Short Sale Blog

Here is the latest short sale news at Seattle Short Sales. We assist hundreds of Seattle area homeowners with short selling their home and avoiding foreclosure.

New Revised Guidelines for Washington’s Foreclosure Fairness Program

Seattle Short Sales - Tuesday, March 11, 2014

The Foreclosure Fairness Program (FFP) was created in 2011 by the Foreclosure Fairness Act (FFA). The program is developed and administered by the WA Department of Commerce. The aim of the FFP is to reduce foreclosures in Washington state by encouraging mediation between homeowners who are at risk of being foreclosed upon, and their lenders. Its aim is to avoid foreclosure by exploring alternatives, such as loan modifications or short sales.

Through the FFP, a mediator is assigned who will work with the borrower and the lender to find an alternative to foreclosure that is appropriate to their situation. Specifically, the program guidelines aim to coming up with some sort of loan modification. However, if both parties want to work towards a different solution, such as a short sale, the mediator will work with them at their direction

Much of the value of the FFP is that it slows down the pace of foreclosure, providing defined steps and timelines, so that homeowners may have some breathing space and seek guidance about what alternatives are available to them. The FFP mediation process typically occurs over a 70-day timeline (and that period can be extended if both parties agree to the extension). The FFA states specifically that if a borrower has been referred to mediation after a NOTS has been recorded, that Trustee Sale may not take place until the trustee receives a certificate stating that the mediation has been completed. In other words, lenders may not rush a Trustee Sale without taking the time to fully investigate other options with the borrower through the mediator.

FFP guidelines are updated from time to time, and they were most recently updated by the Department of Commerce this month. Click this link for a complete listing of Foreclosure Fairness Program guidelines updated as of June 6, 2013. Following are some of the highlights of the newly revised guidelines:

  • The FFP is for borrowers with a mortgage for “residential real property,” which means a single-family residence, a residential condominium unit, or a residential cooperative unit.  The home must be the principal residence of the borrower at the time that contact under the FFA was made - however, borrowers remain eligible for mediation even if they move after that initial contact.
  • Second mortgages and home equity lines of credit (HELOCs) may be eligible for mediation under the FFP provided that all other eligibility criteria are met.
  • Borrowers must be referred to the program for foreclosure mediation by a housing counselor or by an attorney. Borrowers who received a Notice of Default after July 22, 2011, are eligible to be referred to the program for up to twenty days after the Notice of Trustee Sale (NOTS) was recorded. The referring housing counselor or attorney must screen the homeowner for eligibility.
  • Mediation fees are set at $400 for a session of one to three hours (including mediator’s preparation time) with an additional fourth hour charged at $130 if necessary. Payment of this fee is split equally between both parties.
  • Some lenders are exempt from mediation through the FFP. These are mainly smaller lenders such as many of the smaller credit unions. The Department of Commerce posts a list of exempt lenders for each year on its website; click here to see the list of exempt lenders for 2013.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/

You can also contact Lambros Politis on Google+ or submit a contact request at Ark Law Group.

Not Prepared to Give up Your Home Through Foreclosure or a Short Sale? Then Consider a Loan Modification.

Seattle Short Sales - Thursday, January 31, 2013

We have noticed, over the years, that many loan modifications that struggling homeowners have attempted end up failing. Many borrowers who have come to us to negotiate their short sale actually started out by trying to work with their lenders to negotiate a loan-mod. After months of negotiation (or, in some cases, years!) they either were denied the loan-mod, or they were granted a loan-mod with terms that did not help them in the end.

However, this doesn't mean that the idea of getting a loan modification is necessarily bad. In many cases, it means that the negotiation process was not carried out effectively. For many homeowners, a short sale is the fastest and surest way to permanently rid themselves of mortgage debt that they can no longer afford. However, for others, keeping the family home if at all possible is their top priority. They are not prepared to give up their home, whether through a short sale or through foreclosure, without a fight. For them, negotiating more favorable mortgage terms through a loan modification may be the key to keeping that home.

