Pam Marron Home Lending

WHY Specific Short Sale Code for 11.3 Million Who Were or Are Underwater is Worth It

May 28, 2014 by · Leave a Comment 

For a long time, a battle has been waged to get a short sale credit code for past short sellers. Almost all  who have short sold will tell you that they were told upfront that the only way to get short sale approval was if they were delinquent on their mortgage first… told to them by their short sale lender, a realtor or an attorney.

Why the need for a specific short sale credit code?

Getting a specific short sale code will stop the mortgage denial that most short sellers face when they apply for a conventional mortgage two years after the short sale when a foreclosure code shows up on past short sale credit. This is because mortgage credit that goes past 120 days late is coded as a pre-foreclosure or foreclosure.

A specific short sale credit code could be the alternate code used by lenders to change a short sale coded as a foreclosure to a true short sale. And, this specific short sale code could be applied to all short sales going forward.

Why there is great worth for a specific short sale credit code

In almost every single case I see, credit was pretty good before the short sale, until the homeowner had to go delinquent, most often a lender requirement for a short sale approval. Credit is also pretty good after the short sale, and eagerness to improve credit after the short sale is apparent as consumers point out how they are “making it better”.

The ironic flip side to this is that the rebuilt good credit and the ability to come up with 20% down two years later for a conventional mortgage prompts those who have not gone through a short sale to to speculate that “maybe there wasn’t a real hardship”, and fuels the fire of “strategic default”.

From personal experience, I will attest that those who don’t believe these folks are “having hardship enough” need to take a closer look. The hardship is there and painful for most to relay again, as they convince the new lender of why a short sale will never happen again. You may be surprised at the reality of what happened, and be prepared that most will not expose this unless prodded to do so.

A unique difference that is apparent in almost every short sale case is the presence of a dangerously high back end debt to income ratio (DTI), often over a period of time, when underwater homeowners grapple with how to exit their home. Homeowners hang on for as long as possible, borrowing against other credit to stay solvent. A great number of these consumers have wiped out retirement assets and borrowed from others, until there is nothing left to do but short sell.

Why underwater homeowners and past short sellers should fight for a specific short sale credit code

A great majority of underwater homeowners aren’t the “strategic defaulters” that the press and so many others have made short sellers out to be. It is apparent that many stayed in negative equity homes longer than they should have, not quite sure what to do. Every one of them has a story of trying to “do the right thing”, and almost all didn’t tell the real story in their hardship letter to the bank. There seemed to be confusion, as if they were trying to convince the lender that they were worthy of being approved for the short sale, with very little said about the hardship.

Many in this unique financial meltdown were affected simply because they were in an area of the United States where home values plummeted.  Though there are those who tried to scam the banks, the majority did not and have been humiliated by this process, keeping silent even afterwards.

Why this is important for those affected

This is now a fight for those affected, for a credit standing that many of you have built over a lifetime. Erroneous credit can affect interest rates and program eligibility for you in the future. You did the right thing by working with the bank on a short sale and not going into foreclosure. Your credit should not reflect a foreclosure.

underwater_homes_top_states_march_2014

 

9.1 Million U.S. Residential Properties Seriously Underwater in First Quarter, Lowest Level in Two Years/RealtyTrac/April 15, 2014/ http://www.realtytrac.com/Content/foreclosure-market-report/q1-2014-home-equity-and-underwater-report-8037

 

And here’s a news flash. Those who were approved for a short sale and are paying back on the deficiency…. they can’t get back into the housing market either.

Why the mortgage and real estate industries need to fight for a specific short sale credit code

There’s a pattern here, a good one, where importance of credit is apparent, except for the stint of late payments required to exit an underwater home. For a conventional loan, you can re-buy a home 2 years after the short sale with 20% down. Most of the time, past short seller loan files are impeccable, a loan that any lender would jump at.  Short sellers have often been maligned as “strategic defaulters” who willingly stopped making payments. This is often far from the truth, and it can be proven that many lenders, or “investors”, still require underwater homeowners to be delinquent on their mortgage before a short sale approval will be granted, to this day.

There are [1]2.2 million past short sellers across the U.S., many ready to come back into the housing market.

And quietly, another 9.1 million still underwater homeowners are inquiring about what will happen to them when they have to exit their home.

