Jan O'Brien - Real Estate Coach

Realtor Resources for Short Sales, HAFA, Alternatives to Foreclosure

UPDATED MARCH 31, 2010

Here are important downloads, resource sites and aticles concerning short sales, HAFA/HAMP, and alternatives to foreclosures.

To Download this Post as a PDF: ShortSale_Foreclosure _Links

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HAMP/HAFA

• Making Home Affordable http://www.makinghomeaffordable.gov/
• Home Affordable Admin Site for Servicers https://www.hmpadmin.com/portal/index.html

• Making Home Affordable – HAFA page with latest Program Guidelines; Borrowers Documents

  https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html 

From Realtor.org:

• http://www.realtor.org/government_affairs/short_sales_hafa

• (PDF) Download HAFA+Brochure+Text
• (PDF) Download Government_affairs_hafa_brochure
• (PDF) Download Government_affairs_hafa_faqs_121109

Resources for Short Sales

• Realtor.org Short Sales: The Basics - http://www.realtor.org/realtors/basics_short_sales 
• Realtor.org - Short Sales Tools, Tips - http://www.realtor.org/realtors/short_sales_tips_tools
• GLVAR Short Sale/Foreclosure Resource Guide http://www.lasvegasrealtor.com/reo/ GLVAR has compiled a resource guide of informational articles dealing with short sales, foreclosures and REO transactions. Covering tips on the short sale and REO market, representation, taxes, disclosure.

• http://www.shortsaleprofessionalnetwork.com - FREE membership for all CSP graduates

Alternatives to Foreclosures

• FTC – Mortgage Real Estate Publications/Downloads
  http://www.ftc.gov/bcp/menus/consumer/credit/mortgage.shtm

• Download FTCFactsforConsumers  Clearly defines all alternatives to foreclosure - from FTC
• Hope Now Homeowner Options
  https://www.hopenow.com/homeowner-options.php -

Avoid Foreclosure - Help

• RentalForeclosure.com http://www.rentalforeclosure.com/ Tenants can find out if a property is in Foreclosure – NOD file
• Freddie Mac – Working with Your Lender to Avoid Foreclosure
  http://www.freddiemac.com/avoidforeclosure/stop_foreclosure.html
• Hope Now – https://www.hopenow.com/ http://www.housinghelpnow.org/ an alliance between counselors, mortgage companies, investors, and other mortgage market participants. This alliance will maximize outreach efforts to homeowners in distress to help them stay in their homes and will create a unified, coordinated plan to reach and help as many homeowners as possible
• Housing Help Now- http://www.housinghelpnow.org/ National Foundation for Credit Counseling
• Home Foreclosure and Debt Cancellation – (IRS.gov)
  http://www.irs.gov/newsroom/article/0,,id=174034,00.html
• The Mortgage Forgiveness Debt Relief Act of 2007
  http://www.irs.gov/individuals/article/0,,id=179414,00.html
• HUD.gov Avoiding Foreclosure page
  http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure
• Foreclosure Prevention Resource Center (Mortgage Bankers Association) - http://www.homeloanlearningcenter.com/YourFinances/ForeclosurePreventionResourceCenter.htm

Nevada Foreclosure Help and Resources

• Nevada Foreclosure Mediation Program - http://www.nevadajudiciary.us/index.php/foreclosuremediation - This program allows homeowners to sit down with mortgage lenders, under the leadership of trained mediators, to discuss alternatives to foreclosure.
• Nevada Foreclosure Help http://foreclosurehelp.nv.gov/   – Useful resources and info from Nevada Department of Business & Industry
• Nevada Hope at Home http://www.nvhopeathome.org/ -  collaborative effort between Nevada Public Radio, local nonprofit organizations and local financial institutions to help provide residents in southern Nevada access to reliable, easy-to-find information on the foreclosure crisis in southern Nevada
• Legal Aid Center of Southern Nevada http://www.lacsn.org/go/foreclosures/ - Legal Aid Center of Southern Nevada (LACSN) is a private, non-profit (501 (c) (3)) corporation which is a charitable organization dedicated to providing free community legal services to those in need.  LACSN has been providing free legal aid for Clark County's low-income residents since 1958.
• HUD Approved Housing Counseling Agencies - Nevada 
  http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=NV

