Category Archives: Teresa’s Real Estate Blog

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Stop The Banks! The Banks Are Trying To Change The Foreclosure Process!

Posted on February 2, 2010 by admin

The Banks’ Lobbyists Are Trying To Change The Foreclosure Process!

It is not a good thing to give the banks more power.

If you are a real estate agent or a homeowner in the state of Florida please contact your Congress men and women today, please contact your state Senators today! Do not let this plea go unanswered.

If you are in the business of real estate you need to be involved with the political process and this call to action is NOW.

If you are a short sale agent, if the banks get their way with this, this will directly impact your short sale closing ratios. This will also put more of your sellers at risk of losing their homes to foreclosure. Make sure you read the 53 page bill.

Get your Board of Realtors® involved with defending the very essence of NAR and state boards- the protection of homeowners’ rights.

Already Palm Beach County has stopped the foreclosures “on the courthouse steps”. Actually the foreclosure sales were held in the court’s cafeteria but now in order to facilitate so many foreclosures, the county clerk has put all the foreclosure auctions online. This is yet another hurdle to us agents who are scrambling to get the foreclosure stopped because we have a bank that does not know how to talk to their other departments!

The Florida Supreme Court just made a ruling that all banks that are filing foreclosures must offer the homeowners mediation from now on. This new rule started to be in effect on January 1, 2010. Well, this bill slaps the Florida Supreme Court right in the face! It would be a mute rule.

So the banks have now pulled their resources together and are lobbying the Florida house and congress to get this new bill passed. The Florida Bankers Association is a 400 member lobby.

They are trying to undo decades of Florida law by undoing our judicial foreclosure process and change it to a non judicial foreclosure process where homeowners could be foreclosed on in as little as 3 months. Florida has been a judicial state for decades. They want to get this on the books by July 1 of 2010. This would been that they could bypass the judges. Of course they want to bypass the judges. After all, the judges are making the banks show proof of ownership of notes and making the banks obey the laws of service in the state of Florida. The judges will 99.9% of the time rule in favor of the homeowner postponing the foreclosure when we have an offer for a short sale.

37 states have fast track foreclosures. But Florida is and has always been a state where homeowners’ rights matter.

 172,894 South Florida homeowners were served with foreclosure lis pendens notices last year.

This 53 page bill states that the non judicial foreclosures must be completed in no less than 3 months and no more than 1 year.

Here in Florida in a judicial process it takes 18 months or more to foreclose on a property and longer if you hire an attorney for foreclosure defense.

I love how they try to sell this bill as doing some good for the people. That is a bunch of loaded boloney. The bankers also put in the bill to keep their right to deficiency alive and well in the state of Florida. But then the bank throws a little morsel to the homeowners saying they will waive the deficiency if the homeowners do not wreck the house.

It amazes me how they package this bill. The name is so deceiving. They must hire a marketing company to come up with the names for bills so that they sound good to the people.

The name of this bill is:
The Florida Consumer Protection and Homeowner Credit Rehabilitation Act!!!!
What a joke! How in the world do they get to put a name like this on a bill that is just there to protect the banks’ interests?

They mask this with pretending that this bill is really helping! The sponsor of the bill said that this is to help break a foreclosure crisis caused by mortgage fraud. Excuse me? How is taking away judicial rights helping break through fraud?????

He also said that this bill protects the innocent victims- the neighborhoods. How is that going to happen? Agents- please send your congress men and house representatives photos of homes you drive by that are BANK OWNED!!!!

The bankers spokesperson said that getting the foreclosures into the hands of the banks and out of the homeowners’ possession will help with blighted urban neighborhoods and help relieve the judges who are overworked and have too many cases. He also said that this will help the HOA’s and keep the houses nice and neat. What a good scam to get you to believe that taking away more rights is somehow a good thing.

Governor Charlie Crist would also have to sign this Pro Banker bill if this bill becomes law. He is under a lot of pressure from the populist movement and they are not happy with the bankers right now. This may not be a move he is willing to take to risk the Senate race he is in.

The Florida legislature resumes again on March 2. Please get the word out to all the attorneys you know, all the homeowners you know to stop this bill. You never know when you may be in the same situation as these people we are helping to save from foreclosure.

