HAMP eligibility criteria:

Principal residence, First lien mortgage, Serious delinquency, Unpaid balance under $729,750, AND Mortgage payment in excess of 31% of monthly gross income

Home Affordable Foreclosure Alternatives (HAFA)

Participants of HAFA cannot save the homeowner from losing their property, can eliminate foreclosure including provisions and incentives for servicers to allow short sales and Deed in Lieu of Foreclosure.

• HAFA is designed for homeowners who have applied to HAMP but have had no success with their loan modification program, participants must still meet HAMP guidelines.

• Homeowner must be considered for HAFA within 30 days if they cannot meet HAMP requirements or if they specifically request HAFA

• Homeowner has only 14 days to respond to a written notice that HAFA may be available to them giving the lender the time to meet the 30 day deadline

• Homeowner must occupy property

FHA Refinance Option for Underwater Homeowners – Encouraging Responsible Refinancing

A voluntary option for lenders and borrowers (probably roll out in Fall of 2010), Which encourages lenders and borrowers to work together, when appropriate, to restructure debts

• Qualifying first lien mortgage loans must have a minimum write-down of at least 10 percent and total mortgage loan to value on the home can be no greater than 115 percent after the refinancing

• Several other qualifications and limitations regarding the borrower’s ability to repay the mortgage

HAMP eligibility criteria:

Principal residence, First lien mortgage, Serious delinquency, Unpaid balance under $729,750, AND Mortgage payment in excess of 31% of monthly gross income

Home Affordable Foreclosure Alternatives (HAFA)

Participants of HAFA cannot save the homeowner from losing their property, can eliminate foreclosure including provisions and incentives for servicers to allow short sales and Deed in Lieu of Foreclosure.

• HAFA is designed for homeowners who have applied to HAMP but have had no success with their loan modification program, participants must still meet HAMP guidelines.

• Homeowner must be considered for HAFA within 30 days if they cannot meet HAMP requirements or if they specifically request HAFA

• Homeowner has only 14 days to respond to a written notice that HAFA may be available to them giving the lender the time to meet the 30 day deadline

• Homeowner must occupy property

FHA Refinance Option for Underwater Homeowners – Encouraging Responsible Refinancing

A voluntary option for lenders and borrowers (probably roll out in Fall of 2010), Which encourages lenders and borrowers to work together, when appropriate, to restructure debts

• Qualifying first lien mortgage loans must have a minimum write-down of at least 10 percent and total mortgage loan to value on the home can be no greater than 115 percent after the refinancing

• Several other qualifications and limitations regarding the borrower’s ability to repay the mortgage

A short sale can take 45-150 days, on average, to close. Every bank is different
and has its own internal processes. The following is a timeline that outlines a
simple short sale.
Short Sale Process and Timeline;
Property is Listed
Foreclosure dates are verified
Authorization and Required Documents are obtained from the seller
 We can not start the short negotiations without a complete file. All
documents must be provided before the file will be accepted.
Offer is Received (1-30 days if not offers are received then price
adjustment is necessary)
Short sale package is completed and sent to the bank(s)
 Fax confirmation is received
 Notes are published to website for authorized parties
Banks are contacted to verify receipt of short sale package
 Confirmation can take 3-15 days from original send date of package
Banks are contacted to verify package is complete and no additional
documentation is needed
 These calls are made weekly until a negotiator is assigned
 When any items are needed or need to be updated, agent and
homeowner will be contacted
Banks orders BPO/interior valuation
 This will assist the bank in determining whether or not the offer is
within fair market value
 This process can take 2-3 weeks
 The bank is called weekly until verification of values have been
received
Negotiator is assigned (can take up to 60 days to get to this point)
 Depending on workloads and bank policies it can be 30-60 days or
longer before a negotiator reviews the package for a decision.
 Negotiator is contacted for status updates weekly
File goes into review with the Negotiator
 Bank issues approval, counter offer or decline at negotiator level
 If additional terms are requested additional negotiations will take place
Bank issues final approval (usually 90-120 days)
Escrow period begins
 Usually 30 days longer until close of escrow

CONTRACT TO CLOSE SERVICES
Short Sale
191 Sand Creek Rd, Ste 100 Brentwood, CA 94513
Background of Short Sales
Lenders began to accept short sales in the 1990s with the onset of sub-prime
lending. Homeowners who qualified for their loans with less than perfect credit,
little or no money down have been pressured as the market values declined and
have found that when personal finances were not able to make the commitments of
the monthly mortgage payments (loan default) for various reasons, the value of the
home was not enough to pay off principle balance, late fees, attorneys fees or
closing costs. Since foreclosing on a home can cost a lender upwards of $50,000
each property and take more than 9 months in some cases, short sales are a more
cost and time effective alternative. On average savings to the lender can be more
than $15,000 and 6 months time.
Short Sales
A short sale (also known as a short payoff) occurs when a lender or lenders accept
a discounted payoff on an existing mortgage, with $0 in closing for the homeowner,
to avoid the cost of a foreclosure. In other words, when a homeowner owes more
than can be collected through a Real Estate sale, a short sale allows them to sell
their property to avoid a foreclosure for themselves and the lender.
If the seller has other assets or is employed, the lender might choose to workout a
compromise sale, where a demand is submitted to escrow to allow the sale to close
but will require a note from the seller for the balance (or a portion of the balance).
This note may be secured by other property, or a personal note.
Benefits of a Short Sale
Homeowner: Provides homeowners with an alternative to the most
derogatory credit occurrence besides bankruptcy, foreclosure.
Lender: Lenders save time and money by negotiating short sales instead of
costly time consuming process of foreclosure.
Buyer: Provides purchasing opportunities that REO (bank owned) properties
can’t. Let’s face it, if you are willing to be patient through the approval
process, you can pick up great properties at below market pricing.
Future of Short Sales
It is predicted that short sales will only grow as an alternative to foreclosures.
Many of the risky lending practices that led to the housing boom in the late 1990s
through the early 2000s; 0% down payments, interest only loans, adjustable rate
“teaser loans” and loans that negatively amortize are fueling today’s mortgage
crisis and foreclosure wave. With no clear indication of a “bottom” to this
devaluation slide, it is foreseeable that there will continue to be more short sales
and foreclosures for some time coming.

RATES ARE EXTREMELY LOW AND WON’T STAY HERE FOR LONG

30 YR FIXED – 4.25%

15 YR FIXED – 3.75%

5/1 ARM – 3.75%

30 YR HIGH BALANCE – 4.5%

INVESTMENT PURCHASE – 4.75% (WITH 25% DOWN)

FHA – 4.25%

Take advantage of these rates

Please Call Judy Hazen at 925-260-7354 or myself at 925-392-3133 and we will be happy to help you!

Shelly Ukkestad
Senior Loan Consultant
Tel. 925-392-3133
Fax. 877-791-1052
Cell. 925-813-0180

Shelly.ukkestad@prospectmtg.com
www.myprospectmortgage.com/sukkestad

PROSPECT MORTGAGE
191 Sandcreek Rd. Suite 100
Brentwood, Ca 94513