Urban Life

Urban Team's Downtown Phoenix Real Estate Site Has A New Look

The web site gnomes have been very busy lately changing the theme and updating our downtown and north central real estate, home information and search site, UrbanConnectionRealty.com. 

We've been using the StudioPress Agent theme for a whiile and just updated to the latest version. It has amazing navigation tools and everyone tells us it is much easier to get to articles on the real estate subjects they care about. The best comment so far is that the new design is better than a bag of fritos.

We've added a completely new section to the site about short sales in downtown and north central Phoenix. We've collected the most asked short sale questions and written artlces to provide in-depth answers.  Here is a direct link to the short sale page with links to the answers:

Short Sale Help, Information in Downtown and North Central Phoenix AZ

In addition to the short sale section, we are continuing our journey through the 35 historic districts in downtown and midtown Phoenix. This project has turned to to be incredibly fun. We've been researching historic archieves, walking Fred the Dog though neighborhoods and taking some real quality time. Our goal is to provide new insight in these special pieces of Phoenix history rather do a cut and paste rehash of someone elses work. Here is a link to the landing page for the historic district and info section of the site:

Historic Phoenix Homes Arizona

Wow, this post got longer than intended. We hope you like the new look and ease of navigation on the UrbanConnectionRealty.com site. If you have comments or want us to add something, leave us a comment on the site. We love your input.

Best to all,

The Urban Team at Realty Executives
7600 N. 16th Street, Suite 100
Phoenix, AZ 85020
602-234-5777
602-486-4839 (text)
Gene@UrbanTeamAZ.com

Do you need help with a short sale or foreclosure in Phoenix?

There is a lot of confusion for homeowners facing foreclosure or short sale in the Phoenix AZ area. We get phone calls and emails every day with short sale and foreclosure questions like:

• Will I be responsible for the loan deficinecy?
• How do I negotiate with my lender?
• How long does it take to sell a home by short sale?
• What is HAFA?
• My loan modification didn't work so what do I do now?
• Can I stop a foreclosure with a short sale?
• The house I am renting is going to foreclosure, what are my rights?

We like helping people answer these questions or pointing them to people who can help. In times like these we need to do what ever we can to help each other. Below is a list of some places you can find answers to your questions about short sales and foreclosure. If you don't see something that addresses your specific questions or concerns, pop us an email at Gene@UrbanTeamAZ.com or give us a call at 602-234-5777. Most of the time we have answers and if not we'll do our best to point you to a caring pro.

Short Sale Information and Help:

Short-Sale-Phoenix.com is a site dedicated to information about short sales in the Phoenix area. There are dozens of articles from news sources around the country, a step by step guide for selling homes by short sale, contact information for attorneys and much more.

Information About Avoiding Foreclosure:

Know Your Options is a new site put out by Fannie Mae. designed to inform homeowners of the various options avialble to them. It is acutally a pretty good site, but remeber it was put together by the government so they spin things a bit.

Legal Help With Foreclosures & Bankruptcies:

Your local bar association can help you find an attorney who specializes in foreclosure and bankruptcy law. We have found a couple local sources that our clients said were excellent as well. They are:

Nagle Law Group
4530 E. Shea Boulevard, Ste. 140
Phoenix, AZ  85028
602-595-6951
robert.nagle@naglelaw.com or stuart.pack@naglelaw.com

Hymson, Goldstein & Pantiliat, PC
14646 N. Kierland Blvd., Ste 255
Scottsdale, AZ 85254
480-991-9077

We really do hope this information is of help. We spend hours each week studying information about short sales and foreclosures; It can be overwhelming.

Best to you,

Gene Urban & Ron Urban
The Urban Team
602-234-5777

we are bothers... we will treat you like family

How to negotiate a short sale in Phoenix, AZ

One of the big questions from people selling their home by short sale is how to negotiate with their lender. If you have tried talking with a bank or loan servicing company, chances are it was frustrating, not very productive and maybe even a nightmare.

Negotiating with lenders is tough for one simple reason... a massive number of variables and rules. Plus, you are dealing with the bureaucracy of a bank/lender. For most people, navigating the short sale waters is pretty much impossible and one mistake can close down the process.

So, what can you do? We have found a great solution. You may think we are going to say, hire a Realtor to negotiate with your lender. That would be a BIG NO in our book. Very few real estate agents have the skill and experience to negotiate with a lender. In our experience it takes several dozen transactions before you have a clue of what to do.

We have, however, found a wonderful third party company who does exceptional work. The principle in the firm is a woman who teaches agents best practices for negotiating short sales. She has been involved with hundreds of short sale transactions helping home owners sell their home. Plus, she has hired former mortgage industry professionals to do the negotiating. Her firm is called Buy and Sell Smart.

