:: Newport Lending Corp. ::

We are a member of the California Association of Realtors and also a member of the Newport Beach Association of Realtors. Our Realty Center can handle all of your home buying and home selling needs. We approach our realty clients from a financial aspect to insure a smoother experience and “On Time” closings. We employ only the best of the local agents that are ready to work hard for the client not the commission!

Pre-Approval Letter	Want to Sell, Upside Down?	Search for Listings
The Home Shopping Process	What are Short Sales?	Schedule a Preview
Find a local Realtor	Looking to Sell Your Home?	Pre-Foreclosure Help

In today’s mortgage market obtaining a Pre-Approval is of utmost importance before you start your home shopping process. Most Realtors require a Pre-Approval letter from a mortgage broker or lender before they will schedule any viewing appointments.

Obtaining a Pre-Approval and Pre-Approval letter is a fairly easy process. We recommend to first gather all the necessary requirements for our lenders and/or banks to render an accurate decision. But if you would like to know today, if you qualify, call us now to conduct a short interview with our licensed Broker at 949-378-6550.

Once you have been Pre-Approved for a purchase-mortgage-loan, you’re ready to begin! Some say the home shopping process is the most fun, but also the most frustrating part. We recommend taking your time. Find exactly what you desire! This is a very exciting and big decision buying a home! Don’t rush it! Make sure you’re completely informed of all the potential monthly property and loan expenses such as, Property Taxes, Hazard Insurance, Mortgage Insurance and Mello-Roos and HOA (Home Owner Association) Dues if Any. You will most definitely be viewing many properties, so don’t get frustrated, if you don’t initially see what you like. Remember, you are also becoming an expert of the local market by seeing everything available and will have a good sense of purchase value. Call us today to begin! 949-378-6550

Finding a local Realtor is an important task before the embarking on the home buying adventure. Look for someone that is…

1. A great resource is the National Association of Realtors web site Realtor.com

4. Look for a Realtor that acknowledges they won’t get frustrated with driving to multiple viewings and writing multiple offers.

8. Make sure the potential candidate responds quickly to your calls, emails and messages.

9. Make sure they have a great grasp on the market and the area that you are interested in purchasing a home.

10. Pick someone you ultimately like, because you are confident that this particular Realtor will work hard to get you a fantastic deal on a property!

***Note- A Realtor’s commission is paid by the Seller. Call us today for our top Realtor picks in Orange County. 949-378-6550.

If you own a property and are upside down, (the value is less than the amount owed), than maybe a short sale is a great option for you to consider. This can include your primary residence and investment properties. The lender will usually only consider a short sale if a hardship can be documented. The lender, if presented a purchase offer and a complete financial package, may agree to accept the terms of the offer, usually at or neat market value.

What are the borrowers Liability? The three main items to understand fully is what happens to the deficiency or shortage amount, tax liability and credit consequences to the borrower?

What happens to the Deficiency Amount?-That is up to the Listing Agent and the homeowner to negotiate a total debt forgiveness. The borrower should get this in writing. In some cases the lender will only agree to the short payoff if the borrower promises to pay the shortage in full or a portion of the shortage. The lender may ask the borrower to sign a new promissory note.

Of course the borrower can reject this offer and attempt to proceed with a foreclosure which in some states such as California, the borrower is protected against personal liability under the anti-deficiency rules.

What’s my Tax Liability?- The two most important implications with a short sale; debt relief income and capital gains tax. Consult your tax advisor.

3. Purchase-money seller financing (but the discharged debt is treated as a reduction in the owner’s tax basis.)

***In addition, Congress recently enacted the Mortgage Forgiveness Debt Relief Act of 2007 exempting from federal income tax and debt forgiven for a loan secured by a qualified principle residence. This tax break applies up to $2 million for debts discharged from January 1^st 2007 to December 31^st 2009. Any discharges debt excluded from income under the new law must nevertheless be subtracted from the tax basis of the taxpayer’s principle residence for purposes of calculating capital gains.

Capital Gains Tax-In short the price the seller sells the property minus the price the seller paid for the property. If you purchased your property within recent years for a premium and now the property is less in value than what it was purchased for, the capital gains tax would not apply. However despite capital gains tax, homeowners generally qualify for a tax exemption up to $250,000 (or $500,000 for married couples filing jointly) for properties owned and used as their principle residence for at least two of the last five years.

