Mother & Daughter Blog

Never miss a client inquiry again - The RealBird Message Archive has an RSS feed now - Productivity update #3

Fri, 20 Nov 2009 11:35:24 -0600

IF you are not already using RealBird to promote your business showing off your listings, you should be. Realbird.com check them out and check out the post below. They are good!

Rosemary Brooks

Patrick Williams & Associates

Via Real Bird (RealBird Inc.):

One of the issues we have been working on regarding RealBird's lead capturing functionality was making sure that prospective clients' inquiries actually reach you. Email inquiries and showing requests were sometimes lost in space. Either because of spam filter settings or simply because sometimes emails go unnoticed due to information overload.

In May, 2009 we introduced the Message Archive for RealBird members and started to store all of your prospects' and clients' inquires and even consumer-to-consumer forwards for the RealBird Listing Publisher and the RealBird Property Search services. However, that facility still required RealBird members to log in every now and then in order to see if there are new messages that need attention. While this feature was a big step, in practice, it was still not the perfect solution. One forgets to check the Message Archive or due to the log in requirements just delays it. And we all know that a week old lead is as almost as good as no lead at all.

We needed to do better than that. All the powerful features of RealBird is useless if the leads are missed or go cold for the reasons described above. With this new release, we believe we sold the problem. The RealBird Message Archive now has a handy RSS feed that you can subscribe to with your favorite feed reader. You can add it to your browser toolbar, to your iGoogle browser homepage, Google Reader and even access it from your mobile devices, you name it. Most phones - Blackberry, iPhone etc. - has some sort of RSS reader application so that you can be notified when a new inquiry is submitted through RealBird. There are even services that you can use to receive text messages when this RSS feed is updated.

You can get your own RSS feed in the RealBird Member area under the Message Archive section. See the screenshot below:

Previous "Productivity Update" posts are:

Quick sharing to Craigslist, Backpage and social media

Listing marketing checklist - let's go lot tech, shall we?

Enjoy !

-- Zoltan
RealBird.com

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Facebook your Listings (the right way)

Fri, 20 Nov 2009 10:39:35 -0600

Mike Mueller is one my favorite people at ActiveRain and now he is branching out and doing good things to help others promote their business. I love this idea and know that you will too. Thanks Mike

Rosemary Brooks

Patrick Williams & Associates

Via Mike Mueller (Tech and Social Media Consultant):

One of the first questions I get asked by an Agent who wants a Custom Facebook Business Page created is “Can you pull in my listings – here’s my IDX Feed”
The answer is No!
"Pretty Please?"
Still No.
Not because I don't want to. You see... Facebook does not like dynamic content in custom tabs and guess what your IDX feed is? Yup! “Dynamic”.

But wait there’s a workaround and a very pretty one at that. The folks over at RealBird have a slick application.
How slick? Check this out:

Play with it LIVE on Debbi Di Maggio, Piedmont Real Estate
If you have a Facebook Business Page and want something like this for yours – just contact me.

This post brought to you courtesy of Mike Mueller.
Feel free to ReBlog or ReTweet as you like as long as you credit the source (him).
Did you know? He's for hire! He builds Blogs, Graphic Images and Widgets and Facebook Pages and besides… He knows lots of really cool stuff.

Hire Mike (925) 456-4567

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

FHA Appraisal Expiration ........... Change

Fri, 20 Nov 2009 10:10:36 -0600

FHA is continually making changes. This change in the FHA appraisal expiration date can be good if the orginal appraisal was not a good one (under appraised) then its less days active in the FHA system. However, if it was a good appraisal then it will cost someone money to do another appraisal if the 120 days come prior to the next sale or refinance.

Rosemary Brooks

Patrick Williams & Associates

Via George Souto (McCue Mortgage) FHA, CHFA, VA Mortgages CT.:

The third and last change that we have been notified of this week is a change to FHA Appraisal Expiration. FHA Appraisals use to be good for six month, this was both good and bad. Good because if an appraisal was done on a property, and the deal fell apart, the appraisal would still be applicable for a six month period, and the new Buyers/Borrowers would continue to use the same appraisal, because it was attached to the FHA Case Number. Therefore, they were able to save money on an appraisal. The Bad part is that if the reason for the deal falling apart was because of appraisal issues, or the house under appraised, those issues would continue to be a problem for six months, and you could not get away from them by doing a new appraisal.

With this change FHA has reduced the appraisal expiration to 120 days for all existing and new construction properties effective with case numbers assigned on or after Jan 1, 2010. This change aligns FHA with current industry practices.

This again is both good and bad. Good because you are able to replace an appraisal that had issues or under appraised sooner. But likewise it is bad because an appraisal that did not have any issues will now be good for only 120 days in stead of the previous six month.

This concludes the changes that I have to report on for now, but keep in mind that these three changes that I have blogged about, are all Program Changes, there are other changes that have also been made that are Investor Changes. Investor Changes are an additional layer of qualifying requirements that are imposed on by Investor which are over and above those made by Fannie Mae, Freddie Mac, FHA, VA, and USDA. Those changes will differ from Lender to Lender depending on whom the Lender is selling their loans to. The best way to keep up with these changes is by having a good working relationship with a Loan Officer that will keep you up to date on them.

******************************************************************************************************************

Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

5 Tips on Choosing The Right Days to Market Your Real Estate Services Online

Thu, 19 Nov 2009 22:53:02 -0600

So there really is a right day for everything.... here are some tips on when is the right day to blog and promote your Real Estate Services. Great tips

Via Rebecca Levinson, Real Estate Marketing Consultant (Real Skillz-Clear Marketing for Your Real Estate Vision):

How to Choose the Right Days to Market your Real Estate Services Online

Effective real estate marketing online has a lot to do with timing. There has been a lot of research conducted, mainly for industries outside of real estate (i.e.retail, hospitality, automotive) on the best days and times to market services and products online. Implementing the right timing to deploy marketing campaigns into your online marketing strategy is an effective way to ramp up your results.

Here are 5 tips on choosing the right days to market your real estate services online

1. Tweet Midweek-

You can tweet everyday of the week but for maximum effect make sure to tweet on Wednesdays and Thursdays as they are the most active days of tweets and retweets as found by HubSpot's State of the Twittersphere June 2009.

State-of-the-Twittersphere -
State-of-the-Twittersphere -
State-of-the-Twittersphere -

2. Publish Your Most Important Blog Posts Midweek

Frequency of great original content is still important in building your readership and traffic to your blog. I recommend to my clients that they blog a minimum of 3-5 times per week to be considered as a true content provider in the eyes of their readers.

That being said when is the best time for a blogger to publish their meatiest, most important blog posts? Darren Rowse of Problogger addresses the timing factor in When to Publish Blog Posts-Timing Considerations,

"If I have a very important post that I want to get as much attention as possible I generally will publish it on a Tuesday or Wednesday morning (my time)."

Rowse's post also gives some advice as to publishing posts on weekends and holidays that is worth the read as well as the comments on the post (82 so far).

Roger Parker of blogforprofit.com recommends that if you were to only blog twice per week to publish those blog posts on Tuesdays and Thursdays.

Clearly publishing your most important blog posts midweek is a winning strategy.

3. The Weakest Link for Email Marketing is Saturday

You may have several email campaigns in your real estate marketing campaign: email flyers, email follow-up, email newsletters. Email marketing is a heavy hitter for real estate professionals but when is the most effective time for you to deliver your messages to your prospects and customers?

According to EMarketer.com the best days of the week to send email marketing are Mondays and Tuesdays and the least effective time by nearly 50% is Saturdays.

The best advice I found and agree with is to survey your email subscribers and ask them when they would like to receive emails from you.

We are approaching the holiday season so it is important to consider the times that people are online and actively shopping. Study these deployment times statistics provided on the emailstatcenter.com website before launching any niche holiday real estate marketing campaigns.

4. Engage your Fans on Facebook on Tuesdays

In findings from Virtue SRM (Social Relationship Manager) the best days to post on your Facebook Business Page is Tuesdays, followed closely Wednesdays with Mondays coming in #3.

**Allow me one deviation~ What I find more or equally fascinating is the 6.49% CLR (Click Thru Rate) of marketing campaigns such as polls and incentives that are run on Facebook business pages. Fans are clearly interacting with their friends on Facebook in a big way and their interactions are also being seen by their friends.**

5. LinkedIn Users Are Active In the Morning

According to a small study by SenderOK Statistics report which was based on a sample of 440 anonymous users the most activity on LinkedIn occurs in the morning.

"LinkedIn use is predominantly an 8AM-Noon activity with very, very little activity in the evening. Of particular interest is that LinkedIn users tend to arrive at work earlier than Facebook users do....Those serious early morning LinkedIn users will spend an average of 29 minutes reading real Email before they get around to checking your connection request which they could have read first if they wanted to."

While this is a small sampling of members on LinkedIn and their behavior I can attest that this mimics my LinkedIn use. The first online activity I do in the morning is to check my email(which of course includes my blog activity) and the first social network site I check is LinkedIn and this occurs normally between the hours of 7:30-8:30 a.m.

Take into consideration the times and days that people are online and engaging in these online activities when you create and implement your online real estate marketing strategy.

Once you taken action use an analytics tool to measure the effectiveness of your marketing campaigns. Tweak the times you deliver your marketing messages based on your analytics and direct feedback from your recipients.

Get your game on and use the 5 tips on choosing the right days to market your real estate services online.

** UPDATE FROM PUBCON VEGAS 2009-Post Your New Videos on YouTube on Thursdays and Fridays for the weekend traffic**

Subscribe to Blogging In the Rain, A Real Estate Marketing Blog

Join Me on Facebook. Tuesday I'll be posting a discussion about marketing to women.

***************************************************

Rebecca D. Levinson is a real estate marketing consultant with 17 years of experience serving real estate industry professionals.

If you need assistance with online marketing, offline marketing, social networking, or blogging contact Rebecca D. Levinson at #262-203-5231 or email rebecca@bloggingintherain.com.

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Nothing like a good "Quote of the Day" ... that is absolutely the truth!

Thu, 19 Nov 2009 22:48:44 -0600

Just a little something to make you THINK and smile...... and it has nothing at all to do with:

Foreclosures,
Short Sales,
REOs,
Bank Owned Properties,
Market Conditions,
Cash for Keys,
Evictions,
Trash outs
Lawn service
Code Enforcers
Tenants,
Rentals,
Listings,
Low ball offers,
Offers of any kind,
Bank Acceptances,
FHA,
203k Streamline Renovation Loans,
HomePath.com
Mortgage,
Loss Mitigation,
Real Estate
or does it?

....................................................................>>>

Quote of the day:

'Whatever you give a woman, she will make greater. If you give her sperm, she'll give you a baby. If you give her a house, she'll give you a home. If you give her groceries, she'll give you a meal... If you give her a smile, she'll give you her heart. She multiplies and enlarges what is given to her. So, if you give her any crap, be ready to receive a ton of __________!'

Call us at 866-543-0461

DRE License # 01336351 CHECK OUR WEBSITE: http://www.motheranddaughterrealtyteam.com EMAIL: info@motheranddaughterrealtyteam.net

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Buyers: At some point, you should be ready to accept an offer --right?!

