Tag Archives: Citi

Who pays what to homeowners to complete Short Sales

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The big news in Real Estate is the amount of money that lenders are willing to pay homeowners to complete Short Sales.  An interesting proposition since the premise of short sales used to be that the homeowners could not benefit financially in any way.

Then HAFA came along and offered $3,000 to homeowners as “relocation incentive”  to encourage homeowners to participate in this new program.  With the success of HAFA, the top lenders also decided to push Short Sales over Foreclosures since they made more money and never had to “own” the homes and all of the headaches of selling it after the foreclosure process.  And here we are now, less than 3 years after the introduction of HAFA, with one of the big lenders offering up to $45,000 as relocation incentive to encourage homeowners in the same way.

This is obviously an important piece of information that may be a “material fact” to a homeowner who is contemplating a choice between short sale vs  foreclosure.   Unfortunately, a lot of people do not know that this much money is available or believe it to be some sort of scam.   Well, it is not a scam.  The flyer below lists phone numbers to lenders and a homeowner can call to ask about their relocation programs.

 

 

Cash Incentives Flyer

The Nuts and Bolts of the $25 Billion Robo Signing Settlement

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The latest buzz in Real Estate now is about the $25 Billion Robo Signing Settlement.  In typical fashion, the program was announced first, before the details were released.  Fortunately, CDPE’s parent organization was able to read through the settlement and extract the details.

 

So what are the specifics about this settlement?

 

WHO

 

Bank ofAmerica

Ally

Chase

Citi

WellsFargo

 

HOW WILL THE MONEY BE SPENT?

 

$5 Billion  -  $2,000 payments to borrowers who were foreclosed on between Jan. 1, 2008 through December 31, 2011 and who were subjected to the fraudulent practices.

 

$20 BILLION WILL BE USED TOWARDS FORECLOSURE ALTERNATIVES

 

$10 Billion –  Going to borrowers who are currently delinquent on their mortgages in the forms of loan modifications and principal reductions.

 

$ 7 Billion –   Going to assisting homeowners through short sales, forbearance, relocation assistance or other alternatives.

 

$3 Billion  -  Going to help borrowers who are current on their mortgages but owe more than the value of their home into different refinance efforts.

 

TIMELINE

 

30-60 days  -  Negotiators will select an administrator to handle logistics of the settlement and monitor compliance.

 

6  –  9  Months  -   The settlement administrator and attorney general will identify homeowners eligible for immediate cash payments and notify them by mail.

 

3 Years  -  The time it will take for the settlement to  be completed by the banks.

 

 ADDITIONAL NOTES

 

* Robo-signing practices are forbidden.

 

* Dual-track Foreclosures (working with the homeowner on modification of the loan while simultaneously pursuing foreclosure) is forbidden.

* Fannie Mae and Freddie Mac insured loans are not impacted by this settlement.

 

* Special recourse is in place for Servicemembers who were charged over 6% interest
rates after a valid request to lower their rates under the Servicemembers Civil Relief Act
(SRCA) or who were wrongly foreclosed on.

 

* Money will be distributed differently for different states.

-  California will receive the largest portion of the settlement:  $12 Billion

 

Short Sale Mistakes – Do your due diligence

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A prospective client came asking for help.  She had a short sale specialist working on her case for over a year.  The thing was, this agent was not even local (from San Diego) and would only tell her that things were going well for well over a year; not much communication, just that things were OK every few months.  The distance probably had something to do with the lack of continual communication.

 

Only recently, did she receive a call from him saying the lender would not be approving the short sale and would now be foreclosing. This came as a complete shock to her.  This was obviously a case of dual track foreclosure or simple negligence on the part of the agent.  She said the agent was basically backing out and telling her that he could no longer help her.  She wanted to know if I could help by replacing him.

 

It’s easy to wonder why someone would simply trust an agent for over a year and not ask questions or demand that she be kept apprised of the status of the short sale more frequently than a few times a year.  I pulled up the county record to see how much time was remaining on a Notice of Trustee Sale (NOT) and to see if we could save the short sale.  My search found that the NOT was filed over 3 months ago.  I needed to get more information.

 

I asked her to get a copy of her file since the agent was essentially firing himself and I needed to know what type of communication had been initiated and what the lenders had agreed to in writing.  I also asked her to get me a copy of the NOT to find out the attorney service handling the sale.

 

After a week or so, I followed up and not surprisingly, she got nothing from this agent.  Nothing in writing.  Not a copy of the NOT; not a rejection of the short sale letter from the lender; not a copy of the short sale package that was submitted on her behalf; not even a cancellation of the listing agreement; nothing.  Only words.

