It’s a good summary of why HAFA IS NOT GOOD for homeowners versus what it is being touted to be to Real Estate Agents and the general public.

Another colleague, Ted Akers @ www.investorfundingsite.com says:

“it designed to get the homeowner out of the property and back in the banks hands faster. The homeowner is better off not opting-in to HAFA and pursuing standard short sale processing.”

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On April 4, 2010 the United States federal government began implementation of the “Home Affordable Foreclosure Alternatives” (HAFA) program. This was promoted by the Obama Administration as a way to encourage short sales. In reality, it will not be effective and it’s usually worse for a homeowner who is facing a signficant hardship when compared to a traditional short sale. As one sees below, it is more beneficial for the bank than for the homeowner. A few key reasons are:

1. Homeowners who likely were not making payments due to hardship must pay 31% of their gross income to participate in the program or agree to give their property to the bank by a ”deed in lieu” of foreclosure.

2. The bank determines the sales price. Neither the homeowner nor their broker have any control or influence over pricing.

3. The bank can force a deed in lieu if the property does not sell at IT’s price in 120 days, even if the property is not in foreclosure.

4. Even if the program was good, it covers very few loans: not Fannie Mae, Freddie Mac, FHA and VA loans.

5. It only affect a first mortgage/deed of trust. The homeowner is responsible for negotiation of their own junior liens (if any) for a maximum payment of $3,000 for ALL liens.

The homeowners’ benefit is a $1,500 incentive payment IF the sale closes. This presumably helps with moving costs.

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If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

This article was posted in a national real estate publication.

RISMEDIA, January 27, 2009-The national foreclosure moratorium imposed by Fannie Mae and Freddie Mac, major banks such as Citibank and Bank of America, and a host of state governments has created a “breather” for homeowners in default. By working with loan servicers, some homeowners will be able to modify their loan terms and stay in their homes. But many won’t.

Not all borrowers will qualify for modified loans. Lenders are keenly aware of this, as well as the fact that foreclosing on a home is an expensive proposition: It can cost a bank $30,000 to $50,000 to foreclose on a home, plus carrying costs that equate to 1.0% to 1.25% of the value of each home per month. There is little enthusiasm for increasing bank-owned (REO) inventory in markets already saturated with foreclosed homes and falling prices.

As an alternative, lenders have new enthusiasm to ramp up the volume of short sales.

Short sales, as most know, are when the lender allows a distressed property to be sold at a price lower than the homeowner’s mortgage indebtedness, with the difference forgiven. This relieves the homeowner of their ownership and debt burden without marring their credit report the way a foreclosure would. It also typically allows the new purchaser to buy into the neighborhood at a substantial discount . much more in line with the property’s true, current market value. In other words, short sales facilitate efficient clearing of the market.

Historically, short sales have not been very appealing to lenders. The short sale is a complex process that requires an agreement by all the lien holders to accept the lesser amount owed by the original borrower. The paperwork and number of players involved in short-sale transactions can easily overburden a servicer who is already dealing with hundreds of thousands of loan modifications, REO dispositions, etc.

But now with over four million new loans in default in this cycle and six million more expected in early 2009 due to coming interest-rate resets, lenders such as Citibank, Bank of America and Wells Fargo are fired up for short sales.

As they see it, if just 25% of current loans in default could be sold through short sales it would stave off one million foreclosures (good for homeowners) and replace one million nonperforming borrowers with one million performing borrowers (good for lenders).

The industry’s challenge to accomplish this is two-fold: Evaluating their portfolios to determine which homes are well suited for short sales, and processing the high volume of bulk sales.

So lenders are now assessing a distressed borrower’s situation early in the loan modification process, calculating the sensibility of modifying the loan versus offering the property in a short sale or letting it likely roll into foreclosure. In cases where short sales are the best route, lenders are proactively assigning loans in bulk to be put through the short-sale process. (This phenomenon is strangely new to homeowners; in the past it was incumbent on them and their agents to initiate the short-sale process, not the other way around).

The second part of the challenge is how to process the actual sales, considering legacy technology solutions weren’t built to handle either the volume or the complexity of today’s short-sale transactions.

DepotPoint’s TrackPoint, with a new short-sale module, is up to the task. TrackPoint is an online workflow platform that operates in a SaaS environment. The short-sale module can scale an outsourcer’s or an asset manager’s operation quickly to handle massive amounts of short-sale volume, reducing costs and elapsed time to complete transactions.

Already using TrackPoint featuring the new short-sale module is MMREM, Matt Martin Real Estate Management, which has facilitated more than 10,000 short sales as the nation’s largest facilitator of short sales.

“Short sales are often complex, time-consuming transactions,” said Matt Martin, President and CEO of MMREM. “In today’s high-volume environment, managing them can be even more cumbersome than usual. REO TrackPoint featuring the new short-sale module simplifies and streamlines the process. It’s the most comprehensive, efficient national online platform we’ve seen for managing and processing default properties.”