Thu, 19 Nov 2009 21:11:29 -0600

Now that I am focusing on buyers more, I am finding out some interesting and yet confusing stuff about buyers out there.

When you first meet the buyer they tell you what they are looking for and they sound and seem to have a good idea and have it all listed out for you.

You put together a "information sheet" on your buyers and begin your search for the specs that they provided.
You set your MLS to send daily report of the new listings to your buyer and you get a copy too.

You work on that report on a daily basis to see what showed up on the report and how it can match what your buyer is looking for.

You have already covered your buyers on the differences between a REO and a short sale.
You have already covered the market condition with your buyers. ** may have to do this a few more times as you goout viewing house to house
You already know if they are going to occupy the property or if they are investors
You have either determined that your buyer is a good candidate for trying to get a short sale or that they should steer away from then and try for the REOs or traditional sales due to time restraints or they have already told you they don't have the patience for waiting on a short sale approval.

Once that second or third day comes around, your buyers are calling you to see when can they go out and see the properties that they have driven around the neighborhoods to find!! They may end up saying nothing about the available listings that was included in the report.

NO!... they want you to look up what they found - vacant homes through the neighborhood!
So you go on and look up the properties and give the buyer a full report on each. Then you get set to go out and view the available properties.

After going to three or four properties and realize that this is going to be much longer than you thought, you put on your smile and check your list to see what else might fit your buyers.... and this goes on for weeks.

Most of your buyers want to put offers in on almost every house they see... and with the market as it is these days -this is not necessarily a bad idea. You feel it is your obligation at this point to let the buyers know that usually the way it goes is you spend hours looking and putting offers and more .......you are almost ready to resolve that you are just not going to find a home that you can get the bank to accept your offer on... and then WHAM!

Then one day you finally get a call from the listing agent to say the seller is interested in your offer on a property. You literally jump for joy. Then you start you uphill climb all over again when you call your buyer and they just don't seem interested in that property at all. All you hear is disappointment, no concern or interest in the property after all! They actually turn down the seller's acceptance.

You scratch your head and get ready to start all over again. And you wonder how many times will it happen like this.

Yet you love being a Buyer's Agent..... you really do!

Call us at 866-543-0461

CHECK OUR WEBSITE: http://www.motheranddaughterrealtyteam.com EMAIL: info@motheranddaughterrealtyteam.net

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

FHA 203K Streamline Renovation/Purchase

Thu, 19 Nov 2009 19:59:11 -0600

Here is a good example of how the 203k Streamline renovation loan works. Thank you Ken for this example.

Rosemary Brooks

Patrick Williams & Associates

The Mother and Daughter Realty Team

866-543-0461

Via Ken Cook, FHA Home Loans 678-439-8683:

So you or your client have found a home in a great area in the client's price range. Only one problem: it's in bad shape. The HVAC system is 50 years old, the roof is 40 years old and the windows may as well not even be closed. Plus the kitchen has vinyl floors in 3 different patterns and the counters are all laminate with burns and holes and scars.

Not to fear! Meet the FHA 203K Streamlined renovation loan.

Eligible Improvements Virtually any kind of improvement is eligible provided it becomes a permanent part of the real property and adds value.

Additions to the structure

Kitchen or bath remodels

Finished basement or attic

Patios, decks or terraces

Roofing and landscaping

Safety, energy efficiency and electrical upgrades

Handicapped accessibility improvements

Luxuryitems are not eligible

Swimming pools, hot tubs, tennis courts, gazebos, barbecue pits, saunas or alterations to support commercial use

The maximum loan amount must be within the FHA loan amount maximum for the MSA where the home is located and must include the purchase price and the renovation amount. The maximum renovation amount is $35,000 and the minimum is $5,000. Under $5,000 we can do with an escrow of repair funds. A minimum of 10% contingency reserve is required and must also fit into the FHA loan maximums for the area where the property is located. (Any balance remaining on the contingency will be applied to the principal balance and may not be used for additional repairs.)

Yes, it takes a little longer to close an FHA203k Streamline loan than it does to close a standard FHA loan. If you are an agent and you are concerned about that extra couple of weeks just think of it this way: You may make a sale you would not have otherwise made. You may help a buyer get into a home in the area where they wanted to live instead of where they "had" to live. You can be a real hero for someone.

If you are in Georgia I can help you with the necessary paperwork and give you a short class in how to use the FHA 203K Streamline Rehab loan to purchase, sell or represent homes in today's economy. Never hesitate to call me at any time and I'll be happy to answer your questions.

Ken Cook - Georgia - FHA, USDA, VA and Conventional Home Loans (678) 439-8683

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Some Sacramento Short Sales are Improving But Aurora and CitiMortgage Take the Cake

Thu, 19 Nov 2009 12:07:14 -0600

This post makes me hungry for a slice of cake!!! And it is loaded with valuable information about short sales. Well worth sharing.... Short sales are here to stay for a while - take the time to get well informed. Start with this post by Elizabeth Weintraub - a great author.

Rosemary Brooks

Patrick Williams & Associates

The Mother & Daughter Realty Team

866-543-0461

Via Elizabeth Weintraub, Sacramento Short Sale Agent, 916.233.6759, Lyon RE (Lyon Real Estate):

Now that homebuyers no longer feel pressured to buy a home before the home buyer tax credit expires (because it was extended to April 30, 2010), it seems that the market is a teeny bit quieter in Sacramento. Usually Mondays are the worst day of the week, phone-wise. My cellphone tends to ring constantly on Mondays, generally because buyers are out over the weekend looking at homes. But yesterday, it was eerily silent.

In fact, I mentioned to my husband over lunch that my phone hadn't rung once. Was the market slowing down? He asked me if it was turned on. Duh. Of course, it's turned on because it asked to connect me to my Jawbone. It's illuminated. It's on. See? I showed him my phone. Oh. No bars. Somehow, and don't ask me how, I had managed to turn off my wireless connection. Holy crap. Four hours of phone messages.

I often get asked by media whether the short sale market in Sacramento is improving or getting worse; i.e., meaning is it taking longer to get short sale approval or are the banks and PSAs starting to get their acts together. It depends on which banks we're talking about. If it's a Wachovia short sale, the length of time to wait for short sale approval is still the same -- about a week.

If it's a Bank of America short sale or, worse, the loan originated at Countrywide, it's at least 90 days but it could be 6 to 9 months before approval. Aurora used to be better than it is now. Last spring approval came from Aurora within 6 weeks. I've got a handful of Aurora short sales now that are dragging. Last week, an Aurora negotiator told me that the 60-day approval we expected to receive next week is being pushed to 120 days out.

Lovely. Because CitiMortgage, which holds a second on this property, just issued short sale approval. It is set to expire in 2 weeks. On this particular short sale, Aurora holds the first. I emailed the negotiator to ask him why CitiMortgage would give us only a 2-week window on the approval letter when we don't have approval from the first lender, Aurora. Because this is an all-cash transaction, the buyer could perform, but we aren't going anywhere without Aurora's blessings.

His response? Because we should have had approval from Aurora by now. What was he smoking? His response inferred that we somehow dropped the ball, which is nuts. As a busy yet organized Sacramento short sale agent, I manage the short sale process like a gorilla.

I sense that CitiMortgage is now disguising its approval letters. I mean, the thing looks like an approval for a certain dollar amount, but CitiMortgage is really asking for more money. In this letter, CitiMortgage demanded a 2-week escrow but will agree to extend if it receives an 11% premium on the short-pay. It's not a large amount, about $5,000. So the true payoff is about $5,550. A $550 difference. Which the buyer shouldn't have to pay.

We quickly amended the HUD-1 to reflect the true demand from CitiMortgage and sent it off to Aurora. And this is how an escrow that was slated for approval next week will be pushed to January. But hey, at least my cellphone is working again.

---

Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout Sacramento. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. DRE License # 00697006.

The Short Sale Savior, by Elizabeth Weintraub, available through bookstores everywhere and at Amazon.com.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Inspire The Child

Thu, 19 Nov 2009 12:00:33 -0600

This is a wonderful story.. Inspire the Child. Children are a joy. I am raising my brother's granddaughter and there is no greater joy in my life. She brings a smile to my day --- everyday!

Great post to share! Thank you Mrs. Turner

Rosemary Brooks

Patrick Williams & Associates

866-543-0461

Via Racquel Turner (Mothers Fighting For Others):

Inspire The Child

Breaking The Cycle Of Poverty By Educating Young Kenyan Women

Inspiration is the spark that leads to change. Our dream is to create a home for orphaned girls filled with love that will give them a new family. Inspire The Child will also construct a new educational facility for K-8th grade girls. This facility will prepare the girls for a brighter future and support their re-introduction to society. The school will provide counseling and medical attention, and teach them the skills that will empower them to be a strong and independent new generation of Kenyan women.

Mothers Fighting For Others wants to build a home. We want to build a school. We want to build a small community for these girls to learn, to be loved, to believe and take pride in themselves, and to dream big. This is the just the beginning of the journey. I am so grateful to be going down this path. So, I'll be heading back to Kenya next month to scout out three parcels of land. We'll have a better idea of what our needs will be next month.

I am so excited to get started on this program. I hope you are too!!

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

What is Mortgage APR, Can You Explain It?

Thu, 19 Nov 2009 11:53:52 -0600

This is an excellent APR breakdown. Well worth reading and bookmarking for later reference.

Rosemary Brooks

Patrick Williams & Associates

866-543-0461

Via Bill Ladewig Your FHA Guru - FHA and VA Loans Since 1970:

WHAT IS MORTGAGE APR, Can You Explain It?

APR Demystified and APR Predators Exposed

First, lets demystify Annual Percentage Rate (APR).

Mortgage APR was designed to allow consumers to use one standardized number to compare each lender's rate for the same type of loan while rate shopping. It is supposed to represent the borrower's cost and it works like this.

If I lend you, $10,000 and, I charge a $500 Bump-ta-Bump Fee, you will actually receive $9,500, however you must still repay me $10,000. Mortgage APR is my real yield and your real cost on this loan.

We agreed that you will repay the loan at 8% interest on $10,000, HOWEVER you only received $9,500 therefore I will earn more than the 8.0% interest rate I charge on $10,000. In this case, my yield (APR) is 9.799% on the $9,500 you received.

APR is the lender's yield on dollars actually lent ($10,000 minus $500 = $9,500); in this case, the lender's yield (APR) on $9,500 is 9.799%   (APR is computed as if the above example is a 30 year loan)

The $9,500 also represents the Amount Financed in the Truth In Lending (TIL) disclosure.

For those of you who use spreadsheets the Rate Function will find APR. Use the Amount Financed for Loan Amount and use the monthly payment on the actual loan amount.

Fees that must be subtracted from a mortgage loan to properly calculate Amount Financed for APR

Origination and Discount Points

Processing and Lender Fees

Pre-Paid Interest (Use 15 days when closing date is unknown)

Monthly Mortgage Insurance must be added to the payment of all FHA loans and Conventional loans greater than 80% loan to value.

The inclusion of Mi or MIP accounts for the large spread between Rate and APR on loans with mortgage insurance.

NOTES: Fees Not used in APR calculation; third party fees such as appraisal and credit. APR can only be compared on loans of the same type and amortization period

How Do APR Predators Work?

