CalHFA and Short Sales

I wanted to share some thoughts on CalHFA short sales. They are different from other lenders, and are very strict on how the calculate hardships. I’ve heard, time and time again, from colleagues, that CalHFA never approves short sales. If a borrower’s income has not been effected, they will most likely not grant a short sale. It’s very black & white. But it appears that this is slowly changing. I’m in the middle of negotiating a short sale with them now and my client and I have gotten past their front lines: the Collections Department. Now we are in talks with the short sale department and even though my client has not suffered from a loss in income, we have demonstrated that her increased mortgage payment along with her other expenses far outweighs her income. If the investors approve this short sale, it will be a sign that they are slowly changing their position and will be more amenable to work with financially challeneged borrowers.

Sitting on the Market

Everybody is hearing stories of listings selling in days, even before they hit the market. There are multiple offers, reminiscent of the good old days. “There’s no inventory,” is the common cry lately. Then why are there still properties sitting on the market for 4 months and longer, much longer? Well, I’ll tell you… they are overpriced. This is a strong indicator that although we have a ton of buyers out there, and there are feeding frenzies on some properties, buyers are sill resistant to over pay. It may feel like we are back to 2005 in many ways, but buyers have more self control. They are not throwing money blindly at a home just to get in the market. (This is what helped inflate the market so quickly last time.) No this time, we are going to see slow growth. And while inventory is “soooo” low, buyers are not going to throw caution to the wind. Good!