RealtyTrac report . . . 32% of borrowers in Illinois are "deeply underwater"

http://www.chicagobusiness.com/realestate/20140109/CRED0701/140109834/illinois-among-worst-for-deeply-underwater-homes?X-IgnoreUserAgent=1

Don’t get scammed by paying a fee upfront for a loan modification (unless it is for an attorney)

Loan modification scams are on the rise, says Barbara Jones, senior manager of national homeownership programs at NeighborWorks America. These scams often work because people do not know much about the loan modification process and are vulnerable to predators peddling loan modification fixes.

Jones took to the streets to ask a few questions. She asked people how much they would be willing to pay to have their mortgage changed to give them a financial break. One person said he would be willing to pay between $10,000 and $20,000. One woman said she would be willing to pay “whatever it would take to keep my home, especially if I’m in foreclosure.” What they didn’t know is that it is illegal for a company to collect upfront fees for mortgage relief services, unless it’s an attorney who focuses on those types of legal services. Under the FTC Mortgage Assistance Relief Services rule, known as MARS, companies pitching these services are prohibited from collecting any fees until they have provided a written offer from a lender or servicer that the consumer decides is acceptable (attorneys are exempt from the MARS rule and can accept an advanced legal fee to represent and handle these loan modification cases). Also, there must be full disclosure from the lender describing the key changes to the mortgage that would result if the borrower accepted the offer.

Many homeowners are not getting relief through federal and state programs created to speed loan refinances and modifications, making them vulnerable to these illegal scams. It is estimated that more than $93.6 million has gone to loan modification scammers.

To avoid a scam, it will help to remember two key tips. First, you should never be given a guarantee that your foreclosure can be stopped or loan modified. Second, do not pay a fee in advance to modify, refinance or work out issues with your mortgage unless it’s to an attorney who focuses on that area of practice.

The Making Home Affordable program has been extended through 2016, so companies perpetrating loan modification scams are likely to continue surfacing. Borrowers must be informed to protect themselves. 

Freddie Mac short sale policy changes to help service members

Under the new Freddie Mac short sale guidelines, service members can now qualify for a short sale even if the property is no longer  the service members' primary residence. Essentially, this provides a major opportunity for service members who moved and established a new primary residence as a result of PCS orders, but now decide to do a short sale on their former residence.

This change to Freddie policy gives service members who have already moved due to PCS orders and have established a new primary residence the same benefits of a short sale as if they had initiated the sale when they had first received their PCS orders. These benefits include exemption from making a cash contribution and exemption from the general requirement that the borrower's current monthly debt-to-income ratio must be greater than 55% if the borrower is current or less than 31 days behind on payments. To be eligible, the service member must have purchased the property on or before June 30, 2012.

These changes are summarized in the latest Freddie Mac Bulletin and will go into effect after August 1, 2014.

Justice Department lawsuits over mortgage-lending practices continue

The Justice Department's investigations into recent mortgage-lending practices of large banks are not showing any signs of slowing down. Citigroup is the latest one facing a lawsuit by the Justice Department for issues surrounding their mortgage-lending. 

Bank of America is currently facing similar lawsuits filed by both the Justice Department and the Securities Exchange Commission. In 2013, JPMorgan Chase & Co. agreed to pay a $13 billion settlement after an investigation similar to the ones forming the basis of the lawsuits against Citigroup and Bank of America.

The government said that Citi failed to tell investors that more than 70 percent of the mortgages backing the investment were written by mortgage brokers outside the banks' network, making them much more vulnerable to default. Only a selected group of investors were made aware of this practice leaving the rest without knowledge of this heightened risk. 

Please see the link below to the rest of the story at stltoday.com

http://www.stltoday.com/business/local/justice-department-preparing-to-sue-citigroup/article_75726e78-4e3a-5978-8065-b6e48231f9d9.html

Improving market among the many factors benefiting short sales

There is little doubt among experts that the housing market is showing resurgence in the first half of 2014. This is clearly great news for sellers with equity in their home, but also presents tremendous opportunities for sellers who are underwater. Increasing prices certainly lift many borrowers into an equity position, but it gives borrowers who remain underwater a better chance of receiving an offer that will be approved by the lender. Whether the lender is looking for a pay-off of 86%, 88%, or 99% of the fair market value, higher offers are more likely to be approved. It has been this way since short sales first began and will likely always be that way. Lenders want to mitigate their losses as much as possible and high offers allow them to do that.

