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November 2010

HAMP Loan Modifications - September 2010 Report

Since the Treasury launched HAMP (Home Affordable Modification Program) in March 2009, the  participating  servicers have started approximately 1.4 million trial modifications with 519,648 of them converted into permanent status.  A borrower is supposed to move out of a trial when it he or she has made three monthly payments under the new terms and has submitted all documentation.

HAMPActivity_9-2010

Source: Download Oct 2010 MHA Public Final

Trial mods transitioning to permanent status have been averaging about 37,000 for the past six months, but during the month of October, only 23,750 permanent modifications were granted.

The Treasury says of active trial modifications, 69,000 have lasted at least six months, down from more than 266,000 at the beginning of the second quarter of 2010.  More than half (719,487) of the 1,395,543 trial plans started have been canceled.

Other statistics from the September Treasury Making Home Affordable Report:

  • Top mortgage servicers have completed 91,827 short sales or deeds-in-lieu of foreclosure on canceled trial or declined modifications through the HAMP as of September, up 27% from the previous month.
  • The top eight servicers - including BofA, Wells Fargo, Chase, CitiMortgage, GMAC - have canceled 551,821 trials either due to a redefault, lack of documentation, or the borrower was deemed ineligible. Those same servicers have declined 842,436 homeowners from entering a trial.
  • Of the canceled trials in that time, 47,001 have been liquidated through a short sale or the homeowner gave up the deed-in-lieu of foreclosure. Of the mortgages that were denied from a trial, 44,826 went into short sale or deed-in-lieu for a total of 91,827.

If you are a Las Vegas homeowner who would like to know if you qualify for a HAMP loan modification or a HAFA short sale, contact us for schedule a Foreclosure Alternatives Consultation.

Are you a Las Vegas area homeowner who has tried a HAMP or other loan modification and now must consider a short sale or other altervative to foreclosure?   

Jan O’Brien is an expert with the Las Vegas short sale process.   She is the co-author of the Certified Foreclosure Alternatives Consultant designation course.   Call Jan direct at 702-858-9191 to schedule a Foreclosure Alternatives Consultation today.

 

Are you ready for coaching? Take your business to the next level today. Schedule a complimentary 30-minute coaching session today to find out more.

Let us be your virtual coach as well.  Learn at your own pace and on your own schedule.  Our on-demand online courses integrate multi-media with an intuitive learning management system. Learn more about becoming a member of our community at WBNL Coaching.


Strategic Defaults - Walking Away from Underwater Mortgages

In my blog post dated January 26, 2010, Negative Equity and Strategic Defualts - Will We Ever See Principal Reduction Loan Mods? - I addressed the fact that the primary reason for stratgeic defaults on mortgages is negative equity.  Numerous studies, white papers and articles have and continue to address this major concern for a continued distressed property market in the US and in particular in Las Vegas, Nevada. 

Here are some recent stats on Negative Equity:

 Core Logic - Negative Equity Report 2nd Quarter 2010

National negative equity rates declined for the second consecutive quarter. According to CoreLogic, 11 million, or 23 percent, of all residential properties with mortgages were in negative equity at the end of the second quarter of 2010, down from 11.2 million and 24 percent from the first quarter of 2010. Foreclosures, rather than meaningful price appreciation, were the primary driver in the change in negative equity. An additional 2.4 million borrowers had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for nearly 28 percent of all residential properties with a mortgage nationwide.

Negative equity remains concentrated in five states: Nevada, which had the highest percentage negative equity with 68 percent of all of its mortgaged properties underwater, followed by Arizona (50 percent), Florida (46 percent), Michigan (38 percent) and California (33 percent).

Q2_2010_NegativeEquity

 

CalculatedRiskBlog from Q1 2010:

  • There is almost $2.4 trillion mortgage debt for homes in negative equity.

  • The total negative equity is $771 billion.

  • There are 4.1 million homeowners with more than 50% negative equity (they owe 50%+ more than their homes are worth).

Q1NegativeEquityMortgages

What is Strategic Default?

A strategic default (aka "walkaway") is a decision by a borrower to stop making payments (default) on a loan, mortgage  despite having the financial ability to make the payments.  

This is particularly associated with residential and commercial mortgages, in which case it usually occurs after a substantial drop in the house's price such that the debt owed is (considerably) greater than the value of the property — the property has negative equity or is "underwater" — and is expected to remain so for the foreseeable future. Such borrowers are called "walkaways."   Source: Wikipedia

In the case  of the home under the current market conditions, they feel it is a financially sound maneuver simply either walkaway and let the home go to foreclosure or short sale it, and rent or try to find another home that has also lost value.

There are several considerations and concerns for the homeowner who may be considering a Las Vegas strategic default:

  • Deficiency Judgement - In Nevada (and prior to October 1, 2010), lenders have 6 months to pursue a deficincy judgement after a foreclosure and 6 years with a short sale if the deficiency is not satisfied or negotiated in the short sale transaction.  Lenders are less likely to release and fully satisfy a deficiency for the borrower who has assets and/or the ability to pay the debt.  It may be possible to negotiate a promissory note or cash contribution by the seller however.  It is imperative for the homeowner to consult with an attorney regarding their options and strategic default.  And equally important to select and hire a Las Vegas Short Sale specialist should they decide to short sale the property.
  • Possible tax ramifications- homeowners are advised to seek advise from a competent tax expert, CPA, and/or attorney
  • Possible penalties for obtaining future loans - See Fannie Mae Press Release from June 2010: Fannie Mae Increases Penalties for Borrowers Who Walk Away: Seven-Year Lockout Policy for Strategic Defaulters Defaulting borrowers who walk-away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure. Borrowers who have extenuating circumstances may be eligible for new loan in a shorter timeframe. 

