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Last year I predicted that Palo Alto will see more short sales in the future. Well, the future is now so what is happening? There are currently 2 short sales on the market, 5 in escrow, and 6 closed in the last year. This isn't a huge number, but certainly more than we saw in the early part of the century. There's a lot of chatter in the media about how the government is giving banks and homeowners incentives for short sales, and how banks save money by allowing short sales, but does that help the typical Palo Alto underwater seller?

The short answer is no. There is not a lot of help for owners with jumbo mortgages.

The long answer is maybe not.

Here is what I have learned in the last year. It may not be the whole picture, as this world of what happens at the banks, hedge funds, and mortgage insurance companies is not transparent--but I have been involved in short sales and have studied them a lot.

If you are one of the few owners who has one loan then the chances of a successful short sale are much higher. The bank will lose less money than with a foreclosure and will be more inclined to approve your sale. This is assuming you have a verifiable hardship. However, even people with only one loan may run into road blocks if the bank has investors who own pieces of that loan,( frequently hedge funds) and if they don't feel the offer on the house is good enough for them they may derail the sale.

Ok, so what if you have 2 loans, but they are both with the same bank. Again, this is usually easier than some of the other scenarios, but not a guarantee. The bank may be willing, but the investors may not be.

Third scenario, you have 2 loans with 2 different banks. First bank offers second bank 3-10K to allow short sale. The theory is second bank will get nothing if there is a foreclosure. Second bank can have 3 reactions.

1. Co-operate because they get nothing if there is a foreclosure.
2. Play hardball because they know the first bank will lose more money if they foreclose.
3. Not cooperate because they have insurance on the second loan and will get more money if the first bank forecloses and they get paid 25% of their loan from the insurance company as opposed to the 1-5% they are being offered by the first lien holder. In this scenario the first bank is probably not losing too much because borrower has very little equity to begin with since they borrowed on a second or equity line.

4th scenario: In addition to a first and second loan there are other liens against the house including tax or business or personal loan liens. In this case a short sale is almost impossible to accomplish and it is not worth anyone’s time.

So as you can see this is a complicated process and not for the faint at heart. Since many of the loans on Palo Alto homes are jumbo, there are a lot of hedge fund managers out there making decisions about markets in which they may not have enough information. Added to that is the growing resentment against borrowers who are opting for a strategic default or foreclosure because the asset (their home) has depreciated so much they don't feel it is a good investment strategy to hold onto it.

It will be very interesting to see how many attempted short sales actually go through in the next year.
Marcy Moyer
Keller Williams Realty
650-619-9285 Twitter

*photo courtesy of South Florida Short Sales
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"Don and Wendi Sheets did a great job at selling our house. We had it on the market for a year and half when we hired them, they came in and gave us realistic advise and ideas. We nearly lost the house to foreclosure but they helped us through a short sale situation and saved us $30,000 in process. They are a no nonsense team with a ton on knowledge in short sales. We are very grateful for all the work that was put into selling our house. Thanks, Don and Wendi!" Burgess, Milford OH

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Short Sale Approved!

Hi,We are buyers and would like share our story and thank short sale superstars for all the great information! Without this website, we would not be close to sealing this deal with the banks!We started our short-sale process on January 29, 2010 and finally closed escrow yesterday. Here is our timeline.2/5- Sellers signed contract3/6- BPO ordered4/21-BOA approves- gave us til 6/1 to close5/6- CitiMortgage approves-gave us til 6/7 to close5/21- Appraisal ordered and came in lower than our purchase price (50K lower)5/22- Request for an extensions with both lenders and submitted a revised new amount on contract/resumitted again in equator6/11- BOA ordered another apprasial and the amount was the same6/25- BOA accepts new revised price, goes into investor review ( this takes about 3 weeks)7/14- Short sale approved!7/29- Escrow closes!We went through high and low with this short sale. With shortsale superstar, I was able to find information that helped me channel through the office of the president, ways to deal with the negotiators and the escalation process, and even taking my questions on BOA twitter. In the end, we end up saving $50k on the purchase price.For all the buyers out there, it can happen!
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Well this one was not easy. Sun Trust took 11 months to approve this Short Sale! Nine of those were
waiting on the file to be assigned to a negotiator. During this time we
lost 2 buyers and finally found one to stick.....I thought. About 3
weeks ago I received the approval to close. Even though I had
communicated with the Buyer's agent every week for the last 9 months I
found out a week before closing that the Buyer had changed his mind!!!

So....I had to place the property back on the market as an "approved short sale".

We needed a cash buyer that could close in 7 days at the full asking price. Luckily we found one.
Lolita' Clay from Exit Realty brought a full price cash Buyer and they
closed today. 3 days before the Short Sale approvals expired. Way to go


4 bedroom 2 bath condo in Legacy Dunes. Legacy Dunes is a Short term rental community about 5 minutes from the
main gate of Disney World in Orlando Florida. The condo was purchased in
July 2006 for a whooping $335,400!! We sold it yesterday, 4 years
later, for..........$60,000!!! That's a decrease in value of 82%.


