The Seminar for Upside Down Homeowners Sat March 10 at 10am @ The Del Mar Hilton

Matt Battiata & The Battiata Real Estate Group will hold The Seminar for Upside Down Homeowners Saturday March 10 at 10am at The Del Mar Hilton in Del Mar, CA. This will be the 9th seminar for upside down homeowners that the Battiata Real Estate Group has held in the past year.

“There is still a tremendous amount of misinformation out there with regard to options for upside down homeowners,” said Matt Battiata, Broker & CEO of The Battiata Real Estate Group, “and with almost 50% of San Diego homeowners upside down, and The Mortgage Tax Debt Forgiveness Relief Act expiring at the end of this year, there is a huge need for reliable, accurate information.”

Attendees will learn all of their options in dealing with an upside down home, including the various government and private loan modification programs available, short refinances, short sales, deed in lieu of foreclosure and foreclosure as well as the legal, financial and credit implications of each.

The seminar is free, but space is limited and past seminars have sold out. To register call 760-930-9898 or click here.

Making Home Affordable Options

The Obama administration’s Making Home Affordable (MHA) program includes a myriad of different programs for upside down homeowners. Here is a summary of the different programs available, all of which we cover in our Seminar for Upside Down Homeowners (next seminar Saturday March 10, 2012 at 10 am @ Del Mar Hilton):

Home Affordable Modification Program SM (HAMPSM)
Principal Reduction Alternative SM (PRA)
Second Lien Modification Program (2MP)
FHA Home Affordable Modification Program (FHA-HAMP)
USDA’s Special Loan Servicing
Veteran’s Affairs Home Affordable Modification (VA-HAMP)
Home Affordable Foreclosure Alternatives Program (HAFA)
Second Lien Modification Program for Federal Housing Administration Loans (FHA-2LP)
Home Affordable Modification Program for Rural Development Loans (RD-HAMP)
Home Affordable Refinance Program (HARP)
FHA Refinance for Borrowers with Negative Equity (FHA Short Refinance)
Home Affordable Unemployment Program (UP)
Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF)

To find out if you will likely qualify for any of these programs, call Matt Battiata at 760-930-9898 or register for our upcoming Seminar for Upside Down Homeowners by clicking here.

Shadow Inventory Update: 7.5+ million Homes

Shadow inventory in the United States is currently estimated at over 7,500,000 homes and growing.

Consider the following:

Banks currently own over 800,000 REO’s (foreclosures) that they have not yet put on the market, and are simply sitting on. They cannot yet afford to take the losses on these homes, so they are letting them sit vacant, accumulating fines, property taxes, back HOA dues etc.

There are 6,500,000 mortgages currently in default in the United States.

What is the cure rate of these mortgages (the likelihood that they will be brought current as opposed to going to foreclosure or short sale)?

30 days late: 29% Cure Rate (in other words, 71% will go to foreclosure or short sale)
60 days late: 5% Cure Rate
90 days late: 0% Cure Rate

While these are national numbers, these default properties are heavily concentrated in the hardest hit states of Florida, Nevada, Arizona and California.

Chase Bank pays out $30K Short Sale Incentive

Recently, you may have read about major banks paying out thousands or even tens of thousands of dollars to incentivize upside down homeowners to do short sales. News reports over the past few months have detailed stories about JP Morgan Chase, Bank of America, Wells Fargo and other lenders paying out huge cash payments to homeowners to encourage them to do short sales as opposed to walking away and forcing the banks to foreclose.

Well, I am here to report that I now have first hand knowledge of this happening.

We just closed a short sale with a sales price of $420,000 in which the lender, JP Morgan Chase, paid the seller a $30,000 incentive to close escrow.

As lenders continue to see the benefits of short sales vs. foreclosure, we expect stories like this to become more and more common.

Click here to read the approval

The Impact of a Short Sale on your Credit Report

There are 2 ways that a short sale impacts your credit.

The first is the actual short sale, which is reported on your credit as “debt settled for less than the amount owed.” This should not impact your credit until the short sale closes escrow.

