The leading short sale and pre-foreclosure expert nation wide is Jeff Kaller. His students have really done well in our Michigan Market. If they do well in Michigan depress real estate market you know Jeff Kaller is doing a great job of teaching the short sale business. This is one of his articles for your reading. You can find great value from his workshops and his free reports and CD’s:
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Topic: State Foreclosures Only Produce More Questions
By: Jeff Kaller Republished by Ralph Mark Maupin
Nationally, much of the blame for the current housing downturn has been placed on easy access mortgages that targeted many consumers who are now unable to pay.
Although clearly the market is going down, the foreclosure issue is far more complicated to some. Industry insiders who make their living from mortgages say some statistics are multiply by a factor of 2 to the number of foreclosures recorded. A state level mortgage executive clams that federal government is “double dipping” the numbers by counting second mortgages, using an inconsistent sample population from year to year, and counting all the different phases of a foreclosure as new filings. He point is well taken, clearly complicating the issue.
However with more that 5 percent of American homeowners delinquent in their payments, a jump of three-quarters of a percentage point from last year, and the numbers are still staggering. But lately, several options have surfaced to aid the troubled homeowner. One choice of particular interest is the pre-foreclosure sale, it allows you to sell your home and pay off your mortgage before a foreclosure, thereby preventing damage to your credit rating.
Not your typical real estate investor, pre-foreclosure specialist Jeff Kaller, advises, “Home owners need to know what terms they have, pre-foreclosure investor want to assist in finding the best option for the plan…the majority of lenders don't want to foreclose.” This could be a clear indication for many homeowners facing a possible foreclosure to pull out their mortgage documents and double-check the terms.
Nationwide, foreclosures continue to be on a steady rise; 36 percent from July to August with an eight-month total of 244,000 foreclosed homes, an increase of 115 percent from last year. Currently, foreclosures are soaring in Maryland, and many of the loans that homeowners are defaulting on are interest-only loans where no principal is paid. For which the interest-only periods have recently ended. Many other borrowers took out adjustable-rate mortgages (ARMs) over the past two years, and now the low initial payment period of the ARMS has ended. In both cases, borrowers are finding themselves equally trapped with higher interest rates that translate into significantly increased monthly mortgage payments that could go even higher.
“Government officials are steadily trying to develop ways to assist strapped families, now that the housing boom the nation experienced over the past five years has declined,” said real estate investor and pre-foreclosure investor Jeff Kaller.
Showing posts with label jeff kaller. Show all posts
Showing posts with label jeff kaller. Show all posts
Tuesday, January 8, 2008
Record State Pre-foreclosures
The leading short sale and pre-foreclosure expert Nation wide is Jeff Kaller. His students have really done well in our Michigan Market. If they do well in Michigan depress real estate market you know Jeff Kaller is doing a great job of teaching the short sale business. This is one of his articles for your reading. You can find great value from his workshops and his free reports and CD’s:
http://www.ShortSaleBreakthrough.com Real Estate Discount Breakthrough - How Short Sales Can Make You Rich
http://www.FreeRealEstateMentoring.com What the Gurus Won't Tell You. Real Estate Investing - Free Report
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Record State Pre-foreclosures
By: Jeff Kaller Republished by Ralph Marcus Maupin (Mark)
“It's a difficult situation, many overextended homeowners not in default yet won't be able to refinance because of ever stringent credit requirements and will eventually lose their homes to foreclosure unless they are prepared with more options" stated Jeff Kaller Preforeclosure professional and investor.
Recognizing that preforeclosure filings indicate homeowners are in default on their mortgages and may include notice of default or notice of auction. National figures indicate that Florida recorded 111,236 year-to-date pre-foreclosures, second only to California's 132,101. Only Nevada had a higher rate of preforeclosures: 25.5 filings for every 1,000 households. Colorado, Illinois and New Jersey rounded out the top five states.
Preforeclosure filings do not necessarily result in homes being lost.
