Negotiations are KEY to closing your short sale!
Short Sales are made up of many different components. We all know about the stacks of documents, the necessity of an experienced List Agent..and what else? Who exactly do you meet during the process of a Short Sale?
List Agent: Critical. Choose an experienced Agent that CLOSES their short sales. Certified is great, familiar with the different Lenders and their different MO’s is also required.
Buyer’s Agent: I LOVE when my Buyers’ agent understands short sales and can explain it to their Buyers. I keep my buyers’ agents updated, but if they don’t understand the process, it’s often a moot point.
Customer Service Rep: First level of contact for yoru Lender. You can call them, and you can bet I will be!
Equator: The online Customer Service Rep. This system keeps us all honest. It creates an online record of what documents have been asked for and received and any correspondence your List Agent has had with your negotiator.
Negotiator: The person that actually gets your file and starts reviewing it to see if any docs are missing. There are several levels of negotiators. Each level gets you a little closer to the Investor.
Investor: Once the negotiator decides the file is complete, it is passed to the Investors to either counter it or accept it.
Closing Representative: This is your contact that sends your List Agent the Approval Letter. If you need an extension on your close date or a buyer substitution, you hope this person is competent!
Remember that the entity you write your mortgage check to is called your “Servicer.” The entity that actually decides on the net amount they are going to write off in your note is called the “Investor”.
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Short Sale Joy!
Several Short Sale updates came down last week from our friends at Bank of America. I always read these with trepidation, but eternal hope. I think the thought is good..but the reality of implementation is never what the original thought was! Just too many loans with Bank of America and not enough personnel. But here we go anyway…
Update #1: Bank of America 2nd Liens: Enhanced lien deficiency Guidelines
- Short Sale must be initiated by June 1, 2012
- Second lien must be attached to a first lien mortgage owned by Bank of America
This waiver enhancement is based on the Department of Justice settlement and went into effect 6/1/2012.
Update #2: HAFA short sale update
HAFA Short Sale help has been extended to 12/31/2012, but also applies to current HAFA contracts. If you write a contract on 12/31/13, it has to close by 9/30/2014 for it to qualify for the HAFA program.
- The $3,000 relocation fee is only paid to the Primary resident.
- Vacant properties not elegible.
- Non-borrowers can now qualify if occupying the property (tenants, parents, relatives)
So there you have it..the continuing attempt to help the Short Sale process. If you need any more information, please give me a call at 760-285-3578 for a FREE consultation.
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La Quinta Cove short sale just CLOSED!
Another Short Sale in La Quinta..CLOSED! This lovely single family home in the La Quinta Cove, was a primary residence. The Seller relocated and is relieved to be out of the high mortgage payments.
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This is not news, but it IS critical for any Seller thinking about listing their home as a Short Sale in California in 2012. Remember the MOST critical thing..the Debt Forgiveness Act expires on 12/31/2012. Will it be extended? Most likely. However..do you want to take that chance? Read on for a recap of our anti-deficiency law, 580e. It’s a fantastic protection for Short Sale Sellers in California!
One of the first things my Short Sale Clients ask me is, “How does the Deficiency work?” What they mean as a Short Sale Seller is, “Am I going to be sued for the deficiency by my Lender?
In a word, “no!”
The year of 2011 saw a very spescific change to the anti-deficiency law for the state of California. Section 580e of the California Code of Civil Procedure came into effect on Jan. 1. This law generally prohibited a FIRST TRUST DEED LENDER from obtaining a deficiency judgment. This law applied to 1-4 residential units.
Then on July 15, 2011 a bill was introduced that greatly broadened the powers of section 580e.
Now section 580e covers many types of mortgage loans for 1-4 residential units, including..
•Purchase Money
•Rate and term refinance
•Cash-out refinance,
•owner occupied
•rental
•second home or vacation home
(This Law has it’s exceptions! Other types of liens such as judgment liens, tax liens, or HOA liens are NOT exempt from deficiency pursuit by the note holders!)
WOW! Lots of encouragement from the Government to do a Short Sale instead of a Foreclosure.
So..you are protected from the second lien holder pursuit as well now. Your Lender may NOT..
•collect a deficiency
•have a borrower owe a deficiency
•request a deficiency judgment
•require a borrower to pay to get a short sale approved
•require a borrower to waive their rights
Tips:
Sellers: Although a Short Sale Lender cannot demand you contribute to get your short sale done, you may offer to pay something to get a deal to work.
Buyers: Carefully consider before you write your offer, HOW MUCH money a Lender is being asked to write off. Sometimes, if a Lender has to write off a huge deficiency, they COULD choose to not do a Short Sale and pursue their other options. Not a huge likelihood in California..but think about it.
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