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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Wilmington NC Short Sales – Important Information Homeowners Should Acknowledge PART TWO

Wilmington NC Short Sales – Important Information Homeowners Should Acknowledge PART TWO

PLEASE CLICK HERE FOR PART ONE

Common Short Sales Process Used by Most Lenders 

Although the actual process that is commonly used in short sales may vary from one lending firm to the next, it is generally pretty much the same across the board. When most homeowners compare short sales vs. foreclosure it generally is agreed that short sales is the better option. The common short sales process is as follows:

1. The first step is to consult with the lending institution holding your mortgage so you can discuss the options available to you using short sales. This is when homeowners will gain short sale information from the lender in regards to the specific process they will need to follow to complete the sale of their property.

2. This step involves homeowners sending a letter to the escrow agency and the property buyer that will list their detailed short sale information and authorizing the release of this information.

3. The settlement statement holding the short sale information will be reviewed by the lender. The statement includes information on the short sale that includes the price the property will be sold, an itemized list of expenses involved, balances on loans that remain and any other fees that may be applied to the closing of the entire process of short sales.

4. Short selling a property requires that homeowners write a ‘letter of hardship’. This should include in-depth details in regards to financial difficulties the homeowner is facing. Other items the lender will also need to see to validate the necessity for short sales would include information of investment accounts, checking and savings accounts, pay stubs from the employer and any other financial records that would indicate validity for a short sale.

5. The overall condition the property is in, as well as the prices of homes of comparison that will determine a fair market value will be obtained by the lender through information the broker supplies.

6. All aspects of the short sales agreement will then be scrutinized by the mortgage lender. This is to determine that the amounts and conditions are reasonable and to ensure the commission on the real estate is acceptable.

NILESH JETHWA
WILMINGTON NC SHORT SALE EXPERT

http://www.shortsalewilmingtonnc.com/



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Wilmington NC HAFA Short Sale Specialist

The HAFA ( Housing Affordable Foreclosure Alternative) 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

Wilmington NC Short Sale, Foreclosure Option

The Most Important Thing in Short Sale Transaction

Posted by Nilesh Jethwa ( Wilmington NC Short Sale Specialist) 

As a Certified Short Sale Specialist in the Wilmington area, after handling several short sale transactions, I know there are lots of things which make the successful closing of a short sale listing.

As you all know that the successful closing of short sale needs an experienced short sale real estate agent who knows what all the steps to take in order to move the short sale process successfully towards closing.  One of the important things is to submit the short sale package correctly at the first time itself which will save at least 2-3 weeks of times but there’s one more things which makes the transaction to close successfully, just keep reading, you will know that shortly… 

Most of the agents know what all documents to submit to the bank for short sale approval but still you will see that many listings still on the market for more than 6-8 months or it expires from the market with no buyer and even if they get buyers, there’s no answer from the bank and the buyer doesn’t know why it takes longer time or any status on their offer. After reading the above lines, I’m sure you have figured out what is the most important thing in a short sale process – Yes! You guess it right, it is “Communication”! This is where most of the agent fails in short sale.

If there’s no proper communication then deals can fell apart even if you start everything perfectly in the beginning. This is one of the big problems in short sale process and especially after getting an offer from buyer. If the seller’s agent doesn’t communicate properly with buyer’s agent then buyer’s agent cannot explain to the buyer, what’s going on with their offer and if the buyer doesn’t know what’s going on after several weeks, they will lose interest and will look for some other houses. 

If there’s any lien like home owner association (HOA) then you need to communicate properly with them also to close the short sale successfully. Also at the same, you should communicate properly between the title officers and sellers lender (if more than one lender, then need communication with all the lenders).

Short sale is a complex sale, so it is really important that you work with an experienced agent in short sale to sell your house. As you figured out that in short selling your house, it is not just finding a buyer and negotiate with your bank, you need to communicate timely with all the parties involved like buyer, seller, agents, bank, escrow officer, home owner association(if any) and any other lien holders.

All the things are important in successful short sale process like proper documentation, marketing of the house and finding a buyer etc., but in my experience if there’s no communication between all these parties then you cannot close the short sale successfully. So, the most important thing in short sale transaction is “Communication”.

If you are in the Wilmington and Leland area and looking for an experienced short sale agent then call me at 910-622-0319, I would be more than happy to assist you in any way I can. www.shortsalewilmingtonnc.com.

 

 

Wilmington NC Short Sale Top 5 things to do before you Short Sale Your House

Top 5 things to do before you short sale your house in Wilmington NC

Short Sale in Wilmington NC is a long process and it takes times to complete the process and I know it is a difficult choice for you to sell your house which you bought with a good intension to live there or raise your family. But due to certain circumstances, now you cannot afford to keep the house and cannot qualify for loan modification or refinancing. At this point, one of the best options is to do short sale.

Before you decide on short sale, these are the 5 things you need to know which I think is important in your decision.

1. Educate Yourself with All Options

First thing, you have to do is check on internet and educate yourself about different options to avoid foreclosure as soon as you think you will be in trouble. I guess you are already doing that by reading my blog. You can also Google or search on Yahoo on loan modification, deed-in-lieu, bankruptcy, foreclosure, short sale and other available options to avoid foreclosure. Ask professionals (realtor, CPA, attorney) for various options who are familiar with options to avoid foreclosure. It’s better to be pro-active to solve any issues rather than waiting or ignore the problems.

2. Contact Your Lender or HUD Counselors

Once you know that it would be hard to keep paying the payment or when you missed your first payment, contact your lender directly for help in modifying your loan or refinance. Ask your lender what all documents needed for modification or refinance based on your qualified program. Submit all required documents and keep following up with the lender (I know, its time consuming but you are trying to save your house so, it’s ok for that hard work). You can also contact your local HUD counselors for help to negotiate with the lender so that you can keep your house. You don’t have to pay any fees, it’s a free service. Avoid all the scammers who ask for up-front fees or wants to sign your deed to them.

3. Consult Your CPA or Attorney

If your lender denied your loan modification or do not qualify for loan modification due to some reason and cannot afford to own your house, check with your CPA or tax attorney for any tax ramification or any other legal questiosn for doing short sale. The new Mortgage Forgiveness Relief Act 2007 allows you to relief from the tax if it’s your primary residence. Check your scenario with these professionals if you have to pay any taxes or not.

4. Documents required – if going forward for short sale

If you decide to go for short sale then you are required to present these documents to submit to the lender for short sale approval. It’s always to better to have these documents before you start the short sale process. These documents are as follows:
– Copy of your recent mortgage statements
– Last 2 years tax return
– Last 2 paystubs
– Last 2 months of bank statements
– Hardship letter which explains your hardship
– Financial statements which includes your incomes and expenses
– Any other documents to prove your hardship

5. Work with an experienced short sale agent

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 real estate agent in Wilmington area. www.shortsalewilmingtonnc.com.

posted by nilesh jethwa