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Elizabeth Weintraub
How the Elizabeth Weintraub Team Sells Sacramento Homes
My Sacramento sellers often remark on how astonished they are that I quickly respond to their needs. I respond in the medium of their choosing. Email, text, phone, doesn’t matter. Email is probably the fastest as I’m in front of my computer during the week more often than not. What they don’t realize is it’s not that I’m so lightning fast — although I am probably faster with a response than most Sacramento real estate agents (which is why I win so much business) — the reason I quickly respond is because if I don’t, I’ll most likely forget about it.
I’m a busy Sacramento real estate agent. I’ll call a seller once but if she doesn’t respond, I’ll probably never call her again. I don’t hound people. That’s not in my nature. Some sellers are afraid to call a real estate agent because they worry that the agent will continue to call and call and call and pressure them to do business with that agent. I suppose some agents fit that description, but I’m not one of them. With that attitude, I’ve sold more than a 100 Sacramento homes over the past 12 months.
Which is why it’s easy for me to stop what I’m doing when a seller makes an inquiry and respond. Moreover, a Sacramento home buyer gets special treatment. You see, I have team members who will follow up on buyer leads. It’s important for my sellers to know that no inquiry from a curious home buyer will ever fall by the wayside when they hire the Elizabeth Weintraub Team to sell their home. We snap to attention when a home buyer calls. When I receive a buyer inquiry via email, for example, it is immediately forwarded to a team member for a response.
The Elizabeth Weintraub Team members are dedicated. Their job is to follow up. They keep trying to contact the buyer until they speak with the buyer. If you want your home sold, we’ll get it sold. If you have a question about selling a home in Sacramento, you’ll get a response from me right away during business hours. Not 2 days later or when it’s convenient. If I am not with a client, you’ll get a call or email or text immediately upon contact. Not an automatic response, a response from a real live real estate agent. I don’t know very many other Sacramento real estate agents who can promise you that.
Avoid a Short Sale Charge Off
The first thing you need to know about a short sale charge off is the bank is not your friend. But that is true for just about every aspect of a short sale. Sometimes, I want to grab people by their shoulders and shake them into understanding that the banks are not on their side. If you’re reading this right now, listen to me, your bank doesn’t care about you. The only thing the bank wants from you is the money you promised to pay.
If you’re about to embark on a short sale with your bank and you have accounts open at that bank, close them. Put your money elsewhere. Because the likelihood is your bank will close those accounts for you. A short sale makes you a bad credit risk. A charge off on the short sale is an even worse credit risk.
Banks charge off loans because they can deem them uncollectable. The time period varies but a charge off typically takes place after 4 to 6 months of missed payments. A charge off affects your credit report is an adverse manner. You might hear a short sale lender such as Green Tree or Citimortgage (One Main Financial) say you must make a payment on your second mortgage, for example, or it will go to charge off. If you can keep the loan from charge off, it is better for your credit report. Not to mention, once the loan goes to charge off, if it leaves the institution, it will most likely be sold to a collection agency.
I know it’s odd that there is a financial market for uncollectable debts. There are profit-making ventures that have figured out a way to monetize charge offs. Like a vulture swooping down to gobble up a decaying carcass.
However, there are drawbacks to a charge off. A collection agency could nix your short sale by demanding a much higher payment than any of the parties in the short sale can pay. If you’re applying for a HAFA short sale, it is possible the new collection agency does not participate in HAFA, and a charge off could disqualify you from HAFA. Not to mention, if a collection agency determines it can make more money by personally pursuing the borrower, it might reject the short sale all together.
I advise my clients to get legal advice because I cannot give them legal advice about a charge off. Logic says one should avoid a charge off, if one can. I’ve closed quite a few short sales in Sacramento in which a second loan has gone to charge off. As long as it stays with the same bank but moves only to another department, the delay in the short sale is generally not astronomical. Fortunately, thanks to California Civil Code 580e, a charge off is no longer considered recourse after a short sale in California, like it used to be. But it still doesn’t look good on your credit report. And it can mess up your short sale.
