Short Sales and Allowable Fees a Buyer May Pay For the Seller

As a short sale real estate agent I know that there is a real consern about the allowable fees a buyer may pay for the sellers. Until recently there has been confusion amongst the various government lending agencies as to what is allowed for the buyer to pay in the way of allowable fees for the seller in a short sale transaction and when. As short sales have increased the need for clarification has grown. Government agencies have always had very strict guidelines about what a buyer is allowed to pay with most guidelines putting the extra costs unto the seller. Without equity in the property the strict guidelines have made it difficult for short sale escrows when the borrower is requested to pay for the seller fees. At one point earlier in the year the local HUD offices were saying it was allowed on FHA loans for the borrower to pay customary fees while HUD Washington said nothing was allowed. Finally, we have received clarity surrounding the policies from the government agencies and have been told the steps that need to be taken.
Effective as of June 24th, 2010 on FNMA, FHLMC, FHA and VA loans the following guidance has been released.

• 1) Allowable fees paid by the buyer include: short sale processing fees (also referred to as short sale negotiation fees, buyer discount fees, and short sale buyer fees), payment to a subordinate lien holder and payment of delinquent taxes or delinquent HOA fees.
• 2) The Servicer who is agreeing to the pre-foreclosure or short sale must be provided with written details of the fees or payments and has the option of renegotiating the payoff amount to release its lien.
• 3) The borrower (buyer) must be provided with written details of the additional fees or payments and the additional necessary funds to complete the transaction must be documented.
• 4) All parties (buyer, seller and servicer) must provide their written agreement/concurrence of the final details of the transaction that includes the additional fees or payments.
• 5) The HUD-1 Settlement Statement must include all fees and payments included in the transaction.

While the lenders will still have the right to disallow fees paid by the borrower on behalf of the seller, that are determined excessive, we now know all agencies recognize the need to facilitate the short sale transaction.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Villa Rockledge Set For Foreclosure Auction

$30 million beach estate on ocean front in Laguna beach known as Villa Rockledge a family compound is in default. It is not only in default but has a date set for the foreclosure auction.




The home was built in 1921 it sits over the sand on a bluff, it sits on a 1/2 acre lot and has the main home and six villas. Over 12 bedrooms with 9 bathrooms. The compound was first listed in 2009 for $34.9 million.



The Wall Street Journal did an article on the home titled, "A Castle by the Sea". The home was purchased in 1973 for $420,000. The unpaid amount on the loan for Villa Rockledge is $6,212,511.04. If the owner cannot come up with the lenders payment in full it will be auctioned June 30th.



Once again the mortgage meltdown is not just some individules that were first time home buyers.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-874-2247

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

FED Holding Rates

Today in the Orange County Register there is an article on The Federal Reserve (FED) holding rates low. The vote was 9-1 last week to keep rates low. The record low interest levels will be here for an "extended period".



One reason for the continued low rate was weaknesses in housing, commercial real estate and employment. The FED also suggested that Europe's debt problems pose risks to the U.S. economy.



The FED went on to say that the financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.



However, the FED did state they felt the recovery will stay intact despite threats from abroad and at home. The yield on 10 year Treasury note, a benchmark for mortgages and other consumer loans, fell to 3.12 percent from 3.25 percent late Tuesday. That level has not been reached in over a year.



The fear is that is interest rates are too low for too long they could cause inflation.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

www.markandtim.com

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

California Tax Credit For Home Buyers Is Almost Out of Money

The California tax credit for home buyers has been a big success it is almost out of money. The federal tax credit finished on April 30, 2010 to qualify for up to $8,000 in federal tax breaks. California started their tax credit May 1, 2010. It has been so successful that the amount of money set aside for the tax credit is almost gone. 80 percent of the home buyers tax credit funds or set asside  has been claimed by buyers.



The tax credit is issued on a first come first served basis and about 5,630 homeowners have filed for the credit. The program allow home buyers to seek up to $10,000 in tax breaks, spread over three years. The homes must have closed after April 30, 2010.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Market Report for Mission Viejo Area

This weeks market report for Mission Viejo and surrounding areas shows that Orange County Median Prices for the resale homes were up 9.5 percent, for new homes it is up 16.0 percent and for resale condos up 6.9 percent. The sales volume is up for resale homes 6.3 percent and up 16.4 percent on condos and up 48.3 percent for new homes.

