Many homeowners in Southern California that thought their 2nd mortgage they stopped paying on years ago was dead and gone. Alert: The 2nds Are Coming! No, it’s not a bad movie. Savvy and aggressive investment groups are buying up the non-performing mortgage notes from the original servicers or have been waiting in the wings waiting to pounce at the right time. Due to increased home prices in many markets these investors see an opportunity to either foreclose on the homeowner and take the equity that these 2nd mortgages now have or they are contacting homeowners to work out a payoff or get the mortgages to start performing again.

For example, if a homeowner originally owed $300,000 on a 1st mortgage and $100,000 on a 2nd mortgage back in 2011… and the value of the home at the time was $250,000, there would be no equity position in the 2nd mortgage and if you stopped paying on it at the time or filed bankruptcy to discharge it there was no reason for that 2nd mortgage to pursue the homeowner because there was no equity in the home.  Today, that same homeowner may still have the 1st mortgage for $300,000 and the value may be $375,000. That smells like an opportunity for those 2nd mortgage note holders and many are starting to take advantage due to the newfound equity that they see as THEIRS… NOT YOURS.

If you are in Southern California and want advice on your options if this is happening to you, contact me on my cell at 858-212-0395 and I can go over details with you.

Regards,

OCWEN short sale process and timeline is changing.

OCWEN is changing its short sale process to require all applicants to be reviewed and decisioned for Loan Modification prior to an applicant being reviewed for Short Sale. We’re finding that it is needlessly adding an additional 30 days to the short sale approval process. All of our clients have already been vetted for a modification or have no desire to keep the home… so it’s adding an additional month to an already long short sale timeline.  We’ve been tinkering with using a signed statement from the borrower/applicant asking to skip the modification review. I will keep this blog updated with any feedback we get on this tactic. We have been told by several OCWEN representatives that this is a new Federal Guideline through the CFPB.

How is the OCWEN Short Sale Process changing?

These changes will affect short sales moving into 2018. According to a VP at OCWEN their process changed in October and will result in a homeowner reviewed for all retention and liquidation options at the same time.  So they will be reviewed for modification, DIL (deed in lieu), and short sale if they call in for assistance.  They may get approved for one option, two options, all 3 options, or no options. Then they can decide which route to take. The change is to streamline how many times they have to review someone for help.  Now it should be just one time, and the decision gets made.  It will take more time and documents for the review, but the review will then cover all options for the homeowner and they don’t have to keep closing out the review and starting over.  Of course, that assumes the homeowner gives us all of the financial documents we need for the review.  In certain cases, if the homeowner has already been declined for a mod in the past, they can be moved right to short sale and DIL review.

How is the OCWEN Short Sale Timeline changing?

It may increase the timeline 30-45 days.  Currently, the OCWEN Short Sale Process can take an average of 5-6 months… so add an additional month to that timeline.

Regards,