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As a Pleasanton Broker, all too often, I come across a distressed homeowner, who against their better judgement hired and paid upfront for loan modification assistance. I learned of another case of this just yesterday when talking to a distressed owner.

The auction date is scheduled and the homeowner panicked after recieveing 3 separate denials from their lender to modify the loan. The homeowner told me that she’d spent a lot of money, more than $800, for a “law firm’ to work on a modification.

She said she was aware of  law SB94 about NOT paying upfront fees, but her husband had made the decision to do so. It is very unsettling to see this happen to those already under so much stress and confusion about the situation.

If you find yourself in this situation of being denied a modification and needing to choose short sale or foreclosure, here is my advice (having dealt with banks in these situations over the last few years for my clients).

When they tell you you do not qualify for a modification, they actually set up an auction date to sell the property at the court house steps. At this point, a decision between short sale or foreclosure needs to be made. The auction dates can and do get postponed, especially if you list the house for sale, however if you ignore making the choice and there is no headway being made, someone will knock on your door and say they are the new owner.

I’ve witnessed this last year with an elderly lady that did not believe she deserved to have her house taken and was planning to keep it, however she had an upcoming sale date. About a week after I talked to her, she called me crying that the house was being sold that morning. At that point, although I made calls and inquired about stopping the sale, her choice between short sale or foreclosure was simply too late! The house was sold and by noon, the new owner knocked on her door to let her know he was the new owner.

Some people expect they will get a notice from the bank about the sale date. What they may not understand…a notice was given and in some cases maybe 12-months prior when the payments were no longer being made by the borrower. It is called an NOD (Notice of Default).

Once that notice is delivered, regardless if 12-months, 24- months later,  and a homeowner has been able to slide under the radar without making payments, the house can be auctioned out from under the current owner. At that point, the homeowner is basically ejected from the home.

Difficult choices need to be made. Do your homework. Consult with professionals, licensed and in good-standing. Check licenses, check expiration dates and google these individuals before hiring them.

I have a great list of professionals to help distressed homeowners make these difficult decisions between short sale or foreclosure. Just send me an email and I will happily forward you names. It is advisable to speak with a Real Estate Attorney, Tax Attorney, and/or CPA. Making the wrong decision regarding short sale or foreclosure could follow you for several years.

How to start my Pleasanton short sale process is a common question these days. With the many different banks involved and the government programs available, it can be a bit overwhelming. Before thinking of short selling your Pleasanton property or any other property,  you most likely have been in touch with your lender already. Here is a quick rundown of the process:

• Contact your lender and let them know you are having financial difficulties.
• Go to their website as instructed by their customer service representative you speak with and print the necessary forms.  Don’t be shy about asking your lender for help completing the forms, they are now more interested in allowing sellers to short sale than they were even a year ago.

• Be diligent and timely; if the required list of documents is a list of 10 items, SEND ALL 10 ITEMS! It will slow the process if you send in partial documentation and then find a week later that they are still waiting for the other items to start your loan modification application. Remember, they won’t call you to say they are missing paperwork. You will likely get a letter in the mail, but again, that wastes time.

• Follow-up with the modification process at least 2 times per week! This is crucial. The banks aren’t reaching out to consumers. They too are overwhelmed with the amount of files they are trying to process. 

IF you get a denial for your modification, you really only have 2 choices. Before you make your choice, be sure you are informed. Seek the advice of an attorney and CPA. Yes, this will cost a bit of money, but you need to know if you will have tax consequences on the forgiveness amount; peace of mind is important.

If you qualify for the HAFA program to short sell your Pleasanton property, you will get $3000 at the close of escrow to assist with relocation costs and you will received debt forgiveness as outlined in your Short Sale Approval Letter. In this case, you could feel confident that you know what the future holds.Some lenders such as Citibank Mortgage for one, are offering substantial incentives to sellers to Short Sell their properties. Wachovia (for World Savings originated loans) and Chase are also offering financial incentive programs to encourage clients to short sell as well. These lenders are encouraging Realtors to make consumers aware of the incentive programs. Just this week, I saw a Short Sale Approval Letter giving $30,000 to the seller at the close of escrow! This was a loan that had been originated with WAMU, a lender that was purchased by Chase. That’s quite an incentive! For now, most of these incentive programs expire at the end of 2011.

If you need the name of a good Real Estate attorney, you can call Ellen Rosenbueth, Attorney in San Ramon. She is a very good and will be able to answer all of your legal questions. If you don’t have a CPA you feel confident with, let me know or ask the attorney for a referral.

This post was originated at http://activerain.com/blogs/rhondafee

The short sale process is ever-changing; literally what is acceptable procedure this month may be a thing of the past next month. Here is a list of what I have encountered over and over again. This is the only guarantee I can give you regarding your short sale.

