“Stupid Agent Tricks” – Story of the Week

I LOVE my job!!!

A few weeks ago, I began writing a new course called “Stupid Agent Tricks: Don’t Try This at Home” for submission to the Utah Division of Real Estate and, hopefully, an opportunity to present it at the Call for Presentations at the Real Estate Educator’s Association National Meeting in San Antonio, Texas, in June.

As I was preparing this course, I began interviewing agents and collecting awesome stories – beautiful examples of WHAT NOT TO DO we can all learn from. This story was the Best of the Best from last week. Thank you to the Awesome Agent who submitted it. If you have a good one, please share it, so we can all learn from the carefully crafted mistakes of others.

Strap on your seat belt, and enjoy the ride!!!

Disclaimer: The names in this story have been changed to protect the innocent, the not-so-innocent and in some cases the Guilty-as-sin.

Realtor Dodge needs a place to live. He goes on a listing appointment at the Peterson’s home. The Petersons are in trouble financially and need the advice of a professional. Realtor Dodge tells the Peterson’s that he can help them, he offers them $2,000.00 to move out of their home and leave the details of selling the home in a short sale to him. The Peterson’s, who are in desperate need of money accept the offer, take the money and pack up.

Realtor Dodge lists the property on the MLS as a short sale and immediately moves into the home with his family. The listings on the MLS generates a lot of interest in the property and the calls start flooding in. Realtor Dodge in now living in the home rent free (except for the initial $2,000) and does not want to lose this most convenient situation. He does not allow the home to be shown, always offering a different excuse to anyone inquiring about the property. For instance, “There is extensive water damage in the home.” “The owner has a mental illness and you won’t want to run into him with your client.” Not even very creative.

Soon, a Realtor catches on to what it happening and complains to her broker. Her broker immediately calls Realtor Dodge and confronts him with the situation. Realtor Dodge moves out of the house just days later.

Months later the home has gone to Foreclosure and is listed again, this time as a REO. The home is 100% free of water damage. The homeowner has fallen victim to a scam in a time when they are most vulnerable. A short sale most surely could have been achieved if they had been represented by a realtor who truly had their best interest in mind, thus avoiding foreclosure and the stigma attached with it that never goes away.

Did the Gramm-Leach-Bliley Act start the 2008 Mortgage Meltdown?

I admit it. I am addicted to information. For the past six months, I have specifically been addicted to books and articles on the 2008 mortgage meltdown and its causes. When I am teaching a class where the issue of the market and how we got into this mess this comes up, I love to show a wonderful You Tube video done by Jonathan Jarvis. It is short, sweet, succinct, esay to follow, and is very powerful. I highly recommend it.

But going back before that, what happened? This has become quite a hot political issue, I have noticed. I included a portion of the Wikipedia article on the Gramm-Leach-Bliley Act here for you to enjoy. To read the entire article, click here. I would love your thoughts on this. I realize this is a complex issue – that is what makes it so much fun to study!

Gramm–Leach–Bliley Act

From Wikipedia, the free encyclopedia

The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999-2001) which repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and/or an insurance company.

The Gramm-Leach-Bliley Act allowed commercial banks, investment banks, securities firms and insurance companies to consolidate. For example, Citicorp (a commercial bank holding company) merged with Travelers Group (an insurance company) in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica and Travelers. This combination, announced in 1993 and finalized in 1994, would have violated the Glass-Steagall Act and the Bank Holding Company Act of 1956 by combining securities, insurance, and banking, if not for a temporary waiver process.^[1] The law was passed to legalize these mergers on a permanent basis. Historically, the combined industry has been known as the “financial services industry”.

Controversy

See also: 2007 Subprime Mortgage Financial Crisis#Causes

Criticism

President Barack Obama believes that the Act directly helped cause the 2007 subprime mortgage financial crisis.^[22] Economists Robert Ekelund and Mark Thornton have also criticized the Act as contributing to the crisis. They state that while “in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance” the Financial Services Modernization Act would have made “perfect sense” as a legitimate act of deregulation, under the present fiat monetary system it “amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly”.^[23]

Nobel Prize-winning economist Paul Krugman has called Senator Phil Gramm “the father of the financial crisis” due to his sponsorship of the Act.^[24] Nobel Prize-winning economist Joseph Stiglitz has also argued that the Act helped to create the crisis.^[25] An article in The Nation has made the same argument.^[26]

