Short Sales Success - 2010 Short Sale Trends
If you are a Real Estate Professional, you are hurting yourself by not pursuing short sale opportunities
. If you had a previous client in trouble, would you be able to serve them? Would you just walk away and hope you find another client who isnt in trouble? If you are looking to stay in Real Estate, youd better take the time to know how to deal with homeowners in trouble or you will be throwing away good commission dollars and decreasing your customer base you worked so hard earning.
Many analysts have predicted that short sales will only last until 2011, but the fact is it will be much longer. With limited help provided by the government and the economy failing to create enough jobs, more and more people will lose their homes. Look at how long its taken to deal with sub-prime defaults, which started in 2005 and still count for a large part of todays foreclosure inventory in 2010.
Following are the short sale trends as of Dec 2009, heading into 2010, which will explain the challenges short sales in 2010:
Trend #1 Cant Pay Me Now, Then Pay Me Later..Lenders are scrutinizing reasons for hardships and predicting future financial status
In order to prevent short sale approvals for homeowners who may really not be in trouble, lenders have been scrutinizing the reasons provided in a short sale submission. If you broke your leg and you missed a few months of work that caused you to be behind, but your ability to continue earning income when you recover shows to the lender you really dont have a real enough hardship to approve a short sale.
Trend #2 Junior Lien holders get paid $3000 by the Senior Lien holder regardless of how much debt is owed
In most transactions when there are multiple lien holders and the first mortgage lender forecloses, Junior lien holders understand that they will receive nothing. Junior lien holders know this but also dont want to give up their hand that easily. Dont expect Junior lien holders to lay down so easily. In fact, short sale deals have died because the Junior lien holder wanted more than $3000, even when the first and second lenders where the same company!
Trend #3 Junior Lien holders gets borrowers to continue paying on payment plan
Junior lien holders are asking for a promissory note from the borrower if they want them to release the lien from their property and give up their rights to deficiency. The thought is that they will get $3000, and even if the borrower makes a few payments from the promissory note, it is still more money in their pocket. The payment plan is very reasonable with a long payment term with a very low rate.
Trend #4 Commission adjustments
The maximum lenders have been allowing on commissions is 3% for each agent involved. A full 6% commission is supposed to be allowed by FNMA backed loans but lenders may still scrutinize these commissions. In fact, the amount of commissions will most likely be affected if they are not able to recover enough money from a short sale offer. Be aware that if a deal has two separate agents from the same office, the commissions may be reduced.
Trend #5 Strict compliance of title companies for short sale transactions
Every short sale transaction will need title insurance and there has been concern from title companies that a lender will take back an approval if the title company is not able to comply with their closing practices. If any mistakes are made by the title company, they would be paying out money on any future claims.
Trend #6 Homeowners will continue to face foreclosure
This is an obvious trend, but the 24+ billion adjustable mortgages this year will add more inventory to the housing market. Values will continue to decline and lenders will be pressured to allow more short sale approvals to prevent additional inventory hitting the market and reducing the values of their REOs in the market.
Full Article Resourse: www.whbsolutions.com/blog/
by: Art Lee
The Power Of Unique Sales Stories Jewelry Sales - The Best Way to Invest $20,000 The 5 Secrets Of Motivating Your Sales Team Collecting Information Is Key To Increasing Sales Decrease Multitasking To Increase Sales Salesforce Product Schedules and Recurring Invoicing Used Atvs Have Set Huge Record In Sales In Last Two Years In Usa Personalised Number Plates - Dlva Registration, Private Registrations, Reseller Number Plates Why You Need to Adapt Your Sales and Selling to Fulfill Your International Shopper Expectations Coin Collectors Buy And Sell The Best Sales Stories For Getting Referrals Find The Best Ebay Wholesale Products To Sell For Big Money Ten Steps For Excelling In Sales