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The question of whether to short sell a home in probate used to be rare, but now unfortunately it is not. There are estates where the owner dies, owes more than the house is worth, and a decision needs to be made by the Personal Representative (executor) as to what to do.

My opinion, try it. If it is in the best interest of the bank/investor to short sell rather than foreclose they will do it. If it is not, they won't and will take it to foreclosure.

So who benefits if the home is sold as a short sale?  Well the realtor for sure.  The commission is paid by the bank.

However, if the attorney's fees are put on the HUD1 statement (the statement saying who is paying for what and who is receiving what money) the bank may pay them.  Also, the payment to the personal representative can go on the HUD1. This would make it worthwhile for the Personal Representative to try and do the short sale.  This can be very handy if the representative is a Bank or Professional Fiduciary. 

The heirs do not get anything out of a short sale so it does not matter to them if the property is foreclosed or sold short, but it does matter to the neighborhood.  A vacant foreclosed home brings the other homes around it down, while a short sale is cared for by the realtor and even if vacant is not abandoned.

So should you bother?

I think so.

If you have any questions about probate or short sales, please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E.  01191194

I recently attended an online seminar regarding short selling and one of the speakers said something that really stuck with me. He said that many times when a homeowner is faced with the possiblity of being unable to make their mortgage payment(s) for whatever reason, they are not interested in learning how to short sell their home. What is important to them is how they can keep their home and not have to sell it.

While assisting Kansas City home owner's sell their Kansas City home is how I make a living, I have learned how important it is to share with others my knowledge of what may help them even though I receive nothing in return. Knowledge is Power!

So, let's start talking about what things you as a Kansas City home owner may be able to do to avoid having to sell your Kansas City home. As you may have heard, there is a government program called "Making Home Affordable". This program is also commonly known as "HAMP."

• HAMP is a program designed to assist struggling homeowners to avoid foreclosure by modifying their existing loans to an amount that is financially manageable. There are, however, certain guidelines that must be met before you consider applying for this program. One of the requirements is that the home must be your principal residence. There are eligibility requirements based on your finances as well. However, this is a very good starting point if your goal is NOT to sell your home.

If you don't know what to do if you are falling behind on your mortgage payments or you are currently facing foreclosure of your Kansas City home, Kansas or Missouri, please continue to read the upcoming posts and Request a Free Confidential, no obligation, analysis of your home and options that may be available to you to help reduce the burden you may have.

(There are potential tax consequences that should be discussed with a tax professional. Please do not interpret this information as providing legal, tax or other professional advice which you should seek independently.)
(Image courtesy jscreationz-FreeDigitalPhotos.net)__________________________________________________________________

About the Author:

Suzanne Hinton
Hinton Group-Affiliated with ReMax Premier Realty
Voted 5 Star Best in Customer Satisfaction Real Estate Agent
Phone: 816-520-0917
Email: shinton@remax.net
shortsellingyour kansascityhome

©2011 Suzanne Hinton-Hinton Homes-Kansas City Short Sale Realtor
Kansas City Short Sales

I got a chance to watch a couple of agents go at it with each other in a real estate forum trying to answer a question about doing short sales.   It was interesting, to say the least.  Besides the two main agents who proclaimed themselves the “experts” and hijacked the conversation, there were a few others who chimed in and made some comments.  But the question was never specifically answered.

The question posed was whether a lender will approve a short sale if the borrower had assets. He didn’t provide a lot of detail but wanted to either do a short sale or let his home go into foreclosure and he specifically asked not to get into a debate about the ethics in not paying his mortgage.    

The argument or “discussion” in the forum quickly evolved into a big debate about the ethics of what people considered to be strategic default.  One expert proclaimed it was morally and ethically wrong to engage in strategic default and the lenders would not go for it.  The other expert proclaimed morality and ethics had nothing to do with his decision and it was more about money.

As a San Jose Short Sale Agent, I tend to agree with the latter expert.  When you are dealing with short sales with lenders, the department you deal with is called Loss Mitigation.  Let me say it again:  Loss Mitigation.  Their job description is patently obvious: it is to mitigate or lessen the loss for the lenders. 

Yes, there obviously are moral and ethical implications of not paying your mortgage when you have the financial ability to do so.   I firmly believe you should pay when you can and live up to your contractual obligations.  However, the question posed specifically asked not to judge the ethical implications but sought opinion as to whether a lender would agree to a short sale when the borrower stopped paying and was headed towards foreclosure.   