Yes, values are finally rising again. But in many areas, the increase is not enough to pull negative equity homeowners above water, and we are starting to see a new trend of short sellers coming into the real estate market. Many must sell because they have to, not because they want to. Many are calling to inquire about what their credit will look like, preparing for problems they hear and read about after a short sale. These are not deadbeats, but homeowners who are preparing to go through the arduous short sale process with the lender.

Others are already helping

There is already good dialogue between credit reporting agencies who are aware of the foreclosure code being placed on past short seller credit and who are trying to help affected consumers. The National Consumer Reporting Association (NCRAinc.org), a nationwide trade organization of credit reporting agencies, has helped to bring this problem to the forefront.

In May 2013, Senator Bill Nelson of Florida, was made aware of the problem, saw the credit impact and demanded a solution for the problem from the Consumer Financial Protection Bureau (CFPB). The CFPB, already aware of this problem, worked diligently with the Fannie Mae Desktop Underwriter (DU) system on a fix, but the “fix” has posed confusion. Lenders are supposed to be able to instruct DU of an erroneous foreclosure. Instead, the Fannie Mae system must see a conflict in credit code on their end first, and provide a message to the lender for entry to Fannie Mae’s DU system to correct the problem. In other words, Fannie Mae must give permission to do the correction, but only when they see a problem.  Fannie Mae permission to correct the erroneous foreclosure code is given only occasionally, and lenders across the country have given up on this fix.

A few solutions have come out of this problem, often stumbled upon when comparing data.

Full directions for two of the solutions can be found at Directions to SUBMIT A COMPLAINT to the Consumer Financial Protection Bureau and Lender Letter

An intro video to the short sale credit code problem and the two working solutions can be found on the YouTube video “2 Working Solutions for past Short Sellers with FORECLOSURE on short sale credit” at   https://www.youtube.com/watch?v=D2YMtM3ILa4

2 working solutions

 


[1]Boomerang buyers return to market after foreclosure/By Les Christie  @CNNMoney March 11, 2013 http://money.cnn.com/2013/03/11/real_estate/foreclosure-homes/

Underwater Florida Residents: Be Prepared on 10/1 at 9am for $50,000 Principal Reduction through HHF!

September 28, 2013 by · Leave a Comment 

REPEAT: Underwater Florida Residents: Be Prepared on 10/1 at 9am for $50,000 Principal Reduction through Florida’s Hardest Hit Funds! Only 25,000 applications will be processed initially!

Chris Chmura, Fox 13 WTVT   9/27/13

Fl HHF slider revised

And, on 9/23/13, this article on Hardest Hit Funds came out thanks to Beth Kassab in the Orlando Sentinel.

Hardest-Hit Fund finally helps those underwater on their homes

September 23, 2013|Beth Kassab, Local News Columnist

http://articles.orlandosentinel.com/2013-09-23/news/os-hardest-hit-housing-fund-beth-kassab-20130923_1_principal-reduction-homeowners-hardest-hit-fund

However, this is what the Florida Hardest Hit Funds application page on their website showed: NO ABILITY TO MAKE APPLICATION until Tuesday, Oct. 1 at 9am! 

Fl HHF applic website

So get ready, underwater Florida homeowners! Here’s some homework to do before Oct. 1 at 9am:

1.      Go to Principal Reduction page under Florida Hardest Hit Funds and review eligibility criteria at http://www.principalreductionflhhf.org/

Fl HHF website

HHF Prin Reduct criteria  

2.    Read Fact Sheet at http://www.principalreductionflhhf.org/rfv-77.aspx.

3.    Check your income, per eligibility.

Income level Cris Chmura

 

 

Check your family income per Florida county. If you believe that you are over 125% underwater, are current on your mortgage payment and think that your income level will fall into eligible criteria, prepare to apply for up to $50,000 in principal reduction through the Florida Hardest Hit Fund on Tuesday, October 1st at 9am.

Please make sure to review all criteria at http://www.principalreductionflhhf.org/.

Why this is so important:

Percentage still underwater in area Florida counties:

Polk 43%

Pasco 43%

Pinellas 31%

Sarasota 25%

Sumter 10%

Tampa bay still Underwater 9.28

 

 

 

Pasco man gets around home lending glitch

September 15, 2013 by · Leave a Comment 

8 on your side

Posted: August 28, 2013

By Shannon Behnken

PASCO COUNTY, FL -In 2010, George Albright’s Trinity home lost half its value, and he lost income. His lender agreed to allow the house to sell for less than Albright’s mortgage and write off the rest. This foreclosure alternative is supposed to help distressed homeowners get back on their feet.Albright knew the short sale would be a black mark on his credit, but he wanted to buy a home again in a few years.”The bank approved it, so I thought I’d be okay in a couple of years and get back in the market.”

