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I am heated up and ticked off at the recent merger and bullying of Ocwen.  I want contact information for every Florida litigating attorney.

I am the listing agent on a short sale that I have worked for over a year. The first contract would not meet Ocwen's non-provided counter.  All that was stated is that the buyer must come up significantly but would not state to what price.  Let's just say the buyer walked, who wouldn't with those kind of pricing games. 

So I instantly receive an offer at market value from an investor willing to pay cash. 

I submit the offer and about a week later I receive an email from AltiSource stating I and the seller must sign authorization paperwork allowing Altisource to act as the processor on behalf of the seller and that we must submit the property to auction on HubZu for additional bidding.  The seller already signed off on an offer!  Furthermore, I am told unless we sign this paperwork the buyers offer will not even be considered and the application to short sale will be denied.  So this puts the seller in a legal bind.  Oh by the way buyer, seller is not breaching contract with you, Ocwen refuses to look at your offer and even though it has been signed off on you must go through an open bidding process.  Please understand the seller's hands are tied and we request you do not find the seller at fault or cause seller additional financial distress by going after any legal outlets.

In the paperwork form Altisource it states that I must provide the processor RSHH a portion of the monies received, buyer's agent a less than average of monies received and I myself will get what I do not bargain for.  Next it states that if I represent both sides of the transaction I must provide the buyer agent's portion to the net indebtedness instead of receiving it myself.

Are you kidding me.....The short sale lender is supposed to be subject to the contract and the owner of the property is still the owner who signed a listing contract with me, not Ocwen. The seller has the right to choose who to go into an offer with. Neither I nor the seller are willing to sign the paperwork and are inquiring on the legalities of this bullying. 

Where does Ocwen get off acting as the seller and dictating who the seller can go into contract with.  These banks need to have additional regulation.  They cannot just arbitrarily insert themselves into the contract acting on behalf of the owner and deciding who the seller gets to go into contract with. This is strong arming.  They also cannot dictate to the seller who they choose to use to process the short sale and dictate I must pay this group.  This is not in the best interest of the seller and in my opinion violates Respa. 

Does anyone else have input on this?  If you have some hotlines I can call and file formal complaints please pass them on. We have submitted to 3 trial attorneys and have placed a call with FAR.

ADVANCED SHORT SALE AGENT TRAINING

Taught by Wendy Rulnick and Bryant Tutas

This sound familiar? You’ve never had to deal with a short sale in your life – until a few years ago, when foreclosures became so common it was rare that you had a seller without one. Now you can no longer avoid short sales.

So you sign up and get your CDPE and your SFR designations. Maybe you have even closed on dozens of short sales. But still...........

......you're missing something. You are struggling when it comes to dealing with the lenders. You're stressing out over your transactions. And no one seems to be able to tell you how to do it quickly, with no stress.

Well, except us.

Short sales are the new norm. They’re often treacherous, and they can be extremely painful for buyers, sellers, and agents alike.

But they don't have to be. We’ve spent years figuring out how to make short sales less painful all around. You need to know how to handle a short sale, and we’re more than happy to share everything we’ve learned the hard way – so that you can learn the easy way.

This training series walks you through an entire short sale, from the very moment you realize you need one to the final signature on the deal. We’ve included every single trick, technique, and time-saver in our book to make short sales easy on you and on your seller.

You’ll have all the time in the world to learn at your leisure, too, with audio files, Q&A sessions, worksheets, and sample documents. Learn how you want, when you want, the way you want.

Ready to get rid of Short Sale stress and get yourself into Short Sale Superstardom?

"This is by far the best step by step instruction that I have received in my over 10 years experience in real estate" Petra Norris, Lakeland FL

What Do You Get?

· Two Experienced Practicing Short Sale Brokers, renowned in the short sale industry, walk you through an entire short sale from start to finish

· 13+ hours of easy-to-follow teleseminars along with insider tips and secrets for an extra edge

· All the forms, approval letters, and sample documents you need for your next short sale

· mP3 audio files of all seminars so you can listen at your leisure or refresh your knowledge later

· Q&A for as long as you need to get all your questions answered - unlimited access

We’re here to help you. We’ve been dealing with short sales for several years, and we know it can be rough on homeowners and agents alike. We want to make sure this process is as easy for you as possible, and that starts with getting you the education and short sale training you need to make the right deal.

The best part? It’s only $197.You'll get to listen in as two short sale industry experts walk you through the process of making a short sale happen, and then get the extra support you need, when you need it, by having direct access to Wendy and Bryant via www.ShortSaleSuperStars.com

That's 13+ hours of training for one low price– and a real bargain at less than $15 an hour for the best consulting on short sales available in the market.

