CalHFA Debacle with San Jose Short Sale

CalHFA Debacle with San Jose Short Sale

My client requested a loan modification from CalHFA and was denied.

The reason stated was “large surplus of funds.”

Client contacted me to assist with a San Jose short sale.  Value of property is $180,000.

 Loans on property:

  • 1st with CalHFA in the amount of $309,000
  • 2nd with CalHFA in the amount of $15,000
  • 3rd with CalHFA in the amount of $15,000
  • 4th with the City of San Jose in the amount of $65,000
  • 5th with the Housing Trust of Santa Clara County in the amount of $6,500

    • Total Loans = $410,500

 Property was listed and short sale package submitted.  Short sale DENIED.  Reason: “large surplus of funds.”

I don’t know what financial documents the person was looking at because the package I submitted clearly shows a shortage of funds. 

The clown said to me, and I quote: “Often times borrowers overstate their financials. We go by the bank statements. The borrower over stated food costs.”  Huh?

My response:  Really.  If there is a large surplus of funds, and you go by the bank statements, then why are there numerous over draft fees showing on the bank statements? 

The more questions I asked the more I realized I was speaking with an idiot! 

Not uncommon when working with lenders and servicers.  The problem is the people working the files don’t have a clue what they are doing. San Jose short sale agents know more than the people assigned to work the files.

After twenty plus minutes going over the financial documents I uncovered the fact that he failed to factor in $1,210.00 which was listed on the financial statement under credit cards/loans.  The borrower has been paying this amount on a debt consolidation for nearly one year.

Drum roll please!  This amount clearly shows on the bank statements, which “they go by.”  However, because Mr. Bright One did not see it on the credit report, he unilaterally decided it was “overstated” and denied the short sale.

After sending him more “proof” of the debt consolidation he reopened the file and sent it to the loan modification department (again)!

Now that they are factoring in the $1,210 payment for debt consolidation, the borrower qualifies for a loan modification

They recommend that the borrower work with Keep Your Home California to get a $50,000 principal reduction.

You do the math!

CalHFA states that they will not approve a short sale if a borrower qualifies for a loan modification.  If the borrower does not want a loan modification they will foreclose.

I was told by another Bright One at CalHFA “we are human and we make mistakes.”

Yes, indeed you do. You made two of them back to back and you were paid to do it!  You had all the documentation in your possession and you still could not connect the dots. Adding insult to injury, rather than picking up the phone and asking a few questions, you simply DENY and close the file. 

The bottom line:  I have spun my wheels working a short sale only to discover that the two people who have touched my clients file can’t find their ass with both hands.

The borrower did all the right things.  The San Jose short sale agent did all the right things.  Is it any wonder why some people simply walk away and let their home foreclose? It’s no wonder in this case.  CalHFA left the homeowners with no viable option other than the forced foreclosure which CalHFA will proceed with.

CalHFA Debacle with San Jose Short Sale – CalHFA opts to foreclose rather than cooperate with a San Jose short sale!

San Jose Duplex for Sale


San Jose Duplex for Sale


Overview
Maps
Photos
Description
Neighborhood

$595,000
Multi Family
Main Features
3 Bedrooms
2 Bathrooms
2 Units
Interior: 1,149 sqft
Lot: 6,534 sqft
Location
1295 – 1297 Branham Lane
San Jose, CA 95118
USA
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Kathleen Daniels, CDPE, CHS, CSSN, RDCPro

Kathleen Daniels, CDPE, CHS, CSSN, RDCPro

KD Realty
(800) 972-1822
http://www.ExclusiveSanJoseHomes.com

Listed by: San Jose Homes

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Bank of America HAFA Short Sale – Closed 1-27-2012

San Jose Short Sale Agent

Closes HAFA Short Sale with Bank of America on 1-27-2012

Don't Wait Until You Are Out of Time
Get The Help You Need NOW

 

 

Short Sale time frames will most definitely vary depending on the number of loans and who services the loans.

Below is an outline of the time frame for closing a short sale. This property qualified for, and was approved as a HAFA short sale.  The property is located in Milpitas, California.

San Jose short sale agent helps another homeowner avoid foreclosure with a Bank of America HAFA short sale.

 

 

  • List Date: 8/19/2011
  • List Price: $369,000
  • Price Reduced:  $358,888 on 9/3/2011
  • Sale Date: 9/15/2011
  • Number of Offers: 3
  • Days on Market: 27
  • Price Increase 12/2/2011:  $370,800 – mandated by AMS Servicing policy
  • Conditional Lender Approval 1st Lien with Bank of America: 12/22/2011
  • Lender Approval 2nd Lien with Wells Fargo: 1/6/2012
  • Final HAFA Approval with Bank of America: 1/23/2012
  • Sales Price: $358,888
  • Close of Escrow: 1/27/2012
  • List to Close: > 5.0 months
  • HAFA Incentive to Borrower: $3,000.00
  • Bank of America HAFA short sale servicer:  AMS-Servicing

Working with AMS Servicing was extremely challenging. Without Bank of America escalation support this file would not be closed today.

