Over the course of the last several months, I have represented several Buyers who have purchased a home using a FHA mortgage.
While one would think that all FHA loans have the same underwriting guidelines, when it comes to the value of personal property in a real estate transaction, this theory has proven to be incorrect.
In three of the five transactions, the "end buyer" for the loan requested a specific addendum to the Sale and Purchase Contract that stated that the personal property being conveyed with the home had no value and was being left out of convenience to the Seller.
In two of the transactions, I understood the reason why...the first seller was including a washer, dryer and a freezer with the home purchase and in the second transaction, a free-standing jacuzzi was being sold with the property. In the third transaction, however, the built-in appliances (range, dishwasher and microwave) were the only items to convey.
In chatting with the loan officer and their FHA underwriter, I was told that many of the "investors" who are the "end" buyer for FHA loans have their own criteria the underwriters must meet in order for them to purchase the loan.
So, in a industry where the rules change daily, it was recommended to me to add a clause to all FHA contracts that states:
"All personal property listed on the "As Is" Contract for Sale and Purchase agreement, as well as on the Seller's Real Property Disclosure, is being sold with the residence for the Seller's convenience and has no monetary value."
With that being said, if you are a Seller who has a stainless steel appliance package in your home, don't be alarmed if the Buyer's agent asks for you to sign an addendum stating that the appliances have no value. It's not that they are trying to get something for free...they are just working within a system where the rules change on an ongoing basis.
And if you are a Buyer, it might be a good idea to ask your agent to incorporate the above clause in your sales contract...just to be sure there are no last minute issues!
Serving Buyers and Sellers in Central Florida,
LaShawn Norden, PA, REALTOR, RE/MAX Central Realty, (321) 377-0157
OK, so maybe my headline isn't entirely true...deadlines DO matter...but only if you are the Buyer of a foreclosed/REO home.
At least it seems that way.
For some reason, it's becoming more common place for many of the Sellers (banks) of foreclosed homes in Central Florida to not respond to offers within the deadline given. I've been told by many listing agents that their Seller may respond to written offers on the same day they are presented...or, they may wait for days (or weeks) to respond...regardless of the date that the Buyer puts in their offer as the time period required for acceptance.
While it is understood that sellers of foreclosed homes want to obtain the highest possible price, there is no explanation as to why they don't respond even when they receive an offer that will net them a price higher than their listing price.
Not only is it frustrating to the Buyer and their agent, but the real issue here is that deadlines are written for a purpose...to generate a response. Banks should be more proactive and respond with an acceptance, a rejection or a counter offer so that the Buyer can determine whether they want to "stay in the game" or find another property to purchase.
With a surplus of homes for sale in the Central Florida market, it's a shame that qualified Buyers are held captive by these lenders who are either too overwhelmed to handle the business or don't really care if they lose more time and money waiting for the "next best" offer.
When buying a foreclosed/REO home, it's important for Buyers to know that while their offer may have a deadline for the bank to respond, they may not get one by the date given and will then have to make the decision to either extend their acceptance period or find another home.
And yes, this behavior is considered hypocracy at it's finest, because if the Buyer's offer IS accepted, the bank will then demand that the Buyer meet all of the deadlines they are given or will state that the Buyer is in default and can cancel the contract and/or make a claim to the Buyer's escrow monies.
While this business practice is certainly not "fair", this is the system/mentality of many Sellers/banks today and Buyers need to know what they can expect so that they can decide for themselves if purchasing a foreclosure/REO home is what they want...regardless of the waiting games they may have to play.
There are many options for Central Florida sellers who are in foreclosure. While some may seem simple and obvious, many others may be unknown to the consumer and their real estate professionals.
It is my goal, through this series, to address the 9 Options for sellers who are facing foreclosure so that the public and real estate agents alike can determine which options may be worth pursuing.
Option 9: Bankruptcy is the final option written in this series for a reason...to inform sellers that there are many other options they can and should consider if they are facing foreclosure.
While a bankruptcy may stop a foreclosure proceeding (which will allow the borrower time to reorganize their debt) the reality is that bankruptcy typically only stalls the foreclosure...it doesn't prevent it from happening.
The other reason why a bankruptcy may not be the best option is because it may hinder the sale of the property once the seller enters the bankruptcy process. For sellers who are trying to sell their home as a short sale, it is unlikely that any contract will be negotiated while the bankruptcy case is open...even though the sale itself may solve the financial stresses the seller is experiencing.