"Thanks for sharing your joint experience in the minefields of Short Sales, the web forum, and all you have done. The training has been fantastic. I look forward to sharing with you and the charter members as well. This will be an awesome resource site for all of us as we work through the Short Sale maze. Short sales will be around a long time and there is great opportunity for all. The seminars have been fantastic." Don Duft, Realtor, Virginia

What Do We Talk About?

If you’re wondering exactly what we cover in each of the short sale training sessions, here’s a quick layout of what we’ll talk about and the specific strategies you’ll learn:

• Why a Short Sale?
• Qualifying The Seller
• 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
• VA, HAP and FHA
• Getting Short Sales Closed
  

Additional Benefits

• Short Sale Listing Package
• Expired Listing Letters
• Lis Pendens Letter
• FSBO Letter
• Sample HUDs
• Sample BPO Disputes
• You will become a "Featured Member" under "Find Agent" for leads
• Private Member Forum
• Direct Access to Wendy and Bryant For Short Sale Help

****After the Training is delivered to you please be sure to join http://ShortSaleSuperstars.com so we can activate your membership into the Advanced Training Group. All course materials are available in that group as well for easier access. This is also where you will get your continued support from Wendy and Bryant.

Start to finish, the perfect short sale. You’ll receive audio files of the course so you can listen to them as many times as it takes for you to feel comfortable that you can pull off a short sale as perfect as ours.

We know you can – all it takes is a little training, and the help of a few seasoned experts.

Becoming a Short Sale Superstar is just that easy.

"Both Wendy and Bryant's presentation skills are fantastic and between them they have a wealth of experience with short sales. Thank you Wendy and Bryant I really appreciate all your hard work and help in mastering the intricate details of short sales.Best wishes" Sharon Senger, Sharon Senger & Associates

Who Are Your Short Sale Instructors?

Wendy Rulnick

Wendy Rulnick is a licensed Real Estate Broker for over twenty years, and has sold hundreds of short sale and pre-foreclosure properties. She has been featured in Kiplinger Personal Finance Magazine and Florida Realtor Magazine as a short sale specialist Wendy also teaches Short Sale seminars and has developed a special agent training and resource site with her business partner, Bryant Tutas - www.shortsalesuperstars.com.

Bryant Tutas

Bryant has been in Real Estate for 18 years and is the Broker/Owner of Tutas Towne Realty, Inc located in Kissimmee FL. He is also the co-founder of Short Sale Superstars and co-broker of REGrow, LLC. Negotiating Short Sales is the cornerstone of his business. He does it often and he does it well.

We know firsthand just how rough the short sale process can be on sellers, and we’ve been working for years to fine-tune a process that’s easier on them – and on us.

Now we’re making it easier on you. We’re just that kind of people.

"Thanks so very much for all the wisdom, and Relaxed atmosphere. I love listening to yours and Wendy's conversations. I feel like a fly on the wall!! " Ginger Moore, Gastonia NY

What If I Don’t Like It?

Then you get your money back. It’s just that simple. We know we have the knowledge that helps you become a short sale superstar, but if you don’t feel the same for any reason, then we’re happy to refund your money. We want everyone who takes this course to feel they got their money’s worth.

After we refund your money, we’ll ask you how we can improve for others. We’re that devoted to making sure this is the best training course on short sales out there.

Ready to become a Short Sale Superstar?

ADVANCED SHORT SALE AGENT TRAINING

Taught by Wendy Rulnick and Bryant Tutas

"Your webinar was very impressive and informative. I feel that it didn't come across as a lecture, but good and clear conversation. The short sale is a very complex process, but you have made it much clearer and there was a lot of useful information." Richard Barton Real Estate Investor England

"I have signed up for your class and I have to say it is very helpful. My current focus is working with buyers and this really helps me understand things from your (listing agent) perspective and I am sure it will help me seek out the “good short sales” for my buyers. I wonder if you could create a designation like “Short Sale Expert”? You could even have it endorsed by ECAR or FAR. I will certainly write a letter of recommendation for you." Clayton Bonjean, Realtor, Destin FL

"I've enjoyed having my morning coffee with you every Saturday for the past 5 weeks as I listened in and tried to absorb all you had to offer. What an amazing gift you and Bryant are giving - the experience that you share is of such great value and I'm so grateful to be in your circle. I've learned to not be afraid of this process and begin embracing the possibilities. As you mentioned, I think short sales are here to stay for a while. Also, I've really appreciated the personalization of your setup and how you were able to answer our questions.I’ve completed lots of training but feel yours was most valuable in your method of approach and delivery. The dialogue made it feel like I was in an actual brick and mortar classroom with real live scenario" Wendy Weber, Realtor, Scottsdale, AZ

The Short Sale Listing Package

SHORT SALE QUESTIONS? BANK NEGOTIATOR TELLS ALL!

