Tag Archives: wells fargo

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

Short Sale Cash Incentive Programs

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We hear more and more about how the lenders are preferring short sales over foreclosures and even some of them offering cash incentives to encourage the borrowers to do short sales.   Lenders are giving cash to homeowners who cannot afford to keep their homes to sell it and get out from under the crushing debt.

Let’s not be  under any false delusion: the lenders are doing this because they can make more money than permitting a home to go into foreclosure.   If your lender is not one of the major ones offering large cash incentives, then there is another program (HAFA) which offers additional cash incentives to complete short sales.

There is some big  money being offered out there for those home owners who cannot afford to keep their homes.  If the information is out there, then what good consumer would not jump on the opportunity to take advantage of money designated for them?  The money is out there.

Short Sale Incentives Report

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

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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

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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

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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

 

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

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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

Knowledge can avoid tragic foreclosure outcomes – so share that knowledge

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The San Jose Short Sale Agent  shouted with glee today to celebrate the victorious outcome of a family which was able to successfully fight its battle against foreclosure today, as I was feeling proud and victorious.  The family which had endured the humiliation of being turned down for a loan modification by their bank, feeling they were without recourse, had come to me only two months ago to try a short sale as their last hope.   They felt they were at their wit’s end.   They came beaten and  humiliated.  It was bad enough they had to live through the indignity of unemployment which triggered their horror story, but their bank had refused to modify their loan or otherwise assist them.

 

But today they were victorious because the same bank which refused their loan modification request, had approved their Home Affordable Foreclosure Alternatives Program (HAFA) short sale and were willing to pay them $3,000 to help with their relocation costs and also had going to pay nearly $4,000 to pay off their HOA delinquencies and additional funds to pay off their delinquent property taxes.   Unlike two months ago, now the family felt they were getting vindicated.

 

That joyous feeling lasted a few hours as I read this  article today describing a different outcome for a person with a similar hardship which is headed towards a different outcome.   I obviously do not know the full details of Darlene’s situation besides what was described in the article below.   However, what I do know is that she was unemployed, suffers from cancer and fell behind in her payments which led to her foreclosure.

 

Typically three things have to be present to qualify for a short sale approval:  1) hardship (typically economic hardships) ,  2) monthly income short fall (meaning more goes out than coming in)  and 3) insolvency (meaning no assets).   In Darlene’s case, she certainly would have met the hardship (cancer plus unemployment);  the article mentions she is living on pension, social security and unemployment so I would assume she had a monthly short fall and probably did not have much assets set aside.   She certainly sounds like she would have been a good candidate for a short sale.

 

Additionally, if  this were her only home (primary residence), and as she was obviously delinquent on her mortgage payments and her unemployment and other income sources would probably have resulted in her paying more than 31% of her monthly income, there is a good chance she would have qualified for a HAFA short sale as well as Wells Fargo participates in that program.   If she qualified for a HAFA short sale, then she would have received $3,000 relocation assistance and up to $6,000 to pay off her second loan, if she had one.   Rather than being evicted with nothing to  her name or perhaps a small stipend – otherwise known as cash for keys – to get her out, Darlene could have saved herself the humiliation of being evicted from her home of 41 years and walked away knowing that she would have settled her debts with Wells Fargo and other lien holders.   She could have walked away selling her home with the bank’s blessing plus money in her pocket, rather than having the bank evict her and her neighbors of 41 years watching this happen.

 

The unfortunate aspect of this tragic story is that Darlene probably did not know that the HAFA option was available to her.   People in Darlene’s demographics do not often have the benefit of being able to research alternative options to foreclosures on the internet and take advantage of those solutions and the accompanying benefits like my clients did when they reached out to me two months ago.  Both of these people had similar hardships – unemployment (but Darlene’s case was worse because she also has cancer which was probably rapidly draining her bank account) – yet the outcomes will be dramatically different and each of these families will be celebrating the Holiday Season this year  in different states of minds.   It did not have to end this way for Darlene except that she was unaware and regretfully no one around her had given her the requisite  information.

 

If you are reading this blog entry, please share what you have read, so that people like Darlene do not have to suffer through foreclosures due to lack of knowledge regarding alternative options.   Please tell your grandparents, parents, neighbors or others who may be unable to surf the net for answers that there are alternative options to foreclosures; they don’t have to endure the humiliation of an eviction.  Please share with them that there is a Federal Government designed program to help out people facing foreclosures by offering them different alternatives.
San Jose Foreclosure Case is Both Tragic and Complicated

Bank of America streamlines HAFA short sale process in Equator.