In addition to the improving market conditions, there are a number of factors that are making short sales more streamlined, successful. and the preferred route for lenders and sellers underwater. 

First, lenders are catching up to the “New Normal” and many now have systems in place to efficiently review offers. In fact, this "New Normal" dictates that lenders first look at the short sale analysis on a delinquent account before they consider foreclosure . . . a paradigm shift in the way financial institutions handle delinquent accounts and distressed mortgages. This is a radical shift to the way lenders used to approach these accounts before the real estate meltdown in 2008. For example, many of the programs and processes now in place make short sales painless and more sophisticated.

Bank of America now has an “Agent Resource Center” that provides basic information on the short sale process. https://agentresources.bankofamerica.com/shortsale. Although it is not comprehensive of all the nuances of short sales, it presents outlines of and makes some of the required documents easily accessible.

Second, buyers and sellers now have more reasonable expectations on how the sale will proceed and how much time may be involved. Of course, these vary from one short sale to the next, but there are now standards in place. Realistic expectations keep all parties on the same page and cooperating toward a common goal. This simple intangible is remarkably important to success.

Third, short sales are no longer the “Wild Wild West.” There are now agents, lawyers, servicers, investors, and title companies with experience in short sales that can move the process along more efficiently. This bandwidth of knowledge shared by professionals across all these fields has benefitted everyone, especially sellers.

The improving market is great news for everyone, TRADITIONAL REAL ESTATE TRANSACTIONS… AND… SHORT SALES!

Short sales on Auction site – Be aware of the legal landmines

Over the last 18 months, Auction and similar bidding platforms like Hubzu have drawn significant attention for all the wrong reasons. From questions about shill bidding to general, but severe discontent with the process, the pressure on servicers to end the use of these platforms continues to increase.

California Association of Realtors (CAR) has taken the lead by addressing the use of Auction directly with the California Bureau of Real Estate (BRE) and Nationstar, a servicer that has consistently required short sales be worked through Auction. Kevin Birmingham, Transaction Issues Chairman for CAR., has even announced that the Board of Directors voted to amend AB 2039 (Muratsuchi) to prohibit the use of so-called “shill” bidders working for an auction company. This bill will likely be a catalyst for the introduction of similar legislation across the country. You may view text of the amended bill at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB2039.

Despite the push-back, the BRE has informed CAR that Nationstar’s program does not violate any laws. Furthermore, CAR has confirmed that Nationstar will continue to use Auction on its short sales.

As a result, agents must take a pro-active approach to working short sales through Auction to serve their clients and grow their business. Once again, CAR has taken the lead by offering tips on how to effectively manage the site.

Among the most sensible pointers offered by CAR is that “Realtors should also be aware that Nationstar’s market validation program requires both the listing agent and seller to sign documents which could impact their legal rights.  Realtors should advise their clients to seek legal counsel to interpret any clauses in such agreement that may raise concerns as to possible costs or risks to sellers for participating in the process.”

Always keep in mind that there are 2 negotiations in a short sale. The 1st negotiation is between the buyer and seller in coming to an agreement on completing the blanks on the Offer to Purchase and Contract which is exactly what real estate agents do best. The 2nd negotiation is getting the lien holder(s) to agree to settle for less than what is owed and what will happen with the loss (deficiency judgments, 1099, and credit reporting) which generates stacks of legal documents that must be signed by the seller and therefore is considered to be THE PRACTICE OF LAW. The listing agent and seller documents referred to by CAR fall into this 2nd category and should be handled accordingly.

Whether or not your client’s short sale is being worked through Auction, it is always important to get legal protection for your client, your broker, and yourself through the process.

For more great tips from CAR on working short sales through Auction, please visit http://www.car.org/newsstand/news/nationstar/. 

Consumer Finance Protection Bureau

It has been just over three months since the new Consumer Finance Protection Bureau (CFPB) mortgage servicing standards went into effect and there are already promising signs that these changes will provide measurable benefits for borrowers in a short sale.

Although the full impact of these significant policy changes will develop over time, there is an indication that mortgage servicers are moving quickly to adjust. For example, “the 37-day rule” codified in 12 CFR § 1024.41(c (i.e. If a complete short sale packet more than 37 days is submitted before a foreclosure sale, the servicer has 30 days to evaluate the borrower for the short sale) is now fully integrated into the ever-growing short sale lingo. The 37-day rule is one of the most crucial elements of the CFPB regulations because it finally protects borrowers from unchecked “dual-tracking,” the practice of reviewing a short sale while proceeding through the foreclosure process without delay.

