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Why Use A Short Sale Processor?

“No one can whistle a symphony. It takes a whole orchestra to play it.” 

Some agents will not touch a short sale file without their processor(s) and others are scared to relinquish any control whatsoever. We come across a mix of both and find that once an agent has a processor who adds enough value to their business they will never turn back.

A processor should know 10X than you about short sales and everything that goes into facilitating the transaction to the fullest. From client management, foreclosure postponement, servicer and investor guidelines, to completing a short sale with multiple mortgage liens, judgments, and tax liens, no transaction should be beyond your processors comprehension.

Many top producing agents see the following values in a high-end processor:

• Leverage others to free up time to prospect and build their business.
• Increase Value to clients with a loss mitigation team in their corner.
• Expedite and Stream Line Short Sale Transactions

How To Compensate A Short Sale Processor

There are a few different ways that you may be able to have a short sale processor paid that can keep you from coming out of pocket. If the deal doesn’t close, the processor shouldn’t be paid a penny.

Here a few ways to compensate a processor depending on servicer and state guidelines.

• Ask The Servicer To Pay The Fee On The Settlement Statement
• The Buyer May Be Willing To Pay The Short Sale Processing Fee
• Increase Commission Split Towards Listing Side To Offset Processor Fee Paid By Listing Side
• Combination Of The Above

Give me a ring at 1-800-692-9960 to discuss the value we can add to your business in the short sale and loss mitigation realm of real estate.

Brett@ishortsalenow.com

310-564-6389

www.ishortsalenow.com

The Wisconsin housing statistics are in for April of 2014. Here is an excerpt from what the Wisconsin Realtors® Association (WRA) had to say:

Wisconsin existing home sales fell in April even as median prices continued to rise according to the most recent analysis of the state housing market released by the Wisconsin REALTORS® Association (WRA). Home sales declined 11.6 percent in April compared to the same month last year due to a combination of higher home mortgage rates, higher prices and harsh winter temperatures. Median prices rose over that same period, increasing 1.4 percent to $139,900.

“As we enter the second quarter of the year, we have been expecting some improvement in home sales, but it’s important to remember that April sales are still impacted by the February weather given the 6 to 8 week lag between the time an offer is accepted and a closing takes place,” said Steve Lane, chairman of the WRA board of directors. He also noted that there were heavy snows in the northern part of the state as late as mid-April 2014. Every region of the state experienced a decline in April sales. The Central region fared the best, falling just 3.8 percent over the April 2013 to April 2014 period, followed by the Northeast region which dropped 8.5 percent over the period. The South central region fell 9.6 percent and the Southeast region saw a decline of 10.1 percent. Finally, the North region dropped 17.4 percent and the West fell 25.5 percent. Interestingly, home sales fell more substantially in the metropolitan counties which averaged a 13 percent reduction in sales in April compared to rural counties which declined 7 percent between April 2013 and April 2014. “This may be due in part to much tighter inventories in the urban counties compared to rural counties,” Lane said. Rural counties had just over 14 months of available inventory in April compared to just 6.9 months for metropolitan counties.

Below are the number of Home Sales and Median House Prices for the state of Wisconsin, Rock County, and Dane County. These stats include Janesville and Madison. Feel free to contact me if you have any questions pertaining to these figures. As you probably have heard, overall home sales & prices have been increasing over the past few years. This month however showed a decrease of home sales statewide, but an increase in home prices.

Thinking of purchasing a home before prices or rates rise any further?! I'd be happy to show you any homes currently listed for sale. Feel free to visit Home Listings in Rock County to search for current Rock County properties or visit Home Listings in Dane County for homes in Dane County Wisconsin.

Now might be the right time to sell your Wisconsin home. Feel free to take a look at our cutting edge Rock Realty Marketing Plan! If you would like some insight into how much your home is currently worth, I would be happy to provide you with a free comparative market analysis. This is a report that gives a close estimate to what your home might sell for in your current local Wisconsin real estate market. Click below:

What's My Wisconsin Home Worth?

Has your home value fallen below what you currently owe? Have you experienced a hardship like divorce or job loss? A short sale may be right for your situation. Visit our page on Wisconsin Short Sales for more information.

Rock Realty Client Testimonials

"We found Mike online, and, due to positive reviews, phoned him with a request to view houses in the Madison area. We gave Mike no more than one or two days notice, but he was happy to devote the whole of his weekend to us. Our entire house-hunting experience proceeded in similar fashion. We were hunting for houses long distance, so we would wait until an opportunity to travel to Madison presented itself, phone Mike, giving him one or two days to prepare, and show up to view houses. The process took roughly one year to complete. It was long and difficult, but Mike was always pleasant, never complained, made an effort to make himself immediately available, and was never pushy.

Mike is not like many real estate agents who simply want to make a sale, any sale. Instead, Mike made an effort to help us make an honest assessment of the properties we viewed, often pointing out problems himself. Mike left us with no doubt of his honesty and his dedication to his clients.

In addition, since we were shopping long-distance, Mike, with some help from his associate Bethany (who we found to be similarly pleasant and eager to be of service), even took hundreds of high definition photos of properties which he viewed in our stead, often with only a single day's notice. Mike, or one of his associates, would then promptly email the photos to us to view.

During the house-hunting process we changed our minds a number of times, imposed last minute requests, and even had some near melt-downs, but, through it all, Mike was responsive, cheerful, and level-headed. We cannot overstate how hard Mike worked on our behalf. We highly recommend him to any home buyers."

Graham S. & Janet H. (Middleton, Wisconsin 53562)
Rock Realty Home Buyer Client

Thanks for the compliments, and Congratulations on your new home Graham & Janet!

Looking to purchase a home in Wisconsin?? Contact Rock Realty! We would love to help!!