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Starting today, December 1, 2011, Bank of America (BofA) makes the HAFA short sale process run easier and smoother by permitting them to be processed through the Equator system. The use of the Equator system made the entire short sale process at BofA go much smoother. It was only a couple of years ago, that BofA was often deemed to be the worst lender to deal with in the short sale arena. As the San Jose Short Sale Agent who has handled countless number of short sales with BoA prior to their transition to Equator, the changes in their service after converting to Equator were almost immediate. BofA went from the worst to best in a matter of months by a BBB (Better Business Bureau) survey. Unfortunately, the benefits and the efficiency of Equator were unavailable for those who were seeking HAFA short sales with BofA.

 

Until this announcement was made, all HAFA short sales had to be taken out of Equator and handled through their third party vendor call centers and fax machines. This meant things took longer and the inefficiencies of faxing documents to various fax numbers and non-employees came back into play. (But to be fair, even Wells Fargo which also uses Equator, takes the same approach with HAFA short sales and removes them from Equator). But with the announcement today that HAFA short sales can be processed through Equator, all is right with the universe. Now only if Wells Fargo will follow suit.

 

Bofa Announcement

Dual track foreclosure by lenders is alive and well in Silicon Valley.

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I am mad as hell as I write this entry.  Once again, dual track foreclosure has proven to be alive and well and being practiced by one of the large banks in Silicon Valley.

 

What is dual track foreclosure?  Simply put, it is when the lender agrees to work with homeowners on a loan modification request, but also continues its foreclosure effort  simultaneously.  If the homeowners are being given the chance to work on a loan modification, why not stop the foreclosure effort until the resolution of the modification request?   The problem is that by permitting the homeowners to work on a loan modification, it gives them the false impression that the foreclosure action has halted during the loan modification process.   Those homeowners whose loan modifications are rejected are discovering that their homes are being foreclosed soon thereafter, often not giving them enough time to prepare to deal with the loan modification, let alone the foreclosure.     In even worse scenarios, the homeowners are being foreclosed on while they are anxiously awaiting answers to the loan modifications.  Homeowners are given false hopes of saving their homes through a loan modification, but while they are working through the process, their homes get unceremoniously snatched away without warning.    

  

Legislative efforts were made earlier in the year in California to try to stop this deceptive practice by the lenders, but it never passed.   The lobbying efforts of the lending institution were sufficient to get the bill killed in the California Senate.  The despicable practice is still not illegal and being widely practiced.

 

Being the San Jose Short Sale Agent, I received a call from a prospect today who was referred to me by a recent client for whom I completed a successful short sale.  He wanted me to help him because he spoke with someone at Wells Fargo who kindly informed him that they denied his loan modification and by the way, they are going to foreclose and sell his home (court house auction) next week.   Here is an example of a dual track foreclosure at work.

 

This homeowner had trouble making his mortgage payments because his wife had lost her job.  They went from a two income family for which they qualified their loan to a single income family.  They had been working with Wells Fargo since April of this year to get qualified for a loan modification.   After months of providing documentation, they were told a few days ago that their loan modification was being rejected.  And also, by the way, the foreclosure auction (Notice of Trustee Sale) had been scheduled for next week.  When the homeowner asked if he could get a 30 days extension to hire a Realtor to do a short sale, they rejected that request as well.

 

I would love to help this homeowner, but the problem is, with less than a week to go before the auction date, I cannot stop this trustee sale from taking place.  Even if I had a viable offer in hand, most lenders and Wells Fargo, specifically, will not stop the sale if the sale is scheduled to take place in less than 7 days.    Had the homeowner called me a week or two ago, I could have worked some magic, but now with less than a week to go before the sale date, he is out of options.   Had he not relied solely on the bank to and taken other steps, we could have prepared him for a HAFA short sale and probably gotten him $6,000 to pay off the second lien and another $3,000 in relocation expenses.  Instead, he will get nothing for months and months of waiting.

 

Some of you skeptical readers out there may be wondering if I may be exaggerating how often dual track foreclosures may be occurring in the real world?  More often than  you would like to believe and sometimes with confusing results.

 

 

Family Fights to Keep Home After Accidental Sale – Local News – Sacra Men To, CA – Msnbc
For homeowners out there who are  working on loan modifications, do not put all of your hopes into that one basket.  The chances of homeowners getting successful permanent loan modifications are small to begin with, most receive a temporary modification or are summarily rejected like the person who called me today.   So protect yourself and  consider multiple options, do not make the mistake of believing that the lender will have your best interest at heart.

 

 

 

 

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.