Clock ticking on Mortgage Tax Break for struggling homeowners

A tax break that has saved struggling homeowners from paying thousands of dollars to the IRS is just days away from expiring.

If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction.
That means if someone owes $150,000 on their home and it sells for $100,000 in a foreclosure auction, they could owe taxes on the remaining $50,000. For someone in the 25% tax bracket, that would mean paying $12,500 in taxes on the foreclosure. Similar taxes would apply for amounts that were forgiven in short sales and principal reductions.

"Allowing the act to expire would harm these families and their communities and it would run counter to current loss mitigation efforts," wrote Tim Pawlenty, president of the Financial Services Roundtable, Mike Calhoun, president of the Center for Responsible Lending, and John Dalton, president of the Housing Policy Counsel in a letter to the Senate Finance Committee.
So far, though, very little has been done to extend the act as Republicans and Democrats continue to butt heads over the fiscal cliff.

Many mortgage borrowers would be affected. More than 50,000 homeowners lose homes to foreclosure each month. Meanwhile, the number of short sales has tripled over the past three years to a rate of about half a million a year. And, under the terms of the $25 billion foreclosure abuse settlement, roughly one million borrowers may have their mortgage debt lowered through principal reductions over the next couple of years.
"If there ever was a no-brainer in housing policy, this would be it," said Jaret Seiberg, a policy analyst for Guggenheim Securities.

Congress may return to the act after the other fiscal cliff issues are resolved, but by then the housing market will have taken a hit, said Elise Brooks Perkins, communications director for the Financial Services Roundtable. "It can be done retroactively, but the lag time will have a chilling effect on homeowners considering a short-sale," she said.
Most short sellers will not follow through on sales to closing without debt forgiveness in place. Instead they'll fight foreclosure, prolonging the housing crisis.
Congressman Brad Miller, however, said he doesn't see debt forgiveness passing unless it's part of a larger fiscal cliff deal.

Still, the price tag for such an exemption could make it a point of contention, said Seiberg. The office of Sen. Max Baucus, who heads the Senate Finance Committee, estimated the cost of a one-year extension at $1.3 billion.

Even if Congress allowed the mortgage debt forgiveness to expire, not all borrowers who lose their home to foreclosure, sell their home in a short sale or have their principal reduced will take a tax hit. If the debt is discharged in a bankruptcy, no tax is due. And anyone who is insolvent -- meaning they have more debt than assets -- at the time the debt was forgiven would not have to pay the tax.
And in some states like California, certain borrowers are protected against paying the tax because of the way the state treats foreclosures.

REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.
LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Happy New Year from Lotus Realty Group

(Quote) Alchemy is the art that separates what is useful from what is not by transforming it into its ultimate matter and essence.


I hope you all had a wonderful Christmas. I had a nice relaxing time curled up with a book that I have been meaning to read for years. I originally gave it to a dear friend of mine after only reading a chapter. Two years later, another friend of mine gave it to me 7 months before he passed away. I ended up giving it away for the second time to a client. Two weeks ago my hair dresser gave it to me after a conversation we had about dreams that we wanted but didn't know how they were possible. Three times this book came back to me as if the universe was slapping me across the face to say " wake up" I am right here.


Its called "The Alchemist" by Paulo Coelho. Its a fable about a man who was trying to find his personal legend. For him it was buried in the Pyramids in Egypt, so he thought. After many trials, and tribulations and unexpected detours receiving OMENS from the universe that were at times confusing trying to make sense of what all of it meant; he realizes the treasure lies where your heart belongs. The treasure is the journey itself, the discoveries we make along the way and the wisdom we acquire and when your heart really wants something the whole universe conspires so that your dreams can come true.


When I was a little girl I wanted to be a lawyer but I ended up working two sometimes three jobs at a time to survive. Instead of going to school I took a course to be a Certified Nurse Assistant so I could work double shifts and make more money to pay my bills. Years later I picked up a book at a library on Amortization not even knowing what the hell it was and found a business card in it for a Mortgage company. After calling that number I met my first mentor in the lending industry. Years later, I was on one of the top teams in San Diego learning from one of the Best Realtors in the Country which would catapult me into my career. Finally, I never thought in a million years I would meet one of the best people I know and together we would build a successful Real Estate company helping homeowners and Realtors negotiate short sales.


I believe the detours we take are the omens in life and the mentors we have along the way are our angels and soul mates to help us to discover who we are. When I had to work multiple jobs and give up my dream of being a Lawyer I learned hard work and responsibility and how to take care of myself. When I worked in the Convalescent hospitals taking care of old people I learned patience, compassion for the vulnerable and the weak. I use to listen to their stories of their journeys and it gave me strength and hope. When I worked for the mortgage broker she challenged me. She use to put files on my desk and say "figure it out" but hurry, we have a deadline. It forced me to think out side of the box. When I was on one of the top teams and San Diego in Real Estate I learned to step out of my comfort zone, I learned discipline and to fight for what I want. Finally, working with my business partner building our company has helped me grow up in every sense. Its given me passion for what I do, adventure and at times even danger. All the things that make a person desire more and to keep going no matter what. The desire of my heart has always been to help others and my quest for that will go on forever and will manifest in different ways I am sure I have not even thought of yet but I am open to it.


It is easy to get frustrated when we look at the detours along the way. If we perceive them as dreams lost and give up we will never feel the peace and oneness in our hearts. We will always be restless. Where your heart is, so will be your treasure. What would it feel like to be at peace and one with our own hearts? I have a feeling that the book may be right; the universe will conspire and return to us all we felt we have lost and it will be even better than we could ever have imagined.


