Now that we understand their game of short-sale cash a little better, lets get in the game. Consider the buyer get preapproved for an FHA loan with the lender servicing the property. Any servicer will take their short sale approvals into consideration if they are getting the other end of the loan. Also the FHA loan offer may have a better chance of being accepted due to the FHA value approval process.

Once the approval letter is issued, depending on the verbiage the buyer may be able to swap for cash before closing. Otherwise they can payoff the loan right away if needed. Either way, don’t let your strong cash position as a short sale buyer pay an inflated price for a distressed property.

Some second HELOC liens can be recourse loans, meaning if the home goes to foreclosure you may still be personally liable for the full amount of the loan. It is very important that you have a short sale professional working on your preforeclosure that knows not only the process of the short sale, but also understands the many different situations involved with loan types. If you or someone you know is struggling with their mortgage and does not know what to do, please contact Texas-Short-Sale for a private no cost evaluation and option plan for your specific situation.

CNN – 10 cities

New York – Median price: $435,000 – Foreclosure rate: 1.08%

The New York area has the lowest foreclosure rate of any of the nation’s 10 largest metro areas. There three good reasons for that: Prices have always been high, and they have only fallen about 13%, according to the National Association of Home Builders (NAHB) housing index; many area residents rent rather than own; and a large percentage of owners are either in condominiums or co-operative apartments.
Los Angeles – Median price: $320,000 – Foreclosure rate: 3.34%

If L.A. markets didn’t exactly bubble, they were certainly in a froth, with prices so high that many people resorted to dangerous loans in order to buy. When these adjustable rate mortgages reset and the economy tanked, many people could no longer afford their payments, sending foreclosures soaring.
Chicago – Median price: $210,000 – Foreclosure rate: 3.68%

The great Midwestern metropolis was a relatively steady housing market performer all during the boom-bust cycle. Prices never got too high — they’ve fallen just 17% since late 2006 — and the bust has not wiped out much home equity, so there are few homeowners underwater. The area economy did stumble during the recession, with unemployment rising into double digits. As a result, most foreclosures here were job related rather than being tied to bad mortgages.

Dallas – Median price: $164,000 – Foreclosure rate: 1.72%

Texas cities have been among the nation’s most stable housing markets, boasting very affordable prices, continued new development and little price volatility. The economy has helped: The city’s unemployment rate is about a point below the national average, as is the state’s.

Philadelphia – Median price: $230,000 – Foreclosure rate: 1.54%

The biggest housing market handicap for Philadelphia is its old manufacturing economy, which has shed thousands of jobs over the past decade. The unemployment rate has held steady at 8.6% over the past year, and the local economy hasn’t been creating new many jobs to absorb those workers. As a result, population has grown by less than 5% since 2000, barely more than a third of the national average.

Houston – Median price: $150,000 – Foreclosure rate: 1.61%

Like Dallas, Houston has enjoyed strong population growth and steady economic progress. Its residential construction industry also benefits from a relaxed regulatory environment and cheap land for building. Prices never went through any huge run-up in Houston, either. The median Houston home now costs $150,000, more than 15% below the rest of the nation, according to the NAHB index.

Miami – Median price: $126,000 – Foreclosure rate: 7.08%

Florida’s biggest metropolis got caught up in housing fever as few other housing markets did — and it’s paying for it now. During the boom years, home prices more than doubled and thousands of new communities and condominiums were built. However, not all of those projects were finished before the bubble burst. Instead, those units came open in a real estate wasteland, with few buyers and tons of foreclosures to compete with. Having that level of supply available has sent Miami’s median home price plummeting by 60% from the peak.

Washington DC – Median price: $306,000 – Foreclosure rate: 4.42%

There’re few sweeter employment spots in the present economy than Washington, D.C., which has prospered with thanks to a growing population and the most highly educated work force in the nation. The boom did send housing markets on an unsustainable path, however. By late 2006, the median home price in the D.C. metro area had surpassed $400,000. They’ve since come back to Earth, losing about 25% of their value.

Atlanta – Median price: $143,000 – Foreclosure rate: 2.04%

Most of the foreclosures in Atlanta spring from the recession. With unemployment rising — at 10.3% in November, it was up 0.3% from last year and about a point above the national average — many out-of-work Atlantans are having trouble paying their bills. That shows up in the area’s foreclosure rate: One out of every 23 households received a filing in 2010.

