Lee Morof's Real Estate Blog

Short sales, that is, sales that fail to cover the remaining mortgage due on homes, are still somewhat commonplace despite the recent uptick in the housing economy. The benefit to a Southeast Michigan short sale is that it can preserve the credit of the seller by avoiding foreclosure. Unfortunately, the short sale process is difficult to navigate.

The good news is that new FNMA and FMAC guidelines go into effect November, 2012, which may help your situation. Here’s a quick rundown on some of the changes:

Eligibility: The Federal Finance House Authority, in consultation with Fannie Mae and Freddie Mac, has loosened the eligibility. For instance, military families who receive Permanent Change of Station orders will now be eligible.

Streamlined Documentation:  Fannie Mae is reducing the documentation, and in some cases eliminating it, in cases of a borrower hardship of more than 90 days delinquent and with a credit score lower than 620.

Standard Payments: Subordinate-lien payments will be limited to $6,000, eliminating the negotiation for higher payments. Standardizing the transaction may speed up the short sale process on homes.

Servicer Approval: Servicers of Southeast Michigan short sales no longer need individual approval from Fannie Mae so long as the short sales conform to the requirements. Homeowners with hardships, such as divorce, illness or death of a borrower or employment transfer, may be approved as long as the loan is not yet in default. Servicers will also be required to complete short sale evaluations in 60 days.

Help Desk: A Short Sale Assistance Desk is already available to help real estate professionals in targets markets. This is an escalation procedure which may help facilitate and streamline the short sale process.

The streamlined process of Southeast Michigan short sales will assist homeowners most in need, and enable lenders to more quickly and easily qualify certain homeowners for a short sale who are current on their mortgage payments, but dealing with hardships.

If you’re considering selling your home as a short sale, I can help. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney Lee Morof 
RE/MAX Showcase Homes, Birmingham, Michigan
www.NorthWoodwardHomes.com

The Southeast Michigan short sale process for selling your home can be very confusing. To begin to learn how to complete the short sale process, here’s a very brief overview of some of the steps:

• Discuss short sale options with your lender. Talk to your lender and gather all information needed to proceed with a short sale.
• Send a bank authorization letter. You must write a letter to the bank authorizing the release of your information to your listing agent.
• Write a letter of hardship. The hardship letter is an explanation to the bank of how your financial situation has changed since you took out the mortgage. You must detail, in writing, your financial difficulties, income, interest from investments and checking and savings balances.
• Prepare the settlement statement. The escrow company will prepare an estimated settlement statement, which will show your lender all of the transaction costs and detail exactly how much money the bank is going to get at the end. This includes the price the property will be sold at, an itemized list of expenses involved, balances on remaining loans and any other fees involved.
• Review by the mortgage lender. Once all the documents have been gathered and submitted as a Southeast Michigan short sale package, the mortgage lender will review everything.

If you’d like more complete information about the Southeast Michigan short sale process, please call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com. I can help you consider your short sale options for your home.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney 
RE/MAX Showcase Homes, Birmingham, Michigan
www.NorthWoodwardHomes.com

If you are financially distressed, it might be time to cut your losses and minimize the damage to your financial future. If you’re feeling the economic pressure of an impending foreclosure, then consider putting your home up for a Southeast Michigan short sale.

While it might seem like Southeast Michigan short sales should be a speedy process, they’ve been known to play havoc with many unsuspecting sellers. In honor of April Fool’s Day, we’ve created a list of the many short sale pitfalls sellers encounter.

• Settle your accounts – Strive to pay off all your other debt. Your bank might not approve your short sale application if you have judgments from other creditors pending.

• Pay your HOAs – Even if you’re defaulting on your mortgage, it’s important to meet your monthly Home Owner’s Association dues. Your HOA usually has to approve a short sale, so you definitely want to be in good standing when it’s time for them to sign on the dotted line.

• Make sure your buyer is pre-approved – Talk with your real estate agent and have them ensure that your buyer is legitimate. If there is any wavering on the buyer’s side, the bank might not want to deal with the hassle and you’ll be declined.

• Get your documents together – Your bank will want copies of all documents concerning your property before they even consider approving a Southeast Michigan short sale. Remember, they are forgiving you of debt, so do your best to make them want to help you.