There is no definite yes or no answer in these matters as the answer lies in the details.  It has a lot to do with how much assets the borrower has or does not have.  However, if the lender is faced between foreclosure and short sale, from my experience, the loss mitigation department chooses short sales over foreclosures.   At the end of the day, the primary decision will be about which method loses less money for the lenders, then, other factors like ethics and mortality can be entertained. 

Why do you think big lenders like Chase and Wells Fargo are offering people up to $35,000 to do a short sale without even verifying their financial information?   HAFA recently amended its rules to state that servicers are no longer required to verify any financial information, but only to collect signed hardship letters.  Do these actions by large lenders and servicers sound like they are overly concerned about the ethical or moral issues surrounding foreclosures?   

I can’t speak for other States, but in California, the recent changes in the law means if the lenders agree to permit a short sale, then the issues about deficiencies become null and void.  Once a short sale has been approved, the seller can walk away clean without looking over their shoulders.  Yet, another procedure that make completing a short sale more effective and efficient and preferable to foreclosure.  It’s all about money; if the institutions can make more money foreclosing, they will certainly choose that method, but everything recently is geared towards choosing short sales. Yes, the lenders hate strategic defaulters, but they hate losing money even more.    

So back to the question about would a lender approve a short sale if the borrower has assets?  It would depend on how much assets the borrower had and whether foreclosure would yield more money for the lender or a short sale. 

Is a Seller required to keep the air-conditioning running (to prevent mold) while the home is vacant before closing?  The home (short sale) I’m due to close on later this month is now vacant.  The tenant transferred the utilities to her new house when she moved out at the end of last month and I’m worried about mold setting in during these HOT Florida temperatures.  There is also a spa that will not be running.  Is there a law requiring the Seller to keep the home safe while vacant or is it just a moral decision for the Seller?

Not by a long shot! Although foreclosure activity has fallen all over the country it’s due to a glut of paperwork problems rather than any kind of improvement in the housing market.
Foreclosure activity has slowed due to scrutiny since last fall when banks had to do damage control over robo-signing scandals. Robo-signing involved allegations that employees were accused of signing legal documents without even a cursory review.
Home prices also continue to decline or at best remain stagnant. According to the S&P/Case-Shiller 20-city index the market is off by 4.5% across most of the country during May of 2011 compared to the same period last year.

This is from the Florida Association of Realtors(R) newsletter:

.........Banks have resisted a push to reduce principal owed by homeowners behind on their payments. One concern is that borrowers in good standing will stop making payments in order to lower their balances.

Bank of America has offered to reduce principal for loans in its own portfolio and for those the bank services for private investors, the person said. Loans owned by government-controlled mortgage giants Fannie Mae and Freddie Mac would not be eligible.

Of the 14 million loans serviced by Bank of America, half are owned by Fannie and Freddie. One-quarter are owned by the bank, and another quarter by private investors. Borrowers with a balance of $1 million or less and who live in their homes would be eligible. The homeowner’s monthly mortgage debt would have to be equal to 25 percent or more of their monthly income.

READ THE COMPLETE STORY

Short sale homes are some of the most sought properties in the foreclosure market.  They are popular with their affordable and inexpensive price which cause home buyers to prefer them over buying or building a new one.  Even investors spend a huge amount of resources just to find short sale homes.  

Short sale homes can be a profitable investment given in a right circumstances. A short sale means that the owner itself sells the house and apply the proceeds on his loan.  By this circumstances, a buyer can grab the opportunity to offer a good deal and negotiate well to the owner.

A short sale homes makes a lot of benefits.  One of these is that the home buyer can purchase the house for a cheap price.  The bank or lender can recover their money faster, and the home seller could avoid hectics in dealing with foreclosure.  

If you are planning to purchase a short sale homes, you can bargain for a better price and know how to make a winning offer.  You may be able to buy a property that is worth much more than what you have spent.

Planning to buy short sales in Phoenix AZ? You may check out Phoenix Homes for Sale.

Dear Valued Realtor:Please login to https://www.equator.com to complete a task or review a message that has been assigned to you for Short Sale processing. To reply or contact Wells Fargo via email, please log in and go to the Messages section. Thank you for your cooperation.

The message above was sent to me via Equator so that I could complete a task.  I've gotten a ton of messages from Equator from the good folks at Wells Fargo.  They want me to think they actually care about me and my clients.  The truth be told they really don't. 

Tuesday, August 2nd, is Foreclosure Tuesday here in Texas.  Foreclosures happen here on the first Tuesday of every month and only on that day.  So if I can get any of my pending short sales past that date,  I've got it made.  I have been using Equator for years and I'm very familiar with how it works.  All my files are under control with the exception of two.  They are going to be foreclosed on Tuesday despite the fact that they are both under contract with good offers and qualified buyers.   What is the problem?  Both of these files are Wells Fargo loans and the left hand doesn't know what the right hand is doing especially when it comes to Equator.    

