Monday, October 22, 2012

Getting Personal, Here's Us








I just sent some shots of my family to a friend.  I don't know if I picked out the right ones, but I thought I would share it with my friends reading my blog.  4 Children, 8 Grandchildren 2 Great Grandchildren... Here's some.

LIVE, LAUGH and LEARN


I just watched a video by a control freak telling me why I will be happier if I allow myself to be vulnerable.  I highly recommend it for two reasons.  First, it made me laugh, and my most fun thing next to making someone else laugh is to laugh myself.  Second it taught me something.  Next to making people laugh learning stuff is what I like to do. 

I have a technique I use when I see that play button in the middle of an image…I slowly drag my curser to the bottom of the image and make the control bar pop up so I can see how long it is.  This said 20 minutes long and I almost canned it right there.  But for some reason I clicked the play button (I think because she looked kinda cute) and right away she made me laugh.  I watched all twenty minutes.  Although there were 45 seconds in the middle where I almost shut it off, (I think because I didn’t understand it) I watched the whole thing and learned why it is about the most popular of the very popular Ted talks.  (Not me Ted, him Ted.com).  Try it, I think you will like it.

PLAY THE HARP…Refinance your mortgage


Here is an article about the federal government’s program to help people refinance rather than default on their mortgages.  Try it, you’ll like  it…IF a strategic default is too scary for you.   It’s called the Home Affordable Refinance Program.

 

“Nearly 99,000 homeowners refinanced their mortgages in August through the Home Affordable Refinance Program (HARP), according to a new report released by the Federal Housing Finance Agency (FHFA) Tuesday.

The federal government’s HARP initiative, which is applicable for borrowers with loans owned by Fannie Mae or Freddie Mac, has put 618,217 homeowners into new mortgages with lower interest rates since the beginning of this year, when a broader group of borrowers were made eligible for the program.

According to FHFA, HARP is on target to reach a million borrowers in 2012. The agency attributes the continued
high volume of HARP refinances to record-low mortgage rates and program enhancements that included the elimination of its maximum loan-to-value (LTV) ratio limit.

Fannie Mae and Freddie Mac loans refinanced through HARP accounted for nearly one-quarter of all refinances in August, 24 percent to be exact. In states hard-hit by the housing downturn–-Nevada, Arizona, and Florida–-HARP refinances represented nearly half or more of total refis during the month.

HARP refinances for borrowers with LTV ratios greater than 105 percent accounted for more than 70 percent of HARP volume in Nevada, Arizona, and Florida and more than 60 percent of the HARP refinances in Idaho and California. Nationwide, LTV ratios above 105 percent characterized more than half of new HARP loans made in August.

FHFA also noted in its report that nearly 18 percent of HARP refinances for underwater borrowers were for shorter-term 15- and 20-year mortgages in August. By reducing their mortgage terms, these borrowers will be able to build equity faster.

Since the program’s inception in 2009, FHFA reports, Fannie Mae and Freddie Mac have financed more than 1.6 million loans through HARP.”


By Carrie Bay-dsnews.com

Friday, October 12, 2012

Another Incentive To Stop Paying Your Mortgage


I have written blog posts about “Strategic Default”.  Explained why I think it is not a moral transgression.  This article, summarized from a REO Institute article I found on ActiveRain.com, shows how banks are willing to help people stay in their homes…but only if you are 120 days or more late with your mortgage payments!

My Summary:

CitiMortgage to Launch Home Rental Program as Foreclosure Alternative
By: Tory Barringer

 CitiMortgage announced the launch of the Home Rental Program, a program designed to provide an alternative to foreclosure and allow eligible borrowers to stay in their homes.  The Home Rental Program will be managed by Carrington Capital Management, LLC and Carrington Mortgage Services, LLC. CitiMortgage and Carrington developed the program as a pilot.

 In order to be eligible for the program, candidates must: Occupy the property; owe more than their home is worth; be delinquent for 120 days; and be unable or ineligible to receive an affordable loan modification while still having the resources to make monthly rent payments.

 Candidates must have a loan in the pilot portfolio serviced by Carrington.  CitiMortgage has transferred the ownership of loans in its portfolio through the sale of $158 million in mortgages to the Carrington/Oaktree partnership.

 Under the program, the eligible borrower transfers ownership of the property to a vehicle established by Carrington Capital and its joint venture partner, Oaktree Capital Management, L.P. A lease will then be established for the property at a manageable monthly payment.

