August 19, 2013

How to Select a Short Sale Agent

Posted by martikilby under Experienced Short Sale Realtor, foreclosure, Mortgage delinquency, Short Sale, Short Sale Negotiation, Underwater homes | Tags: , , , , , |
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If you are considering selling your home in a short sale, the selection of who will represent you is an important decision. Not only will the agent be marketing your home, but they have the added responsibility of representing you in negotiations with your lender(s) and securing approval of your short sale.

So if you are wondering how to select a short sale agent, here are some questions you will want to ask when interviewing potential agents:

• Does the agent personally do the short sale negotiation or do they hire an in-house or outside negotiator? If they use the services of a negotiator, the following questions should be directed to that person or company.
• How much experience do they have? No number of certifications will make up for lack of experience.
• What is their success rate? It is likely they have had at least one unsuccessful negotiation. Ask them why it did not get approved.
• Ask them to explain the short sale process and what you can expect in terms of a timeline and the documentation you will need to provide. (They should provide you with some sort of a handout explaining the process and describing the required documents.)
• Will they request a preliminary title report? (This is important in order to determine if there are additional liens on the property that will have to be cleared).
• Do they request that the buyer deposit their earnest money into escrow BEFORE the short sale is approved? (This is a good way to make sure you have a serious buyer and keep them in the game and not out looking at other properties. If the sale is not approved, the buyer of course gets their money back).
• How often do they contact the bank during the review process? (They should be in contact with the bank at least once, but preferably twice a week.)
• How often will they provide you with updates? (You should expect an update at least once a week.)
• If you have received a Notice of Default, and/or a sale date has been set, what steps will the agent take to have the sale postponed?
• Are they familiar with HAFA guidelines? Are they familiar with Equator? (If they do short sales on a regular basis, the answer to both should be “Yes”).
• Can they supply you with a reference from at least one client that was happy with their short sale services? Just because they advertise on TV doesn’t mean their clients are happy.
• And finally, are they empathetic regarding your situation, or is their only concern getting the listing? A short sale can be emotionally tough for you the seller and you should work with an agent who cares about you and what you are experiencing.

Do NOT believe them if they tell you they have an inside connection at your bank and can guarantee that your short sale will be approved. That is simply not true. Investors have the final say on approvals and it is highly unlikely that the agent even knows who the investor is at this point, not to mention that investors do not speak directly with negotiators.

If you have any questions about how to select a short sale agent for your San Diego County home, please don’t hesitate to give me a call for a confidential consultation.

 

December 19, 2012

Is Bank of America Writing Their Own Rules, Again?

Posted by martikilby under Bank of America, Experienced Short Sale Realtor, Short Sale, Short Sale Negotiation | Tags: , , , , |
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For any real estate professional negotiating a short sale, the moment you receive that magical approval letter there is usually a sense of celebration and relief. Not so on Monday when I received an approval letter for a standard short sale I am negotiating for another agent in my brokerage.

All of the terms looked fine, EXCEPT there was no allowance for relocation assistance. This is a Freddie Mac loan serviced by Bank of America that I am managing through the Equator platform, so I messaged back immediately. Money for relocation assistance has been an expectation since day one of the short sale process as the homeowner is a single mom with four children under the age of eleven who is currently off the job and receives disability as her only source of income. If anyone ever needed help with the expenses of moving, it is this poor woman!

The reply back from B of A was that the “borrower did not meet the investor guidelines for relocation assistance.” Are you kidding me? She is penniless! So I requested further clarification regarding the specific guidelines. I was told that “any borrower with a loan with MI (mortgage insurance) is automatically disqualified from receiving relocation assistance.”

Does that make ANY sense? I scoured the Internet and contacted a couple of fellow brokers who are short sale experts and no one could find anything to support this “rule”. In fact, everything I discovered supports that fact that as of 11/1/12 Freddie Mac would pay up to $3000 for relocation assistance, with no mention of an MI exception.

