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Fannie Mae has announced that they will no longer allow unemployed homeowners to count their jobless benefits as income on their loan mod application starting November 1.  This comes on the heels of the Treasury Department not allowing unemployment insurance to be counted as income by HAMP applicants earlier this summer.

What is their alternative?  Their solution is to allow the unemployed to apply for a forbearance of 3-6 months instead.   Why?  They don’t want drop-outs.  Unemployment income and unemployment insurance is not permanent income.  However, how many low income or no income folks will be able to afford forbearance payments without an employment windfall?

Unemployment is still rampant and the leading cause of default.  The unemployed have very few options left.  Servicers are offering their own independent programs.  Nearly half of the HAMP drop-outs (hair over 44% according to reports I’ve read) are receiving assistance directly from their servicers.  But for the remaining borrowers, if they cannot modify due to these restrictions, and they fail the forbearance, then they are left with ‘short sale or foreclose’.  Over 13% end up on the foreclosure end.

All of these stats mean that potentially over 40% of the borrowers who fail HAMP and then fail to meet the terms of one of their servicer’s foreclosure alternative programs, are in the short sale category.  Doing some backwards math, there are way over 400,000 borrowers who are truly in some process of or in need of short sale assistance.  Add this to the nearly 25% of borrowers nationally who are facing imminent default if they lost a job due to underwater mortgages.

As a short sale specialist in your area it is essential that you are aware of the ins-and-outs of the modification programs as much as the short sale process.  Your knowledge will stand you apart as an authority.  Unfortunately, 8 out of 10 borrowers in default do not seek out the assistance of a professional when facing foreclosure.  However, borrowers who have already used your knowledge as a road-map through the modification process will be more likely to seek you out for short sale assistance.

We have been saying for the last two years that the time to make short sales work as a catalyst for your business is NOW.

With the right tools this market will lead you towards your real estate business goals.

The only tool created to help agents and investors create a long-term business using short sales as the catalyst to growth….The Flagship System.

To Your Short Sale Success!

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Borrowers Receiving Unemployment Can Forget Loan Mod…Now What? is a post from: Short Sale Daily News

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Other findings in the quarterly report included:

1. The overall loan modification volume increased 24 percent to nearly 171,200 during the quarter, with the majority of modifications completed through HAMP.

2. More than half the completed loan modifications in the second quarter lowered borrowers’ monthly payments by more than 30 percent.

3. Foreclosure starts increased 12 percent to nearly 275,100 while completed foreclosure sales and third-party sales increased 15 percent to nearly 112,400 in the second quarter.

4. Those loans modified more recently–in the last two quarters–are performing significantly better than notes modified in earlier periods.

So it would appear that banks are finally, if not belatedly for hundreds of thousands of foreclosed families, getting their acts together on implementing these modification programs. One of these, HAMP, has already celebrated a birthday, so it’s pretty sad that it took banks like Bank of America this long to start getting any kind of volume going on Fannie Mae and Freddie Mac-sponsored loan modifications.

-  To Your Short Sale Success!

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“Homes needing renovation are typically the very best buys available; however, most prospective buyers have no idea how to finance both the purchase of the home and the renovation work required,” says Dennis Walsh, CEO of REbuildUSA. “The FHA Streamlined 203(k) offers a competitive solution. At the same time, millions of current homeowners could also benefit from this program that offers excellent rates and the ability to make improvements to their homes. We’re excited to partner with Lowe’s to make use of the Streamlined 203(k) much easier than ever before.”

The FHA Streamlined 203(k) renovation loan program provides funds for both the purchase and renovation of eligible homes packaged into one mortgage loan. Once the purchase of the home is closed, renovation funds are held in escrow to pay for pre-determined renovation work done by approved renovation contractors. There were approximately 21,000 FHA 203(k) loans in 2009, including Streamlines.

To that end, most recently, Lowe’s added preferred lending partner Bank of America, which will help coordinate financing options for both renovations and home purchase with renovations through the Streamlined 203(k) loan, increasing the Lowe’s stores footprint with Bank of America’s locations.

“Lowe’s is working with REbuildUSA to be the home improvement solution for products and services required by a Streamlined 203(k) loan,” says Mark Malone, vice president of consumer marketing for Lowe’s. “We can help facilitate the needs of home buyers acquiring distressed properties and facilitate the process of getting their projects done.”

And for the industry’s top leaders, they believe this announcement is coming at just the right time.

“Every real estate professional needs to know about this great opportunity in today’s market,” says Dave Liniger, chairman and co-founder of RE/MAX LLC. In fact, Liniger recently presented the REbuildUSA program to RE/MAX agents during a live broadcast via RE/MAX University.

“[This program] is nothing less than the future of real estate,” explains Ed Krafchow, president and CEO, Prudential CA/NV Realty. “If you’re serious about success in this business, you’ve got to get involved in this ground-breaking program.”

Specially trained Lowe’s associates in stores across the country, except in Texas, can help the customer plan the project and select products and Lowe’s independent subcontracted installers can handle the installation. The program allows Streamlined 203(k)-qualified customers to have a huge selection of products and services under one roof, and it gives customers the ability to immediately improve their homes by adding equity with the repairs and renovations.

Concludes Alex Perriello, president and CEO of Realogy Franchise Corp.: “REbuildUSA is a concept whose time has come and will have a positive impact on the real estate industry and homeownership in America.”

ABOUT LOWE’S
With fiscal year 2009 sales of .2 billion, Lowe’s Companies, Inc. is a FORTUNE® 50 company that serves approximately 15 million customers a week at more than 1,700 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe’s is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.

ABOUT REbuildUSA
REbuildUSA™ is dedicated to “rebuilding America one dream at a time.” Its industry leading 203(k) Specialist designation training, membership support, lead generation, marketing solutions and exclusive online Project Portal™ fulfillment platform help consumers, lenders and real estate professionals leverage the power of the U.S. Government FHA 203(k) Home Purchase and Renovation Loan program. The parent company, Dennis Walsh & Associates, Inc., has delivered cutting-edge education and sales and marketing solutions to more than 80,000 associates of the world’s leading real estate organizations since 1988. REbuildUSA™ is proud to work with Lowe’s as its home improvement partner, Pillar To Post as its home inspection partner and a who’s who of the nation’s most successful real estate organizations and leading mortgage lenders. As members of REbuildUSA™, these industry leaders are able to more effectively open up many more home ownership opportunities and stimulate the economy while improving homes and communities across America.

For more information, http://www.REbuildUSA.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Copyright© 2010 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

On this week’s Preforeclosure Daily Grind “Tip of the Week” we tackle the latest way that Litton Loan Servicing is handling their loan modifications. We cover how they deal with sellers, agents and third party loss mitigation companies when they are servicing the 1st mortgage. We also go over what they are doing when they are servicing a 2nd loan and what debt collection company they are working with. Chase’s new practice regarding sellers that miss one payment and what foreclosure “status” they put them in and what you need to do to get them out, and more.

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The Latest on Litton Loan Servicing and Loan Modifications! is a post from: Short Sale Daily News

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According to the report, foreclosure prevention and loss mitigation efforts at these two government-sponsored agencies were led by short sales and modifications in May. Some 66,000 loan modifications occurred in May at these two agencies, up significantly from 47,000 the previous month. These high levels of short sales and increased loan modifications were leading factors in the majority of May’s completed foreclosure prevention actions.

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