The Helping Families Save Their Homes Act of 2009 signed into law this week by President Obama has a provision that allows a tentant to remain in a home 90 days after it sells in a foreclosure sale.
Effective immediately, an REO lender or buyer who acquires title through a foreclosure sale must give a month-to-month tenant at least a 90-day notice. 90-day notice is also sufficiant to terminate if a new owner will occupy the property as a primary residence at the end of the 90 days. Otherwise, a tenant with a one year or other fixed-term lease with a remaining lease term exceeding 90 days can stay in the premises until the remaining lease term ends.
Friday, May 22, 2009
Saturday, May 16, 2009
Uniform Process for Short Sales Announced
From:
National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001
Responding to the call of the National Association of REALTORS®, on May 14, 2009, the Obama Administration announced incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP). For borrowers who do not qualify to have their loans modified on a permanent basis under the Making Home Affordable Loan Modification Program, the servicer may consider a short sale or, if that is not successful, a deed-in-lieu of foreclosure.
Borrowers (Homeowners). Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program but don’t qualify for a modification or do not successfully complete the three month trial period.Before proceeding with a foreclosure, servicers must determine if a short sale is appropriate. Incentives.
Incentives include: (1) $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; (2) $1,500 for borrowers/homeowners to help with relocation expenses; and (3) up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).
Standardized Documents. The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.
Property Valuation by Appraisal or BPO. Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.
Timeline. In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.
Commissions. The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received.
No Borrower Fees. Servicers may not charge fees to borrowers/homeowners for participating in the FAP.
Program Expiration. The program is in effect through 2012.
DIL Option. Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions).
National Association of REALTORS® Government Affairs Division
500 New Jersey Avenue, NW, Washington DC, 20001
Responding to the call of the National Association of REALTORS®, on May 14, 2009, the Obama Administration announced incentives and uniform procedures for short sales under its new Foreclosure Alternatives Program (FAP). For borrowers who do not qualify to have their loans modified on a permanent basis under the Making Home Affordable Loan Modification Program, the servicer may consider a short sale or, if that is not successful, a deed-in-lieu of foreclosure.
Borrowers (Homeowners). Borrowers/homeowners qualify under the FAP if they meet minimum eligibility requirements for the Home Affordable Modification program but don’t qualify for a modification or do not successfully complete the three month trial period.Before proceeding with a foreclosure, servicers must determine if a short sale is appropriate. Incentives.
Incentives include: (1) $1,000 for servicers for successful completion of a short sale or deed-in-lieu of foreclosure; (2) $1,500 for borrowers/homeowners to help with relocation expenses; and (3) up to $1,000 toward the cost of paying junior lien holders to release their liens (one dollar from the government for every $2 paid by the investors to the second lien holders).
Standardized Documents. The program will include streamlined and standardized documents, including a Short Sale Agreement and an Offer Acceptance Letter. The goal is to minimize complexity and increase use of the short sale option.
Property Valuation by Appraisal or BPO. Servicers will independently establish both property value and minimum acceptable net return, in accordance with investor requirements. The price may be determined based on an appraisal or one or more broker price opinions (BPOs), issued no more than 120 days before the date of the short sale agreement.
Timeline. In the Short Sale Agreement, servicers must give borrowers/homeowners at least 90 days to market and sell the property, or up to one year, depending on market conditions. Property must be listed with a licensed real estate professional with experience in the neighborhood. No foreclosure may take place during the marketing period (at least 90 days) specified in the Short Sale Agreement.
Commissions. The Short Sale Agreement must specify the reasonable and customary real estate commissions and costs that may be deducted from the sales price. The servicer must agree not to negotiate a lower commission after an offer has been received.
No Borrower Fees. Servicers may not charge fees to borrowers/homeowners for participating in the FAP.
Program Expiration. The program is in effect through 2012.
DIL Option. Servicers have the option to require the borrower/homeowner to agree to deed the property to the servicer in exchange for a release from the debt if the property does not sell within the time allowed in the Short Sale Agreement (plus any extensions).
Friday, May 15, 2009
Tax Credit May Be Used for Down Payment
Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, on Tuesday said that the Federal Housing Administration is going to permit its lenders to allow home buyers to use the $8,000 tax credit as a down payment.
Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says.
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Previously, most buyers wouldn't receive the funds until after they filed their tax return, and that deterred some people from using the credit. The NATIONAL ASSOCIATION OF REALTORS® has been calling for the change.
“We all want to enable FHA consumers to access the home buyer tax credit funds when they close on their home loans so that the cash can be used as a down payment,” Donovan says.
He says FHA’s approved lenders will be permitted to “monetize” the tax credit through short-term bridge loans. This will allow eligible home buyers to access the funds immediately at the closing table.
