Sell Your Home Now Q&A

the short sale process blog

· We understand that you are facing some tough decisions about your financial future and that includes the decision to sell your home. Due to your current financial situation and /or the market conditions in California or your area, you need to sell for less than you owe. To sell your home, you need a short sale. As a Short Sale Specialist, we will be able to assist you through the process.

Short sales can be stressful and a time-consuming process. But in many cases they are necessary in order to get you out from under mortgage debt, especially with property values are declining. By performing a short sale, you will be able to take a large bite out of the money you owe to your mortgage company.

A Better Alternative

A short sale or short payoff is accepted by the lender is a much better alternative than foreclosure. You will not have a damaging foreclosure mark on your credit, may not have to bring any money to closing even if your home is “underwater,” may avoid bankruptcy, not need to make any extensive repairs, and could qualify for another home in much less time than if you allowed the bank to foreclose.

**If you are facing a scheduled foreclosure date, be sure to let us know. Please also provide us with any paperwork sent to you regarding the foreclosure.

Other Options

Be sure you have explored other options by calling your lender to discuss your eligibility. They will most likely mention that one option may be the short sale of your home. Your lender allows this option to homeowners that qualify as an alternative to foreclosure. Lenders do not like to foreclose. The process is costly for them. They would prefer that you try to sell the home at fair market value even if that amount is less than the pay-off. Foreclosing on the property will leave them with a property that may take a long time to sell unless deeply discounted.

Do I qualify?

Most homeowners that are facing foreclosure or who are in a ‘must sell’ situation, but cannot sell for the amount owed, do qualify. To qualify you must be experiencing a true financial hardship, have no equity in your home, no assets, be in default, or be facing imminent default, and be in a market where you cannot sell the home for enough to cover your debt and all other associated closing fees.

The Process: What to Expect?

Step 1: Marketing & Paperwork

The home must be listed for sale at fair market value “subject to your Lender’s approval.” This step is important -it shows your Lender that you are making a diligent effort to sell your home.

To process the Short-Sale your lender requires information and paperwork from you. Please be sure to provide everything required. Any delays or missing paperwork could give your lender reason to close your file. Your agent has a list for you to follow.

Step 2: An offer is received

Step 3: Short Sale package submitted

Step 4: Lender orders an appraisal or BPO

Step 5: Negotiations

Step 6: Home is SOLD

Typical Lender Timelines (for each step in the short sale process)

Get authorization on file with lender 2 days

Compile short sale documents 7-14 days

Get short sale package on file with lender 3-7 days

Short sale package assigned to negotiator 10-14 days

Get BPO/Appraisal ordered 14-21 days

Schedule BPO/Appraisal with agent 5-10 days

Time for BPO/Appraisal to get to negotiator 21-28 days

Negotiate/obtain approval from negotiator 15-20 days

Total: 77-104 days

Things to Keep in Mind:

ô€¸ There is no guarantee that all offers will be accepted! Depending on the offer price and other conditions, the lender may say ‘no’ to the first offer that is made on your property.

ô€¸ The Short Sale Process can take anywhere from 2 to 4 months or longer depending on the foreclosing lender. ô€¸ You Lender or Bank will not allow you to receive any funds at closing. (FHA loans have a pre-foreclosure sale program that allows a Seller incentive)

ô€¸ You may be liable for a taxable event or deficiency judgment for the difference owed to your Lien holder(s). There are exemptions you may be eligible for. Ask your agent for

details

ô€¸ You may be able to qualify for another home in 2 years provided you maintain your

credit and income.

ô€¸ You should always seek legal counsel and the advice of a tax professional.

If you have general questions or just need to talk to someone about your situation do not hesitate in contacting me. If I can help you I will direct you to someone who can.

Crystal Gomez, M.A
Short Sale Specialist

Trilogy Property Solutions
13636 Ventura Blvd Suite 324
Sherman Oaks California 91423
www.go.managemyshortsale.com
818-571-4655 cell
888-571-7854 fax

Why we love short sales blog

Why we love short sales

1. Short sales are part of the solution – not the problem – for homeowners seeking to sell an unaffordable home.

2. Short sales provide an alternative when bail-out plans and banks have failed.

3. Short sales remove REO, foreclosures and non-performing properties (assets) from bank books thereby allowing lenders to report a better position and begin lending again.

