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Equator Starts the Day for a Sacramento Short Sale Agent
When it’s 5 AM in Sacramento, it’s 8 AM on the East Coast. I get a head start on my day by updating my Sacramento short sales before people start calling. However, I am finding it is increasingly difficult to write my blog uninterrupted on a Tuesday morning because all of the short sale negotiators in Equator are up and at ’em first thing. It’s like they don’t touch their computer all week or something. They wait until Tuesday. My inbox begins dinging with Equator emails at 5 AM. I could not imagine looking at a file only once a week, but that’s how some short sale negotiators seem to handle their workload.
Many short sale lenders are using Equator now for processing short sales. We’re all anxiously awaiting for JPMorgan Chase to join Equator but it doesn’t seem to be happening. I keep hearing rumors that Chase will be on Equator. First, it was last summer, then by this fall, and it’s just not a reality yet. But we do have the top 4, which are Bank of America, Wells Fargo, GMAC / Ally and Nationstar.
The thing with Equator — as I was explaining yesterday in my presentation to the ballroom of agents at Lyon Real Estate’s FRED (Fun Realtor Education Day) event — is it over communicates. It used to send agents emails containing specific messages and those messages were also kept in a property folder on Equator. Now, for some reason, Equator generates an email to tell a Sacramento short sale agent that there is an email in Equator. And when the agent gets to Equator, the email directs the agent to a task. Except the task is not really always a task. I prefer the old method because I knew what I was getting into before I got there. It’s not always worth it to open Equator. Sometimes, the messages are pointless.
Not only are some of the messages pointless, the messages can also be “system generated.” A system-generated message will say things like somebody is reviewing documents. But nobody is really reviewing documents. Yet, I am not about to complain about Equator. No sirree. I know what life was like for this Sacramento short sale agent before Equator, and I never want to go back there.
It’s bad enough that I have to work on Bank of America FHA short sales outside of Equator. I don’t wish that horrible experience on any short sale agent. I love Equator and an Equator short sale. I am Equator Platinum Certified, not only for short sales but also for REOs. I received certifications for both. I don’t handle REOs, but you never know, one day I might. I have belonged to Equator since its transformation from REOTrans. It’s a lifeline for Sacramento short sale agents.
An Investor Can Do a HAFA Short Sale
This week I am working on listing several investor-owned short sales in Sacramento, one of which will be a HAFA short sale. People think that an investor — a non-owner occupant — can’t do a short sale, but an investor can do a short sale. An investor can even qualify for a government short sale program such as the HAFA short sale, or my very favorite streamlined type of short sale: the Bank of America Cooperative Short Sale. Unfortunately, though, the HAFA Supplemental from last June removes the seller’s incentive portion, the $3,000 cash for a short sale that typically goes to the seller, so there’s not much of a reason to do a HAFA short sale for an investor in California. You have to live in the property to get the $3,000. Which means the tenant gets the cash.
There is a big reason to do a HAFA from a bank’s point of view. The bank gets paid from the government to do a HAFA. You might think so what, the money is insignificant. What is it? $1500? Until you stop to consider that $1500 times 1,000 short sales is one and a half million dollars. Put another way: $1500 times 10,000 short sales is $15 million. You wonder why Bank of America is pushing the HAFA short sale? Besides the National Mortgage Settlement, there’s that $15 million multiplied over and over. You can’t get past the first stage in Equator until the seller talks with the bank about a HAFA.
But not every HAFA is a nightmare to do. Some you’d rather poke out your eyeballs, some not. Sometimes, it is necessary to do a HAFA because a regular short sale has too much scrutiny. The government continually changes how it handles its HAFA short sales. I am a CHS, a Certified HAFA Specialist. I paid attention in class. It used to be that the investor needed a definite hardship to do a HAFA, but that’s not necessarily true anymore. I suspect part of the HAFA process was overhauled because nobody was doing them. People were shunning the HAFAs because the restrictions were difficult to meet. But they’ve loosened up.
It used to be you had to live in the home, and now you don’t. It used to be that the mortgage payment had to exceed 31% of your gross monthly income, and now it doesn’t. It used to be that you had to show an extreme financial hardship, detailed in your hardship letter and documented by tax returns, and now you don’t. It used to be you couldn’t have large sums of cash in the bank and now it doesn’t matter. I had a client complete a Chase HAFA short sale, and he supplied bank statements that showed $80,000 in his savings account. It wasn’t an IRA or a retirement account, it was cash. His financials reflected disposable income. Yet, the government gave him $3,000 and Chase approved his short sale. Yes, a Chase Bank short sale with no hardship.
If you’re worried that you don’t have much of a hardship, and your lender is Chase Bank or Bank of America, you can probably do a HAFA short sale. Investor guidelines will dictate. You just gotta have the story. I find that Wells Fargo will do strategic short sales as well as long as the investor is delinquent. Although, as a Sacramento short sale agent, it is against the law for me to tell an investor or any seller to stop making a mortgage payment. I can’t give legal advice nor suggest a seller become delinquent. I am required to say if a seller stops making a mortgage payment, a seller could lose his or her home. But if you’re gonna lose the house anyway, what the hey.
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.
