Manuel Rosa | Short Sale Specialist Foreclosure Prevention | Essex County NJ

When I decided I could no longer avoid New Jersey Short Salesa few years ago, I went into it with my eyes open and aware of the common complaints and pitfalls.

Short sales are time consuming, the rules are unclear and the banks do not have knowledgeable, business oriented people working the files - these were some of the most common warnings I heard about selling New Jersey Short Sales.

I acknowledge that these were issues when I first started working on New Jersey Short Sales five years ago, but over time the banks have gotten better at processing Short Sales, and the approvals are rolling in.

I still find that I occasionally get assigned a green processor, a hard-nosed negotiator or an out of touch appraiser that cause my Short Sales to get delayed (but not denied; there are always ways to overcome challenges in Short Sales).

But what do I really hate the most about being a New Jersey Short Sale Realtor? My clients.

Okay, not ALL my clients. Just the ones who spend more time grousing about the process than they do helping me complete it.

The process of getting a New Jersey Short Sale approved can be arduous, but if everyone does their part in earnest, it’s not a herculean task. From the New Jersey Short Seller’s perspective, they’ve got the easiest role in my opinion: Be prepared ahead of time, and get me what I ask for in a timely fashion.

What should NJ Short Sale owners have ready? Generally speaking, their last two years of tax returns, last 30 days of paystubs, last 60 days of bank statements and a hardship letter.

A good rule of thumb for NJ Short Sale clients: as you get updated paystubs, bank statements, etc., be proactive - send them to your listing agent so he/she can provide them to your Short Sale bank before they stop processing your file. And yes, you need to provide ALL pages of your statements, even blank pages or disclaimers; missing a page of a statement sounds like a technicality, but can hold up your approval.

Look, I know it’s easy to get frustrated with what banks ask for in Short Sales. Trust me, I don’t want to be asking for this stuff any more than you want to be providing it. But complaning about having to provide updated documents, then taking forever and a day to get them in to your Short Sale listing agent is hurting you more than it’s hurting the bank!

Let’s be realistic here: we’re asking your NJ Short Sale bank to take a hit of tens or hundreds of thousands of dollars. Shouldn’t you at least participate in the process whole-heartedly if we’re to expect the bank to release their lien, waive the deficiency, potentially pay you to do so and get you out from underneath your upside down New Jersey home
?

We're excited to share some good news on the Short Sale front as it pertains to HSBC and a Short Sale in New Jersey.

We were contacted by a family in Kenvil, NJ - located in Morris County - about helping with a potential Short Sale a few months ago. After a Short Sale consultation, the family decided attempting to Short Sell their home financed by HSBC was the right decision.

After a few months of showings and a couple of price improvements, we received an offer on our Short Sale listing. The offer was deemed too low, at which time we provided recent comparable sales to support the offer on our Short Sale listing. The comps, we were told by the first level contact at HSBC were sufficient to approve the sale at the contract price. However, the disclaimer "subject to senior management approval" came into play.

When the file made its way to the negotiator, he put our sale on ice. The appraised value was significantly higher than our offer price, we were told. We were given a counter-offer, which the Buyers agreed to accept. We then had to wait several weeks for the written approval, but when we received the Short Sale approval, we found out it was worth the wait.

The HSBC Short Sale Approval contained a provision for a $7,500 relocation fee to the seller, payable at the time of the closing. The sellers are moving in with family, who are then moving to another apartment, so suffice to say the relocation fee will come in handy for my clients. And I haven't even mentioned that there is no deficiency or seller promissory note required, or that the entire approval process took just 52 days, so this was a huge win for my clients.

I find it odd when I hear Realtors say they hate Short Sales. I can't imagine a more rewarding experience for my clients than the results we achieved on this Short Sale. We've helped our client prevent long-term credit damage and avoid foreclosure in obtaining Short Sale Approvals, and I hope we can continue to help homeowners like this across New Jersey in the future.

