In The News

As a foreclosure alternative, short sales are catching on as lenders and servicers deal with a huge inventory of defaulted mortgages that will continue to grow over the short term.

Loan Resolution Corporation (LRC), a pre-foreclosure asset manager based in Scottsdale, Arizona, recently announced that it has successfully completed its Statement on Auditing Standards No. 70 (SAS 70) Type II certification, the widely recognized auditing standard developed by the American Institute of Certified Public Accountants.

Homeowners stuck while banks mull whether or not to approve short sales could benefit from new federal guidelines that give lenders a 10-day limit to respond to offers.

If you're in trouble on your mortgage and can't get a loan modification, check out the Obama administration's new standardized short-sale plan scheduled to roll out during the coming months. The program, outlined Dec. 1 by the Treasury Department, is an attempt to streamline what has been a contentious, time-consuming process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives.

As DSNews.com reported earlier this week, the U.S. Treasury Department announced new guidelines to the short sale process on Monday in hopes of speeding up the recovery of the housing market.

Short sales may be a new best option for Valley homeowners struggling to avoid foreclosure. Home-loan modifications, endorsed by the federal government, are most borrowers' first choice when they fall behind on their mortgage payments because of a drop in their income. But short sales are also part of the federal housing plan to slow foreclosures. Unlike their slower-than-expected actions on loan modifications, lenders are now moving quickly on many short-sale requests in the Phoenix area.

Travis Hamel Olsen is president of National Short Sale Center and COO of Loan Resolution Corp., both Scottsdale, AZ-based companies that specialize in short sales. They serve as an intermediary between all the parties -- realtors, sellers, buyers, banks -- during the long, hassle-filled process.

A short sale is when a bank allows a homeowner to sell his property for less than what is owed to the bank, and it should occur when the owner’s income is too low to qualify for a loan modification.

The Treasury Department plans to announce financial incentives for servicers to pursue short sales and deeds in lieu of foreclosure for troubled homeowners who do not qualify for the Obama administration's loan-modification program.

As the largest banking companies try to unload thousands of distressed properties, they are using a controversial practice that can win them new loans and has competitors crying foul. It is called "cross-qualifying," and it works like this: Say that Lender A is selling a repossessed property, or has a troubled borrower who wants to sell the home through a short sale.

Trying to cut its losses, Bank of America Corp. has changed its policy on short sales, making it easier for borrowers to sell their homes instead of going into foreclosure. Until a month ago, B of A and its Countrywide Financial Corp. had required that 10% of a home's sale price go toward paying off home equity lines of credit before they would agree to a short sale. But Terry Francisco, a spokesman for the Charlotte company, said Monday that it changed its policy last month, agreeing to accept 5% of the sale price when there is no equity available to holders of the first or second liens.

As inventories of foreclosed homes pile up, some banks and mortgage investors are turning to a new group to help lighten their load: renters. By renting out a foreclosed home, a bank can garner some cash flow from a property and reduce the chances it will be vandalized. Further, rent-to-own agreements that give tenants the option to buy the home at a preset price offer a way to dispose of a property while bypassing the depressed market.

Loan Resolution Corporation, a pre-foreclosure asset management company based in Scottsdale, Arizona, announced yesterday that Robert Jones has joined the company as VP.

Scottsdale-based Loan Resolution Corporation today announced that Robert Jones has joined the nation’s largest Pre-foreclosure Asset Manager as Vice President. In the new position, Jones will be responsible for increasing the overall effectiveness of Loan Resolution Corporation through process improvements and policy implementation. Jones will be responsible for all of the day-to-day operations of Loan Resolution Corporation, ranging from ensuring proper file set up and assignment to reviewing and submitting proposals. Jones is the main point of contact for Loan Resolution Corporation clients.