Many sophisticated borrowers shop interest rates by searching for lowest APR which, if property stated, is a valid way to compare similar loans. Unfortunately, APR is not always stated properly.

How is advertised Mortgage APR is misstated?

Prepaid Interest is not included - most common deception and true on all online Rate sites   i.e.: Bankrate.com, Interest.com, Mortgage101.com, ShopRate.com, etc.

Prepaid Interest is understated - must be 15 days when closing date is unknown.

MI or MIP is not included in the APR on any online rate sites, Bankrate etc.

Some lenders do not include MI or MIP on their web sites such as Amerisave.com

Lender fees are either understated or not included in the APR calculation. This is a tricky one because No or Low Lender Fees does not necessarily indicate a predatory lender. Some lenders charge a higher rate and no points or fees for their so called "Zero Cost" loan. However, the "Zero Cost" rate will always be higher than a rate with points and/or fees.

Notes to the above:

there is no such thing as a Zero Cost loan and some states prohibit lenders from advertising Zero Cost Loans.

The spread between Rate and APR on loans greater than 90% LTV should be at least 0.700%. When it is not... you are being scammed

Rate - Points - Fees are all interdependent

The best way I can explain this is show various Rate - Point - Fee combinations where the lender is making the same gross profit on each combination.

In the examples below, we will use a $200,000 loan amount and Lender gross profit of $1,000, on a day when the Lender's cost for a 5.000% rate is par (0 point).

Best Rate: $1,000 Lender profit in various combinations of points and fees

Rate

Fees

Points

APR

Profit

5.000%

$1,000

     0

5.044%

$1,000

5.000%

$500

0.250

5.044%

$1,000

5.000%

$0

0.500

5.044%

$1,000

Lowest Fees:
You pay $0 points and fees and Lender's investor pays the lender $1,000 for the higher rate.

Rate

Fees

Points

APR

Profit

5.125%

$0

    0

5.125%

$1,000

The point here is that lenders design their loans to provide talking points for their sales staff (loan officers). They all require a certain profit margin and it is not important the way the loan is structured as long as the closed loan delivers their required profit margin.

This illustration also points out the value of correctly stated APR as a way of comparing mortgage loans. For the sake of these illustrations, prepaid interest was not used. If 15 days PP was calculated it would have increased each APR by 0.019%.

Bill Ladewig

800.664.7283 (SAVE)

Bill@YourFhaGuru.com

Website

Bill Ladewig is a Mortgage Broker Licensed by the California Department of Real Estate 00968137

San Diego FHA and VA Home Loans Escondido Mortgages Escondido Localism San Diego FHA and VA Home Loans San Diego Localism San Diego UFMIP Escondido Mortgages Escondido Localism San Diego Mortgage What is APR

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

What is a Short Sale? - FAQ's

Wed, 18 Nov 2009 20:37:31 -0600

Here are some good questions and answers about Short Sale and the process. All homeowners should read this.

Rosemary Brooks

Patrick Williams & Associates

Via Kenny Wagner (The Foreclosure Mitigation Company):

**This is part of a short sale packet that was given to me by my short sale trainers when I was getting trained on how to help others to successfully complete a short sale. I was told that I was free to use this to provide to my short sale clients**

What is a Short Sale?

WHAT IS A SHORT SALE? A “Short Sale” or “negotiated settlement” or “short pay” occurs when a Lender agrees to accept less than the amount owed to payoff a loan as an alternative to foreclosure. If the property is worth less than the amount owed on the loan, then even if the Lender forecloses and takes back the property, they know they are going to take a loss. We can often convince a Lender that they will “do better” if they take less than what is owed now rather than taking the property back by foreclosure and trying to sell it later.

HOW LONG WILL IT TAKE? The Short Sale negotiation process can be a lengthy one. It may take several weeks or sometimes several months to get an approval. Many Lenders have several layers of bureaucracy, insurers, and investors that we will have to maneuver through in order to get a Short Sale approved. So it is important to be patient during this long process.

BUT MY HOUSE IS GOING TO FORECLOSURE, WILL I HAVE ENOUGH TIME? Maybe, maybe not. Just starting a Short Sale will not automatically stop a foreclosure. However, many times we can convince a Lender to stop the foreclosure to let us attempt to negotiate the Short Sale. So, while there are no guarantees, it does not hurt to try.

CAN I STAY IN THE HOUSE? The key word in “Short Sale” is sale. The purpose of a Short Sale is to get the property sold. So you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It will be easier to sell the house if it is vacant, so you should make plans to move as soon as possible.

HOW DO I KNOW THIS WILL WORK? You don’t. We cannot, have not, and will not make any promises to you that this will work. Once you missed a payment, the Lender is in charge and can proceed to foreclosure if they want to. But we know they do not want to and we are very good at presenting alternatives to the Lender that they often want to accept rather than foreclose. We are very good at what we do, but NO PROMISES are being made as to whether or not the Lender will accept a Short Sale – they may or may not.

WILL I GET ANY MONEY FROM THE SALE? NO. A universal requirement of Lenders in granting a Short Sale is that the borrower will not get any proceeds from the sale of the property. The Lender is going to take a loss on your loan – they are not going let you get any money.

WHAT HAPPENS IF THIS DOESN’T WORK? Your house will likely go to foreclosure. A Short Sale is something we try after you have exhausted your other options.

WHAT IS A “RELEASE”? A Lender may offer to “release” its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off the obligations of the note. However, the note is not satisfied. Advantages: This successful Short Sale will allow the property to be sold and thus avoid a foreclosure.

Disadvantages: The remaining debt on the property (sometimes called a “deficiency”) still exists. You are still liable for the note – in other words – you still owe the money. Reality: It is not likely that the Lender will pursue the deficiency unless you have other significant assets, and if you don’t try a Short Sale and the property goes to foreclosure, you are going to have a deficiency anyway.

WHAT IS A “SATISFACTION”? A Lender may agree to accept less than it is owed as complete and total satisfaction of the note and release its lien against the property. Advantages: Your note and obligation to the Lender are satisfied for less than you owe. When the property is sold, the debt is paid off completely. Disadvantages: You may have some tax consequences that you should discuss with your tax advisor due to the fact that the Lender is making money you owe disappear. Sometimes our negotiations are successful in obtaining a satisfaction. Sometimes all we can get is a release.

WILL THERE BE TAX CONSEQUENCES? If we are successful in obtaining a full satisfaction, then there will be tax consequences just like winning the lottery, getting a raise, or finding a bag full of money. Essentially a satisfaction of a debt is like finding a bag full of money and you should consult with your tax advisor as to whether or not a successful Short Sale will result in taxes owed. However, we know of very few people who do not want to win the lottery because there may be tax consequences.

HOW CAN I HELP? The Lender will require a review of a financial package that usually includes: two months’ bank statements, two months’ pay stubs, two years’ IRS tax returns and other information. The leading cause of delay and even denial of our offer to the Lender is caused by the Seller failing to deliver these items in a timely manner. To help us succeed, please find as much of this information as you can right now and complete the a “Financial Worksheet” – this will help us work faster and increase our success.

Acknowledged this _______day of ___________, 20__.

SELLER(S):

Sign Name: ________________________________________

Sign Name: ________________________________________

BUYER(S):

Sign Name: ________________________________________

Sign Name: ________________________________________

Kenny Wagner

The Foreclosure Mitigation Company

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Homeowners: BEWARE! ...The bank wants to know what's in your wallet - and how they can get it from you!... be careful about signing deficiency notes!

Wed, 18 Nov 2009 13:18:43 -0600

Homeowners do you really want your bank account(s) frozen? Do you need another hardship after short sale? Or will you have to hide your money under your mattress to keep it warm?

This is what can happen after the short sale and after you have signed a deficiency note that the bank used forceful words to get you to sign it or else. Take a deep breathe and think before you sign this note. It stands to reason that if you are in hardship now, it could happen again!

So what make the banks ask you to sign a deficiency note? Some banks have no reason, it seems. While some homeowners signed a note on the property and one being a personal note (this is usually what they will attack). But asking for the homeowner to sign a deficiency does not have to be associated with a personal note, it can just be the bank trying to get the homeowner to pay something back to them for their “loss”.

Usually this occurs with the second lien because they end up getting very little from the Short Sale and will not approve unless they force the homeowner to sign a deficiency note, BUT it is not limited to the second lien, first will do it too.

Again, if you are already in a hardship and you have experienced it once don’t do anything to bring it on again. Banks can freeze your accounts (especially when it is the same bank that you did the short sale with), but it is not limited to just that bank the way these bank end up buying out other banks and deficiency notes.

This can impact can affect more than the homeowner --> if the bank account has others on the account (ie. Co-signer).

If your bank request that you sign a deficiency note, make sure you put in writing that you cannot afford to sign this type of note (if you are in hardship this would be more than the truth) and if you do not want to find yourself in another bad situation…. Think it out and put it in writing to that bank.

Be careful what you sign, get advice on it before you sign it. Go to a professional to get that advice.

Call us at 866-543-0461

CHECK OUR WEBSITE: http://www.motheranddaughterrealtyteam.com

EMAIL: info@motheranddaughterrealtyteam.net

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

REO Trans for Short Sales?

Tue, 17 Nov 2009 23:26:08 -0600

I am re-posting this because it is the up and coming new process. In order for the word to get out, the process, the rules and guidelines -- we must inform other agents, homeowners and buyers.

Well worth re-blog.

Need a short sale agent in the Central Valley: San Joaquin/Sacramento/Stanislaus/Merced/Alameda/Contra Costa Counties -- give us a call at 866-543-0461.

Rosemary Brooks

Patrick Williams & Associates

The Mother and Daughter Realty Team

www.motheranddaughterrealtyteam.com

Via Melissa Polce (Keller Williams):

Need direction...have a Bank of America Short Sale in process and they called me...Good Right? Well...they gave me the website REOTrans.com to sign in as an agent...all well and good but it does not link me with my current offer...mind you I am the listing agent on the Short Sale...it did however give me access and let me list it on the site, I have offers in on the property and want to get this baby off my books....anyone have any calls on BofA properties, specifically Short Sales?

Thanks-Melissa

www.TheShortSaleAgents.com

Melissa Polce, 704-450-4335 mjpolce@kw.com

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

The Media is Finally Talking About Short Sales!!

Tue, 17 Nov 2009 23:05:28 -0600

This is a real good short sale source. The media should focus on short sales to help get the banks to moving on approving them at a faster pace. Short sale deserve to get media attention at this point. This is a great post and well worth re-blog.

If you need a short sale specialist for the San Joaquin Central Valley (Sacramento to Merced) or the Alameda, Contra Costa Counties give us a call!

Rosemary Brooks

Patrick Williams & Associates

the Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

EMAIL: info@motheranddaughterrealtyteam.net

WEBSITE: www.motheranddaughterrealtyteam.com

Via Boca Raton Florida Homes for Sale David Serle (RE/MAX Services):

Everyone is talking about it.

Everyone knows someone who has done one.

Everyone has thought of doing one themselves

Everyone thinks they know everything about it.

So why are Short Sales not talked about in the media? I am not sure, but recently I found an article that many in the real estate industry have been jumping up and down about. Why does a short sale take so long?

