Welcome to Frontline Forums!

• The New HAFA Short Sale Program—-A Giant Step Backward for Real Estate Commissions?

  
  Published by Lance Churchill on 01/27/2010
  Comments: No Comments
  

  

  By now, most professionals in the real estate industry are aware that the U.S. Treasury Department issued a plan called the Home Affordable Foreclosure Alternatives program (HAFA) on November 30, 2009.  The HAFA program is intended to speed up and regulate the short sale process for borrowers whose loans are subject to the government’s loan modification program known as HAMP.  This means that, for HAMP eligible borrowers, if their loan modification fails or if they do not want to participate in HAMP, then they will be subject to this new short sale process. 

  These new HAFA short sale rules are intended to simplify the short sale process, standardize short sale forms and expedite servicer and lender response times.  These are all laudable goals, which agents around the country have been waiting for a long time.  But, unfortunately for real estate agents, the amount of commissions they can be paid on HAFA short sale transactions might be less than they expected.

   The battle for payment of fair real estate commissions for short sales has been a long and difficult fight for the real estate community.  For the first several years of the current crisis, real estate agents were forced by the servicers and lenders to take a reduction in their commission as a condition of having short sale offers approved.  It was standard practice for lenders and servicers to pay no more than five percent for total real estate commissions in a transaction. 

  Read More

• TREASURY DEPARTMENT ANNOUNCES NEW SHORT SALE GUIDELINES

  
  Published by Lance Churchill on 12/02/2009
  Comments: No Comments
  

  This week the US Treasury Department released it’s long awaited new short sale rules and forms.  The new program is called HAFA (Home Affordable Foreclosure Alternatives) and sets forth new government policies for a short sale or deed-in-lieu of foreclosure. It is the new rules and procedures for HAMP participating lenders and servicers to follow when a homeowner doesn’t qualify for a loan modification under HAMP’s rules, who are not able to keep their loan modification current or who request a short sale or deed-in-lieu.

  The new guidelines and accompanying forms are contained in a 43 page servicing directive sent to lender and servicers this week.  It pretty closely follows the terms the Treasury Department announced earlier this year but adds specific forms including (1) a form instruction letter to homeowners;  (2) a short sale agreement between the borrower and servicer;  (3) a request for approval of short sale (which includes a very simplified HUD 1 and an automatic $1,500 relocation allowance for the borrower); (4) short sale approval and disapproval forms (so the borrower will know why their short sale was rejected; (5) several DIL forms and;  (6) a checklist for the servicer to follow.

  These rules will be the rules for a vast majority of short sales in the future.  This is because they will be mandatory for all servicers who particiapate in the HAMP program which includes almost all the major servicers in the country and all FreddieMac, FannieMae, VA and HUD owned or insured loans.  The time table for servicers to implement the new rules is anytime between now and April 5, 2010.  However, due to the complexity of the new program, do not expect any servicers to implement the new guidlelines between now and the end of this year.

  To make sure all our members understand the new program, we will be announcing a new webinar shortly to go over the new program and forms in detail.  In the mean time platinum members can find the entire 43 page program posted in the members’ section in the Short Sale category under Resources.





• MOST SHORT SALES NOW PAY A FULL 6% REAL ESTATE COMMISSION

  
  Published by Lance Churchill on 11/11/2009
  Comments: No Comments
  

  HUD, FANNIE MAE AND FREDDIE MAC ALL NOW AUTHORIZE PAYMENT OF SIX PERCENT COMMISSIONS

  A major issue real estate agents have faced when negotiating short sales with lenders and servicers was that it was always a battle to try and get paid a full real estate commission on these difficult and time consuming transactions.  The loss mitigators working for the lenders always tried to force the agents to take a reduced commission as a condition of approving the short sale.   Not only was this frustrating for agents, it also put agents in a difficult position if not in direct conflict with the interests of their client sellers.  This was because by holding out for a full commission, the agent jeopardized the chances of the short sale being approved which could result in the seller’s property being lost at a foreclosure auction.

  This forced real estate commission reduction began to really backfire against the lenders.  With buyers scarce and short sale listings increasing exponentially, selling agents who had qualified buyers had plenty of short sale opportunties to choose from for their buyers.   As a result, the buyers’ agents gravitated toward showing short sale listings that paid a full 6% real estate commission or were pre-appproved for a quicker closing.  Lenders who refused to pay a full commission on short sales were losing out because of their short sightedness of trying to claim that last 1% in a transaction.  Never mind the fact that if there is usually ever a transaction where a full commission is earned, it is the short sale.

