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Orlando Short Sale Fannie Mae program January 31, 2009

Posted by orlandoshortsalefl in orlando foreclosure, Orlando pre foreclosure, Orlando real estate, Orlando Short Sale, Orlando short sale taxes, Orlando short sales, Uncategorized.
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You may have read in the Orlando Sentinel about a new program for Orlando short sales. The program is for Fannie Mae mortgages that are serviced by Countrywide home loans. This is a pilot program for the Central Florida area. The homes in this program are chosen by Fannie Mae/Countrywide. At this time there are approx. 300  pre -approved properties for sale.

Now for my opinion on this pre-approved program. The Three hundred or so homes in this program will not put a dent in all the short sales in Orlando. Yes, it’s a start but the lender is the one who controls the homes that are placed in this program. Fannie Mae/Countrywide need to open this up so that any agent with a countrywide listing can get a pre-approved short sale as well.

If this program works I believe other lenders will follow. However with only 300 hand picked homes, success will be slow at best. I have written a letter to Senator Bill Nelson. I suggest you all do the same. Remember the squeaky wheel gets the grease. His email address:  billnelson.senate.gov

Response to my letter to Senator bill Nelson

Response to my letter to Senator bill Nelson

This program will help the Orlando short sale market only if it is expanded. I know it is a pilot program, but with only 300 homes it is, too small of a start. There are 1,000’s of short sales on the market. We need to get this program expanded. Contact me with any questions at www.scottnwendy.com


Orlando Short Sale and the sellers credit January 25, 2009

Posted by orlandoshortsalefl in orlando foreclosure, Orlando pre foreclosure, Orlando real estate, Orlando Short Sale.
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First let me start off by stating I am not a Tax adviser, Attorney or a CPA. I just want to give an overview of the credit challenge the seller can have. I always recommend to my clients to consult a Tax Attorney or Tax Accountant for advice.

For this scenario we will assume the bank has accepted a short sale payoff on your home. As an example you owe $300,000 on your mortgage. The bank accepts $220,000 as this is fair market value. The lender will then send you a 1099 for the balance. What this does is enable the bank to write off the debt.

A 1099 is similar to a W2. This is income that has to be reported on a tax return. However the IRS has a form #982. This is where your CPA or tax advisor comes in. The form is where you will report the income of the forgiven debt.  The Mortgage Forgiveness Debt Relief Act and Debt Cancellation, here is the link http://www.irs.gov/individuals/article/0,,id=179414,00.html The IRS will use the Act  until the end of 2009, as it stands now.

OK, so what gets reported on your credit. When I negotiate a short sale, I ask the lender to report the mortgage debt as paid as agreed or paid in full. The reason this can be done is as follows. The lender accepted the short sale payoff and sent you a 1099 for the balance. This enables the bank to write the debt (mortgage) off their books. The client can always follow up with the banks attorneys or have the tax adviser contact them to make sure this has been done.

The lenders can however continue to report all late mortgage payments on your credit report. This is an obstacle but not as bad as a Foreclosure. Remember this is an overview of the credit challenge. Always consult a tax professional for advice.

Please remember foreclosure is the last resort. I can help you with your short sale to avoid foreclosure. Contact me and I will answer any questions you may have. www.scottnwendy.com

How does an Orlando short sale work with a second mortgage January 22, 2009

Posted by orlandoshortsalefl in orlando foreclosure, Orlando pre foreclosure, Orlando real estate, Orlando Short Sale.
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This can be done, however it is not as simple as a first mortgage only. My first question to all clients is about the mortgage(s). I always ask for the payoff amount, how many days delinquent, Lender name and if there is a second. The second will either be an equity line of credit, equity loan or in some cases the 20% down payment on the original mortgage. Now we need to find out if it is with the same lender.

Second mortgages with the same lender are easier to accomplish because we only deal with one bank. For the purpose of this post I will assume the second is with a different bank. The same short sale rules apply as in my previous seller article. The negotiator for the first loan needs to be aware there is a second with a different bank.

We now have to get the first mortgage lender to offer the second some money. The first lien holder will generally give you a starting point, but we can always come back and negotiate a higher amount. The short sale package is now sent over to the second for approval.

You need to remember it is in all the lenders best interest to make this work. We can not short sale a home without both approvals. The second lien holder knows if this goes to foreclosure, they generally will get nothing. I will never tell them this because we don’t want any bad blood. I know this sounds silly, however you would not believe how many agents do this. This will kill a deal quicker than you think. Never upset the negotiator. My motto “Be Nice!”

The second will either grant approval or deny. If you must go back to the first lender, remember it is in their best interest to get this done. I can help you with this type of scenario. When you choose a Realtor, ask them if they have done this type of short sale and if it was successful. Please contact me if you have any further questions.


A sellers guide to an Orlando Short Sale January 21, 2009

Posted by orlandoshortsalefl in Orlando pre foreclosure, Orlando real estate, Orlando Short Sale.
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This is a list of the most common items the bank/lender will need for the short sale. Your Realtor should at the minimum have the Authorization letter, Financial statement and be able to guide you through writing a hardship letter.

