I'm sure this will be another great discussion, however the truth of the matter for me is, I don't know. I haven't work with an attorney on a short sale, yet. Though, I'm very interested to hear about experiences of others.
Maybe we should not generalize in regards to attorneys. Isn't that like saying that all realtors are unethical? I have done several short sales, where the clients paid several thousands of dollars, to get a promised loan mod, with no avail. On the other hand, I have a couple of attorneys, who refer their clients to me for short sales.
Richard, good morning. I'm interested as well however my focus is more on the conflict between attorneys and there services and what's going to be 100% best for the client. Now we know agents would love to perform a short sale and save a homeowner from foreclosure through that relief option and we know there is no charge (at least some lol) to do the short sale.
We know that attorneys have options as well however charge a fee, retainer. etc. Can that be a confilict in several situations when a homeowner can successfully get results from doing short sale with a professional Realtor or take a chance beacuse some attorney pitched them modification services and now beacuse of the "Attorney" title homeowners believe it and go for there option.
Let's look at my particular situation. Homeonwer unsuccessfully has been denied twice for a modification. I call with lender specific information according to what the lender would like to offer. They have already said a loan modification will not be approved however would like to attempt the short sale or DIL. An attorney is called and now presents his services and say's he can do it so go with him. Is this ruining our homeonwers??
Will the investor/lender now be dragged out more and more beacuse now an attorney steps in saying they can modify the loan? Will the homeowner now suffer from months and months of delinquency thinking this will happen? Will the homeonwer be presented in many months wil either an unacceptable modification or denial only to now KNOW the short sale is the only other option? Now will then lender/investor be tougher because they see they reached out a year ago and now the homeonwer is asking for help?
This is my concern!
My wife and I paid a local attorney $3500 because he touted how he was going to be able to cut our payment in half through a Modification. He told us it would be a $3500 flat cost. After we paid him his fee, he turned it over to his "Mod specialist", a washed up Realtor that really had no clue what she was doing. The attorney was impossible to get ahold of at that point. Always screened his calls w/ his secretary and never called us back. Two months into it, we start getting bills saying our $3500 has been eaten up already. Keep in mind during these 2 months I personally had to get the sale date postponed because his "Mod specialist" didn't even know there was an impending sale date! wow. So we fought with them. He denied he ever said the $3500 was a flat fee and their engagement letter we signed was so wordy and ambiguous that you could make just about any translation from it. We insisted on our money back because virtually nothing had been done w/ our file, and of course they refused. Our house ended up getting foreclosed on in the middle of this and we lost it. This was 2 years ago. Keep in mind I am a Short Sale specialist and should have known better. I should have just Short sold my house and been done with it. Good old hindsight. We filed a complaint w/ the Division of Real Estate w/ the State, but nothing ever came of it. Learned some very valuable lessons, so it was a $3500 tuition at the school of hard knocks and I share that story with all of my potential clients that ask me about modification. I am with you Eric on this. If a family wants to stay in the house that they've made a home, I am all for it. I hope they are one of the few that is able to successfully work something out with the bank. I don't try to convince them otherwise, but I also STRONGLY encourage them to call me immediately if their attorney or Mod company or Lender starts jerking them around and/or it looks like the Mod might not go through. I have had many people call me back weeks or months later begging me to help them with a Short Sale. Some I've been able to help, others have a sale date in 3 days and its just too late. I have very little faith in these Modification companies/attorneys. That is based on my and several clients and friends experiences.
Good luck to you.
Let me preface what I'm going to say... I think there are some good attorneys out there negotiating. I personally have not met one. To me they were just paper pushers. They submitted files and got approvals or denials. There was no REAL negotiation. Interestingly, I have seen attorneys lose files to foreclosure too, because the people in the office didn't know there was a sale date. Now, I'm not blaming. Sometimes a sales date comes up and we miss it, but USUALLY it's because someone is not checking on a file.
I cringe now when I have to deal with a short sale attorney as a buyer's agent. To me, that just means the process will take a LONG time.