Before contemplating any one of the options above, Sellers should seek the advice of an experienced Real Estate professional and/or Real Esate attorney in their marketplace.
As a Certified Distressed Property Expert in Central Florida, I'd welcome the opportunity to talk with you or refer you to one of several reputable attorneys.
Facing foreclosure is scary...there is no reason why you should do it alone.
There are many options for Central Florida sellers who are in foreclosure. While some may seem simple and obvious, many others may be unknown to the consumer and their real estate professionals.
It is my goal, through this series, to address the 9 Options for sellers who are facing foreclosure so that the public and real estate agents alike can determine which options may be worth pursuing.
To get caught up, you may want to read the 9 Option Summaryhere.
Option 1: reinstatement of your loanhere, Option 2: Forbearance or Re-Payment Planhere, Option 3: Sell the Propertyhere and Option 4: Rent the Propertyhere.
Options 5, 6 & 7 all involve refinancing or modifying of the borrower's loan, and that post can be read here.
Now that the first 7 options have been reviewed, the 8th Option for sellers facing foreclosure is being reviewed in this article.
Option 8: Deed-in-Lieu of Foreclosure: Sometimes this option is referred to by lenders as a "friendly foreclosure," as the homeowner "gives" the deed back to the bank in hopes that the lender will not have to initiate a lengthy foreclosure process in exchange for that lender releasing the seller from being responsible for any deficiency judgment. Typically, this type of solution works in cases where there is one mortgage only or when the second mortgage holder is willing to negotiate this type of arrangement with the first.
In the event the borrower has equity in the property, a Deed-in-Lieu of Foreclosure is not a recommended option as the owner loses their rights to the property and any equity they may have.
When facing foreclosure it is highly recommended that sellers hire a Real Estate professional who is not only experienced and educated but also has relationships with Real Estate attorneys, as some of the suggested options for sellers are best handled by both the REALTOR and the attorney working together for the seller's best interest.
For a list of recommended Real Estate attorneys in the Central Florida market, please contact me via email at LaShawn@LaShawnNorden.com . I'd be happy to provide you with a list of reputable attorneys who I know personally and who have had success in negotiations with lenders.
There are many options for Central Florida sellers who are in foreclosure. While some may seem simple and obvious, many others may be unknown to the consumer and their real estate professionals.
It is my goal, through this series, to address the 9 Options for sellers who are facing foreclosure so that the public and real estate agents alike can determine which options may be worth pursuing.
To get caught up, you may want to read the 9 Option Summaryhere.
Option 1: reinstatement of your loanhere, Option 2: Forbearance or Re-Payment Planhere, Option 3: Sell the Propertyhere and Option 4: Rent the Propertyhere.
OK...now that you are caught up on the first 4 Options available, it's time to get to the next three Options, which I have included in this single article as all three relate to the mortgage on the property.
Option 5: Refinance the Property-Unless the borrower has equity in the home, sufficient document-able income and decent credit, a traditional refinance will not work. Because declining values are the "norm" in many areas in Central Florida, I would suggest contacting a Real Estate professional in your marketplace to ask their opinion of the value of the property BEFORE calling the mortgage holder. If the value of the property is a concern, it's better to find that out upfront.
Option 6: Morgage Modification-A "modification" is similar to a refinance in that the borrower would need to prove their income (ie: their ability to re-pay the loan). If they can, their mortgage holder may offer to extend the length of the loan (15 year mortgage to a 30 year mortgage...or some other variation) or they may agree to lower the interest rate on the existing loan in order to lower the monthly payments so that the borrower can afford them. Some mortgage companies/lenders may also reduce the loan amount due...which is Option 7 below, a Short -Refi.
Option 7: A Short-Refi-While not being offered by many lenders yet, there are a few who have recognized the need to reduce the principal loan amount for a borrower in order for them to be able to maintain the payments and avoid foreclosure. In order to qualify for this type of modification to the loan terms, the borrower would need to prove a hardship in paying the current mortgage as well as an ability to pay the new "proposed" mortgage amount.
While there are many companies who have jumped feet first into the "modification" pool, I would caution borrowers to first contact their OWN mortgage holder before seeking outside resources. In the event the borrower's OWN mortgage holder doesn't offer any of the above options, only then would I seek referrals to other modification companies...and when doing so, be extremely careful. Google their company name, contact the BBB in your market and ask for them to give you references.