4. Short sales turn vacant homes into profitable properties; help retain property values and generate much needed tax receipts as well as local income into the community via broker commissions, sales receipts for repairs etc…

5. Short sales provide an alternative to keeping too much cash in stressed banks while still allowing investors to generate profitable investments.

About half of homeowners to have negative equity by 2011

Analysts at Deutsche Bank say that the number of homeowners whose home value is less than what they owe on mortgage loans will double to 48% by 2001; currently 26% of homeowners have negative home equity. “We project the next phase of the housing decline will have a far greater impact on prime borrowers,” said Karen Weaver and Ying Shen, analysts at Deutsche Bank. Among prime loans – which conform to underwriting and size guidelines of Fannie Mae and Freddie Mac – about 41% will be “underwater” by the first quarter of 2011 from 6% at the end of the first quarter of 2009.

As for prime Jumbo loans, about 26% will be underwater by 2011. “The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding,” said the Deutsche Bank analysts. Among subprime loans, 61% will be underwater by 2011. The drop in home prices is leading to negative home equity and incentivizing borrowers to walk away from their mortgage commitments. In regions such as Las Vegas and parts of Florida and California about 90% of homeowners are likely to see negative home equity by 2011. “For many, the home has morphed from piggy bank to albatross,” the analysts said.

Fannie Mae loses $15.2 billion, seeks $10.7 billion in assistance

Fannie Mae has posted a loss of $15.2 billion in the second quarter of 2009; the loss during the same period a year ago was $2.6 billion. Fannie Mae suffered credit losses to the tune of $18.8 billion, raising the level of delinquent loans to 4% of all loans outstanding. While external factors such as recession have hit the quality of loans, analysts say that Fannie Mae and Freddie Mac lowered their lending standards during the real estate boom and are paying the price as loans go bust. Given the size of loan assets, “it’s hard for their problems to be small,” said Karen Shaw Petrou, managing partner at Federal Financial Analytics.

Fannie Mae has sought $10.7 billion from the government in aid. “We are dependent on the continued support of Treasury in order to continue operating our business,” Fannie Mae said in a filing with the Securities and Exchange Commission. The government which controls Fannie Mae and Freddie Mac has infused $85 billion into the 2 companies so far. The Obama administration is evaluating options – including transferring delinquent loans of Fannie Mae and Freddie Mac to another firm – for restructuring the 2 companies.

Unscrupulous mortgage servicers sued for inappropriate practices

An investigation by the Associated Press (AP) has found that mortgage servicers, who play a key role in the government’s loan modification program, are making money at the expense of troubled homeowners. According to the AP, at least 30 servicers have been sued for a variety of inappropriate practices – harassing borrowers, imposing illegal fees and charging for unnecessary insurance policies. The list of errant companies includes some of the biggest players in the servicing industry — Bank of America, Wells Fargo & Co., JPMorgan Chase & Co. and Citigroup Inc. “The irony is, in essence, the government is paying servicers to do their job, which is to do loan modifications where appropriate,” said Kurt Eggert, a law professor at Chapman University. “And that’s not a part of their job they were ever especially good at.”

The government says it needs the servicers since they are the only link between borrowers and the investors who indirectly own their mortgages through securities. “Refusing to work with a bad player would deprive homeowners, who have mortgages with that servicer, from getting modifications,” said Treasury spokeswoman Jenni Engebretsen.

Provide a service, and make some Money

Mortgage Brokers can earn additional income from their canceled or denied files for lack of equity or bad credit if they know who to team with on investment short sales. Do not let those denied files fill up your back room with dust or don’t throw them into your shredder.

Real Estate Agents can earn DOUBLE their commission if they know how to work with an investor on short sales. What? – did your broker not inform you about the need to work with and learn from savvy investors who know how to put deals together that were never taught in the RE Principles class? NO? Hard to believe.

