Sellers waiting for prices to rise

The title above links to an article from Wall Street Journal.  It discusses "side-lined" sellers, who want to sell but want to wait for home prices to rise even though they may already have equity.  At this point, since our inventory continues to grow here in the San Fernando Valley, I don't think price rises are likely -- at least not until the beginning of 2011, if then.  Thanks, Kendyl; your "tweet" that alerted me to this article.

Burbank low flow toilet and water saving devices -- new rules from Burbank city council

This week, Burbank city council passed new water saving retrofit requirements.  Burbank will now require low-flow toilets and other water-saving devices in every home, just like the city of L.A..  These will need to be installed when a residence sells or otherwise changes hands.  Here's the article from the Burbank Leader.  On behalf of our clients, we Realtors have opposed this due to the cost, hassle and dubious actual water savings, but see the 2009 video above -- Dave Golonski, for one, did not care what Realtors think.

Short sales in Burbank, Studio City and the east San Fernando Valley: new HAFA program details

I've just posted details about the new Home Affordable Foreclosure Alternative (HAFA) program on my website's short sale page. Here's a slightly edited version:


The new HAFA program revamps the short sale market.  In 2009, the Treasury Department introduced the HAFA program to provide a viable short sale option for homeowners who are unable to keep their homes through loan modification -- the Home Affordable Modification Program (HAMP). The goal is to reduce the number of foreclosures by incentivizing banks to pursue short sales instead of foreclosures. And yes, the devil will be in the details.

Here are some of the differences between HAFA and the way short sales have been previously handled by lenders and borrowers.

• Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.  A borrower will no longer have to submit a second package if they have already submitted a complete first package.
• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).  This is huge for both the borrower and the real estate agent as we’ll now know the minimum the bank will accept.
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
• Uses standardized documents, processes and timeframes/deadlines.  There should be no difference now between the way, say, BofA handles a short sale as versus Wells Fargo.
• Mortgage servicers are required to make a preliminary decision regarding allowing the short sale within 15 days of receiving a borrower’s completed package!  We’ll see if the lenders institute enough internal procedures to guarantee that this holds up.
• Provides the following financial incentives:

• $3,000 for borrower relocation assistance;
• $1,500 for servicers to cover administrative and processing costs;
• Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.  In other words, the Treasury will match one dollar to each two dollars the first mortgagor gives the second mortgagor, up to $6,000.  However, 2^nd mortgages are still “the elephant in the room.”
• Requires loan servicers participating in HAMP (the loan modification program) to implement HAFA in accordance with their own policy and investor guidelines. (Remember, the lender’s main concern is not the borrower.  It is the lender’s investor.) What constitutes investor guidelines? It includes factors like total potential loss, local market conditions, timing of foreclosure actions, etc.

Here are a couple of links that you may find useful:

www.makinghomeaffordable.com/contact_servicer.html.
Home Affordable Foreclosures Alternatives Program: Guidelines and Forms 

Tired of links to outside sites in responses to my posts? Me too.

Ray and Al, this doesn't apply to you.  Lately, I've noticed that I'm getting a lot of responses that just have links to products, services and vendors and don't have anything to do with the post.  Rather than set this blog up to approve all posts beforehand, I'm just going to delete some of the worst offender posts, such as the "Shooting in Burbank" post.  You guys have already read it anyway, right?

My Toluca Lake short sale closed!

If you're a regular reader of this blog, you may have been following my "how my short sale is going" posts for 10862 Bloomfield #103 in Toluca Lake.  IT CLOSED! 

Last Monday, Chase, the lender, finally sent the approval letter to me.  It had been a little over 4 and 1/2 months since the short sale package plus offer was submitted to Chase.  While we had verbal approval at the end of May, it just took forever to get Chase's letter -- and you can't close a short sale transaction without having an okay from the lender in writing.  Since the buyer was paying cash, we -- meaning, mostly, the escrow officer -- was able to slam this shut on Friday. (Paying cash is a much faster transaction than getting a loan.)  We had worked in advance with both buyer and seller and had all disclosures and other contractual items reviewed and signed off in June.

A couple of details.  Yes, there were two loans.  Both, however, were with Chase, so Chase just wrote the 2nd off.  The seller/borrower was still current on her HOA payments and mostly current on her taxes, and there were no other outstanding liens against the property.  The seller could definitely prove her hardship, as she was denied a loan modification in 2009 and was laid off this year.  Since I represented both the buyer and seller, the commission was cut in half.  Bah.  But it's closed now and everybody is happy.

Open Sunday 2:00 to 5:00: 4552 Morse Ave., Studio City

Beat the heat by checking out my lovely, airconditioned listing at 4552 Morse in Studio City.  We'll be open 2:00 to 5:00 pm.  This is a truly lovely home in a fabulous neighborhood.  More info can be found on my website at JudyGraff.com.