Contrary to Phil Gramm’s claim that “GLB didn’t deregulate anything” (see Defense), the GLB Act that he co-authored explicitly exempted security-based swap agreements (a derivative financial product based on another security’s value or performance) from regulation by the SEC by amending the Securities Act of 1933, Section 2A, and similarly the Securities Exchange Act of 1934, Section 3A, to read, in part:^{[27] [28]}

1. The definition of “security” in section 2(a)(1) does not include any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act [15 USCS § 78c note]).
2. The Commission is prohibited from registering, or requiring, recommending, or suggesting, the registration under this title of any security-based swap agreement[.] …
3. The Commission is prohibited from … promulgating, interpreting, or enforcing rules; or … issuing orders of general applicability; … as prophylactic measures against fraud, manipulation, or insider trading with respect to any security-based swap agreement[.]

Defense

Critics of the legislation feared that, with the allowance for mergers between investment and commercial banks, GLBA allowed the newly-merged banks to take on riskier investments while at the same time removing any requirements to maintain enough equity, exposing the assets of its banking customers. ^[29] Yet, prior to the passage of GLBA in 1999, investment banks were already capable of holding and trading the very financial assets claimed to be the cause of the mortgage crisis, and were also already able to keep their books as they had.^[29] Also, greater access to investment capital as many investment banks went public on the market explains the shift in their holdings to trading portfolios.^[29] After GLBA passed, most investment banks did not merge with depository commercial banks. In fact, the few banks that did merge weathered the crisis better than those that did not.^[29]

In response to criticism of his signing the bill when President, Bill Clinton said in 2008:

“I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill…. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.” ^[30]

In February 2009, one of the act’s co-authors, former Senator Phil Gramm, wrote in its defense that:

“…if GLB was the problem, the crisis would have been expected to have originated in Europe where they never had Glass-Steagall requirements to begin with. Also, the financial firms that failed in this crisis, like Lehman, were the least diversified and the ones that survived, like J.P. Morgan, were the most diversified.
“  Moreover, GLB didn’t deregulate anything. It established the Federal Reserve as a superregulator, overseeing all Financial Services Holding Companies. All activities of financial institutions continued to be regulated on a functional basis by the regulators that had regulated those activities prior to GLB.” ^[31]

The economists Brad DeLong (of the University of California, Berkeley) and Tyler Cowen (of George Mason University in Virginia) have both argued that the Gramm-Leach-Bliley Act softened the impact of the crisis.^[32] Atlantic Monthly columnist Megan McArdle has argued that if the act was “part of the problem, it would be the commercial banks, not the investment banks, that were in trouble” and repeal would not have helped the situation.^[33] An article in National Review has made the same argument, calling liberal allegations about the Act “folk economics”.^[34]

So? What do YOU think??

Short Sale Success 101: Fifteen Steps to Understanding the Process – (Part 1)

Ok. So, in some attempt to “dial it down” and help real estate agents who are new to the process of helping to facilitate a short sale as the listing agent, I decided to put this “fluff-free” list together to help you simplify the process.

Here goes!

1) Seller contacts agent and asks for help.

2) Agent provides list of items seller must put together in order to facilitate the process.

3) Seller gets needed items together and calls agent back to let agent know items are collected.

4) Agent goes through the list of items with the seller over the phone. If agent feels confident seller has successfully put together the needed items, agent sets up an appointment for seller to come to agent’s office and meet in person. Seller also agrees to bring ALL recent mail from their lender – opened or unopened.

5) In-Person meeting occurs in agent’s office. Seller has brought all necessary paperwork to begin to facilitate the process. Agent has prepared a ROCKSTAR CMA on the seller’s home and shares this information with the seller. Agent should try to give their very best listing presentation and explain in detail about agency and detailing what services agent will provide to the seller to help them try to market the property effectively and to help to facilitate a short sale (IF it is in the seller’s best interest to do so. Seller should contact competent legal and tax professionals to assist them in making critical decisions). Agent will advise seller in writing to get legal and tax advice, as many complex issues can arise regarding deficiencies, how liens will be handled,  among others.

