Fannie Mae wants to defer strategic default with consequences
Wednesday, June 23rd, 2010 By
Thomas Hart
Fannie Mae, which owns or guarantees more than half the mortgages in the U.S., wants to crack down on surging trend of strategic default.
Fannie Mae upped the ante on strategic default of home mortgages Wednesday, saying that borrowers who default despite having ability to pay or do not seek alternatives in good faith won’t be eligible for a new Fannie Mae-backed mortgage for seven years from the date of foreclosure. Strategic defaults are increasing along with home foreclosures. Numerous offers are proliferating online to assist in strategic defaults. Last week the House passed the FHA Reform Act with a provision for penalizing strategic defaulters in the bill.
Strategic default consequences
Fannie Mae, which owns or guarantees more than 50 percent of mortgages in the U.S., wants more severe strategic default consequences. It is now refusing to back new loans for walk-away borrowers for seven years after they abandon their homes. In a press release, Terence Edwards, executive vice president for credit portfolio management at Fannie Mae, said “Walking away from a mortgage is bad for borrowers and bad for communities, and our approach is meant to deter the disturbing trend toward strategic defaulting. On the flip side, borrowers facing hardship who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time.”
Fannie Mae to sue strategic defaulters
In the press release, Fannie Mae, said it will also sue to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments. In an announcement next month, the company will be instructing its servicers to monitor delinquent loans facing foreclosure and make recommendations for strategic default cases that warrant the pursuit of deficiency judgments.
Defining strategic default
The strategic default issue is a thorny one because of the challenge to define what makes a default strategic. The Washington Independent reports that strategic defaulters aren’t really breaching their contracts. Every mortgage contract defines exactly what happens if the borrowers don’t pay: the bank evicts them and takes the home. It’s doubtful that the government could stipulate that homeowners have to hand over the last of their savings to the bank before they can walk away, or that they have to be hand over a certain percentage of their annual income before they walk away. The money people have left could be used to move to an apartment, pay medical bills or to buy shoes for their kids.
Thursday, June 24, 2010
Tuesday, June 15, 2010
Thursday, June 3, 2010
After Foreclosure: How long until you can buy again?
By Les Christie, staff writerMay 28, 2010: 7:58 AM ET
NEW YORK (CNNMoney.com) -- Walking away from a mortgage you can still afford to pay has consequences; everyone knows that. Your credit score is shot and it can be impossible to get credit.
Some homeowners, no doubt, believe that the credit score hit is worth getting out from a deeply underwater mortgage. They may owe, say, $500,000 when their house value is only valued at $350,000. And, they figure, there's no way it will ever be worth what they owe so it's better to get out from underneath the burden.
After default, they reason, they can raise their FICO scores by paying all their bills on time and eventually finance another home purchase.
Don't count on it.
While homeowners who default due to economic hardship, such as a job loss or divorce, normally must wait two to five years before buying a home again, walkaways may face double that time.
"It could be well over seven or eight years before [walkaways] are able to obtain a mortgage to buy a home again," said Jay Brinkmann, chief economist for the Mortgage Bankers Association.
How foreclosure impacts your credit score
"Credit scores are only one component of a complete credit decision," Brinkmann said. "[In these cases] credit scores are not a good indicator of their willingness to continue to pay their mortgage."
But future underwriters will scrutinize their records very closely, and if they find no precipitating factors leading to the defaults -- no job loss, no health issues --the repaired credit score won't overshadow the black mark of a walkaway.
"If you made a strategic decision to default on paying your mortgage, it will work against you," said Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters.
Merrell, who teaches underwriting, said banks are looking at several factors in determining whether to grant mortgages: the amount of money borrowers have in the bank; employment histories; payment history.
However, banks may be far more lenient if the default resulted from factors somewhat beyond the borrower's control, such as from local economic problems. "They'll give you more consideration if it's job related," he said. But, he added, banks look at strategic defaults "very negatively."
That said, it's not impossible to get a loan. Banks still want to make interest payments, so they might be willing to gamble with a walkaway.
"It might be a little more difficult for them to borrow, but [banks'] drive for market share -- to profit from making loans -- will trump that caution," said Keith Gumbinger, of the mortgage information publisher HSH Associates. "I don't think we'll see a full denial."
It's hard to foresee the state of mortgage lending six or seven months from now, let alone seven or eight years into the future. So lenders may look at applications from one-time strategic defaulters and say, "Yes, they walked away but it's a whole different market now," according to Gumbinger.
Even so, lenders may require more from borrowers who walked away than those who didn't.
"To the extent they could get a mortgage," said Brinkmann, "they can count on needing a heavy down payment."
The lenders may ask for 30% down or more. That would provide enough collateral cushion that the bank could get all or most of its money back in a foreclosure.
Strategic defaulters might also be charged higher interest rates, even above the levels other borrowers with similar credit scores would receive
NEW YORK (CNNMoney.com) -- Walking away from a mortgage you can still afford to pay has consequences; everyone knows that. Your credit score is shot and it can be impossible to get credit.
Some homeowners, no doubt, believe that the credit score hit is worth getting out from a deeply underwater mortgage. They may owe, say, $500,000 when their house value is only valued at $350,000. And, they figure, there's no way it will ever be worth what they owe so it's better to get out from underneath the burden.
