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.

Foreclosure Timeline

In California the Notice of Default is usually recorded after the Homeowner misses 3 payments. From that point it takes about 120 days to the point where the house is offered for sale at public auction.

Prior to auction, if the house is still occupied, there will be an eviction overseen by the County sheriff. During the eviction the locks will be drilled out and replaced by new ones and in a day or two people will show up to clean out any possessions left behind.

Start reviewing your options as soon as possible. Lender and government loan modification programs are your first stop. But, be aware, even though you may be in the process of getting your loan modified in many cases, it will not stop the foreclosure process from moving ahead.  You’re still up against that 120 day time line.

So, it’s important that you fight on more than one front.  Get a handle on all of your options by consulting three professionals; a CDPE (Certified Distressed Property Expert), like myself, your tax-preparer, and an attorney to discuss what is best for you in the long run.

If you don’t know where to turn for tax advice, or legal advice about bankruptcy, deed in lieu, etc., go to my Resources page where you’ll find the name and contact info for reputable Sonoma County professionals.

Don’t let the stress immobilize you!  There are options other than waiting for the Sheriff to knock on your door.  There is a dignified way to work through this.  I can help you, so don’t hesitate to call me.

Foreclosure should be avoided if at all possible.  Not only is it stressful to you and your family, it also may represent the longest road back to stability.

Foreclosures stay on your credit report for 7 years normally–that’s almost half the time a child spends growing up at home.  You owe it to yourself to get this information.

Lenders Paying Homeowners to Do Short Sales

Source: February 26th, 2012 in CDPE bulletin…

For awhile now, we’ve instructed agents on government incentives available to distressed homeowners who opt to do short sales. Such programs include the Home Affordable Foreclosure Alternatives (HAFA) program, which provides up to $3,000 to assist the borrower with relocation fees.

In recent news, major publications including USA TODAY and CNN Money have spotlighted the incentives provided by banks. These incentive programs, which offer anywhere from around $2,000 to upwards of $35,000, are intended to provide homeowners with the resources and motivation to pursue a short sale.

As banks look to ramp up short sales, such incentives are becoming more frequent. JPMorgan Chase began their incentive program last year, for example, and Bank of America (which plans a 60-70% increase in short sales this year) piloted a program in Florida this past December. Wells Fargo offers incentives as well, though primarily in states where the foreclosure process is particularly lengthy.

We’ve said it before, and we’ll say it again: This year looks to be the year of the short sale.

For banks, short sales can be a cheaper alternative to foreclosure. The foreclosure process is lengthy and costly, so much so that providing up to a $20,000 alternative for a short sale is still a cheaper option.

In USA TODAY’s article “Lenders Paying Borrowers to Do Short Sales”, Jim Gillespie, chief executive of Coldwell Banker, is quoted as saying “It’s a lot cheaper to shell out $10,000 or $20,000 to someone than it is to go through a long foreclosure.”

In addition to the cost of the foreclosure process itself, foreclosed properties sell for less than short sales on average. According to the National Association of REALTORS®, foreclosed properties sold for 22% less than conventional sales, while short sales sold for around 14% less.

12 Ways to Avoid Foreclosure

1. REINSTATEMENT: Bring the loan current
2. FOREBEARANCE: Temporary repayment plan
3. REFINANCE: New loan with reduction in monthly payments
4. LOAN MODIFICATION: Modify original loan terms or reduce principal                 (Visit: www.hmpadmin.com and contact your bank.)
5. SHORT REFI: (New) Qualify for this process by showing a hardship as well as the ability to pay the new mortgage
6. SELL THE PROPERTY: Use equity to pay off or pay difference
7. RENT THE PROPERTY: Must make loan current
8. SERVICE MEMBERS CIVIL RELIEF (SCRA): Protection for military personnel in foreclosure in specific situations
9. HAP: Department of Defense for eligible service members and federal civilians
   
10. SHORT SALE: Negotiate with bank to accept a sale less than the loan amount due
11. DEED IN LIEU OF FORECLOSURE: “Friendly Foreclosure”
12. BANKRUPTCY: Will stall foreclosure, but not prevent it

Pressure on Fannie and Freddie to do Mortgage Write-Downs

Pressure on Fannie and Freddie to Do Write-Downs on Mortgages

WASHINGTON, April 6 (Reuters) – The Obama administration wants Fannie Mae and Freddie Mac, which finance the bulk of U.S. mortgages, to start reducing loan balances for troubled borrowers, but with safeguards to prevent them from purposely defaulting to obtain relief.

Housing and Urban Development Secretary Shaun Donovan laid out the case for a program with such checks and balances to convince the Federal Housing Finance Agency, which regulates the companies, to provide more mortgage aid.

“This isn’t about force; this is about making the right decision for homeowners and for the taxpayers,” Donovan said in an interview taped for C-SPAN’s public affairs television that was set to air on Sunday.

Read more: US Housing Secretary Pushes Mortgage Write-Downs For Fannie Mae, Freddie Mac.

What is a CDPE?

A Certified Distressed Property Expert® (CDPE) has a thorough understanding of complex issues in today’s turbulent real estate industry and knowledge of foreclosure avoidance options available to homeowners.

CDPEs can provide solutions, specifically short sales, for homeowners facing market hardships.

Homeowners regularly proceed without guidance of any kind through the often financially and emotionally devastating prospect of foreclosure. Speaking with a well-informed, licensed real estate professional is the best course of action for a homeowner in distress.

Through comprehensive training and experience, CDPEs have the tools to help homeowners find the best solutions for their unique situations and to avoid foreclosure through the efficient execution of a short sale.

CDPEs don’t merely assist in selling properties, they serve and help save their clients in need.

Living through financial difficulties poses a challenge for any family, so why make the process of finding a qualified real estate professional difficult too? Select an agent with the CDPE Designation to ensure you have a trained professional to address your specific needs.

If your circumstances are stressing you out, you need information and help.  Contact me now to arrange for a confidential consultation and let’s get you back on the path to stability.

Sheila Lawrence, Realtor, SRES, CDPE

e: SheilaKLawrence@gmail.com

p: 707.478.7240

Come In Out of the Cold

Most likely you found your way to this site looking for answers for yourself, or for someone you know, about what can be done when a Homeowner is in danger of losing their home.  Financial hardship is draining and it’s easy to feel like you’ve failed.  But you haven’t, and you are not alone.

The way through is to make good decisions and for that you will need good, up-to-date, information.  With every bank reacting differently and policies literally changing daily, who has time to keep up with their own life AND make sense of all that is going on in the real estate world.

There are even cash incentives to help you relocate after the house sells.

The good news, and there is some, is that it is getting easier to Short Sale your home if you are not able to continue to keep up with the payments and falling further and further behind.  The really good news is that, compared to a foreclosure, the Short Sale process is much easier on you and on your credit rating.  You can potentially be in shape to purchase another home in as little as two years vs. seven years with a foreclosure.

So, welcome.  If you have questions about your own situation and would like a private consultation, contact me.  I am here to help.

Sheila Lawrence

e: sheilaklawrence@gmail.com

p: 707.478.7240

w: SheilaLawrence.com