• Mission Viejo Zip Code 92691 sales prices are up 15.0 percent and the sales volume is up 16.7 percent.
• Mission Viejo Zip Code 92692 sales prices are up 12.0 percent and the sales volume is up 21.1 percent.
• Aliso Viejo sales prices are down 0.2 percent and the sales volume is up 49.4 percent.
• Laguna Niguel sales prices are down 7.9 percent and the sales volume is up 22.1 percent.
• Rancho Santa Margarita sales prices are down 5.7 percent and the sales volume is up 21.6 percent.
• San Clemente Zip Code 92672 sales prices are up 8.0 percent and the sales volume is up 21.6 percent.
• San Clemente Zip Code 92673 sales prices are down 2.4 percent and the sales volume is up 67.6 percent

If you are considering selling your home we are interested in helping you sell it Tim Lorenz. If you do not know what to do because you are behind in your mortgage and want some help Call Us we will sit down with you and explain the process.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Market Report for Mission Viejo Area

This weeks market report for Mission Viejo and surrounding areas shows that Orange County Median Prices for the resale homes were up 8.4 percent, for new homes it is up 21.1 percent and for resale condos up 15.7 percent. The sales volume is up for resale homes 13.1 percent and up 24.3 percent on condos and up 24.3 percent for new homes.

• Mission Viejo Zip Code 92691 sales prices are up 15.8 percent and the sales volume is up 17.8 percent.
• Mission Viejo Zip Code 92692 sales prices are up 6.3 percent and the sales volume is up 52.3 percent.
• Aliso Viejo sales prices are up 12.3 percent and the sales volume is up 79.7 percent.
• Laguna Niguel sales prices are down 4.6 percent and the sales volume is up 20.5 percent.
• Rancho Santa Margarita sales prices are up 0.7 percent and the sales volume is up 45.3 percent.
• San Clemente Zip Code 92672 sales prices are even 0.0 percent and the sales volume is up 18.8 percent.
• San Clemente Zip Code 92673 sales prices are down 2.9 percent and the sales volume is up 70.0 percent

If you are considering selling your home we are interested in helping you sell it Tim Lorenz. If you do not know what to do because you are behind in your mortgage and want some help Call Us we will sit down with you and explain the process.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

The Short on Short Sales; Whats Best for you?

Whats best for you, in regarding short sale, foreclosure and loan modification? Here is a simplified look at all three, highlighting the differences and benefits of short sales as compared to the other options.

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

What's Best for You!

This is a sample of one of the flyers we use in our e-mail blasts to our past clients and sphere of influence. It will usually go out to about 1,180 at each blasts.

We believe that it should be easy to read and simple to understand.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Buyers Are Saving Money on Mortgages

Buyers are saving money on morgages because interest rates for home loans that are at a 50 year low. With the cost of financing so low it makes very good sense to finance a home with a 15 year fixed rate loan. Yes, the payments are higher, which does affect qualifying for the loan. However, the interest savings are great over the term of the loan combined with the monthly payment ending in one-half the time.

If a buyer was putting 20% down or more and requesting a $417,000 conforming loan today's interest rates would be approximately 4.50% on a 30 year loan and 3.875% on a 15 year loan. The buyer would pay approximately one point.

• 4.500% (30) $2,112.88 Monthly Payment
• 3.875% (15) $3,058.44 Monthly Payment

The difference in the two payments is $985.56. If the buyer felt comfortable with the 30 year payment then stretching a little to make the higher payment is a prudent financial decision. In 15 years the savings to the buyer is $210,116.88. With the 30 year loan the total interest paid over the life of the loan is $343,635.99. By adding the total interest to the original principal balance the total cost to pay off the loan over 30 years is $760,635.99. By comparison, the 15 year loan total interest is $133,519.71 for a total cost over the life of the loan of $550,519.71. That is a savings of $210,116.88.

Most first time homebuyers are just trying to get into a home and qualify for the loan. The 15 year loan is not an option in most cases. However, for the baby boomer looking ahead to retirement, when the 15 year loan is paid off the 30 year loan will still have 15 years to go at $2,112.88 monthly payment.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Three Face Fraud Charges in Foreclosure Rescue

Another three face Charges in a foreclosure Rescue scam, Gregory Flores manager of All Fund Morgage in Anaheim, as well as Sheri Gale loan officer and Amy Hall former loan processor. Flores, Gale and Hall engaged in a scheme to defraus homeowners and lenders between May 2003 and June 2006 in Orange, Riverside and San Bernardino counties.

• The three convinced homeowners to sell or refinance homes convincing them they could save them from foreclosure. Instead they would get cash out loans based on false information.
• They would convince the homeowner to add others to the ownership of their homes in order to qualify for a loan. Homes were also sold to straw buyers. Often without the homeowners knowledge.
• They made false statements on the income of the straw buyers.Homeowners lost title to their homes, while the straw buyers owed the lenders hundreds of thousands of dollars that they could not repay.
• Flores could face up to 30 years and Hall and Gale could face a maximum of 20 years.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Homeowners Who Refinanced Will Get Help

Senate bill (SB 1178) would prohibit lenders from seeking repayment of loan on short sale and foreclosed homes, this California law will help homeowners who refinanced their homes. The California Senate reversed itself and passed a measure expanding mortgage protections to homeowners who have refinanced by a vote of 30-4.

