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Over the last few months, it has become apparent that Fannie Mae is more interested in foreclosing than approving short sales.  The scenario is the same over and over again.  The BPO comes in at one price and Fannie Mae adds 20 or 30% and says that is what they will accept.  Some have suggested that they are trying to get next year's prices if the current price trends continue.  In the meantime, buyers are unwilling to overpay by that much and are backing out of the contracts when they hear the outrageous prices that FM is asking.  If you dispute the value, they reject it and then consider their number good for an additional 90 days from the decision on the dispute.  Has anyone else been experiencing the same kind of problem with Fannie Mae being the investor??

Do you charge your seller an additional fee?  Do you list for 2.5% and offer 2.5% BA commission?  Or are BA's getting it from the servicer on the HUD?  I would appreciate any feedback on this.

The seller lives in NY and was being represented by a NY attorney but the property was in LA, not listed and not on the MLS which is suspect.

My client's cash offer was submitted to the attorney with instructions that they would pay $50k over any other offer. We agreed to pay the attorney fee if it was disclosed on the HUD. The buyer disclosed to nieghbors that he purchased the property with a loan and paid the $50k to the attorney for $425k.

The attorney had a duty to present the highest best offer to the lender!

I have an FHA short sale listed. Bank of America came back and told me to put it on the market for $16,000.00 and that they must walk away with $14,080.00.  We are currently in phase 2...

The problem is that the numbers do not work...

Sale price 16,000.00

Seller incentive is 1,000.00

Title Company fees are 495.00

Commission is 6%= 960.00

Totaling this is less than the bank requirement...

Any advice?

This cute little house was listed, negotiated, and CLOSED in less than 90 days by your Palm Springs Short Sale Specialist!

Primary home and the Sellers were relocated.  One note with Chase, and the negotiator was good; meaning she responded relatively quickly.  The closer dropped the ball a couple times, but nothing awful.  No cost to Seller, all deficiencies forgiven, and they've moved on with their lives.  Buyer got a great little investment home.  All is well.

This lovely little home in the La Quinta Cove will get a facelift, and be available for a tenant within the next two weeks.

List Price:  $130,000   Closed at $135,000

Chase write down?  Approx. $50,000.  Not huge, and now the home can be occupied after it's freshening up. 

I list, work and CLOSE my short sales!  No third party negotiators used or needed.  FREE consultations!

This year under the new BOA short sale process, we have really taken a step back. I have recently been waiting on an approval to come in and finally I get one the explicitly calculates the balance and claims they will not waive the deficiency. Typically, the negotiator will offer a compromise prior to and ask for a contribution in exchange for a deficiency waiver, but I got sandbagged on this approval.

Last year, BOA was great to work with...this year they have been the Gestapo that they always used to be.

What motivation does a seller have going the traditional short sale route if they are going to get screwed?

The Mortgage Forgiveness Debt Relief Act is a government bill that offers relief to most homeowners who would normally owe taxes on the forgiven debt after performing a short sale. The purpose of this act is to help homeowners avoid additional financial hardship by performing a short sale. This Act became a law in 2007. Prior to this act the borrower would have to pay taxes on their forgiven debt. With this act in place, a borrower does not have to pay income tax on forgiven debt in MOST cases.

You should consult a CPA for information on the tax ramifications of a short sale in your specific case. Please be advised that I am not a CPA and the following information should be taken as tax advice.

It’s important to know that when performing a short sale you will always receive a 1099 on the debt forgiven. The question is whether or not you will be held.. For the entire article click here

Brett@ishortsalenow.com

310-564-6389

If you are at risk of foreclosure, you might want to know what the consequences are in the event that it happens to you. The evident and inevitable effect a foreclosure has is the ding on your FICO score as well as the foreclosure stamp on your credit report. This will make it very difficult for you to obtain any credit or even find alternative housing or employment. However, is that all to the negative effects of a foreclosure? Let’s explore deficiency judgments after foreclosure.

Recourse vs Non-Recourse State

In every state, there are different foreclosure laws regarding whether lenders can pursue you for the remaining balance after a foreclosure or not. Check HERE to see if your State is a recourse or non-recourse state.

