Happy New Year! And welcome to year two of the U.S. recession and year one of the global recession. As we head into 2009, the U.S. economy continues to plunge like an aircraft that has lost all lift. There is very little in the economic tea leaves to give economists hope that a recovery is nigh. I am not one to dwell on the doom and gloom. Honestly, I’m not sure how much more bad news readers can take. So let me start with some positives.
 
 First, the sector that led the U.S. economy into this economic and financial morass–housing–is about to turn a corner and start adding, at least modestly, to economic growth in 2009, perhaps as early as this summer. After nearly three years of steep contraction, U.S. home builders, those that remain standing, have been through the worst housing decline since the Great Depression. Building permits have dropped from a cyclical peak of 2.3 million units in September 2005 to a mere 616K units in November 2008. That’s a 73 percent decline so far, and takes out the low-water mark on all previous post-war housing declines. It is fairly clear, given the renewed drop in homebuilder confidence and continued oversupply of new homes, that homebuilding will continue lower in the first quarter of 2009, but before year end, expect housing to be one of the first sectors to lead the U.S. out of recession.
 
 Article by
 Scott Anderson
 Senior Economist
 Wells Fargo Economics

You bought your home three to four years ago. You financed with a low adjustable rate loan. Darn, the adjustable rate has reset and you need to refinance the loan. Uh oh, the house is worth less than your loan amount. Are you a candidate for a short sale? Here is some general information short sales.

There are no set guidelines and no guarantees for short sales. Each bank is different with the timeline it takes to respond to the borrower.

The employees of the lender that are negotiating the sale ARE NOT there for the benefit of the buyer or the seller. Their only goal is to collect as much money as possible for the lender. The lender typically will:

• Misrepresent their own policies or use other means to intimidate or scare the parties involved into paying more money.

• Require the seller to sign a note or new loan for the balance of the mortgage due.
• Change their price and terms up until the moment of closing.
• Pursue a judgment against the seller for total amount of the shortfall.
• Investigate the seller for indications of mortgage fraud if there are unexplainable gaps or discrepancies in the seller’s current financial situation and what he claimed at the time the loan was granted.
• Expect the home to initially be listed at or close to market value and have the asking price dropped accordingly until viable offers are received.
• Require the property be sold “as is”.
• Require an offer be made before they will consider discussing a short sale.
• Give an “approval” letter that is just a thinly disguised “maybe”.
• Set caps on payments to Realtors, title companies.
• Set restrictions for amounts paid to investors negotiating assignments or simultaneous closings.
• Set restrictions on issuing clear title.

The investor who bought your loan wants as much money as possible. When considering a short sale, they will be evaluating whether it makes more financial sense to foreclose on the property of accept the short sale.

 

Courtney Silverman is a top performing Realtor in the Courtney Silverman Real Estate Group at the Keyes Company / Realtors located in Weston, Florida. Courtney has high success in closing short sale real estate transactions. Give her a call at 954-389-3459 ext 36251.