Posted by Amber Sorensen on Wed, Jan 18, 2012 @ 04:39 PM
It’s no secret that completing a short sale can be confusing and frustrating for the seller. One thing that is often overlooked, that can save a LOT of headache, is who’s name is on the title and who’s name is on the mortgage. There are many circumstances that cause these names to be different, the main one being if one buyer doesn’t have the credit or income to be named on the loan, but both buyers want to be considered “homeowners” regardless. Below are some questions you may be asking yourself:
- How does this affect the sales contract? Any documents pertaining to the sale of the property (any contracts or disclosures) must have the names and signatures of whoever is on the title, regardless of whose on the loan.
- How does this affect the short sale packet? The Third Party Lender will only require documents from whoever is named on the loan, regardless of who is named on title. That means that if only 1 homeowner is named on the loan, paystubs and bank statements for the other don’t need to be submitted or included in any financial statements. Unfortunately, this means their debt can’t be used to prove a hardship either.
- How do I find out who is the on the loan and who is on the title? Your monthly loan statements will indicate the names of every person who is named on the loan. You can contact the title company who closed the transaction, or you can contact your Country Recorders Office, to find out who is named on the title. If you currently have your property listed with a Realtor ®, they will have ordered a Property Report from their title company, which will also have this information on it.
Having a missing signature on a contract can severely slow down the transaction process. Submitted financials for someone who isn’t on the loan can confuse the bank and end in them declining a sale based off financial information they shouldn’t technically be taking into consideration. So, before you sign a purchase contract or submit your hardship packet, make sure you’re clear who needs to sign what and whose financials have to be included
Posted by David Robinson on Thu, Dec 08, 2011 @ 04:44 PM
You may have heard about the recent changes to HARP (Home Affordable Refinance Program). This is the government program that allows homeowners to refinance their home loan even if they owe more than the home is currently worth. For example: If you owe $225,000 on your loan and your home is only worth $175,000, you may still be able to refinance to a lower rate.
Originally, the program had a limit of 105% loan to value, it was then increased to 125%. The most recent changes actually remove the loan to value cap on 30-year fixed rate mortgages. This means that homeowners who are significantly under water may have a solution to deal with an adjustable rate mortgage or challenging mortgage payment.
Of course, with every loan program there are some restrictions.
1. Your loan must be backed by FannieMae or FreddieMac.
2. You can have 1 missed payments in the last 12 months but must NOT have missed a payment in the last 6 months.
3. You must have less than 20% equity in your home.
4. Your current loan must have been originated before May 31, 2009.
5. Your lender must be willing to participate in the program. Not all lenders are.
So if you are underwater on your home and would like to refinance to fix your adjustable rate or lower your current interest rate, this program may be right for you. Contact your lender to see if you qualify.
If you are faced with foreclosure or would like to sell your home, contact us and we can discuss a possible short sale.
Posted by David Robinson on Wed, Nov 09, 2011 @ 05:18 PM
You hear claims all the time on the TV, Radio or other advertisements about credit repair services. In my opinion the term “credit repair” is a bit misleading. In reality, these companies specialize in disputing errors on your credit report and ensure that lenders have followed the federal Fair Credit Reporting Act (FCRA). So before you go and spend thousands on “credit repair” take some time to understand what you can do for FREE to improve your credit score.
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Posted by David Robinson on Fri, Oct 14, 2011 @ 07:01 PM
If you or someone you know is struggling to make your mortgage payment or currently facing Utah foreclosure, you need to understand what a Utah short sale is and how it can benefit you.
First, what is a Utah short sale? Simply put, a short sale is a tool used to prevent Utah foreclosure and minimize the damage a foreclosure will cause. Technically, a short sale is when a homeowner sells their home for less than (short of) what is owed to the lender.
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Posted by Amber Sorensen on Fri, Oct 14, 2011 @ 05:37 PM
Now that you have the Basics of the Utah Short Sale Packet down like a pro, here’s some “extras” that we include every time we submit a packet:
- Listing History and Info Cover Sheet - this gives a clear breakdown of the following:
- Repairs that need to be made to the property
- Breakdown of Comparables
- percentage of short sales vs equity sales
- average list price
- average “days on market”
- Days on Market
- Completed Price Reductions (include dates)
- Number of Showings we’ve had and any negative feedback from agents.
- Offers received, along with terms.
- Detailed Comparative Market Analysis for both Sold and Actives.
- Hint: Let the buyers agent help with this, my guess is they most likely pulled comps when writing the offer... ask them to send over the comps they used and then consider using them in your Comparative Market Analysis.
I also review past files that are with the same bank to check for any additional documents that were requested and may be requested again, those docs could include (but are not limited to):
- Arms Length Affidavit
- Homeowners Questionnaire
- Freddie Mac Short Sale Addendum
- No Flip Affidavit
- Name Affidavit
Once you have all these documents in your hands, review them again for completion and then call the bank to ensure you have the correct fax number (if you haven’t already done so). Upload the docs into Adobe, or another editing program. At the top of each page, ad a header with the Borrowers name and Loan number.. if you don’t have access to an editing program, simply print the Borrower name and Loan number at the top of each page personally (but make sure it’s printed and readable).After you’ve faxed the entire packet to the bank, call within 48-72 hours to ensure they’ve received each document (don’t simply ask if they’ve received a fax, many times certain pages can get mixed in with other files even if the majority of the fax was received correctly). Ask at that time if any additional documents are being requested and try to get a time-frame from them as to when the file will be reviewed and assigned a negotiator.If you’ve completed these steps, you’re well on your way to a successful Utah short sale! Next week we’ll be discussing keys to follow up and making sure the Utah short sale packet stays up-to-date while the file is under review.