Short Sales, why Sellers are Frustrated by them

Foreclosures, Foreclosures, Foreclosures. That is what the media talks about. Why? Foreclosures are usually not great deals, and have many repairs that may be required. Foreclosures are prevalent in the Boca Raton market, but Short Sales are probably 2 to 1. Many economists and so called experts have been saying in order for the real estate market to recover we must stop the amount of Foreclosures.

The governments answer is for the banks to modify there loans so there payment is more affordable. Doesn't that just prolong the inevitable for most? Why not figure out a way to shorten the process for short sales. If we streamline the process and make it more efficient, Guess what we will have:

stopped the amount of foreclosures.

Put prideful homeowners in the homes that will maintain their home.

Bring a boost to the real estate industry including more transaction sides and volume which will trickle down to everyone involved in the real estate from the painter to the general contractor.

Increase consumer confidence and increase consumer spending. Statistics show that when homeowners feel safe and well in their home they spend more on durable goods.

Just by streamlining the process of a Short Sale we have solved most of the domestic problems. Just as there is no logic when it comes to banks there is no logic when it comes to our government. Everything becomes a filibuster. Moving towards the future we have to become more proactive rather then reactive. When you are reactive history repeats its self.

David Serle

Vice President/Managing Broker

RE/MAX Services

561-912-3500 Office

561-912-3502 Direct

561-756-3104 Mobile

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

The trials of a short sale!

Tue, 17 Nov 2009 22:52:26 -0600

The woes of short sales... continues.

Via Joni McClintock, CRS (Sundance Realty):

I have recently been working with a client in a short sale for her home. She has not been behind in payments up to this point, but she has not been able to get any offers on her home at a price that would cover her debt. We listed it for 4 months at a price that was fairly reasonable, but as the market started to decline it was above the short sales and foreclosures we were competing against. We had the house staged by a kind realtor toward the end of that time frame and it was neat as a pin. No offers! So we relisted it and dropped the price to compete with the "market". This meant a short sale for my client. She was prepared to do this as she has had a hardship of caring for her elderly parents and shouldering much of their debt. She also lost her co financial supported with the house bills. After a short time we received an offer for the house. I submitted it to the bank and after quite a bit of confusion I heard back from them. By this time 2-3 weeks had past and the buyers was growing restless. The bank turned down the short sale request and said the only option for my client was a deed in lieu. Why was this I wonder? Is it because she is not behind in payments or was the hardship not good enough? I am not sure, but my client is now at a place that she cannot make the payments! She was only short a few thousand with her first and short completely with her second with the offer. They could have countered to cover the first, but they turned her down completely. We had hoped that the offer would cover the first and she would deal with the second. I wonder if it is because it is better for the bank to let a house go into foreclosure even though this is much worse for the seller. The bank stands to have more tax advantages I hear if the house is foreclosed on rather than a short sale. Even though there are lawyer fees and it is long a drawn out.

My client has opted to keep the house on the market and hope for an offer that covers her first completely and only shorts the second. She really doesn't want to deal with bankruptcy or foreclosure. Short sales are a lot of work for all involved, but I believe they are a good option for a seller in financial trouble. So we will persevere and try to get her house sold soon! If you would like to take a look at the house it is at 4594 Koln Lane, Salem, OR and listed for $159,900.

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Change is good!

Tue, 17 Nov 2009 22:46:21 -0600

Announcing a change... Change is good!

We are proud to announce that The Mother and Daughter Realty Team is now working under a new broker: Patrick Williams & Associates. Our service will continue and improve with our new move.

Patrick Williams & Associates is proud to announce its association with Rosemary Brooks & D'Adrea Davie - the Mother and Daughter Realty Team. An integral part of Patrick Williams & Associates' dedication to excellence is the collaboration of high caliber, capable professionals. Serving the real estate industry for 7 years, the Mother and Daughter Realty Team certainly fits that profile..

This Team brings a wealth of professional experience to their clients. The Mother and Daughter Team's trustworthiness, dependability and dedication to their clients are unparalleled. Their client needs are always put first. With their experience for over 7 years in the real estate industry and has successfully helped individuals and families just like you realize their real estate dreams.

When you work with the Mother and Daughter Realty Team you know your needs will be handled in the most professional manner. Their acute listening skills and attention to detail make Rosemary and D'Adrea a tremendous asset for any home seller or buyer. Rosemary & D'Adrea are always looking for the most cutting-edge technology to market their client's homes and looks for opportunities to continue their education and grow professionally. Being ahead of the curve is what both Rosemary and D'Adrea strive to accomplish.

When you work with this Team once, you'll want to call them again when your real estate needs change. They make a lasting impression on their clients.

Rosemary & D'Adrea clients describe them as very professional, diligent, straightforward and committed to their clients. They always put forth a tremendous effort and is very attentive. Both Rosemary & D'Adrea are forthright professionals with a heart of gold.

Then next time you're in the market to buy or sell a home be sure to call the Mother and Daughter Realty Team, you won't be disappointed.

Rosemary Brooks & D'Adrea Davie joins a group of distinguished real estate professionals who are all part of the most sophisticated and technologically advanced market firm, specializing in distinctive properties and estate. Patrick Williams & Associates is dedicated to excellence and our most recent association with Rosemary Brooks is a bright example.

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Buyers: Wondering just how many pre-approvals you will need before getting an offer accepted?

Tue, 17 Nov 2009 21:19:32 -0600

So how many pre-approvals does one buyer really need?

One of the frustrations that agents and buyers experience is that while searching listings, you run into properties that require that the buyer get an additional pre-approval from that seller's preferred lender.

Now this does not sound like a big deal if you only had to do that with one other lender, HOWEVER.... This is not the case! With the market condition (one of the highest hit foreclosurethe way it is - in the San Joaquin Central Valley and in the Alameda/Contra Costa counties of Northern California it is a lot of extra work, paperwork and time to get all of the pre-approvals before you can submit an offer on these bank owned properties.

Out of 10 new listings 5 had pre-approval requirements that included going to the seller's (Bank Owned Property's preferred lender for yet another pre-approval). So which banks are asking for this? Even if your buyer has a pre-approval from a direct lender - they still want this extra pre-approval! These banks I have found to be more demanding of this extra pre-approval:

Wells Fargo
Bank of America
Prime
Prospect Mortgage
OneWest Bank
IndyMac
Chase

**HomePath but they do not require - yet!

It does work out better when your buyer's lender is willing to submit and request these pre-approvals for the buyer. Now that is a good lender when they know that they can run the risk of loosing the buyer! Terrie Nevis from Platinum Mortgage is direct lender that will work with the buyer to help them get these extra pre-approvals and I would like to add that Terrie and his team over at Platinum make sure their pre-approvals are solid.

Call us at 866-543-0461

CHECK OUR WEBSITE: http://www.motheranddaughterrealtyteam.com EMAIL: info@motheranddaughterrealtyteam.net

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Know The Fannie Mae Deed For Lease Program Rules?

Mon, 16 Nov 2009 00:03:23 -0600

This program should help some of the homeowners - any help is better than nothing. Being able to stay in your home for a year or so can be very helpful.

Via Ilyce Glink (Think Glink Publishing):

Fannie Mae announced an innovative program to help keep families from falling into foreclosure. The program, called Deed For Lease (D4L) allows struggling homeowners who are unable to qualify for a loan modification to essentially hand their keys over to Fannie Mae, and then rent back their house at current market rental rates.

Here are the Fannie Mae Deed for Lease Program Rules:

1. The mortgage loan is a first lien mortgage loan secured by a one- to four-unit property. All property types are eligible. Second lien mortgage loans are not eligible.

2. The mortgage loan is not guaranteed or insured by a federal agency (FHA, HUD, VA, or Rural Development).

3. The borrower resides in the property as a primary residence or has leased the property to a tenant who uses the property as a primary residence. Second homes or vacation homes are not eligible.

4. At least three payments have been made since origination or since the last modification.

5. At the time of the referral to Fannie Mae for the D4L, the borrower is not 12 or more payments past due on the mortgage loan.

6. The borrower is not involved in an active bankruptcy proceeding and is not a party to litigation involving the subject property or the mortgage loan.

7. Marketable title is able to be conveyed (a title insurance policy is required).

8. If there are subordinate liens secured against the subject, lien releases can be obtained.

9. The occupant of the property (i.e., the borrower or the borrower’s tenant) has verifiable income. Occupants with no source of income are not eligible.

There is additional Eligibility Criteria to be Determined by Fannie Mae, which includes Deed for Lease Property Eligibility as well as Deed for Lease Occupant Eligibility. To read the additional criteria, logon to ThinkGlink.com.

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Changes to the FHA Short Sale Process

Sun, 15 Nov 2009 23:46:17 -0600

Warning: This is a long and wordy post but don't be fooled.... There is a really good information locked inside. I am re-posting it so that you can bookmark it and come back to get pointers and opinions as needed.

The Pre-Foreclosure Sale (PFS) option allows mortgagors in default (resulting from an adverse and unavoidable financial situation) to sell their home at FMV and use the sale proceeds to satisfy the mortgage debt even if the proceeds are less than the amount owed.

(FMV - Fair Market Value) and that is another subject that is twirling out of control.

Via Brad & Traci Brusenhan (Brusenhan & Associates Realty - Dallas, Texas):

Essentially, HUD (our federal government) has determined that their way of helping the homeowner is to dramatically reduce the opportunity for FHA borrowers to successfully complete a short sale. The 82% net to lender rule that has always been in place is out the window now. Is this what they are doing with our $750 billion dollars? There are several points to these new guidelines that should be thoroughly considered.

For one, I am not at all thrilled about the new “required” language which essentially nullifies our listing agreement. I believe this is something that the mortgage companies must have lobbied for. They have been fighting hard to talk homeowners into a Deed in Lieu of foreclosure. This gives them the power to do so. My experience has been that homeowners do not “get” the fact that it is not in their best interest unless it has been determined that there is absolutely no other way to avoid an all out foreclosure. Unfortunately, the deed in lieu takes time and cannot be processed at the last minute. We have saved a lot of homes at the last minute that would have been easy to give up on. That never would have happened if the homeowner began the deed in lieu process a few of weeks in advance of the auction. This is only one of many points that we should consider a new strategy to overcome and educate our clients about.

This new policy seems to be more evidence of my theory. I believe the only reason that congress is up in arms about the foreclosures is that the reduction of property value dramatically affects the property tax revenues that are collected by local municipalities. In my opinion, they are using the “poor duped homeowner” as a ploy to address their real concern.

Raising the threshold for FHA short sales is right in line with my thinking. I don’t mean to be a conspiracy theorist, but I just don’t have much reason to trust them. They stood in front of the media’s cameras and spoke so passionately when they promised complete transparency with our bail out money. Then they set it up in such a way that the banks who received the free cash from us have zero obligation to disclose anything. Their all a bunch of crooks. If I did that, I’d go to jail. The banks used the money to purchase other failing banks and fill holes in their books rather than helping their borrowers. Then to add insult to injury, they boldly refuse to even acknowledge if they received any money, much less what they did with it... Brad Brusenhan

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON, DC 20410-8000

ASSISTANT SECRETARY FOR HOUSING- FEDERAL HOUSING COMMISSIONER

December 24, 2008 MORTGAGEE LETTER 2008-43

TO: ALL HUD-APPROVED MORTGAGEES

ATTENTION: Single Family Servicing Managers

SUBJECT: Pre-Foreclosure Sale (PFS) Program - Utilizing the PFS Loss Mitigation Option to Assist Families Facing Foreclosure

High foreclosure rates continue to have devastating effects on families and neighborhoods. The Federal Housing Administration (FHA) remains committed to taking actions to help families avoid foreclosure. Since being introduced as a national program in 19941, the PFS Program has helped thousands of mortgagors in default to avoid foreclosure and transition to more affordable housing. The PFS Program can help many families who today are facing foreclosure. The PFS loss mitigation option allows a mortgagor in default to sell his or her home and use the sale proceeds in satisfaction of the mortgage debt when the proceeds are less than the amount owed.

