Latest daily news tips for Sellers

 

 

Government urges short sales, but experts aren’t sure they will help
PHILADELPHIA – March 12, 2010 – With the highly touted federal mortgage-modification program falling short of its target numbers, the government has looked into alternatives to foreclosure and come up with a possible, though not original, solution: The short sale, a transaction in which the lender accepts less than the balance owed on the mortgage.
 Positive elements in the new guidelines: Both homeowners and mortgage servicers will have financial incentive to participate in short sales; there are limited payouts for second lienholders, “and paperwork is standardized, which makes it easier for everyone to comply.”
 The new Home Affordable Foreclosure Alternative program will run until Dec. 31, 2012. Among its provisions:
• The lender must offer a short sale in writing to the borrower within 30 days after the borrower either is ruled ineligible for mortgage modification under the HAMP program or has been ruled unable to sustain payments under a trial plan.
• A borrower may receive up to $1,500 to assist with relocation expenses.
• Incentives of $1,000 will be offered to lenders for each completed short sale. For each deed in lieu of foreclosure, in which the borrower voluntarily transfers the property to the lender, $1,000 will be paid to the lender.
• A lender with a second lien on the property will get up to $3,000 of the short-sale proceeds, or can pursue a short sale outside the program if it doesn’t agree to share.
• The lender will not be permitted to reduce the real estate agent’s commission after an offer on a property has been received.

Refinancing unavailable for many borrowers
NEW YORK – Feb. 16, 2010 –
Half of the nation’s borrowers have mortgages with rates above 6 percent even though the average rate on 30-year, fixed-rate mortgages has been about 5 percent for most of the past year, according to research firm First American CoreLogic. Usually, borrowers refinance if they can save at least one percentage point on the interest rate. Many borrowers who tried to refinance have found they’re stuck because the value of their homes has tumbled and their equity has melted away. Others have been shut out because lenders tightened their requirements.

 Justices adopt Fla. foreclosure mediation rules
 TALLAHASSEE, Fla. – Feb. 15, 2010 – Lenders will be required to pick up the tab for investigating and verifying ownership and then try mediation before foreclosing Florida home mortgages under new rules approved Thursday by the Florida Supreme Court. The investigate-and-verify rule should help prevent those kinds of errors and give judges greater authority to sanction lenders who do make false allegations, the justices wrote. Last-minute cancelations have needlessly delayed other sales, again clogging the system.

 

Are principal reductions the answer?
 NEW YORK – Feb. 15, 2010 – Real estate investors are coming to the same conclusion that housing activists reached at the beginning of the crisis – forgiving principal on underwater loans may be the best way to deal with the problem.

Some activists and investors are asking banks to consider principal reductions so that the amount borrowers owe on underwater loans can be sharply reduced. They say this offers the best incentive for borrowers to continue to make their monthly mortgage payments.