Boston – Median price: $307,000 – Foreclosure rate: 1.24%

The housing market heated up in Boston before just about anyplace else. Home prices more than doubled over six years before peaking in mid-2005. The median price has dropped about 20% since then. Because Beantown is hemmed in by the harbor and by other smaller cities near its margins, land to build on is in short supply, making new homes expensive and buoying the market for existing properties.

In Texas, lenders may foreclose on deeds of trusts or mortgages using either a judicial or non-judicial process. What is the difference?

JUDICIAL FORECLOSURE
The judicial process of foreclosure involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Usually the court declares a foreclosure and the property will be auctioned off to the highest bidder.

NON-JUDICIAL FORECLOSURE
The non-judicial process of foreclosure is used when a power of sale clause does exist in a mortgage or deed of trust. This “power of sale” clause is in the fine print of the deed of trust or mortgage. The borrower pre-authorizes the sale of the property to pay off the balance on the loan in the event of a default. The power given to the lender to sell the property may be executed by the lender or their representative, known as a “trustee.” This is typically the situation we see, and there are guidelines for a Power of Sale foreclosure. I have listed them below:

1. Texas law states the lender must mail the borrower a letter of demand, informing the buyer they have 20 days to pay the delinquent payments or the foreclosure proceedings will start.

2. At any time after the borrowers 20 days have expired, but at least 21 days before the foreclosure sale a foreclosure noticed must be filed.
A. Filed with the county clerk
B. Mailed to the borrower at their last known address
C. Posted on the courthouse steps

3. The foreclosure must take place on the first Tuesday of the month, (even if on a holiday) only if the prior preliminary notices have been given. The sale will take place on the courthouse steps by auction, to the highest bidder with cash. Anyone can bid, and the lender will bid by canceling out all or some part of the balance of the note.

An important note…..
Lenders may obtain deficiency judgments, but are limited to the difference between fair market value of the property at the time of sale and loan balance at the time of default.

Do you or someone you know owe more on their home than what it is worth and don’t know what to do? I am happy to talk about the many options of avoiding foreclosure through Texas-Short-Sale.

I was never so frustrated that the HOA “board” demanded full payment.  After every party involved in this transaction made monetary concessions to work together to a reasonable close, the HOA would not budge.

What I have learned is that in certain instances like this, the HOA would be the first paid at the sale.   Even before the first mortgage.  They have nothing to lose.  They always get paid.

Point being, when HOA liens are present and they have filed to foreclose, get the sellers lender and the other parties to absorb the HOA blood money!

• Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.
• Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.
• Requires the short sale agreement to specify reasonable and customary real estate commissions and costs to be deducted from the sales prices. (The servicer must agree not to negotiate a lower commission after receiving an offer.)
• Will provide standardized documents, including short-sale agreements and offer acceptance letters.

The Foreclosure Alternatives Program is anticipated to launch in late July.

If you are lucky enough to sell your property through a short sale in this market, what next? 

     First CONGRATS!!!  By being proactive you have solved your foreclosure problem.  Now the question, what is the bank going to do about the deficiency (difference of what is owed as to what it sold for).

1.  Your credit will be “bruised” due to the fact there are late payments on the account, but a foreclosure will not be reported which can be much worse.  If you were to go through the foreclosure process a repossession would also be reported to your credit report.  This can potentially extend the possibility to finance another home for a minimum of 2 years.

2.  If an experienced Short Sale Specialist negotiated the sale well, your credit report should read one of two ways:

     Account settled for less than full balance or

     Account satisfied

Account satisfied will imply to future creditors the account was paid in full.  This of course is the better of the two.  Account settled implies the balance was settled out and not paid in full.  Through these times mortgage lenders will realize there was a short sale or foreclosure.  It is at this point a reliable credit repair company can help minimize your time to re-establish your credit.  See my helpful links page at www.texas-short-sale.com for  a very trustworthy company.  More about credit repair companies in another post. 

3.  The biggest “SURPRISE” through this process is the possibility of a deficiency judgment.  The lender has the option to sue for the deficient amount, and if they win a court judgment it is reported to your credit report.  This is the worst thing for your credit.  It is hard to remove and almost impossible for a lender to extend credit.  SOOOO A good short sale negotiator will create a “hold harmless” contract between the lender and borrower to forgive the net deficiency.  If the property goes through the foreclosure process, there is a better chance the lender will hold the borrower liable and sue for the deficiency. 

4.   Beware some lenders may negotiate the borrower pay a promissory note for the deficient amount over an extended period of time.   Consider all options here, as each situation may differ, and make the best business decision to sell the property, move on, and re-establish your credit.  It may be a good option in the long run.