Helping a home owner prevent foreclosure is a noble cause. Those realtors who wish to commit themselves to this cause are entering the path of Enlightened activities. However,  not everyone will be a success. It is more profitable to flip homes than work on a short sale for months only to see your efforts fail.

There are many challenges like negotiating liens, voluminous documentation, high wait time and an aggressive first mortgagee trying to foreclose the property. Such challenges do not exist on a normal real estate transaction. A reator entering this path will need to not only familiarize themselves with the technical aspects but also train their mind to develop certain special qualities.

This website does a good job of helping realtors with the technical aspects through a course and through the forum. When like minded people get together, they can encourage each other. However, I want to talk about training the mind to develop special qualities so we don't abandon our cause.

First,  we must try to remember that many people have helped us when we have been in distress and the high esteem in which we hold such individuals. Compare them with selfish individuals you have come across. You can then see clearly that you'd rather be the former than the latter. This is the first training.

Second, we develop the understanding that this could happen to anyone. Many people experience financial difficulties due to poor economy or not being able to work due to illness etc. Loss of job or reduction in income are the most common reasons due to which  people are unable to make  their mortgage repayments. This can happen to anyone. We must develop the understanding that this can easily happen to us.

Third, we develop a commitment to the cause. We must not look at a short sale transaction as just another transaction. We do not want to just go through the motions. Having realized that we want to help others and having understood that this could happen to us, we must seize the opportunity to rescue the home owners from their plight. This happens when we have committed ourselves to the cause. Every morning when you wake up tell yourself that today you will save homes from being foreclosed. You will save a family from the social and financial trauma brought about by a foreclosure.

Fourth, is awareness. Aware of the stress that such transactions can cause we can be better prepared. We have all experienced stress and if we did not like the experience chances are that somebody else will not like it either. By offering our presence to our clients we put them at ease by bringing them in contact  with our solidity.

Fifth, we must be vigilant. Many things can go wrong. By being vigilant we can prevent that from happening. Always keep an eye on the foreclosure clock. Check if you have standard documents like hardship letter, pay stubs etc. Some lenders frequently lose items or may deny having ever receiving them. Know where you are with each transaction at all times.

Sixth is developing the very valuable quality of patience. We have to tell ourselves that this will take time. You can negotiate a lien for 30% quicker than for 10% but that can kill the short sale. Be patient and help others do the same.

Seventh is perseverance. Perseverance is the ability to overcome difficulties that come our way. No agreement between the first and second lien holder. Unrealistic timelines set by the first mortgagee. Non responsiveness. These are commonly encountered challenges that we must overcome.

Eight is meditation. Take a glass of water. Add a few spoons of sand in it and stir it. That is the state of our mind. Now wait for the water to be still. The sand settles at the bottom and you can see clear water. This is a mind post meditation. By meditating we create conditions for wisdom to arise. We stop negative seeds like selfish desires, greed and frustration from germinating and we remind ourselves of these nine qualities and improve every day.

Finally, the ninth quality is wisdom. The understanding that we are all connected to each other and no one can do anything arbitrarily. While one idiot with poor knowledge can ruin it for others, this also means that we can make it a success. Make sure that you drive the transaction. Be clever. This realization will help you take almost every transaction to the desired conclusion.

Helping others is an activity of the Enlightened. Welcome to the path of Enlightened activities!

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Saurabh Singh is a student of the Vietnamese monk Thich Nhat Hanh and is currently employed with Altisource. None of the views expressed in this post are endorsed by his employer.

I just got an amazing approval on a Crestview Florida VA Compromise Sale from BB&T!  You know the Veterans Administration requirement that the net proceeds of the sale be no less tham 88.13% of the appraised value? And the requirment that the VA Compromise Sale appraisal is firm for six months? This was a breakthrough approval that was about $25,000 less than 88.13% of the appraised value!  How did I achieve this?

First, some background. The Crestview Florida home on a few acres needed work. There were signs of a previous roof leak and rodent damage. This was detailed in a home inspection report for a buyer who had "walked".  His offer was the one that triggered the VA liquidation appraisal that was ordered by BB&T.  I had noted the problems in the MLS, including a copy of the inspection report with the buyer's permission. These facts were apparently ignored by the VA appraiser.  

After three months, and excellent communication with the BB&T negotiator, I precariously lowered the price. Yes, LOWER than what would net the holy 88.13%. She said she was a firm believer in doing anything you could to help the military servicemember and she would fight for an approval even if we were low. (Go BB&T!) Finally, an offer came in.  To support our case of lower value, I provided the negotiator with a report of all the feedback from showings, such as:

5/16/2013 There seems to be quite a bit of water damage to the ceiling in the front bedroom. This buyer is retiring and does not want to "fix anything up". I don't think we will be writing an offer

4/29/2013 the house smells like animal pee and it's strong. This turned the buyer off and he's looking elsewhere. I've shown this house twice now and it does not show well. Not sure what can be done other than sealing the floors and putting in new carpet.

4/18/2013 their concern is the roof it appears there is an active leak and erosion

In addition, I provided a copy of the previous buyer's home inspection. The BB&T rep sent that along with the contract, HUD and buyer pre-approval and home inspection to the VA. She said the VA tech replied "Rodents! This cannot be good!".  72 hours later, the VA Compromise Sale was APPROVED.

Many short sale lenders don't assign a "permanent" negotiator like BB&T to a VA Compromise Sale. This direct line of communication and caring representative was critical in getting the approval. What can you do if you are dealing with any other lender, such as Bank of America or Wells Fargo, who are much more dogmatic about VA Compromise Sales? You can try as I did, or speak directly with the VA. Email vastaffappraisers@va.gov.

It's Wendy!

