Thursday, December 30, 2010

Your Tax Dollars Working to Help Your Credit Score

The Federal Reserve has just published a new website designed to help you understand, and improve, your credit rating.

The Consumer's Guide to Credit Report and Credit Scores is an ad-free site that explains how scores are compiled and used, tips on how to improve your credit score, how to identify and fix errors on your report, among other topics.

With hundreds of crooks offering to "fix your credit" for a fee, it's great to finally have a scam-free site with accurate information.

Wednesday, December 29, 2010

Short Sale - Week 7

This is Part 7 of an on-going series documenting my most recent experience attempting to use Bank of America's Equator system to complete a short sale. You can find earlier posts in this series at:

Short Sale - Week 1

Short Sale - Week 2

Short Sale - Week 3

Short Sale - Week 4

Short Sale - Week 5

Short Sale - Week 6


December 27, 2010
  • I get an email from Equator telling me the property has been rejected from the HAFA program because it is not owner occupied. This is information I gave the HAFA representative when they first suggested it be placed in HAFA. The bottom line - we have lost 2 weeks while they figured this out.
  • I email the new negotiator and ask what's next. He tells me the file is back in review. Once they decide the file is ready, it will be sent to the investor for final approval. This is exactly where we were on December 10!
  • I email the negotiator and ask how long this analysis will take.
  • The negotiator emails me with a counter offer from the investor! The changes are minor. the seller accepts the counter and I communicate the acceptance via Equator.

December 29

  • No word from the investor, so I email the negotiator and ask for an update. He replies that the investor has not gotten back to him regarding the accepted counter.

Analysis - Days 43 - 49:

It was very frustrating for the seller, buyer and me to have lost two weeks while the file sat in the HAFA program. I would not have been so bothered if the file was rejected because of a problem discovered while the file was being analyzed. But the rejection was due to a technical issue that had been disclosed to B of A from day 1! Why it took 2 weeks to toss the file back out is beyond me.

On the other hand, I must commend the negotiator. The day he had the file returned to him was the day we got the investor's counter offer. We're still waiting for a final acceptance from the investor, but it was exciting to finally get a response after so many weeks.

Hint:

Even when the bank seems to be wasting time with formalities, remain calm and polite. Remember that you need the cooperation of people at the other end of the phone or email to get your final goal - a closed deal!

Saturday, December 25, 2010

Short Sale - Week 6

This is Part 6 of an on-going series documenting my most recent experience attempting to use Bank of America's Equator system to complete a short sale. You can find earlier posts in this series at:

Short Sale - Week 1

Short Sale - Week 2

Short Sale - Week 3

Short Sale - Week 4

Short Sale - Week 5

December 17, 2010

  • The seller and I spend the morning scrambling to collect all the new and updated documents required by HAFA. By early afternoon I submit all the required documents. I call HAFA to verify they have received everything. HAFA tells me that the file will be sent to the underwriting department where the documents will be reviewed to see if the file qualifies for HAFA. This will take a minimum of two weeks.

  • Late afternoon I receive an email from Equator confirming that the file is at HAFA's underwriting department.

Analysis - Days 36 - 42:

It was very upsetting for the seller to be suddenly confronted with demands for more paperwork, especially when the documents required were already submitted. It does no good to point out to the lender that the reason the documents are out of date is because they required them a month earlier and just filed them without doing the required analysis at the time they were received. It is also disconcerting to be thrust into the HAFA program. When the seller first contacted B of A to set up the short-sale, B of A should have explain that, once the paperwork is complete, the file will automatically be submitted to HAFA. This way, both buyer and seller understand what will occur, and understand that it will delay the process a minimum of two weeks.

Hint:

Recognize when things are out of your control, and have patience as the file grinds its way through the system.

Thursday, December 23, 2010

Lenders 'Foreclose' Homes They Don't Own

In dozens of incidents nationwide, confused banks have ransacked properties that were either not mortgaged at all or were mortgaged by a different lender or were a customer of the bank in question but were current on their payments.

For instance, Bank of America broke into Alan Schroit’s second home in Galveston, Texas, and turned off the power, allowing 75 pounds of salmon and halibut Schroit had caught on an Alaskan fishing vacation to spoil and create a reeking mess. Schroit had previously paid off the property. Schroit and the bank settled a lawsuit for an undisclosed sum.

Critics of the mortgage process say these kinds of incidents are evidence that the mortgage foreclosure business is flawed and needs to be reformed.

''Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,'' says Ira Rheingold, executive director of the National Association of Consumer Advocates.

Source: The New York Times, Andrew Martin (12/22/2010)

Tuesday, December 21, 2010

Wells Fargo Agrees to Modify California Mortgages

San Francisco Business Times - by John Sailors

Wells Fargo & Co. said Monday it will make up to $2.4 billion in mortgage modifications for homeowners in California with "pick-a-payment" adjustable-rate loans, as pat of an agreement with Attorney General Jerry Brown.

San Francisco-based Wells Fargo (NYSE: WFC) also agreed to pay $32 million to borrowers who lost their homes through foreclosure.

The loans were issued by Wachovia Corp. and Golden West Financial Corp. Wells bought Wachovia after that bank bought Oakland-based Golden West Financial Corp. for $24 billion in October 2006.

The majority of the more than 50,000 at-risk Wachovia Pick-a-Payment customers are in California, Wells said.

Wells will offer loan modifications to nearly 15,000 California borrowers with the loans.

Many of the modifications will include “significant principal forgiveness.”

