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Pre-Foreclosure Specialist Certification

Sacramento Short Sale Certified Specialist Forth Hoyt Explains and Shares Information on HAMP and HAFA, and shows how they are the same programs.  Read on to find out and guidelines for the three different HAFA programs.

I have been on a Short Sale Webinar with Partner First Nationwide real Estate Network (where I got my PCS SHORT SALE Certification)with Scott Thompson – It was called “Pre-Listing Appointment Strategies in Today’s HAFA Era. ”

The program included great information on the three distinct HAFA programs out there.  This information just affirmed what I have always done and continue to do: to help Sacramento Short Sale Sellers make the right decisions.  In order to do this Short Sale Sellers in Sacramento need up to date information. As a Sacramento certified Short Sale agent and Expert Sacramento Short Sale Negotiator, I make sure my clients understand every option, every detail of each of the different programs they may be eligible for so that they can make a wise choice and understand the consequences and ramifications of each of the Foreclosure Alternatives available to homeowners today.

Learned some great places to go to actually see the Short Sale Supplemental Directives, or actual HAFA short sale program  documents and guidelines on HAFA.  HAFA program guidelines are very different for each of the different programs, the Treasury Dept HAFA (covers all private investors; (not Fannie Mae, Freddi Mac, VA or FHA), The Fannie Mae HAFA and the Freddie Mac HAFA.

I’ll include the links and even copy the guidelines here-

Treasury’s HAFA for Private Investors:

Help For America’s Homeowners By Making  Home Affordable

Supplemental Directive 09-09 Revised March 26, 2010
Home Affordable Foreclosure Alternatives – Short Sale and
Deed-in-Lieu of Foreclosure Update

Background
In Supplemental Directive 09-01, the Treasury Department (Treasury) announced the eligibility, underwriting and servicing requirements for the Home Affordable Modification Program (HAMP). Under HAMP, the servicers apply a uniform loan modification process to provide eligible borrowers with sustainable monthly payments for their first lien mortgage loans. While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve a HAMP modification request, a HAMP modification is offered and not accepted by the borrower, or the borrower falls out of a HAMP modification. In these instances, the borrower may benefit from an alternative that helps the borrower transition to more affordable housing and avoid the stigma of a foreclosure.
This Supplemental Directive replaces in its entirety Supplemental Directive 09-09 and is effective as of April 5, 2010. This Supplemental Directive provides guidance to servicers for adoption and implementation of the Home Affordable Foreclosure Alternatives Program (HAFA).  HAFA is part of HAMP and provides financial incentives to servicers and borrowers who utilize a short sale or a deed-in-lieu to avoid a foreclosure on an eligible loan under HAMP. Both of these foreclosure alternatives reduce the need for potentially lengthy and expensive foreclosure proceedings. The options help preserve the condition and value of the property by minimizing the time a property is vacant and subject to vandalism and deterioration. In addition, these options generally provide a substantially better outcome than a foreclosure sale for borrowers, investors and communities.

Read the rest of the Treasury’s HAFA Guidelines for All Non GSE’s Here

Questions  on your particular situation?                                                                                                                                  Contact us today at Forth Hoyt’s Sacramento Short Sale Center

Fannie Mae’s HAFA Guidelines for their GSE owned FANNIE OWNED HAFA:

The Fannie Mae HAFA Guidelines are covered in the Announcement SVC 2010-07  Introduction of Fannie Mae’s Home Affordable Foreclosure Alternatives Program