"Absolutely outstanding webinar! Best information I could have received and well worth the time and money!" testimonial from Suzanne Hinton, Realtor

Available to order on MP3 now-- Wendy and have interviewed a Short Sale Negotiator from one of the major lenders. He's been doing this for 18 years and is a wealth of information. He has spent 90 minutes answering our questions and those of our participants. He will give you insider tips, timesaving tricks, questions to ask when you call in, percentages MI companies cover and all the details you could ever want to be a Short Sale Superstar!.

We can assure you that the Interview is awesome.

The cost is.......

$27

The Interview is now available on MP3. Folks...... this may be the best $27 you have spent in a long time. If you want to soak up this knowledge..........

You may have been reading about Bank of America short sale approval letters and some changes that have occurred. The Bank of America Short Sale Approval Letter has had various versions dealing with deficiency of the promissory note. This article will look at the BoA short sale letter recent changes.

History - Before June 2009

Until June 2009 the typical Bank of America short sale approval letter was not a release of mortgage and a release of liability of the indebtedness (release of the note). My February 2009 article LENDER SHORT SALE ACCEPTANCE LETTER EXAMPLES - READ WITH CAUTION! contains a copy of the pre-June 2009 short sale approval letter. In it you see the language, "Upon receipt of the funds the bank will release the lien. The deficiency balance will be reported to the credit bureaus as "Charge Off" collectable balance. Liabilities for the deficiency balance to be determined."

After June 2009

After June 2009, the Bank of America short sale letter was materially changed in content and in look. The simple letter was gone. Now there was a form letter with distinct sections, one of which (the 2^nd and 3^rd paragraphs) states, "BAC Home Loans Servicing, LP and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreed otherwise or prohibited by law, if the short sale closes on the loan referenced above."

The next paragraph deals with the demand for a "new" promissory note with different terms than the original promissory note (usually with zero interest and a different term for amortization), and states, "If this short sale is contingent upon BAC Home Loans Servicing, LP and/or its investors receiving a promissory note, we will reserve the right to collect the full amount on the new promissory note which may lead to us pursuing a deficiency on that balance should the need arise.

After August 2010

Beginning in late August 2010 (so I have read) the BoA letter language was material changed. The new form used language that states, "Upon receipt of the agreed amount, BAC Home Loans Servicing, LP, and/or its investors will waive the remaining balance due on the above referenced loan and release the borrower from further obligation therein, and waive all rights to pursue further judgment or deficiency. BAC Home Loans Servicing, LP will report the debt as "settled for less than the amount owed" and issue a 1099 for the remaining balance." Now I have my hands on just such a letter.

Here is the post June 2009 BAC short sale letter:

The first paragraph in the above letter is actually very confusing and conflicting in its language. The reason for this is that the last two sentences that refer to tax consequences makes the reader think that this is a forgiveness of debt. This is because there are no material tax issues with the lender pursuing their deficiency - but there are definitely tax consequences when there is forgiveness of debt. (See my article which by its title says it all -- SHORT SELLER STILL MUST DECLARE INCOME ON SALE!). Why that language was there was because the lender "may pursue a deficiency judgment". In reality, from our experience many of the release of mortgage documents received from Bank of America after the short sale using this letter contains language that the promissory note is "fully satisfied" or "paid in full" or that the "indebtedness is satisfied", or similar language. In a few cases our clients reported collection efforts instituted by BoA, but in each the presentation of the recorded release document with the magic payment statement resulted in the collection effort being seemingly abandoned. Five years (the Florida statute of limitations to file a suit on the deficiency) has not yet run, so this supposition still has some time to be proven.

The next paragraph in the above letter is about the collection on a promissory note and is simply that the new note is a new obligation and thus the lender can sue separately on this note if it is not paid. That is simple enough. When there is an absolute need for a promissory note, I suggest to some clients to accept that offer because many of these notes get further reduced based on a present cash value payout since the NPV (net present value) of a zero percent interest note for a relatively long term (we see 10 and 20 year terms) carries a hefty discount. It takes some time (but not much) before a deal can be struck for a discount, but could be a viable option for a seller.

Next I have displayed the new BOA short sale approval letter. Unlike its predecessors, it is the first clean, clear and understandable full deficiency waiver letter Bank of America has produced. Since there is no new promissory note, that paragraph is missing. The language is so clear; I don't see what I can add in this article to make it more understandable. As expected, it mentions that a 1099 will be issued for the forgiven portion of the note, and there will be unfavorable but accurate credit reporting on the borrower's credit report. The next sentence in the letter is actually important. Some people are actually worse off because of a short sale with forgiven debt because they are liable for the IRS tax bill that results. If the IRS tax bill is a debt that will be impossible for the borrower to honor, and no arrangement for lessening that debt is available, the borrower may actually be jumping from the frying pan into the fire. In such cases some other alternative, such as bankruptcy may be beneficial. Note that if you incur a tax liability from a short sale forgiveness before filing bankruptcy, it may not be dischargable! Thus careful planning is necessary.

