I have closed all of the short sales that I have listed. It could be because when I submit a full price market value offer that is denied (and I've had that happen several times), I send a nice letter letting my negociator (cc thier boss) that goes something like this:
"I hope this is not the case at your workplace, but there are some banks/bank programs that reject reasonable offers, then either foreclose on the owners and/or have them complete a deed in lieu and then sell (either by auction or REO agent) the property for amounts less than the offers received during the short sale process. I don't understand the logic behind this, but I do know that it is a categorized as a deceptive business practice under the law and subject to fines and penalties whether done intentionally or unintentionally.
As you know, I have been working on this file for (insert time) and I have complied with all of the additional information that you have requested from me. I need to inform you that if the property is deeded to the bank and either auctioned off or placed with an REO agent, if the property sells for anything less than (insert my highest offer) at any time, I will be bringing an action against (insert bank name) for "Intentional Interference of Economic Advantage" and "Deceptive Business Practices". I hope that it does not come to this, but I have had to do this in the past to insure that my work is not done in vain."
I haven't had to file a suit yet, but I am prepared to do so if needed because I put alot of effort into educating the buyers and sellers involved and I have LITERALLY worked on some short sales for years. I hope this helps.
When it comes to the banks, the left hand never speaks to the right hand. It amazes me every time I do a short sale and speak with someone at the bank/banks. I honestly have called back several times in a day and received different answers everytime. The banks are a mess. And of course they are receiving all kinds of perks from our government. They have been for years. I'm not an expect but it doesn't take a rocket scientist to figure out our banking system is in termoil.
Penny O'Brien with Simply Vegas
Licensed Loan Originator
Amerifirst Financial, Inc.
apply online: http://www.mattpuzz.com
Were there any liens that could be extinguished by the lender foreclosing, i.e. HOA liens, Home Equity line 2nd mtg, contractor liens, etc?
Also were you representing the seller or the buyer? It's possible the Sellers didn't have a true hardship and were required to sign a promissory note by the Private Mortgage Insurer (I see this often in Tampa Bay).
If you're representing the buyer, go and buy it at the lower price! If you were the listing agent then...darn..
All the best,
The bank would get the insurance money for the deficiency whether they short sale or foreclose. Typically, banks will get more money by selling a house short. So, there is no incentive for a bank to deny a short sale for the purpose of foreclosing to list the property as an REO.
Without having first hand knowledge of the details of your file, it appears that the negotiator handling your file just didn't handle the short sale very well. Properties should not go to auction if they are being sold short, especially if there is an offer pending. Clearly, short sales are a long process. In order to get a short sale closed, the file must be handled properly from the beginning of the listing. We offer step by step guidance to Realtors to get their short sales closed, starting with specific verbiage in the listing agreement. We would be happy to help you get your short sales closed.
We are a professional short sale negotiation company and are closing over 90% of our files. The few files that don't close are mostly due to lack of seller cooperation. Please call us directly to discuss your specific situation. We look forward to hearing from you.
Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states
(Matt the video tells a lot!)
I have a frank comversation with every buyer to exhaust the bank owned REO and relo REO inventory before twasting time on short sales. Stop blaming the banks! Its the seller attorneys stalling to get a zero defficiency and sellers lacking real hardships hiding money that holds up most short sale offers from closing.
Is is unethical that the LAW FIRMS the represent many of these banks also OWN the title companies?
Is it unethical that some of the member of the law firms and BANKS have these investment LLC and some really good buys go to those companies and many times before they even go to the public.
Why is it that some banks can get a short sale approval within a couple of weeks and then some take months? Is the system really that messed up?
How about this, if you list the short sale for 417K, submit a offer then the bank forecloses, then puts it back on the market for 409K and your old clients put a offer in and get it, shouldn't you be entitled to a commission or even Procuring cause.