I share this with you because this has not been an easy market and industry to be in. People have lost homes, jobs and family. It is easy to give up. I have been there and I believe in those times that's when the universe slaps you in the face and gives you a book, THREE TIMES to remind us that nothing is really lost and to follow your heart always. I wish all of you A HAPPY NEW YEAR full of peace, love, success and prosperity and may you all find your personal legends.

Whats new at Lotus Realty Group

David Bright, number one Real Estate attorney in San Diego and Cari Drolet, Founder of Lotus Realty Group are teaming up in 2013 to offer a DRE approved 2 day seminar teaching the legal and practical sides of Real Estate. In addition we will be covering Short Sales, REOS and foreclosures. 12 hours of DRE credits and a short sale certification and logo will be given upon completion of the course. Dates, times and locations will be up on our website in January at www.proreseminars.com. For more information please contact Cari Drolet at 858-764-7300 or David Bright at 760-747-3200.


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.


LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Don't Let Your House Sale Fall Through- Wall Street Journal

I read this article today in the Wall Street Journal and wanted to share. It really reflects the importance of keeping on top of your transactions. It does not talk about short sales. I agree with nearly everything in this article but I wanted to shed some light on the short sale side. If you have a short sale listing and are working with a buyer it is important to enforce these principals mentioned below as we are working with deadlines that require extra care as they could potentially not only kill the transaction but put the home into foreclosure.



One thing I wanted to point out is we are seeing buyers put in offers and asking for closing costs back from the bank. There is no guarantee that the short sale lender will approve that. The expectation must be set with the buyer up front that their offer cannot be contingent upon receiving those credits. That is another issue that will blow up at the end. If it is not approved and the buyer walks you will need to start over with a new offer which will need to be resubmitted for approval and that can take up to 2-3 weeks.



Knowing your listing in and out to be able to disclose the proper information to a buyer will minimize your risk of the transaction falling through. Taking it a step further; staying on top of the buyers lender and making sure all parties are working together towards one common goal " To close the deal" will ensure success.

Don't Let Your House Sale Fall Through


Encouraging signs in the housing market may entice more homeowners to put their properties on the market in 2013.


Still, it isn't exactly a seller's market yet—and deals can fall through at the last minute for a variety of reasons. Financing delays, low appraisals, title problems, home inspections and even buyer's remorse can interfere with a seller's ability to close.


The good news: Many of these problems are preventable if sellers are proactive and involved, says Lanny Baker, president and chief executive of ZipRealty Inc., a residential real-estate brokerage. Here are some tips:

1. Learn about the buyer's financing

 

Seek out a buyer who has been preapproved for a mortgage, says Mr. Baker, who evaluated 250 failed or delayed deals over a recent 2 ½-month span and determined that financing problems were to blame 40% of the time. Typically, the buyer's agent will be eager to share this information with you.


However, preapproval doesn't preclude a lender from rejecting a buyer's mortgage application later on, so don't stop there. Check in regularly with the buyer's agent to ensure that the loan is on track to close on time.


Lenders are requiring more stringent documentation, and if buyers aren't organized, or procrastinate when additional paperwork is requested, the closing could be delayed. To keep things on track, make sure your contract contains specific deadlines for buyers. "One key term is a financing contingency, and if the buyer cannot [resolve] that contingency, the terms of the contract would normally release the seller to entertain other offers," Mr. Baker says.


If a buyer is seeking a Federal Housing Administration-insured loan, the home being sold may have to meet certain safety and soundness requirements that typically wouldn't come into play with a conventional loan. To avoid delays, sellers can take care of things that might be flagged in an FHA appraisal, such as chipping paint, before listing. An experienced real-estate agent should be able to help identify such problems.


Sometimes buyers underestimate the amount of cash they will need at closing. If that happens, the agents involved in the transaction—who have a vested interest in the deal closing—may agree to give up part of their commissions to cover the shortfall, Mr. Baker says. A seller can pay some of those costs, as well.

2. Consider cash offers

A buyer who doesn't need financing is more of a sure bet than one who does, says Bob Kelly, an agent with Re/Max Main St. Realty in Moorestown, N.J. However, cash bids are typically lower, so sellers need to weigh their options carefully.


A buyer with a 3.5% down payment who is also asking for seller-assisted closing costs may bring in a larger return for the seller, but the deal could take longer to complete or be derailed by a low appraisal, Mr. Kelly says. A cash buyer won't need an appraisal, just verifiable funds, and may offer an earlier closing date—which in the seller's eyes could compensate for the lower offer.

3. Prepare for the appraisal

Real-estate agents will tell you that low appraisals have killed many transactions in recent years. Many agents say appraisers—who are hired by lenders to assess the value of the home—are overly conservative in their valuations these days, even as home prices are rising in many locations.


To avoid appraisal problems, price your home in line with comparable homes for sale in your area. Even then, however, problems may emerge.


John and Susan Moon priced their Bethesda, Md., home competitively and received multiple bids. Still, the appraised value was $5,000 lower than the offer they accepted. In the end, they split the difference, dropping the price by $2,500 while the buyers brought $2,500 more to the closing table, Mr. Moon says.


"In some cases, you're pioneering new values," especially when receiving multiple bids that raise your home's price, says Stew Larsen, head of mortgage banking at Bank of the West. "As a seller, you need to think about what is Plan B if [the appraisal is low."


Sellers can challenge a low appraisal, he says, but they rarely win unless the appraiser made an obvious mistake.


One option is to add a contingency to the contract, laying out how the sides will renegotiate if the home's appraised value is lower than the sale price, says Paul Reid, an agent with Redfin in Orange County, Calif.

