Tag Archives: JP Morgan Chase

All major lenders have now initiated the changes to HAFA announced in March 2012

Posted on by

 

Lenders such as BofA, Wells Fargo, Chase and Citi have initiated the recent update to the Obama Administration’s  HAFA program this month.  It typically takes several months for major lenders to implement changes to Federal Programs like this one.

This means the program itself has been extended until end of 2013, but other components have been modified, those include changes such as:

* No Occupancy requirements
* Payment of $3000 to tenants to gain their cooperation
* Second lien payoff increased to $8500
* Designated Credit Bureau Reporting is Mandatory now

Learn more about the changes in the video below.

All Major Servicers now pay up to $8500 for second liens on HAFA short sales

Posted on by

On March 9, 2012, another update was made to the HAFA program.   There were many changes but the three most impactful and important ones in my opinion are

1.  The extension of HAFA to the end of calendar year 2013
2.  Increasing the second lien payout to a maximum of $8500
3.  Required Credit Bureau Reporting to Code 13 and Code 65

As the San Jose Short Sale Agent, of these three, the one that impacts my clients most is the one dealing with the increased payout of the second lien.  Everyone says it is not a big deal, but the reality is that the additional $2500 payout to their second lender is a HUGE deal for folks.  The prospect of offering an additional $2500 to get the second to waive their lien in full is a hugely compelling proposition.

According to the Supplemental Directive 12-02 which lay out the particulars of the most recent update, June 1, 2012 is when Servicers are required to implement the changes.  With the huge volume of files each lender or servicer is handling right now, it takes time for them to adjust to changes, so it is understandable why the HUD is giving them nearly three months to come up to speed.

So for all the readers out there, as of last Friday, Bank of America and all of the Servicers who have agreed to participate in HAFA are now bumping up their payout to $8500 to second lien holders.

The fantastic news is that these HAFA guidelines will have a trickle-down effect on non-HAFA short sales for those who cannot qualify for HAFA for one reason or another.

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

Posted on by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Major Lenders offering cash incentives to distressed homeowners to complete short sales

Posted on by

 

As I had written before, lenders offering cash incentives to distressed homeowners has apparently now grown also to include Bank of America and Wells Fargo.  These actions simply go to reinforce the fact that lenders will make more money doing Short Sales than Foreclosures and get the underperforming assets off their balance sheets much quicker.

 

If they made more money foreclosing, we would not see these tremendous efforts to drive distressed homeowners to complete Short Sales.

 

From the distressed homeowner’s point of view, there are other things happening which are ancillary benefits that make completing short sales extremely appealing to them.

 

The key to this huge payoff is that the lenders contact those who they believe to be at greatest risk and send them those wonderful letters.  If you are fortunate enough to receive one of these letters, you need to contact a seasoned professional like the San Jose Short Sale Agent immediately and set things into motion.

 

If you are not the recipient of one of these letters, then you can help others by passing along this information, so that these distressed homeowners  who may receive then, do not end up throwing them away thinking they are some sort of ploy or junk letters.

 

 

Banks Paying Homeowners to Avoid Foreclosures

A Happy Day for the San Jose Short Sale Agent

Posted on by

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

It was a pleasant, beautiful sunny day today as the San Jose Short Sale Agent drove around previewing some homes while listening to some oldies on the radio.   It turned into a much nicer day when my client who was closing on his short sale today, invited me to lunch after he picked up his check for the $3000 relocation assistance check from his HAFA short sale.  He was so excited that the nightmare was ending, that he wanted to celebrate with me.

 

It a little over two months ago when he contacted me, feeling he was at the end of his ropes.  Chase had just informed him they were denying his request for a loan modification after dragging it out for months and the prospect of staying in his home was now up in the air.  But he had made up his mind.  He realized, despite his emotional attachment, he could no longer afford to keep the home.  He had to give it up and move on with his life and make a new life for him and his family.

 

In a little over two months, that same lender – Chase – was willing to allow him to sell his home for a loss, forgive him the deficiency, but on top of that gave him a check for $3,000 to help with the relocation to his new rental.   As we were discussing over  dim sum lunch, he was so happy and grateful that he is able to move forward without the burden of his mortgage, he seemed like a different man.  He was saying he could not sleep even last night, because he was concerned that something could go wrong and we would not be able record the deed and close escrow today.  He was going to sleep well tonight!   My client is now a friend and an evangelist on my behalf.

 

We were discussing why more people who are in similar situation as himself would not choose his route if they were unable to get loan modifications or otherwise afford to keep their homes.  We came to the conclusion it is probably due to lack of information.  If distressed homeowners knew that their income tax exemptions and the benefits of financial incentives from HAFA were ending soon, they would probably take decisive action as to prevent missing out on those valuable benefits.  He would tell his friends whom he knows are having difficulty paying their mortgages to take action.

 

Dear reader, if you or someone you know, are in a similar situation where you have come to the conclusion that you cannot afford to keep your home, but you cannot sell your home either because of the debt you owe to the banks, please take action soon and before this year is up.  Naturally, if you reside in the greaterSilicon Valley, I would love to help you so you can move forward with a new chapter in your life.

 

However, I am not saying you have to come to me necessarily; I respectfully and sincerely urge you to talk to someone who is an expert in the field of Short Sale  and get help soon before the two programs expire.   I think I would not be doing my job and my personal quest to help as many people fight foreclosures if I were not educating people about programs that are available; yet many people are not taking advantage due to lack of information.