So yesterday morning I called Freddie Mac directly. They were incredibly responsive and helpful. The gentleman I spoke with put me on hold for quite a while as he researched the question, finally coming back on the line to tell me that he needed some additional time to investigate and would get back to me before 5:00 pm. At 4:45 he called to report that in all of his inquiries, no one he spoke with at Freddie Mac could find any reason why MI would disqualify a borrower from receiving relocation assistance. So Freddie Mac has opened an internal investigation to determine if the ruling by Bank of America is within guidelines or if they have overstepped the limits of their authority by denying relocation assistance. Ha!

I was told it might take up to a month to receive results of the investigation, but I feel better knowing that we are doing everything we can to help get our client the money she so desperately needs. And I have to admit it felt pretty good to have my hunch regarding this rule, somewhat vindicated by a giant like Freddie Mac. I’ll be letting Bank of America know about the investigation this morning 🙂

I guess that if it just seems wrong, it never hurts to question.

 

April 23, 2012

3 Ways to Kill a Short Sale

Posted by martikilby under Experienced Short Sale Realtor, Short Sale, Short Sale Negotiation | Tags: , , , , , |
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Short sales are tricky at best, and negotiating a successful resolution can try the patience of even the most experienced agent.  With the foreclosure clock often ticking, it’s important that the listing agent keep the transaction on track. Here are a few things agents should avoid that can be real deal killers:

  1. Accepting the wrong  offer.  If you know that the property has termite issues, doesn’t have a working heater, or has other significant repair issues, look carefully at the type of financing  the buyer will use.  VA will not allow the buyer to pay for repairs and it is unlikely that the lender will  pay.  FHA also has fairly stringent rules about the condition of the property, unless it’s a rehab loan.  If there are issues with the condition,  selecting a buyer that is using conventional financing, or cash and agrees  to buy the home “As Is” will improve your odds of success.
  2. Failing to  communicate.  As we all know, short sales are anything but short in terms of the time it takes to close.  Having a buyer that stays the course and doesn’t wander off to buy a different property is critical.  The listing agent should be in touch with the buyer’s agent at least twice a week and provide  updates as soon as they are available.    I also have the buyers deposit their earnest money into escrow within 3 days of acceptance of their offer by the sellers – we don’t wait for short sale approval.  Buyers that have put their money into escrow and receive regular progress reports tend to be much more committed to completing the purchase.
  3. Assuming….anything!  Just because you faxed in your seller’s tax returns, doesn’t mean that they were received and made it  into their file.  For most banks, allow 48 hours for items faxed to the loss mitigation department to be  posted into your seller’s file, then call and confirm.  Failure to provide documents when requested can kill the deal.  Also, don’t assume that the 2nd lien holder will accept whatever  pay-off, the 1st lien holder offers.  Don’t wait for the 1st to be  approved to start negotiating the 2nd .  Better to know what they want early in the game.

The list could go on and on, as each sale has its own peculiarities that could spell trouble.  The key to short sale success is a combination of patience, education, organization, tenacity and a crazy instinct to anticipate obstacles and leap over them before the deal dies.  Good luck out there!

For a no-obligation consultation regarding a short sale inSan Diego County please give me a call at 619-846-9249.

 

January 26, 2012

Video – The Short Sale Process, Part II

Posted by martikilby under Experienced Short Sale Realtor, Short Sale, Short Sale Negotiation | Tags: , , , , , |
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In the second of a 2-part series, San Diego real estate broker Marti Kilby explains the short sale process.


 

 

January 17, 2012

Video – Do You Qualify for a Short Sale?

Posted by martikilby under Experienced Short Sale Realtor, Short Sale | Tags: , , , |
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A short sale is an attractive alternative to foreclosure, mainly because the impact on your credit is far less severe.  However, just because you owe more on your mortgage than your home is worth doesn’t necessarily mean that a short sale is a viable option.