Insurance Agents: yes, you can earn referral fees from my business model if you have clients who are asking for help since they’ve canceled on their home and auto policy due to a pending foreclosure. They need help from an experienced agent and investor to get their home sold if they elect to do a short sale. You can tap into additional income from the hundreds of clients who will eventually cancel on their insurance policy. Supplement your declining income with referral income form short sales. What — nobody asked you? Shame on them!

Attorneys: I love working with attorneys. If you have clients that are denied a modification, need to sell, are in Bankruptcy, or in a Divorce, or dissolving a corporation and need to sell real estate assets in a declining market, then you can earn fee income from working with the homeowners ( I can share with you this specific business plan) and from referral fee income from when we buy and sell on a successful short sale transaction. Yes, I love working with attorneys since they don’t have the time to handle the sale of real estate for their clients but need to offer a viable alternative for their clients. You guys have lots of potential and understand the concept of providing “solutions” for clients.

Accountants / CPA’s are in the numbers. You have clients who are in dire need of help in getting them out of a negative equity market on a residential property and on a commercial property. You have their income figures, you understand the Tax implications and benefits of the IRS Form 982, and you know about IRS Publication 4681 and you can explain it to the property owner. You are an ideal point of contact for your clients and you can now offer them a solution to sell their home, work with an experienced investor, and create a fee income stream from the final transaction ( our referral fee). Selling real estate is not your business, but you can create an alliance with an investor who can provide a valuable solution for your clients. In fact, I probably need to speak to you about my clients since they need your tax advice. I also think I need to call your office.

Property Managers: if you have clients who own Residential Investment Property and need to get out of a pending foreclosure, or are stuck in a short sale with no buyers, or can’t get a modification due to investment status, then you can earn fee income from this business plan. You need to call me and get started on providing immediate solutions for your investment clients. They will love you for it!

Like I said, if you have the understanding then you can generate a solution for your client and make a big difference in their lives and make a good income ( steady income if you we work together) that will supplement what you do best in your profession. Contact me with any questions or any potential client in need of selling their property in a short sale:

Crystal Gomez, M.A

Trilogy Property Solutions

13636 Ventura Blvd Suite 324

Sherman Oaks CA 91423

818-571-4655 cell

888-571-7854 fax

www.go.managemyshortsale.com

Short Sale Expert blog

Short Sale Expert

As your local and experienced L.A County Short Sale Expert I can help you learn what all your options are. If you fall into one of the categories listed below you might be a candidate for a Short Sale. There are multiple options which could include foreclosure, deed-in-lieu of foreclosure, loan modification, repayment plans, forbearance, bankruptcy as well as other available options.

Are you having a hard time making your mortgage payments? Are you late on our mortgage payments? Has your financial situation changed for the worse? Have you lost your job or has your income been reduced? Did your adjustable rate increase causing financial stress? Are you currently or have you recently been through a divorce or separation? Has there been an event in your life causing you financial hardship? Are you being forced to move or relocate? Are you in the military going on active duty? Is your home worth less than what you owe?

If you answered yes to any of these questions than you maybe qualified for a Short Sale. There are a number of other factors before you should consider this as an option. A Short Sale is not for everyone.

Short sales can require many hours of hard work and organization is imperative in order to get them done. Please be aware that short sales will typically take approximately 3-4 months to complete depending on which state you are in (see below for typical lender timelines), and that is simply because the majority of lenders are overwhelmed at the moment, some receiving as many as 500 or more short sale packages a day! In some cases, 2 or 3 weeks may go by without any change in the status of a file.

Our company is also looking to work with agents familiar with the short sale process. We provide full training to agents on how to become a short sale specialist. We pay full commission. Please contact us for details.

Crystal Gomez, M.A
Short Sale Specialist

Trilogy Property Solutions
13636 Ventura Blvd Suite 324
Sherman Oaks CA 91423
www.go.managemyshortsale.com
shortsalecrystal@live.com
818-571-4655 cell
888-571-7854 fax

The alternative to a foreclosure or bankruptsy

The alternative to a foreclosure or bankruptsy

A short sale in real estate is not always a pleasant transaction.

