Email ElizabethA Couple of Short Sale Rumors
An agent friend in northern California said yesterday that Wells Fargo and Chase are planning to rollout new short sale programs this fall. There are a couple of short sale rumors that they are handing over short sale leads to their REO agents. The banks’ thinking, no doubt, is all Sacramento real estate agents are the same, which is pretty insulting to some of us. Some of us are very different. For starters, I get my nails done at a nail salon versus the usual method of chewing them off with my teeth.
Call me silly but some REO agents don’t own a cellphone. That can be a major problem. You and I know they don’t have a phone because they don’t answer it. And their attention to detail, which is required for a short sale, is legendary, right? But hey, we’re talking about Wells Fargo and Chase. What do you want? A cake to go with that nail file?
In other short sale rumors circulating, REDC, a third-party vendor for Bank of America, is pushing Auction.com. A friend at Bank of America says he thinks REDC got its start as Auction.com, but I haven’t checked out that belief. A rep from REDC called me twice about slipping a short sale listing into Auction.com’s 120-day program. That’s longer than some rehab programs. Why would it take 120 days to sell a short sale in Sacramento? Our market is so tight it squeaks.
He wants my seller to agree to let buyers traipse through his home for at least 30 days and make offers online. Auction.com will get paid its commission from the buyer. Listing agents and selling agents are still paid by the seller. That’s an awful lot of commissions to go around in one transaction. I think he’s drinking Kool-Aid, and not the stuff made with sugar. That sounds totally insane. Because you know what will happen. Crazy and frantic buyers will bid up the price to a place where it will never appraise by the buyer’s lender. Then, it will be back to Square One with that short sale when the appraisal comes in low. We don’t need no stinkin’ auctions for Sacramento short sales. No rational seller wants to turn his home into a three-ring circus to boost the profits at Auction.com.
I should just sit back and look at the bright side. The bright side is my web designer got my new website to finally work correctly for Twitter yesterday. And I put a new short sale in Galt on the market today. I prefer my method of selling real estate. The one where the sellers contact me and not the other way around. Nobody wants to be hounded by a real estate agent.
Photo: Shutterstock
Fannie Mae and Other Things That Don’t Work Right
It seems like I have to fix a lot of things that don’t work right. It’s not necessarily that they are broken as much as it is they simply don’t work correctly. Stuff goes haywire. In fact, I am so used to things that don’t work right that I have become somewhat complacent. I don’t get upset over it. I just fix it.
Almost nary a day goes by when I don’t run into some short sale negotiator telling me the bank won’t authorize seller credits on the HUD. Since when did a bank negotiator become a HUD expert anyway? I realize they don’t know how to read a HUD. If they had to prepare a HUD from scratch, they’d be up a creek without a paddle. Yet, here they are telling me to remove fees that are not credits under the assumption they are correct. They’re not correct. This problem has become so commonplace that I keep a stock answer prepared and ready to email. They don’t work right.
Last Friday my company email went on the blink. Stopped downloading to my computer. None of my settings changed. My email client stopped receiving. The company’s exchange server was not updated or altered. The IT department signed on to my computer to check but they couldn’t find anything wrong, either. We ended up doing a redirect. Because it doesn’t work right.
Yesterday we had to call out an electrician to remove a bulb from a kitchen pendant. We’ve had the pendants fixed twice. Third time they stopped working, we bought new pendants. None of this Lumen’s back-basement discount crap. We ordered blown-glass Oggetti. Then, the darned burned-out bulb got stuck in the socket and a wire connection busted. That’s why it doesn’t work right.
In many Sacramento short sales, I routinely encounter the dreaded Fannie Mae problem with second loans. Now, I heard a guy at DTS admit the other day that they kick out Bank of America Cooperative short sales when the investor is Fannie Mae. He said DTS has had too many problems with Fannie Mae. Because Fannie Mae is a government-sponsored entity, it doesn’t work right.
Fannie Mae has guidelines that are often somewhat restrictive. Like telling borrowers to stop making mortgage payments. Yeah, that’s your government telling you to go into foreclosure. Or, choosing foreclosure over a short sale by refusing to postpone a trustee’s sale. Another involves the payment it will approve to a second lender. Second lenders want to negotiate and try to get more, but Fannie Mae won’t allow it.
Most second short sale lenders realize the problem with Fannie Mae. They tend to get on board. Especially since Fannie Mae rarely makes exceptions. I even had the gatekeeper at Green Tree back down on a second demand a few months ago when I explained that since Fannie Mae was the investor he needed to accept 6% of his unpaid balance. He said: Why didn’t you say so? As though telling him my name was Dorothy would get me into the Emerald City. The system for some second lenders, though, is broken. They don’t work right.
