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New Twist for Sacramento Short Sales With a Second Mortgage
Before I get started, let me say that I know agents in Sacramento who will refuse to work on short sales with a second mortgage. Yeah, that’s ridiculous. Sure, it’ s a little bit more work with two loans, and second mortgages on a short sale can throw a monkey wrench into negotiations if they are hard-money loans, but that’s the job of a Sacramento short sale agent, to make it work.
I used to believe that only a lawyer could negotiate certain types of Sacramento short sales but after doing them for almost 8 years, I don’t believe that anymore. In fact, many lawyers hire an assistant or clerk to actually process the short sale. There seems to be little hands-on involvement. Because of the volume I do, and my personal interaction, I hear new developments often before they become mainstream. That’s a benefit to hiring an experienced Sacramento short sale agent to do your short sale and not some recently licensed agent who sat through an online class or a lawyer who pawns off the work.
The new development with the second mortgages secured to underwater homes is some of them are vanishing. Yes, poof, gone. The seller no longer owes the debt. This is done without the seller’s approval, too. The bank simply releases the loan and forgives the debt.
At first I thought maybe they were releasing the loan but not reconveying the mortgage, as what happens in a bankruptcy before a short sale. In a bankruptcy, the debt is discharged and the seller is released from personal liability. However, the loan remains secured to the property in a bankruptcy and the seller remains in title. Some sellers end up filing a Chapter 7 thinking this will get rid of the house, and it doesn’t. Not only that, but some sellers might be better off just doing a short sale and forgetting about a Chapter 7, especially if their only debt is the house.
This is a good place to acknowledge that I have never heard a bankruptcy lawyer say to a qualifying client: don’t do a bankruptcy. That’s like asking a Sacramento real estate agent if you should sell your house or asking a hairdresser if you should cut your hair.
Why would a bank release a second mortgage? Partly due to the National Mortgage Settlement Act and a few other lawsuit settlements. You might wonder why do they care about hanging on to a worthless piece of paper that has no security anyway? So investors can question their assets? Yet, I’m still a bit amazed that banks are issuing reconveyances and letting sellers go.
In some cases, it might mean that the seller won’t even have to resort to a short sale if prices continue to go up. That’s pretty good news for Sacramento sellers. It also makes negotiating the short sale quite a bit easier when there’s only one lender. But it’s still not impossible to work on short sales with a second mortgage, and I do it all the time.
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Sacramento Sellers Hounded By So-Called Short Sale Agents
I don’t ordinarily like to expose or discuss the underbelly of the real estate business, but I will if I believe it has value to the consumer. There are some agents who talk trash about other real estate agents just to make themselves look better by comparison, which is kind of scummy and throws a person into the same camp. But there are good and bad professionals in any business, anywhere you look. Sometimes, it just might seem like there is more disparity in real estate. Perhaps because there are so many of us — something like one out of every 35 people in California holds a real estate license.
Take one of my new clients, for example. While talking to this seller last week — who is about to embark on a short sale — he told me something must have happened recently to trigger all the calls from short sale agents. He said his phone had been ringing off the hook with offers of “assistance.” He was very surprised at the nature and tone of some of those calls and wondered how they got his number. The sad thing is, nowadays, falling behind in your mortgage payments can trigger such a flood of harassing soliciting calls.
First, nobody should attempt to do a short sale by hiring some agent who calls out of the blue or shows up on their doorstep. You should get your short sale agent from word of mouth or through research. Ever since the booming end of the colossal short sale era in 2012, agents have been frantically trying to grab that elusive golden ring of short sales. Even if they have no idea what they are doing or they have attended a half-day class and are now calling themselves an “expert” in short sales — how is a seller supposed to know if they are fakes?
Second, a seller should not be forced to do a short sale, pushed into a short sale or talked into doing a short sale. If a seller doesn’t want to do a short sale, why should that seller be harassed called by other agents who are trying to get some business? Agents typically don’t go around calling complete strangers and pushing them to sell. But some agents will do it to a seller who has an underwater home.
The way they get the seller’s phone number is by subscribing to a service that provides it or by getting it directly from the bank. Some banks such as Wells Fargo and Chase Bank have been reaching out (ack, I hate that term and look, here I am using it) to real estate agents and promising them short sales in exchange for a little mortgage business. They give the agents a list of sellers who are in default (behind in their payments), and agents cold call this list and try to persuade a seller to list with them as a short sale. It wouldn’t be so bad it were only one agent doing this, but it’s dozens of them and. in many cases, these are first- or second-year agents without a lot of experience. Because veteran real estate agents typically do not cold call.
The other way they find out is by asking a title company to provide them with a list of homes in preforeclosure or by subscribing to a private service that provides them with this very public information, or going to the office of the county recorder to find the information in person. Some agents belong to a program called HR 3648, which I suggest you steer clear from. A nonprofit director called me the other day to say she received a letter from HR 3648 that made it look like it was part of Keep Your Home California.Org. I did a search on that website and could not find Program 3648. No surprise.
If you’re looking for an experienced Sacramento short sale agent, ask for a referral, and you might very well be referred to me. I have a lot of previous satisfied short sale clients, hundreds of them. You can research my professional stats, or you can just call Elizabeth Weintraub, at 916 233 6759, Lyon Real Estate.