This Mortgagee Letter (ML) serves to remind mortgagees of the relief that the PFS Program can bring to borrowers with FHA-insured mortgages. To facilitate greater use of this program, FHA has consolidated in this ML the requirements of the PFS Program that have been issued over the years, and has updated and clarified those requirements where needed, to better address the problems faced by mortgagors today and provide greater flexibility in considering a mortgagor’s candidacy for participation in this program.

Key Features of the PFS Program

Establishing Market Value –Mortgagees are reminded to ensure that properties in the PFS program are sold at or near fair market value as established by an independent appraisal, prepared by an appraiser on the FHA Appraisal Roster.

Minimum List Price Requirements – Properties offered for sale under the PFS program are to be listed for sale at no less than the “as-is” appraised value as determined by a current FHA appraisal, obtained and reviewed by the mortgagee.

Negative Equity – The ratio of 63% for the fair market value (FMV) to the outstanding mortgage balance (including unpaid principal and accrued interest) has been updated to address events in the current housing market, and replaced with tiered net sales proceeds.

Tiered Net Proceeds Requirement – This ML incorporates guidelines for varying minimum net sales proceeds based on the length of time a property has been competitively marketed for sale.

Marketing Documentation – Prior to accepting a discounted offer, evidence of competitive marketing from the selling broker is to be presented and mortgagees are to retain this documentation in the claim review file.

Non-owner Occupant Exceptions – Mortgagees are authorized to grant reasonable exceptions to non-occupant mortgagors when documentation indicates a property was not purchased as a rental or used as a rental for more than 18 months, immediately preceding the approval into the PFS program.

Removal of Repair Limitations –With prior approval from HUD, properties with surchargeable damage (i.e., damage caused by fire, flood, earthquake, hurricane, boiler explosion or mortgagee neglect) may be eligible for the PFS program if funds - sufficient to cover the government’s estimated repair costs - are applied to reduce the outstanding debt when a claim is filed.

Increase in Funds Available for Discharge of Subordinate Liens – In instances where a mortgagor has made an initial contribution/incentive of $750 or $1,000, the amount that can be used from sales proceeds for the discharge of liens or encumbrances (which represent an impediment to conveyance of marketable title) has been raised from $2,000 to $2,500.

Change in Allowable Closing Costs – Subject to the stated ratios, HUD allows up to 1% of the buyer’s mortgage amount for closing costs to be included in the “Seller’s Costs” on the HUD-1 for all transactions that involve a new FHA-insured mortgage.

1 The regulations for the PFS Program are codified in 24 CFR 203.370.

Superseded and Updated Mortgagee Letters and Forms

This ML supersedes in its entirety ML 1994-45, “HUD’s Nationwide Pre-Foreclosure Sale (PFS) Procedure”. It also supersedes the section (pages 29-35) of ML 2000-05, “Loss Mitigation Program-Comprehensive Clarification of Policy and Notice of Procedural Changes” that describes Pre-Foreclosure Sale requirements.

Additionally, this ML updates, consolidates and/or eliminates the following HUD forms:

Form HUD-90035 (Information Sheet) and Form HUD-90036 (Application to Participate) have been consolidated to reflect updates made to the program and to delete any reference to HUD’s former Assignment Program. The new Form HUD-90035 (Information/Disclosure) no longer requires the signature of the party providing homeownership counseling to the mortgagor. Form HUD-90036, Application to Participate is obsolete and no longer required.

Form HUD-90038 (Homeownership Counseling Certificate) is now obsolete. Form HUD90054 (Pre-Foreclosure Sale Data Reporting) and Form HUD-92068-F (Mortgage Assignment Program Request for Financials) were both previously declared obsolete.

Form HUD-90041 (Request for Variance) has been slightly modified to reflect the new minimum net sales proceeds of 84%.

Form HUD-90045 (Approval to Participate) has been modified to provide a signature block for the mortgagor’s signature(s) and new language describing HUD’s current PFS Program.

Monitoring of Appraisals

Mortgagees are reminded that HUD performs monitoring reviews of appraisals and holds mortgagees accountable for the quality of appraisals on properties securing FHA-insured mortgages. As such, HUD may request electronically-formatted appraisals to review and ensure their accuracy. Mortgagees who submit appraisals that do not meet HUD’s requirements are subject to the imposition of sanctions by the HUD Mortgagee Review Board in accordance with 24 CFR Part §

25.9 (ee) and Part § 203.5 (e)(3).

Information Collection Requirements

Paperwork reduction information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB Control Number 2502-0464. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB Control Number.

Mortgagees may direct questions or concerns regarding the Department’s PFS procedures to the Customer Call Center for HUD’s National Servicing Center (NSC). The toll free number is (888) 2.... Persons with hearing or speech impairments may reach this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-8...).

Sincerely,

__________________________________

Brian D. Montgomery

Assistant Secretary for Housing-

Federal Housing Commissioner Table of Contents Page Pre-foreclosure Sale Introduction

A. Loan Default 5

B. Mortgagor Qualifications 6

C. PFS Program Participation 6

D. Financial Analysis 7

E. Property Value 8

F. Property Condition 8

G. Condition of Title 9

H. Approval to Participate 10

I. Participation Requirements 10

J. Contract Approval 11

K. Duration of the Pre-Foreclosure Sale Period 13

L. Property Inspections 14

M. Early Termination 14

N. Failure to Complete a PFS 14

O. Mortgagee Incentive 14

P. Mortgagor Consideration 15

Q. Closing and Post Responsibilities 15

R. Claim Filing 16

S. Reporting Requirements 17

T. Erroneous Termination of Mortgage Insurance 17

Pre-Foreclosure Sale Introduction

The Pre-Foreclosure Sale (PFS) option allows mortgagors in default (resulting from an adverse and unavoidable financial situation) to sell their home at FMV and use the sale proceeds to satisfy the mortgage debt even if the proceeds are less than the amount owed. This option is appropriate for mortgagors whose financial situation requires that they sell their home, but they are unable to do so without FHA relief because the gross recovery on the sale of their property (i.e., sales price minus sales expenses) is less than the amount owed on the mortgage. HUD’s home retention alternatives such as Special Forbearance, Mortgage Modification, or Partial Claim must first be considered and determined unlikely to succeed due to the mortgagor’s financial situation. Mortgagees must maintain supporting documentation to demonstrate that a comprehensive review of the mortgagor’s financial records was completed, and that the mortgagor did not have sufficient income to sustain the mortgage. Under no circumstances shall the PFS option be made available to mortgagors who have abandoned their mortgage obligation despite their continued ability to pay.

To participate in the program, mortgagors must be willing to make a commitment to actively market their property for a period of 3 months, during which time the mortgagee delays foreclosure action. Mortgagors who successfully sell to a third party within the required time may receive a cash consideration of up to $1,000. Mortgagees also receive a $1,000 incentive for successfully avoiding the foreclosure and complying with all the requirements of this ML. If the property does not sell, mortgagors are encouraged to use the deed-in-lieu of foreclosure (DIL) option, providing the title on the property is marketable. By following procedures and time frames included in this ML, a mortgagee may submit a FHA insurance claim and be compensated for the difference between the sale proceeds and the amount owed on the mortgage (including accrued interest and reimbursable costs).

A PFS sale must be an outright sale of the property. If a foreclosure occurs after the mortgagor unsuccessfully participated in the PFS process in good faith, neither the mortgagee nor HUD will pursue the mortgagor for a deficiency judgment.

Home Equity Conversion Mortgages (HECM) are not eligible for the PFS Program. The Code of Federal Regulations (CFR) provides special provisions for HECM short sales. Mortgagees should refer to 24 CFR Part § 206.125 (c) or contact HUD’s NSC at the address below (Attention: HECM Housing Specialist) or email hecmhelp@hud.gov.

A. Loan Default

At the time the PFS closes, the loan must be in default (i.e., delinquent more than 30 days). Mortgagees may exercise their discretion to accept applications from mortgagors who are current but facing imminent default. However, by the date the PFS settlement occurs, the loan must be in default. Mortgagees should document this decision in the claim review file.

B. Mortgagor Qualifications

The PFS option may be extended to mortgagors who:

Are in default as a result of an adverse and unavoidable financial situation. Adverse and unavoidable financial situations may include but are not limited to loss of job or verifiable income reduction and extensive medical expenses;

Have negative equity as determined by an “as-is” FHA appraisal that indicates a property value less than 100% of the outstanding mortgage balance (including unpaid principal and accrued note rate interest) and any outstanding Partial Claim amounts, which are secured by a subordinate lien and/or a note. A PFS may be considered if the property’s “as-is” appraised FMV slightly exceeds the mortgage payoff figure, but gross sales proceeds fall short of the amount needed to discharge the mortgage by more than $1,000;

Are owner-occupants of a one-to-four unit single-family dwelling with a FHA-insured mortgage under Title II of the National Housing Act. Mortgagees are authorized to grant reasonable exceptions to non-occupant borrowers when it can be demonstrated that the need to vacate was related to the cause of default (e.g., job loss, transfer, divorce, death), and the subject property was not purchased as a rental or used as a rental for more than 18 months prior to the mortgagor’s acceptance into the PFS Program;

Have only one FHA-insured loan. Mortgagees are authorized to make reasonable exceptions for mortgagors who have acquired an FHA-insured property through inheritance or co-signed a FHA-insured loan to further enhance the credit of another mortgagor; or

Are not a corporation or partnership (i.e., unless a written request to utilize the PFS has been approved by HUD’s National Servicing Center (NSC)). Requests for such approvals should be submitted to:

U.S. Department of Housing and Urban Development National Servicing Center ATTENTION: Branch Chief 301 NW 6th Street, Suite 200 Oklahoma, OK 73102 Phone Number: (888) 297-8685 Fax Number: (405) 609-8405

C. PFS Program Participation

On the 32nd day but, no later than the 60th day of delinquency, the mortgagee shall send the delinquent borrower a pamphlet (HUD-PA-426, How to Avoid Foreclosure) about foreclosure avoidance. This pamphlet provides mortgagors with important information about loss mitigation alternatives, which include the pre-foreclosure sale option.

Mortgagees must inform mortgagors of the full spectrum of foreclosure-avoidance options prior to mortgagors’ participation in the PFS Program. The mortgagee shall also advise that default counseling is available and highly recommended, though not required.