Can This Carmichael Short Sale Be Saved?
A short sale home in Carmichael closed escrow this week that might not have closed at all if it had fallen into the paws of some other Sacramento short sale agent. But fortunately, the seller called me. It was kind of like a story that could be printed in a national magazine. Remember those magazine articles from Ladies Home Journal: Can this marriage be saved?To be honest, I wouldn’t read the story, you know, I’d just say NO and throw the magazine back on the table in the doctor’s waiting room. Well, this is a version of what I call: Can this short sale be saved?
It had everything set against it except willing participants. There were a lot of drawbacks. See, as a Sacramento short sale agent, I know that the secret to closing a short sale is to correctly assess the situation upfront and address potential issues. Here were some of the issues with this particular Carmichael short sale:
- Green pool
- No water service
- Charged-off first mortgage
- Second Bank of America mortgage
- Seller had no additional funds
Not to mention, the comparable sales could go either way. Up or down. It was a non-conforming Carmichael neighborhood with a mix of expensive and entry-level homes. That meant we could have difficulties with a BPO. There was also a slight odor from a cat. All the ingredients for a challenging short sale.
My first and foremost duty is always to the seller. We had to figure out a way to close this short sale with the least amount of problems and try to put some cash into the seller’s hands. We had to make sure the delinquent water bill did not become a lien, because in a HAFA short sale the seller cannot pay a recorded lien from the relocation incentive, but a seller can pay a utility bill. An agent who doesn’t do a lot of HAFA short sales would not know this fact.
We also needed to clean up the pool because the buyer for this house would most likely be an FHA buyer. You can’t get an FHA loan with a green, slimy pool. To clean up the pool, we had to turn on the water. The water had been shut off because nobody lived there anymore and the bill was a few months overdue. Another requirement for a HAFA relocation incentive is the seller has to occupy the property. The seller can do a HAFA without living in the home but she won’t qualify for the incentive if she’s not physically living in the house.
However, the icing on the cake with this short sale was the fact the loan had been sent to charge-off. The new lender was not a participant in HAFA. That meant the seller could not do a HAFA short sale. So, that idea was a moot point. On top of all of this, the short sale would be delayed because the second was held by Bank of America. This meant dealing with Equator for the second just like it was a first, except it wasn’t. Archaic procedure for a second mortgage. 90-day escrow period minimum. Every time I turned around, an obstacle presented itself.
Another Sacramento short sale agent might not have listed this short sale. I couldn’t do that to the sellers. The sellers were some of the nicest people you’d ever want to meet. Sweet, kind, caring. They had a strong attachment to the home. There was an emotional bond. It was not easy for them to sell this house. But I knew we just had to find the right buyer. There is always the right buyer for a home, even a home scented by a cat with kidney disease.
It took a while but we found a buyer. The sellers borrowed money from relatives, worked out a deal with the water company and shocked the pool. It was a struggle to keep the utilities on. People don’t think about what sellers have to go through to sell a short sale when they no longer live in the home. They have to pay for utilities in 2 homes. Many people can’t afford the utility bills for one home much less 2 homes. They have to protect the home and check it after showings because careless agents can leave doors unlocked, which is a disgrace in itself.
I was able to work out a compromise with the new first lender to pay an incentive to the seller even though she did not qualify for a HAFA short sale. It was enough to repay her relatives, pay the remaining balance of her water bill and ease other expenses. The lender gave us a break on the BPO due to the cat odor. We got approval from both lenders. And perhaps the nicest ending was the seller met the buyers the day it closed and was able to talk with them, show them how to operate the pool, listen to their ideas for home improvement projects and gracefully exit. That’s the ideal ending for every short sale: a graceful exit.
