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Short sales routinely show up in credit reports as foreclosures
Source: Los Angeles Times

Large numbers of homeowners who have negotiated short sales are at risk because of a startling omission in the credit system. Their credit reports and scores indicate that they were foreclosed upon, rather than having negotiated a mutually agreeable resolution with their lender, and the Federal Trade Commission and the Consumer Financial Protection Bureau are investigating why and how this happened.

Making sense of the story

  • The credit reporting system now in place does not have a separate code that distinguishes a short sale from a foreclosure, yet there are crucial differences between the two.
  • In a short sale, the bank approves the sale of the house to a new buyer at a mutually acceptable price. Any unpaid remaining loan balance not covered by the sale proceeds may then be either partially or fully forgiven. The bank is an active participant throughout the process, negotiating for a higher price and higher repayment of principal from the original borrower.
  • In a foreclosure, the bank is essentially left holding the bag. The owners walk away at some point or live in the property rent-free until they’re evicted. Frequently there is damage to the house left by the departing owners, sometimes extensive. There is little or no cooperation between the homeowners and the bank.
  • Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) all recognize the differences between short sales and foreclosures in their underwriting policies regarding new mortgages. Fannie Mae generally won’t approve a new mortgage application by borrowers with a foreclosure on their credit report for up to seven years, but will consider lending to people who were involved in short sales, and who otherwise qualify in terms of recent credit behavior and available down payment, in as little as two years.
  • If short sales routinely show up in credit reports coded as foreclosures, borrowers who might be able to qualify for a new mortgage two or three years after a short sale may find themselves shut out of the market.

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In other news …


Mortgage settlement violations persist in California, group says
Source: Los Angeles Times

Violations of a landmark mortgage settlement alleged by New York’s attorney general are also widespread in California, a housing advocacy group says.

Read the full story:,0,7934465.story

Where the mortgage deduction really pays
Source: CNN Money

The mortgage interest deduction is one of the most-expensive tax breaks on the books, but its benefits are distributed unevenly across the country, according to a new report by the Pew Charitable Trusts.

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Buying beats renting in 64 percent of metros after three years
Source: DSnews

Buying a home is more affordable than renting in nearly two-thirds of metros after three years of paying for a mortgage, according to Zillow.

Read the full story


Three big banks nearly halt foreclosure sales after U.S. tweaks orders
Source: Los Angeles Times

Sales of homes in foreclosure by Wells Fargo & Co., JPMorgan Chase & Co., and Citigroup Inc. ground nearly to a halt after regulators revised their orders on treatment of troubled borrowers during the 60 days before they lose their homes.

Read the full story,0,4350791.story?track=rss


Tax break disappears as housing values rise
Source: Mercury News

Tens of thousands of homeowners will see their property taxes go up significantly this year as rising home values restore some or all of their homes’ lost equity.

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U.S. home sales rise in April
Source: Los Angeles Times

Home sales increased 0.6 percent from the prior month and were up 9.7 percent from April 2012 to hit a seasonally adjusted annual rate of 4.97 million units, the NATIONAL ASSOCIATION OF REALTORS® reported.

Read the full story,0,2111010.story?track=rss


Talking Points …

  • If you’re short on time and need to move out of your house in a hurry, here are some tips to assist you.
  • If you’re willing to sell some of your household belongings, you may consider turning to sites like eBay, which have the widest audience and bring the best prices.  However, you’ll waste valuable time packing and shipping goods. Instead, use your city’s Craiglist or your local newspaper classified, and specify “cash and carry.” Since potential buyers will be coming to your house, for security’s sake, have someone with you when you arrange a pick up.
  • Don’t overprice what you own. Unless your furnishings are fashionable and in great condition, they may bring as little as a tenth of what you paid for them.
  • Ask your real estate agent for assistance. He or she may know someone in the market for some lawn furniture or may be willing to help you move furniture into the moving truck. You never know if you don’t ask.
  • To keep moving costs to a minimum, carefully sort through and sell, donate, or give away everything that you don’t need. Otherwise you’ll end up paying extra for movers to pack and ship items that you didn’t want or need in the first place.

부동산 투자  관련 모든일은 전문 브로커 Joyce Kim 과  상의 하세요.

( Selling/Listing/Buying/럭셔리 리스/최고학군 리스 전문가)


Joyce H. Kim

Associate Broker 
The #1 Top producing Office in the Unites States 
301 N. Cannon Drive, Suite E, Beverly Hills, CA 90210
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