How We Sold Jennifer's House in a Matter of Days

“Oh, I got great results. I met him on a Sunday morning and he said, “I bet I can have this house sold by Tuesday,” and he did. He’s very personable. He really listens to me. He’s a great guy doing a great job. He is definitely in the right profession. He is a wonderful people person. My whole experience with him was like that and if I write that he is awesome in an email or something he writes right back, “Thanks so much!”

How We Helped Jonathan and His Family Find the Perfect House

“The results were great. We got our first home. It’s exactly what we wanted and in a great area. It’s something for me and my family, we can see ourselves grow in and it’s just what we needed so it’s perfect. We were looking to buy a house last year and when we reached out again he remembered our whole situation and he remembered the name of my daughter. He just makes you feel at peace and comfortable in a difficult situation. I think he’s a great guy and a great realtor and he’s going to continue his success.”

Local San Diego Agent Provides Resources on Foreclosure Alternatives and Sales

FOR IMMEDIATE RELEASE

For more information, please contact:
JOE MENDOZA
TOLL-FREE (877) 794-5227
SUPPORT@JOEMENDOZA.COM

SAN DIEGO, CA – October 19, 2010 – Local CDPE-designated agent/broker, JOE MENDOZA of KATCAM REAL ESTATE, has released an informational report comparing the consequences of a short sale and foreclosure.

The report can be found at www.GuaranteedHomeHelp.com and provides a thorough explanation of how a short sale may potentially improve a homeowner’s future financial stability. The website also provides tools to learn how to avoid foreclosure in San Diego. The website also helps to have a greater understanding what happens in a Short Sale.

“Considering how damaging foreclosure can be for the homeowner and the surrounding community, it is important that everyone knows all of the alternatives available,” Mr. Mendoza said. “This report is the latest addition to my website, which gives distressed homeowners a way to inform themselves on their best options.”

Currently, one in seven mortgages is in some stage of delinquency. Once a mortgage payment has been missed, the lender has the ability to begin the foreclosure process. A short sale can potentially minimize the damage to one’s future loan eligibility, credit score, employment, security clearance and more.

“We often see homeowners enter the foreclosure process without any visible means of professional guidance,” Mr. Mendoza a pro in handling Short Sales in San Diego said. “My hope is to inform the community that there are legal, dignified alternatives to foreclosure.”

The CDPE designation provides real estate agents with the tools and knowledge needed to efficiently, ethically and effectively pursue foreclosure alternatives, specifically short sales. In addition to their initial training, CDPE-designated agents are connected to a network of professionals via the Distressed Property Institute, allowing them to remain regularly updated on the complex and quickly changing real estate market.

For more information about the CDPE Designation, visit www.cdpe.com.

Short-Sales: Patience is the Name of the Game

Short-Sales: Patience is The Name of The Game
Author: Joe Mendoza

In a world that is full of uncertainties Short-Sales ranks high on the list. As you look through the Multiple Listing Service (MLS) or drive around town a majority of the listings available are in this Short-Sale category.

What is a short-sale? To keep it short and sweet, let’s just hypothetically say a homeowner bought their house around the peak of the market (2004-2007) for $500,000 in Chula Vista, CA. Today 2010, it is now only worth $280,000. Mr. Seller still has a loan of about $490,000. He wants to sell and get out of it, but he has no ability to write a check to cover the deficiency or difference ($280,000 - $490,000 – cost of sale) = $210,000+ to get out of the home. He’s very motivated because he has a job transfer to Japan and will be out of the country several years.

He has several options: #1 - Keep it and rent it out, but rents in the area are $2000. His current monthly payment to the bank is $3500. He will be short $1500 out of pocket every single month. Eventually when he runs out of money, taps out his savings, credit cards, and retirement, it inevitably becomes a short-sale or foreclosure situation anyway. #2 - Walk away or abandon the property and simply let it “foreclose” and the banks take over. That will damage his credit and typically stay on his credit report for up to 7 years. This will make it very hard to qualify for another loan if he wants to buy a car, finance jewelry, furniture, etc. Or #3 - Do a Short-Sale. Typically in 2-3 years he may be able to repurchase another home provided he reestablished his credit and the new lender allows it.

