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Great article today about the big banks abusing borrowers before and after their HAMP loan mods.

Check it out

My  offer was accepted  from the seller on 3/20/11. The seller opt out of the HAFA short sale.  Sellers agent  received message on 6/3/2011 from equator  “The valuation for the property at XXXXXXX  is complete and we can move the short sale forward”  and then on 6/24 the agent received the same message? Whats next? How much longer to receive a response on my offer? The offer is at FMV.

Have a short sale w/ GMAC.

Buyers are offering 140,000 w/$6,000 back towards closing cost, prepaids & points.

Will a bank ever accept an offer with way over 3% of the sell price going back to buyers for closing cost.

Thanks,

Dee

Unethical? I think so.  Immoral? Pretty sure!  Illegal? Biggest question yet!

 I am in the middle of a short sale. I represent the buyer. The listing agent calls me and says we have short sale approval, move forward with inspection/appraisal. I ask for the short sale approval letter, which he flat out refuses to provide.  He says that the approval letter is between his seller and their bank. I explained that since the contract says 'subject to third party approval', it is part of the agreement and must be provided.

Since he was still refusing, I wrote an addendum to remove the third party approval. All of this seems OK, right?

It did until I had a clear to close for my people. He said the sellers arent' ready. (What?!?)  They have moved out of the house and they are now Not Ready?  This seemed pretty strange to me. The timing seemed to be right so there wouldn't be any problems with closing. I knew there had to be some clues in my file that I had been missing.

Once I went back through the contract and all of the addenda, I noticed the signatures didn't jib.

After jumping up and down with both title companies, I finally have the full story.

Our PA was not signed by the sellers, but by a LLC that was formed a couple of days before they listed the house on the market. The primary person of that LLC is one of the Attorney's that is negotiating the short sale.

The listing broker still seems to think we are clueless as to what is going on.

According to the title company, they do not even have short sale approval yet. Why in the world would he have told us to move forward with the appraisal/inspection then?

I think it is illegal to have someone sign a purchase agreement that does not have any ownership in the house. Period.

I am anxious to talk to my E & O Atty. on Tuesday to find what he says about this whole mess.

My sincere thanks to Clay and Kathie Kime, CDPE, for the reply to my inquiry.  I can't wait 'til tuesday, to talk to a supervisor... I love this website... Thanks, REGrow, and all those who share their experiences!

UNITED WE CAN!

 I just sent a HAFA request together with an offer to Chase for some clients.  Chase denied the relocation allowance of $3000 because they claim that under HAFA, if you already have an offer, they will do the short sale but won't give you any money to relocate.  The clients are "dead broke", and without the relocation allowance, they won't sell... they will just fight the foreclosure and wait it out as long as possible.  Does anyone have any ideas/suggestions?  Should we withdraw this offer, and try again in a couple of months, look for a new buyer, etc.?  If we do this, would the same happen when we bring in a new contract?

Thanks for your input...

If you like the rush, the careening highs and crashing lows that makes your Adreneline course through your veins like you've being chased by an unknown intruder..try a Short Sale!  What a rush!  What a ride!  Kind of like a huge roller coaster zipping along....up, then down..back up, then down..yippee!

Even if you're a list agent used to the stress, it is NEVER predictable.  The great ones blow you away because they are great-unexpected, but great.  The crappy ones (generally crappy negotiator driven), drive you to scream at the computer, and in my case, get up from my desk, steam around the house for awhile, do some stretches, perhaps throw myself into the pool for a refresher..whatever.  I come back to the computer with renewed vigor and energy..determined to overcome.

I have to admit I am an Adreneline Junkie..always have been.  Polo playing satisfies that physically, but mentally, I have found that Short Sales are a perfect parallel to the game of polo and keep me focused and driven.  I HAVE to beat the banks..I'm hyper competitive, and NOTHING gets me fired up like a challenge. 

So..Short Sales are not for the feint of heart, but if you're an Adreneline junkie like me..they fit perfectly..