After default, they reason, they can raise their FICO scores by paying all their bills on time and eventually finance another home purchase.
Don't count on it.
While homeowners who default due to economic hardship, such as a job loss or divorce, normally must wait two to five years before buying a home again, walkaways may face double that time.
"It could be well over seven or eight years before [walkaways] are able to obtain a mortgage to buy a home again," said Jay Brinkmann, chief economist for the Mortgage Bankers Association.
How foreclosure impacts your credit score
"Credit scores are only one component of a complete credit decision," Brinkmann said. "[In these cases] credit scores are not a good indicator of their willingness to continue to pay their mortgage."
But future underwriters will scrutinize their records very closely, and if they find no precipitating factors leading to the defaults -- no job loss, no health issues --the repaired credit score won't overshadow the black mark of a walkaway.
"If you made a strategic decision to default on paying your mortgage, it will work against you," said Bill Merrell of the National Association of Review Appraisers and Mortgage Underwriters.
Merrell, who teaches underwriting, said banks are looking at several factors in determining whether to grant mortgages: the amount of money borrowers have in the bank; employment histories; payment history.
However, banks may be far more lenient if the default resulted from factors somewhat beyond the borrower's control, such as from local economic problems. "They'll give you more consideration if it's job related," he said. But, he added, banks look at strategic defaults "very negatively."
That said, it's not impossible to get a loan. Banks still want to make interest payments, so they might be willing to gamble with a walkaway.
"It might be a little more difficult for them to borrow, but [banks'] drive for market share -- to profit from making loans -- will trump that caution," said Keith Gumbinger, of the mortgage information publisher HSH Associates. "I don't think we'll see a full denial."
It's hard to foresee the state of mortgage lending six or seven months from now, let alone seven or eight years into the future. So lenders may look at applications from one-time strategic defaulters and say, "Yes, they walked away but it's a whole different market now," according to Gumbinger.
Even so, lenders may require more from borrowers who walked away than those who didn't.
"To the extent they could get a mortgage," said Brinkmann, "they can count on needing a heavy down payment."
The lenders may ask for 30% down or more. That would provide enough collateral cushion that the bank could get all or most of its money back in a foreclosure.
Strategic defaulters might also be charged higher interest rates, even above the levels other borrowers with similar credit scores would receive
Friday, May 28, 2010
Thursday, May 20, 2010
Foreclosure Filings down in April
ForeclosureRadar (www.foreclosureradar.com), the only website that
tracks every California foreclosure and provides daily auction updates, issued its monthly California Foreclosure Report for April 2010. Foreclosure filings were down in April for the first time since the beginning of the year. Despite the decline in filings, the inventory of properties in preforeclosure or scheduled for sale only dipped slightly as the drop in filings were offset by an increase in the time to foreclose. Cancellations continue to climb, up more than 32 percent from the beginning of the year. The number of properties sold to 3rd parties also continues to climb, helped again this month by slightly better
discounts.
“The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the Notice of Trustee Sale to be re-filed. In fact, 14.6 percent of new Notice of Trustee filings in April were on previously
cancelled foreclosures.”
Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of auction and serve as the homeowner’s final notice before sale.
Foreclosure Filings Foreclosure Cancellations Continue to Climb Short sales and loan modifications are not the only explanation
After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the Bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank’s opening bid, the property will be Sold to 3rd Party; if not, it will go Back to Bank and become part of that bank’s REO
inventory.
Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale
cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to Bank at the trustee sale, and which the bank has not yet resold to another party.
tracks every California foreclosure and provides daily auction updates, issued its monthly California Foreclosure Report for April 2010. Foreclosure filings were down in April for the first time since the beginning of the year. Despite the decline in filings, the inventory of properties in preforeclosure or scheduled for sale only dipped slightly as the drop in filings were offset by an increase in the time to foreclose. Cancellations continue to climb, up more than 32 percent from the beginning of the year. The number of properties sold to 3rd parties also continues to climb, helped again this month by slightly better
discounts.
“The steady rise in cancellations leads us to believe that loan modifications and short sales are gaining traction” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “I’d caution, however, that cancellations also occur due to filing errors and extended postponements, which require the Notice of Trustee Sale to be re-filed. In fact, 14.6 percent of new Notice of Trustee filings in April were on previously
cancelled foreclosures.”
Notice of Default filings are the first step in the foreclosure process. Notice of Trustee Sale filings set the date and time of auction and serve as the homeowner’s final notice before sale.
Foreclosure Filings Foreclosure Cancellations Continue to Climb Short sales and loan modifications are not the only explanation
After the filing of a Notice of Trustee Sale, there are only three possible outcomes. First, the sale can be Cancelled for reasons that include a successful loan modification or short sale, a filing error, or a legal requirement to re-file the notice after extended postponements. Alternatively, if the property is taken to sale, the Bank will place the opening bid. If a 3rd party, typically an investor, bids more than the bank’s opening bid, the property will be Sold to 3rd Party; if not, it will go Back to Bank and become part of that bank’s REO
inventory.