State Residence can make a difference
“With foreclosures spiking around the nation, homeowners should learn the foreclosure laws in their states, truly in this case what you don't know can actually harm you,” states Kaller, “In Alabama, late-paying homeowners can lose their properties to foreclosure in record time - as little as 30 days after a delinquency notice is published.” However, in the state of New York, the process can drag on for well more than a year.
States with long time frames include Florida at 180 days.
Kaller points out that labor force growth and business expansion should be weighed against the real estate market conditions.
Preforeclosures and Terms
One major point is whether the principle instrument securing the loan is a conventional mortgage or a "deed of trust." Kaller indicates that they are not the same even though everybody uses the term "mortgage" interchangeably. “Deeds of trust are the more common of the two, used in 34 states either mostly or exclusively,” says Kaller.
Mortgages involve two parties, borrowers and lenders, while deeds of trust have third parties, called trustees, who hold temporary title to the properties until borrowers pay off their loans.
That difference can be crucial when a borrower falls behind in payments. With deeds of trust, the trustees don't have to go to court to initiate a foreclosure; with a mortgage, the lender almost always does, which slows down the process.
In states where deeds of trust are an option, lenders almost always choose them over mortgages, because they are "non-judicial" - and quick.
According to Jeff Kaller, Mr. PreForeclosure, provides investors with step-by-step instruction needed to make a fortune in Pre-Foreclosures. He is a professional lecturer and author of "Preforeclosure and Short Sales" Home Study Course. Jeff holds several national conferences nation wide every year.
http://www.ShortSaleBreakthrough.com Real Estate Discount Breakthrough - How Short Sales Can Make You Rich
http://www.FreeRealEstateMentoring.com What the Gurus Won't Tell You. Real Estate Investing - Free Report
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Record State Pre-foreclosures
By: Jeff Kaller Republished by Ralph Marcus Maupin (Mark)
“It's a difficult situation, many overextended homeowners not in default yet won't be able to refinance because of ever stringent credit requirements and will eventually lose their homes to foreclosure unless they are prepared with more options" stated Jeff Kaller Preforeclosure professional and investor.
Recognizing that preforeclosure filings indicate homeowners are in default on their mortgages and may include notice of default or notice of auction. National figures indicate that Florida recorded 111,236 year-to-date pre-foreclosures, second only to California's 132,101. Only Nevada had a higher rate of preforeclosures: 25.5 filings for every 1,000 households. Colorado, Illinois and New Jersey rounded out the top five states.
Preforeclosure filings do not necessarily result in homes being lost.
State Residence can make a difference
“With foreclosures spiking around the nation, homeowners should learn the foreclosure laws in their states, truly in this case what you don't know can actually harm you,” states Kaller, “In Alabama, late-paying homeowners can lose their properties to foreclosure in record time - as little as 30 days after a delinquency notice is published.” However, in the state of New York, the process can drag on for well more than a year.
States with long time frames include Florida at 180 days.
Kaller points out that labor force growth and business expansion should be weighed against the real estate market conditions.
Preforeclosures and Terms
One major point is whether the principle instrument securing the loan is a conventional mortgage or a "deed of trust." Kaller indicates that they are not the same even though everybody uses the term "mortgage" interchangeably. “Deeds of trust are the more common of the two, used in 34 states either mostly or exclusively,” says Kaller.
Mortgages involve two parties, borrowers and lenders, while deeds of trust have third parties, called trustees, who hold temporary title to the properties until borrowers pay off their loans.
That difference can be crucial when a borrower falls behind in payments. With deeds of trust, the trustees don't have to go to court to initiate a foreclosure; with a mortgage, the lender almost always does, which slows down the process.
In states where deeds of trust are an option, lenders almost always choose them over mortgages, because they are "non-judicial" - and quick.
According to Jeff Kaller, Mr. PreForeclosure, provides investors with step-by-step instruction needed to make a fortune in Pre-Foreclosures. He is a professional lecturer and author of "Preforeclosure and Short Sales" Home Study Course. Jeff holds several national conferences nation wide every year.
