Credit Counselors and Short Sales May Bail Out Mortgagors

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Vicky Chrisner — Sat, 05 Jul 2008 11:00:00 GMT

Old thread, evolving area of the marketplace. Read the blog referenced above - specifically the June posting on the Truth About Short Sales & Foreclosures!

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Hope — Wed, 18 Jun 2008 11:00:00 GMT

My condo in LV has been foreclosed by the first lender. Now the second has been sold to a collection agency, called Faslo Solutions. They have been calling me and wanted to collect a payment. Please advise.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

greg — Mon, 28 Jan 2008 13:00:00 GMT

Regarding short sales bringing down values. I am a mortgage broker in SF bay area and according to a very experienced appraiser they can not use properties that were sold in short sale as comparables. That means it should not affect refi values.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Steve — Mon, 12 Nov 2007 13:00:00 GMT

Sounds like the homeowner is still stuck with a huge debt if the IRS sticks them with the difference between the loan payoff and the agreed to purchase price! How long does the homeowner have to pay that debt? This is the IRS...if the homeowner doesn't pay the debt, he goes to prison! Or do I have this all wrong?

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Rich — Wed, 07 Nov 2007 13:00:00 GMT

One point the article does not address is the cost to the lender to foreclose. Lenders are stuck with properties that need a ton of work, in a free-falling market, and they are represented (usually) by completely unprepared REO Portfolio managers. If the lenders stand by and wait for regulator or market shifts to bail them out - it won't happen. They will all go under. The adjustable rate alarm clock is just about to go off - and there is no snooze button.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Scott — Mon, 05 Nov 2007 13:00:00 GMT

Stop spreading Negativity. The investor will make a profit yes but instead of the house foreclosing it is sold at a cheaper price then usually re-sold within a month or two for close to top dollar. Obviously something that will benefit people in the neighborhood. Or the purchaser may be a first-time home buyer looking for a 1st home at a good price and is willing to do some renovations. Good for 2 groups of people so far and I can keep going. Shorts are better than sitting around doing nothing.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Watchdog — Fri, 02 Nov 2007 11:00:00 GMT

Sorry, I stick by my posting. In reviewing underwriting criteria for major subprime lenders, there will be very little deference given to the short sale in lieu of a formal foreclosure. There will be some leeway given and that will increase as it ages out but it will greatly impact the borrowers credit. It is the best case scenario of the two but a win-win, benefit-benefit, it is not. If you want to categorize it that way, it is a "win-lose less" scenario.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Jim Hardison — Wed, 31 Oct 2007 11:00:00 GMT

Like literally millions of families facing foreclosure, it all began with unscrupulous people knowing breaking laws to put together a sub prime package for sale to the likes of Merrill. Back to the part about breaking laws. Why have there not been any calls for prosecution? Here in Florida, thousands will lose their homes and it is no less than any other type of grand theft. We cannot play this like monopoly any more. If you must take my home move the criminals into a new home, prison.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Anonymous — Tue, 30 Oct 2007 11:00:00 GMT

I am a lender in the midwest and unfortunately each investor we work with views 120 lates as foreclosure. It is in the homeowners best interest to sell the property prior to going 120 days down. But the reality is that no one involved in this situation benefits other than the investor. The homeowner loses any equity they may have had in the home, the lender takes a significant loss on the loan and it is an excellent point that these short sales will perpetuate declining real estate values.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Frank Wible — Tue, 30 Oct 2007 11:00:00 GMT

Short sale investors are now crawling out of the woodwork. the problem is, I have not seen to many that actually know what they are doing. This can cause more headache then it's worth sometimes. Just as a side note, you may want to check with your local real estate office to see if they have a short sale expert on staff. The lender pays any real estate commissions and costs, so it will cost you nothing to try that route. At least you have a better chance that it's reputable.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Robert — Tue, 30 Oct 2007 11:00:00 GMT

A foreclosure is absolutely not viewed the same a 90 or 120 day late. A foreclosure stays on your 'record' forever. Fannie Mae Form 1003, page 4 of 5, Declarations, question e.: "Have you directly or indirectly been obligated on any loan which resulted in foreclosure, transfer of title in lieu of foreclosure, or judgment?" If a homeowner has had catastrophic events in their lives to create a situation where they no longer can handle their mortgage payment, wouldn't a short sale be the best alternative for all concerned? A 'benefit-benefit' scenario is formulated with a short sale. Yes this is a terrible time we are facing right now, but homeowners must protect themselves and their families as best they can. No one wants to be a statistic, but with loans recasting, home values dropping and lenders disappearing, individuals are being dealt a hand they did not expect. The family is still displaced, yes, but with more dignity than if they were forced through a formal foreclosure.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Prof. Samuel D. Bornstein — Mon, 29 Oct 2007 11:00:00 GMT

I believe that the counseling agencies will have a major problem reaching the millions at risk. The most effective counseling is doing one-one counseling. However, since this is time consuming and labor intensive, it would be impossible to reach these borrowers in time. I suggest that the borrowers should be given a web-based tool which should act as a self-contained advisor. This will accomplish the need to reach many in the shortest time.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

charles — Mon, 29 Oct 2007 11:00:00 GMT

Last person to comment. You are so right

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Sherry Brockenbrough — Mon, 29 Oct 2007 11:00:00 GMT

In response to Watchdog's comment regarding short sales. Short sales are most often a win-win situation for everyone involved. The homeowner avoids the daunting task of foreclosure, and NO, lenders do not perceive a 120 days late on a mortgage the same as a foreclosure, it is only a late. The note holder saves the cost of forcing a foreclosure, and able to satisfactorily close a nonperforming account, and without going into an economics lesson, this is a good thing.

RE:Credit Counselors and Short Sales May Bail Out Mortgagors

Watchdog — Mon, 29 Oct 2007 11:00:00 GMT

I think that people need to stop looking at a short sale as something that bails out a homeowner. The only thing that it does it prevent a formal foreclosure from being on someone's credit. The delinquency is still reported and most lenders will view a 90+ or 120 day late the same as foreclosure. The homeowner and the family is still displaced and the sale will effect the prices of other homes in the area.