Preforeclosure inventory is an estimate of the number of properties that have had a Notice of Default filed against the property, but have not yet been Scheduled for Sale. The Scheduled for Sale inventory indicates those properties that have had a Notice of Trustee Sale filed, but have not yet been sold or had the sale
cancelled. The Bank Owned (REO) inventory indicates the number of properties that have been sold Back to Bank at the trustee sale, and which the bank has not yet resold to another party.
Friday, May 7, 2010
How To Buy a Foreclosure
How to buy a foreclosure
By Les Christie, staff writerMay 4, 2010: 5:44 AM ET
NEW YORK (CNNMoney.com) -- You want to buy a foreclosure? Remember, there are both great opportunities and great pressures and pitfalls in this market.
First, you have to decide at what stage of foreclosure you want to buy. There are three options: 1. pre-foreclosure; 2. sheriff's auction; 3. repossession, called REO (for real estate owned by the bank).
"The safest and best way to buy is when it's a bank-owned property," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are "underwater," owing more on the homes than they are worth.
As a result, potential buyers must negotiate a deal with the lender as well as the owner.(This process is called a "Short Sale" and needs the attention of an experienced agent) That makes buying at this stage of foreclosure complicated and slow. But, you have the advantage of being able to inspect the home before purchase -- which isn't the case in other types of foreclosure sales. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Sheriff's auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs -- and much larger bill than they intended. This stage is usually best left to the professionals, the contractors and investors who regularly bid on these places and know what they're doing.
Repossession: This occurs after the home has gone through a sheriff's auction but does not sell and the bank gains possession of the property. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property comes with a clear title.
In addition, the banks selling these places may extend preferential financing terms to the buyers and may have made some repairs before putting the property on the market.
Even in this safer stage, though, homes are still usually sold in "as is" condition. "That means the bank won't pay for cosmetic issues," said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. "Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical."
He also pointed out that, since you're buying from a corporation, not an individual, the buying process can be faster, so be prepared to move quickly. Many times a listing goes on sale on a Friday and is sold over the weekend.
"The buyers and their agents need to be on top of everything from the inspection to the financing," said Wiener. "Some banks will even charge a per diem fee for late closings."
Once you've decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
"Remember," said Sharga, "there are 800,000 REOs in the banks' inventories. There'll be another home to bid on tomorrow."
Underestimating repair costs: Take full advantage of the home inspection and don't delude yourself about much the repairs will cost.
"Take along someone who can give you a good estimate of how much repair costs will come to," said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. "If you end up not using it, go on vacation after 6 months," Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you're planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That's more likely to hold its value.
Not having financing in place: If you don't have a pre-approved mortgage, you're really not in the market. "You have to be able to move quickly," Sharga said.
Banks don't want to dilly-dally on sales; they're losing money every day that homes sit on the market. That means they'll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won't spend time shopping for homes that are too expensive.
Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there's still work to be done before final approval
By Les Christie, staff writerMay 4, 2010: 5:44 AM ET
NEW YORK (CNNMoney.com) -- You want to buy a foreclosure? Remember, there are both great opportunities and great pressures and pitfalls in this market.
First, you have to decide at what stage of foreclosure you want to buy. There are three options: 1. pre-foreclosure; 2. sheriff's auction; 3. repossession, called REO (for real estate owned by the bank).
"The safest and best way to buy is when it's a bank-owned property," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are "underwater," owing more on the homes than they are worth.
As a result, potential buyers must negotiate a deal with the lender as well as the owner.(This process is called a "Short Sale" and needs the attention of an experienced agent) That makes buying at this stage of foreclosure complicated and slow. But, you have the advantage of being able to inspect the home before purchase -- which isn't the case in other types of foreclosure sales. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Sheriff's auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs -- and much larger bill than they intended. This stage is usually best left to the professionals, the contractors and investors who regularly bid on these places and know what they're doing.
Repossession: This occurs after the home has gone through a sheriff's auction but does not sell and the bank gains possession of the property. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property comes with a clear title.
In addition, the banks selling these places may extend preferential financing terms to the buyers and may have made some repairs before putting the property on the market.
Even in this safer stage, though, homes are still usually sold in "as is" condition. "That means the bank won't pay for cosmetic issues," said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. "Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical."
He also pointed out that, since you're buying from a corporation, not an individual, the buying process can be faster, so be prepared to move quickly. Many times a listing goes on sale on a Friday and is sold over the weekend.
"The buyers and their agents need to be on top of everything from the inspection to the financing," said Wiener. "Some banks will even charge a per diem fee for late closings."
Once you've decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
"Remember," said Sharga, "there are 800,000 REOs in the banks' inventories. There'll be another home to bid on tomorrow."
Underestimating repair costs: Take full advantage of the home inspection and don't delude yourself about much the repairs will cost.
"Take along someone who can give you a good estimate of how much repair costs will come to," said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. "If you end up not using it, go on vacation after 6 months," Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you're planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That's more likely to hold its value.
Not having financing in place: If you don't have a pre-approved mortgage, you're really not in the market. "You have to be able to move quickly," Sharga said.
Banks don't want to dilly-dally on sales; they're losing money every day that homes sit on the market. That means they'll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won't spend time shopping for homes that are too expensive.
Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there's still work to be done before final approval
Tuesday, April 20, 2010
Friday, April 16, 2010
Loan Modification Update!
