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Patricia "Pattie " Romano Your HomeTown Realtor 609 312-9043

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foreclosure? a Short Sale may be the answer

09-08-08
Patricia "Pattie " Romano Your HomeTown Realtor 609 312-9043

Your credit may be adversely affected by a foreclosure, a short sale may be the answer.

Given today's real estate market, many homeowners are left with little or no equity in their property , facing a foreclosure process because you owe close to if not more than the value of the loan on your home. In these types of cases, lenders may sometimes accept discounts on mortgages to allow the sale of the property and avoid potential foreclosures and bankruptcies.

They are not doing this out of charity. These lending institutions don't like bad loans on their books. They are also not in the business of selling real estate. More importantly it may cost them considerably more time and money to sell these properties at the conclusion of the foreclosure process. The premise behind a short sale is that the borrower is also in severe financial stress.

For example, consider that a homeowner with a $200,000 mortgage is late on his or her loan payments and is facing foreclosure. With the consent of the homeowner, an offer is made to the lender for $150,000 as full payment for the loan, which is accepted. The home is than sold to the buyer and the mortgage debt is forgiven.

Hardship letter

Most lenders will request a hardship letter that details the reasons a homeowner has not made the defaulted mortgage payments. This is usually an extensive request, which may require the homeowner to submit pay stubs, tax records and other personal financial records, along with the letter. It is essential that you submit everything that is requested.

HUD-1 settlement statement

A lender will also require a written contract between the homeowner and the buyer. A preliminary HUD-1 settlement statement will reassure the lender that the homeowner isn't receiving any proceeds from the short sale. The HUD-1 form will disclose all charges imposed upon the homeowner and buyer for the real estate transaction.

It usually takes several weeks or months to receive an answer from the lender once you have submitted the HUD-1 settlement statement and all of the other supporting materials.

Keep in mind that if the foreclosure process is moving along during this short sale request, It's not a bad idea to ask the lender to extend it until he or she has had time to consider your offer.

as always if you have any questions ,Please feel free to contact me with any questions


Patricia " PATTIE" Romano
REALTOR® Associate
RE/MAX At Barnegat Bay
31 North Main Street ( RT 9 )
Manahawkin,NJ 08050
www.soldbypattie.com
609-978-4046
Direct cell-609-312-9043
eve: 609-978-5985 - till midnight
Toll free-(888) 860-9177

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How To Avoid Foreclosure By Selling Fast For Less-SHORT SALES

09-02-08
Patricia "Pattie " Romano Your HomeTown Realtor 609 312-9043

As home prices have dropped in some areas of the country, a growing number of homeowners are finding their home is worth less than the mortgage amount still owed to their lender (known as being "under water" or "upside down" in the mortgage). Owners may find themselves in this situation because they purchased their home at the peak of the local market, just before prices began to drop. Or, using an interest-only or payment-option loan, their monthly payments did not reduce the principal owed--and the home's value dropped. Some tapped too much home equity through second loans or lines of credit, even as much as 125% of the home's value.

Those "upside down" mortgage holders who can still make their monthly mortgage payments are safe if they don't need to move. They can wait out the market--perhaps even benefiting from lower property taxes from a lowered tax assessment--until the correction is complete and home prices again begin to appreciate.

Others, however, find themselves caught by escalating mortgage payments and other household expenses they can no longer afford. Although some borrowers can negotiate "workouts" and "loan modifications" with their lenders, others don't have those options. The only choice left to avoid foreclosure is a "short sale"--where the lender agrees to accept, as fulfillment of the borrower's obligation, a sales price lower than the amount still owed on the mortgage.

If you find yourself in this situation, or you know someone else who is, here are five critical factors every short-sale seller must know.

Short Sale Beats Foreclosure On Credit Report
A foreclosure is a court settlement process involving legal action and possible attorney fees. A short sale, on the other hand, is a negotiated settlement with the lender--no attorneys required. Both show up on the borrower's credit profile, but the difference between a foreclosure and a short sale is the difference between broken credit and badly dented credit. The "short sale" consumer has better options sooner in terms of buying another home, qualifying for loans or credit cards, securing reasonable interest rates, finding rental housing, even applying for insurance.

Often Lenders Prefer Short Sales To Foreclosure
Foreclosing is an expensive, time-consuming process for lenders (costing an average $50,000 per property, according to a 2007 report by the Joint Economic Committee of Congress). In a foreclosure, the lender sells the property at auction--which may also result in lower net than the outstanding mortgage--or repossesses and sells the property as "lender owned" real estate, which is a "non-performing asset" that negatively impacts the lender's ability to make loans. In short, lenders want your money not your home.

