As Real Estate Agents focusing on home owner foreclosure avoidance in the local Sacramento, CA market, we have experienced less and less impact with help from the government programs intended to help home owners keep their homes.

From the start the program under the HAMP (Home Affordable Mortgage Protection Program) really hasn’t seem to have much affect. Now the numbers are coming out to justify this feeling, but where has the money gone?

There was 75 Billion installed into this program. To date 421,804 home owners have entered into the program. If a home owner is accepted into the program the federal program pays right around $9,500 in contributions to the loan servicer and the home owner. One of the irony’s is part of the fee paid to the servicer is $500.00 bonus if the home owner is current on their loan. Question is how many lenders are going to want to do a loan modification with a home owner that is current on their mortgage. Think about it. For $500.00 they are going to take a loan that is making money to them and the investor for $500 bucks incentive? Any rate, let’s do the math. $9,500 dollars x 421,804 homes approved = $4,007,138,000 dollars. Where in the heck is the $70,992,862 BILLION tax dollars going?

Statistics just came out that home approved under this program are down 85% from a year ago. It just doesn’t add up. Has it all gone into the classic government red tape?

Now we start on the NEW HAFA (Home Affordable Foreclosure Alternative) program which is the continuation of HAMP. We have helped hundreds of local home owners from foreclosure, and while it does delay closure one way or another, we are encouraging home owners to apply for HAFA whenever possible, but it is becoming more and more discouraging.

Contact us at the HomeStalkers, D&R Group if you or anyone you know is in trouble on their home. We are here to help and give the best professional advice we can possibly give.

We were able to talk to the home owner and showed them the scheduled foreclosure date. They stated to us that they had paid money to a loan modification company and were told it was moving forward. On their behalf, we called our rep at Wachovia who looked up their status and told us the loan modification was turned down first part of June. We can not verify the information the home owner was correct, but this would not be the first time a distressed home owner was mislead by a loan modification company. Wachovia adheres to the ten day rule, so in this case, the only thing we could suggest to this client is to declare bankruptcy which would likely stop the foreclosure.

Our strong suggestion to home owners is to be VERY cautious with any advanced fees paid to loan modification companiesAt Homestalkers and the D&R Group we are happy to council clients for a loan modification and help them for their own negotiations with the bank. Should the loan modification not go through, which is true in many cases, the home owner is not out the up front money.

Is HAFA the savior for distressed home owners? At our HomeStalkers Group, we have negotiated hundreds of short sales on behalf of our clients with over an approximately 99% success rate. To date, we have several HAFA short sales in the works. Our honest opinion is it is a mess and unless things vastly improve, we can not honestly recommend to our clients that they go through this process.

Think about it. You have a short sale system with the banks, investors and servicers that is far from perfect even after several years. Yeah, yeah, yeah, we hear all the rumors about approved short sales, short sale departments gearing up their staffing and more, but now you have thrown in another new entity in the HAFA negotiation. Talk about the right arm not knowing what the left arm is doing, we now through in a leg for good measure. The bad news is the client is the one that suffers, because our experience is banks are forcing foreclosure sooner and while we are trying to get answers with our short sale and HAFA, the foreclosure time line doesn’t stop, yet this is totally contrary to the intended program. There is a lot of coffee room talk among fellow agents that do a lot of short sales is the feeling the banks and servicers really don’t want anything to do with a HAFA program.

At HomeStalkers and the D&R Group, we always want to do what is best for our clients, but we are really perplexed with this latest government venture. We would love to have any agent doing short sales chime in on this.

As of April 5, the U.S. Treasury Department portfolio loans which do not include Fannie Mae or Freddie Mac serviced loan’s seem to work in slow motion. We have spoken to a lot of top agents throughout the country handling short sales and not one has closed a HAFA loan and it has been close to two months now since the start of the program.

Finally we are close to closing one HAFA loan, but another one in the system seems to be in ultra slow motion. Two companies that we are aware of servicing HAFA loans on behalf of the lenders/banks are Promise Solutions and Loan Resolution Services. Our experience when calling Promise Solutions on our files is far less than stellar. When we call on the file, we practically wake someone up on the other end while Loan Resolution Services is at least attentive and we are able to get some and cooperation. Recently we called a vice president and ally at a MAJOR US bank and asked him what’s up with this?

His answer lighted the bulb. The lenders need to use different companies to handle the HAFA portfolios. Promise Solutions is a Government run company and Loan Resolution Services is a privately held company and the lenders need to split the assets between them. Do we really need to say any more?

Contact D&R and the HomeStalkers Group with any pre-foreclosure and short sale questions.

HAFA loans in slow motion

1st time house credit

More info:
http://takeaction.realtoractioncenter.com/ct/ed_1hNs1PTcQ

For help with all your real estate needs in the greater Sacramento area, please give the homestalkers group a call.

Freddie Mac CEO Ed Haldeman said the company has seen the number of its short sales increase 600% from 2008 as lenders look to dampen the impact of foreclosures hitting the marketplace.

In a statement put out this week, Haldeman said Freddie Mac is doing everything it can to prevent more foreclosures, and that short sales are becoming an ever-popular tool in situations where foreclosure is imminent and modifications have failed.

That number could increase as the Home Affordable Foreclosure Alternatives (HAFA) program takes hold. The Treasury Department launched it in April to provide cash incentives to servicers for conducting short sales and deeds-in-lieu of foreclosure.