 

 

December 1, 2011

2nd Lien Holders Blocking California Short Sales

Posted by martikilby under 2nd mortgage, California SB 458, Short Sale, Short sale deficiency, Short Sale Negotiation | Tags: , , , , |
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Well, we saw it coming, and sure enough, as a result of Senate Bill 458 2nd lien holders in California short sales are putting on the squeeze.  The bill was well intentioned, as it restricts 2nd lien holders in a short sale from issuing a deficiency judgment or demand that the sellers bring money to the table. 

But since the bill passed in July, I am increasingly seeing the 2nd lien holder holding out for a pay-off of as much as 35% of the remaining balance on the 2nd TD.  And they don’t care who brings it to the table.  I recently had a 2nd lien holder request that the seller ask her friends if they could contribute!  Are you kidding me?  The result of course is that 2nd lien holders may be blocking California short sales.

Case in point:  I have a short sale that I’m negotiating with servicer G—-T— in the 2nd position. They are demanding 25% of the outstanding balance on the 2nd, which is approximately $40K, so they want roughly $10K.  The 1st lien holder won’t allow more than 6% ($2400) to pay-off the 2nd.  The buyer is contributing another $2K and the selling agent and I are each kicking-in $1K…but that still puts us short of what the 2nd lien holder is demanding by $3600.

So, I’m in the process of trying to negotiate with G—-T— to lower their demand.  Don’t they understand that if they refuse to accept a lesser amount the property will foreclose and they’ll get nothing?  The 1st lien holder is holding firm at 6% and there is simply no other source of funds.  Will they lower their demand, or will this be a failed short sale, killed by the 2nd lien holder?

 

November 13, 2011

Diary of a B of A Cooperative Short Sale – Part 4

Posted by martikilby under Bank of America, Short Sale, Short Sale Negotiation | Tags: , , , |
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Well, as noted in Part 3, the clock started ticking on Monday, October 17, when I submitted the offer and estimated HUD1, and let’s see….today is Wednesday the 26th. Despite several emails and phone calls, no one has contacted me to confirm the new negotiator or let me know what the next steps will be. I feel as though the file has already slipped between the cracks…..

Just left a message for a supervisor…..

OK. Now it’s the 28th and I’ve no reply from anyone so I called again and finally got hold of a supervisor. And it appears my gut feeling was right and the offer is no where to be found. Arrrrggghhh! The supervisor set-up a task for me on Equator so at least I could be connected to the file, though they still have not requested I upload the offer.

So far, this has been a bit uncoordinated because the homeowner started the process and I’m coming in after the fact. More on Monday.

On November 1 I finally received a task to upload the offer into Equator and then on the 3rd received notice of some “additional items” needed by the mortgage insurance company…so it took about 2 weeks to actually get it in the system.

In the offer we requested a pay-off to the 2nd lien holder in the amount of $10,000, which is what the 2nd lien holder told us it would take to get it approved. On November 8 I received a counter offer from B of A….they only want to give the 2nd lien holder $6,000. I forwarded the counter to the 2nd lien holder and am waiting for a reply.

The good news is that B of A did not counter the offer price, which is considerably lower than what they originally requested, and they were pretty quick about issuing a counter. I’m not very hopeful however about the 2nd lien holder accepting $4,000 less…will keep you posted. We’re now at 26 days on this B of A Cooperative Short Sale…..

 

August 31, 2011

Diary of a B of A Cooperative Short Sale – Part 2

Posted by martikilby under 2nd mortgage, Bank of America, Short Sale Negotiation | Tags: , , |
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As you might remember, shortly after I received this short sale listing the homeowner received a notice that the 2nd  mortgage had been sold to a new investor, and the servicing was also transferred away from Bank of America. There is absolutely no equity in the home to provide collateral backing for the 2nd  TD, so it seems odd that any investor would want to buy it.