Introduction
In Announcement 09-05R, Reissuance of the Introduction of the Home Affordable Modification
Program, HomeSaver Forbearance™, and New Workout Hierarchy, Announcement 09-31, Updates and Clarifications to the Home Affordable Modification Program, and in Announcement SVC-2010-03, Home Affordable Modification Program – Program Update and Resolution of Active Trial Modifications, Fannie Mae announced the eligibility, underwriting and servicing requirements for the Home Affordable Modification Program (HAMP). Under HAMP, servicers use a uniform loan modification process to provide eligible borrowers with sustainable monthly payments for first lien mortgage loans.
On November 30, 2009, the Treasury Department (Treasury) released policy guidance related to the Home Affordable Foreclosure Alternatives (HAFA) Program to mitigate the impact of foreclosure on borrowers eligible for but unsuccessful under HAMP. This policy guidance was supplemented by the reissuance of the Treasury’s Supplemental Directive 09-09 on March 26, 2010. HAFA is part of HAMP and provides financial incentives to servicers and borrowers who utilize a short sale (referred to in the Servicing Guide as a “preforeclosure sale”) or a deed-in-lieu of foreclosure (DIL) to avoid a foreclosure on an eligible loan under HAMP. Both of these foreclosure alternatives reduce the need for potentially lengthy and expensive foreclosure proceedings. The options help preserve the condition and value of the property by minimizing the time a property is vacant and subject to vandalism and deterioration. In addition, these options generally provide a substantially better outcome than a foreclosure sale for borrowers, investors, and communities.
The Fannie Mae HAFA program simplifies and streamlines the use of short sales and DIL options by incorporating the following unique features:

Read entire Fannie Mae HAFA Supplemental Guidelines Here

Questions  on your particular situation?                                                                                                                                  Contact us today at Forth Hoyt’s Sacramento Short Sale Center

HAFA Guidelines for Freddie Mac -  their GSE owned Freddie Mac HAFA:

Freddie Mac Bulletin For Freddie Mac Servicers – Subject: Home Affordable Foreclosure Alternatives

California May Have a New Anti Deficiency Law Protecting Struggling Homeowners

Sacramento area Short Sale Specialist and Sacramento Area Certified Short Sale Agent Forth Hoyt Reports on:

The Little Bill That Could-

Will the newest California anti deficiency bill become law? The Newest Short Sale Protection law for struggling  homeowners will surely affect the Sacramento short sale market…

Sacramento Short Sales will surely increase if the little bill that could is signed into law- Short sellers will be glad to hear bout this newest California anti-deficiency bill that is specifically written to protect short sellers from recourse - why are we just hearing about this?  Nearly silently, this newest foreclosure protection bill in  California, Senate Bill 931 passed completely unopposed last week and is headed for Governor Schwarzenegger to sign into law. All eyes had been on Senate Bill   1178, which stops lenders from pursuing homeowners who have refinanced and later defaulted, so the hoopla over SB 931 was overlooked. Lawyers sometimes tell potential short sale sellers that a foreclosure or a bankruptcy offers better protection for the homeowner than a short sale.

New Government Foreclosure Prevention Program Eligibility- Which Programs Do You Qualify For?

Just the first couple lines from the SB 931 Assembly Hearing: June 7, 2010

ASSEMBLY COMMITTEE ON BANKING AND FINANCE
Mike Eng, Chair
SB 931 (Ducheny) – As Amended: June 1, 2010
SENATE VOTE: 31-0
SUBJECT: Mortgages: deficiency judgments
SUMMARY: Provides that in the case of a short sale on residential real property, the holder of the first mortgage or deed of trust shall fully discharge any remaining borrower’s indebtedness following the sale when the sale has been agreed to in writing. Additionally, that nothing shall limit the ability of the holder of the first deed of trust or first mortgage to seek damages, or use existing rights or remedies in those cases where the homeowner has committed fraud or waste in connection with the sale of the real property.

If signed, this newest California Short Sale Recourse Law  will have a huge impact on  our Sacramento area short sale inventory, as many more struggling  homeowners may use a short sale as a way to get out of their upside down home, if there is  no lender recourse for the amount the bank is short…

More info on New Deficiency Protection For Sacramento Short Sales; SB 931 Protects All First Mortgages.

Need information on you particular situation? Contact us Today At Forth Hoyt’s Sacramento Short Sale Center.