4. Tackle title and inspection issues early on

Some listing agents include a preliminary title report as part of their package, but a good agent will be able to spot red flags when reading it for you, Mr. Baker says.


Perhaps a sewage assessment wasn't paid by the homeowner, the deed never got recorded, or an easement was granted that the owner is unaware of, he says. Addressing such issues early on will mean fewer surprises at the end.


Similarly, instead of waiting for the buyer's home inspection to turn up problems, sellers should get one themselves before listing, says Tony Geraci, broker/owner of Century 21 HomeStar in the Cleveland market. That way, they can make needed repairs before the buyer requests them—or gets scared off, he says.

5. Commit to a tight timeline

As a seller, time isn't your friend.
Encourage buyers to move quickly on things like the home inspection. If a deal is going to collapse, it is better to know sooner rather than later so the home can go back on the market.


A longer process also gives a buyer more time to get cold feet. After winning a bidding war, buyers sometimes look at closing documents and paperwork and realize they're spending more than they should have on the home, triggering buyer's remorse, Mr. Reid says.


But if the buyer is looking for reasons to get out of a deal, it may be better to oblige than waste more time. "You never want to keep a buyer that doesn't want to buy your house. Let them out and find the next buyer," Mr. Geraci says.

REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.


LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Back to Basics..Short Sales 101..

(Quote) We just have to keep working and keep trying to do
 the basics and hopefully a win will come. "Terrence Duffin"

There are moments in life in any profession you are in whether you are a Realtor, Doctor, Lawyer or a checker at a grocery store; work begins to look like a mountain to climb with requests and demands and unrealistic expectations. Its easy to lose your footing and at any moment it can feel like the walls are going to cave in. We can lose sight of the goal and ask ourselves "Are we going to blow it? Well, blowing it is not in my vocabulary and I have a feeling neither is it in yours. So what is the solution?


I have learned when transactions are on shaky ground one of two things have occurred; a) either something was overlooked or b) something was over promised and under delivered. I understand that we can get extremely busy and in our industry time is money and things do move quite fast however; I would like you to consider that those two issues I have just mentioned have the capability of ruining a reputation, waisting time as over promising and undelivered means we did not get the outcome we desired therefore losing time, money and a returning client which could have been a future revenue stream.

Lets talk about overlooking documents. In a short sale transaction the bank is looking for accuracy and consistency. One thing I have seen as agents send over files is missing signatures on contracts and disclosures. No holes is the object of the game. The more solid my short sale package is the better chances I will have less requests for revisions from the bank. Here is the top issue and tip to help you in the future:


Double check all contracts. If the home is being purchased by an LLC or an S Corp you will need articles of incorporation and an operating agreement. All the names have to exactly match the RPA contract. The names on the proof of funds and pre approvals have to match as well.


Remember to utilize the checklists I have created to ensure you do not miss anything in the short sale package that the bank will request. They really do work if they are used properly.


In regards to over promising please understand that if you promise your clients the moon and the stars and cannot deliver at the end of the day you will only disappoint them and lose their business. For example, we have had agents tell their clients that they will be able to get the short sale complete by the end of the year before the tax law expires in order to get the listing. That is a huge problem waiting to happen as there are never guarantees in promises like this with all of the unexpected issues that happen in these transactions which can lead to unexpected results. I know you want the listing but your clients need the truth not what they want to hear.


A better response would be; I understand Mr. and Mrs. Seller that the tax debt relief would be a huge benefit for you and your family however we are not positive that the law will be extended into the next year and with the expiration approaching I can tell you that we have a good track record of getting approvals faster than most other companies out there but I will not guarantee you something that may or may not happen. Approval is inevitable however I cannot promise you it will be done by the end of the year and anyone who tells you they can will be lying. What I can promise you is we will do our absolute best and hopefully we will get the extension into 2013. Who knows if they will even benefit from the Mortgage Debt Relief Act? Advise them to speak with a CPA. This will allow you to gain their trust and respect but most importantly, keep it.


Back to Basics means to go back to the beginning and do what works. Here are a few examples:


1. Pre qualify - Utilize the listing agent short sale package and checklists I have created to allow you to ask the right questions to determine if they will qualify.


2. Set proper expectations and time frames


3. Advise your clients to speak with a Real Estate Attorney and a CPA.


Its all about strategy in the short sale game. If you have no strategy you simply have no game.


Lotus Realty Group is here to assist you in the whole process from A-Z. The system works if you work it. Please reach out for any questions that you have and allow us the opportunity to turn your mountains into paths of opportunity.


Extra Tip

Regardless of what Bank it is; if it is a HAFA short sale transaction the ARASS ( Breakdown of all the fees) will include a document to ensure this is a non-arms length transaction. In addition, it will include a NO FLIP 90 day rule.


Reminder that we are having our Holiday party December 6th between 5:00-7:00 pm at 400 S Sierra Ave Suite 102 Solana Beach Ca 92075. Please RSVP to Sarah@LotusRealtyGroup.com.

Real Estate Attorney David Bright will be there do discuss short sales, legal updates and our upcoming seminar we will be offering to agents. Short sale certification and 12 hours of DRE credits will be provided with the completion of the 2 day course. Hope to see you there at the party.



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Another Hurdle for Short Sales-Article in North County Times

Below is an interesting article I read in the North County Times and I wanted to make sure you all had an opportunity to read this to prepare for the possibilities of this happening with your current transactions. Please feel free to give me a call if you would like to discuss further. Happy Thanks Giving to you all!!!


Add this to the long list of things that could derail a short sale.