Unfortunately, we have heard countless tales from our short sale clients of how they spent months, or even years, trying to negotiate a modification with their lender - with no success. Problems that led to their modification failing to get approved range from lenders repeatedly losing paperwork, to lenders continually changing terms or eligibility requirements or submission documents.

We’ve also heard from many homeowners who did manage to negotiate modifications - only to find out the hard way that they cannot meet the obligations of the new loan terms. Often, the new payments still end up being more than the homeowners can afford on the long term, and they end up re-defaulting a year or so later. And, believe it or not, in some cases, the new payments actually end up being higher than the original loan payments!

We've decided to apply our years of experience in facilitating negotiations between struggling homeowners and their lenders to the field of loan modifications too. We want to help struggling homeowners negotiate loan-mods that will actually help them. Everyone’s situation is unique, and there is no single solution to financial troubles that works for all. Our experienced case managers review each homeowner’s situation individually. We look at the pros of all possible solutions - loan modification, short sale, bankruptcy - and our professionals work with our clients all the way, from making the important decisions and making a plan, to carrying out that plan.

We now have an attorney on staff who is dedicated to loan modifications. We look forward to this expansion in our services - so we can review each homeowner's unique situation carefully and offer all options to them.

Our plan is to focus on residents of Washington State who have recently received a Notice of Default (NOD). We will then file immediately for mediation, under Washington’s Foreclosure Fairness Act. Filing for mediation typically stops the foreclosure in its tracks. It allows us time to review the homeowner’s situation, and come up with an appropriate solution. If a loan modification is the best solution, this allows for a very manageable loan modification process, where we work directly with the beneficiary of the borrower’s note.

Seattle Short Sales has a team of experienced and successful real estate specialists dedicated to working with distressed homeowners. We close, on average, 12% of all short sales per month in King County. In the last 24 months, we have negotiated over 756 short sale approvals, and discounted over $81 million of mortgage debt for distressed homeowners.

In addition to our short sales negotiators, our team includes dedicated professionals advising and advocating for homeowners in the fields of: loan modifications, bankruptcy, debt settlement and collection defense. As part of our service, we offer unlimited attorney and CPA consultations.

If you are a homeowner who is struggling to make ends meet, and would like to learn more about the options available to you, please go to: http://seattleshortsales.com/homeowners/

How to Use the WA State Foreclosure Fairness Act to Get an Unfair Advantage Over the Banks

Ross Kilburn - Tuesday, July 10, 2012
We had a short sale file a few months ago that was bogged down. Going nowhere. Repeated calls, emails, and escalations didn't help.

So, we filed for mediation, under the guidelines of the WA State Foreclosure Fairness Act.

In less than a week, we had the approval letter in hand!

Coincidence? Perhaps, you never know.

To find out though, we then tried it on two other short sale files that needed a boost. We got almost instant attention from the lender, with great results.

Finally, we tested it on a file where PMI was wanting an unreasonable cash contribution. PMI isn't the beneficiary, so the FFA doesn't directly apply to them. But, as you can guess at this point, PMI dropped their cash demand entirely!

We've developed specific FFA techniques that are generating phenomenal results. We've closed 80 short sales in the last 90 days.

We would like to teach you exactly how our process works, and how you can make it work for you.

As part of our Advanced Short Sale Training series, we have a new talk we would like to invite you to, titled:

"How to Use the WA State Foreclosure Fairness Act to Get an Unfair Advantage Over the Banks"

Here is what you will learn:
  • When to reply to the Notice of Pre-Foreclosure Options letter to maximize your time advantage
  • Who should be on the initial phone call, and what should be said, and NOT said
  • How to use a mediation filing to help a short sale get unstuck, without paying the mediation fee!
  • Why you might want to file for a mediation on every short sale, and what could happen if you don't
  • Real life examples of successful mediations, from start to finish
  • The secret way to get a mediation completed for your client, with no charge to them whatsoever
We would love to see you, but you need to register soon. We've had previous talks on deficiencies, debt forgiveness, and bankruptcy and they've all sold out. We have space for only 30 people in our conference room.

