Rob Alley

Anti Deficiency Laws

Some states have anti-deficiency laws. These are laws that protect purchasers of residential real property used for his/her primary residence pursuant to a purchase money mortgage. In the event that the purchaser fails to make the mortgage payment and the property is foreclosed and sold to pay the mortgage, a deficiency between the sale price and the outstanding balance of the mortgage could occur. Under anti-deficiency laws, the purchaser will not be held responsible for any deficiency the lender can only recover the property and the proceeds of a subsequent sale; the purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance.

What the Lender Can Recover
The lender can only recover the property and the proceeds of a subsequent sale. The purchaser does not pay any deficit between the sale proceeds and the outstanding loan balance. This allows the purchaser to walk away from a property without owing a deficiency judgment amount. Anti-deficiency laws typically provide no protection for second mortgages or home equity lines. Also, there is no protection when the property is not used as the primary residence of the purchaser.

Anti-Deficiency Laws
While anti-deficiency laws can protect a homeowner in some cases, the majority of Americans have recently obtained two loans in the purchase of homes, often referred to as a "piggy-back mortgage." The first mortgage would have been for 80 % of the purchase price with all or a portion of the balance of the purchase price obtained by means of a home equity line of credit or second mortgage. If the first loan is foreclosed and the amount of the sale is enough to only pay off the first lender, the second lender will be entitled to sue the owner for the value of its loan. Many anti-deficiency laws won't protect the homeowner for amount owed on the second loan.

State Foreclosure Deficiency Laws (Virginia Does Not Have an Anti Deficiency Law)
ALASKA: Alaska has a broad form of anti-deficiency statute that precludes a deficiency judgment following the completion of a no judicial foreclosure.
ARIZONA: Arizona's anti-deficiency statutes prevent a lender from suing a person for any losses on a home after foreclosure.
CALIFORNIA: California's anti-deficiency law applies only to funds used to purchase a residence. The anti-deficiency law does not apply to additional financing such as second mortgages or home-equity loans.
FLORIDA: In Florida, mortgages must be foreclosed by filing a lawsuit in court. Florida is unusual in that the state has passed few statues regulating foreclosures.
MASSACHUSETTS: A proper sale prevents the borrower from exercising any right to reclaim the property through redemption. If the foreclosure sale proceeds are not enough to pay off the lender, then the borrower is liable for the deficiency.
NORTH DAKOTA: The lender may not ask for a deficiency in the foreclosure suit if it has already brought another suit just to collect on the loan. Any cash surplus from the sale, beyond that needed to pay off the mortgage and the foreclosure costs must be paid to the borrower.
OREGON: A deficiency judgment cannot be obtained through a non-judicial deed of trust foreclosure by advertisement.
SOUTH CAROLINA: Deficiency judgments are permitted.
TEXAS: Deficiency judgments can only be for the difference between FAIR MARKET VALUE and the balance owed on the loan. There is no right of redemption.

Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/

If you are in the process of Foreclosure or maybe facing Foreclosure soon, Consult Your Case for Free with a local certified Charlottesville Short Sale Specialist to see which legal options you have available.

A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower ) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

How a Deed in Lieu of Foreclosure Works
In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.

Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.

Neither the borrower nor the lender is obliged to proceeed with the deed in lieu of foreclosure until a final agreement is reached.

Looks easy and sounds good right? Well, not if you are the bank...and that generally becomes a problem for the homeowner. Why would this be so difficult to get the bank to voluntarily agree to this situation? Because the homeowner generally has no equity in their property when they pursue this option. So if the bank does a Deed in Lieu, they have the EXACT SAME PROBLEM that the homeowner did. They have no equity in a property that they now have to move. When a bank sees this, it is very hard to get them to voluntarily enter an agreement to take the deed to the house.

Banks don't want to own houses. They want to lend money and collect interest. If you want a better understanding of how mortgages connect the individual homeowner to Wall Street, check out this link.

Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com
http://www.theaverygroup.com

What is the Credit Crisis?

Check out this video to find out!!!!!

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

There are a couple of key things to take from this. One, it doesn't matter what you think about the area in which you live. YOU ARE NOT INSULATED FROM THIS. Yes, there are some markets that will be worse, like Detroit and the car industry, but EVERYONE will be affected.

Two, its coming to Charlottesville and fast. There have been more and more REOs and Short Sales in Charlottesville month after month. We have an over supply and not enough demand, leaving people who need to sell their home without the ability to do so. Prices are coming down, but there is not enough equity in every home to enable the homeowner to keep lowering the price to get a buyer without doing a short sale.

Three, agents and homeowners need to be aware and prepared for this. If you think the market is turning around, you are wrong. If you have a home listed and you can, SELL NOW, don't wait. It's going to get worse before it gets better. Refer to Preforeclosures Rising in Charlottesville, Charlottesville Real Estate Market Trends - Sold Statistics, Charlottesville Real Estate Market Trends - Months of Inventory, and the Alert To Lock Interest Rates from Leonard Winslow at Dominion Trust Mortgage with the bond Market struggling right now.

If you don't want to listen to me, call someone in Northern Virginia. They will tell you this is the EXACT SAME TREND they experienced in 2007 and look at their market now. Almost the whole market is REO and Short Sale driven.

Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/

Why Banks Need Broker Price Opinions - BPOs: "Why Do Banks need Broker Price Opinions?

Asset managers and bank personnel make decisions on several properties every day. Reading through a lengthy 20 page appraisal and filtering out the critical information is a waste of their time. These asset managers need concise, financial documents that make their choices easier. That's why BPOs are so critical to their job. In addition, a BPO saves the bank over $200 per property compared with a standard appraisal. That money adds up quickly and saves the bank thousands and thousands of dollars a year.

Another reason BPOs are preferred by banks is that the turnaround time is much quicker than appraisals. BPOs can usually be performed by agents in under 48 hours. Many appraisers visit the property within 48 hours, but then require another day or two to process the information and create the full report."

Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/

Why Banks Need Broker Price Opinions - BPOs: "When a bank or asset manager obtains a new foreclosed listing to sell, they immediately need to know the home's value. Typically a bank will assign one to three agents to evaluate the approximate selling value of a home. These banks expect each agent to submit three comparable sold listings and three comparable active listings as well as an estimate of what the agent thinks the home will sell for.

A Broker Price Opinion is not as detailed as an appraisal and does not entail as much work. BPOs differ from Appraisals in a number of ways:
Appraisals typically cost over $300. Most BPOs pay brokers between $50 and $100.
Appraisals require detailed square footage measurements. BPOs rely on county assessors' recorded measurements.

Appraisals use a standard format recognized and used by lenders and mortgage professionals for precise property valuations. BPO's are prepared in different formats and are used simply as decision making tools for asset managers of each bank.
Appraisals are typically 15-20 pages long with detailed information on each aspect of a property. BPO's are usually 2 pages long with information pertaining only to a final selling price."

Rob Alley, Realtor at Keller Williams Charlottesville
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/
http://www.theaverygroup.com/