Want to understand a little bit more about what lenders look for to approve Massachusetts short sales? See my new video below
Why are we so good at Short Sale Negotiation in Massachusetts and New Hampshire??? Because we KNOW the forms you need!
So what’s the difference between all the financial forms from your lender?!?!? This quick video will show you the two major financial forms used by most lenders today.
Oh and if you want the link to the Wells Fargo RMA 10 page form click HERE
Hot off the press. Senate afirm’s two-year extension for Mortgage Debt Relief Act
The Senate Finance Committee voted 23-3 in favor of extending a package of business and individual tax provisions known as “tax extenders,” including one that will ensure that mortgage debt that has been forgiven by a lender will be excluded from the borrower’s personal income.
Under current law, taxpayers who have mortgage debt canceled or forgiven after 2014 may be required to pay taxes on that amount as taxable income. Under this provision, up to $2 million of forgiven debt is eligible to be excluded from income through tax year 2016. This provision was created in the Mortgage Debt Relief Act of 2007 to shield taxpayers from having to pay taxes on cancelled mortgage debt stemming from mortgage loan modifications through 2010. It was extended through 2013 by the Emergency Economic Stabilization Act of 2008. The extension would be through 2016. A two-year extension of this provision is estimated to cost $5.122 billion over 10 years.
Also included in the package taken up by the Finance Committee was a mortgage insurance provision that would treat mortgage insurance premiums the same as interest, allowing a borrower to deduct the cost of the premiums from income taxes. This extension would also be through 2016.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Nick and I are your MASSACHUSETTS SHORT SALE NEGOTIATION CLOSERS! Call us today to find out more about a SHORT SALE OPTION for underwater homeowners. If the bank is knocking, we want to speak to you.
Nick Aalerud and Maryann Little
So what does that mean? In most short sales we work on in Massachusetts, we are working directly with the servicer of the loan. Servicers usually have delegated authority for an investor, and sometimes you can never find the investor. I have a short sale I’m working on in the Cape, in which the servicer has a very high value. Anyone in this business knows when a value is high, that pretty much dooms your sale, unless you can show the servicer why that property will not fetch that amount, e.g. a value dispute.
We did the value dispute on this property and it came back at the same amount we were quoted, so we knew something was wrong. They SENT us their reconciled value and low and behold, it was the amount the buyer was offering, so something is even more wrong. After MULTIPLE left messages for the Director of Loss Mitigation at Specialized Loan Servicing, and faxes, we felt we had to direct to the investor of the loan:
Good Morning James,
I’m writing today regarding the above property located in Massachusetts, which is a default property serviced by SLS.
Your company is listed as the investor on this loan, and before you tell me SLS has delegated authority, I just want to understand how a value reconciliation done on this property by SLS showing the value of $225,000, is denied and countered at an unrealistic value of $270,000. I have tried calling in several times to show them this error, and were are being told this is the number the investor wants.
This number will seal the homeowner’s fate to foreclosure, which he has been trying to avoid for some time now.
I am unsure what to do as I notified Darren Bronaugh several times via fax and email and still have yet to hear back. I also reached out and left voice mails for Christophoer Chavez (SLS loss mitigation supervisor) and emails, none of which were returned.
I would imagine that investors have some threshold for the authorization of a short sale. I can imagine if a property value came back at $400,000 and the offer was $300,000 it may make more financial sense to send that property to foreclosure, but I’m trying to understand how a property value of $225,000 with an offer of $225,000 is being denied and countered as too low.
I don’t often reach to an investor directly as there is no need because we can usually work smoothly with a servicer, but considering no one in management has addressed this issue even though I have reached out multiple times, I wanted to go to the investor.
Please let me know what I can do to help or assist and if there is anything that can be done on this property. Thank you.
Maryann Little, VP Short Sale Mitigation
Short Sale Mitigation, LLC
AA Premier Properties, LLC
500 West Cummings Park
Woburn, MA 01801
The information in this email is confidential and may be legally privileged. It is intended solely for the addressee(s). Access to this e-mail by anyone else is unauthorized. This email does not in any case constitute a binding offer, and any price or other contract term contained in this email is subject to written approval by the parties entering the contract. Short Sale Mitigation, LLC is a Massachusetts based loss mitigation company assisting homeowners and Realtors through the arduous Short Sale Process. Short Sale Mitigation, LLC is not associated with the government, and our service is not approved by the government or your lender. We are in no way affiliated with any government entity. We are an independent 3rd party negotiation services company. – Short Sale Mitigation, LLC is under the direction of AA Premier Properties, LLC in New Hampshire License # 066518
Today I’m patiently waiting for someone from SLS to respond, however am losing hope on this sale. Poor valuations PLAGUE the short sale market and unfortunately there is no oversight to this. How does the investor truly KNOW they will get more for the property if they foreclose? They are basing their decision on a valuation. Anyways, say a prayer for this homeowner as we patiently wait out and see what happens. I was told the investor was reaching to SLS and would ask SLS to respond to us.
Yes. Started the day with a HUGE complaint to the CFPB over a valuation from a company called MCS Valuations, that we believe tampered with one of our short sale valuations. My poor homeowner has been through enough. I’m going to advocate this one all the way up to a director at the CFPB if I have too. I’m thinking of putting a complaint into the Treasury too as the loan is Freddie backed….although I love my Freddie gang, this is blatant tampering by the valuations company and no one wants to actually LOOK at what happened. They all just say, “well that’s the value I see on the screen” – NUMBERS ARE INPUTTED WRONG all the time, and many homeowners lose their homes over it. Sorry, I’m not standing for this. My poor lady lost her husband on Christmas day!!!! http://shortsalemitigation.myproptrackr.com/
We are called quite frequently by Massachusetts Real Estate Investors looking to buy a short sale we may have listed, and asking what the best way to get them the property is. There is no magic ball for an investor to buy a short sale, but there certainly are things that will help the process when writing your offer. You want to make sure you are prepared with the following, when buying a short sale:
1) If you are an LLC, INC,. Trust or some other entity other than an individual, provide your “creation” documents, either articles of organization, trust docs etc. Sellers lenders will frequently request this to review information.
