San Jose Real Estate * Santa Clara County * Richard Gonzalez * Real Estate Silicon Valley Broker Blog – News, Views, and Opinions

I just hung up the phone with a representative from CHASE who introduced herself as a coardinator for a new loss mitigation department created by CHASE to speed up their rediculously slow short sale approval process.

How do you spell relief?

I spell it  A P P R O V A L.

All kidding aside it has not been a a very plesant experience for some of our WAMU/CHASE clients looking to short sale thier home. in fact is has been excruciatingly slow. It literally took seven months for me to get an approval from CHASE on one of my listings only to find that the buyer who had waited for the entire time walked himself into another home. Many sellers we encounter who have WAMU loans has found themselves in the same situation. For that reason I always set an expected six month worst case scenario on WAMU short sales.

How do I use this new information?

If you are contemplating short sale as an option and have a WAMU/CHASE/EMC loan the first thing to do is compete the CASE short sale packet updated in April 2010.

Download CHASE Short Sale Packet

You will also need the following information:

• Listing agreement
• Letter of Authorization for your REALTOR to communicate with the lender
• Listing History from the MLS
• Hardship Letter
• last two years tax returns
• Two months bank statements
• last 30 days proof on income wage earner or self employed (paystubs or profit & Loss or bank statements)
• Purchase contract and pre approval letter from a buyer

Uncharted Territory

Nobody really knows what all this movement means in terms of the approval process because every short sale situation is different. Perhaps this is CHASE’s way of adopting HAFA into their systems. What I do know is that we have come a long way in the last six months and the effort by the lenders to streamline the short sale approvals if much appreciated by the people who need it the most, our clients.

CHASE Short Sale information: www.chase.com/shortsale

California took a bold step today in helping those homeowners in default by allowing taxes owed to the state to be forgiven through 2012.

As mentioned in my blog a few days ago and now the Governor says he will sign the bill as reported by the Sacramento Bee.

“Primarily, the bill affects people who had debt forgiven as they lost homes in foreclosures, short sales and deeds in lieu of foreclosure last year – and through 2012 now. Also affected: those who got loan modifications that cut the amount they owe the bank.”

Read more: http://www.sacbee.com/2010/04/09/2666095/california-wont-tax-forgiven-home.html#ixzz0kdhKy8yh

Incredible as it may seem the $8,000 Federal tax credit can be combined in April 2010 for a credit up to $1,800 as a result of the recent California legislation.

Window of opportunity

• Open to home buyers in the state of California.
• Must be in contract before May 1st 2010
• Must close between May 1st and June 30th 2010
• Non-First time home buyers will still be eligible to receive up to $16,500

“The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits.”

~ California Association of REALTORS Legal Department

Even though you may have already submitted your taxes for 2009 you may be able to save even more on your California state taxes if you received a 1099 as a result of a Short Sale.

Yet another positive effort by California legislators to help the housing market with this new bill. The Sacramento Bee reports on this effort to get this bill into law before April 15th deadline.

“The bill being considered this week, Senate Bill 401, would cancel state tax obligations for forgiven mortgage debt through the 2012 tax year. The Assembly planned Monday to rewrite SB 401 from a bill regarding tax shelters to one that aligns much of California’s tax law with that of the IRS. That includes canceling taxes on forgiven mortgage debt and on recipients of federal renewable energy grants.”

Read more: http://www.sacbee.com/2010/04/06/2657410/california-expected-to-cancel.html#ixzz0kMw5Xs6U

Today the banks who signed on for HAMP in 2009 have agreed to increase their participation in HAFA(Housing Affordable Foreclosure Alternatives) an extension of HAMP that provides incentives for banks and servicers to streamline the Short Sale process.

Banks and HAFA

Bank of America for instance partnered with equator.com in November  to decrease the short sale approval timelines from 6 months to 45 days  to conform to the HAFA guidelines. Other lenders Like Wells Fargo are able to approve  23% of the Short Sales they service in 10 days.

What is HAFA?

HAFA will continue to evolve as banks and servicers adopt and implement HAFA rules and guidelines. In the mean time home owners can visit www.whatishafa.org to determine if they qualify for HAFA.