FrankMears.com
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Frank Mears
ABR, ABRM, CDPE,CRB, CSP, CSP, GRI, SFR, SRS, SRES
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A legal process by which a
mortgagee's right to redeem a
mortgage is taken away, usually
because of failing to make
payments
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
IRVINE, Calif. – Jan. 13, 2011 –
RealtyTrac® (http://www.realtytrac.com) the
leading online marketplace for foreclosure
properties, today released its Year-End 2010 U.S.
Foreclosure Market Report™, which shows a total
of 3,825,637 foreclosure filings — default notices,
scheduled auctions and bank repossession —
were reported on a record 2,871,891 U.S.
properties in 2010, an increase of nearly 2
percent from 2009 and an increase of 23
percent from 2008.
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Top 10 foreclosure States (2010)
1. Nevada
2. Arizona
3. Florida
4. California
5. Utah
6. Georgia
7. Michigan
8. Idaho
9. Illinois
10.Colorado
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# 73 Milwaukee-Waukesha-West Allis
# 99 Green Bay
#131 Madison
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The sellers owe more on the mortgage and home
equity loans than their home is worth
The seller is unwilling or unable to cover the
difference.
Some, but not all, sellers may be in default on
their mortgage and heading for foreclosure.
Some sellers don’t understand that if they have
assets such as stocks, other real estate, high
salaried job, savings, the lender is not going to let
them just walk away with out signing a note to
repay the difference in what they owe.
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Advertise for them.
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Referrals
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Prospecting
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The CMA will be your first indicator
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The seller net sheet will be next (2nd Mtg, HOA
dues, property taxes)
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If they can afford it, the seller should also get a
home inspection to see what repairs are needed
and how this might affect the value.
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To avoid the financial loss on foreclosure
properties ( average $86,000)
Avoid increasing the REO inventory
The area or neighborhood is decreasing in
value
The property is in poor condition
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Do you list the property based on your market
evaluation? (disclose in MLS that price offered is
subject to short sale approval by the lender.
Commission offer is also subject to lender
approval
Does the owner notify the lender at this time that
they are considering asking for a short sale and
give the lender permission to discuss the loan with
their agent?
Do You wait until you have a contract and then
notify the lender and send in the complete short
sale package?
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1.
The letter of authorization
If there is more than one lender you need to
contact the all.
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1.
2.
The letter of authorization
Cover Letter and short sale request
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1.
2.
3.
The letter of authorization
Cover Letter and short sale request
Hardship letter
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1.
2.
3.
4.
The letter of authorization
Cover Letter and short sale request
Hardship letter
Owners financial package (BEWARE!!! Of major
discrepancies between the sellers information
and the information used to obtain the loan)
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1.
2.
3.
4.
5.
The letter of authorization
Cover Letter and short sale request
Hardship letter
Owners financial package
Broker Price Opinion
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1.
2.
3.
4.
5.
6.
The letter of authorization
Cover Letter and short sale request
Hardship letter
Owners financial package
Broker Price Opinion
The Hud 1
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1.
2.
3.
4.
5.
6.
7.
The letter of authorization
Cover Letter and short sale request
Hardship letter
Owners financial package
Broker Price Opinion
The Hud 1
The 1099 issue
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Mortgage Forgiveness Debt Relief Act of 2007
 Applies only to forgiven or cancelled debt used to
buy or substantially improve your principal
residence or to refinance debt (only up to principle
balance of the old mortgage, immediately prior to
re fi) incurred for those purposes
 Applies to debt forgiven in 2007 thru Dec 2012
 Taxpayer files form 982 Reduction of tax attributes
Due to discharge of Indebtness
 WWW.IRS.GOV
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1.
2.
3.
4.
5.
6.
7.
8.
The letter of authorization
Cover Letter and short sale request
Hardship letter
Owners financial package
Broker Price Opinion
The Hud 1
The 1099 issue
Submitting the package
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Cover Letter
Make sure to state the amount the lender will
receive at losing and stress the reasons why the
payoff amount is justified.
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Make sure that the lender’s foreclosure
department is aware of the short sale
negotiations and or short sale approval.