6) If seller chooses to hire agent, this relationship will be clearly outlined and explained. A WRITTEN agency agreement will be signed by the seller, the agent, and the agent’s broker. (Agent absolutely WILL NOT give seller ANY advice, guidance, or counsel until seller has hired the agent in writing! – Remember The Law of the Duck - if it looks like a duck, acts like a duck, and quacks like a duck, IT IS A DUCK! We absolutely cannot look like agents and act like someone’s agent and talk like someone’s agent UNLESS AND UNTIL we ARE their agent! And how do we know they have hired us? That’s right! We put it in writing!)     

7) Seller signs Authorization to Release Information.

Very shortly after the in-person interview in which all “i’s” are dotted and all “t’s” are crossed, agent will diligently begin to seek out the proper party at the seller’s lender with whom negotiations and communications need to be made with. The easiest way to try to establish who this person is is to locate that information in the mail obtained from the seller. If that doesn’t work, the department may be called “Loss Mitigation,”  “Legal Department,” or “Foreclosure Department” (among other things it could be called). Keep trying until you get to the right person in the right department. This is 1/3 of the battle!

Stay tuned for Part 2…

For much more information for Realtors, please check out the webinars (most available at no cost) at www.realtorsfr.org.

From Dan’s Desk: Top 5 Reasons REALTORS Are Being Sued Now

From the very beginning of my career in 1999, I was given some amazing advice that has never failed me:

 ”Surround Yourself With People Who Make You Look Great.”

Several years ago, I met a Salt Lake City Attorney who specializes in real estate related issues. Recently, we met up again. When I shared with him all of my exciting courses and happenings,  Dan enthusiastically agreed to be part of the “Pumped About Education” Team by teaching portions of some of my courses and by contributing to my courses as well as to my blog. We will ALL benefit from Dan’s wealth of knowledge and expertise! We are THRILLED and fortunate to have him.

This past week, Dan was very busy with Depositions involving REALTORS and mortgage fraud cases. When I asked him to share with me the Top 5 Reasons he sees REALTORS being sued right now, this is what he shared:

1)    The trust scam.  Realtor or “short sale expert” tells owner to deed property to a “trust” to avoid foreclosure.  Trust then lists the property in MLS.  Trust tries to get property under contract with third-party buyer.  In the meantime, realtor/short sale expert prepares a REPC between the original owner and the trust and presents it to the bank for short sale approval.  Wait 90 days for Fannie Mae/Freddie Mac seasoning.  No disclosure is made to short sale bank that title has transferred and that borrowers no longer own the property.  Short sale price presented to the bank is, say, $200,000.  Realtor/trust then gets property  under contract with third party buyer for $250,000.  Realtor does simultaneous closing with escrow/title company out of state using funds from the $250,000 to pay off the bank in the $200,000 short sale.  Realtor gets paid commission from bank on $200,000 short sale plus splits the difference between the $250,000 and $200,000 with the “trust.”  (He then shared that I had a student in my class last week that orchestrated this one. Yeesh!!)  The crazy thing is Dan nailed her on it and she still thinks it’s legal and there are lawyers (who obviously don’t know jack about real estate) who are telling her that it is fine.

 (2)    Reg Z/TILA Rescissions.  There are apparently quite a few lawyers out there who are promising that they can scour a borrower’s closing documents, find a TILA or Reg Z violation and, as a result, get the borrower out of the loan and essentially get their home for free.  I can’t go in to all the details but let’s just say this is a theoretical possibility but generally not worth pursuing.  In fact, I’ve been corresponding with lawyers all over the country on this and, to date, no one can provide me with proof that this has actually worked.  Everybody has “heard” that it works but, so far, I’ve seen nothing but “hearsay.” 

(3)    Produce the Note.  There are quite a few lawyers out there telling people that they can get them out of their loan by demanding that the bank produce the original note.  This is a delay tactic only and not a long-term solution. 

(4)    Loan Modification Companies.  They take the money up front—usually around $3,500.00—but I’ve had a lot of people get burned because the loan modification company does nothing for them.  There are legitimate modification companies out there—I think—I just don’t know of any.  Again, the borrowers need to realize that their negotiating position is relatively weak.  They signed a note promising to pay the bank; they haven’t paid the bank.  There’s just not a lot to work with there, particularly in conservative Utah with conservative judges who believe in freedom of contract and the free market economy.

 (5)    Incompetent agents—this is not really a scam but I see it a lot.  There are agents who simply don’t know what they are doing and don’t know how to protect their clients from still owing the bank money even after the completion of the short sale.