Pre-foreclosures and Terms
The leading short sale and pre-foreclosure expert Nation wide is Jeff Kaller. His students have really done well in our Michigan Market. If they do well in Michigan depress real estate market you know Jeff Kaller is doing a great job of teaching the short sale business. This is one of his articles for your reading. You can find great value from his workshops and his free reports and CD’s:
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Preforeclosures and Terms
One major point is whether the principle instrument securing the loan is a conventional mortgage or a "deed of trust." Kaller indicates that they are not the same even though everybody uses the term "mortgage" interchangeably. “Deeds of trust are the more common of the two, used in 34 states either mostly or exclusively,” says Kaller.
Mortgages involve two parties, borrowers and lenders, while deeds of trust have third parties, called trustees, who hold temporary title to the properties until borrowers pay off their loans.
That difference can be crucial when a borrower falls behind in payments. With deeds of trust, the trustees don't have to go to court to initiate a foreclosure; with a mortgage, the lender almost always does, which slows down the process.
In states where deeds of trust are an option, lenders almost always choose them over mortgages, because they are "non-judicial" - and quick.
According to Jeff Kaller, Mr. PreForeclosure, provides investors with step-by-step instruction needed to make a fortune in Pre-Foreclosures. He is a professional lecturer and author of "Preforeclosure and Short Sales" Home Study Course. Jeff holds several national conferences nation wide every year.
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Preforeclosures and Terms
One major point is whether the principle instrument securing the loan is a conventional mortgage or a "deed of trust." Kaller indicates that they are not the same even though everybody uses the term "mortgage" interchangeably. “Deeds of trust are the more common of the two, used in 34 states either mostly or exclusively,” says Kaller.
Mortgages involve two parties, borrowers and lenders, while deeds of trust have third parties, called trustees, who hold temporary title to the properties until borrowers pay off their loans.
That difference can be crucial when a borrower falls behind in payments. With deeds of trust, the trustees don't have to go to court to initiate a foreclosure; with a mortgage, the lender almost always does, which slows down the process.
In states where deeds of trust are an option, lenders almost always choose them over mortgages, because they are "non-judicial" - and quick.
According to Jeff Kaller, Mr. PreForeclosure, provides investors with step-by-step instruction needed to make a fortune in Pre-Foreclosures. He is a professional lecturer and author of "Preforeclosure and Short Sales" Home Study Course. Jeff holds several national conferences nation wide every year.
Pre-foreclosure Training and Information Perspective
The leading short sale and pre-foreclosure expert Nation wide is Jeff Kaller. His students have really done well in our Michigan Market. If they do well in Michigan depress real estate market you know Jeff Kaller is doing a great job of teaching the short sale business. This is one of his articles for your reading. You can find great value from his workshops and his free reports and CD’s:
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Preforeclosure Training and Information Perspective
by: Jeff Kaller Republished by Ralph Mark Maupin
Trying to find a great deal in real estate, even if the market is attractive and competitive it only means bargains do exist. In comparison to most financial portfolios where there's simply too much risk, real estate is still the most attractive path.
Fundamentally the sure way to find a great real estate deal is to identify a motivated seller in the right market. No doubt a preforeclosure purchase can be a great way to save money on buying a home or investing in real estate.
There are numerous seminars and how-to books that promise to turn even the most raw naïve buyer into a high-powered real-estate investor through the magic of preforeclosed homes. The problem is that instant, no risk, no-strings attached wealth often turns out to be like most things that sound too good to be true…not true! If it were easy money, everyone would be getting rich off of preforeclosures.
Word to the wise, if you are not armed with the latest preforeclosure information and techniques, it is quite possible the investor will become overwhelmed and possibly drown in a sea of financial losses.
It’s important to understand that even in a distressed market like today, motivated sellers are aren’t going to magically appear and speak directly saying, “I need to sell my house to you and you only.”