One of the benefits to a short sale is that most lenders require only a two-year waiting period before you can buy again. A foreclosure, on the other hand, sticks on your credit report for seven years. But Albright, and thousands of others who have waited their two years, are finding that a computer glitch resulted in foreclosure, the “kiss of death” in lending, on their credit anyway.

“Again, I thought I did the right thing, and I’m getting linked in with other foreclosures, and I didn’t think that was fair because I thought I did the right thing, as best I could at that time.”

The problem is that credit agencies don’t have a code for “short sale” and so many just mark foreclosure. Fannie Mae is working on a fix to its computer system that would flag this problem. The new system is supposed to launch Nov. 16. In the meantime, the Federal Housing Administration is working to change its guidelines, too.

Instead of waiting three years for an FHA loan, a distressed seller can now jump back into the market after one year of good credit.

Until all of the computer fixes are in place, experts recommend obtaining a letter from your former lender to prove your short sale situation.

This is what Albright did, and now he has been approved to buy a home again.

National Consumer Reporting Assoc.(NCRA)…Could Not Have Done This Without Them!

September 6, 2013 by · Leave a Comment 

NCRA 8.23.13

Perception of Short Sellers is Half of Story

March 20, 2013 by · Leave a Comment 

Yesterday I had a conversation that hit me to the core, as so many have done over the past 2 years. I spoke with a mortgage banker in California who was calling to find out how to get the foreclosure code corrected on credit for a past short seller. I was elated, thinking here is another person in my industry that “gets it” and wants to help underwater homeowners. We dove into conversation and shared views about real estate markets in California and Florida.

I asked him about strategic defaulters as this was a topic he brought up. “How many strategic defaulters do you deal with?” I asked. His reply, “4 out of 7”.

“How do you know this, do you talk to these people?” I asked.

His reply was the pat answer of a majority of folks that I speak with. ”You can tell because they still have money and they are only late on their mortgage payment.”

That’s the definition and perception of a strategic defaulter to the majority of folks (who are not the underwater homeowners).

I have been in the mortgage business since 1985. For the last two years I have felt differently about short sellers, differently than everyone around me.

What I see is another side of the story.

For years, realtors have told me about clients who brag about how they got away with a short sale when it appears everything is status quo and good. Here’s the reality. Lenders don’t approve a short sale without a hardship.

 Every time I get a call, I have to drill for the gut of why short sellers are selling. This is not offered upfront unless it is obvious, like there is a death or a divorce. People are used to sharing their best attributes to get service, not their hardship. Oftentimes what I learn is not even known by their realtor.

I would wager a huge bet that a very large majority of underwater homeowners who approach a short sale are harder off than anyone, including the press, think. This is not meant to garnish sympathy for these folks. They don’t want it. Many cringe at the humiliating process that they see coming, being labeled as a “strategic defaulter” and dreading that their home sale may affect their neighbors’ home values. I get the call when their lender tells them they can’t give them help until they go delinquent on a mortgage payment.

Here is where the confusing blur between a true short seller and a strategic defaulter lies.

All of us have been brought up by the rule that good credit is needed to get a mortgage to “enter” and own a home. Short sellers are shocked to learn that in order to “exit” that home, they can’t just sell it unless they have the money to pay the difference. In order to sell a negative equity home, an approval must come from the bank. That approval is often tied to a verbalized implication that you must be delinquent on your mortgage in order to get the short sale approval to exit.

Why is this? Two reasons that I can see.

1.      It is an assumption that if you are behind on your mortgage payment, you must have a hardship.

2.      Servicing fees are paid to service delinquent loans

However, the idea that we are told that in order to get help, we need to do something so against what we have been taught… to pay our bills on time and keep good credit… is foreign to the majority of us. This is the reason for an overwhelming number of calls.

And I can attest that the lenders are outright telling these folks to be delinquent. I am on the 3-way calls with them and hear it.

Here’s a “strategic” default: when a homeowner purchases another home knowing they will default on the first home after that additional home closes. (Lenders already see this and guidelines require qualifying for both homes and hefty reserve requirements for both homes.)

