Updates from August, 2012

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  • Short Sales Surging

    1:12 pm on August 2, 2012 | Comments:0
    Tags: , ,   Filed under: Agent information, Consumer news and advice, economy, Foreclosure, mortgage, Seller Info, Short Sale, Short sales, Statistics, The Housing Market

    by The KCM Crew on August 2, 2012

    The Office of the Comptroller of the Currency released their First Quarter 2012 Mortgage Metrics Report recently. In the report, they covered the success the banking industry is having in each of several categories regarding the current housing crisis. They found:

    Loan modifications 

    These are “actions that contractually change the terms of mortgages with respect to interest rates, maturity, principal, or other terms of the loan.”

    Down 36.7% from last year.

    Completed foreclosures 

    Where “ownership of properties transferred to servicers or investors. The ultimate result is the loss of borrowers’ homes because of nonpayment.”

    Up 2.7% from last year.

    Newly initiated foreclosures 

    “Mortgages for which the servicers initiate formal foreclosure proceedings during the month. Many newly initiated foreclosures do not result in the loss of borrowers’ homes because servicers simultaneously pursue other loss mitigation actions, and borrowers may act to return their mortgages to current and performing status.”

    Down 8.1% from last year.

    Short sales 

    “Sales of the mortgaged properties at prices that net less than the total amount due on the mortgages. Servicers and borrowers negotiate repayment programs, forbearance, or forgiveness for any remaining deficiency on the debt. Short sales typically have a less adverse impact than foreclosures on borrowers’ credit records.”

    Up 19.7% from last year.

    The only category up significantly is short sales. And the rate of increase in short sales is accelerating.

    http://www.kcmblog.com/2012/08/02/short-sales-picking-up-steam-2/

     
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  • New Rules Aim to Speed up Short Sales

    9:49 am on April 26, 2012 | Comments:0
    Tags: , , ,   Filed under: Buyer Info, Consumer news and advice, Seller Info, Short sales

    (MCT)—The short sale process could get a lot quicker starting this summer under new rules that will require lenders to respond to offers within a month.

    Fannie Mae and Freddie Mac, the nation’s two largest mortgage backers, will implement the guidelines on June 15. The changes require mortgage servicers to make a decision within 30 days of receiving a short sale offer. They also must consider requests for pre-approved short sales within that same timeframe.

    If the lender needs more than 30 days, it must give borrowers weekly status updates and a decision within 60 days of the initial application. (More …)

     
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  • Do Appraisers Use Distressed Properties as Comparables?

    5:14 pm on February 8, 2012 | Comments:0
    Tags: , , , , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, Home owner information, pricing, Property Appraisal, Seller Info, Short Sale, Short sales

     

    Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

    “Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

    On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

    “An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
    And they explained the possible differences between short sales and foreclosures:

    “A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

    A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

    Bottom Line

    Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.

    http://www.kcmblog.com/2012/02/07/do-appraisers-use-distressed-properties-as-comparables/

     
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  • You May Owe Federal Income Taxes in 2013 if you have a Short Sale, Foreclosure

    12:13 pm on January 12, 2012 | Comments:0
      Filed under: Foreclosure, Short sales, Tax

    In Tuesday’s Sarasota Sales Meeting & Caravan, Branch Manager Darla Furst mentioned the following article about Short Sales and Foreclosure Tax Implications for 2012 and beyond. It’s a very good article to read and study.  With any financial transaction like this, there are pros and cons – and it’s important to consult all of the right experts such as a tax accountant and/or attorney.  Rushing into a decision to short sell or foreclose shouldn’t be done based on articles like these, but instead on sound advice from the right experts.

    WASHINGTON – Jan. 9, 2012 – You may owe federal income taxes in 2013 if you have a short sale, foreclosure after this year. Now is the time to make the hard decision: Are you going to walk away from your underwater home?

    Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.

    But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes.

    So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section.

    Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before Dec. 31. (More …)

     
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  • 5 Reasons You Should Consider Selling Now

    12:06 pm on May 10, 2011 | Comments:0
    Tags: , , , , ,   Filed under: Buyer Info, Consumer news and advice, Foreclosure, mortgage, pricing, Short sales

    by The KCM Crew on May 10, 2011

    If you plan on moving anytime in 2011, you should strongly consider selling your house now rather than waiting. Here are five reasons why:

    1.) This is when your house will get the most exposure 

    The spring, and particularly the month of May, is when most buyers enter the real estate market. This surge of buyers dramatically increases the exposure for your house . The best chance of getting quality offers (perhaps even multiple offers) is RIGHT NOW! (More …)

     
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