The valuation firm Clear Capital released the results of its home price forecasting models Thursday. The company expects residential property values at the national level to show slight increases over the next three months, ending the year with a growth rate of 1.2 percent.
Diagrams illustrating the trajectory of home prices from 2006 to now and Clear Capital’s projections heading into 2013 depict the valley shape with current prices at the bottom and a subtle upward trend from March through December of 2012.

The strongest of the country’s four regions throughout much of 2011, the Northeast, is expected to see a modest gain of 0.3 percent over the next three months but pick up momentum and grow prices by 1.3 percent to wrap up the year.

The South is expected to perform the strongest in the short term with prices projected to increase 0.5 percent over the next three months, and end the year up 1.6 percent.

Clear Capital’s forecast indicates the Western region could be turning a corner. The three-month numbers show the region gaining 0.2 percent, and pushing that to a positive 1.0 percent by year-end.

The Midwest remains the weakest region of the country in terms of home prices. There, Clear Capital is expecting a drop of 0.6 percent over the next three months, but then movement into positive territory with a 0.7 percent gain by December.

The 50 metropolitan statistical areas (MSAs) tracked by Clear Capital are forecast to show mixed gains and losses, with 30 markets expected to see gains and 20 markets projected to post losses through the end of 2012.

Over half of the metros in the company’s study should see prices move less than 2 percent in either direction. No

double-digit declines are expected however, Phoenix, Arizona, and Tampa, Florida, are expected to see double-digit gains.

Clear Capital sees positive price trends on the horizon for most of the country, despite the fact that currently home prices are continuing to slip. Data through March 2012 shows national home prices fell 0.2 percent in Clear Capital’s rolling quarter-over-quarter analysis.

The West, South, and Northeast posted quarterly gains of less than 1 percent, and the Midwest lost a significant 2.4 percent.

The year-over-year numbers showed even weaker performance for the nation and all its regions, indicating short-term appreciation has yet to be enough to turn the long-term tide.

According to Clear Capital’s assessment, the nation lost 1.4 percent in home values from March 2011 through March 2012, which is slightly better than February’s year-over-year decline of 1.9 percent.

REO saturation, which traditionally pushes down prices, continued to climb last month, Clear Capital reported. It was the second month in a row that distressed property sales as a percentage of total sales increased for the nation and all regions.

Clear Capital says its findings confirm speculation that finalization of the attorneys general settlement has led servicers to become more aggressive in moving their REO backlog onto the housing market.

In March, the national REO rate went up 1.2 points from the previous month’s reading to hit 27 percent, pointing to an acceleration of REO sales. The Midwest contributed the most to the increase, jumping 3.8 points to 34.3 percent, with the other regions all seeing softer increases.

Of particular interest this month, according to Clear Capital, is how the changes in REO saturation are affecting prices. In the past, there has been a consistent inverse relationship between changes in REO saturation and prices, but not in March’s study. Although their REO rates increased, the West, Northeast, and South regions also saw home prices increase.

These geographies are exhibiting a pricing resilience to REO saturation that has not been seen in previous analyses, Clear Capital says. The company says it could be explained by improvement in jobs numbers recently, rapidly increasing investor activity in certain regions, and a general increase in consumer confidence.

Source: DS News Carrie Bay April 4th 2010
Image Source: DS News

According to the Making Home Affordable Program- Extension and Expansion, released March 9^th 2012, several improvements to this initiative will become effective on June 1, 2012. These changes will include an extension of the original deadline for HAFA submissions. Originally, the deadline was set for December 31^st 2012. However, with the recent changes, the deadline has been extended one full year.  So homeowners now have until December 31^st 2013 to submit.

Below are some of the major changes that will take effect June 1, 2012 for HAFA:

1) There are no longer occupancy requirements for HAFA eligibility.

• The previous version of HAFA required homeowners to have lived in the property within the last 12 months.

2) Secondary lien holders will now be offered $8,500 instead of the original $6,000 in exchange for the full release of the lien.

• This is a 41% increase in the payout allowed to a subordinate lien holder.

3) The $3,000 relocation incentive will now be exclusively available to owner or tenant occupied properties.

4) Mortgage payments will be allowed to exceed 31% of the borrower’s gross monthly income.

5) Servicer is no longer required to verify financial information (but still can).

6) If the property in question is sold for less than the full balance owed, and the balance is forgiven, the credit bureau will report in one of 2 ways:

 Account Status Code=13 –Paid or closed account/zero balance

or

65- Account paid in full/a foreclosure was started

What do these changes mean for you? With these changes, more homeowners will be eligible to utilize the HAFA program. Homeowners will now be able to stay current on their mortgage payment and still be able to qualify for the program. In turn, this will help limit the overall impact on credit score. It is also incredibly noteworthy to point out the increase in fund allocation towards secondary liens. With the new 41% increase from what was originally approved, lenders are less likely to decline the short sale due to insufficient fund allocation. In layman’s terms; faster approvals and happier homeowners!