Weeks later, the transferred loan is finally in the system at the new servicing company and I was able to speak to a representative.  She informed me that we would need to submit a complete short sale package directly to them for review and approval.  Now this is very different from what  B of A told me…..they said that they would negotiate the approval with the new servicer.  Hmmm.  So, do I believe Bank of America and assume that they will take care of getting the approval for the 2nd, or do I negotiate directly with the new servicer?

Well, I think we all know what assume stands for, so there is no way I’m going to trust that  B of A will get anything done for us with the 2nd  mortgage!  I’m having my seller pull together all of their financials and required documentation for submission and I’ll negotiate directly with the 2nd lien holder.

Meanwhile, we have yet to receive an offer, so at my request Bank of America has approved a second price reduction.  I’ve been doing some heavy Internet marketing, so hopefully the lower price will help get the right buyers in the door, soon.  Will keep you posted!

 

August 8, 2011

San Diego Short Sales: The Real Numbers?

Posted by martikilby under Exp[erienced Short Sale Realtor, Real Estate Sales Statistics, Short Sale | Tags: , , , , |
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In the world of real estate, being an effective representative for your client means staying on top of sales numbers and making sure that you have a clear picture of the market place.  So I spent some time today researching short sale numbers in San Diego County and found two interesting statistics: 

  1. There has been little change in the number of short sales that have closed escrow this year as compared to the same period last year.

                                      Detached Homes                Attached Homes

            2011                2172                                        1508

            2010                2074                                        1578

  1. The number of short sale listings that did NOT sell in the same period is much higher than I believe most people would expect. 

                                     Detached Homes                 Attached Homes

            2011                2371                                        1462

            2010                1769                                        1227

This means that roughly half of all short sale listings this year did not become successful sales transactions.  So what happened to these homes and their owners?  We can hope that some of them received permanent loan modifications or in some manner managed to reinstate their loans and keep their homes.  But it is likely that the majority became foreclosure statistics.

And why does the short sale listing failure rate seem to have increased this year over last?  Is it just because there were more attempted?  Are the bank requirements becoming more stringent?  Are there more inexperienced agents trying to handle the negotiations?

The answer is probably, “All of the above.”  But whatever the reason, don’t let your short sale become one of the failed statistics.  Make sure that you work with an experienced short sale Realtor who will pre-qualify you and your home and knowledgably guide your negotiations to a successful conclusion.

 

 

August 2, 2011

Diary of a B of A Cooperative Short Sale – Part 1

Posted by martikilby under 2nd mortgage, Bank of America, Loan Servicing, mortgage, Short Sale Negotiation | Tags: , , , |
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Of all the articles I’ve written, posts about Bank of America and their Cooperative Short Sale Program seem to draw the most attention.  Is that because people have been disappointed in the results?  Or are they nervous about potential problems?  Well, I thought it would be interesting to share the progress of a new B of A Cooperative Short Sale that I’ve just listed to see just how good, (or bad) the process really is now that the program has been around for a while.

This sale is a bit different than most short sales I’ve done, as the owner had already begun the Cooperative program when I was hired.  Thus a lot of the initial paper work was already in the system, and the bank had ordered an appraisal.  The turn-around time on the appraisal was fairly quick, and I was pleased to see that the suggested list price approved by the bank was reasonable according to all of my research, so at least we are not dealing with an unrealistic starting price.

We did lose a couple of days as I tried to connect with the B of A representative, who will be my primary contact, but we finally spoke and she seems pleasant and knowledgeable.

So just when I thought this might be smooth sailing, the homeowner received a notice that the 2nd mortgage had been sold to a new investor, and the servicing also transferred away from Bank of America.   So how do you sell a 2nd mortgage that is upside down?  There is absolutely no equity in the home to provide collateral backing for the 2nd TD, so it seems odd that it was sold at this stage of the game.

This of course throws a bit of a wrench into the works as I will now have to negotiate a totally separate approval with the new note holder, through the new servicing company…..once they even figure out that they have the account.  Sigh.  We will have to see how this affects the B of A approval process…really not sure what to expect at this point, but I’ll keep you posted.

 

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