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Second-Lien Holders Are Killing Short Sales

Second-Lien Holders Are Killing Short SalesShort Sale Denied

WASHINGTON – July 27, 2012 – Second-lien holders are being blamed for derailing many short sale transactions. But a bill working its way through Congress – the Fast Help for Homeowners Act – would, if approved, require second mortgage lenders on federal mortgages to report their final decision on a short sale agreement within 45 days. If the second-lien holder doesn’t do that, the deal would automatically be approved on the 46th day. U.S. Rep. Jerry McNerney, D-Calif., proposed the legislation.

Greg Galli, a broker with Suburban Realty in Palmdale, Calif., supports the bill after seeing some of his recent short sale transactions fall through because second-lien holders refused to negotiate. He recalled one incident in which the second-lien holder refused a $6,000 payment from the first-lien holder in order for a short sale to move forward. Instead, the second-lien holder demanded $1,400 more, amounting to a total of $7,400, and all from the homeowner.

“(Second lien-holders) can really delay the deal if they don’t want to respond, or if they just don’t want to do anything,” Galli told HousingWire. “It doesn’t make sense. If they let it go to foreclosure, the second lien is going to lose out completely. It would make sense for us to work through the process, and then they can negotiate.”

Some in the housing industry aren’t in favor of legislation that might push a second-lien holder to make a faster decision on a short sale. Critics argue that first-lien holders need to be more willing to work with second-lien holders on an agreement that favors both parties.

“I am always hesitant to force second-lien holders or any lender to do something that they didn’t contractually agree to upfront, because ultimately that will add to the cost of future credit and reduce its availability,” Mark Zandi, Moody’s Analytic’s chief economist said.

Source: “Evasive Second-Lien Holders Thwarting Short Sales,” HousingWire (July 25, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

I hope this information is useful to you. Please contact me for all your South Florida real estate needs at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: 1 Comment »

Top 5 Reasons to Buy a Home

Top 5 Reasons to Buy a HomeTop 5

1. Housing Affordability Still at Record High Levels

Each month the National Association of Realtors issues its “Housing Affordability Index,” which measures the ability of the average family, in a particular geographical area, to afford the average priced home for that area.  In February 2012 the national affordability index was 206.6.  This means that if a family with the median income of $60,974 wanted to purchase a median-priced existing singlefamily home at $157,100 (with a 20% down payment of $31,420), they would have 206.6% of the qualifying income needed to purchase that home.

2. Interest Rates Are at Historic Lows

It’s still a great time to take advantage of historically low interest rates.

3. Tax Advantages of Homeownership

Whether you’re a first-time buyer, up-sizing, or down-sizing, most homeowners qualify for tax breaks annually.  Please consult a tax advisor.

  • Interest paid on a home mortgage maybe tax deductible (up to the value of the primary residence)
  • Property taxes are typically deductible for most homeowners

Plus, for most homeowners, there are no capital gains taxes when a primary residence is sold.  Please consult a tax advisor.

4. Inventory of short sale Real Estate Owned (REO) properties

Also called lender-mediated, lender-owned, or non-traditional, these properties may appeal to bargain hunters looking for that hidden gem.

5. Inventory of homes overall is at an 6.4-month supply nationally. It is a buyer’s market!

More than 6 months of housing inventory indicates that it’s a buyer’s market, where traditionally buyers enjoy more choices and more bargaining power.

Regional differences in housing affordability from February 2011 to February 2012

Housing Affordability by Region

Please contact me for all your South Florida real estate needs at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Five Rules for Buying a Foreclosure or Short Sale with Confidence

Five Rules for Buying a Foreclosure or Short Sale with ConfidenceThe Rule Book

(ARA) – Buyers are still clamoring for real estate deals in this turbulent market. Foreclosures and short sales offer some of the best bargains, but also have a higher risk level. Still, more than four in five adults think foreclosures and short sales can be good deals, according to a recent American Society of Home Inspectors (ASHI) survey.

Some analysts say the rebound has begun and home prices may rise by the end of 2012. This means now may be buyers’ last chance to take advantage of affordable properties and low interest rates. If you want to score a bargain before the housing market recovers, you’ll need to follow a few rules to invest with certainty.

Make a wise investment by adhering to these five rules while shopping distressed properties:

Rule 1: Position yourself for success

Before starting your search, get preapproved for a mortgage so when a good deal presents itself, you’re positioned to submit a bid right away to be the first offer on the bank’s desk. Work with an experienced real estate agent who can help guide you through the daunting sea of foreclosures and short sales. Bidding can be complicated and time-consuming, especially when working with a home sale needing bank approval. A good agent will know how to navigate through the paperwork and red tape.