With more than 1.2 million foreclosure, preforeclosure, bankruptcy, FSBO and tax lien listings, it’s important for training in the analysis and search of large and complex databases of foreclosed homes and investment property information. Being able to identify opportunities while researching top lending institutions and government agencies Real Estate Owned; Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, and other government agency and financial institution properties is essential.
A trained investor will know the plus and minuses of private deal "buying equity," i.e. investors pay the owner a fee and then take over the existing debt and the home. This protects the homeowner's credit report from the black mark of foreclosure.
As well knowing that buying equity this way is difficult in a seller's market because the owner could just as easily sell the home and usually pocket a greater amount in appreciation than an investor would be willing to pay.
Buying during the foreclosure period is one of the best ways for anyone to get involved in real estate investing. With a small investment and some specialized knowledge an investor can buy a house at a substantial discount and resell it retail gain up to 15% - 20% profit in the process.
Editorial by Mr. Jeff Kaller. Jeff is Mr. PreForeclosure, he provides investors with step-by-step instruction needed to make a fortune in Pre-Foreclosures.
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Preforeclosure Training and Information Perspective
by: Jeff Kaller Republished by Ralph Mark Maupin
Trying to find a great deal in real estate, even if the market is attractive and competitive it only means bargains do exist. In comparison to most financial portfolios where there's simply too much risk, real estate is still the most attractive path.
Fundamentally the sure way to find a great real estate deal is to identify a motivated seller in the right market. No doubt a preforeclosure purchase can be a great way to save money on buying a home or investing in real estate.
There are numerous seminars and how-to books that promise to turn even the most raw naïve buyer into a high-powered real-estate investor through the magic of preforeclosed homes. The problem is that instant, no risk, no-strings attached wealth often turns out to be like most things that sound too good to be true…not true! If it were easy money, everyone would be getting rich off of preforeclosures.
Word to the wise, if you are not armed with the latest preforeclosure information and techniques, it is quite possible the investor will become overwhelmed and possibly drown in a sea of financial losses.
It’s important to understand that even in a distressed market like today, motivated sellers are aren’t going to magically appear and speak directly saying, “I need to sell my house to you and you only.”
With more than 1.2 million foreclosure, preforeclosure, bankruptcy, FSBO and tax lien listings, it’s important for training in the analysis and search of large and complex databases of foreclosed homes and investment property information. Being able to identify opportunities while researching top lending institutions and government agencies Real Estate Owned; Department of Housing and Urban Development, Department of Veterans Affairs, Fannie Mae, and other government agency and financial institution properties is essential.
A trained investor will know the plus and minuses of private deal "buying equity," i.e. investors pay the owner a fee and then take over the existing debt and the home. This protects the homeowner's credit report from the black mark of foreclosure.
As well knowing that buying equity this way is difficult in a seller's market because the owner could just as easily sell the home and usually pocket a greater amount in appreciation than an investor would be willing to pay.
Buying during the foreclosure period is one of the best ways for anyone to get involved in real estate investing. With a small investment and some specialized knowledge an investor can buy a house at a substantial discount and resell it retail gain up to 15% - 20% profit in the process.
Editorial by Mr. Jeff Kaller. Jeff is Mr. PreForeclosure, he provides investors with step-by-step instruction needed to make a fortune in Pre-Foreclosures.
Pre-foreclosure One on One
The leading short sale and pre-foreclosure expert Nation wide is Jeff Kaller. His students have really done well in our Michigan Market. If they do well in Michigan depress real estate market you know Jeff Kaller is doing a great job of teaching the short sale business. This is one of his interviews for your reading. You can find great value from his workshops and his free reports and CD’s:
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Pre-foreclosure One on One
By: Jeff Kaller Republished by: Ralph Marcus Maupin, Jr.
Homeownership is becoming an ambivalent reality for more and more Americans across the nation. Over the past seven years, homeownership numbers reached almost seventy percent, even with critical mortgage issues looming, the increase reflects the highest rate ever. However there are remains many Americans don't realize that homeownership and investments are still within their grasp.
