Category Archives: Distressed Property

Remember Short Sales?

Posted on October 1, 2019 | Leave a comment

short-salesThere are a lot of new sales associates who were not in the business when short sales were common, and institutional memory can be short.

In the last few months, we’ve seen a rash of short sales come up and we’re finding some sellers who are in a short sale situation and don’t realize it.

A short sale is a home that is available at a purchase price that is less than the amount owed by its current owner, and the owners are considered “distressed borrowers“ due to their financial challenges. They are behind on their mortgage payments, need to sell, and their home is underwater – it is worth less than the outstanding balance on the mortgage.

The transaction benefits the bank by allowing it to avoid repossessing the home in foreclosure, which is expensive and time-consuming. Though their credit may be impacted to varying degrees, the seller avoids the significant credit hit that comes with foreclosure and the bankruptcy that sometimes accompanies it.

Short sales require a lot of extra work by sales associates to facilitate approval by the lien holding institutions, and can take months to complete. Sales associates not experienced in short sales should consult with their managing broker before jumping in with both feet.

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A HUD Closing – Not Your Normal Closing Process

Posted on November 1, 2018 | Leave a comment

HUD-HEADER-opensansAre you working with a buyer who is looking at purchasing a HUD owned property?

If so, there are some important considerations to keep in mind as you work your way to the closing table. Regardless of what the contract may or may not say, HUD has its own rules that everyone has to follow.

Here are the top-3 HUD-specific requirements that cause the most confusion during the closing process:
– HUD requires 5 full business days before closing to review all documents for approval. Expect HUD to utilize the entire 5 days before making changes to the ALTA Settlement Statement or issuing approval. They will not make exceptions. Even as we notify the buyer’s lender at the beginning of the process of HUD’s guidance timeline requirements, lenders without regular experience with HUD closings may have trouble meeting tight timelines.
– HUD does not pay any of the closing costs. Even if they are your typical customary seller costs, HUD expects the buyer to pay. They will only pay any outstanding taxes, HOA dues and prorations. From time to time they may issue a seller concession, depending on the nature of the contract.
– HUD does not allow last minute changes to the contract, even something as simple as a buyer’s address, or changing their name to read on the deed such as a middle initial, etc. It either has to stay as written or there is a process that has to be followed to make this change. Last minute changes almost always result in closing delays up to a week, sometime more.

Remember, even if you are experienced with HUD purchases, your customer may not. Early on in the process, make sure they and their lender fully understand the unique requirements of a HUD purchase.

You can get a PDF of this title tip here.

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Nuisance and Demolition Liens or Unpaid Tax Certificate in Duval County?

Posted on July 17, 2016 | Leave a comment

tallgrassDo you have a potential or active listing in Duval County that you would like to know has Nuisance and Demolition Liens or unpaid Tax Certificates? In some jurisdictions in our areas, specifically in Jacksonville Beach, Neptune Beach, and Atlantic Beach, we have to work either directly with the city or pay for a Municipal Lien Search in order to determine what Nuisance or Demolition liens there may be on a property that needs to be take care of prior to closing. For most of the county, you can find them and any unpaid tax certificates all on one webpage. Here’s how.

Let’s assume that there is a vacant lot you could potentially list off of Marbon Rd. in Mandarin. Because you already followed steps provided in previous Title Tips, you printed out appropriate information from the Property Appraiser’s website and have the last deed in hand – you also know that the RE# is 158180 0020.

Here are the simple steps to follow:
1. Go to http://www.coj.net.
2. Select “Government,” and then under “Constitutional Officers,” select “Tax Collector.”
3. Under “Important Links,” select “Property Tax Search,” and on the next page select “Property Tax Search” again.
4. Enter the RE# given above in the search box, click “search,” and click the RE# at the top of the results, “2015 — 158180-0020.”
5. Right under the Legal Description, you will see, “Nuisance and Demolition Liens.” As with most properties, it states there are none.
6. Continue to scroll down to “Property Tax Bills.” You can see the bill by simply clicking the year, it will also tell you if it was paid. In this case 2013, 14, and 15 have not been paid.
7. Scrolling down again, you will see that under “Unpaid Tax Certificates” each of those years are listed.

As always, more issues may arise in the course of producing a Title Commitment, but this a good start to see what issues the present owner may have. Knowing this, you can help them get things cleared up so when a buyer shows up with a contract, there is a smoother and quicker way to a clear Title.

You can get a PDF of this Title Tip here.

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Posted in Distressed Property, Jacksonville, Title Tip of the Week

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Short Sales and Debt Forgiveness

Posted on December 8, 2014 | Leave a comment

Generic_-_upside_down_houseOne of the more common questions about short sales over the last year has been what Congress is doing about renewing the Mortgage Debt Forgiveness Act and its included Tax Increase Prevention Act of 2014.

Without its renewal, any mortgage forgiveness resulting from a short sale would be counted as income for those sellers who were allowed by their lender to sell their homes for less than their mortgage balance. Being that the average short sale has a debt forgiveness of almost $75,000, that is no small consideration.

Well, last week the House of Representatives passed a 1-year extension, and now it is up to the Senate to act before the new Congressional session begins in January 2015.

Even though short sales have decreased significantly over the last two years, there are still a lot of people who qualify for a short sale. According to an estimate from RealtyTrac, in the first three quarters of 2014, there have been over 170,000 short sales representing $8.1 billion in debt forgiveness.

As always, anyone considering a short sale should consult their tax professional to review how it would specifically impact their taxes.

You can get a PDF of this Title Tip here.

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VA Foreclosures and the Quit Claim Deed

Posted on May 15, 2014 | 3 comments

va foreclosed homes_05-05-2011Under normal conditions, you don’t want to close a property with just a Quit Claim deed, but there is an exception to this that has evolved over the last year.

