How to Find Help for Short Sale

Question

I have posted before regarding my problem with my investment properties (see: Is it possible WAMU will lower my principal?) . I took the advice of this group and immediately put the property that has the best chance of selling for as much as I owe, on the market. It is not listed as a short sale.

Everything below is regarding another property that has about a 50% LTV.

I am ready to begin the short sale process on this property. I have never missed a payment on anything in my life and I am still current on this property. I have a payment on it due the 1st and need to decide whether to send it.

My 1st mortage on my investment property loan was shifted from WAMU to Chase. I received the letter from Chase last week saying they have the mortgage, now. I had already spoken to WAMU and got a verbal agreement to short sale. Now that Chase has the mortgage, I guess I need to contact them and see if they will give another verbal agreement to short sale.

How do I find a qualified person for the help I need? All the realtors I have contacted say they are "experts on short sales". I seriously doubt they all are. I have gotten the name of a couple of attorneys, but I'm not sure is an attorney is really needed to do this, or at least not the entire process.

The property is in FL, a recourse state, with judicial foreclosure and allows deficiency judgments. Are these facts enough for me to be foolish not to use an attorney? Unless an attorney is experienced with Short Sale negotiation, I think I would be better off with whomever has the most experience, whether they are an attorney or not.

How do I find an experienced person? Do I do most of it myself and just pay them for advice?

Would I be better off to just foreclose? I have read things that say a SS does not do as much damage to the credit rating and then other places say there is not much difference. We would jusdt have to realize that we would not be able to fincance anything for a very long time. Based on my lack of judgment with these properties, that is probably for the best.

I worry that we would not even get a buyer if we did short sale. The foreclosure could be finished sooner, correct?

My hardships are:
1. devaluing of property, short sale now before mortgage company loses more.
2. I will no longer have my job as an employee. My company is changing my status to self-employed.
3. Loss of income from accounting clients due to economy and their businesses closing.
4. Loss of income from farming due to drought last fall and winter. I sold the cattle and have not been able to buy back.
5. Decrease in both days rented and amount of rent, due to the economy. It is a vacation rental.

Thank you, dmj4

William Alston · Answer

dmj4 Because each lender seems to have their own magic words there is no "one size fits all" formula that I am aware of.

However, what you want is clear unequivocal language that they will not pursue a deficiency and that this is a part of the short sale bargain that you have struck.

Also beware of the following which I picked up from one of our local "mills" that handles a lot of short sales.

When you get your settlement agreement keep it close to you until the statute of limitations has run on the lender's ability to pursue you.

(I now recommend to my clients that they put it with the birth certificates or their passports, somewhere safe and where they will remember where it is.)

The reason is that it has become known that lenders are holding their files for several months and then giving them off to collectors in bundles.
In the bundle there are files with recourse rights and some files without recourse rights.
They are not readily distinguishable and reports have come in of people being contacted by collectors even after they had received a settlement which waived recourse.
Shady yes...but does it work? Only if you haven't kept your settlement agreement handy.
One last tip from our panel of legal research experts who shall remain nameless...Even if you don't get clear language waiving your deficiency many times the settlement agreement shows that you owe $0 or a note in the amount of $0.
With this documentation you have at least some evidence to support the argument that in your negotiations you bargained for a waiver of deficiency and were explicitly told by the lender during negotiations or perhaps at close that this was the meaning of the $0 or the note in the amount of $0.
Good luck

Scott Hubbard · Answer

DMJ4-

William is right. On the approval for a short sale, it will spell out whether or not they will pursue a deficiency judgment, promissory note, or have a balance due.

To take a step back, I always put in the sales contract that the lender agrees to waive deficiency judgment and considers the balance (short amount) as settled.

If you put in the above in the sales contract as an addendum, then reference this in both the original short sale package letter and subsequent conversations with the negotiator, you will have an easier time getting what you want.