We sat down with preforeclosure expert and real estate entrepreneur Jeff Kaller to gain some insight into the preforeclosure market.
Reporter: How do you explain the current real estate market?
Kaller: As interest rates rise, more and more homeowners are falling into foreclosure situations. Clearly this reality prompts flood of bargain-hunting investors in every real estate market and courthouse auction across the country.
Reporter: Is there general advice as to what to invest in first?
Kaller: Professionals specialize in niches, such as low-income housing or condominiums. Less-seasoned investors should stick with single-family homes in lower-middle- to middle-class neighborhoods, where resale likely will be easier
Reporter: Can you give us a working definition of preforeclosure short sell procedure?
Kaller: Sure, its really very simple, a procedure in which the borrower is allowed to sell his or her property for an amount less than what is owed on it to avoid a foreclosure. This sale fully satisfies the borrower's debt.
Reporter: What is your advice to investors regarding timing?
Kaller: The great thing about this market is that investors can get in the game before or after auctions, too. It’s also possible to try to buy directly from homeowners beforehand or from lenders who is successful in the auction.
Reporter: As an investor, are there general legal issues that stand out?
Kaller: Here is an important pitfall: Some states give foreclosed homeowners time to reclaim their property by paying the auction price, often plus an additional percentage. For example in Colorado, homeowners have 75 days (though the state is set to eliminate that grace period). So you could spend tens of thousands of dollars remodeling a house, only to have the original owner grab back the newly improved home.
Reporter: It appears professional training is the key for a profitable investor venture. Can you give a few “no brainer” reasons for preforeclosure investing?
Kaller: Absolutely, for one, “Instant Equity,” many properties have equity available due to a purchase price below market value or ‘short sale’ on the part of the bank. Second, new construction is standard for many foreclosure properties due being one to two years old with builder warranties still in place. For investors, the property is ready to rent, such as preforeclosures; the sellers are often interested in renting the home as a tenant. This gives them time to repair credit and perhaps re-purchase the home in the future and if you are seeking the home for yourself, it’s ready to move in for owner occupied. The most important feature is you get more house for less money.
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
Pre-foreclosure One on One
By: Jeff Kaller Republished by: Ralph Marcus Maupin, Jr.
Homeownership is becoming an ambivalent reality for more and more Americans across the nation. Over the past seven years, homeownership numbers reached almost seventy percent, even with critical mortgage issues looming, the increase reflects the highest rate ever. However there are remains many Americans don't realize that homeownership and investments are still within their grasp.
We sat down with preforeclosure expert and real estate entrepreneur Jeff Kaller to gain some insight into the preforeclosure market.
Reporter: How do you explain the current real estate market?
Kaller: As interest rates rise, more and more homeowners are falling into foreclosure situations. Clearly this reality prompts flood of bargain-hunting investors in every real estate market and courthouse auction across the country.
Reporter: Is there general advice as to what to invest in first?
Kaller: Professionals specialize in niches, such as low-income housing or condominiums. Less-seasoned investors should stick with single-family homes in lower-middle- to middle-class neighborhoods, where resale likely will be easier
Reporter: Can you give us a working definition of preforeclosure short sell procedure?
Kaller: Sure, its really very simple, a procedure in which the borrower is allowed to sell his or her property for an amount less than what is owed on it to avoid a foreclosure. This sale fully satisfies the borrower's debt.
Reporter: What is your advice to investors regarding timing?
Kaller: The great thing about this market is that investors can get in the game before or after auctions, too. It’s also possible to try to buy directly from homeowners beforehand or from lenders who is successful in the auction.
Reporter: As an investor, are there general legal issues that stand out?
Kaller: Here is an important pitfall: Some states give foreclosed homeowners time to reclaim their property by paying the auction price, often plus an additional percentage. For example in Colorado, homeowners have 75 days (though the state is set to eliminate that grace period). So you could spend tens of thousands of dollars remodeling a house, only to have the original owner grab back the newly improved home.
