New Short Sales Regulations Coming Up! Add yours for FREE

by qinfovio 24. August 2013 17:45

What a short sale veteran Realtor have been living through the past five years.

Since we do not have any kind of regulations to oversee short sales lenders/investors, we are bringing ours to our congressman and you are all invited to the same.

We all start our short sale in the same way. The homeowners have missed their first payment, they received their first calls from their lenders, then a bunch of mail start to piled up and lenders call again and mails keep piling up. By the same time, homeowners should have been receiving a ziliions solicitation through the mail from Realtors, all kinds of organization good and bad offering their help.  Once homeowners have pick one, let say a Realtor, our next step is to contact their lenders, sometime one, other times their second lender and we will stop there. We are required to provide and submit a bunch of documentation, starting with owners income tax, bank statement, HAFA program and a list of government programs available to homeowner.

The next step would be to list the property for sale, bring an offer in, and to start to upload all the stuff into their platform. There has been a lot of improvment since the earlier 2008, when at that time it was done by fax, and we have to stamped loan number on each page, fax and fax again.

After all documentations have been submitted, a negotiator will be attribute to our file. Our negotiator will review all document and will start requesting a zillion of informations from homeowners and then also frombuyer and seller agents and also buyers information, certification that nobody is related to homeowners. As in our area, we are using title company to check all recorded lien relevant to the property, to enter all the In and Out cost related with the sale on the property and we call it the HUD1. During that time, lender/investor will go through platform to order a BPO (Broker price opinion).

It will take a good 30 days more or less to get any respond for an approval and many times we find some concession, condition to get this short sale approve. And it take an average 45 days to get short sale approved.

But we have a black list of lenders/investors that we have no idea what is wrong with them? with them, they will keep requested to update all the documents that we provided them, they take more time than any other average short sale take to review documents and by the time they reviewed the last one, they have to go back to request to update all the documents they requrested 90 days ago, including a new HUD1 is. What also happen, they will bring a new negotiator into the process.

We had short sales with these specific lenders/investors going for four years and we need to contact our congressman, our governmemt, asking to regulatethem. The amount of man power put into these short sales would transalate in thousands of hours of frustration, of paper work, on the phone.

It is costing small business, brokerage a lot of money that we are not getting compesate. The personel (negotiators) used by lenders is very questionable. All parties involve in a real estate transaction related with short sale are regulated, from Realtor with the deparment of real Estate, to title company, to loan  officers. We are all licensed professional.

When researching any rules, there are some but only New rules will speed up short sales - Apr. 19, 2012 apply for Fannie Mae and Freddie Mac loan.

 

 

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What are the Tenants Rights with a Short Sale Property? What are the Owners Tax Liabilities on short selling an Income Property?

by qinfovio 29. July 2013 12:02

We are seeing more issues lately concerning tenants rights in a short sale or a foreclosure property.

With a short sale property, if the lease was signed before the owner miss any payment, this lease is valid and the lender will have to fulfill this lease. The Realtor will have to comply with tenant rights concerning all the showings and it will required a 24 hours notice, check with your state.

                                                                          

 

But the tenant rights and any obligations, that come with any federal and states law, work both ways. Realtors, property management, owners are required to obey by these laws and it also works for the tenants. They are obligated to show the property and respond to any of these compliances. They are obligated to pay their rent until the end of their lease and during the transfer of ownership.

As now, we have a case where tenant has some medical issues and showings are limited to couple days a week, within a specific time frame. The tenant in this case will need to come with a note from the doctor mentioning due to health condition, showings will have to be limited to a specific time. But I will say that in this case, the property will end up in foreclosure.

Once the property foreclosed, it will be turn to an asset management that will instruct tenant with future rent payment.

Usually with all foreclosed property, unless as the case above where it was a short sale and lenders is obligated to the lease, tenant will received a 30 days notice and in some case, they might get some cash for keys.