2) If you are using a HARD MONEY LENDER, you are NOT a CASH BUYER. If you check you are a cash buyer and your company is an LLC, the seller’s lender will want to see a copy of your bank statements. When a hard money lender issues you pre-approval, that’s exactly what it is, it’s a letter saying you are APPROVED to buy the sale, but your offer should be written as FINANCED without a contingency. If you are using hard money, just write in that it’s not contingent upon anything, like an appraisal (although I do know some hard money lenders want appraisals). The bottom line is you need a bank statement showing you can buy the property if you are a true cash buyer, so submit your offer accordingly AND your bank statement if you are a cash buyer.
3) Know your numbers. Selling banks are not going to consider a low ball number. If you are trying to buy the property for a certain price, have your back up ready. You should have repair estimates on hand, inspections, appraisals, comps, pictures of the property and any damage, and any other information pertaining to the sale that would affect the property value. Be prepared to support the value you are offering.
I was talking to an investor last week, and I told the person Zillow and Trulia were listing the property value at $110,000 and the investor’s offer was in the $40,000 range. Now I know Zillow and Trulia are NOT ACCURATE, but they ARE a gauge. Once the investor told me about the chemical plant across the street and the work needed on the property, it made a lot more sense to me on WHY they were offering such a low amount. If you do plan on submitting a low offer, be prepared to bullet point out WHY certain things affect the value so that we can submit it to the sellers lender.
4) UNDERSTAND WHAT SOLD AS IS MEANS! This means the seller has no money to fix things on the property, remove snow, winterize pipes, pay past due utility bills, get smoke certs or title V, or bring money to closing. 99% of short sale homeowners, do not have excess funds. If they did, then they’d be able to pay their mortgages. Many times an investor will need to assist paying off an execution, or other non-mortgage lien on title. The seller will NOT be cleaning the property at closing and you may have to take ownership of the property subject to the tenants still being there. Many times the bank has taken possession of the property so you will have to change the locks. These are all things to consider when submitting your offer.
5) Ask if the loan is backed by Ocwen or Nationstar and if so, back away quickly. Both servicers will take your offer, not respond, and then put the property up on Hubzu or Auction.com for other investors to bid on, even though you have an executed contract. I know, I know, it stinks, but any NON-GSE loan will end there and you don’t want to go through the work to lose the property to a higher bidder.
6) Just because it’s a foreclosure, does not mean it’s a SHORT SALE. I get one call a week from eager investors who see a property going into foreclosure and they call looking for short sale advice in Massachusetts. JUST because a property is being foreclosed upon does not mean it’s a short sale. The homeowner must have NEGATIVE EQUITY. If the homeowner has equity and is being foreclosed they can just list it online and get a traditional buyer and pay their loan off, so this goes back to knowing numbers.
That’s it for now, but as I think of more things, I’ll let you know.
We are trying to track short sale trends in Massachusetts per county. Feel free to visit our Essex County Statistic and Middlesex County statistics for January for an overview of numbers. So far the numbers in January are not surprising. As I have stated before January is one of the slowest months of the year for negative equity properties to sell in Massachusetts. Massachusetts short sales however are still strong in numbers overall. In 2014 we had one of our highest year for short sale negotiations in Massachusetts. Much of this is due in part to lenders working through the Massachusetts red tape and finally being able to foreclose on properties that were protected under Massachusetts law. Massachusetts does an EXCELLENT job of protecting defaulting homeowners, and does make every attempt to make sure that a homeowner has the option of a workout before foreclosure.
The Suffolk County short sale SOLD numbers for Massachusetts in January are unremarkable. There was not one single family property that sold short in Suffolk county in January 2015, however there were 3 multi families and one condo that made up the Suffolk sold market. The graph below represents those numbers. The DTO on the condo was zero, so it was likely a pre arranged buyer where the DOM for the condo was 73. The DTO was 3.67 for the multi family listings – and DOM was 135 – Muti Family listings don’t last long in Massachusetts. The market is strong for sellers of Multi families.
Moving on to active Massachusetts short sale listings, there is a TON of activity, and most properties are either UAG, or CTG. Boston, leads with 19 Single Family Massachusetts Short Sale Listings, 18 Condo Massachusetts short sale listings and then 13 Massachusetts multi family short sale listings. This is followed by revere that has much smaller numbers. The DOM for Suffolk County Massachusetts active single family short sale listings is 174, where DTO is 78. The DOM for Active Suffolk County Short Sale Condo Listings is 252, and DTO 94, where the DOM for Active Massachusetts Suffolk County Short Sale condo listings is 170 and the DTO is 47. Again, Massachusetts short sale Multi families don’t last long.
I pulled the numbers of CTG/UAG and Actives for Active Condo listings and very few short sales do not go under contract. Out of the active short sale condo listings in January for Suffolk County Massachusetts only 6 were active out of 25. The rest were CTG or UAG.
Our firm works with underwater homeowners throughout the state. Feel free to visit our website at http://shortsalemitigation.net for more information or poke around on our blog site here to learn the MOST about short sales. Our firm has the most up to date current information on short sale guidelines and what you need to do to get your home SOLD if you are underwater. Please don’t forget you do need some sort of hardship or inability to pay.
Call Maryann today to find out more how we can help 978-384-0032