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."

When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due.

Mortgage Forgiveness Debt Relief Act of 2007, be aware the I.R.S. could consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.

Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.

· Call the Lender

· Submit Letter of Authorization

· Preliminary Net Sheet

· Hardship Letter

· Proof of Income and Assets

· Copies of Bank Statements

· Comparative Market Analysis
· Purchase Agreement & Listing Agreement

Now, if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request. Credit report status is not always negotiable.

A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. A lender may consider a short sale if the seller is current but the value has fallen. The seller may have over-encumbered, owe more than the home is worth.

If you find yourself confused and have any questions please do not hesitate in contacting me. If I cant help you I will direct you to someone who can.

Crystal Gomez, M.A

Trilogy Property Solutions
13636 Ventura Blvd Suite 324
Sherman Oaks California 91423

818-571-4655 cell
888-571-7854 fax

www.go.managemyshortsale.com

Sell Your Home Now Q&A

Buyer’s Objections & FAQ

How to Answer Them

Simplified

Question: I can't wait that long:

Answer: I'm sorry you feel that way, but any short sale property you put an offer in may take the same amount of time. As you know, Lenders are extremely over loaded with properties in default and they are working as fast as they can to get your offer processed and approved.

Question: The value is going to be less by the time the short sale is complete:

Answer: If you believe that will happened then I recommend you make your offer reflect a slight decline in the market, that way you will still feel like you're getting the property at a fair price

Question: What if the property incurs more damage when and if it's vacant?

Answer: That can possibly happen. There is nothing I can do to prevent vandalism from happening. If that occurs you can always withdraw your offer.

Question: If I have to extend my mortgage commitment I'm walking:

Answer: As you knew at the beginning of the short sale process, it may take a while for the foreclosing lender to get to your file. Please know that they are moving as fast as they can and are doing their best. This is a great house and you are getting a great deal so I would hope you are willing to get an extension from your mortgage company.

Question: I want the bank to pay for repairs:

Answer: Unfortunately most banks will not pay for repairs since the property is to be purchased "AS IS". What I recommend you do is before you submit your offer have your contractor walk through the house and give you repair estimates. After that, make your offer inclusive of those repairs.

Question: I'm not paying a 3rd party loss mitigation fee for negotiating a short sale:

Answer: The fact is that this 3rd party is really a team member. They work extremely hard to make sure this transaction closes. Their average time waiting on hold and working to get us paid is about 4 hours. I don’t know about you, but typical attorneys, title agents or real estate agents don’t have the expertise or the time to handle this transaction as well as they do.

Question: I know the second mortgage is requiring 10% of the principal on their

mortgage in order for them to produce a release; however I won’t pay anything extra for a 2nd mortgage or a junior lien for the property:

Answer: Typically 2nd mortgages are requiring10% or their principal amount in order to release their lien position however most 1st mortgages only “typically” pay a total of $2500 to a 2nd mortgage holder (or junior lien holder) so it is likely you will have to pay the difference (10% minus the $2500). What I recommend you to do is make your offer inclusive of this fact.

Question: The property has been listed AS-IS. Can I still request a due diligence

period for inspection?

Answer: As the Buyer you can have your agent make any requests that meet your needs. Just keep in mind that the Seller has listed the property as a short sale in AS-IS condition because they are having a financial hardship. They cannot afford to make any repairs, installations, pay for a home warranty, termite inspections, surveys, or make any improvements to the property. The Seller’s situation in no way impedes upon your rights to request a due diligence period for inspection. Ultimately it is the decision of the Seller to accept or counter your offer.

Question: Can I put in an offer with financing, appraisal, or inspection contingencies?

Answer: Yes, you can submit any offer that meets your needs. The Seller may accept, counter, or reject based upon their needs.

Question: Does the Seller have to submit all offers to the lien holders for review?

Answer: No. The Lender(s) or Bank(s) being asked to approve the short sale are not a party to the agreement. The home is owned by the Seller. It is there choice to send or not any offers received.