When working with Massachusetts short sale candidates, the most daunting task always seems to be writing the hardship letter. All homeowners requesting a short sale are required to provide the lender with a hardship letter. The hardship letter is your best, and only, opportunity to explain to the lender why you are no longer able to afford your mortgage payments. Most real estate professionals make the mistake of viewing the hardship letter as a mere formality, or simply one more document amongst the many requested by the lender. That is a poor assumption and one that could prove costly at a later stage in the short sale process. It is no secret that banks are approving more short sales than ever before, but they are also rejecting short sales if they feel the homeowner's hardship is insufficient. As someone with a high short sale success rate, I can honestly say that a well-crafted letter, written by the homeowner, can be the determinative factor in getting the lender to agree to a short sale. Even though I have been negotiating short sales for about five years and reviewed hundreds of hardship letters during that time, I am still unable pinpoint what exactly makes a great hardship letter, but I can tell you a few things to avoid when presenting your short sale hardship to the lender:

Don't use a form letter or download one from the Internet

The loss mitigation department reads hundreds of hardship letters each and every day. You don't need to be a great writer, but you should be able to tell the lender, in your own words, why you are requesting a short sale. The lender does not care about your grammar and they certainly don't care whether your letter is typed or handwritten. The loss mitigation representative has one objective and that is to determine whether you qualify for a short sale. If you can't take the time to write your own letter, they probably won't take the time to read it.

Don't try to explain your hardship

Every letter the short sale department reads attempts to explain the unfortunate circumstances surrounding the inability to make the mortgage payments. Instead of focusing on the effects of the financial hardship, an effective letter should state the actual hardship event, such as divorce or loss of job, and move on to the next paragraph. If you are writing a hardship letter, the reader already knows that you are having trouble making your payments. Your job is to tell them the reason why you are no longer able to make your mortgage payments, not to get them to feel bad for you.

Don't blame others

Even if a loan officer from a bank convinced you to refinance and you used the equity in your property to pay off your student loans, this is not relevant to your request for a short sale. Instead of blaming others, take responsibility and stress the fact that some event, which was outside of your control, caused your financial situation to change such that you are no longer able to afford the mortgage payments. The financial documents you provide should support this assertion.

Don't blame the poor economy or collapse of the real estate market

If the real estate market didn't collapse, the person reading your letter wouldn't have a job. There are other ways to tell the bank representative that your property is no longer worth what it once may have been. Instead of blaming the poor economy, it may be more effective to highlight the fact that the property has been on the market at full price for over a year and you only received one offer. Showing the bank that you at least attempted to sell at a higher price only substantiates the current short sale offer price. The bank will examine a multitude of factors, including how long the property has been on the market and whether you have lowered the asking price, in order to determine whether you qualify for a short sale.

Don't write a novel

Some of the most effective hardship letters are no more than a few sentences long. Keep in mind, the person reading your letter most likely has hundreds of other files similar to yours. The sooner you can present the reader with your hardship reason, the more likely they are to approve your hardship request. Even if you have a great hardship reason, if you bury it on page three of you letter, the lender is less likely to read the pertinent portions of your  letter. In fact, some of the most effective letters are actually those which bullet-point the hardship reasons and simply refer to the financial documents as proof that you can can no longer afford the home.

Admittedly, there is no magic formula to writing an effective hardship letter, but if you can avoid some of the above-referenced examples and present the lender with a concise and informative letter,  you will greatly improve your chances of getting your short sale approved.  The hardship letter is one of the first documents the loss mitigation department reviews,  so if your letter fails to convince the lender that you are a qualified short sale candidate, it is highly unlikely that any additional information in your application will prove otherwise.

Related Posts

How To Qualify For A Massachusetts Short Sale: The Involuntary Hardship

Short Sale Tax Consequences: Understanding The Qualified Principal Residence Exemption

How Does A Short Sale Affect Your Credit Score

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.

So it seems to be a growing trend now that a buyers lender is demanding to see the lenders full blown short sale approval letter, not just the cover page with all the terms. In the past i have always taken the approval letter and removed the SS# and Loan# for obvious reasons. I got a call yesterday from a buyers lender demanding to see all the pages of the approval letter, that clearly have no information that they would need. They told me that they are getting bombarded with Realtors who are faking short sale approval letters to keep buyers around or maybe to buy themselves some time until they get a real approval. 

I'm calling our legal hotline tomorrow when its open, but i wanted to see if anyone had ran into problems with this lately? I would hope the NAR would weigh in on the issue. Seems as though we as Realtors are opening ourselves up to all kinds of legal problems if we start giving out anything a buyers lender demands just because we have scumbags ruining it for the rest of us.

Thanks!

There are many obvious reasons as to why an agent or broker would be necessary when you are selling your property.  From market knowledge to pricing to marketing, an agent is a good friend to have when selling your home.

But what about the buyers side?

Does a buyer really need an agent to represent them?  Well, being a broker I would have to say yes. But I will back up my claim with some very important reasoning.

First of all buyer representation is something that is really not all that old, but came about due to a lot of buyers being taken advantage of at the closing table.  There are things that a normal buyer really isn’t privy to nor should they have to be.  That is where a good agent representing the buyer earns their share.  They are there to protect the interests of the buyer and negotiate the best possible price for the property being purchased.