- See more at: http://activerain.com/blogsview/3804884/how-to-get-a-va-compromise-sale-approved-netting-under-88-13-#sthash.XeXwm44v.dpuf

How to Pick Profitable Rental Properties

(Investment Properties: Part 4 of 5)

From looking at various homes to actually making a profit, investing in rental properties takes many steps. A person that is new to the process may feel a bit overwhelmed. In order to reduce risk and increase your chances of making positive cash flow with real estate, here are some tips on picking a home.

Good School Zone

A good school zone will always attract families. Many families will be able to purchase homes in the area but some will have to rent a while in order to get their finances in order. These are the types of people who will stay in a home for 2 or 3 years and be potential good tenants. Focus on schools that have high standardized test scores and achieve well in the areas of math and science.

Avoid High Crime Areas

This may seem obvious, but it needs to be pointed out. Homes in areas that are subject to more than average rates of crime will be tough to rent out. Furthermore, the crime rate will drop the rental rate. This can cause a breakeven or even net loss on the monthly cash flow.

Demographic of Neighborhood

Each neighborhood will have its own miniature set of demographics. A community next to a college or university will likely be made up of homes rented almost exclusively to students. An older neighborhood with higher priced homes will likely have couples that are middle aged and higher. Study the neighborhood carefully to make sure there is an available market of tenants that fit the demographic.

Employment Opportunities

Another factor that can heavily influence the profitability of a rental property is the number of available jobs in the nearby area. A new factory, expanding hospital or growing university are places that will add on more people and need them for full time work. Many times people will obtain a job first and then start looking for nearby homes to rent. Sometimes these people can be short term renters but it is possible to find someone that locks in a home for 2 or 3 years.

Check for Vacancies and Homes for Sale

For a new subdivision that is under construction it is common to see multiple signs indicating new homes for sale. However, for an established neighborhood, a high number of for sale signs is a kiss of death. This typically indicates that the area is on the decline. An even worse condition is the presence of several vacant homes. These are homes that have been abandoned for various reasons. Steer clear of these areas in your own best interest.

Be on the Lookout for Problems from Mother Nature

Some areas are more prone to natural problems than others. Issues like flooding, mud slides and tornadoes seem to be attracted to certain areas. The insurance for properties in these areas can be quite high and chip away at the monthly cash flow for the property.

Finding a good property based on these guidelines does not automatically mean that your home will be a cash cow. However, it should increase your chance for success in a very lucrative type of investment.

Investment/Rental Properties (5 Part Series)

• Preparing to Purchase that First Rental Home (Part 1 of 5)
• Adding the Title of Landlord Behind your Name (Part 2 0f 5)
• Rental Property is Still a Safe Investment (Part 3 of 5)
• How to Pick Profitable Rental Properties (Part 4 of 5)
• Success Plan for Investing in Rental Property (Part 5 of 5)

If you have a client that has a just filed or soon to be filed residential foreclosure action in Florida, what new timelines can you expect under the new Florida Foreclosure Law?  Effective with all NEW lawsuits filed on or after July 1, 2013 the new streamlined foreclosure procedures law will govern how fast the lawsuit will proceed – or at least that is the theory behind the new law.  Reality can be quite something else.

Under the law as it existed before June 7, 2013 (the date Governor Scott signed the legislation) an uncontested or minimally contested foreclosure action could take about 110 days from start to finish PROVIDED the lender’s attorney did all the things the lender’s attorney could do under Florida’s Rules of Civil Procedure when they could be done.  For example, a foreclosure action usually results in the Lender counsel waiting for the time after service of process of the lawsuit on the defendants and then filing a Motion for Summary Judgment of Foreclosure.  The reality is that most lender counsel don’t jump on getting the Motion for Summary Judgment filed and the Motion then set for a Hearing date until days or weeks after the soonest date one can be requested.  The procedural rules provide that the lender attorney cannot set the Motion for Summary Judgment for hearing sooner than 20 days from the date of the filing of the Motion for Summary Judgment.  Many courts today are have busy schedules, so it may take 30 days to get a hearing, thus creating a 10 day delay. 

Under the law (click here for a copy of the bill) as it will be beginning June 8, 2013, these timelines are supposed to have been changed.  …………

One part of the legislation actually asks the Florida Supreme Court to create an expedited timeline for foreclosures in the Florida Rules of Civil Procedure.  These Rules are created not by the legislature, but by the Florida Supreme Court.  Almost all of the 110 days that I mentioned above are from time requirements set forth in the current Florida Rules of Civil Procedure.  Since the legislature cannot change those timelines, it has asked the Florida Supreme Court to do so.  So the changes in the entire procedure in Florida are not over yet and there is actually no real “EXPEDITED” in the new law – at least not for now!

Some changes that will affect borrowers:

Deficiencies

The existing deficiency law allows a lender to pursue a deficiency as late as anytime before 5 years after the foreclosure sale date.  The revision now states that any deficiency judgment must be sought within one year from the foreclosure sale.  Further, in the case of owner-occupied residential property, the amount of the deficiency may not exceed the difference between the judgment and the FMV as of the date of the sale. There is also a rebuttal presumption that a residential property for which there is a homestead exemption is an owner-occupied property.

Finality of Mortgage Foreclosure Judgment

Presently, if a mortgage foreclosure judgment and sale is set aside, the title reverts to the borrower.  Under new Fla. Stat. 702.036 any action to set aside, invalidate, or challenge the validity of a final judgment of foreclosure or to re-establish a lien or encumbrance is relegated only to monetary damages if certain conditions are met: 1) proper service, 2) final judgment was to the property, 3) appeals periods have run, and 4) a non-affiliated third-party bidder purchased the property. The statute then goes on to address the rights of the true owner/holder when that final judgment is received via a lost note affidavit.

