I recently had a short sale denied. I was representing the buyer. The short sale progressed as normal. 4 months of waiting through the bank shuffle of unorganized levels of processing. Last week we were informed the short sale was denied because Fannie Mae was the investor on the loan. Fannie Mae requires the seller to be 30 days late on their mortgage payment before they will even consider the short sale. Again, it took the bank 4 months to find this out. Why? I think this is one of many examples of how screwed up our banking system is that they would waste this much time, money and manpower of their own resources just to find out Fannie Mae was the investor on the loan. So now my buyer has to wait while the seller misses their September payment, reports late on October 15th to start the process all over again.
In itself the whole things sounds like an oxymoron. The government continues to bail out the banks and at the same time encourages people to stop making their mortgage payments. I have since been told this was to deter those thinking of doing a strategic default. However you only have to be 30 days late ... once. After the first month you can start making your payments again, just not catch up until the short sale is complete. Really????? Honestly, Fannie Mae truly believes this is going to deter someone with 1 30 day late from not walking away from their home.
It is hard feeling like a guppy in an ocean. I hate asking questions anymore because it leads to more unanswered questions. Like cancer the politics involved in all of the banks and the government has spread to a level that I think they are unable to control now.
In light of all of this, a family member emailed me this article from September 1999 talking about Fannie Mae. Is this guy psychic or what? The article will blow your mind. Click link below
Fannie Mae New York Times September 1999
Monday, August 23, 2010
Monday, April 12, 2010
Wells Fargo..........What can I say?!?!?!?
I am having an issue with Wells Fargo. I do not know if it is entirely their fault as the same problem seems to arise with whatever lender I happen to be dealing with.
Here is how most lending processes go: Your first interaction is with a loan officer. They are the customer service individual who blows lots of sunshine your direction to make sure you do not choose the competition. I liken to compare them to Best Buy. You know how the customer service reps try so hard to sell you the extended warranty. They use the oldest marketing technique in the world to frighten you about the "What If". If you have ever returned anything to Best Buy you know that the two departments are night and day. Well the same thing with mortgage companies.
Once you find a home (and get an offer accepted after multiple bids) your file is now transferred to a loan processor. The loan processor is in charge of verifying all the things you claimed on the credit application and gathering all additional information to prepare the file for the next person. Forget it if you told the loan officer anything on your file. Most likely they never told the loan processor.
Once every "i" is dotted and every "t" is crossed the file moves to final underwriting. This is the big kahuna of the loan process. This person can either kill the deal, make your life (and your clients) living Hell, or ride smooth like butter (rarely happens). I guarantee that your file and all underwriting guidelines have changed dramatically by the time you originally talked with the loan officer.
My complaint. Total and utter lack of attention and communication within this loan process. These lenders have no accountability to the purchase contract as a legally binding document. They move when they want, they call when they want, they do as they please when they want because it isn't costing them anything.
I recently had a file where the seller wrote in the addendum's to the accepted purchase offer that they would charge a $100 per diem for every day the file did not close over the contract close of escrow date. This is not new in itself as the sellers (banks) have been writing that in for the last couple of years but they never follow through. Kind of like those parents who are constantly threatening their children to do something if they do not behave but never follow through with the punishment.
Well I had a file where the seller is enforcing this per diem charge. Not only that but they are charging ME $300 to request a close of escrow extension. From day one, knowing how the lending process works, I have been in contact with my buyers lender making sure that every person in the journey knew about the charges. Never an acknowledgment like "Yes, we value Ms. "X"'s as a client and will do everything in our power to close this early just in case the unforeseen happens at the last minute (which always occur). Nope, none of that, no communication. They just him/haw along as business as usual totally ignoring my cautions and warnings.
So here is close of escrow and the seller is charging my buyers the $100 a day. I emailed the lender and ask them how much longer they needed so I could inform their "valued" customer how much they were going to have to pay at $100 a day due to Wells Fargo's lack of attention to the file.
Of course, the finger pointing started (non productive) and a varied list of excuses now graced my ears all of which could have been taken care of with proper communication. I even had the loan officer email me and say "As A Broker, You should understand the market we are in". Whatever,... I told him complacency was a short cut to the unemployment line. Furthermore, Lenders and Realtors are a dime a dozen. It is all about customer service and professionalism none of which they have shown their "valued" customer of 30+ years. Yet today I received ANOTHER condition to the final approval of the 3 that have already been requested. It would be to efficient to give them to me all at the same time so "our" client can work on them all. Nope, one at a time because what is another day to them. It is not their $100 a day they have to pay.