More than likely Option 3 is best. There are some repercussions by choosing a short-sale, but usually not as harsh as Number 1 and 2. Please check with your local tax and legal professionals. Keep in mind real estate agents and brokers are NOT supposed to tell you which one to do or give you tax or legal advice. If they do, I suggest you look for another agent immediately because it may cost you thousands of dollars and years of headaches for wrong or bad advice.

As far as being a buyer of a short-sale, a seller usually looses control of the decision making process in a short-sale. The bank or original lenders loss mitigation department becomes the biggest decision maker to approve or disapprove a short-sale because they are going to suffer a severe loss on the sale.

Why does it take long for the approval? The banks today are simply inundated with stacks of hundreds of thousands of these types of transactions and it unfortunately takes time to go through these files one by one. The government is trying to help minimize losses and even hoping to keep some folks in their home if they wish to. Complex mathematical formulas for these transactions are involved. Also, sellers have to provide documentation as to why they should be granted a short-sale and/or “forgiven” of the debt on this type of transaction. These reasons and a few others are the main reason why it takes so long to close this sale.

However, like anything else. There are positives and negatives to both sides of the fences as a seller and buyer. Truly, patience is the name of the game to keeping your sanity, minimizing your losses, and maybe even getting a great deal on a short-sale.

About the author. Joe Mendoza is an active local real estate broker and serves the San Diego and Temecula marketplace. He’s been recognized as a Top 1% Producer in the nation, nationwide and local news, and “Who’s Who In Real Estate”.

Buy a Home With Your Basic Allowance for Housing (BAH)

Buy a Home With Your Basic Allowance for Housing (BAH)
Author: Joe Mendoza

Great news military families! You can now afford to buy in San Diego! Once upon a time back in the early 2000’s, most military families were “priced out” of the market. Meaning the VA lending limits were not enough to buy a home using the “VA No-No” program. This was hard to imagine now, but trust me, I have been a broker for nearly 12 years and it was absolutely insane how unaffordable San Diego was a short decade ago.

The Veteran's Administration (VA) loans were established by Congress in 1944 as a special program to reward veterans for the service they provide to the country, especially during times of war.

VA loans typically offer "0" down payment, reduced or zero closing costs, and interest rates that are usually comparable to, or lower than, conventional rates. This gives veterans, who are eligible, a better chance of buying a home than non veterans. In other words, you can get away with virtually $0 out of pocket and own a home.

Veterans, active duty or reserve troops, and certain surviving spouses of veterans may be eligible for VA loan financing. All honorably discharged veterans who served during times of war such as World War II, the Korean War, the Vietnam War, and for certain dates during the Iraq Wars, are also eligible.

Is it really that simple? Yes it is! Every month on your Leave and Earnings Statement or your pay, you are rewarded a very special item called a “BAH”. The Basic Allowance for Housing (BAH) is based on geographic duty location, pay grade, and dependency status. The intent of BAH is to provide uniformed service members accurate and equitable housing compensation based on housing costs in local civilian housing markets, and is payable when government quarters are not provided.

I’ve helped many families who normally thought they couldn’t afford to buy a home because of “myths” they believed like: their fixed income, lack of savings, bad credit, and were quite surprised when I shared the great news that they can buy. I encourage all VA families to take advantage of this program, the abundant supply of REOs, short-sale, and new home inventory here in San Diego and Riverside Counties because I promise you it won’t be too long where once again prices will be up, rates will skyrocket, and as history ALWAYS repeats itself, many homes will be unaffordable, especially in San Diego.

To take advantage of this tremendous program today consult your local lender and favorite realtor.

About the author. Joe Mendoza is an active local real estate broker and serves the San Diego and Temecula marketplace. He’s been recognized as a Top 1% Producer in the nation, nationwide and local news, and “Who’s Who In Real Estate”.

Short Sales Stymied By Complications, delays

Short sales stymied by complications, delays
By Emmet Pierce
Union-Tribune Staff Writer
2:00 a.m. June 7, 2009
A home on Cottonwood Avenue in Santee was trashed by vandals while it sat vacant for months, awaiting lender approval for a short sale. (Laura Embry / Union-Tribune) - With an estimated 20 percent of U.S. mortgage holders owing more on their loans than their homes are worth, short sales often represent the best chance for distressed borrowers to avoid foreclosure.