Posted by Amber Sorensen on Thu, Oct 06, 2011 @ 06:29 PM
Who enjoys going back and forth with the banks over paperwork? Not me! Unfortunately, if you’re going through a short sale, you’ll have to, it’s just the ugly truth. But one thing you can do upfront to ensure as little back and forth as possible, is to complete a clean and complete Short Sale Packet from the get-go. Remember, the banks have hundreds, if not thousands, of files on their desks... they are going to look at your packet once, and move on, and if it’s not complete, you’ll have to wait until they go through all the other files again before they get back around to yours. This can add several days, if not weeks, to the review and approval processes.
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Posted by David Robinson on Tue, Sep 27, 2011 @ 02:53 PM
As Utah home prices continue to decline, the topic of strategic default is becoming more common. Strategic default is simply the decision to stop making your monthly mortgage payment even though you may be financially able to do so. Over the years, I have shied away from working with Utah homeowners who choose to strategically default on their mortgage. Like many others, I thought of it as irresponsible or unethical. It just didn't seem right. That said, my eyes have recently been opened to a new perspective. As I was researching the topic of strategic default, I stumbled upon a paper written by Brent White, a University of Arizona law professor. White argues that breaching a mortgage contract is not only morally acceptable, it may be the most responsible course of action when necessary to fulfill more important obligations to one’s family. This is a concept that is foreign to most of us. We have a natural tendency to look down upon those people who would “choose” to let their homes go. We think of them as irresponsible and selfish, that they are only looking out for themselves and care nothing for the neighborhood or their personal obligations. Although this is currently the socially acceptable reaction, White does a great job of helping you see the other side of the story. Among other arguments, White compares a mortgage contract to any other contract. To illustrate his point, he uses the example of a cell phone contract. He writes, “First, a mortgage contract, like all other contracts, is purely a legal document, not a sacred promise.
Think of it this way: when you got your cell phone, you likely signed a contract with your carrier in which you “promised” to pay a set month payment for two years. Let’s say, though, that two months after you sign your contract, the price of cell phone service drops by half – meaning that the same cell phone service you pay $100 a month for could be had for half of that with another carrier. You decide that you would be financially better off paying the early termination fee of $300, rather $100 a month for another 22 months for the same service that you can now get for $50.
Would it be immoral for you to break your contractual “promise” to pay $100 for two years, and elect instead to pay the early termination fee? Of course not. The option to breach your “promise” to pay is part of the contract, as is the consequence of breach – a $300 early termination fee. There is absolutely nothing immoral about exercising your option to breach, and you’d be financially wise to do so.”White also tackles the argument that mortgage default hurts neighborhoods and the economy. White points out that underwater homeowners carry an unequal portion of the burden to prop up neighborhood values while lenders are slow to come to the negotiating table and work out better options. He writes, “If lenders were less intransigent and more willing to negotiate, underwater homeowners wouldn’t have to walk away from their homes in order to save themselves from financial ruin. And we wouldn’t have to worry about the fragile housing market crashing again.Why speak of morality and social responsibility only when talking about strategic default by homeowners, and not by financial institutions or large corporations?” He goes on to highlight two major U.S. businesses who chose to strategically default on their mortgage obligations yet they were not criticized for being immoral. Although I still find myself struggling to overcome the ingrained social stigma of strategic default, White has helped me to look at this topic from a different perspective and to be more understanding of Utah homeowners who choose strategic default when dealing with their underwater home. Read the full article by Brent White here. Read More
Posted by Amber Sorensen on Fri, Sep 16, 2011 @ 10:51 AM
There’s no doubt for anyone who’s in the real estate business that listing agents and buyers agents are often caught in a tug-of-war, especially during Utah short sale transactions. The listing agents have fiduciary duty to their client - the seller and the buyers agent has fiduciary duty to their client - the buyer. The end goal, of course, is that everyone walks away from a successful transaction with a smile on their face. Unfortunately, this isn’t always the case, and sometimes, the deal falls apart in the 11th hour.
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Posted by David Robinson on Mon, Sep 12, 2011 @ 12:30 PM
Utah foreclosure scams are increasingly becoming a major problem for the residents of the state. Homeowners and consumers alike need to make themselves aware of these scams and what to do if they come across any of them. There are a few precautionary measures to be wary of including high up front costs, high profit guarantees, and promises that sound to good to be true.
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Posted by Amber Sorensen on Thu, Sep 08, 2011 @ 11:53 PM
A few weeks ago I had the privilege of attending the Utah Association of Realtors Annual Convention in Park City. I went unsure of what to expect, as while I’ve attended many continuing education courses, I’d never attended this particular conference before. I was pleasantly surprised!
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