Tag Archives: foreclosure

New Law: No more deficiency claims on Short Sales in California!

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Woo Hoo!  SB 458 is now the law in California!  This means the second mortgage holder must relieve a homeowner of any deficiency claim if they approve a short sale.  SB 931 made the same type of deficiency waiver mandatory for first mortgage holders, but the second mortgages were exempt.  This led the seconds to put a stranglehold on many homeowners, making unreasonable demands on distressed homeowners. NO MORE.  Short Sales mean paid in full.

As a San Jose Short Sale Agent, I believe this announcement is one of the most significant in the Short Sale process because it permits homeowners to simply walk away after the sale.  I spent many many hours negotiating with seconds to permit the homeowners to walk away without paying anything or paying as little as possible. The passage of this new law eliminates that whole unpleasant process.

Kudos to Governor Brown for having the compassion to help distressed homeowners.  Finally, some protection for the homeowners and not  just for the large banks.  We must allow short sales to process quicker and more efficiently, rather than drag on because of the seconds want to squeeze more blood out of homeowners who already suffered from negative equity and are losing their homes.  This new law makes it easier California homeowners to do a short sale now and avoid foreclosure because that little sticky issue with the deficiency claim is preserved after a foreclosure sale.   Now the reason for doing a short sale over a foreclosure becomes infinitely more clear.

 

 

CALIFORNIA ASSOCIATION OF REALTORS® applauds Gov. Brown on signing SB 458 into law

LOS ANGELES (July 15) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown on signing SB 458 (Corbett) into law. SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.

Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”

SB 458 contains an urgency clause making it effective upon signing.

 

What are the qualifications of a HAFA short sale?

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What does a Notice of Trustee Sale look like?

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We discussed previously, the Notice of Default (NOD) which is essentially the first step in the foreclosure process.  You are officially put on notice and have certain timeframes which will dictate the process by which the home will be separated from the homeowners.

 

After the three months or 90 days which are given to cure the default, the next step is the filing of the Notice of Trustee Sale (NOT or NOTS).   This is otherwise known as the Auction Date or Auction Sale where the home is sold to the highest bidder at the steps of the County Court House.  If a homeowner were unlucky, they may receive this simultaneously as their loan modification is being rejected – a victim of dual track foreclosure.

Sample NOTS
As you can see, the instrument is used to answer the following:  a) how much is owed after penalty and interest, b) who is owed this money and c) where the auction will take place.  It is sort of the Who, What and Where of the foreclosure process.

 

 

This is the last step in the foreclosure process.  The homeowner can stop the foreclosure process by paying the full amount listed there before the sale date; or seeking alternative options like a short sale or deed in lieu.  When you receive this notice, you really must act fast.

 

What does a Notice of Default look like?

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You hear the term all the time.  Notice of Default, (NOD).  If you google the term, you get pages and pages of definitions and suggestions on what to do.  But after reading all of the material, could you identify it if you saw it?

 

As the San Jose Short Sale Agent, I try to explain the significance of this document and try to describe what the documents looks like to my clients, but most cannot visualize it.   However, I don’t blame them, because even for me, in order for me to learn or absorb something: I need to see it, feel it or experience it before it will register in my brain.  I supposed we are all the same in this regard.

 

Instead of always trying to describe this document, I decided I would show everyone a sample.  This way, they will know when the official foreclosure process has begun and certain timelines have been established.   This is when things get very serious.

 

 

 

Sample NOD
As you can see from a real NOD from one of my clients (relevant information removed), the document simply identifies three things:  a) how much do you owe, 2) to whom do you owe said money and 3) when the sale date (a.k.a. auction date)  can take place if said money is not paid.   If the default amount is not paid by the end of 90 days, then the agent of the beneficiary can file a Notice of Trustee Sale (NOT or NOTS), which will describe when and where the property will be sold.

 

If you see one of these documents in the mail, then it is time you seek help from someone who can stop the foreclosure process.

 

 

Foreclosure victims are not dead-beats.

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Finally, some news that paints a true picture of how the Financial Crisis has made many decent homeowners unfairly portrayed as dead-beats.  As a San Jose Short Sale Agent, I see many many people who through circumstances outside of their control, fall into economic catastrophes from which they are unable to recover.  The  ones I see most are unemployment or reduction in income,  negative equity preventing homeowners from getting better interest rates when their ARMs reset,  and unforeseen medical bills.

People who fell so far behind and are facing foreclosure or seeking short sale to avoid foreclosure are generally not bad people (of course there are those who try to work the system), they just suffered some tragic economic hardships.   Most of  these clients struggle for a long time before coming to the conclusion they cannot pay their mortgages.   And I believe the TransUnion finding is finally vindicating many of  them from being incorrectly labled as dead-beats.

Foreclosure Victims

Miraval Homeowners are you having difficulty making your mortgage payments

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Miraval Homeowners, are you or someone you know having financial hardship which is preventing you from keeping up with your mortgage payments?  Have you been turned down for a loan modification?  Do you know if you were a victim of dual track foreclosure? Do you need help?