• The lender will claim they’ve not received a fax even when I have fax confirmations sheets showing it was sent.
• Once they do receive a fax, it takes 48-hrs to ‘upload’ to their system.
• Since it takes them 48-hrs to upload to their system, by the time they “lose” it twice, we’ve lost a week of time.
• Every person you or I talk to up and until we have a negotiator assigned to the file is “reading off a script”. They are uneducated ‘phone representatives’ hired to divert us from pestering them. This is my personal opinion, not a fact.
• Every time we call, up and until we are assigned a negotiator, we will never talk to the same person twice. There are hundreds of ‘phone representatives’ located in different states. We can ask the same question of 3 different phone representatives and get 3 different answers. Yes, they have a script, but each individual can throw their own twist on what they believe the script means.
• Once a foreclosure date is set, they will NOT allow us, you or anyone else to postpone the date unless they have an offer in hand that they deem acceptable and MUST be at least 7-days prior to the sale date.
• Once we have a negotiator assigned it can still be an additional 30-days before we have concrete information from them.
• Expect the unexpected.  Iwork so diligently on my clients’ short sale and sometimes when it makes all the sense in the world for them to work with us to complete the short sale, they will move forward with the foreclosure.
• There is nothing I can say with exact confidence that will put your mind at rest other than my promise that I make your transaction just as important to me as it is to you. There are no regulations in place that I’ve found to be consistent and the lender can choose their path at any given time without regard for your feelings.

 All of the above are my own personal experience with many different lenders and should not be considered fact across the board with regard to all short sale lenders. There are some outstanding lenders, such as HSBC and Wells Fargo, but for the most part, these are the exception to the rule.

You may wonder why many Realtors® do not do short sales. They are so much work on the part of the Realtor and there is no assurance of being paid since the lender can foreclose instead of short selling.

About the Author: Rhonda Fee is a licensed Realtor, ABR, e-Pro serving the Tri-Valley and beyond. For more information about Rhonda, please visit her website: www.rhondafee.com

According to an article recently posted by Andrew Taylor (AP), there is good news about the extension of the First Time Home Buyers Federal Tax Credit. I’m looking forward to more clarity regarding the exact qualifications. I interpret this to refer to clients already in contract by the cut-off date of April 30, 2010, having an extended period of time (September 30, 2010) to close escrow. That is great news for those who have been in contract for months purchasing a short sale property! Comments are welcomed; more news to come.

As both a Pleasanton Realtor and resident of Shadow Cliff homes, here is an update of what is happining in my neighborhood. At this same time period last year, January – April we did not have even one sold property! In my opinion, 2009 was a very good year considering 2008! This update shows that the market has most definitely improved.

Shadow Cliff continues to be a great place to live. If you’d like further details about this report, please don’t hesitate to ask.

Jan – April 2010

Many Real Estate owners in Pleasanton, CA and everywhere in the country are facing difficult decisions regarding what to do with their mortgages.  Some of the more common reasons people are finding themselves in these stressful situations are:

1.  They were talked into financing 100% of their mortgage due to the “thinking” that within a few years, the market value of their property would increase, thus they could then refinance because they would have instant equity.

2.  The type of loan the borrower got to purchase or refinance the loan has met it’s short “intro rate” term and has now adjusted to a rate the borrower cannot afford.

3.  Someone refinanced their home back when “No Doc Loans” were available for, let’s say for the sake of example, a 5-year term. Now the term is up, there is no longer the “No Doc” option and they are stuck without a way to remain in their home.

And I’m sure the list goes on as to the reasons why many find themselves in this situation. The one thing to know is that You Are Not Alone!!

What can you do if you find yourself wondering how to move forward?

First, (A) Act upon your situation. Don’t sit around hoping it will get better, burying your head in the sand. That won’t help. You can get through this; many people have gone through it successfully and are beginning the process right now.

Second (B) Believe…find a professional you believe you can trust. ASK for references from their past clients. Make your professional prove to you they know what they are doing. If you hire someone to guide you that doesn’t truly know how to get through a short sale, you’re going to be in deep trouble.

Third, (C) Cooperate. Cooperating with your Real Estate professional makes ALL the difference. How can we do our job if you are not providing the information the bank requires? The process is what it is. And what is that you might ask? It is tedious, time consuming, monotonous, wearisome, and the list goes on. Your professional knows exactly what to expect and how to get through it. They should set your expectation right up front as to the path to a successful end.  This is not a short process and you should expect it to take at least 4-months to a successful close. Once an offer is received and sent to the bank, this process alone can take up to 90-days to get an approval. Once the approval is completed, let your 30-day escrow begin!  That’s the less complicated part.