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Real Estate Marketing "The Podcast" How do I get listings or deals? #Investor #Realtor

David Bartels LIVE from Anaheim CA presentation

805-413-8000
http://www.homeloanadvocates.com/

Banks grant short sales for two reasons: the seller has a hardship, and the seller owes more on the mortgage than the home is worth.

The seller will need to prepare a financial package for submission to the short sale bank. Each bank has its own guidelines, but the basic procedure is similar from bank to bank.

A few examples of a hardship are:
Unemployment / reduced income
Divorce
Medical emergency
Job transfer out of town
Bankruptcy
Death

The seller’s short sale package will most likely consist of:
Letter of authorization, which lets your agent speak to the bank.
HUD-1 or preliminary net sheet
Completed financial statement
Seller’s hardship letter
2 years of tax returns
2 years of W-2s
Recent payroll stubs
Last 2 months of bank statements
Comparative market analysis or list of recent comparable sales

Writing the Short Sale Offer and Submitting to the Bank

Before a buyer writes a short sale offer, a buyer should ask his or her agent for a list of comparable sales.

Banks are not in the business of giving away a home at rock-bottom pricing. The bank will want to receive somewhat close to market value.

The short sale price may have little bearing on market value and may, in fact, be priced below the comparable sales to encourage multiple offers.

After the seller accepts the offer, the listing agent will send the following items to the bank:
Listing agreement
Executed purchase offer
Buyer’s pre-approval or proof of funds letter and copy of earnest money check
Seller’s short sale package.

The Short Sale Process at the Bank

Buyers may wait a very long time to get a response from the bank. It is imperative for the listing agent to regularly call the bank and keep careful notes of the short sale process.

Buyers may get so tired of waiting for short sale approval that they may feel the need to threaten to cancel if they don’t get an answer within a specified time period.

That type of attitude is self-defeating and will not speed up the short sale process. If buyers are the type with little patience, perhaps a short sale is not for them.

Following is a typical short sale process at the bank:
Bank acknowledges receipt of the file.
A negotiator is assigned.
The bank orders a valuation of the property.
The file is sent for review or to the investor.
The bank may then request that all parties sign an Arms-Length Affidavit.
The bank issues a short sale approval letter.

Some short sales get approval in 3 weeks. Others can take as long as 12 months. A typical Short Sale transaction takes 4-6 months to complete.

Too often, many homeowners doing a short sale read up on the internet and speak to friends, coworkers, relatives and anyone else whose done a short sale, about how they received $3000 relocation assistance by doing a HAFA short sale.

Sadly...this is NOT always the case. Simply going into the HAFA short sale program here in CA does NOT guarantee you will walk away with money.

Case in point.....First your realtor needs to determine if your servicer(the one you normally make or made your mortgage payments to for your 1st lien)participates in the HAFA program. Many servicers DO NOT!.

Also, even if your servicer(1st mortgage lienholder) participates in HAFA, the INVESTOR who is above your servicer and has final say so...may NOT be a HAFA participant.

Many 1st mortgage liens are SOLD to a private investor or group of investors that DO NOT belong to HAFA, nor do they have to abide by HAFA's guidelines and rules. 

OK, so let's say your 1st lien holder and their investor DO participate in HAFA and allow you to do a HAFA short sale.

If you have a 2nd lien, you need to also find out if THEY participate in HAFA...for if they DON'T...then guess what may happen when you go to close? Your 2nd lien holder could see the $3000 monies awarded to the seller(YOU) by the 1st lienholder and decide to GRAB or TAKE any monies on the table. Thereby preventing YOU, the homeowner from getting ANY MONIES awarded to you. Don't say NO...because I've seen it done.

Also...here's the kicker....and even better than the above. Let's say..Mr and Mrs Seller had a 1st and a 2nd on their home, and the 1st even agrees to a HAFA short sale, and so does their investor.And let's say your 2nd lien servicer WAS a participant in HAFA and agreed to participate. *  If your 2nd in this process gets SOLD OFF or CHARGED OFF during this process to a collection co. for x amount of months of NON PAYMENT on your part, then that COLLECTION co is NOT HELD to HAFA's rules and can collect the relocation monies at funding. The collection companies ARE NOT SERVICERS...and therefore they DO NOT belong or partipate in HAFA's rules or programs...so  since they are a collection company..they can TAKE the monies left on the table. Remember people...they are a COLLECTION company...they don't call them a collection company for nothing!!!!

Remember the 2nd lien holder, whether it be a servicer or now a collection co...has begrudgingly accepted what the 1st will give them, and they are NOT happy.

Please make sure when doing a short sale that you interview an agent who has done them extensively and has much experience in negotiating short sales. Please don't assume EVER that because an agent has these CDPE or SFR designations...that they KNOW or are VERSED in NEGOTIATING short sales. These companies handing out designations are PRIVATE COMPANIES charging realtors a $500 or more fee to take a 1 day or sometimes just a several hour course in short sales. THIS DOES NOT mean your realtor knows in the slightest how to navigate and negotiate the slippery slope of short sales. Many of these realtors who have gotten their licenses not that long ago or get these designations because they know that 50% of the market is upside down and if they want ANY business, they better get with the program and start handling short sales.

I am not knocking these designations....there are agents who have them and legally have experience and know how to handle short sales... the main thing is to check for experience in how many short sales they have done...and if they have DONE it themselves. Farming it out to 3rd party negotiators or attorneys, does NOT guarantee success.

Please ask many questions about the short sale process and scenarios. There is no magic wand that anyone can wave to make sure your short sale goes smoothly, for many things occur as roadblocks to navigate along the way. But with a strong negotiating agent who is familiar with all the ins and outs and possible scenarios that the banks, lenders, servicers, investors,and collection agencies throw our way....hopefully having this extensive knowledge and experience can help you obtain a successful outcome.

Improvements and more improvements have been the recurring case for the government sponsored enterprises Freddie Mac and Fannie Mae. Although these GSE’s (Government Sponsored Enterprise) had a slow start in finding the right solutions for the housing crisis we are facing, the momentum for improvements via federal guidelines have picked up speed. The Goal: Get through distressed properties quickly to catalyze the housing recovery. How? Streamline their short sales. Let’s explore new and improved federal guidelines these GSE’s will implement on November 1^st.

Click the links below to see if your mortgages are backed by Freddie Mac or Fannie Mae:
Freddie Mac or Fannie Mae

Please read this concise document from FHFA.GOV HERE for the new Fannie and Freddie Guidelines and eligibility requirements.

Notes on new FHFH Guidelines:

• A significant change for starters is homeowners being eligible for a short sale without being in default or at risk of imminent default. If the homeowner is able to show hardship and back it up with proper documents, a short sale is now possible. Note that it is not only for those who are relocating due to current or new employment (this may be confusing).
• The right to pursue deficiency waiver for monetary exchange or promissory note applies to those who have sufficient income or assets. Even then, if you have a solid negotiator and/or short sale team, you can walk away from the property with little liability.
• For those who are in serious financial distress (missed several payments and have low credit scores), a short sale will be more streamlined as documents required to show hardship has been reduced or eliminated.

In the past, the GSE’s guideline alterations were not received well by many professionals in the real estate community. However, these new changes presented by the FHFA were well received by U.S. Realtors and an international credit rating agency. This includes the National Association of Realtors who said, “Making the short sale process go more smoothly will help avoid foreclosure and keep homes occupied.”

www.seattleshortsaleblog.com

Peter