Lost Note Affidavits

Fla. Stat. 702.015 is created to address a lost note affidavit for residential loans by requiring threshold requirements in the initial pleadings.  The complaint must contain affirmative allegations as to it holding/owning the note and its entitlement to enforce them. Further, in the alternative, the complaint must contain allegations as to how the right to sue was delegated to the plaintiff if it is now the owner/holder. Lastly, contemporaneously with the complaint, a plaintiff must file a certification regarding the original note. In addition, when the complaint is filed a plaintiff must file its lost note affidavit.

Lost Note Indemnification

A big deal is the new indemnification requirement.  This is important because the prior law did not have any baseline standard for the lender guarantying to the borrower it would AND COULD defend any claims that someone else held the promissory note.  Fla. Stat. 702.11 is created to state lost note indemnification means 1) a written indemnification agreement, 2) a surety bond, 3) a letter of credit, 4) deposit or cash collateral,  or 5) other security the court deems appropriate.

Timelines

The new timeline for an expeditiously lender attorney handled residential foreclosure I think will remain the same – for now!  Until the Florida Supreme Court creates new “expedited” rules of procedure, I do not see the timeline changing under the new law.  I will stick to my 110 day start to finish timeline that I proposed years ago – that can still work today.  See FORECLOSURE PROCESS FINISHED IN 100 DAYS?  BUT - now you say that most realtors say that foreclosures take years, not weeks.  Although it is true that there are foreclosures that have taken since 2008 to get resolved in 2013, that was the result of situations and forces that no one could have predicted (and no one did predict that log jam scenario, further aggravated by a moratorium on filing foreclosures, another delay no one predicted).  Timelines are based on technicalities but they are subject to the vagaries of human conduct, mostly caused by distraction and personal priorities.  Lately we hear of foreclosures taking 5 months in Florida.  That's 150 days and close to the technical line of 110 days, so reality and possibility are becoming aligned.   My experience is getting away from the major population centers creates a courtroom atmosphere were there are far fewer pending cases and thus fewer delays both from excess work vs. available time, to simply the number of pending cases.  Whatever the reason, now more than ever your clients need to understand the race of the FORECLOSURE EXPRESS VS. LITTLE ENGINE THAT COULD .

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© 2013 Richard P Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660  RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com. 

See our easy to find articles at

TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

Unfortunately, not all Short Sale properties that are listed for sale in the Los Angeles area will close escrow. First, what is a Short Sale? If a home's current market value is less than the mortgage balance owed and the homeowner (borrower) cannot afford to make the mortgage payments, they will ask their lender(s) to take an offer from a buyer and approve a Short Sale. This a very different type of sale compared to the traditional real estate transaction. Not all real estate agents will have the training, knowledge and experience that is required with a Short Sale. So, choosing a professional Short Sale Realtor is important. The homeowner is already having a difficult time and does not need to become the agent's first short sale experience. 

If a trustee sale date has been set or the foreclosure date is soon approaching, that could put the Short Sale at risk. The Short Sale Agent and seller would have to work on getting the short sale package to the lender quickly and then, the agent must insist that the lender postpone the foreclosure sale so that there is time for a Short Sale. So, it is better not to wait if you are planning on a Short Sale. 

Sometimes, a lien or judgment will show up that affects the title of the property besides the mortgage loans. These liens or judgments must be cleared before a sale can close. Liens may include past due homeowner association (HOA) fees and state or income taxes. Judgments may be as a result of unpaid credit card bills, for example. 

Other reasons that a Short Sale might not be successful: 

All Short Sale lenders will require an appraisal on their behalf to obtain an estimate of the fair market value of the property before they approve an offer. Sometimes, the appraiser's value will come in "high" and the lender might want more than a buyer is willing to pay for the home. The Short Sale Realtor should be able to work with the lender to dispute the value (if that's the situation). 

If there is more than one mortgage loan involved, then a second lender will need to approve a certain amount of money for their settlement as part of the Short Sale. The first mortgage company dictates how much of the Short Sale proceeds they are willing to allow to the junior loans. If the junior liens want more money, there are ways that it can be satisfied. 

It is also important that the buyer that is purchasing the home be serious and qualified. The buyer should be able to obtain financing (unless they are paying cash) to complete the purchase of the short sale home. If the buyer cancels, another buyer has to be ready to go.

However, there is good news-- my Short Sales have been successful. So, Short Sales do close!

Note: While I was in the process of writing this article, I received a phone call from a short seller that had a trustee sale date within a couple of days. The homeowner was upset because they had hired a real estate agent to work with their lender on a Short Sale and the realtor did not properly communicate with the lender so the bank was not postponing the foreclosure sale. Seller was NOT happy. 

Google+ Sara Mehrpouyan CDPE is an Experienced, Knowledgable, & Trusted Short Sale Realtor Agent in Los Angeles area

los angeles short sale realtor agent

source: http://activerain.com/blogsview/3765671/are-all-short-sales-in-los-angeles-always-a-success-

With foreign buyers again flocking to buy United States real estate, it is important as a Buyer Realtor to remember to advise them of their obligations and liabilities when they sell it.  FIRPTA (Foreign Investment in Real Property Tax Act) has been around for decades, yet many Realtors forget to tell their foreign buyers of the implications of FIRPTA when the foreigner is looking to buy, thereby possibly short changing their client on options and surprising them with expenses when they sell.

Some Basics:

There is no tax when the property is purchased - it is when it is sold.

A corporation owned by a foreign national is generally subject to FIRPTA.

If a married couple owns the house and one spouse is foreign, then the foreign spouses' one-half interest is subject to FIRPTA.

If a married couple owns the house and one spouse is foreign but is deceased, the deceased interest is still counted as being foreign owned.

The way FIRPTA works, at the sale the closing agent or the new Buyer must withhold and submit to the IRS 10% of the sale price.  Note, that is 10% of the contract sale price, not the net to seller!  The Seller then needs to file a tax return and either pay the additional tax (if more would be due) or seek the refund.