A 3-Lockbox Friday for This Sacramento Agent
This Sacramento real estate agent should be adding 3 more homes to the inventory in the Sacramento area on Monday. It’s a small contribution to our sorry state of affairs in the Sacramento real estate market. We have fewer than 1,500 homes for sale in Sacramento at the moment, which is miniscule and does not meet the demand. This means when a potential seller calls to say he or she wants to put a home on the market, this Sacramento agent does her best to accommodate without delay.
I was driving back from Elk Grove where I have a lot of listings when I got the call to Rocklin. I seem to list and sell an unusually high number of homes in Elk Grove, even though I do not live there. I live in Land Park. Probably because so many are short sales in Elk Grove, and I am the best Sacramento REALTOR to handle short sales. Yet, a few that are not short sales are creeping into my listings. I closed a regular home in Elk Grove that comped out at the top around $245,000, and with one-eye closed and clenched teeth we pushed the limit to meet the rising pending demand to $259,000, yet it sold for all cash at $280,000.
Buyers are desperate to buy a home today. It’s hard to pick a sales price because it’s hard to predict how high a buyer might decide to go or how far out an appraiser will go to appraise. I realize sellers think us listing agents can pull rabbits of hats, but we can’t always predict what buyers will do. We can only guess. If your home is marketed correctly, the market will take you where you want to go. You don’t want to be too high because buyers will wonder what’s wrong with your home when you reduce. You don’t want to be too low because buyers might wonder upfront what’s wrong. You want to be priced just right, like Goldilocks and the Three Bears.
Which brings me to my 3 lockboxes from yesterday. One lockbox went on a home in Elk Grove that will be a short sale. Another lockbox went on a home in Elk Grove that will be a traditional sale, and the home is absolutely gorgeous. Don’t call me about it because you’ll get your chance to buy it along with everybody else next week. I don’t make side deals or give special considerations to my friends. I’m not that kind of listing agent. Don’t offer to let me write the deal in the hopes I will compromise my ethics and tell the seller to take your offer, because I don’t do that, either. Yada, yada, that’s not what you meant, yeah, right!
Another lockbox went on a home in Rocklin, which will be a short sale. It will need some work, and homes that need work are often a struggle with the short sale bank because the banks often refuse to acknowledge the homes need work. Or, maybe those darn BPO agents just don’t go inside. Hard to say, but it will be challenge, yet not a challenge that I can’t overcome.
Elk Grove in the morning. Rocklin in the afternoon. Back to Elk Grove in late afternoon. That was a lot of driving yesterday for a Sacramento agent who lives in Land Park. I love this business.
Why Would an Agent Sell Short Sales?
You might be one of those people who could not in a million years fathom why a Sacramento short sale agent would want to specialize in short sales. There are days I ask myself that question. And there is nobody to talk to about it. My husband doesn’t want to hear it. He doesn’t want to hear it any more than my other types of complaints such as why can’t I buy pieces from the new Eileen Fisher Resort Collection at the Eileen Fisher website? Why can’t other department stores such as Macy’s, for example, sell Eileen Fisher online?
Here you have a designer with her own website and she doesn’t sell all of her designs on her own website. Not only that, but you cannot buy those designs on any other website. It’s like a big secret. They send out a catalog but consumers can’t buy featured items. How sneaky is that? What you have to do is call Eileen Fisher to find out which department stores near you carry which particular garments, and then call those stores to order. You would think it would be difficult for Eileen Fisher to increase her sales volume in that manner because, let’s face it, it’s kinda nuts.
But I accept that because I sell short sales, I guess. I am surrounded by insanity. I seem to function well in that kind of environment, which is kind of scary when you think about it, not to mention, it makes me want to go screaming into the street. Yet, I seek out that kind of frustration through the very act of accepting short sale assignments and listings.
For instance, I am well aware of the torture of a Bank of America FHA Short Sale. Still, I continue to list and sell them. I can’t stop. I know I shouldn’t look at a train wreck but I do. Just yesterday a negotiator told me that her QA department would kick out a HUD because it was drawn in accordance with RESPA. Apparently, Bank of America thinks nothing of violating RESPA. It routinely tries to change the way items are listed on the HUD — and are required by law to be listed on the HUD when the buyer obtains financing. It makes me wonder how does she ever do any FHA short sale for Bank of America when she cannot read a HUD? Does she make the other agents she deals with so frustrated that they end up breaking the law just to stuff a sock in her? How does she keep her job?
Moreover, where does Bank of America find these people? Do they pull them out of soup lines? Hire them out prison mail rooms? What hideous crime must a person commit to go to work on FHA short sales at Bank of America? Whom do they need to offend to be demoted to the FHA short sale team?
I suppose they could go to work at CCO, but then they would suffer a worse fate because they would have to live in Tennessee. A negotiator at CCO told me yesterday she received permission to look up the sellers’ loan on the Fannie Mae website but it was not listed there. Except that it was. I’ve been telling her for 2 months the seller has a Fannie Mae loan and, as such, Fannie Mae will not authorize a payment above $6,000 to the second lender. I sent the negotiator the preapproval letter from Fannie Mae on Fannie Mae letterhead, but that was not good enough. Finally, I downloaded a screen capture of Fannie Mae’s Loan Look Up website that showed the seller’s name and address to prove that it was indeed a Fannie Mae loan. I turned the screen capture into a PDF and sent it to CCO. The approval letter appeared like magic moments later.
See, that’s how I do it. Eventually things work out. Eventually they see the light. It doesn’t mean they will change. I’m not looking for anybody to change. I just want that short sale approved. My sellers are counting on this Sacramento short sale agent to be successful for them. I am not about to let them down.