If you are in a recourse state, then it is possible for your lender to sue you and obtain judgment for the remaining balance owed. If a judgment is entered against you, they may be able to garnish wages and/or seize any non-exempt property you owe. Although not likely, they may even be able to seize your vehicle but this of course depends on the state specific laws. It might be worth it to do a bit of research on the subject.

If you are living in a non-recourse state, the foreclosing lender cannot pursue but you are not off the hook yet!

Any otherlenders (2nd mortgages or even 3^rd or 4^th) ARE able to pursue you for the remaining balance.

We at seattleshortsaleblog have received numerous requests for help in dealing with subordinate lienholders whom after the home was foreclosed on, is now pursuing the homeowner via threatening judgment, judgment, or the popular strategy, selling off the debt to collection companies.

We feel it is better to pursue a short sale, and get a deficiency waiver prior to closing the sale. Those 10 words on the approval letter, “we hereby release our rights to collect a deficiency judgment” (or verbiage similar) are VERY IMPORTANT and in our opinion, better than hoping the lender will not come after you after foreclosure.

Hope this helps

Peter

Full Article Here: www.seattleshortsaleblog.com
Feel free to share the articles on my blog with homeowners in your area!

This Week's Superstar Discussions.

Discussions	Replies	Latest Activity
FHA Short Sale Refinance Good morning all, Has anybody worked with or knows of a lender that will work with home owner on a short sale refinance? The way it was ex… Started by Anynomus Guest	8	2 minutes ago Reply by Bryant Tutas

FBI regarding Submitting All Offers Tough issue. There is a legal side and a financial side. From a legal perspective, we need to advise our clients (the seller...not the le… Started by James L. Bilotta	1	yesterday Reply by Joseph Alfe

Urgent Help Required Title company wants copy of Service Agreement I'm in the process of finishing up a short sale with Wells Fargo as the first and E*Trade who is serviced by PNC Consumer Services. We hav… Started by Ann Wilkins	5	19 hours ago Reply by Bryant Tutas

Auction.Com - Bank of America One of my sellers is being "offered" Auction.com with Bank of America. Can anyone provide input with their experiences? Here is their sale… Started by Wendy Rulnick	16	yesterday Reply by Cami Pinsak

Any tips for Escalating a file with Green Tree? I have completed the package 2 months ago, Green Tree has the contract and all the sellers financials. I am unsure how to properly request… Started by Donna Gallegos	13	yesterday Reply by William F Griffin Jr

Will The Junior Lienholders ACTUALLY Pursue A Homeowner With A Deficiency Judgment? I've been getting many inquiries from homeowners about what they can do if they lost their home to foreclosure and have a junior lienholder… Started by Peter J Kim	9	on Friday Reply by P Nicolas Velecico

Multiple contracts am a cash buyer and have been waiting for approval of short sale for 2 months. There is another house that I see that I want to buy. It's a… Started by Suzette Fagan	4	on Thursday Reply by Wayne Brooks
HELP! Fannie Mae wants more than FMV Greetings everyone and thank you in advance for your responses~ I have a short sale listing Green Tree is the servicer and Fannie Mae is t… Started by Laurie Lock	5	on Thursday Reply by Gregory Holmes
Nationstar NIGHTMARE! Hello All, Does anyone have a good contact at Nationstar Mortgage? I recently had a B of A short sale APPROVAL LETTER and after this is wa… Started by Teresa Keeler	1	on Thursday Reply by MNshortsale54

I was researching the latest bulletins from both Fannie Mae and Freddie Mac and the keys to both are 90 days delinquent and less than 620 credit score.  What happens when a borrower is more than 90 days delinquent and has a credit score of less than 620? 

• Borrowers are NOT REQUIRED (my emphasis) to make a cash contribution/promissory note
• Servicer is NOT REQUIRED (again my emphasis) to obtain or review the Borrower Response Package (aka short sale package)

Good news for folks looking to short sale their home.  Any distressed borrowers who need help in Broward county or surrounding areas in Florida please contact me!

