Georgia is third in the nation, with 13.5 percent of mortgages one or more payment past due as of December 31st, according to the Mortgage Bankers Association’s National Delinquency Survey. Florida and Nevada came in at #1 and #2.

The MBA said the drop in the 30-day delinquency rate is “a concrete sign” that the end of the mortgage crisis may be near. That’s important because mortgages that are 30 days late generally serve as a leading indicator of serious delinquencies and foreclosures.

The U.S. Department of the Treasury recently reported while more than 1 million U.S. homeowners have started the process of modifying their home loans under the government’s Home Affordable Modification Program (HAMP), only 116,000 have actually had their mortgages modified as of last month.

In Georgia, there have been 33,059 active trial loan modifications through January. Of them, 4,508 have been permanently modified.

Atlanta is among the top 15 metro areas for HAMP activity, accounting for 3.2 percent of overall HAMP activity. The city had 30,285 active trial loan modifications through January. Of those, 3,692 were permanently modified.

If you or someone you is having financial issues and concerned about foreclosure, contact us for a free report on Avoiding Foreclosure.

Federal and mortgage industry officials are increasingly looking for ways to get distressed borrowers to leave their homes voluntarily, without going through the expensive foreclosure process or a messy eviction.

Citigroup, for instance, plans to announce a pilot program on Thursday that would allow delinquent borrowers who don’t qualify for or decline mortgage relief the opportunity to stay in their homes without making payments for up to six months before turning over the keys, in return for keeping the property in good condition.

Other initiatives have also emerged for borrowers likely to lose their homes. Fannie Mae and Freddie Mac, the mortgage financing companies, developed programs allowing former homeowners to become renters after a foreclosure or other proceedings.

As part of its federal foreclosure prevention program, known as Making Home Affordable, the Treasury Department announced late last year that lenders would be eligible for $1,000 in exchange for allowing borrowers to sell their home in a short sale.

In such deals, the borrower sells the home for less than the outstanding mortgage, and the lender forgives the difference.

Moody’s Economy.com has forecast that the number of short sales and transactions in which borrowers surrender their deed in lieu of foreclosure will increase more than 50 percent, to about 490,000, this year. That is just a fraction of the 1.9 million homeowners Moody’s has forecast will lose their homes to foreclosure this year, up from 1.7 million last year.

With continued high unemployment and depressed home prices, expect to see foreclosures continue to rise in 2010. A record 3 million U.S. homes are projected to be repossessed by lenders this year.

In 2009, there were 2.8 million foreclosures according to RealtyTrac and 4.5 million foreclosure filings ares projected for this year. There were 3.96 million filings in 2009.

Many are projecting this year to be the peak in the foreclosure wave. Despite efforts by lenders and pressure by the government, initiatives to keep people in their homes has failed.

As reported previoulsy, lenders have permanently modified such a small number of home mortgages, that the total is less than 1% of the 4 million loans targeted under the Obama administration’s foreclosure prevention plan through November, the U.S. Treasury Department said last month.

Fewer than half of the 3.2 million homeowners estimated as eligible for mortgage relief by the Treasury actually qualify, according to Herb Allison, assistant secretary for financial stability.

Besides pressuring lenders to do more loan modifications or accept short sales, the government has also attempted to stimulate the housing market with the extension of the $8,000 tax credit and the expansion for repeat home buyers worth a $6,500 tax credit.

This tax credit is due to expire on April 30th, which is about the same time that it in anticipated that the Fed will run out of funds to continue their purchase of mortgage bonds (which has held mortgage rates at very attractive, historically low levels). This is likely to add additional pressure to the market.

Georgia had the seventh-highest rate in the US at 2.68 percent of households receiving a foreclosure filing, which equated to 106,110 filings.

If you’re delinquent on your mortgage payments, contact us today to discuss alternatives to foreclosure. We are a team of Certified Distressed Property Experts and are trained to assist you with your needs.

The U.S. Department of Housing and Urban Development (HUD) recently released a letter to lenders covering short sales and short payoffs. Mortgagee Letter 09-52 is effective immediately and provides guidance to lenders regarding borrower eligibility when pursuing a new Federal Housing Administration (FHA) mortgage.

In a nutshell, FHA guidance included:

Borrowers are not eligible for a new FHA mortgage if they pursued a short sale agreement on their principal residence simply to:

• Take advantage of declining market conditions, and
• Purchase, at a reduced price, a similar or superior property within a reasonable distance.

Borrowers are considered eligible for a new FHA-insured mortgage if:

• They were current on their mortgage and other installment debts at the time of the short sale of their previously owned property, and
• The proceeds from the short sale serve as payment in full.

Borrowers in default on their mortgage at the time of the short sale (or pre-foreclosure sale) are not eligible for a new FHA-insured mortgage for three years from the date of the pre-foreclosure sale. Lenders may make exceptions to this rule under certain circumstances, such as a short sale being due to the death of the primary wage earner.