And you can’t fix Fannie Mae.
Photo: Shutterstock
Yet Another Low Appraisal on a Sacramento Short Sale
Elizabeth, how do you do it? That’s what a seller asked me yesterday. She was very ecstatic that her short sale closed but it wasn’t an easy road. She thanked me for making the process less painful than it could have been. For many Sacramento short sale sellers, I am their rock. I’m not just a Sacramento short sale agent. I am the individual these people rely on to help them through the emotional upheaval. Don’t let anybody kid you, surviving a short sale can be like crawling naked through shattered glass.
Here’s a better example. Short sales are like driving down the road, la-dee-da, and all of a sudden, whammo. You’ve got a deer’s antlers blasting through your windshield, stuck in your steering wheel, inches away from your face. There were no deer-crossing signs on the road. It wasn’t dusk or dark outside. Nothing could have prepared you for that deer who suddenly leaped across the highway. People think that all short sales are the same and they aren’t. Even though I’ve closed hundreds of short sales, I still can’t always predict with pinpoint accuracy what will happen.
Take low appraisals for example. Generally, when the buyer’s appraisal comes in low, the short sale bank will issue a revised approval letter at the appraisal’s price point. Especially when it’s an FHA appraisal. FHA appraisals are assigned a case number. So, if the bank rejects the lower appraisal and the home goes back on the market, the next FHA buyer will get the same appraisal. I hear conventional appraisals are positioned to be assigned case numbers as well.
That didn’t happen in this particular client’s short sale. Her lender was Citimortgage, now One Main Financial. Her buyer obtained 2 appraisals. The first appraisal was conventional and was, oh, say, $200,000. Good thing because that was the sales price and also the amount approved in the short sale approval letter. But wait. Somebody at U. S. Bank ordered the wrong appraisal. It was supposed to be an FHA appraisal. The buyer then paid for an FHA appraisal. That appraisal was, oh, say, $180,000. We were suddenly $20,000 apart.
We signed an addendum lowering the price and sent the FHA appraisal to Citimortgage. Much to our astonishment, Citi said your mother is a hamster and your father smells like elderberries. We argued. Citi refused to accept the appraisal. I sent my own opinion of value and CMA. Finally, I was able to move Citi up to oh, say, $195,000, but we were still apart $5,000. Now, in some other universe, this transaction would have probably blown up at that point. However, the buyer really really wanted this home. So, she borrowed $5,000 from her parents to pay the difference.
This is why selecting the right buyer is key to the successful outcome of a short sale. But the suspense wasn’t over yet. Remember, this poor unfortunate buyer had chosen U. S. Bank as her lender. The bank’s representatives performed poorly, to say the least. U. S. Bank managed to mess up the closing six ways from Sunday, especially funding. It was so bad at closing that the escrow company had to bitchslap them. A quiet, mind-your-own-business escrow assistant really laid into them. But we finally prevailed and escrow closed. Another happy ending in Sacramento!
The way that I do my job as Lyon Real Estate’s #1 short sale agent is I keep my eyes on the horizon, my hands on the wheel. And I hope to god I don’t meet some deer hopping across the road.
Photo: Elizabeth Weintraub
It’s a Good Idea to Treat the Agents You Want to Hire With the Same Respect You Demand
Do you treat agents you want to hire with the same respect you demand? I already know the answer, but let’s explore.
Some people are very uncomfortable being fawned over. My husband is one of those. He especially dislikes being fawned over by insincere people in roles of servitude. I first noticed his distaste for this many years ago when we checked in to stay a night at Adare Manor, a castle in Ireland, County Limerick. Guests are treated like royalty at Adare.
First, they seat you in an oversized antique chair. You’re way too good to stand in line at reception. Then, a row of butlers gently wave fans in your direction and pluck grapes from the overhead vines to place into your mouth, one at a time. A handmaiden removes your shoes to wash and then massages your feet. A concierge rushes over to hand you a glass of chilled champagne. My husband squirmed.
I, on the other hand, pointed out the fact my left shoulder still had a tinge of tightness and could use a bit of manipulation. OK, that’s not really what happened, but it’s the impression I was left with — that’s how lovely it was.
The difference is: that’s the standard of attention at Adare. It’s not like some guests are treated differently than others. You’re pampered just the same whether you pulled up in a horse-drawn carriage or a VW bug. There is attention to detail, which is evident throughout the castle.
