Wisconsin Real Estate & Wisconsin Living presented by First Weber Group

The five largest mortgage services are adopting new rules for servicing short sales. This should be a welcome addition to a lengthy and unpredictable process.  The new rules are a result of a settlement with State Attorneys General and detailed information can be found here at Housing Wire.

According to a REALTOR Mag article, 30 days is key and here are some of the new requirements:

1. Mortgage servicers must provide a decision to borrowers within 30 days after receiving a request for a short sale.

2. They will be required to notify the borrower within 30 days if any documents needed to proceed are missing.

3. Banks will be considered in violation, and will be fined, if they take longer than 30 days for the above.

That’s good news for many people navigating the short sale waters. While not with ALL banks and not applying to ALL aspects of the short sale process, it is a start.  This agreement is part of the larger settlement with five major banks regarding mishandling of foreclosures. Bank of America, JPMorgan Chase, Wells Fargo, Ally Financial and Citigroup are the banks involved, according to Housingwire.com. Inman News also talks about additional requirements of banks and how they have been fined and are required to provide homeowner relief in the form of principle reductions and refinancing.

If you have questions about short sales, please ask your First Weber agent or read this article about Short Sales in Wisconsin.   Thanks for reading the First Weber Wisconsin real estate  Wisconsin living blog.  To search for Wisconsin real estate, please see firstweber.com

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Short Sales among first time hombuyers declining

Buying a home for the first time is an exciting experience.  In a “traditional” home buying process, your agent will guide you through the steps to get you safely to closing and the timeline is pretty typical.  Imagine buying a short sale as your first home.  Normalities go out the window, making a first time homebuying experience a confusing and frustrating process coupled with lots of waiting. Your real estate agent is still there to guide you through the process but the banks have control of the transaction. (Not sure what a short sale is? It is when a home is being sold for less than is owned to the bank. You can read more about short sales and foreclosures in our Distressed Homeowners category.)  Nationally, sales of short sale properties has been falling for the last 3 months accoring to a Housing Pulse survey.  Just 39.7% of first time home buyers purchased a short sale, the lowest level ever recorded by the Housing Pulse survey.

Short sale or traditional house for sale?

Short sales are attractive from a pricing perspective but waits of weeks and months appear to be having an impact. If you are willing to stick it out and deal with a lot of uncertainty, there are plenty of short sales to purchase.  If not, purchasing a home that is not a short sale or foreclosure may be the way to go.  Homes that are not short sales or foreclosures usually have the benefit of progressing to closing in a more “traditional” way.  They are also more likely to be in good condition and better maintained by homeowners not under financial hardship. To search for homes for sale in Wisconsin, please search firstweber.com. 

Contact a First Weber agent for short sale listings in your area

If you are willing to consider short sales and foreclosures, talk to a First Weber agent or read up on Wisconsin short sales in this article by First Weber’s Tom Weber.  If you are interested in the Housing Pulse survey you can read more here.

Thank you for reading the First Weber Wisconsin real estate blog about how short sales are declining among first time home buyers.  Nationally, more first time home buyers are choosing to purchase properties that are not short sales.  What about you? Are you considering buying a short sale or going to stick with looking at houses that are for sale traditionally?  Either way, a First Weber agent can assist you.

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Many homeowners have seen their values go down due to the recession. Home values are cyclical and will come up again, but what if you are in trouble and need to move now even through your home value is down? If you’ve lived in your property a long time, you will now likely take less proceeds with you on the sale. If you bought in recent years, depending on your situation, a short sale might be the right answer. A short sale is when you owe more on your house than you currently can sell it for. Learn more about short sales here. First Weber Group can assist you in getting your house sold as a short sale if needed.

Here’s a great blog post from the KCM blog which explores the options of a fictitious Mr. Smith and what happens if he chose the short sale process versus the foreclosure process. If you are in the unfortunate situation he is, please take time to read. Their conclusion is: In almost all situations, a Short Sale always wins and is the lesser of the two evils. Most often the short sale garners less of a loss to the bank and has a less negative affect on the seller’s credit report. Do not delay contacting a Wisconsin real estate agent if you see yourself in a short sale situation. Act now, choose wisely, but be prepared to wait as short sales are not a short process.

