dwan twyford

Here is the prisoner’s dilemma.

When you cloud the title of a short sale with the Notice of Option and your C buyer goes behind your back (after signing a contract with you for $10,000 more than you owe the Seller A) to Seller A and creates their own deal, cutting you completely out of the deal, do you show up at closing?

Here’s the rest of the story.

We knew C had gone to A because A called B and was furious.  You’re making $10,000 on my house!  How could you do that and not give me any of the money?

C had proven to be a sneaky snake oil salesman.  And he painted the picture that B, the investor, was really the sneaky snake oil salesman and A believed it.  When in fact, B was the only one doing what the Option paperwork and subsequent Purchase Contract to C said she would do.

• Buy the property,
• Find another buyer,
• Resell the property and
• Make her money on the spread.

The investor had spent months working on this transaction only to be left out in the cold at the end.  She did need to close by the end of the month to meet the banks’ requirements.  She would have made it too but C went to A, took more time, C decided he could negotiate better with the bank and get an extension into the following month, making up a story to A and forcing B to back out.

B did however, send an acceptance letter to the attorney who was to close the now A to C purchase that she would uncloud the title for $5,000. – release her Notice of Option.  Just 1/2 of what she would have made had everybody done what they originally agreed to.

A mistakening sent an email to B (which was meant for the closing attorney) saying she felt sure B would “get out of the way with a payment of only $2,000.  Just tell her to show up at 4:30p.m.  she’ll show up and take it, we don’t have to pay her $5,000″.

I’ll publish the results of the survey here in a few weeks.

It’s true! The big czar of the Treasury Secretary. The home he bought in Westchester County New York in 2004 for $1.602mm won’t sell for that same amount. He’s dropped the price to $1.575 million and still no buyers. He’s renting.

The answer when you can’t sell. Rent. And hope for almost enough money to cover the mortgage and not kill yourself coming out of pocket for the rest.

He owes $1.25million with 2 loans and is renting the house for $7500 per month.

finance.yahoo.com/news/Geithner-faces-sluggish-apf-15419661.html?.v=6

According to my handy dandy payment calculator, an interest rate as low as 6% ON BOTH LOANS will cover the mortgage payment. You know the 2nd mortgage interest rate is never that low. Unless he got a special deal. And of course there is taxes and insurance on a $1PLUS million dollar house.

I think he might be hurting…or looking for another way, ethical of course, to get his mortgage paid.

Maybe I’ll send him one of my marketing letters to get him to do a short sale.  Maybe we should all send him letters. 

Read the article.  It’s a shame actually.  Maybe he can find a solution…like taking offers from people – whether they are too low – and sell the house for what people want to pay.  We could get more short sales accepted.

Are you aware than many borrowers, after a loan modification, falls
into foreclosure again?  Loan mods often don’t work.  Isn’t that what we said years ago about Forbearance?  The stats have not changed.

The 14 largest banks in the nation said that over half of the loans they modified in 2008 were delinquent again after six months.[1] Smaller mortgage companies are having better results, but still are reporting 25 percent of modified loans becoming delinquent again.

That says Short Sales are here to stay.  Loan mods are often just putting off the inevidable.  Foreclosure and the defaulting homeowner must move out of their house.

Short Sales save their credit, their house from foreclosure and their self esteem.  Do short sales.  We are helping people and helping ourselves.  It’s not stingy.  It is a needed service!

www.shortsalequeen.com/?coaching

Deb McMillan

Anecdotal evidence suggests that there is a dramatic increase in the number of homes that are being sold while still in pre-foreclosure.

For example, Ocwen Financial noted in a recent New York Times article that they modified half of their delinquent loans last year, foreclosed on one third, and most of the rest were sold pre-foreclosure for less than the amount owed.[1]

Typically, according to the National Association of Realtors, distressed homes sell for 20 percent below normal market price, although discounts of 40 percent or more are not unusual if the home is not in good condition.

[1] New York Times. “Modifying mortgages can be tricky.” February 19, 2009.

How many of you are seeing these kinds of discounts?

Then check out www.shortsalequeen.com/?coaching

Do you remember 12 or 18 months ago in Cleveland, Ohio where the judge threw out 14 foreclosure cases because the banks couldn’t produce the paperwork to prove that they were owed the money from the mortgage and therefore had no legal right to start the foreclosure proceedings?

Well that has been taken to a higher level.  Now you can (and maybe you always could) get paperwork to file at the court house to request to see the original of the Note and Mortgage from the foreclosing bank.  If they can’t produce it, the bank must stop the foreclosure proceedings and the homeowner gets to stay in their house or avoid the foreclosure sale a little bit longer.

Because the banks sell and resell paper – the Note – the original promissory Note could be in any banks’ file.  So the foreclosing bank must go back to the other banks and find the electronic copy.  This could take awhile and therefore, stall the foreclosure and the sale. 

But they will find it.  So it’s not a way to get your house for free, never owing anything again.  It’s just an opportunity to delay the sale or the process, giving the negotiator or the homeowner more time to negotiate an agreement with the bank.

Pretty cool idea!  Produce the Note! 

We’re trying our first one.  We have a deal that wasn’t suppose to go to sheriff sale.  We’ve ask them to vacate the sale.  So far they have told us we have 30 days to work the short sale but the banks have to return phone calls to make that work.  That’s the hard part.

So we are getting with the seller to have them sign the paperwork – Request for Production of Document.  I’m guessing that if it is in the packet that gets sent to the homeowner in the very first foreclosure notification file, the bank does have the Note and this tactic can’t be used. 

Stay tuned and see it that’s so or if this works.  One more tool for your Short Sale Queen Short Sale Tool Box!

http://www.shortsalequeen.comcoaching
Deb McMillan
The Short Sale Queen and Coach