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

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

Kathy Dyer

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

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

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

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

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

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

History Of The MARS Rule

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

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

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

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

Failure to Exempt Real Estate Professionals From MARS

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

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

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

NAR Interpretation of MARS

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

The Revised MARS Rule And The Realtor Exemption

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

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

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

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

Related Posts

National Association of Realtors: LIFE ON MARS

FTC MARS DISCLOSURES

Are Realtors Subject To The FTC MARS Ruling?

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

US Bank Short Sale Approved ~ Los Angeles Short Sale Agent

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

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

Los Angeles Short Sale Agent

US Bank Short Sale

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

Thanks!!

Jeremy,

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

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

Regards,

Gail

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

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

ANY ADVICE ON WHAT TO DO?

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

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

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

Thanks,

Jeremy

This past week, I got an ING Direct Short Sale to closing.  Getting there was full of directives from ING Direct that every Short Sale Agent in this country should be aware of.

For starters, our contract had the Buyer requesting closing cost help from the Seller.  After reviewing the contract, ING Direct, as the Short Sale bank, determined they wanted more money in the sales price and that there would be no closing cost help to the Buyer.  Since my Seller was now officially an investor, having moved out of state and rented the home for a couple years, he faced a tax implication on every penny that didn't go toward the pay off of his loan.  So when the Buyer agreed to increased sales price and no closing help, Buyer and Seller signed an addendum to those terms and we moved forward.

Next up was the forced use of ULS for the title company.  ULS stands for United Lender Services and they are located in Pittsburgh.  When I asked my negotiator how this was NOT a violation of CRESPA (a Buyer's right to choose whatever title company they like), the response was something like, "ING's lawyers have reviewed it and it's legal.  So does the Buyer want  this house or not?"

As the Listing Agent for this Short Sale, knowing that ING had also asked for a cash contribution from my client and that we were working with a title company that had no clue about our local tax rates and fees, I begged for a preliminary HUD.  I wanted to make sure my Seller wouldn't be overcharged for anything. The week of settlement, we finally saw a preliminary HUD.  Despite the fact the ING Direct has said that the Seller was not permitted to pay the Buyer's closing costs, there was the optional owner's title policy on the Seller's side where it did not belong.  When questioned, our ING Direct negotiator's response was, "Since we (ING Direct) is forcing the Buyer to use the title company, we have to pay for the title policy."  Problem is, ING Direct is not the Seller.  And the money was coming directly out of the net proceeds that was going to pay off the mortgage.  And remember, every penny not paid was a tax liability to the Seller.  THE SELLER WAS BEING FORCED TO PAY BASED ON WHAT ING DEMANDED.  And that was forcing the Seller into a higher tax burden with the IRS.  ING Direct seemed to not understand that they were NOT a party to this contract, merely a contingency to it.

We did an addendum, though none was needed and our regional sales contract clearly spelled out whose charges were what.  That was the only way ING Direct and ULS would have the owner's title policy on the side it belonged. 

Then came the sheer ignorance of working with an out of state title company.  They transfer charges, a Bueyr's fee, were on the Seller's side and there was no Grantor's Tax.  Again, I had to point out to the ULS and ING Direct the error or their ways.  They were in the process of violating our state statutes.  When I explained that, and who was to pay for what, and on what page of the contract they could find that information, it was corrected.

If you ever have to deal with ING Direct, make sure you save your emails and know your local charges and statutes.  I've already reported this to higher authorities.  And since it involved interstate commerce, I can probably add the US Attorney General to the llist.  I know that mortgage fraud is not worth anyone's time unless it involved a big fish.  Well, I believe ING Direct is a pretty big fish.  If you've had similar experiences, please contact the authorities. 

Here I am in beautiful West Vancouver, BC.  I was here last year with clients/friends, but in the Northern Vancouver area.  Both are gorgeous.  As I did last summer, I am experiencing the other side of the Palm Springs, Calif. real estate reality.

No Short Sales!

Strange, but true.  The Banks here are regulated,therefore, no unregulated run up of property value..just a steady, gradual rise.  Now, the Vancouver market appears to be blazing along.  In fact, at a dinner party the other night with 4 couples, 3 of the couples had purchased their first homes in the Vancouver area within the past year!  All are paying top $ and shared with me when asked, that "This is a Seller's Market!"  The dinner conversation turned to California real estate, and the explanation of Short Sales and how we got into this mess.  The looks on my Canadian friends' faces when we really started getting into the price/sf of homes in my desert area vs. cost to build/sf, was brilliant! 

"How can they afford to sell those homes that cheap?"

"Short Sales!"  Then the Short Sale talks begin. 

I do a fair share of equity sales in California as well as my Short Sales.  I have a fair share of the Canadian buyers purchasing their winter residences, and part of the reason I'm up here is because of a home that hasn't sold yet.  My client and I are doing some investigative work..why is it still on the market after 6 months?  I can tell you for SURE, that it is not a Short Sale. 

