Archive for the 'Learn' category

Short Sale Testimonials: the Good and the Bad

Thursday, March 25th, 2010

“What I have to say is that Ms. Adriana West was very efficient and attentive to all my questions since I signed my contract with her until the closing.  Thanks.”

The feeling I enjoy every time I close a Short Sale and receive this kind of feedback is wonderful. I know for sure this Seller is going to be able to re-build his financial future.  This is one of the more important reasons I started working in Short Sales in the first place.

I would like to know how to give this kind feedback (the good and the bad) to a Lender or Servicing Companies that is not doing its job, and have them listen, while millions of people are facing foreclosure.  When they are in the middle of a Short Sale process, waiting for months and months for an answer, calling the Lender every week and still go into foreclosure – with their houses selling for less of the Offer that was in the Short Sale process.

This month one of my clients experienced this situation, working with Everhome and their service provider for Short Sales transactions National Quick Sale.  We worked together for over 4 months, and provided everything to this servicing company.  I paid a fee up front just to have the privilege to process the Short Sale through this Company (and lose an additional one point of my commission + $ 250.00 because they require it just to process the transaction).  After calling, sending emails, contacting supervisors of both companies, and proving to them that the offer we submitted was 20K above what the properties are currently selling for in this particular subdivision, they decided randomly to foreclose and not give any answers.

Now, you might think: well 20K is not that much…in this case it really is that much when the property is only worth $60,000. 

After the foreclosure, I kept calling and sending emails.  Somebody left me a message saying that the “investor” owner of that loan decided to foreclose instead of extending. When I tried to call back, the telephone number that this gentleman left turned out not to be his, it is from a completely different lady.  I never heard from them again.
My client was asking me if there is a way to hear get an answer from them, due to the fact that her house is going to sell for less than the offer we were working with. She believes that she did all she needed to do to go through the Short Sale process, she would like to have a letter from the “Investor/owner of her Loan” to really understand the reason why her file was not important.

I always like to post good news here in my blog, and not be so negative.  On my next blog I will share a transaction through another Lender… a positive one… they are improving their system and it is actually working!

Royal Banks and Serf Clients

Friday, February 5th, 2010

I had a question from a client: “Why is it that nobody hears me?”

Working on Short Sales can give you some frustrating moments when I, as an Agent, do not understand where fairness enters into the picture.

I had a Short Sale in process with a foreign bank that seems to believe themselves part of the royalty — maybe that is due to their country of origin.  I had submitted an offer back in October 2009, and my client patiently provided all of the extra documents that the loss mitigation department requested for three months.

The foreclosure date was set for 02/02/2010. I have called this department every other day for the past several weeks and every time they needed an extra document to be able to review the file. One day before the foreclosure date, I called back again and the gentleman who answered the phone was not in the mood to help me at all. He stated that because the offer was so low (they have had this offer for three months), he did not believe that they can make an extension of the foreclosure date in order to review the file.

I did not understand why they did not counter the offer, or tell me this three months earlier so that I might be able to negotiate a better offer with the buyer. The bank representative asked me about the listing and the listing price.  I explained that this house had been on the market for over six months, with regular periodic price reductions, and this was the only offer I was able to get. He interrupted me and told me that he was going to send an e-mail to the investor (which happened to be Freddie Mac), but that he did not see a reason to extend the foreclosure process.

My level of frustration steadily increased as he refused to allow me to speak. He told me that if I didn’t have anything more to offer there was nothing more to discuss, and hung up the phone.

I called again, and this time a woman answered who review the notes and told me that I had just talked with this person — so why was I calling again? She stated that the file was incomplete, and that there is no way that they were going to accept to extend the foreclosure with an incomplete file. I asked her why this gentleman did not tell me about the file being incomplete when I called in the first place, and asked her to review the file since I had sent all requested documents more than one time. She asked me to hold and transferred me back to the original “gentleman” who denied that he had hung up on me. Now, because his ego was hurt, he tells me that he has decided the investor is not going to extend the foreclosure process and that was it.  I asked to speak to his supervisor, and he transferred me to his voicemail.

Persistent me, I called back two hours later. The person who answered the phone transferred my phone call to the supervisor, who said that he had been trying to call me but nobody answered. When I explained my frustration, he closed the communication and told me that the file was closed and the house was going to foreclosure. I told him about my previous conversation with the negotiator (he was aware of it), and told me that the investor did not accept an extension to the foreclosure and that was the end of it.