A mortgagor who has expressed an interest in the PFS option or who has been identified by the mortgagee as a qualified candidate for the PFS Program must be mailed a copy of the revised Form HUD-90035 (Information/Disclosure). Prior to mailing Form HUD-90035, the mortgagee must add its toll-free or collect telephone number to the form. Form HUD-90035 provides the mortgagor with appropriate PFS disclosures, information on housing counseling, and information about tax consequences. This disclosure form, the aforementioned pamphlet, and other HUD forms can be found on HUDclips at: http://www.hudclips.org.

D. Financial Analysis

Prior to signing Form HUD-90045 (Approval to Participate), the mortgagee must request financial documentation to evaluate the mortgagor’s ability to support the mortgage debt. The PFS option may not be offered to mortgagors who have sufficient personal resources to pay off their mortgage commitment.

The mortgagee may prescribe the form that the mortgagor must use to submit its financial information. Mortgagors may provide financial information during a telephone interview, electronically, via the regular mail, or in person. Regardless of how the mortgagor’s financial information is obtained, the mortgagee must independently verify the financial information. Mortgagors with surplus income and/or other assets are required to re-pay the indebtedness through the use of a repayment plan.

The mortgagee must analyze the mortgagor’s ability to meet the monthly mortgage obligation by:

Estimating the borrower’s fixed monthly expenses (e.g., mortgage payment, food, utilities, car payment, outstanding obligations, etc.);

Estimating the borrower’s anticipated monthly net income (making necessary adjustments for income fluctuations); and

Subtracting expenses from income to determine the amount of surplus income available each month.

If the mortgagee’s evaluation indicates that the mortgagor is not eligible for a PFS or another loss mitigation option, the mortgagee must immediately advise the mortgagor of this decision in writing, explaining the reason for denial and giving the mortgagor at least seven calendar days to respond. In the servicing or claim review file, the mortgagee must maintain all evidence (i.e., supporting documentation, including all communication logs) of compliance with HUD’s Loss Mitigation Program requirements.

E. Property Value

Properties offered for sale through the PFS Program are to be listed at no less than the “As

Is” value as determined by an appraisal completed in accordance with the requirements of

HUD Handbook 4150.2 (Valuation Analysis for Single Family One-to Four-Unit

Dwellings). To this end, mortgagees must:

Obtain a standard electronically-formatted appraisal from an appraiser on FHA’s Appraiser Roster. The selected appraiser must not share any business interest with the mortgagor or the mortgagor’s agent. Appraisals obtained by the buyer, seller, real estate agent, or other interested parties may not be used to establish the FMV of the property for the PFS Program. It also important to note that:

The appraisal must contain an “as-is” FMV for the subject property;

The appraisal will be valid for six months; and

Distress sales may not be used by the appraiser to establish comparable values unless they represent the only comparables within reasonable proximity of the subject property.

Provide a copy of the appraisal to the homeowner, sales agent, or HUD, upon request.

Mortgagees are reminded that in accordance with HUD regulations at 24 CFR Part §

203.365 (c) they are responsible for the accuracy of all documentation used in the PFS decision, including accurate and complete appraisal information.

In an effort to ensure that the most current FMV is used for the PFS, a mortgagee may obtain a new FHA appraisal, even if the property was appraised by an FHA Roster Appraiser within the preceding 6 months.

To be reimbursed through HUD’s claim filing process, the cost of the appraisal must be reasonable and customary for the market area where the appraisal is performed. The appraisal must be retained in the claim/servicing file, even if the PFS is not approved or completed.

F. Property Condition

Properties that have sustained damage may be eligible for the PFS option. If the cause of the damage is fire, flood, earthquake, tornado, boiler explosion (for condominium’s only) or mortgagee neglect (i.e., surchargeable damages as defined in 24 CFR Part § 203.378) mortgagees must obtain prior approval from the NSC at the address above. Prior to seeking this approval, the mortgagee must obtain the government’s estimate of the cost to repair the surchargeable damage by contacting the HUD Management and Marketing (M&M) Contractor with jurisdiction for the geographic area where the property is located. A list of M&M Contractors can be found on the Internet at: http://www.hud.gov/offices/hsg/sfh/reo/mm/mmingo.cfm.

Upon receipt of the government’s repair estimate, the mortgagee must submit a Form HUD-90041 (Request for Variance) to the NSC to obtain the approval needed to enter into a PFS Agreement with the mortgagor.

In accordance with 24 CFR Part § 203.379 mortgagees are responsible for the cost of surchargeable property damage. If the property is being sold “As Is” subject to the damage, the mortgagee will be required to deduct the government’s estimate of the cost of the damage from its PFS claim (See Appendix A - Claim Filing Instructions for Item 109).

If the property is being sold “As Repaired” and funds for surchargeable repairs will be escrowed or provided as a credit to the borrower at closing, the amount of the repair escrow or repair credit is not an allowable settlement cost as defined in Section J of this ML and may not be included in the net sales proceeds calculation.

If the damage is not surchargeable it is not necessary to obtain approval from NSC prior to approving the PFS Agreement. Regardless of the cause of the damage, the mortgagee must work with the mortgagor to file a hazard insurance claim and either use the proceeds to repair the property or adjust the claim by the amount of the insurance settlement (non-surchargeable damage) or the government’s repair cost estimate.

Mortgagors are required to disclose any property damage to the mortgagee during the application or after the PFS approval. In the event a property sustains significant damage after a mortgagor has received approval to participate in the PFS program, the mortgagee must re-evaluate the property to determine if it continues to qualify for the PFS Program and terminate participation if the extent of the damage changes the property’s FMV. .

G. Condition of Title

All properties sold under the PFS Program must have marketable title. Prior to execution of Form HUD-90045 ( Approval to Participate) the mortgagee must obtain a title search or preliminary report verifying that the title is not impaired with un-resolvable title problems or with junior liens that cannot be discharged as permitted by HUD. If the mortgagee determines that these issues can be resolved, the mortgagor may be accepted into the PFS Program and resolution of said issues may be pursued while the property is being marketed.

Frequently, it is in the interest of all parties to facilitate the discharge of secondary liens in order to clear title. In some cases, junior lien holders will release a lien for a partial cash payment or a promissory note from the mortgagor. Mortgagors who have the financial ability to do so must be required to satisfy or obtain release of liens. Additionally, any incentive consideration payable to the mortgagor ($750 to $1,000) may be applied toward discharging liens.

If no other source of funds is available after applying the mortgagor’s incentive amount, the mortgagee may obligate up to an additional $1,500 - for a total of $2,500 - from sale proceeds towards discharging liens or encumbrances to meet all required ratios.

• Title I Liens – If the first mortgagee discovers that a mortgagor has a HUD Title I (property improvement) loan secured by the property, the first mortgage holder must contact the Title I subordinate lien holder to advise of the mortgagor’s participation in a PFS. The first mortgagee may be required to negotiate the release of the lien in order to proceed with a PFS.

If the Title I loan has been assigned to HUD, the first mortgagee should contact HUD’s Financial Operations Center for guidance. The Center’s contact information is as follows:

U.S. Department of Housing and Urban Development Financial Operations Center 52 Corporate Circle Albany, New York 12203. 1-800-669-5152/ fax (518) 862-2806

Section 235 Recapture -Mortgagors with Section 235 mortgages may be eligible to participate in the PFS Program. However, the mortgagee must first determine if the loan is subject to recapture as referenced in Chapter 11 of HUD Handbook 4330.1, Rev. 4 (Administration of Insured Home Mortgages). Generally, if the mortgagor has no equity in the property, there will be no recapture amount owed to HUD under the subsidy provisions of the 235 mortgage. If a recapture amount is owed to HUD after completing the calculation, the mortgagee should contact HUD’s NSC prior to approving the PFS.

Partial Claim – The partial claim (unpaid subordinate mortgage) amount must be included in the total delinquency when calculations are made. Any outstanding balance on a partial claim note must be deducted from the net sale proceeds based on the tiered structure of 88%, 86% or the minimum of 84% of “as-is” appraised FMV.

H. Approval to Participate

After determining that a mortgagor and property meet the participation requirements herein, the mortgagee must notify the mortgagor using Form HUD-90045 (Approval to Participate). The form shall include the date by which the mortgagor’s sales contract must be executed.

I. Participation Requirements

A mortgagor must acknowledge their decision to participate in the PFS program by signing and returning Form HUD-90045 (Approval to Participate) to the mortgagee within 7 days of receiving the form. The mortgagor’s signature on Form HUD-90045 confirms their agreement to comply with the PFS Program requirements listed below. Mortgagees must monitor the PFS transaction in its entirety to ensure the mortgagors’ compliance with these requirements and, should terminate a mortgagor’s participation in the PFS Program in the event of noncompliance.

Use of Real Estate Broker – The services of a real estate broker/agent must be retained to market a property within 7 days of the date the approval to participate is granted. The broker/agent must market the property within the pre-established time frame and list the property for the established sales price. The broker/agent selected should have no conflict of interest with the mortgagor, the mortgagee, the appraiser or the purchaser associated with the PFS transaction. Any conflict of interest, appearance of a conflict, or self-dealing by any of the parties to the transaction is strictly prohibited. A broker/agent shall never be permitted to claim a sales commission on a PFS of his or her own property or that of an immediate family member (e.g., spouse, sibling, parent, or child).

Pre-Existing Purchasers – The requirement to engage a real estate professional does not apply if a mortgagor located a buyer for the property prior to being approved to participate in the PFS Program, providing all PFS requirements are met concerning appraisal requirements and minimum ratios for net sales proceeds.

Required Listing Disclosure – The Listing Agreement must include the cancellation clause which reads as follows: "Seller may cancel this Agreement prior to the ending date of the listing period without advance notice to the Broker, and without payment of a commission or any other consideration if the property is conveyed to the mortgage insurer or the mortgage holder. The sale completion is subject to approval by the mortgagee.”

Property Maintenance – Until the PFS transaction has closed, the mortgagor must maintain the property in “ready to show” condition, make basic property repairs, and perform all normal property maintenance activities (e.g., interior cleaning, lawn maintenance, etc.).

Arms-Length Transaction – Mortgagors and mortgagees must adhere to ethical standards of conduct in their dealings with all parties involved in a PFS transaction. The PFS must be between two unrelated parties and be characterized by a selling price and other conditions that would prevail in a typical real estate sales transaction.

Relocation Services – A relocation service affiliated with the mortgagor's employer may contribute a fixed sum towards the proceeds of the PFS, without altering the arms- length nature of the sale. This contribution simply reduces the shortfall between the proceeds and the amount owed on the mortgage note. As with any other PFS, such a transaction must result in the outright sale of the property and cancellation of the FHA mortgage insurance.

J. Contract Approval

The mortgagee will have 5 working days from receipt of an executed Contract for Sale to respond back to the mortgagor using the Form HUD-90051 (Sales Contract Review). The PFS transaction must be an outright sale of the premises.

No sale by assumption, regardless of provisions for release of liability, may be considered. The contract must not include contingencies that might delay or jeopardize a timely settlement.

Before approving any sales contract, the mortgagee must review the sales documentation to determine that there are no hidden terms or special agreements existing between any of the parties involved in the transaction. Additionally, the mortgagee must determine if the property was marketed at the gross offering price (close to FMV) and the minimum net sales proceeds’ requirements (described herein) have been met. The mortgagee will be liable for any insurance claim overpayment on a PFS transaction that closes with net sales proceeds less than the percentages indicated below.

