Sellers who are underwater, because they owe more to the bank than their house is worth, or simply won’t net enough from the sale to pay off all the closing expenses, can request that their bank take less than the amount owed.

It is up to the bank to make the ultimate decision to agree on the sale and allow the deal to close.

While it’s common that sellers requesting a short sale are in arrears on their mortgage, it’s not necessary.

In fact, there is an advantage now in remaining current on your payments.

Effective June 1, 2012, the credit bureaus have announced that they intend to report short sales by borrowers otherwise current on their mortgage obligations as being neutral on the credit report.

That means that the borrower’s credit score won’t be adversely affected, provided they have been current on their mortgage payments in the last 12 months. It remains to be seen if the credit bureaus will proceed with this announcement, but if they do, it will be a big advantage to homeowners stuck in underwater situations.

Remember, a short sale isn’t for everyone. If you have equity in your home, but like everyone else the home has merely declined in value, you wouldn’t want to do a short sale.

And if you have been late on your mortgage, the short sale will have further impact on your credit score, making it harder to get a loan in the future.

And finally, be sure to use a lawyer familiar with the process to ensure that there is no deficiency judgment remaining after the short sale that will leave you still owing the bank money even after the sale is done!

Source: NY Daily News

Instead of foreclosing on people, a costly and lengthy process, they’re increasingly using short sales to move people out of homes they can no longer afford. Short sales are not only faster than foreclosures, they often turn out to be cheaper. By forgiving part of the loan up front (a loss they would take anyway during foreclosure, lenders can get possession of a house faster and sell it before it has had time to deteriorate.  Homeowners get to shed their mortgage debt faster – and with less damage to their credit rating.

Short sales began outpacing foreclosures in some states late last year. Six states saw more preforeclosure sales – typically, short sales – than foreclosures in the fourth quarter, according to RealtyTrac, an online marketplace for foreclosure properties based in Irvine, Calif. In preliminary first quarter data for 2012, that total jumped to 12 states, including traditionally big foreclosure states like California and Arizona, RealtyTrac reported Thursday.

RELATED: Reasons to Consider a Short Sale

“I think we will see more states with short sales outnumbering foreclosure sales in the coming months,” says Daren Blomquist, RealtyTrac vice president, in an e-mail. ” In addition to the government incentives they can get for a short sale through the HAFA [Home Affordable Foreclosure Alternatives] program, lenders are realizing they can often recover more of their losses through a short sale than through foreclosure, and also that they can avoid any accusations of improper foreclosure procedures.”

Bank of America, for example, announced this week that it will offer its short-sale incentive program, piloted in Florida, nationwide. Under the program, delinquent homeowners can get up to $30,000 in relocation expenses once they complete a short sale.

One challenge with short sales is that they’re complicated. They involve negotiations among three parties (the bank, the seller, and the buyer) over what price the house will sell for and what loss the homeowner and the bank will take. These talks can drag on for months, with the buyer eventually walking away for lack of a clear decision.

Next month, mortgage-backers Fannie Mae and Freddie Mac aim to speed up the process with new guidelines that will require lenders to make a decision within 30 days of receiving a short-sale offer.

Accepting an offer is no trifling matter, because homeowners in a short sale typically owe more on the home than the home will sell for. Banks are likely to lose that difference whether they agree to a short sale or foreclose.

“Short sales are a more efficient way for the market to absorb the distressed properties and that should help pave a quicker path to market recovery,” Mr. Blomquist says.

Still, they’re a drag on the market, he points out. On average, short sale homes sell for 21 percent less than non distressed properties. They’re just not as much of a drag as foreclosure homes, which typically sell at a 34 percent discount.

Source: Christian Science Monitor

In addition the applicant will owe no more on their mortgage with the sale of their property. To qualify for the relocation assistance the homeowner must participate in one of the preapproved price short sale programs, such as HAFA (Home Affordable Foreclosure Alternatives) or Bank of America’s proprietary program.