Here is the post August 2010 letter:

Please realize that currently BoA is using both letters, depending on numerous factors not all of which anyone outside (and probably inside) BoA can recite with certainty. In fact you can see that these letters were both received in first 2 weeks of November.

The question comes up when does BoA issue one letter or the other?? My first thought would be that the primary residence got the waiver language. Wrong! This was an investment property and the seller has multiple properties. As you may or may not know, BOA is usually not the investor who owns the promissory note and mortgage - but BoA is the servicer and given the authority to negotiate the terms of the short sale, subject to final approval by the investor. That is why different lenders have BoA issue different terms for their short sale approvals, whether it be a contribution of cash to the short sale, or a post closing promissory note, or a residual deficiency option.

Copyright 2010 Richard P. Zaretsky, Esq.

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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, email: 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 understand articles at:

TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES

Need feedback, help and advise.

I've listed a home (Nov. 2011)  in Scottsdale AZ, for a seller who was discharged of his Mtg Debts thru Chapter 7 BK in  2 months prior-Sept.2011.

The seller did not want a secondary negative credit reporting of a  'foreclosure' on his credit after his BK, so that is the reason he would like to short sell.

The first Lien holder ( B of A) approved the short sale and offered the junior Lien holder (chase) $6,000 to release the lien.

Chase sold or transferred their Mtg debt to a Debt collector named Five Lakes Agency (out of MI), who I believe works under the company known as Randall, Miller & Associates P.C.

This Debt collector has demanded all the short sale info and  contract, including the buyers (who I do not represent) Pre Qual letter. (Fincancials!) in which I  provided everything to them to move for  their approval.

This Debt collector stated, "The house has NOT been on the Market long enough, and to dump this accepted buyer and find another one who will pay them $20,000, otherwise, the sale will NOT happen". They said they "will NOT forward the contract and B of A offer  that pays  Chase $6,000 and a minimum of $20,000 is all they can forward to Chase." 

Now, let me get this straight..

A 3rd party (not associated with the debt in Michigan,  is a negotiator for a short sale which is  practicing Real estate- UNLICENSED in AZ-  as well as attempting to collect an 'uncollectable' debt from a party (Buyer)  not associated with the actual debt- in order to strong arm a hold on the junior Lien release.

What happened to MARS compliancy?  How do I get past this Debt collector to let Chase KNow they have $6,000 free money to simply release the Lien in which they have to do anyway if the home forecloses...

Anyone- anyone- ?

First I would like to thank ALL of you for your comments. It worked! Let me try to sum it up for you.

- Put the house on the market October 2009.

- Got an offer 1 day later, VA buyer fully approved

- Submitted ALL paperwork to BOA

- Waited all of October, November and December

- Get a notification that we must use REO Trans/Equator - WTF???

- We upload everything in Equatore

- We get a denial end of December because they cant get the log in right.

- Start the process all over again. Now we are moving forward.

- Wait, and wait, nothing in December, January or early February

- Buyers are going to walk, but willing to wait until end of Feb

- Contact BOA and nothing

- Foreclosure letters have been coming since January

- Contact Foreclosure attorney and they get us a negotiator - Can you believe that?

- Negotiator is communicating so we are moving forward

- Now it's March and we are in REO Trans/Equator and it says Negotiation.

- We email, we call, we write. We call attorney. They cant help.

- Foreclosure date set for March 24. Buyers extend til March 15 because they see we have a negotiator

- March 10 comes and goes. Nothing in REO/Trans.

- I take a SFR class on March 11 to get certified in Short Sales and learn absolutely NOTHING but BOA is hard to work with and God bless anyone who can get one closed in time

- I meet you guys on March 12th.

- I first filed a complaint with the OCC, BBB and sent a letter to my congressmen and to President Obama. I copied all the folks I spoke to in the past at BOA, the foreclosure attorney and I emailed and left messages for Dave Sunlin, SVP, Mr. Massey, Chairman of the Board and Joe Price, Chief Financial Officer, Gabrielle Harrison, VP of REO Sales. I did all this on a Saturday and Sunday so that Monday morning, they would have my emails waiting for them first thing.

- Monday afternoon, March 15 (they are in a different time zone) my phone was ringing off the hook. I got phone calls from 2 BOA reps and a call from Fannie Mae. WOW!!!!

- I also called the MI company Old Republic who told me they couldnt talk to me so I had a BOA rep on the line working with them to get the whole thing negotiated. It was like a symphony.