Legal and Tax Ramifications for Sellers

IRS.GOV useful links

• The Mortgage Forgiveness Debt Relief Act of 2007
  http://www.irs.gov/individuals/article/0,,id=179414,00.html
•  IRS Release of Lien
  http://www.taxalmanac.org/index.php/Internal_Revenue_Code:Sec._6325._Release_of_lien_or_discharge_of_property
•  IRS Pub 1450 – How to Request Release of Federal Tax Lien
  www.irs.gov/pub/irs-pdf/p1450.pdf
•  IRS Pub 783 – Discharge of Lien Request
   www.irs.gov/pub/irs-pdf/p783.pdf
• IRS Pub 4681 Canceled Debts – Foreclosures
  http://www.irs.gov/publications/p4681/index.html
•  IRS Pub 908 – Bankruptcy Tax Guide
  http://www.irs.gov/publications/p908/index.html

State Foreclosure Laws Summary  

• http://www.foreclosurelaw.org
• http://www.realtytrac.com/foreclosure-laws/foreclosure-laws-comparison.asp
• http://www.all-foreclosure.com/procedures.htm

The National Consumer Law Center - http://www.consumerlaw.org/

This site has some excellent resources regarding programs for foreclosure mediation by state. 

• State and Local Foreclosure Mediation Programs: Can They Save Homes?, September 2009  http://www.consumerlaw.org/issues/foreclosure_mediation/content/ReportS-Sept09.pdf
• ·State and Local Foreclosure Mediation Programs – Updates and Developments – 01/10 http://www.consumerlaw.org/issues/foreclosure_mediation/content/ReportS-UpdateJan10.pdf
• Summary of Programs by State
  http://www.consumerlaw.org/issues/foreclosure_mediation/content/SummaryOfPrograms.pdf

Recommended Blogs to Read/Subscribe to:

• DailyDose email from http://www.dsnews.com/
• Calculated Risk blog -  http://www.calculatedriskblog.com/
• Housing Wire - http://www.housingwire.com/
• Bubble Meter blog - http://bubblemeter.blogspot.com/
• Dr. Housing Bubble - http://www.doctorhousingbubble.com/
• JanOBrien-Real Estate Coach - http://www.janobrien.com/

 

Bank of America Signs on for HAMP Second Lien Program

I was pleasantly surprised last Friday when I was reviewing the Making Home Affordable website for our Certified Short Sale Professional designation training.  I noticed that Bank of America and Countrywide are now on the list of servicers who have have formalized their commitment to the program through a signed contract.  

Recommended steps for homeowner to see if HAMP is a viable alternative to foreclosure:

1. Complete the quick online form on the eligibility page of Making Home Affordable 
   http://www.makinghomeaffordable.gov/eligibility.html
   
2. Determine if your lender is participating in HAMP by either looking them up on this page: http://www.makinghomeaffordable.gov/contact_servicer.html AND calling your lender to verify and discuss your options.
3. HAMP has a Request a Modification process - http://www.makinghomeaffordable.gov/requestmod.shtml.  Recommend contacting your Mortgage Servicer first.

More news today regarding the Second Lien Modification Program.  Bank of America is first servicer to sign up for the HAMP Second Lien Mod Program.... read more:

BofA Signs on as First Servicer of HAMP's Second Lien Program

Home Affordable Modification Program Admin Site explains:

The Second Lien Modification Program is a complementary program to the Home Affordable Modification Program designed for first lien mortgages. This Program is expected to reach approximately 1 - 1.5 million responsible homeowners who are struggling to afford their mortgage payments. The Second Lien Modification Program coordinates with HAMP's first mortgage modification program to lower payments on second mortgages and offer comprehensive affordability solutions for homeowners.