Reporter: It appears professional training is the key for a profitable investor venture. Can you give a few “no brainer” reasons for preforeclosure investing?
Kaller: Absolutely, for one, “Instant Equity,” many properties have equity available due to a purchase price below market value or ‘short sale’ on the part of the bank. Second, new construction is standard for many foreclosure properties due being one to two years old with builder warranties still in place. For investors, the property is ready to rent, such as preforeclosures; the sellers are often interested in renting the home as a tenant. This gives them time to repair credit and perhaps re-purchase the home in the future and if you are seeking the home for yourself, it’s ready to move in for owner occupied. The most important feature is you get more house for less money.
Frequently Asked Questions on Short Sales and Pre-foreclosures
The leading short sale and pre-foreclosure expert Nation wide is Jeff Kaller. His students have really done well in our Michigan Market. If they do well in Michigan depress real estate market you know Jeff Kaller is doing a great job of teaching the short sale business. This is one of his articles for your reading. You can find great value from his workshops and his free reports and CD’s:
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
"Frequently Asked Questions"
By: Jeff Kaller Republished by: Ralph Marcus Maupin,
Here are 10 frequently asked short sale questions that are very helpful especially if you are just getting started or considering short sales as a means to acquiring pre-foreclosures.
1. What happens to the seller's credit rating when they allow an investor to short sell their property?The way it show on the credit report is that the loan is "paid" or “settled”; however there will be a notation that says "settled for less than originally owed" or something along these lines. Be careful how you state this. Each lender and reporting agency will say it a little different and the credit will still be affected even if a short sale is accepted, approved, and closed because of all the previous late payments. 2. Where do you find buyers for short sales?Depending on where you live, you may see investors who advertise with bandit signs or in your local newspaper. Call the investors directly and ask them if they are interested in purchasing a deal you have. Another good place is your local real estate investors club meeting (REIA). My favorite way to find buyers is using the MLS (multiples listing service). I like flat fee companies because it cuts down on commissions. 3. Define a short sale?A short sale is a workout plan that the banks have in place to help homeowners and themselves prevent foreclosures. When the mortgage company agrees to accept less than the loan amount to them to avoid foreclosure process. A negotiated short sale results in a discounted purchase price for the buyer/investor. The buyer would finance the acquisition much the same as in any other conventional acquisition or the investors can use some creative strategies.4. Can an owner profit from a short sale?The seller cannot profit (monetarily) from a pre-foreclosure short sale in most cases. FHA programs will give an incentive fee of $500-$1,000 to the mortgagor to participate in the pre-foreclosure sale program. The incentive fee can also be used to payoff a second mortgage.5. Can you do a short sale is the homeowner is in bankruptcy?Mortgage company’s will not approve a short sale if the homeowner is in bankruptcy...why? Because approving a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy. But you can still get the process started and be ready to work the short sale as soon as the house is released from bankruptcy. (Ask the bankruptcy trustee and the mortgage how to proceed in this situation) 6. What documents do I have need to include in the short sale package?Documents depend on the lender. Each lender has different requirements. It is typical to require authorization to release information, hardship letter, financial statement, purchase and sales contract, settlement statement (HUD 1), pay stubs, bank statements and tax returns. Additional documents are needed on FHA loans. Remember the banks may ask for more so be prepared.
7. Do mortgage companies always send someone out to do an appraisal / brokers price opinion on a possible short sale?All lenders require a BPO or full appraisal of the property before making their final decision to accept or reject the short sale offer. This is there only way of assessing the value of the property and making a good decision on the banks end.8. How late in the pre-foreclosure process can you start a short sale?Each state will be different. It is really up to the lender. Try to allow a window of at least 30 days for the mortgage company to approve the short sale offer.9. What is a Due on Sale clause?"Due on Sale" Clause (DOS) Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender's security instrument upon a sale of all or any part of the real property securing the loan without the lender's prior written consent. Contact your local real estate attorney for more details in your state. 10. Will banks allow a short sale when the owner has some equity?Yes and No. No, If a property has what the “lender would consider” a substantial amount of equity, chances are they would consider allowing the property to foreclose and then reselling it closer to the retail value. Yes, if you can affect the BPO/appraisal to come in lower than the market value. Your job will be to create the equity in the home by negotiating a successful short sale and affecting the banks value on the home.