 

I wanted to help her, but with no documentation and only verbal statements, I could not commit myself to help her out of her predicament.  Given her particular situation, I seriously doubt anyone could help her with no documentation of what had happened before and being asked to step in only with the verbal understanding that foreclosure is imminent.

 

How could this individual have avoided this type of crisis?  I’m not going to go into allegations here without seeing any documentation, but it seems like the agent who professed to be a specialist perhaps was not so experienced.

 

I believe she did not have to be in this situation.  The best way to have avoided this crisis, in my opinion, was for her to have done her due diligence when hiring someone to help her out initially.   You really do not get a second chance when you are dealing with foreclosures.

First, she should have hired someone locally rather than someone who is 500 miles away to market and sell her home.  From what was described to me, he really didn’t know the local market and did not price it correctly nor put in a lot of effort to get it marketed correctly.  If she were not getting answers, she could have dropped in on a local agent to demand answers in a more timely manner.

 

Secondly, she is a young computer literate woman; she should have done some research into who she was hiring.  After all, she found me online.  She should have Googled the person’s name and see what was said about the individual.  She may not have gotten everything she needed, but she would have discovered if someone were alleging bad service or worse.  People may not write nice things about you, but if they felt mistreated, they will let the world know, from my experience.

 

Please distressed homeowners, do your due diligence before hiring someone to help you.

Homeowners have an obligation to take advantage of assistance programs to fight foreclosure

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You are at the end of your ropes and came to the conclusion that you can no longer afford to keep your home.  If there were a way to help sell your home and protect your financial future, would you seek help?

 

If the government had a program which would help pay for a portion of your loan obligation and also help pay for your moving expenses, would you seek help?

 

If the government had a program which would insure that the lenders would not come after you for deficiency that results from what you borrowed versus what you ultimately re-pay them, would you seek help?

 

If the government said until 2012, the IRS will not collect taxes on the gains that result from the lenders forgiving you for portions of your loan, would you seek help?

 

Many homeowners are continuing to suffer because unemployment rate is still 10% in Silicon Valley and loan modifications are still very difficult to obtain  or may be secretly a victim of dual track  foreclosure.  If you saw no other way out except to sell your unaffordable home through a short sale using the HAFA program to obtain all of the above-mentioned benefits, would you seek help?

 

If the answer to the above questions were yes, then you may be a candidate for the HAFA short sale program.  Most major lenders are participants of this program which was designed to help distressed homeowners avoid foreclosure.  It is one of the few government programs designed to help struggling homeowners that actually works.

 

However, time is running out and you may not be able to take advantage of all of these wonderful benefits after the end of calendar year 2012.  So please contact us to find out more and see if you can qualify for all of these free benefits, including money to help settle your other liens and help you move.  Help is available to you, not taking advantage of this program is wasteful and can be disastrous to your financial future.  You have an obligation to help yourself by finding out more.

 

You may be fortunate and not be in a situation to take advantage of these benefits offered by this program.  However, if you know someone who may be able to benefit, then please forward this link and help them take advantage of these benefits and free money.   You will be helping someone out a very difficult situation.  It may be the right thing to do.

 

Another successful Wells Fargo short sale approval

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Another short sale approval came in today.    Another young family can now move forward and use the $3,000 check to help them relocate.  This was a HAFA short sale and another $6,000 from the proceeds were given to the second lien holder to help settle their claim.  After submitting the offer, it took less than 45 days to get the final approval.   This approval again, contradicts the rumors floating around out there that HAFA automatically causes delays in short sales.   HAFA deals with deadlines and was designed to speed up the process.

It was good for the bank, the seller and the buyer.   The house may not have sold for the amount borrowed, but we received a fair market value offer that was sufficient to pay monies to all parties involved to get them all to settle.   A happy day for all.  A good day for all.
Wells Fargo Approval

Silicon Valley Homeowners, Chase is offering incentive of up to $25,000 to short sale your home.

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The word is getting around.  JP Morgan Chase and other large lenders are actively encouraging homeowners who are in distress and not able to make their mortgage payments by offering them incentives of up to $25,000 if they are successful in short selling their homes.  So far this has only been information from third parties and other sources whose clients were solicited by mail.   Today, I learned that one of my colleagues had a client reach out to him because Chase had wanted the borrower to do a Short Sale with a CDPE designated agent if they wanted to receive $25,000.   Silicon Valley Homeowners, if you receive this type of letter, you need to contact a CDPE designated short sale specialist like myself.

