| The first answer is, when you owe more than the property is worth. |
| The second answer is, the process where you ask the lender to take less than the current amount owed. |
| What is required for a real estate short sale? |
| First the property must be listed for sale. |
| Then during the marketing period your broker must package a short sale request to the lender of record. |
| Some of the documents required for a real estate short sale. |
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| 1) |
Last 2-3 years tax returns, any w2’s? P & L when needed. |
| 2) |
Most recent rent roll/pay statements |
| 3) |
Most current bank statement for all of your accounts |
| 4) |
Proof of other mortgages/payment coupons when needed |
| 5) |
Copy of notes/ deeds of trusts |
| 6) |
Broker price opinions of any real estate involved. |
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| Who gets the lucky real estate short sale approval? |
| Typically, the mortgage lenders will only accept a real estate short sale on your mortgage if you’re behind in payments (which is changing) and have a ready and willing buyer and you’re are unable to debt service your existing liabilities. Also if your cash flow is not the same now as it was years ago, and no more savings to pay for this debt...You’re on the road to short sale of your property. |
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Why does the bank allow a short sale? |
| 1) |
Neither side is doing the other a favor, a short sale is simply the most economical solution to the lenders problem. A short sale is typically faster and less expensive than a foreclosure. In some states, it does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of the offer. |
| 2) |
Lenders will incur a smaller financial loss on average, than would result from foreclosure or continued non-payment. |
| 3) |
Borrowers are sometimes able to mitigate damages to their credit history, and partially control or limit losses. |
| 4) |
Each lender works a little differently, but they all have similar goals. They want to liquidate their non-performing assets. |
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| When times are tough, we want you to know, you have options. |
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| Millions of Americans with loans last year missed at least one payment. If your mortgage(s) have become an intolerable burden, forcing the bank to foreclose on you is the wrong action. First get some help from experienced professionals and try to work a short sale option.
Work with the professionals who know commercial and residential properties and the lending industry. Knowing the industry is better than knowing the local real estate know it all..
This news clip came from the MBA ON 04/22/2010 |
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Commercial and multifamily mortgage origination volumes decreased 46 percent in 2009 among repeat reporters, with mortgage bankers reporting $82.3 billion of closed commercial and multifamily loans, according to the Mortgage Bankers Association's (MBA) 2009 Commercial Real Estate/Multifamily Finance: Annual Origination Volume Summation. Commercial banks and savings institutions were the largest single investor group for commercial and multifamily mortgages, responsible for $19.8 billion, or 24 percent, of the closed loan volume. Multifamily properties were the dominant property type--representing $36.5 billion, or 44 percent of the lending total.
Relatively few commercial mortgages were made in 2009, as the recession curtailed both the supply of and demand for new mortgage debt," said Jamie Woodwell, MBA's vice president of commercial real estate research. "As the recession has receded, origination volumes have picked up slightly, but the absolute levels remain low." |
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Among the key findings are: |
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Decreases wer e seen across most property types and investor groups, and were led by declines in loans intended for: Credit companies; REITS, mortgage REITs and investment funds. |
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$15.9 billion of multifamily loans were closed for Fannie Mae, a 32 percent decline from 2008. |
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$15.2 billion of multifamily loans were closed for Freddie Mac, a 24 percent decline from 2008. |
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$5.8 billion of l oans were closed for FHA/Ginnie Mae, a 168 percent increase from 2008. Loans for Fannie Mae and Freddie Mac accounted for 85 percent of the total reported multifamily volume in 2009. |
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Lending for office properties had the largest percentage decrease in ori ginations by property type, followed closely by retail properties and hotels/motels. |
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| Year-over-year changes are based on the changes in volume among "repeat reporters" that participated in both the 2008 and 2009 surveys. |
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What this means is that 40% less buyers were in the market place than in the past. |
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| In March this article came out of the MBA |
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| Delinquency rates continued to increase in the fourth quarter for most commercial/multifamily mortgage investor groups, according to the Mortgage Bankers Association's (MBA) Commercial/Multifamily Delinquency Report. Between the third and fourth quarters, the 30-plus day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 1.63 percentage points to 5.69 percent. The 60-plus day delinquency rate on loans held in life company portfolios decreased 0.04 percentage points to 0.19 percent. The 60+ day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.01 percentage points to 0.63 percent. The 90-plus day delinquency rate on multifamily loans held or insured by Freddie Mac increased 0.04 percentage points to 0.15 percent. The 90-plus day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.49 percentage points to 3.92 percent. |
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| "The ongoing impact of the economic fallout on commercial real estate markets continued to drive up commercial and multifamily mortgage delinquencies for most investor groups in the fourth quarter," said Jamie Woodwell, MBA's vice president of commercial real estate research. "Continued job losses, consumer restraint and a lack of household growth all sustained the pressure on commercial real estate operations and mortgages during the fourth quarter." |
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| Construction and development loans are not included in the numbers presented here, but are included in many regulatory definitions of 'commercial real estate' despite the fact that they are often backed by single-family residential development projects rather than by office buildings, apartment buildings, shopping centers or other income-producing properties. |
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| The analysis incorporates the same measures used by each individual investor group to track the performance of their loans. Because each investor group tracks delinquencies in its own way, delinquency rates are not comparable from one group to another. |
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| Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the fourth quarter were as follows: |
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CMBS: 5.69 percent (30-plus days delinquent or in REO); |
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Life company portfolios: 0.19 percent (60-plus days delinquent); |
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Fannie Mae: 0.63 percent (60 or more days delinquent) |
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Freddie Mac: 0.15 percent (90 or more days delinquent); |
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Banks and thrifts: 3.92 percent (90 or more days delinquent or in non-accrual). |
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The MBA analysis looks at commercial/multifamily delinquency rates for five of the largest investor-groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, Fannie Mae and Freddie Mac. Together these groups hold more than 80 percent of commercial/multifamily mortgage debt outstanding. Call 760-408-8998 for more information about short sales DRE#00559723 |
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