Short Sale transactions are NOT exempt and require the tax be paid.

There Are Some Areas of Relief:

You can apply for an Exemption Certificate from the IRS, which as of now takes about a month to obtain.  If you have no one familiar on how to do it, our firm can do it for you. The Exemption Certificate sets forth the financial aspects of the prior purchase and the present sale of the property and shows that no profit is being made, and thus the IRS will issue a certificate to that effect, exempting the closing agent/buyer from having to withhold the 10% of the sale price.

If the property being sold is residential property and the sale price is under $300,000, and the Buyer will sign an affidavit that the Buyer and family will be the exclusive user of the property for half of EACH of the next two years, then the closing agent can rely on the affidavit and not collect the withholding 10% tax.  A bit weird but many transactions fall into this category.

If a foreign corporation that has elected to be treated as a domestic corporation and furnishes the buyer with a Non-Foreign Person Certification (Entity Transferor), then no withholding will be required.

See my previous articles on FIRPTA here on ActiveRain at FIRPTA and SHORT SALES - DANGEROUS LIABILITY TO BUYER AND CLOSING AGENT and at SHORT SALE AND FIRPTA TAX WITHHOLDING - IRS ISSUES PRIVATE GUIDANCE.  The IRS law on FIRPTA can be found at Foreign Investment in Real Property Tax Act of 1980.

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© 2013 Richard P Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660  RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com. 

See our easy to find articles at

TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

Good morning Superstars,

Here's a sampling of this week's Superstar discussions.

Discussions	Replies	Latest Activity
Principal Curtailment Payment Hey Everyone, This is a first for me. We are working with a short sale and there are two loans on the property. The first is a fannie ma… Started by Freddie Castaneda	17	14 hours ago Reply by Kimberley Kelly
BofA PFS Short Sale / Deficiency Waiver? I have a BofA short sale... We just got the approval letter. However, we cannot figure out where it waives the deficiency. When I ask BofA… Started by Matthew Jeschke	2	yesterday Reply by Kevin - Greenville, SC
Franklin Credit Management Help I just got an approval letter from Franklin, 2nd lien, saying that they will only release the trust/lien, but will reserve all the rights t… Started by Trong Dang	1	yesterday Reply by Ron Scribner
Junior lender declines HAFA approval We have had a lot of recent success with our short sales, but we have just now experienced first hand, the drastic changes coming to our pr… Started by Erik Larson	15	yesterday Reply by Ron Scribner
4 Liens and no cooperation... Short sale with four liens: BOA first will only give second 734 will not budge SLS second Demanding 1500 will not budge One credit card wit… Started by Dawn Maloney	29	yesterday Reply by Dawn Maloney
Secret Appraisals This is a great article that I have read and re-read. Kudos to Bryant Tutas for writing and sharing it. From "Short Sales Are Serious Busin… Started by C. McBee	2	yesterday Reply by Bryant Tutas
Updates on Fannie Mae & Freddie Mac Inflated Value Issues Just looking for any input on others experiencing the Fannie & Freddie inflated value issues. Any recent updates or solutions? I have… Started by Raymond Kennedy	38	on Friday Reply by Kevin - Greenville, SC
VA not responding to Chase Chase picked up a loan the first week of March from Met Life. We turned in a full package the first week of March as soon as Chase assigned… Started by Holly Jessop	4	on Friday Reply by Kevin - Greenville, SC
FHA and Chapter 7 Good morning Superstars, I am working a short sale where the seller's moved out of the home and are renting a home for cheaper than their… Started by Marlon Rankine Do You Need More Short Sale Listings? Short Sale Superstars wants to make generating Short Sale leads easier for you. So..... .....here is a FREE one hour course on Short Sale Lead Generation that may help you. Let's make 2013 a banner year for Short Sales. Together we can help a lot of folks avoid foreclosure.	1	on Thursday Reply by Brian Avery

The corruption of the banks continue here still in Las Vegas! Us Bank approved a short sale after 8 months of gruelling work only to delay in approving the final closing Hud ( nearly two weeks ago).  The Presidential office now inform me they are rescinding the agreement as they state the seller makes too much money!  This after they already approved sellers based on pay stubs and current tax years.  Anybody else have a similar experience?  We are starting the fight and intend to expose these crooks.  Complaints to our local congress and OCC  are in tow.  Any intelligent suggestions would be appreciated.

Short sale listings are different from listings where the seller has equity. When we receive an offer on the listing and the seller agrees to the price it does not mean that the lender will accept the price. We mention a settlement date in the original accepted offer but may not hear from the lender until after that date.

When I receive offers on a listing I talk to the buyer agent and explain how the process works and also state that it is important for them to provide any information requested as soon as possible and that we usually get only 3 days . I also tell them it may take time and to make sure buyers have the option to extend their lease . 

                         Here are some things buyers and buyer agents  should be made aware of :

1.  These days lenders are pricing the homes at close to market value so do not expect 'to steal ' the house in some markets.

2. If it is an ' as is '   sale, figure out the costs of use and occupancy permits, possible  lender required repairs and other repairs before making an offer.

3.  If it is a short sale, if the seller has signed it, it does not mean the sellers lender wil agree to  the price and terms. Be prepared for a counter offer. You often have only 3 days to accept , counter or reject the counter offer and you may not receive this counter  offer for weeks .

4.  Once the offer is accepted by seller's lender and signed off by lender , in short sale,they  may  expect buyers to close in 30 days..

5. If it is a short sale , do not give notice to your current landlord until you know when you are closing. If you are required to give 60 days notice, you may have to be prepared to lose one months rent.

6.Different lenders have different policies so ask your agent to find out from listing agent about what the lender expects in terms of closing date. You will also receive an addendum from the seller's lender , that you have to sign .