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1-1
HARP, HAMP &
HAFA Overview
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Home Affordable Refinance
Program
Home Affordable
Modification Program
• Home Affordable
Foreclosure Alternatives
• Short Sale
• Deed-in-Lieu
Note:
HAFA does not
apply to
FHA or VA loans
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$3,000 cash to seller
Foreclosure suspension
Liability release
No notes or $$$ contributed
More $$$ for 2nd liens
Pre-approved short sale
Approval or denial in 10 Biz days
Deed-in-lieu possible with $3,000
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Standard forms
No $$$ contribution
No last minute
commission negotiations
Quicker approval or denial
Listing remarks
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Monthly
payments?
New process
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Foreclosure Web sites
Foreclosure.com
Foreclosures.com
Realtytrac.com
treas.gov/auctions/irs/index.html
HUD.gov
http://www.equator.com
Homesales.gov
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 REO
Properties (Real Estate Owned)
Property is now in the lenders inventory
 Redemption
Period
On mortgage foreclosures a property may be
redeemed at any time prior to the foreclosure sale
by paying the total amount owed. In Wisconsin
there is a statutory redemption period after the sale.
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Property management duties
1. Inspect
2. Secure
3. Trash Out
4. Evict
5. Cash for Keys
6. Utilities go into licensees name
7. General Property Maintenance
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The Good
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The Good
The Bad
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The Good
The Bad
The Ugly
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One to four family homes
Initially 0ffered to Owner – Occupant buyers. After
the initial period has passed and the property
remains unsold then it is offered to investors.
General sales Conditions
 Buyers must obtain their own financing
 Sold as is
 Safe, Secure and Marketable
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1.
Owner Occupants
2.
Investor buyers
3.
Non-Profit Organization buyers
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Good neighbor next door program
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
$100.00 down program
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$500.00 selling agent bonus
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1.
2.
3.
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5.
6.
7.
8.
9.
10.
Make sure your broker is registered with HUD and has an active
NAID #
Set up your own personal selling agent account in BidSelect so that
you may place bids for buyers
Find Available properties in bidSelect listing site
Show and advertise available HUD homes according to regulations
When you have a buyer complete a HUD sales contract package
Place a bid in the appropriate bidding timeline
Check the results of the bid around noon the day after the bid
deadline
If you win the bid, deliver the contract package to M & M contractor
office within 2 business days of acceptance
Contract acceptance begins the TIME SENSITIVE pre closing
essentials
Close
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Vendee financing is a loan product offered to
individuals to help finance the purchase of VA REO
Properties. Vendee Financing will be offered to both
veterans and non-veterans. Some of the guidelines
are listed below:
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Seller may contribute up to 6% of the contract sales
price
Vendee mortgages are assumable by qualification
Vendee Financing is not a credit score driven
product.
..
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Owner Occupied Purchase
Can be financed with as little as 0% down. The loan
amount may be increased up to 2% to finance closing
costs, prepaids or other expenses. Funding fee may not
be financed.
Non-Owner Occupied Purchase
Can be financed with as little as 5% down. Investors
may use 75% of anticipated rent based on appraiser's
estimate to offset against the subject property monthly
payment.
Investors must have experience managing rental
properties to include anticipated rent on subject property
in underwriting.
No maximum number of investment properties
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Any purchaser can apply for Vendee Financing. You do not
have to be a Veteran.
Vendee Financing is available for non-owner and owner
occupied.
Low Interest Rates
 The seller may contribute up to 6% of the contract sale
price for closing costs.
 2.25% VA Funding Fee
 No pre-payment penalties
 An appraisal is not required for underwriting.
 Non-Owner Occupied Only
 No maximum number of investment properties.
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To be successful you need to learn the rules for
foreclosures in your state. You also need to be
patient and realize that lenders do not always
understand the law of supply and demand and
that market value is not what you have in it but
what you can get out of it. Lenders are more likely
to negotiate favorably on a property that has been
in inventory for a long time than one that has just
been taken in.
There are many opportunities for buyers and agents
in foreclosure and pre-foreclosure transactions.
Learn the rules, be patient and good luck.
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TM
FrankMears.com