A good buyer agent will walk their buyers through the entire process and make sure that they understand the ins and outs of what is going on and why.  They are there to make sure that the correct inspections are requested and completed, they are there to make sure that any repairs that need to be done are done, and they are there to make sure that when the keys are handed over, both parties are walking away feeling good about the deal.

A buyer’s agent should be able to let their clients worry about other things rather than all the technical aspects of purchasing a home.  Buying a home should be fun and exciting, rather than stressful and unpleasant.

A good buyers agent will always work for their clients best interests, negotiate the best price and terms of a contract, see that all inspections and repairs are requested and completed on time, and will make sure that there is a smooth transition at the closing table.

Tim Brown
Owner/Broker, Realtor®, ABR,CRS,CDPE®
Auctioneer NCAL#8560
Hines & Associates Realty
TeamHeidi
Direct Line: 704-619-1008
Client Care Line: 704-815-3208
www.CarolinaHomes4Sale.com

Although we have done and successfully closed MANY short sales we will admit its ALWAYS a learning experience as the processes continue to change and new programs role out.....

Recently my partner and I were working a short sale with B of A thru equator.  Long story short we had it approved and the first buyer walked away.  We quickly got it back under contract.  The 2nd time around, after inputing all documentation in equator (initiating the short sale and uploading all documents under the library tab) we called the main line to confirm we were on track.  The representative stated the homeowner needed to call in to process the short sale further, which from our experience was rather normal.  The seller called in and discussed the short sale. Unbeknownst to us the B of A representative suggested to the seller to try and do the HAFA.  The seller told us of this and we said ok but was not sure if they would qualify.  

In the end what happened was the seller did NOT qualify and the banks suggestion to do HAFA was strictly without them pre-qualifying them to meet HAFA's requirements.  In this situation the seller hadn't lived in the property for 12 months exactly, which is one of the main requirements (must have resided in the home the past 12 months).

Lesson learned, which is when your clients call in make sure you see if they qualify for HAFA because B of A will NOT go thru the program in detail with the seller and also won't advise them on if they qualify.  So its our duty to understand each and every process and qualification for HAFA.

In the end we had to have the HAFA file declined in equator so we could initiate a traditional short sale on equator.  

So for some reason there two departments don't speak to each other, so we had to put everything back in and start over.  

Just wanted to share so you also don't get into the same situation of trusting that the B of A representatives are educated enough to advise our clients on HAFA.

Good luck!

Brett Hultberg and Doug Emerick

B & D Real Estate Group

480-510-8941 or 602-790-4963

bretthultberg@gmail.com or doug.emerick@gmail.com

Hi Broker Bryant. What does MI stand for? And why am I waiting on MI approval?

MI stands for Mortgage Insurance. The Mortgage Insurance Company is a major decision maker with a Short Sale. They are the ones insuring the loss. There are usually 3 entities involved in the Short Sale decision making process.

The Lender/servicer:

• The Short Sale request is submitted to the servicer (lender). This is Bank of America, Chase, Wells Fargo etc.. This entity is the one that lent the money or bought the servicing of the loan later. This is who Borrowers/sellers make their payments to. They take NO loss in a Short Sale as the loan was already sold to the Investor.

The Investor:

• The investor is Fannie Mae, Freddie Mac, Pension funds, Insurance companies etc.... To protect their investment they may purchase Mortgage Insurance based on the value of the promissory note. Or the Borrower may have purchased Mortgage Insurance when they took out the loan.

Mortgage Insurance Company:

• They insure the Investor's investment against loss. If the mortgage loan was for 200k then the promissory note is for 200k. The MI Company insures the investment for 20% to 35% or more of the original value of the Note. This figure depends on how much insurance the Investor or Borrower bought from the Mortgage Insurance Company.
  

Let's say the Mortgage Insurance is for 25%. The note is for 200k. Therefore, the Insurance will pay the Investor $50,000 (200,000 x .25) if the property is foreclosed on or the borrower does a Short Sale or Deed in Lieu. Plus, they may have conditions the Investor has to meet before they will pay at all. These conditions may be why the Borrower is asked to miss payments or participate in the loss by a cash contribution, promissory note or both.

So as you can see the Mortgage Insurance Company is a major player. They can make or break a Short Sale. I hope this helps.

Many people that are not close to the real estate industry ask us what the difference between agents, REALTORS and brokers are. It can be confusing because a lot of times individuals in the real estate professional can sometimes be lumped into a group together.

A lot of people use the blanket term “agent” to describe someone who is licensed in their state to buy, sell and negotiate the sale of real estate. An agent has taken the courses and has passed their exam as well as paid any necessary dues required.