Upon discussing it with my client, they did not understand why some people in short sale departments believe they have the power to play with the public’s financial future just because I, as my clients agent, was asking for an answer and trying to keep the process moving for my client. This supervisor and negotiator each get a check every week or 15 days and it doesn’t matter to them if they’re doing their job well or not. Their company is not the owner of the loan, it’s Freddie Mac. How sweet? And it’s my client who is suffering the consequences.

Why do these people believe that one must treat them as royalty in order for them to do the job that they are being paid to do? The only ones who suffer the consequences are my client who has done everything possible to try to follow their guidelines, and myself wasting all the months of work to get to this point.

When will these banks begin to treat our clients (theirs and mine) as human beings that feel and eat and breathe the same air as they do and that we are all citizens of the same country?

My client was asking me if there existed some document explaining that Freddie Mac was not interested in their short sale. Unfortunately my response was no.

Where is there an entity, Hotline, government site, anything where borrowers can complain of the treatment that they receive, or we real estate agents receive as we try to help them through this recession?

Posted in Learn, Sellers, Why an Agent | Comments Off

Don’t Trust the Sun

Thursday, December 10th, 2009

A couple of months ago, I was in the middle of one of the most unusual short sale transactions I have experienced in the last four years. In this particular case, I was representing the buyer. This was the listing agent’s first short sale transaction.  So after explaining my experience with both the listing agent and the seller, the seller authorized me to assist in negotiating with the banks.

The seller was legally an LLC, not an individual. It is relevant, however, that the Lender’s negotiator was a vice president at a local Bank similar in name to the title of this blog, rather than the national 1-800-number. With the exception of dealing with this negotiator, throughout the transaction all had gone well and smoothly.  Nothing interesting in any way, unless you are one of the parties to the transaction.

What made this blog worth writing was the negotiator. Again, this is a vice president. This negotiator would only talk with the Seller. He literally refused to put one word in writing stating that the only thing he will do is sign the HUD-1 after the transaction is closed, if it meets his agreed criteria. On the other hand the underwriters for the buyer’s loan would not give their approval without something in writing saying that the closing would remove all liens from the property – and the only piece of paper missing was from this vice-president.

A vice-president in charge of loans at a major bank cannot have that position without understanding the requirements of the underwriting department. It is not possible for this person not to understand that without a written document approving the removal of the lien, the underwriters will not release the loan.  He must understand that the closing table is dominated by attorneys, and no attorney will believe the spoken word of anybody — it must be in writing. So, we are at an impasse.

Of course, as you would expect with such a strange reaction, there was a back-story that we did not know until just before the end.  The bank was negotiating a multi-faceted lawsuit with the managing partner of the LLC which included a large cash settlement.  We got our one-sentence approval the day that VP got his $55,000 cashier’s check.  It became very clear to us that this was the bank’s intended strategy — to use the pressure of the delayed and re-delayed closing to force the seller to respond to the lawsuit settlement.  This does not excuse, however, the downright rude attitude of the executive representative of the bank. It also underscores the fact that lenders will do whatever they feel they need to do in order to achieve their results, with no regard to what is ethical or fair to the other parties of the transaction — such as giving us a clue of what was going on earlier in the process.

Although it turned out well for all parties in the end, I am always interested in suggestions that might have avoided all of the stress on everyone involved in the transaction. And in the meantime, if any of you run across a negotiator who refuses to put anything in writing, maybe this blog will give you the clue I was missing all along.

Going Back to Far Wells?

Wednesday, November 18th, 2009

I just received the most interesting phone call! I need to write this blog while the details are fresh in my mind.

I had a couple of short sales where the second lien is a line-of-credit from a major unnamed lender (go figure…  from the title). In both cases, the first lender was reasonable and responded within an appropriate timeframe with an approval. In both cases, this second lender refused to accept reasonable amounts, or the amounts dictated by the first lender (which in one case was THE SAME LENDER holding both loans). The negotiator from the Line of credit refused, and refused, for several months to try to work with my Seller:  If they were not going to get their significant percentage of the outstanding balance, plus a promissory note, they were not going to release the lien. There is no room for negotiation. There is no flexibility in these guidelines.