You Need An Offer To Get Short-Sale Approval
Lenders generally do not "pre-approve" borrowers to conduct a short sale. Instead, the seller-borrower finds a buyer, who makes an offer that is presented as part of a short-sale package for the lender's consideration. The package will include information such as the purchase contract, an estimate of the net from sale, a complete seller's financial disclosure and a hardship letter stating why the seller can no longer make payments. The lender often requires other information as well.

If the lender is open to a short sale, their loss mitigation department orders a Broker's Price Opinion (BPO), asking a knowledgeable real estate professional to render an opinion on the market value of the property (by looking at sold prices of comparable properties, the cost of making repairs and any other factors that might impact the property's value).

Assuming everything is to the lender's satisfaction, if the buyer's offer meets or exceeds the BPO, chances are the lender will accept the short-sale offer and "forgive" the difference between the offer and the outstanding mortgage

New Law Waives Income Tax On Forgiven Debt
Until recently, mortgage debt forgiven by a lender was considered to be part of the borrower's taxable income, meaning the taxpayer would have to pay income taxes on the forgiven amount. That rule has changed: On December 20, 2007 President Bush signed into law the Mortgage Forgiveness Debt Relief Act of 2007, which excludes forgiven mortgage debt from taxation. The exclusion only applies to a taxpayer's principal residence and to indebtedness forgiven between January 1, 2007 and January 1, 2010. The excludable amount of debt is limited to $2 million. Other restrictions apply; consult a knowledgeable tax professional for all the details.

Short-Sale Process Requires Professional Help
Conducting a short sale is not a simple process, as it requires negotiations with the lender (often more than one lender is involved) as well as the buyer, who may not understand the unique intricacies of the process. That's where our expertise becomes essential. We understand the complexities and critical timing of short-sale procedures and can guide you--whether you want to sell your property as a short sale or you're interested in purchasing a short sale. Please feel free to give us a call for more information. I'll be happy to discuss all your options!


Patricia " PATTIE" Romano
REALTOR® Associate
RE/MAX At Barnegat Bay
31 North Main Street ( RT 9 )
Manahawkin,NJ 08050
www.soldbypattie.com
609-978-4046
Direct cell-609-312-9043
eve: 609-978-5985 - till midnight
Toll free-(888) 860-9177
Click to Talk to Patricia

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Pros & Cons The Home Buying

08-31-08
Patricia "Pattie " Romano Your HomeTown Realtor 609 312-9043

This is NOT about whether you should or should not buy, but how to get through the confusing process of looking at homes and deciding which one is right for you.

Buyers, in general, often have a tough time deciding on the "perfect" house, especially if there is lots to look at. This is even more difficult for new buyers, since they have not been through the process before, and they tend to be a bit more anxious about making a decision,But either way with so much out there to choose from, make a check list - First begin with a full Time Real Estate Agent who will help you in that decision.

Have all the facts on the market, know the inventory, Be available and give you the sound advise you in making one the most important and largest financial investment in your life .

Busy Streets.

  • Pros: Often homes on streets with more traffic are thousands of dollars cheaper. If noise doesn't bother you, don't pass up homes on busy streets. Drive by at different times of the day / week to ascertain noise levels.
    Cons: These types of homes will always sell for less than others in the same area. If bedrooms are located near the front of the home, sleep may be disturbed.
  • Cul de sac.
    Pros: Number one choice of buyers with children.
    Cons: Less privacy, neighbors know more about you.
  • Corner lots.
    Pros: Often larger lots. Fewer neighbors. More visibility.
    Cons: More traffic noise. More vulnerable to vehicles jumping the curb. Kids might trespass at the corner. More sidewalk to shovel in winter.

    Type of Home

    • Single Family.
      Pros: Good appreciation. Opportunity for gardens. More privacy. Quieter.
      Cons: More expensive than our next category. More maintenance.
    • Condos, Townhomes, Cooperatives.
      Pros: Less expensive than comparable single-family homes. Generally newer so fewer repairs. Lock-n-go lifestyle. No yard or exterior maintenance.
      Cons: Less privacy. Noisier. Common walls and/or floors and ceilings. Sometimes no private yard or balcony.

    Number of Stories

    • Single Story.
      Pros: Easy wheelchair access. Some medical conditions such as bad knees make it hard for certain individuals to climb stairs. Easier to clean.
      Cons: Can be noisier if stereos or televisions are located on the same floor as bedrooms. Some people feel safety is compromised if bedrooms are located at ground level. More of the lot is absorbed by living quarters.
    • More than One Story.
      Pros: More living space on same foundation than a ranch home. Less noise if entertaining on lower level while other family members sleep upstairs.
      Cons: More trips up and down the stairs to carry stuff to bedrooms. If laundry rooms are on the second floor, washers could leak. Might need dual vacuum cleaners.It is difficult to maintain consistent temperatures on each level without dual heating and cooling units.
    • Split Levels.
      Pros: Often less expensive if purchased with lower level unfinished. Higher ceilings are appealing. Downstairs family room separates noise levels from upstairs. More square footage on same size lots as ranch homes.
      Cons: Less storage space. Hassle to take trash downstairs and carry groceries upstairs or vice versa. Kitchens tend to be smaller.