Net Sale Proceeds – Regardless of the property’s sale price, a mortgagee may not approve a PFS contract if the net sale proceeds fall below the minimum allowable thresholds stated herein. HUD has established guidelines for varying minimum net sales proceeds based on the length of time a property has been competitively marketed for sale.

For the first 30 days of marketing, mortgagees may only approve offers that will result in minimum net sale proceeds of 88% of the “as-is” appraised FMV.

During the next 30 days of marketing, mortgagees may only approve offers that will result in minimum net sale proceeds of 86% of the “as-is” appraised FMV.

For the duration of the PFS marketing period, mortgagees may only approve offers that will result in minimum net sale proceeds of 84% of the “as-is” appraised FMV.

Mortgagees have the discretion to deny or delay sales where an offer may meet or exceed the 84%, if it is presumed that continued marketing would likely produce a higher sale amount. However, the mortgagee is still limited to 4 to 6 months after the date of the mortgagor’s approval to participate in the PFS Program.

Allowable Settlement Costs – The term “Net Sale Proceeds” is defined as the sales price minus closing/settlement costs (i.e., reasonable and customary costs per jurisdiction that are deducted at settlement). Allowable settlement costs include:

Sales commission consistent with the prevailing rate but, not to exceed 6%;

Real estate taxes prorated to the date of closing;

Local/state transfer tax stamps and other closing costs customarily paid by the seller including the seller’s costs for a title search and owner’s title insurance;

Consideration payable to seller of $750 or $1,000 (i.e., if such consideration is not used to discharge junior liens);

Up to $2,500 to be used for the discharge of junior liens if closing occurs within 90 days. Within 90 days, the first $1,000 represents the mortgagor’s consideration and the additional $1,500 represents FHA’s consideration for a total of $2,500. If settlement occurs after 90 days, the first $750 represents the mortgagor’s consideration and the additional $1,500 represents FHA’s consideration for a total of $2,250;

Outstanding partial claim amount. This entire amount must be paid when calculating the net sales proceeds. The seller, buyer, or other interested party may contribute the difference if the net sales proceeds’ amount falls below the allowable threshold; and

Up to 1% of the buyer’s first mortgage amount if the sale includes FHA financing.

Unacceptable Settlement Costs – The following costs may not be included in the net sales proceeds calculation, however, the seller may use their consideration of $750 or $1,000 for these settlement costs.

Repair reimbursements or allowances;

Home Warranty fees;

Discount points or loan fees for non FHA-financing; and

Lender’s Title Insurance fee.

K. Duration of the Pre-Foreclosure Sale Period

Unless an extension has been approved by NSC, mortgagees have 4 months from the date of the mortgagor’s approval to participate in the PFS Program. Mortgagees have a pre-approved extension of 2 additional months to complete the PFS if one of the following exists:

The mortgagee is in the Tier 1 category under the Department’s Tier Ranking System (TRS); or

There is a signed Contract of Sale, but settlement has not occurred by the end of the fourth month following the date of the mortgagor’s approval to participate in the PFS Program.

Mortgagees are reminded that, on a monthly basis, they must review a property’s marketing status with the mortgagor and/or real estate broker.

L. Property Inspections

Mortgagees have a responsibility to ensure that insured properties are not subject to abandonment or waste, and are required to conduct property inspections on the 45th day following default if there has been no contact with the mortgagor. Property preservation and protection (P&P) inspections are not required during the PFS period if contact with the mortgagor is maintained, unless there is reason to suspect that the property has become vacant. Inspections to verify occupancy are reimbursable using Part C of the Form HUD-27011 (Single Family Application for Insurance Benefits). However, funds expended for P&P work on an occupied property are not reimbursable.

M. Early Termination

A mortgagor may voluntarily terminate participation in the PFS Program at any time. PFS Program participation may also be terminated at the discretion of the mortgagee, for any of the following reasons:

Un-resolvable title problems;

Determination that the mortgagor is not acting in good faith to market the property;

Significant change in property condition or value; and

Re-evaluation of the information provided by the mortgagor indicates that the case does not qualify for the PFS option.

The mortgagee must forward the mortgagor a date-stamped written explanation for terminating his/her program participation. This letter shall also include the “end-of-participation” date for the mortgagor. The mortgagee must then resume appropriate servicing actions.

N. Failure to Complete a PFS

At the expiration of the PFS period, the mortgagee must re-evaluate available loss mitigation options. If the mortgagor’s financial condition has improved to the point that reinstatement is a viable option, the mortgagee may undertake one of the home retention loss mitigation tools. If reinstatement is not feasible, the mortgagee should try to obtain a DIL of foreclosure before commencing foreclosure. An alternate loss mitigation option or first legal action to initiate foreclosure must be completed within 90 days of the expiration of the PFS period. If more than 90 days are needed to complete a DIL or initiate foreclosure or resume foreclosure, mortgagees must follow HUD’s standard extension procedures and request an extension from the NSC.

O. Mortgagee Incentive

FHA will pay mortgagees an incentive fee of $1,000 for each completed PFS transaction that complies with all of the requirements in this ML. This fee may be claimed on line 129, Part B of Form HUD-27011.

P. Mortgagor Consideration

Mortgagors, acting in good faith, who successfully sell their properties using this option are relieved of their mortgage obligation and are entitled to a consideration of $750. If the closing occurs within 3 months of the approval to participate, the mortgagor will be entitled to $1,000. Unless the mortgagor’s consideration is required to release junior liens, the mortgagor may elect to accept cash paid at closing. The mortgagor may also apply a portion of or the entire amount of consideration to offset sales costs not paid by HUD; including a home warranty plan fee, costs of optional repairs, and buyer’s closing expenses. If the PFS is unsuccessful and foreclosure occurs, mortgagors who participate in the PFS Program in good faith will not be pursued for deficiency judgments by the mortgagee or HUD.

Q. Closing and Post Closing Responsibilities

Prior to closing, the mortgagee will provide the closing agent with a Form HUD-90052 (Closing Worksheet) which lists all amounts payable from sale proceeds. The closing agent will calculate the actual net sale proceeds and provide a copy of the Form HUD-1 (Settlement Statement) to the mortgagee. The mortgagee must review the actual terms of the transaction to ensure that they are in accordance with the earlier estimates prior to granting final approval of the PFS. The mortgagee is required to ensure that:

The final terms of sale are consistent with the purchase contract;

Only allowable settlement costs have been deducted from the seller’s proceeds;

The net sales proceeds will be equal to or greater than the allowable thresholds; and

The Form HUD-90052 is included in the claim/servicing file.

Once the mortgagee gives final approval for the PFS and the settlement occurs, the closing agent must pay the expenses out of the proceeds, and must forward the net sales proceeds to the mortgagee. The closing agent must also forward a copy of the Form HUD-1 to the mortgagee to be included in the claim/servicing file.

A PFS must be reported to national credit bureaus as a “short sale”. Mortgagees will be responsible for filing a Form 1099-A (Acquisition or Abandonment of Secured Property) with the Internal Revenue Service and reporting any discharge of indebtedness, in accordance with the Internal Revenue Code.

R. Claim Filing

HUD will reimburse the mortgagee for reasonable and customary costs of the appraisal, title search (if not included in the settlement statement), and the allowable percentage of legal fees for a postponed foreclosure, pending completion of the PFS.

Disbursements for taxes, assessments, hazard insurance and other allowable items payable before the date of the PFS closing are reimbursable only if they are not satisfied at closing. HUD will not pay property-related costs which were incurred after the PFS closing date.

HUD will monitor mortgagees by selecting and reviewing appraisals for risk assessment purposes. Electronic appraisals will be reviewed for accuracy and to ensure that FMVs were used in lieu of distressed sale values. HUD is now requiring mortgagees to enter the FMV in Block 30 on Part A of Form HUD-27011.

The consideration paid to the mortgagor and allowable amounts (i.e., which do not exceed $2,500) paid to release all junior liens must be reflected on the Form HUD-1 and must not be included on the Form HUD-27011. The mortgagee’s incentive fee must be entered on line 129 of Part B of the Form HUD-27011.

Upon receipt of the portion of the sales proceeds designated for mortgage satisfaction, the mortgagee will satisfy the mortgage obligation and file a PFS claim for FHA insurance benefits via Form HUD-27011. The mortgagee must not submit an FHA insurance termination to the Department if a PFS claim will be filed.

If the mortgagee began the PFS process timely, then HUD will grant the mortgagee an automatic extension of 90 days after termination of the PFS to initiate another loss mitigation action or undertake the first legal action to institute foreclosure as described in Section “N” of this ML. To receive the extension, the ending date of the terminated or failed PFS transaction must be entered in Block 21 of Part A of the Form HUD-27011. A date that is no more than 90 days after the date listed in Block 21 must be entered in Block 19, to receive this extension. The claim for insurance benefits, (Parts A and B of Form HUD-27011), should be received by HUD within 30 days after the settlement date of the PFS transaction. If the sale proceeds have not been received from the closing agent, an extension must be requested from the NSC. The expiration date of the approved extension must be recorded in Block 20 on Part A of Form HUD-27011.

HUD will hold mortgagees, submitting excessive claims that do not meet the aforementioned required minimum allowable tiered-thresholds of 88%, 86%, or 84%, liable for excessive claim amounts. Claim filing instructions are located in Appendix A and these instructions supersede those found in Chapter 8 of HUD Handbook 4330.1 rev 1 (FHA Single Family Claims) For questions about filing a claim, please send an email to FHA_SFClaims@hud.gov. Mortgagees must include their Servicer Number, FHA Case Number, and a keyword phrase, such as “claim filing,” “claims status,” etc., in the e-mail subject line.

S. Reporting Requirements

Mortgagees are required to update HUD’s Single Family Default Monitoring System (SFDMS) with 2 default status codes when utilizing the PFS Program. These codes are as follows:

Status Code 15 to indicate that the mortgagor has been accepted into the PFS Program; and

Status Code 17 to indicate that the PFS transaction has been completed.

Mortgagees must update SFDMS with Status Code 15 in the month that the mortgagor is approved to participate in the PFS Program. Mortgagees must continue to report the account under Status Code 15 during the entire time that the mortgagor is participating in the PFS Program. Once a PFS is complete (i.e., settlement has occurred and all funds have been received), mortgagees must report the account as Status Code 17 within 30 days of the PFS closing date. However, if no successful PFS transaction occurs and a DIL is obtained, the account should be reported as Status Code 47 in the month the DIL is recorded. Information on additional status codes along with instructions referring to bankruptcy, foreclosure, etc. are included in Mortgagee Letter 2006-15.

Mortgagees will be in compliance with HUD’s reporting requirements when reporting codes are entered into the SFDMS within the above-prescribed timeframes. If reporting codes are not provided within the prescribed timeframes, the mortgagee will be subject to interest curtailment. Mortgagees are subject to interest curtailment if they do not initiate the PFS transaction or report the initiation of the PFS transaction to HUD via SFDMS timely.

T. Erroneous Termination of Mortgage Insurance

A mortgagee must not submit a Mortgage Insurance Termination in situations where the mortgagee has filed or intends to file a claim for FHA insurance benefits. HUD can only pay FHA mortgage insurance benefits when the mortgage insurance is in an “active” status. Mortgagees may direct questions or concerns regarding the Department’s PFS procedures to the NSC’s Customer Service Call Center. The center’s toll free number is 1-8....