- On the eve of March 15, 2010, I had the loan negotiated and the MI company responded to the deal (BOA said the MI company was the hold up.) They said they would call me back by March 16 to get things approved.

- On March 16th, not a single soul called me. I am angry now because I was just stood up. Not acceptable.

- So, at 4 pm. I called Dave Sunlins office and what do you know. His assistant answers. I told her hat this will not work and that they need to realize that this could happen to them, etc. etc. etc.

- At 6 pm my time, I got a phone call from the senior team manager leader whomever

- At 7 pm she APPROVED the loan. Can you believe??

The Squeaky wheel really does get the grease. Squeak and you shall GET!

Below is the letter I sent to BOA:.(use it, change it, whatever) They need to hear from YOU!

Good luck and if you would like to email me for more info, I will give you whatever you need latouche@hotmail.com

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Dear Mr. Sunlin, SVP of BOA Loss Mitigation Dept at BOA,

(Note: I have copied Mr. Massey, Chairman of the Board and Joe Price, Chief Financial Officer)

How are you? I trust all is well.

I know you don't know me, but it is time I contacted you regarding my Bank of America Short Sale. I have been so upset that no one at BOA will assist me to get this short sale closed, that I have made a formal complaint in writing to the OCC, the BBB and FDIC. I will be happy to copy you on the letter I am also writing to our government about the unfair and unethical treatment of American citizens by BOA. I plan to send a press release to CNN to expose this unfair practice against your customers.

The property address:
-------------------

-------------------

Chesapeake, Virginia 23323

Respectfully, I am trusting you will try to get to the bottom of this situation. In summation: I have a home that was sold in October to a ready willing and able buyer and BOA wont do anything to help me get this home closed. The buyers are going to walk away on March 15 and my home is in foreclosure proceedings. This is unconsionable. Please assist ASAP. I have outlined the situation below if you are interested in seeing how much pain and suffering I have endured.

I have been rather patient through the process, but time is of the essence. I have a short sale that has been in the "works" since October 2009. For some, October 2009 is not a long time, but JUST imagine you bought a house in October and you cannot move in until "NEVER." Also imagine me, the seller, about to get foreclosed on when I have a ready, willing, and able buyer. This is absolutely ridiculous and unconscionable.

Let me share the timeline with you:
October 2009 - listed our home
October 2009 - got a qualified buyer and a ratified contract
October 2009 - sent a complete package to BOA
October 2009 - BOA acknowledges receipt of packet
November 2009 - NOTHING but waited
December 2009 - NOTHING but waited
December 2009 - We are told to use REO/Trans aka START Process ALL OVER AGAIN
January 2010 - NOTHING but wait
Buyer is about to walk now. They are impatient
February 2010 - Foreclosure notices are coming left and right.
February 2010 - Buyers extend because we now have a NEGOTIATOR named Erica from BOA
February 2010 - STILL WAITING
February 2010 - Supposedly waiting for response from MI company
March 2010 - Buyers are threatening to walk away no matter what if the home does not close by March 15th (THIS YEAR)
March - 2010 - Foreclosure date set for March 24, 2010

Still Waiting, nothing done, still in REO/Trans in the negotiation phase.

Can anyone explain why BOA would rather foreclose than get this home SOLD!!!!???

I have been in contact with Erica Myers-Bill with BOA and her email is erica.myers@bankofamerica.com. While she is very nice, I understand that she is just the person who answers the phone and email. Other than that, I know she has no power to get anything done.

I expect immediate action as my buyers would like to close on March 15, 2010 or they will walk. The market is not that great, therefore, we dont know when, if ever, we will get another offer from a qualified buyer.

I hate to involve the entire BOA family, but it seems like I have no other option. Until I get satisfactory action, I will contact whomever I can. All I want is to get this home closed and make the buyers happy. They have been patient too and they deserve the home they are contracted to buy.

I know you are not personally responsible for the negligence of your company, but I am respectfully begging for your help. I have suffered enough stress, sleepless nights and hair loss over this ordeal. I would pray that you can find it in your heart to help get this situation expedited and resolved IMMEDIATELY! I wish I could articulate in words how this has affected me, but I am sure that is the last of your concern. In summation: PURE HELL!

If it's the last thing do, I will find your home address and camp outside your home and/or office until you approve this loan.

God Bless and good night!

Today’s trend in short sales is "waiver of deficiency”.  A short sale is where a property is sold without enough proceeds to pay off the mortgage debt. A "waiver of deficiency” is what happens if the lender accepts the short sale proceeds as payment in full, and cancels the balance of the debt. 

It used to be difficult to get waivers of deficiency from companies such as Bank of America and Chase.  Now it is getting a bit easier, albeit not less painful for the homeowner.  Typically, a cash contribution or promissory note is required for the lender to issue a waiver.