MMREM has increased its short salle through-put by more than 300% by using TrackPoint with the short-sale module.

Tom Gordon is Executive Vice President of Business Solutions for DepotPoint, Inc., which brings greater efficiencies and cost savings to mortgage lenders, loan servicers, foreclosure attorneys and REO asset management firms that use the company’s Web-based application suite, TrackPoint, to vertically process properties through foreclosure straight into REO management.

By Tom Gordon

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A Research Note by Barclays Capital, indicates that short sales have been boosted by mandatory and voluntary foreclosure prevention efforts that have prevented mortgages from entering REO status.  As federally-funded loan modifications made through the Home Affordable Modification Program (HAMP) grow and lenders are expected to hold off on foreclosure proceedings, the REO pipeline shrunk, according to BarCap researchers. The foreclosure prevention efforts have had the effect of “artificially” boosting short sales.  “The artificial constraints to foreclosure auctions have resulted in a reduction in REO stock,” BarCap said. “As a result, the net volume of REO liquidations has also dropped.

As short sales are not affected by moratoria, their rate held up and their overall share in distressed sales increased.  It has now risen more than 10 points from the lows to about 35% of overall liquidations. It remains to be seen if this increase will sustain itself once the large number of loans sitting in foreclosure are finally released into REO.”  BarCap researchers pointed to the difference in severity seen in foreclosure and short sale scenarios as one of the drivers behind servicers choosing short sales.

HOWEVER, most experts agree that there is a looming shadow inventory of REO’s yet to come and that foreclosure numbers are likely to stay high thru 2011 due to specific types of outstanding mortgages, specifically Option ARM’s which have a greater liklihood of having values underwater when they recast.  Information regarding the Barclays research was provided by Chris McLaughlin.

For low-cost Transactional Funding for Short Sale Back-to-Back closings visit Ted’s Transactional Funding website at: www.InvestorFundingSite.com Their fees are some of the lowest I’ve seen.

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And of course, if you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

kenny@tfmcpartners.com

P: 702-204-3945

Chat with Kenny @ TFMC

Courtesy of they guys @ http://www.thinkbigworksmall.com

“The IndyMac Bank Slap In The Face” - You won’t believe the sweetheart deal that the Indymac boys were given by the FDIC.

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1287086

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

Click here >Big Banks Accused of Short Sale Fraud

- courtesy of Jeremy Brandt

The title says it all…

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kindest Regards,

Kenny Wagner
The Foreclosure Mitigation Company

P: 702-204-3945

Chat with Kenny @ TFMC

If you find yourself in a position where you owe more than your home is worth and you need to sell, a short sale may be your best option. But don’t get taken for a long, stressful ride by a self proclaimed ‘expert’…

“What is a short sale?”

Simply put, a short sale is a real estate transaction where the homeowner owes their lender more than what their property is worth and they need to sell. In a short sale, the lender must approve and accept less than what they are owed as full payoff (this means they may settle for $400,000, even if you currently owe them $500,000…even if the loss is hundreds of thousands of dollars).

Are you facing a financial hardship that you know will decrease your income?

Are you getting behind on your mortgage and you’re not sure if you can catch up?

Or do you just need to sell quickly but your home is worth less now than when you bought it?

If you are facing any of the situations above, and you think a short sale might be your best option, then read on. If you’re still not sure and just want more info, then email us to request a free copy of our article “The 9 Alternatives When Facing Foreclosure”

Don’t worry. It’s not your fault…

You gotta remember, we’ve all had our ups and downs in life and a lot of other good people are also in the same tough spot as you. Life seems scary when you’re facing the reality of foreclosure and I know how you feel when you just don’t wanna answer the phone any more…

We all agree that we’re in the middle of a national mortgage crisis and that, in many cases, homeowners who have bought or refinanced in the last few years have been seriously abused by unethical lending practices!!

You bought your home and hoped (like we all did) that it would increase in value (and some folks were even promised it would!), but most likely the harsh reality is that now your home is worth less than when you bought it and the value is still declining sharply.

I’ve helped hundreds of homeowners in this position to get the help they deserve. I’ve also, helped train hundreds of real estate professionals both locally and across the nation to do the same for their clients.

It’s sad but true!

Did you know that nearly 90% of the homeowners nationwide who try to “short sale” their home will end up losing their home to foreclosure due to an uneducated or lazy agent?

Don’t allow this to happen to you!

I hate to say this about my fellow agents, but the majority of them that are “trying to help” have not been properly trained and sadly, they are misinformed as to how to even negotiate with lenders. Some even get so far as to submit your ’short sale packet’ and then just sit back and wait for a response! In the end, they simply don’t know how to help you and you will become one of those “90%” that were not helped.

“Short sales are not easy!”