Lease payments will be determined by local market rates but are expected to be lower than the borrower’s mortgage obligation. Carrington will work with borrowers to establish a length for each lease.

The program will be tested in six of the hardest-hit markets to evaluate its effectiveness: Arizona, California, Texas, Florida, Nevada, and Georgia. Carrington will contact homeowners who meet eligibility requirements.
 
Want some help selling your house?   Talk To Ted!

 

Wednesday, October 10, 2012

Why Get A Mortgage Even If You Have The Cash


Two of my sons just bought our house and gave us a Life Estate.  Even though they could pay cash, I urged them to borrow the money from the bank.  I want them to take out a mortgage on the house. 

I gave them two good reasons to do this.  First, mortgage loan rates are at an all-time low.  They almost for sure can invest their cash and make more in a stock market fund than they will be paying for the next thirty years for the interest on the borrowed money. 

Second, they will be paying off the mortgage in cheaper dollars because of inflation and the reduced value of the dollar.  This is, in my mind, a sure thing-according to past history (what I could buy with a dollar in 1942 when I was a kid) and to the amount of borrowing and printing of money our government has done recently.

This second point, paying a mortgage off using devalued currency, was harder to get across to them.  Today I received an email from Bank of America that gave a great explanation.  I have changed it a bit to make it even clearer:


How to Explain the Impact of Inflation

Imagine for a moment that you are going to lend your own money to someone to buy a house. You determine this person is a good credit risk, you process the loan, and you start receiving $1,500 per month as your regular payment. You then of course take that $1,500 and start loading up your shopping cart with the goods and services you need on a monthly basis(food, clothing, medicine, gas, and so on).

But over time, you notice something happening.

Every month, you are getting slightly less in your cart than you did the month before for that same $1,500 you are spending. Why? Because costs are on the rise. That's inflation.

Why Interest Rates Go Up when there is fear of inflation in the air.

Imagine that you are once again going to lend your very own money to another person to buy a house. You want the same shopping cart full of goods that you got last time in return for doing the loan, but this time you realize that you can no longer get that same cart full with $1,500. Due to inflation, you now need $1,700 to buy those same goods and services.

As a result, you will charge a higher interest rate to compensate you for the ongoing impact of inflation.” 

Your dollars will be worth less in the future than they are now…

Thank you Bank of America.  That makes it plain to see why my kids should use a home mortgage now and put their cash into “inflation proof” investments. 

 But you must invest your cash!  Do not spend it.  If you do, as inflation takes place you will become very, very poor.

Another major benefit to my kids is that we sold the house to them for a very low price and it is worth more than that.  We worked out a great deal with the bank to pay off our existing loan (for much  less than we owed) with the kid's money and gave them the deed.  Much better than leaving the house to them as part of our will with all the costs, risks and sibling conflicts that can cause. 

We simply (and inexpensively) gave them a Quit Claim deed.  They sent the payoff money to the bank.  We gave them the deed.  The deed we gave them gave us a Life Estate.  Thank You, Lord!

Want to know more about how to invest in today’s bargain real estate market?  Talk To Ted!  I am an experienced and knowledgeable Buyer’s Agent.

Monday, October 8, 2012

Backyards are highly overrated


This article in USA today made me think.  I love to sit out in my screened-in lanai (porch), watch the birds use the bird bath and squawk at each other; admire the flowers and trees; glance over at the seldom used barbeque and thank the Lord for all my blessings.  But I don’t like mosquito bites, the hot Florida sun on my bald head, or standing up and moving around too much.  Makes me sweat.  So I think there is some wisdom in what is said here.  I would give up our big yard for more storage space and a larger office.  Read and ponder:

WASHINGTON – Oct. 8, 2012 – After a dreary few years, the housing market is showing signs of life. A mid-September report from the National Association of Realtors found that home resales rose 7.8% in August from a year before. New housing starts are up, too, which has people thinking about what kind of space they’d like to live in. One major focus of this question? The great outdoors.

According to a survey by the American Institute of Architects (AIA), 64% of architecture firms are reporting increased interest in outdoor living spaces: places for adults to relax; places for the kids to play. People want “a luxurious outdoor world, to get away from their everyday lives at home instead of having to go somewhere,” says Janet Bloomberg, with KUBE Architecture.

There’s just one problem: Evidence shows that for all we lust after outdoor sanctuaries, such retreats have little to do with the lives we actually live. Neither adults nor children spend much leisure time outdoors, and in making the trade-offs to have private outdoor space, we could be making ourselves less happy overall.

