The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown on signing SB 458 (Corbett) into law. SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.
Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.
“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”
SB 458 contains an urgency clause making it effective upon signing.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.
Showing posts with label short sales. Show all posts
Showing posts with label short sales. Show all posts
Tuesday, July 19, 2011
Tuesday, March 11, 2008
When A Short Sale Isn't a Short Sale
When A Short Sale Isn't A Short Sale  Real estate agents are complaining that some homes marketed as short-sale properties are not actually short sales. In a short sale, the lender signs off on a real estate transaction in which the sale proceeds fall short of what the owner owes for the mortgage. A decline in the home's value since the date of purchase, or a seller falling behind on mortgage payments do not automatically qualify a home as a short sale. There can be no short sale without the lender's approval, as the lender must consider whether it is worthwhile to accept less than the full loan amount in order to avoid a foreclosure. What is there to gain by marketing a property as a short sale that isn't a short sale? Serious buyers are a rare breed in some market areas these days, and many of them are looking for bargains. Short sales can in some cases sell for a lower amount than comparable properties that are not similarly distressed, as there is urgency by sellers to get out from under the properties and by lenders that wish to avoid costs associated with foreclosure. So just like those furniture stores that seem to perpetually advertise a going-out-of-business-everything-must-go-including-the-plastic covers-on-our-electrical outlets-final-ultimate-last-possible-ever-chance-to-buy-cheap-stuff-from-us sale, dangling the "short sale" term in marketing a property may be an effort to attract bargain-basement shoppers. Short sales and other properties in some stage of foreclosure have become a substantial market segment in some hard-hit areas. Short Sale (of house) A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes. See also deed in lieu (or foreclosure). Deed in Lieu (of foreclosure) A means of escaping an overly burdensome mortgage. If a homeowner can't make the mortgage payments and can't find a buyer for the house, many lenders will accept ownership of the property in place of the money owed on the mortgage. Even if the lender won't agree to accept the property, the homeowner can prepare a quitclaim deed that unilaterally transfers the homeowner's property rights to the lender. Foreclosure The forced sale of real estate to pay off a loan on which the owner of the property has defaulted. Default A failure to perform a legal duty. For example, a default on a mortgage or car loan happens when you fail to make the loan payments on time, fail to maintain adequate insurance or violate some other provision of the agreement. Default on a student loan occurs when you fail to repay a loan according to the terms you agreed to when you signed the promissory note, and the holder of your loan concludes that you do not intend to repay. If you believe you may fall under one of these and would like some assistance, give me a ring or visit my website. Pam Winterbauer 2006 REALTOR of the Year Windermere Welcome Home 925 824-4878 / 510 889-8889 Toll Free: 877 876-8889 http://pamwinterbauer.com Information Contact Information Rates Rate: $0.01 per item Links Profile Service Area: The East Bay Years of Service: Three Decades Service Type: Real Estate Market Focus: Premium Attributes Specialties Residential Specialist Seniors Specialist Single Level Home Specialist Internet Marketing Short Sales & Foreclosures At Home with Diversity Certified Credentials 2006 REALTOR of the Year Broker Associate Certified Residential Specialist Seniors Real Estate Specialist Internet Marketing Specialist National Association of REALTORS California Association of REALTORS e-PRO Certified Accredited Sellers Representative Bay East Association of REALTORS
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Sunday, March 9, 2008
"Approved Short Sale" vs a Short Sale - BIG DIFFERENCE!!
There are a lot of homes on the market right now advertising that they are a ‘short sale'. In fact, for some of the searches I have done for client's literally ¾ of the homes pull up as a ‘short sale'. Just because someone advertises a short sale, does not automatically mean that the bank will sell it short. These folks, I guess at least 80% of them DO NOT HAVE APPROVAL FROM THE BANK TO SELL SHORT. Their agents have mistakenly guided them to believe that once they get an offer - that is the time to approach the bank with the belief that with something in hand the bank will somehow take their request more seriously. This couldn't be further from the truth.
Being approved for a short sale can be much harder than being approved for your original home loan. Essentially you have to qualify all over again and prove that you don't have the ability to make your payments. Yep, we are talking tax returns, paystubs, bank statements, letters detailing your situation, etc....Initially when you bought your home this was a minimum 3 week process...now the banks are overloaded, understaffed and quite frankly, don't have the same incentive to get you moved through the system as they did when you were qualifying for your original home loan that was going to net them cash.
In addition to proving, or essentially qualifying with the bank to sell it short their must be a meeting of the minds on acceptable terms. Negotiating the terms of an acceptable sale can take days or weeks....it all depends on the parties involved. Now as always there are exceptions, but as a rule, it is not as easy as submitting an offer from a potential buyer and hearing back from the bank in 48 hours.
I always ask agents, "Has this short-sale been approved by the lender?" If it has, then they should be able to provide you with the details of the approval. I don't show homes that are not "approved short sales". My buyer's time is valuable to them and once they are educated correctly, they understand that it just doesn't make sense. Even if you do decide on an "approved short sale" you still have to work with a bank. It's still ‘a roll of the dice' as to the ability of the bank to correspond to your buyer in a timely fashion.
A few banks have stepped up to the plate and have seen the value in working these sales efficiently but the majority have not and it can be extremely frustrating for all parties involved.
Here is what I tell my buyers, "I bet I can find you just as good of a deal being sold by someone that is competing against short sales and there will be disclosures, guarantees, repairs made, responses in a timely matter and we can count on the deal closing when it's supposed to." Now, doesn't that sound better?
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