THE FUTURE OF

SHORT SALES

WITH JACOB SWODECK F O R C VA R E D U C A T I O N

HIGHLIGHTS OF TODAY’S TALK
•  Are  short  sales  going  away  soon?   •  Are  short  sale  lease  backs  possible/legal?   •  Is  HAFA  over?   •  Is  it  true  there  is  a  new  no-­‐doc  short  sale  process?   •  Are  lender-­‐directed  short  sale  leads  an  emerging  concept?   •  What  are  the  pros  doing  to  get  more  short  sale  lis?ngs?   •  Short  sale  expert  panel  

HOW LONG WILL SHORT SALES LAST?
•  2.3  million  homes  represented  in  “Shadow  Inventory”  (7-­‐9   month  supply,  $376B,  down  12%  form  2011)  (CoreLogic  as  of   Oct  2012)   •  Shadow  inventory  represented  85%  percent  of  the  2.7  million   proper?es  that  are  seriously  delinquent,  in  foreclosure  or  in   REO  (CoreLogic  as  of  Oct  2012)   •  2.4  million  addi$onal  borrowers  are  30  –  60  days  late  and  are   not  included  in  the  shadow  inventory  numbers.  (via  LPS   Monthly  Monitor  Report  Dec  2012)   •  Est.  440,000  short  sales  in  2012.    1,000,000  expected  in  2013   (Daren  Blomquist  of  RelatyTrac)  

HOW LONG WILL SHORT SALES LAST?
•  Other  variables  –  adjus?ng  loan  mods,  lack  of  inventory  and  high   demand  push  up  values  to  make  up  for  nega?ve  equity  in  some   markets,  private  and  public  bulk  sales   •  Twenty-­‐two  percent  of  all  residen?al  proper?es  with  a  mortgage— or  about  10.7  million  home  owners—were  underwater  by  the  end   of  the  fourth  quarter  for  2012,  according  to  CoreLogic  data.     •  From  September  2011  to  September  2012,  1.4  million  homeowners   had  moved  from  nega?ve  equity  to  posi?ve  equity.     •  How  will  this  affect  consumer  mindset  for  borderline  equity   homeowners?   •  Is  this  an  actual  recovery  or  is  it  fabricated  by  the  powers  that  be?    

FANNIE AND FREDDIE MERGE THEIR SHORT SALE PROCESS
•  •  •  •  •  •  •  •  •  Servicer  Alignment  Ini?a?ve   Fannie  and  Freddie  drop  HAFA  Dec  31,  2012   Went  in  to  effect  Nov.  2012   No  more  separate  Fannie  or  Freddie  short  sale  process   Much  more  streamlined  as  far  as  hardship,  ?melines,  and   documenta?on  needed   91+  days  late,  less  than  a  620  fico  score  =  pre-­‐approved  hardship   Added  no-­‐doc  process  for  some  loans   Oversight  by  FHFA  (Federal  Housing  Finance  Agency)  under  Ed   DeMarco   Dirty  lihle  secret:  Eventually  GSE’s  will  be  phased  out    

MANY “BIG” HAFA CHANGES FOR NON-GSE LOANS
•  Via  Supplemental  Direc?ve  12-­‐07   •  Effec?ve  Feb.  2013     •  No  hardship  docs  if  91+  days  late  and  less  than  620  FICO  score   (bank  pulling  credit  early  on)   •  Lease  back  op?on  reaffirmed  in  new  HAFA   •  No  more  Treasury  HAFA  docs  required   •  New  docs  include  SSN  (Short  Sale  No?ce),  ARSS   (Acknowledgment  of  Request  of  Short  Sale),  and  the  HAFA   Affidavit     •  30  day  decisions  regardless  how  HAFA  was  ini?ated    

HAFA SHORT SALE LEASE BACKS FACT OR FICTION?
•  Via  Supplemental  Direc?ve11-­‐02  and  12-­‐07   •  U.S.  Treasury  allows  for  a  legi$mate  non-­‐profit  to  buy  a  short   sale  property  under  HAFA  with  the  inten?on  to  lease  the   home  back  to  the  prior  owner   •  Na?onal  Short  Sales  created  the  Short  Sale  Lease  Back  (SSLB)   program  and  has  closed  a  few  non-­‐arm’s  length  short  sales   with  an  understanding  that  the  prior  owner  will  lease  the   home  back.   •  Guidelines  have  been  given  (finally)  for  non-­‐profit  and   program  qualifica?ons  

DEPT. OF JUSTICE’S $25B ATTORNEY GENERAL SETTLEMENT
•  Went  in  to  effect  mid  2012  (biggest  consumer  protec?on   sehlement  in  history)   •  Must  be:  BofA,  Wells  Fargo,  CHASE,  Ci?,  Ally/GMAC   •  Must  not  be:  Fannie,  Freddie,  FHA,  VA   •  www.Na?onalMortgageSehlement.com     •  $10B  towards  Principal  Write-­‐downs   •  $7B  towards  special  programs  (i.e.  Short  sales,  military,  etc.)   •  $3B  towards  Refi  programs   •  $5B  towards  sehlement  payouts  to  wrongfully  foreclosed   •  3  year  program  

SHORT SALE LEAD GEN
(THAT WORKS)

•  Expand  and  capture  your  S.O.I.  (friendly  network)   •  Make  your  future-­‐past  clients  raving  fans  (who  refer)   •  Be  unique  in  your  approach  (SSLB,  $25B  Sehlement,  VA  Lease   Back,  etc.)   •  Establish  yourself  as  an  expert,  read  more,  blog,  social  media   presence,  u?lize  video,  host  consumer-­‐centric  seminars   •  Pound  the  pavement  –  knock  on  doors.   •  Call  NOD’s  not  on  DNCL    

“LET’S STAY IN TOUCH”
• Short  Sale  Coaching  –  www.SSICCoaching.com     • Facebook.com/jacob.swodeck     • Twiher  -­‐  @JakesLadder     • Email  –  JacobSwodeck@KW.com  

THE FUTURE OF

SHORT SALES

I N D U S T RY PA N E L

SHORT SALE PANELISTS
• Amelia  Castro  –  Wells  Fargo  Short  Sale  Manager       • Bob  Irish  –  Top-­‐producing  Broker,  founder  of           SSLB  and  NSS,  subject  maher  expert       • Brian  Bean  –  Top-­‐producing  Broker,  writer,                 short  sale  expert  

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