7. Have buyers sign the short sale addendum and make them aware that it is a short sale.

8.If the buyer agent is going on vacation ask them who will cover for them.

9. We may have to work twice as hard when we have a short sale and those who are not prepared to work hard should refer the listing to an agent who will and who has patience.

I finally broke down and responded to an automated Bank of America email survey.  The email was titled "Help Us Improve Our Process."  I received the email because one of my Destin short sales was declined in Equator. Why? Our seller was a day late getting us newly requested documents. We had to re-initiate the short sale a few days later.  It's seems like a bunch of "make work", but that is what we do. Work for the short sale lender.

Overall, Bank of America does a pretty good job. They are one of my top short sale lenders to work with, along with BB&T and PNC.  They are fairly quick to respond, and if they don't, you can always use the Twitter Escalation team (call their Social Media team), with whom I've had fabulous results.

If one of Bank of America's inconsistent deadlines for returning documents is not met by a day or so, they will close your file. Or as they love to say "YOUR FILE WILL BE DECLINED." They love using that word - "Declined".  Why don't they use something else, like ''Denied! Killed! Trashed! Deleted'?" I suppose "Declined" is supposed to sound ominous and threatening. I wonder why Bank of America does this?  I cannot imagine telling one of MY CLIENTS, that if he didn't send me a copy of his home survey in 72 hours I would CANCEL his contract and his sale would be DECLINED.

Some negotiators give a fair amount of time for new documents to be returned, some demand "within 48 hours", with no regard whether it's a Friday evening or Saturday at 1:00 p.m..  I've had that demand, and when asking for a further update, after scrambling over a weekend to get a document, the negotiator disappears for a week or more. OK, so then what was the rush?

Maybe they like to keep their file count down to save their negotiators time from checking on extra "dormant" files.  But let's look at the big picture. It seems it takes twice as much effort on their part and OUR part to "re-open" a file. Then they have to re-assign a negotiator and request all the same documents.  We have to re-upload the same initial documents.  Just give it a few more days, dude.

I commented on the survey: "Do not treat the real estate agent as an employee. They are not employees of Bank of America. I don't work for your company. I am trying to help someone out with a short sale, basically gratis. We do the best we can to respond to every request, which are put forth as "demands" without politeness, or we are threatened dismissively with "your file will be DECLINED".  Is this appropriate and customer-service related language to use to real estate agent, with whom I am sure you want future business?  You do, don't you? Use some common sense." Allow a "human amount" of time for a new request to be fulfilled.

It's Wendy!

Feel free to email or call me if you wish to discuss this further. Wendy Rulnick 850-650-7883 or itswendy@rulnickrealty.com

Good morning Superstars.

Banks prohibited from entering into real estate brokerage and management businesses? Right. And pigs fly.

In 2001, the Federal Reserve Board and the U.S. Treasury Department proposed rules allowing national bank conglomerates to engage in real estate brokerage and management. The rule would have reclassified these activities as financial in nature.

The National Association of Realtors was dead set against this and used their powerful lobbying force to fight.

NAR's position was that.....

• "Allowing large, national banking conglomerates into real estate would create anti-competitive and anti-consumer concentrations of power within the industry." Read full article

On March 11, 2009, President Obama signed into law the FY2009 Omnibus Appropriations Act that permanently prohibits banks from entering the real estate brokerage and management businesses.

Fast forward to today.

When was the last time you did a Real Estate transaction that the Banks didn't control? In my market area of Poinciana Florida approximately 65% of all real estate transactions are either REOs or Short Sales. In both cases the Banks are in control.

The Banks control the real estate commission by limiting how much we can charge and how we can charge. The once "always negotiable" commission is now set at 6% whether we like to or not. Anti-competitive and, in my opinion, a direct violation of Sherman Anti-Trust Laws.

Banks are also.....

• Interfering with Fiduciary relationships.
  
• Interfering with contracts.
• Taking away the rights of a property owner by placing restrictions on who can purchase real estate.
• Restricting when a new owner can resale the property.
• Restricting who a new owner can rent to.
• Dictating how the home is sold. Think auction.com
  

Banks are doing everything they can to make selling and purchasing Real Estate difficult. Banks are making up the rules as they go along and most make no sense whatsoever. So agents, buyers and sellers are thinking of ways to skirt around these unreasonable rules. Problem is.....we can't act illegally or unethically just because the bank is doing so.

Banks prohibited from entering into real estate brokerage and management businesses? Right. And pigs fly.

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• Pricing and Marketing The Property
• Negotiating Techniques 1
• HUD1 Tips
• Escalation and Communication Tips
• Disputing Bad BPOs
• Cash Contributions and Prom Notes
• Negotiating Junior Liens
• Lead Generation
• 10 Short Sale Mistakes
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Well where do I begin today? There are many changes taking place with Short Sales that have me concerned about the direction real estate is heading. Especially as it relates to Short Sales.

Concern #1:

It seems like the bulk of Short Sales are now with entities other than banks. Such as Nationstar Mortgage, Ocwen and Greentree. These 3 companies are taking over the servicing of many toxic mortgages. Why does this matter? The fact that they are not banks means they do NOT fall under the control of the OCC and the Federal Reserve. Less oversight means these servicers can try and make their own rules.

Here are some of the “requirements” from Nationstar Mortgage.

1. Buyers of Short Sales who need financing must pre-qualify through Nationstar. If they use Nationstar financing NS will allow the short seller to pay 3% in closing costs for the buyer. If they don’t use NS......no closing costs assistance.

2. Agents have to send in a full blown BPO and a complete title search as part of the short sale initiation process. Title Searches cost money. They expect the agent or seller to pay for this even though there may not even be a contract on the property.