The problem is that many real estate professionals say it's growing increasingly difficult to complete transactions in which lenders allow sellers to accept less for the home than the outstanding debt. Many pending short sales fall through as buyers grow tired of waiting for loan servicers to complete a lengthy approval process.
“There is an awful lot of paperwork and moving parts,” said Rick Sharga, vice president of the RealtyTrac real estate research firm. “The loan servicers are overwhelmed. There is a huge, huge bottleneck. It's not at all uncommon to hear a Realtor talk about making an offer on a short-sale home and not hearing back for three months.”

Acknowledging that more needs to be done, Bank of America last week announced plans to “re-engineer” the way it processes short-sale requests. The move represents a major shift in strategy for one of the world's largest financial institutions.
Typically, processing a short-sale request takes 45 to 60 days at the bank, said David Sunlin, its real estate management executive. Under the new plan, Bank of America hopes to reduce the response time to one week or less.
The impact on the mortgage market could be significant, since Bank of America, with its acquisition of Countrywide Financial, services one in five mortgages in the U.S., officials said.

Banks don't like to lose money, but consumer demand for short sales is skyrocketing, explained Sunlin. Sometimes allowing a home to sell for less than the outstanding debt is better than going through a costly foreclosure process.
“A short sale is not a one-size-fits-all cure-all but, when it is appropriate, we would agree that it has been underutilized as a tool,” he said. “We are seeing at least twice as many (short-sale) offers this year as last year, and that doubled from the year before that.”

The plan, which will be implemented in 60 to 90 days, calls for the bank to reach out to homeowners and begin working with them as soon as they decide to list a home as a short sale. Currently, the process of evaluating short-sale requests doesn't begin until a delinquent homeowner approaches the bank with an offer to sell a home for less than the outstanding debt.

Aware of the short-sale bottleneck, the Obama administration is attempting to address the problem through a large infusion of cash. While details of how the plan will be implemented remain unclear, the idea is to give both lenders and distressed borrowers financial incentives to make more short sales happen.

Lenders have been slow to embrace short sales because they don't like to take losses. Even when they decide a short sale is in their best interest, it can take months to negotiate a price. If there is more than one mortgage, which is common in California, the second, unsecured lien holder must sign off on the sale. That usually means cutting a deal with the first lien holder to share a portion of the proceeds.

In cases where loans have been bundled into securities and sold on Wall Street, things get even more complicated. Investors may need to sign off on the deal.
Part of the problem is that each financial institution has its own method of processing short-sale requests. Unless you are familiar with various servicing companies, working out a deal can be a time-consuming ordeal. A common complaint is that many of the loan officials who work on short sales appear to be learning as they go along.

“It pretty much drives everyone nuts,” said Keith Gumbinger vice president of HSH Associates, a New Jersey company that monitors loan prices. “The Realtors say it is a foot-dragging thing, and nothing can move until you get a decision.”
With all the hassles, it might seem like sellers would be better off going through foreclosure and getting it over with, but that's not always the case. If homeowners go into foreclosure, their credit often will be so damaged that they won't be able to purchase a home for five to seven years, said Kurt Wannebo, a San Diego real estate broker who specializes in short sales.

If they do a short sale, they typically can return to the housing market in two years.
Bob Satnick, chairman of the California Mortgage Bankers Association, said he has seen cases in which sales are delayed when lien holders try to maximize their return. Recently, some institutions have pushed to have sellers sign promissory notes that require them to repay all or part of the outstanding loan balance at a later date.

“That is a relatively new wrinkle,” he said. “Where I have seen them come into play is from the second lien holders. I have seen lenders asking the seller to come in with additional money up front. I have seen them approve the short sale but reserve their right to pursue future deficiency from the borrower.”
Santee real estate agent Dan Tacon said he has a standard answer for lenders who seek promissory notes: “No.”

Tacon tells his clients if they can't walk away free and clear, they probably are better off going through foreclosure.
“If people could afford the payments, they would not be selling the house,” he said. “Why should you pay for something you don't have? Your credit already is shot. Everything already has been taken away from you.”
In recent months, Tacon said he has grown increasingly frustrated with the amount of time it takes to get short-sale approvals from loan servicers. This sometimes results in vacant homes falling into blight, he said.

