Author Archives: Brad Pearson
Short Sales
What is a short sale?
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.
Why is the number of short sales rising?
Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.
A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.
What challenges have short sales presented for REALTORS®?
The rapid increase in the number of short sales, and the short sales process itself present a number of challenges for REALTORS®. Major challenges include:
Limited experience
Many REALTORS® are new to the short sales process; a difficulty which is compounded by many lenders’ lack of sufficient and experienced staff to process short sales. Even if the REALTORS® are experienced, most servicers are under-staffed and still not adequately trained, making negotiating a short sale particularly difficult.
Absence of a uniform process and application
Until HAFA guidelines were established, both short-sales documents and processes were lender-specific, making it very difficult and time-consuming for REALTORS® to become knowledgeable and efficient in facilitating these transactions.
Multiple lenders
When more than one lender is involved, the negotiations are much more difficult. Second lien holders often hold up the transaction to exert the largest possible payment, in exchange for releasing their lien, even though in foreclosure they will get nothing.
As a result of these challenges our members have reported difficulties with: unresponsive lenders; lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause buyers to walk away.
What is being done to address or eliminate these challenges?
HAFA is designed to address many of the challenges presented by short sales. For more information see NAR’s Home Affordable Foreclosure Alternatives Program
Reposted from OC Register: Mortgage Bankers Assoc HQ = Short Sale
Mortgage bankers HQ now a short sale?
February 9th, 2010, 4:41 pm · 16 Comments · posted by Jeff Collins
Space available: Google maps image of 1331 L St, NW, reportedly the MBA HQ.
The Internet continues to reverberate with the weekend’s news that the Mortgage Bankers Association has sold its Washington, D.C., headquarters for about half of what it paid for the high-rise three years ago.
According to the Wall Street Journal, the industry trade group sold its $79 million headquarters on Friday for $41.3 million, or 48 percent off its original sale price. ( The Washington Post reported its original sale price at $90 million.)
Left unanswered was whether the association will repay the $75 million purchase loan the MBA received from a group of banks led by PNC Financial Services Group Inc. or whether the deal will end up a short sale.
The Journal wrote:
“John Courson, chief executive officer of the trade group, declined in an interview Saturday to say whether the MBA would pay off the full loan amount. “We’re not going to discuss the financing,” he said. A spokeswoman for the MBA added that the MBA has reached “an agreement with all relevant parties” regarding the outstanding amount on that loan but declined to provide any details.”
The buyer was listed as CoStar Group, a commercial real estate information firm, which plans to move its headquarters from Bethesda to the District.
The MBA purchased the 10-story, glass-walled building while it was under construction in 2007, and planned to finance the purchase by leasing out unused space, according to news reports. However, the office market soured, and the MBA has only been able to lease out about 10 percent of the available space.
All of which ignited a cacophony of commentaries.
The Baltimore Sun’s Jay Hancock wrote:
“So far we can file this only in the Department of Irony, not Hypocrisy. But stand by.
” … Will this turn into a short sale? Will the MBA walk away from the difference that it owes a lending group headed by PNC Financial? Will it do what it has urged homeowners not to do? That would be an act of headline hypocrisy for the books. As the Journal’s James R. Hagerty reports, MBA executive John Courson has urged families with underwater mortgages to keep making the payments.”
Said real estate writer Scott Van Voorhis at Boston.com:
“Mortgage bankers have not been terribly sympathetic these past few years to the plight of struggling homeowners.
“Those who have tried to do the right thing, and sell their homes in short sales instead of simply walking away, have too often found themselves caught in a web of corporate red tape.
“And for frustrated homeowners who opt to walk away, well let’s just say there’s been absolutely no mercy at all.
” ‘What about the message they will send to their family and their kids and their friends?’ John Courson, chief executive of the Mortgage Bankers Association, recently asked.
“Well now we can ask the same question about the Mortgage Bankers Association’s own, spectacularly foolish real estate activities.”
Added Glenn Hall of TheStreet.com (the Register’s former business editor):
“Sounds like one of those jokes that make the rounds on the Internet, but sadly this one is true.
” … This is more than a little embarrassing for a group that represents some 2,400 lenders, loan brokers, commercial banks, thrifts and life insurance companies.
“You expect more from a group whose directors include executives from JPMorgan Chase, KeyCorp and other notable financial companies.”
29,000 Real Estate Agents quit!
The state Department of Real Estate reported that by the end of 2009, 503,284 people had California real estate licenses — down 29,247 or 5.5% from the end of 2008. December’s agent total was the lowest monthly total since May 2006.
Still, California had one real estate agent for every 25 households in the state by the end of 2009.The decline in agents has led to slightly less competition …
In 2007, when to total number of people with real estate licenses peaked at 549,244, the state had one agent for every 23 households in the state.
At the start of the decade, however, there 38 households for every real estate licensee.
Put another way, California had one agent for every 76 men, women and children in the state in December.
That compares to one per 69 residents in 2007, when the number of licensees peaked. But that’s down from 112 at the start of the decade.
State figures show further:
Starting in 2000, California saw an uninterrupted increase in the number of real estate agents for 7 1/2 years while home sales and prices boomed.
But well into the housing slump, the number of agents began a two-year drop.
During that time, broker licenses held steady, while the number of “sales agents” — those who must be employed by a broker to work — fell 12%.
California had a record 398,716 sales agents in November 2007. By last December, there were 350,870 sales agents.
The number of brokers, meanwhile, increased since November 2007, holding steady at 152,000 or more from April 2008 on.
The strong and competent survive!
10 signs that you might be failing in your Real Estate Career
Written by Brad Pearson, Inspired by Jeff Foxworthy:
1. When you’re alarm clock goes off in the morning, you hit the snooze button until noon and then go to lunch at McDonalds and order off of the dollar menu.
2. When you show up to the office, the receptionist asks, “Can I help you?”
3. The last time you checked your office mail box was in July and you had candy canes in it!
4. You’re picture on your business card looks like it was taken 15 years ago.
5. You’re spouse keeps leaving job applications on the kitchen table for you.
6. You’re still carrying a pager and a flip phone.
7. You’ve changed your car license plates back to the paper dealer plates.
8. You dress like your going to your buddy’s house when you come to work.
9. When you get to you your cubicle there’s a picture of someone else’s family on your desk.
10. You’ve got a huge Mona Vie sticker on the back window of your car!
Now… 10 Signs that you might be SUCCEEDING in your Real Estate Career!
1. You wake up 10 minutes before your alarm clock goes off and hit the gym for 1 hour before work! Then arrive at work no later than 8:30am!
2. When you show up to the office, you are the first to arrive and know exactly what your schedule is for that day and that entire week!
3. You are continuously focused on personal and professional self improvement . And seek out coaching from qualified coaches to continue growing!
4. You schedule 3 solid hours of lead generation time every day and let nothing get in your way! And as a result are never on less than 4 qualified appointments per week!
5. You take 2 days off during the week and realize that you must work weekends if you are in the Real Estate business!
6. You spend less than 30-40 minutes a day on admin and preparation of materials and for appointments.
7. You attend every sales meeting for the most current strategies and ideas!
8. You dress for success every single day!!! Regardless of the heat, circumstances ,etc!
9. You’ve embraced technology and use it to streamline your business so you can have more time for “LEAD GENERATION” activities!
10. When you get home at the end of the day, your spouse says “Oh my gosh, what happened to you today?” Because you actually look like you worked your tail off all day!
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