Central Florida Short Sales

We all know Short Sales can be very frustrating. Short Sale Lenders can make decisions that make absolutely no sense to us as agents. There are many times where we are tempted to be overly creative to get a deal through. Folks....being creative is OK. Committing fraud is a crime.

Not all Short Sales are successful. There are Sellers that will be foreclosed on. This is a fact. All we can do is our best. The only 100% way to NOT be foreclosed on is to make the mortgage payments. If you don't make your mortgage payments then the Lender has the right to foreclose on you and take your property away.

A Short Sale is one of the remedies the Lender has to avoid the cost of foreclosure.  But make no mistake about it they do NOT have to choose this option. We can do everything possible to get the Lender to accept a Short Sale but they may sill foreclose.

Earlier today I deleted the comment below from www.ShortSaleSuperStars.com and wrote the writer an email letting him know that we do not in anyway condone this practice. Wendy Rulnick and I started www.ShortSaleSuperStars.com to help folks in our industry successfully close Short Sales by doing them the right way. Please stay above board. Sellers are facing very difficult times and the last thing they need is an agent suggesting they do things that may come back to haunt them. OK here it is:

"This is what you do. You negotiate the offer with the buyer and the seller and get all parties to sign. Then... with permission of the parties, you rewrite a new front page of the contract with a lower purchase price and send that amount in to the lender with the offer and hardship package. I would make the purchase price about $20,000 lower because they always seem to come back and want at least $15,000 more than the offer that is submitted. This must be their MO. In any case, it worked like a charm. Then... you tell the BPO agent that the offer price is what you sent into Carrington. I hated to resort to these tactics, but Carrington messed with my sellers for over one year. The only bummer is they gave us an approval letter for 20 days because we were getting close to the foreclosure date. I asked for an extension because the buyer was not able to meet the deadline. We needed TWO more days to complete the closing. They came back and reduced our commissions to 3% for both side TOTAL! To top things off, Kirk the SR VP told the closing atty's mitagator that he hates realtors. Go figure."

What do you think? Fraud or no fraud?

.......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?

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?

Title Companies handling Short Sale "negotiations" is the new trend in my area. I quote "negotiations" because they don't really handle negotiations at all. Instead they do what Title Companies do....shuffle paperwork. Here's an excerpt from one National company's solicitation to agents.

Now folks there may be Title Companies that are doing a good job with Short Sales but I have yet to experience one. I guess the issue is that handing your Short Sale over to a Title Company is handing it off to a 9-5 Monday through Friday hourly employee. They are NOT going to spend the time required to push your particular Short Sale through to closing. They are NOT negotiators. They are office workers. And there's nothing wrong with this unless.......you are counting on them to help you avoid foreclosure and salvage your credit.

Just yesterday I had a Title Company contact me on one of my Buyer side transactions. They were asking me for the Buyer's personal information including his first 5 digits of his social security number. Agents that handle Short sales everyday know this  information is being requested because it is a Bank of America Short Sale and the Title Company is getting ready to initiate the Short Sale through the Equator system.  Entering the Buyer's details is one of the very first tasks.  Nothing wrong with this  either except for with this particular transaction we have had the property under contract for 2 months!!!

This means that for 2 months this file has just been sitting. Two months of wasted time. Two months closer to foreclosure for these unsuspecting Sellers. Heck....my experience with Equator tells me that this file could have already been approved in this amount of time.

Agents that handle their own Short Sales from beginning to end do NOT sit on a file for 2 months. We are proactive. We follow up on our Short Sales at least twice a week if not more. We push the transaction along we don't just wait for things to happen. And most importantly we DO negotiate "the terms of approval and acceptance on the Seller's behalf." That's our job. That why we get paid.

So folks, if you are facing foreclosure, PLEASE hire a negotiator NOT a paperwork shuffler. You'll be glad you did.

Are you facing foreclosure in Florida?

Well this one was not easy. Sun Trust took 11 months to approve this Short Sale! Nine of those were waiting on the file to be assigned to a negotiator. During this time we lost 2 buyers and finally found one to stick.....I thought. About 3 weeks ago I received the approval to close. Even though I had communicated with the Buyer's agent every week for the last 9 months I found out a week before closing that the Buyer had changed his mind!!!

So....I had to place the property back on the market as an "approved short sale". We needed a cash buyer that could close in 7 days at the full asking price. Luckily we found one. Lolita' Clay from Exit Realty brought a full price cash Buyer and they closed today. 3 days before the Short Sale approvals expired. Way to go Lolita!!!