On our short sale web site, www.short-sale-phoenix.com,  we have a bit more information about the gang at Buy and Sell Smart and contact information. Simply use this link to go to our page on negotiating a short sale in Phoenix, Scottsdale and other Arizona cities.

We'd like to be clear about something here. We get no referral fee from them. We've written this post because a lot of people are frustrated, angry and don't know where to turn. Finally, we have an answer and we're delighted to share it with people thinking about a short sale in the Phoenix area.

We hope this information helps you if a short sale is in your future.

Gene Urban and Ron Urban
The Urban Team at Realty Executives
602-234-5777

 

 

Banks and PMI Companies Use Lies & Intimidation

Some banks and mortgage insurance companies are using lies and intimidation tactics to scare home owners conducting short sales to sign promissory notes in Arizona.

Yesterday, one of our clients received an email from their lender filed with lies and mis-truths in an effort to have them sign a promissory note or face foreclosure on their home. Luckily, they followed our advise and had an attorney on their side to protect their rights under Arizona law. Below is the actual email from the lender.

The pmi company will allow this sale to proceed, however they will require that the home owner sign an interest free promissory note of $35,000. The term would be 180 payments @ $194.44/mo. If the home owner decides to accept this option, deficiency rights can be waived and we can proceed with the short sale and there will be a lesser impact on the home owner's credit rating. If the home owner does not wish to participate, I will be required to close the file and the home will need to proceed with foreclosure.  Please note, in the event of foreclosure both the lender and the pmi company can reserve the right to pursue the home owner for deficiency.  All aspects of the home owner's situation have been taken in to account by the pmi company.

The email is filled mis-truths. Under Arizona law, our client is protected under anti-deficiency statues and neither the lender or the pmi company can pursue them after the trustee sale/foreclosure. NOTE: This is not the case for all homeowners, yet our client does qualify under the law.

Tactics such as this are sadly common. Since many homeowners do not seek legal counsel, a very bad idea in our opinion, they may not know their rights and can be taken advantage of by such threats.

The bottom line… if you are attempting a short sale, make sure and hire an attorney to protect you against the lies, threats and deception lenders and PMI companies are using. If you live in the greater Phoenix area, our web site, Short-Sale-Phoenix.com has an attorney resource page.

Be careful out there and protect yourself…

Gene Urban
The Urban Team at Realty Executives
602-234-5777

Short Sale Horror Story as Evil Bank Sweeps Checking Account

Those of you who often visit Urban Life know we are highly involved with short sales. Ron has the coveted Master Short Sale Consultant (MSSC) certification and we both hold SRF designations.

Naturally, we hear a lot of strange stories about short sales, lenders, evil banks and more. That said, the most recent was beyond belief and offers a bit of advise for those who have bank accounts with the same company that services their mortgage.

THE STORY:

A borrower had a nearly empty checking account with $1000 of overdraft protection.  The bank, without the consent or permission of the borrower, increased that overdraft amount to $10,000 so the bank could process a mortgage payment through this account. Yes, they really did that. 

To add insult to injury, the bank’s action created a negative balance for the account holder, a problem that would have to be cleared up before he could close the account.

You may wonder how that could possibly happen. The fine print in many account agreements signed when opening a new bank account provides the bank the ability to sweep funds in an account to pay other delinquent accounts. 

THE MORAL OF THE STORY: Don’t keep your checking and savings accounts with the same company that services your mortgage or mortgages.

Make sure you share this story with your friends, workmates and others who could be hurt by such evil business practices.

Be safe out there…

Gene Urban
The Urban Team at Realty Executives
602-234-5777

This story was provided by Thomson Conant, a Phoenix based law firm with a dedicated short sale practice.

Bank of America Short Sales Problems Being Resolved

I attended  a Bank of America short sale seminar yesterday at the Westin Kierland in Scottsdale, AZ. The event was targeted to the real estate industry and agents trying to help clients with their short sales in the greater Phoenix market. The sessions were lead by Matthew Vernon, the new head of the short sale and REO divisions for Bank of America.

Vernon was hired in December, 2009 to fix the problems that have plagued Bank of America customers trying to sell their home via the short sale process. Surprisingly, Vernon spoke with unusual candor for a senior bank official. He fully admitted the mess BofA made with short sales in 2008-2009 and did not try to belittle the frustration and angst home owners, home buyers and realtors have felt when faced with a Bank of America short sale.

Matt, as he asked to be called, talked about the complexities he faced when taking over in December. Problems like 60,000 short sale applications/month coming into the system, 1200 investors on BofA loans that have different rules of engagement, poor technology, poorer cross communications, not enough trained staff and too complex a set of procedures/policy.