I go back to the conversation at the beginning, with the California mortgage banker who perceived the majority of short sellers were “strategic” because they were only late on their mortgage payment. If we report those who pay the mortgage late but stay current on everything else as “strategic defaulters”, additional blame and consequences need to go both ways and placed on the lenders, who have made going delinquent on a mortgage a requirement in order to provide short sale approval. And, this is even after new FHFA short sale guidelines effective 11/1/12 that state FNMA and FHLMC mortgage holders can proceed with a short sale while being current on their mortgage and with a hardship.  

I am not going to get all “social worker” here. I am not a sucker who these folks have convinced with a bad story. If it doesn’t make sense to me, I have no problem telling them there is no way I will be able to convince an underwriter of their plight and why.  

Take another look at what you see, versus what you have read about on strategic defaults. The reason these folks are going delinquent is because this is the option they are given, other than handing over a huge pile of cash they do not have, to exit. Many of them are borrowing from others and their 401k’s to stay current on what they have. Many now have to exit, as they would also do if the home was not underwater.

Perception is only half of the story.

Numerous Problems Surround Underwater Homeowners: To Get Short Sale Approval, Throughout Process, and Afterwards

March 16, 2013 by · Leave a Comment 

Problems Outlined. There are solutions. Anyone listening?

If you are having any of problems noted below, please email Pam Marron at pmarron@tampabay.rr.com or call 727-375-8986.

1.) Credit:

  •         Short sales incorrectly show up on consumer credit as a foreclosure. This one error extends the wait period before getting a new mortgage approval from the short sale minimum wait timeframe of 0-2 years to the minimum foreclosure wait timeframe of 3-7 years. 
  •         Why can’t this easily be corrected? Because there is no specific short sale code. 
  •         Previous short sale lenders and their attorneys usually will not change the incorrect foreclosure credit code. A credit code change can be made by a credit repair company that demands a downgrade of the credit code if the mortgage did not close as a foreclosure. However, this results in extra cost and further delay for past short sellers.  
  •         It has been claimed by credit reporting agencies that the erroneous credit code is also affecting other consumer credit of past short sellers.

2.) Credit and Denial through Fannie Mae/Freddie Mac Automated Underwriting Systems:

  •          Government Sponsored Enterprises (GSE) Fannie Mae (FNMA) and Freddie Mac (FHLMC) automated underwriting systems (AUS) are reading short sales incoreectly as a foreclosure, which results in a denial for the past short seller of a new mortgage after the required wait period.
  •          Mortgage underwriters are reluctant to override the erroneous FNMA and FHLMC AUS findings even when provided proof that the past mortgage was closed as short sale because of fear of buyback of loan  if nthere is no “Accept/Approve” through AUS.

3.) Problems Created by Ignoring Dual Tracking:

  •          Lenders have illegally proceeded with “dual tracking”, continuing to process a foreclosure even though the homeowner has entered the short sale process. This results in a “Foreclosure Started” credit code, which is then reported as Foreclosure, noting the (Method of Payment (MOP) as an M-8 or “8” on payment history.

Dual Tracking results in additional costs to get fixed and a delay of getting a mortgage for the past short seller.

4.) Banks Ignore FHFA Short Sale Guidelines Effective 11/1/2012:

         Banks are still requiring underwater homeowners to be delinquent even though the 11/1/12 FHFA Short Sale Guidelines <http://www.fhfa.gov/webfiles/24211/shortsalesprfactfinal.pdf>  which allows FNMA/FHLMC homeowners to be current on their mortgage. This needs to stop.
·      Though FHFA states that all ten 10 hardships listed on the Uniform Borrower Assistance Form 710  <
https://www.fanniemae.com/content/guide_form/710.pdf>  are eligible, lenders are still using the previous three “D’s” for hardships: death , disability, divorce and have now added relocation.

 (Note: Eight of the ten hardship reasons are noted on the FHFA Fact Sheet. However, Reduction in Income and Other: A Hardship Not Covered, are not noted on the FHFA Fact Sheet. Additionally, Legal Separation is not noted on the FHFA Fact Sheet with Divorce. FHFA has confirmed that all hardships listed on Form 710 from August 2012 are included.)

