Banks Resume Foreclosures…

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I can help

Posted by Michael Hughes

It is important  in today’s Boulder real estate market that you know what a short sale is In order for these people to sell their house and move on they either have to come to the closing with money or negotiate with the bank who hold the mortgage to accept less than they owe (short sale).

The Basics: A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan (mortgage).  It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower into foreclosure. A short sale is better for the borrower because it does not impact them as severely (or nearly as long) as a foreclosure does. Both parties (lender and the owner) consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency..

Owners View: These would be sellers are stuck.  They would like to (need to) sell their house in Boulder, but for any number of reasons (bought at the peak of the real estate market, or negative amortizing loans, or ARM’s, or second loans, or HELOC’s or, or,or) they cannot find a price a buyer will pay for the home and that will also pay off the existing loans and closing costs.  Convincing the lender is not an easy job to take less than they are owed.  First of all there must be a compelling hardship where the seller absolutely cannot keep up the payments nor come up with cash to close.
So they must have a proveable hardship (and write a letter in detail regarding what the hardship is). Once all of the documentation is complete a package including the sales contract signed by buyer and seller is sent to the bank for approval.   This is the tough part, it takes patience.  It can take up to 6 or 7 months but usually no fewer than 8 weeks to get an answer from the bank.  If the short sale is approved and  the sale goes through at a lower amount,  the sellers credit is hurt (although not as bad as a foreclosure) and the bank still has the right to claim and try to collect a deficiency.

Buyers Perspective: Short sales provide a unique value opportunity.  If you have the patience of Job. Many times banks approve a price which is a great deal for the buyer.  The main downside for a buyer is the uncertainty.  The bank has the right to accept other offers so even if you were the first offer in to the bank, by the time they get around to reviewing it there may be multiple offers.  It might take two or more months to figure out that the bank will not approve the list price of the house.  Buying a short sale is not for someone who has a certain date in mind or is not willing to be patient while the weeks tick by without any word.  There is no countdown, there are no numbers.  You hear when you hear and the news is not always what you had hoped for.  For the right buyer it is a good opportunity but it is certainly not for everyone.

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 and you can also visit my website or the Boulder MLS. You can also facebook me.

Solution Housing Bubble

Posted by Michael Hughes  April 10, 2010

This is how we solve the current housing crisis. Encourage, no make the bankers take less as in short sale (currently known by Realtors ® as “long sales”) or foreclosures (REO’s) as bankers reduce inventories of foreclosed properties and slash prices in order to sell them more quickly it will result in the average value of a home going upward. This will drive the market to a stronger position and increase market value as the supply diminishes, even if the demand is static (Economics 101 CU-Boulder- Rezza Ramazanni). If you would like to sell or buy a home in Boulder give me a call today.

If you have questions regarding this article or are thinking you will Buy A Home In Boulder please call me 303-359-6627 or e-mail Michael Hughes at Fuller Sotheby’s International Realty in Boulder, CO

Is the Economy Getting Better? Divergent Views

By Michael Hughes  January 6, 2010

Maybe the Great Recession has relaxed it’s grip on America but it has been replaced by considerable debate over the clarity of economic indicators and the staying power of improvement.  The Good:

• Fifth straight month of gains in manufacturing.
• Some economists think data released this Friday will show the economy gained jobs in December, the first monthly net increase in two years.
• Stock prices are up.
• Oil prices are up.

The Bad:

• Americans are saturated in debt prompting many to hunker down in to thrift mode.
• The government largess and stimulus will be exhausted by mid year.
• The upcoming surge in foreclosures.
• The dysfunction of the financial system.

Economists of a more optimistic type assert that such views fail to account for what has been happening in recent months.  Areas of the economy that went into deep freeze have revived and must grow just to replenish their inventories.  (ie the Index of Manufacturing reported on Monday increasingly robust orders and production at American factories in December.  Purchasing managers index rose to 55.9, its highest level since April 2006.  Hopes of a lasting recovery were also bolstered by news from China, South Korea, India and Taiwan showing economy expansions in December at a faster clip than at any time since the beginning of the global downturn.  Mr. Sinai an economist said “Strong growth in Asia reverberates around the world and helps U.S. exports.”

Let’s face it during the over reaction that gripped the financial markets in 2008 many companies panicked and cut too many workers and pared back too much inventory.  There will be a reversal here and I don’t think it’s ephemeral.  Chief economist Robert J. Barbera believes the economy will add 2.5 Million new jobs this year.  A considerable improvement.  As investors absorbed evidence of factory expansion, they saw signs of more cash registers ringing up sales, more insurance agents writing new policies, more trucks carrying more product and more transactions by banks.

2010 is going to be a great year!

Need help with real estate, foreclosure, short sale, or just have a quick question?  Give me a call Michael Hughes at 303-359-6627 or you can email me at michael.hughes@sothebysrealty.com or visit my website at www.bolderrealestate.com