• Don’t give up – Even if you’re declined for a short sale several times, there’s a chance they’ll approve you the next go around. Find out why you were declined and try to remedy the situation as soon as possible.

Don’t let a short sale fall through and turn you into a fool this April. Follow the tips above and you’ll be prepared to present a credible account to your bank. If you’re considering a Southeast Michigan short sale, please call 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney 
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
www.NorthWoodwardHomes.com

With the current economy, homeowners are finding themselves in sticky situations when it comes to keeping up with their mortgages. If the possibility of foreclosure is within your future, you might want to determine whether you’re a candidate for a Southeast Michigan short sale.

A short sale is when the owner and the bank agree to sell the home for a loss. Short sales are more beneficial to the homeowner’s financial future because it tends to damage their credit score by reducing it around 100 points instead of the 300 points a foreclosure might inflict. If you are starting negotiations with your bank to try and list your home as a Southeast Michigan short sale, consider the following three qualifications.

1. Foreclosure has NOT already taken place. A short sale can still happen during the foreclosure process if you’re still in pre-foreclosure and you have only received notices from your bank. However, if your home is already in foreclosure and is up for auction, it is too late.
2. You have NOT filed for bankruptcy. If you have, then you are ineligible for a short sale. Banks cannot pursue collection of debt if you’ve filed for bankruptcy — so you can’t work with them on selling your home.
3. You owe more than your home is worth. The best way to determine whether your home would qualify for a Southeast Michigan short sale is to ask an experienced real estate agent to estimate your home’s current value and compare it to how much you still owe. If you owe more than it’s worth, then you may qualify for a short sale.

Don’t wait until it’s too late! If you’re having trouble paying the mortgage on your home and meet the three qualifications above, it might be time to talk to your bank.

This subject can be extremely confusing. As a Certified Distressed Property Expert and Attorney, I am uniquely qualified to help!  Please call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com, if you are searching for more short sale information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney  
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
www.NorthWoodwardHomes.com

With prices still low, it continues to be a buyer’s market for those interested in Southeast Michigan real estate. Some of today’s most profitable buying opportunities are with Southeast Michigan short sales and REO properties. Not sure what short sales or REOs are? Here’s a synopsis of each:

• A short sale property is when the sale price of the property falls short of the balance owned on the mortgage. As a result, the real estate transaction can involve a lot more time and negotiation than a straight purchase, as the seller’s lender has to sign off on any agreements. The up side for the buyer is that you can make a nice profit because Southeast Michigan short sales are priced at or below market. To successfully purchase a short sale property, hire a Certified Distressed Property Expert who has experience and knowledge negotiating with sellers and lenders.
• A real estate owned (REO) home is a property that is owned by the lender after an unsuccessful foreclosure auction. Usually, the lender asks a real estate agent to list the property for sale. The initial listing price is often high. Hire a Southeast Michigan real estate agent who is knowledgeable about REOs to negotiate the price for you and help you navigate the complicated process through to a successful closing.

According to a Housing Pulse survey, short sales were the largest segment of the distressed property market during November 2011, at 17.6% of total home purchase transactions.  The reason for this popularity is clear: price. The average price of short sale properties is close to 20% lower than non-distressed properties, and REO properties are discounted by an even higher percentage.

If you have the time and patience to wade through the short sale process, or are willing to invest in repairing an REO property in less than move-in ready condition, you can reap financial benefits from your patience and hard work.

If you would like to discuss your particular situation, and whether Southeast Michigan short sale and REO properties might be good options, give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

The reality of today’s real estate market means that there are many opportunities to purchase Southeast Michigan short sales.  While the process can still be confusing, it is increasingly common. Here are a few tips on how to make sure you leap through the extra hoops a short sale requires with ease and grace:

• Avoid short sales with multiple mortgage lenders: Offers on Southeast Michigan short sales with two different lenders are at a much higher risk of being declined. The first mortgage lender will likely only allow a small percentage to go to the holder of the second mortgage – who will therefore be likely to veto a deal, on the hope that more funds would be generated in a foreclosure.
• Check the Real Estate Agent’s Short Sale Track Record: Agents with experience with short sales are much more likely to be able to successfully navigate the system than those new to the vagaries of short sales.
• Make Reasonable Offers: Short sales can be better deals, but they are unlikely to be magically cheap.  No matter what, the bank isn’t going to give the home away just to avoid foreclosure.  You want to put together an offer that makes the buyer and the bank happy.
• Follow Up on the Details: With the bank involvement, there will be more negotiation and more detail.  Keep your i’s dotted and t’s crossed to make sure the process doesn’t stall.
• Allow For Extra Time: Short sales are not a short process, so if you are truly in a hurry to close a deal, consider other options.