According to Matt, Bank of America customers will see a marked difference. Procedures have been streamlined with the adoption of the Equator system where homeowners and real estate agents input the short sale application and other information. Bank of America has and will continue to add staff and facilities to meet the volume of short sale business.

Perhaps of greatest interest is Bank of America’s shift to HAFA policies. Vernon says BofA will work quickly to attempt loan modification. If that fails, qualified distressed homeowners will be offered the opportunity to sell their home by short sale. In such cases, the terms of the short sale will be agreed to upfront prior to the home being listed.

Vernon’s goals are impressive. He wants the short sales to be, time-wise, very similar to traditional home sales. He told the audience not to measure Bank of America on its past, rather on the present and future where new systems, procedures and staff are committed to making the process decided more transparent and effective. 

For more information visit the Bank of America Short Sale Info Page. 

Also, the Urban Team has a site dedicated to short sale information, legal advise, FAQ's and more for those in the greater Phoenix and Scottsale, AZ market who need short sale help and information.The Urban Team's Short Sale Site

Gene Urban
The Urban Team at Realty Executives
602-234-5777

HAFA, Short Sales and Government Koolaid

There has been a lot of talk about HAFA,  Home Affordable Foreclosure Alternatives Program (HAFA). For those who don't know, HAFA, is a government program touting to reform short sales, making them more streamline and doable. In truth it is government Koolaid at its finest.

Personally, I had high hopes for this bit of policy until the reality of it came to light. It is so full of loopholes, opt-outs and poor thinking that it would be funny if it didn't give false hope to so many who need the real thing. Let's look at some of the BIg Problems as I see them.

• The guidelines are simply that, guidelines. It is not law, only a suggestion on how banks and loan servicers should handle short sale applications. Since it is not law, there is no requirement to play. Gutless and non enforceable language is how I see it.
• Homeowners have to attempt a loan modification and be denied before the guidelines can kick in. This is a real BIG problem as loan mods are expensive, time consuming, frustrating and seldom granted. According to one expert, most people can't afford a loan modification and when denied are days or weeks away from foreclosure.
• The guidelines have little if any upside to the banks, lenders and investors. Since it is an opt-in program, they have little motivation to participate. I don't know about you, but I haven't seen too many articles touting the compassionate nature of the banking industry. To the contrary, they are generally bottom liners and the HAFA guidelines do not favor their bottom line.

Our advise, as short sale knowledgeable real estate guys, is to work with an attorney who really knows short sales and a realtor with a lot of knowledge. We believe you should have your attorney help you submit your short sale package to the lender and handle all conversations. NOTE: Make sure the firm you hire has a dedicated short sale division and a strong track record. Short sales are not for the inexperienced or weak at heart. They demand a lot of knowledge and skill sets many do not possess.

If you want to learn more about short sales, we have a web site dedicated to short sales, www.short-sale-phoenix.com, that includes a FAQ section, numerous articles and referrals to qualified legal counsel who can help negotiate your short sale.

That concludes this rant about short sales. Hope it helps and please, please don't drink the government koolaid on this one. It may help some senators and congress people get votes, but it is unlikely to help get your short sale done.

Gene Urban
The Urban Team at Realty Executives
602-234-5777

www.UrbanTeamAZ.com
www.Short-Sale-Phoenix.com
www.UrbanConnectionRealty.com

Why Do Short Sales Take So Long To Close

We are often asked why it takes so long to close a short sale, especially since the banks and Government say they have streamlined the process. Below are a few of the many reasons we’ve discovered as the Urban Team has ventured into helping people through the short sale process.

Secondary Financing: 

Many homeowners have more than one loan on their property. Since the primary lender is taking a loss, they are reluctant to give much, if anything, to the second lien holder. Often this is not acceptable to the investor in second position and they draw a line in the sand and become uncooperative.

A common scenario is the secondary lender wants a settlement of 10% of the loan amount. Let’s say the loan was for $40,000, then they want $4000.00. The problem is many primary lenders cap the amount the will offer the lender in 2nd position at $1000.00 - $2000.00. The result is a battle of wills. PMI, something we will be discussing in a moment, can effect the outcome of the battle as well.

Homeowner’s Credit Report:

Lenders are now checking homeowner credit reports. If the report shows the borrower is current on most everything except the mortgage, some lenders are pushing him/her to sign a promissory note for the shortfall. Most reasonable people aren’t too keen on signing away their future simply to avoid foreclosure and a take bigger ding on their credit report.

