Help With Short Sale

How To Choose A Short Sale Agent

by averypiantedosi on April 30, 2012

For good or for bad, short sales have become a way of life for a large portion of the home selling population. Many homeowners are faced with this option as their only way out – without facing foreclosure. Because of the increased need for short sales, many real estate agents have started offering short sales as a part of their service menu. Although many agents have an idea as to how the process works, and many have done short sales, most of them are not specializing in short sales exclusively.

So how do you choose a short sale agent to sell your property?

First of all, you need to make sure this person specializes in short sales. Ask how many short sales they have completed in their career. If the number isn’t in the triple digit range, move on!

Find out how many times the agent has worked with your specific lender… Do they have any inside connections with Chase Bank, for example? How many short sales have they closed with Bank of America? If they haven’t’ worked directly with your lender I would be weary.

Ask about the agent’s CLOSING ratio. In other words, it’s not very difficult to get a short sale listing, but to close a short sale is a whole different story!

Is the agent certified to deal with short sales? There is an SFR (short sale and foreclosure resource) designation that is specific to the complex process that is involved with short sales. Make sure your agent has this or some other official training when it comes to the field.

Does the agent mitigate the short sale themselves or do they ‘outsource’ your file? Many agents claim they are ‘short sale experts’ and promise to handle your file from beginning to end. However, what they are really doing is outsourcing the mitigation to an attorney’s office or a title company. Although these options can be a useful support, the agent themselves should be directly negotiating with your lender on your behalf!

Go with your gut… There are agents and short sale companies out there who don’t seem like they are on the up and up. Some warning signs are: 1) Charging a large fee upfront. A small fee upfront is fine.. this shows that the agent knows what their time is worth. However, if they are asking you to shell out $2500 or more before there is even an offer BEWARE! 2) The agent does not work for a large, established and reputable real estate broker 3) the agent promises you the world! If you are being told that you don’t have to come to closing with any money, that you won’t get taxed on your deficiency or that they GUARANTEE your short sale will be approved- RUN! These people are not being upfront or they don’t have the experience and/or knowledge to successfully navigate the short sale process.

Although not every person seeking a short sale will come to me for my services, I hope that this guide will be a helpful tool when interviewing short sale agents.

In terms of my short sale services:

1)I specialize in short sales ONLY. I don’t do any other real estate transactions and have dedicated 100% of my business to just SHORT SALES for the past 5 years.
2)I have worked with ALL of the major, minor and local lenders multiple times. I have contacts with every bank and typically have multiple files processing at one time with multiple lenders.
3)I am SFR certified
4)I work with an in house processor and do not outsource to a title company or attorney. I personally mitigate with your lender to get the best results.
5)I do charge an upfront fee: $695- which is less than the average fee charged in my region. I do this because I am working to relieve people from tens of thousands of dollars’ worth of debt and there are no guarantees! It helps qualify the sellers are weeds out people who aren’t serious, without breaking the bank.

Bottom line is you want to choose someone who is ethical, educated, experienced, dedicated and will work to get your short sale approved to your satisfaction. Whoever you decided to choose to be your short sale agent, please follow the above tips when making your choice and you won’t be lead astray!

As always, I am available for free phone consultations at any time regarding short sales at 248-670-4064 or via email: averylp@comcast.net

Good luck!

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Fannie and Freddie Set Timeline Requirements for Short Sales

by averypiantedosi on April 22, 2012

Beginning June 15, real estate agents working with distressed homeowners whose loans are backed by Fannie Mae and Freddie Mac should expect to receive a decision on a short sale offer within 30-60 days.

The GSEs issued new guidelines Tuesday that fall under the Servicing Alignment Initiative rolled out last fall and aim to bring greater transparency to the short sale process and expedite decisions related to these pre-foreclosure sales.

Not only is a short sale an effective foreclosure alternative when home retention is no longer an option, but it keeps homes occupied and helps to maintain stable communities, according to the Federal Housing Finance Agency (FHFA).

Addressing real estate practitioners’ No. 1 complaint about short sales, FHFA directed Fannie Mae and Freddie Mac to establish a new uniform set of minimum response times that servicers must follow in order to facilitate more efficient short sale transactions.

The GSEs’ new short sale timelines require servicers to make a decision within 30 days of receiving either an offer on a property under the companies’ traditional short sale programs or a completed Borrower Response Package (BRP) requesting short sale consideration, whether it’s through the federal government’s Home Affordable Foreclosure Alternative (HAFA) program or a GSE program.

If more than 30 days are needed, servicers must provide the borrower with weekly status updates and come to a decision no later than 60 days from the date the BRP or offer was received.

According to the GSEs, this 30-day add-on will provide some leeway for servicers who may need more time to obtain a broker price opinion (BPO) or a private mortgage insurer’s approval for a short sale. All decisions must be made within 60 days.