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Now I am speaking to all Home Owners and mostly the one that own investment property, rental and anything that is not their primary residence. I know that they are offering FREE Stay/ Hotel Room and you might have to share a room.

                                                                             

 

It is not because a short sale has been approved by your lender that mean you are FREE of any tax liabilities.

There are some specifics requirement. The majors ones are: The property has to be your primary residence or you have live there for 2 years since the last 5 years. If you did a refinancing/cash out, it has to be for improving the property and you will have to show all invoices, it can be done to only one property...as now another items was added to the list, for any job relocation.

Lenders will provide you with 1099-C and then you will figure out the rest.

And concerning your Realtor, they will provide you with a bunch of disclosures to protect themselves, mentioning that you should contact a tax attorney or anything similar to that, and that it. They will collect their commission. They will show you all their Short Sale Certification Specialist and the blabla like any sale persons...but when you reach this point, you will find no one to talk to.

I experienced the hardship on my own and my best advice to all of you is to consult with bankruptcy attorney. They will input all your incomes, expenses, and their software will figure out all your options. The main concern of any Debts and if not properly dispose, are the tax involvement.

Be sure to check with any attorneys specialize in this field, at least a real estate or tax attorney and if you have more than one property and you are insolvent, a BK attorney is the way to go. Because if you check with each of them, you have to pay each time, start from the last.

 

 

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Real Estate

08.28.12 New American Revolution

by qinfovio 28. August 2012 14:54

  The next American Revolution

For the past couple weeks, I was watching through DVD the American Revolution and also the the Prohibition from

the 1920 through 1933. This revolution came from learning from the older world, where you had only two class

of people the poor and the rich, no middle class. As B Franklin was visiting England in the 1760, he really felt that

he and the American peoples were not fitting in either class. The purpose of England to make

money with the new world was supposedly be done on trade not on taxing American peoples.

 

And itall start with Stamp Act of 1765, England could made all the money they need with the trade but then the kingdom need

to collect money to pay for his war. They were able to do it with all their other colonies and mostly India.

But in America, people migrated from England and they were not planning to live this policy in the world.

 

The biggest challenge once the war with England was over was to form a government. And it is where I want to make a point to

this Tuesday Talk today. American with only 13 states, was ahead of the world with the idea to create a new type of government

and creating a republic instead of a monarchy, with freedom of speech and the press. It took over 4 months

to write the American Constitution.

 

The New America has change the world politic moving from monarchy, to socialism/communism to capitalism. And the only politic  

 that work is capitalism. As now, our country and all the old world is turning into socialism, meaning that our peoples are expecting 

  in our government to take care of us.

 

At the beginning of the New America and all the way to the Prohibition (1920) there was no income tax. Income tax was created

to pay for the lost of revenue due to the prohibition. American had his up and down since the earlier to mid twentieth century,

economically speaking, but as our government start to need more money to pay for his war, income tax and mostly corporate tax went  

up   high enough forcing major corporations to relocate. And what was a capitalist system that we had is gone. And it is not only  

 happening over here, but to most develop country.

 

And now, a little more than 222 years from our last revolution, we might need to come back to our first purpose to be independent 

from our government not to be dependant. It will probably take a new kind of revolution in the US to get back into more a capitalist system 

and getting less power government/control.

 

We will need to reverse the wheel to go back to a 15% corporate and income tax, so it will be profitable and get the business back

to the US. And our actual crisis has already done a good part of it by readjusting our housing market and it will keep adjusting.

And the next biggest part will be to cut government spending and it is where an evolution that might turn into a revolution will bring us to

the next level, making the wheel to turn.

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07.03.12 Tuesday Talk "Ben get his money, US get his Independency,and the French have to eat their debt until it explode."

by qinfovio 3. July 2012 16:49
Good afternoon,
 
We had a good meeting last week with Leslie Appleton-Young our California Association Realtor "Chief Economist".
She was very neutral, just sharing analysis and data.
 
