Programs to help save my home from foreclosure in California    

• Home Affordable Modification Program SM (HAMP^SM)                              
• Principal Reduction Alternative SM (PRA)
• Second Lien Modification Program (2MP)
• FHA Home Affordable Modification Program (FHA-HAMP)
• USDA’s Special Loan Servicing
• Veteran’s Affairs Home Affordable Modification (VA-HAMP)
• Home Affordable Foreclosure Alternatives Program (HAFA)
• Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP)
• Home Affordable Refinance Program (HARP)
• FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
• Home Affordable Unemployment Program (UP)
• Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF)

Unemployment Mortgage Assistance: Downloadable Program Description >>

Mortgage Reinstatement Assistance: Downloadable Program Description >>

Principal Reduction: Downloadable Program Description >>

Keep your home options ( the most recent program available)

Keep Your Home  Short Sale (ask us for a brochure)

KEEP YOUR HOME LOAN MODIFICATION

Keep Your Home FHA principle reduction loan

Keep your home options:  California

• Home Affordable Modification Program SM (HAMP^SM)                              
• Principal Reduction Alternative SM (PRA)
• Second Lien Modification Program (2MP)
• FHA Home Affordable Modification Program (FHA-HAMP)
• USDA’s Special Loan Servicing
• Veteran’s Affairs Home Affordable Modification (VA-HAMP)
• Home Affordable Foreclosure Alternatives Program (HAFA)
• Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP)
• Home Affordable Refinance Program (HARP)
• FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
• Home Affordable Unemployment Program (UP)
• Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF)

Unemployment Mortgage Assistance: Downloadable Program Description >>

Mortgage Reinstatement Assistance: Downloadable Program Description >>

Principal Reduction: Downloadable Program Description >>

Keep your home options ( the most recent program available)

Keep Your Home  Short Sale (ask us for a brochure)

Keep Your Home loan modification

Keep Your Home FHA principle reduction loan

Living in your house for free ??  How long will it last?

Sounds funny , but it is true. So many people have not made mortgage , tax , HOA payments etc, for over a year. Sounds great , but the problem is they have not saved a dime. Any program down the road they apply like loan modification, Short Sale rent back , Deed for Lease, or even straight renting have one thing in common. You actually have to pay something to live in the home!! Free is way better.

So now people cannot even afford to short sale sell their house, because they are so used to living in the house for FREE.

FHA Short Sale Guidelines
Do you own an FHA or HUD insured home and want to do a short sale? Here are the FHA short sale guidelines:

You must list the property with a licensed real estate broker who is not related to you To do an FHA short sale

You must be at least 31 days delinquent for an FHA short Sale
You have to keep the house on the market for at least four months, possibly as many as six.
The home must be owner-occupied, exceptions are made for death, divorce, unemployment, or job transfer for an FHA short sale
Realtor commissions cannot be more than 6%.
You have to be pre-approved in order to be qualified for a short sale.
There must be documentation proving your decreased income or inability to make the mortgage payments.
HUD will reimburse the buyer for up to 1% of the mortgage as part of closing costs if the new mortgage is also FHA-insured.
HUD will not pay for points, home warranties, or lender’s title insurance.
All short sales must be “arms-length” transactions.
HUD will pay the lender up to $1,000 if the sale is closed within 3 months from the date of application
HUD will pay up to $1,500 for the discharge of secondary liens after the primary lender’s incentive has been applied.
The borrower must not be encouraged to default on their mortgage in order to participate in the short-sale program.
The property may not be an investment property

www.guidetomortgageplanning.com

FHA Short Sales Guidelines rule number 1.

should be handled by an experienced agent:

The agent should understand the different phases of the FHA short sale program

Short Sale Process:  From A-Z

LISTING AND FILE PREPARATION for Short sale process

Once we have pre-qualified the distressed homeowner and they are in fact a candidate for a short sale, then it is time to start collecting their supporting documents and list the home. The goal is to accomplish 100% of the paper work at the first meeting. You should of received the short sale welcome package via email before your appointment to allow adequate time for preparation. Read the disclosures carefully, fill out all of the forms and start gathering the following:

(Short Sale Welcome package)

-  Financial statement ( Assets/Liabilities and Income/Expenses )