A growing number of short sellers in San Diego County are seeing their deals suddenly fall apart and cash bonuses disappear because the companies that accept and manage borrowers’ mortgage payments every month — like Citi, Chase and mainly Bank of America — are selling off the servicing rights to those loans to smaller companies for financial reasons.


“You’re wasting your time; you’re wasting everyone’s time,” said Brian Ruhl, a San Diego Realtor who has had to handle a handful of these cases during the past six weeks. “We’re asking on every (client) file now.”


Short sales are deals that let overextended borrowers sell their homes for less than what they still owe as long as the banks say yes. Short sales, once rare deals before the recession, now make up an estimated 29 percent of total home resales in San Diego County, based on October numbers from local real estate tracker DataQuick.
       

Servicing transfers or releases, which don’t affect the investors who own those mortgages, are nothing new. Realtors say they’ve always been around, spiked during the housing boom and have been occurring infrequently in more recent years.


They’ve suddenly spiked again, not surprisingly because servicing transfers can be a lucrative, cash-driven business for big-name lenders as well as for the small firms that buy up those rights.


How it works: Mortgage servicers are companies to which you send your mortgage payments and call if you have questions on your loan. When your loan is originated, they get a small interest of that for monitoring whether borrowers are in fact paying on time. Mortgage companies typically get 25 basis points for each home loan, which translates to $500 a year on a $200,000 mortgage, based on details from top investment publication Seeking Alpha.


Servicing rights can either be retained or they can be sold to other companies for cash.


In Bank of America’s case, they’ve been focused on selling, especially “delinquent loans needing extra attention, largely to smaller companies who specialize in that type of high-touch servicing,” said bank spokesman Richard Simon, who acknowledged that selling has increased since the start of the year.


Service releases have made sense for Bank of America, which was dethroned by J.P. Morgan Chase as the nation’s biggest bank last year, for two key reasons. One, they want to offload “legacy mortgage issues” from the acquisition of loans from the now-defunct Countrywide, and two, the demand for buying servicing rights has become “robust,” Simon added.

Who decides what’s released and when?


“Market factors and strategies of the servicers and/or investors,” wrote Simon, in an email to the U-T San Diego.
       

The gains realized by companies like Bank of America with such sales have meant potential losses in time, effort and money for those involved in the short sale process.


Some consumers who had just begun or were in the middle of short sales and had their servicers change are now having to start from scratch with the new company if they want to get the deal done, real estate pros say. How this typically unfolds: The short sale is in full swing, a borrower suddenly gets a letter stating the servicer is set to change in a couple of weeks, and all the borrower can do is wait until the change occurs.



The change, which can tack on an extra four to six weeks to an already lengthy short sale, can jeopardize deals with prospective buyers because short sale agreements can expire and patience from buyers tend to wear.


“Who do you complain to?” said San Diego real estate broker Vincent Scuncio, who’s also dealt with about a handful in the last six weeks. “You can rage against the machine, but then what?”


Such changes also have mucked up cash incentives promised to homeowners who agree to complete short sales. When the servicer changes, it’s more likely than not that the new servicer will not carry through with awarding the incentive, which can mean the loss of thousands to tens of thousands of dollars that could help struggling homeowners, Ruhl said.


“The $15,000 to $20,000 pushes them over the fence” of doing a short sale, said Ruhl, who added that some potential short sellers still hold out hope for a loan modification. “They’re a month into it and then they find out it’s being service released ... They don’t get it (cash incentive.)”


How can a borrower protect themselves from a service release jeopardizing their short sale?


Ask lenders if there are plans for a service release. They’re required to tell you, Ruhl said. Also, this way, you’ll know how much time you may have to close the deal.


Bank of America, which appears to be doing more service releases than other lenders, has heard similar complaints from real estate agents from other parts of the country, so much that they issued an FAQ on this issue to those who deal with short sales earlier this month.


“The fact is, there are many potential obstacles to the completion of a short sale throughout the complex process,” said Simon, of Bank of America. “The release of servicing is just one and several others occur more commonly.”


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.


LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...


Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions: 858-764-7300

Time to plan for a successful 2013!!!!

(Quote) Crystallize your goals.Make a plan for achieving them and set yourself a deadline. Then, with supreme confidence, determination and disregard for obstacles and other peoples criticisms, carry out your plan. "Paul J Meyer"


As 2012 comes to an end we reflect on the events of the past. We let go of what is no longer working and come up with a strategy to be more productive to achieve our highest potential in the upcoming year. I don't know about you but I certainly plan on knocking it out of the park in 2013. Professionally and personally. In my opinion the level of ones success is based on the level of personal growth. The questions to ask yourself are:


a) Was I consistent in all areas of business such as keeping a schedule and time blocking for prospecting, marketing, appointments and lead follow up?


b)Was I disciplined?


c) Was I balanced with exercise, good nutrition, play, and spending time with family?


d) Did I procrastinate or did I approach everyday with passion and productivity?


e) What areas do I need to improve in 2013 to accomplish what I need to accomplish?


f) Will I be focusing on listings only ( traditional, short sales or both), working only with buyers; or will I be working with both listings and buyers?


It is important to be specific with your schedule and what you put in your schedule. Experience has taught me if I have my hands into too many things I defeat my ultimate goal which is to be effective and efficient and give good customer service and increase my referrals. Although I am experienced in all sides of real estate clearly my area of focus has been short sale negotiating for REALTORS. Focusing on that area and doing it well and helping others achieve their goals has helped me acheive mine and all other aspects of the business naturally started to come full circle for me.


My hope for all of you in this upcoming year is to have a plan in place and follow it with all of the passion that you have inside of you to accomplish your goals. Anything is possible when we get our minds right and sharpen our vision and move in the direction of our dreams.


