Central Florida Short Sales: August 2010

Hi folks. Have Short Sales got you down? I know from experience that dealing with Short Sales all day every day can be very frustrating. BUT......it is what it is. NAR put up a good fight a few years back to keep Banks out of Real Estate. And NAR won!!! You wouldn't think that today would you? Banks found their own way to control the Real Estate market.....REOs and Short Sales.

I struggle with this because I'm a control freak. Not only do I have to be in control but things have to make sense to me.

Kind of funny in this current market isn't it? I have no control and nothing makes sense. But Real Estate is what I do. So I have to keep moving forward. I have to figure out how to work within the system. People in my market need my help and I would be letting them down if I didn't learn everything I can about Short Sales.

That's why Wendy Rulnick  and I created www.ShortSaleSuperStars.com. We needed a place to go where we could get help and support from others in our industry that are going through the same things. If you haven't joined us yet then you are missing out. We now have almost 3,600 members who are helping each other with Short Sales.

You do NOT have to go it alone. Pop on over an join us. We'd love to have you. Here are some samples of the conversations going on today:

***CLICK ON ANY PICTURE TO JOIN US. BUYERS AND SELLERS ARE WELCOME***

Are you facing foreclosure in Florida?

.......Lender Business Processing Service.  Not quite sure how long they have been offering their servies to lenders but I have just had my first experience with them this week. In fact, I am on hold with them as I write this article. I've been on hold for over 2 hours!!!

I wrote a post a few weeks back about receiving Short Sale approval from Chase in 5 days. My approval was good until August 23rd. I had a really great Chase negotiator by the name of Gregory Williams. Mr. Williams is awesome at what he does and always responded to me very quickly. I emailed him last Friday asking for an extension of a couple days so we could get the transaction closed. He called me immediately to let me know the file had been sent over to LBPS and Chase had nothing else to do with it. YIKES!!! This is NOT what you want to hear 2 days prior to closing!!

Anyway, like the good little Broker I am, I did not let it derail me and instead just picked up the phone and called LBPS. That's when the fun and games began. I have now spent a total of 6 hours on hold this week and still have not sorted anything out. In fact, that 6 hours has been spent doing nothing more than holding to confirm that my LBPS 3rd Party Authorization has been received and approved!

I fear this is going to be a very painful experience. While I was writing this article (still on hold) I received an email from one of my other Sellers to let me know his loan was also just sold to LBPS. Oh well....no one ever said our jobs were supposed to be easy. I guess I best figure out the LBPS system!

Here's some info put out by IBM LBPS.

Folks, if you have a loan being serviced by IBM Lender Buisness Processing Service (LBPS) and are facing foreclosure, PLEASE contact me so I can help.

Are you facing foreclosure in Florida?

Hi folks. Short Sales DO get approved. It just takes patience, organization and negotiating skills. In the last 7 days the following lenders have issued approvals for our Florida Short Sales.

Orlando Florida Short Sale with Bank of America

• Property sold for $127,000. The amount owed Bank of America is $200,000 on the first and $38,000 on the 2nd. The 1st agreed to $109,894 (55%) the 2nd $3,000 (8%). The property was listed in March 2010. Bank of America denied a contract of $130,000 in April. This week they accepted $127,000!! I guess their decision back in April cost them us another few thousand.

Davenport Florida Short Sale with US Bank (FHA) and PNC Bank

Property sold for $60,000. Since FHA will only allow $2,500 to be paid towards the 2nd the Buyer agreed to pay PNC Bank an additional $4,000. US Bank was owed $93,500 and accepted $51,000 (53%) and the 2nd with PNC Bank was owed $61,500 they accepted $6,150 (10%). We had a buyer that fell out last week because they would not come up with the additional $4,000 for the 2nd. We placed it back on the market and found another buyer in one day. 

Kissimmee Florida Short Sale with Bank of America

Property sold for $60,000. This one has taken over a year. Bank of America was owed $190,000 and accepted $54,000 (28%) the 2nd also with Bank of America was owed $38,000 and accepted $2,350 (6%). We have gone through 5 buyers on this one. The Buyer that is closing has been under contract for a year. Patience galore!!

Tutas Towne Realty has already successfully negotiated Short Sales with the following Lenders.

• Chase
• Sun Trust
• GMAC
• Wells Fargo
• Bank of America
• US Bank
• PNC Bank
• Citi
• HomeEq
• Fifth Third Bank
• ING Direct
• GreenTree
• Capital One
• ASC
• First Horizon
• E-Trade
• Transland Financial
• USA Bank
• IBM LBPS

Can we add you to our list of successful Short Sales? 