We pay a ton of money to NAR to help with these conflict and they have done nothing but get behind the banks. In 4-5 years this won't matter and even now we have all just said this is the way things are done. Honestly, we as realtors should have not ever let this happen and DEMANDED that banks work within the guidelines that we conduct our business by.
One final note, at what point does a negotiator that is PROBABLY UNDER EDUCATED and making about 6 dollars per hour qualified to do anything in this housing market? That does not even make sense.
You need to have an agressive agent who is willing to go above that negotiators head and make something happen.
If the short sale was strategic in nature that could explain why it wasn't accepted or yes the back end MI, specially if it was Radian could have squashed it. The short sales we are having success with are the pre-approved ones and ones with some type of hardship like a divorce.
Finally, our idiotic elected leaders and paid officials have started to clamp down on servicer abuses. Many mortgages are owned by Fannie Mae and Freddie Mac and it's amazing they've let these greedy banks get away with these schenanigans for years. The HAFA short sale program puts strict guidelines on time frames and approvals so that is helping somewhat.
What is amazing is that the investment pool trustees that manage many mortgages are not bringing lawsuits against these "servicers" i.e. BofA, Chase, Wells Fargo, etc. Fannie Mae and Freddie Mac should be intiating lawsuits but it will probably never happen.
Realtor, GRI, CSSN
John Hall & Associates
Did the "servicer" give you a counteroffer price above $417k and did they require the seller to sign a promissory note? Did you represent the seller or the buyer? Hopefully you weren't representing both because lenders do question sales where there is only one agent involved. That could be another issue why the $417k offer was refused.
Also was there PMI? PMI companies often require a promissory note or in some cases they may have to actually foreclose to collect on an insurance claim if they have "reinsured" their coverage by another insurance company.
Or did the low asking price result in a bidding war and the final sale price was above 417k?
Just curious, because in Tampa, bank owned listings are often listed below market and result in a bidding war and the ultimate sale price is above asking and oftentimes to an ALL CASH buyer.
How you been? Sorry this happened to you. That sucks. Unfortunately, that happens a lot here in Las Vegas. I think the Banks are still overwhelmed and the short sale departments typically are not cooperating correctly with the foreclosure departments within the same bank. The banks are being made whole in most cases through PMI and even double dipping by going after defaulted borrowers for deficiencies. Give me a call dude.
Also I believe there are certain rules with PMI that may require a foreclosure sale for the investor to collect.
And of course BankOne's ridiculous deal with FDIC may give an "incentive" to just go ahead and foreclose.
It's surprising that some of the investors are not going after the "servicers" for their negligence in handling short sales.
If you do not take 5 minutes to watch the video I posted at the bottom of this post you are cheating yourself. In some cases the banks and others involved in the holding and servicing of the mortgage are being compensated for the losses they incur. While each case is different which is why it takes so long for the decision making process to happen during a short sale, this video allows for some understanding to the madness. Please watch it and forward it to your friends in the industry so that they will better understand. Good Luck to all of you out there selling!!
Amerifirst Financial, Inc.
I am going to loose my listing because banks are not returning our phone calls and emails. It is absolutely clear that it is done on purpose.
Also, Private Mortgage Insurance may demand from the lender to reduce the loss for the insurance and demand a cash contribution from the Seller to close the short sale deal. I recently had that happen for a Sale with 80-20 purchase money loans. The PMI did not think the financial situation of the Seller was a real hardship. It is my understanding that the lender needs to respect the demands of the PMI or will not be paid the claim. It's also possible that the lender received a lower appraisal when the property was finally offered as a bank owned home.
One of the largest banks in America gets100% of their losses made up through TARP.
Why do you think they are so difficult in trying to do short sales with?
Since the big banks own Washington and since the Federal Reserve is a PRIVATE CORPORATION who works for the banks, you will see more and more of these under the table deals.
Terry S. Smith
44 Year AZ Resident
DPR Realty LLC
8341 E. Gelding Drive
Scottsdale, AZ 85260
Contact me Direct (602) 763-1858
Office (480) 994-0800