The second is the missed payments, assuming that you stop making your payments. Contrary to popular opinion (even among realtors), it is not necessary to stop making your payments when you do a short sale. With that said, most people do stop making their payments, either because they cannot afford it, or because they make a decision to stop putting good money after bad. If you stop making your payments, this will have an impact on your credit almost immediately.

Depending on how good your credit is before you start the short sale process, and depending on how established your credit is, the short sale and the missed payments will have varying impacts on your credit. The better your credit is, and the more established it is, the less impact the short sale and missed payments will have on your credit. And vice versa.

The bottom line is that the impact of both the short sale and the missed payments varies for everyone, depending on your credit profile before the short sale.

I have seen a 50 year old homeowner, with very established credit and an 820 credit score, do a short sale, miss 7 months of payments, and end up with a 750 credit score. I have also seen a 23 year old with a 660 credit score miss 2 payments and see their score drop down to the high 500′s.

Again, it varies for everyone, depending on how good your score is and how established your credit is (in other words, how many years you have built your good credit up).

If you continue to make your payments during a short sale, you will minimize the impact of the short sale on your credit by about 50%, as you will not take any hit from missed payments.

WIth that said, industry experts view any impact on your credit from a short sale or missed payments as a relatively temporary hit, as it is possible to quickly repair your credit after the short sale has closed escrow.

For our clients who take steps to repair their credit, we see them buying within 12-24 months after a short sale, and in some cases less.

Ask your Battiata Real Estate Group agent for more information on our credit repair program.

Battiata Real Estate to hold series of 5 Short Sale Seminars Nov 15-19

November 7, 2011 – With almost 50% of San Diego homes under water, and an increasing willingness on the part of lenders to work with upside down homeowners to avoid foreclosure, more and more San Diego homeowners are seeking to educate themselves on their options in dealing with an upside down home.

Matt Battiata and The Battiata Real Estate Group will host their “Seminar for Upside Down Homeowners” at 5 convenient San Diego County locations Tuesday November 15 through Saturday November 19.

The dates, times and locations are as follows:

Tuesday Nov 15 Carlsbad: Carlsbad Resort by the Sea @ 6pm
Wednesday Nov 16 Escondido: California Center for the Arts @ 6pm
Thursday Nov 17 Mission Valley: Courtyard Marriott Mission Valley@ 6pm
Friday Nov 18 Chula Vista: Chula Vista Comfort Inn 632 E St @ 6pm
Saturday Nov 19 Del Mar: Del Mar Hilton @ 12 Noon

“This seminar is a great opportunity for any upside down homeowner who wants to educate themselves on their options, whether a loan modification, deed in lieu of foreclosure, FHA short refinance, bankruptcy / lien stripping or a short sale,” said Matt Battiata, Broker & CEO of the Battiata Real Estate Group.

“The seminar is 100% informational – it’s purpose is not to steer people in any particular direction – it’s simply a forum for homeowners to learn about and discuss their options so they can make an informed decision.

The Battiata Real Estate Group has held “The Seminar for Upside Down Homeowners” twice in 2011.

“Our first two seminars were so well received, and tapped such a huge demand, that we have been deluged with requests to do it again,” said Battiata.

The seminars are free but are expected to be full. You must register to attend by calling 760- 930-9898 or register online at http://battiata.com/short-sale-san-diego/seminar-for-upside-down-homeowners/

Bank of America Short Sale Policy Change re Foreclosure Postponements

Bank of America’s Loss Mitigation Department told us today that, as a matter of policy, they will no longer postpone foreclosure sale dates on properties that are 18 months or more in arrears.

Bank of America said they will consider postponements if there is an offer in review, but only on a case by case basis.

In general, it has been our experience that we are able to get most Bank of America foreclosure sale dates postponed as long as we are actively engaged in the short sale process, so while this is not surprising, the fact that they have a policy in place regarding this is significant.