It also helps to have a well written and seller-centric contract with an effective short sale addendum. That way, if you receive an approval that has a something other than $0 and $0, then you call the negotiator and try to make them compromise.

In my experience, you will be able to get most of what you want if you ask for it up front and at the beginning of the process. It is much harder to ask for new terms or conditions post-approval.

Donna J · Answer

Hi Everybody, I am updating my current situation; I am the original poster.

We are now 3 months behind on this loan and WAMU/Chase has begun giving us a little attention.

We received an offer for $179K and sent the SS packet in December. When we sent it we were only 10 days late.

The condos, in the same building, exactly like ours were listed for 169K, at the time. I attached the realty listing for those with the SS packet. Since that time Countrywide accepted a SS for $165K.

Our 179K offer expired, but the buyer put an extension on it until March 24th.

We have been calling twice a week since we first sent the packet, but they would not let us speak with our negotiator. Finally, she called to tell us she was ordering an internal BPO, which they did last week. The first time my husband spoke with the negotiator, she called with an attitude saying they had not been able to contact us to get the BPO done. My husband told her it was done the day before. She was hateful saying she received an email that morning and it had not been done. When my husband told her he was sure it had been done, she went into some king of rant about whether it was done for Fannie Mae or someone else. Our realtor called the agent doing the BPO and they wouldn't give any info about it.

Some people get negotiators that are somewhat nice and others get hateful one, it seems we got a hateful one. I do know her job is probably an impossible one right now. I just hope she see that $179K is better than $165K and acts soon.

I have heard that many times they order multiple BPO's. If they accept the BPO because our offer is higher, how close could we be to the end?

Thanks!

Donna J · Answer

One more thing, please. We have heard rumors that our realtor is getting out of the business and moving to a different state. They have not told us this, but they have told others.

What wording do I need to make sure is in our final agreement with WAMU/Chase regarding them being able to come back on us for the loan balance in Florida, which is a recourse state? I am assuming recourse or nonrecourse is determined by where the property is located, not where I live.
Thanks!

Roger King · Answer

Hi everyone - I know its been about 4 months since this was originally posted, but it occurred to me that if dmj4 only owes about 50% ltv, why doesn't he go to a group of investors (like here or an REI club) and 'wholesale' his own property for 55%? Make a little $ and dump the problem. No fussing with banks/mods etc...

It's 1am, and I just thought this might have been a quicker solution.

Thanks!!

It's 1am, and I just thought this might have been a quicker solution.

Thanks!!

Scott Hubbard · Answer

I second what William said, there are no rules. This is mainly due to the fact we are dealing with lenders who service the notes for investors who have their own expectations.

William Alston · Answer

Rule number one in short sales
There are no rules
As David Peeples and Nick Johnson point out above is what I have seen proven time and again.
Somebody says it can't be done but nobody told David or Nick that it couldn't be done or at least thye had the snes to say "Why Not" so they did it anyway.
Its all about skill, patience and luck but there are no friggin rules.
Call Mitsu or somebody like her.
This is the real America meeting here, making something out of nothing, creating new businesses that pay well, give personal satisfaction and serve a growing need in America,

STOP BANK SEX NOW
If you ain't gonna kiss me or buy me dinner just leave me alone Mr. Chase Wamu FARGO.

STOP BANK SEX NOW If you ain't gonna kiss me or buy me dinner just leave me alone Mr. Chase Wamu FARGO.

Mitsu O'Riley · Answer

Hey Nick,
I work with Independent Loss Mitigation Experts. They are a new business based in Savannah. I specialize in FL, but am learning the GA rules, and onto other states as needed.
I work for the file on the people side. Meaning seller, buyer, agents, etc...

Mitsu O'Riley · Answer

I am a short sale Loss Mitigator. I will be happy to answer your questions.
A third party can usually get answers faster, and the deal done more efficiently. Your first step will be to call Chase and discuss your options. Be sure to talk to their workout dept. or something beyond customer service.

How to Find Help for Short Sale

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