Check out his workshops- Jeff is doing them all over the country http://www.JeffsWorkshop.com (LA in January)
"Frequently Asked Questions"
By: Jeff Kaller Republished by: Ralph Marcus Maupin,
Here are 10 frequently asked short sale questions that are very helpful especially if you are just getting started or considering short sales as a means to acquiring pre-foreclosures.
1. What happens to the seller's credit rating when they allow an investor to short sell their property?The way it show on the credit report is that the loan is "paid" or “settled”; however there will be a notation that says "settled for less than originally owed" or something along these lines. Be careful how you state this. Each lender and reporting agency will say it a little different and the credit will still be affected even if a short sale is accepted, approved, and closed because of all the previous late payments. 2. Where do you find buyers for short sales?Depending on where you live, you may see investors who advertise with bandit signs or in your local newspaper. Call the investors directly and ask them if they are interested in purchasing a deal you have. Another good place is your local real estate investors club meeting (REIA). My favorite way to find buyers is using the MLS (multiples listing service). I like flat fee companies because it cuts down on commissions. 3. Define a short sale?A short sale is a workout plan that the banks have in place to help homeowners and themselves prevent foreclosures. When the mortgage company agrees to accept less than the loan amount to them to avoid foreclosure process. A negotiated short sale results in a discounted purchase price for the buyer/investor. The buyer would finance the acquisition much the same as in any other conventional acquisition or the investors can use some creative strategies.4. Can an owner profit from a short sale?The seller cannot profit (monetarily) from a pre-foreclosure short sale in most cases. FHA programs will give an incentive fee of $500-$1,000 to the mortgagor to participate in the pre-foreclosure sale program. The incentive fee can also be used to payoff a second mortgage.5. Can you do a short sale is the homeowner is in bankruptcy?Mortgage company’s will not approve a short sale if the homeowner is in bankruptcy...why? Because approving a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy. But you can still get the process started and be ready to work the short sale as soon as the house is released from bankruptcy. (Ask the bankruptcy trustee and the mortgage how to proceed in this situation) 6. What documents do I have need to include in the short sale package?Documents depend on the lender. Each lender has different requirements. It is typical to require authorization to release information, hardship letter, financial statement, purchase and sales contract, settlement statement (HUD 1), pay stubs, bank statements and tax returns. Additional documents are needed on FHA loans. Remember the banks may ask for more so be prepared.
7. Do mortgage companies always send someone out to do an appraisal / brokers price opinion on a possible short sale?All lenders require a BPO or full appraisal of the property before making their final decision to accept or reject the short sale offer. This is there only way of assessing the value of the property and making a good decision on the banks end.8. How late in the pre-foreclosure process can you start a short sale?Each state will be different. It is really up to the lender. Try to allow a window of at least 30 days for the mortgage company to approve the short sale offer.9. What is a Due on Sale clause?"Due on Sale" Clause (DOS) Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender's security instrument upon a sale of all or any part of the real property securing the loan without the lender's prior written consent. Contact your local real estate attorney for more details in your state. 10. Will banks allow a short sale when the owner has some equity?Yes and No. No, If a property has what the “lender would consider” a substantial amount of equity, chances are they would consider allowing the property to foreclose and then reselling it closer to the retail value. Yes, if you can affect the BPO/appraisal to come in lower than the market value. Your job will be to create the equity in the home by negotiating a successful short sale and affecting the banks value on the home.
Subscribe to:
Posts (Atom)