Why we love short sales blog

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Why we love short sales blog

Saturday, November 14

Why we love short sales

1. Short sales are part of the solution – not the problem – for homeowners seeking to sell an unaffordable home.

2. Short sales provide an alternative when bail-out plans and banks have failed.

3. Short sales remove REO, foreclosures and non-performing properties (assets) from bank books thereby allowing lenders to report a better position and begin lending again.

4. Short sales turn vacant homes into profitable properties; help retain property values and generate much needed tax receipts as well as local income into the community via broker commissions, sales receipts for repairs etc…

5. Short sales provide an alternative to keeping too much cash in stressed banks while still allowing investors to generate profitable investments.

About half of homeowners to have negative equity by 2011

Analysts at Deutsche Bank say that the number of homeowners whose home value is less than what they owe on mortgage loans will double to 48% by 2001; currently 26% of homeowners have negative home equity. “We project the next phase of the housing decline will have a far greater impact on prime borrowers,” said Karen Weaver and Ying Shen, analysts at Deutsche Bank. Among prime loans – which conform to underwriting and size guidelines of Fannie Mae and Freddie Mac – about 41% will be “underwater” by the first quarter of 2011 from 6% at the end of the first quarter of 2009.

As for prime Jumbo loans, about 26% will be underwater by 2011. “The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding,” said the Deutsche Bank analysts. Among subprime loans, 61% will be underwater by 2011. The drop in home prices is leading to negative home equity and incentivizing borrowers to walk away from their mortgage commitments. In regions such as Las Vegas and parts of Florida and California about 90% of homeowners are likely to see negative home equity by 2011. “For many, the home has morphed from piggy bank to albatross,” the analysts said.

Fannie Mae loses $15.2 billion, seeks $10.7 billion in assistance

Fannie Mae has posted a loss of $15.2 billion in the second quarter of 2009; the loss during the same period a year ago was $2.6 billion. Fannie Mae suffered credit losses to the tune of $18.8 billion, raising the level of delinquent loans to 4% of all loans outstanding. While external factors such as recession have hit the quality of loans, analysts say that Fannie Mae and Freddie Mac lowered their lending standards during the real estate boom and are paying the price as loans go bust. Given the size of loan assets, “it’s hard for their problems to be small,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics.

Fannie Mae has sought $10.7 billion from the government in aid. “We are dependent on the continued support of Treasury in order to continue operating our business,” Fannie Mae said in a filing with the Securities and Exchange Commission. The government which controls Fannie Mae and Freddie Mac has infused $85 billion into the 2 companies so far. The Obama administration is evaluating options – including transferring delinquent loans of Fannie Mae and Freddie Mac to another firm – for restructuring the 2 companies.

Unscrupulous mortgage servicers sued for inappropriate practices

An investigation by the Associated Press (AP) has found that mortgage servicers, who play a key role in the government’s loan modification program, are making money at the expense of troubled homeowners. According to the AP, at least 30 servicers have been sued for a variety of inappropriate practices – harassing borrowers, imposing illegal fees and charging for unnecessary insurance policies. The list of errant companies includes some of the biggest players in the servicing industry — Bank of America, Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. “The irony is, in essence, the government is paying servicers to do their job, which is to do loan modifications where appropriate,” said Kurt Eggert, a law professor at Chapman University. “And that’s not a part of their job they were ever especially good at.”

The government says it needs the servicers since they are the only link between borrowers and the investors who indirectly own their mortgages through securities. “Refusing to work with a bad player would deprive homeowners, who have mortgages with that servicer, from getting modifications,” said Treasury spokeswoman Jenni Engebretsen.

Provide a service, and make some Money

Mortgage Brokers can earn additional income from their canceled or denied files for lack of equity or bad credit if they know who to team with on investment short sales. Do not let those denied files fill up your back room with dust or don’t throw them into your shredder.

Real Estate Agents can earn DOUBLE their commission if they know how to work with an investor on short sales. What? – did your broker not inform you about the need to work with and learn from savvy investors who know how to put deals together that were never taught in the RE Principles class? NO? Hard to believe.

Insurance Agents: yes, you can earn referral fees from my business model if you have clients who are asking for help since they’ve canceled on their home and auto policy due to a pending foreclosure. They need help from an experienced agent and investor to get their home sold if they elect to do a short sale. You can tap into additional income from the hundreds of clients who will eventually cancel on their insurance policy. Supplement your declining income with referral income form short sales. What — nobody asked you? Shame on them!

Attorneys: I love working with attorneys. If you have clients that are denied a modification, need to sell, are in Bankruptcy, or in a Divorce, or dissolving a corporation and need to sell real estate assets in a declining market, then you can earn fee income from working with the homeowners ( I can share with you this specific business plan) and from referral fee income from when we buy and sell on a successful short sale transaction. Yes, I love working with attorneys since they don’t have the time to handle the sale of real estate for their clients but need to offer a viable alternative for their clients. You guys have lots of potential and understand the concept of providing “solutions” for clients.

Accountants / CPA’s are in the numbers. You have clients who are in dire need of help in getting them out of a negative equity market on a residential property and on a commercial property. You have their income figures, you understand the Tax implications and benefits of the IRS Form 982, and you know about IRS Publication 4681 and you can explain it to the property owner. You are an ideal point of contact for your clients and you can now offer them a solution to sell their home, work with an experienced investor, and create a fee income stream from the final transaction ( our referral fee). Selling real estate is not your business, but you can create an alliance with an investor who can provide a valuable solution for your clients. In fact, I probably need to speak to you about my clients since they need your tax advice. I also think I need to call your office.

Property Managers: if you have clients who own Residential Investment Property and need to get out of a pending foreclosure, or are stuck in a short sale with no buyers, or can’t get a modification due to investment status, then you can earn fee income from this business plan. You need to call me and get started on providing immediate solutions for your investment clients. They will love you for it!

Like I said, if you have the understanding then you can generate a solution for your client and make a big difference in their lives and make a good income ( steady income if you we work together) that will supplement what you do best in your profession. Contact me with any questions or any potential client in need of selling their property in a short sale:

Crystal Gomez, M.A

Trilogy Property Solutions

13636 Ventura Blvd Suite 324

Sherman Oaks CA 91423

818-571-4655 cell

888-571-7854 fax

www.go.managemyshortsale.com

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Website:	http://www.go.managemyshortsale.com
Phone:	818-571-4655
Fax:	888-571-7854

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Why we love short sales blog

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