HARP changes put refinancing in reach of more homeowners – Appeal-Democrat: Real Estate

HARP changes put refinancing in reach of more homeowners

When the federal Home Affordable Refinance Program HARP launched in 2009, millions took advantage, but many other homeowners found they couldn’t qualify to refinance their underwater mortgages. Today, significant enhancements have made the program more accessible for homeowners and a great opportunity to lower payments or build equity faster.If you owe as much or more on your home than its current value, you’re considered “underwater” or “upside-down” on your mortgage. For some homeowners, the situation has led to foreclosure. Others, however, have stayed current on their mortgage payments, and those are the people HARP is intended to help.You may be eligible for HARP if: You are current on your mortgage. Fannie Mae or Freddie Mac backs or owns your mortgage, and they acquired your mortgage on or before May 31, 2009. Use Fannie Mae’s and Freddie Mac’s online tools to find out. The mortgage is for your primary home, a single-family second home or a one- to four-unit investment property.

via HARP changes put refinancing in reach of more homeowners – Appeal-Democrat: Real Estate.

Federal Government Looks to Spread Awareness of Refinancing Options – Press Release – Digital Journal

Federal Government Looks to Spread Awareness of Refinancing Options>PRWEB.COM NewswireChicago, IL PRWEB October 03, 2013The Federal Savings Bank is continuously informing current lien holders of various refinance opportunities. With refinance activity on the decline, the Federal Housing Finance Agency is doing all it can to spread awareness about the Home Affordable Refinance Program.However, theres more to the FHFAs awareness campaign than just spurring on mortgage activity. The government agency has said that too many Americans who are eligible to benefit from the program have not done so due to a lack of knowledge regarding HARP.”Theres a perception among some that youve got to be delinquent in order to have some government-sponsored program that can help you,” FHFA Acting Director Edward J. DeMarco told Bloomberg on September 23rd. “What we want to do is correct that misperception.”

via Federal Government Looks to Spread Awareness of Refinancing Options – Press Release – Digital Journal.

Distressed sales remain source of risk | 2013-09-13 | HousingWire

Distressed sales remain source of potential fraud riskShort sale transactions on the rise since 2006Megan HopkinsSeptember 13, 2013 5:27PM0 CommentsForeclosureShort saleCoreLogicDistressed SalesShort Sale FraudEd GerdingEmailPrintReprintsShare on facebookShare on twitterShare on linkedin MoreAAARelated ArticlesInterthinx Fraud Report Links Mortgage Fraud, Foreclosure: DBRSSuspected Mortgage Fraud Reports to FBI Grew 5% in 2009Mortgage fraud greater in areas riddled with foreclosures: InterthinxRelated CompaniesHubzuThe volume of the nations shadow inventory is on the decline, but remains high as lenders and servicers continue to work through a backlog of properties, CoreLogic CLGX said. The research firm said during a webinar on fraud risk that distressed asset sales, such as short sales, remain a potential source of fraud.Unrealized recoveries on suspicious short sale transactions can cost lenders as much as hundreds of millions per year.”The trend that we’re seeing is that the overall short sale volume has dropped slightly, but that the combined suspicious rate has been static so far from 2012 to 2013 at 83%,” said Ed Gerding, fraud and risk strategist at CoreLogic.

via Distressed sales remain source of risk | 2013-09-13 | HousingWire.

The ‘Perfect Storm’ for Short Sales Continues in 2013

Like 2012, 2013 may just continue to be the perfect storm for doing a Short Sale:

  • Sonoma County’s available inventory of homes for sale continues to be the lowest in years.
  • Competition for what inventory does exist has pushed up prices and turned the tables, making it a Sellers Market.
  • Bank and Government programs are getting more and more favorable for the Distressed Homeowner who needs to sell.
  • Lenders have too many foreclosures on their books, making Short Sales a better alternative for them.
  • Short Sales are getting, well, shorter because of improved operating standards by the banks and programs by the government.
  • The option to Short Sale is easier on your credit than a foreclosure, making it possible to buy another home sooner.

And the Number One Reason:  The Forgiveness of Debt Tax Relief Act has been extended to the end of 2013 saving you literally tens of thousands of dollars you would otherwise owe the IRS in Federal Income Tax after a Short Sale.

How the Does the Mortgage Debt Relief Act Affect You?

When you escape a debt the IRS normally counts the amount of the debt you were forgiven as income, and taxes you accordingly.  In terms of a taxable event, this could be significant to you financially if you short sale your home.

Example:  Mr. & Mrs. Jones owe $550,000 on their mortgage, but the current market value for the house is $350,000.  Faced with a transfer, they have to sell their home. Their lender allows them to Short Sale their home for the current market value even though it will net less than the balance owed on the mortgage. In agreeing to sale short, the lender also agrees to forgive the debt on the outstanding balance; in this case, $200,000. Enter the IRS, who view the $200,000 as taxable income!

The Mortgage Forgiveness Debt Relief Act addresses this very scenario, and has been in effect for the last since 2007 when the market began its collapse, throwing many homeowners into financial distress by owing more on their mortgage than what their house was actually worth in the changed market. (It has recently been extended to the end of 2013.)

This act allows a home owner a tax exclusion for the forgiven mortgage debt. Without this Act, in the scenario above, the Jones would get a tax bill on the $200,000 as though it were regular, earned income. That means a bill of somewhere around 30%, or $60,000. Quite a deep hole to fall into!

The Mortgage Forgiveness Debt Relief Act is about making it possible to get out from under financial hardship so you can get back on your feet again.