Attachment: Appendix A - Claim Instructions

Active Forms:

Form HUD-90035 Information/Disclosure

Form HUD-90041 Request for Variance

Form HUD-90045 Approval to Participate. Property Sale Information/ Property Occupancy and Maintenance

Form HUD-90051 Sales Contract Review

Form HUD-90052 Closing Worksheet

Form HUD-27011 Single Family Application for Insurance Benefits

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

How Can a Short Sale Benefit a Lender?

Sun, 15 Nov 2009 23:37:14 -0600

This is very important question for agents to know when trying to negotiate a short sale ---> use it to remind the negotiator of the benefits of approving the short sale you have before them!

Need a short sale agent in the San Joaquin Central Valley? Alameda County, Sacramento area? Give me a call at 866-543-0461. Rosemary Brooks

Via Christine Hynes (American Loan & Mitigation Specialists):

How Can a Short Sale Benefit a Lender?

While a short sale can be an effective relief for a homeowner facing foreclosure, it can also benefit lenders. Believe it or not, property foreclosure is not only a hardship for the homeowner, but for the lending bank as well. The homeowner has to deal with the reality of losing their home and the financial worries that ensues and the banks must find a way to recover as much of its losses as possible. Banks do not want to own homes. They are not in the real estate business, and foreclosing on a home only adds more to their workload.

The lender has to carry out the entire foreclosure procedure and legal proceedings, bear all the expenses related to a successful auction, refurbish the property and make it suitable for sale, and find the right buyer that will offer the closest amount to the value of the home. Sometimes lenders aren’t able to find a buyer for the home, and so they lose even more money with the property sitting as dead weight. The answer to this problem is a property short sale.

Short sale is a process where the lender agrees to sell the property at a lesser rate than the loan balance, thereby making up for some of its losses from the borrower not being able to pay back their debts. With a successful short sale, the homeowner effectively sells their home at a lower price before the actual property foreclosure and pays off the debt back to the lender, thereby avoid foreclosure. This saves the owner from the hard credit score hit that a foreclosure brings, and saves the bank from all the overhead of a foreclosure and auction.

The lender is paid directly from the sale of the home, which saves them from the even larger loss foreclosure would have brought. Lenders are increasingly viewing short sales as effective alternatives to foreclosure as it is far more beneficial for both the lender and borrower. The biggest advantage is avoiding the expense and cost of foreclosure, while recouping most of its money in a much shorter time span than a foreclosure auction.

Unlike foreclosure proceedings, a short sale does not involve any additional fees for closing. Both the lender and borrower are not required to pay for refurbishment fees, nor the legal fees that come with a foreclosure. If a buyer can be found, there is no need to put the house on the market or go through a foreclosure auction, saving both time and money. Most of the time, lenders will receive a much closer to market price offer than they would if they had gone through the auction process.

If you are looking for assistance with or have questions about short sales, feel free to contact us at www.callALMS.com today!

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Best Source for Pre-Foreclosure Info is at Your County Court House

Sun, 15 Nov 2009 23:32:28 -0600

Getting information from the court house on defaults, sounds good. I will give my county recorder a call and see if I can get the online address. Finding information on our county website is not the easiest thing to do. I will share the information when I get it for San Joaquin County.

Thanks, for sharing

Via Hunter Paschall (3 Days Live, LLC):

The best source for pre-foreclosure information is the county courthouse.
Real estate transactions are recorded in the county in which the property is located.

You will need to look for the pre-foreclosures in the county you are interested in. A property in residing in county #1 cannot be found by looking in county #2. This information is public record and anyone can simply go and look at it.
Most county courthouses are big imposing buildings filled with lots of official departments and offices.

The first trip to the courthouse can be intimidating to the nervous visitor. Make the process easier by getting some information in advance.
Call and ask which office or department handles real estate transactions. Generally, it is the county clerk or county recorder’s office.
Call this department and get some basic information such as where in the courthouse they are located, what hours they are open to the public, etc.

Courthouse records have valuable information for pre-foreclosure investors.
What exactly are you looking for?
That depends on what phase of pre-foreclosure you are dealing with and the state in which
you are located. In trust deed states, for example, you will look for Notices of Default. In states that use the mortgage system,
look for a Lis Pendens.

Other public records of interest can be found at the tax collector’s office.
People who are seriously behind on their property taxes are often also in default on their home loan.
In addition, keep an eye out for notices (either in the newspaper or at the courthouse) of current lawsuits.
You may spot information on a legal battle involving a home in pre-foreclosure.

Need funding for your Short Sale?
I can help you with that.
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Have an Awesome Weekend,
Hunter
407-772-2274

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Credit Damage Scale

Sun, 15 Nov 2009 23:07:35 -0600

This is good list on credit and impact. Print it out and request a copy of your credit report and compare it. It is always good to know how the credit world view you.

Via Oscar Morante (Best Short Sales):

This is the credit rating damage scale in order of severity.

Download Article

Lower Severity Credit Damage

•·         Just between creditor and debtor

•·         No judicial system involvement

•·         Not of public record

1 - Missed & Late Payments (but still paying)

•·         Less than 30 days in default

•·         Minimal credit rating damage

•·         Easily fixable

•·         Most likely not reported in credit record if less than 30 days late

2 - Pre-Charge-Off Settlements

•·         Between 30 to 120 days in default

•·         Moderate credit rating damage

•·         Harder to fix

•·         Most likely already showing in credit report

3 - Charge-Offs

•·         Beyond 90 to 120 days in default

•·         Debt most likely sold to junk debt collectors or similar collection operations

•·         Hard but possible to fix

•·         Removable by agreement & credit repair

Higher Severity Credit Damage

•·         Judicial system involvement

•·         Of public record

4 - Law Suits & Judgments

•·         High chance of garnishment

5 - Evictions, Foreclosures, Liens & Repossessions

•·         Issue of most concern by lenders, and landlords

6 - Bankruptcy

NOTES:

•·         No legal advice provided

•·         Credit impact also affected by debt to income ratios

Download Article

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

Nine Options When Facing Foreclosure

Sun, 15 Nov 2009 22:52:18 -0600

This is pretty handy list of options for someone facing foreclosure. I always advise to check with your lender to see if there are these or other options that you may qualify for - since things are changing so quickly in this crisis times.

Also, if you have a Fannie Mae property - you may qualify for Fannie Mae Deed in lieu of foreclosure -- LEASE BACK PROGRAM. Please read about it at: Deed for Lease Program - helping you avoid foreclosure - Fannie Mae adds another avenue/option for homeowners.

And check out these 9 points / options.

Good luck homeowners.

Need an agent: Call me at 866-543-0461 (San Joaquin Central Valley / Alameda Counties). Rosemary Brooks

Via Kenny Wagner (The Foreclosure Mitigation Company):

You may be facing foreclosure… so what are your options?!? Try to look at the situation more from a financial standpoint rather than an emotional standpoint. This way you can more successfully analyze which option might best suit your needs and desires to move you towards resolving your financial difficulty. One very important thing to remember: Time is of the essence. Take time to think through your situation and make a decision. Then, take action right away so you have enough time to complete the solution you choose.

Nine options when facing Foreclosure

1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information. Not the best option.

2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.

3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.

4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment.

5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.

6. Partial Claim – A loan from the lender for a 2^nd loan to include back payments, costs and fees.

7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained, all mortgage payment and taxes must be current. Most loan applications ask if this has ever happened.

8. Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney.

--Chapter 7 (Liquidation) To completely settle personal debt.

--Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.

--Chapter 11 (Business Reorganization) A business debt solution.

9. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale. In this case, the homeowner will get cash from the sale. On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value.

I affirm that I have read this and understand that I have several options available to me and that there may be more than those listed above. I affirm that I have been advised that I should consult an Attorney and CPA. Understanding this I know that I have the option to choose to use The Foreclosure Mitigation Company to assist me in negotiating the short sale of my home.

Kenny Wagner

The Foreclosure Mitigation Company

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649

"I just can't make my mortgage payments any longer" - Is this you?

Sun, 15 Nov 2009 22:40:00 -0600

You can never get too much information on how to make your life easier if you are in the situation of having mortgage payment issues. Please read this and pass it on.

If you need an agent in the Central Valley / Alameda area - call me at 866-543-0461.

Rosemary Brooks, the Mother and Daughter Realty Team

Via Lynn Pineda-Coral Springs REALTOR, Short Sale Specialist (Keller Williams Partners Realty):

Act now and avoid foreclosure.

Times are really tough.    Unemployment rates have reached double digits.    More and more families are

struggling to make ends meet.   Many of you in Coral Springs and surrounding Broward County cities

need to sell your homes but you owe more than what your home is worth.    What do you do?

If you have sufficient income your Lender may qualify you to have your loan modified. Whereas, some of you may not qualify for a loan modification. If you don't qualify for a loan modification, you can consider selling your home as a Short Sale.

Where do you begin in considering a Short Sale? Who can help you? What's involved in a Short Sale?

       (a simplified summary follows)

First, you will need to list your home for sale with a Realtor. You will want a Realtor who specializes in Short Sales, like I do. I found a need quite some time ago when many individuals and families were struggling to make ends meet and were facing the devastating possibility of losing their home to foreclosure. I chose to play an active part in helping homeowners avoid foreclosure. I have a very high success rate in gaining Short Sale approval from homeowners Lenders.(Read some of my prior posts here)

Second, your Realtor will find a Buyer for your home.

Third, a complete Short Sale package will be submitted to your Lender to include financials and a hardship letter gathered from you by your Realtor, the Buyer's offer and a market analysis.

Fourth, your Lender will review the Short Sale package submitted

Fifth, an appraisal value (called a BPO; Brokers Price Opinion) will be completed and placed on your home and compared against the Buyers offer.

Sixth, a final review of all will determine an approval or decline of the Short Sale offer. Counter offers may be involved in which case I, as your Realtor, will go back to the Buyer's Realtor to get them to agree to counter offer.

Seventh, once all parties agree to the sale and closing occurs. Closing typically takes place within 30 days.

Eighth, you now move on to better days ahead and know that the possibility exists that within two years you could be in a position to buy again through FHA financing guidelines if you remain in a favorable position going forward with your credit.

Ninth, remember don't lose hope with your situation, act now.

Tenth, Call me as I'm here to help you avoid foreclosure and to help you sell your home as a Short Sale.

The more you know, the better prepared, the better the outcome.

I serve Coral Springs and the surrounding cities such as Coconut Creek, Parkland, Tamarac and Sunrise in Broward, Dade and Palm Beach Counties of South Florida as your dedicated Realtor, Short Sale Specialist and CDPE Certified Distressed Property Expert ready to work for you.

I'm looking forward to hearing from you soon. Please call me at 954-464-1100 or email me at: lynnp@ImagineYourHouse and it would be my pleasure to help you!

Learn more about me and Coral Springs Real Estate as your Coral Springs Realtor

Copyright protected. Do Not Copy

Rosemary Brooks

Patrick Williams & Associates

Mother and Daughter Realty Team

PH: 866-543-0461

FAX: 866-815-1649