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How Many Short Sale Offers Go To The Bank?
Short sale agents and yes, even lawyers, sometimes struggle with proper protocol regarding the handling of short sale offers. If you’re new to the short sale arena, you might not even know who is a party to a short sale. You might think the bank is a party to the short sale. I’ve yet to see a spot in the purchase agreement for a short sale bank to sign. Banks are a component as a contingency but the short sale bank is not a party to the short sale.
Even sellers get confused. I’ve had sellers ask over and over if the bank is paying the costs of the sale. It can be argued that the costs of sale are reducing the net proceeds to the bank, and that part is true. But the bank does not own the property. This is the thing people forget. The seller owns the property, and therefore the seller is paying the costs of sale. The bank is interested and approves the costs of sale only because if costs can be reduced, the bank’s check goes up.
The short sale is contingent on bank approval, but the bank does not sign the short sale offer. The bank approves the purchase offer agreed to between the buyer and seller. Unless the Sacramento short sale agent signs an agreement with the bank to get the bank the highest price possible, the parties to satisfy are the seller and the buyer. Of course, a wise short sale agent knows the bank will base, in part, the decision to approve the short sale on the BPO. This means the agent submits an executed purchase contract that will meet market value.
It’s a major mistake to believe that the short sale banks expect to receive every offer submitted to the seller. The bank wants to see the offer that is sufficient to net the bank an acceptable amount. The bank wants to see the offer that the seller and buyer have accepted. The bank wants to see the offer from the buyer who is qualified, committed and dedicated to closing the transaction. If a short sale agent sends a bunch of offers to the bank, it signals the agent is clueless, and the bank will most likely reject all of the offers.
Death Qualifies for a Short Sale
I suspect you’ve landed on my blog with the thought she is NOT going to talk about death and a short sale. But you would be incorrect or maybe you just don’t know me very well yet. I’ll talk about anything I darn well feel like on my blog. If you’re not interested in matters surrounding death, all I’ve got to say is you are going to be very surprised one day. That old grim reaper is hanging around and not just around us old people. You can’t escape it. One day you’re laughing and joking with friends, and the next day, bam, somebody is dead.
You just hope it’s not you.
I haven’t seen very many dead people myself. Once, driving along the Biz 80 freeway in Sacramento, I saw an upside-down Corvette. The windows were open. The driver was still in the car, shirt unbuttoned and this huge stomach was bloated and bare for all the world traveling by to see. I guess it took paramedics a long time to get there. They were probably stuck in a traffic jam on the other side of the road. Because even people on the other side of the road were slowing down to gawk. You don’t want to look but you do. It’s kind of human nature. I felt sorrow and horror for this dead person in the Corvette.
If this guy in the Corvette had a home that was upside down, the same as he was, his joint tenancy partner or tenants in common partner could sell that home as a short sale. Because death qualifies for a short sale. Even if his heirs were not on title to the property, they can use death as a qualifying factor to get rid of the house. Doesn’t matter if it’s Fannie Mae or Freddie Mac or which bank is servicing the loan. There is no getting around it, death qualifies for a short sale.
To do a short sale involving a dead person, you need a recorded copy of the death certificate. It might take a while to get the death certificate, especially in Sacramento. I guess it depends on where the person kicked the bucket. If a person died in the hospital, I hear you get a death certificate a lot faster than if you came home and found your ex-husband dead in bed. That’s what clients tell me. I don’t have any first-hand experience myself.
But I do have a lot of first-hand experience selling short sales in Sacramento. I’m a competent and veteran Sacramento real estate agent. I am, in fact, working on two separate short sales this week involving spouses who have passed on. These are different than a strategic short sale or a short sale involving loss of income, for example. There is a lot of grief and bereavement. Pain. People need to talk. I listen. I’m not just in the real estate business. I’m a person, too. If somebody has died in your family and you need to sell that Sacramento home as a short sale, call Elizabeth Weintraub at 916 233 6759. I know what to do. Remember, death qualifies for a short sale.
Maybe Your Roseville Home is Worth More?