 PLEASE be careful out there. KNOW your contracts! DO NOT dispense legal or tax advice! If you are in Utah and need an awesome real estate attorney, I highly recommend Dan McDonald. You may email Dan at dmcdonald@smithlawonline.com.

What is REBAC?

I am very proud to be a REBAC Instructor and offer NAR Approved Designation and Certification Courses anywhere in the United States and Canada. For more information on REBAC, as well as approved Designations and Certifications, visit www.rebac.net.

REBAC focuses on buyer representation. While it is now a broadly-accepted, mainstream business model in real estate circles, it’s sometimes easy to forget that it wasn’t always so—and how quickly the shift occurred. Within the National Association of REALTORS® (NAR), buyer representation officially took hold in November 1996, when NAR acquired the then-independent Real Estate Buyer’s Agent Council (REBAC), giving full support to a trend that had been gaining momentum throughout the 1980s.

Now, ten years later, REBAC has enjoyed exponential growth and is the largest of NAR’s Institutes, Societies, and Councils. Numbering more than 50,000, active REBAC members span the globe, with nearly three quarters holding their Accredited Buyer’s Representative (ABR®) or Accredited Buyer’s Representative Manager (ABRMSM) designations.

REBAC’s course provider network—the many real estate associations and schools that offer REBAC courses—is equally or even more impressive, encompassing and extending well beyond the U.S. More than 136,000 real estate professionals have participated in REBAC-sponsored education.

New HAFA Guidelines – NAR Answers Frequently Asked Questions

Hurray for NAR! I’m SO grateful to one of my students who turned me on to this “translated version” of the new Home Affordable Foreclosure Alternatives Guildelines. (See my previous posting on the guidelines themselves, or visit: http://www.realtor.org/government_affairs/short_sales_hafa for more information on the guidelines.

Here are NAR’s FAQ’s for you to better understand what these guidelines REALLY mean for us, and our Buyer and Seller Clients. Way to go, NAR!!! 

1. What is HAFA? Initially announced on May 14, 2009, with guidance and standard forms issued on November 30, 2009, the program will help owners (referred to below as borrowers) who are unable to retain their home under the Home Affordable Modification Program (HAMP).

A borrower (the current owner) may be able to avoid a foreclosure by completing a short sale or a deed-in-lieu of foreclosure (DIL) under HAFA.

The guidance and forms released on November 30 do not apply to loans owned or guaranteed by Fannie Mae or Freddie Mac. Those enterprises will issue their own HAFA guidance and forms.

2. Who is eligible?

The borrower must meet the basic eligibility criteria for HAMP:

Principal residence.

First lien originated before 2009.

Mortgage delinquent or default is reasonably foreseeable.

Unpaid principal balance no more than $729,750 (higher limits for 2 to 4 unit dwellings).

Borrower’s total monthly payment exceeds 31% of gross income.

3. How is the program being implemented?

Supplemental Directive 09-09 (November 30, 2009) gives servicers guidance for carrying out the program. All servicers participating in HAMP must also implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include such factors as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions, and borrower motivation and cooperation.

Short Sale Agreement (SSA). The servicer will send this to the borrower after determining the borrower is interested in a short sale and the property qualifies. It informs the borrower how the program works and the conditions that apply.

REALTOR

® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics

Request for Approval of Short Sale (RASS). After the borrower contracts to sell the property, the borrower submits a RASS to the servicer within 3 business days for approval.

Alternative RASS. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The Servicer must still consider the borrower for a loan modification.

4. How will HAFA improve the short sales process?

HAFA:

Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.

Uses borrower financial and hardship information already collected in connection with consideration of a loan modification under HAMP.

Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).

Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).

Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).

Uses standard processes, documents, and timeframes/deadlines.

Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis; up to 3% of the unpaid principal balance of each subordinate loan).

5. What are the timelines for HAFA?

Based on a servicer’s written policy, the servicer must consider every potentially eligible borrower for HAFA.

REALTOR

® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics

If a servicer has not already discussed a short sale or DIL with the borrower, it must notify the borrower in writing of these options and give the borrower 14 calendar day to respond, orally or in writing. If the borrower does not respond, that ends the servicer’s duty to give a HAFA offer.

Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:

o

Does not qualify for a HAMP trial period plan.

o

Does not successfully complete a HAMP trial period plan.

o

Is delinquent on a HAMP modification (misses at least 2 consecutive payments).

o

The borrower has 14 calendar days from the date of the Short Sale Agreement to sign and return it to the servicer.