One of the files is a VA loan and I was instructed to put it in the Equator  system.    I was given 8 tasks to complete and I completed all of them in record time.   At no time did they ask me to put in a 3rd Party Authorization.  Some nameless person using the "System" login was giving me numerous tasks to complete.  I answered their message and replied that, "Yes, we had an offer."  The offer was entered along with the estimated HUD 1, the buyer's prequalification and the buyer's proof of funds to close.  I did my job.   Then, Voila,  they disappeared.  I've had no contact since the 27th.  In fact,  everything I've put into the system has been deleted and says "file missing."   I have emailed every anonymous contact on the file including "Generic Negotiator at Wells Fargo.com"  That address bounces back as non-existant.  

My other  problem file  is a convential loan with Korean owners who do not speak English.  I usually bring a translator with me when we meet to facilitate the language problem.  This file has been in Equator since the 13th of July about the time I was notified that Wells Fargo was using the platform.  I again did what I was told.  The documents have been both faxed and input into Equator.  On the 16th we were instructed to have the Seller call in to discuss HAFA.  That's when this comedy of errors multipled!!!  Despite the fact that my clients already had a denial letter for a loan modification no one seemed willing to accept the fact that they wanted to do a short sale and attempt to preserve their credit history.  I made 2 visits to their home to help get us out of "active" loan modification.  We have all been calling for 2 weeks.  At no time when I was present did Wells Fargo offer to put on their own translator despite being told on every occasion that my clients do not speak English.   We have informed them over and over that the client wants to do a short sale and not a loan modification.  Wells Fargo was asked to pospone the foreclosure and we were told that it wasn't close enough for them to ask for a postponement. 

During this whole fiasco,  Wells Fargo implemented a "1 person contact"  policy for all their files.  This would make things simpler if we only had to reach 1 person instead of constantly being shuffled from contact to contact and then accidentally disconnected.  I was delighted to get her name and phone number.  I called her and left a message.  She called me back the next morning and asked that I fax all the documents to her, all 98 pages.  I did it,  and again no contact or response.  On Wednesday I called the Wells Fargo Foreclosure department and was told to fax in all the documents again because they couldn't help me delay the foreclosure without having the documents in their system.    They apparently can't see the documents I faxed to my "1 person contact"  I again asked for a postponement on the foreclosure.  I was told that as soon as the documents were in the system  they would request it.   They did request it. 

So here's what happened.  On Friday afternoon at 4:30, I called in to see the postponement had been granted.  I got a nice surprise fromWells Fargo.  The postponement was being denied because the request was within 10 days of the foreclosure.   I pointed out that the documents were in Equator since the 13th,  they had been faxed, refaxed and faxed again.  I was told by some moron in the Foreclosure Department that they couldn't accept the Equator documents.  ....and guess what?   All the documents have now disappeard and each one says "file missing."   I was even told by that someone, that Equator was not what they looked at. 

Wow!!!  So does Wells Fargo value me?  I think not!!!  If they did,  they would respond to repeated phone calls and system emails.  If they did,  they would treat me like I was a valued realtor instead of giving lip service to the subject. 

Because of the new law that was passed in Ca. July 15th, stating that 1st and 2nd lien holders can not pursue a deficiency, ask for cash at closing, or pursue any promissory notes,  Golden One sent my client a new revised approval letter releasing them of any promissory note. We closed the short sale on July 26th and the negotiator called the next day and said they were sending out a new approval letter that did not ask for the promissory note. I asked why to the negotiator, she said that the bank did not want any law suits. What a pleasant surprise for the client. 

Has anyone else had this happen? Anyone who had a closing after the law and the client has a promissory note or asked to give cash at close? In Golden One Bank. Of course our commissions were cut to 4% all along.

Kathy Dyer

Palm Springs, California had some interesting sales statistics for June, 2011.  What intrigued me is that my own Sales number almost directly reflect what the CDAR report states..my own business is running almost equal between Equity Sales and Distressed Sales.  The Equity Sales seem to be in the higher end, which means that median number they always throw around should be going up..if other Agents are seeing the same thing I am...

Market recovery has to include rising fair market (equity) transactions as well as sales in ALL price ranges to appear more stable, and that is wehat's happening here in the desert.

714 Existing family homes sold in June from Palm Springs to Coachella, including unincorporated Bermuda Dunes..this would be for Palm Springs, Cat City, Rancho Mirage, La Quinta, Indian Wells, Desert Hot Springs, Palm Desert, Indio and Coachella.  That's only a slight dip from June of 2010 when 747 units sold.  Of the total sales, only 48% were Short Sales or Distressed properties..meaning that 52% were NOT! 