In the event a servicer makes a counteroffer, the borrower is expected to respond within five business days. The servicer must then respond within 10 business days of receiving the borrower’s response.

The GSEs plan to use the new short sale timelines to evaluate servicer compliance with the Servicing Alignment Initiative.

Edward DeMarco, acting director of the FHFA, says the GSEs new borrower communication and timeline requirements for short sales “set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

GSE servicers must comply with the new minimum communication time frames for all short sale evaluations conducted on or after June 15, 2012, although servicers are encouraged to begin implementing the new requirements sooner.
“I applaud Fannie and Freddie for finally coming out with real guidance with real world timelines for their servicers,” commented Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty Inc., which specializes in short sales. “There is no question that this will help short sales and the market as a whole.”

Last year Freddie Mac completed 45,623 short sales, a 140 percent increase since 2009. Fannie Mae’s short sale completions shot up by 101 percent over the same period, totaling around 79,800 in 2011.

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Why I became a Michigan Short Sale Specialist… By Avery Piantedosi

by averypiantedosi on February 27, 2012

My decision to specialize in short sales came with the realization that the real estate markets in several areas of the country were in the kind of trouble that was not likely to go away soon. I made a commitment to concentrate my efforts on listing, selling and mitigating short sales because that was where the market was. As word spread that I was actually able to close these sales, the demand for my services grew to the point where it was no longer necessary to advertise which was great to say the least.

Then the recession hit hard, this increase in activity was phenomenal, considering that many realtors and brokers were hurting for business. I was being thanked by clients who were hugging me at the closing table and writing enthusiastic letters of recommendation. While I was grateful for these accolades, something didn’t feel right. I was seeing suffering and lives damaged by a process that did not feel like a victory to me. The truth is, negotiating a short sale is no fun – not for the realtors, the buyers, the sellers or the title companies. Many people are forced to seek this remedy because they have become ill, gone through divorce, or because they have to relocate for work outside of their home state.

Even in the absence of a catastrophic event, there is another kind of loss affecting numerous homeowners – hard working people who have placed their faith in a perceived asset that is now, in many cases, worth 50% less than they owe to a lender. What this situation amounts to is paying rent to lender on a depreciated property that may not recover its value for many years.

I would much rather be selling homes to people who walk away with a sense of optimism and a clear future path. Instead, I contend with lenders who seem to be making a game of messing with people’s lives. One of my clients nicknamed me “The Hammer” due to my tenacity in seeking fair outcomes from corporate lenders who often appear oblivious to the predicaments of their customers. The job of “The Hammer” is not pleasant, but it can, and often does, result in more equitable resolutions.

I am willing to fight for clients because I believe that they deserve a second chance, without the added insult of having a foreclosure on their records. However, I still find myself questioning the circumstances that bring about all this misery. If there is any good news in this story, it is that people are being forced to reevaluate their priorities. In the end, what is important is not an impeccable credit score or owning a home beyond one’s means. What is more important are the values associated with our pursuit of happiness.

The light at the end of this seemingly dark tunnel is achieved by our refusal to return to chasing material things with reckless abandon. We must not go back to the model of a lifestyle based on unbridled consumption. If the short sale phenomenon has taught us anything, it is that there are better choices.

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Short sales and REOs… huh?

by averypiantedosi on February 23, 2012

BY GREG SMITH

There are many confusing terms out there today regarding “distressed properties.” I’d like to take a moment to layout the different terms used in today’s Real Estate marketplace, such as short sale (or pre-foreclosure), REO, etc., to help you understand what you are seeing.

Many Realtors use some of these terms more for marketing purposes, because the general public associates those certain words with good value. This is not always the case. Each property should be evaluated on a case-by-case basis with an EXPERIENCED BROKER familiar with the area, values and various additional requirements and procedures.

What is a short sale?

A short sale occurs when a lender agrees to take less than the full loan payoff for an owner’s property. In most cases, the owner is in default and is not making payments for whatever reason.

Short sales, in most circumstances, are the first step to avoid foreclosure. Although the lender(s) will recover less than the total loan amount in a short sale, they may prefer this in lieu of foreclosure. The costs of foreclosing on a property may be more than the bank’s loss by taking a short sale. Also, the property may not sell at auction, and then the bank would be forced to take it back as an REO (Real Estate Owned) property, which then they would have to maintain, list and sell with an REO broker.

Short sales are very complicated, and the outcome is not guaranteed. There are so many variables that I cannot even cover everything in a couple paragraphs. The bank (lender) is not obligated to take a short sale, and in most cases the process to get one approved is a cumbersome and time-consuming task for the buyer, seller and the Realtors.