The general guidelines for HAFA eligibility are as follows: 

• You live in the home or have lived there within the last 12 months.
• You have a documented financial hardship.
• You have not purchased a new house within the last 12 months.
• Your first mortgage is less than $729,750.
• You obtained your mortgage on or before January 1, 2009.
• You must not have been convicted within the last 10 years of felony larceny, theft, fraud, forgery, money laundering or tax evasion in connection with a mortgage or real estate transaction.

What all this means is the incentive is for homeowners who can no longer afford to make their mortgage payments on their primary residence and are facing foreclosure. I suspect the larger the loan the larger the incentive. By the way, preapproved means the short sale is initiated with Bank of America before there is an offer on the house. To complete the sale, the home must be sold at a price above the approved amount. If you have a Bank of America mortgage and are considering a short sale for financial hardship reasons, this is a great time to see if you qualify for the relocation incentive.

Using the Equator system

When processing short sales, it’s important to know about how each of the lending institutions handles loss mitigation and paperwork processing. Many folks already know that Equator is the online platform used by 5 major lenders (Bank of America, Wells Fargo, Nationstar, GMAC, and Service One). If you have done a few short sales in Equator with different lenders, you may see what while your same Equator account is used for all your short sales at all the lending institutions, each of the servicers uses the platforms in a different manner.

And, my hat goes off to Bank of America for really raising the bar when it comes to short sale processing online. And, believe me, after processing short sales with Bank of America in 2007, this change is much appreciated.

New Bank of America Short Sale Process

Effective April 13, 2012, Bank of America made a few major changes that may make our short sale processing times more efficient.  The goal of these changes is to make short sale processing through Equator (the Internet-based platform) at Bank of America so efficient that short sale approval can be received in less than one month.

First off, Bank of America now requires their new third party authorization for all short sales being processed through the Equator system. Additionally, the folks at Bank of America will be working to improve task flow for short sales in Equator by making some minor changes to the process.

According to the Bank of America website,

Now you are required to upload five documents (which you can obtain at www.bankofamerica.com/realestateagent) for short sales initiated with an offer:

• Purchase Contract including Buyer’s Acknowledgment and Disclosure
• HUD-1
• IRS Form 4506-T
• Bank of America Short Sale Addendum
• Bank of America Third-Party Authorization Form

And, now, you will have only 5 days to submit a backup offer if your buyer has flown the coop.

The last change is a curious one, especially for short sale listing agents, since it often takes awhile to find a new buyer after you learn that the current buyer has changed his or her mind.

Short sale listings agents should be familiar with these changes in order to assure that they are providing their client with the most efficient short sale experience possible.

Source: AG Beat

It is vital that financial and tax advisors know the tax pitfalls in these transactions to best advise clients. In the worst case of adding insult to injury, property owners not only lose the real estate and all the money they have invested, but they also may have to pay income taxes.

This is due to the general tax rule that forgiveness of debt creates ordinary taxable income (Reg. 1.1001-2 (c), Rev Rul 90-16). This applies to short sales, foreclosures and Deeds in Lieu of Foreclosure.

Fortunately, there are some exceptions, but the rules are very strict. We have developed a procedure to determine the tax implications and advise our clients. I will outline the process, and then give some examples.

First, you need to decide if the mortgage was recourse (owner had personal liability) or nonrecourse (no personal liability). Basically, if they signed the mortgage they are personally liable. Generally, if a loan is nonrecourse, this is stated in the note itself. If the loan is nonrecourse, then there is no income from debt forgiveness.

With forgiveness on recourse or personally liable mortgages, the owner will receive a Form 1099A (Acquisition or Abandonment of Secured Property) from the lender or closing attorney showing the balance of principal outstanding (Box 2) and the fair market value of the property (Box 4).

The correct amount of debt forgiveness income is the amount of the mortgage debt in excess of the fair market value at date of foreclosure/short sale. You can use another value than that shown on Form 1099A if you have proof to the contrary. Selling expenses can be added to the debt to calculate total debt, but they are also deducted from the fair market value along with basis to determine the gain or loss. The full principal amount of any nonrecourse debt relieved is treated as the sales price.