Note:  While this is fantastic news, there are some qualifiers to this tax act.  Be sure to consult a qualified tax preparer before moving ahead.  Also, another thing to consider; the state of California is expected to follow suit with their own forgiveness of debt relief. However, as of this writing, they have not yet extended this tax break on the state level. Plain English: You may get off the hook at the Federal level, but the state is not there….yet.

Principal “Curtailment” for Underwater Home Owners

If you fit this description:

  • Have low to moderate income
  • Owe more than your house is worth
  • Live in your home
  • Are delinquent, or have a hardship that puts you at risk of default
  • Have a mortgage balance of less than $729,750

Read this article….

Principal relief for stressed homeowners

A limited number of underwater homeowners in California will soon be able to get principal reductions of up to $100,000 apiece on Fannie Mae and Freddie Mac loans through the federally funded Keep Your Home California program.

The federal agency that oversees Fannie and Freddie has steadfastly refused to allow permanent principal reduction on loans they own or guarantee on the grounds it would cost taxpayers money. But in mid-September, Fannie and Freddie told servicers they could immediately begin accepting money for principal reductions from programs financed by the U.S. Treasury’s Hardest Hit Fund, including Keep Your Home California.

Fannie’s and Freddie’s willingness to accept money from Hardest Hit Funds does not signal a change of heart on the part of their regulator, the Federal Housing Finance Agency. Lest anyone get the wrong idea, Freddie says it will allow funds to be used for “principal curtailment.”

Read the rest here…

via Principal relief for stressed homeowners – SFGate.

Why a Short Sale Blog?

After earning my CDPE (Certified Distressed Property Expert) designation I was fired up. The landscape in my profession had changed drastically over the preceding 4 years. People were hurting…lots of them.

Our homes are one of the things we tend to take for granted and if there’s one thing this recession has taught us, it’s just how central a role our homes play in our lives.

Not knowing if you can continue to stay in your home, and being worried about where else you could live if you lost it, is a tremendously stressful ordeal to go through.  Add children to the mix, and it is pure misery.

The CDPE training showed me just how many options people had.  The problem was that no one wanted to own up to their situation.  When your security is shaken to the core, the appearance of stability affords you a comfort you are reluctant to give up, even if it is only the appearance and not the reality.

So, I started this blog with some definite standards…

  • Put all this great information from my training out there
  • Be unbiased and present ALL the options (not just Short Sales)
  • Allow people to access it in privacy without having to sign up
  • Be current
  • Give links to helpful sites
  • Alert readers to potential pitfalls

The blog has helped me too.  After months of wading through the morass of a tortured real estate market this blog gave me an outlet to do something positive. Being able to make a difference, even if I don’t know the person I helped, was such a relief

Things are improving, gradually.  First with the Robo Signing settlement, then the refinement and improvement of some government programs, as well as changes in both federal and state laws that protect the homeowner and help to level the playing field between them and their lenders.

I am happy you found your way here, and it is my sincere hope that the information here helps you.

Awesome New Site for Fannie Mae Mortgage Holders!

Fannie Mae site helps you find your way through…

Confused about what options might be available to you and if you even qualify for them?  Fannie Mae’s Know Your Options site will get you rolling in no time!

First, to be sure your mortgage is owned by Fannie Mae, start with the Loan Look Up on the very top menu line.  Once you’ve confirmed this, you have a literal plethora of assistance in sorting out what options may be open to you.

Their Option Finder makes this all easy!  You answer simple, focused questions and come out the other end with your options!  If there is something you are not sure about, you can contact them for assistance from a real person!  

Included are…

  • How to refinance with little to zero equity
  • How to modify your loan
  • Options to stay in your home
  • Options to leave your home
  • What to do if you are already in foreclosure
  • A Resource list for Mortgage Assistance & Government Programs that may apply

Another great feature are the calculators made available on the site so that you can get an estimate of your monthly payments would be on a modification or refinance.

Check it out now at www.knowyouroptoins.com!

5 Things To Do Immediately After Getting a Notice of Default

In California, once the notice of default has been recorded, you have approximately 120 days to save your home before it is auctioned.  Once you get the notice in the mail don’t waste any time!

Here are 5 things to do immediately….

  1. Call your lender and ask them what solutions they have.  Banks are moving away from foreclosures and new programs are coming along all the time. The best way to be sure you have the latest information is to call the lender. If you want to keep your home, begin the process under as many avenues as are available, including non-profit programs.
  2. Find out who owns your mortgage.  Even if your loan is with BofA, it could be owned by Fannie Mae or Freddie Mac (Question #9 in FAQ),   If it is, you may qualify for a government program and be able to refinance without an appraisal (HARP2), to modify your loan (HAMP), or to do short sale and get a cash incentive to help with relocation expenses. (HAFA).
  3. Get professional advice from your tax preparer and an attorney about your financial options and the effect a short sale would have on your finances.
  4. Operate on the 120 day timeline.  This is the typical timeline from Notice of Default to foreclosure and then auction.  In that 120 day period is your opportunity to a) get a loan modification consent from the bank, b) short sale your property, or c) find a way to bring your mortgage current.
  5. Contact a certified short sale Realtor, such as myself, if you want or need to sell your home. Get that ball rolling as soon as possible.
Until the Home Owner’s Bill of Rights takes effect on January 1, 2013, the banks are under no legal obligation to stop the foreclosure process, even if they have told you they would work with you on a loan modification.
 
One last thing:  That Notice of Default you got; it is public record. So, put your guard up regarding people who may try to contact you.  Some of them may be legitimate, but some may be working a scam