Email ElizabethA Chase Bank Short Sale in Equator
One of the absolutely joys of my life is a Chase Bank short sale in Equator. I can’t begin to describe how wonderful it has been to see a Chase short sale sitting in my Equator task folder, patiently waiting for the HUD to be uploaded. It is a thing of beauty to behold. The only thing more beautiful than a Chase short sale in Equator is a Chase HAFA short sale in Equator, and I’ve definitely got one of those. It is true that one can’t always truly appreciate splendor until one has experienced hell. I am a Chase short sale expert; I have been to hell and back.
It used to be that I’d tell clients to expect at least a 4-month escrow with Chase Bank. All of that advice has changed — as with most short sale advice, it changes with the wind. I listed this particular short sale just before Thanksgiving. The seller’s spouse had unexpectedly died. I seem to be working with quite a few sellers lately whose spouses have suddenly died without warning.
It’s very different to work with people who are grieving as compared to those who simply despise their banks with a great vengeance. I find that I need to slow down quite a bit and be more patient. To listen to them more carefully. That doesn’t stop me from cracking jokes, though, and I think they appreciate it. Humor at times of uneasiness is often welcome as long as it’s not insensitive. I suspect that laughter gives them a bit of break from the steady flow of reality that they must absorb.
We opened escrow right around Thanksgiving and received HAFA short sale approval within 30 days. That’s pretty incredible when I look at my past record of having to fax documents to Chase, which would go to a central fax number and never directly to the negotiator, so they’d get lost. There are two loans on this short sale, yet getting the second approval from Bank of America was a piece of cake. That’s because Bank of America has been in Equator for what seems like a lifetime but probably has been only a couple of years. I lose track of time at my age.
I decided to ask Chase for an extension because the day we are scheduled to close is the day Chase needs its money. I know that we can’t get it to them on the same day, not when we are funding and recording on that day. That’s often the tricky part, getting the money to the bank on time. But Chase said no problem. We can have a few days if we need it. And Chase responded to this request within minutes. Minutes! It just doesn’t get any better than that!
But wait. I am now registered with Chase Bank to receive short sale prospects directly from the bank. Although most sellers in Sacramento find me through the internet or from a friend’s referral, now this Sacramento short sale agent might be able to connect sooner with those who can benefit from my short sale expertise. Call Elizabeth Weintraub at 916.233.6759. As a new client said yesterday, not only did I make her day (by talking to me), but I most likely will make her next two years more enjoyable.
Changes at Fannie Mae Affect Short Sales and REOs
Fannie Mae announced last August, in sort of a roundabout way, that it was not extending HAFA past December 31, 2012. Which is actually a blessing in disguise for many short sale agents as Fannie Mae HAFA short sales were risky from the get-go for sellers. That’s because Fannie Mae had so much red tape that by the time a seller jumped through of all the hoops, her home could be headed for foreclosure and Fannie Mae was not about to stand in the way of a foreclosure. I’d say that Fannie Mae never met a foreclosure sale it didn’t like.
The thing is if a home goes to foreclosure, then Fannie Mae can put it back on the market as an REO and hope some clueless homebuyer will opt for its HomePath financing program. There are plenty of clueless buyers to go around. The deal with HomePath is there is no appraisal. Is Fannie Mae stupid? No, Fannie Mae may be many things but stupid is probably not one of them. Without an appraisal requirement, Fannie Mae can charge a premium for the REO, and it often does. Sometimes, that premium results in a price that is 10% to 20% or more over market value. That means Fannie Mae HomePath homebuyers are underwater the day they close escrow. Isn’t that brilliant? That’s our government.
Fannie Mae has also changed its short sale procedures from a standard short sale to a traditional short sale HAFA II. It has recently put in place requirements that prevent a buyer from flipping a short sale. That’s OK because most buyers of a short sale owned by Fannie Mae are willing to live in the property and therefore do not want to flip it. They are the most likely buyers willing to put with the crap they have to endure to buy a Fannie Mae short sale. Many investors are not willing to walk down that road with Fannie Mae.
