November 2011

July, 2010 I took a new Connecticut short sale listing. This was a Fannie Mae Bank of America loan. Fannie Mae had just gotten on board with HAFA and my new clients wanted to go with the program.

HAFA was supposed to be governments solution to “streamlining ” and “simplifying” the short sale process.

A summary of the last 15 months:

July 2010 –  I met with my new clients and their property went on market

October 2010  - After about 6 weeks  Bank of America finally acknowledged our requests and a  HAFA short sale file was opened.

December 2010 – A HAFA approval letter arrived with a GROSSLY EXAGGERATED valuation of the property that could NEVER be reached. We started the value dispute process.

April 2010 – After 5 months…

How long have you been doing short sales? Even today, many real estate agents simply do not understand short sales, though they may volunteer to take yours on. Make sure the agent you are choosing has plenty of experience in this area.

How many short sales have you personally closed on the listing side? Representing buyers in a short sale is a totally different ballgame than representing a seller in one.  You are looking for someone who has closed multiple short sales on the seller side.

Out of short sales listed, how many have you closed? This is critical. Listing short sales does not mean closing them. You are looking for someone with a good track record of actually closing their short sales.

Who  does your negotiating? Is the agent…

Back in May – I listed a new CT short sale for sale -  a single lien Bank of America FHA loan. Within days we secured a very strong buyer and a complete short sale package headed to the lender.

After reviewing the sellers documentation, Bank of America immediately refused to process for a short sale as they determined the sellers should be in a loan modification instead.

HUH? The seller is RELOCATING FOR EMPLOYMENT. Relocation and loan modification don’t belong in the same sentence.

The package was resubmitted with a very clear explanation for why a loan modification would not be the answer to my relocating sellers problems. We were promised this would go straight to short sale and my sellers would not be harassed for a loan mod.

WRONG!!!…

Not even a shoot out could stop this Wells Fargo short sale!

Short sales are almost never smooth sailing – but this one came with more than its fair share of "disturbances".

Before calling me, my client had been listed with a Realtor with no real short sale experience – which had resulted in nothing but the Manchester, CT home sitting on the market as 6 months passed with zero progress. Now facing foreclosure,  my clients situation had become time sensitive. We listed the house with a price improvement, and not long after a cash buyer was secured.

Then the unthinkable happened. As the buyers were at the home, a hostage situation broke out…the neighbor decided to hold his family hostage and my listing quickly became a crime scene.…

YES, CONNECTICUT IS A RECOURSE STATE

An internet search for the answer to this question, will frequently give the COMPLETELY INACCURATEanswer that CT is an anti-deficiency/non-recourse state.

This is a widely spread incorrect fact. If you live in Connecticut and your home forecloses - the lender absolutely has the right to sue you for a deficiency judgement.

In CT, a deficiency judgement may be pursued by the mortgagee in both a strict foreclosure, and foreclosure by sale.

Per Connecticut Mortgage Law:

  Sec. 49-14. Deficiency judgment. (a) At any time within thirty days after the time limited for redemption has expired, any party to a mortgage foreclosure may file a motion seeking a deficiency judgment. Such motion shall be placed on…

This double Wells Fargo short sale (WF first and a WF HELOC) started out like many others. Wells (who was once my favorite lender), has only gone downhill in the last year or so. After a securing a buyer for the property and submitting a full package, Wells began their usual fumbling around. After a BPO came in too high, Wells countered and no agreement was ever reached on price...so the first time around, our short sale was left dead in the water and we started over.

Soon a second buyer was secured, and at exactly this time, Wells decided to move all their files over to Equator. Equator is a software platform that automates short sale processing. Equator has proven to be an improvement for every lender who has transitioned to using it, however it…

SEVEN WAYS TO MASSACRE YOUR HOME SALE

• Photos? You don’t want photos of your home on the internet!
• Price the house based on what you owe or what you spent on improving the home. Market value? That doesn’t apply to your home. It is unique.
• Force severe showing restrictions. If they really want to see it, they will provide 72 hours notice and/or agree to schedule for Wednesdays  between 11 and 1:30 only.
• Refuse to stage the home. After all, you still have to live there. Surely buyers will understand and overlook the dishes in the sink and juniors toys all over the floor.
• Be present for showings. You need to be there to “SELL THE HOUSE!” to prospect buyers.   No one could possibly appreciate the home without your…

I’m usually not a big fan of Ocwen but it seems lately they are in a hurry to rid themselves of problem property. When I originally took this CT short sale listing, I was not looking forward to dealing with Ocwen. However, once a buyer was secured - OCWEN’s turn around time was phenomenal. I was never contacted for a BPO, but yet the approval letter for this short sale arrived less than two weeks after submitting a short sale package.

Unfortunately, the story does not end there. Another day brings another lender delay, as the buyer, his agent, and lender poked around for several months and at the end of the day - were unable to close at all.

Back on market, a new CASH buyer was quickly secured. This time Ocwen was not quite as quick as the…

This Coventry, Connecticut homeowner originally called me after a long drawn out attempt at a loan modification proved unsuccessful. He had read great things about HAFA and wanted to pursue that as his next option.

I’ve seen many try and fail at HAFA and consider the program generally a waste of everyone’s time, but since my client really wanted to try anyway we thought we’d give it a shot. After the attempt at HAFA miserably failed and we had wasted a few months in the process, my client opted out of HAFA and we swapped over into a traditional Chase short sale.

We soon secured a new buyer and our problems with Chase continued. Chase’s next two property evaluations came in way too high, and Chase countered with a ridiculous…

Will signing over my deed stop the foreclosure from affecting my credit?

NO. You cant avoid foreclosure by signing your deed over to anyone.  This will  remove your ownership of the property and any say or control you had in what happens to the home, but it doesn’t get you out of the foreclosure.

If you signed up for the loan, you’re still responsible for the loan, even if you sign away the house. Unless the lender specifically ends your responsibility for payment, you’re still on the hook. A foreclosure will still happen, and it will still show up on your credit.

Signing over your deed leaves you in a pretty bad spot –  still responsible for the mortgage, but having lost all your rights to the property.

Seek other alternatives to…