What is a Short Sale?

A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.

Be aware that the seller need not be in default -- to have stopped making mortgage payments -- before a lender will consider a short sale. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.  Short sales occur when property values drop or inflated appraisals were obtained, making the property worth less than the amount of its mortgage. This means when a seller enters into a purchase contract to sell for an amount that is less than the home's present mortgage balance, if the seller isn't bringing in money to close, the lender must approve the short sale. That's because the lender is taking a loss.

It's one strike against you if the listing agent has never handled a short sale, but it's even worse if your own agent has no experience in that arena. You need an experienced short sale agent.   I have gone through the process with clients many, many times.  I have vast experience negotiating with banks and lenders.

For sellers, if you owe more than the home present market value and you can not afford to continue to stay in the home than short selling the property could be a very good possible option.  After consulting with a financial or legal advisor, I can assist you in making choices that are in your best interest. 
An agent with experience in short sales will help to expedite your transaction and protect your interests. You don't want to miss any important detail due to inexperience or find out your transaction is not going to close on time because no one has followed up in a timely manner or communicated with the lender thoroughly.  

Home Affordable Foreclosure Alternatives Program

Call me today for more detailed information at 973-534-3065.  Put my experience and commitment to customer service to work for you!

Foreclosure Overview

What is Foreclosure?

With mortgage interest rates at historic lows and a record number of homes falling into foreclosure, many real estate investors and home buyers are pouring their money into the foreclosure market. But before you set sail on your foreclosure adventure, you need to know how to navigate the foreclosure market.  Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments and the lender files a public default notice or a lis pendens (Latin for "lawsuit pending") - depending on the state. The default notice is a public record, and for buyers it's the first step in locating a property in foreclosure.

If you are a seller, navigating your way through the foreclosure process can be daunting.  Often times, selling while there is still equity is the best move.  In a declining market, doing nothing can be disastrous.  Call me and I can help you make the choices that are in your best interest.  My home marketing plan is world class and has helped many people start a new life.

If you are a buyer, good foreclosure buys are available, but buyers need to do their homework, be patient, learn the foreclosure process and most importantly - be persistent. If you are a novice, it is highly recommended that you educate yourself about the foreclosure process and arm yourself with the necessary research and preparation.  I provide my clients with detailed information and proper guidance when I work with them.  I have extensive experience negotiating with banks and lenders and also third party representatives.  Let my skills in negotiating go to work for you!

Foreclosure buyers, however, need to be careful. There can be other liens on the property, which can drive up the purchase price. Liens are typically placed on a home for outstanding property taxes. But there can also be mechanic liens for unpaid repairs or remodeling done by a contractor. Buyers should also research the local state foreclosure laws.

Ultimately, however, the foreclosure process can end one of four ways:

1. The borrower/owner pays off the default amount to reinstate the loan during a grace period known as pre-foreclosure.
2. The borrower/owner sells the property to a third party during pre-foreclosure, allowing the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
3. A third party buys the property at a public auction at the end of the pre-foreclosure period.
4. The lender takes ownership of the property, usually with the intent to re-sell. The lender can take ownership through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction.  

Always consult a tax attorney or financial advisor prior to making decisions regarding foreclosures. 

For more information please call Heather Ryker-Milling at 973-534-3065

Housing Predictor: 10 Million Foreclosures Through 2012

By Mike Colpitts, Editor of Housing Predictor   

More than any other segment of the financial crisis, the foreclosure epidemic is severely impacting the U.S. economy. On average every foreclosure costs the economy $225,000, the average on home mortgages made during the real estate boom. The losses translate into trillions of dollars, and it is becoming abundantly clear U.S. taxpayers will foot the bill.

The crisis has been running its course for more than two years as government policymakers dabble with solutions. However, efforts so far have only led to piecemeal solutions for the world's most damaged financial sector rather than a plan to halt the epidemic.
An estimated 4.2 million properties have been foreclosed, keeping pace with the Housing Predictor forecast updated last March. However, since more powerful actions have not been imposed to directly deal with the crisis, the epidemic of foreclosures is increasing and is now forecast to impact a much larger number of homeowners.

Housing Predictor forecasts that 10 million homeowners will be foreclosed through 2012 as more mortgage holders are unable to refinance their mortgages because of falling home values or give up at the prospect of holding on to their homes all together.
The increase to 10 million foreclosures represents 2.4 million more homeowners from the 7.6 million forecast in March. These homeowners will have the dream of home ownership taken away. Until lawmakers take more severe action to halt the epidemic it is clear the housing market will not stabilize and the economy will weaken further.

The Obama plan offers $75 billion to incentivize lenders to modify mortgages on a volunteer basis. Without forcing bankers to modify mortgages the plan was destined to fail from the beginning, and is presently viewed as a farce by real estate economists. Without a plan requiring lenders to deal with borrowers in jeopardy of foreclosure and force banks to negotiate the amount owed on mortgages, the crisis will only expand, triggering millions of more foreclosures. A Housing Predictor analysis has determined that the foreclosure epidemic could eventually affect one in six homeowners, or 25 percent of all mortgage holders.

Only 100,000 homeowners have been offered modifications by bankers under the current program, according to the Treasury Department, and fewer have actually taken them up on the offers. Under the plan, mortgage holders who do not qualify for a loan modification will undergo foreclosure, sell the property via short sale or hand the keys to their homes over and sign a deed in lieu of foreclosure instead.

More than three years have now passed since Housing Predictor first issued its foreclosure epidemic forecast. In the meantime, the economy has worsened, foreclosures are increasing, unemployment is rising, businesses are failing in higher numbers and credit remains tight except to the best of creditworthy borrowers.

One of out three Americans surveyed say that if home values continue to fall they'll walk away from their mortgages, which could set up a worst case scenario for the U.S. economy, triggering an economic calamity. The Mortgage Bankers Association says that 5.4 million mortgages are presently delinquent or in the formal stages of foreclosure, which equates to 12 percent of all U.S. mortgages. An estimated 16 million borrowers are underwater or owe more on their homes than what they could fetch in today's market.

For more information please call Heather Ryker-Milling at 973-534-3065

Military personnel and federal employees, such as members of the foreign service and employees of the intelligence community, are able to enjoy additional benefits when it comes to the homebuyer tax credit.

Typically, in order to claim the tax credit, eligible buyers must enter into a contract to purchase a principal residence by April 30, 2010, and close the transaction no later than June 30, 2010. However, according to the IRS, servicemen and women get an extra 12 months, allowing them until April 30, 2011, to sign a binding contract and until June 30, 2011, to close the purchase.

The extension is available to individuals or their spouses who serve on qualified official extended-duty service outside the country for at least 90 days between Jan. 1, 2009, and April 30, 2010. In order to qualify, only one spouse needs to be overseas during that time frame.

In addition to the extension, eligible members of the armed services, intelligence community or foreign service do not have to repay the credit if their home is sold or ceases to be a primary residence within the first three years as a result of orders sending them to a new duty station at least 50 miles away.