Of my four closings yesterday, two of those homes were regular transactions and not short sales. I hope this is a trend that continues. Fewer short sales, more equity sales. Because for the past 7 years, most of my business in the Sacramento four-county area has been short sales. That’s why they call me a Sacramento short sale agent. But before short sales, I enjoyed a long career selling regular homes. People tend to forget about that. But I don’t because my job is to help sellers sell their home, regardless of what it is.
One of those closings was a home in Roseville. It was owned by a spunky 82-year-old woman whom everybody adored. I mean everybody: the title company, the escrow officer, the buyer, the buyer’s agent, and especially me. This woman is incredible. Funny, sweet and smart. I could not believe that her family dumped her at the last minute. The home was hers alone, but a while ago her family members decided to join her in title. I’m not sure exactly why but I’m betting they felt she had equity, and they wanted a piece of it. When she told them she was interested in selling, they convinced her that she would have to do a short sale. If she was to short sale, they wanted to bail because they did not want to participate in a short sale. No money to them and nothing but a hassle.
See, the thing is a short sale lender will want everybody to participate in the short sale process, even if the parties are not on the mortgage. If they are on title, they need to fill out all of the paperwork, just like the mortgagors, and apply for the short sale. This seller’s family members were so sure she had to sell as a short sale that they deeded the home back to her and recorded that deed! I always check out title before I take a listing. Three decades ago I used to work at First American Title. This seller definitely had clear title to the home. A home with equity!
She was also very shocked when I told her she did not have to do a short sale. She had plenty of equity. This Roseville seller had enough equity to sell her home for top dollar, pay a commission, all of her closing costs and back taxes, and still have a lot of money leftover. Do you know how good that feels as a real estate agent to share with a seller that kind of good news? Or, as a seller to hear it? To find out that instead of a short sale, you can protect your credit and stash, say, $20,000 in the bank. When you’re on a fixed income, $20,000 could be a year’s income or more.
It beats the alternative. I had to inform a Land Park seller last year that her Land Park home had slipped into short sale territory and that she needed to sell as a short sale. We tried to sell as an equity sale but it hadn’t been working. She exploded to the point that I had to cancel the listing. Just blew up at me. I always try to tell people the hard truth but not everybody can handle an agent who is direct. Some prefer agents who sugar-coat, beat around the bush, and that’s not me. Eventually, that Land Park seller put her home back on the market as a short sale with another agent. That was too bad. Because I would have done a good job for her. You can trust that I will always try to do what is best for the seller.
But before jumping to the conclusion that your home is underwater, you should ask a real estate agent for her opinion of value. You might be pleasantly surprised. Some of us do a bang-up job at pricing a home and figuring out market value.
The Search for Intelligent Life in a Green Tree Short Sale
Talking to a Green Tree short sale bank negotiator can be like that cartoon about what dogs hear. You know what I’m referring to, right? The human is speaking to the dog, giving a lecture about not jumping on the furniture or perhaps not tracking dirt on its paws into the house, and the caption balloon over the dog’s head is an interpretation of what the dog hears, which is “blah, blah, blah.” This is what it feels like when I talk to a short sale bank negotiator. Words are coming out of the mouth of this Sacramento short sale agent, but they are ignored and must sound like incomprehensible gibberish to the negotiator.
This is so common place in short sales that my Sacramento short sales are ripe with illustrations. Let’s look at a Green Tree short sale, for example. Green Tree is famous for trying to extort extract payments from sellers during the short sale, and why not? Green Tree is a collection agency. If PNC or Bank of America transferred the servicing of your loan to Green Tree, you’re stuck with Green Tree and, by extension, so am I. But that’s OK, I don’t mind dealing with Green Tree as it’s typically good fodder for illustrations of ineptness.
The latest problem is a Green Tree short sale in which there are four individuals who have signed the mortgage. All four people have signed the promissory note and the deed of trust. Since Green Tree picked up this loan by assignment, it was not involved in the notarized signatures on the prom note and deed of trust. In fact, Green Tree might not even know how to recognize a promissory note and deed of trust nor understand the instruments even though these pieces of paper are the basis for its business. Because Green Tree has decided there are only 2 individuals noted on the note and deed of trust — because that’s what Green Tree’s incorrect records tell Green Tree.