Metrics for the Making Home Affordable Program (HAMP) improved substantially during March according to data released late Wednesday by the Treasury Department. The foreclosure prevention program, a joint effort by Treasury and the Department of Housing and Urban Development, has been widely criticized for its effectiveness in moving distressed borrowers into permanent loan modifications.
During the March, however, over 60,000 homeowners enrolled in the three month trial period required by the program were converted into permanent modifications. This brings the cumulative total of permanent loan modifcations to 230,801. The March conversions represent a 15 percent increase over the 53,000 accomplished in February and a 3.5-fold rise in permanent modifications since the first of the year. An additional 108,000 permanent modifications are pending; most are awaiting approval from the borrower.
In terms of the overall conversion rate, 16.1 percent of all offers extended have been converted to permanent loan modifications. Much improved from last month's rate of 12.6 percent. When measuring performance against the number of HAMP trial offers that have actually been accepted, 19.8 percent of homeowners who have completed the 3-month period have been converted to a permanent modification. Again, much better than the 15.6 percent conversion rate reported in February.
The number of homeowners entering the program, however, is declining as might reasonably be expected after the initial flood of applicants. There were 57,000 new entrants into the program in March compared to 72,000 in February. A total of 1.44 offers for modifications have been extended to borrowers and 1.17 million homeowners have started the trial modification program.
There was a large number of trial modifications cancelled during the month. Since the program started in the spring of 2009, there have been a total of 155,000 cancellations, 66,500 of which were recorded in March. The report provided no explanation for this number. A total of 2,879 permanent modifications have been cancelled compared to 1,400 reported last month.
Under HAMP, borrowers are offered a five year modification of their existing mortgage based on a debt to income ratio that cannot exceed 31 percent. The servicers who administer the program can offer an extension of the loan term, a reduced interest rate, and/or a reduction of the principal balance. 100 percent of the modifications to date have included an interest rate reduction, 39 percent have involved an extension of the term of the loan and 28 percent have had some type of principal reduction or forbearance. Servicers have been reluctant to offer forbearance to borrowers and HAMP has recently announced a new component of the program to encourage this method of modification.
The HAMP report estimates that approximately 6 million residential mortgages are currently 60 days or more in arrears and that approximately 1.7 million of these are eligible for the HAMP program. Servicers are encouraged to contact borrowers to request information regardless of their apparent eligibility. To date servicers have sent out over four million solicitation letters.
CitiMortgage and GMAC continue to be the most active participants in the program; both have nearly 50 percent of their estimated eligible borrowers enrolled in trial or permanent modifications.
The reasons for delinquency as reported by the borrowers have remained relatively consistent over the life of the program; 59.1 percent report that their hardship was caused by a loss of income (a slight increase from 57.4 percent in February), 10.5 say it is excessive obligations and 2.8 percent report their delinquency was principally caused by the illness of the principal borrower. Combined with the fact that 44.1 percent of the 6.5 million unemployed Americans have been out of work for longer than six months, this statistic implies the true test of HAMP's success will be whether or not permanent loan modifications are able to avoid re-default.
During the March, however, over 60,000 homeowners enrolled in the three month trial period required by the program were converted into permanent modifications. This brings the cumulative total of permanent loan modifcations to 230,801. The March conversions represent a 15 percent increase over the 53,000 accomplished in February and a 3.5-fold rise in permanent modifications since the first of the year. An additional 108,000 permanent modifications are pending; most are awaiting approval from the borrower.
In terms of the overall conversion rate, 16.1 percent of all offers extended have been converted to permanent loan modifications. Much improved from last month's rate of 12.6 percent. When measuring performance against the number of HAMP trial offers that have actually been accepted, 19.8 percent of homeowners who have completed the 3-month period have been converted to a permanent modification. Again, much better than the 15.6 percent conversion rate reported in February.
The number of homeowners entering the program, however, is declining as might reasonably be expected after the initial flood of applicants. There were 57,000 new entrants into the program in March compared to 72,000 in February. A total of 1.44 offers for modifications have been extended to borrowers and 1.17 million homeowners have started the trial modification program.
There was a large number of trial modifications cancelled during the month. Since the program started in the spring of 2009, there have been a total of 155,000 cancellations, 66,500 of which were recorded in March. The report provided no explanation for this number. A total of 2,879 permanent modifications have been cancelled compared to 1,400 reported last month.
Under HAMP, borrowers are offered a five year modification of their existing mortgage based on a debt to income ratio that cannot exceed 31 percent. The servicers who administer the program can offer an extension of the loan term, a reduced interest rate, and/or a reduction of the principal balance. 100 percent of the modifications to date have included an interest rate reduction, 39 percent have involved an extension of the term of the loan and 28 percent have had some type of principal reduction or forbearance. Servicers have been reluctant to offer forbearance to borrowers and HAMP has recently announced a new component of the program to encourage this method of modification.
The HAMP report estimates that approximately 6 million residential mortgages are currently 60 days or more in arrears and that approximately 1.7 million of these are eligible for the HAMP program. Servicers are encouraged to contact borrowers to request information regardless of their apparent eligibility. To date servicers have sent out over four million solicitation letters.