Property:

4 bedroom 2 bath condo in Legacy Dunes. Legacy Dunes is a Short term rental community about 5 minutes from the main gate of Disney World in Orlando Florida. The condo was purchased in July 2006 for a whooping $335,400!! We sold it yesterday, 4 years later, for..........$60,000!!! That's a decrease in value of 82%.

Hardship:

Loss of income

Liens:

1st with Sun Trust for $269,150. Settled for $62,183 or $.23 cents on the dollar.

2nd with Sun Trust for $30,350. Settled for $10,973 or $.64 cents on the dolllar

HOA lien for $6,000. Received full payment from the Seller.

Details:

The Seller had to contribute $17,500 to Sun Trust plus had to pay the $6,000 to the HOA. No promissory note and Sun Trust issued a Waiver of Deficiency for both liens.

Another successful Central Florida Short Sale by Tutas Towne Realty!!

Are you facing foreclosure on your Sun Trust Mortgage? If so........

Short Sales never cease to amaze me. Just when I'm really getting fed up with how slow Chase is they give me an approval in 5 business days!!! The other Chase Short Sales I have done all took 6 months or more so this one was truly a surprise. Hopefully this is a sign of things to come.

One of the reasons this one got approved so quickly is that the Seller had been working with Chase for over a year trying get a loan mod and then trying to do a Short Sale by herself. By the time she finally listed  the property with me she already had a negotiator contact.

I listed the property and sold it the very next day. I called the negotiator and all he wanted was the contract and the HUD statement. These were sent over on July 1st and we received the written approval on July 8th!!

Property:

3 bedroom 2 bath pool home in Winter Haven Florida. Tenant occupied.

Hardship:

Loss of income

Liens:

1st with Chase for $196,500

2nd with Chase for $64,500

Details:

The property was placed on the market on June 23rd. Went pending June 25th. Short Sale was submitted on July 1 and was approved on July 8th. No seller concessions or contributions.

Chase agreed to a purchase price of $105,000 with a NET to them of $96,270 or.... 37 cents on the dolllar.

Are you facing foreclosure on your Chase mortgage? If so........

This wasn't the easiest Short Sale but after 14 months and 5 buyers we finally got it closed. Another Florida Short Sale success story.

The property:

3 bedroom 2 bath single family home located in Saint Cloud Florida. It was bought new in 2006 for $253,500. The owner was transferred almost immediately and was never able to move in. It has never been lived in.

Liens:

• Mortgage with Bank of America for $235,000

• HOA lien for $3,800

• County lien of $300 for mowing

Hardship:

Loss of income

Issues:

This property was placed on the market in March of 2009. It was actually a referral from an ActiveRain member. The biggest issue was that the community this property is located in has a CDD (Community Development District). The annual "fee" for this CDD is $2,700 a year. This is on top of the taxes and the HOA fee. So basically the cost to live in this house is well over $600 a month BEFORE you add in the mortgage and the insurance. This is OK on an expensive property but when the property is less than $100,000 the cost is way out of line. This exorbitant cost is the reason we had 4 buyers that could not or would not close. Here's a good article on CDDs in Florida.

Anyway, we were able to find a buyer that was willing to pay the costs of living in this community. Bank of America would only pay $1,000 towards the HOA lien so I had to negotiate this down as low I could get it. I got it from $3,800 to $3,100 and the seller was able to borrow money to pay the $2,100 that Bank of America would not pay. I personally paid the county mowing lien to help get the transaction closed.

The property sold for $91,000 and Bank of America accepted $81,829 on the $235,000 that was owed. Or 35 cents on the dollar. Do you need help with your Florida Short Sale?

Hi folks. Let me tell you a little story about one of my Short Sale Sellers. Let's call him "Responsible Rex". I met Rex many, many years ago. On most days we are very good friends and on some days I don't like him at all. But overall he's a pretty good guy. And he happens to be a Real Estate Broker.

Back when Real Estate was really booming Responsible Rex, like many others, started buying property. He did OK on a couple of flips and reinvested that money into rental properties. All were financed. Things were going well. The rentals were mostly paying for themselves and his Real Estate business was booming. Cash was flowing.

Then it seemed like over night his Real Estate business hit the proverbial wall.  Responsible Rex went from selling 60-70 properties a year to less than 20. And to make matters worse property values dropped by more than 50%. Do the math. 66% decline in business. 50% decline in value. This equates to an income loss of almost 85%!!!! Holy reduction Batman. Overnight, Rex went from making more money than his Doctor to less money than.......well....just about anybody with a job.