Our underwriter will make an exception for VA foreclosures who are transferring with only a Quit Claim deed.

Buyers and their agents may be concerned that with a Quit Claim deed, that they may be taking on additional liability. As long as they have Owner’s Title Insurance, they should have no concerns, as the the underwriter will cover them the same as they would over other deeds.

One thing to keep in mind with all these foreclosures, though technically they are being sold by VA, it will take time for them to get the deed through the lending bank, to the VA, and then to the new buyer. This can extend the time to finalize the deal. Our processors and closers will keep you up to date on the process as it works its way through, but everyone should have a bit more patience when purchasing from the VA than in a normal file.

So, if you’re purchasing a VA foreclosure – close with Watson Title Services of N FL, get owner’s title insurance … and everyone should sleep well at night.

You can get the PDF of this tip here.

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Posted in Buying, Distressed Property, Military, Title Tip of the Week

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Close Your HUD Homes With Us – Title Tip of the Week from Watson Title Services of N FL

Posted on March 7, 2014 | Leave a comment

hudThe Buyer Select Closing Agent (BSCA) program began for HUD home sales last summer in Florida with a staggered rollout county by county in the state.

How this affects the sales associate is if their buyer wishes to purchase a HUD home that qualifies for the Buyer Select Program. If it does, the buyer can chose their own approved closing agent. Selling agents will no longer be forced to work with a HUD designated closing agent.

Watson Title Services of N FL is an approved settlement agent for BSCA, so for your HUD closings you will have all the benefits of the Watson Family of Services’ customer service, access, and accountability on the way to the closing table.

When HUD asks, all you need say is, “Yes, we would like to use Watson Title Services of N FL Inc. Their HUD BSCA ID is WATSON0004.”

You can get the PDF of this post here.

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Don’t Forget Your Spouse!

Posted on March 3, 2014 | 1 comment

questionrighDon’t cause an unnecessary delay to your closing. Especially on a Short Sale, ask twice if the buyer is married if you see only one name on the contract.

When a contract is submitted to a Short Sale lender, the buyer(s) listed on the contract must be the same as those on the HUD and lender docs.

If, for instance, the wife (buyer) is the only one on contract but the husband needed to be on the loan for financing, the husband must be added to contract, initialed by all parties, and submitted to Short Sale lender for their approval.

If this is done after Short Sale Approval, then a new approval letter must be generated because the HUD will be denied by the Short Sale lender if the names do not match. This will cause a delay in closing.

Though this usually happens when married couples are involved, this rule applies to any change in the buyers’ names between contract and closing.

You can download the PDF for this tip here.

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Fannie, Freddie & HAFA

Posted on January 27, 2014 | Leave a comment

fanniefreddieIn the Short Sale world, the question comes up now and then if FNMA (Fannie Mae) and FHLMC (Freddie Mac) participate in the Home Affordable Foreclosure Alternatives (HAFA) Program.

The short answer is, no. Fannie and Freddie no longer offer the HAFA program. Freddie has a very informative page that outlines their policies that is worth a review, but for Fannie all we have is a verbal “no” from the file managers we talk with. We ask for each file where appropriate, and we consistently receive a “no.”

Here is the executive summary from the above linked site:

“Treasury’s HAFA program ends on December 31, 2013. However, Freddie Mac’s participation in the program expired on December 31, 2012. The materials on this Web page are only applicable to borrower evaluations on Freddie Mac mortgages conducted on or before December 31, 2012. The Freddie Mac Standard Short Sale is available for borrowers evaluated after December 31, 2012.”

If there is a short sale under review from over a year ago (yes, there are some) that is still waiting for approval, depending in lender and circumstance, they should still offer it.

For new applications/submissions however, the files are no longer being reviewed for HAFA.

You can get the PDF of this here.

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The Real Estate Market Fix Starts Here

Posted on June 5, 2012 | 1 comment

I see it every day with Short Sales – a buyer gets frustrated and walks away as we wait for lenders to make a decision; a seller just stops trying to sell as they tire of the wait and process; a home goes in to foreclosure for both of the above, or worse – a sale falls through over just a few hundred or low thousands of dollars.

We – as in everyone – see the results in our neighborhoods. Especially in Florida, mother nature does not take kind to a home without people. Just two streets down from my Mandarin home there is a home that has been foreclosed on. If it were sold at short sale – a new homeowner would have kept an eye on the trees in the yard. They would have taken care of the weak and diseased tree.

A home without owners naturally decreases in value over time, as deferred maintenance and neglect take its toll. Tropical Storm Beyrl showed that it doesn’t take long to take an even larger bite out of a home’s value. Not just the home in question, but the entire neighborhood.

It doesn’t take long. That tree is still there.

Another reason that everyone wants to make the short sale process work – fewer foreclosures means a stronger market for all.

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Will Fannie & Freddie’ s New Timelines Help?

Posted on April 23, 2012 | Leave a comment

Everyone is looking for new ways to make Short Sales less frustrating. As a result, there has been a lot of interest in Fannie & Freddie’s new timelines effective June 15th for HAFA or other GSE programs and their impact on short sale timelines.

– Fannie Mae and Freddie Mac will require servicers to make a decision within 30 days of receiving either an offer on a property or a completed Borrower Response Package (BRP) requesting short sale consideration.

– If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days.

– With a counteroffer, the borrower is expected to respond within 5 business days. The servicer must then respond within 10 business days.

In our experience though, this should not change the timelines we have seen for most of these files. It is good to have in writing, but in many respects this just puts in to writing what is already being done. A full overview at the link.

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