Once you have calculated the correct amount of debt forgiven, then you have to determine how much is taxable.

The first exclusion deals with a primary residence where up to $2 million of forgiven debt is not taxed. This only applies to a mortgage secured by the principal residence of the taxpayer. The Mortgage Forgiveness Debt Relief Act of 2007 covers calendar years 2007-2012.

For second homes and other property, there is an exclusion for insolvency. You first have to calculate if the owner was insolvent immediately before the foreclosure or short sale. This means total liabilities exceed total assets. There is a worksheet Form 982 and instructions for this in IRS Publication 4681. If the owner is insolvent, then only the amount of insolvency is excluded from taxable income. Unfortunately, in most cases only a small portion of the forgiven debt qualifies.

If second homes or non-rental property are involved, the insolvency exclusion is the only help. But there is hope in the case of rental property. IRC Section 1231 basically states that the sale of rental property at a loss qualifies for ordinary loss treatment as opposed to capital loss. Of course, sale at a gain would be a capital gain. Thus, the loss on disposition of rental property could be offset against the forgiveness of debt income, adjusted for recapture of depreciation.

This is a developing area of the Tax Code, so we expect to see IRS rulings in the future.

Source: Accounting Today

Critics say that selling a home for less that it is worth can come with a steep price, including a lower credit score and the loss of any built up equity. But for a growing number of homeowners, the benefits outweigh the risks, particularly when their only alternative is foreclosure.

Why should you consider a short sale? Three reasons:

1. They can get you out of debt:

“With the incentive for banks to forgive debts that remain after the sales, the typical homeowner walks away debt-free. ‘For most borrowers, it’s a good idea,’ said Todd K. Helwig, a real estate attorney with Mirick O’Connell in Massachusetts. ‘If you want to get out from under the burden of your loan, it’s usually the best way, as long as you can convince the bank to agree not to collect the remaining debt.’ (Short Sales Soar as Home Foreclosures Fall by Lawyers.com)

2. They can benefit your lender: 

“[A short sale] allows the lender to avoid adding another piece of property to their foreclosed inventory (which for many lenders is overloaded already). The lender also saves time and money in avoiding the foreclosure process. Finally, in most cases, the lender can get more money from the short sale than it can at a foreclosure auction.” (Short Sale in Surprise, Arizona: When It Is the Best Option by Dan Dodds)

3. They’re getting easier:

“On April 17, the FHFA directed Fannie Mae and Freddie Mac to develop enhanced and aligned strategies to facilitate short sales, deeds-in-lieu and deeds-for-lease to help more homeowners avoid foreclosure, including requiring that servicers review and respond to short sale requests within 30 days from receipt of a short sale offer.” (Fannie and Freddie Streamline Short Sales by Orrick, Herrington & Sutcliffe LLP)

But as short sales become more prevalent, concerns have grown about abuses. Industry experts say sellers, buyers and real estate agents are colluding to further depress the prices of already distressed houses so the buyers magnify their profits when the homes are resold.

Advocates say short sales often offer the best alternative for homeowners who can’t afford to keep their homes and want to dodge the harsher credit damage and embarrassment of foreclosure.

For lenders, short sales are a way to avoid the higher cost and public stigma involved with seizing a home and evicting its occupants. A short sale is initiated by the homeowner, although it requires the lender’s consent.

The burgeoning popularity of short sales in Inland Southern California is reflected in market data showing that in January there were 2,152 short sales in the region. They represented 32 percent of all homes sold, up from 22 percent in January 011.

At the same time, real estate agents complain that some of their peers who are hungry for business are assisting investors to defraud the banks by obtaining homes at artificially deflated prices, sometimes by using phony valuations. As a result, they say mortgage investors, including government-sponsored enterprises like Fannie Mae and Freddie Mac, are taking unfairly large losses.

“If the property being sold short is a Freddie or Fannie type loan the money (lost) ultimately is coming out of the taxpayer’s pocket,” said Brian Pozza, senior fraud strategist at CoreLogic, a research company in Santa Ana that reports on short sale risks to lenders.

