Utah Real Estate & Mortgage Blog

If you are in the market to rent a home in the near future, then take heed of this warning. Scammers are trying to rent you homes that are not available, not on the market, and frequently occupied. Homes that are REO or Short Sales are being targeted. Almost always the REO properties are vacant and the short sales are often vacant as well.

The scam works like this: After a house is listed on the market, a scammer then posts an ad online trying to rent out the home before it is sold. Interested candidates will then contact the scammer about renting the property. The scammer asks for them to submit their personal credit information for the lease application as well as two months of rent. Once they have your information, they have you!

Often times the renters don’t even know it’s a scam until they pick a key up from the scammers “office” and go and try to move in. They find the key doesn’t work, and sometimes the home will still be occupied by the current owners if it is a short sale.

Freddie Mac is aggressively watching the internet ads and removing any posting they find, but they won’t catch them all. To ensure you don’t get caught up in this, there are a couple of very obvious indicators to look for when talking to the “landlord.”

1. Try to get the current homeowners name. If they cannot give you the name, then it’s likely a scam.
2. If they are out of the country, keep your guard up.
3. They might ask you to send payment to them through Western Union.
4. They will try to “rent” the home to you without a lease being signed.

If you notice any of these indicators, please flag the ad as inappropriate or as a scam, and contact the proper authorities. Spread the word to all of your family and friends that are needing to rent a home so they don’t become the next victim.

For more information, please contact me at 801-999-8305.

Great News!

As of March 15^th, 2012, the time frame for banks to pursue a deficiency judgment after a short sale changed from 6 years to 3 months.  This is a significant change, and may be important if you are involved in a short sale, especially if the deficiency was not negotiated or addressed during the short sale.

S.B. 42, passed by the 2012 Utah State Legislature and signed by the Governor, imposes a 3-month statute of limitations within which the mortgage lender must file a lawsuit to collect a remaining balance after the closing of a short sale.  The 3-month period begins with the recording date of the reconveyance (the release) of the lender’s trust deed.  The objective of the bill is to encourage borrowers to engage in short sale negotiations with some comfort in knowing that the limited 3-month statute of limitation would apply to a lawsuit to collect the remaining balance rather than the 6-year statute of limitations applicable generally to all written contractual obligations.  The legislation recognizes also that often a short sale agreement between a lender and a borrower will include a written payment plan for some or all of the remaining loan balance.  The 3-month statute of limitation does not apply to such an agreement.  Finally, the 3-month statute of limitation does not apply if the borrower engaged in fraud in connection with the short sale.  The legislation will be found at Utah Code Section 78B-2-313.

If you are considering short selling your home or have any questions regarding the process, give a short sale specialist a call at 801-683-9666.

By: James A. Browning

Short sale transactions can be an excellent choice for homeowners who must sell & who owe more on their homes than their current values. Unfortunately, there are numerous misunderstandings regarding short sales, & it is extremely important to understand the proper procedures & best practices in this process should you choose this path for your homeowners/sellers.

Misunderstanding 1: THE LENDER/BANK WOULD RATHER FORECLOSE THAN CONSIDER A SHORT SALE TRANSACTION.
This is likely the most common misunderstanding. In reality, banks DO NOT want to foreclosure on properties, as the foreclosure process is rather costly and lengthy. Banks, lenders, investors, and even the Federal Government have stated publicly if a homeowner is qualified for a short sale, the transaction needs to be considered, based upon:

• FINANCIAL HARDSHIP: there is a current hardship causing the homeowner to have trouble affording his mortgage.
• MONTHLY INCOME ISSUES: The lender will want documentation showing that the homeowner cannot pay the monthly payment or will soon not be able to afford the monthly payments.
• INSOLVENCY, The lender will want proof that the homeowner does not possess significant liquid assets that could pay down the debt of the mortgage.

Misunderstanding 2: YOU MUST BE LATE ON YOUR MONTHLY PAYMENTS TO BE ELIGIBLE FOR A SHORT SALE.
While this may have been true in the past, today, lenders/banks are interested in verifiable hardships, monthly payment shortfalls, or pending monthly payment shortfalls and insolvency.
If the homeowner meets these requirements, & is unable to afford his mortgage, act immediately. Any delay may limit the homeowner’s options for a short sale transaction.

Misunderstanding 3: IT IS TOO LATE TO NEGOTIATE A SHORT SALE TRANSACTION BEFORE THE FORECLOSURE.
This misunderstanding probably hurts the homeowner the most. Many mortgage holders do not understand that foreclosure is a long process, & there is time to evaluate options & potentially make decisions that could result in a better outcome.

Misunderstanding 4: LISTING A PROPERTY FOR A SHORT SALE IS AN EMBARRASSMENT TO THE HOMEOWNER.
It is quite understandable that homeowners may have reservations about going public regarding their financial distress. Recent predictions, however, indicate that one in eight homeowners in the U.S. is currently behind in their payments.

Misunderstanding 5: SHORT SALE TRANSACTIONS ARE IMPOSSIBLE & NEVER GET APPROVED.
This is inaccurate. Short sales are becoming more streamlined & lenders have become more knowledgeable & willing to work with homeowners to complete these types of transactions. Real estate professionals are also becoming better educated in the short sales process.

For example, Realtors with the “Short Sales Certified” designation have received extensive training in methods to help homeowners in distress and how to successfully process short sale transactions. There are absolutely no guarantees in any distressed situation; however, the short sale transaction process has become more efficient, while timelines for approval have also become much shorter.

Misunderstanding 6: PROSPECTIVE PURCHASERS ARE NOT INTERESTED IN SHORT SALE TRANSACTIONS.
This is a major myth and homeowners hear this frequently, oftentimes causing them to be wary of listing their homes as short sales. This is not accurate. In fact, many real estate professionals receive phone calls/emails from prospective buyers who only want to look at short sales or foreclosures.

In conclusion, brokers/agents who have been awarded the “Short Sale Certification” designation have been trained in all aspects of the short sales process. Banks/lenders have come to expect that real estate professionals who have received this designation are the ones with whom they desire to work with.

Zoom Agents ARE Short Sale Certified. Call us today if you are considering short selling your home at 801-792-5040

I wanted to pass along a great audio clip from my CPA – Mark J. Kohler with KKO Lawyers. He hosts a weekly radio show online and some of them relate to Real Estate. This weeks clip focuses on the tax consequences to you as a seller when involved in a short sale or foreclosure.

I hope you enjoy it!