A “broker” is similar to an agent in that they too are also required to take classes, pass an exam and pay required dues. However a person with a “broker” license usually has a little more education and experience that that of an agent. However, in the state of North Carolina, there technically are no real estate agents, but rather brokers. In NC you take the broker class and exam and are not given the option of just being an agent.

A “broker in charge” is a agent/broker that has been in the business for a specified period of time and now has acceptable experience in the real estate profession. A broker in charges job is oversee all of the agents and/or brokers that hold active licenses under him and the representing brokerage or real estate company. The broker in charge is responsible for the actions of all the agents and brokers under them and needs to make sure that everyone is doing their job and upholding the code of ethics and the law.

All the agents, brokers and brokers in charge all have to take classes and pass exams. That is how you get your real estate license. It is not an easy process and can actually be a lengthy one at that. Once an individual holds a license they need to have a broker in charge “activate” it and move their status from inactive to active. Once the individual holds an active license with a brokerage they can then become a REALTOR.

A REALTOR is an agent/broker that has applied for membership to the Realtor Association and has made an oath to uphold the REALTOR Code of Ethics and act in the best interest of their clients while still maintaining the respect and trustworthiness to others. Not all individuals that hold a real estate license are actual REALTORS. A lot of time people are so familiar with the term that they classify everyone in the real estate sales business a REALTOR. Though it is not required by law that a licensee be a member of the Realtor Association, many brokerages highly recommend it or even require it. Their resources and reputation give that extra bit of credibility to those agents and/or brokers that choose to be members.

Another area in which a lot of people are unfamiliar about is Designations. What are they? Designations are accomplishments an agent/broker has worked hard to obtain. Many of them are based on experience, while some are based on in-class courses and exams, and some are a combination of the two. An agent/broker that is equipped with a few designations is relaying a message of professional. A professional is someone that strives to better themselves in an effort to better the quality of service they bring to their clients. Designations come in all shapes and sizes and of course relevancy. No matter how you look at them, designations are another way agents are able to stay on top of the market, technology and your best interests.

Tim Brown
Owner/Broker, Realtor®, ABR,CRS,CDPE®
Auctioneer NCAL#8560
Hines & Associates Realty
TeamHeidi
Direct Line: 704-619-1008
Client Care Line: 704-815-3208
www.CarolinaHomes4Sale.com

Hi

An offer was submitted to Ocwen a month ago and we cannot get a live person on the phone just automation!  Does anyone have a good number that actually will not send you into the loop abyss?

Thanks

Los Angeles CA – I recently received an e-mail from another real estate agent. They were asking for our advice on a short sale.

They accused a large, national lender (one of the 4 largest in America) of lying to Fannie Mae. Fannie Mae is almost a subsidiary of the Federal Government

Here was the e-mail they sent us. ” The lender told the seller that they had to agree to a deficiency or the short sale would not be approved.

The seller said that was unacceptable. They told us they wouldn’t go thru with the short sale unless the deficiency was waived. We notified the short sale negotiator and he sent us a short sale decline letter.

The decline letter says buyer walked. That was a total lie! It appears that this lender told the owner of the loan, Fannie Mae, that the buyer walked when that was not the case.

But, he told us that Fannie Mae was making them do it. I think they are showing this to Fannie Mae to cover their butts! Steve.”

Our comments on this. This is a big deal. That lender’s legal obligation is to do what is best for Fannie Mae. Short sales usually reduce a lender’s losses by 20%, thereby netting Fannie Mae more money.

For this lender to do this is a blatant violation of their legal obligation. Fannie Mae’s policy is to not pursue short sale deficiencies. They just write off the loss and move on. We have sold many short sales where Fannie Mae waived their deficiency rights.

I think the short sale negotiator’s ego is getting in the way of a deal. They are probably delegated for Fannie. This means Fannie tells them to do whatever they want on behalf of Fannie.

The person not willing to waive the deficiency is this short sale negotiator. This is pathetic and should be investigated.

There is a solution to the problem. I would recommend calling Fannie Mae directly and let them know what is going on.

Thinking about a loan modification? Our Glendale loan modification kit will show you how to reduce your mortgage payment, keep your home, and get back on your feet. Send me an e-mail at cme4homes@jenniferescobar.com to request a Free Copy. Or, click here to request a copy.

Want more information about a California Free Loan Modification? Our FREE Loan Modification Services will help you get a loan modification approved with your lender. Click here to for more information regarding my FREE LOAN MODIFICATION SERVICES!

Thanks for reading this, Jennifer Escobar.

Jennifer is a Real Estate Agent at Qwest Real Estate.

My BLOG: CA Free Loan Modification Services | Los Angeles Short Sale

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