Gene Wunderlich, director of government affairs for the Southwest Association of Realtors, said investor groups sometimes offer the short sale listing agent an opportunity to collect commissions on two transactions in the flip of a house from the distressed seller to the investor and then to another buyer.

The investor group gets the listing agent to step aside so it can control the transactions from start to end, Wunderlich said.

He said the investors “come in with a couple of dummy offers” for the listed house that are much lower than they could get in the open market. That way the bank ultimately is likely to accept the investors’ low ball offer.

The investors then arrange for the selling agent to raise the price of the house they are purchasing in the multiple listings so it can be quickly resold at a sizeable profit, he said. Throughout the process, he added, “the bank is kept in the dark.”

In some instances the investors arrange concurrent escrows so the sale and resale of a house occur simultaneously. That way investors can make a profit without using any of their own money and without adding any value to the property such as by refurbishing it, Wunderlich said.

CoreLogic in its latest report on “suspicious” short sales that was published last May said “nearly one in six suspicious short sales is resold on the same day, making legitimate increases in value doubtful.”

Danica Vorkapich-Patton, broker-owner of California Property Solvers, said she has heard of investors hiding the ultra-low prices on homes that they purchase by hiring an out-of-state lawyer to close the deal.

This out-of-state closing is not recorded in the local multiple listings, she said, so neither the lender who took a loss on the short sale nor the second buyer of the property will know that the price of the house increased sharply overnight.

Investors and unscrupulous agents have an easier time manipulating a short sale than a standard sale because the home owner who has no equity frequently does not care whether his listing agent markets the house to obtain the highest available price.

“The original owner of the property is not really involved. All they want to do is sell the property and get out from under it. They are going to lose money in either case,” said Wunderlich.

Another reason why homeowners who sell short have little incentive to push for the highest sales price is that in California lenders who agree to a short sale may not sue to recover the deficiency.

Further, Congress in 2007 exempted homeowners from having to report the amount of the loan forgiven in a short sale as income on their federal taxes. The exemption is in effect until December.

The listing agent under the law has a fiduciary duty to the seller he represents and not to the lender, although the lender in a short sale has the most to lose or gain, said Tom Pool, spokesman for the California Department of Real Estate, which licenses real estate agents.

“It puts the lender in the situation where they have to do their own due diligence to make sure they are getting an optimum price,” he said. Still, he said agents could be committing fraud if they misrepresent the true market value of a property to a lender.

Sometimes the seller, rather than investors, will initiate a deception, said Vorkapich-Patton.

“Homeowners don’t want to lose their homes. So they are trying to get creative. They go to a relative or friend and say you can buy my house from me and I get to stay in the home,” she said. Such arrangements also can result in a property being sold for less than if it were marketed to the public, real estate experts say. Also while such a sale is not illegal, it becomes fraudulent if the seller signs an affidavit routinely required by the bank that there are not relatives or associates involved.

Agents struggling to stay in business in the wake of the housing market crash may be willing to participate in these schemes. “Agents who haven’t had a paycheck in a year will jump on anything,” said Wunderlich.

Glenn Stull, a longtime broker and real estate agent in Cherry Valley, said he believes there is widespread short sale abuse in Inland Southern California. He contends that the real estate industry needs to amend its code of ethics so agents are required to show the banks all the offers they receive on a property and to let them know how long the properties are marketed before an offer is accepted.

Stull said too many short sales are recorded the same day they are put on multiple listings and too many others are put in a “hold-do-not show” status to discourage competing offers. These practices can contribute to driving down home prices and are “hurting the community and the local tax base,” Stull said.

The California Department of Real Estate has received complaints about short sales and taken about 25 disciplinary actions against agents for professional violations since 2010, said Pool. He said the department would do more if lenders were more cooperative in the investigations. “Many times we ask for cooperation that is not forthcoming,” he said.

Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said lenders’ worries about short sale fraud are “pretty mild because they are aware of it and have taken proactive steps to mitigate any potential loss and because law enforcement is aware of it as well.”