My thoughts are if the attorney is a boutique firm and only deals with short sales, they can be VERYVERY good at what they are doing, but if they are an attorney that does "other" things, real estate, trusts, closing, etc., and just ADDED short sales to the list of things they do, they won't be good for the clients.
My personal experience is that Smitty is right on target. The seller's attorney has been negotiating our purchase of a short sale since early June, and he's an absolute nightmare. He hasn't answered one question we've asked (NOT the way to keep a buyer engaged) and has blown off questions from our attorney as well. I'm dreading the closing process, and hope this guy (or his staff) do a better job with that.
FWIW, the agent in the transaction is dual and seems to know nothing about the SS process. As a result, when the lawyer tells her something and she calls me to pass the message along, she can't answer the questions that I usually have in response, so my questions never get answered. So in reference to the previous question about whether agents are "the" problem, I'd have to say that they can be part of the problem, if they either don't want to learn about the SS process, or if they oversell their "expertise."
As usual, Smitty is correct. I require all sellers to have an attorney, but they stay in their area of expertise, which is dealing with other attorneys, generating closing figures, and legally protecting the seller. They leave the negotiation to me.
Hi again Eric,
Thanks for the clarification. I read, (or should I say I half read) your initial post in a hurry on my way out to the office this morning. I do apologize. I'll tell you up front I've never personally gone through a modification, foreclusure or short sale on a home, so I can't give my viewpoint from experience. However, I can share your veiwpoint regarding the overall challenge now. I would think that in this case, time may be critical and they've (BOA) has made it clear to you they've taken time and analyzed the situation and, presented 2 options. And knowing that there are no guarantees in any of these processes, if I'm a homeowner in this predicament, there are several things that I would want to consider in a case such as this. They are:
Unless the attorney has a magic wand, BOA seems pretty direct and to the point about their position and holds most, if not all the cards. I can see this case very well backfiring on the attorney unless he/she can present clear/concise direction but, they they can't, then the homeowner is left holding the bag. And, I don't think anyone would want to alienate BOA to the point where they remove the few options presented so far. Please correct me if I'm wrong, the almost inevitable and eventual foreclosure, if the modification doesn't occur; will ultimately do more damage to the homeowner's long term credit than the short sale, correct? So, I wonder if most attorneys in these circumstances and under such short timeframes are making their clients aware of this so they can weigh their options? Hopefully so. But regardless, of whether you're a short sale agent or a real estate attorney, I would think that you would still have a responsibility in the homeowner's best interest.
The real question might be is this the homewoner way of getting out of commiting to you, because they're unsure? Now as far as attorneys go, a lot of them are just plain weasels! Collect a fee, submit paperwork through an assistant, and just accepts the outcome without really fighting for the homeowner. With that being said, I know a couple of attorneys who have some strong relationships with banks and are able to obtain modifications when the owner could not.
As an investor, I've gone through that plenty, but I wish them luck and follow up with them. Trust me, 9 out of 10x they will be back. It's sad, but true. No hard feelings...
I am sure there are some attorneys realtors out there that do have the clients interest at heart, but the ones I have come across are more about getting the fees commission than truly helping someone. Most of us realtors attorneys working with short sales truly do care about our clients and go the extra mile to do everything we can to help them avoid foreclosure, minimize the credit damage and start again with a clean slate. And most important of all, we do this without any guarantees that we will get paid. Unlike attorneys realtors who set their fees commission percentage....
Really, Ray? I'm kind of disgusted by this 'we're good and they're bad' mentality. In 17 years of practice I can give you examples of realtors doing some of the most dishonest and reprehensible things imaginable. And yet I don't judge the category by these examples.
Except for a few hundred dollars in hard costs, most of my fees come from the sales proceeds, so it's a contingency matter for me too. And I don't make 6% in fees.
But I will tell you - nearly all of my real estate files right now are short sale negotiations and closings. On average I close 3 per month. In 3 years I have only had 4 deals fail to work out, either because the buyer was impatient or over valuation. NEVER because of anything I did or didn't do. And I have NEVER had a short sale which was otherwise approved fail over my fees.
So you know what, yeah I'm pissed about your comments. I find them offensive generalizations that say more about the people you have in your sphere of contact than it does about a profession generally.