Mortgage modification

Successful Short Sales: It All Starts with the Seller, by Gee Dunsten, Rismedia.com

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RISMEDIA, Monday, February 13, 2012— Last month, I outlined the reasons why you should get back on the short sales bandwagon if you’ve fallen off. In the current market, more and more lenders are coming around to the realization that short sales are a favorable option after all and, therefore, are processing and closing short sales at a much faster pace.

That said, there are critical steps that must be taken throughout the short sale process.

First and foremost, make sure the home seller is truly eligible for a short sale. A credible, documented financial hardship resulting from a loss of employment, divorce, major medical crisis, death, etc., must exist. This financial hardship needs to be proven with proper documentation as well as detailed financial statements, paystubs, bank statements and tax returns.

To properly identify and qualify a potential short sale client, conduct a thorough interview right up front—and be sure to leave no stone unturned. This will prevent you from futilely pursuing a short sale with the lender. I use the following Short Sale Seller Questionnaire with my clients:

1. Is your property currently on the market? Is it listed with an agent?
2. Is this your primary residence?
3. When was the property purchased?
4. What was the original purchase price?
5. Who holds the mortgage?
6. What kind of loan do you have?
7. Do you have any other liens against your property?
8. Who is on the title (or deed) for the property?
9. Who is on the mortgage?
10. Do you have mortgage insurance?
11. Are you current with your payments? If not, how far in arrears are you?
12. How much do you owe?
13. Why do you need/want to sell?
14. What caused you or will be causing you to miss your mortgage payment obligation?
15. Do you have funds in accounts that could be used to satisfy the deficiency?
16. Are you currently living in the property? If not, is the property being maintained?
17. How soon do you need to move?
18. Are you up to date on your condo or HOA payments (where applicable)?
19. Do you owe any back taxes?
20. Are you considering filing for bankruptcy protection?
21. Are you currently pursuing a loan modification with your lender?
22. Who is occupying the property?
23. Do you hold or are you subject to any type of security clearance related to your job?
24. What are your plans after you sell?
25. Are you looking to receive any money from the sale of your home?
26. How much income are you currently making from all sources?
27. Do you anticipate any income change in the not-too-distant future?
28. Do you have a pen and a piece of paper to make a couple of notes?

Emphasize that inaccurate or missing information will potentially delay or completely thwart the short sale process. Next month, we’ll take a close look at working with lenders to secure a short sale.

George “Gee” Dunsten, president of Gee Dunsten Seminars, Inc., has been a real estate agent and broker/owner for almost 40 years. Dunsten has been a senior instructor with the Council of Residential Specialists for more than 20 years. To reach Gee, please email, gee@gee-dunsten.com. For an extended version of this article, please visit www.rismedia.com.

 

 

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Treasury Done ‘Very Little’ to Fix Gov’t Foreclosure Prevention Program, Says Watchdog, by Marian Wang, Propublica.org

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Making the argument that the Treasury Department has done “very little” to improve a foreclosure prevention program that has failed to meet its goals, the government’s TARP watchdog testified at a hearing on Wednesday that the case for keeping the program alive has worn thin and is “all but exhausted” .

We’ve documented many of the major weaknesses in the government’s loan modification program—not least of which is its failure to hold banks accountable for withholding permanent loan modifications from struggling homeowners that the program was intended to help.

House Republicans are now considering a bill to end the troubled program. As the Washington Post reports, consumer advocacy groups have argued for fixing the program rather than ending it at a time when so many homeowners still need housing help.

That’s also what the program’s watchdogs have advocated—though they’re now voicing doubts that Treasury will make any meaningful fixes.

“Treasury, it seems, stands alone in defending the status quo,” testified Neil Barofsky, the special inspector general for the TARP program. Barofsky noted that last month, a Treasury official attended a Mortgage Bankers Association conference to discuss enhancements to the loan modification program and said there would be no “major new programs coming out.”

“We may tweak around the edges,” HousingWire reported the official as saying.

The Treasury Department has continued to defend the program, arguing that while the program has fallen short of its goals, it has still helped modify about 600,000 mortgages. Ending the program, Treasury has argued, would hurt the housing market.

“It would cause a huge amount of damage to a very fragile housing market and leave hundreds and hundreds of thousands, if not millions, of Americans without the chance to take advantage of a mortgage modification that would allow them to stay in a home they can afford,” Treasury Secretary Tim Geithner said yesterday.

Geithner may be right about one thing. As our data shows, by the end of last year, the program had given nearly 1.5 million households “a chance” of a mortgage modification through a trial modification. For most, that chance never turned developed into permanent help.

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