Steve Mortensen

With SO much buzz about short sales these days in Orange County CA, I thought it would be appropriate to write a post about the governments latest attempt at helping the struggling homeowners here in Orange County. The latest attempt from the Obama Administration is entitled: HAFA (Home Affordable Foreclosure Alternatives) took effect on April 5, 2010 and goes through the end of 2012. As with most attempts by the government to help homeowners with foreclosure alternatives, this one sounds good, but may not help as many people as one would hope in Orange County CA.

What is HAFA? HAFA is a government program aimed at struggling homeowners to allow them to sell their homes to avoid foreclosure, even if the home owner owes more then the home is worth (short sale). Under HAFA, the lender will pre-approve the short sale and give the homeowner at least 4 months to market and sell the property using a local licensed real estate professional (Short Sale Steve).

Who is Eligible for HAFA? To be eligible for HAFA the home must be your primary residence and the first trust deed must be originated before 2009. You must be behind on your payments, or will be behind in the foreseeable future. Also, the current unpaid principal balance must be below $729,750. Lastly, you the homeowner, must be eligible for, but unable to complete a loan modification under the Home Affordable Modification Program (HAMP.)

Homeowner Incentives? Unlike the traditional short sale, the HAFA program allows the homeowner to receive a cash incentive for selling their home. The HAFA program will give homeowners $3,000 for relocation expenses!

What is the procedure for HAFA? First call your lender, then follow these steps. Step 1: Your lender will evaluate your loan for a modification under HAMP. Step 2: Your lender deems you unable to qualify for a modification. Step 3: Your Lender will issue a Short Sale Agreement (HAFA SSA) Step 4: You call a local short sale specialist (Short Sale Steve) to put your home for sale. Step 5: Market your property for sale as approved short sale. Step 6: You submit a Request for Approval of Short Sale (RASS) once we receive an offer to purchase. Step 7: Your lender will approve the RASS within 10 business days. Step 8: 30 days after approval your home closes escrow.

Tax, Credit on Other Consequences: A HAFA short sale may have serious tax, credit, financial, legal and other consequences. I strongly recommend to seek qualified tax, legal, and other advice from qualified professionals.

As a homeowner in Orange County CA, you need to know your options to help avoid foreclosure. Visit my website for up to the minute updates on what your options are: www.Short-Sale-Steve.com and read my free eBook on how a short sale can help you today!

"Short Sale Steve" is Steve Mortensen of Exotic Properties Realty Co. Contact Us at: 714-463-4429

Vista Del Verde & Kerrigan Ranch Homeowner's in Yorba Linda CA are Facing Foreclosure Alone

Several days ago I had the pleasure of reading a fellow Realtors blog post about the homeowner's in her local market that were suffering foreclosure proceedings in silence. The post was explaining how the luxury homeowners in her market were defaulting on their mortgages at a very high rate, but only a small percentage were reaching out to professionals for help with their dilemma.

That article prompted me to do some research on my own local communities of Vista Del Verde and Kerrigan Ranch in Yorba Linda, CA. Both of these planned communities consist of high-end homes and condominiums from the $500,000's to the $2.5M range. The dilemma with Vista Del Verde and Kerrigan Ranch homeowners is the same challenge that is being faced by many other homeowners in Orange County, CA: Home values have plummeted, interest rates are beginning to adjust on their ARMs and homeowners are falling behind on their mortgages at an alarming rate.

Title data shows that there are currently 31 Notice Of Defaults and 36 Notice Of Sales in the Vista Del Verde and Kerrigan Ranch communities. A quick search of the MLS shows that there are currently 65 homes for sale in Vista Del Verde and Kerrigan Ranch, of those homes for sale, only 10 are listed as Short Sales that showed up when cross-referenced with my search of NODs/NOS.

That means that almost 85% (57 Homes) of homeowner's who have a Notice of Default or Notice of Sale are facing the threat of foreclosure ALONE and have not reached out for help!

I'm sure that some of these defaults are "Strategic" but I'll bet my last dollar that the majority of these homeowners simply just do not know what there options are when it comes to foreclosure. Most have heard negative things about Short Sales and that's why they hesitate to reach out to Realtors to better explore their options. These homeowner's do not need to suffer in silence. There are several options that are available to assist homeowner's with foreclosure prevention: Loan Modification, Deed in Lieu of Foreclosure, Short Sale, or Refinancing.

If you or someone you know is struggling to keep up with their mortgage payment and is facing foreclosure, don't go it alone -- reach out and explore your options, call me today. Time Is Tickin'

Another Short Sale Scam in Anaheim Hills CA for 2010!

As a short sale agent in Orange County CA you will come across many different scams with so call sophisticated investors. This new short sale scam that seems to be catching on is overly aggressive and overly dangerous for the listing agent. It goes somng like this:

An "Investor" calls up and says that they want to make an all cash offer on your short sale listing. Starts out sounding great! Then they proceed to tell you that they (the investor) also want to negotiate the short sale. Hmmm, now starting to sound fishy, right? From there what they say is that they intend negotiate the sale in their "Investors" name, but they want me to continue to market the property to find an end buyer. To top it all off, they will allow me to represent them for both sales, allowing me to make a whopping 6% with little to no efforts. Then they go on to explain that this type of transaction is fully above board and that the banks are fully ok with it.

When I was a child, my mom always told me "if it sounds too good to be true, then it probably is." I think that's the case with this short sale scam.

I of course have many questions for these so called "Investors."

1. Why would any lender want to short sale a property to you for a huge discount, knowing that you intend to resell the property immediately following the close of escrow, for a huge profit? Does this make any business sense whatsoever?

2. How could I turn over negotiations on my short sale to someone I do not know, let alone someone who does not have a fiduciary duty to my seller?

3. How many short sales have you negotiated?

4. Are you licensed and how am I liable?

5. Why does this sound too good to be true?

Well upon some quick research and speaking with my real estate attorney, here's what I've come up with:

At best, I'm in the "gray" area of ethics, at worst, I'm committing flat out lender fraud by representing my "Investor's" offer as the highest and best that I can field on the open market. All the while knowing that my "Investor" is asking me to continue to market the property at a higher price to find the ultimate 'end buyer.' I'm certainly putting my livelyhood on the line because if the lender were ever to get word of this deal they could come back on me for lender fraud. I'm simply just not willing to risk that and furthermore it's simply not the right thing to do!

Watch out for these shady investors and their short sale scams! They start out sound great, but it's a scam and you're putting your livelyhood and reputation on the line here, for me, it's just not worth it. Check out my website for more information on short sales: www.Short-Sale-Steve.com

Steve Mortensen - Broker / Owner - Exotic Proerties Realty Co. - 18340 Yorba Linda Blvd, Ste 107-187, Yorba Linda CA 92886 - Cell: 949-981-4441 - DRE #01813078