Condos saw a slight decrease in sales in June at 227 over 229 last year, but the median went up meaning the more expensive units are selling.  Of total sales, only 37% were Short Sales or bank-owned..a large 63% were Equity Sales.

It just feels much, much better here in the resort desert that I live and work in...and that's a good thing!

The Federal Trade Commission (FTC) recently issued a statement that it would no longer enforce several provisions of the widely scrutinized Mortgage Assistance Relief Services (MARS) Rule. The MARS Rule required all real estate agents working on short sales to make certain disclosures to homeowners as well as banned the collection of up-front fees. In a July 15 press release, the FTC conceded that the MARS disclosures were "confusing customers and inaccurate in some contexts." The Commission issued an immediate stay on the enforcement of the MARS provisions to ensure the guidelines did not "inadvertently discourage real estate professionals from helping consumers with [short sale] transactions." The stay applies only to real estate professionals who: 1) are licensed and in good standing under state licensing requirements; 2) comply with state laws governing the practices of real estate professionals; and 3) assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes. The stay exempts real estate professionals who meet these requirements from the obligation to make disclosures and from the ban on collecting advance fees. These professionals, however, will remain subject to the Rule’s ban on misrepresentations.

History Of The MARS Rule

Enacted in December of 2010, the MARS Rule prohibited real estate professionals from making false or misleading claims and outlined several disclosures that had to be made by individuals offering foreclosure relief services, including short sales. The ban on advance fees went into effect in January, 2011. The rule applied to all individuals, as well as companies, who provided mortgage assistance relief services:

Section 322.2 DEFINITIONS (i) ‘‘Mortgage Assistance Relief Service’’ means any service, plan, or program, offered or provided to the consumer in exchange for consideration that is represented, expressly or by implication, to assist or attempt to assist the consumer with any of the following: and followed by subsection (6) Negotiating, obtaining or arranging:

(i) A short sale of a dwelling,
(ii) A deed-in-lieu of foreclosure, or
(iii) Any other disposition of a dwelling other than a sale to a third party who is not the dwelling loan holder.

While the authors of the MARS Rule specifically exempted attorneys from complying with the rule, they failed to provide a similar exemption for real estate agents. As a result, a number of real estate professionals immediately sought clarification as to whether they were considered a MARS provider and, therefore, subject to the rule.

Failure to Exempt Real Estate Professionals From MARS

As mentioned above, the FTC refused to explicitly exempt real estate agents from the MARS Rule because they felt real estate agents did not qualify as mortgage assistance relief service providers:

“The Commission concludes that an exemption for real estate agents is not necessary. Real estate agents customarily assist consumers in selling or buying homes and perform functions such as listing homes for sale, showing homes, and finding desirable homes for consumers. The Commission is aware that real estate agents may perform these functions when properties are bought or sold through a short sale transaction, but does not consider these services to be MARS.”

On the one hand, the FTC clearly intended for the rule apply to any real estate professional working on short sales. On the other, the failure to specifically exempt Realtors created widespread confusion among real estate agents as to whether they had to comply with the rule if they were obtaining, arranging or negotiating a short sale. The FTC's reluctance to provide an exemption for Realtors, as they did for attorneys, essentially deferred interpretation of the MARS Rule to local and national real estate boards.

NAR Interpretation of MARS

The National Association of Realtors (NAR) broadly interpreted the MARS rule to conclude that “negotiating a short sale of a dwelling includes any communications with a lender about the possibility of a short sale transaction involving a consumer’s loan.” Consequently, “anyone who provides short sale negotiation services is considered a MARS provider and subject to the disclosure requirements”. Based on this interpretation, NAR expressly stated that “the MARS rule could have an impact on real estate professionals who represent short sale clients or market themselves as a MARS provider or a short sale specialist”. The NAR opinion strongly encouraged all individuals handling short sales, while working under their licensed capacity as a real estate professional, to comply with the MARS disclosure requirements. As a result, real estate agents throughout the country were required to update their advertising materials and consumer disclosures.

The Revised MARS Rule And The Realtor Exemption

Less than seven months after enactment of the rule, the FTC stated that “the stay on enforcement applies only to real estate professionals who are licensed, in good standing under state requirements and in compliance with all laws. Anyone who meets these requirements is now exempt from "the obligation to make disclosures and from the ban on collecting advance fees.” The Commission said that the stay does not apply to real estate professionals who provide other types of mortgage assistance relief, such as loan modifications. While the stay of enforcement provides some relief to real estate agents working on short sale transactions, in that they no longer have to issue short sale disclosures, the FTC made it clear that they will closely monitor this industry and continue to bring enforcement actions against all real estate professionals who engage in unfair or deceptive acts or practices.