If a deficiency waiver is not issued, there is a chance the lender will pursue the borrower for the balance of the note after the short sale closes.  They may sell the note to a collection agency and might seek all legal means to get the monies owed, including a deficiency judgment in Florida.

Not all short sale sellers want a waiver of deficiency. Some have a higher tolerance for the uncertainty of future collection efforts. I’ve had recent short sales in Destin and Fort Walton Beach Florida where the homeowner states:  "I know I owe the money.  I will pay the bank later.” or "I cannot come up without enough funds now to contribute to the loss.  I will deal with the lender if they contact me.”

Even if a property is sold without a waiver of deficiency, there is a chance the lender may not pursue the homeowner for the balance due.  It’s always best to consult with an attorney to discuss your situation.  Given options – each seller needs to make his own decision during short sale negotiations.

Learn more about Short Sale Negotiations on the new webinar by my www.ShortSaleSuperstars.com partner Bryant Tutas and me.

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

As a further sad saga on the false hope of Quiet Title lawsuits being a fabulous answer to homeowners trying to invalidate their mortgages, a Florida foreclosure defense attorney who tried the scheme on his own property is now missing and has absconded with over $3 million that was in his law firm and title company trust accounts.  The scheme to eliminate the homeowner’s mortgages was discussed in my last article,  QUIET TITLE MORTGAGE FORECLOSURE DEFENSE MERITLESS IN FLORIDA and before that in QUIET TITLE ELIMINATION OF MORTGAGE ATTACKED BY FLORIDA AS DECEPTIVE.

Timothy McCabe tried the novel textbook tactic out of the playbook that some foreclosure defense attorneys have promoted.  According to local news reports, including today's Sun Sentinel, in December 2012 McCabe applied to the court for a final judgment to quiet title of a property he owned.  The loan was originally provided by AmNet Mortgage, but was later sold to US Bank, to whom some payments were made by McCabe. Notwithstanding McCabe’s knowledge of US Bank being the lender, McCabe served the complaint on AmNet Mortgage, not US Bank, and when AmNet Mortgage did not timely respond, he obtained a clerk’s default against the defendant and applied to the court for a final judgment declaring that McCabe was the owner of the property without the lien of the mortgage now held by US Bank.

The trial court judge however is known to be bright and no pushover.  The judge looked at the public record and saw that McCabe was in a foreclosure suit on the same loan, but the plaintiff in that suit was US Bank, not AmNet Mortgage, and saw that the service of the suit was on AmNet Mortgage and not US Bank.  Having unraveled the scheme, the trial court judge said in his opinion, “The actions of these attorneys show willful and intentional professional misconduct and intentional fraud upon the court and contempt of court”.  He then referred the matter to the Florida Bar for further investigation.

The Florida Bar has since filed a disciplinary complaint against McCabe and his law firm partner because of the matter.  This week it sought an emergency disbarment of McCabe.

The next day after the filing of the bar complaint, McCabe took off, leaving his wife and children without a clue as to where he is. He also emptied the money from the escrow accounts.

The public needs to know that these quiet title actions when used to defeat a mortgage are usually bogus and not in good faith.  Attorneys that promote the scheme are typically not well educated in the concepts of quieting title.  They should be scrutinized carefully.  If it seems like it is too good to be true, it usually is not true!

There are situations where a quiet title action is appropriate,  Last month an investor that buys notes and mortgages and uses us to advise him, brought a loan package for us to perform due diligence.  The foreclosure suit had been dismissed by the court and an new suit had not been refilled for over one year.  The promissory note that had been in default was defaulted 5 years and a month earlier.  Clearly the promissory note was no longer enforceable by an action to collect the money because more than 5 years had passed since the notice of default, and there was no pending lawsuit to enforce the contract.  In Florida, the this type of written obligation must be enforced within 5 years of a declared default or the "statute of limitations" bars enforcement thereafter.  The note and mortgage were worthless and the borrower in that case should file a quiet title action to invalidate the mortgage because it is now unenforceable by reason of the unenforceability of the promissory note that is the basis of the mortgage.

Sadly, I know the attorney and I pray that no harm comes to him and that he returns to his family and deals with the problems around him.

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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. 

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TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES.

Do you hold a government position, are you in the U.S. Military or are you a Federal contractor? These and many other jobs often require asecurity clearance. If you are considering short sale or foreclosure, proceed with caution or your position may be at risk.

If you currently hold a security clearance, such as DOD  “Confidential”, “Secret” or “Top Secret”, and work for the Federal Government, at Eglin Air Force Base or Hurlburt Field, you may already know a credit check is one of the standard procedures to obtain your clearance.  A short sale, foreclosure, or deed in lieu of foreclosure, as well as missed mortgage payments, can all affect whether or not you retain your clearance.  

