short sale

I have been reviewing the HAFA program since it’s becoming more apparent that the banks want to have the homeowners enrolled in the program.

Have you looked at it?  It doesn’t look like a good deal at all to me.  Yes, not a good deal for the homeowners is what I mean.

The property has to be their personal home.  That’s normal.  But they must also still be living in it.  It is also very possible they may have to be making payments to the bank during the 120 days they give the homeowner to find a buyer on a short sale for a set purchase price the bank has per-determined.

UGH!  That who paragraph sounds like a lot of  “ifs” and a bad deal to me.

Also, when the homeowner signs up for the HAFA program, yest there is an Opt In Form, they agree to do a Deed-In-Lieu in 4 months (120 days) if the house doesn’t receive the desired short sale offer.

Does that stink?  In today’s market I’m guessing that the bank will price the house higher than it will really sell for.  And with the First Time Home buyers Credit gone, buyers are looking for deals.  So if the bank is pricing the houses high – no buyers will appear and the homeowner will automatically get a DIL on their credit.

OUCH.  That doesn’t look or feel near as good as a short sale or as easy to recover from.  Good job HAFA.  Really helping the homeowner.

We talk about all this and more on my weekly coaching call with short sale students all across the country.  You should be on there too!

Log on and learn more at www.shortsalequeen.com

That’s all for now

Deb McMillan

The Short Sale Queen® and Coach

So – yesterday we talked about the problem.  Freddie – Fraud on Short Payoffs, no Disclosure .

Wasn’t it interesting that the article didn’t talk about what penalties there might be for no disclosure or reselling at a higher price without informing the short sale lender.

Does this make it so it is not a law or have any chance of becoming law?  The article did give “Fraud tips” and where to call if you believe there is fraud.

Click here for the Freddie Mac newsletter article.

But no wording on the repercussions if the house was resold for more and the lender wasn’t informed.

Who does decide what a “better price” is?

Is $100,000 net to the short sale lender, cash and close today better than $105,000 with $2,000 closing costs and have to wait to be approved for financing?  And who makes that decision?

And if the $105,000 comes as you are walking into the title co. to close, are we to stop the closing, call the bank and “report” the higher offer? Or do we just go to Freddie Mac Real Estate H-E double hockey sticks, do not pass GO and do not collect our profit at the other end – because there were no rules to follow.

As you can see, higher may not be better – but who decides?

Best I can tell is if it can close NOW and stop the bleeding it is the better offer.  Will my lawyer agree?  Will Freddie Mac agree?  Will the short sale lender agree if it all comes down to a court case to decide?

Obviously I don’t want to be the one to fight that battle.  However, I will continue to do business in the short sale arena.  The harder it gets the less competition it will be so maybe the profits (at appraised value, of course) will be better.  Can’t blame a girl for trying.

So what is the solution?

Glad you ask.

I and my students currently have a Short Sale Addendum that we give to most C Buyer realtors.  I will be updating it with some phrase like “the short sale bank has been informed of the B buyers intention to resell for a profit” and give it to ALL C Buyers/Realtors.  But I’ll run it past my attorney’s first.

I’ll also include an updated ‘disclosure’ statement in my Option Contract – to be run past my attorney first.  More disclosure seems to be the order of the day.

And was the Freddie Mac newsletter even talking to us who are already disclosuing what we are doing?  Maybe not.  Maybe it was aimed at those who don’t disclosure.  So disclosing more can only be a good thing.

So for Freddie’s sake – stop the omission of fact, intention of deceit – lying about the sellers situation or hardship and stop the material misrepresentation of facts.   I really don’t believe if you are reading my blog, that you do this in the first place.  I just get tired of defending the people who are doing it the right way in the first place.

Again – if you feel good about what you are doing – helping people who are in foreclosure and giving them an opportunity to start over with a cleaner financial slate, and you are NOT taking advantage of people – You are doing the right thing, the ethical thing.  What we do is not unethical if do those things above.  If your seller is happy when the job is complete – you are doing the right thing in my book!

Here’s to your short sale financial success!

Deb McMillan
Short Sale Queen® and Coach
www.shortsalequeen.com

for more tips and coaching and daily info on short sales check out these links:

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The Best TRaining for Short Sales AnyWhere!

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and a Great Easy to Read Guide to Short Sales and Recession Proof Real Estate Investing Click here!

Well, they changed the law again at the last minute. It’s the HAMP law, silly.  I know, I can hardly keep up with the government and their changes in their infinite wisdom.

The bill now gives $1,500 to homeowners who get a short sale.  I think that comes from the lender not us. (more investigation will be done)

The 2nd mortgage will get $6,000 if they forgive the debt.  That’s good but the wording I found was “$6,000 of the short sale proceedings” so I think that means we pay the $6,000.  Boo.

But if it get the negotiations done within ten minutes, that’s a reward in itself!  And you can budget that amount.

