Payments outside of settlement? Not in a short sale!

We have been warning our customers and anyone who asks that fooling around with a short sale payoff letter can be hazardous. Bob Hunt, a director of the National Association of Realtors, weighs in on the problem in Realty Times in a posting, "Undisclosed Short Sale Payments May Lead to Trouble."

He points to

"A recent memorandum from the legal department of the California Association of Realtors® (CAR) warns CAR members as follows: "'Undisclosed payments in short sale transactions, especially those paid outside of escrow, may violate the law, including RESPA, laws against loan fraud, and licensing laws.'"

For instance? The senior mortgagee authorizes a small payment to the junior mortgagee and the latter demands money be paid outside of the closing to obtain a release of the mortgage.

Why is the first mortgagee opposed to this? Because, if there's money to be had, the first mortgagee wants it. Let's face it, the lender has given its approval because of the money available at closing.

Remember, the lender must approve the proposed HUD-1 before closing. Once that's done, you are asking for trouble if it's not accurate when you get to closing. It may even constitute loan fraud on a Federal level if the lender is federally-related. So, our advice has been and will always be--- when dealing with a short sale, disclose, disclose and disclose again, in writing, and get approval to all changes to the HUD-1 before closing.

For your next title order or

if you have questions about what you see here,

contact Stephen M. Flatow

Vested Title Inc.

648 Newark Avenue,

P.O. Box 6453,

Jersey City, NJ 07306

Tel 201-656-9220 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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New guidelines to speed short sales?

New guidelines for lender approval of short sales kicked in this week under Home Affordable Foreclosure Alternatives enacted by the Federal government.

As reported in The Star-Ledger,

The new federal push provides lenders with financial incentives to accelerate the process — $1,500 for servicers to cover administrative costs and up to $2,000 for investors, according to the National Association of Realtors.

If experience is an indicator, homeowners may not have a lot to be excited about as the guidelines are voluntary.

More about the new guidelines can be found here.

For your next title order
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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Good news about jumbo loans

The New York Times reports "Lenders Loosen Reins on Jumbos." Writes Bob Tedeschi,

IT may be too early to announce a thaw of the mortgage market, but some early signs have emerged, at least in one important category: jumbo loans.

Mortgage industry executives say conditions are improving for those borrowing more than $729,750, the threshold for jumbo mortgages in the tristate region. Not only is it starting to get easier to qualify for these loans, they say, but rates are also coming down.

What does that mean for the market?

David Adamo, the chief executive of the Luxury Mortgage Corporation, a broker and banker in Stamford, Conn., said his company was offering jumbo loans on behalf of more lenders now than late last year. “It’s an indicator that the high end of the market is beginning to recover,” he said.

Too optimistic an approach? Perhaps, because "one element of the mortgage equation has not changed as sharply: borrowers must still have excellent credit to qualify for the loans."

I think it's too early to tell what the impact will be in New Jersey. What do you think?

Read the Times article here.

For your next title order
or if you have questions about what you see here,
contact Stephen M. Flatow
Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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