As lenders adapt to the policy changes, borrowers in the short sale process must also have an understanding of the process, or have a trusted professional on their side to represent their best interests.

HAMP recipients in default -- again

Happy Monday, and happy SPRING!

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The Washington Post is reporting this month that the average national rate for a default AFTER completing a HAMP refinance is currently over 1 in 4.  The rate for the Midwest is even higher, topping 30%.  Additionally, the program slashed rates on these borrowers for a time length of five years.  The first entrants into the program began in 2009; their rates should rise sharply this year.  For more on this story, you can read the entire article here --> http://wapo.st/1gtZDrX

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In better news, Cardinal baseball returns THIS SUNDAY in an away game versus the Reds.  Ready for baseball to return to the 'Lou?  Check out the progress that Ballpark Village has made while we've all been buried in the snow.  via stltoday.com --> http://bit.ly/NKcOIo

Free Short Sale Webinar Conducted by our Founder, Elizabeth Kayser

If you haven't yet "liked" the Kayser Short Sale Law Firm or signed up for the newsletter, you've been missing valuable FREE short sale information.  The latest?  A FREE webinar scheduled less than two weeks from today, conducted by our firm's founder, Elizabeth Kayser.

Here is the info. on the webinar, scheduled for March 26, 2014 at 2pm central:

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Many realtors avoid short sale listings because they don’t understand the process, don’t know how to talk to homeowners about the advantages of short sale over foreclosure, and are concerned there is no way to earn a decent commission in listing a short sale home.

Don’t let fear of short sales stop you! You can keep your license and keep your commission safe when working with short sale properties.

FEAR NO SHORT SALE! KEEP YOUR COMMISSION & KEEP YOUR LICENSE Webinar

In this 60-minute webinar, attorney Elizabeth Kayser of the Kayser Short Sale Law Firm will discuss:

•        The Advantages Of Short Sales Vs Foreclosures

•        The Short Sale Process Explained - Simply

•        Tips for successful short sales

•        Earning your commission on short sales

About Elizabeth Kayser & the Kayser Short Sale Law Firm:

Elizabeth Kayser, Principal Attorney and founder of the Kayser Short Sale Law Firm, has been conducting short sales workshops and presentations for six years in the greater St. Louis area. Elizabeth has been interviewed on KPLR channel 11, Fox2, and has been a guest speaker for several radio stations.  She has also frequently been featured in the St. Louis Post- Dispatch and Baltimore Sun. Additionally, Elizabeth has been directly involved influencing short sale program guidelines at the Federal level.

Kayser Short Sale Law Firm manages the entire lender process -- providing legal direction, and managing all the paperwork, correspondence and phone calls.  Kayser’s team keeps the listing agent apprised of all developments and does their best to ensure the full commission is paid straight to the agent.

If you would like to start increasing your revenue stream with short sales, or are simply wanting to improve your short sales knowledge, this webinar is for you!

Registration is quick and easy... just click here to sign up!
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This Year's Resolutions

Over the past year, Kayser Short Sale Law Firm has grown by leaps and bounds. We are excited that we are now on Facebook, Twitter, and LinkedIn, and that we are also creating different tools to aid homeowners during a short sale. For 2014, Kayser has new resolutions to take it a few steps farther from last year!

1. Create more tools for real estate agents to use when handling a short sale

We know that when it comes to explaining a short sale to a homeowner, things can get a little confusing. In fact, when it comes to explaining anything even related to a short sale, homeowners can end up scratching their heads. We are working to create infographics, videos, eBooks and other material for real estate agents that can help them when working with homeowners. We want to give agents everything possible to make the short sale process quick, easy, and painless for both parties.

2.  Reach out to new real estate agents

The firm has several companies that we work with consistently on short sales, but we think we can do better! This year, we want to reach out to new and different companies and explain to them the value of a short sale. The more agents we are able to reach out to, the more homeowners who are saved from a foreclosure.

3. Update Kayser’s technology

Currently, we are working with our business consultants to update the technology Kayser is using. We are converting to new programs and software that will help make us more efficient at what we do. This means a quicker, more efficient short sale process for all of our clients!

4. Continue doing what we’re doing!

The heart of Kayser is still dedicated to preserving homeowners’ dignity and integrity. That is what we are all about, and we intend to keep it that way. Our staff will continue to work hard to ensure that homeowners avoid a foreclosure, save their credit score, and are able to get back on their feet in a timely manner.

 The choice of a lawyer is an important decision, and should not be based solely upon advertisements.