The lesson here, with regard to Bank of America as well as any and all other lenders, is don’t let yourself get significantly behind in payments before starting the short sale process.

Or to put it in a different way, don’t wait until you are in the 11th hour of the foreclosure process to start to explore your options – be proactive and find out about your options early.

In other words, once you find out that your loan modification is not going to get approved, or will not be significant enough to make staying in your home possible, or you decide to stop making your payments, start the short sale process.

It is true that lenders do not want to foreclose if they can avoid it – but if you get far enough along in the foreclosure process, you are playing with fire, and lenders will foreclose.

Mortgage Tax Debt Forgiveness Relief Act to Expire in 2012

The clock is ticking for San Diego homeowners who want to short sale their home and avoid getting hit with a huge tax bill from the IRS and California Franchise Tax Board.

The Mortgage Tax Debt Forgiveness Relief Act, and its California state income tax counterpart, SB401, which exclude most homeowners from owing taxes on the debt forgiveness of a short sale, expire at the end of 2012, which means most homeowners’ whose short sales close after that date will owe income taxes on the amount their lender forgives in the short sale.

“We expect to see a deluge of short sales over the next 14 months in San Diego County,” said Matt Battiata of The Battiata Real Estate Group, ” as homeowners race to complete their short sales prior to the expiration of these tax exclusion bills.”

“Most short sales close in 4-6 months,” said Battiata, “but in some cases they can take a year or longer, so many people are getting started sooner rather than later just to be safe.”

San Diego Foreclosure filings, inventories & outcomes 2011 on Battiata.com

06073 – Foreclosure Filings

06073 – Foreclosure Outcomes

06073 – Foreclosure Inventories

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Battiata Real Estate Group “Seminar for Upside Down Homeowners” Saturday Oct 1 at 12 noon at The Del Mar Hilton

The Battiata Real Estate Group “Seminar for Upside Down Homeowners” will be held Saturday October 1 at 12 noon at the Del Mar Hilton.

The format for the seminar will be an educational forum for homeowners who are upside down on their homes to learn about their options.  Topics will include short sales, loan modification, bankruptcy and lien stripping, as well as deed in lieu of foreclosure and foreclosure, as well as the credit and tax implications of each.

“The focus of this seminar is to give people accurate information so they can make the best decision for their financial future,” said Matt Battiata of The Battiata Real Estate Group.

“There is so much misinformation out there on the web and even among so called experts with regard to loan modifications and short sales, that we really felt there was a need to educate homeowners,” said Battiata.

This is the second “Seminar for Upside Down Homeowners” that The Battiata Real Estate Group has held – the last one on July 30 was filled to capacity.

The Battiata Real Estate Group is the market leader in short sales in San Diego County.

To register, go to www.Battiata.com or call 1-800-980-0628

July 2011 North San Diego County Real Estate Market Analysis

This is an interesting July 2011 market report for North San Diego County put together by HomeDex for the North San Diego Association of Realtors.  It shows median prices for single family detached and attached homes, our affordability index as well as many other indicators, and whether they are trending up or down.  The median price of a single family detached home in North San Diego County is now $450,000. Click here for the full report.

Battiata Real Estate Seminar for Upside Down Homeowners Oct 1 at Del Mar Hilton

SAN DIEGO, CA — With almost 50% of San Diego homes under water, and an increasing willingness on the part of lenders to work with upside down homeowners to avoid foreclosure, more and more San Diego homeowners are seeking to educate themselves on their options in dealing with an upside down home.

Matt Battiata and The Battiata Real Estate Group will host a free “Seminar for Upside Down Homeowners,” Saturday, October 1, 2011 at 12 noon at the Del Mar Hilton.

“This seminar is a great opportunity for any upside down homeowner who wants to educate themselves on their options, whether a loan modification, deed in lieu of foreclosure, FHA short refinance, bankruptcy / lien stripping or a short sale,” said Matt Battiata, Broker & CEO of the Battiata Real Estate Group.