So tonight I am in Cabo San Lucas Mexico on vacation and having to deal with an incompetent/arrogant lender who could care less about their "valued" customer.
Buyer Beware.
Here is how most lending processes go: Your first interaction is with a loan officer. They are the customer service individual who blows lots of sunshine your direction to make sure you do not choose the competition. I liken to compare them to Best Buy. You know how the customer service reps try so hard to sell you the extended warranty. They use the oldest marketing technique in the world to frighten you about the "What If". If you have ever returned anything to Best Buy you know that the two departments are night and day. Well the same thing with mortgage companies.
Once you find a home (and get an offer accepted after multiple bids) your file is now transferred to a loan processor. The loan processor is in charge of verifying all the things you claimed on the credit application and gathering all additional information to prepare the file for the next person. Forget it if you told the loan officer anything on your file. Most likely they never told the loan processor.
Once every "i" is dotted and every "t" is crossed the file moves to final underwriting. This is the big kahuna of the loan process. This person can either kill the deal, make your life (and your clients) living Hell, or ride smooth like butter (rarely happens). I guarantee that your file and all underwriting guidelines have changed dramatically by the time you originally talked with the loan officer.
My complaint. Total and utter lack of attention and communication within this loan process. These lenders have no accountability to the purchase contract as a legally binding document. They move when they want, they call when they want, they do as they please when they want because it isn't costing them anything.
I recently had a file where the seller wrote in the addendum's to the accepted purchase offer that they would charge a $100 per diem for every day the file did not close over the contract close of escrow date. This is not new in itself as the sellers (banks) have been writing that in for the last couple of years but they never follow through. Kind of like those parents who are constantly threatening their children to do something if they do not behave but never follow through with the punishment.
Well I had a file where the seller is enforcing this per diem charge. Not only that but they are charging ME $300 to request a close of escrow extension. From day one, knowing how the lending process works, I have been in contact with my buyers lender making sure that every person in the journey knew about the charges. Never an acknowledgment like "Yes, we value Ms. "X"'s as a client and will do everything in our power to close this early just in case the unforeseen happens at the last minute (which always occur). Nope, none of that, no communication. They just him/haw along as business as usual totally ignoring my cautions and warnings.
So here is close of escrow and the seller is charging my buyers the $100 a day. I emailed the lender and ask them how much longer they needed so I could inform their "valued" customer how much they were going to have to pay at $100 a day due to Wells Fargo's lack of attention to the file.
Of course, the finger pointing started (non productive) and a varied list of excuses now graced my ears all of which could have been taken care of with proper communication. I even had the loan officer email me and say "As A Broker, You should understand the market we are in". Whatever,... I told him complacency was a short cut to the unemployment line. Furthermore, Lenders and Realtors are a dime a dozen. It is all about customer service and professionalism none of which they have shown their "valued" customer of 30+ years. Yet today I received ANOTHER condition to the final approval of the 3 that have already been requested. It would be to efficient to give them to me all at the same time so "our" client can work on them all. Nope, one at a time because what is another day to them. It is not their $100 a day they have to pay.
So tonight I am in Cabo San Lucas Mexico on vacation and having to deal with an incompetent/arrogant lender who could care less about their "valued" customer.
Buyer Beware.
Sunday, April 11, 2010
ipad review
I must be the only person on earth that does not understand Apple's new Ipad. The wireless card on my laptop crashed. After several hours to no avail my I.T guy said it was a lost cause. It just so happened that day I attended an awards conference coordinated by WEMAR (West Maricopa Regional Assoc. of Realtors). Low and behold I saw a familiar face. This familiar face had an Ipad. Everyone wanted to see it. I am not an Apple fan AND I wanted to see it. So for the duration of the conference I googled over his ipad.
Netbook or Ipad. Netbook $269, ipad $499. I justified the extra money as maybe I would not have to upgrade my computer in a couple years. Since I have never heard an Apple owner complain of their computer crashing over a driver failure or virus, I considered this foreign being. So I spent the next 20 minutes trying to find a store that had one. Best Buy, no. Apple store, yes! But....I was told to hurry because they were going quick. Never tell a women to hurry because they are going quick. You wonder who those crazy people are driving on the freeway. Its a women driving because someone told her something was on sale and they were going quick!