 

You are not alone in your struggle.  1 of 7  homeowners are cannot keep up with their mortgage payments and faced with uncertainty as to what to do.

 

There is help out there for you.  Depending on your situation, there are Federal Government approved programs which may even provide you with $3,000  assistance to help you move and another $6,000 to pay off a second mortgage during these dark days.  Find out more about your options.

 

We have helped many homeowners, and your neighbors at the Miraval as well, escape from their stifling situation.  There are solutions available to you.  Let us help you.   Learn about your options.   Move on with your life.  Not doing anything is not an option.

 

Please contact us for a no-obligation consultation.

www.sanjoseshortsaleagent.com
650-605-3188

 

 

Distressed Market now THE MARKET in California.

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Foreclosures share of California sales inches down in April « HousingWire

According to Dataquick,  in April 2011, distressed properties accounted for 54% of all sales. Mind you that your local neighborhood numbers will differ, but this gives an insight into where the market is headed.   Because California still has a higher than the National average in unemployment rate of 12.3%, versus 9.0% for the nation,   people who are having trouble meeting their mortgage obligations will continue to present itself as a serious problem.  Silicon Valley’s unemployment rate was 10.3% in Santa Clara County and 8.4% in San Mateo County.

The direct correlation between unemployment rate vs. foreclosure is quite obvious.   Until we can address this issue of 12.3% of our fellow Californians who want to work but cannot find a job, we cannot resolve the housing crisis and start discussing the prospect of  increase in housing prices.

 

 

The perfect scenario for a short sale

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Yes, sometimes it takes a few months, and the waiting is difficult; but when the end result is the perfect case scenario, everyone comes out happy.

 

In this particular case, the seller gets the short sale approved, but more importantly, she gets the approval plus the waiver of the deficiency claim and with no contribution in the form of cash or promissory note. The perfect scenario for the seller.   She gets to sell this place and start a new chapter of her life without the constant fear of the underwater mortgage and the fear of foreclosure and its impact on her future looming over her.   A young person gets another chance at her life.

 

 

Bank of America Approval

 

 

In a mortgage default situation, doing nothing insures that the foreclosure will be expedited

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I got a call yesterday from an out of area agent who wanted to get some information about short sales because he searched on the web and found me as one of the top San Jose Short Sale Agent.  Like many Real Estate Agents, he did not really understand and did not want to learn about short sales, so he wanted to get some information that he could pass along and refer the relative to me.

 

One problem: a Trustee Sale date was scheduled one week ago.  For those who are not familiar, a Trustee Sale is also known as an Auction Date.   The homeowner wanted to stop the foreclosure but the Agent was not aware of the Trustee Sale Date.  This could have been a

 

This illustrates and highlights an issue I want to discuss today: when dealing with foreclosures, inaction leads to action.  Being afraid of the prospect of losing one’s home is understandable, but allowing that fear to transform us into acting like a deer in the headlight is not an option.  You must take action one way or another.

 

In the case above, the homeowner was afraid and did not know what to do and that fear led her into inaction.  But we must remember, she had months of notice as to what was eventually coming.

 

The typical non-judicial foreclosure process looks something like this in California (remember, this is a simplified description for illustration purposes only, each case and timeline will be different):

 

  • Homeowner misses 2 to 3 mortgage payments.
  • Lender sends Notice of Default – giving 90 days to re-pay delinquent payments plus interest and penalty or will lead to Trustee Sale or Auction Sale
  • Typically within 21 days of missing the deadline issued on the Notice of Default, a Notice of Trustee Sale date is scheduled at the courthouse steps
  • On the scheduled date and time, the property will be put on auction for sale

In a typical scenario like above, we are looking at minimally 6 months, from missing the first payment, before an auction date is set to sell the property; sometimes it takes much longer.   During this time, in addition to the numerous phone calls, letter and the actual notices are sent to the homeowner’s mailing address.   The homeowner had plenty of notice as to what was eventually coming, so whether she wanted to pay off the delinquent monies, or request a loan modification or do a short sale, she could have contacted the lender to slow down the process or find out alternative options available to her.  There are methods to delay or extend the trustee sale date.

 

What is my point?  She knew she wanted to stop the foreclosure, but by the time she decided to do something about it and reached out to someone for help, it appears, it was too late.

The lenders generally do not want to foreclose on a property because they can make more money using other foreclosure prevention methods. So if the intention is to prevent a foreclosure, the homeowner must take action, reach out to the lenders to request a loan modification or to a Realtor to do a short sale, or call me and I can answer questions you may have if you are in Silicon Valley, but take some sort of action before the trustee sale  date is scheduled.   In a foreclosure situation, by not doing anything, you have actually chosen to expedite the foreclosure process.

 

California Association of Realtors’ (CAR) Open Letter on Short Sales

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Here is an open letter from CAR’s president, Beth Peerce, discussing the need to get lawmakers and other involved parties to create a more standardized short sale process.  It is a good explanation of the challenges that stand in the way of getting a short sale approved.