-  Hardship letter ( Signed and dated)

-  Checklist:

-  Most recent two years tax returns

-  Most recent two months paystubs (If self –employed, fill out a profit and loss statement for the last three months)

-  Most recent 2 months bank statements

-  HOA Statement (We advise that you continue making the HOA payments)

-  Mortgage statement(s)

-  If there are any documents the home owner cannot provide, a letter of explanation will suffice to help the short sale process

(Short Sale Listing package)

-  Signed Disclosures acknowledging short sale process

-  Signed Authorization to contact lender(s)

-  Signed listing agreement for a short sale

-  List of repairs ( Pictures if noticeable)

-  Signed schedule of price reductions ( These occur on the 1st and 15th of the month, there should be a total of three)

MAINTAINING LISTING for short sale process

We want to create a listing history with the lenders to help the short sale. It is our job to show the bank we are working to get them the highest and best offer in the short sale. Typically, the bank has an idea of what they think the home is worth however, in most cases the lenders value is not in line with our market. We want to start the listing at what is owed on the mortgage and come down slowly.  Have two to three scheduled price reductions (1st and 15th of the month).  Once you get to your final price reduction you will be at the market and drive in the offers you need in order to submit a complete package.  Ideally we want to see 3-5 showings on average per week. This gives us the opportunity to gather everything we need to submit a complete package.  At this stage we start the following:

- Make the initial contact with the lender in regards to the short sale, faxing over authorization and ordering payoff statements.

- Request from the lenders their specific short sale requirements.

- Keep communication open with the lender.  You should get updated weekly on the progress of the listing.

 

ACCEPTING AN OFFER in the short sale process

The most common issues with buyers writing an offer on your short sale listing are the following:

-  They are not qualified buyers for a short sale or any sale.

-  They are putting in multiple offers all over San Diego County so by the time we get the approval; the buyers have purchased another property.
Here is a solution to help minimize the chances of this occurring:

-  We have the buyer get DU approval through a reputable lender, preferably a bank or credit union.  The lenders we use collect all of the buyers documentation up front to start the DU process.  This will tell us if this buyer can in fact purchase this property.  Furthermore if the buyer is willing to go through the DU process then we know this is the home they want.  Typically the bank wants to see an offer at 80% of the balance of the loan. This is not always the case however our goal is to get as close the number as possible.
SUBMITTING A COMPLETE SHORT SALE PACKAGE

We never want to submit a package unless it is 100% complete. If we do not submit a whole and complete package it will be lost under a sea of other files or it will be tossed in the shredder by a tired representative.  This is a complete package;

-  Table of contents

-  Short sale cover letter

-  Signed authorization for the short sale

-  MLS Listing sheet to show short sale lender

-  Hardship letter (signed and dated)

-  Asset and liability sheet

-  Expense sheet

-  Most recent 2 years tax returns

-  Most recent 2 months paystubs or profit and loss sheet for last three months

-  Most recent 2 months bank statements

-  Comparative market analysis ( with 3 active, 3 pending and 3 sold listing sheets)

-  List of repairs (pictures if noticeable)

-  List of detrimental factors to help determine short sale marketing issues

-  Listing agreement ( no electronic signatures)

-  HUD

-  DU Approval

-  If this is a CASH buyer, provide proof  of funds to the short sale lender

-  Fully executed RPA ( no electronic signatures)

-  Copy of good faith deposit

-  Preliminary title report

-  Termite report
Submitting the Short Sale Package: 

We verify the fax numbers and address and then fax a complete package and mail it to the lender.  We then follow up 24-48 hours to confirm receipt.  Once a package has been submitted, it takes 7-10 days to get imaged into their system. Please don’t ask us why they are not up to 2010 technology…YES we know it would be easier just to Scan and email a PDF to them
Getting assigned a negotiator: in the short sale process

Once assigned, the negotiator typically calls to introduce themselves and sets expectations for the short sale process.
Broker Price Opinion (BPO):

This is a person, typically a realtor the lender sends out to give an opinion of what the home is worth.  Once this has been ordered and completed, the value is in review. This can take anywhere from 7-10 days. Once the negotiator has everything they need the file is submitted to the investor for final approval.  This can take up to 3 weeks. We have a practice of meeting the BPO agent at the property to help with any questions they may have
Lender follow up:

