Mortgage Lending Slowing Down -May effect Buyers of Preforeclosure short sales!

Have you heard that not many lenders are passing out mortgages any more and it could affect buyers for Preforeclosure short sale discounted buyers?

If you've tried to get a loan to buy a house or any property, you probably do know. Without great credit, nobody wants to lend money.

The market is so tight, the lenders want to get out of the business. Many mortgage brokers are doing Commerical lending only. Mortgage companies are even discounting "A" paper.

That means mortgages that are held by people with really good credit are being sold at a discount. Why? Not because there is doubt they will pay but because the Note holder wants out.

Merrill Lynch lost $25,000,000,000.00 and still kept their doors open. Is that amazing? Yes, that is $25 Billion. Yes, with a B. Ouch! How do you keep your doors open after a loss like that? Do what you have to do to NOT do it again. And apparently that is get out of the residential mortgage business.

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Pay Preforeclosure Short Sale Prices in Redemption?

Is it true that banks would accept a preforeclosure short sale price after the foreclosure sale?

It's true. this will be about the 4-5 time I've heard the banks say they would not stop the foreclosure sale. They would, however, if your price was good, they would sell it to you at the short sale price during the redemption period.

The redemption period is the time AFTER the foreclosure sale when the defaulted homeowner has time to buy the house back. In my counties in Southern Ohio and most of Ohio it is about 30 days. It is the length of time it takes to have the deed changed into the name of the new buyer, whether it be the bank or someone at the sale.

In Michigan, it is six months. So you see it can vary drastically by state. It is a state law.

I had 4 deals in Detroit that did go to sale. Two of the four banks said they would still sell it during the redemption period. I've had 2 in Cincinnati say they would still sell it during the 30 day redemption.

This saves time and money for the banks. The homeowner can stay in the house during the time of redemption. so in Michigan, it is another 6 months that the banks lose the monthly payment and interest. They also have to pay taxes and insurance on the property during the time. It can be expensive.

So if the bank won't stop the foreclosure sale, ASK if they will sell it during the redemption period. The worse they can say is no. Ya' Got toAsk! Deb

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New Possible Fraud - New Reason to Reduce Pre Foreclosure

New Possible Fraud - New Reason to Reduce Preforeclosure
Short Sale Values to the Bank

When determining value, are sheriff's paid extra when the value is high? Could this be happening in appraisals for preforeclosure short sales too? This is something I'm always on the look at for. A reason to convince the bank their value of a house is too high. Well, today's paper gave me a reason I'd never ever thought of. And it's a good one too,

It can't be used in all instances. You'll have to wait until the sheriff has an appraisal for the house as they set a foreclosure sale date. But it's usable!

Appraisers Were getting a Percentage of the Value

This morning's paper said that the appraisers that work for the sheriff are paid based on a percentage of the value they put on the home. This is a drive-by appraisal. They don't see the inside of the house. They can't see the inside of the house because they see 50 houses per day. There's no way they can go inside any of them and still see 50 per day.

They have been giving wrong values-high values on the houses-so they can get more commission when appraising the house. But we already knew that. But we didn't know about the sheriff's appraisers getting a percentage of the value they determine! I figured it was a flat fee.

On February 1 (3 day's ago), How they are paid is being changed

The appraisers will be paid per parcel. In my county, 3 appraisers go out together in one car to see 50 houses per day. There are just two appraisers in my surrounding counties. So they divide the total number of parcels by 3 or the number of appraisers per car and that's how much they get paid.

I closed on a house last week that had 3 parcels. At $250 per parcel times 2 (appraisers in this county), they got $750 divided by 2. Not bad. $375 each for house-assuming it is only one parcel.

Let's figure this out. Let's say each house is one parcel. So 50 parcels per day times $250 each (in the cheap counties) equals $12,500 divided by 2 appraisers = $6,250 per day.