If you’re looking for a real estate agent with experience in Southeast Michigan short sales, give me a call.  As a Certified Distressed Property Expert and Attorney, I can help you navigate the system and close on your new home. You can reach me at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Knowledge is power. That’s true whether you’re running a Fortune 500 Company or investing in Southeast Michigan short sales.

To increase your level of knowledge and improve your success in investing in Southeast Michigan short sales, here are the definitions and important information about four acronyms:

BPO: This stands for Broker Price Opinion 

A BPO is, essentially, the same thing as an appraisal. In a short sale transaction, the lender hires a broker to appraise a home. The broker assesses the house both inside and out to determine its current market value.

If a BPO has not been ordered by the lender or if you cannot find out what the value of that BPO is, you may be at a big disadvantage when trying to submit a short sale package.

The closer your short sale offer is to the BPO, the better chance you have of the short sale transaction going through.

NOD: This stands for Notice of Default

This is the first official stage in the foreclosure process. The lender has a right to file the Notice of Default after the very first late payment, but the NOD is not usually filed until 60 to 90 days after a late or missed mortgage payment.

In some states, the Notice of Default is also attached to the home, generally on the front window, like a big scarlet letter. It states that the borrower is in default, behind in the mortgage payments, and if the payments are not paid up, the lender will seize the home.

This is a crucial step in purchasing a short sale, because if the lender has not issued an NOD, they won’t consider your short sale offer.

NOT: This stands for Notice of Trustee’s sale

The NOT is a recorded notice that a trustee’s sale has been scheduled.  That means the clock has really started ticking! If all late payments, fees, and penalties aren’t paid up, the property will be auctioned off to the highest bidder. The minimum amount is usually whatever the lender needs to pay off the first loan and other fees.

The buyer who wins the auction gets the property as-is. This includes all liens, whether or not the lien has been recorded. Title insurance is generally not available for up to two years. This can be a significant risk for a buyer.

Many properties don’t sell at auction so they go to the lender and become REOs or Bank Owned Properties…

REO: This stands for Real Estate Owned by the lender

An REO, also known as a Bank Owned Property, is a property that goes back to the lender after an unsuccessful foreclosure auction. So when you hear the term REO, it means that the lender now owns the home.

Usually, the lender asks a real estate agent to list the property for sale. The initial listing price is often high. Hire a real estate agent who is knowledgeable about short sales to negotiate the price for you and help you navigate the complicated short sale process through to a successful closing.

If you’re interested in investing in real estate or Southeast Michigan short sales, I can help. I’m a Certified Distressed Property Expert and real estate lawyer.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney 
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

If you’re a potential buyer of Southeast Michigan real estate, when scanning the listings of homes for sale, you may see references to Southeast Michigan “short sales.”  You may hear vague warnings about avoiding short sales from some people, while others tout the advantages.  So who is right?  Well, it depends…

Short Sales Defined
First, what is a short sale?  A short sale is a situation in which the current market price of a home would not, in fact, cover the amount the home owner owes on the mortgage.  Yes, that’s what people mean when they say they are “underwater” – they owe more on their home than it is worth.

Since the mortgage can’t be paid off by the sale of the house, short sales become an option, albeit a complicated one. The seller and the bank (or banks, as is sometimes the case if there are multiple mortgages on the house) become, if the bank agrees, essentially co-sellers of the house.  Any offers considered by the seller have to be approved by mortgage holder(s).

Seller Short Sale Advantages
Short sales can be a win-win situation for the seller and the mortgage company. The seller is relieved from his debt without the greater stigma of foreclosure attached to his credit standing. The mortgage company often gets more money than it would in a foreclosure auction, and without the time and expense of the foreclosure process.