“The seminar is 100% informational — its purpose is not to steer people in any particular direction — it’s simply a forum for homeowners to learn about and discuss their options so they can make an informed decision.”

In addition, attendees will learn little known secrets on how to avoid potential tax implications & preserve their credit when negotiating with their lenders.

The Battiata Real Estate Group put on their first Seminar for Upside Down Homeowners in July 2011.

“Our first seminar was so well received, and tapped such a huge demand, that we were deluged with requests to do it again,” said Battiata.

The seminar will be held Saturday, October 1, 2011 at noon at The Del Mar Hilton. The seminar is free but is expected to be full. You must register to attend by calling 760- 930-9898 or register online at http://battiata.com/short-sale-san-diego/seminar-for-upside-down-homeowners/

About The Battiata Real Estate Group:

The Battiata Real Estate Group is the market leader in the marketing, sale and negotiation of short sale properties in San Diego County.

Matt Battiata has traveled to Capitol Hill in Washington, DC four times in the past 3 years to meet with House & Senate leaders regarding the real estate crisis, is regularly interviewed as a real estate expert in both local and national news, and has negotiated several hundred distress sales in just the past few years alone.

The Battiata Real Estate Group can be found on the web at http://battiata.com/

RSVP List for 2011 Seminar for Upside Down Homeowners Building Quickly

The RSVP list for the upcoming Seminar for Upside Down Homeowners, which will be help Saturday, July 30 at 12 noon at the Del Mar Hilton, is building quickly.

The seminar, which is free to and open to the public (although you must pre register through www.Battiata.com), will present upside down homeowners with all of their options in avoiding foreclosure, including bankruptcy, lien stripping, short sale, loan modification, and foreclosure, and the tax and credit implications of each.

Experts will speak on all of these topics and more, and then open the floor to questions.

The seminar will be held from 12-2 this Saturday July 30 at The Del Mar Hilton.  To register go to www.Battiata.com or call 760 930 9898.

CA SB 458 Prohibits 2nd Lienholders from Pursuing Deficiencies after Short Sales

Gov. Jerry Brown signed the much heralded SB 458 into law today, July 15, 2011.

SB 458 extends the protections of SB 931 (passed in 2010), and ensures that any lenders that agree to a short sale must accept the agreed upon short sale proceeds as payment in full for the outstanding balance of all loans.

SB 931, which was passed in 2010, ruled that 1st lien holders could not pursue deficiencies in California, but did not apply to 2nd or junior liens.

SB 458 extends this protection to 2nd lien holders as well.

It remains to be seen how lenders will react to this legislation, but my guess is that they will simply negotiate that much harder to get whatever money they can during the short sale, in light of the fact that they cannot pursue after the short sale has closed escrow.

Bottom line, short sale sellers will still want to make sure they have an experienced broker negotiating their short sale in order to avoid having to bring in funds at close of escrow or sign a promissory note.

Upcoming: Seminar for Upside Down Homeowners July 30 2011

Matt Battiata & The Battiata Real Estate Group will host The Seminar for Upside Down Homeowners, Saturday July 30, 2011 at the Del Mar Hilton in Del Mar, CA.  The purpose of the seminar will be to educate upside down homeowners on their options, including Short Sales, Loan Modification, Foreclosure, Chapter 7 & 13 Bankruptcy, Lien Stripping (the discharge of the 2nd loan on a property) and more.

Experts will outline the pros and cons of each option, including the credit impact and the tax implications.

For more information and/or to RSVP for the event, call 760 930 9898 or email to info@battiata.com.

Short Sale Update: Beware of Lenders Trying to Change Non-Recourse Loans into Recourse Loans in Short Sale Approval Verbiage

Short Sale Sellers Beware:  We have seen some investors recently attempting to change the terms of a loan within the short sale approval letter, specifically changing a non-recourse loan into a recourse loan.