CitiMortgage and GMAC continue to be the most active participants in the program; both have nearly 50 percent of their estimated eligible borrowers enrolled in trial or permanent modifications.
The reasons for delinquency as reported by the borrowers have remained relatively consistent over the life of the program; 59.1 percent report that their hardship was caused by a loss of income (a slight increase from 57.4 percent in February), 10.5 say it is excessive obligations and 2.8 percent report their delinquency was principally caused by the illness of the principal borrower. Combined with the fact that 44.1 percent of the 6.5 million unemployed Americans have been out of work for longer than six months, this statistic implies the true test of HAMP's success will be whether or not permanent loan modifications are able to avoid re-default.
Tuesday, April 13, 2010
SENATE BILL 401 SIGNED TODAY--TAX DEBT FORGIVEN FOR SHORT SALES!
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
NO MORE STATE TAX ON FORGIVEN DEBT
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:
Homebuyer Tax Credit Chart 2010.
Internal Data Exchange (IDX).
NO MORE STATE TAX ON FORGIVEN DEBT
Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification. Enacted into law yesterday, Senate Bill 401 generally aligns California's tax treatment of mortgage debt relief income with federal law. For debt forgiven on a loan secured by a "qualified principal residence," borrowers will now be exempt from both federal and state income tax consequences. The existing federal exemption is for indebtedness up to $2 million, whereas the new California exemption is for indebtedness up to $800,000 and forgiven debt up to $500,000.
"Qualified principal residence" indebtedness is defined as debt incurred in acquiring, constructing, or substantially improving a principal residence. It includes both first and second trust deeds. It also includes a refinance loan to the extent the funds were used to payoff a previous loan that would have qualified.
The tax breaks apply to debts discharged from 2009 through 2012. Californians who have already filed their 2009 tax returns may claim the exemption by filing a Form 540X amendment.
Taxpayers who do not qualify for the above exemptions (e.g., second home or rental property) may nevertheless be exempt under other provisions. Most notably, taxpayers who are bankrupt are exempt from debt relief income tax. Also, taxpayers who are insolvent are exempt from debt relief income tax to the extent their current liabilities exceed current assets.
For more information about mortgage forgiveness tax consequences, go to California Franchise Tax Board's Mortgage Forgiveness Debt Relief Extended webpage and the Internal Revenue Service's Mortgage Forgiveness Debt Relief Act and Debt Cancellation webpage. The full text of Senate Bill 401 is available at www.leginfo.ca.gov.
C.A.R. provides REALTORS® with many legal articles covering a wide range of topics of interest. Some of the new or newly revised legal articles available at http://qa.car.org/ are as follows:
Homebuyer Tax Credit Chart 2010.
Internal Data Exchange (IDX).
Wednesday, March 31, 2010
$18,000 in tax credits for first time homebuyer between May 1-June 30
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®
$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.
For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws. C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.
$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)). California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)). Other terms and restrictions apply to both tax credits.
For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws. C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.
Friday, March 26, 2010
AB 183 will provide $200 million For Homebuyer Tax Credits
On March 25, 2010 Governor Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit Legislation, into law.
AB 183 will provide $200 million for home buyer tax credits. $100 million for qualified first-time homebuyers of existing homes and $100 million for purchasers of NEW, or previously unoccupied homes (abandoned,bank owned). This opportunity will be available pursuant to an enforceable contract executed from May 1, 2010 to December 31, 2010.
The credit will equal 5% of the purchase price or $10,000--and will be paid in equal installments over three consecutive years. Purchasers will be required to live in the home for atleast two years or forfeit the credit.
AB 183 will provide $200 million for home buyer tax credits. $100 million for qualified first-time homebuyers of existing homes and $100 million for purchasers of NEW, or previously unoccupied homes (abandoned,bank owned). This opportunity will be available pursuant to an enforceable contract executed from May 1, 2010 to December 31, 2010.
The credit will equal 5% of the purchase price or $10,000--and will be paid in equal installments over three consecutive years. Purchasers will be required to live in the home for atleast two years or forfeit the credit.
Wednesday, March 24, 2010
3 REASONS WHY THOSE WHO DON'T BUY NOW MAY REGRET IT LATER
3 Reasons Why Those Who Don’t Buy Now Might Regret It Later
Print Article
RISMEDIA, March 24, 2010—Buying a home is one of the biggest decisions an individual can make. So it’s understandable that one considering a home purchase may take their time to avoid rushing into such a large financial commitment. However, several factors might leave prospective home buyers who don’t purchase a property now wishing they had taken action sooner.
“Current market conditions have created a perfect storm of sorts that has made it an ideal time to purchase for first-time and trade-up buyers alike,” said James M. Weichert, president and founder of Weichert, Realtors. “Those who have the means and the desire to buy now but don’t, aren’t likely to see such a great opportunity again anytime soon.”
Specifically, Weichert offered three reasons why those who aren’t under contract to purchase a new home by April 30, 2010 might regret it.
1. They won’t receive a sizeable amount of money from Uncle Sam.
For the past two years, the federal government has offered a home buyer tax credit to help stimulate the economy. But that financial incentive is set to expire soon. First-time buyers who aren’t under contract to purchase a home by April 30, 2010 will leave the $8,000 that is available to them through the tax credit on the table. Meanwhile, repeat buyers will miss out on the opportunity to collect up to $6,500 from the government.