The U.S.Treasury Department issued new guidelines for short sales that should make the process easier, faster and more consumer-friendly. Imagine a world where short sales were short? Somehow whenever I think of the word “imagine” I think of the the song written by John Lennon and his depiction of a world that would never be. The same could be said for a world where short sales are actually short.

If you’ve been a frequent reader of our ShortSalesCentral.com, then you know that a short sale is when the mortgage lender accepts less than what they are owed in lieu of foreclosing on the property. It’s generally considered a win-win. It allows the homeowner to walk away from the property without a foreclosure on their credit and allows the lender not have to go through the cost and hassle of foreclosing, maintaining and marketing the property after the fact. Not to mention having to increase their reserves due to foreclosing on the home.

The new program doesn’t go into effect until April (why wait???), but here are the major points on the new program:

-Mortgage servicers will have 10 days to approve or disapprove a short sale price. This will speed up time and allow the borrower to be released from debt more quickly.

-The borrower will receive $1,500 in relocation credit. This will help move out of the home and into an alternative residence without as much stress or worry about getting into debt again right off the bat.

-Mortgage servicers will receive $1,000, and second lien holders up to $3,000. This encourages them to release the home for a lower price than they may have otherwise.

-Loan servicers will no longer be able to require a reduction in commission for agents or Reators on a short sale. This will make sure agents don’t shy away from short sales for fear of not earning as much.

The new guidelines should allow the process to go faster and make short sales a more viable option. But that is if the lenders agree to play along since the program is voluntary. Time will tell. Contact us if you need assistance with your Atlanta short sale needs. We have a team of Certified Distressed Property Experts ready to go to battle for you.

With homebuyers rushing to complete their home purchase before the first time home buyer tax credit expires, a report Friday is expected to show strong September sales.

Home resales are expected to show an almost 5 percent increase to a seasonally adjusted annual rate of 5.35 million, up from 5.1 million in August, according to economists polled by Thomson Reuters. If the report meets forecasts it would be the best month for home sales in more than two years.

The National Association of Realtors’ report is scheduled for 10 a.m. EDT.

First time homebuyers and investors both are taking advantage of the low mortgage rates, short sales, foreclosures, and overall discounted homes.  The buyers are also eligible to take advantage of the tax credit of 10 percent of the sales price, up to $8,000 so long as the sale closes by November 30, 2009.

With concerns about the housing market still prominent, Congress is considering several proposals to extend the tax credit for first-time buyers. Senators Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn., want to extend it through June 30, and expand it to include all home buyers, at an estimated cost of $16.7 billion.

One potential roadblock, however, emerged this week. There are concerns that some of the 1.5 million applications for the tax credit are fraudulent.

At a hearing before a House subcommittee Thursday, J. Russell George, the Treasury Department’s inspector general for taxes, questioned the legitimacy of some 100,000 claims for the credit, potentially including some illegal immigrants and 580 people under 18. The youngest taxpayers to apply for the credit were 4 years old, his office said.

While the program has widespread support in Congress, there are growing concerns about the costs. The cause, said Sen. Jack Reed, D-R.I., “is a worthy one.” But “I hope we can find ways to pay for it.”

Foreclosures have been relatively common over the past few years, however short sales are becoming increasingly more common and we wanted to put together this guide to help you with purchasing a short sale.

1. Identify potential short-sales – The best way to do this is to link up with a Realtor that is a Certified Distressed Property Expert (CDPE), they will be able to help you locate pre-foreclosures in your area.  You’ll want to identify how much is owed on the home in relation to its approximate value.  Avoid those homes with a lot of equity in the home as the lender will likely prefer to foreclose and resell closer to the market price.
2. View the property – Inspect the property and determine how much money it will cost to repair or renovate it.
3. Do your research – What’s the property worth?  What do other similar homes in the surrounding area sell for?  You make your money when you purchase property, not when you sell it so this is a very key step.
4. Find all liens and mortgages – Learn about possible liens on the property and which lender is the primary lien holder.
5. Figure out the financing – You will want to be pre-approved and qualified for a loan prior to submitting an offer.  It might take long to hear back from the lender once an offer is submitted, but once approved the lender will want to move quickly…sometimes in as few as 20 days.
6. Contact the lender – You will need the homeowner to complete and sign (notarized) an authorization letter, which gives the lender permission to discuss the mortgage situation with you.  Once you have this signed, you or your CDPE agent should speak with the loss mitigation department or the resource recovery department.
7. Complete the lender’s short sale application – most lenders require that you fill out their corporate documents specific to a short sale.
8. Assemble the proposal – The proposal consists of a package of materials including the application, authorization letter, the purchase and sale contract, a hardship letter, a statement of the property’s value, detail of the costs and liabilities, and a settlement statement.
9. Negotiate – As with most real estate transactions, it is likely the lender will reject your offer and come back with a counteroffer.  Be ready to negotiate and determine what the maximum amount you’re willing to spend so that if you walk away from it you don’t regret it knowing that it was more than you were willing to spend.
10. Seal the deal – Once all three parties have reached an agreement – you, the seller, and lender – then get everything officially recorded.  Setup a closing, get financing all under way, fulfill any special stipulations per the contract and close…the property is now yours!