3. Auction.com. Nationstar is requiring some of their Short Sellers to use Auction.com. If they don’t the short sale will not move forward. Here’s a great discussion on the issues Auction.com creates.

   1. Snippet: “Even though we have a legal, binding contract on the property, NS is requiring the seller to put the home on auctions.com for 2 weeks before they will consider a shortsale. If the seller does not comply, we are told his only option is foreclosure. We have been told that if there is an offer for less than the current contract amount, the current buyer is still in the winner's position. BUT if a new buyer offers MORE than the current contract amount, that offer will supersede.”

Concern #2:

Servicers and Investors handling Short Sales as they do their REOs. The obvious issue is that they are not the owner of the property as they are with an REO. Basically they are trying to control our listing agreements, list price, marketing and contracts.

Examples:

1. Requiring the Seller to use and pay for a negotiator for the LENDER!!

2. Requiring the Seller to auction their property.

3. Requiring the agent to hold open houses.

4. Dictating list price.

Concern #3

This is the big one. Fannie Mae and Freddie Mac manipulating the Real Estate market.

Examples:

• Inflating retail values while simultaneously selling bulk properties at HUGE discounts to institutional investors. .

• Placing restrictions on the resale of the purchased property.

  1. Title Transfer requirement change: (Fannie and Freddie)

• • The buyer is prohibited from selling the property for any sales price for a period of 30 days from the date of the deed.
  • After a 30 day period, and until 90 days from the date of the deed the buyer is further prohibited from selling the property for a sales price greater than 120% of the short sale price. Note: The above restrictions will run with the land and are not personal to the grantee.
• Offering properties for sale with no appraisal requirement through Homepath and Homesteps.

2013 is going to be a very interesting year. Are you ready for it?

Related articles:

• Fannie Mae Homepath Short Sale Guidelines

• Fannie Mae and Freddie Mac to allow walkaways by on time borrowers

• The market shift is here are you paying attention

• Dear Fannie Mae

• Fannie Mae and Freddie Mac new short sale evaluations are way off base

Hello everyone. Mine will probably be a quite different blog from what you are used to seeing. I am a first time short sale buyer - not an agent, not a seller, and not an investor (per se), although this will be an investment property. I have purchased a property (completed foreclosure) via auction.com previously. Same seller (BoA). Start to finish we closed in less than 45 days with that transaction. I have read many of the comments on the various blogs, and, as a buyer (or even if I was a seller), I find the general "attitude" of most Agents to be less than desireable. Here's "my story" (the short version):

Purchased a short sale property through auction.com. Auction ended Janaury 12, 2013. Was listed as "Bank Approved Short Sale" which tells the Buyer "hey, they already looked at this" and I can close this thing in about 60 days (or less). Estimated closing date was 2/26/13. All documents say transaction will close within 45-60 days. Today was day 54, and I don't even have a bid confirmation, much less Lender's approval. It should be noted that my agent is also the listing agent - but from what I have found, the listing agent does most of the document and information input anyway (via Equator), so I am "at that agent's mercy" either way. To me, the additional commission should be an added incentive to get the deal closed as quickly as possible. "Dual agent" also reduces some back and forth and the good old "he said - she said" "excuse(s)".

January 17th agent tells me "I have provided everything they have asked for, and we are waiting on the bank". That sounds pretty good, but the reality is contract was due on January 14th, and we were 3 days late from the start. Not to mention the agent had not yet even asked me for my information (first 5 of ssn etc.). Agent called and obtained this information from me on or about 02/17/13. Numerous e-mails from me to my agent, reminding agent of dates, holidays (non-business days) etc., and requesting to know the transaction status etc. goes on through the date bid confirmation was to be provided (02/04/13 - 15 business days from end of auction). Same old same old - we are waiting on Bank - no new tasks in Equator blah blah blah. "Be Patient" and "it can take months for a short sale" is what I hear all the time.

Original closing date nears, and I, the Buyer, prepare an extension. That's right, I "had" to do it myself, or risk the closing date just passing by, and everything going down the drain. On 02/25/13 my agent re-does the extension, and we extend closing date to 04/11/13. As of today, the agents fee is not even right on the estimated HUD1. Now, if "you" cannot get any other number right on the HUD1, "you" should be able to get "your" fee amount right, right? Agent either cannot or will not provide the Equator status to me (one of the six), which tells me we have oodles of problems still. Agents response on phone tonight was "I will wait for someone to tell me it is wrong, and if not, it must be right" (or pretty close to that - regarding their commission/ fee) So for those of you who do not know, so you will know - the allowable commission is 6% of the BID PRICE - not the Total Purchase Price. We also "thought" last night it might be a flat fee - at more than double that 6%. It seems that "discrepancy" got fixed this afternoon. Like the Bank and/or Lenders are going to have more than 30% of the purchase price "ate up" in commissions/fees!

I found and have read the BoA Equator agent reference guide. It says all over the place - deadlines and accuracy are critical. My guess is that the Equator system serves as a check and balances for all the numbers (offer amount, commissions, fees and closing costs). Some or all of those are input via other agreement(s) (listing agreement etc.). If/when they do not match, the system kicks it out, and corrections need to be made. As a buyer, I do not have access to the Equator system, although I did register an account with them. I can look at properties for sale, like I want to do this again! I would also think it tracks the documents and dates. I had to resubmit my proof of funds, since it was more than 30 days.

So, my question to "you" superstars is: Why is this? Why does it seem that deadlines are treated as "purely mythical", and accuracy seems to be the least of an agent's concern? I have seen comments that pretty much flat out say these things. I have also had agent(s) tell me this is how they view short sale(s). Why do agents continue to tell buyers (and wholeheartedly believe and expect) a short sale will take months, when the bank says it will take 45-60 days? (Keep in mind in this case, I beleive the BPO was done prior to the auction, so a valuation dispute is not (currently anyway) in any way an issue). As far as I know, the Lender has not even seen this stuff yet. Perhaps BoA has not seen it either.

