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Laguna Niguel Short Sale – Case Study #32

by Vince Bindi on April 5, 2009

Short Sale Case Study #32 -  We will describe another successful Short Sale for a detached home located in Laguna Niguel, Ca.  The details of the short sale such as; property  address, exact loan amounts, and names will not be revealed to protect the privacy of the previous homeowner.

Property and Finance  Details: This Laguna Niguel home was a 4 bedroom, 3 bath, 3 car garage with 3,150 square feet of living area.  This detached home was originally purchased in the Spring of 2004′ for $885,000 with a 10% down mortgage.  In the summer of 2007′ an equity loan (HELOC) was also taken out on the home for about $245,000 with National City Mortgage.   This property was sold via a Short Sale in the winter time of 2009′ by the ShortSalesASAP team.

Market Condition: Home prices have dropped dramatically in southern California due to the severe recession and nationwide financial crisis.  More specifically, prices have been dropping about 1% per month for the past 2.5 years in Laguna Niguel, although there are now signs that prices may be leveling off.   The homeowner experienced a financial hardship and was no longer able to keep current on the mortgage loan payments.   They inquired into a Loan Modification, but even in the most optimistic scenario, they still would have been about $300,000 upside down on their home mortgage.

Preparation Stage: After we signed the listing agreement with the homeowner, we gathered all of the required documents from the homeowner.  After review and packaging, we delivered these documents to the 1st and 2nd banks to present our short sale case.   After some tricky and difficult negotiations, our expert team was able to obtain preliminary approval for the Short Sale with tentative terms and conditions.  During this preliminary short sale approval phase, the homeowner was able to live in the property as normal.  There were no interruptions from other agents or prospective home buyers, and due to their hardship, they were living rent  free.  This Preparation Phase took about 6 weeks to complete.

Sales and marketing Stage: Once the short sale was tentatively approved, we placed this Laguna Niguel property on the market for sale.  It was listed in the Multiple Listing Service (MLS) for a price of at a price of $825,000.   After a period of about 3 weeks with no offers, we dropped the price to $789,000.   A week later we received an offer from a loan qualified buyer for $735,000.    After several days of counter negotiations,  we obtained a purchase price of  approximately $750,000.

Closing Stage: In the final stage of this short sale process, we obtained the signed offer from the Buyer, and gathered the other required Short Sale disclosures and Buyers loan qualification paperwork.  We submitted this  package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs. After some tough negotiations with our specialists obtained the updated short sale approval letter from the 1st and 2nd Mortgage Banks.  Once we received these bank  approval letters, we moved forward with the closing of escrow. The last Phase was completed in about 21 days.

The result was that the entire debt on the home was removed from the homeowner. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments payments.  Most importantly, if this home were to been lost in Foreclosure,  the 2nd Mortgage HELOC loan would still be owed by the homeowner after the 1st mortgage lender foreclosed.  As a result of this short sale though, the convinced to the 2nd Mortgage Bank to accept to small pay-off we generated for them as a settlement in full.     The homeowner is now working with our credit restoration affiliate and their credit rating should be repaired to a level where they should be able to buy again home by 2010′ .

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

Aliso Viejo Short Sale – Case Study #29

by Vince Bindi on April 1, 2009

This Short Sale Case Study outlines another successful short sale transaction that was conducted for a detached home located in the Vista De Oro subdivision in Aliso Viejo, Ca.

ORIGINAL PURCHASE:  This large detached home was bought by the homeowner in March of 2007′ for $770,000.  This home was purchase using Zero down financing, and there was a 1st Mortgage with a loan balance of $620,000 and a 2nd mortgage with a loan balance of $150,000.   The fist loan was a fixed rate mortgage and the 2nd loan was an adjustable rate loan.

This single family detached home was 4 bedroom, 3 bath,  2,200 square foot home, with 2 car garage.  This property was sold and closed escrow in December of 2008,  via a Short Sale by the Aliso Viejo  ShortSalesASAP company.

FINANCIAL CRISIS:  Home values have decrease by about 35% since the peak in pricing in Spring of 2006′,  throughout Orange County, CA. and in Aliso Viejo as well.   This Aliso Viejo short sale property dropped in value by about 25? % From the time this home was purchased in 2007′, until it was sold at the end of 2008′.

