Home Buying in 93950>Question Details

Luxair, Home Buyer in 93950

Short sale legal help???

Asked by Luxair, 93950 Mon Jul 2, 2012

We are currently buying a short sale home, with proper representation. Two days before we were about to close escrow it became noted that the sellers second mortgage bank had not been approved for the short sale. We waited nearly 3 months for their first mortgage bank to approve the short sale now almost 3 weeks later we still have no answers. Bottom line/most recent info; 1st mortgage approval will not expire for a few weekss & will be paid off & the short sale action will apply to the sellers 2nd mortgage. We as the sellers JUST became aware of the second mortgage and the delays, we had contractors, movers, gardners, and a landlord we made arrangements with 3 weeks ago. Now we are about to be "homeless"! Do we have legal actions? Fee reductions? ANYTHING to help us with this disaster?

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Answers

9
Christina M Turner’s answer
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0 votes Thank Flag Link Tue Nov 27, 2012
Legal Shield, Linda Shepard, Associate
0 votes Thank Flag Link Tue Sep 11, 2012
You could sign up for Legal Shield for $35.95/month, a family plan. There are attorneys available for estate law advise to further assist you with the legal issues surrounding a short sale.
0 votes Thank Flag Link Tue Sep 11, 2012
I read a report last night about delinquency resolutions and only a tiny fraction were completed short sales, yet it is THE buzz word in real estate today. I can’t get the guys at my office to agree on where to go for lunch let alone get the seller and two lenders to agree on anything. The report I read was only about first mortgages, so I am sure the figures are even worse when there is subordinate financing involved.

The only purchase loan I have EVER closed on a short sale did not have an attorney/facilitator involved, nor did it have a second mortgage. I have worked on several that had attorney/facilitators and none of them closed.

As already mentioned you could contact the second mortgage and offer to pay them something, make payments, etc. If you make a payment arrangement be sure to notify your lender that is providing the first to make sure you still qualify with the new payment. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Tue Jul 3, 2012
I recommend that you call Connie Holt at Strategic Loan Solutions in Monterey (831-324-0091). She is an attorney who specializes in facilitating short sales, as the name suggests. Their firm represented the seller on a short sale in Carmel Valley where I represented the buyer; they did a wonderful job getting the deal done for us. As per Maureen Mason's reply below, there may not be much that can be done but it never hurts to give a call. Good luck!
0 votes Thank Flag Link Tue Jul 3, 2012
Florida is also a state where attorneys are not used for most real estate transactions.
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Your predicament is very unpleasant to say the least. In the 'Wild, Wild, West of Real Estate, known as Short Sales' anything can happen. Short sales that close are a miracle .and you are so close.
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Short sales are extremely complex. Soliciting guidance from the internet will only inject further uncertainty and confusion. To add to the complexity of an already mind boggling endeavor is the protocol in play by the local real estate professionals. As the buyer, you are the LEAST significant player, least influential participant in the short sale process. Clearly you bear the great burden of consequences. This does not mean you do not have the ability to resolve the issue.
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You must rely on the experience and skills of your agent to assist the listing agents team. There are short term strategies they can pursue. Before you torch everyone around you, try to get back on topic and work cooperatively towards a beneficial outcome.
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Because of the very nature of short sales, the low success rate, the extreme complexity and added to all of that, the owner can choose at any time, even at the last minute, to implement their end game and bring everyone's efforts crashing to the ground. No prudent professional will leave themselves with exposures in such a high risk endeavor. You knew you would be playing for the Washington Generals when you tossed your hat into the short sale arena. They always lose to the Harlem Globe Trotters.
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You failed to mention the option YOU do have of resolving this issue. It is easy to make the 2nd go away. Find out what the 2nd payoff is, do the math and chose wisely. Rather than looking for others to blame when high risk activity produces the expected liability, you should look to pool resources, efforts and energies to achieve the best possible outcome. You may find, addressing the 2nd directly will be your best option in the terrible situation in which you now find yourself.
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Let me repeat, rely on your local professionals to address this properly. Please be aware, NO ONE is happy about your situation. It is when the wheels come off the wagon, and they often do, that real pros demonstrate their worth. Don't let your words and expressions create counter-intentions that will sabotage the willingness of those working on your behalf.
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Short Sales , they are unlikely to get any better.

Wishing you the very best outcome possible,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL
727.420.4041 - http://www.RealEstateMadeEZ.us
0 votes Thank Flag Link Tue Jul 3, 2012
If you have "proper representation" then I'm assuming that means you have a Realtor and that the seller has a Realtor. What I can't tell from what you write is whether there is a facilitator handling bank negotiations or not. Typically we hire a facilitator to do the negotiations with both banks (or more typically the servicers).

You must have known about the second mortgage existing when you read it on the preliminary title report after the escrow was opened. It was a lien on the property. Evidently, what you didn't know was whether the 2nd would accept a payment offer made by the first to the second. 2nd lenders are unfortunately the greatest problem in a short sale.

So, in terms of attorneys, there are several that specialize in real estate transactions (most of them in Monterey). I just don't know if you're going to change anything by hiring an attorney. You can't force the sellers to do anything out of their control nor can you force the second lender to act any more quickly than they act.

Your situation is unfortunate because it sounds to me as though you did not have clear enough communications from someone and gave notice to your landlord. I'd try to explain your situation to your landlord first. He/she should understand. If you really want this home, then I think patience might be your best course of action right now. It's unlikely the second lender will really force the property into foreclosure right now.

California is not a state where attorneys are used for real estate transactions so the helpful comments from agents out of state do not reflect California. There are several attorneys who specialize as facilitators for short sales whom we often hire, though. If it turns out there is an attorney who's negotiating with the lien holders on behalf of the seller, then your representative may be able to arrange a meeting with that attorney.

This may not be what you want to hear, I know. But please talk to your representative in this transaction and see if he/she can get you any more answers.
Maureen Mason, Realtor
0 votes Thank Flag Link Tue Jul 3, 2012
You should absolutely speak to an attorney. This is one reason why we use them for all transactions in my area. I hope all works out for you!

Chris
0 votes Thank Flag Link Tue Jul 3, 2012
Hi Luxair,

I can feel your frustration and dilemma but a legal advice could be best given by your attorney.
I wish you the best.

Maria
0 votes Thank Flag Link Tue Jul 3, 2012
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