BREAKING NEWS...On Wednesday, Feb. 17, 2009, details were released on the President's Homeowner Affordability and Stability Plan.  The $275 Billion plan is geared towards helping struggling homeowners with keeping their homes and reducing foreclosures, mainly through Government backed refinaces and loan modifications.  I will be participating in a conference call this Friday, Feb. 20th, where I should obtain the latest information on the plan.  I will update this article with the most current information soon.  Until then, for current info., please visit my blog at : www.ReddingBlogCentral.com.

Are you or someone you know behind on their mortgage payments? A sad fact is more than 50% of homeowners who lose their home to foreclosure NEVER seek serious professional counseling to find out what their alternatives are.  The first thing a homeowner who is having difficulty in affording their mortgage payment should do is talk with your lender about a loan modification.  All lenders have different criteria, however, if you qualify and really want to stay in your home, this may be the best solution for you.  If a loan modification is not an option for you, a short sale of your home is possibly the next best solution. A "short sale" is a process in which the lender approves the sale of a home for less than what is still owed on the home's mortgage.  Each company has their own set of processes through which they decide whether or not to accept a short sale, and while there are many similarities, each has its own requirements for final approval.  A short sale can be a win-win-win situation for the seller, buyer, and lender.  The seller gets out of the mortgage liability without having to go through foreclosure or possibly facing bankruptcy, the buyer usually pays below market price, and the lender doesn't have to go through the expensive and time-consuming process of foreclosure.

With today's economic climate, many people are having a rough time meeting their financial obligations, one of which is making their home mortgage payment.  If you are in this situation now, or about to be thrust into this situation, it is important to talk with a Certified Distressed Property Expert immediately.  After a confidential discussion with you, the CDPE will be able to advise you if you are a potential candidate for a short sale, or if there is a better alternative for your situation.  Time is of the essence!  There are specific time lines to be followed to prevent your lender from foreclosing on your home.  It is very important that you contact us as soon as possible to evalutate your situation. As mentioned above, over 50% of home owners who lose their home to foreclosure NEVER seek the confidential consultation of a professional, whether it be a CDPE, Attorney, CPA, or other professional who can help and guide them in their situation.  Many of these foreclosed homes could have been dealt with differently and saved the homeowner the stress of a foreclosure and the impact it will have on their credit and public record for a long time. Don't hesitate...make the call today!

The first step is to call and set up an appointment to discuss your situation. I will explain your options and, if necessary, refer you to other professionals.  If you decide that a short sale is the best option for you we will set up a listing appointment in your home.  At the listing appointment, in addition to signing the listing agreement, the listing agent will provide you with additional information about the short sale process, including a list of items you will need to provide us so we can begin putting a "Short Sale Package" together to submit to your lender.  The items a lender requires may vary slightly, but usually include the following:

• Authorization to Release Information:  This form is signed by the borrower and co-borrowers on the home mortgage loan and submitted to the lender, and any other lien holder, so agents of RE/MAX Town & Country can submit and negotiate the short sale offer on the seller's/borrower's behalf.
  
• Residential Purchase Agreement:  This is the purchase offer that has been accepted by the sellers.
  
• Buyer Pre-approval Letter:  A letter from the buyer's lender stating they are approved for a loan.  For a cash buyer, proof of funds are required, such as a bank acount statement showing sufficient monies deposited to purchase the home.
  
• Estimated Settlement Statement:  This statement is completed by the Escrow Officer and lists the purchase amount, seller/buyer costs, and the net amount the lender(s) will receive at the close of escrow.
  
• Residential Listing Agreement:  This is the listing agreement between the seller and RE/MAX Town & Country.
  
• Hardship Letter:  This letter should be a single page handwritten letter from the seller, explaining to the lender what has occurred in their life to place them in such a financial hardship that they no longer can afford to make their mortgage payments.
  
• Financial Statement:  This is a detailed accounting of the borrower's and co-borrower's assets and liabilities.
  
• Recent Pay Records:  Most lenders will require the past 2 months of the borrower's and co-borrower's pay records from all sources of income.
  
• Recent Bank Statements:  Most lenders will require the past 2 monthly statements of the borrower's and co-borrower's bank/credit union accounts, and other accounts where assets are held.
  
• Tax Returns:  The borrower's and co-borrower's past 2 years of income tax returns, federal and state, along with W-2s and 1099s.
  
• Comparable Market Analysis:  Some lenders may require a CMA or BPO (Broker's Price Opinion), which is a report that lists market value of the short sale property by comparing sales prices of similar properties that have sold recently.

Once the listing of your home is completed, it will be placed on the local Shasta Board of Realtors Multiple Listing Service and marketed for sale in the manner the listing agent described at the listing appointment.

Now is the time for you to begin to gather the required financial documentation listed above!

Upon acceptance of an offer, I will schedule a meeting with you at my office, where I will receive your financial documentation and hardship letter.  We will go over the short sale process and I will answer any questions you may have.  Generally, I will have the Short Sale Package submitted to the lender(s) within 2 business days of the purchase agreement acceptance date.  I will follow up with a telephone call to confirm receipt. On occassion, it takes several days for a Short Sale Package to be logged into the lender's record system.

At this point I will be in contact with the lender(s) on a weekly basis to check the progress of the short sale review.  The lender will assign a negotiator and order a BPO (Broker's Price Opinion) or appraisal to be completed by an outside company.  Once the negotiator has reviewed the short sale package, it is usually reviewed by the lenders upper management and then presented to the lenders investor board or committee for final approval.  The entire review process can take anywhere from 3 weeks to 3 months or more.

Once an approval letter is received by all lenders escrow will be opened (if not already opened) and the Buyer's investigation period will begin.  The rest of the escrow will proceed as any other home sale, with a closing date being scheduled and both seller and buyer doing their part to close on time.  Any extension of the escrow period must be approved by the lender(s) and reflected on the lender's approval letter.

As a Realtor and Certified Distressed Property Expert for RE/MAX Town & Country, one of the most reputable Real Estate companies in the Redding area, I guarantee you the highest level of honest, ethical, and professional representation.  My specialized training and experience in negotiating short sales gives me a distinct advantage over other Real Estate Agents in listing, marketing, selling, and obtaining a short sale approval from your lender.  Call me today for a free and confidential coversation, where we will talk about your situation so you can determine if a short sale of your home is your best option.  Remember, time is of the essence.  Do not delay...make the call now.

Glenn I. Revheim - Realtor
Certified Distressed Property Expert
RE/MAX Town & Country
Main Office: (530) 222-3800
Direct Office:  (530) 222-5355
Cell: (530) 410-4242
Email:  Glenn@RemaxRedding.com

For information regarding tax issues on short sale forgiven debt, follow this link to the IRS website.

For information on California's Foreclosure Timeline, click here.