The drill goes like this:  the bank approves the short sale on a non recourse loan and then sends out an approval letter stating the short sale is approved etc but adds in the following curious verbiage in the approval:  ”you are still responsible for the deficiency balance remaining on the loan.”  The seller signs it, thinking this is just boilerplate bank verbiage that does not apply to them because they have a non recourse loan.

In our case, our seller refused to sign the letter, the bank, after bluffing repeatedly that they would not remove the verbiage and would cancel the short sale, did in fact remove the verbiage, and the short sale closed escrow with the seller safe from any further recourse from the bank.

The lesson:  Read your short sale approval carefully before you sign it!

New HAFA Guidelines Effective Feb. 1, 2011

The Obama Administration’s HAFA short sale program has been in effect since April 5, 2010 and was created in an attempt to encourage lenders to do short sales and prevent homes from going to foreclosure.

Since its inception, however, only 661 HAFA short sales have been completed nationwide – a fraction of the number the Treasury Department and the Obama Administration had hoped for.

Effective February 1, 2011, the federal HAFA short sale guidelines will be amended in an effort to include more borrowers in the HAFA program and therefore reduce the number of homes in the United States that will go to foreclosure.

HAFA or Home Affordable Foreclosure Alternatives program is a joint government & lender program which allocates both a $3,000 incentive for borrowers who complete a successful short sale, as well as up to $6,000 to go to the 2nd lien holder in the short sale.  It also specifies that the 2nd lender will not pursue a deficiency against the borrower.

The primary change in the HAFA program is the elimination of the debt to income hardship requirement for borrowers.  Previously, in order to qualify for a HAFA short sale, the mortgage payment on the first mortgage had to exceed 31% of the seller’s gross monthly income.

This financial hardship requirement has now been removed, so sellers who wish to do a HAFA short sale will no longer need to meet any arbitrary income or financial hardship ratio, which should dramatically broaden the spectrum of borrowers who will qualify for the HAFA short sale program.

View from the Trenches: 2011 San Diego Real Estate Market Forecast

Every year around this time, I get a host of questions from clients, reporters, economists, neighbors etc. about the direction the San Diego Real Estate Market will take over the next 12 months.

National publications publish articles with predictions about the national real estate market, but as Gary Keller once said, talking about the national real estate market is like talking about the average temperature in the United States.  It doesn’t mean a thing to the person in Minot, ND where it’s -20F, or Death Valley, where its 110F.   Real estate, like the weather, is local.  National averages mean very little.

The good news is that if you know a particular market (i.e. San Diego County), the real estate market is very predictable – significantly more so than almost any other financial market, be it the stock market, the currency or bond market, the market for wine futures – you name it.  As I have often said, if you know a particular real estate market, and you know what to look for, you can set your watch by it.

I said this in January of 2005 when I predicted the San Diego market would drop by 40% over the next several years; I said this in January of 2009 & 2010, when I predicted both years would be the “Year of the Short Sale” and I say it now, in January of 2011.

As someone who works in the trenches with buyers, sellers, agents, lenders, appraisers, mortgage brokers, short sale negotiators, and foreclosure asset managers (just to name a few), the following is my take on what 2011 holds in store for the San Diego real estate market.

Approx. 50% of San Diego Mortgages Upside Down

In December, CoreLogic reported that 30% of San Diego mortgage holders were upside down on their homes, based on home values determined by the San Diego County Assessor’s Office.

However, because this report is based on the County Assessors assessed value of real estate, which is typically high relative to actual prices in a declining market, I believe the actual percentage of upside down mortgage holders in San Diego County is actually closer to 50%.

This is without a doubt the biggest statistical factor impacting the San Diego market.

Loan Modification, Short Sale, Foreclosure – in that order

Due to the increasing lender liability associated with foreclosures, government pressure to give homeowners options to avoid foreclosure and the realization by lenders themselves that they lose less money and incur less damage to their public image through short sales and loan modifications, foreclosures will continue to be lenders’ last resort in dealing with homeowners in default.  This does not mean however, that they will not occur in earnest.