This is a crucial part of the process. We typically follow up every 3 days to keep the file in front of the negotiator. Lenders have a huge turn-over in employees and sometimes a file can be tossed around. We need to know where your file is at all times.
Buyer and buyer’s agent follow up:

We like to keep the lines of communication open with the buyer and the buyer’s agent. Informing them of any new break through’s  in the process once a week. Even if there is nothing new to report we want to make sure the buyer knows we are doing our best to make this a win for all parties involved.
APPROVAL

Once the lender has issued an approval they want to close it as soon as possible.  It is crucial to have a team of professionals that is experienced in these types of transactions (Agents, Escrow, Title, Negotiators, and Buyer’s Lender) who can avoid pitfalls and ensure closing.  Most approvals are good for 30 days. We want to make sure we have the right buyers and are able to move forward quickly. In most cases we can get extensions however we want to avoid that. Some lenders will give an extension but charge a per diem for every day we do not close on time.

The goal is to close your transactions as fast as possible. If we are following a systematic structure, knowing the boundaries to stay in and guidelines to follow:

-  Qualified sellers

-  Listing history

-  100% complete packages

How to structure Short Sale Negotiation fees:                                              

Having acted as a third party short sale negotiator for listing agents over the last couple of years, most agents like my services, but many do not like the idea of having to pay me. Typically agents have tried to find solutions to help subsidize my fee etc. I have seen it structured many ways in which some I agree with and some I think may be a little shady. Here are a few examples.

1. Putting the short sale negotiation fee on the HUD1 as processing , transaction , short sale negotiation fee, etc

(Banks do not typically like to pay this)

1. Charging the buyer a % to negotiate the short sale.

(Fannie and Freddie allow this but some states like Ca do not really like the concept)

1. Listing agent getting a higher split than buyer’s agent

(My opinion this is the best route to take)

MLS Listing Re Short Sale Negotiator Fees

Short sales present a special problem with conditional compensation being offered to a cooperating broker. The listing agent may not be entirely sure what the commission will be until the terms of a short sale negotiation are approved by the lender. The Multiple Listing Service (MLS) has adopted NAR-approved language giving participants in the MLS the ability to disclose or may require disclosure to other participants that there is a potential for a short sale. If the property is being listed as a short sale, that should be disclosed in the private agent remarks section.  A listing that requires the buyer’s agent to pay a portion of the negotiator’s fee may be a prohibited contingent offer of compensation. To avoid an MLS Rule violation, rather than requiring the cooperating broker to pay a stated amount of the negotiator’s fee, the listing agent may lower the percentage of the commission offered to the cooperating broker, subject to discussion with the seller and full written disclosure.  The purpose of the MLS is to exchange information regarding available properties for sale or lease and to establish legal relationships with other participants by making blanket unilateral offers of compensation. The MLS Rules govern the behavior of the participants.

Loss Mitigation 101

Know Your Loss Mitigation Options: 

1.What is a Forbearance with Loss Mitigation

With this loss mitigation option, you and your mortgage company agree to temporarily suspend or reduce your monthly mortgage payments for a specific period of time. This option lets you deal with your short-term financial problems by giving you time to get back on your feet and bring your mortgage current.

Forbearance may be loss mitigation option if:

• You are ineligible or do not want to refinance
• You are facing a short-term hardship
• You are several months behind on your mortgage payments

What are the benefits of this loss mitigation option?

• Lower or temporarily suspend your monthly payment—giving you time to improve your financial situation and get back on your feet
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure

How does it this loss mitigation option work?

Forbearance reduces your monthly mortgage payment—or suspends it completely—during the forbearance period (usually between 90-180 days). If you qualify for forbearance, you and your mortgage company will sign an agreement that will outline the forbearance terms:

• length of forbearance period,
• reduced payment amount (if the payment is not suspended), and
• the terms of repayment.

After the forbearance period has ended, you will need to repay the amount that was reduced or suspended. However, you usually have a few ways you can repay—moving the payments to the end of your mortgage, which will lengthen the term; making a one-time payment for the amount; or adding a specific amount to your payments each month until the entire amount is repaid (see Repayment Plan for more information).

