I am a very experienced short sale realtor/negotiator.
I have 20 listings in pipeline, close 4-5/month.
Florida listing
Chase 1st lien $445,000
USAA 2nd lien $50,000 (to date client made over $26,000 in payments)
seller unemployed, insolvent, and used personal retirement savings to make payments.
Chase was good to deal with, understood and was reasonable to offer a short sale approval at market value, with a HAFA $6k contribution to 2nd.
USAA took 60 days (after Chase approval) to have "committee" review offer of $6000, they countered with demand for 75% payoff of loan balance.
Responded that this was rediculous and a waste of realtor time, and countered at maximum of 20% ($8800) with contributions from buyer as well as realtors.
USAA took almost 60 days again submitting our counter offer to USAA "committee", they responded to demand a payoff of 50% ($41,000) of UPB.
Seller has now abandoned property, he tried very hard to "do the right thing".
REALTORS UNITE! BEFORE YOU ENGAGE ANY SHORT SALE WHETHER FOR BUYER OR SELLER, ASK WHETHER THE 2ND LIEN IS A USAA LIEN. USAA DOES NOT RESPECT REALTORS EFFORTS, LET ALL GO TO FORECLOSURE OR BANKRUPTCY.
DO NOT LIST OR BROKER PURCHASE OF ANY USAA 2ND LIEN SHORT SALE!
WHEN THIS GOES TO FORECLOSURE, I WILL COPY , ENLARGE AND SEND THIS TO THEIR "COMMITTEE"!
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I agree...don't give up. They are frustrating no doubt, but I am still at it. Funny enough they just sold off the loan to another servicer and they have contacted me to ask for resubmission! We are in the process of that now. As with all things...time changes them. The short sale processes are forever changing and purging. Keep up the fight and don't give up for the sake of your client. Let them know the house is vacant and the seller has no intention of paying or settling. Worst case, Cancel the offer, wait a bit and resubmit again and escallate to as high as you can go. Good luck!
Kim, thanks for quick response. Can you send a draft sample of the "Buyers Discount Fee Agreement"? and do you work on transactions in Fl? are you licensed in Fl?
Kim:
1) How much do you charge for your negotiating service? and how do u bill it on the HUD?
2) Who usually pays?
3) Since you are a law firm do you require sellers to sign an acknowledgement that you are not retained for foreclosure defense purposes, and they should seek their own counsel to review the approval?
4) Do you need to get title/closing fees also?
I have had good success with RTR on 2nds, they start out tough, and in case of RTR/chase 2nd liens they demand 20% UPB, but a combination of the "B" word, bankruptcy, and/or if I show realtor contribution towards the 2nd, they know they hit bottom.
With regard to brokers "tooting" and "giving up" seems that you should be able to discern that from the submission package and whether it is thoughtfully assembled. I use a checklist, with which party is responsible for each item. Also go a little easy on the brokers even if unwarranted, given that they bring you work. I have detected an air of superiority, deserved or not from 3rd party negotiators (not in your case) which seems counterproductive.
In spite of my occasional misspelling and constant poor typing, I do maintain some competencies. I have been finding lately very poor BPOs, the most recent, a sales associate licensed less than 2 years shows up in a new expensive car (knew I was in trouble already), I asked him about it and he was proud to tell me that he does 10-12 BPOS every day! Imagine the quality of his work! And yes he did almost kill my deal, but it brings up the point that rebutting BPOS and submitting my own have become more routine. The last one, clients offered $106k the lender advised a BPO result of $220,000 as a consequence of my rebuttal they had it appraised, I met appraiser and we closed at $111,000. Please let me know what your typical fees are, (and yes I know it varies from region and state, but would be interesting to hear your answers).
Hello: Actually, in this case I speak about the broker - I brought the client to him. I usually am hired by the sellers who were in a loan mod and decided to short sale. I agree though, the agents and the brokers bring me the business, and highly respect their positions. All my business is through word of mouth, so if it’s not the borrowers referring me it will be the escrow company’s and/or agents & brokers. Since we are a law office based out of CA, we recently stopped performing short sales with NC properties, simply because the news laws that passed in 2011, which prohibits all agent outside counsel from postponing foreclosures, and only an attorney who is licensed in NC can postpone or negotiate the property, if the home is scheduled with a foreclosure date. Crazy, I know, but maybe they will come to their senses soon. I am closing my last short sale in Salvo, NC this month and I will greatly miss my new friends I made with top agents and brokers who I have worked with so long. They are older and wiser and I have learned a lot from experienced agents/brokers.
My fee is set and applies to all states, and is paid in different ways. My fees are always on the final HUD-1 and sometimes the lender will fight me and tell me to remove, but I won’t back down & will contact the legal department and ensure the fees are added to the final settlement statement (HUD). The agents can either split my fee ½ & ½ and/or the buyers can pay the full 1% of the sales price. Many agents with investors come to me and don’t mind paying me because I get them such a great discount on the property, which means I have repeated business with cash investors who buy properties as short sales, and walk away with equity. This is called a “Buyers Discount Fee Agreement” or I will have agents draw up an Addendum.