Foreclosure filings and foreclosure sales will likely increase in 2011 over 2010 & 2009 levels, but the current trend is also one of increased foreclosure sale postponements, as lenders continue to encourage borrowers to pursue loan modifications and short sales as alternatives to foreclosure.

In reality, however, since lenders have shown virtually zero willingness to do meaningful loan modifications, the most likely alternative to foreclosure will continue to be short sales, making 2011 once again, the Year of the Short Sale in San Diego County.

In the event that the short sale fails, then and only then will lenders exercise their last resort: foreclosing on the property and either taking it back to resell as an REO or selling it immediately at the courthouse steps.

Foreclosures will be up from the previous 2 years, but so will short sales, as homeowners become more educated about their options and lenders push short sales as the preferred option for borrowers in default.

The Bottom line

So, are we at the bottom of our down cycle in San Diego real estate?  In general, no, though in certain price ranges we are certainly getting close.  Still, many buyers are deciding to pull the trigger anyway and buy due to extremely low interest rates that are finally starting to go up.

The central issue is that we have a tremendous number of people in San Diego County who cannot afford the homes they are in and do not want them due to negative equity.  The only solution for these homeowners, barring the hoped for principle reductions and loan modifications that have thus far been simply a pipe dream for millions of Americans, is getting out of those homes, either via short sales or foreclosures.

While neither is good for the market, short sales are definitely the lesser evil for lenders, homeowners and the market and economy in general.

Bottom line, the sooner we can process these sales and get these homes on the market and sold, the sooner our economy and real estate market can recover.

And that may be the best news of all for 2011.

30% of San Diego mortgage holders underwater in 3Q

*Note* The following is an excellent article by Andrew Keatts of the San Diego Daily Transcript on the San Diego real estate market.   I believe the # of San Diego mortgage holders upside down is actually higher than this – likely as high as 50% – as the CoreLogic report is based on San Diego County Tax Assessor assessed values, which are typically high relative to actual market value.  In addition, the CoreLogic report referenced here mentions another 5% of San Diego homeowners who have less than 5% equity, which means that in the event they need to sell, they will be upside down based on selling costs of 6% to 7%.

By Andrew Keatts  - San Diego Daily Transcript – Dec 13 2010

Nearly a third of all mortgage holders in the San Diego area owed more than their home was worth during the year’s third quarter, according to a report released by CoreLogic.

Negative equity among all residential properties with a mortgage in the county has been on the decline for three consecutive quarters, echoing the national trend.

Commonly referred to as “underwater” or “upside down,” a property in negative equity is one in which the amount owed on the mortgage is greater than the current value.

There were 175,234, or 29.5 percent, of all properties with a mortgage in negative equity during the third quarter, down from 30.5 percent a quarter before and 32 percent in the year’s first quarter.

But most of those improvements in the negative-equity rate have come due to underwater homeowners being foreclosed, rather than by increases in home values pushing their heads above the surface.

The median price of homes sold through November of this year in the county is up roughly 8 percent over the year-ago period, according to the San Diego Association of Realtors (SDAR).

Through the third quarter, the S&P/Case-Shiller Home Price Indices found home values in the county to appreciate 5 percent over the same period a year ago.

For homeowners in mortgages originated at the height of the housing boom, those modest appreciations offer little relief.

“In the immediate and short-term, there won’t be the big price increases needed to offset negative equity,” said Robert Brown, professor of economics at California State University, San Marcos, who also compiles the Homedex, a monthly report on home sales in North County.

He points to a steady supply of distressed inventory, incremental gains in sales prices, and a mostly flat supply of total inventory as evidence.

Nationwide, 22.5 percent of all properties with a mortgage were in negative equity, down from 23 percent in the second quarter and 24 percent in the first.

“Time is the only cure,” said Mark Marquez, president of SDAR. “The trend is saying equity is increasing.”

CoreLogic (NYSE: CLGX) also measured homes in “near negative equity,” or those with less than 5 percent equity, finding 4.8 percent of all homes with mortgages in San Diego County on the brink of going upside down.

