USAA 2ND LIEN, DONT BOTHER, LET IT GO TO FORECLOSURE!
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"!
Replies to This Discussion
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Permalink Reply by John Treadwell on
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I think with all the new changes your going to see all 2nd liens harder to just walk away from now. Ask for a promissory note, And I have done short sale now from 2005 ,and seen many changes, But the first thing is too be nice to the people on the other side ,because they will put you at the bottom of the pile . I have always found helpful numbers for higher up on Banks right here on this site. If you think USAA is a tough ,try being in 2nd with PNC or Green Tree Like someone said here don't give up just keep going back with a counter to the counter until all parties agree.
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Permalink Reply by Kim Christensen on
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Exactly, never give-up..... we are all saying this but some are already convinced is not negotiable. If you don’t respect the other side, they won’t respect you back, resulting in a bad experience. These u/w and negotiator’s know when you are difficult and frustrated, so always have a positive outlook and know you will settle eventually.
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Dear All:
First I would like to say thank you to everyone that contributed to this blog, and a little bit of apology along with it. To all the well wishers urging me to not give up, as anyone who knows me personally will attest that I NEVER GIVE UP...NEVER! Even when confronting association attorneys trying to prove to the association board how to play hardball... (they never count on me taking the buyer directly to the homes of board members to introduce a new potential dues paying member) or even an IRS Tax lien requiring subrogation.
Now.... the real reason I titled this blog as I have is, as a result of your wonderful input we are now at top ranking if anyone googles USAA 2nd lien, it is one power we have by creating a common voice. So Thankyou All!
Second, I have petitioned both my state association FAR and our national association NAR to write a position paper to 2nd lien holders. 2nd lien holders more often are playing russian roulette with their asset, knowing that we realtors will somehow make it work by holding our commissions hostage, especially after completing our work with the 1st lien holders. I asked them to write and ask the following, when the lender holding the 2nd lien who requests rediculous settlements even after we prove inability to pay any more or even insolvency, reveal how often they will agree when in first position to contribute above HAFA or even when non HAFA how often will they agree to contribute more than 10%.... the answer of course is almost never. the 2nd lien holders are holding our commissions hostage, and disrepecting our time and efforts, as well as discouraging the very benefit we bring to market by helping to relieve the market of distressed properties. I have found that as soon as I offer realty commission contributions, the 2nd lien holders satisfied that they have drawn blood, become reasonable.
So my fellow superstars, one way of handling this is by managing expections, since i am mostly a listing agent (although I also short sale negotiate upon request by buyers agent), i ask buyers agent to prewarn buyer when there is a 2nd lien, that should the realtors need to contribute commissions will the buyer be willing to reimburse those commissions up to an agreed level. This sets an expectation on the part of the buyer that he may need to bring more to closing, obviously this doesnt work with highly leveraged finance deals.
I will report the outcome on this transaction, but feel that we DO need to unite to demand our NAR to represent our interests by writing a position paper and demand a response to our inquiries. if we bring this issue to the forefront, and subject it to publicity we may be able to force more equitable treatment and respect. wishing you all quick closings!
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Permalink Reply by Nick Curcio on
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Richard,
You are a Real Estate agent. Your job is to put your homeowner in the best position possible. I have had numerous deals close with USAA as a 1st and a 2nd lien. You cannot be serious telling all agents not to accept USAA clients. This is like a child holding his breath because he did not get his way. If you did not have positive results from USAA, well I am sorry, but maybe you should outsource your short sales to a competent third party negotiator. Good Luck!!!
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oooh Nick, I do believe you tried to insult me. Didnt mean to get your panties in a bunch, or was that simply some self serving attempt at advertising your company.
Fact is I AM representing my clients best interests, and will get this closed, but not before USAA has attempted to create more aggravation than is necessary for my client. My client is an excellent candidate for a BK, and is trying to do the right thing by settling this in a short sale. My client currently has 3 other credit accounts with USAA, so it is in their own best interests to cooperate fully, and avoid my client's BK. That is the frustration: that USAA feels it necessary to waste precious time and efforts to come to the only conclusion possible, for their own self interests.