It became clear that this lender was simply not going to accept the short sale transactions I was negotiating with them. The sellers reached the point where things could no longer wait, and decided to file bankruptcy.  Both of them.

Now here we are three weeks after our last conversation with this lender. I had stopped calling because the clients had filed bankruptcy. There was no point. So I just get a phone call from the negotiator who has both files asking me for a status on the transactions. “Oh, they have both filed bankruptcy because your organization would not accept to negotiate a short sale in any other way than your guidelines.”

The negotiator asked if there was any way to bring the Short Sale back to the table. “Sorry, no, as I understand it, all the papers have been filed by the Seller with the court.”
The negotiator gushed about how unfortunate this was, that now they had some leeway to work with. Did I have any other clients that she could help me with?  The change in tone and manner was astounding!

I cannot help but wonder…  how many bankruptcies and foreclosures did it take to prompt this phone call?  And, have they really changed their ways?  Are other lenders sounding like they are beginning to see the light?  Please let us know what you are experiencing out there.

My house was foreclosed and I did not know…

Friday, October 23rd, 2009

In the last week I have received many responses to the last blog that I wrote (Do They Really Know What They Are Doing?).  The majority of the people (who happened to be homeowners) have told me that after working a short sale with Bank of America for months, and having strong offers, the bank foreclosed and never gave a response to any of the offers.

One of these was a homebuilder who had more than $200,000 equity in his house, and even so the bank foreclosed. Well, BOA clearly shows the it has no feelings involved with these processes. I truly believe, however, that it is my responsibility as an agent to follow up with this bank and make sure that my listings are not foreclosed in the middle of the process. I can say that I have saved each of my listings from foreclosure between two and four times each during the short sale process. It is a long and frustrating process, one in which I spend over three hours doing it each time, but I truly believe my clients deserve this time and effort.

I show the bank that it is a good business decision not to foreclose, and when they see that I do not give up calling and calling until the extension is given (I think I become a pain in their…), then they do it.

Your clients really deserve an agent who is working in their best interest.  Are you really up for all this hassle?  If the answer is no, please refer these clients to an agent who is willing to make this commitment and has the experience to make it happen.  It is better for everyone involved, and could mean the difference between bankruptcy and saving the client’s financial future.

Short Sales with FHA Backed Loans

Monday, August 24th, 2009

For the last six months (yes, we have been waiting 4 months for a response), I have been representing one of my clients in Mableton, GA, to do a Short Sale on his property.

My client gave me all the documentation I needed to make the Short Sale packet, we received an offer, and sent the complete package to the lender.  Then we sat back and waited…. And waited…. And waited…  This Big O bAnk took all the time they wanted in processing the short sale.  In one of the 100 phone calls I made, they told me that since the loan was FHA, I would be assigned to a “Special” negotiator (Man, did I feel “Special” that day), but since they had so few negotiators that managed the FHA process, I would need to be patient (More than I already had been?).

When I finally got the negotiator to look at the file, he told me that he needed a “Vacancy Letter” from my client explaining the reason why he was not living in the house.  My client explained *honestly* that he had lost his job and after several months without work, he received an offer of work in another state, so he had to move with his family.  My client, trying to be responsible, kept paying the mortgage on the “vacant” house for almost a year – all the while attempting to sell it without any luck.  When he ran out of savings, his only option was to call me and begin the short sale process.

After receiving this letter, the “special” negotiator sent me an email saying that she had declined the file.  I called and asked why???  She told me it was because the client had “Abandoned” the property.  I responded with a copy of the FHA guidelines (which they should know better than I, they are the rules they must operate by) where it states:

The property must be owner-occupied, no “walk-a ways” or investment properties. Exceptions: when it is verifiable that the need to vacate was related to the cause of default (job loss, transfer, divorce, death), and the subject property was not purchased as rental investment, or used as a rental for more than 18 months.

When this “special” negotiator understood that I knew the rules, she stated that she had proof that my client had rented the property, and FHA properties cannot be rentals…  When I asked for copies of this “proof”, the call magically was dropped, and suddenly, no one returned my calls.

My client and I appealed the case with HUD, and their response was that the only thing they were able to do was to ask the lender to review the file again. Supposedly, the bank did so, and denied the Short Sale yet again.