“I’m sticking with what I’ve been saying, that the bottom is probably late 2012,” said Matt Battiata, president of Battiata Real Estate Group. “This is the shadow inventory: people who can’t afford their homes. Banks continue to have no interest in helping people, which unfortunately means they need to get out, either by foreclosure or short sale, and that is going to take some time to happen.”

He says it’s possible that the process of transitioning distressed properties back to the market could temporarily increase the number of underwater homeowners.

As the 30 percent of properties are gradually repossessed or sold short, downward pressure would be put on area home values.

In the process, those near negative equity homeowners — and potentially others currently with minimal positive equity — would be pushed underwater.

“When you play out the logic, when those homes go on the market, that’s not going to cause prices to appreciate,” he reasoned. “It’ll do the opposite, and then you’ll have more homes upside down.”

Brown agreed that the market is far from normalcy.

“I don’t see that necessarily these homes are going to reach the inventory, but they’re at risk. And the margin is narrow. No question about it,” he said.

In addition to the possibility that home values might temporarily depreciate, any unexpected circumstance, like loss of employment, could thwart homeowners’ efforts to stay in their homes.

“I don’t think there’s anything on the positive side that would speak to rapidly increasing prices,” he said.

But, Brown said the general feeling that the economy is in a slow but real period of recovery will likely discourage people from walking away from their mortgage.

“The people who were going to have already done it,” he said. “Those steady but small quarterly declines suggest to me it isn’t going to be a significant flood of people.”

Marquez allowed that there probably wouldn’t be a historically normal number of traditional transactions for two to three more years, but says the market has absorbed the lengthy short sale timeline and the depressionary effect of distressed transactions on prices.

“Price appreciation under $500,000 will continue to see 3 percent to 6 percent,” he said. “Higher price points are a little more full of peaks and valleys, so they’re harder to comment on.”

CoreLogic uses its propriety Automated Valuation Model (AVM) to assess the value of homes, which it measures against the Mortgage Debt Outstanding (MDO) that it gathers through public record data.

Chase Bank Short Sale Update: Less than 29 Day Approval time with Full & Final Satisfaction of Debt

Battiata Real Estate Group Update:  We just negotiated an approval with a full and final satisfaction of the debt on a Chase loan in less than 29 days.

Chase Bank Loss Mitigation has typically been one of the slower lenders to deal with, however recently, thanks to a streamlined approach to the submission and negotiation of short sales on the part of our office, The Battiata Real Estate Group has seen our approval times drop and drop.

We are now seeing approvals with a full and final satisfactions of the debt come in within 60 days or less with most lenders.

More updates to come.

Short Sale? Make sure it includes a “Full & Final Satisfaction” of the Debt

At The Battiata Real Estate Group, after starting short sales in earnest in 2005 (and now 5 years & several hundred short sales later), our average time period to get short sales approved has dropped dramatically, and more importantly, our success rate at getting “full & final satisfactions” from lenders, where the seller walks away free and clear with no deficiency judgement, no money brought in to close the deal, no promissory note and with no threat of further recourse from the bank, has reached over 90%.

Let me make sure I am explaining this correctly, because it’s important.

A true short sale is where a seller gets out from under an upside down property, pays absolutely nothing to sell their home (no commissions, no closing costs, no seller contribution, no promissory note) and walks away from the property with a settled, forgiven debt, also known as a “full and final satisfaction” on the outstanding debt of their home.

These sellers walk away from the short sale of their home with no further worry about their lender pursuing them for the outstanding balance on their home – it is a done deal, and they walk away owing nothing.

If you are considering a short sale, be sure you do your homework and hire the best.  You typically only get one shot at a short sale – don’t squander it with an agent who is inexperienced at short sales or doesn’t have the knowledge, the integrity or the negotiating skills to achieve a full release for you from your lender.

Make sure you go with an agent who has a documented track record at not only closing short sales but negotiating full & final satisfactions on the debt.