Are You Thinking of Changing Professions?
Anybody interested in changing professions? Be sure to include in your budget donating $1000 per year to the Sheriff's re-election campaign. This will make sure you keep your job each year!

So the value for the sheriffs' office is based on the exterior of the property only. It can easily have the highest values in the neighborhood being used as the comps--no matter what the interior condition.

With this formula, the bank can deny your "real" short sale value. They can just wait until the sheriff sale. Buy it back with the expectation they will get much more than is a realistic value as the sale price.

And they won't. It will take a year to get it back, list it with a realtor, and lower the cost enough to get a buyer at its real value. The bank loses. But so do we when our value is already real for today's market.

You'll need to find out what appraisers make in your county. Each county that was in the article had a different payment for the appraisers.

Check out this link to the Enquirer Article. Cut out the couple paragraphs near the end to use with your packet to the bank. Spell it out in your cover letter what it means so maybe, just maybe the bank will accept your offer.

Cincinnati Enqurier Article

To Your Investing Success
Deb McMillan
The Short Sale Queen®

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New Possible Fraud - New Reason to Reduce Pre Foreclosure
Short Sale Values to the Bank

This is something I'm always on the look at for. A reason to convince the bank their value of a house is too high. Well, today's paper gave me a reason I'd never ever thought of. And it's a good one too,

It can't be used in all instances. You'll have to wait until the sheriff has an appraisal for the house as they set a foreclosure sale date. But it's usable!

Appraisers Were getting a Percentage of the Value

This morning's paper said that the appraisers that work for the sheriff are paid based on a percentage of the value they put on the home. This is a drive-by appraisal. They don't see the inside of the house. They can't see the inside of the house because they see 50 houses per day. There's no way they can go inside any of them and still see 50 per day.

They have been giving wrong values-high values on the houses-so they can get more commission when appraising the house. But we already knew that. But we didn't know about the sheriff's appraisers getting a percentage of the value they determine! I figured it was a flat fee.

On February 1 (3 day's ago), How they are paid is being changed

The appraisers will be paid per parcel. In my county, 3 appraisers go out together in one car to see 50 houses per day. There are just two appraisers in my surrounding counties. So they divide the total number of parcels by 3 or the number of appraisers per car and that's how much they get paid.

I closed on a house last week that had 3 parcels. At $250 per parcel times 2 (appraisers in this county), they got $750 divided by 2. Not bad. $375 each for house-assuming it is only one parcel.

Let's figure this out. Let's say each house is one parcel. So 50 parcels per day times $250 each (in the cheap counties) equals $12,500 divided by 2 appraisers = $6,250 per day.

Are You Thinking of Changing Professions?
Anybody interested in changing professions? Be sure to include in your budget donating $1000 per year to the Sheriff's re-election campaign. This will make sure you keep your job each year!

So the value for the sheriffs' office is based on the exterior of the property only. It can easily have the highest values in the neighborhood being used as the comps--no matter what the interior condition.

With this formula, the bank can deny your "real" short sale value. They can just wait until the sheriff sale. Buy it back with the expectation they will get much more than is a realistic value as the sale price.

And they won't. It will take a year to get it back, list it with a realtor, and lower the cost enough to get a buyer at its real value. The bank loses. But so do we when our value is already real for today's market.

You'll need to find out what appraisers make in your county. Each county that was in the article had a different payment for the appraisers.

Check out this link to the Enquirer Article. Cut out the couple paragraphs near the end to use with your packet to the bank. Spell it out in your cover letter what it means so maybe, just maybe the bank will accept your offer.

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20080203/BIZ01/802030304&GID=aIFG5nh1YTxJX8/LktkCQ/ohTn2E+oxsPhIEQNe3VHY%3D

To Your Investing Success
Deb McMillan
The Short Sale Queen®

Are you already receiving the Queen's Tips, Techniques and New ideas to get more pre foreclosure short sales closed? If not, click here and get signed up now!


All the Short Sale Queen Tips and Tricks