Mistaken impression

Anyone who studies how Americans spend their time eventually comes to a stark conclusion: Impressions and reality differ a great deal. A fascinating book published this summer, which came to a similar discovery, was Life at Home in the Twenty-First Century, the result of an anthropological study of middle-class Los Angeles families. Researchers from UCLA’s Center on Everyday Lives of Families recorded hours of footage, documented possessions, and clocked how people spent their days to the minute.

Few of those minutes turn out to be spent outside.

Children averaged fewer than 40 minutes per week in their yards. Adults spent less than 15 minutes of time per week in their yards. These families had sunny Southern California weather. They had nice porch furniture, trampolines, even pools. They just didn’t use them. Many families told researchers that they used their backyards all the time, but then were rarely observed out there in this multiyear study.

The great indoors

Jeanne Arnold, one of the lead researchers, pinpoints two main culprits: first, general busy schedules (work, school, activities); but second, the prevalence of media options, which “seem like magnets, whether it’s television or computers or video game consoles.” Rather than use their outdoor retreats, people would retreat by turning on a screen. People don’t like this image of their lives. So they don’t acknowledge it -- to researchers, or with their budgets.

“They’re willing to spend to sort of perpetuate that illusion,” says Arnold. By having nice yards, pools and decks, they could “attempt to project something that’s not necessarily going on, but is clearly ideal” -- a family that spends time together outside.

All this would be humorous, except that yards come with externalities. A family moves to the exurbs for a private patch of green. But to buy less than six minutes a day of play and 2 minutes of adult leisure, the parents pay with increased commutes. The Census reports that the average commute is about 50 minutes a day, and battling traffic seldom makes people happy. One 2004 study in Science of Texas working women found that commuting ranked at the absolute bottom of the happiness scale on any given day.

To be sure, even if a backyard isn’t used, it can still bring happiness. Leonard Kady, chairman of the AIA’s Small Project Practitioners group, notes that “you’re always looking into the space.”

But the broader point is that, while a private, beautiful yard seems part of the American dream, Americans spend little time using those yards we pay dearly to get and upgrade. If the kids are just going to play Nintendo, or you’re just going to watch TV, better to live close to work, even if there’s no yard, so you can be home more to enjoy the screens.

© Copyright 2012 USA TODAY, a division of Gannett Co. Inc., Laura Vanderkam. The author of “What the Most Successful People Do Before Breakfast,” Vanderkam is a member of USA TODAY’s board of contributors.

 

Friday, October 5, 2012

Are Strategic Mortgage Defaults Immoral?

Apparently Donald Trump and lots of other Americans do not think so.  The Donald defaults as a business strategy and it works just fine (Google 'Donald Trump Bankruptcies' for lots of info on this.)  And lots of folks are agreeing with him that a mortgage is a contract with a business; not with God.  You agreed to give them the house if you did not make your payments.  So here, take the house...

This article reports on how fast this trend is growing:


Survey: 32% Of Americans Justify Strategic Default


The housing crises seems to have led Americans to take a less critical view of strategic default.

According to a recent survey that polled 1,026 U.S. adults, 32 percent stated they believe homeowners should be able to strategically default without facing consequences. The online survey was conducted by JZ Analytics on behalf of ID Analytics.

ID Analytics also reported 13 percent of the surveyed Americans said they are likely to strategically default on a mortgage, and 17 percent said they know someone who has strategically defaulted.
The statistics were revealed Wednesday at ID Analytics’ Advance 2012 conference.
John Zogby, senior analyst at JZ Analytics and creator of the Zogby Poll, presented the results at the event.

“Our research into the consumer opinion of the economic crisis of 2008 found alarming results,” Zogby said. “What jumped out is how many Americans feel it is acceptable for homeowners to walk away from a mortgage and go into foreclosure. If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery.”

Some of the survey respondents justified their position on strategic default because they believe the “mortgage market has been a scam for many years, built on false promises that took advantage of people that didn’t understand what was happening,” according to a release.

Low credit scores don’t appear to bother people very much as well, with 36 percent of those surveyed stating they believe it’s socially acceptable to have a poor credit score.