Responsible Rex needed to do something. He needed to do something fast. Rex needed to unload debt. So he placed a few of his properties on the market. The properties sold but in order to make it happen Responsible Rex had to bring big checks to closing. He drained his finances to do so.

Responsible Rex was an honorable man and honored his financial obligations. No strategic default for Rex!! The mortgages were paid in full even though it wiped him out. Rex went from being a homeowner to being a tenant.

Rex was also a smart man and very quickly started revamping his Real Estate business. Before long he found a new niche and his business started climbing upward. Then, as fate would have it, life threw a curve ball and smacked Responsible Rex right upside the head. His wife, Sassy Sadie, started having serious health issues and almost died.

Rex, unable to focus on his business, started sliding into despair and his business once again started to nose dive. Things were very difficult. Rex didn't know what to do. He needed money and he needed it bad. At this time, Responsible Rex was actually staying in a hotel in another town to be close to Sassy Sadie while she was under going treatments.

Out of necessity, Rex, missed a couple of payments on his remaining two rental properties. He used the rent to pay for necessities instead of mortgages. Low Life Scumbag!!

BUT....Rex is a master at moving forward. Within a few months he was able to send in the 3 payments he had missed on his mortgages. Rex was back on tract!!! Sassy Sadie was out of the hospital. Things were looking good.

Then surprisingly, Responsible Rex received letters from Bank of America. They returned his checks and stated that they needed certified funds. So Rex, being Responsible, ran down to his bank and sent them cashiers checks. About a month later these too were returned. What the......!!!!

Bank of America had started foreclosure. They told Rex to contact the foreclosure Attorney to find out how much money was needed to reinstate the mortgages. So he did. However, the Attorney couldn't give Rex an amount.  The Attorney said to call back.

This went on for many months. Bank of America would NOT give a reinstatement figure nor would they accept any payments.  In the meantime, the tenants in both properties were served foreclosure papers and moved out.

After about 8 months of this Responsible Rex, totally frustrated with Bank of America, contacted me. To be rid of his frustration it was decided to list his properties and sell them as Short Sales. So we did. Both properties were sold and were closed on in May.

Fortunately, Responsible Rex Broker Bryant was able to make it through all of this with his head held high. He did the responsible thing. And now he and Sassy Sadie The Lovely Wife have moved forward and are living in their new home in Solivita and Tutas Towne Realty is having one of it's best years ever. The Storm has passed.

Folks...if you are struggling with keeping your property and are thinking about doing a Short Sale then give me a call. I CAN relate and I can help. Sometimes being Responsible requires making hard decisions. What say you? 

Hi folks. I wrote this post almost a year ago but feel I need to bring it back to the top of the stack. Short Sales are another year older and it just seems like buyers and their agents would "get it" by now. You can't just walk away from the Short Sale Contract. If you do.....my Seller is entitled to your deposit money. A Short Sale contract is STILL a contract. Buyers that feel they can just walk are wrong.

Here is my opinion on why Buyers feel this way. They are misinformed.

A Short Sale contract is no different than a regular contract with the exception of the 3rd party approval contingency. This contingency is related to the Lender approving the “Short” NOT approving the contract. The lender has no authority to approve the contract since they are not a party to the contract.

They do however have the authority to approve or disapprove the Seller’s request for a “Short” payoff.

A contract is binding and legally enforceable when:

1. It has a legal purpose
2. The parties are legally competent
3. The offer has been made and accepted
4. There is consideration
5. The parties have willingly consented to the terms

There may also be contingencies in the contract. Contingencies are: Conditions which must be met if a contract is to be performed.

Some contingencies may be to protect one of the parties:

1. Survey
2. Inspections

Some contingencies may need to be removed in order for the purchase to be completed:

1. Title
2. Short sale approval
3. Financing

The Short Sale approval is just one more contingency in the purchase contract. And just like any other contingency it should have a time period to be removed.  

If it can’t be removed in the time allowed then the parties can either extend the time period or cancel the contract and return the escrow deposit.

If it can’t be removed at all because the Short Sale was denied then the contract becomes  “null and void”. The Seller is now unable to perform. This is no different than when the Buyer’s financing is denied. He too is now unable to perform.

Folks....this stuff is NOT complicated. It’s Real Estate 101. Stop trying to complicate matters by treating the Short Sale as anything other than what it is…..a contract contingency.

If your Short Sale listings are not closing. Get training. You’re doing something wrong.

If your Buyers are getting frustrated then you are not setting the right expectations.

These are my thoughts. What are yours?

***I am NOT an Attorney and this is not legal advice. I am however a Licensed Florida Real Estate Broker and this IS my opinion.