2. They might not lock-in on the historically-low interest rates.
Thanks to measures taken by the Federal Reserve including the purchasing of mortgage-backed securities, interest rates have remained historically-low for several years. With the economy beginning to show signs of recovery, it is widely believed that the government will soon put an end to these stimulus efforts.
If that happens, many economists believe we will begin to see a sharp increase in interest rates which could result in a much higher monthly payment for those who wait. For example, an interest rate increase of 1% on a 30-year fixed mortgage of $300,000 could cost a buyer $188 more a month or $67,000 more over the span of the entire loan.
3. They might miss out on record home price affordability.
Home price affordability is at its most optimal level in decades. As a result, those who wait to buy will likely pay more for the home they purchase than what that same home would cost right now. In fact, home prices have already begun to rise slightly in some markets. Instead of getting a better bargain, waiting to buy a home might net buyers a higher purchase price, less appreciation and less house for their buck.
“There is no time to waste for anyone who wants to take advantage of this great buying opportunity. Particularly for those who have a home to sell first,” added Weichert. “If you are prone to saying ‘what if’ and wondering what could have been, you will thank yourself down the road for buying now.”
Print Article
RISMEDIA, March 24, 2010—Buying a home is one of the biggest decisions an individual can make. So it’s understandable that one considering a home purchase may take their time to avoid rushing into such a large financial commitment. However, several factors might leave prospective home buyers who don’t purchase a property now wishing they had taken action sooner.
“Current market conditions have created a perfect storm of sorts that has made it an ideal time to purchase for first-time and trade-up buyers alike,” said James M. Weichert, president and founder of Weichert, Realtors. “Those who have the means and the desire to buy now but don’t, aren’t likely to see such a great opportunity again anytime soon.”
Specifically, Weichert offered three reasons why those who aren’t under contract to purchase a new home by April 30, 2010 might regret it.
1. They won’t receive a sizeable amount of money from Uncle Sam.
For the past two years, the federal government has offered a home buyer tax credit to help stimulate the economy. But that financial incentive is set to expire soon. First-time buyers who aren’t under contract to purchase a home by April 30, 2010 will leave the $8,000 that is available to them through the tax credit on the table. Meanwhile, repeat buyers will miss out on the opportunity to collect up to $6,500 from the government.
2. They might not lock-in on the historically-low interest rates.
Thanks to measures taken by the Federal Reserve including the purchasing of mortgage-backed securities, interest rates have remained historically-low for several years. With the economy beginning to show signs of recovery, it is widely believed that the government will soon put an end to these stimulus efforts.
If that happens, many economists believe we will begin to see a sharp increase in interest rates which could result in a much higher monthly payment for those who wait. For example, an interest rate increase of 1% on a 30-year fixed mortgage of $300,000 could cost a buyer $188 more a month or $67,000 more over the span of the entire loan.
3. They might miss out on record home price affordability.
Home price affordability is at its most optimal level in decades. As a result, those who wait to buy will likely pay more for the home they purchase than what that same home would cost right now. In fact, home prices have already begun to rise slightly in some markets. Instead of getting a better bargain, waiting to buy a home might net buyers a higher purchase price, less appreciation and less house for their buck.
“There is no time to waste for anyone who wants to take advantage of this great buying opportunity. Particularly for those who have a home to sell first,” added Weichert. “If you are prone to saying ‘what if’ and wondering what could have been, you will thank yourself down the road for buying now.”
Tuesday, March 23, 2010
Wednesday, February 24, 2010
Is A Strategic Default...Immoral?
Nearly 10.7 million, or 23 percent, of all residential properties with mortgages were in negative equity or "underwater" as of the 2nd quarter of 2009, with an additional 2.3 million mortgages possibly approaching negative equity-or having less than five percent in equity. That adds up to nearly 28 percent of all residential properties with a mortgage nationwide.
The majority of "underwater" homeowners is largely concentrated in five states--namely Nevada, Arizona, Florida, Michigan and California. Among these five states the average negative equity share was 46 percent, compared to 13 percent for the remaining states.
The question increasingly being asked is what the likelihood is of homeowners underwater who are going to "leave the pool" or "strategically default". According to a study by Experian, more than a quarter of all existing defaults were found to be strategic and more than doubled from 2007-2008. The study also found that borrowers with higher credit scores were 50% more likely to strategically default than those with lower credit scores.
The most important variables in predicting strategic default are the moral and social considerations. There is some research that suggests that while borrowers with negative equity should be walking away in droves, most homeowners choose not to strategically default due to the desire to avoid the shame and guilt of foreclosure and exaggerated anxiety over the preceived consequences from foreclosure.
What's most alarming is the decreasing rate of delinquencies that are ending up in foreclosure. Data by LPS (Lender Processing Services) suggest the average number of delinquent days for loans in foreclosure has risen from 249 to 406 from January 2008 to December 2009--a 63 percent increase. The fear is this "shadow inventory" is only going to lead to more inventory and home price problems in the future.