The Short Sale Agreement must give the borrower an initial period of 120 days to sell the house (extensions permitted up to a total of 12 months).

Within 3 business days of receiving an executed purchase offer, the borrower (or agent) must submit a completed RASS to the servicer, including (i) a copy of the sale contract and all addenda; (ii) buyer documentation of funds or pre-approval/commitment letter from a lender; and (iii) all information on the status of subordinate liens and/or negotiations with subordinate lien holders.

Within 10 business days after the servicer receives the RASS and all required attachments, the servicer must approve or deny the request and advise the borrower.

The servicer may require the closing to take place within a reasonable period after it approves the RASS, but not sooner than 45 days from the date of the sales contract unless the borrower agrees.

The servicer must release its first mortgage lien within 10 business days (or earlier if required by state or local law) after receipt of sales proceed from a short sale or delivery of the deed in the case of a DIL. Investor must waive rights to seek deficiency judgment and may not require a promissory note for any deficiency.

Requests a short sale or DIL.

REALTOR

® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics

6. What are the HAFA rules re real estate commissions?

The guidance states that a servicer may not require a reduction in the real estate commission below the amount stated in the Short Sale Agreement.

The SSA states that the servicer will pay the commission as stated in the listing agreement, up to 6%.

If the servicer has retained a vendor to assist the listing broker, the vendor must be paid a specified amount from the commission.

Neither buyers not sellers may earn a commission in connection with the short sale, even if they are licensed real estate brokers or agents. They may not have any side deals to receive commission indirectly.

7. What are the required clauses for the listing agreement?

Cancellation clause—seller may cancel without notice and without paying commission if property is conveyed to mortgage insurer or mortgage holder.

Contingency clause—sale is subject to written agreement of all sales terms by the mortgage holder and, if applicable, mortgage insurer.

8. How much are the incentive payments?

Borrower Relocation Incentive–$1,500, paid to the borrower at closing.

Servicer Incentive–$1,000 for administrative and processing costs for a short sale or DIL completed under HAFA. Investors may provide additional incentives.

Investor Reimbursement for Subordinate Lien Releases—up to $1,000 for allowing up to $3,000 in short sale proceeds to be paid to subordinate lien holders. Subordinate lien holders that receive HAFA incentive must agree not to pursue deficiency judgments.

9. Do servicers have to treat similarly situated borrowers the same?

Yes, but not all borrowers will qualify for a short sale or DIL.

Participating servicers must have a written policy, consistent with investor guidelines, that describes the basis for deciding whether to go ahead with a short sale in individual cases.

REALTOR

® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics

The policy may include such factors as the severity of the loss involved, local market conditions, the timing of pending foreclosure actions, and borrower motivation and cooperation.

10. What are the steps for evaluating a loan to see if it is a candidate for HAFA?

Borrower solicitation and response.

Assess expected recovery through foreclosure and disposition compared to a HAFA short sale or DIF.

Use of borrower financial information from HAMP. (May require updates or documentation.)

Property valuation.

Review of title.

Borrower notice if short sale or DIL not available (to borrowers that have expressed interest in HAFA).

11. Can the servicer complete a foreclosure during the HAFA process?

No. A servicer may initiate foreclosure, but may not complete a foreclosure sale:

While determining borrower’s eligibility and qualification for HAMP or HAFA.

While awaiting the return of the Short Sale Agreement by the 14 day deadline.

During the term of a fully executed Short Sale Agreement (while the borrower seeks to sell).

Pending the transfer of ownership based on an approved sales contract per the RASS or Alternative RASS.

Pending transfer of ownership via a DIL by the date specified in the SSA or DIL Agreement.

12. What about DIL?

Subject to investor requirements, servicers may accept a deed-in-lieu of foreclosure under HAFA, which requires a full release from debt and waiver of all claims against the borrower.

The borrower must vacate the property by a specified date, leave the property in broom clean condition, and deliver clear, marketable title.

REALTOR

® is a registered collective membership mark which may be used only by real estate professionals who are members of the NATIONAL ASSOCIATION OF REALTORS® and subscribe to its strict Code of Ethics

Same incentives available.

13. What else should I know?

The deal must be “arms length.” Borrowers can’t list the property or sell it to a relative or anyone else with whom they have a close personal or business relationship.