In addition to those findings, 17 percent said they would exaggerate personal information to obtain credit

MORTGAGES FOR CONDOS HARDER TO GET

I am beginning to see small signs the housing market is tightening up.  Here is a move by Fannie Mae that will make condo loans harder to get.  I highlighted the important stuff:


Fannie to tighten loan criteria for condos, refis
WASHINGTON – Oct. 4, 2012 – Starting Oct. 20, Fannie Mae will tighten some of its underwriting standards for condo buyers and homeowners who want to refinance. The changes have some in the industry concerned.  The new guidelines were created to reduce Fannie Mae’s risk and force more borrowers to shop around for mortgages.  Among the Oct. 20 changes:

• Condo buyers with less than a 20 percent downpayment must complete a two-page condo questionnaire about the homeowner association’s finance goals, as well as provide additional documents, such as a reserve study, by-laws and a copy of the master insurance policy. Currently, only condo buyers who put down less than 10 percent must produce the extra paperwork. Some analysts predict that the extra paperwork could lead to more loan denials under Fannie Mae’s strict condo loan underwriting criteria.

• Fannie Mae will end discretionary approvals or “Expanded Approvals” (EAs) for all Fannie Mae refinances, except for Fannie Mae’s Refi Plus Program loans or HARP loans. EAs were believed to help borderline borrowers qualify for a mortgage when they didn’t have a perfect combo of loan-to-value and debt-to-income ratios, creditworthiness and financial reserves, according to a Realty Times report.

• Self-employed borrowers also may face more hurdles in qualifying for a Fannie-backed mortgage. Fannie Mae will require self-employed borrowers to provide two consecutive years of federal tax returns instead of one, the current standard. Underwriters will base income on an average from the last two years of tax returns.

“Because of the new two-year average approach, one bad year out of two could sink a self-employed homeowner’s application even if the most recent year would have qualified him or her under the old rules,” San Jose, Calif., mortgage lender Shashank Shekhar writes.

Source: “Fannie Mae Tightens Underwriting Rules for Condo, Refinance Loans, Borderline Borrowers,” Realty Times (Oct. 3, 2012)

You Piss Me Off!


I wear my emotions on my sleeve.  I blame that on my "half Italian" heritage, but actually I like emotions and feel they enrich my life.  But Emotional, "touchy feely" types like me turn a lot of people off. 

Anyway, I was reading this article in the Johns Hopkins newsletter because I have an artificial aortic valve and am interested in staying alive until I can get rich again.  And I want so badly to be loved.  Especially now that everyone I knew that loved me unconditionally has died and gone to heaven.

Here is an excerpt from the article that helps me rationalize my emotional affronts:

"Study participants who suppressed their anger were nearly three times more likely than those who didn't to experience a heart attack or die of a cardiac problem. Anger alone was not associated with these events. Those with a "type D" personality -- marked by a tendency to experience negative emotions and inhibit self-expression -- were four times more likely than those who didn't have that personality type to suppress their anger."

My next most common habit that is likely to piss off my friends is my constant attempts to get a smile or a laught using provocative comments.

(And my dear wife hates it when I swear...P----d O-- as an example)

So when you read my stuff on this blog, reach out to your higher self.  If I P--- you off, forgive me and know it is just my feeble attempt to live longer.  Or make you laugh. 

Tuesday, October 2, 2012

Can't Fix Background of this Blog

I received a message from a good friend telling me my use of white in the background was "Over The Top".  I mentioned in a previous blog that I do not know how to fix it.  In my earlier blogs I would type copy, post it, and it would appear on my solid yellow ground.  Then Blogspot changed how the posting and design of same works.  Now when I type or cut and paste my copy from a word document I can't control the background color.  The site also seems to decide on its own what font and font size to use.  That is usually frozen up on my screen and no matter how many times I highlight my copy and try to select the right font or font size, nothing happens.
     I was going to switch to WordPress, but I have been blogging for years on this site and do not want to lose my previous blogs and comments.  It gives me some street cred to have been at it for all those years.
     So if anyone out there, including Blogger, knows where I can find and print out how the hell this new design scheme operates, I will really appreciate it.  Until then, I will continue to spend hours trying to get my posts to look right.

     I just looked at the preview of this post.  I simply hit "New Post" and started typing and it turns out this thing.  Nothing like my old design, but if it keeps turning up, I will keep using it.  Meanwhile, please forgive those ugly yellow things with my name on them. 

Only Amateurs Make Low Ball Offers to Banks


I think this article from Trulia is worth reading.  It coincides with my report that a high percentage of Zillow’s “Zestimates”  are way off.  I really need to do a lot of research to come up with the right offer to make on a Short Sale or Bank Owned property.   Are You an  investor with cash?  Use a dedicated Buyers Agent!  Try Me.  You’ll Like Me!