It is no wonder our Canadian friends are purchasing in California..particularly, the winter resort area of Palm Springs.  It's a quick flight.  The Canadian dollar is crushing the US dollar, and the winters here are cold, while us desert rats average about 80 degrees throughout the winter months..I cannot think of a better place to be in the winters.

Back to the investigative work today...working my California Short Sales as needed, but had to share here on SSS how lovely it has been to re-visit the real estate world of urgent Buyers.

Short sales are unquestionably becoming a viable option for most homeowners and are rapidly becoming popular in our country today. The Federal Trade Commission (FTC) recently cancelled rules set by the Mortgage Assistance Relief Services (MARS). Their reasoning was they did not want to “inadvertently discourage real estate professionals from helping consumers with these types of transactions.” The rules that were cancelled for those trying to assist consumers in obtaining approval of a short sale from their lender or servicer were required disclosures, recordkeeping requirements, and the legal option to charge upfront fees. However, there has been a huge debate on whether it is fair for brokers to charge upfront fees to homeowners who are pursuing a short sale.

*Email received from staff in the Bureau of Consumer Protection:
The FTC’s stay means that the mars rule does not prohibit real estate professionals who assist consumers in obtaining short sales from charging advance fees. However, the mars rule does not preempt state law. This, in turn, means that if a state law bars such advance fees, real estate professionals who operate in that state continue to be prohibited from charging them.

The basic premises of the debate amongst Realtors are:

• There are realtors who believe charging an upfront fee to sellers who are already struggling financially is unethical and even unlawful in their respective states. It exposes homeowners to realtors who are not experienced in short sales but are hungry enough to take on the transaction knowing there is a considerable chance of failure. If the short sale transaction falls through, the homeowners will be put in a position worse than where they started.
• On the other hand, there are numerous brokers who are experts in the field of short sales having successfully closed hundreds under their belt that advocate charging an upfront fee is fair because of their many hours put into the transaction.  If the seller simply decides to walk, the brokers do not receive any compensation for all their efforts put into the deal.  Remember, we are not talking about inexperienced, unsuccessful Realtors. The “stay applies only to real estate professionals who: 1) are licensed and in good standing under state licensing requirements; 2) comply with state laws governing the practices of real estate professionals; and 3) assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes.”

Is it wrong for them to charge a small upfront fee for their legitimate services? Some realtors claim that they had sellers who were excited for the upfront fees and hired them because of it. The upfront fee establishes a commitment in a transaction that is a prolonged process and requires many hours of effort dealing with banks/servicers, sellers, and buyers.

What is your opinion on this matter? Do you believe upfront fees are justified and even beneficial for the short sale or is it unethical for Realtors to charge prior to closing a short sale because of the detriment it may have on the homeowner in case of failure. Homeowner’s opinions are greatly encouraged.

Our team of agent’s stance is to not charge an upfront fee for any given short sale transaction.

Peter

*Agents/brokers, your comments on my blog are very welcome!! Thank you

WHY Short Sale ~ by Los Angeles Short Sale Agent

Why Short Sale ? These are 3 words that may be on the minds of many people in such difficult times.

What is a Short Sale ? A Short Sale occurs when the homeowner receives an offer from a buyer which is lower than the balance owed on the home mortgage. House values have declined so this may be the situation for many homeowners.

Why Short Sale ? People are feeling a burden of debt. Some are finding that they may be able to rent a home for less than they are paying for their mortgage payment, property taxes, insurance and maintenance on the current property.

Why Not Let the House Go to Foreclosure ? There is always tomorrow. In other words, we need to be concerned with our credit in the future. Foreclosure may reduce your credit score more than a Short Sale would.

Future Home Purchase could happen sooner after Short Sale vs after Foreclosure. Qualifying for a home loan after Short Sale of a house takes a shorter time period. Foreclosure will have you waiting for a long while.

If you are in California, there are 2 bills that are giving homeowners that Short Sale some protection.

Senate Bill SB 931 went into effect January 1, 2011 and prohibits a deficiency judgment after a Short Sale for First Trust Deeds (First Loan/Mortgages).

Senate Bill SB 458 now prohibits a deficiency judgment after a Short Sale for 1st AND 2nd Mortgages.

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation - Mortgage Debt Relief Act of 2007

In certain circumstances, a homeowner does not have to pay federal income tax on debt forgiven on a loan secured by a qualified principal residence via a Short Sale. For tax advice, speak with your tax professional.

Feel free to contact me with any Questions. If you are not in Los Angeles area, I can still help. I belong to a network of Short Sale Agents across the United States. For more FREE information, visit my website www.Short-Sale-Vs-Foreclosure-Help.com

Received a response for my "CAR - Call To Action" call made and the response I received today!  It really does make a difference when we all take the time to have our voices heard!