For a list of mortgage lenders who have been in business for years and have positive reputations with both Real Estate professionals and consumers alike, please email me at LaShawn@LaShawnNorden.com
The final two options for Central Florida sellers who are facing foreclosure are Deed-in-Lieu of Foreclosure and Bankruptcy and each will be reviewed in single article format this coming week.
To make sure you get them first, subscribe to my Blog. As a dedicated Real Estate agent who is not only experienced, but professionally educated regarding distressed properties, I'd welcome the opportunity to answer your questions and to help you determine if any one of the options shared are suitable for your personal situation.
There are many options for Central Florida sellers who are in foreclosure. While some may seem simple and obvious, many others may be unknown to the consumer and their real estate professionals.
It is my goal, through this series, to address the 9 Options for sellers who are facing foreclosure so that the public and real estate agents alike can determine which options may be worth pursuing.
To get caught up, you may want to read the 9 Option Summaryhere.
Option 1: reinstatement of your loanhere, Option 2: Forbearance or Re-Payment Planhere and Option 3: Sell the Property!here.
Much like the last option, Option 4 is also considered a "common sense option," but again, sometimes the obvious is often overlooked.
Option 4: Rent the Property
While this option may be less desireable than selling, it may be worth considering if the rent payments are sufficient to cover the monthly expenses. In some cases, it may even be worth considering if the rent payments will cover the majority of the monthly expenses and the owner can pay for any shortage.
For homeowners who are considering renting their property, I would highly suggest retaining the services of a Property Managment company who will qualify potential tenants via credit and background checks, collect the rent payments, draft the lease documents, coordinate repairs and follow the laws if a eviction is ever required.
Unless you know the potential tenant personally (and even then, there is no guarantee they won't stiff you on the rent), it is my belief that professional Property Management companies are worth every dollar they make!
If you are a homeowner who has a home to rent in Seminole, Orange or Volusia County in Central Florida, send me an email at LaShawn@LaShawnNorden.com and I'll be happy to refer you to quality Property Management agents in your marketplace.
In the event that reinstating, repayment and renting are not options for your personal situation, I'd welcome the opportunity to meet with you to discuss other options, including selling your home.
There are many options for Central Florida sellers who are in foreclosure. While some may seem simple and obvious, many others may be unknown to the consumer and their real estate professionals.
It is my goal, through this series, to address the 9 Options for sellers who are facing foreclosure so that the public and real estate agents alike can determine which options may be worth pursuing.
To get caught up, you may want to read the 9 Option Summaryhere.
This particular article is what one might refer to as the "common sense option," but when financial pressures are mounting, sometimes the most obvious solutions get overlooked.
Option 3: Sell the Property!
For homeowners with equity, selling the property is certainly an option to consider. While some borrowers may owe more than their home is worth in today's market, there are many more who do have equity and just haven't thought about selling their home as an option.
Even if there isn't a lot of equity, being able to sell the property may be able to generate enough proceeds to cure the foreclosure and relieve the borrower from the financial stress of having to make the next mortgage payment.
In cases where there is a potential foreclosure on a home with equity, it is very important that the sales price be enough to cover:
Loan payoff (inclusive of interest)
Late payments
Penalties
Attorney fees
Real Estate brokerage fees
Pro-rated taxes
Title charges and closing fees
Liens (HOA, mechanics, etc)
Pre-payment penalties
In the event that the value the home is not high enough to cover the mortgage and the associated costs listed above, then a "short sale" may be the best option to consider...and that option will be the topic of a future article in this series.
To find a qualified Real Estate agent in your marketplace, ask your friends, family and co-workers for a referral. It's smart to consider hiring a full-time professional REALTOR who has references, a proven marketing plan, knowledge of your marketplace and strong negotiating skills. Since time may not be on your side, you need an agent who will be!
Subscribe to my Blog to find out about how you can avoid foreclosure by hiring a Certified Distressed Property Expert!
There are many options for Central Florida sellers who are in foreclosure.
As a Certified Distressed Property Expert (CDPE), there are many options that I can (and do!) suggest to Central Florida Sellers who are facing economic hardships and who are concerned about losing their home to foreclosure.
To find out about the 9 options for Sellers, you can read my blog post here.
You can my blog post about Option 1, which is reinstatement of your loan,here.
Today's post is about Option 2, which is Forbearance or Re-Payment Plan.
