Great News for distressed homeowners with Bank of America serviced home loans.  What was one of the least efficient administrative processes for handling short sales has now been transformed into one of the premier leaders in short sale processing.

Bank of America has continued to improve the short sale process so agents can help homeowners avoid foreclosure.  Starting thi smonth (April, 2011) a series of technology enhancements are being implemented to improve the short sale process. 

• Integrated Technology for Deals With an Offer and Without an Offer: 
  Agents can now initiate a short sale in Equator prior to marketing the property.  The benefits of this type of "pre-offer program" include understanding the terms of the short sale and gaining investor agreement for a list price upfront in the process.  In addition, the homeowner may qualify for a cash incentive and have their deficiency waived. 
• Short Sale Specialist Assigned Earlier in the Process:
  If a short sale is initatied with an offer, a short sale specialist will be assigned in Equator earlier in the process.  If a short sale is initiated without an offer, agents should be aware that many initial steps in the process require homeowner contact to determine program eligibility.  Once the appropriate short sale program has been identified, a short sale specialist will be assigned and Equator will launch the agent tasks.

• Homeowner Documentation: 
  Short sale specialists are able to identify earlier in the process which homeowner documents, if any, are required.  Depending on the homeowner's situation, the amount of documentation required may be significantly reduced.  However, the short sale process will not move forward until all required homeowner documentation is provided.
• Initial Offer Evaluation:  
  If an offer is submitted that is significantly lower than current values, the offer may be rejected and the agent will be notified in the Equator portal.  The Submit Short Sale Offer task will reopen and a new offer must be submitted. 

Action Required:  

• Agents should renegotiate with the buyer to agree on the highest and best offer and execute the new signed contract. 
• In order to complete the task, all supporting documents must be updated to reflect the current offer details. 

Stay tuned for future communications and educational materials related to this series of technology enhancements. 

The newest scam targeting distressed homeowners is the “trustee” scam.

THE SCAM:  The scammer convinces you that you can send letters and filings that can eliminate your home loan and the banks’ right to foreclose for non-payment.  In fact, they want you to believe that you can gain free-and-clear title to your home, while wiping out the debt and never making another payment.

They will likely sprinkle in a few Bible verses to convince you that God says it's OK not to pay and try to steal your house from the bank with tricks and deception.

THE CON:  The first thing they will try to convince you is that the bank never actually loaned “money” to you to purchase the property.  They will say that the bank only “extended credit” and that the funds stated to be repaid in the loan are actually “your” money and not the banks.  FACT:  The bank did loan “money” for the purchase of your property.  When you went to closing, the seller received the “money” for the property that your bank advanced on your promise to repay.  There were hard dollars involved.

The scammer will tell you that you can challenge the naming of the "Trustee" in your Deed of Trust.  FACT:  While one can “challenge” anything, you cannot change or revoke it without the bank’s written agreement.

The scammer will tell you that you can challenge the Power of Attorney granted in the Deed of Trust.  FACT:  While one can “challenge” anything, you cannot change or revoke it without the bank’s written agreement.

The scammer will tell you that if you give them a deadline to respond – and they don’t – that the Bank has tacitly agreed with your complaint and argument and becomes bound to your assertions.  FACT:  Nothing could be further from the truth.  NOTE:  When a bank or a trustee gives the borrower a time period to dispute a claim or intended action, it is because there are statutory consumer protection laws that take precedence (are superior to) over simple contract law, which the bank has to follow.

THE DUPE:  Next the scammer will provide you with sample letters and filings, and for a fee (an advance fee from you of typically $2,000 - $4,000) they will help you craft your own letters and filings to your bank.  This is the part where they get paid and you get the shaft.

THE DAMAGE:  Once you stop paying your loan installments, your credit will begin to suffer damage.  Each missed payment and the longer previous missed payments remain outstanding, the credit damage is compounded and compounded.  Each bank and underlying investor (owner of the loan) are different, but eventually they will all take severe action to foreclose, seize your home and evict you and your personal property by police and sheriff force.

By the time you realize you have been taken by the scammers, your credit is totally ruined, your home has been or will be foreclosed on and you will suddenly realize that “you paid them” to get you into much deeper trouble than you ever thought possible.

NEVER PAY ANYONE ANY FEE IN ADVANCE FOR FORECLOSURE AVOIDANCE.

In a recent study, the Chicago Booth/Kellogg School Financial Trust Index found that a full 36% of Americans would consider “strategic default”—another term for walking away from your mortgage—if they were underwater (owed more on their home than what it was worth).

Now that more than one in four American homeowners is “underwater,” we feel that it’s important for the community to know the truth about strategic default.

The truth is the foreclosure process carries with it credit issues, current and future employment challenges, issues with security clearance and possible debt collections.

That’s why it is vital to explain the 3 reasons why the term “strategic default” is misleading:

There’s nothing strategic about defaulting on purpose, especially when you have options like short sales, mortgage modifications, and refinance (just to name a few) that may keep you from foreclosure.

1.  The waiting periods to apply for a new mortgage loan are at least five years less in a short sale vs. a foreclosure.

2.  A foreclosure will show up on your credit report every time you apply for a home loan, car loan, new job, etc., and will affect your financial situation for many years to come.

3.  If you are underwater and can no longer afford your mortgage payments, you need to create a genuine strategy to avoid foreclosure, helping to provide stability for you and our community.

If you have any questions about what steps you or someone you care about should take next, contact us today!

5 Steps for a Successful Short Sale

Lenders and the federal government, prompted by the sheer volume of loan modification and short sale requests, have overhauled their systems and programs, making the foreclosure avoidance process much easier than in the past.

If you are considering short selling your home to avoid the financial and emotional fallout of foreclosure, you should be aware of the five steps you should take to increase your chances of a successful transaction.

First, do you qualify?

You must:

1. Have a verifiable hardship, like unemployment, medical bills, or relocation
2. Must have a monthly income shortfall
3. Be insolvent (you have no cash or assets that can be sold to pay down the mortgage), or headed towards insolvency

If you meet these qualifications, follow these five steps to a successful short sale:

1. Contact us so we can identify your servicer, fill out a short sale packet for the lender, and assemble all the required information needed to list your home for sale
2. Gather financial information (i.e., bank statements, pay stubs) from at least the last three months
3. Keep your house in showcase condition for showings, and make as many repairs as necessary and that you can afford
4. Expect the lender, junior lien holders, and private insurance companies to request more paperwork, and try to gather requested information quickly to ensure transaction efficiency
5. Set realistic expectations and work with us, the lender, and the buyer to the satisfaction and benefit of all parties involved

For more information about how the short sale process works, or about any other foreclosure alternatives you may qualify for, call me today. We can help you alleviate the burden that the threat of foreclosure brings, and we can develop a strategy to help you breathe a little easier.

IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.