…unless you seek the help of an expert agent with a proven track record. I have been personally trained by a former Chief Loss Mitigator who is a career loss mitigator and asset manager with 20 years in the business (he is ultimately the guy at the bank who accepts or declines short sales). Actually, I went so far as to make him my partner and train my entire office. We are now helping save even more folks from foreclosure.

We have successfully negotiated short sales for hundreds of families and as you can see from my recent approval letters below (I swap out some of my recent approvals every couple months, so you will notice these will have been from within the last 90 days), we actually get the banks to say YES to our short sales. Before you agree to have an agent help you sell your home, ask him/her to show you just one short sale approval within the last 6 months… I doubt they can.

The best part is, my business partner, has taken his tips and tricks from working INSIDE THE BANK and taught my team and I exactly how to ethically BEAT THE BANK… 93.2% of the time!

My one partner most recently worked for IndyMac Bank, a top ten lender, as the head of their HELOC loss mitigation division and the other for WAMU as a FVP of Operational Risk in the Mortgage Division.  Both of their insider knowledge and broad base of industry contacts allows us to get our approvals faster than any other agents in the states that we actively work in!  In fact, we are constantly solicited by agents nationwide to ‘help them’ get their short sales approved.

If you have any questions that will help you better understand how the short sale process works, please contact me directly.

See Below for a sample of successful results…approval letters for short sales.

If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company

1-702-204-3945 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com

To start off my Blog I thought I would provide you with a great post from a colleague of mine on “Tax Consequences of A Short Sale: Dealing with a 1099C”

I copied this from a colleague’s website Matthew Smith @ Short Sales Des Moines.
Matthew presented this so simply & clearly that I wanted to share it for your benefit.

Matthew Smith is a top notch short sale specialist in the Des Moines, IA market.

If you are in his market & need help or have any questions please contact him as he comes highly recommended.

Kenny

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If you are a homeowner going through a foreclosure of Short Sale, it is important that you become well versed on 1099C’s.

This will prevent 2 things:

1.) A Coronary on or before February 2, 2010 when you receive your 1099C.

and

2.) Having to pay taxes on monies that were ‘forgiven’ by your bank in the short sale or foreclosure

Let us first talk about exactly what is a 1099C .  A 1099C is a Cancellation of Indebtedness form that a lender is required to fill out when the forgive a debt greater than $600.  The lender is supposed so send these out to you before February 2 in the year following the discharge of the debt.

Not all cancelled debt is considered a taxable event such as the following off the IRS website:

• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• 
  
• Insolvency:  If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you.You are insolvent when your total debts are more than the fair market value of your total assets.Insolvency can be fairly complex to determine and the assistance of a tax professional is recommended if you believe you qualify for this exception.
• 
  
• Certain farm debts:If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.The rules applicable to farmers are complex and the assistance of a tax professional is recommended if you believe you qualify for this exception.
• 
  
• Non-recourse loans:A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral.That is, the lender cannot pursue you personally in case of default.  Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income.  However, it may result in other tax consequences.

If your lender does not issue you a 1099C and you have had debt forgiven or discharged in the prior year, you still are required to report this. If you follow the formula under Section 3 on the IRS site you can easily figure out the amount that was forgiven (you may need to call your lender to verify the amount of the payoff prior to the sale).

Here is the good news….

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012.
Up to $2 million of forgiven debt is eligible for this exclusion ($1
million if married filing separately). The exclusion does not apply if
the discharge is due to services performed for the lender or any other
reason not directly related to a decline in the home’s value
or the taxpayer’s financial condition.

More information, including detailed examples and qualifications can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.

So, if you are like me, you may be saying now, “Ok, thats fine and dandy, I understand I don’t have to pay the taxes
… but unpack this for me a bit, how do I actually go about doing this? What forms do I need, what do I fill in the blanks with?”

I’m glad we asked that question, so here it goes. You need to get yourself an IRS Form 982 and it looks something like this:

Now, if the only debt you are reporting forgiven that you are excluding is due to a foreclosure or short sale then you only need to complete lines 1e, 2 and 10b. What you do is go back to the 1099C that you received from your old lender and go to box 2 (see below), That number is what you will enter in box 2 and 10b of your form 982.

So, that is pretty much it. If you have further questions, check out the following sites:

The Mortgage Forgiveness Debt Relief Act FAQ

Publication 4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments with detailed examples

IRS New Release IR-2008-17

Tax Payer Advocate Service – 1-877-777-4778,

Home Foreclosure and Debt Cancellation (good for figuring out how to calculate your own 1099C income if bank fails to send you one)

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If you’d like to discuss your personal situation to learn what options are available to you, give me a call at 702-204-3945 or you can contact me via email kenny@tfmcpartners.com or by leaving a comment below.

Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company

1-702-204-3945 Direct
1-206-971-5033 Fax

kenny@tfmcpartners.com