Short sales are still going to be an important part of our market and I am always here for your continued support in closing your short sale transactions. I am happy to sit down with you and help you incorporate short sales into your schedule. I have created a platform that has helped many agents become very successful in marketing, prospecting and pre qualifying. With our help in taking the negotiating off of your plate this will allow you too focus more on prospecting and building your pipeline.


Here are some key points to watch out for in the current short sale market:


1. Bank of America is starting to incorporate a new program for qualified candidates that will allow the second to basically be written off to help homeowners experiencing difficulty to stay in their homes. The second HAS to be a BofA second. The lender will send out a letter to the homeowner to call in to customer care to discuss further options. Please keep in mind when you have a client entertaining a short sale but is on the fence and inquires about this please set proper expectation and let them know that BofA may be their lender but there are specific qualifications and there is no guarantee they will be able to participate. The best advice you can give them is to have them call a BofA representative to discuss if this is a viable option for them. There still may be tax implications so if a client of yours is involved in this program they will want to still talk to a CPA.


2. Lenders want to close on time and as I have said in the past extension's are not going to always be granted and you will most likely see it happening less and less over months to come. Your best option is too make sure that your homeowner is thoroughly qualified for a short sale, you have a complete short sale package and you are on top of the buyers lender. If all parties have done their job properly there is no need for an extension request.


3. Lastly, Clearly we are suffering from low inventories and it has become harder and harder to get offers accepted. I would suggest not taking the first offer on the table. Cash and conventional are always better as government loans have been taking alot longer. You can see how that can pose a problem when a short sale lender wants to close in 30 days and just because you may have a buyer contract with a 45 day close does not mean the short sale lender will honor it. I would suggest giving a time limit of one week of allowing all offers to come in and let all agents know you will be making a decision for example; Wednesday the 21st at 3:00 pm. This will allow you to pick the best offer and also give the buyers agents a good feeling knowing that at least they are in the game and have a shot. But be very selective on a short sale listing. Be mindful. Is there a sale date? What stage of the foreclosure process is this property in? Because if it is a home that has a sale date in 3 weeks that has already been postponed 3-4 times your chances will be less than average of getting it extended.


Lotus Realty Group is here to help. We ask that you contact us before you take a listing so we can give you the proper analysis of your situation and give you the proper paperwork to be fully prepared at your listing appointment. Effective and Efficient is our goal.


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.


LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

The Great Approach-2012 Beckons

(Quote) We fatuously hoped that we might pluck from the human tragedy itself a consciousness of a common destiny which should bring its own healing, that we might extract from life's very misfortunes a power of cooperation which should be effective against them.

As we approach the end of the year it is important to look at where we came from. The housing crisis certainly did cause panic and chaos throughout the nation and forced us all to really look at our actions and our motives as to why we ended up here and how we would need to move forward stronger with awareness to prevent the same mistakes from occurring.

In 2012 there were a lot of efforts within the financial institutions to make short sales more favorable to a homeowner rather than just walk away from their properties and allow it to foreclose by offering large incentives and tightening up their systems to allow short sales to close faster making the process more effective and efficient. With the nationwide unemployment issue along with other hardships such as death, divorce and value depreciation; homeowners are still defaulting on their mortgages.

We have experienced low inventories this year which has made it difficult for buyers to get accepted offers however; I believe homeowners are holding off on making a decision to sell to see if the Mortgage Debt Relief Act will be extended into next year which will allow homeowners to be free from paying taxes on the cancellation of debt. I believe after elections we will see a lot more homeowners putting their homes on the market therefore bringing about more inventories. Thus far in 2012, we have seen a steady appreciation of home prices, and while next year will likely be a bit more volatile, the positive trend should continue but I also believe we are not completely out of the woods yet. It is my opinion that it will be another 3 years before we truly stop the bleeding.

What life lessons can we take from the debacle in the housing industry to make us stronger in 2013? Since most people’s wealth is tied to their house this is something we need to look at.
Don’t ever leverage yourself particularly just because everyone else is. You don’t have to keep up with the Jones’ just make sure that you are protected.

This leads into being comfortable in your own skin rather than relying on others or property values to keep your self- esteem up. Things can go down even when the experts tell you they cannot so do your own homework or find a trusted advisor that can help you. Don’t get sucked in by the sales person. Just because you lost your house it doesn’t mean that all is lost. There are billionaires that do not own a house as they do not want to be tied to one location.

There is freedom from a lack of possessions and the bills that come with it. Is the dream of owning a home your dream or is it because you have bought into the slogan “Americas Dream”? I encourage you to make your own decisions and stop pointing a finger at others for your lack of convictions.
If your health is good and you are emotionally strong then you are ahead of the rest regardless of whether you have the mansion or not. It has been my experience those who do own massive houses wish for the simple things in life. The more you have the more pressure there is too maintain it. I am not saying that you should not own a home. I am just saying that your motivation to buy should be pure in intent and not bite off more than you can chew. .

I have seen many people go through transitions this year. I have a friend who experienced a divorce which caused him to sell his house and then lost both of his parents in a year period. It is amazing to see his journey and his change of perspective. It certainly has made him very humble and appreciative of his life and what he has and he has walked through it all with grace and dignity. Though there is a sense of loss there is also compassion and understanding for others. When we are emptied of self that is when god’s grace comes in and gives us the opportunity to fill that emptiness with good choices, right action and respect for all humanity.

I have had my share of ups and downs this year and I can honestly say that at the time I felt defeated to some degree. I was forced to look at all of my points of character that led me into the unfavorable conditions I put myself into. What were my motivations? What drove me to want the things I had? Were they serving me? How could I be of better use to myself and others?