The law had been the if you borrowed money to purchase a home you did not have to worry about any liability ont he mortgage other than the property itself. If the homeowner did refinance the home did not get a similar protection. SB1178 corrects this situation and both will be treated the same.

There is no protection for any cash that may have been have been taken out by the homeowner. They would still have to pay back the cash out portion of the loan.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Market Report for Mission Viejo area

This weeks market report for Mission Viejo and surrounding areas shows that Orange County Median Prices for the resale homes were up 11.2 percent, for new homes it is up 35.4 percent and for resale condos up 11.3 percent. The sales volume is up for resale homes 8.4 percent and up 18.0 percent on condos and up 81.8 percent for new homes.

• Mission Viejo Zip Code 92691 sales prices are up 10.3 percent and the sales volume is up 10.9 percent.
• Mission Viejo Zip Code 92692 sales prices are up 18.2 percent and the sales volume is up 38.2 percent.
• Aliso Viejo sales prices are up 11.9 percent and the sales volume is up 47.4 percent.
• Laguna Niguel sales prices are down 11.4 percent and the sales volume is up 22.0 percent.
• Rancho Santa Margarita sales prices are down 7.7 percent and the sales volume is up 62.7 percent.
• San Clemente Zip Code 92672 sales prices are up 4.6 percent and the sales volume is up 31.3 percent.
• San Clemente Zip Code 92673 sales prices are down 0.8 percent and the sales volume is up 16.7 percent

If you are considering selling your home we are interested in helping you sell it Tim Lorenz. If you do not know what to do because you are behind in your mortgage and want some help Call Us we will sit down with you and explain the process.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-874-2247

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

The Lending Industry and the Government

There is a war going on between the U.S. government and the lending industry. Due to the financial collapse of FNMA and FHLMC the government was required to step in and take over these two housing giants. FNMA just required an additional $11.8 billion dollars of new capital to keep them afloat. The U.S. government is trying to stem these losses by making all of the lenders buy back loans that were sold to these two agencies. If government auditors can find any discrepancy in the file they issue a repurchase agreement to the lender who in turn needs to use their capital to buy the loan back. In response to the increased buyback requests from the government lending institutions are pressuring their underwriters to make sure not one piece of documentation is missing from a loan file prior to the closing of the loan. This often results in conditions that don't make any sense to the borrowers and agents and can cause major upset prior to closing not to mention closing delays.

In 2009 Bank of America was requested to buy back $425 billion of home loans from FNMA and FHLMC. In 2010 the number is supposed to double. In the first quarter of 2010 Wells Fargo set aside $2.6 billion in reserves just to pay the legal bill for fighting the government and their buyback requests. The pendulum has swung from lenders making practically every loan four years ago to the extreme opposite making getting a home loan a very harrowing experience for the buyers, to say the least.

Is there anything you as agents can do to help make the borrower's experience less daunting? Absolutely there is. Have all of your clients be thoroughly pre-approved prior to putting them in your car. Unfortunately there are many versions of what a pre-approval entails. We cross pre-approve borrowers for REO and short sale properties. We see regularly the poor job and lack of documentation that made up the pre-approval. We have a lender that asks for supporting documentation from the buyer only to find out they don't qualify at all. Had we not asked to cross qualify the client that escrow would have collapsed shortly.

So what can be done to make sure the very best of efforts is being put forth?

• One, call the lender that issued the pre-approval letter and ask, "Did you collect income and asset documentation and review it with an underwriter to determine the accuracy of the qualification?"

• Two, allow time for the lender to take these steps in order to better prepare everyone. We are still asked to write pre-approval letters by talking to the client on the phone when the purchase contract is being written as everyone is in a hurry.

This process doesn't cut it in today's difficult lending environment. Remember, if the borrower did not submit income and asset documentation to the lender for review then the pre-approval letter in your hand isn't worth the paper it is written on.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Median Home Sale Price is Up

Orange County's medisn home sale price is up and at a 21 month high. The median price is up showing at $440,000 for the home sale price.

This Year the median home selling price was 12.8 percent above the pervious year and 32 percent above 2007. The low point in the cycle was hit in January 2009 at $370,000. We are currently above that mark by 19 percent.

Sales volume is also up with 3,056 homes sold, up 12.8 percent compared to a year ago. New homes have increased there volume by and are now accounting for 6 percent of the total of the homes sold in Orange County.