I was leaving the next morning on vacation and thought what an opportunity to learn this new technology. I drove the 45 minutes to the Apple store. It was packed. Everyone was playing on the demo ipads. The associate informed me they had one more left. Feeling kind of special, I paraded through the store with it. As he did his thing on the computer for me to purchase it I informed him I needed the wireless keyboard. He said sure. I asked him if the usb jack is in the box or do I need to buy it separately. I could tell this was going to be a nickel and dime thing. As he typed on the computer to ring me up he informed me that it is not in the box and it is not coming out for another 6 months. sigh of disappointment.
I admit. I did not do my research on this thing. I just figured since it was such a hot commodity, there had to be a reason. So as I looked at him very dumbfounded, I asked well how do I sync my blackberry? (you can laugh at my expense) He said I couldn't. I think the utter look of a deer in headlights must have been the expression on my face.
I started thinking of all the things I use a USB port for. My camera, magicjack, my printer, portable drives....
Again I asked him what about all of these things just in case I missed something again. It was not getting any better. He informed me that the ipad is not meant to be a computer. Huh?!?!?!? So I asked him what am I paying $500 for and what can I do with it. He took me to a demo and showed me a nifty calendar and all it could do. Wow, I was impressed now.................(not).
I told him I meet clients on the fly, I need them to sign docs electronically through the computer, I have to do analysis on the fly, cma's, write up offers, addendums, counters.......so how do I do all that on this? He said I can not download anything but Apple Apps. I can not download sharper agent (my flyer creator), toolkitcma (my cma and buyer presentation program), justsnooping (my virtual tour provider), or any of the other websites I use to advertise on that need a program download. I am a pdf creator/merger/extractor fanatic. The only pdf function I can do is open a pdf. I can not even dowload it. Seriously beyond confusion. I look around the other demo's to see what people are doing on them. Playing games. I had to ask. Are people paying $500 to play games on this?
So either I got a really bad Apple associate or this ipad is not for Real Estate agents. They promote their mobility. Who is more mobile then a Realtor? I did not see one function that could possible make my life more efficient or effective. I could not believe that something that is so marketed toward mobile business professionals and all it really was is another version of the iphone on steriods.
So with major disappointment (mad at myself for following the crowd and not researching it first) I handed the ipad back to the associate. He took it back with great pride. I went to Best Buy and purchased a netbook. Best part, Best buy gave me a $45 gift certificate so total was $230 and some change. I even got 3 usb ports!
Netbook or Ipad. Netbook $269, ipad $499. I justified the extra money as maybe I would not have to upgrade my computer in a couple years. Since I have never heard an Apple owner complain of their computer crashing over a driver failure or virus, I considered this foreign being. So I spent the next 20 minutes trying to find a store that had one. Best Buy, no. Apple store, yes! But....I was told to hurry because they were going quick. Never tell a women to hurry because they are going quick. You wonder who those crazy people are driving on the freeway. Its a women driving because someone told her something was on sale and they were going quick!
I was leaving the next morning on vacation and thought what an opportunity to learn this new technology. I drove the 45 minutes to the Apple store. It was packed. Everyone was playing on the demo ipads. The associate informed me they had one more left. Feeling kind of special, I paraded through the store with it. As he did his thing on the computer for me to purchase it I informed him I needed the wireless keyboard. He said sure. I asked him if the usb jack is in the box or do I need to buy it separately. I could tell this was going to be a nickel and dime thing. As he typed on the computer to ring me up he informed me that it is not in the box and it is not coming out for another 6 months. sigh of disappointment.
I admit. I did not do my research on this thing. I just figured since it was such a hot commodity, there had to be a reason. So as I looked at him very dumbfounded, I asked well how do I sync my blackberry? (you can laugh at my expense) He said I couldn't. I think the utter look of a deer in headlights must have been the expression on my face.
I started thinking of all the things I use a USB port for. My camera, magicjack, my printer, portable drives....
Again I asked him what about all of these things just in case I missed something again. It was not getting any better. He informed me that the ipad is not meant to be a computer. Huh?!?!?!? So I asked him what am I paying $500 for and what can I do with it. He took me to a demo and showed me a nifty calendar and all it could do. Wow, I was impressed now.................(not).