California joins nine other states in entering agreements with Wells Fargo. The others are Arizona, Colorado, Kansas, Florida, Illinois, Nevada, New Jersey, Texas and Washington.

Thursday, December 9, 2010

Short Sale - Week 5

This is Part 5 of an on-going series documenting my most recent experience attempting to use Bank of America's Equator system to complete a short sale. You can find earlier posts in this series at:

Short Sale - Week 1

Short Sale - Week 2

Short Sale - Week 3

Short Sale - Week 4

December 10, 2010


  • I send an email to Merna asking for an update on the file. I receive an email telling me the file has been referred to the HAFA program.
  • HAFA, or Home Affordable Alternative Program, is part of the government's Making Home Affordable program. HAFA is designed to streamline the process of going through a short sales or foreclosures. It has some real benefits to the seller, but there are specific requirements the seller and the home must meet in order to qualify.
  • I email Merna asking why the file has been referred to HAFA without notifying me or the seller.

December 15, 2010


  • Merna responds to my email telling me that files are automatically sent to HAFA and I am to contact them for more information. I contact HAFA and am told that some of the documents submitted by the seller are now out of date. Of course, these documents were not out of date when submitted, but because the short sale process takes many weeks, they are now too old. Updated documents must be submitted in order for HAFA qualifications to continue.

December 16, 2010

  • HAFA contacts the seller directly and explains the program. They tell her that she must fill out additional documentation and must do so today. The seller explains that she can not possibly get all the documents to HAFA that same day. HAFA tells her she has 24 hours to get the documents into the system.
  • I contact HAFA and ask for a list of documents that must be resubmitted, as well as some new forms specific to HAFA. I contact the seller, provide the specific HAFA documents, and discuss the list of additional documents. She and I begin to assemble the documents.

Analysis - Days 29 - 35:


Prior to this week, I felt we were moving through the process at a reasonable pace. In a month we had submitted a deal, completed all of B of A's document requirements, and gotten an appraisal. Transferring the file to HAFA has stopped the negotiation process. There will now be a minimum of a 2 week delay before the file moves forward. However, if it is accepted into the HAFA program, and if HAFA approves the deal, the benefits to the seller are worth it. The question is, will the buyer hang around long enough to close.

Hint:

As the process drags on, communication is vital. Keep the seller and especially the buyer up to date on what's going on, even if there has been no progress.

Short Sale - Week 4

This is Part 4 of an on-going series documenting my most recent experience attempting to use Bank of America's Equator system to complete a short sale. You can find earlier posts in this series at:

Short Sale - Week 1

Short Sale - Week 2

Short Sale - Week 3

December 2, 2010

  • I receive an email from Merna telling me that the appraisal has been submitted. B of A is gathering its internal documents to see how much is owed (loan amount, unpaid payments, fines, etc.) against the property. This information will be given to the short sale negotiator. They will analyze how much the holder of the loan (the investor) will lose on the offer. This analysis will be submitted to the investor who then can either accept, reject or counter the offer. Merna warns me that that my buyers should be prepared for a counter offer. If the buyer counters the investor's offer, this will result in substantial delays. And, if that isn't enough, Merna's email ends by telling me that, even once the investor agrees to price and terms, they can change their mind up until the day we close!

Analysis - Days 22 -28:

Activity on the file has really slowed down. It's hard on the seller, the buyer, and the agent, but there is nothing we can do except wait until we hear from the investor.

Hint:

Keep your buyer up to date on the market. If something new comes on that may be of interest, let them know. If the new property is not a short sale, they may decide to make an offer on the new listing rather than play the waiting game with the investor.

Thursday, December 2, 2010

Feddie Mac Suspends Evictions For the Holidays

Freddie Mac today announced it has ordered all evictions involving foreclosed occupied single family and 2-4 unit properties that had Freddie Mac mortgages to be suspended from December 20, 2010 to January 3, 2011.

"If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays," said Anthony Renzi, Executive Vice President of Single Family Portfolio Management at Freddie Mac.

Short Sale - Week 3

Short Sale - Week 3


This is Part 3 of an on-going series documenting my most recent experience attempting to use Bank of America's Equator system to complete a short sale. You can find earlier posts in this series at:

Short Sale - Week 1

Short Sale - Week 2

November 29, 2010

  • Met with the appraiser. I provided him with a full set of comparables showing that the purchase price offered by the buyers is in line with prices paid for similar homes. I also gave him information on the Homeowners Association and complex, the amount of the monthly dues, and what this amount covers. He told me he would submit the appraisal no later than tomorrow. But he had no idea how long it will take to enter the system.

December 1, 2010

  • Got a call from the appraiser asking a question about the property. Of course, this is a question that I covered in the documentation I provided at the time of the appraisal. And it also means that the appraisal has not yet been completed. So much for his promise to have it submitted the next day!

Analysis - Days 15-21:

It's been a week of nothing to do but wait for the appraisal to be submitted. I was pleased that, in the world of real estate lending, it only took about a week to schedule the appraisal. Even more impressive was that the appraiser actually knows the area where the property is located and has done other appraisals here. Past experiences with short sale appraisers is that they cover a very broad territory. Often this means that the appraiser knows nothing about the property's specific neighborhood, and this almost always results in a bad appraisal. Some have been so bad that I have had to petition to have a new appraisal done.

Hint:

Make sure your agent meets the appraiser at the property and provides accurate comparables. If the home is part of a Homeowner's Association, have the agent also provides the appropriate HOA information to the appraiser. Your agent's goal should be to make the appraiser's job as quick and easy as possible so that your appraisal gets done in a timely manner.