BUYING A HOME AFTER SHORT SALE IN WILMINGTON NC

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As a Realtor who has been heavily involved closing WILMINGTON NC SHORT SALES over the last two years, one of the questions that I get asked quite often from home sellers is how long will it take before I will be able to buy a home again.

The answer to this question does not have any clear cut and dry answer. There are quite a few variables involved when trying to figure out when someone will be able to purchase a home after a foreclosure or short sale

Going through either a short sale or a foreclosure has the potential to seriously impact ones credit. Government entities Fannie Mae, Freddie Mac and FHA do not directly loan money to individuals but are the governing body that work with lenders to guarantee loans and free up money to provide mortgages.

Banks typically have the authority to lend to whoever they want but will generally follow the guidelines set forth by these entities. There are some lenders of course that will take greater risks with some borrowers than others.

Below are the general guidelines that FHA, Fannie Mae and Freddie Mac follow when considering a loan after a short sale or foreclosure:

Short sale with FHA Loan

  • Can purchase right away with no mortgage default
  • 3 year wait if in default at the closing
  • Reduced wait if the borrower has re-established good      credit and can show extenuating circumstances

Short Sale With Fannie Mae Loan

  • 2 year wait if the borrower puts 20 % down
  • 4 year wait if the borrower puts between 10% to 20% down
  • 7 year wait if the borrower puts less than 10% down
  • 2 year wait if the borrower can show extenuating      circumstances and puts more than 10% down

Short Sale with Freddie Mac Loan

  • 4 year wait before being able to get a loan
  • 2 year wait if the borrower can show extenuating      circumstances

Foreclosure with an FHA Loan

  • 3 year wait before being able to get a loan
  • Reduced wait if the borrower can show extenuating      circumstances and re-establishes good credit

Foreclosure with a Fannie Mae Loan

  • 7 year wait from the completed foreclosure sale date
  • 3 year wait if the borrower can show extenuating      circumstances. Additional underwriting requirements apply for 4 years      after a 3 year waiting period.
  • 7 year wait for a 2nd home, cash out re-financing, or      an investment property

Foreclosure with a Freddie Mac Loan

  • 5 year wait from the completed foreclosure sale date
  • 3 year wait if the borrower can show extenuating      circumstances

** As a side note a deed in lieu of foreclosure follows the same guidelines as FHA’s foreclosure policy, the same as Fannie Mae and Freddie Macs short sale policy.

When analyzing the difference between completing a short sale or going through a foreclosure in regards to purchasing another property in the future it boils down to the waiting time which is more favorable in a short sale.

*** The above information for waiting periods before buying a home after completing a short sale and foreclosure was sourced by the Fannie Mae and Freddie Mac selling guides along with the FHA handbook.

If you are need to short sale your home or condo in Wilmington, Hampstead, Leland, Rocky Point, Wrightsville Beach, or Carolina Beach get in touch! I would love to interview for the chance to represent your best interests.

I am successfully completing short sales throughout the Wilmington NC and Surronding areas. So far, knock on wood, I have a 98% success rate for short sale approval! Short sales are specialized transactions that are critical to have the right Realtor representing you. Do not make the mistake of picking an agent that does not understand how to get to the closing table on a short sale. www.shortsalewilmingtonnc.com

If you are outside the Wilmington NC  area and need to do a Short Sale please feel free to contact me and I would be happy to refer you to a Realtor in your location that handles short sales and knows what they are doing! I have referred short sales to other Realtors all around the country.

Nilesh Jethwa (CDPE)

910-622-0319

WILMINGTON NC SHORT SALE EXPERT

www.shortsalewilmingtonnc.com



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11 Things To Know About Buying A Short Sale Home In Wilmington, NC

11 Things To Know About Buying a Short Sale Home in Wilmington, NC

Now-a-days you can see that most of the listings are short sales. Those who are looking to buy, can get a good houses and sometimes below market price.

Here are 11 things about buying a short sale home in Wilmington NC, which might help you to buy short sale listings in this market:

1. Educate Yourself About Short Sale:

You need to know more about short sale and difference between short sale and other sales (regular sale & reo sale). Whether it’s the right buy for you or not. If you want to buy as soon as possible and cannot wait couple of months then short sale is not the right choice to write an offer. But if you can wait couple of month then look for short sale homes also in your search criteria and ask your agent to show short sale listings also.

2. Get Pre-Approval:

This is important whether you are writing offer to short sale or other type of listings. Pre-approval will make your offer stronger and gets higher priority than others who are submitting without pre-approval. So, make sure you are pre approved with a good lender before your home search.

3. Time Frame:

It takes time to know the final approval from the seller’s lender after you submit your offer, may be 1 month, 3 months or more. You need to have patience to wait that long for your dream home.

4. Offer Acceptance:

Even though, seller accepts your offer, doesn’t mean that your offer has accepted and you can move forward with that offer. Once you submit the offer, the seller’s agent forwards to the seller’s lender for final approval. The lender may accept it, reject or counter back to you with their price based on their own appraisal price.