If you are still struggling with your mortgage payments after the forbearance period is over, you may be able to qualify for a modification that would permanently change the terms of your mortgage.

2. What is a Loan  Modification with loss mitigation?

Under this loss mitigation  option, you reach an agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, interest rate, etc. In most cases, when your mortgage is modified, you can reduce your monthly payment to a more affordable amount.

A  loan modification may be a loss mitigation option if:

• You are ineligible to refinance
• You are facing a long-term hardship
• You are several months behind on your mortgage payments or likely to fall behind soon

What are the benefits of this loss mitigation option?

• Resolve your delinquency status with your mortgage company immediately
• May reduce your monthly mortgage payments to a more affordable amount
• Change the original terms of your mortgage permanently, giving you a new start
• Less damaging to your credit score than a foreclosure
• Stay in your home and avoid foreclosure

How does this loss mitigation option work?

A modification involves one or more of the following:

• Changing the mortgage loan type (e.g., changing an Adjustable Rate Mortgage to a Fixed-Rate Mortgage)
• Extending the term of the mortgage (e.g., from a 30-year term to a 40-year term)
• Reducing the interest rate either temporarily or permanently
• Adding any past-due amounts, such as interest and escrow, to the unpaid principal balance, which is then reamortized over the new term

3. What is Deed-for-Lease with loss mitigation?

The Deed-For-Lease™   loss mitigation option is a program from Fannie Mae that allows you to lease your home after you have transferred the title to your property to the mortgage company (commonly called a Deed-in-Lieu of Foreclosure). The lease terms are up to 12 months (with the possibility to extend longer). And the monthly rent is based on the current rental rates for your area—not on your original mortgage payment.

Deed-for-Lease is an alternative to foreclosure and may be a loss mitigation option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are several months behind on your mortgage payments
• You may owe more on your home than it’s worth
• You have not been able to sell your home
• You want to remain in your home and neighborhood

Find out who owns your loan

Deed-for-Lease is available for loans owned by Fannie Mae. To see if your loan is owned by Fannie Mae.

What are the benefits of a Deed-for-Lease in terms of loss mitigation?

• Eliminate or reduce your remaining mortgage debt
• Resolve your delinquency and avoid foreclosure
• Stay in your home and neighborhood—no need to move or relocate
• Lease at current market rate rent for up to 12 months with a possible option to extend the term
• Pay no security deposit
• Assistance for relocation may be available at the end of your lease
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) by executing a DIL than if you went through foreclosure (at least 7 years)

How does it work?

If your loan is eligible for Deed-for-Lease,

1. Your mortgage must be owned by Fannie Mae—click here to check
2. Your mortgage company will refer you to a property management company that will inspect your property and review your financial information
3. You will sign a lease agreement (if you qualify for the program)
4. You will sign a Deed-in-Lieu of Foreclosure (DIL) to transfer title to the property to Fannie Mae
5. Your lease becomes effective once the DIL is complete/accepted by Fannie Mae
6. You will remain in the property according to the lease terms paying monthly rent
7. The property management company will manage the property and collect the monthly rent

4. What is a Short Sale with loss mitigation?

A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. You may also be eligible for the government’s Home Affordable Foreclosure Alternatives Program (HAFA) which offers short sale and DIL options.

A short sale is an alternative loss mitigation option to foreclosure and may be an option if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are behind on your mortgage payments
• You owe more on your home than it’s worth
• You have not been able to sell your home at a price that covers what you still owe on your mortgage
• You can no longer afford your home and are ready or need to leave

What are the benefits of a Short Sale in terms of loss mitigation?

• Eliminate or reduce your mortgage debt
• Avoid the negative impact of a foreclosure
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)

What is the process for a Short Sale in this loss mitigation option?

If you qualify for this loss mitigation option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:

• set the sale price (based on current market value),
• collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
• review acceptable offers,
• agree to the terms of the sale once a buyer is in place, and
• work with the buyer’s real estate agent and mortgage lender to finalize the sale.

In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Deed-in-Lieu of Foreclosure).

Keep Your Home Short Sale loss mitigation option.

The SHARP Housing Program “Sell, Rent & Buy Back” program.