I need to point out that not everyone is automatically extended this offer.  You must be the recipient of a letter specifically offering you the money.     But one thing is certain: this is no joke, this is happening because the lenders like Chase have figured out that they can still make more money by permitting short sales to be completed than go into foreclosure.   Banks never do anything unless they can make money as the end result.

 

 

 

 

 

 

Governor Brown sign AB 771. No more gouging of sellers when they order HOA document package.

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If you sell a lot of Common Interest Developments (CID) or condos and townhomes like me, then you and the seller feel violated every time you are required to order the HOA document package from the HOA.  They have absolute control over you because the HOA is the only entity which can certify and reproduce these documents.  You are not able to sell a condo or a townhome unless these documents are provided to the prospective buyers.

I have not heard about $1,000 bundled fees, but I have never seen a $75 HOA documentation fee either, it is always $300 or $350 from my experience.  This is my opinion, but running documents through a high speed double sided copying machine, does not warrant a $350 up-front fee and 10 days to produce these documents.  I have heard repeated complaints from sellers who have to fork over these charges and receive a bundle often consisting mostly of HOA newsletters and meeting minutes of association meetings along with the requisite insurance and financial documents about the health of the HOA.  Most people do not seem to object to having to pay the HOA to reproduce needed documents, but they do seem to object to paying so much money once they see what they received; thereby challenging the assertions that the feels were “reasonable” charges to actually reproduce said documents.  The law also will create a form which will detail what is required and how much it will cost to obtain said documents.

 

 

Governor Brown Signs Bill Preventing Gouging of Condominium/Townhome Buyers

The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown for signing AB 771, a bill that prevents home buyers in a common interest development (CID), such as a condominium or townhome, from being charged excess document fees.

Homeowner associations (HOAs) are required to provide specific documents to prospective purchasers of homes in a CID — a form of real estate ownership in which each homeowner has an exclusive interest in a unit and a shared interest in the common area property. In addition to the standard residential property disclosures, purchasers of a unit within a CID must receive basic information about the structure, operation and management of the HOA that operates the CID.

Current law requires that this information come from the HOA and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents. HOAs generally have provided the documents for approximately $75 to $250. Increasingly, HOAs have been delegating document preparations to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation. This delegation of responsibility by HOAs sometimes resulted in home purchasers being forced to pay additional fees, as much as $1,000, for other documents which were “bundled” with the required documents.

Assembly Bill 771 (Betsy Butler, D-Torrance) addresses this situation by specifying that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees. The bill also creates a new form detailing which documents are required, and requires the provider to disclose the fees that will be charged for the documents before they are provided. The seller of a CID must complete this form and transmit it to the prospective purchaser along with the required documents. This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided and the precise fees being charged for those documents.

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered inLos Angeles.

CALIFORNIAASSOCIATION OF REALTORS®
Lotus Lou, 213-739-8304

Learn not to be a victim of Fraud

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If you follow this blog, you know one thing I really hate are frauds against people facing distress.  Nothing worse, in my opinon, than taking advantage of people who are desperate because they are about to lose their homes.  It’s targeting one of the most vulnerable segment of society in order to make a few bucks.  Those fraudsters are the worst scum in my opinion.

 

I found a blog by a Realtor named Monique Bryher in Southern California who writes about various California Real Estate Frauds, it is called Califorinia Real Estate Fraud Report.  I found it to be an excellent place to learn about the fraud of the day, if you will.  I wanted to take a moment to talk about it because it is well orgranized by topic and because you can also receive a weekly report about the fraud du jour.

 

The best way to avoid being victimized is to be educated about scams.

 

http://www.californiarealestatefraudreport.com/

 

Check it out.

How do you save money and heartache? Pay your HOA dues.

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As a San Jose Short Sale Agent, I can tell you that one of the most difficult situations to deal with in a distress scenario involves an HOA which has filed a lien on the property for non-payment of dues.   What is even worse is an HOA that hired an attorney to sue the homeowner for non-payment of dues, slapped on a bunch of indiscriminate fees and penalties and demonstrated absolutely no willingness to compromise to reach a mutually agreeable settlement because they have a default judgment in their hands.

 

Asking for the unpaid dues is obviously expected, however, the attorneys piled on additional fees and surcharges in the complaint, among them items like: interest of 12% per annum, late charge of 10% per month, lien fee of $1300, collection cost of $500, litigation guarantee fee of $600, plus additional collection and attorney fees.  The total of lien amount was roughly $16,000 but the non-dues fees came out to be approximately 50% of the total amount.