Are you facing foreclosure in Florida?

Hi folks. Let's talk about this Strategic Short Sale thing a little. I know there are many people that just can't understand why anybody would do a Short Sale if they can afford their mortgage payment and they do not have a hardship. In fact, there are those that would call this immoral. Well OK then.

My job is not to judge. My job is to inform people so they can make a decision based on facts, their needs and what's best for them. And as much as it sucks a Strategic Short Sale MAY be the best option. Just because someone can afford their mortgage payment does not mean continuing to make it is the best way to go. 

This post will give you some hard cold financial data. Do with it what you may.

First, you have to remember that in my area property values are down 75% and in some communities as much as 85%!!!! Folks that purchased from 2003-2007 with 20% down are still way up side down. Just to put our decline into perspective.....the average house in Poinciana, in the year 2000, sold for $81,000 and $56 per sq ft. Today, 2010, they are selling for $72,500 and $41 per sq ft. Unfortunately our MLS data only goes back 10 years so I can't see how far back values have gone. But we do know houses are worth less today than they were 10 years ago!!

If you purchased a house in Poinciana Florida in 2006 at $220,500 (average 2006 selling price) and put 20% down ($44,100) today, that house is worth $72,750! Your PITI (principle, interest, taxes, insurance) payment, if you have an interest rate of 6.75%, would be roughly $1,450 per month. You would still owe $168,000. This is 232% of what the house is now worth (LTV). So just to be EVEN on your mortgage, values would have to increase by 132%!! Of course this doesn't include the $44,100 you put down.

So.....should you continue paying? Only you know the answer to that question. Just remember that until values increase by 132% you will STILL be upside down on your mortgage.

If you did decide to do a Strategic Short Sale today and rent a similar house you would save approximately $700 per month. If you invested $400 of that savings at 5% you would have almost $28,000 at the end of 5 years. If you kept your mortgage instead you would still owe $150,500. What would your house be worth in 5 years? I have no clue. But I can only guess that it would not have appreciated 100%. That means if you needed to sale in 5 years you would SILL have to do a Short Sale. Do you take the hit now or take it later?

The numbers are staggering. What say you?

Are you facing foreclosure in Florida?

Well that's a good question. What do you think? Most folks would probably answer this question with a resounding YES! But...what if I told you the answer is "No....you don't necessarily need a hardship to qualify for a Short Sale. You may be able to do a Strategic Short Sale". Heck, big business and lenders do them all the time.

One reason lenders/investors may approve the Strategic Short Sale is that the hardship in no way changes the financial outcome of the Short Sale for the lender. The numbers are still the same. In fact, the numbers may even be better for the lender on a Strategic Short Sale because the Seller is in a financial position to contribute. So why wouldn't they approve it?

Now while you may not have to have a hardship to do a Short Sale you may very well be required to be delinquent on your payments. This is mostly due to government intrusion into the process. For example HAFA (Home Affordable Foreclosure Alternative) requires the mortgage to be: "delinquent or default is reasonably forseeable." 

Also, if you have an FHA loan: "At the time the PFS (pre-foreclosure sale) closes the loan must be in default (i.e. delinquent more than 30 days)." FHA DOES require a hardship. 

If you are way upside down on your mortgage  and see no light at the end of the tunnel then you have to ask yourself some hard questions. The reality is that most of us will have to move for some reason over the next 5-7 years. So ask yourself:

• If I'm upside down on my mortgage today will I still be upside down in 5 years if I have to move then?

• Would my family be better off if I took the financial hit today instead of waiting?
  

• If I did a Strategic Short Sale today would I be able to rent a property for my family and save a substantial amount of money each month?
  

• How will going through a Strategic Short Sale affect my credit and will my interest rates on my credit cards go up drastically?
  

• How will a Strategic Short Sale affect my job (security clearance)?

Ask yourself hard questions. Seek legal advice from an experienced Attorney. Talk to your CPA. Have a family meeting.

Then if you decide that a Strategic Short Sale is the option for you, remember, there are no guarantees it will work. You may be asked to contribute to the "Short". What I tell potential Sellers when they ask the question is... "If you have no hardship and you have assets or sufficient income the bank may very well want some of it. You may have to bring a cash contribution to closing and they may also want you to sign a promissory note. But you may very well have your Strategic Short Sale approved."

These are difficult times and that require making difficult decisions. Let me know if I can help.

Are you facing foreclosure in Florida?