“Why should I care?” you might ask, especially if you are not in the military.  According to the Washington Post, over 850,000 Americans hold security clearances and one-third are NOT employed by the government.  Also, those who hold security clearances are among the top wage earners in the United States.  You don’t have to be a technocrat or engineer to require a security clearance. If you are a janitor, fire fighter, police officer, or administrator in a secure facility, for example, at an international airport, you may need a clearance.

Before proceeding with a short sale, I ask my potential sellers to check with their current or FUTURE security or personnel officer to find out how a short sale may affect their position.  Even though many have received the “OK for short sale, but not foreclosure or deed-in-lieu of foreclosure”, a few have not.  I recently had an airman from Fort Walton Beach Florida inquire about short sale.  He told me his new position would be overseas with an international military group, representing  the United States. I asked that he check with his security officer before proceeding with a short sale. The answer? “No way.” He would have lost his position if he had gone forward. Instead, he is going to rent out his property. (By the way, that potential seller had interviewed two agents, and I was the only one who mentioned this possibility.) 

How about another “at risk” scenario? I had a former short sale seller apply for an overseas position in the Middle East as a U.S. contractor after short sale.  All applications, interviews, etc., had been completed except for the credit check. The position was denied. Why? Short sale.  I don’t want to frighten anyone away from short sale who needs a security clearance, as these are the less frequent outcomes. But, I want to put out a strong warning, consult your security officer before proceeding.

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204
Email Wendy: itswendy@rulnickrealty.com

Niceville Florida Short Sale Help

Wendy Rulnick, Broker, is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". She has successfully helped hundreds of families avoid foreclosure through short sale along the Emerald Coast of Florida. Wendy Rulnick is knowledgeable in all aspects ofshort sale, including VA Compromise Sale, FHA HUD pre-foreclosure sale, HAP military PCS, HAFA, Bank of America Coop program and more.  She is also co-founder of www.ShortSaleSuperstars.com and short sale instructor to agents across the United States. Wendy Rulnick sells real estate in Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Panama City Beach, Eglin AFB, Hurlburt Field. 

ING Direct, the Dutch-bank and internet-based mortgage lender, has objected to American Homeowner Preservation’s program to keep families in their homes, and ING will no longer consider AHP short sales. “ING DIRECT will also be adding your company to our exclusionary list as your company strictly finds investors to keep sellers in their home, while the bank takes a significant loss.  This is against ING DIRECT’s short sale policies and guidelines, and as such you will no longer be able to work on this short sale file or any future ING DIRECT accounts,” Adam Agostinelli of ING Direct Retail Asset Management advised in an email to AHP. “We are disappointed in ING’s failure to recognize that AHP’s program can reduce ING's losses and concurrently keeps struggling families in their homes,” stated AHP’s Michelle Weadbrock.

Although ING Direct President Arkadi Kuhlmann (pictured atop motorcycle) has rightfully bragged of ING's lower-than-average 2.88% default rate, ING did require a bailout by the Dutch government and has recently been accused of violating federal truth-in-lending laws. In addition, Kuhlmann states that “the European Commission has mandated that we be sold by 2013” as part of a move to break up large financial institutions. Is now the time  for ING Direct to amend their short sale policies so that maximizing ING’s recovery while allowing families to remain in their homes is an option?

Until 7/21/2010, our office had never received a Bank of America short sale approval letter that relieved the borrower from future liability or from the pursuit of the deficiency after the short sale. In what hopefully marks a meaningful shift in Bank of America’s handling of post-short sale deficiency issues, Winged Foot Title received a Short Sale Approval Letter from Bank of America that waived its and the investor’s “rights to pursue further judgment or deficiency.”

If you have been involved in an approved Bank of America short sale, then you are likely aware of what has been the company line on borrowers’ future liability. To wit, the standard language has been: “BAC Home Loans Servicing, LP and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total balance due, unless agreed otherwise or prohibited by law, if the short sale closes on the loan referenced above.”

The deficiency language in the letter is significantly different. It reads:

“Upon receipt of the agreed amount, BAC Home Loans Servicing, LP, and/or its investors will waive the remaining balance due on the above referenced loan and release the borrower from further obligation therein, and waive all rights to pursue further judgment or deficiency.”

We were admittedly shocked by the language in this letter. Winged Foot Title’s Short Sale Title Solutions Team has orchestrated a hundred or so Bank of America short sales over the last two years. Because of the previously standard deficiency language, we have made a point to make available to listing agents and their short sellers copies of prior approval letters from Bank of America so that the sellers’ expectations would be set correctly in advance of delving into the short sale process. This letter, unique as it may be (it is the first and only we have received), may signal a shift in Bank of America’s deficiency standards. At this point, we are hard pressed to shout that out loud. What we can say with confidence is that under certain circumstances, Bank of America and certain investors may at least be making ad hoc deficiency evaluations and determining on a case by case basis whether or not to retain the rights to pursue further judgment or deficiency.