We are definetly showing a trend toward a positive outcome in our area. If you were waiting for the positive sign before you bought or sold. You just got that message. So give us a call so we can help you with all of your real estate needs.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-874-2247

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Market Report for Mission Viejo Area

This weeks market report for Mission Viejo and surrounding areas shows that Orange County Median Prices for the resale homes were up 15.7 percent, for new homes it is up 34.9 percent and for resale condos up 13.5 percent. The sales volume is up for resale homes 7.0 percent and up 18.9 percent on condos and up 61.2 percent for new homes.

• Mission Viejo Zip Code 92691 sales prices are up 25.8 percent and the sales volume is up 15.9 percent.
• Mission Viejo Zip Code 92692 sales prices areup 11.1 percent and the sales volume is up 34.0 percent.
• Aliso Viejo sales prices are up 18.0 percent and the sales volume is up 46.4 percent.
• Laguna Niguel sales prices are down 6.2 percent and the sales volume is up 25.0 percent.
• Rancho Santa Margarita sales prices are down 11.8 percent and the sales volume is up 33.3 percent.
• San Clemente Zip Code 92672 sales prices are down 0.5 percent and the sales volume is up 20.0 percent.
• San Clemente Zip Code 92673 sales prices are up 4.6 percent and the sales volume is up 2.6 percent

If you are considering selling your home we are interested in helping you sell it Tim Lorenz. If you do not know what to do because you are behind in your mortgage and want some help Call Us we will sit down with you and explain the process.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Jesse James and Sandra Bullock Home

Did you here that the home owned by Jesse James and Sandra Bullock is for sale. The home is an ocean front home in Sunset Beach it is one of the beaches that is the closest thing to a private beach you can have in Orange County. The home is not on the Multiple Listing Service and is shown by appointment only and has a price tag of $6.75 million.

It is a shame Jesse James and Sandra Bullock who are going through a break up have to sell this two story ocean front home. The home sits on a corner lot and was rebuilt (remodeled in 2002). The home has an extensive security system with multiple cameras.

The entire great room overlooks the beach, and the glass enclosed pool.

If you are looking for the luxury home call us.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Listing on Westfield in Laguna Niguel

28165 Westfield Drive, LN $565,000

Attractive single story, 3 bedroom home with city lights view. This home features hardwood floors, French doors, fireplace, recessed lighting, and beautiful granite countertops in secondary bath. Exterior highlights are a private lap pool, in ground spa and covered patio area. Some cosmetic maintenance needed, but a wonderful home with great amenities!

Special Features:

• SQ. FT. = 1,862 (estimated)2 Car attached GARAGE
• Year Built = 1981
• Private Lap pool and spa
• Covered Patio
• Fireplace in living Room

Additional Photos

Tim Lorenz 

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Over 40 Years Experience Representing South Orange County Home Buyers, Sellers,

Investors and Relocations!

There Are Realtors That Succeed at Short Sales

Short Sale Realtor's Successes

These are the properties that we have listed an sold lately Via Coyote, Polk Circle, Encantadi Canyon were sold and closed all short sales. Westfield Dr., and Coral Reach are short sales that we have just listed.

In addition, we have short sales that are under contract and are waiting to close. If you were wondering if you knew of a Realtor who can close short sales, we are that team. We can handle your problem property.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Compare the Real Estate Markets in Southern California

Housing Inventory Snapshot May 31, 2010

Average List Price Median List Price Average Days On Market

Los Angeles County, CA

Single Family under $600K $347,240 $345,000 88

Single Family over $600K $1,298,394 $899,000 112

Condo/Townhome under $400K $233,138 $229,000 99

Condo/Townhome over $400K $607,337 $524,950 100

Orange County, CA

Single Family under $1M $581,787 $569,000 87

Single Family over $1M $3,020,931 $1,950,000 136

Condo/Townhome under $600K $323,481 $318,000 91

Condo/Townhome over $600K $1,126,997 $895,000 135

Riverside County, CA

Single Family under $700K $229,851 $199,000 132

Single Family over $700K $1,545,416 $1,099,000 234

Condo/Townhome under $150K $101,536 $100,000 126

Condo/Townhome over $150K $236,533 $219,900 103

San Bernardino County, CA

Single Family under $700K $220,535 $180,000 113

Single Family over $700K $1,307,869 $1,100,000 133

Condo/Townhome under $200K $108,144 $104,000 115

Condo/Townhome over $200K $284,464 $239,990 140





MORTGAGE. National Averages (May 31, 2010)*

30-year fixed Rate - 4.92% APR - n/a%

15-year fixed Rate - 4.33% APR - n/a%

5/1 ARM Rate - 3.79% APR - n/a%


* Mortgage rates were collected from publicly available sources (yahoo.com) on the date stated. The accuracy of the information and the availability of these rates are not guaranteed by the publisher. Rates are provided for informational purposes only and are subject to change without notice. Actual market interest rates may vary.

** There are not enough listings in this category to compile comparative analysis.

*** MLS doesn't provide access to this data.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!