Vorkapich-Patton said “Most banks are providing the listing agent with a document that all parties in the transaction must sign to guarantee there is no fraudulent activity going on behind their back.”

Also she said in the last six to eight months title and escrow companies in California have refused to accept double escrow sales of short sale properties because of complaints from lenders.

Pozza at Corelogic said “once the housing market took a dive, people were under the impression that mortgage fraud had gone away.” But he said CoreLogic’s short sale studies were “a heads up” to lenders that fraud, which once largely was about misrepresenting a homebuyer’s finances, had morphed into a new form.

Corelogic has developed products designed to inform lenders if a short sale property is scheduled for end-to-end sales and tell them how soon after a home is sold short it is resold, and at what price, he said.

One outcome, he said, may be to let lenders know whether the banks that are servicing their troubled mortgages are doing a good enough job.

Source: PE.com

Mission Valley nowadays serves as an important shopping and entertainment center for San Diego. Some condominiums and apartments can be found in the area as well.

Showing properties 1 - 15 of 97. See more Mission Valley community real estate.
(all data current as of 5/18/2012)

1. $109,000 : 10797 San Diego Mission Rd 101, San Diego
   
   2 beds, 1 full bath

   Home size: 766 sq ft

   Lot size: 3.00 ac
2. $225,000 : 2020 Camino De La Reina 2304, San Diego
   
   2 beds, 2 full baths

   Home size: 1,006 sq ft

   Lot size: 24,664 sqft
3. $135,000 : 6171 Rancho Mission Rd 314, San Diego
   
   2 beds, 2 full baths

   Home size: 866 sq ft

   Lot size: 15,246 sqft
4. $189,900 : 6780 Friars Rd 249, San Diego
   
   2 beds, 2 full baths

   Home size: 957 sq ft

   Lot size: 976 sqft
5. $205,000 : 1950 Camino De La Reina 110, San Diego
   
   2 beds, 2 full baths

   Home size: 1,025 sq ft

   Lot size: 24,664 sqft
6. $380,000 : 1442 Camino Zalce, San Diego
   
   3 beds, 2 full baths

   Home size: 1,450 sq ft

   Lot size: 1,607 sqft
7. $199,900 : 5645 Friars Rd 400, San Diego
   
   2 beds, 1 full, 1 part baths

   Home size: 1,120 sq ft

   Lot size: 43,560 sqft
8. $175,000 : 2230 River Run Dr 196, San Diego
   
   2 beds, 2 full baths

   Home size: 977 sq ft
9. $149,767 : 6314 Friars Rd 309, San Diego
   
   2 beds, 2 full baths

   Home size: 972 sq ft
10. $90,000 : 5966 Rancho Mission Rd 233, San Diego
    
    1 bed, 1 full bath

    Home size: 604 sq ft
11. $434,900 : 918 Camino De La Reina 55, San Diego
    
    3 beds, 2 full, 1 part baths

    Home size: 1,628 sq ft
12. $425,000 : 2843 Piantino Cir, San Diego
    
    2 beds, 2 full baths

    Home size: 1,735 sq ft
13. $184,000 : 2216 River Run Dr 96, San Diego
    
    2 beds, 1 full bath

    Home size: 928 sq ft
14. $130,000 : 6780 Friars Rd 260, San Diego
    
    1 bed, 1 full bath

    Home size: 664 sq ft
15. $9,999,995 : 4605 Yerba Santa Dr, San Diego
    
    7 beds, 10 full baths

    Home size: 15,000 sq ft

Listing information deemed reliable but not guaranteed. Read full disclaimer.

Foreclosures are plentiful in Atlanta, and as in other highly distressed markets, investors are swooping in, some buying in bulk, to take advantage of the hot rental market. Another new trend helping to alleviate all the distress is short sales.

Short sales (selling the home for less than the value of the loan) are rising across the nation, and while they have yet to overtake foreclosure numbers in Atlanta, they are in fact up 120% from a year ago, according to RealtyTrac.