Winged Foot Title is busy compiling the details leading up to this potentially groundbreaking approval letter and will share them as quickly as possible.

Stay tuned...

Move in without closing first? Whoa! I just got an offer on a Destin Florida short sale listing with an early occupancy clause.  The buyer wants to move into the property before closing and short sale approval.  Is that a good idea? One of the negatives of short sales is the waiting time for the buyers during the short sale process. It could take 60-120 days for a short sale approval, then another 30 days for the buyer to close. Some buyers “bail” because they get wandering eyes or are tired of waiting so long.  The solution for some sellers, to keep a buyer in the sale, is to allow the buyer to move in early.  This could be a bad idea, but there are some things short sale sellers can do to lessen the risk.

1.       Require the buyer to complete and remove the home inspection contingency prior to move in.  Why?  Removing this contingency overcomes one hurdle to successful closing. Since most short sales are sold “as is” with the right of buyer to inspect and accept or reject the property, you’ll have that clause of the way.  Also, it might lessen those phone calls to the seller as a landlord after the buyer has moved in.

2.       Require a lease.  This may seem basic, but without it, you might lose legal protections if the closing does not occur and you have a tenant you don’t want. Who negotiates the lease?  Not me.  Property management is a specialty, and it’s not mine.  I refer my clients to a professional property manager, or they make their own lease if they are experienced with rentals.

Should a short sale seller allow early occupancy? It's not my decision, but I’ve had several successful short sales where the seller did negotiate early occupancy and allowed the buyer to move in early.  In these cases, we knew the short sale was likely to be approved, the buyer was pre-approved for a mortgage, the earnest money was deposited, the inspection contingency was removed, and of course, there was a lease. 

If you are considering short sale to avoid foreclosure, be sure to consult an attorney and an experienced Destin Florida short sale agent.

It's Wendy!

Wendy Rulnick, Broker, Rulnick Realty, Inc.

Call toll-free 1-877-487-9639 or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Destin FL Real Estate

Destin Short Sales & Pre Foreclosure Help.

Read Wendy's Destin Real Estate Blog

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner, to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. 

Again, we were shocked but excited by the Short Sale Approval letter language waiving Bank of America’s and its investor’s right to pursue further judgment or deficiency after the short sale. In the interest of educating and of determining what type of Bank of America short sale may result in a deficiency waiver, let’s take a look at the details that lead to the approval.

The original loan amount was $220,562.00 and was taken by two sisters in order to purchase a Fort Myers home. Early in 2010, one sister lost substantial income and was not able to contribute her share of the payment. The other sister could not afford the entire payment on her own. Because of the hardship, the sisters listed the property for sale in early June. The received an offer on June 7, 2010 and the file was initiated through the Equator system on June 11. Incredibly, the file was approved in just 29 business days from the date of the Equator initiation!

A copy of the approval letter has been made available. In it you will find that the approved offer price was $60,000.00. Total closing costs were not to exceed $7,003.17, including realtor commissions capped at 6% or $3,600. Bank of America’s investor’s approved net was $52,996.83, or roughly 24% of its original loan. The approval letter contained sections dedicated to Promissory Notes and Cash Contributions; but neither were applicable in this situation and the sellers were not required to sign a Promissory Note or make a cash contribution at closing.

We have also made available the only Deficiency Evaluation Tool (DET) we have ever seen. In fact, we just Googled “Deficiency Evaluation Tool” and got only one unrelated hit. We are working with Bank of America to find out more about the DET, but on its face its title seems to do a fine job of describing the DET’s use. It seems that Fannie Mae (FNMA) and/or Bank of America will use this tool and its questions to determine whether it should waive the approval’s deficiency language or not. Here are the questions along with the answers related to our transaction:

1. Select state in which property is located (ok…not really a question, but it’s there!) [Florida]
2. Owner Occupancy: Was the home owner occupied at the time of the origination? [Yes]
3. Purchase money: Did the first lien finance the home purchase? [Yes]
4. Is the first-lien investor non-delegated? [No] (we do not understand what this means and are working on an answer)
5. Is there a BAC second lien? [No Second Lien]
6. Is there a mortgage insurer (MI)? [No MI]
7. Is FNMA (Fannie Mae) the investor? [Yes]
8. Have we received an appropriate contribution, or has FNMA agreed to close without a contribution? [Yes]

Based on the DET we received and the answers provided, it may be safe to create a checklist for determining the likelihood of deficiency waivers for Bank of America-servicedFNMA loans.

If you have any questions, please feel free to call me at (230) 985-4142.

- Chris

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