The homeowners have to NOT qualify for the HAMP (modification program) before they are eligible for all this.  AND

The bank has to have a sale value on the house BEFORE it gets listed.  HUH?

And the Realtor commission can’t be cut after submission of the offer.

A Realtor (BPO – not appraiser) will determine the value of the property and not be shared with the owner.  (does that mean it can be shared with the Buyer?)

The feds are expecting 10 million foreclosures in the next 3 years.  TEN MILLION?!?!  Now is the time for short sales.  I’ve ALWAYS said that.

They do expect this program to help 4 million.  A drop in the bucket.  Get busy!  Buy my home study course and coaching!  We have more ways to get leads and include doing the short sale yourself or having a qualified negotiator do it for you.    NOW IS THE TIME!  Click here for my link.

Personally I think it is a little bit dangerous when the government gets involved in all this. It is easy for me to say, because I am not (or at least I think) underwater with my mortgage.  But even if we aren’t receiving this help from our government, the fact is that we all still have to pay for it – and so much more important is the fact that we are slowly exchanging more of our freedoms for the comfort of having the government “look out” for us and fix our problems.  Scary, scary, scary.

Deb McMillan

The Short Sale Queen® and Coach

www.shortsalequeen.com for the best short sale course anywhere!

One of my clients got a letter a couple weeks ago.  It said “if you pay 10% of the balence of the loan by the end of the month – we will forgive the additional mortgage amount and release the mortgage from the property”.

What a deal.  Problem was they still didn’t have $4,100.  And I went out of town so I couldn’t buy it either.

A couple weeks went by.  I got a call from Household Finance.  They said they just sent a letter to the homeowner that if he came up with $500 by the end of the month = they will forgive the additional mortgage amount and release the mortgage from the property”.

No, I didn’t forget a zero.  Five hundred dollars.

Amazing!  The lender is cleaning up their books and offering a tax time offer to homeowners to get the loan off their books and give the homeowner their house.

An guess what?  The homeowner did find $500.  Actually, he had about $350 in layaway on a gun.  He got the money back and added $150 to the total.  Paid Household finance over the phone and are now waiting for the letter stating they will be owning the house.

What does this mean to you?  Just as I always said “banks don’t want those houses back.”  Some are ok if they have to take them back.  Some are much less than OK.

If you’re working on a loan mod or short sale with Household Finance, Beneficial Finance or HSBC – now is the time to ask for a BIGGER discount.  They just may be ready to deal and not want your house back either!

Deb McMillan

The Short Sale Queen® and Coach

To learn more about getting bigger discounts click here!

What do you think? Has the FHA Seasoning rule changed for the better even if you are doing short sales and double closes? Do you think you can still get them done in 1 day?

So many “special” requirements. Only 20% profit or you need 2 appraisals and probably all your receipts that show how much you spent to improve the value, property marketed open and fairly, no previous flipping with the past 12 months…and the big one. The one all the vendors are coming out of the woodwork selling their new program so this one will work.

The Seller Must Hold Title to the Property

If you are already one of my coaching students you know we already fit that criteria. No need to depend on somebody else’s money for 7 – 14 days while you get on title, no need to hold the property HOPING the C buyer really does close the sale 2 weeks later. No extra stress keeping your fingers crossed convincing your lender the buyer will buy.

No need to do lots of repairs and keep all your receipts – at least in most cases.

If you are buying short sales on an Option to Purchase Contract…and Know How To Explain It to the Underwriter of the end buyers lender…You are Good!

When we record the Notice of Option at the County Court House that the buyer and seller both sign and notarize (if you are already my coaching student – yes I have changed the form and you should be getting the updated version soon) you know you already show up on title with all the rights of the seller.

That’s why we’ve been able to complete double closes already with conventional lenders, without trusts and a comfort lender from the end lender. We did, can and could act as the seller.

OK, so I’m probably one of the few who are saying this. And Yes, it does need to be tested. And it will be just like the conventional loans – each one will be different and get special approval from each underwriter. SO…

Start your conversation early with the buyer’s underwriter. Let them know exactly what you are doing. How you are buying the property, that you are reselling for a profit and you believe it will appraise at the higher value.

This is why the Options have worked in the past. The deal is transparent. Those who need to see all about the deal see all they need to see about the deal.

We’ve had 2 appraisals before we could close on other deals. That hasn’t changed. We haven’t shown receipts of the work we do. Can we get by with that now? I don’t see why not.

Again, each case will be different but don’t start spending money anticipating you can’t do these deals. Be persistent, be proactive, be confident in the Option Contracts.

If you need more convincing – check me out for my coaching. You will be persistent, accountable, proactive, confident and get your deals closed!

www.shortsalequeen.com
Check out these websites for freebies and more Short Sale Information!

www.theShortSaleTips.com

www.BestShortSaleCourse.com

www.ShortSaleTerms.com

www.MyShortSaleTraining.com

To Your Real Estate Short Sale Success!

Deb McMillan
The Short Sale Queen® and Coach