What’s my Credit Consequences?-A short sale may adversely affect a borrower’s credit rating. A short payoff may be reported on the borrower’s credit as a loan that has been settled for less than it’s balance. There may also be a drop in the borrower’s credit score. Many credit experts believe that a short sale will have less of a negative impact on the borrower’s credit than a foreclosure. Both in terms of FICO score and length of the time the derogatory mark will affect the borrower’s credit. Fannie Mae, as recently as May 31^st 2009 has already readjusted the lending guidelines to five years must pass, with foreclosures on credit, before they will lend again to foreclosed borrowers. Fannie Mae requires two years must pass on short sales.

A short sale is defined as an over encumbered property whereby the homeowner is usually is serious default and bank has the decision to either foreclose against the homeowner or settle for less than what is owed. When coming across a property that is listed as a “Short Sale”, this means that the homeowner has decided to list the property for sale and hopes that the bank will settle for less than what is owed, before the bank forecloses. Typical time frame for a bank to foreclose is 90-120 days after filing a Notice of Default. Many banks are delaying the standard foreclosure process to provide an opportunity for delinquent homeowners to get current or make other arrangements such as a short sale. Short Sales typically take slightly longer to close than a listed bank owned foreclosure or otherwise known as an REO (Real Estate Owned).Call us if you would like to go view houses listed for Short Sale at 949-378-6550.

A short sale is usually a better deal for the lender to accept than waiting for the foreclosure process to carry out. If the lender decides to proceed with the foreclosure process, the lender will have additional interest due, legal and attorneys costs while adhering to the lengthy judicial requirements of foreclosing on a homeowner. There are also benefits for the homeowner to short sale a house vs. letting the property go to foreclosure if they ever want to be a homeowner again. For instance, a homeowner who short sells their house only has to wait 2 years to purchase a home again vs. a homeowner who recently had a foreclosure, has to wait 5 years to purchase again via Fannie Mae guidelines May 31^st, 2009. There are credit and tax consequences to a homeowner with a short sale or foreclosure. In a short sale the mortgage may show “Paid in full” and “Settled for Less than Owed.” We advise to consult your tax advisor before making your final decision. A short sale is less detrimental to a seller than a foreclosure and does provide an opportunity to make a clean break from the financial and emotional burden, including possible, positive tax consequences if negotiated properly, than letting the foreclosure play out. Lenders are also negotiating short sales on investment properties! A short sale is a win- win for the Buyer-getting the property at a discount, the Seller-getting out from underneath the debt and the Lender-getting back the majority of the investment in cash and eliminating certain extra costs avoiding foreclosure! Call us if you would like a consultation at 949-378-6550.

Are your contemplating selling your house. We have excellent in house realty services to accomplish your timely sale. First, here is a list of important things to consider:

From Condos To Multi-Million Dollar Estates, A Few Reasons A Short Sale Could Be The Best For You.

If you are struggling to make your mortgage payment, do not worry. There are several options available to you at this time. Lenders are willing to make accommodations to help your situation. Below is a list of Pre-Foreclosure, realty and mortgage options to consider for relief:

Loan Modification-A homeowner who is upside down or unable to refinance, may want to look into a loan modification. A loan modification is any change in loan terms; a loan workout with the lender through negotiations. Such loan changes of allowing the borrower new terms are included but not limited to: Reducing the rate slightly or significantly, allowing missed payments to be waived, adding missed payments to the loan balance, principle reduction, locking the rate from adjustable to a fixed rate and finally, a graduated rate or payment plan. (Example of a graduated rate plan: Fixed rate of 3% for three years, 4% fixed for the fourth year and 5% fixed for years five through thirty.) Call us today to see what your specific lender may do for you! 949-378-6550.

Short Sale- A short sale is defined as an over encumbered property whereby the homeowner is usually is serious default and bank has the decision to either foreclose against the homeowner or settle for less than what is owed with a new buyer. A great time to make this important decision to short sale the house is if the lender has issued a Notice of Default. The Notice of Default starts the clock of the intent to foreclose 90-120 days. A short sale is less detrimental than a foreclosure and may allow the homeowner a clean break from the financial and emotional stress of a impending foreclosure. We have an excellent short sale staff to consult with about your situation today. 949-378-6550.

