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Tuolumne Meadows and a Rocklin Short Sale
One of the things about hiking in the wilderness is it gives one time to reflect. With me, though, I tend to think about my Sacramento short sales. Other people might reflect on the purpose of life, why we are here, where we are going. But I think about why so many people seem to believe that discharging mortgage debt in bankruptcy makes that debt go away, because it doesn’t. It’s secured debt. This must happen because some bankruptcy lawyers don’t fully explain to clients how real estate works. Or, maybe these lawyers don’t understand real estate?
In the case of a Rocklin short sale that just closed, I think the lawyers were betting on a foreclosure. When a foreclosure takes place, title is involuntarily transferred. But if the bank doesn’t foreclose, title will stay in the borrower’s name. Not to mention, the other twist, if a second mortgage is discharged through bankruptcy, only the liability is discharged; the debt remains until it is released. Enter the short sale solution.
Try explaining to an energetic and knows-he-is-right borrower that his debt is still there. It’s hard to say yes, your debt was discharged, but your obligation still exists. Those are words coming out of an agent’s mouth that make no sense to them. Because, gosh darn it, their lawyer said it was discharged. You know what? I am not a lawyer. I’m just a Sacramento short sale agent who will do your short sale for you if you want to do it.
That Rocklin short sale was a Bank of America Cooperative Short Sale. The bank had called the borrower, and it was the bank who explained to the borrowers that foreclosure had never taken place. Yeah, 3 years later; they still owned that home in Rocklin. The bank did not want to do a deed-in-lieu, either. It wanted the sellers to do the short sale, and it would pay the sellers to do it. The sellers found this Sacramento short sale agent. I’ve closed a lot of Cooperative Short Sales through Bank of America, and I knew exactly what to do.
We faced a few challenges. There was that slight problem of the water being shut off. Oh, and no other utilities, either. Did you know that Placer County will place a temporary water meter on the property for $300? A temporary water meter will allow a home buyer to do a home inspection. The sellers chose a VA buyer. Buyers who obtain VA loans often get the short end of the stick when trying to buy a home because sellers and some agents tend to believe that VA loans are nothing but trouble when just the reverse is true. Why is that? Why do we say we honor our veterans and then do the opposite thing by rejecting their purchase offers?
That’s what I was thinking about yesterday as we hiked to Elizabeth Lake in the Tuolumne Meadows at Yosemite National Park. It was straight up for 2.3 miles. Totally silent. You could pause on the trail to catch your breath — it’s over 8,000 feet in elevation — and hear a sound in the distance. It is a low hum, and sounds a little bit like freeway traffic, but you know there are no roads nor freeways nearby. Then you realize it is the sound of the wind through the tree tops. If you stand still for a few more minutes, the gust of wind heading your direction will arrive and blow through your hair. You’re connected to nature. There are no cellphones, no computers, no bank negotiators, no short sales.
Then, an older fellow comes bounding down the path, wearing a button-down shirt, shorts and hiking boots. He’s talking on his cellphone about his prostate. Discussing his doctor’s diagnosis and at least acknowledges the existence of other people within earshot by telling the person on the other end of the phone that complete strangers are now privy to his medical condition. My first thought was you can’t get away from them. My second thought was who was his carrier? Why does he have service and I do not?
Photo: Elizabeth Weintraub, Elizabeth Lake, Tuolumne Meadows
Did Karma Close This Bank of America Cooperative Short Sale?
Do you believe in karma? You might be surprised. My husband and I had dinner last night at one of our favorite restaurants in Midtown Sacramento: The Waterboy. When the bill arrived, my husband whipped out a gift certificate. Who sent us that? Turns out it was a gift from a client. A husband and wife for whom I had done a Bank of America Cooperative Short Sale. They were a couple another Sacramento real estate agent might refer to as high maintenance. Agents call clients “high maintenance” if clients behave outside the norm or require more work, reassurance, or explanations than other clients.
I call it business. I’ve been around the block.
This couple had asked me to come into the office on a Saturday to talk with them. I ordinarily do not consult with clients about a short sale because I am not a lawyer. I don’t really give in-office consultations nor do I charge an hourly fee. I get paid on commission. Believe it or not, I do most of my real estate business via phone and email. Very little of it is in person. I am not high pressure nor would I ever try to force a seller into doing a short sale. Sellers typically need to come to that decision on their own, but I’m happy to help walk them through the pros and cons of their particular situation on the phone.