5.) No Refinance Program for NON-GSE Mortgage Holders:

  •          There is no refinance program for underwater non-FNMA or FHLMC conventional mortgage holders! There is a streamline FHA and VA loan for government mortgage holders. Conventional non-FNMA/FHLMC mortgage holders are beholden to investor rules which often require default on the mortgage before considering a short sale.

6.) HARP 2.0 Problems:

  •          HARP loans do not allow a refinance to an underwater homeowner with a past short sale for specific time frames. This can be a detriment to those homeowners in underwater areas where the likelihood of having another mortgage that may have had to short sell is high. Also, there is a difference between FNMA and FHLMC waiting periods for past short sellers who want to refinance with HARP:
      •  FNMA: won’t allow a HARP refinance on property if borrowers had a past short sale unless the current refianced home is at 80% LTV and it has been 2 years since the short sale, or at 90% LTV and 4 years after the short sale. This prevents many who have already had a past short sale from getting relief for a prolonged period of time.
      • FHLMC: will allow a HARP refinance on current property if the short sale was 2 years past.
  • Underwater homeowners are being turned down for HARP by current lenders because of the lender’s overlays, which may not be actual HARP guidelines. Underwater homeowners do not get the message that they may still be eligible for the HARP program through another lender without overlays.

IMPORTANT NOTE: A group in New Jersey called Loan Value Group, LLC (LVG) is successfully working with Arizona and a number of other states to contact, educate and convert eligible borrowers to HARP. LVG is the only company offering this service free of charge to the borrower and the state and so far, have acheived 80% contact rates and greater than 90% conversion rates. LVG could launch this program within 60 days to help the state of Florida! Learn more about what LVG is doing here!

7.) HARP 2.0 and VA Loan Refinance Ineligibility to Ex-Spouses, Widows, Widowers:

  •          HARP refinancing, which allows a refinance for underwater homeowners, is only available If the current mortgage holder is on the note. If the ex-spouse was give a quit claim deed to the home per the divorce but is not on the note, they cannot do a HARP refinance without the original note holding spouse staying on the mortgage. (How many divorced spouses can you find that are willing to refinance a home with their ex-spouse?) 
  •        On VA and FHA loans, the same holds true: widows and widowers who are not on the note but are on the deed and title as the spouse cannot get the attention of the bank to refinance the loan, for modification help or for a short sale unless they are late on the mortgage payment, which triggers the lender to contact them. Then, due to their late payment on the mortgage, they are not eligible for a refinance!  (If there was equity in the property, the widow/widower could simply refinance.)
  • HARP is the only refinance option for GSE held underwater mortgages, and an FHA or VA Streamline refinance is the only option for underwater government mortgage holders. When lenders refuse to work with ex-spouses, widows and widowers if they are not on the note, this problem can destroy the lives of the ex-spouse needing the refinance to lower payments, as well as the ex-spouse who holds the note, when the lender requires a mortgage delinquency in order to short sell a home.

8.) No Qualifying of Short Sales Before Submission by Most Professionals:

  •          Realtors and title companies are improperly entering prospective short sellers into the Making Home Affordable (MHA) program through HAFA, not HAMP. Additionally, very few are taking into consideration “waterfall qualifying criteria” which requires >31% front debt to income ratio in order to be considered for HAMP and >55% back end debt to income ratio in order to be considered for HAFA for a short sale, especially when proceeding while being current.

Often, underwater homeowners trying to apply for a short sale while being current are told that “the investor required a 31 day delinquency in order to be approved for the short sale”. This is in direct conflict with the HAFA guidelines that allow for Imminent Default, which means the ability to make mortgage payments on time with the threat of soon being delinquent if something is not done. In these instances, homeowners are turned down simply because they did not enter MHA through the modification route of HAMP first, but entered at the foreclosure alternative route of (HAFA) first.  

9.) Chinese Drywall Mold Repairs Required to Made Before Short Sale Approval

  •          Homeowners who have Chinese drywall mold problems are required to make repairs prior to getting approval for a short sale. Chinese drywall is a health hazard and has caused homeowners to move out when the mold begins affecting family health.  Some lenders do not know what Chinese drywall mold is, but lenders that do know require a costly and lengthy report to confirm that the mold is present. Then, lenders often require underwater homeowners to pay for the repair which can cost $20,000 and up. Frustrated underwater homeowners who don’t have the money for negative equity and then must short sale certainly don’t have the extra money to repair Chinese drywall problems.