SB 931 Signed into Law – Prohibits Deficiency Judgements on all 1st liens in CA

Governor Arnold Schwarzenegger signed SB 931 into law this past week, prohibiting lenders from pursuing deficiency judgements after short sales on all 1st liens in California, including “recourse” loans where the borrower has refinanced.

In California, once a seller has refinanced their mortgage, whether it is a cash out refinance or simply a refinance to a better interest rate, the loan becomes a recourse loan, meaning the bank can pursue the seller after the short sale for the deficiency, unless stated in writing that the debt is settled on the short sale approval.

Now, with the passage into law of SB 931, lenders are prohibited from pursuing sellers on all first mortgages in CA after a short sale.

Bank of America Halts All Foreclosures in US – Other Lenders likely to Follow Suit

CA SB 931 Passes Senate – Bans Deficiencies on 1st Liens after Short Sales

The California Senate has passed SB 931 unopposed.  SB 931 prohibits banks from pursuing deficiency judgements against sellers on 1st liens in California, regardless of whether the seller has refinanced or pulled cash out.

In California, once a seller has refinanced their mortgage, whether it is a cash out refinance or simply a refinance to a better interest rate, the loan becomes a “recourse loan”, meaning the bank can pursue the seller after the short sale for the deficiency, unless they state in writing that the debt is settled on the short sale approval.

SB 931 prevents banks from pursuing sellers on all first mortgages in CA.

The bill is now headed to Governor Schwarzenegger’s desk for his signature.

Luxury Property Short Sales & Strategic Defaults

The upper end, luxury real estate market in San Diego, Palm Desert & Orange County has finally taken a significant hit in property values. Prices in the upper end (here defined as properties that were worth at least $1,750,000 or more at the peak of the market), have dropped by as much as 50%, and in some cases more.

Properties that listed and sold in the mid to high $3,000,000′s a few years ago, are now selling in the low $2,000,000′s and even lower. As more and more of these sales close escrow, and the comps get lower and lower, more and more homeowners are questioning the wisdom and business sense of making large monthly payments on properties that they may not have equity in for years to come.

Thus arises the luxury or upper end short sale and strategic default.

$1,000,000+ short sales are truly a different animal than short sales in lower price ranges.

Many high dollar short sales involve “recourse loans” – loans which have been refinanced, and in many cases, where borrowers have pulled out substantial amounts of cash on 2nd’s or equity lines. This means that we need to negotiate a “full and final satisfaction” in order to prevent the seller from being pursued for the deficiency, or remaining balance, by their lender.

We have been extremely successful of late in negotiating high dollar short sales for our clients. A recent deal in the Rancho Santa Fe area resulted in Bank of America accepting a short payoff of $2,200,000 on a loan amount of over $3,200,000. The short sale was negotiated in less than 30 days and was negotiated without the lender requiring any cash contribution by the seller.

In this case, the sellers got out from under the debt of the property and paid absolutely nothing to sell their home.

We have done similar deals with Chase, Wells Fargo, Citi, IndyMac etc.

Every short sale, and especially every high dollar short sale, is unique and requires a unique strategy and approach. One size does not fit all.

In my experience, perhaps the biggest mistake any homeowner can make when considering a short sale is assuming that all agents are the same, and that any agent, (i.e. their neighborhood realtor), can effectively negotiate a short sale.

High dollar short sales are handled differently than lower priced short sales by the banks, and they require a different approach.

Unlike many realtors and attorneys, we do not subcontract out any of our short sale negotiations – we do it all in-house. We have negotiated several hundred short sales and have a documented 90+% success rate.

If you are considering doing a short sale on your home, and have a loan amount of $800,000 or more, do yourself a favor and call me. I am more than happy to answer any questions over the phone, and describe in detail the short sale process I have developed over the past 4-5 years for doing high dollar short sales.

There is no obligation when you call, and whether or not you list with me or not, I guarantee I will give you information that will make the call well worth your time.

I can be reached at 760 930 9898 or 760 390 3895 or via email at matt@battiata.com.