Signed into law on May 5, 2011 by Governor Neil Abercrombie, Hawaii’s Act 48 was touted as one of the strongest foreclosure laws in America. Its intent was clear and definite; provide additional protections to individuals facing foreclosure by reforming the process by which lien holders effectively foreclose on a property. Of key note:

• Act 48 imposed a moratorium on Chapter 667, Part I Non-judicial Foreclosures effective until July 1, 2012. Known as ‘Part I’ of non-judicial foreclosures, this was the method previously used most by lien holders as it proved to be the fastest and least expensive.
• Act 48 ‘fixed’ Chapter 667, Part II Non-Judicial Foreclosures to eliminate the requirement that the mortgagor sign the deed after foreclosure. In its original form, ‘Part II’ was inherently flawed by requiring that the mortgagor (who was being foreclosed on) to sign the deed. With lack of cooperation by the mortgagor being prevalent, Part II was not used very often in the past.
• Act 48 created a Mortgage Foreclosure Dispute Resolution (MFDR) program. In essence, this program is offered to all owner-occupants whose property is being foreclosed on through non-judicial procedures and allows a platform to mediate with the lender. Lenders are required to participate if the owner chooses to go through this program’s mediation and will share in some of the expenses. This program will be administered by the Department of Consumer and Commerce Affairs, it is to be functional by October 1, 2011 and set to expire on September 30, 2014.
• Owners can elect to convert a non-judicial to a judicial foreclosure, provided that they have not already participated in MFDR. Therefore, owner occupants are strongly encouraged to give proper thought to which venue is most beneficial to their particular circumstances.

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The designations most agents get serve one purpose, marketing. They are trying to separate themselves from the pack to get listings.

Some of the poorest quality short sale education is offered by real estate boards and governmental agencies who were caught completely off-guard by the explosion of homes needing to be short sold.

These real estate boards and agencies move slow, as most large organizations do. So, how can they stay ahead of the Short Sale curve, when they can’t even keep the addendums updated?

I find myself creating necessary forms and disclosures long before my local board comes out with one. If you do the same, be sure to run them by your broker and an attorney if necessary to ensure you stay within professional purview.

The fact that our own professional organizations seem to be slow to keep up, what would make anyone believe the short sale training offered by them would actually give agents a competitive advantage against the financial institutions?

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Following on the success of the First Look Program many larger banks are going to take a page from First Look. Banks will now allow local governments and non-profits the ability to buy foreclosed homes before they are sold to private investors.

The largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo have agreed to let the groups purchase the properties ahead of private investors. Neighborhood organizations will have up to 48 hours to evaluate bank owned property before professional investors get to view and bid for purchase.

The idea is to level the playing field and allow those who would be stakeholders in the community helping stabilize real estate markets. HUD thinks they can move 100,000 properties through this program.

The National Community Stabilization Trust will collect information on foreclosed properties and help local groups to identify which ones to purchase.

From The Website

The National Community Stabilization Trust facilitates the transfer of foreclosed and abandoned properties from financial institutions nationwide to local housing organizations to promote productive property reuse and neighborhood stability. In collaboration with state and local governments, the Stabilization Trust builds local capacity to effectively acquire, manage, rehab and sell foreclosed property to ensure homeownership and rental housing are available to low- and moderate-income families.

The term “short sale” was hardly even heard of 4 years ago.  The name alone is so ironic in that it usually takes 3 months to a year to close.

Most Realtors® won’t even show them as now a days you are lucky if they close at all. They are without a doubt the most frustrating of all sales. Still I guess we will be forced to live with them until someone let’s the lawmakers know that enough is enough.  We need regulations and rules.  Realtors are either getting rich or running for the poor house.

Fannie Mae recently passed a regulation that prohibits banks from negotiating the buyers commission or reducing them. A small but great victory for buyer’s agents who are at the mercy of the listing agent.  Most of the time they offer 2.5% – 3% and state on the MLS that if commissions are reduced they are split 50/50.

Well I guess we have to take the word of the listing agent and their escrow officers on this.

I recently had a listing agent tell me that they reduced the total commission to 3% and I was to settle for 1.5%. She then accidentally forwarded me an email from the bank negotiator, who allowed a 7% total commission.  Talk about dishonesty and greed.  Unfortunately it is very prevalent in this market.  I did manage to get my 3% but with a lot of Broker to Broker combat.

How I long for the old days. Continue reading this post

If you are selling real estate in a military market, it’s important for you to know all of the options out there for your seller clients.  We’ve recently worked with several Realtors who were completely unaware of the Housing Assistance Program (HAP) that is offered by the Department of Defense. This program can help a military member avoid a short sale, or reduce the loss they have to contribute to help cover their mortgage after being forced to relocate.

We communicated with one military client who had short sold the home a few months prior to contacting us from a blog post – and had zero idea about this program.  The program essentially provides loss assistance to those in the milltary that are relocated or moved to another part of the country and are “in the red” on their home.

To apply for the program click here.

Here is an excerpt from the HAP DOD website:
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I’ve sold a ton of REOs (Real Estate Owned homes – foreclosures) to first-time homebuyers – many of whom I’ve met through HomeGain.com. Before we start looking at homes, I take time to meet with them and explain the entire process in as much detail as necessary. I hate surprises, and I’ve discovered buyers don’t like them either. I want my clients to fully understand the process so they know what to expect once we hit the streets.

In the process, I’ve discovered a sad truth. No amount of discussion or explanation ahead of time can adequately prepare prospective buyers for the process of trying to buy an REO in the current market.

I recently came across a video that so perfectly sums up the process of buying an REO – I decided I have to share it with you. As I watched it for the first time, I discovered I was unsure how to respond … should I laugh … or cry …

You decide.

For additional musings on REOs, also read:

1. Top 10 Things I HATE About REOs: AND 3 Startling Consequences
2. How To Buy An REO – Top 17 Questions Answered
3. Bank Tactics Causing Repeat Of Crash Conditions in San Francisco Bay Area

Thanks to San Diego Castle Realty and Kris Berg for producing the video!

Watch the video on YouTube