Finally, if you read my previous post you might understand my subtlety in titling this blog discussion, as I did, so other agents can read the entire blog, realize USAA is not impossible, however likely to waste precious time disrespecting BOTH Realtor and more importantly CLIENTS time, So each time you respond to it, you give my title higher SEO, and agents can read the entire thread and make their own decision. So Nick, sorry if I dont join you in singing Kumbaya with lenders, who refuse to standardize underwriting decisioning in cases like this, and make an organized approach to short sale 2nd lien decisioning, especially when the 2nd lien is not affiliated with the 1st lien holder, and it is not an investor owned note. Because if they did, then ALL real estate agents could handle short sale transactions and not pray to the supposed gods of third party negotiators.
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Nick is right. I used to bang my head against a wall trying to to negotiate and be an agent too. I now outsource my work to Shortsalenegotiations.com. My life is now easier because I let people who do this all day, every day handle things. I still read this to keep up with trends.
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Richard,
I, too, am a very experienced negotiator. I have 57 listings and close 10 per month. In fact, we just closed one on June 29th that had a second with USAA. Our client was not nearly in the predicament that yours is. And, we did not experience the same problems you did.
Being a short sale negotiator, you will run into lenders who are hard to work with and situations that you cannot close, despite your very best efforts.
However, you must always do what is in the best interest of your client - not what is in your best interest or what is least frustrating for you. Telling everyone to ban USAA is not the right thing to do. You should definitely speak to their "committee" or office of the VP in an effort to encourage them to be better. But, let's don't refuse to work with them. Because I can tell you from recent experience that they do close short sales.
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The #1 way to get what you want, is to go above the negotiator’s head. If the assigned negotiator says she has all the pull, and appears to make the final decision on approval letters verbiage, and/or settlement amounts. The fact client’s, broker’s, and agents hire me for good reason, since I deliver every time, and you know why? I have the contacts at most lenders that will get me logic and approvals, without going around in circles with incompetent negotiator’s and their section manager’s who just copy what the negotiator’s say, and usually know less then I do on the subject.
The #2 most important, is beating the lenders with a common strategy; they are not allowed to think outside the box, and that’s isn’t their fault, so we need to play the game better dancing around the rules and getting results.
Remember, if you don’t think you are getting anywhere with the assigned negotiator on buyer#1, and the value was higher then the offer, knowing they will deny buyer#1 soon, don’t stand there waiting for the results - beat it by getting out before the denial is issued!
The fact most lenders won’t accept a short sale file 2x’s with the same buyer they already declined in the past, they won’t allow the same buyer to come back in for reconsideration and this would be bad if there is a f/c scheduled.
Hopefully, other states will follow CA laws in short sales so everyone is protected. I believe if they make you accountable for the deficiency amounts, what’s the point in doing a short sale then? Really? Why go through the hassle to help lenders get a better price through a short sale, when they are giving you a hard time with settlement and refuse to get what they can, rather then an REO, which they will gain much less if a bonafide purchaser buys the property at auction.
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original note $50,000
clients payments with interest to date $26,000
remaining UPB as calculated by USAA including interest, penalties, etc. $41,000, (sorry my parenthesis was not placed immediately next to UPB).
50% of $41,000 = $20,500
a closing with rational negotiation...... priceless!
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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.
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We have had one short sale where USAA was in second position and they REFUSED to negotiate. We were on the line with USAA and the Seller and USAA made it clear that they would not settle for any amount other than full payment. The 1st lien holder agreed to sell it to our buyer after forclosure which they did.
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Permalink Reply by Jeri Groves on
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They basically refused with me, too, then insisted that the Seller pay the difference between what they would settle for (which was more than the 6% USAA in first position offered USAA in the 2nd position). We had proof that the 80/20 was ONLY used for the purchase and repairs, and they still wouldn't budge. My question is, how did you convince the 1st lien holder to sell it to your buyer after foreclosure??? I've got one like that now with PNC in first and Citi in 2nd, and it just may foreclose... Another with Nationstar in 1st and BOA in 2nd, and BOA has not OPENED THE FILE since submission on 7/2!!! Unbelievable!
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