For instance, I recently closed a short sale with Bank of America and depending on how I spin it, I can make completely sensationalize it or I can give you all the details and it paints a much different picture.

What do I mean?

Let’s take the above mentioned short sale and I’ll apply the same marketing spin a lot of these “short sale internet gurus do.”  Here we go:  “Another short sale successfully negotiated in 22 days!  Buyer and seller couldn’t be happier with outcome.  Give us a call and we’ll show you how we close our short sales in less than one-third the time of other real estate agents!”  Okay, please forgive the cheesy sales pitch, but I hope you get the point.  It sounds as if this is the rule not the exception when it’s not.

I did in fact get it done in 22 days from contract to close.  What I left out is we had a buyer’s agent and lender who were really on top of things and a buyer who had everything ready to go at the drop of a hat.  That made what some would call impossible, possible, and saved my sellers from foreclosure in the final hour.

What you don’t hear about is all the heavy lifting that was done before up to that point.  This required getting all the major players involved, including, Fannie Mae, the asset manager at Bank of America, and a representative from the PMI (private mortgage company) Radian, and my sellers so we could work through what seemed to be an imminent foreclosure; and three fallen contracts.

Sure, I’ve successfully completed a lot of short sales for my Boise, Idaho clients and there’s nothing more rewarding than seeing the burden lifted at the closing table when it’s all over.  Bottom line, if it sounds too good to be true, I can almost assure you it is.  Approach your selection of a short sale agent with caution.  Words like “guaranteed success” paired with short sales are not what you’re after.  You want an agent who understands short sales and knows what to do with everything goes sideways.

In a nutshell the rule bans all upfront fees for renegotiating mortgage terms and mandates some disclosures are made to consumers if a short sale is negotiated with a lender for Idaho homeowners or when advertising short sale experience.

Companies or real estate agents advertising help with short sales are now required to include the following:

 You might notice that it’s prominently displayed in the footer on every page of this website and on many others.  Does it change the way I do Idaho short sales?  Nope, I’ve never charged my short sale clients and upfront fee.  While some real estate agents resorted to practice, I abstained.   And while it’s only my opinion, I don’t see any reason to take money from a homeowner who’s already in a bad way.

So other than having a few more disclosures for my clients to sign, it is business as usual for me.  Some Realtors® may have to adjust their current practices to comply and I would caution you as I do all my clients to run the opposite direction of anyone charging upfront fees.

Despite the rule taking effect January 31, 2001, it still hasn’t stopped the scammers calling with to sell you on their “foreclosure rescue” wares.  It is in this regard that I offer this last little piece of advice.  Don’t get sucked into a scam by anyone calling and asking for an upfront fee.  Even if they claim to be an attorney, accountant, or guaranteed success (When’s the last time you actually got your money back from anyone offering a 100% money back guarantee?).  It’s funny how the ones that offer something like that are always the most difficult to get to stand behind their word.

A little common sense goes a long way and I’m all for my clients getting tax and legal advice, however, the attorney cold calling you from California is probably not your best bet.  What are some of the scams you’ve seen?  Let’s see if we can help some good people avoid a bad situation.

Sure you’ve probably read the horror stories about dealing with nasty lenders.  Agents gripe about them constantly on blogs and online forums.  You may have even tried contacting your lender about short sales or loan modifications and figured out first hand that they’re not always the most helpful.  But I can tell you from experience; it’s usually not your lender that kills short sales.

And what about short sale buyers?  Sure, it’s likely that buyers going after short sales without proper expectations and an understanding of the process aren’t likely to stick around long enough to get short sales closed.  However, an experienced agent should help to clear expectations, explain the process, and follow up with the listing agent regularly to check progress.  As a listing agent, we sometimes have to coach the buyer’s agent on keeping their buyers engaged.  Guess what, even though some buyers ultimately walk, it’s still not the top reason Idaho short sales don’t’ close.

So what is the top reason a short sales fail in Idaho?  Believe it or not, it’s the seller.  Now if that comes as a shock to you, please let me explain.  The contributing factors listed above can really wreak havoc on the outcome of short sales, however, if a seller truly committed to process, 9 times out of 10 we can overcome those obstacles.  So then, how can a seller avoid being top reason short sales fail?