To learn more go here: http://seattleshortsales.com/agents/training.htm

To your success,

Ross Kilburn

General Manager
Seattle Short Sales, Inc.
1400 112th Ave SE, Suite 220
Bellevue, WA 98004
O. 800-603-3525
F. 888-860-1314

Washington “Foreclosure Fairness Act” Passed This Week Will Provide More Options to Homeowners

Seattle Short Sales - Friday, April 08, 2011

This week, the Washington State legislature passed the new House Bill 1362, also known as the Foreclosure Fairness Act. The bill, sponsored by Democratic state Rep. Tina Orwall (Des Moines) is aimed at reducing the high rate of foreclosures in Washington State. The bill was passed by the Senate at the end of March, but with amendments, so it had to return to the House, where it was passed on Wednesday.

Recent data released by RealtyTrac indicate that Washington State had the 11th highest number of foreclosures in the country for February 2011. One third of these were in King County, with Snohomish and Pierce Counties together accounting for another third.

According to HB 1362, section 1a, "The rate of home foreclosures continues to rise to unprecedented levels, both for prime and subprime loans, and a new wave of foreclosures has occurred due to rising unemployment, job loss, and higher adjustable loan payments.”

This represents a significant rise in the foreclosure rate for the state; two years ago, Washington ranked only 25th nation-wide. Over 77,000 families state-wide have lost their homes in that time period, and 43,000 more families are expected to lose their homes in 2011.

The Foreclosure Fairness Act has been drafted with the intention of slowing the foreclosure rate in Washington State by providing homeowners with information and alternatives. There has been a growing recognition that the current American foreclosure system is “broken,” with many struggling homeowners stymied about their options due to problems communicating with their loan servicers: long telephone waits, lost paperwork, not getting to speak to right people. The new bill will bring homeowners and servicers face to face, in the company of a third party to facilitate negotiations.

Rep. Orwall told the Seattle Medium that “one of the keys to restore Washington’s economy is to stabilize the housing market through a proactive and effective strategy that helps families keep their homes. Mediation is an important new tool to ensure that all options have been explored before moving to foreclosure.”

The new bill will require that lenders provide homeowners with a notice of how much of a payment (including any fees) is required to reinstate a deed of trust before recording notice of foreclosure sale, and also that they explain that mediation is an option. It will allow for the provision of a professional housing counsellor (i.e. a disinterested third party) early in the process, to help with communication, in order to try to avoid issuance of a foreclosure notice in the first place.

If the homeowner and servicer cannot come to an agreement, the bill then provides for foreclosure mediation: help from the third party in looking at alternatives, such as short sales. Foreclosure mediation has already dropped the foreclosure rate in other states.

The bill also provides for a mechanism for funding the new housing counsellors. Financial institutions which issue more than 250 notices of default in the preceding year will be required to pay a $250 fee on each notice of default. The fee will also help to fund outreach campaigns as well as the costs of enforcement of the new regulations.

“Foreclosure may sound like someone else’s problem, but when it’s happening en masse, like it’s happening right now, it’s all of our problems,” commented Sen. Adam Kline to The State Column, noting that a high rate of foreclosure “tears the connecting threads out of our neighborhoods.”

Foreclosure mediation, aimed at finding alternatives to foreclosure, will not only help individual homeowners. Reducing the foreclosure rate statewide will also help the housing market as a whole, speeding the recovery of home prices and eliminating the problem of negative home equity that currently plagues one third of Seattle area homeowners.


If you are a homeowner, and would like to learn more about short selling your home, please go to: http://seattleshortsales.com/homeowners/

If you are a real estate agent, and would like to learn about our no-fee short sale service, please go to: http://seattleshortsales.com/agents/

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