The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring at the end of 2012, however, the tax may not apply. Forgiven debt will not be taxed if the amount of forgiven debt does not exceed the debt that was used to acquire, construct, or rehabilitate a principal residence. Check with a tax advisor.

The servicer will report to the credit reporting agencies that the mortgage was settled for less than full payment. There will be a negative effect on credit scores.

Buyers may not reconvey the property within 90 days after closing.

14. When does the program end?

Short Sale Agreements must be executed and returned to the servicer no later than 12/31/2012.

15. Where can I find the guidance and forms?

Go to www.Realtor.Org/Shortsales for links to the guidance, these FAQs, a summary, and much more information about short sales.

 

New HAFA Guidelines for Short Sales

As you have probably heard by now, the new Home Affordable Foreclosure Alternatives Guidelines came out last month. My main struggle with these guidelines is that they were in Ancient Greek. I consider myself to be very well educated on industry issues, but I found this rather excruciating to read and digest. Thank heavens for NAR! They translated it for us in their excellent Frequently Asked Questions Docement that, in my opinion, saves the day.

These guidelines go into effect by April 5, 2010, but lenders can put them into place earlier if they choose to. HOWEVER, these guidelines, as great as some of these appear to be, are ONLY for Non-Fannie/Freddie backed loans. Fannie and Freddie have stated they will come out with their own guidelines soon. Watch for those to come out soon.

For now, here are the Guidelines:

Enjoy! (For the Full Text and links to many more valuable tools and resources, visit: http://www.realtor.org/government_affairs/short_sales_hafa

Home Affordable Foreclosure Alternatives Program (HAFA)

On November 30, 2009, the Treasury Department released guidelines and forms for its new Home Affordable Foreclosure Alternatives Program (HAFA). HAFA is part of the Home Affordable Modification Program (HAMP). HAFA provides incentives in connection with a short sale or a deed-in-lieu of foreclosure (DIL) used to avoid foreclosure on a loan eligible for modification under the HAMP program. Servicers participating in HAMP are also required to comply with HAFA. A list of servicers participating in HAMP is available at MakingHomeAffordable.gov.

HAFA applies to loans not owned or guaranteed by Fannie Mae or Freddie Mac, which will issue their own versions of HAFA in coming weeks.

HAFA is a complex program, with 43 pages of guidelines and forms, designed to simplify and streamline use of short sales and deeds-in-lieu of foreclosure. HAFA:

• Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
• Uses borrower financial and hardship information already collected in connection with consideration of a loan modification.
• Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
• Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6 percent).
• Requires borrowers to be fully released from future liability for the first mortgage debt (no cash contribution, promissory note, or deficiency judgment is allowed).
• Uses standard processes, documents, and timeframes/deadlines.
• Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to $1,000 for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders (on a one-for-three matching basis).
• Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.

The program does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

For the fantastic FAQ’s, check out: http://www.realtor.org/wps/wcm/connect/bf232c8040a1a8b79c84ff1890ffcf5b/government_affairs_hafa_faqs_121109.pdf?MOD=AJPERES&CACHEID=bf232c8040a1a8b79c84ff1890ffcf5b

How Do I Get My ABR Designation?

The Accredited Buyer Representative (ABR®)  Designation

Courtesy of REBAC.

Getting the Designation

Why get the Accredited Buyer Representative (ABR®)  Designation?  What are the qualifications?

The Accredited Buyer Representative (ABR®) designation is the benchmark of excellence in buyer representation. This coveted designation is awarded to real estate practitioners by the Real Estate Buyer’s Agent Council (“REBAC”) of the National Association of REALTORS® who meet the specified educational and practical experience criteria. 

There are five major requirements to attain and use the ABR® designation:

• Meeting the REBAC® education requirement – 
• completion of a 2-day ABR core course through an accredited course provider,
• or completion of the REBAC®  Web course, 
• or completion of the satellite television education programming through the RE/MAX Satellite Network 
• Completion of one elective course. Current members who have already obtained the ABR® designation are grandfathered as to the elective course requirement.
• Passing a written examination on legal and practical aspects of agency representation.
• Practical experience requirement of acting as a buyer’s representative in 5 documented and verifiable transactions.  (Valid transactions are those that occurred anytime prior to and up to 36 months after the date the course was completed.)
• You must, at all times, be a member in good standing with REBAC® and the National Association of REALTORS®.