Foreclosure Notices In Sacramento Continue At Alarming Rates

Foreclosure Sales, or Trustee Sales in Sacramento, the actual Trustee action or   Sacramento county trustee sale at 720 9TH ST  downtown Sacramento, held nearly every business day are still being postponed at record rates, but so are Notices of default Filings in Sacramento County.

ho long can they continue to file the default, file the notice of sale and then just postpone? Well, if they postpone for over a year, they will have to re-file the Notice of Default, as I understand

“Despite a tsunami of mortgage delinquencies we continue to see no signs of a foreclosure wave” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “Lenders and government intervention continue to delay foreclosures despite their continued failure to find a long term solution to unsustainable negative equity.”

See Foreclosureradar’s Foreclosure Report at Wereheretohelp.org

Struggling Homeowners are Searching For Foreclosure Options

Sacramento Homeowners now  include a huge number of homeowners that have lost jobs, thair salaries cut, had hours reduced and overtime stopped.

With the housing market here in Sacramento, El Dorado and Placer counties and the loss of housing values, many homeowners are looking for ways to stop foreclosure, keep up on their payments and stay in their home

El Dorado County Approved And Pended Along With Closed Short Sales

Looking For Short Sale Information in El Dorado County?

Need Short Sale Market Stats or Short Sale Market Information For El Dorado Hills? Sacramento Area Multi-Certified Short Sale Specialist Forth Hoyt Shares Short Sale Market Facts for El Dorado County and El Dorado Hills

The Short Sale is becoming a more viable foreclosure option in El Dorado Hills and El Dorado County.  Short Sales are going pending and approved in El Dorado County much much more successfully than in the past. See the graph above and the chart below that illustrate that short sales are going pending and approved much more that in the past.

	1 month			1 year
	May 10	June 10	% Change	June 09	June 10	% Change
For Sale	187	203	8.6%	227	203	-10.6%
Sold	40	46	15%	21	46	119%
Pended	59	98	66.1%	48	98	104.2%

With the short sale being approved, going pending, and actually closing escrow in El Dorado County so much more frequently and consistently, I wondered how they were doing as a foreclosure option in El Dorado Hills? So lets take a look at El Dorado hills short sale information

But first:

• Short Sale VS. Foreclosure …Tough Decisions Facing El Dorado Hills and El Dorado County Homeowners Today.

The Chart Below shows that El Dorado Hills has an inventory of Active Short Sales that is barely more than 1/4 of the active short sales in El Dorado County, yet Pended and Approved Short Sales and Closed Short Sales that is nearly half of the entire El Dorado County Short Sale Inventory for these categories!

El Dorado Hills Short Sale Market Stats for 6/09 to 6/10

With so much talk about short sales as an option to foreclosure, and with many new Government short sale Programs it’s nice to see they are actually closing and getting short sale approval on more and more short sales.

• New Government Foreclosure Prevention Program Eligibility- Which Programs Do You Qualify For?  CHECK YOUR ELIGIBILITY NOW

When you look at the year over year numbers, you can really see that short sales in El Dorado Hills are definitely trending upward and being successfully used as an anti-foreclosure tool in El Dorado Hills

The Chart above and graph below show that, not surprisingly,nearly half of the pended short sales in El Dorado County were short sales that were approved and went pending in El Dorado Hills.

1 month			1 year
	May 10	June 10	% Change	June 09	June 10	% Change
For Sale	55	68	23.6%	79	68	-13.9%
Sold	12	20	66.7%	5	20	300%
Pended	19	46	142.1%	18	46	155.6%

With so much talk about  giving homeowners foreclosure options, stopping foreclosure and working homeowners to avoid losing their homes, (except for a principle reduction loan modification that makes sense!) you might think that the foreclosure filings such as notice of default and notice of trustee sales in El Dorado Hills And El Dorado County would both be down. NOT THE CASE!  Foreclosure filings for both El Dorado Hills and El Dorado County are both way up, yet the postponement of the El Dorado County Trustee Sale (at the courthouse steps) have just continued…

Mortgage Rates Drop To Record Lows

From DSNEWS.COM

The weekly mortgage rate reports released Thursday by Freddie Mac and Bankrate were mixed. But one thing was certain: the average rate for 30-year fixed-rate mortgages hit a new record low.