I told him I meet clients on the fly, I need them to sign docs electronically through the computer, I have to do analysis on the fly, cma's, write up offers, addendums, counters.......so how do I do all that on this? He said I can not download anything but Apple Apps. I can not download sharper agent (my flyer creator), toolkitcma (my cma and buyer presentation program), justsnooping (my virtual tour provider), or any of the other websites I use to advertise on that need a program download. I am a pdf creator/merger/extractor fanatic. The only pdf function I can do is open a pdf. I can not even dowload it. Seriously beyond confusion. I look around the other demo's to see what people are doing on them. Playing games. I had to ask. Are people paying $500 to play games on this?
So either I got a really bad Apple associate or this ipad is not for Real Estate agents. They promote their mobility. Who is more mobile then a Realtor? I did not see one function that could possible make my life more efficient or effective. I could not believe that something that is so marketed toward mobile business professionals and all it really was is another version of the iphone on steriods.
So with major disappointment (mad at myself for following the crowd and not researching it first) I handed the ipad back to the associate. He took it back with great pride. I went to Best Buy and purchased a netbook. Best part, Best buy gave me a $45 gift certificate so total was $230 and some change. I even got 3 usb ports!
Monday, March 29, 2010
Mortgage Debt Relief Act and Arizona Anti Deficiency Statue
http://www.keytlaw.com/blog/2009/11/confusion-about-short-sales-and-anti-deficiency/
Great source of information for individuals debating whether to short sale or foreclosure. 2 considerations must be observed. One has nothing to do with the other as many people confuse the two.
Anti Deficiency Statue has to do with the lender seeking recourse for their loss after the fact. The anti deficiency law in Arizona affects short sales different than foreclosures (mainly that the anti deficiency law only protects in a foreclosure). Everyone involved in a short sale must make sure language in specific and clear in bank settlement letter to protect your clients from further recourse from bank. I particulary found the statue of limitation information valuable. 90 days for a foreclosure and 6 years for a short sale. In most cases both homeowners and investors are covered under this statue....in most cases emphasized.
The Mortgage Debt Relief Act has to do with Uncle Sam. Whether you short sale or foreclose the bank will issue a 1099 unearned income. Now you have a situation with your taxes to deal with. Whatever amount the banks writes off as a loss is conveniently reported to you as unearned income. This means you have to pay taxes on that income (doesn't this just seem wrong). In any case, Former Pres. Bush enacted the Mortgage Debt Relief Act and Pres. Obama has extended it. It protects owner occupied (not investors or second homes) from having a tax obligation on this unearned income.
The link above is a valuable research tool for those trying to decide between their options. There are many many gray areas that until court cases start setting precendence will possibly be further setbacks for those who foreclose or short sale.
I am not an attorney or capable of giving legal advice. This is information as it has come known to me through my own research.
Great source of information for individuals debating whether to short sale or foreclosure. 2 considerations must be observed. One has nothing to do with the other as many people confuse the two.
Anti Deficiency Statue has to do with the lender seeking recourse for their loss after the fact. The anti deficiency law in Arizona affects short sales different than foreclosures (mainly that the anti deficiency law only protects in a foreclosure). Everyone involved in a short sale must make sure language in specific and clear in bank settlement letter to protect your clients from further recourse from bank. I particulary found the statue of limitation information valuable. 90 days for a foreclosure and 6 years for a short sale. In most cases both homeowners and investors are covered under this statue....in most cases emphasized.
The Mortgage Debt Relief Act has to do with Uncle Sam. Whether you short sale or foreclose the bank will issue a 1099 unearned income. Now you have a situation with your taxes to deal with. Whatever amount the banks writes off as a loss is conveniently reported to you as unearned income. This means you have to pay taxes on that income (doesn't this just seem wrong). In any case, Former Pres. Bush enacted the Mortgage Debt Relief Act and Pres. Obama has extended it. It protects owner occupied (not investors or second homes) from having a tax obligation on this unearned income.
The link above is a valuable research tool for those trying to decide between their options. There are many many gray areas that until court cases start setting precendence will possibly be further setbacks for those who foreclose or short sale.
I am not an attorney or capable of giving legal advice. This is information as it has come known to me through my own research.
Friday, March 19, 2010
HAFA - Home Affordable Foreclosure Alternatives CHANGES COMING APRIL 5TH
I hope this is not just another program the banks DONT have to follow. This is a step in the right direction. Second lien holders do not realize how many people are filing for bankruptcy after a foreclosure because of the second lienholders lack of cooperation during a short sale. Dealing with one mortgage has always been a much smoother transaction.