I am so grateful today for all of those experiences. I have softness in my heart today and a deep desire to help others whether it is helping a homeowner short sale their property or being a listening ear and a hand to hold when someone is in need of a friend.

Hardships, though they do not feel good and there are growing pains that come along with it, there are many hidden blessings that give us so much hope for the future and the ability to unite in love and compassion and blaze a trail for those still lost in the fire.

Let’s be that light and shine brighter than ever. What do we have to lose? Using our experience in hopes that others might be healed. What greater way to bounce back from adversity so that nothing that we go through in life is in vain.

I wish you all a wonderful holiday season filled with peace, love and light and Happy New Year.

Extra Tip

If you are a REALTOR submitting an offer on a short sale as your own personal property; the short sale lender may decide to NOT give a you a commission.


REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP


PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

A Note From Cari Drolet, Lotus Realty Group

(

Quote) Gratitude is an art of painting an adversity into a lovely picture. ~Kak Sri


Hello everyone. It feels great to be back. Thank you all for your patience while I have been away healing. There are times in life that we get thrown some challenges that we must overcome in order to gain the wisdom and courage to embrace all life has to offer. The good and the bad. Sometimes we may want to deny the challenges exist. We may get up everyday and put on a smile, pull up our boot straps and wish it all away.

Unfortunately, most challenges cannot be hidden or ignored otherwise the problem builds so high that it becomes harder and harder to see the light at the end of the tunnel and eventually the mole hill that became a mountain comes tumbling down. The song "Landslide" by Fleet wood Mac comes to mind. So much truth in that song.

From a Woman who is use to controlling my life and driving as hard as I do in business; I certainly have had to practice surrender this past month. Learning to trust the process and allowing others to take care of me and at the same time helping me see my circumstances in a more positive light and how I can use my experiences to not only better myself on all levels; mind, body and spirit; but to use my experiences to help others who may be going through the same.

Though my personal experience is different from a homeowner losing their home; energetically the feelings are the same. I have seen what foreclosure does to a homeowner. I understand the overwhelming feelings of disappointment, shame, guilt, grief and loss, panic and fear. Denial is a huge part of this experience. Avoidance. These are all defense mechanisms and walls we use to block out the reality of what is really going on because its too painful. We convince ourselves we can do it all by ourselves in the face of adversity but the truth is we need people. We need help. We need compassion and sometimes we do need the guidance of others to overcome challenges and to land in a better spot than when we started.

REALTORS, we certainly have a lot of reasons why homeowners should short sale vs foreclose with the incentives banks are giving homeowners and their cooperation level. We are still awaiting confirmation that the Mortgage Debt Relief Act will be extended so you may experience homeowners holding off on making a decision until they know for certain. However; if in fact it is extended you will definitely see an increase in homeowners reaching out to you.

If you have some clients on the fence my suggestion would be to help them see the benefits of a short sale aside from the possibility of incentives or the Mortgage Debt Relief Act. The reality is; if its not working maybe its time to try something different.

I have definitely gained more gratitude for life, for the people in my life that have always been there to support me and have never left my side. Those are the blessings that can not be replaced by anything material and I thank god everyday for all that he has given me. I am truly blessed. I wish all of you a wonderful holiday season and many blessings to you and your families.

Please contact Lotus Realty Group if you have any questions in regards to potential short sale listings you have coming up. We would be happy to assist you with your transaction.

REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

New Lender Program "Customer Relief"

To be prepared is half the victory.
"Miguel Cervantes"

 

I spoke with a Wells Fargo Representative today to get clear on a program that was rolled out 2 months ago. I get a sense the lenders are trying to work out the details to be more accurate, effective and efficient. It is called the "Customer Relief program". Through this program all net proceeds will go to the first lien holder and the second will be wiped out with a zero balance. If homeowners are qualified for this program through the first lien holder then the second from what I am told has to participate. (We shall see). In addition; if the second does get wiped out it still falls within the debt forgiveness however; they will still get a 1099. If the BPO comes back higher than the unpaid balance then the homeowner will be declined for the Customer Relief program and will move into traditional short sale status. The lenders that are participating in this are the following:


- Wells Fargo

- GMAC

- Bank of America

- Chase

- Citi Group

Homeowners who WILL NOT qualify are:


1. Fannie Mae loans ( Freddie Mac is okay)

2. Lots

3. Capital Markets

The benefit for the homeowner is if they are 90 days past due on their mortgage they will NOT be asked to provide their bank statements, pay stubs or tax returns. 30 and 60 day lates will still need to provide the standard financial information. It is still unclear exactly what the qualifications are as the lender has only provided who will not be qualified for this but we were told that the value of the home and the offer would not be a determining factor. As we learn more about the program we will provide you with more information.


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

New Lender Program "Customer Relief"

1. To be prepared is half the victory.
2. "Miguel Cervantes"
3.  

I spoke with a Wells Fargo Representative today to get clear on a program that was rolled out 2 months ago. I get a sense the lenders are trying to work out the details to be more accurate, effective and efficient. It is called the "Customer Relief program". Through this program all net proceeds will go to the first lien holder and the second will be wiped out with a zero balance. If homeowners are qualified for this program through the first lien holder then the second from what I am told has to participate. (We shall see). In addition; if the second does get wiped out it still falls within the debt forgiveness however; they will still get a 1099. If the BPO comes back higher than the unpaid balance then the homeowner will be declined for the Customer Relief program and will move into traditional short sale status. The lenders that are participating in this are the following:

- Wells Fargo
- GMAC
- Bank of America
- Chase
- Citi Group

Homeowners who WILL NOT qualify are:

1. Fannie Mae loans ( Freddie Mac is okay)
2. Lots
3. Capital Markets

The benefit for the homeowner is if they are 90 days past due on their mortgage they will NOT be asked to provide their bank statements, pay stubs or tax returns. 30 and 60 day lates will still need to provide the standard financial information. It is still unclear exactly what the qualifications are as the lender has only provided who will not be qualified for this but we were told that the value of the home and the offer would not be a determining factor. As we learn more about the program we will provide you with more information.