According to Freddie Mac’s Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 4.57 percent with an average 0.7 point for the week ending July 8, 2010, inching down from last week’s average of 4.58 percent. Freddie Mac said this rate marked yet another all-time low in its 39-year survey.

Bankrate also reported a decline in 30-year fixed-rate mortgages. According to its weekly mortgage survey, rates averaged 4.74 percent with an average 0.39 point

New Anti Deficiency Law Would Help Thousands Of California Homeowners

New California Anti Deficiency Law Would Help Thousands Of Caifornians: SB1178 Would Stop Deficency Judgements For Refinanced Homes

Courtesy Los Angeles Times:

With thousands of Californians facing foreclosure on their underwater mortgages each month, state lawmakers are rushing in with measures to help them cope with their loans and possibly stay in their homes.

Three bills moving through the state Assembly after passing the Senate would delay the start of the foreclosure process and limit lenders’ ability to force borrowers to cover the difference when their home is sold for less than the amount they owe on their loan.
On Tuesday, the Assembly Judiciary Committee approved the most controversial of the measures. The bill would ban creditors from seeking so-called deficiency judgments from borrowers who can afford to make monthly payments yet walk away from a refinanced home that is underwater, meaning that the house is worth less than the loan on it.

Such strategic defaults recently emerged as a growing problem for the banking industry. They accounted for 31% of all foreclosures nationwide in March, according to researchers at the University of Chicago and Northwestern University. That’s up significantly from 22% the previous March.

“We’ve had bank bailouts,” state Sen. Ellen Corbett (D-San Leandro) said. “It should only be fair in this economy that we try to figure out ways to help homeowners as well.”

Learn More About Your Particular Situation:

Contact us Today at Forth Hoyts Sacramento Short Sale Center.

Corbett authored the bill to protect borrowers from being hit with an order to pay whatever portion of the loan amount that isn’t covered by a bank’s sale of the foreclosed property.

Helping homeowners is a matter of balance, Corbett said. Her bill, SB 1178, would insulate refinancers from deficiencies up to the value of their original purchase loan. But borrowers would remain vulnerable for any refinanced loans exceeding that level.

The battle over Corbett’s bill pits bankers and the mortgage industry against the California Assn. of Realtors.

Lenders oppose provisions that would make the ban retroactive to cover existing home refinancing contracts that go into foreclosure after July 1, 2011. They would like the bill to cover only refinancings done after that date.

“It sets a bad precedent to change the rules in the middle of the game,” said Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn.

Realtors, however, are hoping to keep people from being doubly punished by losing their homes and burdened with more debt. They want to bolster a still weak housing market by giving homeowners a chance to get back in the market soon.

“They’d be in a better position if they’re not confronted with signing away their lives,” said Alex Creel, senior vice president for governmental affairs of the California Assn. of Realtors.

A second foreclosure-related bill passed by the Assembly committee Tuesday would prohibit bankers from attempting to collect deficiency payments after a homeowner gives up the property in a short sale. In such sales, banks and homeowners agree to allow sales of houses at less than the loan amounts and avoid foreclosures and black marks on the borrowers’ credit histories.

New Government Foreclosure Prevention Program Eligibility- Which Programs Do You Qualify For?

The third measure would delay the start of a foreclosure process by giving owners more time to work with lenders on a plan to modify loans to lower monthly payments, allowing borrowers to stay in their homes.

Although foreclosure activity is down substantially from a year ago, the numbers remain high, and some experts see another wave soon of foreclosures, short sales and signings of deeds to banks to avoid foreclosures.

In May, 23,911 Californians received notices of default — the first step in the foreclosure process — and 27,841 got notices of trustee sale, according to online tracking service ForeclosureRadar.com. Default notices dropped 43% in May compared with May 2009, while trustee sale notices fell 36%.