ALWAYS Get a Preliminary Title Report

 Beware! Property tax liens – and other liens, I’ll get to that in a minute – can put the kybosh on your short sale.

Bottom line is this: a property can’t be sold, because the title can’t be transferred, IF there are any outstanding liens on a property.  And, there are a number of liens that can show up on a title report and cause your short sale to go ‘belly up’.

When putting together a short sale (or any real estate sale for that matter), be sure to request the title report right at the beginning of the process. Look for ANY liens against the property, including property tax liens, home owners’ association liens, abstract judgments and delinquent loans and IRS tax liens.

Any of these can cause your short sale to go south. Don’t take the word of the homeowner and assume that asking them whether there are any liens against their property is adequate. There could be liens against the property they are unaware of; it could be a big surprise for them and for you. Always better to know exactly what you’re dealing with upfront and not expend the effort to put together a deal that has little chance of happening.
Here’s what you need to know about some specific liens:

• Some lenders will pay for home owner association liens, Bank of America, for example, typically will NOT pay for these. We recommend the seller to keep these current throughout the short sale process if possible.
•  Most short sale lenders will not allocate funds for abstract judgments, so these need to be settled before closing. Depending on the lien and on the dollar amount, these can sometimes be settled for less than the actual amount. These negotiations can be time consuming so it’s important to get the negotiations under works as soon as possible.
•  The majority of short sale lenders will pay for delinquent property tax liens, so those are not typically a barrier to get a short sale completed.
•  Most lenders will not pay IRS tax liens. However, these can be removed following an IRS process and you can learn more about this through IRS Publication 783 or by going to: http://www.irsvideos.gov/Individual/IRSLiens

We’ve heard about too many instances where a preliminary title report wasn’t requested and everyone was very sorry later. Most liens can be handled and cleared and the short sale can move forward – but the operative concept is to be aware they exist so that they can be handled.
Don’t be intimated or concerned if you pull a preliminary title report and there are many outstanding liens. The majority of them can be released or negotiated off. It just takes persistence and experience in working with these additional liens to clear the title. Just DON’T wait until the last moment, this could potentially derail your short sale.
AND, if you’re working with Short Sale Experts, you don’t have to worry about the details, because we handle them for you. Since it’s all we do – all day, every day – you benefit from our expertise, not just in the details, but in the relationships we’ve built and our knowledge of the process. We navigate the waters so you don’t have to. Short Sale Experts give Short Sale Assistance a whole new meaning. Call us to see how easy it can be to complete a short sale when you work with us. We’re here to make your life easier and your transactions simpler. 888-SHORT-20   Info@shortsaleexpertsinc.com

As 2012 is well under way, negative economic news continues. You’re likely running into clients with their backs against the foreclosure wall. While the short sale has always been a viable option for some clients, in 2012, thanks to the new California short sale laws, it has become a whole lot more interesting. That’s good news for the real estate profession we well, and who couldn’t do with a dose of good news?

Two laws enacted this year in California – Senate Bill 931 and Senate Bill 458 which extends the protection offered by SB 931, favor the seller over the bank.

In the past, the homeowner in the short sale situation could still be pursued by the bank in the form of a deficiency judgment.

DEFINITION: Deficiency Judgment: A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full.

Senate Bill 458 doesn’t allow the lender to pursue a deficiency judgment in California after they agree on a short sale and the short sale effectively closes. In effect, the law protects the seller from primary and junior liens. Lenders can no longer go after secondary liens if they agree to a short sale.*

In some cases, the homeowners might actually MAKE MONEY in the short sale process. This isn’t just the “cash for keys” money available in some foreclosure situations, but actual cash out of the sale.

California Association of Realtor’s President, Beth L. Peerce says – “The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” She proceeded to say..“SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”

People facing foreclosure often don’t know where to turn or who to trust. The short sale does them a world of good. Educate your clients that a short sale allows them to keep their credit intact, enabling them to get back into home ownership more easily when they’re ready.

Potentially it offers them some money as some lenders are paying sellers to participate in the short sale – giving financially stressed sellers some cash they can use to move, or for anything else that’s pressing.

You’re aiming to serve your client AND you’re looking to close deals. The new California short sale law offers you the opportunity to close more business and provide a great service to your clients, offering them a way out their foreclosure nightmare.

We know a short sale is more work for you. That’s where we come in. Our job is building and maintaining the relationships that enable us to move easily and efficiently through the ‘red tape’ of the short sale process. This not only saves you time and stress, it means you’re more likely to actually get the short sale deal to go through.

