Expedited Short Sales! Is It Possible?

The larger banks have finally streamlined the short sale process and as of June Freddie Mac and Fannie Mae have begun expediting their short sale transactions.  Time will tell if the steps they are taking will achieve results.

Federal policies now require Fannie and Freddie servicers to review and respond to short sale requests within 30 calendar days of receiving an offer and complete borrower package.  After that they must provide weekly updates and a final decision within 60 calendar days.

It remains to be seen whether the servicers will actually make these deadlines.  There are no penalties for missing the deadlines so it’s not clear what their incentive will be.  But it is a step in the right direction.

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You’ve Completed a Short Sale: It’s Time to Repair Your Credit

Once you’ve completed a short sale your focus should be on repairing your credit as quickly as possible.  Damaged credit affects your future finances and the sooner you can bring your credit score back up the better able you will be able to get financing at a decent interest rate.

As we all know, your credit score is important when purchasing a new car or a new home.  The higher your credit score the lower your interest rate will be.  You’ll probably be renting for a while but eventually you may decide to purchase a new home and you’ll be glad you repaired your credit.

You can deal directly with the three credit bureaus, Transunion, Equifax and Experian and ask them to remove errors one at a time.  This can be time consuming but cost effective.  The best bet is to sign up with a company that will provide access to all 3 bureaus.  Compare the companies available before choosing.

Alternatively, you can use a credit repair company.  Please do your homework when choosing a company to work with.  Check any company you are considering with the Better Business Bureau.  Also, google the company name to see if they have received bad reviews or any red flags show up.

Whichever method you choose be sure to start early.  Don’t wait until you need to replace your vehicle or want to purchase a home to start.

San Diego Short Sales

The Time to Short Sale is Now!

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation are due to expire on December 31, 2012.  The act allows taxpayers to exclude income from the discharge of debt on their principal residence whether as a short sale or foreclosure as well as the amount of any debt reduction due to mortgage restructuring.  Once the act expires homeowners who short sale or foreclose will be liable for the tax on the amount of debt forgiven.  The IRS considers the forgiven debt ‘taxable income’.

The expiration date is just around the corner and short sales can take anywhere from 3 to 9 months to close, so it is vital to get the process started now.

Another reason it is important to short sale now rather than later is the fact that as the banks start releasing REO (bank owned) properties into the market the supply of homes will increase and this may affect the prices offered as well as the number of offers received.  The better the price your home commands, the smaller the amount of the forgiven debt will be.

Lastly, if you are underwater in your home, sinking more money into it is not going to help you recover financially.  The best thing to do is get out from under it now, begin saving up money for your next home and rebuilding your credit.

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Housing Bust is OVER!!!

According to the Wall Street Journal…the housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

From here on, housing is unlikely to drag the U.S. economy down further. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. “Manufacturing had led growth and construction had lagged,” JPMorgan Chase economists said last week.”Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life.”

Plenty could go wrong. The biggest threat is a large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get worse. Or overly zealous regulators or a post-election change in government policy could unsettle mortgage lenders or home buyers.

But the housing bust is over.

Source: Wall Street Journal

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Short Sale vs. Foreclosure

Why is it better to do a short sale versus a foreclosure? The main answer is money! Some banks are now giving homeowners up to $30,000 to short sale their home! To find out if your lender is participating in this  program, just give us a call or send us an email. The other reasons to do a short sale versus a foreclosure are:

• The amount of time that negatively affects your credit report is a lot less
• The reduction in credit score is a lot less
• You can buy another home much sooner
• Does not challenge most Security Clearances (Police officers, military, CIA, security)
• No bad effects on current and future employment
• No deficiency judgment no matter what your circumstance, including investment property!

Find out more advantages to doing a short sale here: San Diego Short Sales

Remember, knowledge is power! Find out all your options before it's too late! Contact us for a free, no obligation consultation. (619) 890-7447

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