Buyer Short Sale Advantages
For potential buyers, short sales can have some advantages. The biggest possible advantage is a better price. Keep in mind though that short sales are seldom amazing deals. The bank will usually do an analysis on comparable properties in the neighborhood, and will likely turn away any offers that fail to come in that range.

What you are more likely to get with a Southeast Michigan short sale purchase is a home that has been cared for and recently lived in.  Short sales are still officially owned by the seller, not the bank (as in foreclosures), and so someone is more likely to be living there, mowing the lawn, cleaning the kitchen and making repairs.

Short Sale Buyer Complications
The bad news on Southeast Michigan short sales is time and administrative detail. With the companies holding the lien having final say on the process, their review can delay acceptance of short sale offers, sometimes for months. And, of course, if there are multiple lien holders, the time can increase dramatically. A short sale can take three months – not much longer than a standard closing – but they can also take six months or longer.  If that level of timing uncertainty doesn’t work for you, you might want to consider other options in your quest for Southeast Michigan real estate.

Whether you’re considering buying or selling a short sale, as a Certified Distressed Property Expert I can help. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

When a buyer makes a Southeast Michigan short sale offer on your home, it’s impossible to know for sure if the offer will be accepted by the lender.  Even when you’ve negotiated the offer with the buyer and come to an agreement that meets both of your needs, there’s still no guarantee that the lender will say yes to the short sale.

Here are three tips to help get Southeast Michigan short sale offers on your home accepted by the lender:

1. Convince the lender that you have a legitimate hardship. Submit a hardship letter,  paystubs, bank statements, monthly budget and profit and loss statement to demonstrate that you cannot make your monthly payments and have no disposable income. Here are examples of hardships to mention in your letter:
   a. lost your job
   b. reduced hours/pay at current job
   c. have to move more than 75 miles from home to get a new job
   d. death of a borrower
   e. divorce
   f. onset of a disabling illness
2. Negotiate with the buyer to exclude terms and contingencies that complicate the sale. Lenders do not like to accept short sales when they include time contingencies or when the short sale is contingent on the sale of a home.
3. Submit paperwork as a complete package. Ask your lender for a list of all documents needed. Fill out the paperwork and collect all other documents required. Make copies of everything. Put together a complete package including all the documents your lender requested, and only then send the entire package to your lender. If the lender later tells you they can’t find a particular document, don’t waste your time arguing about it, just resend the information – it’s easy to do because you already have copies prepared!

If you’d like more information on the possibility of selling your home as a Southeast Michigan short sale, give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

In today’s precarious job market, many luxury homeowners are finding they can’t afford their massive, custom-designed properties any longer. As the once rich are having to quickly sell or abandon their Southeast Michigan real estate, you might be able to snag a good deal on a distressed luxury home.

There are many horror stories associated with national and Southeast Michigan short sales and foreclosures, but if you do your research, are patient and can act quickly, you might be able to purchase the home of your dreams. If you want to take advantage of this sour market, then consider the following guidelines — and happy house hunting!

• Find an agent who has experience with distressed real estate. Interview Southeast Michigan real estate agents to find out their history of dealing with foreclosures and Southeast Michigan short sales.
• Research comparables. Investigate to make sure it’s actually a good deal by looking at other luxury homes that have sold in the area. Your agent can give you invaluable information on comparables.
• Be patient. It’s easy to get anxious when it comes to making such a large purchase, but remember that these properties are in turmoil — which can take some time to resolve.
• Hire a home inspector. If you’re going to be investing big bucks, pay a home inspector up front to check out the home. Just because it’s a luxury property doesn’t mean that it hasn’t been neglected for the past couple years. You’ll want to know what kind of damage and repairs you’ll be dealing with.
• Make an offer quickly. Other potential buyers and real estate investors will be keeping an eye out for enticing properties, so be ready for competition.
• Have your finances together. Pay as much as possible in cash. It will be more enticing to the lender, who actually makes the final decision on a short sale or foreclosure.

If you want to purchase luxury Southeast Michigan real estate at a great price, consider distressed properties going to a short sale or foreclosure. As a Certified Distressed Property Expert and Attorney, I can help you navigate any type of real estate transaction.  Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com, if you’re ready to start looking or would like more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com