Hello, 

Just reaching out to see if there is anyone that has any contacts at Nationstar that can help push a file along? It's been sitting in Equator with no updates since 9/20. I have tried numerous times to email everyone on the list in Equator but I have not received a response yet. 

Please pass on any contacts you may have for Nationstar! 

Thank you! 

Jane

Citi has asked to reduce REALTORS commission to 5%. I thought that was NOT allowed.

Any help?

This Bank of America Short Sale was difficult not due to the Lender..but rather the Buyer!  A real lesson in why a Short Sale Buyer should always use a local Lender for their loan.  The Lender MUST know the local market and inventory.  But..I got it CLOSED anyway!

Original note Value:  Approx. $415,000

Short Sale Price:  $240,000

HAFA short sale meaning the Seller received $3,000 in relocation fees which was a tremendous help since they had spent almost $45,000 on improving the home approx. 3 years ago.  Things change in peoples' lives..often without any warning and that mortgage that was manageable suddenly becomes unmanageable!

List to Escrow:  Approx. 4 months.

Short Sale questions?  Call me for your FREE property consultation.  760-285-3578.

10 Most Common Short Sale Mistakes And

How to Avoid Them

1. Not Qualifying the Seller
   • Their financial situation (current assets etc)
   • Hardship (will give clues to how you will get approval)
   • Type of mortgage
   • If it’s FHA loan and other types, can try to get pre-approved
   • Is Fannie or Freddie?
2. Not preparing the seller for cash contribution and/or promissory note (part of #1 but so important!)
3. Not doing preliminary title search
4. Not controlling the list price and subsequent price reductions
5. Advising your seller to accept an offer that is too low
6. Not controlling the terms of contract – buyer end, short sale approval time frame, deposit upon seller acceptance (not short sale approval)
7. Submitting an offer or multiple offers to the lender. Instead of one fully accepted and signed contract.
8. Not working multiple liens simultaneously
9. Not reviewing seller’s documents before sending to lender
   1. Common financial worksheet mistakes
      1. Seller does not add the figures correctly
      2. Seller leaves out expenses
      3. Seller forgets about mortgage payment he is not making
   2. Common package mistakes
      1. Leaving out documents, not labeling blank pages
      2. Not having exactly the same on all documents and as they are on the loan
      3. Common hardship letter mistakes
      4. Not providing supplemental hardship information
10. Not getting your emotions out of the transaction. Keeping your focus on the end result.

I am so excited about this news! I know, it doesn't take much for me to get excited, but this is really big news in my opinion.

Up until now if you were involved in a Silicon Valley Bank of America Short Sale they did not take electronic signatures. This would have been ok if the bank could sit with you in your conference room and look at the offers. We all know this does not happen and the paperwork will often be faxed several times before B of A gets to see a document. Since they cannot accept illegible documents it made things harder for the participants.

Also, despite the sometime lengthy process of a short sale, Bank of America will often say they need a document now, and not being able to get electronic signatures is sometimes tough.

Now, for any new short sales, you can send all documents with electronic signatures. This makes me very happy. As a Silicon Valley Short Sale Specialist anything that can make a short sale more efficient is ok with me.

So if you have any questions about short sales in San Mateo or Santa Clara Counties please feel free to contact me.

Marcy Moyer

Keller Williams Realty

www.marcymoyer.com

marcy@marcymoyer.com

650-619-9285

D.R.E. 01191194

We've been hearing it a long time, but today a Chase representative actually initiated one of our files into equator today. Chase files will be initiated into equator similar to how GMAC does it. One cannot initiate it into equator themselves and will need the assistance of the short sale department. Let's hope their equator system moves smoothly!

Brett@ishortsalenow.com

www.ishortsalenow.com

310-564-6389

Working on a short sale for a divorced young lady in Pembroke Pines, FL..  Soon after listing the property I placed a regular combo lock box on the property since it was vacant.  Soon after I get a call from an agent stating there is no lock box on the property!  I then found out that Chase had called my client and told her "we need the lockbox code so we can do a property condition report".  Well of course my client gave them the code.  Chase then proceeded to throw away my lockbox and change the locks!  It took months and months of calling Chase to finally mail me a key so that we could have access to the property. 

