Newly Proposed Foreclosure Law

Under a bill recently proposed to Congress, people who are far behind on their mortgage can withdraw from their 401(k) to save their home without paying any penalties.

According to the language in the “HOME ACT,” the proposed bill allows homeowners to withdraw money from a retirement plan penalty-free (but not tax free) to make mortgage payments toward his primary residence up to $50,000 or one-half of the present value of one’s 401(k) account (whichever is smaller). This will be allowable as long as the funds are used for that purpose within 120 days of withdrawal. This sounds like a great idea that could potentially help millions of homeowners who are behind on their payments or struggling with a recent job loss.

However, you can look at the bill another way.

The option to withdraw from a retirement plan may just be a postponement of the inevitable. It may do little or no help at all to the millions who are hopelessly underwater, and who may eventually lose their home. Is this bill really about helping the millions of American’s facing impending foreclosure? Or is this another attempt to a bailout that we, as taxpayers, will end up paying for when folks who opt into this plan will eventually need help because their retirement funds have been depleted?

What do you think? Would you ever do this, or would you prefer a Short Sale as a solution?

Ihor Pochay
BROKER/SHORT SALE & REO SPECIALIST
Team Pochay Realty
C (562) 334-7393
ihorpochay@hotmail.com
TeamPochayRealty.com
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New Short Sale Policy from Bank of America

Interesting move by Warren Buffet to invest $5 billion in BofA this week. While that news may be indirectly relevant to this blog, I have another news to share regarding Bank of America’s new short sale policy, which allows real estate agents to substitute a new short sale buyer without restarting the often complicated process of a short sale transaction. Here are the details:

Bank of America now allows real estate agents to submit a backup offer on a short sale transaction if the original buyer has walked away from the sale. This means agents will no longer have to initiate a new short sale via Equator (a file management system). Instead, they can continue with the original transaction in Equator and work with the same short sale specialist. This is a HUGE change that will save time for sellers, buyers and REALTORS by not having to repeat a number of short sale processes again and again.

When a Backup Offer Is Ready
Real estate agents should send a message to their short sale specialist via Equator when the original buyer is no longer interested in the property or simply walked away from the transaction. The Bank of America short sale specialist should respond within two business days and ask if the agent has a backup offer ready to submit. If another buyer is prepared to make an offer, the short sale can proceed without having to repeat the short sale initiation steps. The short sale status in Equator will change to “marketing,” and agents will be directed to complete the following tasks within 14 business days:

1. Complete the “Listing Data” task.
2. Provide the marketing description.
3. Review the marketing plan.
4. Upload the purchase offer.

The real estate agents will then have 14 days to complete the “Listing Data” task. If the task is not completed on time, the file will be closed.

When No Backup Offer Is Ready
This new process applies only if there’s an available backup offer when a buyer walks away. If a backup offer is not ready to be submitted, the short sale will be declined. In that case, real estate agents should return to marketing the property and initiate a new short sale in Equator system once another offer is received.

This is definitely great news for the real estate industry as we continue to see short sales on the market. It’s a win-win all around. If you’d like to learn more about this topic, don’t hesitate to contact me.

Ihor Pochay
BROKER/SHORT SALE & REO SPECIALIST
Team Pochay Realty
C (562) 334-7393
ihorpochay@hotmail.com
TeamPochayRealty.com
Follow me on Twitter and Facebook

California Governor Signs SB 458 – No Deficiency After Short Sale for Junior Liens

Good news for California homeowners considering a short sale! SB 458 was signed, which is the new California law that extends the protections of SB 931, ensuring that any lender/bank that agrees to a short sale transaction for a residential property from 1 to 4 units, must agree to the short sale payment as payment in full for the outstanding balance of all loans (first/second/third mortgage liens, HELOC, etc.).

What is SB 931 any way? It was a law signed in 2010, which stated that after a short sale transaction is completed in California, lenders/banks cannot pursue the homeowner/seller for the remaining balance of the loan (amount owed minus the sale price). But unfortunately, this rule did not apply to junior lien holders (second/third mortgage or home equity line of credit/HELOC). SB 458 extends the protections of SB 931 to junior liens.

For sellers who conduct a short sale after July 2011, SB 458 means that a short sale junior lien holder cannot require additional compensation (cash contribution, promissory note, etc.) as part of the short sale approval. If needed, the agent still can contribute to make the transaction go through.

SB 458 ensures that after close of escrow in a short sale transaction, there is no possibility that the lender can pursue the borrower/seller. Therefore, the lien and (personal) liability will be released by all lenders involved in a short sale.

These two short sale laws combined with the Mortgage Forgiveness Act, make it perfect for Short Sale transactions to be conducted in California.

If you are behind on your payment or simply need to move to another area but your house is upside down (you owe more than it's worth), give me a call and I will make your transaction as smooth as possible.

Ihor Pochay

BROKER / Short Sale & REO Specialist

Team Pochay Realty

Cell: (562) 334-7393

ihorpochay@hotmail.com

www.TeamPochayRealty.com

www.shortsaleyourhome.blogspot.com

DRE# 01772584

MARS Mortgage Assistance Relief Services Disclosure

Homeowners who are facing foreclosures are willing to do and listen to any company that will say we can help you stop foreclosure, modify your home and/or conduct the Short Sale. There are many schemes out there, where some individuals and companies are taking advantage of distressed homeowners and are not performing the acts that they promised.

Recently, the Federal Trade Commission (FTC) issued a Rule to fix the unfair and deceptive practices associated with mortgage assistance relief services - Mortgage Assistance Relief Services (MARS) Rule. Here some points from this rule:

1. It's illegal to charge upfront fees. The service must be performed first and the homeowner must agree to the offer from the bank.

2. Clear and prominent disclosure of information before signing people up for services is mandatory (i.e., total cost, stopping of services at any time, that the company is associated with the government, etc.).

3. Cannot advise either to pay or not to pay the mortgage. The homeowners must be told that failure to make mortgage payments may result in losing the house and damage to their credit.

4. It is illegal to advise homeowners to stop communicating with their lenders and services.

5. No misrepresentation of services is allowed. Under this Rule, it is prohibited to make claims that are false or misleading.

6. Must disclose to customers if they receive an offer of mortgage relief from a lender or service. The companies or individuals are required to provide written notice to customers from the lender or service describing all the facts. It’s important to note that the customer must be advised that if they do not like the offer from the service or lender, they can reject it and will not have to pay for the services.

This rule applies to any company and or individuals who offer mortgage assistance relief services (Short Sales, Loan Modification, etc). If you have any questions in regards to this Rule or need to Short Sale your house, please call me at 562-334-7393.

Ihor Pochay
BROKER / Short Sale & REO Specialist
Team Pochay Realty
Cell: (562)334-7393
ihorpochay@hotmail.com
www.TeamPochayRealty.com
www.shortsaleyourhome.blogspot.com
DRE# 01772584