5. Other Liens:

If other liens like HOA, tax liens and others where the seller owes to those lien holders , could also be a hindrance to the final approval of the sale. Most of the time, bank approves to pay all the liens but sometime they don’t, in that case either the seller or buyer or both needs to contribute to get that good deal.

6. Writing Offer:

Write a good offer based on the market value, don’t think that it’s a short sale, you can write a ridiculously low offer and bank will accept it. No, once you submit the offer, bank will also do their part by ordering appraisal to check the market value. They compare the appraisal value with your offer price. If you really like the house then write your best offer so that you can have higher chance of getting that house. Now, write only for those houses which you really like and not all short sale listings.

7. Check Listing Agent:

Check whether the agent representing the seller has experience in short sale or trained /certified agent in short sale, this shows that the agent can handle the short sale correctly from the beginning itself from submitting the package to getting approval from the lender. If the buyer side agent is also experienced is short sale then that would be a plus point to the buyer.

8. Follow up:

You need patience, once you submit your offer, don’t call your agent every other day for the status. The lender takes time depends on their work load to order appraisal or BPO (Broker Price Opinion) to determine the market value. This process itself sometime takes 30 days and another 30 or more days for final approval. But make sure, you ask your agent to follow up with the listing agent every other week or so for the latest update if any.

9. Backup Offers:

If you really like the house and somebody already wrote an offer, then ask your agent to submit a backup offer, if they are accepting the backup offers because sometimes the first buyer may walk away from the deal due to long waiting period or due to some other personal reasons.

10. Terms & Condition:

All the short sale listings are “As-is” sale, but that doesn’t mean you have to buy a house without any inspections. You have the right to do all the inspections but the seller will not fix anything if there’s any repair. It depends on you whether you are satisfied with the inspection reports and repairs(if any).

11. After Approval:

After getting the approval letter from the lender then work on to remove your contingencies(inspections, loan approval) and submit your initial deposit to the title within the specified time so that you can close the escrow on time and move to your home.

Buyers, you can get a deal with a short sale, but it comes at a price. If you have the time and the patience you could be rewarded handsomely.

Posted By Nilesh Jethwa CDPE Wilmington NC



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WILMINGTON NC HAFA SHORT SALES

The HAFA program is the government’s new short sale program. The government created the program in an effort to assist homeowners who can no longer afford their home and who want to avoid the damage a foreclosure does to a borrower’s credit. The following is my understanding of the program guidelines as presented in the MAKING AFFORDABLE Supplemental directive 09-09.The federal government has asked lenders to voluntarily implement a new program called Housing Affordable Foreclosure Alternative (HAFA.) The start date is April 1, 2010 although it is expected that some lenders will implement the program sooner and as I stated earlier, lender participation is voluntary. The guidelines further state that a lender who participated in the HAMP (Homeowner Affordable Modification Program) will be required to participate in HAFA. Loans in which Fannie or Freddie has an interest in do not qualify. They are working on their own short sale program. In order to qualify for HAFA, a homeowner must meet the basic eligibility requirements for HAMP. They are: • The property is the borrower’s primary residence. • The mortgage loan is the first lien originated before 01/01/09. • The mortgage is delinquent or default is reasonably foreseeable. • The current mortgage balance is $729,750.00 or less. • The borrower’s monthly mortgage payment exceeds 31% of the borrower’s gross income. • If the borrower has mortgage insurance, the insurer must waive any right to collection from theborrower. If a borrower meets the following criteria, the participating servicer must give the borrower the option to enter into the HAFA program: • The borrower did not qualify for the HAMP trial period. • The borrower did not successfully complete the HAMP trial period. • The borrower is delinquent on their HAMP modification. • The borrower requests a short sale or deed-in-lieu. The good news for sellers who participate in HAFA: • The lender is required to forgive any deficiency (no more waiting and wondering if they going pursue the deficiency.) • The sellers will get $1500.00 at close of escrow. • Servicers are expected to provide an approval letter 10 days from the date the offer is received (no more waiting for months with no guarantee that the short sale will be approved.) • The short sale will be pre-approved and the server will provide the listing agent with a pre-approved listing price. • The server will pay up to 3%, but no more than $3000.00, to junior lien holders. • If a borrower meets the HAMP qualification requirements listed above, they can participate in HAFA without going through the HAMP program first; as long as their servicer is participating in the program. However, if the borrower hasn’t gone through HAMP first, it will be very difficult for a servicer to get an approval letter to the borrower ten days from the offer submission date, and it will more than likely create delays. During the HAMP program process the borrower’s hardship is evaluated. The servicer becomes very familiar with the homeowner’s situation and all the obstacles that cause short sales to take forever are dealt with. Short sale pre-approval is pretty much determined through the HAMP process, so going through the HAMP program first will help the short sale to move quickly through HAFA. The good news for buyers: • The endless waiting for short sale approval will be eliminated. Short sale approval in 10 days or less. • Lenders must allow at least 45 days for close of escrow. This program will take all those frustrating unknowns out of the short sale process. The HAFA summary states that it is the borrower’s responsibility (with the assistance of their Realtor) to “deliver clear marketable title to the purchaser or investor.” It further says that the servicer can assist the borrower and the listing agent in the negotiations with lien holders, but they are not required to do so. An experienced Short sale agent knows how to negotiate with junior lien holders; however juniors could create problems based on HAFA guidelines. The program provides $3000.00 for junior lien holders. It also requires that junior lien give up the right to pursue any deficiency. If a junior wants more than $3000.00 and/or is not willing to forgive the deficiency, the borrower will not be able to obtain clear title as required. Multiple junior liens could create a problem. If there is more than 1 junior lien holder, $3000.00 may not be enough to satisfy them all. Another potential issue is that senior liens are not mentioned in the program guidelines. Property taxes are considered a senior lien and currently lenders will pay past due property taxes in order to attain clear title. Since the HAFA program stipulates that providing clear title is the borrower’s responsibility, one could assume that the borrower will have to pay any past due property taxes, before close of escrow, so clear title can be provided. definitely One other important requirement: • The transaction must be completely arms length. No one involved in the transaction can be related. This includes the Realtors, the buyers and the sellers. Currently in a short sale transaction the lender does not automatically give up the right to pursue. Large numbers of short sales fail because borrowers are concerned that the lender may pursue the deficiency. The fact that the HAFA program requires that the lender forgives any deficiency is a huge relief for borrowers struggling with their mortgage. Other than the problems that may arise with other lien holders, this program is a major step in the right direction for borrowers who are “under water.” It gives them a real chance at a fresh start. There are so many borrowers out there that are responsible people who find themselves in a night mare they never imagined, this program is an opportunity to move beyond the night mare and begin again. It is also a win for everyone who lives in the neighborhood of the borrower who participates in HAMP. Short sales generally do not bring down the value of the neighborhood as much as an REO does. Overall we see this as a positive solution for a homeowner in a very difficult situation. This is one of most important step in short sale, hire an experienced agent, if that agent is Certified and trained in short sale then that would be a plus. An experienced short sale agent knows how to negotiate with lender, how to prepare the short sale package and how to market your property to get buyer for your house. Before hiring, check that agent’s web presence, ask for reference and check whether they have successfully closed any short sale transactions. If you are in Wilmington , NC or near by area and need my service for short sale, don’t hesitate to contact me at 910-622-0319, your expert short sale agent in Wilmington area. www.shortsalewilmingtonnc.com.