Knowing all this, I searched for a short sale specialist, and found Ben Hirsh, of Hirsh Real Estate Specialists. He does much of his work in foreclosure sales and has a contract with Fannie Mae, but lately short sales have been a growing part of his business.

“The banks can make all the rules they want, but the banks are too large to be that nimble. And you can’t really blame them. They have millions of assets all around the country. You expect them to turn around in 30 days and give an answer on whether they are going to forgive the money you owe them? I wish that would happen in 30 days, but that’s my dream world.”"The short sale market is overtaking the REO (bank-owned) market,” says Hirsh, who still expects to sell at least 300 foreclosed properties this year. He notes a greater willingness among real estate agents, thanks to a greater commitment by banks to expedite the once-lengthy process. Fannie Mae and Freddie Mac just last month announced new rules requiring them to answer short-sale requests within thirty days. Hirsh is skeptical that that will happen:

Hirsh did say, however, that getting approved for a short sale, while time-consuming, does not require much hardship, if any. That struck me as strange, since short sales are supposed to be a foreclosure alternative. The nation’s five largest banks get credit for doing short sales as foreclosure alternatives in the $25 billion mortgage servicing settlement they recently signed.

Source: The Street.com

That’s when the two biggest mortgage backers in the U.S., Freddie Mac and Fannie Mae, will impose new rules requiring lenders to respond to offers within 30 days.

Mortgage servicers like Wells Fargo, Bank of America, JP Morgan Chase and GMAC will be required to decide within a month of receiving a short-sale offer.

And they will have to weigh requests for pre-approved short sales within 30 days.

The average short sale takes 306 days from start to end, compared to 113 days five years ago, according to RealtyTrac.

Some may not blame lenders for dragging their feet. After all, they’re the ones taking the hit in a short sale.

Homeowners who experience hardships like a job loss or serious illness, who struggle to pay the monthly note, and who owe more on the house than it’s worth may seek to escape the burden through a short sale.

But they must persuade their lender to allow them to sell the house for less than the outstanding loan, and to forgive the difference between the sales price and loan amount.

On average in the Memphis area, short-sale buyers get a 20 percent discount from market value of a house, Silvana Piadade said. She’s a Realtor who specializes in short sales, typically representing the struggling homeowner trying to sell.

Last year, she estimates, she completed 40 short sales.

Piadade is skeptical that Fannie Mae and Freddie Mac’s new rules will be effective.

“From experience, I can tell you that’s wishful thinking,” the Prudential Collins-Maury Realtors agent said of the 30-day decisions.

“In the last six months, it’s gotten worse in terms of the servicers not having qualified people to handle short sales.”

The new rules don’t solve the problem of servicers’ staffing being overwhelmed by the number of short-sale applications, Piadade indicated. “They’re just putting warm bodies there and try to deal with short sales,” she said.

“… When you have the volume Bank of America and Wells Fargo are handling, there’s no way to speed it up.”

The longer the lender takes to approve a short sale, the more likely the prospective buyer will walk away before a deal is completed.

“If you lose the buyer, then the seller doesn’t have any other option if he doesn’t get another buyer quick enough,” Piadade said, adding it creates a high risk for foreclosure.

To the extent short sales are a win-win, the bank’s victory is the money it still saves by avoiding foreclosure. The house could sit there for a long time, in need of maintenance, at risk of vandalism and vulnerable to losing its value.

The paperwork for short sales is thick. After all, the lender must verify that its borrower is struggling financially the way the borrower claims.

An agent experienced in short sales isn’t challenged by completing the forms and providing the required documents, Piadade said.

“It’s just dealing with the banks” that don’t have the better systems in place, she said. “You have to call every two days.”

A recent client of Piadade’s, Lilia Meraz, benefited from a short sale in February.

She and her husband, with three children, bought a four-bedroom house on two acres in Byhalia in 2006 for $212,000.

Financial problems hit after the couple separated for a few months. Plus, the residence proved to be too far — a 40-minute drive — from Meraz’s job as a hair stylist in Southaven.

The $1,500 monthly mortgage became too much.

She was two months behind on her mortgage before contacting Piadade and applying for a short sale last summer.

