Profile picture for Taylor Brown

Taylor Brown

Agent
Specialties:
Buyer's Agent,
Listing Agent,
Relocation,
Foreclosure

Advice

  • (67 Contributions,
  • 3 Best Answers,
  • 12 Helpful)

Contributions are sorted newest to oldest.

How is the HAFA Program Affecting Short Sales In Your Area?

Answer

Wouldn't you agree it's a little too early to tell?  It is agreeable that the HAFA will help, how much is yet to be seen.  As with many new sets of rules, it takes a while for "creative" people to discover the new loop holes.  For the rest who adhere to the guidelines it will be some time before we can see the effects given that we are still dealing with a process that, according to the guidelines, can still take months to complete.  Also keep in mind that Fannie and Freddie do not have to adhere to the new short sale guidelines and MANY of the short sales are owned by one of the two.   

  (0)
inspections for foreclosures

Answer

You are absolutely entitled to an inspection unless the bank has deemed the house a tear-down in which case all you can do is drive by and/or walk around it.  Otherwise you are absolutely entitled to an inspection.  Something else to keep in mind is this: On foreclosures, banks are looking for the lowest number of contingencies as possible on a contract.  If you write an inspection contingency into your contract (or leave it in) you are telling the bank "if my inspector finds something that I don't like, I'm going to cancel the deal and you're going to have to start looking for a buyer, AGAIN."  This may be fine in an area or on a piece of property where there is no demand, but in an area such as most Chicago neighborhoods where almost all foreclosures have multiple offers, any contract with an inspection clause will most likely be defeated by someone who eliminates the inspection clause on the purchase contract.  Here is a work around: Get the inspection done before you make the offer.  It may cost you a few hundred per home, but if you're going to be saving thousands over the price of a conventional sale it will be worth it.  When your inspector gives their thumbs up - write an offer that has the inspection contingency crossed out, it will significantly strengthen your offer in the banks eyes.

  (0)
New Loans For Short Sales?

Response

Andy - Please provide a link to verify this information.  You mentioned in bullet point two that the borrower must continue to make their payments throughout the short sale process.  You have clearly never managed a short sale before or you would know that you were contradicting yourself.  NO BANK will grant a short sale if they borrower is able to make their payments and that's a fact.  No borrower can show a true "hardship" if they are able to continue making their payments which is a prerequisite for any short sale approval.  This FHA Loan program you speak of sounds like a clear opportunity for fraud if it even exists.  If a home is upside down 300k this program you speak of would allow a creative person to fraudulently claim hardship, short sell their home, be forgiven on the 300k with no tax penalty and utilize a FHA insured loan to buy a new home immediately following the short sale?  Highly unlikely.  If you have a link to prove otherwise, please post it so we can all benefit.

  (0)
Does a foreclosed home sale count as a valid comparable sale for a VA assessment?

Answer

It really depends on how many foreclosure/short sale homes are in the mix. If you pull a cross section of recently sold homes in the area and 1 out of every 10 (these numbers are not firm, just examples) are foreclosures, they should not be included in CMA.  If half or more of the recently sold comps are foreclosure/short sale, then it is very acceptable (and commonly done) to include them in the calculation of your home's market value.  Check with their lender to see if you can go with a different underwriter and appraisal company.  On most loans it is also possible to dispute with the lender you have, however with FHA loans once the appraisal is done on the property, it sticks with the file as long as the buyer goes FHA.  VA loans may be similar, it is best to speak to your underwriter.

  (0)
WILL HAFA REALLY WORK????

Response

Another crystal ball question... With such a huge amount of variables it would be hard for anyone to predict with certainty.  Given all of the problems we had with lack of regulation and all of the benefits of streamlining the process of short sales it seems that HAFA is a step in the right direction.  I saw a great article on some of the changes that are coming on TheChicago77.com site: http://www.thechicago77.com/2010/02/the-short-sale-process-part-2-%E2%80%93-new-regulations-mean-an-easier-process/ You can also find a wealth of excellent info on our site: http://www.DreamTown.com/blog

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