Here are 3 good ideas for success:

Short sales can be the best possible outcome in most situations for sellers who can no longer afford to keep their homes.  Your lender prefers them to foreclosure and they’re likely to help you recover faster financially with less damage to your credit than a foreclosure or bankruptcy.

What are some of the biggest obstacles you face in a short sale?  Maybe we can help.

Okay, maybe the rhyming title doesn’t make it sound as serious as it is, but if you’re considering this approach to escaping your underwater mortgage in Idaho, you should think twice.  If you haven’t heard of the “buy and bail” approach, here’s the down and dirty: 

An Idaho homeowner has a mortgage on a home that far exceeds its value.  It doesn’t take long to realize the home they bought can be picked up at a huge discount in today’s market or, better yet, they can get an even bigger one.  So they go to a lender and take out a loan to purchase another home.  Once the purchase is complete, they let their first mortgage go into foreclosure.

This may sound like a simple idea; however, most lenders have cracked down on the practice.  Idaho homeowners trying to buy a second home have probably already figured out the number of hoops underwriters require you to go through to do this.  Fannie Mae has seen a huge increase in the number of homeowners who fail to pay their mortgage soon after purchasing a second property.  FHA (Federal Housing Administration) has now implemented changes to guidelines that don’t allow for rental income to count toward qualifying for mortgages on second homes for purchases made after September 19, 2008.

So the lenders have made it clear that they’re well aware of “buy and bail” practices, but you may be wondering what the actual consequences are?  According to the following excerpt from the FBI’s website regarding mortgage fraud:

I’d say it’s pretty serious stuff.  If you own an Idaho home that has lost a significant amount of value due to the market declines, you may still qualify to sell the home in a short sale or possibly a loan modification through your lender without committing mortgage fraud.

In cases where your Idaho home may have lost a significant amount of value, many financial analyst have stated that a homeowner could recover financially more quickly through foreclosure alternatives like short sales or deed in lieu of foreclosure. 

What do you think is homeownership worth doing time in prison?

The Idaho Housing and Finance Association has received approval from HUD to begin administering the 13 million dollar Emergency Home Loan program. 

ELHP is designed to help Idaho homeowners who are currently unemployed or are under employed (loss of at least 15% of income) and are at risk of foreclosure cover mortgage payments while working to resolve their current financial hardship.

This program provides troubled Idaho homeowners with a forgivable, deferred payment “bridge loan” to assist with them with catching up on the mortgages and making principle and interest payments, taxes, and insurance for up to 24 months or $50,000 dollars. 

Idaho Housing and Finance Association hopes to help up 500-600 homeowners with the ELHP program and currently have an estimated 174 applicants already.  The program is on a first come first serve basis for Idaho homeowners.

According to the Idaho Housing and Finance Association’s website, Homeowner(s) must be experiencing at least one of the following events to qualify:

And they are subject to the following eligibility requirements:

As someone who spends a lot of time on the phone with lenders negotiating short sales through their various stages, I can tell you that dealing with lost short sale documents is something that comes up on a regular basis. 

While more lenders are moving to electronic systems like Equator.com, there are still lenders or programs like HAFA (Home Affordability Foreclosure Alternative) out there that require you to fax in paper work.  Faxed paperwork usually equates to lost documents.

For Idaho homeowners attempting to do a loan modification or a short sale as an alternative to foreclosure,  I can tell you with the utmost certainty that you will be asked to fax in required documents at some point in the process.  Typically we’ll have our clients bring us the paperwork and submit the short sale packages for them.  This takes some of the frustration out of the process on their part.  However, I realize many homeowners are attempting loan modifications, and those are typically performed by the homeowners themselves.

In light of that scenario, I thought I would share some tips for Idaho homeowners to use when attempting to provide your lender with required documents.  These are some of the things we do when processing short sales that help with our success and allow us to keep our sanity:

Yes, sometimes the people on the other end of the line might seem like they’re trying to drive you crazy, and maybe they are.  Either way don’t give them the satisfaction, or bother getting mad at them, it won’t get you anywhere.  Just do like your shampoo bottle tells you, rinse and repeat until they’ve got everything required to process your request.

What are some of your biggest frustrations with trying to get your lender to assist you?