We close 96% of the short sales that cross our desks. There are no upfront costs to you. If you have any questions about how to present the short sale option to your clients or how simple it is to work with us, let’s talk. You just may find that when we handle the short sale, you can focus on doing more of what you do best. Working with us, you’ll be liable to close more business. Need we say more?

*this does not constitute legal advice 

At the height of all the market insanity in 2007, Congress passed a law to help homeowners who were at risk of losing their homes. Essentially, the law stated that if a homeowner (and this only applies to their primary residence) was unable to meet their mortgage obligation and had their debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure may qualifies for the relief and they may NOT be obligated to pay taxes when the lender filed a “Cancellation of Debt”.

If the homeowner has a mortgage and the lender forgives or cancels the debt, the forgiven amount can be subject to taxes. The lender is required to report the “Cancellation of Debt” to the IRS. The borrowed money, since it is forgiven and no longer required to be repaid, is considered income by the IRS and is taxable as such. The Debt Forgiveness Act offers just that – forgiveness of the potentially taxable amount.

When the act expires? Ouch. Possible BIG ouch. The law is set to expire in December of 2012 and being indebted to the IRS is no laughing matter. Although there is already “talk” of the Act being extended past 2012, it’s important to stay informed! What does that mean for your clients facing foreclosure wondering about the tax liability?

It means NOW is the time to act. Many lenders take a long time to foreclose. The nationwide average is about 16 months after ‘no payment’ on the part of the borrower and in some regions; it’s even longer than that. If a homeowner is having extreme difficulties making their mortgage payment, they should give the short sale option serious consideration and then start the balling rolling immediately.

Why? Think about this. Even if someone stopped making payments today, they probably wouldn’t be foreclosed on before the end of 2012. If the Mortgage Debt Forgiveness Relief Act is NOT extended, homeowners who are foreclosed on after 2012 could be subject to income taxation at their regular tax bracket on the deficiency amount – this can sometimes run into hundreds of thousands of dollars!

Just to make this crystal clear – here’s the simple math: The homeowner borrows $350,000 and then defaults on the loan and the original lender ends up recouping only $250,000. The remaining debt could be considered income for the borrower. There is a ‘cancellation of debt of $100,000, which is the income that could be taxable – and due immediately. Like we said: Ouch.

The best thing to do is to be informed! Discuss this Act your tax professional and contact us for more information.

You can visit the IRS website about the “Mortgage Forgiveness Debt Relief Act and Debt Cancellation” for more information: http://1.usa.gov/w9xDbJ

If you or your clients are having difficulty making your mortgage payment and attempting to avoid foreclosure, we recommend looking into a short sale.  Point your clients in the direction that will do them the most good – keep their credit intact as much as possible and put them on the path likely to lead to homeownership once again – the Short Sale!

Remember, here at Short Sale Experts, the short sale is what we do – all day, every day. We know our way around the process and working with us is intentionally designed to make your job – and your life – easier. AND, get results for your clients. Talk to us about how we can make your life easier – no obligation, no stress and expert assistance. We’re here for YOU.

Attention Realtors: Don’t miss out on the social media frenzy!

In today’s world over 90% of transactions start online, let us show you how to get in front of those people and GET MORE CUSTOMERS online!

Attending this powerhouse marketing event will increase your marketing results quickly and easily. Don’t miss this groundbreaking event. It’s jam-packed full of tips, strategies and real world techniques that are virtually guaranteed to help you grow your business.

Event will be Wednesday February 29^th at 9:30am – 12:30 in Mission Valley.
To RSVP, click that you are “going”, call 858 518-1533, or email Oliver@BigBlockRealty.com

When you attend this free game changing event you’ll learn:

- The secret behind monetizing on successful social media campaigns
– How to have consistent flow of new customers coming your way
– How to get tens of thousands of new fans to your fan page on facebook
– How to automate the entire process
– The real truth behind SEO (search engine optimization) the holy grail of internet marketing.

You don’t have to go far to know that social media is vital to your business. In fact, it’s being hailed as the one-stop resource for making your marketing dreams come true. The truth is, you know how powerful and effective social media and internet marketing can be – you don’t need the nightly news or a best-selling book to embrace its potential.

EVENT WILL BE Wednesday February 29^th in Mission Valley from 9:30am – 12:30.

Not sure if you have a few hours to attend this event? Well this is our promise to you about what you can expect from this workshop:
– New ideas that actually work
– Real-world examples
– Innovative solutions
– Case studies
– An expert international trainer
– How to engage you customers and get them involved (and referring you business!)

Don’t wait any longer to RSVP for this event! Call us now with any questions at (858)518-1533