Concerns about strategic defaults were also reflected in response to a question about the consumer payment hierarchy. When asked if the current generation of homeowners considers their mortgage to be their most important credit obligation, 49 percent of bankers said no and 29 percent said yes.

Although concerns remain regarding strategic defaults, other signs point to growing stability in the housing market. More respondents (26 percent) expected delinquencies on mortgages to decline in the coming months than at any previous time in the two years FICO has been conducting this survey. Furthermore, 53 percent of respondents said the housing market would improve by the end of 2012, compared with 24 percent who said the market would deteriorate.

More than half of survey respondents (56 percent) expected the supply of credit for residential mortgages to fall short of demand over the next six months. A similar majority (53 percent) expected the supply of credit for mortgage refinancing to fall short of demand, indicating that lenders remain  cautious about the risks in the real estate market.

Source: fico.com

If you are interested in a strategic short sale, please call 619-663-7139 or email me directly at mark@sdmyhome.com.

Purchase Contract including Buyer’s Acknowledgment and Disclosure
HUD-1
IRS Form 4506-T
Bank of America Short Sale Addendum, which includes
the Agent Certification form
Bank of America Third-Party Authorization Form

The acknowledgement and disclosure form, short sale addendum, and the form for  third-party authorization are available through the company’s online Agent  Resource Center.

Based on signed contracts, C.A.R.‘s Pending Home Sales Index (PHSI) climbed from a revised 91 in December to 102.4 in

January and was also up from last year when the PHSI was 93.1 in January 2011. Pending home sales are indicators of future home sale activities, providing information on where the market might be heading.

Of all distressed properties sold in California, 23.8 percent were short sales, the highest level in three years since C.A.R. has kept record. Previous month’s data was at 22.2 percent and also 22.2 percent a year ago.

The share of REO sales were higher in January as well at 25.9 percent compared to the previous month of December, which stood at 24.6 percent. A year ago the numbers were higher at 30.8 percent.

Overall, the share of distressed property types that sold went up to 50.1 percent in January, an increase from 47.3 percent in the previous month, but a decrease from 53.5 percent a year ago in January 2011.

Non-distressed sales made up 49.9 percent of home sales in January, a decrease from the previous month, which stood at 52.7, but up from 46.5 percent last year.

Source: DSNews.com
Reported by Esther Cho

Senators Lisa Murkowski (R-Alaska), Scott Brown (R-Massachusetts), and Sherrod Brown (D-Ohio) proposed the bill addressing the issue of short sales timelines on February 17. A short sale is a real estate transaction where the homeowner sells the property for less than the unpaid balance with the lender’s approval.

“There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” said Murkowski. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is ‘yes,’ ‘no’ or ‘maybe?’”

The legislation, also known as the Prompt Notification of Short Sale Act, will require a written response from a lender no later than 75 days after receipt of the written request from the buyer.

The lender’s response to the buyer must specify acceptance, rejection, a counter offer, need for extension, and an estimation for when a decision will be reached. The servicer will be limited to one extension of no more than 21 days.

The bill will also allow the buyer to be awarded $1000, plus “reasonable” attorney fees if the Act is violated.

According to a release from Short Sale New England, short sale homes do not bring down neighboring home values like foreclosed homes do, and 83 percent of short sale buyers are satisfied with their purchase, according to a 2012 Home Ownership Satisfaction Survey conducted by HomeGain.

“The current short sale process can be time consuming and inefficient, and many would-be buyers end up walking away from a sale that  could have saved a homeowner from foreclosure,” said Moe Veissi, president of the National Association of Realtors. “As the leading advocate for homeownership, realtors are supportive of any effort to improve the process for approving short sales.”

Equi-Trax released a survey last year on the issues real estate agents face when completing short sales. Guy Taylor, CEO at Equi-Trax, said 71.9 percent of respondents reported that a short sale can take four to nine months to complete, and they think that is simply too long.”

The survey also found that 18.2 percent of deals require less than three months to complete, with 10 percent requiring more than 10 months.

When agents in the survey were asked to how the short sale process can be improved, 57.6 percent said lenders should take less time to close transactions, 14 percent said borrowers should be better educated about short sales, and 40.4 percent said both of these changes are necessary to improve the process.

In April 2011, a similar bill was introduced by Reps. Tom Rooney (R-Florida) and Robert Andrews (D-New Jersey), but this version requested a response deadline of 45 days instead of 75 from lenders. The legislation never came up for debate before a House committee.

Source: DSNews.com
Reported by Esther Cho

Earlier this month, Wells Fargo advised NAR that it has modified its existing guidelines to allow the postponement of a
scheduled foreclosure in connection with a short sale, but only in limited situations.

NAR explained that for loans owned by Wells Fargo, including those inherited with  the bank’s Wachovia acquisition, as well as other loans serviced by Wells Fargo but owned by an investor, the policy allows for one foreclosure postponement, but only if: (1) Wells Fargo has a short sale sales contract in hand that has been approved (including approvals from junior lien holders and mortgage insurers, if applicable), (2) the buyer has proof of funds or financing approved, and (3) the short sale can close within 30 days of the scheduled foreclosure sale.

However, Wells Fargo noted that not all investors allow for such postponements and stressed that in jurisdictions where the courts will not approve the delay, the postponement policy will not apply. Wells Fargo told NAR that it is willing to address situations that do not qualify under these guidelines on a case-by-case basis.

Last month, it  was reported that Wells Fargo had stopped delaying foreclosures in  order to allow distressed homeowners to complete short sales. But as NARoutlined, the foreclosure timeline can be pushed back for a short sale as long as Wells Fargo’s specified criteria are met.

NAR has been holding meetingswith the nation’s four largest lenders, including Wells Fargo, to address concerns about their processes for short sales and REO disposition. The trade group’s talks with the banks are ongoing, but NAR
has indicated that the discussions have been productive in fostering mutual  success and support for a market recovery.