After this long story, I ask myself: How important is it for the Big O bAnks to pay these negotiators out of their pocket to review loans that are backed by HUD?  How much effort will this bank tell their negotiators to spend when, at the end of the day, all they are doing is servicing the loan and they won’t be the ones losing the money with a Foreclosure?

The buyer is still there, with an offer better than what HUD will get selling the house after foreclosure in a couple of months…

Does anyone have any answers or advice to share with my audience on how to respond to these disasters that happen every day with the few remaining banks that have not collapsed?

Playing with your financial future

Thursday, June 4th, 2009

An investor called me and told me that he was interested in buying all my Short Sales. I was thrilled, even though I thought it was too good to be truth. I met with him at my office and he gave me a contract that I would have to use to work with him.

In explaining his contract to me, he said that his “idea” to buy all my short sales that I had been working was that he would make an offer from the beginning of the process (with a rather ridiculous amount) and that I had to find another buyer to make an offer (for more than his).  Then he would give the other buyer the option to buy the house, but he would keep the difference between the two offers at the end of the transaction.

I talked with my lawyers, and in Georgia it is not illegal to agree to this kind of transaction, but from my point of view it is unfair.  Especially when I as a Real Estate Agent am representing a seller in distress, not the bank, not that investor.  I understand that every human being needs to make their living, but it is not always the fair way.

Sellers, would you like it when a person is taking advantage of your situation, playing with your financial future.  How many of you believe that this investor is going to be fair, if the bank does not accept his offer, or the investor does not allow any competing offers to be presented if he does not make money on the transaction.  Even worse, how many of you believe that this investor will buy the house at the end of the day, if he’s lucky enough for the bank to accept his offer, but no second buyer has come along to make another offer?

Short Sales are demanding and can also be a source of revenue for lots of investors.  Which of these investors will be interested in the seller’s financial future?  It was good for my sellers that I am interested in their financial future and helping them make a new financial life for themselves.  Let me know if I can help you protect yours.

Stimulus package from Whom?

Wednesday, May 6th, 2009

I love hearing that these blogs are helping people in one way or another, whether it be a seller in distress or an agent trying to make some Short Sales happen, to gain experience and make more transactions in this very difficult market.  But I don’t think the lenders are getting the same message.

One of the longest transactions I’ve ever had over the years I’ve been doing Short Sales is with one of those lenders who “didn’t need the Bailout money,” they said, in order to survive.  But in the end, they decided to accept the government’s money anyway – or excuse me, our money – yours and mine.

The theory they started out selling us, the public, was that the money would be used to help all those people in financial distress.  A few weeks later, the lender decided instead to use the money to buy another large bank.

So, you will understand if I sprinkle a little sarcasm in my story about this lender.  I have been working on this one since September 2008, when I sent an offer I received to the Loss Mitigation Department.  The negotiator assigned to the file took all the way through December and into January to even order the BPO.  When the BPO came in, he decided to counter for about $4,000 more than the offer because the offer seemed low.  By the time he countered, now it was February.

So let’s do the math.  This man waited four months to process the file, order a BPO, and make a counteroffer for $4,000 higher.  This means the negotiator was asking, in effect, for the amount of money the seller had not paid on the mortgage for those 4 months.  Is it fair to the seller, who his doing everything in his power to sell the property, when the negotiator delays and delays the process?

After the negotiator finally gave me the numbers for the counteroffer, and the buyer actually accepted them, I sent all the documents.  Once again, I could not reach anyone by telephone until a month later, when by magic, the loan was assigned to a different negotiator.

It took all of February and March to finally have this new negotiator answer my calls, who proceeded to tell me that their counteroffer was for even more money than they had originally agreed.

After convincing the buyer yet again, the negotiator finally sends me an approval letter, with which the closing attorney tells me he cannot close because the terms are unclear and the transaction might be open to fraud.  Yes, fraud.  After explaining all this to the negotiator, he decides to send me a new approval letter, asking for yet another higher number (for the third time changing the numbers and the approval letter).

Then he had the temerity to tell me  that if the buyer did not accept this change, I should reduce my commission to match his numbers. 

I would love to know if this negotiator is paid a flat salary or a commission.  I would love to know if he’s willing to give up a little of his salary to close a short sale.  Or maybe, as we see in the news every day, he not only gets a salary, but a nice bonus.  But to me, the real question is: Are they doing the job they’re being paid to do?