She started with the bankruptcy with the City of Stockton and then she move to a larger issue concerning
the economy in Europe. I now understand why the US is so concern with the economy over there,
since they represent 90% of the US export.
 
GDP for the first quarter at 1.6%, second quarter 1.9%. California unemployment at 12%,
and we lost over 500,000 jobs since the crisis, mostly in construction, lending, real estate area.
 
She mentioned that we should expect a lot of government cutting job.
 
California new housing permits are up from 20.6% from 2010. Under water mortgage represent 29.9% of home owners and another
4.7% that have negative equity. It is one on the main reason to our low inventory. 
 
She mentioned no inflation for 2013 and not to pay attention with the media with the real estate market. The real estate market
is very local and the best way to find out is to go by zip code.
 
Another bigger concern is what is going to happen with Fannie Mae, Freddy Mac and FHA. All these low
down payment loans have been bought back through bonds. To be able to sell these type of loan through the banks,
it will take a larger down payment and through more strict regulation.
She mentioned that not every body should be a home owner,and you should be able to save so you can put a larger down payment.
The No Down payment that come with VA loan or 3.5% with FHA is not much of a collateral!
 
You can check on the link below for the complete information.
 
 
The message that I received is that we are going to go back like we used to do loan.
It is going to take time for real estate to goes up, just like it was. it will goes up accordingly with CPI and GDP.
 
                                                ____________________________
 
 
When it comes to Fourth of July, I did improved my American history a lot. I really enjoyed the book and biography
of Benjamin Franklin. At one time of his life, he spent a lot time in France for the only purpose to get some
money to finance the American Independence from the British.
 
Ben get his money, US get his Independency,and the French have to eat their debt until it explode.
 
The 1774 - 1789 was one one the worst financial/fiscal crisis in the world and it was cause to excessive debts
that tax payers have to pay.
 
 
Happy 4 Th of July!
 
 

 

Christian Viollaz
License 1318338
9 Buyer Traps and How to Avoid Them

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06.26.12 Tuesday Talk Carpet Cleaner Hourly Charged Would be More Reasonable

by qinfovio 3. July 2012 16:45
Good afternoon,
 
I have been watching a series call "Lie to Me" through Netflix. It has a lot to do with the body language
and reading people expressions, feelings and I am sure that it is going to help me a lot in real estate.
 
This will take me to this situation where I visited three weeks ago a home owner that was delinquent into his mortgage
at the request of his lender. I found out last week that he hang himself. In his case, he was going through
a divorce, has lost his job and he was in his way to loose his house.
 
I will be more aware of this similar situation in the future since I have access to their personal situation and I will ask straight forward questions.
I will suggest that you do the same if you have friends or family member that go through this hardship.
 
                                                                                ________________________
 
I will be sharing with you next week our tomorrow meeting with CAR California Association of Realtors. They are visiting the Entire State
and bringing us the latest update with our real estate market and also our economy for 2012. It is very important for them to sent the message
across the State and of course, the message is always good, because people want good news just to feel good.
 
                                                                                ________________________
 
I will expect a new brand of business opportunity and mostly for business that charge you per quantity instead of per hours.
The typical example would be carpet cleaning where they charge your per room. I had one my rental that need a carpet cleaning
and I had couple estimate that came to $280.00 and I also ask how much time it would take? The answer was 2 1/2 hours. ($112.00 per hours)
 
You don't need a Master or Ph.D! All you need a machine at around $10,000.00 plus a van. Charging a $60.00 to $70.00 will still good money.
 
It is the same for installing floor, most of them charge per square feet. I did one last year where I paid a per hour and it was a good saving.
 
                                                                                __________________________
 
I was asking 3 weeks ago if we could built a home (1200 to 1400 sf) for $150,000.00.
I was checking with one of my old contractor's friend. He said in the 1970/1980 a general contractor would be
a one man show. He would buy a lot, subdivide the lot, draw a plan and go through the city for approval.
 