Never mind that I sent Green Tree a copy of the deed of trust showing that all four individuals have signed it. The evidence is in front of their faces. Nope, Green Tree has demanded a new package, new hardship letter and all new documents signed by only 2 people. You might be asking what’s the harm in that? Well, the harm is Green Tree is not the lender. Green Tree is the servicer of this loan. The lender is Fannie Mae, making this a Fannie Mae short sale. And when Fannie Mae sees there are only 2 people who have signed everything, Fannie Mae will kick out this short sale package and reject it. Green Tree has refused to send the file to Fannie Mae unless we submit it with only 2 individuals. Do you see the problem?
We have talked to the negotiator and the negotiator’s supervisor. They both have demanded that we submit a package that will be rejected by Fannie Mae for being incomplete. Makes one want to grab Green Tree employees by their shoulders and shake these people.
I’m just a Sacramento short sale agent. Why am I having to explain to Green Tree who their borrowers are? Why doesn’t Green Tree employ people who can reason and think? The only way to remove a borrower from a mortgage, apart from death — which, believe it or not doesn’t do it either — is to refinance that mortgage or pay it off, neither of which has happened.
Today we will contact Fannie Mae and report this problem at Green Tree, in addition to contacting the supervisor’s supervisor at Green Tree. Somewhere, there is intelligent life in this universe.
How to Get $10 a Day for a B of A HAFA Short Sale
We just closed a Bank of America HAFA short sale yesterday that had started in January. This was my second Bank of America HAFA short sale closing this month. The one that closed last week was much worse by comparison. In this particular HAFA, I was fortunate to represent an extremely detail-oriented seller who had completed all of her paperwork immaculately and upon receipt. This escrow should have flowed just like clockwork, yet it took 10 months to close. Within 30 days of opening the file in Equator, we had approval from the second lender, Green Tree, and all documentation submitted and verified, including two completed BPOs. Still, it took 10 months.
By the time Bank of America gave us its first B of A HAFA short sale approval in May, the approval at Green Tree had expired. Despite our pleas, Green Tree closed the file. We reopened the file at Green Tree and started over. There were the usual battles at Green Tree: calling the seller at work, harassing the seller for payment, threats of short sale charge off, and finally we said: fine, send the file to charge off. See, this is the thing — Green Tree can reopen and re-approve a file in 2 to 3 weeks, what it takes Bank of America 3 to 4 months to do.
To add to the horrors, Bank of America then abruptly closed the file early July. It was a mistake. We had asked for an extension but no, they closed the file. We tried to reverse the soft decline, Tweeted the Social Media Team, escalated the file to the Executive Office, but to no avail. Of course, by this time, Green Tree approved the short sale a second time, while we started the process over with Bank of America.
Bank of America assigned an escalation specialist to the file. This negotiator managed to get approval two months later, insisting her performance was perfectly satisfactory. You’re telling me that a HAFA initiated in January and closing in October is perfectly satisfactory? This is why many sellers would rather poke out their eyeballs than do a Bank of America HAFA short sale. The only benefit to a seller is that $3,000 payment. Which worked out to a return of $10 a day.
I reflect on this and wonder what we could have possibly done differently. The answer I come up with is not to have applied for a B of A HAFA short sale at Bank of America. But when a seller insists on a HAFA, that’s what I do. It’s not my decision to make. This particular seller figured she had 10 months to wait, so it didn’t matter. As long as she closed by the end of the year, she was satisfied, but I wouldn’t go so far as to say she was happy about it.
The other element in this transaction was the buyer. The extremely patient, dedicated and committed buyer. We selected the right buyer, which is always key to a successful closing. It could have been much, much worse. I could have had to sell this Elk Grove short sale three times instead of only once.
As an experienced Sacramento short sale agent, I have been closing Bank of America HAFA short sales for a long time. I am Equator Platinum Certified and a Certified HAFA Specialist. If you absolutely want to do a HAFA short sale through Bank of America, I doubt there is much I haven’t seen, and I’ll be happy to help you close it. Just be forewarned.