 

Please talk to someone.  Indecision means you are making a decision to allow foreclosure to happen to you.

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

Posted on by

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.

 

 

 

 

 

 

Which do lenders prefer? Strategic default or short sale

Posted on by

I got a chance to watch a couple of agents go at it with each other in a real estate forum trying to answer a question about doing short sales.   It was interesting, to say the least.  Besides the two main agents who proclaimed themselves the “experts” and hijacked the conversation, there were a few others who chimed in and made some comments.  But the question was never specifically answered.

 

The question posed was whether a lender will approve a short sale if the borrower had assets. He didn’t provide a lot of detail but wanted to either do a short sale or let his home go into foreclosure and he specifically asked not to get into a debate about the ethics in not paying his mortgage.

 

The argument or “discussion” in the forum quickly evolved into a big debate about the ethics of what people considered to be strategic default.  One expert proclaimed it was morally and ethically wrong to engage in strategic default and the lenders would not go for it. The other expert proclaimed morality and ethics had nothing to do with his decision and it was more about money.

 

As a San Jose Short Sale Agent, I tend to agree with the latter expert.  When you are dealing with short sales with lenders, the department you deal with is called Loss Mitigation.  Let me say it again:  Loss Mitigation.  Their job description is patently obvious: it is to mitigate or lessen the loss for the lenders.

 

Yes, there obviously are moral and ethical implications of not paying your mortgage when you have the financial ability to do so.   I firmly believe you should pay when you can and live up to your contractual obligations.  However, the question posed specifically asked not to judge the ethical implications but sought opinion as to whether a lender would agree to a short sale when the borrower stopped paying and was headed towards foreclosure.

 

There is no definite yes or no answer in these matters as the answer lies in the details.  It has a lot to do with how much assets the borrower has or does not have.  However, if the lender is faced between foreclosure and short sale, from my experience, the loss mitigation department chooses short sales over foreclosures.   At the end of the day, the primary decision will be about which method loses less money for the lenders, then, other factors like ethics and mortality can be entertained.

 

Why do you think big lenders like Chase and Wells Fargo are offering people up to $35,000 to do a short sale without even verifying their financial information?   HAFA recently amended its rules to state that servicers are no longer required to verify any financial information, but only to collect signed hardship letters.  Do these actions by large lenders and servicers sound like they are overly concerned about the ethical or moral issues surrounding foreclosures?

 

I can’t speak for other States, but in California, the recent changes in the law means if the lenders agree to permit a short sale, then the issues about deficiencies become null and void.  Once a short sale has been approved, the seller can walk away clean without looking over their shoulders.  Yet, another procedure that make completing a short sale more effective and efficient and preferable to foreclosure.  It’s all about money; if the institutions can make more money foreclosing, they will certainly choose that method, but everything recently is geared towards choosing short sales.  Yes, the lenders hate strategic defaulters, but they hate losing money even more.

 

So back to the question about would a lender approve a short sale if the borrower has assets?  It would depend on how much assets the borrower had and whether foreclosure would yield more money for the lender or a short sale.

Who does not qualify for a short sale?

Posted on by

 

 

 

 

 

 

 

 

 

 

 

 

We get all kinds of requests and questions about who can qualify for a short sale.

Many people, due to unforeseen hardships, are unable to make their mortgage payments are able to qualify and get the needed approvals.  However, because the short sales are becoming such a large part of  real estate transactions and all participants are trying to standardized the process through the  HAFA  program and because  HUD, a government agency,  oversees and encourages the utilization of short sales, not everyone will qualify.

Simply put, if you have been convicted of certain financial misconduct, most lenders who participate in the HAFA program cannot permit a short sale to be approved.

Below is the Dodd Frank Certification which is a part of the JP Morgan Chase’s  Short Sale package.    If you answer yes to any of these offenses, you are ineligible to receive any benefits that result from a short sale approval.

 

Dodd Frank certification

 

 

Bank of America stalls foreclosures in all 50 states!

Posted on by

As the Robo-Signer scandal continues, PNC has stalled foreclosure efforts in 23 states and Bank of America has stopped their foreclosure efforts in all 50 States until further notice.

Granted that California is a non-judicial foreclosure state, but the impact of these possible fraudulent actions on the part of these lenders is reverberating throughout the entire  industry and may have implications for non-judicial states as well.    Questions continue to rise as to the validity of these lender practices and how many homeowners may have been negatively affected.   An institution like Bank of America would not be stopping foreclosures in all 50 states, unless their own attorneys discovered something questionable about their practice.   More regulatory scrutiny certainly will follow.

This saga is getting more interesting every day.

Bank of America is now third lender to stop Foreclosure in 23 states

Posted on by

This is now the Third National lender to halt its judicial foreclosure efforts in 23 states.

It obviously was common practice among these national lenders to have the “Robo-Signers” sign off on judicial foreclosure documents without having personal knowledge about each case, as it is required in judicial foreclosures.  With each of these banks voluntarily stalling their foreclosures efforts, the question as to the veracity of those homes that were already foreclosed on within the past three years must necessarily be challenged.  This could possibly means thousands, if not, tens of thousands of foreclosures, depending on how many lenders in those 23 States used these Robo-Signers.

Attorney Generals of several States are demanding a moratorium on foreclosures.

This story definitely will continue on as more players either come out voluntarily or are forced out.  Stay tuned.

But the larger implication