A Chase Bank Short Sale Loves Me, Chase Bank Loves Me Not
Usually I do not talk about Sacramento short sales until they close, just as a matter of policy. But this particular Chase short sale is so bizarre; whatever happens the seller is beyond giving much of a hoot, even though the bank is offering, let’s say $50,000 in cash for a home worth, let’s say $200,000.
The problem is there is a second loan held by a collection agency. The second has been sold over and over. It’s amazing that there is a market, a physical financial market for a second loan without any equity. There is a way that collection agencies can make big bucks buying up worthless instruments. You would think there is something illegal or against the law with this kind of practice, but everybody just looks the other way and shrugs their shoulders when I ask about it. It’s not a small financial practice, it’s a huge money-making venture. Hand-over-fist piles and piles of money is manufactured out of thin air! Nobody is talking about it.
The second problem is Chase has flagged this short sale as a file that needs a huge cash payment by Chase to the seller. To a person with an underwater home. Why does Chase need to give the seller $50,000? Nobody is saying. It’s unrelated to the National Mortgage Settlement because it’s been going on for more than a year. See, the thing with a Chase short sale is these short sales are not in Equator like almost every other short sale. These short sales are negotiated directly with Chase so they take forever to get approval. On average, my Chase short sales get approved in 3 to 4 months.
Because of California Civil Code 580e, the seller cannot make any contribution in a short sale. The second lender says if the seller is receiving a huge wad of cash from Chase, they want more of it. But the seller can’t give it to them. So, the answer is the seller gets nothing. We received short sale approval on this with Chase giving the seller nothing, and then the buyer split. Sorta par for the course.
Now we are back with a new buyer trying to get a second approval from Chase. This time Chase says it can’t issue approval unless the seller takes the $50,000. What? It’s a Chase Bank short sale like this that can make a Sacramento short sale agent pull out her hair.
Feds to Allow Current Mortgage Payments for Short Sales
I realize how horrible it sounds when our government tells a seller that she cannot be current on her mortgage payments if she hopes to do a short sale. For years, the government has been telling people to stop making mortgage payments, if you can believe that. It’s true. Fannie Mae and Freddie Mac, government-sponsored entities, require a default for a short sale. Come November 1, though, all of that changes. The Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, yesterday announced new streamlined short sale guidelines, effective November 1, to permit a short sale in eligible cases of hardships without a delinquency. It’s about time!
This means the feds will allow current mortgage payments for short sales. What a relief for sellers worried about delinquencies. The thing people don’t realize is there are different types of short sales. The type of short sale depends on the investor. Rules that govern a traditional short sale do not apply to Fannie Mae and Freddie Mac, including other types of short sales such as FHA or VA or CalVet. And let’s not even talk about the grandmother and granddaddy of all short sales: the Fannie Mae HAFA short sale or Freddie Mac HAFA short sale. Many short sale agents would rather be forced to walk barefoot across hot coals than to do a Fannie Mae HAFA short sale or a Freddie Mac HAFA short sale because those are painful enough for everybody.
Not only will a seller be able to remain current on her mortgage if she has a Fannie Mae or Freddie Mac loan, but the new guidelines give servicers delegated authority. Banks that service these loans can determine whether the seller’s hardship will qualify for a short sale. Common hardship reasons are:
- death
- divorce
- unemployment
- relocation
- medical
Plus, if a borrower must relocate due to a commute of more than 50 miles to work, which is a fact of life for many of us in California, that constitutes a hardship as well. This is a welcome relief for this Sacramento short sale agent and my sellers in Sacramento. Being current on mortgage payments for a short sale is a huge improvement. It’s like we’ve been beating our heads back and forth in the doorway for years. You know how good it feels to stop!
Now if we can just get Fannie Mae to stop sending short sales to auction because the short sale can’t close prior to the trustee’s auction date, we’ll have something to truly celebrate. We need a way to postpone the auction in a Fannie Mae short sale. Come on, FHFA, I know you can do it. We’re rooting for ya in Sacramento. But for now, us hungry little squirrels, we’ll take the peanuts you toss.