Currently ONLY available in California, Nevada and Arizona…

This program is offered through  Stabilization Home Affordability

Revitalization Program

This loss mitigation program is approved by the US Treasury and HUD.**

Property must be in marketable condition and be in alignment with the surrounding

neighborhood as a Single Family Residence or condominium..

Qualifications:

• · 30+ days or more late on payment as per HAFA guidelines.
• · The homes first lien or mortgage reflects 20% or more in negative equity
• · Home must be owner occupied.
• · 1 st mortgage must be less than $729,750
• · Individual must have a job and be able to pay market rent.

How does the Short Sell & Rent Back Program work?

1. As Realtors, we list your home*

2. A monthly lease rate is determined based on the appraised value of your home.

3. Under this agreement, you must keep the home clean and green…a reflection of your

pride in home ownership.

4. You are required to maintain, your property insurance, property taxes and Home

Owners Association fees if property is located in an HOA.

5. You contract with the non-profit organization SHARP to buy your home. SHARP

will negotiate with your mortgage company to sell your home to our investor under the

Federal Governments HAFA Program. This process may take 2 to 4 months for

approval to sell the home under the HAFA guidelines.

6. The sale closes and you rent the property back. (my opinion the best loss mitigation option)

7. Your mortgage company pays our fees…you don’t pay any commissions.

8. Buy the home back after 1 to 3 years.

* It is a requirement with mortgage companies that the property must be listed with a

licensed real estate agent.

Arms length Transaction does not apply in this program per US Treasury

5. What is a Deed-in-Lieu in terms of loss mitigation?

A Deed-in-Lieu of Foreclosure (DIL) is where you, the homeowner, voluntarily transfer the ownership of your property (the title and all property associated with it) to the owner of your mortgage in exchange for a release from your mortgage loan and payments.

A DIL is an alternative loss mitigation option to foreclosure and should be considered if:

• You are ineligible to refinance or modify your mortgage
• You are facing a long-term hardship
• You are behind on your mortgage payments
• You owe more on your home than it’s worth
• You don’t want to sell your home or haven’t been able to sell your home
• You can no longer afford your home and you are ready to leave

Important! If your loan is not owned by Fannie Mae, there may be a similar leasing option offered by your mortgage company. Always contact them to see what is available.

What are the benefits of a Deed-in-Lieu?

• Eliminate or reduce your remaining mortgage debt
• Avoid the negative impact of a foreclosure
• May be eligible for relocation assistance in some cases
• Start repairing your credit sooner than if you went through a foreclosure
• May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (at least 7 years)
• If your loan is owned by Fannie Mae (click here to check), you may qualify to lease your home through the Deed-for-Lease Option

What is the process for a Deed-in-Lieu?

To qualify for a DIL, you will work with your mortgage company to complete the eligibility process, such as determining the value of the property and how much you still owe as well as reviewing your current hardship. If approved, you will need to vacate the property (unless we agree to lease the property back to you), and you may be required to sign standard pre-closing documents as well as attend the closing.

Additionally, you will need to leave the home—both inside and outside—in good condition, free of interior and exterior trash, debris or damage, and all personal belongings must be removed. In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.

A DIL usually takes around 90 days to complete, but this could be shorter or longer or depending upon your specific situation.

Loss Mitigation 101is designed to help individuals understand what programs are available.    Most individuals will fit into one or more loss mitigation option boxes.  The key to loss mitigation is to have a game plan and understanding of the process. The loss mitigation process can be frustrating , but ultimately save thousands of dollars.

 Loan modification; the Net Present Value & DTI ratio: Which is the main reason for loan modification failure  