(I rearranged the topics because I felt her first two points were weak.  They are at the end.) 

5 A-ha! Moments That Get Buyers to Boost Lowball Offers

When the market begins an upturn, like it’s doing now in most places, it’s easy to think that the biggest challenges for buyers are soon to be a thing of the past. Loan guidelines are a bit looser, it’s less likely that a property will decline in value after closing, and rates are still quite low. But experienced agents know that in an ascending market, it can be tough to get appraisal comps to keep pace.

And in the same vein, it can be even more challenging to get buyers’ mindsets to keep up with the heat of the market.

It’s not at all bizarre for a buyer to have to lose one, two or ten properties while the market “educates” them that when supply and demand shift, the lowballs of yesteryear just won’t cut it. Fortunately, there are a few powerful talking points agents can use to help their buyer clients experience less trauma and lose fewer dream homes before they stop lowballing sellers and seriously get into the game.



When your buyer clients insist on making a lowball offer because they want to “get a great deal,” gently remind them that an offer price that seems like a great deal is just an illusion, even a delusion, if the offer doesn’t get accepted by the seller. This reminds them that home buying is not a one-sided endeavor – that the sellers must agree with a price before it becomes the price. It also forces them to face the very real possibility that a lowball offer will result in rejection and loss of the house, especially in a multiple offer situation. If they choose to go in low anyway, that’s obviously their call to make, but this reminder helps you avoid being at the end of the finger-pointing if they make a lowball despite your advice.

 


3.  “Make your best offer on your first offer, as you can’t count on being given another opportunity to go higher.”

Scenario: there are fifteen confirmed offers coming in on an REO property. You give your first-time buyer client the comps, which suggest the home should sell at $30,000 more than the asking price/offer price – and your client can easily afford to offer the offer price + $30K. Your buyer insists on offering the asking price, and no more, because they want to conserve money to negotiate with the bank.

Here’s your talking point: “I urge you to make your best offer on your first offer. This is a bank-owned property, and the bank is unlikely to go back and forth with all fifteen buyers. As well, if the highest offer is a cash offer or is willing to forego an appraisal contingency, the bank might simply take it outright, with no counters to anyone. When there are this many offers, you simply cannot count on being given an opportunity to negotiate and offer more later.”

This point, and all of the others listed here, have a strong track record of success at actually getting buyers to rethink their offer price and strategy on that go-round. However, even if they don’t take your advice, and they go in low and lose the first home, the fact that you gave them the comps, gave them this advice and warned them what would happen if they went in low –then cheerfully wrote the lowball offer anyway – places you in a position to have stellar credibility on your offer recommendations on the next go-round.

 
4.  “How would you feel if you heard that the winning offer was at $X?”

This is a reality check, another one that most useful where you believe or know there are multiple offers. And this one is particularly powerful because it helps buyers understand that the value of a home at any moment is based on what a qualified buyer is willing to pay for it – and that every home is not necessarily worth blowing the bank on. If a buyer is trying to decide between two price points, this can help them make a decision about which one to choose – “What if you hear that the winning buyer made the same offer as your high offer? Will you feel regret?  Or will you feel fine with having taken that risk, given the way you feel about the property?”

I pose this question even in heated multiple offer situations where my client is offering what I feel is a competitive price for a listing – this prepares them for the reality that they might not be successful, and helps them stay as emotionally detached as possible and move on to other listings very quickly, when they are not successful.

5.  “Let’s look at the list price: sale price ratio for: my last few sales/my last few buyer clients/the recent comps.”

American home buyers aren’t all great at math, but they are desperately interested in making smart decisions, and they are well aware that the data can help them do it. If you’re struggling to get your buyer client to understand that the market has shifted and they need to be more aggressive with their offer prices, shift from giving advice to offering evidence: show them the full comps data for any or all of the following, with a specific emphasis on the actual list price, the actual sale price and the list: sale price ratio:

·        the last few homes you sold

·        the last few buyers you represented

·        the comparable sales for the listing they want to make an offer on.

If the data reflects that homes are selling at, near or over asking, this can be very influential in helping a buyer wrap their head around the new state of the market. It can even be helpful to give them references to other buyers you’ve represented who struggled with this and had to lose several homes before they started taking your offer price advice.