Refinance- *Borrower Must Be Current on the Mortgage to Qualify for a Refinance.

The Making Home Affordable program announced by the Department of the Treasury on March 4, 2009, includes a new initiative – Home Affordable Refinance – to provide refinance opportunities to borrowers with mortgages held or guaranteed by Fannie Mae. This initiative is for borrowers who have demonstrated an acceptable payment history on their mortgage but due to a decline in home prices or where mortgage insurance (MI) is not available, have been unable to refinance to obtain a lower payment or move to a more stable product. The Federal Housing Finance Agency (FHFA) has also provided greater flexibility to Fannie Mae to implement this refinance initiative.

Fannie Mae is announcing new refinance options to achieve the goals set out for this initiative and to incorporate additional flexibilities provided by FHFA. Importantly, the maximum loan-to-value (LTV) ratio for refinance mortgage loans under this initiative will be expanded to 105 percent, and MI requirements will be significantly relaxed to assist borrowers who have experienced home price declines. Call us today to see if you can refinance! 949-378-6550.

Bankruptcy-Is a court proceeding for people who are unable to pay their debts to settle those debts with their creditors under a judges supervision. For a homeowner facing foreclosure, the filing of a bankruptcy case provides an “automatic stay” which temporarily stops the foreclosure proceedings. Under a Chapter 7 bankruptcy case, a lender generally requests for the federal bankruptcy court to lift the automatic stay to allow the lender to resume its foreclosure proceedings under California law. Under a Chapter 13 case, the debtor can keep the property by paying the amount overdue over a three-to-five year plan (along with regular mortgage payments.) Bankruptcy and loan modification/short sales usually don’t mix. If the homeowner is waiting on a short sale approval and files bankruptcy, the lender typically forwards the file to its legal department. The homeowner’s legal stay generally prevents the lender from negotiating a short sale with the homeowner. The homeowner should consult these options with a qualified bankruptcy attorney. Call us today for our bankruptcy attorney we recommend. 949-378-6550.

Deed in Lieu-Is a voluntary agreement between the a borrower and lender for the borrower to surrender the title to the property in full satisfaction of the debt. A lender may agree to a deed in lieu of foreclosure to avoid the costs of foreclosure. The credit and tax consequences of a deed in lieu of foreclosure are similar to those of a foreclosure.

Foreclosure Timeline-You may be upside down and/or lost your job and can’t make the payments. You must decide if you want to keep the house or start over and start fresh. The approximate minimum time frames for the foreclosure of owner-occupied loans made from 2003 to 2007 are as follows:

1. Pre-Foreclosure Period-A lender may initiate the foreclosure process when a borrower defaults on a loan, such as missed payments. Lenders are generally waiting a few months before starting the official foreclosure process.

2. Day 1-Lender Contacting Borrower-The lender must contact the homeowner to access the financial condition of the homeowner and explore options.

3. Day 31-Filing of the Notice of Default-The lender has 30 days to file a Notice of Default after speaking to the homeowner to explore options.

4. Day 121-Filing of the Notice of Trustee’s Sale-Three months after filing a Notice of Default, the lender record a notice of trustee’s sale setting forth the time, date, and place of the upcoming trustee’s sale. Because of the gravity of the notice of trustee sale it must be widely disclosed and published for three weeks straight in a newspaper of general circulation.

5. Day 145-Deadline to Cure Default-Up to five business days before the trustee sale the borrower can reinstate the loan by curing the default amount.

6. Day 152-The Trustee Sale-At the trustee sale the property is sold through a public auction to the highest bidder. Homeowner still has the right to redeem property by paying the full amount

Other Alternatives-A homeowner facing an impending foreclosure may have other alternatives to consider. There are choices during these stressful times. Clear your worries and focus on the outcome desired and the action necessary to resolve.

Second Job-An extra job may make up the shortage in funds needed or after a new payment is negotiated through a loan modification!

Rent a Room-Can you rent a room for extra money in the interim. May help with the lender negotiations and income requirements!

Seek an injunction-Maybe consult to seek legal action against the lender as circumstances warrant.

Call us and tell us your story! We can help walk you through all this! 949-378-6550.