The HAMP program (Home Affordable Modification) is difficult to measure because there are still 1,164,507 cumulative trial-period plan offers extended to borrowers. Available data indicates about 112,000 modifications have turned permanent. While HAMP has helped to slow down the foreclosure crisis, currents efforts have been insufficient as the total number of struggling homeowners not on track for any foreclosure prevention assistance continues to grow. Only four out of ten seriously delinquent borrowers are involved in loss mitigation efforts.
Taken from Real Estate Insights
NANCY'S PERSPECTIVE...
Today I read a Real Estate Blog asking what the "magic number" seems to be for a homeowner when considering walking away. According to First American Core Logic that number is $70,000 negative equity or 25% when the homeowner default behavior changes.
In no way am I advocating a homeowner walking away from their financial responsibility. We had an experienced Loan Officer express her own feelings on the responsiblity she has taken on with her mortgage. She stated "I signed this contract, nobody forced me to, it was my decision and I understood the financial obligation I was taking on when I signed it."
This should be the attitude of every homeowner unless for one reason or another they have come in to a place of financial hardship that makes it impossible for them to maintain their mortgage. We are talking with many homeowners in this position, wanting to know what their options are.
May I give this small word of advise? Be informed, be pro-active, talk to your lender about a possible loan modification or reduced principal balance. If after taking these steps you are still coming up against a brick wall, THEN consider a Short Sale. Don't pretend like the problem is not there and hope it will go away, resulting in foreclosure.
There is a "point of no return" in the foreclosure process where it's too late to consider a Short Sale. Don't let your situation get to that point. Protect your credit and your ability to buy another home in the near future. A Short Sale will have a negative impact on your credit, but not as much as a foreclosure. Talk to a Real Estate Attorney or your CPA about the Tax ramifications of a Short Sale.
Effective April 5, 2010 the Treasury Department will be implementing the HAFA (Home Affordable Foreclosure Alternative) program to streamline the Short Sale Process. This program will be offered specifically to homeowners who have tried the Loan Modification Trial Period and were declined the modification.
We're here to help in any way we can. If you have questions about the Short Sale process attend our informational workshops the 3rd Saturday of each month at 410 Century Park Dr. Yuba City from 10:30-11:30 a.m. Call to reserve your space (530)701-3132 or email us at cookteamonline@att.net
The majority of "underwater" homeowners is largely concentrated in five states--namely Nevada, Arizona, Florida, Michigan and California. Among these five states the average negative equity share was 46 percent, compared to 13 percent for the remaining states.
The question increasingly being asked is what the likelihood is of homeowners underwater who are going to "leave the pool" or "strategically default". According to a study by Experian, more than a quarter of all existing defaults were found to be strategic and more than doubled from 2007-2008. The study also found that borrowers with higher credit scores were 50% more likely to strategically default than those with lower credit scores.
The most important variables in predicting strategic default are the moral and social considerations. There is some research that suggests that while borrowers with negative equity should be walking away in droves, most homeowners choose not to strategically default due to the desire to avoid the shame and guilt of foreclosure and exaggerated anxiety over the preceived consequences from foreclosure.
What's most alarming is the decreasing rate of delinquencies that are ending up in foreclosure. Data by LPS (Lender Processing Services) suggest the average number of delinquent days for loans in foreclosure has risen from 249 to 406 from January 2008 to December 2009--a 63 percent increase. The fear is this "shadow inventory" is only going to lead to more inventory and home price problems in the future.
The HAMP program (Home Affordable Modification) is difficult to measure because there are still 1,164,507 cumulative trial-period plan offers extended to borrowers. Available data indicates about 112,000 modifications have turned permanent. While HAMP has helped to slow down the foreclosure crisis, currents efforts have been insufficient as the total number of struggling homeowners not on track for any foreclosure prevention assistance continues to grow. Only four out of ten seriously delinquent borrowers are involved in loss mitigation efforts.
Taken from Real Estate Insights
NANCY'S PERSPECTIVE...
Today I read a Real Estate Blog asking what the "magic number" seems to be for a homeowner when considering walking away. According to First American Core Logic that number is $70,000 negative equity or 25% when the homeowner default behavior changes.
In no way am I advocating a homeowner walking away from their financial responsibility. We had an experienced Loan Officer express her own feelings on the responsiblity she has taken on with her mortgage. She stated "I signed this contract, nobody forced me to, it was my decision and I understood the financial obligation I was taking on when I signed it."
This should be the attitude of every homeowner unless for one reason or another they have come in to a place of financial hardship that makes it impossible for them to maintain their mortgage. We are talking with many homeowners in this position, wanting to know what their options are.
May I give this small word of advise? Be informed, be pro-active, talk to your lender about a possible loan modification or reduced principal balance. If after taking these steps you are still coming up against a brick wall, THEN consider a Short Sale. Don't pretend like the problem is not there and hope it will go away, resulting in foreclosure.
There is a "point of no return" in the foreclosure process where it's too late to consider a Short Sale. Don't let your situation get to that point. Protect your credit and your ability to buy another home in the near future. A Short Sale will have a negative impact on your credit, but not as much as a foreclosure. Talk to a Real Estate Attorney or your CPA about the Tax ramifications of a Short Sale.
Effective April 5, 2010 the Treasury Department will be implementing the HAFA (Home Affordable Foreclosure Alternative) program to streamline the Short Sale Process. This program will be offered specifically to homeowners who have tried the Loan Modification Trial Period and were declined the modification.
