActiveTrack™ technology, agents can identify real-time unlisted distressed property leads to stay way ahead of competitors.  Agents know immediately when specific properties enter foreclosure, when foreclosure sales information is published, when the lender sets the minimum bid amount, when bankruptcies are filed, when a property becomes an unlisted REO and much more. 

Customized functionality allows agents to define a market search and determine a preferred method of instant notification (email or SMS text). The technology not only alerts agents of leads, but continues to report on a customized list of properties. 

KEY FEATURES

• Real-time distressed property data
• Accurate information about what’s happening in a given neighborhood or zip code
• Customizable functionality
• Instant notification via email or SMS text
• Complete real estate market intelligence
• Tools to support value and pricing strategy
• Opportunities to identify potential customers who don’t think they have any options
• Industry leading short sale negotiations and distressed property transaction management 

To try ShortSale ProLogic risk free for 30 Days in Nevada and increase your business, contact the team at Claremont Information Systems via email at support@ShortSaleProLogic.com or call 1.888.404.4766. No credit card is required.

About Claremont Information Systems
Claremont Information Systems is a technology company created specifically to bring efficiencies to the distressed real estate market. Founded in 2008, Claremont provides real estate professionals with reliable, real-time data to make actionable decisions on foreclosed properties. Currently covering the Colorado, Arizona, Nevada, and California markets, Claremont data is delivered to consumers through Web interface and sold in report format to Institutional Companies and Governmental Agencies. For more information www.ShortSaleProLogic.com or call 1.888.404.4766.

Foreclosure Friday Report

Foreclosure Friday Report 

Short Sale ProLogic Foreclosure Friday Report

 

This morning, we looked into the Colorado zip code 80238 using Short Sale ProLogic. We found an astounding number of properties currently going through the foreclosure process: 1,754! What is worse, only 112 of those properties are actually listed.

There is an incredible opportunity for Realtors to use this information to not only make money, but to help guide the homeowners facing this crisis to a better solution. It is a win-win! Short Sale ProLogic is able to provide Realtors with the right tools to be able to approach the homeowner, guide the homeowner and take them through the short sale process.

If you haven't done so already, head to shortsaleprologic.com and see what this tool can do for you. Trust us, it is worth your time.

True or False? Common Foreclosure Myths That Homeowners Should Know About

COMMON FORECLOSURE MYTHS

Shannon Peer, Colorado's Foreclosure Prevention Hotline Director uncovers several foreclosure myths that homeowners should know about:

Myth: You need to be two to three payments behind before the bank can help.
Truth: Contact you bank even before you miss your first payment.

Myth: The bank is stalling and losing my paperwork because they want to foreclose on my house.
Truth: The bank does not want to own your house.

Myth: The bank has an obligation to work with every homeowner.
Truth: Most banks want to work with homeowners, but not every bank is required to work with homeowners.

Myth: A loan modification can fix every foreclosure.
Truth: There a many different workout options used to prevent foreclosure.

Myth: All loan modifications are the same.
Truth: There are lots of differences among loan modifications.

Myth: The foreclosure process stops once you have submitted your documents for review.
Truth: The foreclosure process will more than likely continue while your documents are being reviewed.