It sounds like you don’t need help on short sales, with all your knowledgable and experience. In any case, if you are a top producers like the agents and brokers I work with, you don’t have the time to sit on the phones and negotiate with lenders. They are a lot of work, and I do most the work so sellers don’t feel overwhelmed with paperwork, and hardship letters and so on— we want this to go smoothly. Let me know, Kim
ED, KIM, ERIK... Thanks for your input, in fact I have previously worked with a law firm negotiator, but invariably it ends up that I either have to refute the BPO, and supply my own valuations or that of a 2rd party licensee, or a 1st/ junior lien insists on a larger settlement, or promissory note, the law firm cannot refute the values and as a result , i must get involved in the negotiations anyway. But i do agree with you on the contact and respect that a law firm gets from the negotiator. with regard to the junior liens, when these are represented by a law firm (such as an association's counsel), again I have experienced that I must get involved by circumventing the associations counsel (something that a law firm negitiator cannot do), and contact/negotiate with board members ( I have even taken new prospective buyers .. with buyers agent permission and knock on members doors to introduce the new buyer and willing dues payer). I guess i need a law firm, who employess a licensee, who can do evaluations.. Additionally, my concern with a 3rd party negotiator, is commitment to the seller's best interests with regard to obtaining a reasonable approval, and waiver of deficiencies.
I guess I have to locate a very good 3rd party negotiator/law firm, and try it again. Preferrably a law firm that also practices both foreclosure defense, and bankruptcy filings, which would really get lender's attention! But still the issue remains, that of all the 2nd lien holders I have negotiated with specifically USAA was the most difficult.
I definitely agree with you about the agents need to be greatly involved, since this is their job, and why we need your input and expertise. I always make sure the agents and/or Brokers are aware they have very important roles, and most of the time I have everyone working together as a team, which we need to make the deals work and move smoothly through the system. However, sometimes I have brokers who give up and let me do all the walking, which is frustrating when the sellers know this and realize the broker is a joke and chooses to opt out of the transaction. Some Broker’s love to toot their own horns, just to gain to client’s - but in the end I had to ensure that everyone stayed focused to close the deal with happy client’s. I have never had an issue with 2nd liens, since I bypass them and seek the investor to settle. I would say this is an issue and agents have almost lost properties when the negotiator in their office was unable to settle the 2nd, and came to me for help. I will settle in 2 weeks, and they are amazed by my results. RTR is a 2nd collection who is hired after the 2nd’s are charged-off and the lender seeks help. These can be the hardest ones, and previous National City, who is now with PNC but the same group as National City, who was huge on 2nd and 3rd liens.
To most of those participating in my blog, thank you for helping rank it very highly on the 1st page of Google search, that was part of my intention. As a follow-up, I just closed on that transaction, to the extreme satisfaction of all parties. To Nick Curcio , who made a feeble attempt at promoting his own business while trying to insult me, I took your advice and let a very competent negotiator handle it.....ME. I will tell you that USAA was the most difficult 2nd lien holder I have dealt with to date, they are not satisfied with 10% and started with requesting 75% which was rediculous, then 50% (after taking 90 days to come to that equally rediculous offer), from an insolvent client. Even more frustrating was that USAA could not accept a promissory note as a partial settlement, because (get this!), their computer was not able to handle processing of a promissory note!
So if you do take a listing or bring a buyer to a deal where USAA holds (only) the 2nd be ready for a long ride. Better make sure that the buyer leaves room from actual market value, to deal with USAA separately. I would only hope that they get many future foreclosures/bankruptcies and lose any claim to payoffs, so they become more respectful of Realtor's time invested in getting a short sale done.
Hi Richard,
I am writing because I am in a similar situation with USAA right now. Chase is the first lender and has already approved the short sale and they will pay USAA $2,500. This is a VA short sale. USAA is HELOC and they started the negotiation asking 41% or the balance ($12,000). After going back and forth trying to lower their requested amount, their final answer is $6,637. Chase is not going to increase the amount that they have already approved. I tried to get them to increase it before they approved the short sale but they kept saying that that amount is the max the investor approves. I have not been able to find any guidelines for a VA short sale that indicates that payoff to junior lien holders, in fact, all I found is that VA doesn't pay anything to junior lien holders.
Could you give me any advice how to get USAA to accept Chase's offer? Do you, or anyone reading this blog has any knowledge of the allowance to junior lien holders on VA short sales?
Any help will be greatly appreciated.
I posted in a thread above, before seeing this. I used to try to be a jack of all trades and found I was master of none. I found a highly competant firm to outsource my short sales to, shortsalenegotiations.com. I now list and close 15-20 short sales, per month. By freeing myself from having to be on hold with banks and uploading forms, I concentrat on listing homes and getting acceptable offers. I was comeptant at negotiating too, or so I thought. I closed about 70%. I now close nearly 100%. This makes sense to me. I hope by throwing your hands up and letting properties go to foreclosure, without asking if there is a better way makes sense to you.
That is a good response. We are a law firm that works and streamlines short sale packages. I tell the agents and brokers to focus on listing the short sales, and leave the banks to me. I do this all-day everyday and work 5am to 9pm PST, which is why I am so good. The agents who work the files themselves can take longer, but have an average success rate, if they don’t run into issues, like value or foreclosure postponement. This is when the agents need help, since the lenders respect law firms who have lender contacts that will successfully close the short sales. They do a basic job and receive a basic approvals within an average of 60-90 days? The top agent in my area and #1 in sales for 20 years— he has had on going issues with a short sale on my street for a year and a half. I have asked him why he doesn’t let me take over and close the deal; he doesn’t want to lose his commission cut to pay me, so who suffers, the seller, yes? I get approvals in 30 days, and 100% success rate. Every short sale has an issue, never a dull moment, and this is when your bank contacts become most important, since they will expedite and/or resolve the issues right away. Most negotiators are new or have a power trip over the file, so if you piss them off, your file is doomed. So I usually go over their heads to the VP who trickles down to that section manager who takes control and gives fast results. Every file has a negotiator I can’t deal with, from lack of knowledge, or the fact they enjoy having power over this transaction, which results in value disputes and denial-all because the lenders hire these young people to handle serious issues that have families involved.
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