Your Reno and Sparks Real Estate Source

By February 1, 2011 servicers, other than Fannie and Freddie, must make changes to their HAFA policies in order to be compliant with the Making Home Affordable Program. Through September 2010 only 342 HAFA short sales were completed and closed. Pretty pathetic for something with so much hoopla from big brother. With poor results in the past, the program has been revamped to open it’s eligibility to more borrowers and potentially improve the market. The Supplemental Directive 10-18 can be found here but for most a quick summary below might suffice.

Monthly Gross Income

Servicers are no longer required to verify the monthly mortgage amount exceeding 31% but may with their own policies. The hardship affidavit still applies.

Vacant Property

The property still must be or recently have been the borrower’s principal residence but now it can be vacant or rented to a non-borrower for less than 12 months from the date of the Short Sale Agreement. Relocation stipulations have been removed.

Release of Subordinate Liens

The 6% cap on junior lien holders has been removed and replaced with a cap of $6,000. Investors will still be eligible for incentive reimbursement up to 1/3 of the cost to remove subordinate liens.

Issuance of Short Sale Agreement

Within 30 days of the servicer offering HAFA, the servicer must complete and send the Short Sale Agreement. If the borrower requests HAFA the servicer must respond within 30 days.

Response to Alternative Request for Approval of Short Sale

The servicer has 30 days from the receipt of an executed sales contract to approve, reject, or counter with the AltRASS form.

Commissions

Listing commissions shall be paid to what the listing agreement says, not to exceed 6%. Third party negotiators, contractors, etc. shall not be paid from this commission.

Deed-in-Lieu

D-I-L’s like deed-for-lease are qualified for HAFA relocation incentives.

Borrower Notices

Borrower’s may be notified of HAMP and HAFA eligibility simultaneously. This means no waiting through HAMP then waiting through HAFA back-to-back.

Retroactivity

Borrowers can be re-evaluated for HAFA eligibility even if they have been denied, per the servicers re-evaluation policy.

Everything sounds nice but are servicers really going to quit doing the 31% debt to income if they don’t have to? Will these timelines actually be followed and if not is there any type of punishment?

Golden Ticket, no. A step in the right direction, yes.

BPOs… one reason your short sale gets approved and what helps set the list price and price reductions for REO properties. While many agents are happy taking pictures and filling out reports in their home markets others are extending themselves beyond their primary areas.

Our regional MLS covers the Reno/Sparks suburban market, Incline Village/Lake Tahoe areas, surrounding farmland, and the far outskirts of the high desert. That leaves a lot of room to cover and photo adventures can be up to 5 hours round trip. With gas prices nearing $3.50 a gallon these long trips don’t always pay for themselves. While most agents won’t step foot in a car unless they see thousands of dollars at the end I think BPOs can be more than supplemental income.

There are three redeeming factors for the potential long drives involved with BPOs.

1. Staying up to date on market conditions. While everyone drives their clients around to different areas and has a general idea of price per sqft of those areas BPOs allow agents to have a detailed view of neighborhoods and cities. I don’t always print CMAs when taking clients out. Having prior knowledge from BPOs allows me to speak more freely about comparable prices compared to the “I’ll check when we get back to the office”. It also keeps me current on other potential homes that my clients may like.
2. The Scenery. The natural landscape of Nevada provides amazing views and scenery. From our snow capped mountains to fertile farmland the nothern part of the state contains much beauty. The pictures from this post are of my trip to Incline Village in Lake Tahoe today, about a 1.5 hour round trip including taking photos. Not a bad break from staring at my off white textured walls and bookcase all day.
3. Peace. With offers, counter offers, addendums, phone calls, and emails taking up most of my day the long drives give me time to recombobulate. Just myself, the road, and beautiful scenery to make all the busyness go away. I know I’m going to get hammered by the hardcore lead generators about spending this time to make calls and follow up but sometimes we just need to settle down and enjoy what God has given us.

While BPOs can be profitable I think their secondary offerings can be just as appealing and important. How far have you or how far are you willing to drive in order to recover your peace and sanity?