The guidelines of the Second Lien Modification Program are detailed further in: Download Sd0905Second LienMP

Making Home Affordable Program Deadline Extended to October 3, 2010
Treasury Secretary Timothy Geithner recently informed Congress that the Obama Administration is extending the Troubled Asset Relief Program (TARP) until October 3, 2010. As a result, the deadline for servicers to register to participate in the Making Home Affordable Program is extended from December 31, 2009, to October 3, 2010.

Related posts:

• Understanding Alternatives to Foreclosure... Updates on Loan Modifications under HAMP and the new HAFA guidelines
• Home Affordable Foreclosure Alternatives Program (HAFA) Guidelines

Our CSP designaton course covers all the latest information you need to know about short sales and other alternatives to foreclosure.  Check out the current Training Schedule for dates, times and locations.

If you are a homeowner considering your alternatives to foreclosure and would like more information, I recommend visiting the Residential Short Sale blog.

Negative Equity and Strategic Defaults - Will We Ever See Principal Reduction Loan Mods?

Have you noticed a lot of recent press criticizing the HAMP program as short-sighted and delaying the inevitable onslaught of more foreclosures?  The underlying theme is pointing to "negative equity" as a primary factor for homeowners "strategically defaulting" - ultimately deciding to let their home go to foreclosure or short sale.

In case you missed some of those recent articles and resources:

Amherst Securities testified before the House Financial Services Committee (12-8-09) - Download Amherst Securities Group - HAMP Testimony

Two main points from this report:
1. Single largest problem with housing market is negative equity.
2. Current modification program does not address negative equity and is destined to fail.

WSJ Development Blog (1-4-10) NY Fed: Most Successful Mortgage Modifications Reduce Borrowers’ Principal

Borrowers who receive loan modifications that reduce loan balances and not simply interest rates are far less likely to re-default on their loans, according to a new study from the Federal Reserve Bank of New York.    Modifications that write down loan balances “can double the reduction in re-default rates achieved by payment reductions alone,” the study says.

Negative Equity Report for Q3 (Calculated Risk Blog 11-24-09)

Data Highlights

Nearly 10.7 million, or 23 percent, of all residential properties with mortgages were in negative equity as of September, 2009. An additional 2.3 million mortgages were approaching negative equity, meaning they had less than five percent equity. Together negative equity and near negative equity mortgages account for nearly 28 percent of all residential properties with a mortgage nationwide.

The distribution of negative equity is heavily concentrated in five states: Nevada (65 percent), which had the highest percentage negative equity, followed by Arizona (48 percent), Florida (45 percent), Michigan (37 percent) and California (35 percent).

Other articles/reports/studies:

• White Paper Sees Strategic Defaults Rise with Negative Equity (12-08-09)
• Strategic Default White Paper - Strategic_Default_White_Paper.pdf
• Negative and Equity and Foreclosure - Negative Equity and Foreclosure.pdf
• Moral and Social Constraints to Strategic Default - MoralandSocialConstraintsto_StrategicDefault.pdf
• Subprime Mortgage Modification and Re-Default - Subprime Mortgage Modification and Re-Default.pdf

Become a Certified Short-Sale Professional - get the latest information regarding alternatives to foreclosures and processing short sales from A to Z.

Friday, February 19th, 2010  - 9:00am-5:30pm ~ Doors Open 8:30
Realty Executives 1903 S. Jones Blvd., #100, LV, NV 89146 (N of Sahara Ave.)  MAP
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Home Affordable Foreclosure Alternatives Program (HAFA) Guidelines

The following is a re-posting of the recent article from Realtor.org on the newly released guidelines for the Home Affordable Foreclosure Alternatives Program (HAFA) with added commentary from me :)

On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA). HAFA is part of the Home Affordable Modification Program (HAMP). HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA.  A list of servicers participating in HAMP is available at MakingHomeAffordable.gov.  NOTE: Not All Loan Servicers are participating!

HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.

HAFA is a complex program, with 43 pages of guidelines and forms, designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure.

Download the official document: Download Hampupdate122309

HAFA:

• Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
• Uses borrower financial and hardship information already collected in connection with consideration of a loan modification. This is why it is so important for real estate professionals to understand ALL alternatives to foreclosures!  See my recent posts on Understanding Alternatives...
• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).  Hopefully this will speed up the lengthy process everyone has been experiencing for final short sale approval.  Are you a CSP yet?  Check upcoming course dates.
  
• Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent). Yeah!
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).  A welcomed relief for Nevada homeowners...Deficiency Judgment issues will be the biggest impediment to successful short sale closings as homeowners and real estate agents are better educated.
• Uses standard processes, documents, and timeframes/deadlines. Have not seen the forms / standards as of yet...
• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

Press Release, HAMP Update—New Program Offers Borrowers Foreclosure Alternatives

Supplemental Directive 09-09, Introduction of Home Affordable Foreclosure Alternatives—Short Sale and Deed-in-Lieu of Foreclosure

Understanding Alternatives to Foreclosure... Updates on Loan Modifications under HAMP and the new HAFA guidelines

Real Estate Professionals... are you staying informed and updated on the developments and guidelines regarding all alternatives to foreclosures in order to assist homeowners?

My recommended approach to serving your clients who are dealing with their own housing crisis and/or economic downturn is to be the conduit of information.   Provide options and possible solutions as well as recommendations to other experts and professionals to help each individual make their best decision.

One of your initial qualifying questions is to ask the homeowner... "Do you want to keep/stay in your home?"

If the answer is yes, then consider recommending that the client...

• Contact their loan servicer to see if they qualify for a loan modification under HAMP or another program
• Visit the www.MakingHomeAffordable.gov website to learn more about HAMP (Home Affordable Modification Program)
• Learn about their rights under the new Nevada legislation concerning the Nevada Foreclosure Mediation program (http://www.nevadajudiciary.us/index.php/foreclosuremediation)

If your client is unable to get loan modification, then a short sale may be an option for them.  I encourage you to get educated on the short sale process if you haven't already done so.  Steve Kitnick and I teach the CSP (Certified Short-Sale Professional) designation course in Las Vegas at least monthly.  You can check the schedule and register for an upcoming course right here on this blog or at Steve's site:  NevadaCE.com.

Here are some more resources, recent articles and news regarding Short Sales & Loan Modifications:

A link to an article on the new Treasury Guidelines for Short Sales (HAFA):
Treasury Releases Guidance for Making Home Affordable Short Sales

Great news...read all the details...download the official supplement from the Treasury...Not so good news..

Not effective until April 5, 2010. Unless participating servicers want to opt in early!

MakingHomeAffordable.gov website is a MUST read/review. It's loaded with all the information regarding loan mods under the HAMP program.... Who is eligible, Is the Loan with Fannie or Freddie, How to request the Loan Mod, etc.

Did you know?......(from the site):
A wide array of servicers have agreed to participate in the Home Affordable Modification program and have already engaged borrowers and expanded capacity to begin the modification process for eligible homeowners. In addition, all servicers for loans owned by Fannie Mae and Freddie Mac are required to participate.  The following is a list of servicers who have formalized their commitment to the program through a signed contract:

Search for Your Mortgage Servicer: show all servicers

Other recent articles of interest:
Quarter of HAMP Mods in Default Again
Industry's Mortgage Workouts Exceed Completed Foreclosures, HOPE NO...
Bank of America: 2/3 of Borrowers May Lose Government Mods  ....of the 65 thousand trial modifications set to expire Dec. 31st with B of A, a full two thirds of the borrowers, while current on their payments, have not submitted the full documentation required to turn a trial mod permanent under the HAMP guidelines.

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• Calculated Risk blog
• Bubble Meter blog
• Dr. Housing Bubble