Great to hear, don’t you think?

We feel this is yet another testament to the incredible work by qualified agents being done on behalf of homeowners who need the most assistance. Short sales look to continue their leadership in the marketplace, and we look forward to releasing more information on Freddie Mac and Fannie Mae’s HAFA programs on August 1, 2010.

California has just announced a new funding program to help home owners delinquent on their mortgages avoid foreclosure. The program will be administered by CALHFA. The guidelines are just starting to roll out, but there have been a few details released.

The program is intended to help lower end home owners that are delinquent. This will be on Purchase money loans only and will not help anyone who has refinanced. The total money funded into this project is approximately 750 million which is not a lot. The total income of homeowners can not exceed approximately 65,000 per year.

We will report more on this as details become available.

The HomeStalkers Group and the D & R Team.

In the past, if a client was close, by close we mean a few weeks, we could typically market this property aggressively, hopefully receive an offer for submission to the lender and stall the forclosure. In some cases just days prior to the foreclosure date.

The other day we took a listing on a very clean house and when we looked up the records, we found the Notice of Default was filed some time back. When calling the bank we were informed the foreclosure date was in 15 days. In the past, this wouldn’t of been a huge concern, particularly on a clean property that we had already had a lot of interest on. We were informed that that there are new state laws varrying by each state effecting the amount of time an offer can be submitted in order to postpone the short sale. We were told by this lender the time period in California is two weeks prior to the slated foreclosure date. In this pariticular case, we have to receive a bonified offer in one day in order to postpone.

The bottom line is if a homeowner has received a notice of default, they better take charge of the matter immediately.

At HomeStalkers Real Estate Group, we have two active files that involve HAFA candidates. Both files have been caught in some form of a very ugly vortex. Folks this is SERIOUS business since it involves deep emotions to sellers, buyers and agents. For all those agents dealing in short sales that don’t get emotionally involved, it is probably time to exit the arena of short sales.

Both short sales are being serviced by Bank of America. I bite my tongue when I say this, but BofA has actually been helpful dealing with on these files, the problem is with the HAFA side of the equation. Both files work a little differently, but the result has been the same, a complete nightmare and this is a program to help home owners avoid foreclosure yet our experience is showing the complete opposite and driving them into foreclosure. A HAFA file has to be coordinated with a HAFA servicer. So if a short sale doesn’t involve enough trouble, now we have the HAFA component. One HAFA coordinator (and I say that loosely) is Promise Solutions and the other is Loan Resolution Services. Promise Solutions is a type of government entity. We have been told that Promise Solutions doesn’t receive any extra compensation to close files. They are paid typical wages and don’t seem to have any incentive to close these files. When we call in the morning it sounds like you are waking them up. I can not confirm this, but we believe that the banks need to submit a certain amount of files to Promise as part of the formula which doesn’t surprise us.

Letters originating from BofA in this case have been sent to clients while in the middle of our short sale negotiation stating they might be eligible for HAFA. We have been told from a manager at BofA they sent out 60,000 letters. These letters are sent out randomly with no certain criteria. Now, both our clients that a short sale could have been approved months earlier are in serious jeopardy of going to foreclosure all because they sent in the HAFA paperwork but have no chance of qualifying for the programs and are all stalled in the vortex of HAFA. Even people at BofA say that many of the people sent letters have no chance of qualifying.

The problems are much too deep to totally tackle in one blog, but the problems are similar. Home Owners that receive HAFA paper work and are contemplating a HAFA program in order to gain a few extra bucks, better think long and hard it. It could have serious implications.

If you are thinking about a short sale or would like more information on all this please give us a call at the HomeStalkers Group.

Rick Stalker & Donna Burnett

Federal Tax Credit

The first time home buyer tax credit extension allows a buyer to enter an agreement with a seller by April 30, 2010 and close on the house by June 30, 2010. First time home buyers are defined as anyone who has not owned a home for the past 3 years. First time home buyers will get an $8,000 tax credit. Other home buyers, who have owned their current home for at least five years, are eligible for a $6,500 tax credit. Income limitations have been increased to $125,000 for single filers and $225,000 for joint filers. The purchase price of the home must be less than $800,000.

California Tax Credit

The home buyer must be a California taxpayer, and there is no limit on the income of the home buyer. The program is available to both existing homeowners and first-time home buyers, however for existing home owners, a newly built home must be purchased. To be a first time home buyer, you cannot have owned a home anywhere in the world during the three years prior to buying your new home. If you’re married, that applies to your spouse as well. The tax credit is worth up to 5% of the purchase price of the home, or $10K, whichever is less. The payment is credited against the home buyer’s annual CA state income tax, with the total payment being spread evenly over three years. If you qualify for the full $10K, you’d get up to $3,333 per year – but only if you pay at least that much in annual CA state income tax. If your CA state income tax is $4,000 a year, you get a $3,333 credit against that amount, effectively lowering your state income tax to $667. If you owe less than $3,333 per year in CA state income tax, you’ll receive a tax credit only for that amount. The extra will not roll over into the following year’s payment. The credit will begin to be applied to the tax year in which the home was purchased. If you buy your home in 2010, the tax credit will begin to be applied against your 2010 taxes. You cannot apply the tax credit to your 2009 taxes, even if you file your 2009 taxes after you purchase your home.

Still have questions, please contact your tax advisor.

Clarifying Home Buyer Tax Credits