A proven strategy for a successful short sale is to require the purchase agreement time line to begin the day following receipt of the the first lien approval.  As shown on the short sale time frame above, the file was ready to be closed by the time the final approval letter was issued. The file was closed within 3 days of receiving the final approval.

You can save your home from foreclosure. Get the help you need now. Don’t wait until you run out of time. Call your local San Jose short sale agent who is trained, certified, experienced, with a track record of helping homeowners avoid foreclosure.

Call 1-800-972-1822 today!

Sign Petition to Extend the Mortgage Debt Forgiveness Act

Petition to Extend the Mortgage Debt Forgiveness Act

On December 31, 2012 the Mortgage Debt Forgiveness Act of 2007 is scheduled to expire. As a San Jose Real Estate Agent-Broker, who manages many San Jose short sales, I recommend signing the petition to extend the Mortgage Debt Forgiveness Act of 2007. 

“The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.” Source: irs.gov


How does extending the mortgage forgiveness and debt cancellation act help homeowners who want to avoid foreclosure with a short sale?   Upon completion of a short sale, lenders issue homeowners a 1099.  Simply stated, the loss to the lender on a short sale becomes the gain, or income, to the homeowners.

With mortgage forgiveness and debt cancellation the income realized by a modification of the terms of the mortgage (short sales modify the terms of a mortgage) is excluded. In other words, the debt relief act allows the exclusion of income on certain cancelled debt on a principal residence. 

Mortgage Forgiveness and Debt Relief relates to taxes.  Therefore, to fully understand if you qualify to exclude income on cancelled debt on a principal residence, you definitely need to consult with a licensed tax adviser who is well versed in foreclosure tax laws.  San Jose short sale agents are not licensed to give tax or legal advice.


IRS Publication 4681 – Rev. 1/24/2011 – Cancelled Debts, Foreclosures, Repossessions, and Abandonments (for individuals) in preparing 2011 Tax Returns.

Avoid Foreclosure – get the help you need now! 

Call San Jose short sale agent, Kathleen Daniels today for a free consultation!

1-800-972-1822

San Jose Short Sale Closes on 1-6-2012

San Jose Short Sale Closes on 1-6-2012

Bank Of America Short Sales

Short Sale time frames will most definitely vary depending on the number of loans and who services the loans.

Below is an outline of the time frame for closing a San Jose short sale. This property did not qualify for a HAFA short sale. The property is located in the Evergreen Community in San Jose, CA.

Alternatives to Foreclosure

  • List Date: 10/15/2011
  • List Price: $399,999
  • Number of Offers: 1
  • Sale Date: 10/20/2011
  • Days on Market: 6
  • Lender Approval 1st Lien with Bank of America: 12/8/2011
  • Lender Approval 2nd Lien with Bank of America: 12/2/2011
  • Sales Price: $400,000 – Cash Purchase
  • Close of Escrow: 1/6/2012
  • List to Close: <3 months

You can save your home from foreclosure. Get the help you need now. Don’t wait until you run out of time. Call your local San Jose short sale agent who is trained, certified, experienced, with a track record of helping homeowners avoid foreclosure.

Call 1-800-972-1822 today!

San Jose Short Sale Agent Closes Another HAFA Short Sale

San Jose Short Sale Agent Closes Another Short Sale

HAFA Short Sales

Short Sale time frames will most definitely vary depending on the number of loans and who services the loans.

Below is an outline of the time frame for closing a San Jose short sale. This property qualified for, was approved as, and closed as a HAFA short sale.

Alternatives to Foreclosure

  • List Date: 10/2/2011
  • List Price: $368,888
  • Number of Offers: 3
  • Sale Date: 10/12/2011
  • Days on Market: 10
  • Lender Approval 1st Lien with Bank of America: 12/9/2011
  • Lender Approval 2nd Lien with Bank of America: 12/10/2011
  • Sales Price: $370,000
  • HAFA Incentive to Borrower: $3,000.00
  • Close of Escrow: 1/6/2012
  • List to Close: 3 months
  • Bank of America HAFA short sale servicer:  UTLS

Working with UTLS was extremely difficult.  Thankfully Bank of America is now managing their HAFA short sales in-house provided there is an offer on the property at the time the short sale is initiated. 

You can save your home from foreclosure. Get the help you need now. Don’t wait until you run out of time. Call your local San Jose short sale agent who is trained, certified, experienced, with a track record of helping homeowners avoid foreclosure.

Call 1-800-972-1822 today!

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