Now you ask me, why are you doing this?  Why put yourself through all this?  Well, let me tell you it’s not all about the money.  As you can see, left and right, they always want to cut my commission.  But at the end of the day, I firmly believe that I’ve helped someone begin a new life and have a new opportunity to reconstruct their future and their financial standing.  Maybe I’m naïve, but the truth is I feel pretty good.  Especially when I win one of these big battles.

In other words, the only kind of STIMULUS PAKCAGE that homeowners in distress receive is through fair and honest agents that do not give up in the process, fight for their clients, and make a Short Sale happen.  If any of you are in need of this type of Stimulus, let me know.  You can be assured that you are in good hands.

Lender: This file is not a top priority to review…

Monday, April 27th, 2009

 

I was working with a client in Kennesaw GA.  He was convinced that the honest thing to do was to try to continue paying the mortgage as long as he possibly could, even when his wife had been fired and they need to use what little savings they had to try to make it…. Until a Short Sale was approved.

 

Eventually we received an offer and waited for over 3 months for an answer, with weekly phone calls to the Lender’s Short Sale dept. Finally, I received an answer: This file is not a top priority for the Lender to review. They do not have a time frame for the review process, and the person who gave me this news promptly hung up the phone on me.

 

How can it be that the lenders in this country are punishing those who are trying to be good citizens, do what they’re supposed to do, and “play by the rules”?  In this case, my client was continuing to crunch numbers and make huge sacrifices while they were waiting for an answer.

 

Is this really the time to be trying to teach us all to be bad citizens because this fits the Lender’s Guidelines?   Please tell me what kind of behavior we should expect and accept from these lenders?  They are already more responsible for the problem than is the public.  Do we have to give up our moral principles in order to become a priority file for the lender?

 

Let me know your thoughts.  Why do we bail out those who have caused the problem at the expense of those who play by the rules?  What can be done to fix it?  How do we tell our lawmakers to apply some “common” sense to common problems?  Leave a comment here and let us know.

No Deficiency Notes for MY clients

Sunday, March 15th, 2009

Another Great Success Story for my client in Roswell, GA.  I’ve been working with this client on a Short Sale transaction for 8 months now, and we had wonderful news this week.

First, some background on the scenario.  The market value of the property was $900,000.  There were two mortgages with different lenders.  As I noted in an earlier blog, in the beginning my client thought it would be easier for me if he hired an Attorney to negotiate with both lenders.  In the earlier article, you can see why that made me decide never to let an attorney negotiate for me again.

We worked with an offer for over three months – a great offer at the time.  The lienholder in second position wanted, and even demanded (how funny!), to net $42,000 from the short sale, and have a deficiency note in place on the borrower for the balance of the loan.  Oh, and my commission could only be 1% (which the lawyer agreed to, by the way).

Even when both lenders agreed on the transaction, I managed to increase my commission back to a reasonable amount, and my client was tempted to accept the deficiency note, the second lienholder took a month to send me their acceptance letter.  During this time, the buyer got tired and walked away.

I took control of the negotiations away from the attorney when my commission was ridiculously reduced, and started over from scratch after the buyer withdrew his offer.  Months passed, and finally I received an offer $100,000 BELOW the initial offer – just three days before the property was to be foreclosed.  I contacted the lenders, and Lender 2 – even when they knew they were going to lose everything – demanded a specific amount in order to accept the transaction.  The next day, when I received the Acceptance Letter, it included a deficiency note that at this time was not part of the agreement (they had not mentioned it in the phone call).

They were offended when I told them it was not going to work.  They stated they would not negotiate any further.  I thanked them for their time and hung up.  The next day at 7:00am, I received a phone call from the same negotiator stating that they had reconsidered the offer and were open to agree to the original amount and no deficiency note.  Because the second lienholder was lazy and made unrealistic demands, at the end of the day we closed the transaction paying them just $16,000 and no deficiency note whatever.

The Lender in the first position was always very helpful and open to work through the transaction. My client is thrilled that after 9 months they sold their house and do not owe anything to any lender.  Now at the end of the transaction, do you think the Attorney was working in my client’s best interest?  Or working for an outrageous hourly fee for their own benefit?

Share with me your stories.  I would like to hear from you.  I love to share this kind of success story with my current and future clients, and remind them: you are in great hands with me working on your behalf.