Bright Spots and Challenges Ahead for Short Sellers

March 13, 2013 by · Leave a Comment 

Homeowners Try to Get Short Sale Approved While Being Current but Lenders Make it Impossible to Proceed!

Short Sale Bright Spots

There are some bright spots.

Lenders like Wells Fargo and Chase are doing the right thing with portfolio loans, allowing underwater homeowners to proceed with a short sale without being delinquent.

Institutional investors are coming into areas and purchasing homes at nearly market price when the rent meets sustainability numbers. These same investors have deep pockets and rehab homes back to safe, livable standards and get the eyesores next door back in good shape. Some of these investors even allow for a rent-back, allowing short sellers time to repair credit and prepare for the next place they will live in.

And the Federal Housing Finance Agency provided a new short sale policy that allowed short sellers to get approved while being current on their mortgage payment, with hardships listed on the Aug. 2012 Form 710.

Challenges Abound

But that is it. Lenders are either unaware or are ignoring the other 6 hardships. Underwater homeowners that are trying to short sell while being current are STILL being turned down for the following reasons, even after the Nov. 1, 2012 FHFA policy that states they can be current:

  • The “investor” states they must be 30 days late to complete the short sale.
  • The lender disqualifies the hardship even though it is listed on the 8/2012 Form 710.
  • The lender tells them there are too many people they have to help that are already late. Why should they help someone current on their mortgage?

And, unlike a refinance that has equity, widows, widowers and ex-spouses in a divorce that were deeded or willed a home cannot get a HARP refinance or other refinancing for underwater homes unless they were already on the mortgage.

There is no credit code for a short sale, so when short sellers are in the clear to repurchase a home, their short sale credit is reported as a “Foreclosure” through Fannie Mae and Freddie Mac automated underwriting systems. This can be corrected, but is costly, time consuming, and often results in further delay to get back into a home purchase.

Non-Fannie Mae and Freddie Mac mortgage holders have limited mortgage product available to refinance, unlike the HARP 2.0 available for Fannie Mae and Freddie Mac mortgages. Conventional  portfolio mortgages have NO options.

And, a good number of realtors blame underwater homeowners, holding them responsible for careless financing and low sales prices that keep values down in real estate markets. Though realtors desire listings of underwater homes, many are reluctant to help those that they perceive made the housing crisis what it is.

Attention finally coming to Short Sellers and Underwater Homeowners…. and Immense Thanks to all who are helping!

March 9, 2013 by · 1 Comment 

You know when you finally get somewhere when you have been trying for a long time, and it finally happens? It is finally happening, and thanks to the staff at U.S. Congressman Gus Bilirakis’s office, I am going to Washington, D.C. to share targeted problems of short sellers and underwater homeowners with agencies and politicians that can help with solutions.

I am extremely grateful to so many who understand the plight of these folks who are not able to exit underwater homes without major damage to their credit and most often, without proper direction that is no shorter than 4-6 months.

 Since the inception of this challenge which was never meant to be a challenge, the stories from across the U.S. and right here in the Tampa Bay area have bothered me to my core, and the folks that are helping have been troubled as well.

I am grateful to so many who have helped, many on their own dime when I couldn’t afford their services in this fight.

Attorney Chae DuPont, with Morris and DuPont Law Firm, who taught me there is a way to qualify homeowners for a modification and short sale, who is brilliant at finding the best avenue for underwater homeowners that takes into account the WHOLE picture, including education and preparation for what happens after the fact. To attorney Julan Mustafa with Morris and DuPont, who has referred countless folks who he thought I could help when they weren’t in need of attorney services. To the” dynamic trio” staff at Morris and DuPont, who are pit bulls at getting to the final resolve for the clients, and who are an inspiration to me to keep going. And Jorge Fajardo, head of Loss Mitigation, a veteran mortgage professional, who can understand the mortgage technical aspects of incredibly complicated situations.

To Marilynn DeChant, owner of DeChant Public Relations, who introduced me to Shahra Anderson, Executive Director for Senator Bill Nelson, and who, along with much help from business partner Lia Gallegos, helped me quickly get together a White Paper that went via Ms. Anderson to the White House last year.  Ms. DeChant has continued to support this effort and arranged to meet with Greg Giordano at (now) Fl. State Representative Mike Fasano’s office and has been at meetings with U.S. Congressman Gus Bilirakis’s staff.    