Georgia’s unemployment remains higher than the national average of 9.7 percent for the 22nd consecutive month.  The state’s current unemployment rate is 10.2 percent.  Last year in August the state’s rate was 6.4 percent.

According to the Georgia Department of Labor, Georgia’s work force has shrunk by 79,039 to 4.74 million people since last December.  The number of unemployed workers has doubled to 481,488 from 244,962.  The number of jobs has declined by 314,100 to 3.87 million.

Health care and private educational services improved, adding a combined 13,400 jobs.

Until the unemployment rate starts to improve we will continue to see a plethora of short sales, foreclosures, and REOs.  With mortgage rates extremely low and homeowner’s and bank’s willing to negotiate now is the time to purchase a home for investment purposes as well as primary residence.  Contact us if you would like to learn more about the available distressed homes on the market.

What’s a Foreclosure

Foreclosure is the process whereby the lender takes possession of the property.  A foreclosure terminates all rights of the homeowner covered by a mortgage.  Foreclosure is the process in which the estate becomes the absolute property of the lending institution.

When a homeowner fails to make the payments on their mortgage, the lender can begin foreclosure proceedings. This is a very specific legal process with set timelines and outcomes. In a Short Sale situation, the home owner’s name is still on title of the property and they are the official owners who are trying to sell the property. In a foreclosure, the lender takes possession of the house and as a result, the homeowner is no longer a party in the sale.

Foreclosure my pose potential problems such as: Title problems, Superior loan pay offs, IRS liens, tenants or owners still occupying the property, and/or structural problems.

What’s a Short Sale

Short sales occur when the current value of the home is less than the debt owed to the lender.  It occurs when a lender agrees to take less than the full loan payoff from the homeowner. The seller must demonstrate to the lender that they have a financial hardship and are unable to fulfill their mortgage repayment obligation.  In most cases, the owner is in default and is not making their payments for whatever reason.

Short sales, in most circumstances, are the first step to avoid foreclosure. Although the lender(s) will recover less than the total loan amount in a short sale, they may prefer this in lieu of foreclosure. The costs of foreclosing on a property may be more than the bank’s loss by taking a short sale. Also, the property may not sell at auction and then the bank would be forced to take it back as an REO (Real Estate Owned) property, which then they would have to maintain, list and sell themselves.

Something to keep in mind, the lender is under no obligation to grant a homeowner a short sale and in most cases it can be a frustrating process to get approved for one.  A Certified Distressed Property Expert, however is trained to help you with the process.

Banks are overwhelmed with short sale requests and the approval process can take months. Each bank evaluates each individual request on a case by case basis. Many times there is more than one lender involved. Not only do the banks consider the borrower’s personal and financial situation, but they also consider an appraisal of the property, market conditions, the banks financial situation, their current portfolio and in many cases have to consult with an outside investor who purchased the loan at some point. Given all of these varying circumstances, you can imagine why this process takes so long.

This article should help answer questions surrounding short sales and serve as a helpful guide on how to buy an Atlanta short sale home.

First the basics:

1.  What is a short sale? In real estate, a short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor.

2.  How does a seller benefit? A short sale allows the homeowner to avoid foreclosure.  The benefit of this is that it has less negative impact on the individuals credit and provides the homeowner a chance to rebuild and move forward with their life.  Another benefit that is often overlooked is that the individual is actually residing in their home mortgage free while the short sale is being negotiated.

How to Approach a Short Sale Listing agent:

Below are a few questions that you should ask the short sale listing agent:

1. Have you submitted a purchase offer to the bank? If the answer to this question is yes, you should dig a little deeper with your questions.  Get as much information from the listing agent as possible to help you determine what type of competition you are facing.

2. Have the homeowners applied for a loan modification? If the answer is yes, has a broker price option (BPO) been done?  When was the date of the last BPO?  If the BPO was done within the last 6 months are you able to get the BPO price?

3. Is the listing agent handling the short sale negotiations or are they outsourcing negotiations to a third party? If the listing agent is not the point of contact and is unwilling to be the point of contact you may want to skip this one as it may be more trouble than its worth.

How to write the purchase offer:

Write a “clean” offer.  Make it simple for the bank to take a look at your offer and either approve or disapprove it.  The fact that it is a short sale means you can go in with a low offer, but try not to be greedy and ask for much else…this will be frowned upon.

Go in with your best offer first because should it become a multiple offer situation you will want to feel confident and not regret anything about the offer.

What happens next?

You wait.  And wait.  And wait.  Often times it takes several weeks before you will hear anything back from the banks.  Don’t get discouraged if you haven’t heard back, it will just take some time until you do hear something.

Knowing that you put forth your best offer to begin with though means that should you get denied you will have no regrets, but if your offer is accepted you will be over joyed and not think you over-paid either.