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Re Cap of HAFA Guideline Changes

(Quote) “Any Change, even for the better is accompanied by drawbacks and discomforts" Arnold Bennett

I hope you all had a wonderful long weekend. I was able to get away briefly to Sedona, Arizona. It started off quite rough actually with unexpected surprises that left me in a vulnerable state. I realized how my life has been structured with work and things I can control on a daily basis and how much I count on that but the minute I was put in a circumstance where everything had changed which was out of my control; let me tell you, it was touch an go there for a moment. I learned surrender. To let go and allow everything to unfold as it was suppose to and I had an experience that was better than I could have controlled all on my own. That is so true in all aspects of life really whether it is business related or personal related. They are all connected.

In our business we deal with circumstances out of our control all the time especially with short sales. I have seen first hand how these changes can cause alot of frustration and confusion with professionals in our industry however; when I look back over the years all of changes were for the greater good for all parties involved when we work together, surrender, allow and trust.

Below you will find a recap of all of the new changes to the HAFA guidelines. I will be keeping a running list of not only the changes within HAFA but also Fannie Mae, Freddie Mac and all other lender updates and make sure you are all abreast with the most current information so you will be fully armed and ready to set proper expectations with your clients.

Short Sale Guidelines

HAFA Qualifications for Incentive:

1. Must be owner or tenant occupied

2. 3k seller/tenant relocation assistance

3. Payment to 2nd lien holder is 8% or 8500k

4. If Fannie/Freddie backed loan payoff to 2nd lien is 6000k

5. Property can be vacant or tenant occupied up to 12 months before the Short Sale Agreement but seller must be able to prove it was their primary residence and they have not purchased another home in the last 12 months.

6. Mortgage must be originated on or before Jan. 1st 2009 (for 1st lien)

7. Balance of Mortgage has to be under 729,750 for 1 unit properties. Higher balances are available for 2-4 unit properties.

8. Program is extended through Dec. 31, 2013. Contract must be written on or before this date and must close escrow before Sept. 30, 2014.

9. Military- Any active military members who have been forced to deploy or relocate for service qualify as owner occupants if it was their primary residence.


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Hottest topics in Real Estate today with George Chamberlin on KOGO

Please join Lotus Realty Group and" SPECIAL GUEST" number one Real Estate Attorney in San Diego "David Bright" on 95.7 FM and AM 600" MONEY MATTERS" with George Chamberlin Sunday August 26, 2012 at 10:30am.

George and David will be discussing the market, legal issues with short sales today and the new FANNIE MAE AND FREDDIE MAC improvements to allow homeowners to short sale their property in a more effective and efficient manner. Tune in and get the latest updated information in real estate today from the top professionals in the industry.


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

Cultural Shift by Cari Drolet, Founder of Lotus Realty Group

http://www.visionmagazine.com/archives/1206/1206_viewpoint_worms_waking.html

Sleep my little baby-oh
Sleep until you waken
When you wake you'll see the world
If I'm not mistaken...

Kiss a lover
Dance a measure,
Find your name
And buried treasure...

Face your life
Its pain,
Its pleasure,
Leave no path untaken.”
― Neil Gaiman, The Graveyard Book

Fannie Mae and Freddie Mac Updated Short Sale Guidelines

(Quote) Education is the most powerful weapon you can use to change the world.

"Nelson Mandela "

There have been several changes over the last 6 months with short sale guidelines. It has always been important for me to make sure you are all up to speed with the most current information so you will be able to ask the right questions and set proper expectations with your buyers and sellers. Staying on top of these changes will only allow you to better explain to your potential clients what to expect moving forward. In addition to being well versed in short sales and charming your clients with your knowledge; you will bring some much needed peace of mind back into their lives. It is no secret that losing your home is no picnic and this is a very stressful time for them. Be your clients glimmer of hope for a knew beginning, a new chapter. One homeowner at a time, we can make a difference.

Below are the most recent changes with the government backed loans and Bank Of Americas Cooperative short sale program:

Loans owned by Fannie Mae and Freddie Mac will take longer than a regular short sale. The investor has to sign off on the value and their review process takes 45-60 days to complete. In addition; Fannie Mae and Freddie Mac first liens will only give 10% up to $6000 to second lien holders and no other parties can contribute to the second lien payoff.

A great way to be able to set expectations with your clients is to ask them if their loan is owned by Fannie or Freddie. ( See seller interview questions) If they are not sure they can go to the government sites and get that information by entering the property address.

EXTRA TIP OF THE DAY

Bank of Americas Cooperative short sale program that offers incentives for homeowners to short sale their property has stated ; if the second lien has Mortgage Insurance, the homeowner will NOT qualify.


For more information please contact Cari Drolet, Lotus Realty Group at 858-764-7300 or by email cari@lotusrealtygroup.com

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.


LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS


At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Is The Worst Over?

(Quote) Hope doesn't come from calculating whether the good news is winning out over the bad. It's simply a choice to take action.
Anna Lappe

There have been alot of opinions going around about our market and if the worst is over. There are signs that the market may be stabilizing however; I feel that we need to keep our eye on the local market and weigh it against what is happening nationally. Often times the two do not align because of our relatively robust market compared to many areas of the nation that are having much deeper problems.

