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Click Below to search Las Vegas area foreclosures on the MLS.

Take me to: 2010 First-Time Homebuyers Tax Credit

7+ Million Loans Behind On Payments

Approximately 7, 200,000 mortgage loans are behind on payments and 1,000,000 properties are now in REO status and owned by banks, according to the January 2010 report from a large lender processing service company.

Home delinquency rates passed the 10% mark. The total foreclosure inventory is 3.2%, and the rate combining foreclosures and delinquencies is 13.3%.

The percentage of new serious delinquencies is 4.64%, which is higher than any other year analyzed for the same period. Of the loans that were up-to-date as of December 31, 2008, by December 31, 2009 there were 2.3 million new loans classified as seriously delinquent.

Prime loans have experienced deterioration at a worse pace on relative basis than subprime, FHA, and all loans as a whole. Within the prime category, loans with current unpaid principal balances between $417,000 and $600,000 have performed the worst. However, 2009 loans are performing better than loans from any of the prior 5 years and have been improving as more origination months are added to the pool of loans. (We may speculate that this phenomenon is because the loans made beginning in 2009 and later are at much lower prices than those in the previous 5 years, at least in the Las Vegas/ Henderson area, are at lower rates, and are more conservatively written than loans in the previous time frame.)

http://www.vegasreoconnection.com

Short Sale

Short Sale FAQs

Short Sales currently form more than 44% of available listings in the Las Vegas market. Of those listings in escrow, either contingent or pending they are 70% (probably because they take longer to close than other sales, they tend to pile up.) In the last three months Short Sales comprised 25% of the closed transactions in the Las Vegas Market. (Statistics run May 5, 2010.) This applies to Single Family Residences in the Las Vegas Valley only, including Las Vegas, Henderson, North Las Vegas, and portions of Clark County adjoining these cities.

What is a Short Sale?
In a transaction where the value of a real estate property is less than the amount owed, in order for the seller to clear the mortgage lien from the property, he can bring in the difference in cash, or he may ask the mortgage company to take less money than it is owed. If the mortgage company agrees to take a lesser amount than it is owed, it is a short sale transaction.

What makes a property eligible for a Short Sale?
The mortgage(s) encumbering the property are more than the home is worth. Even if a buyer can be found who will pay the amount needed to remove off the loan(s), if the value of the property does not support the price, as evidenced by an appraisal. the buyer will not be able to get a loan large enough to cover the cost.

Does the seller need to do something to get the bank to allow a Short Sale?
The buyer must supply all his financials to the bank if he is asking it to forgive so much debt. In addition, the seller must provide a hardship letter to the lender giving it a good reason to accept his request. Reasons might be the loss of a job, a transfer to another city, an illness or anything else that might make it hard for the borrower to keep up the obligations he agreed to.

How long does a Short Sale take?
From the time an offer is accepted on the property by the seller and is submitted to the lender for their Short Sale approval, to the time of actual approval can take from one month to one year. It is not a short process (we joke it should be called a long sale), and is made even more complicated by the fact that the bank you are dealing with may not be the actual owner of the loans, but is simply servicing the loan for the owner. The good news; the time for a response has decreased significantly since the beginning of 2010.

Why would a bank agree to allow a Short Sale?
Often, the only alternative left to a seller if the bank will not allow a short sale is to let the house go into foreclosure. A myriad of problems can develop during the foreclosure process, and afterward when the house sets vacant while it is owned by the bank. Statistically, the bank loses about 20% less when allowing a short sale than having to proceed with the foreclosure process.

Do I have to pay taxes on the amount the bank allows me to short?
The lender is required to send you a 1099 at the end of the year in which the short sale is taken. The IRS says you must pay taxes on forgiven debt. However, the Mortgage Forgiveness Debt Relief Act of 2007, http://www.irs.gov/newsroom/article/0,,id=205004,00.html, was passed that is in effect through December 31, 2012, which provides for a tax exemption on forgiven debt on the sale or loss of a primary residence. There are conditions to the exemption, and a person who believes he may use this relief should always consult with his accountant to see if he qualifies.

How long do I have to move?
The move date is determined by the contract between the seller and the buyer. Most buyers want the property as soon as the escrow closes, which is generally around 30 days after final approval from all the lenders.

Can the bank still foreclose, even if I am pursuing a Short Sale?
Yes, if the homeowner is behind in payments the bank may initiate the foreclosure process at any time. If a breach has been filed. the foreclosure process clock is ticking during the time the property is made available for Short Sale. Sometimes, but this is entirely at the lender's discretion, the actual sale may be postponed, especially if there is a viable Short Sale offer that may produce a closure.

What is the HAFA program?
A seller may apply directly to the HAFA program, or may be referred to the HAFA program when he is not eligible for the HAMP (Home Affordable Modification Program)) program. No lender or servicer is required to participate in the HAFA program, and if they choose not to, they may continue to do regular short sales. However, if they participate in HAMP, they must also participate in HAFA.
The HAFA program became effective on April 5, 2010 and expires December 31, 2012.
• An alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
• Uses the financial and hardship information already collected for a loan modification.
• Allows borrowers to know pre-approved short sales terms (including the minimum acceptable net proceeds).
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
• Standardizes processes, documents, and timeframes/deadlines.
• Provides financial incentives:
◦ $3,000 for borrower relocation assistance;
◦ $1,500 for servicers to cover administrative and processing costs;
◦ Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis.

Who sells Short Sale listings?
Mike Pristow and Donna Hodge have successfully completed numerous Short Sale transactions all over the Las Vegas and Henderson areas. In addition, they attend numerous information sessions with large servicing companies, such as Wells Fargo or Bank of America, to stay apprised of the latest developments in the procedures used by the various lenders. They treat each Short Sale with the same care they give to their more traditional listings and sales, including all the same MLS listings, including advertising, web placement, magazine advertising, flyers, and other creative means to get the property SOLD.

Call Mike or Donna at 702-604-1001.