Atlanta sellinga short sale class 6.26.12

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Atlanta sellinga short sale class 6.26.12

  1. 1. Foreclosure Alternatives“Discover Home Selling Options when you owe more than it is worth” June 26, 2012 Atlanta, GA
  2. 2. Agenda• Market update• Modifications• Short Sales• Foreclosures• Debt Relief Act• Bankruptcy *For informational purposes only
  3. 3. AdvisorsReal Estate Broker – Marketing your houseBankruptcy Attorney – Bankruptcy and credit impactsShort Sale Specialist – Attorney IntermediaryMortgage Lender – Future Purchase OptionsCPA – Tax Implications
  4. 4. Market Conditions
  5. 5. Geographical Comparison - Atlanta
  6. 6. Foreclosure Activity by Month – Atlanta
  7. 7. Case-Shiller: Atlanta Area v. 20-City 250.00 20 City Composite Atlanta 200.00 150.00 100.00 50.00 0.00
  8. 8. Case-Shiller – By the NumbersCase-Shiller: Atlanta Area Down 17.3% year-over-year Peak was July 2007 Down 38.9% from peak Currently at November 1996 pricesCase-Shiller: 20-City Composite Down 4.5% year-over-year Peak was July 2006 Down 35% from peak Currently at November 2002 prices
  9. 9. Atlanta Unemployment Rate
  10. 10. 55% of Atlanta Homes Under Water
  11. 11. Loan Modifications
  12. 12. Forms of Loan Modifications• Temporary Mods • Forbearance • Reinstatement• Mortgage Modification • HAMP – Making Home Affordable • HAFA – Part of HAMP• Special Programs – SRCA & HAP
  13. 13. Home Affordable Modification Program HAMP Criteria: 1- Borrower is delinquent or faces imminent risk of default 2. Primary Residence 3. Mortgage originated before January 2009 4. 2nd Lien Modification Program (2MP) Beware of Predatory Modification Companies
  14. 14. Ways Modifications can help 1.Reduce Interest Rate as low as 2% 2.If necessary, extend loan to 40 or 50 years 3.Forbear portion of principal 4. Balloon Payment*
  15. 15. 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%Apr-71Apr-72Apr-73Apr-74Apr-75Apr-76Apr-77Apr-78Apr-79Apr-80Apr-81Apr-82Apr-83 18.45%Apr-84Apr-85Apr-86Apr-87Apr-88Apr-89Apr-90Apr-91Apr-92Apr-93Apr-94Apr-95Apr-96Apr-97Apr-98 30 Yr Fixed Source: Freddie Mac Interest Rates 1971 - TodayApr-99Apr-00Apr-01Apr-02Apr-03Apr-04Apr-05Apr-06 30 Yr FixedApr-07Apr-08 Source: Freddie MacApr-09Apr-10 Interest Rate
  16. 16. Short Sales
  17. 17. What is a Short Sale?
  18. 18. Short Sale Process1. Create Package2. Market Property3. Receive Offer & Evaluate4. Submit Contract to Lender5. Receive Lender Approval6. Close Sale7. Move
  19. 19. Hardships Examples • Loss of Job • Loss of Income • Reduced Income • Business Failure • Severe illness • Relocation • Mortgage Adjustment • Too Much Debt • Divorce • Death of Spouse • Incarceration • Damage to Property
  20. 20. Short Sale Package Contains• Cover Letter• Hardship Letter• Preliminary HUD• Purchase Contract• Loan pre-approval• Authorization to Release Info• Seller Financial Worksheet• Bank statements & bills• Income Tax returns• Listing Agreement & MLS Printout• Listing History• Property Repair & Damage Form• Estimated Carrying Costs• Current Market Stats and Comparables
  21. 21. Arms-Length Transaction
  22. 22. How We Sell Your House• Perfect debut • Professional photos & video tour: optimized for online • Pricing: a science, not an art• Marketing blitz • Website syndication: 30+ sites • Private placement • Service: open house, private tours, sign, flyers• Sustained effort • Showing feedback, bi-weekly updates • Real-time traffic dashboard
  23. 23. Pro Photos Make A Big Difference After price, the #1 factor for driving tours: photos
  24. 24. 90% of Buyers Search Online 140,000 visits in Atlanta for October 2010 (Source: Internal records) #1 real estate search site in the US (Source: Hitwise)
  25. 25. Evaluating the Offer• Keys to getting the lender to accept the short sale contract • Contract Price • Contract terms • Closing cost contributions • 2nd pre-approval letter • Inspections done right away • Earnest Money up-front (90 days) • Start Title Work Right Away