This post is from Katerina Gasset at www.Short-Sales-Florida.com

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Don’t expect these low interest rates to last

Posted on February 1, 2010 by admin

According to Dr. Mark Dotzour, chief economist for the Real Estate Center at Texas A&M University, mortgage interest rates are low right now but don’t expect that to last. When the government quits buying mortgage-backed securities, rates will head up and away.

Dotzour says that mortgage rates were low at the end of 2009 because “the global consensus among bondholders appeared to be that inflation will remain low in the United States for an extended period. This caused the ten-year U.S. Treasury rate to fall to between 3.2 and 3.6 percent for much of the second half of 2009.”

With extraordinary levels of federal deficit spending, Dotzour says it is unlikely that the low-inflation scenario will be popular when the economy starts to rebound. Consumers should expect mortgage rates to rise when signs of improvement appear.

A second factor contributing to the low mortgage rates is the Federal Reserve Bank’s unprecedented purchase of nearly all the mortgage-backed securities issued by Fannie Mae and Freddie Mac in 2009, he adds. Totaling more than $1 trillion for the year, this program has been extended through the end of March 2010.

“The Fed has never done this before in its history,” says Dotzour. “They are doing this to stimulate the economy by keeping mortgage rates as low as possible. When the Fed stops buying these securities from Fannie and Freddie, mortgage rates are likely to increase, and possibly quite abruptly.”

How far will rates go up when the Fed terminates its buying program? Dotzour says that question is difficult to answer precisely because this has never been done before; but many experts think that rates could move up one-half to 1 percent.

“The combination of extraordinarily low mortgage rates and current price levels are making homes extremely affordable to American families. In fact, national and Texas housing affordability indices indicate that homes are more affordable than ever. But this will not last. When the economy recovers and the Fed stops purchasing mortgages, rates will rise.”

To read more on the subject, see Dotzour’s article “Rate Expectations” in the January 2010 issue of Tierra Grande magazine at http://recenter.tamu.edu/tgrande/.

© 2010 Florida Realtors®

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Bank Hiring Surge

Posted on January 31, 2010 by admin

Banks across America are mounting a hiring surge right now. Why?  They are gearing up for what lies ahead…more defaults, more short sales and more foreclosures.  Collectively, the big 4, including Bank of America, Chase, Wells Fargo and Citi have recently added over 17,000 new employees to their payroll to help manage the volume of loan modification and short sale requests as well as the disposal of foreclosures.  And the most ambitious are those that have a large number of Alt-A  (Interest Only and Option ARM) loans.  Wachovia, for example, is loaded with these loan products.  They were recently acquired by Wells Fargo so now it’s Wells Fargo’s responsibility to deal with the mess that is going to be hitting them this summer when many of these Alt-A loans begin re-casting to fully amortized loans.

Experts are predicting more mortgage mayhem. Now you can see why banks are on a hiring surge.  2010 and 2011 are shaping up to be as big (if not bigger), than the sub prime meltdown of 2007 and 2008.  Believe it or not,  2009 was the “eye” of the storm.

When you study what the banks are doing, hiring tons of employees to gear up for more defults, short sales and foreclosures, that should give you a clue as to what lies ahead…you guessed it…more defaults, short sales and foreclosures. Short sales and foreclosures dominate the residential (and soon to be commercial) real estate markets.

Bottom line…there is no shortage of short sales and foreclosures in our area or in this country.

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New Short Sale Guidelines

Posted on December 15, 2009 by admin

Let’s get to the truth about the New Short Sale Guidelines…

There have been a surge in posts and articles written by Real Estate Agents and the media regarding the new HAFA program; the streamlining Short Sales Program rolled out by the U.S. Treasury Department.

Many of the posts on this topic rang strong with hope for a faster closing time. I will be writing a set of articles along with this one that will go over all of the points in the 43 pages of guidelines and forms. There is just too much to put in one post.

Whenever I see a group of people complaining and wanting something to be changed I want to take a step back to see the big picture. One sentence comes to mind often, ” Be careful what you ask for.”

NAR, Realtors® and homeowners around the country shouted, petitioned, discussed, wrote and spoke to their representatives about how long short sales take and how the banks don’t seem willing to do them and that they don’t know what they are doing.