 

When dealing with lenders, whether it is the first or second, everyone is operating on the principal that compromise is necessary to achieve the ultimate goal of completing a short sale to avoid a foreclosure.  In this case, that goal was punctuated by a Trustee Sale scheduled only weeks away.  Whether the second lien holder tries to negotiate for 10% or 50%, there is the underlying understanding that everyone has to give a little to make the deal happen in the end.   This fundamental concept, by which everyone operates in the distressed market, gets tossed out the window when an attorney with a default judgment is on the other end of the phone.  WE DO NOT NEGOTIATE becomes the mantra.  And because of the default judgment, there is no incentive to take less, even though the other parties are taking substantially less.  They knew she had a steady job, so even if the property foreclosed, they would pursue her after the foreclosure.

 

Negotiating with these attorneys has been the worst experience to date for me.   It would be a bit different but for the default judgment in their hands; at least there would be some sort of room to maneuver.  After literally having begged for some relief, we managed to reach a settlement for 90% of the value of the lien.  The relentless threat of pursuing her after the foreclosure, in conjunction with the seller not wanting to have to file for bankruptcy to protect herself from the attorneys and the impending foreclosure, led to the signing of a promissory note plus some cash.   At least it was finally over and they agreed to release the claim and let the short sale proceed.

 

What did the seller and I both learn from this experience?  Pay the HOA dues at all cost.  Had she paid it, we would not have dealt with the 50% ancillary fees and costs that were padded on the complaint.   She certainly would have saved a lot more money and we both certainly would have endured less emotional distress.

More arrests in Silicon Valley for loan modification fraud

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I have said this many times, but my personal pet peeve is hearing of scammers who try to take advantage of people who are victims of these economically difficult times.    It is bad enough that many homeowners are suffering and find themselves in a situation where they are unable to pay their mortgages.  But far worse to believe they are victimized again a second time when they put their hopes on people who profess to be there to help.  Sometimes even the lenders are engaged in practices that are bordering on scams called dual track foreclosure.

 

Every time one of these scammers is identified, I get worked up and get into my crime busting mode…….   So here we go again.

 

The first tell tale sign of a fraud or scam is that the so called service providers are asking for payments up front, before any work has been performed.  ALWAYS BE LEERY OF THESE REQUESTS.  There are multiple variations of these pay-first scams.

A recent scam identified by the California Department of Real Estate (DRE) involves up front payment to join a class action lawsuit which promises extraordinary home mortgage relief.  A brief description of the con has been reposted below for review purposes.

 

QUESTIONABLE AND/OR FALSE CLAIMS OF THE SO-CALLED MORTGAGE LOAN

DEFENSE OR “MASS JOINDER” AND CLASS LITIGATORS.

A.  What are the Claims/Sales Pitches?

They are many and varied, and include:

1. You can join in a mass joinder or class action lawsuit already filed against your

lender and stay in your home.  You can stop paying your lender.

2. The mortgage loans can be stripped entirely from your home.

3. Your payment obligation and foreclosure against your home can be stopped when

the lawsuit is filed.

4. The litigation will take the power away from your lender.

5. A jury will side with you and against your lender.

6. The lawsuit will give you the leverage you need to stay in your home.

7. The lawsuit may give you the right to  rescind your home loan, or to reduce your

principal.

8. The lawsuit will help you modify your home loan.  It will give you a step up in the

loan modification process.

9. The litigation will be performed through “powerful” litigation attorney

representation.

10. Litigation attorneys are “turning the tables on lenders and getting cash settlements

for homeowners”.

In one Internet advertisement, the marketing materials say, “the damages sought in your

behalf are nothing less than a full lien strip or in otherwords [sic] a free and clear house if

the bank can’t produce the documents they own the note on your home.  Or at the very

least, damages could be awarded that would reduce the principal balance of the note on

your home to 80% of market value, and give  you a 2% interest rate for the life of the

loan”

There are many varieties of scams identified and collected by the DRE over the years, some of them are listed below in the Consumer Alerts page for your benefit.    http://www.yourhome.ca.gov/fraud_warning.pdf

 

Homeowners in distress, I know you are in desperate situation and are seeking any and all assistance you can find, but please don’t let your situation cloud your judgment.  Be the wise consumer that you always have been.  Please check on the people who profess their desires to help you.  Know who you are dealing with before you give them any money.