Meraz owed $197,000; the house sold at short sale for $167,000.

For its part, the bank absorbed the loss but avoided foreclosure expenses.

For her part, Meraz will have to restore her credit over several years before she can buy another house, but she escaped a $197,000 burden.

That transaction is part of a big shift occurring in the real estate market, RealtyTrac reported in late April. Short sales are outnumbering foreclosure sales in many areas.

In the last three months of 2011, 88,303 short sales occurred across the U.S., according to RealtyTrac. That was a 15 percent rise from the previous year.

“We continued to see a shift toward pre-foreclosure, or short sales, and away from (bank-owned) sales in the fourth quarter,” Brandon Moore, CEO of RealtyTrac, said.

————————————————–

Short sale issues

Several factors can affect a short sale, including:

– The knowledge and efficiency of the loan servicer.

– The property’s condition.

– Title showing liens against a property.

– Delinquent home owner’s association dues.

– Emotional distress of the homeowner.

– A buyer willing to make repairs on properties sold as-is.

Source: Silvana Piadade, findhomesin memphis.com

In addition to concerns over a rising volume of strategic defaults, are disconcerting results about consumer priorities, it was noted in the survey report. Only 29 percent of bankers said the current generation of homeowners consider a mortgage to be the most important credit obligation, while 49 percent said it’s not a priority.

A strategic default often occurs when the value of the property is below the mortgage balance (under water).

The rationale, according to FICO’s Chief Analytics Officer Dr. Andrew Jennings on YourHomeStrategy.com, is simply this: “After five years of a brutal housing market, many people now view their homes more objectively and with less sentimentality.”

“Well known economists like Paul Krugman and Hal Varian have acknowledged that strategic defaults were an inevitable result of the collapse of the housing bubble and as long as home prices continue to fall, strategic defaults will continue to rise,” reads YourHomeStrategy.com.

Whether or not a strategic default is in the best interest of the defaulting homeowner is a decision that each individual borrower needs to determine, based on his or her personal economic situation. But it can create a devastating blow to the person’s credit record.

Questions from readers

Question: Do most people expect rents to increase this year?

Answer: The recently released Fannie Mae National Housing Survey revealed that 48 percent of Americans who responded expect rental prices to increase, and the expectation is that they will go up by 4.1 percent over the next 12 months.

That’s the biggest projected increase recorded to date. Also, 33 percent of the survey respondents expect home prices to increase over the next 12 months. Americans project home prices will go up by 0.9 percent over the same time period. If respondents were going to move, 66 percent say they would buy a home, according to the survey report.

Q: How long does it take to get a decision from a lender about a short sale proposal?

A: New regulations will soon be implemented that will expedite most of those decisions. Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The Government-Sponsored Enterprises recently issued new guidelines that are designed to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales. Fannie and Freddie plan to use the new short-sale timelines to evaluate servicer compliance with their Servicing Alignment Initiative, reported DSNews.com.

Q: How can you know if a real estate firm is truly ethical?

A: Awards are given for outstanding high ethics. A recent example is an award given to Realogy Corp., a global leader in real estate and relocation services. According to a Realogy release, it has been recognized by the Ethisphere Institute, an international business ethics think-tank, as one of the 2012 World’s Most Ethical Companies.

“Out of a record number of nominations for the award, Realogy earned the coveted recognition by implementing and maintaining upright business practices and initiatives that are instrumental to the company’s success, benefit the community and raise the bar for ethical standards within the industry.”

Q: Where does the proposal to reduce the principals of troubled mortgages now stand?

A: According to DSNews.com, the head of one of the world’s most powerful financial policy bodies has tossed her hat into the debate about mortgage principal reductions.

“Christine Lagarde, managing director of the International Monetary Fund, says the housing problem in the U.S. is something that needs to be addressed” and “it is a matter of urgency,” reported DSNews.com.

“Lagarde tipped her hat in favor of the administration’s proposal of principal reductions but said the problem is that the big boys and girls — Fannie and Freddie — have to be part of that equation.”