What's the takeaway?  As a distressed seller always refer any questions about accessing the property back to your agent.  Since this was the first time this had happened to me it is now knowledge that I pass onto every seller who is short saling a vacant property.  Chase's response is that the property was "abandoned" and they were protecting their collateral.  My take is they were successful in trying to get away with taking possession of a property they do not own!

Here in the Palm Springs Valley of California, the past 4 years have seen a pile of Short Sales listed and closed.  Unfortunately, there have also been some questionable methods to this short sale madness.  This article sums up some of the Short Sale fraudulent practices that are showing up more and more frequently.  If you are considering a Short Sale, be sure to use a list Agent that is experienced in your area and bone up on the Short Sale Law in your state.

Don’t let your Short Sale turn into a Lemon..

Short Sales are here to stay for another couple of years.  The Deficiency protections afforded to Sellers of Short Sales in California is ecpiring 12/31/2012.  Will it be extended?  Nobody knows for sure.  It would be the smart thing to do  in our non-recourse state to avoide a slew of Foreclosures..but Lenders are not know for their “smarts”..rather their bottom lines on their books.

There is alot of Short Sale fraud happening.  Be careful about your List Agents and document everything!

.  Orange County Register

Short sale fraud “heating up,” expert says A panel of short sale experts presenting at CALIFORNIA REALTOR® EXPO 2012 in Anaheim last week said that “fraud is heating up like a wildfire right now …” and “we’ve got to be aware that this fraud is changing directions, jumping containment lines.”

• Short sales involve the selling of a home for less than is owed on its mortgage.
• Among the most common forms of fraud are: Flopping, non-arm’s length transaction, side agreements, and false information.
• Flopping: Scammers arrange to buy a home at an artificially deflated price intending to flip it immediately at its actual value.
• Non-arm’s length transactions: The buyer in a short sale is related to the seller by blood, marriage, or some type of business or personal affiliation.  This istypically arranged by an underwater borrower to regain ownership of the property free from the mortgage debt.
• Side agreements: In addition to payments included in a lender’s “approval letter,” the buyer and seller have side agreements to pay off junior liens, short sale negotiators’ fees, or other third-party fees.
• False information: The transaction includes phony details in the closing settlement statement, or HUD-1, to hide buried costs and fees.

I will do NOTHING that is not disclosed on the HUD.  Sellers and Buyers may not have ANY knowledge of each other.  Short Sales must be taken very seriously..

November 1, 2012 short sale changes

These changes are to streamline the short sale process and have the goal of shortening the timefram of a short sale completion.  Starting Nov. 1, 2012 even borrowers that are current on their mortgage are eligible for a short sale on loans where Fannie and Freddie are the investor-as long as a hardship still exists. Some more benefits are:

• Relief for those underwater who need to move over 50 miles for a job
• Waive right to pursue deficiency judgment in exchange for financial contribution when a borrower has sufficient income or assets to make a cash contribution or sign promissory notes
• Reduced or eliminated DOCUMENTATION for those borrowers who have missed several payments, have low credit scores and serious financial hardships
• Offer up to $6,000 to second lien holders to expedite a short sale

The last bulletpoint in my opinion may lead to a mini wave of short sale approvals PRIOR to November 1, 2012 because currently the junior lien holders receive a max of $8500 in a HAFA short sale.

Also interesting to note is that from Nov. 1, 2012 the HAFA program will be known as a Standard Short Sale/HAFA II.

However, borrowers who take advantage of a short sale will need to wait at least 2 years for a new mortgage that is backed by Fannie Mae or Freddie Mac.

Just a refresher, the Federal Housing Finance Agency (FHFA), the entity that makes these new changes is the agency that regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.  These GSEs (Government Sponsored Enterprises) provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

If you or someone you know is a distressed seller in South Florida, please have them reach out to me today!