  26. 26. Short Sale Parties Short Sale Bank #1 Attorney Customer Short Sale Care Departme Litigation Center nt Closer Intermediary BPO Mortgage Appraiser Insurer Escrow Assistant Mortgage Negotiato Investor r #1 Sellers Bank #2 Mortgage Investor Customer Short Sale #2 Listing Care Departme Litigation Closing Agent Buyers Center nt Departme nt BPO Mortgage Redfin Home Buyer’s Appraiser Insurer Agent Appraiser Inspectors Lender Mortgage Negotiato Underwrit Investor r er #1 Mortgage Investor Investor Guideline #2 s Closing Departme nt
  27. 27. Short Sale Approval Process
  28. 28. Closing• Buyer needs to close within 30 days of lender approval • Cash to Close • Seller Note• Attorney represents buyer’s lender*• Title Search • Title insurance• Closing Paperwork• Final HUD Approval
  29. 29. Lis Pendens
  30. 30. Short Sale vs. Foreclosure
  31. 31. Foreclosures1. Deed in Lieu (Cash for Keys)2. Foreclosure Notices3. Non-Judicial Foreclosures4. Post-Foreclosure 1. Redemption Periods 2. Deficiency Judgements 3. Tax Consequences
  32. 32. Phantom Tax Mortgage Debt Relief Act of 20071. Debt must be incurred on Principal Residence2. Cancelled debt up to $2mil3. Debt from 2nd Mortgages and HELOC’s not eligible4. Debt from Investment properties and second homes not eligible5. Further criteria exists
  33. 33. Bankruptcy
  34. 34. Bankruptcy Tid-bits• Temporary Stop for Short Sales and Foreclosures• Chapter 7 • “Straight Bankruptcy” or liquidation • May be allowed to keep certain exempt property • Stays on credit for 10 years• Chapter 11 • Businesses and corporations • Re-organization of debts • Most expensive Bankruptcy• Chapter 13 • Payment plan – keep all property • Re-organization of debts and 3-5 year payment plan • Stays on credit for 7 years• Consult with a reputable Bankruptcy Attorney
  35. 35. Thanks For Coming! Please fill out the survey we’ll send tomorrow along with the slide deck. We’d love to get your feedback on how the class could improve.To get even more info on the home buying process, check out our home buying guide: http://redfin.com/home-buying-guide
  36. 36. HUD Settlement Statement
  37. 37. Favorite Real Estate Links • Property Information • PropertyShark: Zoning data, title history, permits, neighborhood data; navigation is clunky • Neighborhood Information • WalkScore: Proximity to points of interest • Trulia Heat Maps: Median prices across a county
  38. 38. Favorite Real Estate Links: Listings • Redfin: MLS + FSBO + REO, updated every 15 minutes, with DOM, price history, Zestimate • craigslist: Major FSBO source that Redfin cant crawl • HotPads: Foreclosure heat maps • Brokerage site of listing agents: more photos of the listing • RealtyTrac: Foreclosure market detail, subscription required for full reports
  39. 39. Favorite Real Estate Links: Pricing Data • Case-Schiller Indices: Pricing trends by metropolitan area • HouseMath: Compares a housing investment to a stock market investment • Altos Research: Median price trends and days on market by city, but some complain data is unreliable • MSN Home Affordability Calculator: Based on your income & credit score • SmartMoneys Home Buying Worksheet: Similar to the MSN calculator, but requires more info
  40. 40. Favorite Real Estate Links: Mortgage • Bankrate: Many ads, but is great for comparing local lenders • Zillows Mortgage Marketplace Help Center: Articles mortgage rates, types of mortgages, credit reports, and a series of mortgage calculators • The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators • HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyers
  41. 41. Favorite Links • Loans for First-Time Home-Buyers • Federal Housing Administration (FHA) • Fannie Mae and Freddy Mac • CalHFA: California State agency that helps certain buyers • Government Sites • Federal Trade Commission: Articles & alerts for home-buyers. • Dept. of Justice: Role of competition in real estate
  42. 42. Favorite Links Cont. • Remodeling & Renovations • DoItYourself.com: A few ads, but a useful clearinghouse of information on remodeling • National Association of Home Builders (NAHB): Articles on remodeling your home, most are good • What to Look for in an Inspection • American Society of Home Inspectors (ASHI): Good consumer FAQ & virtual home inspection

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