Although I do sell real estate on the weekends, I don’t do it in person. I don’t get dressed up, put on makeup and drive down to the office. I paid that price years ago, and I don’t do it today. If a client wants to meet with me in person, we meet during the week in daylight hours, like any other business person. It’s a misnomer that an agent must be on call 24 / 7. I am not ashamed to say that I have over $20 million in closed and pending sales so far this year, so if I’m telling you that I don’t have to go into the office on the weekends to be successful, it’s the truth.
Yet, this client desperately needed to meet on a Saturday. She and her husband lived out of the area and they could not meet any other day in Sacramento. So, I made an exception for them. It wasn’t a big transaction, either. It was a small short sale in Antelope. Around $125,000. I might have grumbled a little to my husband, but I went. You know why? Because these people needed my expertise. Who else would do a Bank of America Cooperative short sale for them? There aren’t very many short sale agents in Sacramento who know how to do this kind of transaction; in fact, I don’t know of any. I specialize in Cooperative short sales. They needed help. They were also really nice people. I like working with nice people.
Every client is different. They don’t always fit the mold we agents set. Some need a little bit more help and explanations than other clients. I certainly wasn’t expecting a gift certificate from them to The Waterboy, though. That was a surprise. See, karma has a way of coming around.
Bank of America Cooperative Short Sales vs HAFA Short Sale
Don’t ask a third-party vendor for Bank of America whether a Cooperative Short Sale is better than a HAFA short sale. Because I’ll bet you dollars to doughnuts the vendor will pick the HAFA. Doesn’t matter whether it’s DTS, REDC, AMS, and so forth, all the acronym companies, they’re all the same. Call me silly, but that’s what I see happening, even though the HAFA is not necessarily the better option. It’s possible that Bank of America would push / promote HAFAs as well because there might be more money to the bank through a HAFA.
When I open a Cooperative Short Sale in Equator, the first thing that happens is my requests for a Cooperative are ignored. The third-party vendors pursue the HAFA. I send emails that say do NOT review this for HAFA because the seller wants to pursue a Cooperative Short Sale. Then, I ask the seller to call the customer service number and repeat over and over Cooperative, like a mantra. If the customer service rep says HAFA, the seller is counseled to say “No, Cooperative.” Yet, the bank opens a HAFA anyway. You’ve gotta ask yourself, why is that? I’ll tell you why I think they’re doing it, and it’s not because they’re stupid, although you may disagree. It’s because there is probably more money in it for the bank.
Is the HAFA better for the seller? Speaking strictly for a California short sale seller the answer might be no. Let’s make it clear I am talking about a streamlined Cooperative, a short sale in which Bank of America has delegated authority to approve without financials. I have a certain Cooperative approved, and Bank of America is telling the seller that in order to do the Cooperative without financials, the seller must be 90 days delinquent to satisfy this particular investor. But in a regular Cooperative short sale, the seller is better off with the Cooperative over the HAFA.
Especially if the seller qualifies for the HIN Cooperative Short Sale, because that minimum payment starts at $5,000 and can go up to $30,000. A HAFA short sale maximum payment is $3,000. However, you can combine the two types of short sales, when you get right down to it, if you’re willing to submit financials and tax returns, and I’m getting approval on one of those in a few weeks.
But if you’re not willing to hand over your sensitive personal information and you just want to do the Cooperative Short Sale without financials, the Cooperative beats HAFA in the PITA classification every time. Some types of Cooperative short sales pay $2,500. Even when you take into consideration the $500 difference vs the PITA, let me tell you, a Cooperative short sale wins hands down. In fact, the only thing worse than a Bank of America HAFA short sale is a Bank of America HAFA Fannie Mae or Bank of America HAFA Freddie Mac short sale — with Freddie Mac HAFA having the slight edge for winning the crawling-through-broken-glass-naked award because it doesn’t use the ARASS.
If you’re got a choice, pick the Bank of America Cooperative short sale. Your Sacramento short sale agent will thank you. Your mother will thank you. Your doctor will thank you. And you’ll sleep better at night.
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
