Thomas Otis

An article about a recent survey from Trulia.com and RealtyTrac released today really shows people are not getting the help they need or they do not understand how to solve their foreclosure problems.

Points of interest:

1. 59% would not strategic default or leave the keys and walk. Shows there are still a large number... 41% would consider walking away...that's nearly half.

2. 69% would opt for loan modification but it shows only 10% actually are successful to loan modification. How many still fall behind after they modify. Not good, so only 10/100, sounds like the odds are against you or the loan modification requirement are not realistically meeting the needs of those applying. It now seems clear that government programs will not reach the overwhelming majority of homeowners in trouble, which only will result to a larger number of foreclosed homes on the market.

3. Only 5% see Short Sales as an alternative. I find that alarming. Not because I am a Realtor and make money from the sale of the homes, but the fact that people still are uninformed about the benefits. If only 10% can get a loan modification that means that 90% are going to foreclosure unless they short sale. It shows that the education and incentives for short sales are not reaching the homeowner.

I always tell my clients that the biggest mistake they make in these times is shutting down. This is a natural reaction to being in financial distress and loosing their home. Not thinking that things will get better will mean that short term decisions, like letting the home go to foreclosure, may seem easier than going through the hassle of selling. "Why help the bank...they do not want to help me!" My answer is things will get better and this ball & chain of foreclosure will follow you around for years on your credit. Making and effort to short sell will allow you to buy a home again, earlier. The incentive right now do not seem like much but waiting another 2-3 years until you qualify for a loan may seem like forever. Banks are penalizing homeowners that leave it go to foreclosure.

If I can be of any help with short sales as a foreclosure alternative, let me know.

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I am sure like most of us, myself included, are happy for the break from the "all at once" deadline rush to get under contract to receive the tax credit. My local market was swamped with people buying, and sometimes over paying for homes because so many offers where being written. It appears that the general public needs a "whats in for me" incentive and a deadline to get them off the fence to buy houses. I do believe that the tax incentive, for all its good and bad attributes, did help people over the fear of a "decline after purchase" risk. The tax incentive covered their downside risk in their minds. I think both first time and existing homes owner were brought into the market because of the tax incentive. Now I have seen a significant drop off in property inquires, and showing requests. That is an indication of future business. This drop of in prime marketing season, I think, is a reflection that the tax incentive is over. Many of us experienced the drop off between the extension and the last deadline in November 2009 until March 2010.

In addition I am surprised, buy discussions with other agents, and there lack of knowledge of the double underwriting that is coming down the road for lending. My buyers that are working with Wells Fargo in the past weeks have expressed absolute frustration over the process of loan underwriting. They are constantly being asked for more information, more detail. This along with the lack of the tax credit, yikes!

It my my real world opinion is we are not even remotely out of the woods until this option arm reset is gone and behind us and the "perceived" economy gets back on track and people get back to work. Short sales and foreclosures are still on the rise here.

What I am curious about is real world agents feedback on how they feel about the market future without market incentives. I would like other agents to chime in on there opinion if the market will suffer without real estate tax credit.

I think this is a great easy too understand video about HAFA and how it affects consumers. Take a look...

Did you know there was a $3,000 stay in property bonus for you the homeowner if you qualify?

Have questions or need help, I give you honest answers....

Another interesting experience with B of A. At least you can talk with someone faster these days but after talking with three different people, I found out the can not process the offer through equator. Ironically the person could not email or fax the documents. So if you are doing a B of A FHA short sale, you need their specific forms...I had to google the forms and you will find the PDF online. Here's the link to the form they are legal size.

http://shortsales66.com/bofa/FHA%20Short%20Sale%20Packet.pdf

Hope this help everyone.

Dave Liniger, RE/MAX International Chairman and Co-Founder, recently urged government and economic leaders to push lenders to release foreclosures to help speed their short sale processing so the housing market can recover. Liniger made his comments as a featured speaker at the Five Star Government Forum in Washington D.C. The Forum brought government and industry leaders together to share ideas for building stability in the nation's housing market.

A proactive approach and current information is the only way to get things moving. Buyers can be very unfamiliar with the process of short sale, but for banks, this is the best avenue to clear these properties. Foreclosure is much more expensive, and it does stigmitize the property. In addition, the buyers excitment for the home decreases as time goes by, unless they are "Getting a Hell of a Deal", otherwise why take in the risk of "as is" homes and waiting and waiting.

I experience it everyday, the frustration of someone who is not familiar with the local market, taking forever to decide if an offer is good or not. They also base their decision on BPO's or apprasials that track past sales, but if the market is declining...those may not be accurate. Don't get me wrong, the bank needs to protect themselves from low values and fraud. Banks need to staff up with qualified people and move these processes to a more resonable time frame. The general public that is familiar with process are ready to buy, but many are reluctant to make offers because the time for approval is to long.

Come on, lets go...the option arm reset storm is coming and lenders need to get there acts togather, and stop beating up on their sales force, we are the front lines for them.

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