FTC MARS Exemption: Is it Good Or Bad For Short Sale Agents?

As someone who exclusively negotiates Massachusetts short sales, I depend on local real estate agents for a large portion of my business. Since the inception of the MARS Rule last December, I found that very few real estate agents were aware of the rule, let alone compliant. Seeing as many agents didn't issue the required MARS short sale disclosures, the exemption likely won't have much of an affect on individual short sale transactions.  By exempting real estate agents from the advertising disclosures, however, the FTC may have opened the door for more inexperienced real estate professionals to market themselves as short sale specialists without having any short sale experience.

Many real estate agents who were aware of the MARS Rule were reluctant to enter the short sale market because the disclosure requirements were extremely prohibitive with regard to advertising and marketing materials. Granted, the MARS rule will still be enforced against any real estate professionals engaging in unfair or deceptive practices, but it won't prohibit inexperienced agents from targeting distressed homeowners through mass marketing campaigns. One of the biggest problems in the short sale industry is the spread of misinformation, and by lowering the barrier of entry into the short sale market, the FTC MARS exemption may have the opposite result than that which the Commission intended.

Related Posts

National Association of Realtors: LIFE ON MARS

FTC MARS DISCLOSURES

Are Realtors Subject To The FTC MARS Ruling?

About the Author: Greater Boston Short Sales, LLC(GBSS) is Massachusetts’ leading short sale negotiator. GBSS assists buyers, sellers, real estate agents and attorneys with getting their short sales closed. Contact us today if you are a homeowner facing foreclosure or a Realtor seeking assistance with a short sale transaction. GBSS is a MARS provider. Please read our disclaimer HERE.

US Bank Short Sale Approved ~ Los Angeles Short Sale Agent

US Bank is approving Short Sales. US Bank has listed a Short Sale as an option on their website under Mortgage Help. Many homeowners in the Los Angeles & surrounding areas are finding themselves in a situation where they can no longer afford to pay the monthly mortgage payment, insurance, property taxes & property maintenance. If the mortgage balance is more than the home is currently worth, then a Short Sale would be an option. With any Short Sale, if you would like to attempt a US Bank Short Sale, it is best that you work with a Short Sale Agent that is trained and experienced.

Below is a sample of the approval letter obtained on a US Bank Short Sale. This was actually on my client's investment property. The US Bank Short Sale approval letter also states that they will not pursue the remaining balance (deficiency). So, if you are considering a Short Sale with US Bank, feel free to contact me. I am a Short Sale Agent in Los Angeles & surrounding areas. If you are located in another area, I can still help because I am part of a network of Short Sale Agents nationwide.

Los Angeles Short Sale Agent

US Bank Short Sale

I'm lookimg for a supervisor's phone number at Franklin Credit Managemnet Copr in Jersey City.  If anyone has a number please send it to me...I'm desperately trying to get a hold of a supervisor to save a short sale I'm working on.

Thanks!!

Jeremy,

Does your MLS offer the Fannie Mae Short Sale Assistance Desk.  If yes, then you may be able to speed up the process.  If the property is backed by a Fannie Mae loan (use the Fannie Mae loan look up tool at http://www.fanniemae.com/loanlookup/ to confirm, and if it meets the eligibility guidelines for submission to Fannie Mae for review (visit https://www.efanniemae.com/is/reprofessionals/pdf/ssadreferenceaid.pdf to review the guidelines),

Then, you should log onto the Assistance Desk on your MLS website, complete the online questionnaire and submit the issue to Fannie Mae for resolution.  This will dramatically cut through the red tape.  If your MLS does not have the Assistance Desk, you may want to encourage them to offer it to their subscribers.  For more information, contact ssad_information@fanniemae.com

Regards,

Gail

Hi, there are 3 deals that are ready to close, but the 2nd's are asking for 50% of the loan balance, and I just do not know what to do:

1) Realtime Resolutions: they have a balance of 140K, and are asking for 80,000 as a payoff. The 1st (B of A) has allotted them $6,000.

ANY ADVICE ON WHAT TO DO?

2) Strategic Recovery Group: they have a balance of 120K, and are asking for a $60,000 payoff.

3) Indymac: They are doing a BPO (Why would a 2nd do a BPO???)

If someone has any advice for me, please respond. I would appreciate any feedback.

Thanks,

Jeremy