The homeowner was having financial difficulties and was having a very hard time keeping up with their loan payments.  Their debt to income ratio was to high to qualify for a Loan Modification, and the home was upside down by about $200,000.

SHORT SALE PREPARATION: This Aliso Viejo home was initially put in our Short Sale Preparation Phase. Here we gather all of the required documents from the homeowner and contact the banks to present our short sale case.  With some hard knock negotiations, our expert team was able to obtain preliminary approval for the Short Sale along with terms and conditions.   This Preparation Phase took about 4 weeks to complete.  During that time the homeowner was able to live in the property as normal, with no interruptions from other agents or prospective home buyers, and due to their hardship, were forced to stop making their mortgage payments and lived rent free.

SHORT SALE MARKETING & SALE: the next phase was the  Marketing-Sales of the pre-approved short sale.  The home was marketed heavily and posted in the Multiple Listing Service (MLS) for a price of at a price of $649,000. After a period of about 3 weeks, the price was dropped to $599,900.  We finally found a qualified Buyer and after several counter offers, we were able to get them to offer $580,000 to purchase this home.

CLOSING PHASE: After the purchase offer was signed by the buyer and seller, we opened escrow for the new buyer.  We packaged the purchase offer, Short Sale disclosures and Buyers loan qualification paperwork. We submit the updated package to the 1st and 2nd mortgage banks.  Our post short sale specialist then expedites the delivery of these documents to the bank negotiators to finalize the short sale and obtain the approval letters in writing.

Many people ask us why a mortgage bank would accept a short sale.  Well the reasons are many, but the bottom line is that banks have determined that they loose 15% more when they are foreclose as compared to accepting a short sale.  These savings are due to reducing loss of the time value of money, avoiding property damages, eliminating foreclosure legal expenses, and minimizing bank management overhead expenses.

FINAL RESULT:  At the completion of this short sale, the homeowners mortgage debt was completely eliminated.   The homeowner lived in their home during this short sale process and did not have to make any loan  payments. They were also able to rent a comparable home for substantially less then what their payments used to be. In addition, the homeowners credit was less damaged by the short sale as compared to a foreclosure. In addition, Fannie Mae (FNMA) altered their underwriting policy, so that a past homeowner only has to wait 2 years before they can buy another home using FNMA underwritten loans.  If the homeowner went through foreclosure, the waiting period would be  5 years !

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

Ladera Ranch Short Sale Success Story #38

by Vince Bindi on March 29, 2009

Another successful Short Sale case study for a detached home located in Ladera Ranch, Ca.   This single family detached home was 4 bedroom, 4 bath, 3,568 square foot home, with 3 car garage.  This property was sold and closed escrow in September of 2008,  via a Short Sale by ShortSalesASAP.

This spacious home was bought by the homeowner in December 2006′ for $1,200,000. There was 1st Mortgage with a loan balance of $960,000 serviced by Countrywide Mortgage, and a 2nd Mortgage with a balance of $240,000 serviced by Wells Fargo.  Both loans were fixed rate mortgages.

Real Estate prices have taken a beating in the past 2 years throughout Orange County, CA. and prices have also decreased sharply in Ladera Ranch as well.  This Ladera Ranch home has dropped in value by about 28% in the past 2 years.  The homeowner had a financial hardship and was having difficulty keeping up with their mortgage payments.  They looked into a  Loan Modification, but decided to conduct a Short Sale since they still would have been $325,000 in the hole with this property after the Loan Modification.

PHASE I: This Ladera Ranch home was initially put in our Short Sale Preparation Phase. Here we gather all of the required documents from the homeowner and contact the banks to present our short sale case.  With some hard knock negotiations, our expert team was able to obtain preliminary approval for the Short Sale along with terms and conditions.   This Preparation Phase took about 4 weeks to complete.  During that time the homeowner was able to live in the property as normal, with no interruptions from other agents or prospective home buyers, and due to their hardship, were forced to stop making their mortgage payments and lived rent free.

PHASE II: Phase II was the start of the our Short Sale Marketing-Sales Phase where we market the property for sale extensively on the Internet and in the Multiple Listing Service (MLS) for a price of at a price of $925,000. After a period of about 2 weeks, we obtained a solid offer from a qualified  buyer for $850,000.   After a couple days of negotiations headed up by our short sale Realtor,  we obtained a purchase price of $875,000.