Posted by Nilesh Jethwa



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Divorce Short Sales, Wilmington NC

Short Sale: Wilmington, NC I’m Getting Divorce and Cannot Afford to Pay the Mortgage

Nilesh Jethwa: Wilmington NC Short Sale Expert

Couple of days ago, I had received a called from a lady and mentioned that she is getting divorce and cannot afford to pay the mortgage alone on her house and also asked “Do I have any options to avoid foreclosure?

She bought the house together with her husband but now they are separating and her husband is moving out of the house and doesn’t want to pay the mortgage.  It was really sad to hear about her current situation and now she is confused what to do with the house.
 
She tried to refinance and loan modification but bank denied her loan modification due to her high debt to income ratio and couldn’t get refinanced because her house value has gone way down than the loan amount.  She thought foreclosure is the only option at this time.

I explained about short sale and its advantages and disadvantages over foreclosure.  She realized that there are options other than foreclosure and successful short sale will avoid foreclosure from her credit history.

The good news is that her husband is cooperating with the short sale and ready to sign the documents which are required for short sale.  I have sent all the required documents to her so that we can start working on short sale.  At least, after successful short sale, they can move forward on their life without worrying about their mortgage payment and foreclosure.

If you know anyone in the same situation in the Wilmington and Leland NC area, going through divorce, cannot afford the house payment and cannot qualify for loan modification then please refer them to me so that I can help them to sell their house and avoid foreclosure from their credit history.

Please feel free to check my other posts on my website www.shortsalewilmingtonnc.com for more information on short sale or contact me directly at 910-622-0319.

Short Sale Wilmington, NC Part 1

What makes a successful short sale? It’s simple, everybody has to believe that they are a winner.

  • · The seller needs to know that they’ve gotten out of a bad situation with less credit damage and a new start.
  • · The buyer wants to make a purchase of a property below the true market value, at least in the near future.
  • · The lender must believe that the short sale will net them more money than a foreclosure action.

If we’re the buyer, then our interests are best served by a purchase at the lowest possible price that will be approved by the lender. The seller gets no cash, so we are just showing them a way out of a foreclosure action.

Here’s what you’re looking for as the buyer in a short sale transaction:

  • · A homeowner upside-down in their loan. Their home is worth less than they owe on it in various mortgages.
  • · Clear title and no prohibitive liens or claims against the property.
  • · Enough time to complete the process before foreclosure action.
  • · A willing seller with a desire to help in order to avoid foreclosure.
  • · A current valuation that will allow you to buy the home at a bargain price, creating instant equity.
  • · True hardship on the part of the seller to convince the lender of the necessity of a short sale.
  • · If VA or FHA, the situation meets their criteria for short sale.

In short, you are looking for a homeowner owing more on their home than they can get in a sale, and a situation where the lender will approve a purchase price that meets your investment goals.