To the staff of U.S. Congressman Gus Bilirakis, Elizabeth Hittos and Michael Ciminna, who have helped us with aspects of this problem since August of 2012, and have offered guidance to key people for this trip. To Michael Ciminna, thank you for your efforts to help our veterans and to Elizabeth Hittos, for your support of bi-partisan solutions on this underwater housing crisis affecting so many in Florida. And thank you to Senator Bill Nelson’s Executive Director, Shahra Anderson, for working with us on behalf of Senator Bill Nelson’s office, and for your bi-partisan efforts with the staff at US Congressman Gus Bilirakis‘s office.   

To Greg Giordano at Florida State Representative Mike Fasano’s office, who heard the plight of underwater homeowners and short sellers and who got Fl. Representative Mike Fasano on board with a plan to bring an expansive platform of help to these homeowners in the near future.

To realtors Roxanne Amato and Lorraine Seddon with Future Home Realty, who gathered important statistics on numbers of underwater homeowners affected in Florida starting in April of 2011. This was the beginning, as an eerie loss of buyers was the hunch of major problems coming.

To realtors Laura Bech/ At Home in Pasco and Diane Chisholm/Prudential Tropical Realty, who gave me my first clients who had past short sales and helped me learn what these folks were REALLY going through.

To realtor Christie Johnson, Remax New Dimensions, who I met thanks to Marilynn DeChant. Christie strongly sees the value of helping underwater homeowners who want to be current on their mortgage but proceed with a short sale. Christie Johnson referred me to Robin Furer, First National Title Services, who arranged a meeting with Laura Salemme, First National Title Services owner. Laura Salemme, very experienced in title but also a veteran mortgage professional, clearly saw the challenge of helping short sellers proceed while being current, and was willing to hire a person who would do nothing but meet this challenge. I am grateful to FNTSDirect.com for looking forward to what this means…. to help these past short sellers get back on their feet and re-enter the housing market with credit intact. This is the title company I will recommend to all.

To Realtors Jim Chapman and Dan Stephenson with Prudential Tropical Realty, who saw the ”pinpoint” of credit problems I saw coming, saw WHY we had to correct it, saw the benefit it would provide to the real estate community and provided the first support.

To Gunther Flaig, builder/developer in Tampa Bay, Florida, who recognized that correcting this problem could affect the ability of new homeowners to come back into the real estate market. Many homeowners coming into model homes cite they’d love to buy a new home but can’t due to constraints of selling an underwater home. Gunther saw that paying attention to this and helping these homeowners  to keep their credit intact can help these folks prepare themselves for a new purchase after a short sale.

To the clients that worked so hard with me to get approved for another home when they met the REAL guidelines of a mortgage purchase after a short sale. You know who you are, and I am grateful that you allowed me to get involved to learn how to help. That’s the only way. I know these folks are humiliated by press that slanders them as a “strategic defaulter” when they were given no choice but to be delinquent by their lenders. Most of these clients will not go public with problems they are encountering, comparing it to a divorce: they thought they were done and then I make them relive the bad experience again. Thank you for facing this and getting through it.

To Ken Harney with the Washington Post, who “gets it” and has enlightened me to all sides with his thought provoking articles.

To Terry Clemens, Executive Director of the National Consumer Reporting Association, who encouraged me to keep up the fight last year before the election when I became angry that the problem was ignored because of the election.  Much was going on to help behind the scenes. Terry Clemens and Renee Erickson, another NCRA board member and with Acranet, Inc., invited me as a speaker to the NCRA Conference in Dec. 2012 where I met many credit agencies facing the same problems I was having. This conference is also where I met Tom Oscherwitz with the Consumer Financial Protection Bureau, and was able to present the serious credit error of a foreclosure on short sale credit that is stalling past short sellers from re-entering the housing market. Because of Mr. Clemens, along with Mr. Oscherwitz and with the help of Avantus Credit, we have been able to see problems in back end code on the Fannie Mae and Freddie Mac automated underwriting systems.  

To Frank Pallotta, Managing Partner with Loan Value Group, LLC, (developers of the Responsible Homeowner Reward program), who is now working with Arizona and many other Hardest Hit Funds states to help eligible underwater consumers with the benefits of the HARP 2.0 program when additional lender overlays prevent an approval. This is an important program that every state that has underwater homeowners needs to seriously consider. Frank Pallotta also provided me a path at the beginning and shared contacts that could help at high levels. Locating those who truly see the plight and can help was critical.