Option 2 is somewhat like Option 1 in that if a borrower who has missed mortgage payments did so due to a temporary situation such as an illness or a short-term job loss, they may be able to negotiate a re-payment plan with their lender to "make up" the missed payments.
If a re-payment plan is offered by the borrower's lender, it is usually because the borrower can demonstrate that they will have the necessary funds to repay the missed payments and legal fees...but may need several months to do so.
In situations such as these, it is not uncommon for the borrower's lender to agree to allowing the missed payments to be moved to the end of the scheduled loan amortization plan as long as the borrower can provide the required documentation from their lender.
If a forbearance or re-payment plan is granted by the borrower's lender, the borrower needs to know that until ALL of the missed payments are caught up, the mortgage is not fully reinstated and any further missed payments during this same time period may result in foreclosure action.
In the event that you are a seller who is delinquent in your mortgage, a forbearance/repayment plan or one of the other 8 remaining options for Sellers facing foreclosure may be an option for you.
Contact a Certified Distressed Property Expert (CDPE) in your market place to see which option is best for you.
A list of CDPE professionals can be found by visiting the CDPE website here.
There are many options for Central Florida sellers who are in foreclosure.
As a Certified Distressed Property Expert (CDPE), there are many options that I can (and do!) suggest to Central Florida Sellers who are facing economic hardships and who are concerned about losing their home to foreclosure.
To find out about the 9 options for Sellers, you can read my blog post here.
Today, I'd like to review Option 1, which is reinstatement of your loan.
Reinstatement of your loan is often an option if the reason for the missed payments was temporary, such as an illness or temporary job loss.
In order to have the loan reinstated, the borrower must re-pay all of the missed payments, including late fees and legal fees if any were accrued.
Reinstatement must be approved by the borrower's lender and the amount owed should be obtained in writing from the lender in the form of a reinstatement letter. Because most reinstatements of the loan are time sensitive (meaning they have an expiration date), it is very important that the borrower pay all fees due by required due date.
Once the loan has been reinstated, they should continue to make regular monthly payments on their mortgage in order to avoid further action by their lender.
If you are a seller who is delinquent in your mortgage, reinstatement or one of the other 8 remaining options for Sellers facing foreclosure may be an option for you.
Contact a Certified Distressed Property Expert (CDPE) in your market place to see which option is best for you.
A list of CDPE professionals can be found by visiting the CDPE website here.
There are many options for Central Florida sellers who are in foreclosure.
As a Certified Distressed Property Expert (CDPE), there are many options that I can (and do!) suggest to Central Florida Sellers who are facing economic hardships and who are concerned about losing their home to foreclosure.
Below are 9 options that are available to Sellers:
Reinstatement:
Forbearance or Re-payment
Sell the property
Rent the property
Refinance the property
Mortgage modification
Short-refi
Deed-in-lieu of foreclosure
Bankruptcy (if all else fails!)
If you own a home in Central Florida and are unable to pay your mortgage and are thinking that foreclosure is your only option, I'd be happy to schedule a confidential interview to see if any one of the above options will work for you!
Selling or purchasing a home can be exciting and scary at the same time! The goal of my blog is to educate Central Florida Buyers & Sellers about the Good, the Bad & the Ugly things that can happen in a real estate transaction! As an advocate for consumers in Orange, Seminole and Volusia County, I especially enjoy working with first-time home buyers, relocation buyers, sellers of distressed property and luxury home sellers. Native to Central Florida, I'd welcome the opportunity to be your advocate too!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
In two of the transactions, I understood the reason why...the first seller was including a washer, dryer and a freezer with the home purchase and in the second transaction, a free-standing jacuzzi was being sold with the property. In the third transaction, however, the built-in appliances (range, dishwasher and microwave) were the only items to convey.
While it is understood that sellers of foreclosed homes want to obtain the highest possible price, there is no explanation as to why they don't respond even when they receive an offer that will net them a price higher than their listing price.
Option 8: Deed-in-Lieu of Foreclosure: Sometimes this option is referred to by lenders as a "friendly foreclosure," as the homeowner "gives" the deed back to the bank in hopes that the lender will not have to initiate a lengthy foreclosure process in exchange for that lender releasing the seller from being responsible for any deficiency judgment. Typically, this type of solution works in cases where there is one mortgage only or when the second mortgage holder is willing to negotiate this type of arrangement with the first.
To get caught up, you may want to read the 9 Option Summary 
Option 4: Rent the Property
;)
;)
