Buy and sell Pre Foreclosure short sale properties in Minnesota

Fannie Mae announcements:

February 24th 2009

No Negotiation of Pre foreclosure Sales Commission

Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers

Effective March 1, 2009, closing of pre foreclosure sales may not be conditioned upon a

reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of the property in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with pre foreclosure sales.

Government Bills, Acts, and executive power:

December 2007

Mortgage Forgiveness Debt Relief Act of 2007: H.R. 3648

There are certain IRS tax obligations to your seller if they sell short. President Bush signed into law in December of 2007, exempting some of these obligations for some people. Seek a competent tax attorney for other information. A brief overview can be found here.

HUD (Department of Housing and Urban Development)

December 24^th 2008

Mortgagee Letter 2008-43 “Pre-Foreclosure Sale (PFS) Program – Utilizing the PFS Loss Mitigation Option to Assist Families Facing Foreclosure (MS Word)

Here’s some of what you need to know about the FHA PFS:

· They removed the calculation that required the property to appraise for at least 63% of the indebtedness (this is helpful because many properties have dropped below 37% of the mortgage balance).

· HUD used to accept 82% of the appraised value as their net - now it is 88% if it sells within 30-days marketing time, 86% if it sells in 60-days, and 84% after 60 days.

· Prior to ML 2008-43, HUD would pay zero buyer closing costs on an FHA short sale, now they will pay 1% of buyer’s closing costs if the new buyer is obtaining FHA financing.

· They’ve increased the amount allowable to discharge junior liens up to $2,500.

· FHA allows the seller to walk away with up to a $1,000 check at closing.

How too, and other helpful short sale articles:

June 2007

"Sold up Short, How to succeed at Short Sales"

Unfortunately, short sales are a reality for home owners who owe more than their property is worth.

If you have patience, persistence, and a knack for problem-solving, this niche could be for you.

BY MARIWYN EVANS

Media, news, inspiration:

October 16, 2008

"Be fearful when others are greedy, and be greedy when others are fearful"

Billionaire Warren Buffet talks about the state of the economy,

and some wise advice for investors that now is a great time to invest.

Buffet is referring too the stock market being a stock market guy.

But his message rings true for real estate as well.