California real estate tax credits may still be available!

Check this out from Cyberhomes.com's blog: http://www.cyberhomes.com/content/blog/10-07-14/california-home-tax-credit.aspx.  If you've purchased a home in California this year, there may still be time to claim the credit.

New "HAFA" short sale conditions

"HAFA" stands for Home Affordability Foreclosure Alternatives and it's the latest set of short sale rules to come along.  These will be implemented by most loan servicers on August 1, 2010.  We Realtors have been strongly encouraged by our brokerage management to get up to speed on the new rules.  I'm currently on module six of an eight-module webinar.  So far, it certainly looks like the devil with be in the details, but here are two things I know now:

• Paperwork and timelines will be standardized;
• The short sale process will be shorter.

I'll have more info as I become more educated.  I'll also be updating my Short Sale and Foreclosure page on my website very soon.

How my Toluca Lake condo short sale is going, Chapter 4

If you're a regular reader of this blog, you may recall posts about my short sale with Chase bank.  I rep both the buyer and the seller on this Toluca Lake condo, and we had a complete package (all seller financials, all buyer financials, offer, etc.) submitted at the end of February.

Anyway, we finally had a negotiator assigned in May, he asked for a few more pieces, and verbally told me at the end of May that we were approved for the short sale purchase.  Yay!  Time for dancing in the streets!

Note the word "verbal." Even the negotiator has to kick things upstairs for a final sign-off and that department issues an approval letter.  Nothing can happen until the letter is received by seller.  The negotiator has expected the letter any minute -- for the last five weeks. 

One thing did happen.  After three weeks of waiting, "upstairs" kicked the approval out unless I agreed to halve my commission.  What's a Realtor to do?  Unhappily, I agreed of course.  And we got reapproved.  Verbally. 

Then, no letters could be issued at the end of June or the beginning of July because it is the end of the fiscal year and all Chase employees had other responsibilities.

So we're still waiting for the letter.  Seller, buyer and escrow are ready to close.  Jay, my Chase negotiator, and I talk every day re status.  I have his number memorized.  I know the names of his kids. 

To be continued.

Huge reduction on overpriced Glendale condos

The Excelsior at Americana has just reduced prices on all of its condos.  High time.  Prices used to run $842,000 to $1,124,000 for units from 1,338 sf to 1,529 sf.  Oh, yes, that's right -- they did have a view of the common area.  Was there really a market clamoring for condos at that price point in Glendale?  Are there really lots of buyers who wish to live over a shopping mall (actually, that might be fun) and pay a premium on Glendale real estate to do so?  Anyway, the prices are now $585,000 to $695,000 -- still high, but not out of line with prices on condos in the area. 

Models as real estate agents?

Somehow, I just don't think this will work quite as well here in the San Fernando Valley as it does in NYC.

Short sales, Fannie Mae and HAFA

Fannie Mae's New HAFA Program

As you may have heard, by August 1, 2010 Fannie Mae and Freddie Mac, the formerly Home Affordable Foreclosure Alternatives Program (HAFA) exempt mortgage giants, are set to implement their own HAFA programs. For borrowers who are eligible for the Home Affordable Modification Program (HAMP) but were unable to secure a Loan Modification on their Fannie or Freddie loan, this is potentially promising news.
Today we’ll examine Fannie’s recently released HAFA Program Summary. Their stated goal with joining the program is to provide financial incentives for and simplify the process of short sales and deed-in-lieu (DIL) options in the face of foreclosure. For the most part, the Fannie version is in line with the wider HAFA program which includes the following:

• Any borrower who wishes to utilize the new program must have already been evaluated for HAMP, which gives them more options in the event of an unsuccessful evaluation and also removes the need for further eligibility investigation as the HAFA program will use the HAMP documentation. In addition, the program standardizes the steps, documents, and timeframes of short sale or DIL approval;
• Before the property is even listed, the borrower will be able to get pre-approved short sale terms;
• The servicer cannot condition their approval of a short sale on a reduction of the real estate commission outlined in the listing agreement;
• Fannie will release those who are successful in a HAFA short sale from future liability for the debt, and;
• Servicer and borrower will be entitled to certain incentives:
• Servicers will receive a $2,200 fee for a short sale, or a $1,500 fee for DIL
• Borrowers will receive $3,000 to assist with relocation expenses

Fannie’s documents and a full Program outline can be found at their website. Given the amount of foreclosures Fannie has been aggressively pursuing across the country (even being known to refuse to postpone a trustee’s sale with a viable short sale offer before them), one might be forgiven for questioning the sincerity of their commitment to providing foreclosure alternatives.

What does all this mean? I will be obtaining a HAFA certification through California Association of Realtors soon and I'll let you know then.  Thanks, Activerain, for providing this blog post.