After a long slump, it looks like the local housing market is starting to show signs of life. I don’t want to say we are out of the woods at this point, of course, but it is a positive sign to see home sales start to pick up. Lenders certainly haven’t relaxed too much, as I see they are still picking things apart, asking for more and more documentation as part of the loan approval process. Long story short, make sure you have all your documents in perfect order if you are looking to buy a house today, because chances are the lender is going to be asking for everything.
On other real estate fronts, I have been working on mortgage modifications for people behind on their mortgage. I recently had a client who hired me to do a modification, and things seemed to be going smoothly with the lender. We supplied all requested paperwork and all our ducks seemed to be in a row. The process was abruptly ended by the lender, however, when the lender issued my client a summons and complaint in foreclosure. I have now entered a counterclaim against the lender for bad faith, but it is apparent that things like this have been happening with frequency. My question is whether HAMP (Home Affordable Modification Program), which was set up to avoid this type of situation, is really effective at all?
I also just wrapped up a short sale closing that took one year and three months to complete and featured a series of three or four buyers that didn’t work out. My clients and I persevered however. We got the sale without a foreclosure proceeding being initiated, even though my clients had not paid their mortgage for a long time.