Rule 2: Do your research

A real estate agent can help you with research, but it’s wise to do some on your own. Are there any undisclosed liens on the property? Is the seller behind on his property taxes? What permit records does the city have on file? This information will be critical during decision-making. Work with your agent to Read the rest of this entry »

Written by Michael Solovay | Discussion: 26 Comments »

Short Sales: A Viable Alternative to Foreclosure

Short Sales: A Viable Alternative to ForeclosureShort Sales

By John Voket

One of the things we hope to see less of in 2012 is short sales.

This brings me to a blog by Bion Grady, (bionsellshomes.com) who specializes in loan modification assistance and short sales in Paulding County, Ga. Grady says if the only alternative for distressed homeowners is to walk away from their property, a short sale may still be a viable alternative for a number of reasons .

Grady advises homeowners to remember these four things:

1. Debt Eraser. The upside down debt is erased in most cases. If you are selling because of a financial hardship, then the upside down debt will be automatically erased in most cases. If your loan is owned or insured by Fannie Mae, Freddie Mac, FHA, and/or VA, and you are short selling because of a financial hardship, their policies state that your debt will be erased.

2. Faster Rebound. You are eligible to buy another home much sooner compared to a foreclosure. The most common loan program, Fannie Mae, stipulates that you can buy another home under their program in two years. FHA, a popular low down payment loan program stipulates that you can qualify for an FHA loan within three years.

3. No Cost to You. According to Grady, all of the expenses are paid for by your lender. That includes the title insurance, any county taxes or fees on the sale, attorney fees, and the real estate agent. If the lender foreclosed on the house and then tried to sell it, they would have to pay all the costs.

4. Less Credit Damage. Upon completion of the short sale, Grady says your credit score will drop between 50 and 100 points. However, it will rebound fairly quickly, and you will have a lower debt to income ratio, which will boost your credit. In addition, anything and everything bad on your credit can be fixed through the dispute process.

I hope this information is useful to you. Please contact me for all your South Florida real estate needs at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Foreclosures Trending Downward

Foreclosures Trending Downward

New figures show that foreclosures are down nationwide.  There were 830,000 foreclosures completed in 2011 compared to 1.1 million in 2010.  Florida had the most homes in the foreclosure process, almost 12% of all mortgaged homes.

I hope this information is useful to you.  Contact me for all your South Florida real estate needs at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Miami, FL Is Number One

Miami, FL Is Number OneMiami, Florida

Miami, FL is the number one town on REALTOR.com’s Q4 Top 10 Turnaround Towns Report.  According to the Miami Association of Realtors, sales of existing single family homes in the Miami Metropolitan Area increased 51% in the 3rd quarter compared to a year ago.  Miami has half as many properties in Realtor.com’s inventory of listings as it had a year ago.  Also, Miami continues to be a hot market for international buyers.  In May, international buyers purchased about 60% of the existing houses and condos and 90% of the newly built homes in Miami.  According to the experts, Miami, one of the hardest hit foreclosure markets, is on its way back.

Fort Lauderdale, FL made the list as well coming in at number eight.  The list also includes several other Florida cities.

I can help you with all your South Florida real estate needs.  Contact me at (305) 329-4929 or solovay.m@ewm.com.

Written by Michael Solovay | Discussion: No Comments »

Town Hall Meeting

Town Hall Meeting

For more information visit the City of Aventura website at:  www.cityofaventura.com

Written by Michael Solovay | Discussion: No Comments »

Facts and Trends: Aventura, FL

Aventura Condos

November 2007 – January 2009

 

Aventura Trendgraphix

 

We can see from the chart that:

  • 2,053 condos were for sale  in 1/08  vs 1,732 condos for sale  in 1/09 = 16% decrease in the number of condos for sale 
  • Amount of inventory went from 57 months supply last year to 31 months supply currently
  • 55% increase in number of sales

Interesting Facts:

December 2008 – January 2009

Short Sale Inventory:          331 = 19% of total inventory for sale

Foreclosure Inventory:        31 = 2% of total inventory for sale

                                                      ————–

Total                                            362 = 21% of total inventory for sale

 

Short Sale Closings:               18% of total closings

Foreclosure Closings:          32% of total closings

                                                     —————-

Total                                           50% of total closings

50% of all Closings for the period were Short Sales and Foreclosures.

For more information please contact me at solovay.m@ewm.com

Written by Michael Solovay | Discussion: No Comments »

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