 

Read more on strategic defaults and negative equity:

The Strategic Default Monitor™ - How To Strategically Default?

70% of Nevada Mortgaged Properties are Underwater - 11.3 Million U.S. Homes with Negative Equity (2-24-10)

Strategic Default by Tish Black-Chernine, Black & LoBello Law (1-12-10)

Should You Consider a 'Strategic Default' on Your Mortgage?  Daily Finance (2-6-10)

NPR: The Dilemma Of Walking Away From A Mortgage (10-28-10)

Are you a Las Vegas area homeowner facing a possible foreclosure and wanting to learn more about your options?  Contact Us Today for a no obligation Las Vegas short sale consultation.

Jan O’Brien is an expert with the Las Vegas short sale process.   She is the co-author of the Certified Foreclosure Alternatives Consultant designation course.   Call Jan direct at 702-858-9191 to schedule a Foreclosure Alternatives Consultation today.

 

Are you ready for coaching? Take your business to the next level today. Schedule a complimentary 30-minute coaching session today to find out more.

Let us be your virtual coach as well.  Learn at your own pace and on your own schedule.  Our on-demand online courses integrate multi-media with an intuitive learning management system. Learn more about becoming a member of our community at WBNL Coaching.


NAR & HUD Launch Home Buying Videos at 2010 Convention

At the NAR Annual Convention this month, NAR and HUD unveiled three videos to help prospective homeowners shop for a home, shop for a mortgage and understand the closing process. 

HUD’s videos are available from both HUD and NAR’s websites as well as from HUD’s YouTube channel.

Shopping for your Home – The homebuying process obviously starts with finding a place you’ll want to call home. This short video will instruct viewers on assessing how much of a home you can afford, working with a real estate agent and what happens once you find the home you want to buy. Housing counselors can assist home buyers and home owners on issues such as home buying, fair housing, credit issues, and foreclosure prevention.

 

 

Shopping for your Loan – Once you’ve found the home of your dreams, the next step is to shop for a mortgage loan. This video will help consumers use the good faith estimate (GFE), which is a form that spells out the terms of a loan offer, to shop for the best loan for them. Consumers will learn how to use the GFE to determine how long an interest rate is available for a particular loan and how to identify key loan terms and costs of a particular loan offer. HUD suggests consumers shop and compare GFEs from multiple mortgage brokers and/or lenders in order to get the best loan for their situation.

 

Closing the Deal – Finally, this video walks consumers through the actual closing process including how to make sure the loan they were offered closely matches what they encounter at the settlement table. In particular, HUD will walk the viewer through the HUD-1 Settlement Statement and demonstrate ways consumers can compare their actual costs with those reflected on their Good Faith Estimate.

Are you a Las Vegas area homeowner facing a possible foreclosure and wanting to learn more about your options?  Contact Us Today for a no obligation Las Vegas short sale consultation.

Jan O’Brien is an expert with the Las Vegas short sale process.   She is the co-author of the Certified Foreclosure Alternatives Consultant designation course.   Call Jan direct at 702-858-9191 to schedule a Foreclosure Alternatives Consultation today.

Considering a Las Vegas Home purchase?  Search all Las Vegas Homes for Sale using our free, interactive map-based search.

Search all Las Vegas Foreclosures, including Henderson, Green Valley and North Las Vegas bank-owned homes.

Las Vegas Real Estate Professionals: Become a Certified Foreclosure Alternatives Consultant (CFAC)Check the schedule for upcoming class dates.

 

Visit www.WBNLCoaching.com to learn more about our coaching program and online training membership options. Your FREE, basic membership includes a complete real estate business-planning course and downloads.


NAR Amends Code of Ethics to Include Sexual Orientation as Protected Class

During the November 2010 National Association of Realtors (NAR) annual meeting in New Orleans, NAR’s delegate body voted to amend the NAR Code of Ethics to include sexual orientation as a protected class. The amendment to Article 10 of the REALTORS® Code of Ethics was passed in a roll-call vote by a greater than 9-to-1 margin.

Here is the amended language of Article 10 (additions are underlined):

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

REALTORS®, in their real estate employment practices, shall not discriminate against any person or persons on the basis of race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

A related recommendation amending Standard of Practice 10-3 was approved as well:

REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, or national origin, or sexual orientation.

 

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FREE Basic membership is free and includes:

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Las Vegas Real Estate Video Quick Tip 1 - GLVAR Consumer Newsletter

 

The Greater Las Vegas Association of REALTORS® has an excellent tool to use for staying in touch with your current, past and prospective clients - an HTML Consumer Newsletter.  The Association will collect, compile and distribute statistics, news and events pertinent to the consumer and forward the information to each REALTOR® member each month.

When forwarding the Newsletter, remember to perform the following steps:

  1. Click the [Forward] button to generate a new email.
  2. Change the [Subject] line of the email to your choosing.
  3. Delete ALL content from the top of the email to the specified line (Delete the line too!).
  4. Scroll to the bottom of the email and delete ALL content from the *** REMOVE Notice and everything below (Delete the line too!).
  5. Send email to your contact list utilizing the "To:, CC: and BCC:" fields.

More options are available at LasVegasRealtor.com on your My Profile page. Look for the Menu Option [Consumer Newsletter Options].

 

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