To Joe Gendelman, Fl. Regional Director for National Credit Federation, who patiently figured out a way to get creditors to correct the erroneous error of the foreclosure code when the loan closed as a short sale. He is also regional director for Business Credit Ally which helps business owners separate their personal credit from their business. Small business owners are fearful of what delinquent mortgage credit will do to the growth of their business.

To those of you with select lenders who are doing the right thing and not requiring underwater homeowners to be delinquent while they proceed with a short sale. You know who you are. I cannot name you, but wish I could.

To those of you at the U.S. Treasury: you have helped more than you know… to listen, intervene and direct to the proper resources when homeowners and I have been at the highest frustration. You have helped with FHFA, Fannie Mae and Freddie Mac connections.

To the present housing department at the White House: keep pushing The Plan to Help Homeowners Refinance rolled out by President Obama in March of 2012 that can help many of the 16 million underwater homeowners that do not have a Fannie Mae or Freddie Mac loan and cannot take advantage of HARP 2.0. It was your fact sheet that showed us how a shorter term mortgage could get underwater homeowners back into a positive equity position.     

Grateful to all, Pam Marron

Realtors: Why Help Short Sellers Repurchase?

November 1, 2012 by · Leave a Comment 

More Buyers NOW = Realtor Income Increase NOW = Higher Values NOW!

Example in tri-county Tampa Bay, Florida alone: Pinellas, Hillsborough and Pasco Counties:

  • increase the number of homebuyers in the marketplace
  • bring $12.5 million monthly income back into the realtor earning stream NOW versus waiting two years!
  • help change supply and demand to bring house prices back up!

 

How? Here’s the numbers….

       Realized Waiting Revenue to the Real Estate Community!

  • 18,550 short sellers in 2011
  • 18,550/ 12 months = 1545 short sellers/mo. that COULD BE eligible to re-purchase NOW!
  • $135,000: median home price in Tampa Bay, Florida
  • $135,000 x 6% realtor commission = $8,100 on a repurchase for a buyer
  • $8,100 x 1545 new purchases = $12,514,500 in realtor monthly income in Tampa Bay alone!

As a licensed correspondent lender for 27 years, these resources have helped me help homeowners entering, coming out of, and avoiding a short sale. These options are not easy, but they are working. If more of us do the same, it will eventually become easier.

Contact Pam Marron, 27 years Sr. Loan Officer,at 727-375-8986 for help getting your short sellers ready for a future purchase, or to help underwater homeowners stay put, with equity solutions!

Committed to helping my customers achieve homeownership!

Massive and Erroneous Mislabeling of Short Sellers

August 9, 2012 by · Leave a Comment 

As many of you know, I have championed the cause of short sellers for the past year. While the press continues to report on abuses of strategic defaulters, I am seeing another story entirely. As a working mortgage broker in this business for 27 years, I receive calls and emails daily from underwater homeowners who have struggled with how to sell vastly undervalued homes. Their only option to sell is a short sale. Yes, they want to continue to do the right thing and pay their mortgage but are told by their lender that in order to be approved for a short sale, they must be delinquent on their mortgage payment.

I have intervened on many of these calls, in disbelief of what exactly is being said to homeowners. When a request to make payments is made, the call is commonly escalated to a supervisor. It has clearly been said more than once: “if you pay your mortgage, it may hamper your ability to get approved for a short sale”.

Strategic defaulters are those that can pay their mortgage payment but chose not to. However, other than a handful of programs that allow continuance of payment while getting approved for a short sale, defaulting on a current mortgage payment is the common requirement of getting a short sale approval, advised by the lending institutions that hold the mortgages of these underwater homeowners. The frustration is that this “trigger for default” is not in writing in any manuals, but it is clearly stated by almost all lending institutions.

This is the reason that short sellers en masse are becoming mislabeled as strategic defaulters.

Why is this practice so detrimental to turning this housing market around? Because any mortgage lates prior to a short sale automatically exempts a past short seller from repurchasing a home for 3 years with an FHA mortgage. If the mortgage lates had not occurred, these homeowners could repurchase within the 3 years after the short sale. Additionally, it is common for lenders to have their own overlays regarding past short sellers that extend wait time even further than published underwriting guidelines.

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