San Jose Short Sales

A. Absolutely Yes. It is up to the bank to make the ultimate decision to agree on the sale and allow the deal to close.

Sellers who are underwater, because they owe more to the bank than their house is worth, or simply won’t net enough from the sale to pay off all the closing expenses, can request that their bank take less than the amount owed.

While it’s common that sellers requesting a short sale are in arrears on their mortgage, it’s not necessary. In fact, there is an advantage now in remaining current on your payments.

Effective June 1, 2012, the credit bureaus have announced that they intend to report short sales by borrowers otherwise current on their mortgage obligations as being neutral on the credit report.

That means that the borrower’s credit score won’t be adversely affected, provided they have been current on their mortgage payments in the last 12 months. It remains to be seen if the credit bureaus will proceed with this announcement, but if they do, it will be a big advantage to homeowners stuck in underwater situations.

Remember, a short sale isn’t for everyone. If you have equity in your home, but like everyone else the home has merely declined in value, you wouldn’t want to do a short sale.

Having success with Short Sales requires setting the right expectations from the beginning; buyers and their agents must have realistic expectations about Short Sales. Setting the right expectations can be the difference between failure and success of the Short Sale transaction. Here’s a good example of an email you can attach to the counter offer.



This is a Short Sale. It will require minimum 60-90 days to get closed. If the Buyer is not prepared to wait this long then this property will not work for her. We will require the deposit to be placed once the contract is signed by the Buyer and the Seller. Once under contract the Buyer cannot just walk away. If they do the deposit will be forfeited to the Seller.


If the Buyer is agreeable to these terms then the Seller and I will do everything we can to get the lender to agree to the Short Sale. The property will go into pending status and we will provide the lender with all the documentation they need to have this Short Sale approved in a timely manner.


Please let me know within 48 hours your Buyer’s decision. I’m looking forward to working with you to achieve a successful closing.



If they agree 
chances of the Buyer lasting through the Short Sale process are very very good.

If they don’t, we will look for another buyer.

Please contact me at alan@i2realty.com or call me at 408-835-7743 if you want to do a short sale.

Alan Nguyen, Broker
www.i2realty.com

Freddie Mac, the federally owned company that buys mortgages from local lenders, says it wants to make the short sale process easier on home sellers by updating its timelines for short sales and requiring better communication from lenders. Last year, Freddie Mac completed 45,623 short sales.

The initiative is part of the Servicing Alignment Initiative (SAI) Freddie Mac and Fannie Mae launched in 2011 at the direction of their regulator, the Federal Housing Finance Agency (FHFA). Yesterday, FHFA announced that Fannie Mae and Freddie Mac must adopt the new short-sale guidelines, and the latter announced compliance shortly after that.

“Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short sales under the Obama Administration’s HAFA program or Freddie Mac’s traditional short-sale option,” says Tracy Mooney, Freddie Mac senior vice president, single-family servicing.

Freddie Mac proposals

• Loan servicers should make a decision within 30 days of receiving 1) an offer on a property under Freddie Mac’s traditional short sale program or 2) a completed Borrower Response Package (BRP) requesting consideration for a short sale under HAFA or Freddie Mac’s traditional short sale program. BRPs are standardized assistance applications developed under the Servicing Alignment Initiative.

• If a lender needs more than 30 days, it must give homeowners a status update at least weekly, and a final decision must be made in less than 60 days.

• If a servicer makes a counteroffer, the borrower must respond within five business days. The servicer then has 10 more business days to respond to the buyer.

The Bank of America Cooperative Short Sale. The Bank of America Co-op is what Short Sales should be.

■  Low to no documentation from the Seller.
■  Pre-approved pricing with aggressive price reductions.
■  $2,500 cash to the Seller at closing.
■  Full Waiver of Deficiency.
■  6% Commission.
■  Can be an investment property.

It’s basically HAFA without all of the paperwork and time delays. One key point is that you want to be sure to go through the Co-op approval process prior to placing the property on the market.
Once you have these things in, the process is very straight forward.

■  List the property at the approved price.
■  Sell it.
■  Upload the contract and HUD into the Equator system.
■  Received the final approval. Usually within 15-30 days
■  Close the transaction.

Please contact me at alan@i2realty.com or call me at 408-835-7743 if you want to do a short sale.

Alan Nguyen, Broker
www.i2realty.com

Infinite Investment Realty and Broker Alan Nguyen just had another successful San Jose Bay Area Short Sale Closing with Central Mortgage and Wellsfargo Bank.

The property: 2 bedrooms 2 baths Condo located in San Jose California, 95133. This home has 979 sq ft of living area. It was purchased in 2009 for close to $57000. It sold today for $440,000.

Liens:
■ 1st Mortgage with Central Mortgage for $233,000
■ 2nd Mortgage with Wellsfargo Bank for $83000

Hardship:
■ Loss of rental income. This is an investment property.