Tuesday, May 12, 2009
Letter from Senator Boxer
Dear Friend:
The Senate recently passed an amendment (SA 1035) I authored requiring that homeowners be alerted within 30 days if their lender sells or transfers their home mortgage loan. The amendment is good news for America’s homeowners.
My amendment provides transparency and gives homeowners another tool to fight illegitimate foreclosures and negotiate loan modifications to help keep families in their homes. Under the measure, if a loan is sold or transferred, the new note holder would have 30 days to notify the homeowner with the following information:
the identity, address, and telephone number of the new creditor;
the date of the transfer;
how to reach an agent or party with the authority to act on behalf of the new creditor;
the place where the transfer is recorded; and
any other relevant information regarding the new creditor.
This is just common sense: If you have a mortgage on your home, you should know who actually holds that mortgage. But too often, homeowners are not able to modify their mortgages to avoid foreclosure simply because they cannot find out who holds their mortgage.
My measure has been endorsed by the National Consumer Law Center, the National Association of Consumer Advocates, Consumer Action, the Consumer Federation of America, Consumers Union, the National Association of Neighborhoods, the National Council of La Raza and the National Fair Housing Alliance.
Sincerely,
Barbara Boxer
United States Senator
The Senate recently passed an amendment (SA 1035) I authored requiring that homeowners be alerted within 30 days if their lender sells or transfers their home mortgage loan. The amendment is good news for America’s homeowners.
My amendment provides transparency and gives homeowners another tool to fight illegitimate foreclosures and negotiate loan modifications to help keep families in their homes. Under the measure, if a loan is sold or transferred, the new note holder would have 30 days to notify the homeowner with the following information:
the identity, address, and telephone number of the new creditor;
the date of the transfer;
how to reach an agent or party with the authority to act on behalf of the new creditor;
the place where the transfer is recorded; and
any other relevant information regarding the new creditor.
This is just common sense: If you have a mortgage on your home, you should know who actually holds that mortgage. But too often, homeowners are not able to modify their mortgages to avoid foreclosure simply because they cannot find out who holds their mortgage.
My measure has been endorsed by the National Consumer Law Center, the National Association of Consumer Advocates, Consumer Action, the Consumer Federation of America, Consumers Union, the National Association of Neighborhoods, the National Council of La Raza and the National Fair Housing Alliance.
Sincerely,
Barbara Boxer
United States Senator
Monday, May 4, 2009
Short-Sales Not Without Risk
More people are choosing to do a short sale on their homes. The benefit of a short-sale over a foreclosure is that the homeowner walks away from the sale with their credit intact, and free from mortgage debt.
Or do they?
Some lenders are going after borrowers for the repayment of the balance still owed on the loan. A PMI Group Inc. spokesman says the mortgage insurer "primarily target[s] borrowers who are not experiencing hardship – but those who simply elected to walk away from the property due to its decline in value."
So if you plan to do a short-sale, make sure your lender agrees to eliminate the debt after the sale. If not, you could find yourself owing a mortgage without owning a home.
Or do they?
Some lenders are going after borrowers for the repayment of the balance still owed on the loan. A PMI Group Inc. spokesman says the mortgage insurer "primarily target[s] borrowers who are not experiencing hardship – but those who simply elected to walk away from the property due to its decline in value."
So if you plan to do a short-sale, make sure your lender agrees to eliminate the debt after the sale. If not, you could find yourself owing a mortgage without owning a home.
Friday, May 1, 2009
Do You Feel Lucky?
Do you enjoy bidding on Yahoo or EBay? Do you like the thrill of winning that great pair of earrings, or those 1950's salt and pepper shakers?
Now you can bid on mortgages! That's right - you, too, can become an investor in loans, just like the big Wall Street firms.
Interested? Check out LoanMarket.net. You can search for loans that meet your criteria such as amount, position (first loan or second loan), location, interest rate, etc. You can see information on the borrower to determine the risk. And, if you find something that looks appealing, you can make an offer to the owner of the note. Loanmarket handles all the paperwork, and fees are paid by the seller of the note.
Let me be very clear. I am NOT suggesting you invest in loans and I am NOT recommending Loanmarket. I am simply keeping you informed as to new options in the lending and investing environment.
Now you can bid on mortgages! That's right - you, too, can become an investor in loans, just like the big Wall Street firms.
Interested? Check out LoanMarket.net. You can search for loans that meet your criteria such as amount, position (first loan or second loan), location, interest rate, etc. You can see information on the borrower to determine the risk. And, if you find something that looks appealing, you can make an offer to the owner of the note. Loanmarket handles all the paperwork, and fees are paid by the seller of the note.
Let me be very clear. I am NOT suggesting you invest in loans and I am NOT recommending Loanmarket. I am simply keeping you informed as to new options in the lending and investing environment.
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