1. Loan Modification Front-End Debt To Income: First, to qualify for HAMP (the Treasury’s “Home Affordable Modification Program”), the borrower’s current payments for housing debt (i.e. principal, interest, taxes, insurance and association dues) must be “unaffordable” which means that those payments exceed 31% of the borrower’s gross monthly income. This is known as the “Front-End, Debt-to-Income Ratio.” This is usually not a big hurdle because most borrowers in financial trouble are paying well in excess of that 31% threshold. However, some borrowers believe they need to show the lender that they have NO income. In that situation, the loan modification will be rejected immediately because the borrower needs to be able to show that a loan modification will lower the Front-End DTI to at least 31%. If the borrower has no income (or if the borrower artificially decreases his or her income), the lender simply can’t do anything to get the payment to be “affordable” (there are limits to the interest rate reductions and term extensions which prevent unlimited adjustments to reach affordability). Alternatively, some borrowers already pay less than 31% of their gross income toward their housing debt, but have so many other bills that they still can’t afford the mortgage payment. These borrowers also fail the Front-End DTI test because they are already under the 31% threshold (the lender doesn’t care that you are over extended on non-housing debt). So, as you can see, the borrower has a narrow window between making too much money and not making enough money, within which the lender could provide an adjustment to the mortgage (e.g. lower interest rate, extend term or reduce principal) which would transform the loan from unaffordable (i.e. greater than 31% Front-End DTI) to affordable (i.e. equal or less than 31% Front-End DTI). However, the evaluation doesn’t end here. This where the Net Present Value test comes in to kill off the most effective loan modification tool: the principal reduction.

2. Net Present Value (NPV): Next, the lender must determine whether it will suffer a greater loss by providing a loan modification as compared to simply foreclosing on the home and selling it. The lender must figure out which option (modification vs. foreclosure) provides the highest Net Present Value to the lender. In both a modification and a foreclosure, the lender eventually recoups some of the money that was lent to the borrower. In a loan modification, the lender will receive monthly payments which include principal and interest (albeit, at a lower interest rate than originally contemplated) over a period of 30 or 40 years. An accountant can look at that stream of 360 (or 480) monthly payments and figure out what is it worth in “today’s” dollars (that’s called the “Net Present Value” of a series of payments). Alternatively, in a foreclosure, the lender will end up selling the property either at a public foreclosure auction or as an REO (bank “Real Estate Owned”), and, after paying the foreclosure and sales costs, the lender will have a lump sum of money which it can (hopefully) re-lend to a new borrower at current interest rates. Again, an accountant can figure out how much money the lender will receive as a Net Present Value from the foreclosure and sale. At that point, it becomes a simple mathematical calculation to determine whether the lender receives more money through a loan modification or by foreclosing and selling the property. That’s the Net Present Value Test. Here’s the problem for a borrower: If the lender has to significantly reduce the interest rate, or extend the maturity date of the loan, or even reduce principal, all in an effort to comply with the Front-End DTI test above (to achieve that 31% target), it becomes MORE LIKELY that a foreclosure will provide a greater recovery than a loan modification. If so, the lender cannot approve the loan modification and must foreclose and sell the property. It is this little known NPV Test that kills many loan modifications, and the borrower is not told why they don’t qualify. Your Loan Modification will not work!

So, as you can see, in situations where the lender must reduce the principal balance of the mortgage to the CURRENT MARKET VALUE to make the loan affordable, it is almost a mathematical certainty that the loan modification will fail the NPV test.

A loan modification is not as clear cut as all those TV and radio commercials make it sound. There are ways to counter the harsh result of the Net Present Value Test. A skilled negotiator can actually make a difference, but more often than not, a LOAN modification is SIMPLY NOT GOING TO WORK for the borrower. You must take a very close look at the numbers before you waste time and money attempting a loan modification. Additionally, YOU SHOULD NEVER PAY ANYONE AN UPFRONT FEE FOR A LOAN MODIFICATION (See the California Department of Real Estate for warnings regarding Loan Modification Scams). The failure rate is so high that you are almost certainly throwing money away.Loan Modification just does not work.

A better option than loan modification is going to be the KEEP YOUR HOME SHORT SALE! The principal reduction opportunity alone makes this a better program.

SHARP Homeowner Presentation

KEEP YOUR HOME SHORT SALE:Frequently Asked Questions

Can I apply for help through the  KEEP YOUR HOME SHORT SALE program if I have
lost my job?
Only if you have another source of steady income. You may use Social Security, a pension, disability income or income from a family member living with you. Without steady income, we cannot move forward with your application.

I have a low credit score and/or I have filed for bankruptcy.
Can I still apply to the KEEP YOUR HOME SHORT SALE?
Yes.

My home has not been foreclosed on but I canʼt make my
payments now. Can I apply to the KEEP YOUR HOME SHORT SALE?
Yes, you can apply for help if you cannot afford to make
your current payments.

