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My team of agents and investors daily dedicate the majority of our steam to short sales.  We know how to find the deals that work.  We have spent time and dedication towards learning the best ways to systemize the process so that all parties win.

However, no matter how much we push forward to keep our costs down, to net lenders what is required, and to help homeowners walk away with the best result, I am still astounded daily at how little the servicers care to do the same.   The servicers are bleeding the tax-payers, bleeding the investors behind the note, bleeding sellers and buyers, and keeping the market from ever recovering.

Why am I on this tirade today?  Well, I just did our monthly file audit.  Looking in depth at fmv, lender short sale approvals, buyer counts, and days on market, I determined that servicers have on our files alone lost over 1.5 million in potential net.

Case in point:  A short sale in our system had a buyer at 325k.  The servicer took too long to review the file, lied about lost paperwork, incorrectly closed the file during review, and simply let their untrained reps ‘not care’ about the result.  The buyer bailed after 90 days.  Property declined in appeal over those 90 days and foreclosure comps on the same street brought the value down to 305k.  Buyer contracted.  Servicer played the same game.  Short Sale approval came in at 305k.  Buyer did their inspections and found mold.  The mold was a new development due to the seller’s inability to maintain the utilities.  They requested the approval be reduced to 295k to address mold concerns.  The servicer refused to play-ball.  Buyer bailed.  Mold continued to get worse since the home was not being maintained for next 60 days.  Now, the mold will keep the property from receiving an offer any higher than 185k.

Had the servicer lit a fire under their butt they would have received 140k MORE NET months earlier.  Instead, they let the property deteriorate.  That is a 44% HIGHER NET they simply let die.

The irony of this case is that I, wearing my investor hat, had offered the seller the same 185k at the very beginning.  My investor offer is now all the servicer is going to get.  The only reason the seller turned my offer down was her servicer’s refusal to drop a deficiency judgment.

Even with the mold and the fact that the servicer caused the loss to be greater, they will still not let the seller off for the deficiency.   So, the neighborhood gets another low-ball distressed property sale, the seller is being chased for money the servicer would have gotten with the first offer, and two buyers have lost time negotiating the process.   A lot of time was wasted.  A lot of money was wasted.

In our continued commitment to the seller, we are now building a complaint case and public relations problem for the servicer so that the property is approved at the investor price-point and the seller is released from liability.  The property is now a short sale rehab!  Our team will now NET the 44%.

This same story happens all the time.   I wonder what the national total for net loss due to servicer laziness would be.  Those are the stats I would like to read.

We work diligently every day – if the servicers had the same commitment, recovery would be months not years away.

To your short sale success!

Hey Lenders, Time is Somebody’s Money! is a post from: Short Sale Daily News

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Negotiators from both have asked our facilitators to remove stipulations from the contract that protect the seller from being sued for non-performance should the short sale approval include requirements a seller cannot meet.

The stipulation both seem to have an issue with simply says in short form that the contract is “contingent upon Seller’s lender(s) agreeing to:

1. A.  Take a reduced pay-off on its mortgage in an amount sufficient such that the purchase price of the Property pays off the reduced amount of the mortgage, and other liens, judgments, and other encumbrances on the Property, the real estate commission(s) owing to the Broker(s) and the other expenses of sale for which the Seller is obligated under this Agreement or any other contingent Agreements without Seller having to pay additional sums.

What is their issue?  It’s simple. They want to keep the door open to demand money from the seller at close.  They want to demand money from the seller and ‘contract scare’ them into paying it versus risking breach of contract.   Looks like the lenders are tired of short sales that fall apart prior to close too.

Sneaky move ASC and Wells…. But, don’t hold your breath.

As an agent, I cannot advise a short sale seller to agree to a binding contract that puts them in jeopardy of being sued for non-performance.  If the lender last minute demands cash payments, promissory notes, etc… and the seller simply cannot pay the difference, they are still on the hook to close.  A buyer can force the seller’s hand to acquiesce and sell their first-born child to pay what is demanded.

Two of our other Wells Fargo files are in final negotiations.  Wells is demanding huge cash payments from the sellers in both.  For these files, the stipulations are included and the buyers for both are working with us to find a compromise that works.  Without the stipulations, the buyers, no matter how attached they are to the property, would not have as much incentive to help with the process.

We want your thoughts!!!!

-  To Your Short Sale Success!

Lenders Demanding We Drop Short Sale Contingencies that Protect the Seller…”Say What?” is a post from: Short Sale Daily News

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On this week’s Preforeclosure Daily Grind “Tip of the Week” we dive into which of today’s short sale lenders are making it harder to get our transactions to close (the answer is not what you think)!  Listen in as we tell you which lender it is, why they are doing it and how to make sure your deals close. The new mandatory authorization to release information that Wells Fargo has and the new email alerts that Bank of America is using via their Equator.com System and what they are intended to inform us of and so much more.

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What Short Sale Lenders are Making Closing Harder? is a post from: Short Sale Daily News

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On this week’s Preforeclosure Daily Grind “Tip of the Week” we dive into what many of today’s buyers’ lenders are requiring on your short sale acceptance letters, in order to finance a short sale purchase transaction. Listen in to see what McCue Mortgage is requiring from Bank of America and CitiMortgage. We also cover what line to put a 2nd lien holders payment on a HUD-1 settlement statement to satisfy a 1st mortgage, why you can’t change a Bank of America short sale approval letter, why CitiMortgage no longer accepts extra payments of the HUD-1 settlement statement and more.

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End Buyer’s Lenders Are NOW Stopping Short Sale Transactions is a post from: Short Sale Daily News

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In today’s real estate environment Lenders are doing more and more due diligence and scrutinizing the majority of short sale deals to try to save money. Listen in as we discuss what you should NOT do in order to stay off their BLACK BALL List! On this week’s Friday Coffee Break we also cover where the future of the short sale business is going, where to find out if you need a license to negotiate short sales in your state, how and where to escalate and FHA file, the best way to handle Auctions and whether or not they are an effective way to purchase properties and more.

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This week’s Preforeclosure “Tip of the Week” is about the 2 main factors that drive today’s short sale lenders into pursuing promissory notes,what foreclosing lender is still pursuing promissory notes in non-recourse states and much more.

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