Question: Who determined the list price?

Answer: The list price has been determined by taking into consideration recent sold comparables and any repairs needed by the property. Since it is below the amount required to pay-off the Lien holder(s), it has been listed as contingent to their approval.

Question: If an offer has already been submitted to the lender for review, can I make a back-up offer?

Answer: The answer to this question depends upon the real estate rules in your

particular state as well as whether or not the primary contract has been accepted or, by terms of the offer, is considered binding. Keep in mind that despite the status of the primary offer, all offers received have to be presented to the Seller

Question: I am unrepresented and want a break on commission…

Answer: Please know that in a short sale the commission is actually paid as a

reduction in the net to the foreclosing Lender or Bank. You may feel that you are

financing the commission within your purchase price. However, the truth is that if we reduced the commission it would only mean more net to the lender and not a reduction in the amount you finance. Be sure that the total purchase price you offer is truly the amount that you wish to pay for the property and let the Lender worry about the commissions.

Question: I want seller concessions or a seller contribution to closing.

Answer: You can request seller concessions. Seller allowances are subject to lien holder(s) approval just like all other parts of the process. Should the lien holder not allow any seller concessions and you are unable to roll your closing costs into your loan, be prepared to bring money to closing.

Question: Can the short sale processing fee be included as a closing cost to the

Seller?

Answer: Yes. You can request that the Lender or Bank allow the seller to provide a small percentage to you as a seller concession. If the Lender or Bank allows seller concessions, you can apply that to your closing costs. Provided there is an agreement in place between you and the 3rd party processing the short sale, the fee can be added to the HUD settlement statement as a Buyer Paid closing cost covered by Seller concessions.

Question: Are all offers contingent? To what?

Answer: All offers made on short sale listings are contingent to Lien Holder(s) approval of a short sale at terms and price acceptable to all parties. Be sure that a clearly written contingency is included in your offer.

Question: Why should I wait through the long short sale process if the terms from the lender may be unacceptable to the Seller?

Answer: The likelihood of the terms being unacceptable is a risk you should measure before placing an offer. Keep in mind that you may be able to get the property for a sizeable discount.

Question: Do I have to put up earnest money?

Answer: Yes, you should put up earnest money. Lender and Banks like to see that Buyers are vested to the purchase. However, you can make requests in your offer regarding the dates that earnest money will be provided to the holder and deposited. It is in the best interests of the Seller to require earnest money be deposited upon acceptance.

Question: If the bank rejects or counters, do I get my earnest money back?

Answer: Yes. Any disputes over earnest money should be brought up with the

Brokers involved.

Question: Do I need to be pre-qualified for a loan or show proof-of-funds?

Answer: Yes. It is important to the Seller and to the Lender or Bank to see that you

will be able to perform. Offers on short sales that do not have either are not regarded

as serious and are many times passed rejected by Lenders or Banks.

Question: When is my offer binding upon all parties? & when does due diligence

begin?

Answer: The Date of Binding Agreement and start of due diligence is determined by the real estate rules in your state and the presence of any special stipulations added to the offer that clearly defines the time-period for both. For contracts to be enforceable, all time-lines must be clearly explained and accepted by all parties.

Question: I negotiate short sales myself, why can’t I negotiate my own offer?

Answer: Since you negotiate short sales you will have an even better understanding than most of the hurdles that may need to be overcome in the process. The Seller has already chosen someone to negotiate on their behalf. Should they need your assistance, they will be certain to contact you. In the meantime, you will be provided regular updates as to the short sale progress.

Question: I won’t make an offer until the short sale price is approved….

Answer: We understand. However, most short sales require an offer be presented to get approval. Should you submit an offer, you would be helping to accelerate the short sale process. Make sure that any offer you make takes into consideration current sold comparables, competing active listings, and the repairs necessary.

Crystal Gomez, M.A

Trilogy Property Solutions

13636 Ventura Blvd Site 324

Sherman Oaks CA 91423

818-571-4655 cell

888-571-7854 fax