Recent sales data indicate that better than half of Essex County, NJ Multi-Family homes sold are distressed sales.

The most recent month of sales data show that 57% of 2-4 Family Homes sold in Essex County, NJ were either Short Sales or Foreclosures. In Newark, NJ, 73% of the multi-family homes sold were distressed, while in East Orange, NJ, 83% of the multi-family homes sold were Short Sales or Foreclosures. These two Cities combined make up nearly 62% of the total of multi-family homes sold in Essex County, NJ.

Newark, Irvington, East Orange and Orange, all located in Essex County, NJ, continue to be some of the hardest-hit property values in the State of New Jersey and nationwide. Property values in some of the Essex County, NJ locations have fallen by more than 50% over the last four years, and sales trends like these do not figure to help in the near-term.

Essex County, NJ is a diverse region with some of the more exclusive and desirable towns in the State. Its easy access to New York City has attracted many upper-income earners to reside in its leafy suburbs.

Yet at the same time, the Essex County, NJ population centers around the Greater Newark area. Newark, Irvington, East Orange and Orange have seen unemployment rise faster than the national average. This joblessness, combined with falling property values, has fueled the growth in distressed property sales in the Essex County, NJ.

Homeowners in these devastated Essex County, NJ housing markets should explore their options when facing financial difficulties related to their homes.

Alternatives to Foreclosure available include:

· Mortgage Forbearance

· Loan Modification

· Short Sale

· Deed-in-Lieu of Foreclosure

· Bankruptcy

A Realtor who is trained to deal with distressed homeowners and educate them on their options may be a good first resource. The SFR – Short Sale & Foreclosure Resource - designation is the only one recognized by the National Association of Realtors. Click here to locate an SFR in the Essex County, NJ area.

New Jersey is about to see the number of Foreclosures rise dramatically in the very near future.

A ruling today by New Jersey Superior Court Judge Mary Jacobson will allow four of the largest servicers of mortgages to resume uncontested New Jersey Foreclosure actions.

Bank of America, J.P. Morgan Chase & Co., Citigroup and Wells Fargo were all granted relief from the temporary halting of foreclosures that arose as a result of the so-called "Robo-signing" charges brought against them by the attorney general's office. These four servicers combined control about 71% of the mortgage market nationwide, so a vast majority of New Jersey Foreclosures are likely to be affected by the ruling.

So, what does this ruling mean for New Jersey homeowners and property values?

The most likely result is a flood of bank-owned properties will hit the market over the next 12-18 months, which could drive already low New Jersey home values even lower. New Jersey Foreclosure filings are down 83% as compared to the same time last year. As of July, there had been only 6,100 Foreclosure filings, versus about 35,000 at the same time last year. So we can expect a sharp spike in New Jersey Foreclosure filings, and ultimately, REO properties for sale in the Garden State.

Looking at this in the purest sense of supply and demand, we could see six times as many New Jersey Foreclosures hit the market as are currently available for sale. It will take quite some time to sell off this inventory in order to stabilize the market. This will bring down all NJ residential values in a significant way, but if you don't need to sell over the next 12-18 months, you should not feel the impact.

However, if you are a distressed homeowner in New Jersey, and were waiting to make a decision on what to do - short sale, deed-in-lieu, bankruptcy, foreclosure, etc. - this ruling should give you the motivation to act immediately. Foreclosures and Short Sales both fall into the Distressed Property category, with both selling for discounts to regular home sales. The pending rise in New Jersey Foreclosures is sure to expand the pool of distressed NJ homes. This means Short Sales in New Jersey are about to get a lot more competition in the distressed pool, which can not only make values decrease but will also lead to longer marketing times. With the several key Short Sale programs/incentives scheduled to sunset at the end of 2012 - HAFA, IRS Mortgage Debt Forgiveness & Relief Act to name a few - this gives underwater homeowners even more of a reason to consider other alternatives to becoming one of the thousands of New Jersey Foreclosures that are about to occur.