But as today with a bunch of policies and useless jobs that have been added, it would not make it profitable to build anymore.
 
 
Thanks and I will see you next week.
 

Chez Christian Reviews

 

Christian Viollaz, Realtor  

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06.19.12 Tuesday Talk "The American Dream of owning a home will be a subject of the Pass Century"

by qinfovio 3. July 2012 16:38
Good afternoon,

 

As today's, inventory is running very low. I think that most first time home buyers are getting  too

picky and the ones that are taking advantage of this situation are investors. We have the lowest interest rate

in the history and less than 4.00% will not exist; unless it is an interest loan only.

 

Most of these loan made in today's market are FHA loan that have been bought back from our government through bonds.

It is not going to be for ever before our government dry out. The next generation of loan will then be made by Banks, Lenders

with higher qualification requirement, larger down payment, higher rate just like it used to be.

 

The American Dream of owning a home will be a subject of the Pass Century. As I expect the home price to keep declining at a lower rate,

mostly at the higher end, most peoples would be unable to buy since they won't have the money for their down payment.

 

As you can see with all our short sales, and foreclosures, most of these loan holders were investors. They are the one that bought of these

bad loans. And believe me that before these investors invest again on buying loan, they will be requiring larger down payment with more restriction.

 

As today, I am seeing faster change in the entire short sales industry with Tax Relief ending this year. I am seeing our government getting more difficult

and giving more opportunity to home owners to stay in their homes and lenders offering deed in lieu to homeowner.

Lenders will be better off to rent these property and bundle a bunch of them to sell them to investor, like Warren Buffet.  He mentioned not long time

ago that he would love to get into this market. Unlike most investors, Warren does not invest into gold, there is no dividend or income from it, it will just goes up

with inflation. Instead, he will look at compounding dividend and in this case the return on bundle's property will be easily around 15% with the volume that

he can buy. These property would be pay off in 6 to 7 years.

                                                                                                _________________________

 

Last week we had a good meeting with one of my client with Philip Daunt a Real Estate Attorney that will take over our short sale.

 

The most important issue was to find out if our homeowner has refinance or not their loans and if they refinance their loans, what was the money used

for? If it was use to do a remodeling, then you will be exempt from your tax but you will need to show all receipts. If the refinance was used to consolidate

debts and spent for any leisure, there is a big chance that you will have some tax consequences.

 

As the first loan go away with a short sale or a foreclosure, the first loan is called a non recourse loan meaning that the lenders cannot come

back after the owner to sue for money repayment, but you still have this tax liability to check. You have to check with your Tax Attorney.

 

Now if the second loan was refinance or if you took a line of credit, it will turn this loan into a recourse loan and the bank/ lenders will have the right

to collect that money and you will be also liable to paid tax on it. The only option left will be to file bankruptcy. You will have to check with

a Bankruptcy Attorney. 

 

Bottom line, short sales will have tax liabilities if not qualify with the tax relief act of 2007 and if it is a non recourse loan, the second will sell to debt collectors.

 

Thanks and I will see you next week

 

Christian Viollaz
License 01318338
 
To Find Out What's Your Home Worth?
 

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06.12.12 Tuesday Talk Silent Spring

by qinfovio 3. July 2012 16:28
Good morning,
 
I just started reading Silent Spring by Rachel Carson. She was one of the first woman biologist in 1937, that later on went to fight the world
of pesticides, herbicides, DDT and all that craps. It was quite a challenge on her side challenging the man's world that come with
a high political involvement of this industry.
 
It is the similar issue with our latest crisis, when nobody want to listen and hoping the party will never end.
What is not good for bugs, insects, weeds... are not going to be good for human being. We cannot growth in a clean
environment that way.
 