My first question is:

Who says that being a professional small business in Real Estate was going to be a walk in the park? And what makes a business where there is no ceiling, low entry level and can create success beyond one’s wildest dreams also expected to be easy. Real estate is one of the highest stress careers but you can have a big pay day.

My second question is:

How many Real Estate Agents who wrote these posts of the blissful future of short sales actually read all 43 pages of the guidelines and forms?

I was tempted to write about HAFA but decided that I better understand HAFA and form an opinion based on facts- the facts that are written in these guidelines. So I spent 8 hours yesterday studying these guidelines and speaking with attorneys about them to get their opinions.

On the NAR website under the HAFA section it states:

“HAFA is a complex program, with 43 pages of guidelines and forms, designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure.”

Do you see the oxymoron? How do you place the words, COMPLEX and SIMPLIFY in the same sentence?

The first rumor that I want to dispel is that all the short sales are now going to go smoothly. That is NOT the case.

These guidelines are complicated to say the least, there are a lot of ifs, ands, and buts going on here.

The second rumor that I want to dispel is that all short sale lenders will have to answer your request for a short sale within 10 days.

This is NOT the case ALL the time and in ALL situations.

These guidelines are NOT for Fannie and Freddie owned loans. Fannie Mae and Freddie Mac will be coming out with their own set of guidelines in the coming weeks.
The guidelines only pertain to servicers who are in the HAMP program now, or those who enroll in the HAMP program. Servicers must offer the HAMP program first before they offer the HAFA program.

The HAFA program is only for:

* Principal Residences
* First mortgages
* The mortgage is delinquent or will be delinquent in the foreseeable future.
* The unpaid balance is less than $729,750.
* The monthly mortgage payment is more than 31 percent of the borrower’s gross income.

The third rumor that I want to dispel is that this is going to happen right now. NOT TRUE.

This program begins on April 5, 2010 and servicers have until December 31st of this year to opt in to the program.
However, servicers may opt to begin the program at any time before April 5, 2010 as long as they can implement a record keeping system.

The fourth rumor that I want to dispel is that all the lenders are now under these guidelines.

The HAFA program is not LAW. The US Treasury rolled out these guidelines to go along with the HAMP program.

This part really gets me!

“The Treasury has selected Freddie Mac to serve as its’ compliance agent for HAFA.”

You mean the same Freddie Mac that was involved with the huge accounting and fraud scandals?

According to the Chicago Tribune Freddie Mac executives “devised a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.”

We believe in adding value to our sellers. We are good at negotiating short sales. Short sales are much more about good negotiating skills than anything else and programs like these tend to tie our hands in applying our negotiation skills.

We will take longer short sale times with approvals any day over shorter short sale response times that come back with a Rejection mark on them in order to fulfill their accountability time frames.

We close 98% of ALL of our short sale listings and other agents do also. If we can do it, then you can too. If you are not closing above 80% of your short sale listings than you need to learn negotiating skills. Negotiating skills is what brings value to your clients and your business. Stay tuned for more details on the HAFA guidelines and forms- consider subscribing to our blog to be alerted of new articles.

This information courtesy of Katerina Gusset of International Properties Investments, Inc.

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2010 will be the Year of the Short Sale

Posted on December 7, 2009 by admin

From Bloomberg News:

Banks are beginning to go along with short sales in increasing numbers, three years into a U.S. housing slump that pushed the economy into a recession and cut resale values by 30 percent from the peak in July 2006. Short sales almost tripled to 40,000 in the first six months of 2009 from the same period a year earlier. Yet for each short sale, there were 25 foreclosures started or completed in the first half of this year, according to data from the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

It’s really finally dawning on banks that they’re better off with a short sale,” said Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles. “I think banks were in denial.”

Wells Fargo, Bank of America Corp. and JPMorgan Chase & Co. this year have hired and trained more staff, developed software systems for expediting short sales, and increased marketing of short sales to delinquent borrowers.

Banks are increasing such sales under pressure from the Obama administration and lawmakers who criticized them for favoring foreclosures and delaying short sales, Green said. Lenders and loan servicers also stand to receive up to $2,000 in incentives to close short sales under a Treasury Department plan unveiled Nov. 30.