  List of Current Electives

  Check the Education page of the REBAC Web site for additional course listings as they become available.

  • Successful Buyer Representation in New Home Sales – REBAC
  • Representing the e-Buyer – REBAC
  • Successful Relocation Representation – REBAC
  • CIPS Essentials Course – Contact Heidi Henning at 312/329-8376
  • e-PRO Internet Course – Visit Realtor University
  • Innovative Marketing for Buyer’s Reps – REBAC
    
    Using the Designation

    When can I begin using the ABR® designation in my advertisements and in representations to the public?

    Upon receipt, review and approval of your application, the ABR® designation will be awarded to you. REBAC will send you the ABR® Designation Kit which includes a certificate, lapel pin, advertising slicks, a press release for distribution to your local media and reproduction artwork of the ABR® logo for your advertisements. Although you cannot use the ABR® designation until it has been awarded to you, membership in REBAC begins when you complete the ABR® Designation course.
    Learn more about REBAC.

HUD Eases Up on 90 Day Flipping Rule (HURRAY!!)

I did backflips on Tuesday when I saw this! (If only it applied to short sale properties too…)

HUD TAKES ACTION TO SPEED RESALE OF FORECLOSED PROPERTIES TO NEW OWNERS

Measure to help bring stability to home values and accelerate sale of vacant properties

WASHINGTON – In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD Secretary Shaun Donovan today announced a temporary policy that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. The announcement is part of the Obama administration commitment to addressing foreclosure. Just yesterday, Secretary Donovan announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofit housing developers to combat the effects of vacant and abandoned homes. “As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said Donovan. “FHA has an unprecedented opportunity to fulfill its mission by helping many homebuyers find affordable housing while contributing to neighborhood stabilization.” With certain exceptions, FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This temporary waiver will give FHA borrowers access to a broader array of recently foreclosed properties. “This change in policy is temporary and will have very strict conditions and guidelines to assure that predatory practices are not allowed,” Donovan said. In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities. “FHA borrowers, because of the restrictions we are now lifting, have often been shut out from buying affordable properties,” said FHA Commissioner David H. Stevens. “This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.” The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions: •All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction. •In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions. •The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program. Specific conditions and other details of this new temporary policy are in the text of the waiver, available on HUD’s website.

HUD is the nation’s housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation’s fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. Print Friendly Version Making Home Affordable Help for America’s Homeowners HUD Implementation of the Recovery Act HUD.GOV/Recovery Federal Housing Administration Insuring More Than 37 Million Mortgages Since 1934 Community Planning and Development Developing Viable Communities Fair Housing and Equal Opportunity Equal Housing Opportunities for All Public and Indian Housing Ensuring safe, decent, and affordable housing Ginnie Mae Helping to make affordable housing a reality for millions of low and moderate-income households across America

Inspired By “Invictus” – I AM the Master of my Fate!

My 13 year old daughter, Jeannene, is a HUGE Rugby fanatic. Many of her Christmas gifts were rugby related – a professional Gilbert ball, a jacket, a silver rugby ball necklace, the movie “Forever Strong”. She went crazy over her gifts. It is fun to give gifts to someone who is so enthusiastic and appreciative!

So, the day after Christmas, we went to see the movie “Invictus” as a family. It was incredible!! I HIGHLY recommend it! It touched my soul and inspired me tremendously.

During the movie, Nelson Mandela’s character (played masterfully by Morgan Freeman) recites the poem “Invictus” by William Ernest Henley. I remember learning this poem in high school and being reintroduced to it in college, but it cut me to the core when I heard it in the context of Nelson Mandela’s life and how he handled personal challenge with grace and triumph. I wanted to share it with you.

Invictus

Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.

In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.

Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.

It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate:
I am the captain of my soul.

I love that! I am the master of my fate! I am the captain of my soul!

Magnificent words to live by. So much of what happens in life is beyond our ability to control. But we CAN control how we react to what comes at us. And we CAN decide to get up when we fall, dust ourselves off, and try again.

This strikes a major personal chord with me. For so much of my life, I have been “waiting” for events or people or circumstances to come in and rescue me, fix things, and make it all better. I’ve been on this earth for a few years now (who’s counting?), and I am JUST now finally figuring this out! It is incrdibly empowering to know that I posess all of the tools and skills I need to become whatever I want to be. I am in the driver’s seat of my own destiny. And MAN, does it feel GOOD!!!