Summary:

We completed the shortsale within about 2 months. Central Mortgaqe was quick to approved the purchase price at $200,000. Wellsfargo settled for $3100 as the second lender. Buyer got $3200 in NCRR credit.

Please contact me at alan@i2realty.com or call me at 408-835-7743 if you want to do a short sale.

Alan Nguyen, Broker
www.i2realty.com

We just completed the short sale with Chase as first lender and BofA as second lender. This is a single family home, 3 beds, 2.5 baths, 15 years old. Here are the details:

Mortgage Holder: Chase and Bank of America

Original Purchase Price: $415,000 in 2000

Mortgage Amount: Chase $532,000, Bank of America $200,000

Sales Price: $350,000 with $8000 NCRR credit to buyers

Cash Contribution Required: No

Judgment: Charged off $11,000

Short Sale Deficiency: Waived

Incentive: $30,000 to seller for doing shortsale

This short sale, obviously, was a huge loss to the investor – over $500,000 when including closing costs. Since it was a big amount, it took 4 months, 3 different buyers, to complete the short sale. Chase settled the short sale, allowed $10,000 pay off to the second.

It paid to do short sale as seller got $30,000 incentive. If you have Chase mortgage and are considering short sale, contact an experienced San Jose short sale Broker. Questions? Email me at alan@i2realty.com or call 408-835-7743

Alan Nguyen
www.i2realty.com

If you never missed a payment during your Short Sale, your credit should still be reasonably good and there are banks that likely will lend you money right away. However, most people who complete short sales fell behind on payments, and it takes 2 years before they can get another loan. So if you want to unload your upside down home and purchase a lesser home, you have a choice. Obviously, if you’re paying cash, there’s nothing stopping you from buying a home at any time.

If you have any other thoughts, please email me at alan@i2realty.com or call 408-835-7743

Alan Nguyen
www.i2realty.com

Infinite Investment Realty and Broker Alan Nguyen just had another successful San Jose Bay Area Short Sale Closing with Bank of America.

The property: 4 bedroom 2.5 bath SFH located in San Jose California, 95136. This home has 1,651 sq ft of living area. It was purchased in 2009 for close to $57000. It sold today for $440,000.

Liens:
■ 1st Mortgage with BankofAmeria Mortgage for $540,000

Hardship:
■ Increasing in expense and reducing of income.

Summary:

The owner didn’t want to go thru a short sale process without knowing if he is qualified. Luckily, his mortgage was FHA and FHA allows doing a preforeclosure approval before listing. I initiated the FHA preforeclosure short sale in Nov 19 2011 and got the ATP (Approved to Participate) price at $440,000 on 1/6/2012. We got a buyer right away and closed the deal on 2/22/2012. Please contact me at alan@i2realty.com or call me at 408-835-7743 if you want to do a short sale.

Alan Nguyen, Broker
www.i2realty.com

1. Submit complete and organized short sale packages with contract that makes sense.

2. Fully understand the Short Sale process and treat the negotiators with respect.

3. Only escalate when all other avenues have been exhausted. Help the negotiator have a good experience working with you. If you do have to escalate don’t bash the negotiator.

4. Be a problem solver not a problem creator. Work with the lenders to get the short sale approved.

5. Never stop learning and being open for new ways to handle short sales. Know the difference between a regulation or law and a rule or company policy.

Negotiators work on many shortsale files, you need to build a reputation as one who gets deals closed. If you have any other thoughts, please email me at alan@i2realty.com or call 408-835-7743

1. 536 Lanfair Circle, San Jose, CA 95136. This 4beds/2.5baths, 1651 sq. ft., 11K sq. ft lot SFH. The borrower has one FHA loan with Bank of America. I got the pre-approved FHA 90045 ATP (Approved to Participated) at $440,000 before it is even listed on MLS. Beautiful remodelled home with a gorgeous huge backyard.

2. 2456 Sequester Court, San Jose CA 95133. This charming, quiet upstairs end unite condo is 2beds/2baths, ~ 1000 sq. ft. is great for 1st time buyer. Borrowers have 2 loans, Central Mortgage and Wellsfargo Bank.

3. 286 Cannikin Drive, San Jose CA 95116. 3beds/2baths, SHF, 14 years old is listed at $350,000. Short sale already approved at $350,000. Borrower has 2 loans, Chase and Bank of America.

4. 2328 Coral Sea Street, Alameda CA 94501. This gorgeous almost new home, 4beds/3baths, ~2500 sq. ft. is ready for a new owner. Borrower has 2 loans, 1st with Chase and 2nd with Bank of America. This should sell quick at $675,000.

5. 227 Kiely Drive, Santa Clara CA 95051. This 2nd level condo, 2beds/2baths, ~1000 sq ft is coming soon. Cupterno schools without Cupertino pricing, at $265,000. Borrowers have 2 loans both with Chase.

Do you need help with your San Jose Short Sale or want to know more about those lisitngs? You can email me at alan@i2realty.com or call 408-835-7743