Of course, lest we forget, they had centuries to perfect.
As a real estate agent selling Sacramento homes, I’ve got all of two lousy seconds when a client calls to make an impression. To many people, I’m just some other agent. They often think we are all the same. But we’re not. For one thing, I’m a pretty cheery individual who is rarely in a foul mood. Clients tell me they love my energy. When a client calls, I stop what I am doing to focus on that call. Unless I’m driving, of course. Can’t just stop in the middle of the freeway; no, we share the phone and the road. For another, I’ve got years and years of experience. I’m the kind of person who learns from my mistakes and, more importantly, from the mistakes of others.
But I set my own standard of care, and I try to apply it evenly across the board. I truly try to provide exceptional service. I work fervently from 5 AM to 7 PM during the week. Much of my day is spent reacting to fires, especially working on 50+ short sales or so. Sometimes, I receive more than 500 emails a day. But if you want to be a client — a buyer or seller of real estate — I will call you back. If you are a client, I will call you back. If you are an agent calling on an active listing, I will call you back. This is a service business and I never forget it. I respect the time of other people.
I had to chuckle, though, when I received an email on Friday from a seller I had never met and never will meet. She had sent me an email a few days earlier saying she wanted to sell her home in Rocklin. I immediately called and left her a message on her cellphone. No response. Then I sent an email. No response. Four or five hours later, I called and left her another message. No response. Then, on Friday, she sent an email to say she was feeling ill and could not meet with me, we would need to reschedule, although we had not scheduled an appointment.
Some days I’m just damn lucky. I’m confident she will find an agent she deserves.
Banks Can Mess Up a Short Sale for Military Personnel Through Mortgage Insurance
Despite the fact that I am opposed to war, I hold the utmost respect for our military. All military — active or retired or no longer among us. Many of my clients serve in the military, so while I have no children and none of my relatives speak to me, I feel a special connection to my clients who serve, especially those deployed overseas.
OK, I have to admit a weakness when they call me ma’am. Especially the men. Everybody is so efficient, which I greatly admire, being the sort of efficient person that I am. If you know me, you know that I did not grow up around the military, and I don’t know much about it, either, so I try not to mess up the military terms and make it sound like I do because the last thing I would want is to insult a member of our military.
Yet, the short sale system and our U. S. banks seem to have no problem insulting the military. There is an awful thing going on that I wish would be investigated. It’s akin to the credit derivative swaps, which I still don’t fully understand. It’s when banks take out their own mortgage insurance policy on underwater homes. They’re doing this left and right. They do it without permission from the homeowner, because they don’t need permission, and they pay their own premium.
This is happening especially on those 80 / 20 combos. The old loans that financed 100% of the purchase price. When borrowers took out these loans, they were promised there would be no mortgage insurance. They relied on that assurance when they chose this product. Yet, today, they might have mortgage insurance. The mortgage insurer might deny or mess up their short sale. If I were those borrowers, I would be madder than hell. I’d believe I was sold a false bill of goods. I’d raise the roof and start screaming at reporters and lawyers.
But it’s also happening on first mortgages that have already been approved once for a short sale. It’s really bad when it happens to a member of our U.S. military who needs security clearance. Why? Because many of the mortgage insurance companies will not approve a short sale unless the seller is in default. If a seller stops making a mortgage payment, that could be enough to lose a security clearance.
I am presently working on an odd situation. We had approval for a short sale from U. S. Bank a few months ago. We could not close escrow because the buyer bailed. The buyer said he canceled because he wanted to use a garage in the condominium development to store commercial products, and the HOA did not allow it. Now that we have a new buyer, U. S. Bank is telling us it has taken out mortgage insurance for its underwater loan. That mortgage insurer requires default to approve the short sale, and our short sale seller has been making the payments. Dilemma.
You’ve got to ask yourself, how is there a market for mortgage insurance like this? Those policies are insuring thin air because there never was equity to start with. How is the mortgage insurance company making a profit? Is the mortgage insurance company in bed with U. S. Bank? In other words, after the policy is enforce, does U. S. Bank make the company subject to reinsurance? There’s a big lawsuit going on over reinsurance and mortgage insurance.
Fortunately, there is a program like HAP, the Homeowners Assistance Program. HAP was revised by Congress in 2009 to help our service members who were transferred and forced to sell an underwater home. It involves transferring ownership of the home prior to closing to the government, which then sells the home to the buyer. I am hoping this program will save the short sale for military. Because our banking system sure as hell won’t.
Photo: Shutterstock
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