PHASE III: This final Phase is the Short Sale Bank Closing.   After we obtain the signed offer from the Buyer, we packaged the purchase offer, along with required Short Sale disclosures and Buyers loan qualification paperwork. We submit the updated package to the 1st and 2nd mortgage banks, to conduct the final short sale adjustments of the terms, conditions and costs.   After some tough negotiations with our expert short sale Realtor team, our attorney and the bank officials, we got both the 1st and 2nd Mortgage Banks to agree to this short sale offer of $875,000. Once we received the bank short sale approval letters, we moved forward with the buyers closing through escrow. The last Phase was completed in about 27 days.

The result was that the entire debt on the home was removed from the homeowner. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments payments. They were also able to rent a comparable home for substantially less then what their payments used to be. In addition, the homeowners credit was not as badly damaged as it would have been if the banks had foreclosed. They are now working with our credit restoration affiliate and their credit rating should be repaired to a level where they should be able to buy again home in Irvine by the end of 2009′ .

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s). If you have any questions regarding Short Sales, contact our team of experts at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

Irvine Short Sale – Case Study #63

by Vince Bindi on March 24, 2009

SUBJECT PROPERTY: This successful short sale was completed for a single family home in Irvine, CA.   It was 4 bedroom home with 2,080 square feet of living area.  This home was sold and closed escrow  in January, 2009,  via a Short Sale by  ShortSalesASAP. This detached house was  purchased by the homeowner in February of 2002′  for $405,000.  The owner then refinanced and also obtained a Equity Line of Credit loan (HELOC) in 2nd position with a total new loan balance of approximately $650,000 in 2005′ .    The 1st Mortgage was Virtual Bank with an adjustable rate mortgage with a balance of  $508,000, and the 2nd HELOC loan was with WAMU, which was an interest only loan with a balance of about $142,000.

FINANCIAL NUMBERS: Due to the dramatic drop in real estate prices that has hit southern California, including Irvine, this home has dropped in value by more then 32% since the refinance in late 2005′.   The homeowner had a financial hardship and was having trouble keeping up with their mortgage payments, so they investigated a Loan Modification.  They could not qualify for one, for the debt to income ratio was to low.    Also, the loan modification did not address the fact that the home had loan debts and other liens that were more then $50,000 more then the home was worth. They contacted us in July of 2008′ to learn about the Short Sale option, and selected us to conduct the short sale.

PREPARATION PHASE I: This Irvine home was initially put in our Short Sale Preparation Phase.  In this phase, we gather the documents from the homeowner and contact the banks to establish and present our short sale case. This Preparation Phase took about 4 weeks to complete, and during that time the homeowner lived in the property as usual with no interruptions from other agents or prospective home buyers.

SALES AND MARKETING PHASE: The Short Sale Marketing-Sales Phase is where we placed the property on the market in the Multiple Listing Service (MLS) at a price of $625,000.  After a period of about 4 weeks, we obtained a buyer. After several counter offers,  we obtained a purchase price of $615,000.  This Phase took 4 weeks to complete.

BANK NEGOTIATIONS PHASE: The Short Sale Bank Negotiations Phase began after we obtain the signed offer from the Buyer.  Here we packaged the purchase offer from the Buyer, with required Short Sale disclosures, along with the Buyers loan qualification documents. We submit the updated package to the 1st and 2nd mortgage banks, to conduct the final short sale negotiations. After some tough negotiations  with our expert short sale Realtor team, our attorney and the bank officials, we got both the 1st and 2nd Mortgage Banks to agree to the short sale offer. Once we received the bank short sale approval letters, we moved forward with the buyers closing through escrow. The last Phase was completed in about 3 weeks.

CONCLUSION: The result was that the entire debt on the home was removed from the homeowner. The homeowner was able to live in their home during this short sale process and did not make any mortgage payments payments. They were also able to rent a comparable home for substantially less then what their payments used to be. In addition, the homeowners credit was not as damaged as it would have been if the banks had foreclosed. They are now working with our credit restoration affiliate and their credit rating should be repaired to a level where they should be able to once again buy a home in Irvine by the end of 2009′ .

ShortSaleASAP is licensed with the California Department of Real Estate, and our services are free to the homeowner, for we are paid by the mortgage bank(s).  If you have any questions regarding Short Sales, contact our team of  experts  at: (949) 388-3396 or drop us an email at: Info@ShortSalesASAP.com

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