  1. Authorization letter: This is signed by the seller and will enable the Realtor and the title company to get information about the loan and negotiate the short sale on your behalf.
  2. Hardship Letter: The seller writes this letter to the bank explaining briefly, the situation that has caused the financial hardship. The hardship letter must be hand signed.
  3. Financial Statement: This will be a form to list your outstanding debts, (credit cards, car payment, food, insurance, etc.) and list your assets, (cash, savings, IRA). The purpose of this is to show the sellers debts higher than the income. The lender may provide this form and may require their form completed.
  4. Listing agreement: This is sent to the lender and must be signed to show house is listed in MLS. The lender may require a MLS print out as well as the listing history report for property.
  5. CMA or BPO: Similar to an appraisal, this will show what is listed for sale in area and the most recent solds in this area. I always send this to the lender. They may or may not order their own BPO/appraisal.
  6. Estimated HUD-1: This is where a good title agent comes in. I work with a title company that specializes in short sales. I can have an estimated HUD done in under 2 hours. The HUD statement shows the lender what the final net will be. This is after the lender pays closing costs and Realtor compensation. All lenders require a HUD with the short sale package.
  7. Purchase and Sale contract: This is sent to lender when you have an offer on your home. The majority of lenders want to make sure you have an offer before negotiating a price. Each purchase offer will net the lender a different amount. You as the seller sign the contract. You can counter the offer before sending it to the bank.
  8. Bank statements, W2’s, pay stubs: Some lender require this and some do not. I will not send this information unless the lender requests. I find that to much paperwork can slow down the sale.

This is the majority of the information needed. I have all required docs readily available. Make sure you ask your agent if they have done a short sale before. You can also ask to see a recent approval letter from the bank on a short sale they negotiated. A short sale is not like a standard real estate transaction. The agent you use should be experienced. I can help you avoid foreclosure, contact me with any questions.

Nine options when facing an Orlando Foreclosure January 20, 2009

Posted by orlandoshortsalefl in Orlando real estate, Orlando Short Sale.

1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction.  Loan applications generally ask if the applicant has ever been foreclosed upon.  Credit reports also disclose this damaging information. Not the best option.


2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees.  Usually this is accomplished through a refinance of the debt.  New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default.  With this option, there should be equity in the home.


3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.


4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan.  This may allow the homeowner to catch up at a more affordable level.  To qualify, you must prove to the lender you have fixed the problem that caused the late payment.


5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation.  The lender may even be able to provide a temporary payment reduction or suspension of payments.  Information will be required from the lender to show that you are able to meet the new payment plan requirements.


6. Partial Claim – A loan from the lender for a 2nd loan to include back payments, costs and fees.


7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing.  Banks generally require the home be well maintained, all mortgage payment and taxes must be current.  Most loan applications ask if this has ever happened.


8. Bankruptcy – This option can liquidate debt and/or allow more time.  I can refer you to a qualified bankruptcy attorney.

     –Chapter 7 (Liquidation) To completely settle personal debt.

     –Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.

     –Chapter 11 (Business Reorganization) A business debt solution.


9. Sale –  a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value. This is the option that 95% of clients use.

Visit my web site http://www.scottnwendy.com

Orlando Buyer Short sale Offer Process January 19, 2009

Posted by orlandoshortsalefl in Orlando real estate, Orlando Short Sale.
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If you are a buyer looking to submit a short sale offer to the bank. This is a general idea of what you should expect.


1.         Offer is submitted to short sale lender after being negotiated with seller.  Included in the offer are:

a.         Purchase agreement

b.                  Pre-approval letter

c.                   Proof of funds to close (if applicable)


No offer shall be considered complete without the three items listed above.


           2.                  Buyer can wait until acceptance by lender is received to proceed with their appraisal and home               inspection.  Contingencies will need to be released 10 days after acceptance.


           3.                  Lender will accept or decline offer verbally with agent.  This process can take anywhere from 5 to 30         business days.  The lender will usually not counter.  The offer is either accepted or declined.


4.                  If offer is accepted, lender will send an acceptance letter based on agreed terms and set a close of escrow date.  The terms usually cannot be altered after the fact and most transactions are as-is.



5.                  If the agreed upon close of escrow date is late due to any fault of buyer, a fee set by the lender will be accessed.


6.                  If offer is declined, buyer can re-submit a higher offer for consideration.  This process should take considerably less time, usually within 5 to 10 business days.


7.                  This entire process can take up to 60 days or longer.  Patience and cooperation from all parties can make the process considerably shorter.

Hello world, Welcome to Orlando short sales! January 18, 2009

Posted by orlandoshortsalefl in Orlando Short Sale.
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 I specialize in helping home owners like yourself avoid foreclosure. I will negotiate the short sale with the lender on your behalf. This is a win win for the lender and you the owner. the last thing the bank wants is another home. This is despite what the banks reps are telling you. I will list your home for free. The lenders pay all of the Realtor fees, closing costs, etc.

You can short sale your home as long as we can show hardship. This means even if you are current on your mortgage we can do a short sale. The bank will require a financial statement from you. You must be able to prove that your debts out weigh your income/assets. This is the case in 99% of my clients.

I know what the lenders will need and I have all the items we need to file to send to you. This will help speed up the process. The lender usually will net more money on a short sale than on a foreclosure. The foreclosure process will cost the lender additional time and money. The majority of the lenders are very open to a short sale.

You can go to my website for more information or email me directly. I can help you. Foreclosure is the last resort.