Replies to This Discussion

Permalink Reply by Jeff Payne on January 23, 2012 at 8:01am

Good point Brian.  I too have attorneys who refer short sale business to me.   I do ZERO negotiating, I gather the paperwork that the lender requires and submit the short sale package, I communicate for updates from the lender and when we get an answer from them, I give the answer to the seller for their review and advise them to seek legal advice for anything that they do not understand.

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Permalink Reply by Bryant Tutas on January 23, 2012 at 8:32am

Wow you guys are cautious. I will go on record and state that I DO negotiate short sales. And I give my opinions based on experience if asked. What I don't do is give a legal opinion. Folks hire me for my experience and expertise. That's what I give them.

And I agree with Jeff that anyone can be sued. If I spent my time worrying about being sued I'd have to get out of real estate. But fortunate after 18 years in the biz I have NEVER even come close to being sued.

I'm excellent I what I do and I document everything. I feel confident that if I ever got sued I would have no problem winning. And of course that's why we carry E and O insurance.

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Permalink Reply by Jeff Payne on January 23, 2012 at 8:48am

Good points Bryant.  I still have to say that I process short sales as I don't know that I have ever negotiated with the lender.  I have relayed my sellers responses to them and I guess that could be negotiating :)

I have no problem telling people how short sales have gone in the past, based on my experience.

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Permalink Reply by Elliott Levine on January 23, 2012 at 10:56am

Jeff,

 

Our average turn around time for a short sale decision is 30 - 60 days.

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Permalink Reply by Elliott Levine on January 23, 2012 at 11:05am

Jeff,

 

What is your typical turn around time on a short sale ?

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Permalink Reply by Jeff Payne on January 23, 2012 at 12:47pm

Same 30 to 60 days.  I was more curious about how much time is spent on a file.

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Permalink Reply by Kevin - Greenville, SC on January 23, 2012 at 5:16pm

When it comes down to it the Servicer is not going to do anything they don't want do, unless ordered by a Court (and sometimes they don't even comply with that!).

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Permalink Reply by Matthew Fetick on January 23, 2012 at 12:44pm

Interesting reading.

Let's be clear here. Licensed real estate agents have a fidiciary relationship to their clients. I absolutely believe it is in my client's best interest for me, the person who has been in their home and has the best market knowledge to represent them in this transaction. Short sales are almost never disallowed by a lender based on hardship etc. On the contrary the battle is almost always over the value of the property. The person in the best position to discuss value is a licensed real estate agent practicing in that area. I outsourced my short sale negotiations to a law firm in Florida for 6 months with terrible success. Why? Because it always came down to value and defending the offer that was submitted as the best possible price the lender will receive. In the end, I spent more time sending the comps to the attorney than if I had just submitted them myself. 

Further, in the restatement/repeal of MARS, the government already clearly stated that negotiating the short pay off of a mortgage is NOT practicing law. On the contrary it may be illegal for 3rd parties to step into the transaction, charge a fee and profit for negotiating the short payoff. Read: http://ftc.gov/opa/2011/07/mars.shtm

I have no interest in making the short sale process more "expensive" by adding a 3rd party to the equation. Ever since taking back and owning the responsibility of negotiating the short sales myself I've gotten 100% of my short sales approved and only 1 did not waive the deficient balance.

I advise my sellers to have the attorney of their choice review the approval letter for which I am willing to pay up to $250. It certainly won't take more than 15 minutes for an attorney to review 2 paragraphs and issue an opinion.Only 1 has taken me up on that offer.

However, the attorneys that want to negotiate the short sales are attempting to charge ridiculous fees to do what the agent should be doing.

Let's keep short sales efficient, and contain costs so that all parties are well served.

An attorney can be sued just as easily as an agent which is why we both maintain E and O and General Liability policies. I'm no more exposed for a law suit than an attorney. And further, I think that if I need to defend myself any jury would look at the substantial volume of short sales I've negotiated and families that I have helped and look well on that, rather than some attorney sitting in an office, outside of the area trying to cash in on the process.

PS: Jeff CONGRATS on your high ranking. Those of us that sell at a high volume embraced the short sale business so that we could most effectively help our clients through these tough times.

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Permalink Reply by Pattilynn Guilford on January 23, 2012 at 12:57pm

Technically, short sales are simply debt mediation. Agents do not write the legal listing, nor the contracts, therefore they are not engaging in the unauthorized practice of law.

Then following the bank's narrative on what documents need to be submitted, the docs are submitted. With time the banks have basically set up systems and told us how and what to submit. In fact, lately they send Approval Letters without any 'negotiation'.

Agents are basically doing the bank's work of gathering docs and submitting without being compensated as an employee of the bank. But it is what we do to help distressed homeowners and to save homes from foreclosure and falling into the hands of the government to rent out.

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Permalink Reply by Jeff Payne on January 24, 2012 at 6:30am

Elliot, I already know that answer. I have personally met alot of these negotiators and it is easy to see where the problem lies. They are either uneducated and just go thru the motions of having a job or they are fresh out of college with a finance degree and this job is the job is all they could find or they are old loan originators, in all three cases they really don't care about or understand what they are doing

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Permalink Reply by Elliott Levine on January 24, 2012 at 6:40am

Jeff,

Believe it or not, most of the negotiators do not have a degree or any education. They get paid on volume,  declined or approved. Most are lazy and if the file requires any extra work, they will automatically decline it so they can receive their volume bonus. In most cases, they have the authority to make the decision on the short sale. The system is ridiculous and needs to be changed or this issue will drag on for many, many more years.

 

Kudos to you for your passion foryour client and your passion for this business. People like you are few and far between.

Lets find a way to work together !

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Permalink Reply by Jeff Payne on January 24, 2012 at 6:47am

I agree with you. Too many hired off of the street to fill positions, they are the worst to deal with. The negotiator with a finance degree trying to make a name for himself for a promotion is just as bad too. Pushing them off of their desk is the key. That is why I really like BofA and equator because it is very transparent and easy to escalate if needed. We have a dedicated person to escalate to but in the last year I have only had to do it a few times and I attribute that to equator and the negotiator being held accountable to their actions.
Since I started doing short sales about 6 years ago, the system has improved tremendously and I beleive that is in part to people like you and I showing the lenders that we are their solution and not the problem. Our masterminds we have with the lenders have helped the process tremendously because the lenders now see us a people with passion who are here to solve the problem

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