Sometimes these requests are not approved by the bank, and the property ends up going to foreclosure anyway. Lately, some of the larger Mainland financial institutions like Bank of America have taken great steps toward improving the process. Each bank evaluates each individual request on a case-by-case basis. Not only do the banks consider the borrower’s personal and financial situation, but they also consider an appraisal of the property, market conditions, the bank’s financial situation, their current portfolio and in many cases have to consult with an outside investor who purchased the loan at some point.

Given all of these varying circumstances, you can imagine why this process takes so long – although many buyers do not want to wait out this long process and deal with the uncertainty. If a short sale is approved, it can be below market (depending on the bank appraisal).

If you are considering selling your home as a short sale, please contact me. Depending on the types of loan(s) you have and your financial situation, it may or may not be the best option for you.

What is an REO?

REO is a abbreviation for Real Estate Owned properties.

If no one purchases the property at the courthouse, then the property becomes an REO, owned by the bank. A home that has been “foreclosed” and has become a bank owned property can then be listed by a Realtor hired by the bank to market and sell the property. To sell the house as quickly as possible, the lender will remove any liens on title and clear any other issues that may slow down the sale of the property. Generally, lenders are very motivated to sell these properties, as they are in the business of lending money, not owning real estate. REOs tie up their capital reserves and hamper their ability to lend money.

Also, the management of these properties can become very costly. This is the best opportunity to find a good deal.

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“The Light at the End of the Tunnel” by Avery Piantedosi

by averypiantedosi on January 15, 2012

When the recession hit hard, this increase in activity was phenomenal, considering that many realtors and brokers were hurting for business. I was being thanked by clients who were hugging me at the closing table and writing enthusiastic letters of recommendation. While I was grateful for these accolades, something didn’t feel right. I was seeing suffering and lives damaged by a process that did not feel like a victory to me. The truth is, negotiating a short sale is no fun – not for the realtors, the buyers, the sellers or the title companies. Many people are forced to seek this remedy because they have become ill, gone through divorce, or because they have to relocate for work outside of their home state.

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What is a short sale?

by averypiantedosi on January 11, 2012

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What is a Short Sale and Why is it Better Than Foreclosure?

by averypiantedosi on November 20, 2011

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More than $300 Billion in Mortgages Repossessed in 2010| As The Market Turns, Ask Amy Ransdell, Mortgage & Real Estate News, REO Landing

by averypiantedosi on July 16, 2011

Credit rating agency Equifax is reporting a huge number of bank repossessions in 2010, saying banks to possession of $304 billion in foreclosed mortgages. And the number is still rising as we near the halfway point in 2011. To put it in perspective, that $304 billion is more than twice to repossessed total for 2006 and 2007 COMBINED! Equifax reports that the vast majority of these will be written off as losses. Not surprisingly, banks are getting buried under the sheer weight of the REO inventory they are processing and maintaining. What this translates into is short sales for Realtors–think of how many opportunities have already been missed? And for investors, it’s time to buy, buy, BUY!

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Short sales to ramp up with HAFA changes

by averypiantedosi on May 2, 2011

Servicers are moving toward a proactive approach in pursuing short sales as an alternative to foreclosure, servicers on a Mortgage Bankers Association panel said Wednesday.

A component and specialty servicer, meanwhile, predicted that short sales could increase 50% industrywide this year. Buffalo, N.Y.-based AMS Servicing told HousingWire that the projected increase is due largely to changes in the Obama administration’s Home Affordable Foreclosure Alternatives, or HAFA, program that opens up eligibility to a larger group of homeowners. AMS has determined through analysis of its 2010 short sale metrics that as many as 91% of previously ineligible borrowers might now be eligible for the HAFA short sale program.

To make short sales a success, outreach is critical, panelists on a short sale and deed in lieu panel at the MBA’s National Servicing Conference & Expo. In the past, servicers were more reactive than proactive when it came to short sales, looking at potential short sales that were brought to them, but not pursuing them ahead of time. But that is changing, said panelists who discussed trends in short sales.

“Power of denial is very sharp for someone losing their home,” said David Sunlin, senior vice president at Bank of America (BAC: 12.43 +1.22%). Borrowers want to do the right thing, Sunlin said, and it’s important for servicers to guide the borrower through to the end, whether it’s a short sale or a deed in lieu.

“We need to get these short sales done in a timely fashion. A short sale today is a lot better than it was six months ago,” said Abel Fregoso, vice president and national field short sale manager for Wells Fargo (WFC: 29.11 0.00%).

The Treasury Department took action in December eliminating some rules it said have held back short sales through the HAFA program. HAFA no longer asks for income verification, unless the borrower is less than 60 days overdue on the mortgage. This means that borrowers who previously were deemed ineligible because their income was too high, may now qualify for a HAFA short sale, said Jim DePalma, executive vice president, default management at AMS Servicing, in an interview after the panel concluded.