Not not everyone sees a worsening problem, however. Erik Weichelt, president of the San Diego Association of Realtors, said he has noticed things loosen up for short sales over the last 45 days.
Michael Corradini of ShortSalePros.com, a short-sale consulting company, said some agents are having an easier time concluding deals because they have developed relationships with loss-mitigation departments. The longer you're in the business of negotiating short sales, the easier it becomes.

“These lenders are absolutely swamped,” he said. “However, once you get a deal done, you can call that same loss mitigator up and get your file moved to higher priority.”
Despite their drawbacks, short sales are a big part of the San Diego County real estate market. Brian Yui, CEO of Houserebate.com, a San Diego-based real estate company, estimates that about 40 percent of the active listings of homes for sale in the county are short sales.
Under the right circumstances, all parties can benefit. Lenders can avoid the time and expense required to resell a foreclosed home. Neighborhoods are better off because there are fewer vacant dwellings.

One potential downside for sellers is that they sometimes end up with a tax penalty, however. If the property sells for less than the amount borrowed, that difference generally is considered income.
“Whatever the bank loses, they will pass it on to borrowers in the form of a 1099 (tax form) cancellation of debt,” said Wannebo. “But there are exemptions from having to pay taxes. It's a case-by-case scenario.”
He noted that the Mortgage Forgiveness Debt Relief Act of 2007 offers some homeowners tax exclusions on loans used to purchase their home. Also, if homeowners can prove insolvency, they can be excused from paying taxes on loans or properties.
Recently, the federal government announced new incentives for lenders to work with troubled borrowers. They include a $1,000 payment to loan servicers who complete a short sale or a deed-in-lieu of foreclosure, in which the borrower simply relinquishes ownership.

The program also is offering payments of $1,500 to distressed homeowners to help with relocation expenses after short sales or deed-in-lieu transactions. It will offer payments of up to $1,000 toward the cost of paying second lien holders to release their loans. The U.S. Treasury will pay $1 for every $2 paid by the investors to the second lien holders.

The plan, which is part of the Making Home Affordable program, still is being fine-tuned, said Ron Garber, president and CEO of ShortSalePlan.com, a short-sale consulting firm based in Yorba Linda. Details of how loan servicers will apply for the money and take part in a companion plan to standardize short-sale procedures have yet to be disclosed.

Having all the various players using the same set of guidelines when negotiating short sales would be helpful, said Garber.
“The problem is when you are dealing with a couple of institutions at the same time and there is no correlation between what one needs and the other needs,” he said. “You can't succeed in chaos.”

Just what is a REO or Short-Sale?

Author: Joe Mendoza

Who would've thought a professor, an attorney, a doctor, an engineer, even worse a BANKER not know what an REO is? I've come across all of the above and the list is growing!!!

Quite simply, a REO stands for "Real Estate Owned" by the bank. There is no longer a homeowner or buyer (temporarily). It is a controlled asset or a "non-performing asset" (NPA) held by the bank and the bank is losing every day it is holding it in their possession.

Ladies and gentlemen, ALL banks are NOT in the business of being a property manager and / or playing the game "monopoly". They are holding some of these properties, but eventually NEED to get rid of them and that is where most of you with the ability to purchase come in.

There are some incredible opportunities in this arena, but be sure you work with a highly skilled, knowledgeable, trained realtor. Unless you have tremendous pockets and a powerful legal team.

So, what is a short-sale? It is simply the prior step to a REO where a homeowner is still in possession and needs to sell their property 'SHORT' to the bank. The homeowner usually owes more than the property is actually worth. Here in San Diego, California there are a TON of these and other parts of the country as well.

As a buyer, if you are patient and persistent, there may be some great deals out there that pay off if you have the fortitude to wait, but the bank has to still approve ALL terms and conditions in your purchase contract (offering). You may wait up to 3 months or more, but eventually you will have an answer.

As a seller, (disclaimer: CHECK YOUR CPA, ACCOUNTANT, LEGAL COUNSELLOR, etc.) there are certain consequences that may or may not affect you. Simply "walking away" could come back and haunt you for years as far as tax liabilities, deficiency judgements, etc. Seek help before "throwing in the towel". From what I've seen and had the opportunity to help my clients, a short-sale is way better than a foreclosure! You may be able to salvage credit and buy again sooner than if you had a foreclosure.

Thanks again for reading and freely share especially to those that are looking for answers.

Visit http://www.JoeMendoza.com