In the economic world, we need a clean environment so we can grow in a similar way. I don't plan to be pessimistic
in my Tuesday Talk but I cannot tell you that every is going back up when we are near of the bottom yet.
 
The good news is I know the different steps that I need to take to protect myself and how to benefit from a crisis.
 
                                                                            _________________________
 
The information that I am sharing with youabout short sale property are good for both side and on the buyer side you will know what to expect.
 
It took us 3 years to close this short sale at 485 Francis in Seaside. The challenge with that one was Chase. We had 2 loans with them
and they seem to be finally together with their short sale department.
 
We also closed couple short sales in two months and half, from beginning to the end.
 
                                                                            _________________________
 
As now, the other biggest challenge is the second loan. I have one transaction with Aurora as a first loan and BOA as the second.
As I go in a case by case and see how it develop, I will have to bring an attorney to facilitate this short sale. The second lender is
asking more and more information concerning my seller for the only purpose to sell their info to debt collector.
Even if the short sale is approved by the second lender, there no law to prohibit them to sell their second loan. 
 
I was asking myself if I was better off to let that one foreclose? The only way to get rid of the second loan is through a bankruptcy
that has been discharge or a short sale.Since this transaction is getting such a pain for the amount of work required by both of these lenders,
that maybe BOA will expect me to let it foreclose.If it foreclosed, I will not get paid for the amount of work that I did and it will let
my seller unprotected with debt collector that will hunt them for the rest of their life.
 
The only solution is to take 1% of my commission to cover the facilitator fee and my seller to pay $500.00 the set up fee.
And sometime, you have to spend money to make money
 
                                                                            __________________________
 
I also see more and more banks offering Deed in Lieu to delinquent's homeowner with a minimum payment per month, an amount
of time they can stay with $3000.00 at the end.
 
The HAFA program offer to all short sales is similar but without a minimum payment per month. Concerning your credit,
A Deed in Lieu is also treat as a Foreclosure.
 
Thanks and I will see you next week.
 
Christian Viollaz
License 01318338

FREE Quick Over-The-Net Home Evaluation

www.MontereyBuyersClub.com

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06.05.2012 Tuesday Talk Always Negotiate with all Offers!

by qinfovio 19. June 2012 16:53
Good afternoon,
 
If you are familiar with smaller project of sub-division, you will find some pocket of opportunity as an investor around Monterey County .
I will need to do more research concerning the construction cost.
 
Price and value of land have dropped at a price where it might be profitable to build again and sell it at a profit.
 
My main question is can you build a home around 1500 sf for $150,000.00? Let me know if some of you
has some information that I can use.
 
                                                        _____________________________
 
Our primary job as a Realtor is to protect our clients as sellers or buyers so they can get the best deal.
 
I have experienced this many times on my own but I have a very good story to share with you that changed my attitude
and try to be more flexible and be at the finishing line.
 
                                                        ________________________________
 
I was representing a seller selling a home in Seaside in 2007 when the market was just changing. 
 
We received a good offer around $820,000.00 and part of the offer was to have seller to clear termite inspection and
to pay for section 1. As I am always very cautious with the section 1 that could be very high sometime, I suggest to limit
our cost to $4000.00. We went ahead with this buyer, they did their termite inspection and it came back at over $8000.00
 
Buyer did not want to pay the extra $4000.00 and walked away. On our side, we told ourselves that we will get another buyer.
 
It took us over 4 months to find another buyer, we sold for $60,000 less.
 
My seller has to carry a note for the buyer for an amount of $196,000.00.
 
Later on this buyer/new owner lost his house in foreclosure, never pay back the note to my seller.
 
And later on my sellers lost their home because they did not received  $196,000.00
 
The bottom line is with the $4000.00 that we try to save end up to cost to my seller their own home.
 
                                            ___________________________
 
Why am I sharing this story with you? I am seeing more and more Agent try to over protect their clients
with our short sales and taking the very high risk to loose the deal at the cost of their clients.
 