The restrictions state a buyer of a Fannie Mae short sale can’t sell that home within 30 days from closing. OK, that’s not so bad. However, a buyer also can’t sell within 90 days for more than 120% of the sales price. Fannie Mae doesn’t want a buyer to profit from its misfortune. Nothing wrong with that, either. It’s still willing to pay a incentive to the seller to do a Fannie Mae short sale, though, under certain conditions.
Real Estate agents, on the other hand, are screaming about Fannie Mae price fixing — because so many of those Fannie Mae REOs are overpriced — but I don’t know if you can call it price fixing. I am not a lawyer. I suspect a seller can choose to sell a home at whatever price it wants. This is America. There’s a sucker born every minute.
The Parallels Between Communication and Service
My car turned 2 years old a few days ago, so I made an appointment to change the oil with a new service center in Midtown, Sacramento. Last year, I had the dealer pick it up to change the oil and bring it back, and they charged me about $250. The guy in Midtown charges $125, and he gives me a ride home to Land Park. The problem with changing service centers is the guy in Midtown can’t perform warranty work and get paid by the manufacturer. For that, I have to go to the dealer. Since the dealer is the only dealer around Sacramento, if something goes haywire, I’m stuck with the dealer.
My sister bought a car in Minneapolis, and the only service center for her car is in Madison, Wisconsin, 6 hours away, so I don’t know why I’m complaining about a 45-minute drive. Well, yes, I do, because I don’t have a choice. The guy in Midtown told me my transmission fluid was leaking, so that meant if I wanted it covered under warranty, it’s off to the dealership with it. Fortunately, I could call Roadside Assistance and make them tow it, so I did not have to interrupt my workday to drive to the dealer.
I had the car picked up on Friday. The dealer called me on Saturday to say, yup, it looks like my transmission fluid is leaking. The plan was to clean it up and try to figure out why it was leaking. On Monday, the dealer called and said they don’t know why it’s leaking but they suspect it’s a gasket.
Really? I thought maybe it was caused by a cosmic reaction to global warming.
In any case, since it’s a gasket, they will have to order that part, and yes, they know I expected to pick up my car on Tuesday but it will be least Thursday before it will be ready. No apologies. And my guy is going on vacation, so I can talk to his buddy if I have questions.
See, this is a perfect example of excellent communication yet poor service skills. It should take not a week to determine a gasket is needed, and to obtain and install a gasket. You don’t have to be in the automobile industry to feel this way about it. Just like a real estate client doesn’t have to completely understand how real estate works to feel like she is not a priority to her Sacramento real estate agent. I would die if a client felt that way about me. Curl up and die. Because service is everything.
I know that sellers and buyers have choices when it comes to picking a real estate agent. We are not all the same. They are not stuck with the first agent they run into, and there is not only agent working in Sacramento. Competition should breed excellence. But I don’t simply strive to provide excellent service because I’m concerned that a client might ring up an agent on the other block. I do it because I care about my performance. I take pride in my work. My goal is for my clients to be happy.
Just because I work at the largest independently owned real estate company in Sacramento doesn’t mean we sit back, kick up our feet and enjoy our monopoly like this automobile dealer. I work with a great group of people at Lyon Real Estate, and I love my team members to pieces. If you’re looking for a Sacramento real estate agent, please know that I will strive to meet your expectations.
I closed more than 150 transactions last year. Each was important. You want something done right — you ask a busy person to do it. I am never too busy to pick up my phone and talk to you.
The Seller’s Hardship in a Short Sale
I can often spot a Sacramento buyer’s agent who is new to short sales. They are the guys who start firing off questions the minute they get this short sale agent on the phone. It’s like they are reading from some list of questions to ask a short sale agent, and maybe they are. There is a lot of goofy information online, written by people who are not short sale agents. You can’t blame buyer’s agents for thinking that it’s true because, after all, it’s online, man, it’s on the Internet, it must be true. A smart reader would consider the source before absorbing the data. Sometimes, it’s just an opinion and not fact. And sometimes, it’s a stupid opinion at that.