PMI Insurance:

PMI is often the biggest hurdle to overcome and the hardest to anticipate or even be aware. Let’s start with what PMI is and how it effects the negotiations.

PMI is an insurance policy lenders take out when borrowers offer less than a 20% down payment. The PMI insurance kicks in when the loan goes into default and is taken back by trustee sale or judicial foreclosure.

Let’s look at a common example of how PMI is used by the lender. A homeowner buys a house but only has enough money to put 10% down. The lender takes out a PMI policy on the other 10% and the borrower pays the insurance premium.

So, how does this effect a short sale? There are three major factors to consider.

1. PMI insurers like to see borrowers sign promissory notes because it reduces their payout to the lender. The promissory note is credited against the shortfall. Thus, they push the lenders to require the homeowner to sign a promissory note because it reduces their liability. 
2. PMI insurers can put off a payout by not accepting the short sale and forcing a foreclosure. Since, they earn money on their investments, PMI insurers like to keep it as long as they can and forcing a foreclosure can put off the payment for several more months. In their minds this just makes good business sense.
3. The third problem is a bit complex. Let’s say a second lien holder has a PMI policy that will payout 10% of their loss and the lender in first position is offering a 5% payout. Let’s do the math… if they refuse to accept the 5% offer and kill the short sale they will get a 10% payout from the PMI insurance company. What would you do? You’d probably refuse the offer and hold out for 10% or let the property go to foreclosure and take the 10% a few months down the line.

So, now you have a better sense of why lenders are reluctant to suck it up and agree to the short sale. To most lenders it is simply a matter of looking at the bottom line and deciding what direction provides the best outcome to them.

If you would like more information about short sales, we’ve put together a wed site dedicated to providing short sale information. Simply go to www.short-sale-phoenix.com and take a look.

Best to you,

Gene Urban
The Urban Team at Realty Executives
602-234-5777

The Failure of HAMP and Loan Modifications

There was a great article in Inman News discussing problems with the government's HAMP program. Steve Bergsman authored the piece and it illustrates the weak link causing most of the problems…failure of the loan servicing companies.

We’ve talked about the the problems with short sales and loan mods in previous posts, Steve Bergsman’s article gives even more insight.

HAMP's failure is quite evident. As of January, more than 900,000 homeowners were in "temporary" trial loan modification plans, but mortgage servicers had managed to convert only about 63,000, or 7 percent, of the temporary modifications to permanent modifications, reported the Treasury Department.

Here is a link to the Inman News piece for you to learn a bit more from a top industry expert’s perspective.

Enjoy…

Gene Urban
The Urban Team at Realty Executives
602-234-5777

Another Big Mistake as Banks Bypass Appraisers on Short Sales

The Federal Government's HAFA program is getting a lot of news these days. One aspect of HAFA is to streamline and set guidelines for the short sale process including the use of BPOs verses appraisals.

The first question you might ask is what the heck is a BPO? A BPO or broker price opinion is a quasi-appraisal performed by a licensed real estate agent. Essentially, the real estate agent is hired by the bank to evaluate the current market value of a property as part of the short sale process.

Normally, professional appraisers perform this function. If you've bought a home you'll remember the bank required an appraisal before they would approve the loan. Appraisers take over 2000 hours of course work to learn to perform their job and spend big bucks on specialty software as well.

WHAT'S THE PROBLEM WITH BPOS VERSES APPRAISALS?

The person doing the BPO does not have the skill sets an appraiser does. They are simply real estate agents who may have never taken classwork to learn how to do appraisals. Since Arizona doesn't require a real estate agent to have a GED, the agent doing complex market analysis could have flunked high school math.

Even more important is that an appraiser is an independent 3rd party verses the agent is either directly hired by the bank or could be a party to the sale of the home. Does something sound wrong about that to you... it should. A neutral 3rd party operating independently is pretty important in my book.

To add some fun to the conversation I've put a link to the boys at Think Big, Work Small. They have a great video expose on this topic. If you have never seen one of their v-news reports you have to take a look. It is no wonder they have millions of followers... they rock!!

Think Big Work Small Newz

WHAT CAN YOU DO TO HELP?

• Make some social noise.
• Tweet & FB this post and the Think Big Work Small guys link.
• Send the National Association of Realtors a tweet @askNAR.
• Call the Arizona Department of Real Estate, 602-771-7799, and let them know you think they are falling down on the job by allowing banks to determine how we do real estate in our State. You will get a receptionist, but tell them you are a tax payer and want to talk to the commissioner.

Thanks for helping pass on the message. The banks are step by step ruining our home values and neighborhoods. Letting them use BPOs verses appraisals just adds to the problem.

Gene Urban
The Urban Team at Realty Executives
602-234-5777