We're here to help in any way we can. If you have questions about the Short Sale process attend our informational workshops the 3rd Saturday of each month at 410 Century Park Dr. Yuba City from 10:30-11:30 a.m. Call to reserve your space (530)701-3132 or email us at cookteamonline@att.net
Tuesday, January 5, 2010
WHAT WILL 2010 BRING?
Real estate review and predictions: What follows a decade of boom and bust?
By Renae MerleWashington Post Staff Writer Saturday, January 2, 2010
The U.S. housing market has been in a slump for nearly four years. Home prices have fallen 30 percent since reaching their peak in 2006, leaving nearly a quarter of borrowers owing more than their homes are worth. Millions of homeowners have fallen into foreclosure.
So what will 2010 bring? Many economists expect to see a continuation of the tentative signs of healing found in the housing market in 2009.
Reduced prices, low interest rates and a tax credit for first-time home buyers helped boost the market in 2009. The pickup in sales translated into a stabilization of prices in some parts of the country. In Northern Virginia, for example, median home prices bounced more than 11 percent in November compared with a year earlier. That could continue in 2010 as long as the economic rebound persists, economists said. But risks remain, including an expected increase in mortgage rates later this year and rising unemployment. "The unemployment rate is a big concern that could slow the recovery process," said Lawrence Yun, chief economist for the National Association of Realtors.
Will home sales continue to rebound in 2010?
Economists largely agree that the rebound in home sales that began in 2009 will continue in the new year. The National Association of Realtors predicts that sales will rise 10 percent this year, after a 5 percent increase in 2009.
The rebound could be even stronger in the market for new homes. After reaching the lowest inventory levels since the 1970s, there are likely to be about 500,000 new homes sold in 2010, an increase of about 30 percent from last year, said Dave Crowe, chief economist for the National Association of Home Builders.
But that's still far from the 1 million new-home sales that occur in a normal year, Crowe said. "The rate will appear rather impressive due to the rather dismal levels we achieved in 2009," he said.
Nancy's perspective...
As we will more than likely see an increase of homes in default in 2010, we hope homeowners will educate themselves on what their options are; whether it be a loan modification through the HAMP program, or understanding the advantages of a short sale over a foreclosure. Allowing your home to go into foreclosure before considering the long term ramifications can be detrimental to a person's credit for 5-7 years. A Short Sale will only affect a person's credit for up to two years. Please feel free to go to our website at http://www.cookteamonline.com/ and take a look at the 'Short Sale Application' tab to see if you qualify for a short sale. We would be happy to talk to you about your options if you are struggling to make your housepayments.
2010 will be a challenging year for many of us. As we are challenged to make tough decisions it's important to put things into perspective and focus on what truly are the most important things in life... family, friends, health and a God who will never leave us as we are!
Happy 2010 to all!
By Renae MerleWashington Post Staff Writer Saturday, January 2, 2010
The U.S. housing market has been in a slump for nearly four years. Home prices have fallen 30 percent since reaching their peak in 2006, leaving nearly a quarter of borrowers owing more than their homes are worth. Millions of homeowners have fallen into foreclosure.
So what will 2010 bring? Many economists expect to see a continuation of the tentative signs of healing found in the housing market in 2009.
Reduced prices, low interest rates and a tax credit for first-time home buyers helped boost the market in 2009. The pickup in sales translated into a stabilization of prices in some parts of the country. In Northern Virginia, for example, median home prices bounced more than 11 percent in November compared with a year earlier. That could continue in 2010 as long as the economic rebound persists, economists said. But risks remain, including an expected increase in mortgage rates later this year and rising unemployment. "The unemployment rate is a big concern that could slow the recovery process," said Lawrence Yun, chief economist for the National Association of Realtors.
Will home sales continue to rebound in 2010?
Economists largely agree that the rebound in home sales that began in 2009 will continue in the new year. The National Association of Realtors predicts that sales will rise 10 percent this year, after a 5 percent increase in 2009.
The rebound could be even stronger in the market for new homes. After reaching the lowest inventory levels since the 1970s, there are likely to be about 500,000 new homes sold in 2010, an increase of about 30 percent from last year, said Dave Crowe, chief economist for the National Association of Home Builders.
But that's still far from the 1 million new-home sales that occur in a normal year, Crowe said. "The rate will appear rather impressive due to the rather dismal levels we achieved in 2009," he said.
Nancy's perspective...
As we will more than likely see an increase of homes in default in 2010, we hope homeowners will educate themselves on what their options are; whether it be a loan modification through the HAMP program, or understanding the advantages of a short sale over a foreclosure. Allowing your home to go into foreclosure before considering the long term ramifications can be detrimental to a person's credit for 5-7 years. A Short Sale will only affect a person's credit for up to two years. Please feel free to go to our website at http://www.cookteamonline.com/ and take a look at the 'Short Sale Application' tab to see if you qualify for a short sale. We would be happy to talk to you about your options if you are struggling to make your housepayments.
2010 will be a challenging year for many of us. As we are challenged to make tough decisions it's important to put things into perspective and focus on what truly are the most important things in life... family, friends, health and a God who will never leave us as we are!
Happy 2010 to all!
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