My absolute favorite question to get from a buyer’s agent is: What is the seller’s hardship? Even if I gave them that information — which I won’t — they wouldn’t know what to do with it. It’s like asking who is the lender; they don’t know what that means, either. They might hear it’s Bank of America and then cringe, because years ago Bank of America had received pretty bad press. However, nowadays, Bank of America short sales are, for the most part, pretty straight forward. So, unless that agent has closed a bunch of short sales herself, she would most likely be clueless about what’s involved or what she could expect to gain from obtaining that knowledge.
It’s none of the buyer’s business what kind of hardship the seller is enduring. That’s personal and private information. Any sensitive information shared by a seller with this Sacramento short sale agent remains confidential. In fact, it’s my fiduciary relationship with the seller that prevents me from disclosing information, apart from ethical reasons. The only thing a buyer or her agent needs to know about my short sales is whether I believe the short sale will close. They don’t get to see the hardship letter.
I’m not disclosing even if there is a hardship in a short sale because not every short sale requires a hardship. Some of my Bank of America Cooperative Short Sales have no hardship whatsoever but they close. If a buyer’s agent wants to know whether a Notice of Default has been filed, the agent can find that information in the property data available online to agents, right alongside the number of loans and identity of the original lenders.
A buyer’s agent is not squeezing the sellers’ personal and confidential information out of this Sacramento short sale agent.
California Short Sale Taxes vs. Personal Liability
A reader from my homebuying website on About.com asked me this morning if he could stop paying on a promissory note after his short sale closed. His short sale agent negotiated, he said, two purchase-money loans in 2010, in which he ended up paying the second lender $5,000, plus he handed over an additional $10,000 promissory note to a credit union. I suspect that the credit union loan was not a purchase-money mortgage because credit unions were not in the business of financing 80 / 20 combo loans. I’m betting that second loan was a hard-money loan. But that’s neither here nor there. The main problem for this guy seems to be that he negotiated a discounted payoff and promised to repay part of it, which he hopes to undo.
This is a pretty good example of short sale confusion. Not only do some people hope that once a law changes or goes into effect that it’s retroactive and can reach back into the past to change agreements or somehow alter things that were legal to do into being against the law — which ain’t gonna happen — but personal liability is often confused with taxation issues. Whether in California a seller has personal liability for a loan after a short sale is a separate issue from whether a seller is liable to pay taxes on that forgiven debt. Mortgage debt relief and whether banks can legally pursue a seller for a deficiency are not the same thing. They are two different things.
But wait, you might say, does this mean a bank might try to collect the balance due on a short sale at the same time the government goes after a seller for taxes on that balance due? Yes, that’s exactly what I am saying. It’s a double whammy.
Fortunately, SB 458, passed in California in July of 2011, added Section E to the California Civil Code 580. It basically says that short of mortgage fraud, in which case it can still pursue, if a seller does a short sale on 1 to 4 units, the bank can’t pursue; can’t go after the seller. But that’s for short sales that closed after July of 2011. It doesn’t matter if the loan was hard money or purchase money, whether the property was owner occupied or a rental, whether the loan was in first, second or third position. Can’t go after the seller. This is a good reason to avoid foreclosure and try to do a short sale. Especially if a seller has a hard-money loan because, legal experts say, foreclosure proceedings do not offer any protection for the seller against a hard-money loan.
But can the seller be taxed on a short sale? On the federal side, for 2013, the mortgage debt relief law has been extended to January 1, 2014. The California law regarding short sale taxes for 2012 has expired. State legislators are working on an extension. This is the part where the law after extension the last time was made retroactive. It took California lawmakers almost a year to pass the extension last go around. We were sweating. But then they made it retroactive. Will they do it again this year? We sure hope so. But this is a classic example of why a seller in Sacramento should get legal and tax advice before doing a short sale. Don’t rely on your Sacramento short sale agent to dispense legal and tax advice because we are not allowed to do it.
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