I am launching http://www.westvalleyshortsale.com/ by the end of the month as a place for resources and/or alternatives to foreclosure.
As taken from email from Desiree Montgomery, MSSC of Realty Executives
"The mortgage modification process thus far has been very confusing for all parties involved. Now there is another program coming that will hopefully aid in some relief for homeowners. The Home Affordable Foreclosure Alternatives (HAFA) is a Short Sale Alternative to foreclosure where once the mortgage lien holders approve the Short Sale, the the homeowner will not be pursued for the difference. Also, under HAFA, the homeowner who participated in good faith will also receive relocation assistance at the close of the transaction.
On April 5th, new the HAFA changes are coming that affect Short Sales. Even though you can go online to see the participating banks, my staff has been literally calling each of the Banks to see if they are going to be ready by the launch date.
Just a few highlights:
Participating Banks were provided a streamlined process that you must follow, to the letter
Approvals are given within 10 business days
Buyers have a minimum of 45 days to close
Contracts and settlement statements will require specific requirements to be approved
Seller's may have to negotiate terms with second lien holders BEFORE requesting approval under this program
Contracts in your current pipeline will require a different set of documents and tools"
I look forward to this!
I am launching http://www.westvalleyshortsale.com/ by the end of the month as a place for resources and/or alternatives to foreclosure.
As taken from email from Desiree Montgomery, MSSC of Realty Executives
"The mortgage modification process thus far has been very confusing for all parties involved. Now there is another program coming that will hopefully aid in some relief for homeowners. The Home Affordable Foreclosure Alternatives (HAFA) is a Short Sale Alternative to foreclosure where once the mortgage lien holders approve the Short Sale, the the homeowner will not be pursued for the difference. Also, under HAFA, the homeowner who participated in good faith will also receive relocation assistance at the close of the transaction.
On April 5th, new the HAFA changes are coming that affect Short Sales. Even though you can go online to see the participating banks, my staff has been literally calling each of the Banks to see if they are going to be ready by the launch date.
Just a few highlights:
Participating Banks were provided a streamlined process that you must follow, to the letter
Approvals are given within 10 business days
Buyers have a minimum of 45 days to close
Contracts and settlement statements will require specific requirements to be approved
Seller's may have to negotiate terms with second lien holders BEFORE requesting approval under this program
Contracts in your current pipeline will require a different set of documents and tools"
I look forward to this!
Tuesday, March 9, 2010
Thought for the Night about the Mortgage Interest Deduction
At dinner tonight, conversation turned some friends of the family who just lost their home. Not because they do not make enough money, just the opposite, but because they got involved in a really bad business venture that has been tied up in the court system for a long time and drained their savings over the last 4+ years. Like everyone else they took out the equity of their home and their retirement to start this business which ultimately failed.
It started the rotation of logic in my mind that I know of a few people in their situation. They make good money but made bad decisions. All these people who make good money will be doing their taxes this year and next to a very rude awakening. What happened to their mortgage interest write off?!?!?!?!? So we are going to have literally millions of people paying in an enormous amount of money in taxes to the government. Am I wrong in this thinking? Not only that but what about all the taxes having to be paid on the 1099 unearned income statements from the short sales and foreclosures. Sure some people are covered under the "Debt Relief Act" assuming they were primary residences but many more were not.
So when I hear about all the tax cut programs because of lost revenue from property taxes, I have to think about all the revenue they are getting from people not having the greatest tax shelter which was their home. Maybe in the big picture of things this amount is insignificant, but it was a thought none the less.
It started the rotation of logic in my mind that I know of a few people in their situation. They make good money but made bad decisions. All these people who make good money will be doing their taxes this year and next to a very rude awakening. What happened to their mortgage interest write off?!?!?!?!? So we are going to have literally millions of people paying in an enormous amount of money in taxes to the government. Am I wrong in this thinking? Not only that but what about all the taxes having to be paid on the 1099 unearned income statements from the short sales and foreclosures. Sure some people are covered under the "Debt Relief Act" assuming they were primary residences but many more were not.
So when I hear about all the tax cut programs because of lost revenue from property taxes, I have to think about all the revenue they are getting from people not having the greatest tax shelter which was their home. Maybe in the big picture of things this amount is insignificant, but it was a thought none the less.
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