Learn More About Your Particular Situation:

Contact us Today at Forth Hoyts Sacramento Short Sale Center.

RealtyTrac, another data analyst, reported that California in May was home to six of the top 10 U.S. metropolitan areas with the most foreclosure filings. Those areas were Riverside-San Bernardino, Bakersfield, Merced, Modesto, Stockton and Vallejo-Fairfield.

Corbett said her measure was particularly needed because few borrowers know that when they refinance their homes for more than the original loan amount, they lose their protection against being hit with deficiency bills, a state law that went on the books in 1933 during the Great Depression.

In recent decades, the deficiency threat was minimal because home values invariably rose, leaving owners with plenty of equity to cover the payoff cost of their refinanced mortgages in the event of a foreclosure. But that changed when the California housing bubble burst in the last three years, sending the statewide median home price plummeting 42%.

Bankers, who have been negotiating with Corbett and the Realtors group, say they sympathize with the call to aid borrowers who refinanced their homes to take advantage of better terms or interest rates.

They persuaded Corbett to not extend protections to borrowers that took cash out of their refinancing, even if the extra money was used to improve properties.

The two deficiency protection bills “place the right balance of risk between the homeowner and the lender,” said Sean O’Toole, ForeclosureRadar’s founder and chief executive.

However, O’Toole said the third bill to push more loan modifications beyond what federal authorities and lenders themselves were doing was “misguided.” That legislation won’t work if government agencies and lenders don’t come up with billions of dollars to reduce monthly principal payments sharply, he said.

“Homeowners that are saddled with uncertainty are less likely to be productive consumers,” O’Toole said. “That’s part of the reason why our economy is still struggling.”

marc.lifsher@latimes.com.

Copyright © 2010, The Los Angeles Times

Measure protecting consumers from overreaching lenders now goes to Assembly

LOS ANGELES (June 3) – The California Senate this morning approved SB 1178 (D-Corbett) by a 30 to 4 vote, extending anti-deficiency protection for consumers who have refinanced their original mortgage loans and now are facing foreclosure. The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) is the sponsor of the consumer protection legislation.

“Currently, if a homeowner defaults on a mortgage used to purchase his or her home — known as a ‘purchase money mortgage‘ — the homeowner’s liability on the mortgage is limited to the property itself,” said C.A.R. President Steve Goddard. “Unfortunately, the original law did not extend the purchase money protection to loans that refinance the original purchase debt, even if the refinance only was to obtain a lower interest rate. SB 1178 corrects this inequity and extends the same protections to consumers who refinance their home loans.

“Today’s vote was a victory for homeowners in California,” he said. “SB 1178 now moves to the Assembly for approval. C.A.R. is calling on our elected representatives to swiftly pass this much-needed legislation and send it to Gov. Schwarzenegger for signature.”

Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States with nearly 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

###

Behind Homeowners Have Decisions to Make

CHICAGO (MarketWatch) — The percentage of loans in foreclosure or with at least one payment past due was a non-seasonally-adjusted 14% in the first quarter, down from 15% in the fourth quarter of 2009, the Mortgage Bankers Association said Wednesday. CHICAGO (MarketWatch) — The percentage of loans in foreclosure or with at least one payment past due was a non-seasonally-adjusted 14% in the first quarter, down from 15% in the fourth quarter of 2009, the Mortgage Bankers Association said Wednesday. But mortgages in the foreclosure process hit a record high at a non-seasonally-adjusted 4.63%, up from 4.58% in the fourth quarter. The percentage of loans in the foreclosure process was 3.85% in the first quarter of 2009. Homeowner delinquency rates muddied the housing-market picture: While the seasonally adjusted delinquency rate rose, the figure on a non-adjusted basis dropped in the first quarterBut mortgages in the foreclosure process hit a record high at a non-seasonally-adjusted 4.63%, up from 4.58% in the fourth quarter. The percentage of loans in the foreclosure process was 3.85% in the first quarter of 2009. Homeowner delinquency rates muddied the housing-market picture: While the seasonally adjusted delinquency rate rose, the figure on a non-adjusted basis dropped in the first quarter.