David Sunlin said changes to the program are seen as positive by servicers. It works best, he said, when used pro-actively, by helping the borrower market the property instead of having the borrower come to the servicer with a buyer in hand.

HAFA was launched in April 2010 to provide an incentive to servicers and investors for pursuing short sales and deeds-in-lieu of foreclosure. The program was designed for homeowners who fell out of the Treasury’s Home Affordable Modification Program, or HAMP.

Servicers on the panel said they expect the changes in HAFA to encourage more participation in the program.

But the incentive for borrowers to short sell their home can be challenging when it can take up to two years or more to complete a foreclosure. The ability to stay in the home without paying the mortgage may lessen the incentive to participate, panelists said.

As for deeds in lieu of foreclosure, Fannie Mae has looked at them with some sort of incentive at the end of it, such as a few months with reduced rent or no rent, said Beverly Wilbourn, vice president of preferred loss mitigation strategies for Fannie Mae. The key is to engage the borrower earlier and keep them engaged in order to avoid a foreclosure, she said.

“Offer them a way to transition from a very difficult financial circumstance,” she said. “Get to the homeowner and talk them through to life after this horrific situation.”

But, Wilbourn added, “You don’t want to go out and tell everyone to go do a short sale or do a deed in lieu.” The GSE wants to be sure that it is a viable option and the right alternative to foreclosure.

Short sales that have either second liens or mortgage insurance can be more challenging, said Leo Esposito, first vice president of loss mitigation and asset disposition services at ServiceLink, a unit of Fidelity National Financial (FNF: 15.46 +0.13%). But that’s not to say they can’t be done, he said.

The seller may have to make a contribution or sign a note for a short sale with a second lien or with mortgage insurance for the sale to go through, said Wells’ Fregoso.

John Will, director of component servicing with Fannie Mae, said the GSE is looking at ways that it can do a better job at short sales. The goal, he said, is to speed the process. It is taking all the best practices it can find to further cut the time it takes to get a short sale done.

“We are trying to cut the timeline in half,” he said. The goal is to get to the first offer faster and provide a response because it it goes to a second or third offer, those are generally for less money, he said.

Many borrowers, however, are still in a retention mindset when it comes to their home, Esposito said. If they are not eligible for foreclosure mitigation, then Esposito said its company focuses on a “door-knocking” campaign to encourage a short sale.

Write to Kerry Curry.

Follow her on Twitter @communicatorKLC.

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Commercial Short Sales Advantageous to Seller and Buyer

by averypiantedosi on February 21, 2011

Commercial assets are valuable to businesses however in these stressful and uncertain economic times with property values sometimes dropping drastically while payments remain the same, such assets can become liabilities. In instances where cash flow is insufficient to meet mortgage and upkeep payments, then a solution must be found quickly. When this happens, commercial properties present a problem to the business and may even be in danger of foreclosure. One of the solutions that is often overlooked in these stressful situations may be a process called commercial short sales.

Bankruptcy or foreclosure are never ideal solutions, since no one wins and the property owner loses their business and ruins their credit and the bank ends up with a property they have little or no interest in owning or maintaining. Commercial properties that are drains on the cash flow of a business endanger it and the credit of the business or individual. A commercial short sale is a sale of the commercial property that disregards the amount owed on a property. It is sold at what the market will bear and sometimes that will be less than what is owed on the property. A commercial short sale requires special arrangements with the bank however; this can be an answer to what might seem an insurmountable problem for the business.

Commercial short sales are not automatically approved, and the property owner will need to provide financial information proving they are unable to make the mortgage payments as well as suggested sale prices. Once this process has been approved by the lender (it takes some time so begin as soon as the situation becomes apparent) then the property owner can move forward and begin market the property for the agreed upon amount. This might seem a little complicated but less so than bankruptcy or foreclosure and infinitely preferable in outcome.

On the other side of the coin, someone must buy that property and commercial short sales can be advantageous to an investor or to a business, which is in search of a property. Such solutions work for all three parties involved. The financial institution may avoid having a commercial property on their hands, which they must sell and maintain. The company owning the property can arrange to keep their business standing, remove that cash flow drain from their books and not declare bankruptcy or have a foreclosure on their records.

The wise investor or business looking for new properties can find remarkable deals in commercial short sales, which they can then utilize for business or resale or even rental. They increase their income, the financial institution gets what could be a foreclosure off their books and the business owner relieves himself or herself of a debt. This is truly one of the all sides win situations.

In stressful economic times with rampant unemployment, reduced consumer incomes and hence reduced cash outlays there are rarely ideal solutions to economic hardships. An exception to this might be considered commercial short sales, where everyone involved can benefit and financial disaster, which seemed certain could be averted.