Dear Estella:

Thank you for contacting me about H.Res. 25, legislation expressing support for the current Federal income tax deduction for interest paid on debt secured by a first or second home.  I appreciate hearing from you on this important legislation.

As you know, the home mortgage interest deduction allows Americans a federal tax deduction, based upon interest paid on a first or second home mortgage.  This deduction acts as an incentive for homeownership, providing relief for American families and promoting a path to homeownership for the middle-class.

I believe the strength of our economy depends on a strong housing sector.  At a time when our nation's housing market continues to recover, removing the mortgage interest deduction would serve to destabilize our fragile recovery.

H.Res. 25 has been referred to the House Committee on Ways and Means, where it awaits further action.  Please know that I will keep your views in mind, should it reach the floor of the House of Representatives for a vote.

Again, thank you for contacting me to express your support for the mortgage interest tax deduction.  To learn more about my work in Congress, or to sign up for periodic e-mail updates, please visit my website at www.house.gov/matsui.

Sincerely,                               DORIS O. MATSUI                     Member of Congress

Received a response for my "CAR - Call To Action" call made and the response I received today!  It really does make a difference when we all take the time to have our voices heard!

Dear Estella:

Thank you for contacting me about H.Res. 25, legislation expressing support for the current Federal income tax deduction for interest paid on debt secured by a first or second home.  I appreciate hearing from you on this important legislation.

As you know, the home mortgage interest deduction allows Americans a federal tax deduction, based upon interest paid on a first or second home mortgage.  This deduction acts as an incentive for homeownership, providing relief for American families and promoting a path to homeownership for the middle-class.

I believe the strength of our economy depends on a strong housing sector.  At a time when our nation's housing market continues to recover, removing the mortgage interest deduction would serve to destabilize our fragile recovery.

H.Res. 25 has been referred to the House Committee on Ways and Means, where it awaits further action.  Please know that I will keep your views in mind, should it reach the floor of the House of Representatives for a vote.

Again, thank you for contacting me to express your support for the mortgage interest tax deduction.  To learn more about my work in Congress, or to sign up for periodic e-mail updates, please visit my website at www.house.gov/matsui.

Sincerely,                               DORIS O. MATSUI                     Member of Congress

Closed another Short Sale in Rancho Mirage, California.  Recorded yesterday for $265,000.  Bank of America notes at approximately $485,000.  

My Seller is a lovely woman who LOVED this condo.  She and her husband spent many happy years there.  Her husband died a couple years ago, and it just became too emotional for her to live there.  Emotional as well as expensive.  She finally gave in and decided to short sale it with me. 

My Buyer is a Canadian who was looking for a gated community with lakes.  He got it!  This community on the Northern side of Rancho Mirage, Lake Mirage Racquet Club, is fantastic.  He has a lovely condo with a private boat dock, and Western views of the Santa Rosas' over the lake..yes, here in the desert!!!  We truly do have it all.

My Seller is relieved and her stress level plummeted yesterday with Recording.  My Buyer is thrilled to have his desert winter retreat..all is well in the Short Sale world. 

Short Sales truly are a tremendous way out for both Buyers and Sellers...I list, work and CLOSE my Short Sales.  No negotiation company used or needed.  I actually enjoy the negotiations!

Short Sale Tip # 61 Birmingham, Michigan:  Don't wait to start the short sale process. “You HAFA try!!” Mike Sher (248) 496-1572, Max Broock Realtor

 Often real estate agents wait to start the short sale process until they have an offer.  This is a BAD idea and if the seller is not making payments it is a worse idea.  In short sales, time is not on your side.  So why not try and make some headway with banks before you have an offer.  Perhaps the seller can go HAFA (Home Affordable Foreclosure Avoidance) program.  This program offers full deficiency release, $3000 seller moving allowance and once approved, the bank is able to make a decision 10 days after they get an offer.  Why not try.  Sadly, some agents would rather wait to get a buyer before they start the HAFA process.  Not sure why they wait, maybe they unaware or inexperienced.  Either way, it is a mistake.  I would recommend that one day one your realtor or attorney sends in the 3^rd party authorization.  Day two a call should be made to investigate different short sale options.  Day three an application should be sent into the bank to start the process.  After all, “idle hands are the devils tool!”

Sincerely,
Mike Sher
Max Broock Realtors
248 496-1572

2010 results: 75 units sold, over $10,000,000,00 in sales and 365 days of FOCUS!

The Mike Realtor Team sells Homes in Bloomfield, Birmingham, Beverly Hills, Farmington, West Bloomfield. Rochester, Troy, Novi, Huntington Woods, Royal Oak & Auburn Hills. Call us at (248) 644-4700 X 242 or check us out at www.ShortSaleOaklandCounty.com or www.mikerealtor.com Mike Sher