  Fortunately today, the full 6% commission has become the norm with HUD, FannieMae and FreddieMac now all authorizing payment of a 6% commission and prohibiting their servicers from trying to reduce the real estate commission if the 6% had been agreed to by both the borrower and the listing agent.  These three entities together control a vast majority of the delinquent loans in this country.  In case you weren’t aware of this change in policy or you are running into servicers who are still trying to fight you over your commission here is when the payment of a full 6% commission was officially authorized by each of those entities.

  Read More





• TREASURY DEPARTMENT STATES NEW SHORT SALE PLAN IS STILL IN DEVELOPMENT

  
  Published by Lance Churchill on 10/22/2009
  Comments: No Comments
  

  Unfortunately, it looks the U.S. Treasury Department is going to miss its third self imposed deadline for issuing new short sale rules and policies to accompany the HAMP loan modification program.  Despite an earlier statement that we would see the new policies this week, the Treasury Department released written testimony from an appearance before the Congressional Oversight Committee a few minutes ago which indicates it hasn’t finished developing them yet.  Here is the relevant excerpt from today’s press release:

  Today, I want to outline some of the recent steps that Treasury and the Administration have taken or will shortly be taking to improve the effectiveness of HAMP with the goal of strengthening the housing sector, helping millions of homeowners and laying the foundation for economic recovery and financial stability.

  First, we are committed to helping eligible homeowners obtain a final modification if they are qualified for HAMP…………………………..

  Second, we are developing a foreclosure alternatives program for HAMP, which will provide incentives for short sales and deeds-in lieu of foreclosure where borrowers are unable or unwilling to complete the HAMP modification process. We are aware that there are many borrowers whose modifications under HAMP will not be sufficient to keep them out of foreclosure; for example, borrowers who do not have sufficient income to support a modified payment. The Foreclosure Alternatives Program can help prevent costly foreclosures and minimizes the damage that foreclosures impose on borrowers, financial institutions and communities.

  Read More





• NEW GOVERNMENT SHORT SALE RULES COMING NEXT WEEK

  
  Published by Lance Churchill on 10/14/2009
  Comments: No Comments
  

  The Treasury Department keeps letting out hints that it is almost ready to release the final details of it’s long awaited new short shale rules and policies.   An official announcement is expected next week for the launch of the new Homeowner Affordable Foreclosure Alternatives (HAFA) program formerly referred to as the Foreclosure Alternatives Program (FAP). Although the announcement of the new program is expected next week, it may take several months to actually implement the program as it did for the modification program (HAMP).  It  appears that the rules will be similar to those announced last May to provide financial incentives to borrowers, lenders and servicers to participate in the program as well as hopefully sytemitize and speed up the overall short sale process with standardized forms.   Watch this blog for the latest updates on the new program.





• BANK OF AMERICA USING REOTrans FOR SHORT SALES

  
  Published by Lance Churchill on 10/12/2009
  Comments: No Comments
  

  Bank of America has started using REOTrans to help process it’s short sales.  This also means of course that all Countrywide loans will also be included.  REOTrans is an online system that many lenders have been utilizing for a few years as a portal for their REO agents.  The system allows documents to be uploaded into the REOTrans database where agents are able to view their files at anytime to see what is happening with them.  The new Short Payoff Module (SPO) that REOTrans has created is intended to automate the short sale process as well.

  It is important for agents to get registered in the REOTrans system sooner rather than later.  Bank of America is only the first of many lenders and servicers that will probably start using this platform.   Already 16 of the top 25 lenders in the country use REOTrans for processing their REO properties.   Most importantly, since all Borrowers will now also have to independently register with REOTrans, those who aren’t represented by an agent will be referred to a REOTrans registered agent.