The seasonally adjusted delinquency rate for mortgages on one- to four-unit residential properties, which includes mortgages at least one payment past due but doesn’t include those in foreclosure, rose to 10%, from 9.5%. The delinquency rate was 9.1% in the first quarter of 2009.

The non-seasonally-adjusted delinquency rate dropped to 9.4%, from 10% in the fourth quarter of 2009.

The MBA’s quarterly national delinquency survey covers 44.3 million loans on one- to four-unit residential properties, representing 85% of all first-lien residential mortgage loans outstanding in the United States.

“The issue this quarter is that the seasonally adjusted delinquency rates went up while unadjusted rates went down,” said Jay Brinkmann, MBA’s chief economist, in a news release. “Delinquency rates traditionally peak in the fourth quarter and fall in the first quarter and we saw that first quarter drop in the data. The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement.”

Typically, more homeowners fall behind on their mortgage payments in the fourth quarter, the time of year when the first heating bill comes and holiday expenses add up, he said. Sometimes, tax refunds help borrowers become current in the first quarter.

“Most importantly, the normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which,” he said.

Roughly 4.2 million mortgages were “seriously delinquent” in the first quarter, meaning that that they were 90 days or more past due or in foreclosure, he said in a phone interview.

The percentage of mortgages that entered the foreclosure process was a non-seasonally-adjusted 1.23% in the first quarter, up from 1.20% in the fourth quarter; the foreclosure starts rate was down from 1.37% in the first quarter of 2009.

“Compared to last year, delinquencies are worse, but compared to last quarter the news is more encouraging,” said Greg McBride, senior financial analyst for Bankrate.com. “But the jury is still out as to whether we’re going to see a sustained decline in delinquencies.

“The news is not as encouraging on the foreclosure front where a backlog of seriously delinquent borrowers, plus the added impact of strategic defaulters and borrowers falling out of the modification program all represent future foreclosure inventory waiting for a time to happen,” he said.

The road ahead

Brinkmann said there still is a case for gradual improvement in the delinquency numbers this year, but the magnitude of the improvement will depend on economic growth and the country’s employment picture. And with the slowdown in the European economy, U.S. economic growth expectations have been revised downward.

First-time unemployment claims, which had been falling since March 2009, stopped decreasing during the first quarter, Brinkmann said. That likely halted the decline in the 30-day delinquency rate.

“If mortgage delinquencies are not yet clearly improving, it also appears they are not getting worse. However, a bad situation that is not getting worse is still bad,” Brinkmann said in the news release.

Recent research, mainly from the credit bureaus, has also documented the increased incidence of “strategic defaults,” where borrowers who could make their mortgage payments decide to pay other bills ahead of their mortgage loan, said Michael Fratantoni, MBA’s vice president of research and economics. Typically, these are borrowers who owe more on their mortgage than the current market value of their home. See story on more homeowners opt to quit paying their mortgage.

“If you look back three, four years ago, it was always the case where a borrower would pay the mortgage first before the second mortgage or credit card debt,” Fratantoni said during a conference call with reporters. Today, for some groups of borrowers, that’s no longer true. “It runs counter to what anyone would typically expect and the historical experience,” he said.

Given that many strategic defaulters also have high credit scores, Brinkmann said that in the future, credit scores might not be as good a predictor of mortgage borrower risk. For people who take this route, even if their credit score improves, the fact they defaulted on their mortgage will have a negative impact for years to come, he said.

“Some of these people are underestimating the long-term costs,” including the ability to buy a house in the future, he said.

While Florida, Arizona, Nevada and California have played heavily into the national delinquency and foreclosure numbers for several years, that’s changing somewhat: Florida is still worsening, but California is showing signs of improvement, Brinkmann said.

“However, Washington, Maryland, Oregon and Georgia showed the greatest overall increases in foreclosures started compared to last quarter,” Brinkmann said.