Loss of income


1st with Sun Trust for $269,150. Settled for $62,183 or $.23 cents on the dollar.

2nd with Sun Trust for $30,350. Settled for $10,973 or $.64 cents on the dolllar

HOA lien for $6,000. Received full payment from the Seller.


The Seller had to contribute $17,500 to Sun Trust plus had to pay the $6,000 to the HOA. No promissory note and Sun Trust issued a Waiver of
Deficiency for both liens.

Another successful Central Florida Short Sale by Tutas Towne Realty!!

Are you facing foreclosure on your Sun Trust Mortgage? If so........

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more?

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Another Short Sale Success Story!

Beautiful 3 bdrm/ 2 bth family home with rocking chair from porch originally sold on July 19, 2010 for $109,829.00. Our short sale approval timeline is as follows:

June 9, 2010 - Submitted short sale paperwork to lender along with offer and preliminary HUD-1

July 15, 2010 - BPO assigned to area agent.

July 22, 2010 - BPO received by lender.

July 23, 2010 - File assigned to negotiator.

July 27, 2010 - Negotiator conducts phone interview with seller.

July 29, 2010 - Short sale approval received!!!

Original Loan Amount - $ 109,829.00
Short Sale Purchase Price - $ 48,637.00
Amt of waived deficiency - $ 61,192.00

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For years, the term “short sale” has been the antithesis of the real estate market….from holding your breath for seemingly an eternity waiting for a loss negotiator to let you know whether or not you’ve reached their “golden figure” to wondering whether or not the listing agent is acting as an automatic offer vessel funneling as many offers to the lender as humanly possible. Let’s face it, for so long it was the “Wild, Wild West” of the real estate industry.

Then, all of a sudden, lenders (and Realtors) began to actually conceptualize the idea that the notion of selling properties for less than the actual mortgage note could actually work… long as processes were made SOP on the lender’s end and education became more common throughout the real estate industry. Since I’m a HUGE fan of the FHA Pre-Foreclosure Sales Program, I’m focusing on the benefits of this program from a different angle….the buyer’s perspective! Here are a few ways that this program works to assist the home buyer:

1) Upfront terms – One major benefit, from a buying standpoint, is that these sales are “pre-approved”. Not only that, but HUD has mandated a “sliding scale” of what their net profit would have to be based upon the length of market time! Now, the selling agent is able to adequately calculate exactly where your offer needs to be in order to get the deal to the table!

2) Closing costs assistance – Although HUD advertises that they’ll concede up to 1% of the purchase price for closing costs assistance. Ask your negotiator to request a variance for up to 3% in closing costs. It can be done and most of the variance requests are APPROVED as long as their desired net is met.

3) Appraisal costs – If you’re purchasing an FHA Pre-Foreclosure sales program property with an FHA mortgage, then you can bet your bottom dollar that an FHA certified appraisal has already been completed on the property. In fact, since that appraisal has already been assigned an FHA case number, then it’s married to the property for the next six months. The bottom line is that your buyer can save the expense of the appraisal since one has already been completed on the home!

It’s pretty clear that we’ll be dealing with an increased number of short sales for the next few years. So, removing the stigma is a must so that we can reduce the number of boarded abandoned properties and maintain a semblance of communal appeal within our neighborhoods.

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here is my horrer story...

2 banks were involved, placed an offer on october 2009 on this short sale property. this property was orginially in the market as a short sale from june 2009,

at one point 1st bank ordered a BPO ( internal), and 3 weeks letter they ask us if we close in 4 days ( that was end of april 2010). we were not ready, however at the same time first bank reealize that there is 2nd bank involved.. i am not sure why sellers agent did not work with 2nd bank before??

anyway, finaly we negotiate with 2nd bank and got ther approval which is good until end of the month.. they might extend it.. when we got the approval letter from 2nd bank we provided it to first bank and ask the approval from their side ( remember, at one point they wanted us to close in 4 days, however, at that time they did not gave us an approval letter).. it has been 3 weeks since we are pleading first bank to give us an approval ( at that time the negotiator ask our ( buyer) finiancial statement and check if the seller has any other loans ( which i belive he has none) and we realize that last week they completed seconed BPO ( internal). which was done on sunday.. ( On top of that the negotitor of the first bank had no idea about this BPO, so i guess some intertnal department of bank orderd that)

now how long it will take to get the approval from the first bank? or will they approve or not??

in this case what should i do to expediate this sale?

what can my agent ( buyers agend) should do and what can sellers agent needs to do to get this thing done?

i feel like i will have heart attack.. it has been more than 9 months.

help please.... belive me i am dieing but at the same time i am thinking i have spend more than 9 months waiting for this? should i walk away?

help please

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Has anyone worked or closed a short sale with Primary Financial Services, LLC based in Phoenix AZ? They are the collection company Wells Fargo Home Equity sells off to. I'm working a file where Wells is the 1st and PFS is the 2nd. Wells has agreed to pay 10% or $8K to PFS, but PFS wants 20% or $16K. I'm looking for a good contact to escalate to or for any ideas you may have. This is a CA purchase money deal so there is no recourse against the seller. PFS stands to lose a lot of money if this goes to foreclosure. Your comments are appreciated.