Keep in mind that this is an election year. Historically, those in politics that are trying to get elected, or get their candidates elected, are doing whatever they can to make people feel that they are better off than they actually are. Therefore, I expect we will see an even stronger push to help people keep their homes or short sale them.

I believe we will experience increased foreclosures, which is inevitable as some people have abandoned their former homes, or have no desire to go through a short sale. There is already a large inventory that falls in this category ( Ghost Inventory).

It is in the investors best interest to do whatever they can that causes the inventories to stay low. So the longer they keep the ghost inventories in the closet the better their chances of diminishing deep losses.

It is always a good thing to remain hopeful. I have so much hope in so many areas of my life that often times I get disappointed when I feel that my hopes and aspirations are not happening as they should or returning to me fast enough. I can only form the best opinions and judgment's based on the information that I have right now to be able to move forward in a positive way and from where I a m standing I can see that we still have alot of global issues to work out. We still have a large unemployment factor and as long as this is a part of our economy we will still see a large number of homeowners unable to pay their mortgage and forced to either short sale or foreclose.

Yes, I believe that the government is doing what they can to implement programs for homeowners to stay in their property however; experience has taught me that nothing happens exactly according to plan and there is always a wrench thrown in the mix. For example; when SB-458 was passed stating that there will be no deficiency judgment once the short sale is complete; they extended that to second lien holders. What did that do? It actually further irritated the second liens and made it more difficult to negotiate the payoffs as alot of times they want to increase the amount since they are unable to pursue the homeowner for more money once they short sale is complete. Some things in life are bitter sweet I suppose. Light and dark. You cannot have one without the other to some degree.

For me, I choose to keep working out my systems. Making sure that I have a strong team in place to prepare for anything that comes my way in this market as nothing is certain and everything changes.

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

My Home Improvement Page sponsored by KOGO 95.7AM/FM RADIO

http://northsd.myhomeimprovement.com/pro/san-diego-short-sale

Don't forget to tune in to Money Matters radio with George Chamberlin every Sunday as George Chamberlin and Cari Drolet, Founder and CEO of Lotus Realty Group  talk about "The truth in Short Sales" between the hours of 10am and 1pm.

(Quote) You have to start with the truth. The truth is the only way that we can get anywhere. Because any decision-making that is based upon lies or ignorance can't lead to a good conclusion. Julian Assange

KOGO 95.7FM/AM RADIO WITH Lotus Realty Group "Lets talk Short Sales"

http://www.youtube.com/watch?v=DuvFaseNpY0&feature=colike

Adapting to the current market place

(Quote) Enjoying success requires the ability to adapt. Only by being open to change will you have a true opportunity to get the most from your talent. "Nolan Ryan"

We are entering a very exciting time in the short sale market. While it is a very stressful and trying time for the homeowner, we as REALTORS have a great opportunity to be of service. The lenders are in line to close short sale transactions with a great system in place to ensure a smoother process. We are seeing alot of homeowners reaching out for help. They are desperately looking for guidance. For someone to show them what to do. As professionals, we have the honor of being that light in the dark for them. It is a different market. With the amount of adversity out there it has been my experience that I have had to change the way I look at my job and the people I work with.

I remember my first introduction to a short sale listing appointment years ago. I was with my mentor at the time This was a past client of his. I was to listen and learn only. The homeowner had 3 properties she bought from him awhile back and all 3 were under water. He had his contracts ready and was pushing for her to sign them . In a traditional market that would have worked with this client however; she was in tears and she was extremely emotional about being in the position she was in. She had shame attached to not making her mortgage payments and felt overwhelmed. What I heard in her voice was she needed someone to listen. She wanted to know all of her options instead of being told she needed to sign the contract. He did not get those listings after that appointment.

The inability to adapt to the current market place was the reason those listings were lost. The ability to be versatile, to deal with a wide variety of people who are suffering; to arm yourself with the proper knowledge and to be well versed in short sales so you can give that desperately needed guidance to your clients; will set you apart and give your clients a good feeling about the choice they made to list with you. There is no greater feeling than being of service. It is the fastest way to heal yourself and others. That is the level of compassion needed in this market place.

On another note; there are some changes with HAFA and lender requirements I would like to share with you.:

HAFA ( Home Affordable Foreclosure Alternatives ( Bank of America)

Time Line:
The HAFA short sale or deed in Lieu of Foreclosure may be initiated up to December 31, 2013 however; the transaction must have a closing date on or before September 30, 2014.

Subordinate Lien Increase:
The aggregate cap of $6000 was increased to $8500 to satisfy second lien holders.

Occupancy Requirements:
Occupancy requirements have been removed for HAFA eligibility.

HAFA Relocation Incentive:
The $3000 relocation assistance money will be paid only to a primary resident. Homeowners may use this money to pay transaction costs. It must be reflected on the HUD and a letter from the homeowner signed and dated must be sent to the short sale lender. The HAFA money CAN NOT be used to pay second liens.

AURORA BANK

Aurora will no longer be servicing loans. They are re directing their loans to Nation Star. There may be one other lender Aurora will be sending loans to however; they have not disclosed that yet. If you currently have a short sale with Aurora you will need to ask your client if a letter was received in the mail stating their loan was sold off. You may have to start over. The good news is Nation Star uses the Equator system which will make the process go alot smoother. If you have had experience with Aurora then you know how difficult and frustrating they are.

If you have any questions in regards to these changes please feel free to contact me and I would be happy to help. I wish all of you the best of luck and Lotus Realty Group thanks you for your continued business.

Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP
PROFESSIONAL SHORT SALE NEGOTIATORS

At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...