Source: siouxcityjournal

Showing properties 1 - 12 of 275. See more 92101 zip code real estate.
(all data current as of 5/18/2012)

1. $294,900 : 1262 Kettner Blvd 604, San Diego
   
   1 bed, 1 full bath

   Home size: 682 sq ft
2. $895,000 : 700 W Harbor Dr 2403, San Diego
   
   2 beds, 2 full baths

   Home size: 1,353 sq ft
3. $309,000 : 1501 Front St 515, San Diego
   
   2 beds, 2 full baths

   Home size: 1,108 sq ft
4. $349,000 : 500 W Harbor Dr 1606, San Diego
   
   1 bed, 1 full bath

   Home size: 975 sq ft
5. $148,000 : 1150 J St 703, San Diego
   
   0 beds, 1 full bath

   Home size: 571 sq ft
6. $524,900 : 800 The Mark Ln 2304, San Diego
   
   1 bed, 1 full bath

   Home size: 905 sq ft
7. $1,080,000 : 700 W Harbor Dr 2404, San Diego
   
   2 beds, 2 full baths

   Home size: 1,268 sq ft
8. $1,175,000 : 200 Harbor Dr 3002, San Diego
   
   2 beds, 2 full baths

   Home size: 1,474 sq ft
9. $429,000 : 1050 Island Ave 615, San Diego
   
   2 beds, 2 full baths

   Home size: 1,283 sq ft
10. $425,000 : 700 W E St 512, San Diego
    
    1 bed, 1 full, 1 part baths

    Home size: 1,041 sq ft
11. $399,900 : 877 Island Ave 310, San Diego
    
    1 bed, 1 full, 1 part baths

    Home size: 1,113 sq ft
12. $649,000 : 321 10th Ave 2301, San Diego
    
    2 beds, 2 full baths

    Home size: 1,103 sq ft

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The guidelines, required by the Federal Housing Finance Agency and effective June 15, would require servicers of mortgages backed by Freddie and Fannie to review and respond to requests for short sales within 30 calendar days of receipt of a buyer’s offer.

A short sale is a transaction in which a lender agrees to accept less than the amount owed on the mortgage. It is a “strategic default,” designed to get a borrower out of financial trouble without having to go through the drawn-out legal tangle of the foreclosure process.

A short sale does affect the seller’s credit score, reducing it as much as a foreclosure would, according to Fair Isaac Corp., which developed the system.

On average, according to recent data from foreclosure search engine RealtyTrac, short sales are taking 306 days from start to finish, compared with 113 days in 2006 as the housing market started to unravel.

Area real estate agents who handle such transactions have acknowledged that they do take a long time to complete, and that delays often result in loss of the sale.

But lenders are becoming more accommodating, though they have issues with short sales because they have been abused by unscrupulous investors and others, perhaps to the tune of $375 million in annual losses nationwide.

In January, there were more than 35,000 short sales nationwide, on pace for more than 105,000 pre-foreclosure sales for the first quarter. That would be the highest quarterly total since the first three months of 2009.

This is not the first time the government has acted to accelerate the short-sale process. In late 2009, the Treasury Department proposed financial incentives and simplified the procedures for completing them. That included a $1,000 payment to servicers and a maximum of $1,000 to go to investors who signed off on payments to subordinate lien holders, the Treasury said. Borrowers were to receive $1,500 in relocation expenses.

The rules, which took effect in April 2010, were supposed to reduce the short-sale process to 10 days, but didn’t.

The pending Fannie Mae/Freddie Mac guidelines will mandate weekly status updates to the borrower if the short sale remains under review after 30 calendar days.

Servicers also will be required to make and then inform borrowers of final decisions within 60 calendar days of receipt of an offer.

By the end of the year, Fannie and Freddie will announce other “enhancements” to the short-sale process, including borrower-eligibility evaluation, simplified documents, and payments to subordinate lien holders.

Housing Finance Agency acting director Edward J. DeMarco said the changes were being considered “additional tools to prevent foreclosure, keep homes occupied, and help maintain stable communities.”

Source: philly.com