Ryan Smith

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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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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...

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Finding the Short Sale Superstars have been like taking a deep breath of air. I have read till I'm seeing double and still want more. The knowledge that is shared on this site is priceless. I get the reassurance that I really do know what I'm doing. I just needed to bounce it off of someone that has had the same experience. As you all well know, there's not ever one deal the same, but close. So when you question yourself, just ask one of the Superstars and you'll get the accalades that you deserve. No one else knows the pain and joy we feel helping our clients.

Thanks Superstars

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Short Sale Management Software

Hi ..We are looking for a really good SS management software program?

Ideally we would like it to have the capability to track the sale and a calendar timeline with reminders, have a running communication log, forms to access. file information and documents storage, analysis spreadsheet, contact database and maybe fax capability ...etc. Dreaming about that program that has all the buzzers and bells...maybe could cook dinner too!! ;-)

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Nashville/ Mt. Juliet Area Short Sale home, closed with Ocwen Mortgage-
12433917865?profile=originalWe recently brought this Short Sale home in the Mount Juliet, TN are to closing. The mortgage was held by Ocwen who was servicing the loan for Freddie Mac.
We helped the homeowner write his hardship letters and start the short sale process, then provided the ongoing paperwork, price information (BPO) and established a relationship with the negotiator at Ocwen.

The homeowner owed over $264,000. Ocwen settle with us for $215,000. The new homeowner has a wonderful home which appraised for $230,000 and the former owner has piece of mind at last. Plus the former owner can say that he did not walk away from his obligation, but rather made an effort and reconciled his debt. This will go a long way for him in repairing his credit.

If you or someone you know is over their head with a tough mortgage? Please, don't let them go to foreclosure! Call us or some other Short Sale Qualified expert and get them some help.
Jim & Cathy Wood- 615-347-4424 begin_of_the_skype_highlighting 615-347-4424 end_of_the_skype_highlighting begin_of_the_skype_highlighting 615-347-4424 end_of_the_skype_highlighting.

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The person who negotiates with a lender on behalf of a homeowner needs a license, either under NRS 645 or NRS 645F. In the case of a real estate licensee who maintains a license under NRS 645, that licensee must be part of a real estate transaction with the homeowner. Any other person - even an unlicensed assistant in the brokerage office - who negotiates with the lender would fall under NRS 645F, and needs a license from the Mortgage Lending Division.

This has been an issue here and I'm sure it will continue to be since short sales are here to stay.

It's vitally important that all licensees, and especially brokers, who are dealing with short sales understand the limitations on unlicensed assistants, and the licensure requirements for third parties providing services between sellers and their lenders.

SOURCE: Direct from GLVAR Go HERE to Read the Article

Division Reminds Licensees about Short Sale Negotiations
By Deanne M. Rymarowicz, Esq.
GLVAR Legal Counsel

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Equator System Failuremonet of

I have been using Equator for several months now. I am finding so many errors with their site and the ability to have it function properly. They really need some professional help with the site for the company to get to next level. The site is always down and many many times does not accept the submit operation. Many times I watch for 20 minutes or more and make several attempts to get the information requested to Equator. The on line chat people are so over whelmed with trying to help 2-3-4 people at one time you can sit and wait for 10 minutes to keep information,support or advise.
Hopefully some day they will listen to others advise and not ignore or expertise in not only real estate but how to make it work properly for the sake of all Real Estate Professionals.
Stay tuff guys, its not you , its the Equator System's NON-FUNCTIONALITY.
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B of A short sale

what is the deal with hafa short sale versus regular. I am submitting mine through equator and when does it give me the option of going hafa or regular?

Please advise. Thank you

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Hardship Qualification

Sellers divorced beginning of the year. Former husband lives in home and verbally agreed to keep B of A mortgage payments up to date. He's 4 months behind and can prove financial hardship but former wife could not prove hardship. Question: is a divorce enough and how will wife's income affect an approval? Any suggestion appreciated. G............
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I have a 2nd HELOC, not a purchase money which is now with Focus Management Group, originally with Wells Fargo. Having a tough time getting a buyer that will come out with substanstial amount. My seller will not come out with no monies (unemployed) nor settle with a promissory note. BofA as the 1st position will only give $3,000.00. Am I on a deadlock here?

"The balance amount on the loan is $259,405.33. 20% of this amount will be $51,881.07 the lien will be release with no deficiency balance or 10% $25, 941.00 for lien release only."

Loren Hill

Collection Manager

Focus Receivables Management, LLC

Direct... (678) 228-0010

Fax... (678) 228-0018

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