In Idaho, the number one deal killer for short sales is time;  the time it takes from date an offer is made to recieving an approval from the seller’s lender(s). 

Well good news for troubled Idaho homeowners trying to avoid foreclosure and the buyers trying to help them out mat be on the way. 

A new bill introduced to Congress aims to speed up the short sale process.  The bill, the “Prompt Decision for Qualification for Short Sale Act of 2011,” was introduced to the U.S. House of Representatives April 12^th, 2011 for review by Tom Rooney (R-Fla.) and Robert Andrews (D-N.J.).

While lenders like Bank of America have made great strides in streamlining the short sales process, Idaho homeowners who have loans with less pro-active lenders can end up waiting months for their answer.  Frustrated buyers end up walking away from contracts often resulting in the homeowner ending up in foreclosure.  The National Association of Realtors supports the bill and has actively been pushing the mortgage and lending industry to improve the short sales process. 

A faster short sales process for Idaho homeowners would help to clear many of the distressed properties that have wide ranging affects on the local home values.  Getting troubled homeowners through the process in a more efficient manner would definitely help to speed the recovery process for both homeowner and real estate values.

If this bill were signed into law, the benefit to Idaho homeowners attempting a short sales would be great benefit, however, how do you think it would affect those who own the surrounding homes?

Boise, Idaho Short Sales and Foreclosures

Financial Insight Center, financial advisor, Brian Wiley with Boise real estate agent, Brian Brumpton, on Watching Idaho’s Money

Financial Insight Center,financial advisor, and Watching Idaho’s Money radio host, Brian Wiley and Keller Williams Boise, real estate agent, Brian Brumpton discuss short sales, foreclosures, and loan modifications in the Boise Area.

Listen along as they talk about the realities of a distressed market and the issues buyers and sellers are dealing with.

Is there a moral dilemma surrounding short sales and foreclosures? Should there be?
Brian and Brian weigh in with their opinions on homeowners defaulting on their mortgages and the options available to struggling homeowners. Taking the headlines from a national level and applying them to what’s going on at the local level.

Short Sales – Boise, Idaho

Homeowners in Boise, Idaho who have fallen behind on their mortgage payments may have heard horror stories about the length of time short sales can take. Programs like HAFA (Home Affordability Foreclosure Alternative) were created to help speed up that process. But what about troubled homeowners who don’t qualify for the HAFA program?

All is not lost; Bank of America has created a created a cooperative short sale program to help Boise, Idaho homeowners who many not qualify for any of the government sponsored programs. While their first priority is to keep owners in their homes with a loan modification or another remedy, sometimes “short sales” truly are the best option.

Persistent high unemployment levels, declining home values and many other factors facing Boise families have put them at risk of foreclosure. The number of short sales has doubled in the last year according to Bank of America. Often this results in the slowing of an already time-consuming and intensive process in which participation from multiple parties is typically required. Bank of America has taken numerous steps in speeding up the short sales process and it shows. The cooperative short sale program is latest example.

Bank of America has really gone from one of the worst lenders to deal with on short sales and become a shining example of what most lenders really need to model their process after. The improved process allows Boise homeowners to limit damage to their credit and move on while allowing Bank of America to limit the loss on properties through foreclosure.

If you or someone you know if facing foreclosure, please ask for help, it’s completely free and totally confidential. Complete the assistance application and HopeForIdaho.com will provide you with a consultation from a local real estate agent experienced in successfully completing short sales to help you decide it is the right option for you.

Boise, Idaho Short Sales and Foreclosures

Financial Insight Center, financial advisor, Brian Wiley with Boise real estate agent, Brian Brumpton, on Watching Idaho’s Money

Financial Insight Center,financial advisor, and Watching Idaho’s Money radio host, Brian Wiley and Keller Williams Boise, real estate agent, Brian Brumpton discuss short sales, foreclosures, and loan modifications in the Boise Area.

Listen along as they talk about the realities of a distressed market and the issues buyers and sellers are dealing with.

Keller Williams real estate agent Brian Brumpton discusses what homeowners in Boise, Idaho can do when facing foreclosure and shares some of statistics of distressed properties (foreclosures and short sales) seen at the local level. Host Brian Wiley and Brian Brumpton talk about the short sales process with a caller frustrated by their lender’s response time.