New Treasury Department guidelines for foreclosure alternatives scheduled to take effect in April 2010 will require lenders to consider borrowers for a short sale on their primary residence 30 days after missing two consecutive payments on a modified loan or after the borrower requests a short sale.

The Treasury Department would pay up to $1,500 for a homeowner to relocate, $1,000 to loan servicing companies that accept a sale and a maximum of $1,000 to help settle a second mortgage or subordinate lien. A lender must agree to release the borrower from all liability for repayment for the mortgage, under the Treasury plan.

In July, Wells Fargo began mailing notices to delinquent borrowers advising them that short sales might be an option to avoid foreclosure.

“When we determine that a loan is not affordable for the customer — either because a modification was denied or failed – – we obtain the value of the property, run it through our loan decision tool and then send a letter to the customer advising them of our short sale program, including the short sale price we are willing to take on the property,” Debora Blume, a spokeswoman for Wells Fargo Home Mortgage said in an e-mail.

Wells Fargo is focusing on delinquent borrowers in Florida and California homeowners with “Pick-a-Pay” loans originated by Wachovia Corp., Blume said. Wells Fargo acquired Wachovia in December 2008 and owns the “Pick-a-Pay” loans outright, said J.K. Huey, the bank’s senior vice president overseeing short sales and bank-owned properties. That allows the company to approve a short sale without consulting investors or parties that can hold up transactions.

“Pick-a-Pay” mortgages have among the highest rates of negative equity, because borrowers could select their monthly payments, often paying less than the interest, with the difference added to the principal. That formula means that total loan debt was increasing at a time property values were falling.

Wells Fargo held $87.8 billion of such loans as of Sept. 30, down $7.5 billion from the end of last year. Wells Fargo Chief Financial Officer Howard Atkins said on an Oct. 21 earnings call that the bank is reducing the number of loans with “negative amortization potential.” As of the end of the third quarter, 26 percent of the loans in that portfolio now have minimum monthly payments that fully cover the interest due so that the total principal does not grow, up from 16 percent at the end of last year.

As of Sept. 30, Wells Fargo had modified 43,500, or 22 percent, of the distressed loans to reduce borrowers’ payments, Atkins said.

JP Morgan doubled the number of staff trained to handle short sales after adding 5,000 people since Jan. 1 to deal with distressed mortgages, said Thomas Kelly, a spokesman for the New York-based bank’s home lending division.

Chase services 10.3 million mortgages worth $1.4 trillion, according to Kelly. Of its portfolio, Chase reported 422,000 loans more than 60 days delinquent, about one third of which were in loan modification programs, according to a Nov. 10 Treasury Department report on the Obama administration’s Making Home Affordable Program.

“We’re reaching out to people who are struggling with the Obama loan modifications or our own,” Kelly said. “Approaching customers is a very recent phenomenon.”

Bank of America, the nation’s largest loan servicer, had one of the lowest loan modification rates, with 14 percent of problem loans in trial workout plans as of Oct. 31, according to the Obama Administration.

The Charlotte, North Carolina-based bank started a “cooperative short sales” program in October and may close its first short sale through the program this month, said Dave Sunlin, senior vice president for foreclosure and real estate management.

Many are borrowers with pay-option adjustable-rate mortgages issued by Countrywide Financial Corp., Sunlin said. BofA bought Countrywide, once the nation’s largest mortgage originator, for $4 billion in stock in 2008.

Short sales benefit a neighborhood because they clear out stagnant properties that may have an adverse effect on values, said Sean Shallis, a senior real estate strategist with Weichert Realtors in Hoboken, New Jersey. Shallis has one home with bank approval for a short sale and three others waiting approval on the same street in Jersey City with views of the Manhattan skyline.

“In every case we had multiple offers from people who had plenty of money to put down,” Shallis said. “Americans are out there still buying homes and trying to move it along.”

Short sales also help the bank, because foreclosed properties lose more value when they are vacant or a homeowner vandalizes a house on the way out, Sunlin said.

“We typically expect a 10 to 15 percent decrease of loss severity with a short sale,” Sunlin said.“The loss severity of short sales is lower but it’s not low,” Goodman said.

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