Ultimately, what to offer is a decision for the buyer to make, in consultation with their head, their hearts, their bank account and their tax and financial advisors. Helping buyers have these a-ha! moments is not about trying to talk people up in price, indiscriminately, to get a higher commission, nor is it about trying to convince people to spend more than they can afford on a home. In fact, some of the conversation a smart agent might need to have with lowballing buyers is around house hunting at a lower price range so they can make more competitive offers without blowing their budget.

Helping buyers manage their own mindsets in this way is meant helping buyers who are house hunting in a price range they can afford stop sabotaging their own offers by making time-wasting offers that have no chance of success. It’s also about helping them minimize the regret and frustration that comes with losing home after home and helping them avoid being priced out of a certain neighborhood or size home by a rise in prices.

Most importantly, this is about doing what they come to us for: helping them successfully secure a home that meets their wants, needs and budgets.

TALK TO TED  THINKS THESE ARE RELATIVELY WEAK; SALESPITCH SOUNDING:

1.  “A great deal isn’t a great deal if you don’t get the house.”

Many of today’s home buyers are remnants from the recession: people who craved to get the great deals and low prices of the bottom of the market, but were afraid to buy until home prices stopped dropping. While they might have done a mindset reset to understand that home prices have stabilized, making it safe (in their opinion) to buy, many have not adjusted their understanding of the flip side of market dynamics. Today’s market realities of competing with other buyers and having to make an offer at or even over the asking price are simply hard for them to swallow.

2.  “If you offer X vs. Y, you’ll actually only be saving Z%.”

You deal in six or seven figure transactions on a daily basis, so it can be easy to forget that your clients do not. For most of them, this is one of only a handful of occasions in their lifetime where they will be involved in a deal of this size and impact. Combine the fear of making a mistake on their biggest transaction ever with the deep desire to get a great deal and to make a smart decision, then add in the fact that many Americans just aren’t that great with math and you’ll see why it’s easy for buyers to think their lowball offer would reflect a much better deal than it really would.

This is especially the case with buyers making a decision between two offer prices on a higher-priced home where there are multiple offers. On an $850,000 listing where you know there are at least one or two other offers, your buyer might be vacillating between offering $860,000 and $865,000. Obviously, the higher offer positions them the most competitively. So, do the math for them: let them know that the $5,000 difference is a difference of only .6% – in a world where buyers are used to retail discounts of 10, 20, even 30%, many will feel that a .6% discount is not worth losing a home over.  Similarly, you might want to point out the actual mortgage payment difference between two offer prices being considered.

This empowers your buyer client to make a completely informed decision about whether the level of “discount” reflected in their offer price is significant enough to be worth the reduced chances of successfully securing the property.  And they may decide that it is, but if they make that decision with this information, they will feel much more comfortable and less regretful about it, if they aren’t the successful buyer.
Tara-Nicholle Nelson

Trulia's In-House Demystifyer of All Things Real Estate

Monday, October 1, 2012

FHA INSURES YOUR MORTGAGE? UNDERSTAND THE FHA SHORT SALE PROCESS



Whenever an FHA-insured mortgage is involved. FHA short sales must advance through a very exact and systemized process.
Before a short sale can be initiated — The U.S. Department of Housing and Urban Development (HUD) requires that the homeowner be reviewed for all home retention options (modification) before a short sale is pursued.
This 30- to 90-day process seeks to determine whether a legitimate hardship exists and if a short sale is appropriate. The review also will certify that the home has not been rented for more than 18 months and is being maintained, that there is a marketable title, and that the property has only one FHA-insured loan.
A listing agreement or offer is not required in order for the homeowners to be approved. Once the homeowner is approved to short sell their home, foreclosure is put on hold and the homeowner receives an Approval to Participate (ATP) letter.
Submitting a Contract for Purchase to the Mortgage Holder:  Banks do not begin negotiating the purchase contract until after the homeowner is approved to participate and has given them a signed copy of their ATP, usually within seven days.  
Homeowner involvement — FHA short sales must be initiated by the homeowner, not an agent.  Contact your assigned Customer Relationship Manager (CRM).
Seller Incentives:  HUD dictates the amount of incentives payable to the seller.
Agent involvement — Seller’s agents need to work with the homeowner to make sure the following items are organized and completed once the ATP has been executed.
Those include:
§  Pay stubs (dates, amounts, names, institutions)
§  Bank statements (all pages, accounts, and borrowers)
§  Hardship letter
§  Occupancy certificate
§  Marketable title
 
I took most of this material from an email I received,  the Bank of America monthly newsletter.  If you would like to see their version, go to  crm@lenderoffice.bankofamerica.com