Commencing January 1, 2013, Governor Brown’s Homeowner Bill of Rights goes into effect which makes California the first state in the nation to take provisions in the National Mortgage Settlement, which covered the nation’s five largest mortgage loan servicers, and apply those rules to all mortgage servicers.
What is the California Homeowner Bill of Rights? The California Bill of Rights was enacted into law on July 11, 2012 to help struggling Californians keep their homes. It aims to avoid foreclosure where possible to help stabilizeCalifornia’s housing market and prevent other negative effects of foreclosures on families, communities and the economy. It generally prohibits lenders from engaging in dual tracking, requires a single point of contact for borrowers seeking foreclosure prevention alternatives, provides borrowers with certain safeguards during the foreclosure process and provides borrowers with the right to sue lenders for material violations of this law. The bulk of the law only applies to first trust deeds secured by owner occupied properties with one to four residential units. What I think is particularly significant about this new law is it’s single point of contact provision. There have been too many instances of homeowners and their files getting lost in the process and they simply give up in frustration.
If you would like more information on this law and how it may affect you, please feel free to contact me at 714 801-0827 or email me at Barbara@TheOCRealEstateEdge.com.
With short sale approval in hand, we all hurriedly went about the business of getting this transaction closed. That meant inspections, disclosures, final loan approval and last but not least, the appraisal. Today the very utterance of that word sends shivers down the spines of most agents. Sales are falling out of escrow daily as a result of properties not appraising for their sales price. With little inventory, buyers are vying for homes that are often selling above asking price, sometimes way above asking price. Ours was to be no exception. The property did not appraise for the $287,000 sales price. The appraisal came in at $275,000.
What did that mean to us, aside from more inconvenience? Well, it means we have to once again go back to the lender to get short sale approval on a new sales price which naturally means another delay. Not an insurmountable obstacle, but an obstacle nonetheless which brings us back to the issue of value.
Allow me to climb up on my soapbox for a moment. If we had gotten a correct valuation of the property with the BPO at the beginning of the short sale, the overall process may have been considerably shorter and there certainly would have been a lot less headaches. If you will recall, the BPO agent put the value of the home at $315,000. In a market where the sales to list price differential is 3% or less, a valuation of 12% above the appraised price is a disaster in the making.
Despite all the hurdles, missteps and an occasional roadblock or two, we were finally able to get short sale approval within a few weeks of resubmitting it to the bank. On Friday, October 12th, escrow on this transaction closed. While one young man was happily starting his life in his new home, another one was finally freed of a burden that came with home ownership and able to move forward in his. Both are happy and got what they wanted….and needed which is all that matters to me.
If you or anyone you know is in need of short sale assistance, please contact me at Barbara@TheOCRealEstateEdge.com for more information.
As you may recall from my last post, after much haggling we had finally agreed to price. The bank wanted the sales price increased by $49,000 but they reluctantly agreed to split the difference with the buyer and accepted an increase of only $24,000. Even with the newly agreed sales price, we knew we weren’t out of the woods just quite yet. There were still the issues of who would pay termite and other sales related costs.
After being the hands of the investor for over two weeks, the negotiator finally got back to us. It was just as we thought. The investor did not want to pay for the cost of the termite work which was approximately $2,600, nor did they want to pay for the hazard report or a home warranty policy for the buyer. The negotiator wisely suggested we lower the price back down to $287,000 and that the buyer pay these costs. The buyer readily agreed and the matter went back to the investor for final written approval.
Then a few weeks later during the late afternoon hours on the Friday before the long Labor Day weekend, we got the news we had long been waiting for. We had formal short sale approval and a letter to prove it! I quickly told the buyer’s agent and we both immediately went to work to finalize our sale. We were really moving now and the end was in sight. Nothing could stop this escrow from closing now. Or could it?
Next on Diary of a Short Sale – The Value of a Good Valuation
The last few years we have seen the coming of age of Generation Y, children born in the mid to late 1980s and after, usually of baby boom parents. With numbers estimated as high as 70 million Generation Y, or the Millennials, is one of the fastest growing segments of society with many now entering our workforce and….buying homes.
They were born of an age where there was a computer in almost every home and cell phones, albeit large and clumsy, were the norm so it’s no wonder they are extremely tech savvy. Today, Generation Y relies on their Blackberrys, laptops, I-Pads, I-Phones and most every other hand held electronic gadget known to man for their day to day existence. They are connected 24 hours a day, 7 days a week. Their most favorite form of communication is email or text messaging which is where the problem lies. Where’s the human interaction? How can we always effectively relay a thought or concept with all their subtle nuances with just a few abbreviated keyboard characters? While I, too, enjoy the benefits of text messaging and find it a very time efficient form of relaying a quick “yes or no” or “running late”, it does not replace having an honest, open dialogue with another person.
As a real estate professional, I am happy to give quick updates via text message but I would never think of delivering any substantive news by way of a text. There comes a time when you have to use the phone for that which it was intended…placing an actual telephone call or , heaven forbid, calling to schedule a face to face meeting! There have been many times during the course of a real estate transaction where I have needed to have a conversation with a client and have left a voice mail to that effect only to receive a text in return.
Personally, I have found that the key to successful text messaging is not speed or accuracy or thumb dexterity but knowing when not to text and when to pick up the phone to make the call. It can make a world of difference.