Short Sale to be Streamlined

There may be some good news on the horizon for those who have short sales with Freddie Mac and Fannie Mae. Both institutions intend to streamline the short sale process to help the borrowers and their communities. The FHFA (Federal Housing Finance Agency) told these mortgage servicers they needed to develop streamlined processes to help more homeowners avoid foreclosure.

Some of the changes:

• Review and respond to short sale requests more quickly (within 30 days)
• If it goes over 30 days, they have to keep the borrower informed weekly.
• A final decision has to be reached and communicated to the borrower within 60 days.

These new time lines are to take affect in June.

For more information read the Press Release from the FHFA about Short sales being streamlined.

Foreclosure Mediation Bill Passed

On April 11, 2012, Oregon Governor John Kitzhaber signed a bill (Senate Bill 1552) to create a foreclosure mediation program. This program is designed to allow home owners a chance to discuss options with their lender before going through foreclosure.  Also under this law, banks will no longer be allowed to start the foreclosure process and at the same time start negotiating loan modification. Banks that have less than 250 foreclosures will not be held to this new law. Not all of the details are worked out yet, and the Law won’t become effective until July 12^th. Keep your eye out for more information on who is able to participate in this program, and if it’s right for you.

If you’re thinking of taking advantage of this new program, make sure you act in a timely manner. When the process is initiated, there are supposed to be limits on how long you can wait before your consultations and mediation begin. If you wait too long, your lender may not be required to wait to foreclose.

For more information, check out the Oregon Government foreclosure help website.

Featured Short Sale: 492 SE 11th Cir., Troutdale, OR 97060

492 SE 11TH  CIR Troutdale 97060 This beautiful traditional home four bedroom home is located in a cul-de-sac that is close to school and quaint Troutdale Oregon. Some of the features you’ll find in this Troutdale home are newer laminate floors, tiled master bath, vaulted ceilings, & picturesque views! This beautiful home also has a large fenced yard with a patio, garden, sprinkler system and more.

Address: 492 SE 11th Cir, Troutdale, OR 97060 Bed/Full Bath: 4/2.1 Sq. Ft.: 2021 Price: $200000 (Short Sale) Email your Sherwood Realtor Stacy Owens to schedule a viewing of this property

BEWARE!!! Debt Relief Act Coming To An End

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

Have you heard of the mortgage forgiveness debt relief act? This is an important act that has helped make Short Sales a viable option for many. When you have a debt forgiven (in a short sale it would be the bank forgiving part of your debt), you have to pay income tax on the debt that has been forgiven. The debt relief act of 2007 made it possible for people to be exempt to this rule when applied to their main residency.

This ends in 2012

The debt forgiveness act applies to debt cancellations that occur between 2007 and 2012. This is 2012 folks, and there is no sign of the debt relief act being extended at this time. That means in the future you may likely have to pay taxes on the amount forgiven by a bank during a short sale or foreclosure.

How does the IRS know my debt has been canceled?

When a bank forgives a debt (over $600) they are required to fill out a form 1099-C to report the amount of the debt cancellation. That means you better report it on your end as well. And if you need to short sale your home, you may want to try to get it taken care of before the end of the year, so your debt may not be taxable.

For more information – visit the IRS website.

Featured Short Sale: 107 E 9th St Newberg OR 97132

107 E 9TH ST Newberg, OR 97132 This Newberg Oregon home has great potential as a starter home or an investment home. With three bedrooms, living room, dining room and kitchen, this home is making the most of the 1040 square feet. Perfect for a get together, you can be in the dining room talking to someone making dinner and still talking with someone in the living room. This bungalow style home has a one car garage as well.

Address: 107 E 9TH ST Newberg, OR 97132 Bed/Full Bath: 3/1 Sq. Ft.: 1040 Price: $170,000 (Short Sale)Email your Realtor Stacy Owens to schedule a viewing of this property View a virtual tour of 107 E 9TH ST Newberg, OR 97132

Check out other Newberg Short Sales starting under $100,000.

Listing and Receiving a Short Sale Offer

You’re Still the Owner

Because you are still the owner, you still have the power to accept, reject or counter offers made on your home. It’s best to talk with a Real Estate Attorney to find out what all the best options are for you so you can make wise decisions along the way.

Time Frames and Contingencies

If you’ve never been part of the short sale process before, you might be surprised at how long the process can take. There are a lot of parties involved, so there are a lot of things to coordinate in order to actually make a short sale work. Give Short Sale Specialist Stacy Owens a call to get a accurate picture of how the process will go, or attend one of her Free Short Sale Seminars and get your questions answered there. Bank Approval Contingencies may also be in effect during your short sale. This is a contingency designed to protect the buyer if the short sale isn’t approved by the bank. For the seller, it really translates into the time between when you accept the buyers offer and when the bank does. It’s a sign you’re one step closer to completing the short sale process.

Short sale Paperwork

Paperwork is not a word that brings visions of fun an laughter to the mind. In a short sale there will be quite a bit of paperwork that the seller will have to work through. That’s why having a short sale specialist help you through the process can make things go a lot smoother. Some of the paperwork will be provided by the seller, but some of it will be filled out by your Real Estate Agent.

Communication with the servicer (lender)

Not every real estate agent is willing to put in the work it takes to get a short sale pushed through. It takes a lot of time and communication with the lender(s). Sometimes the only way to get a short sale through is to continue to keep your short sale on the top of the pile. That means that your real estate agent has to have a lot of tenacity to see the short sale through to completion.

Time frame for response to short sale offer

There are a lot of things that can affect the time frame in which you get a response from a short sale offer. Sometimes a short sale is pre-approved for a certain amount. If there is a number already approved, you can skip the negotiating and write the offer for that amount. If there isn’t a price agreed on, the servicer will likely ask for an appraisal. The process generally takes longer than a traditional home sale.

The buyer’s right to terminate

It’s important for seller’s of a short sale to understand that in a short sale, the buyer has the right to terminate the agreement and offer up to the time that the bank has approved the short sale. This can be frustrating, but working with the right real estate agent can help you navigate these waters more easily.

Bank Approval Contingencies

Short Sale Bank Approval Contingencies are Important 

In a short sale all things are dependent on the bank and their willingness to sell the home at a loss. For the protection of the buyer, a bank approval contingency should be attached. That way if the bank approval doesn’t come through, the buyer isn’t obligated to the agreement to purchase. If all other contingencies are met (like financial contingencies, inspection contingencies, or expiration date contingencies), and the bank does approve the short sale, then the home will enter escrow. Basically the bank approval contingency in a short sale is the time between when the seller has accepted the offer and the time the bank approves or denies the short sale.