    Interior Specifications

    • Number of Bedrooms.
      Pros: Common minimum requested configurations are 3 bedrooms. Newer parents prefer bedrooms located on one level.
      Cons: 2 bedrooms appeal primarily to first-time homebuyers, singles or seniors. However, don't discount a two bedroom if an extra den will satisfy your space requirements.
    • Number of Bathrooms.
      Pros: More than one bath is preferred by most people. One bath homes are often less expensive.
      Cons: Don't pass up a one bath home is there is room to add a second bath. Sometimes it costs less to put in an extra bath than it does to buy a two-bath home.
    • Square Footage.
      Pros: larger spaces offer more room and cost less per square foot than smaller spaces.
      Cons: Don't be misled as lay-out is more important than actual square footage. Sometimes well designed smaller spaces appear larger.
    • Bonus Rooms.
      Pros: Extra space for media rooms, art studios, children's playrooms, gyms, den/study.
      Cons: More expensive.
    • (Source Realtor.org)
    		•

    To see whether Ocean, Monmouth or Atlantic County is the right fit for you or someone you might know

    Than Give me or one of my team members a call,

    "Your Hometwon Realtor"


    Patricia " PATTIE" Romano
    REALTOR® Associate
    RE/MAX    At Barnegat Bay
    31 North Main Street ( RT 9 )
    Manahawkin,NJ 08050
    www.soldbypattie.com
    609-978-4046
    Direct cell-609-312-9043
    eve: 609-978-5985 - till midnight
    Toll free-(888) 860-9177
    Click to Talk to Patricia

    0 Comments
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    NO...the sky is NOT falling

    08-28-08
    Patricia "Pattie " Romano Your HomeTown Realtor 609 312-9043

    NO...the sky is NOT falling! The world, as we know it, is not coming to an end. Neither is the real estate industry coming to an end. In fact, things may be a whole lot better than the national media has led you to believe.

    You've heard reports of the vast numbers of foreclosures & Short Sales across the country, the widespread drop in the number of home sales and the record-breaking decrease in property values. As a result, many potential buyers are terrified of purchasing a home now...for fear that it will be worth less than the purchase price on the day of closing.

    On the other hand, many home owners are reluctant to place their homes on the market because they have heard that it is a buyers' market...that they will have to 'give their home away' if they want to sell.

    Well, If your mother was anything like my mother, she probably told you NOT to believe everything you hear. Your mother was right!

    So...to whose voice should you be listening?

    Who is telling the truth?

    Who can you trust to give you accurate information and sound advice?

    The answer is simple...TRUST the EXPERTS who KNOW the FACTS!

    Patricia " PATTIE" Romano
    REALTOR® Associate
    RE/MAX     At Barnegat Bay
    31 North Main Street ( RT 9 )
    Manahawkin,NJ 08050
    www.soldbypattie.com
    609-978-4046
    Direct cell-609-312-9043
    eve: 609-978-5985 - till midnight
    Toll free-(888) 860-9177
    Click to Talk to Patricia

    0 Comments
    Blog_tag

    NO...the sky is NOT falling!

    08-28-08
    Patricia "Pattie " Romano Your HomeTown Realtor 609 312-9043

    NO...the sky is NOT falling! The world, as we know it, is not coming to an end. Neither is the real estate industry coming to an end. In fact, things may be a whole lot better than the national media has led you to believe.

    You've heard reports of the vast numbers of foreclosures & Short Sales across the country, the widespread drop in the number of home sales and the record-breaking decrease in property values. As a result, many potential buyers are terrified of purchasing a home now...for fear that it will be worth less than the purchase price on the day of closing.

    On the other hand, many home owners are reluctant to place their homes on the market because they have heard that it is a buyers' market...that they will have to 'give their home away' if they want to sell.

    Well, If your mother was anything like my mother, she probably told you NOT to believe everything you hear. Your mother was right!

    So...to whose voice should you be listening?

    Who is telling the truth?

    Who can you trust to give you accurate information and sound advice?

    The answer is simple...TRUST the EXPERTS who KNOW the FACTS!

    Patricia " PATTIE" Romano
    REALTOR® Associate
    RE/MAX     At Barnegat Bay
    31 North Main Street ( RT 9 )
    Manahawkin,NJ 08050
    www.soldbypattie.com
    609-978-4046
    Direct cell-609-312-9043
    eve: 609-978-5985 - till midnight
    Toll free-(888) 860-9177
    Click to Talk to Patricia

    0 Comments