Thanks in advance for your insights and responses.

When I began my career in real estate 7 years ago, I quickly learned to adapt to the world of declining home prices, BPO's, REO's, Short Sales, Asset Managers, yada yada yada.....you get the picture. Almost overnight, my entire business was centered around the distressed market. From a business standpoint, it didn't bother me. In fact, it fit right into my loss mitigation background and appealed to the analytical party of me. It wasn't the best scenario and could be extremely volatile at times, but it paid the bills and I was good at working the market (still am). So, I turned a deaf ear to the drunk monkey telling me that I wouldn't be able to make a living in the distressed market because it was saturated with agents. I told the monkey to shut up when he told me that I didn't have enough experience to make it in the distressed market because it was saturated with agents who'd been in the business for 10+ years. Finally, I smothered him with a pillow after he told me that 2012 was a fluke and that my business wouldn't be that successful again....

Well, the market has changed again.... and he's reared his ugly head. He'd actually almost convinced me that I knew nothing about the traditional re-sale market and that I wouldn't be able to transition my business in the manner that it needed and 2013 would be horrendous for me! WHAT????? Well, I looked that monkey square in the face and told him that because of my keen ability to research and study market trends brought on by many years of completing BPO's, I wouldn't have an issue with properly pricing a property to sell. I told him that because I'm actually used to completing monthly marketing reports on all of my listings, monthly CMA with marketing plans for normal market sellers would be a breeze! I finally told him that because I was able to maneuver through one of the tougest real estate markets that our Country has ever seen, my problem solving skills are fine tuned and remarkable! Then.....I laced his banana with cyanide.

PDF Version of this article - 10 Underwater Homeowner Options

Slipping toward foreclosure can lead to feelings of anxiety, depression, and loss of self-esteem. Don’t give up. There are options available to help millions of homeowners rescue themselves from the brink. Since it is crucial to act before a foreclosure takes place, now is the most important time for you to review the following options and solutions.

As a Certified Distressed Property Expert (CDPE), I am trained in assessing all foreclosure alternatives and pursuing the best solution for your own financial situation.

1) Short Sale

A short sale allows the homeowner to avoid foreclosure, minimize financial damage and move on from a burdensome, unaffordable mortgage. In many cases, a short sale allows the borrower to qualify for a new mortgage in just 24 months, as opposed to five years or more after a foreclosure.

A trained real estate agent can help facilitate a short sale with your lender if you have three qualifications. First, you must show some type of financial or personal hardship. Second, you must have a monthly shortfall, meaning your monthly expenses are greater than your monthly income. Finally, you need to prove that your debts are greater than the value of your assets (certain investments, property, etc.). These requirements may differ per lender, so check with a distressed property specialist for specific information from your mortgage company.

2) Reinstatement

A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult for homeowners to achieve. The homeowner simply pays the total amount past due (including late fees) to the lender. This solution does not require the lender’s approval and will “reinstate” a mortgage up to the day before the foreclosure sale.

3) Forbearance or Repayment Plan

A forbearance or repayment plan involves negotiating with the mortgage company to allow the homeowner to repay back-payments over a period of time. The homeowner typically makes current mortgage payments in addition to a portion of the back-payments owed. This option requires lender approval.

4) Mortgage Modification

A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These changes require lender approval and typically result in a lower payment for the homeowner and a more affordable mortgage.

5) Rent the Property

This option does not require lender approval, but does require the homeowner’s ability to rent the house for enough money to cover the monthly mortgage payment.

It is important to remember that there may be unexpected costs associated with the maintenance of a rental property in addition to the monthly mortgage payments. Homeowners should take this into consideration when deciding whether this option will work for them.

6) Deed-in-Lieu of Foreclosure

Also known as a “friendly foreclosure,” a deed-in-lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property. Deed-in-lieu can potentially lessen the damage to a credit score and future loan eligibility, and sometimes the lender will forgo their right to pursue a deficiency judgment, meaning the homeowner will not be responsible for further payments.

7) Bankruptcy

Many have considered and marketed bankruptcy as a “foreclosure solution,” but this is only true in some states and situations. This does not require lender approval, but you must have non-mortgage debts that you claim as a hardship.

Entering bankruptcy can be a risky and costly process. Be sure to seek the advice of a qualified bankruptcy attorney when pursuing this as an option.

8) Refinance

As opposed to mortgage modification, refinancing means you will be acquiring a new loan based on your current credit standing. If you have already missed mortgage payments, your credit score may make it difficult to find a loan with cheaper payments.

9) Sell the Property

Homeowners with sufficient equity can list their property with a qualified agent who understands the foreclosure process in their area. Unfortunately, many homeowners in today’s market have experienced a decline in home value and may owe more than what the home is worth.

10) Servicemembers Civil Relief Act

(Military personnel only)

If a member of the military is experiencing financial distress due to deployment—and that person can show that the debt was entered into prior to deployment—he or she may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers to help qualify them for this relief.

Pull Yourself Back From the Brink

If you are on the edge, you have no time to waste. Call me today; I’m here to lend a hand.

Place Your Confidence in CDPE

With the right assistance, the stress of facing foreclosure becomes manageable. CDPE- designated agents have received the knowledge and training necessary to assess all possible foreclosure alternatives and pursue homeowners’ best options. A CDPE- designated agent attends several days of intensive, thorough training on foreclosure avoidance and how to help facilitate a short sale efficiently and ethically. The highly regarded CDPE logo means you are working with the most informed, up-to- date resource available.

Michael Collins, CDPE, SFR, BPOR
Broker - Rock Realty
608-921-8536

If you are wondering if a short sale might be right for your home, please visit our Short Sale Home Evaluation page.