What I also learned from this lesson, as a seller's agent, don't kill the deal, be more flexible and be at the finishing line!
 
I am seeing more and more transactions not getting through for few thousands of dollar or stupid act from agents that want
to follow the contract by the letter. You cannot do that with most the short sales, REO.
 
Do not hold the funding of the loan because you request a walk through of the property and to be vacant prior to funding.
 
The hardest past of the transaction has been done, just work it out and put it into writing.
 
 
Thanks and I will see you next week!

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05.29.12 Tuesday Talk Assisting Debt Collector

by qinfovio 19. June 2012 16:50
As now I have a clear understanding why our inventory of foreclosure home is so low. You have heard a lot about the "robo-signing scandal".
Five of our majors Lenders have foreclosed on millions of home without proper verification, disclosures and this mass of home inventory
has contributed to the collapse of the the US Hosing market.
 
And as now, all lenders are required by HUD to make at least 3 attempts to make a physical contact with the homeowner and it is where I step in now.
As a side job, I just join a National Debt Collector where our main job is to visit homeowner. All these lenders go through debt collector to make contact
with homeowner, by calling, mailing by FedEx a package for their loan modification and have me as their field rep to meet with them.
 
I go visit these homeowners asking them if they received their package and some other case I try to get the homeowner over the phone with their lender
and if after 3 attempts, I have made no contact, then the lender will proceed with the foreclosure process.
 
The package that I have to come back to pick up is the same one that come with all our short sale and I need to verify that it is complete. I should ask maybe for tips?
 
I have to take 3 stamps pictures with date and time and this will prove that we try to make contact with homeowners.
 
We are going to have a lot of foreclosure but they will come out at a slower paste because of the process.
 
                                                                        
Thanks and I will see you next week!
 

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05.22.12 Tuesday Talk: Economy Versus Currency

by qinfovio 19. June 2012 16:46
Good afternoon,
 
I am seeing more and more investors that are trying to approach home owners that have received a NOD notice of default.
 
This time, the picture is different that it was 10 years or 15 years ago. None of these properties have enough equity to cover their mortgage.
Their options are deed in lieu, short sale, loan modification or foreclosure. Investors can only buy these properties at the court house
or as a short sale through real estate office.
 
Here is a good link to go check the entire process, it is very complex. All lenders are now sending an ARM length transaction disclosures
 
 
to all their short sale. They want to be sure that there is no fraudulent act and everybody including buyers, sellers and their agents
have to sign.
 
Be very careful with all these disclosures made specifically to prevent fraudulent act!
 
                                                                                           ____________________________________
 
Today, I want to say few words concerning "Currency versus Economy".
 
The value of a currency is base on supply and demand and not in the economy of a country. The more demand there is for your currency,
the more value your currency will have.
 
But if your print more money so you can pay your debt, they will be over supply of money and the currency value will go down.
 
This will mean that you will need more money to buy less and it is what we call inflation.
 
Raising Inflation/Price due to an economy that is booming without putting more money in the market is not inflation, it is just a shortage of your currency.
It is also a growing economy fuel with speculation without real income growth.
 
As now you can see the price of a barrel of oil at  $92.00 but price at the pump is going up instead of going down.
Less investors/demands for U.S dollars and over supply of currency.
 
We have 2 majors events that might trigger a further decline of our currency.
 
First one is PAGE Pan Asian Gold Exchange that I shared with you in one of my Tuesday Talk
 
The purpose of PAGE is to take over the world currency by backing up their gold with 100% gold.
 
and the other one is the embargo with Iran that will take place July 1. Iran was not planning to trade oil in US dollar anymore
 
                                                                       ________________________________
 
 
We are expecting a new edition of Aftershock for this year (last one was done in 2010) that I think might come in the fall.
They are expecting last 2 bubbles to pop "Us Dollar" and our "Government Debt" and these events might do it!
 
Thanks and I will see you next week.

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