  Although it is in the initial stages of implementation, at the present time the system for short sales works like this;  Certain documents will still need to be faxed to the lender, for example the Authorization,

  Read More





• THE SOLUTIONS TO SHORT SALE PROBLEMS ARE COMING SOON——-MAYBE

  
  Published by Lance Churchill on 10/09/2009
  Comments: No Comments
  

  The problems with short sales; the delays, lack of response from servicers, lost files, reduced commissions, confusion, lack of uniformity, etc., etc. will soon all be solved.  Or at least the government says they will be.  On May 14, 2009 the Treasury Department announced that it would soon release new short sale rules, policies and forms for all agency and federally regulated loans and all lenders and servicers partcipating in the HAMP program.  This “Foreclosure Alternatives Program” (F.A.P.) would probably cover 75% of all short sale transactions.  So we waited and waited, month after month.  Finally, on September 9, 2009 the Treasury Department announced the release was imminent and that would take place by the end of September.  So as I am writing this on October 9, 2009,  I am beginning to think that maybe the government was a bit premature in announcing that it could easily solve the problems of short sales without really having any idea if any of its solutions would work in the real world.  So, while we wait, over the next few days I’ll examine some of the ideas it announced it would implement for short sales, both the pros and the cons, so you will be ready to take advantage of them when they arrive. Stay tuned……………





• Working the Foreclosure Cycle – Your Key to Long Term Success

  
  Published by Speare Valasakos on
  Comments: No Comments
  

  

  As a Real Estate Broker, Lender and Investor, I have worked the foreclosure and distressed property market for over three decades.  As you can imagine, I have seen many people come and go in real estate over the years.  One of the main reasons for people leaving real estate is that they either lack the knowledge that the market will change or they are unprepared for the change when it comes.  Sure, many of these people have some short term success.  They may have learned one or two effective ways to conduct business, but within a few years, they are forced out of the market because the real estate cycle changes and they don’t have the ability or knowledge to change with it.

  A recent example of the changing market would be after the Dotcom blow up of the stock market and terrorist attacks of 9/11.  After these events, our economy went into a tail spin.  The Federal Reserve responded by lowering interest rates to the lowest level in over 40 years.  Real estate took off and we saw one of the greatest real estate booms in history.  In Southern California, properties were appreciating between 20-30% a year.  One did not have to have much skill for success in this market environment.  One just needed to get into the market.  It did not matter what they did, just get in, buy a property and fasten your seat belt.  Appreciation and the euphoria of the market would take care of the rest.

  Let’s take a closer look at a few types of people that were successful at that time but soon faded from the picture.

  Read More





• The 3 Steps to Short Sale Success

  
  Published by Speare Valasakos on 09/16/2009
  Comments: No Comments
  

  With the cooling of the real estate market, the meltdown of sub-prime and option arm loans, rising unemployment and negative equity in properties, the number of homeowners that find themselves in foreclosure has skyrocketed to unprecedented levels. And it is predicted that several million more homeowners will fall into foreclosure in the next two years.

  In today’s new market place more and more people in foreclosure that are upside down in their properties. They usually owe substantially more on their loans than the property is worth. Unfortunately, many agents today still do not know how to help these people.

  Some may have heard about a short sale but don’t have the expertise to successfully complete one. Most agents struggle with short sales because they have not learned how to effectively manage the process.

  To successfully work in the short sale market, you need to break down the short sale process into three steps. By breaking the process down it helps the agent focus on the important elements for completing each step. Once each step is mastered, the short sales process becomes systematic and easier for the agent to successfully complete a short sale.

  The 3 Steps to Short Sale Success Are:

  Read More





• Welcome To Our New Real Estate News and Education Blog…

  
  Published by Lance Churchill on 08/27/2009
  Comments: No Comments
  

  The purpose of this site is to share with our readers and members the most up to date information on all aspects of real estate sales and investing in these challenging times.  My partner Speare Valasakos and I each have 30 years of experience in all aspects of distressed and creative real estate.  Speare has been an investor, agent and broker actively selling and investing in real estate since 1980.  I have been a real estate attorney since 1980 and actively investing personally for over a decade.  Our company, Frontline Seminars was created to educate real estate agents and investors and teach them new ways of doing business.  We chose the name Frontline to convey the fact that we are actively involved in what we teach and that we bring to the table the newest and latest information about how to succeed in the current real estate market.  As a team we are able to bring our different talents together to present a complete and unique perspective on today’s real estate issues and challenges.    We will talk about not only current market conditions and the latest news but also current practices to help you prosper in the distressed property market.  We hope you will come back often to review our new postings and take advantage of the many real estate resources and training programs we have available. Our membership sections are set up to allow our subscribers access to a wealth of information, programs, tips and forms not available anywhere else and at a fraction of the cost of obtaining the materials separately.   The over ten thousand agents and investors we have educated in the past ten years believe in us and our materials.  We know that once you get to know us, you will too.

  Please visit often,

  –Lance Churchill