You can search for a First Weber agent with Short Sale and Foreclosure certification here. If you don’t see your neighborhood First Weber agent on that list, most agents, regardless of certification, are likely to have experience in these situations.

Thank you for reading the First Weber Wisconsin real estate & Wisconsin living blog about which is the better of the two evils: Short Sales or foreclosures. Read the linked article from the KCM blog and make your own conclusion. More at our Distressed Homeowner blog category.

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Foreclosures and short sales can be complicated processes – whether you are on the buying or selling end.  To help you navigate through your situation, it is recommended you work with a Wisconsin real estate agent experienced in foreclosures or short sales.

What is the difference between a foreclosure and a short sale?

A foreclosure is a legal process in which a mortgage lender sues to regain possession of a property after the homeowner defaults (stops paying) on the mortgage.  The lawsuit does provide a redemption period in which the homeowner can payoff the mortgage. In Wisconsin, this period is generally 6 months.

If the homeowner is able to repay the mortgage by refinancing or selling the property during that time frame, the foreclosure suit is dismissed. If not, the property goes to aution or Sherriff’s Sale where is it bid upon in "as-is" condition, and usually sight-unseen.  If the lender ends up being the highest bidder on the property  it is now considered REO or Real Estate Owned and the lender puts it back up for sale. Such properties are often in bad condition.  When buying an REO property, you will be able to view it and working with an agent who is familiar with the REO process is recommended.  Here’s a good blog post about the 5 realities of buying a foreclosure property.

A Short Sale is quite different and certainly not a short process.

Short Sales are when a property is sold for less than is owed on the property. The contract between buyer and seller cannot go through unless the lender agrees to take a loss on the sale.  This approval process can take a long time and involve extensive negotiation.  A short sale may not affect credit scores as much as foreclosures.

Things to consider:

Non-traditional sales processes like these should be handled by an experienced agent. Find an SFR certified First Weber real estate agent.

REO properties are usually sold as-is and may require repairs

A foreclosure remains on the borrower’s cerdit report for 7 years and negatively affects the credit score.

Having trouble making your mortgage payment?

Contact your lender and see if there are any modifications that could be made to your loan such as negotiating a payment plan, refinancing or receiving a forbearance period if your situation is temporary.

Thinking about purchasing a Short Sale?

Inquire extensively about the home and it’s financial status – any obligation for unpaid taxes or bills and the cost of needed repairs.

Here is another blog post all about short sales and if they could be right for you.

Thank you for reading the First Weber Wisconsin real estate & Wisconsin living blog about buying short sales and foreclosures in Wisconsin.  To see thousands of properties for sale in Wisconsin, please search firstweber.com or contact a First Weber agent for foreclosure and short sale listings.

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Wisconsinites in danger of foreclosure: You may qualify for assistance, but you must apply.

Deadline for filing pre-screening paperwork is July 22, 2011.

The U.S. Department of Housing and Urban Development (HUD) is implementing the Emergency Homeowners’ Loan Program (EHLP) with money provided through the Dodd-Frank Wall Street Reform and Consumer Protection Act.  EHLP was created to help homeowners who are involuntarily unemployed or underemployed due to medical or economic conditions and who are at risk of foreclosure. 

Over $51 million dollars in EHLP loan money is available to Wisconsin homeowners in danger of foreclosure

In addition to the unemployed/underemployed condition above, other criteria include: applicants must be at least 3 months behind in their payments, live in the property as a primary residence, must have received notice from a lender’s intent to foreclose. 

Here’s a survey to see if you might qualify for EHLP.

Pre-application screening paperwork must be filed by July 22, 2011. 

See prescreening forms on the Neighborhood Works EHLP website and find a EHLP counseling agency in Wisconsin.

Please the the EHLP portion of  HUD’s website for more or go to NeighborWorks American EHLP website

Thanks for reading the First Weber Wisconsin real estate & Wisconsin living blog for information on HUD Emergency Homeowners’ Loan Program in Wisconsin.  This article is for informational purposes only.

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