Can I apply if I can afford to make my current payments to
reduce my overall loan amount(s)?

No. The KEEP YOUR HOME SHORT SALE program is intended for homeowners that
cannot afford to make their payments and may lose their
homes to foreclosure.

May a friend move in with me to save my home with the KEEP YOUR HOME SHORT SALE?
Yes. You may apply with a friend as long as they are willing
to move in to the home and live there as a full-time,
permanent resident.
Can multiple loans be consolidated ?
Yes. If you have one or more loans that were used to
finance your home you can apply.

KEEP YOUR HOME SHORT SALE works with individuals and families to purchase
their homes through a short sale, from banks following a
foreclosure or at public auction. How your home is
purchased depends on your unique situation.

For the KEEP YOUR HOME SHORT SALE to begin working with someone to repurchase a home, several things must fall into place. First, applicants must be able to afford the new payments. Second, the bank must agree to accept the offer from non-profit to purchase the home. Because a successful outcome depends on a number of factors, we cannot guarantee a purchase will go through.

KEEP YOUR HOME SHORT SALE;

7 Things to Know Before You Buy That Short Sale House                                            

The Wrong Short Sale House Might Not Ever Close

• Qualify the listing agent and the seller before writing an offer on that short sale house.
• When you spot a Short Sale house that interests you, take your hand off the mouse and step away from the computer. Before you get all excited over the prospect of buying that short sale house, pick up the phone and call your real estate agent. Your agent needs to research that short sale listing first.

In some real estate markets, fewer than 50% of short sales close. Just because that home is listed as a short sale doesn’t mean it’s really for sale (because it’s subject to lender approval), nor does it mean it will sell at the advertised price. Here are 6 things you need to know before trying to buy that short sale.

1.COMPARABLE SALES FOR THAT SHORT SALE HOUSE

Most short sales are all priced below comparable sales. Some short sales are priced ridiculously low. So low that the sellers’ bank will never accept the offer. These types of listings receive multiple offers. But all is not lost. To get your offer accepted, it will need to be priced near market value. (How the offer is structured is very important!!) If you’re not prepared to pay above a superficial price on a low ball short sale listing, then pass.

2.MORTGAGE AMOUNTS &  NUMBER OF liens

Ask your agent to research how much is owed against the home and find out the number of loans that are recorded. A second or third mortgage lender will receive peanuts as compared to the amount a senior lender in first position will get.

Moreover, some lenders, deserving or not, get a reputation for being difficult to work with. If your agent is an experienced short sale agent, he or she will know who these lenders are and can advise you of the difficulty you may encounter.

If your offer is well below of the mortgaged amount, it is unlikely that your offer will see the light of day on the negotiator’s desk.

3. SHORT SALE LISTING AGENT’S TRACK RECORD

A listing agent who is advertising a short sale but has never closed a short sale is a risky proposition for you. That’s because it’s up to the listing agent to submit the short sale package to the lender and negotiate. Your buyer’s agent can’t talk to the bank.

Ask yourself, do you want to risk rejection of your short sale purchase because the listing agent has no experience?

4.SHORT SALE SELLER QUALIFICATIONS

Find out if the listing agent has received a completed short sale package from the seller, and ask about the contents of that package.

Some sellers do not want to cooperate and are slow to return these documents. Others have never been told by their agent that these documents are mandatory. You don’t want your short sale purchase delayed because the listing agent doesn’t have the required documents.

5. NUMBER OF SHORT SALE OFFERS RECEIVED

Home priced under value will receive multiple offers. An agent is not required to disclose the terms of those offers, but you do want to know how many offers you are up against.

Here’s how it generally works:

• When a short sale home first comes on the market, the first offer will most likely be a tad below list price.
• The second, at list price.
• The third offer will be slightly higher, maybe by a $1,000 or $2,000.
• The fourth offer will be significantly more.

 6 THE LISTING AGENT’S SHORT SALE PROCEDURES

Make sure the listing agent has an internal procedure to process short sales. Some use outside negotiation companies, which is ok.  Hopefully they just do not toss the file to Transaction coordinator or an office newbie

 7. * Always work with a buyer’s agent who really understands the short sale process, this will save you so much time and headache.