Thursday, April 24, 2008
Short Sales with Countrywide (the update)
Here’s the latest information on what Countrywide will do and what they won’t do.
I reported that there were various rumors going around that involved countrywide and short sale negotiations.
Some of those were true - others were not. ( here and here )
Then again, the rules are changing constantly. CFC has informed it’s Loss Mitigation Department as of late last week via an internal memo (I tried to get a hold of it without success) that they are indeed considering short sale negotiations on most all property.
Here’s what I’ve learned:
1. It depends on the Investor. Is the loan a Fannie, Freddie, ALT-A, Equity, etc.?
2. Needs a surplus percentage higher than 30%.
3. If not, must show a proper Financial Hardship
What constitutes a Financial Hardship with CFC?
- Natural Disaster
- Disability Mortgage Holder or Family Member
- Death of Mortgage Holder or Family Member
- Illness of Mortgage Holder or Family Member
- Property Damage (mold) Greater than 50% or more of the property
- Divorce
- and Other Financial Considerations
ME: “How do you calculate the surplus percentage?”
THEM: She didn’t know. The memo didn’t say. She said it was much like DTI. I was pushing my luck. I tried to get one more question answered…
ME: “Does the home have to occupied?”
(see Momma don’t let your Countrywide Houses go vacant)
THEM: “Not if they have a Financial Hardship”
So this tells me that if the present debt obligation is high - the income is low, according to their “surplus percentage” you don’t need to qualify under the Financial Hardship section.
However, if the income is high, the debts are low, you might need to knock off your significant other to qualify. At least according to their memo.
Remember all rules are meant to be broken. Never give up hope!
Labels: Loss Mitigation, Negotiation, Short Sale
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Wednesday, March 26, 2008
It’s Good To Be Second
Except in the case of Kissing Booths of course.
Buying a Short Sale? You should hope you are late to the party. Yeah, that’s right. In a short sale purchase it’s usually a good thing to be the second in line on an offer.
Here’s why.
I was consoling a client today because her Listing Agent reported to her that there had been only one offer made on the house and they were thinking they might withdraw it. She was worried.
“What if the house doesn’t sell?”
We look at it differently. Any offer, even a bad offer is a good offer.
- It allows us to complete a package.
- It allows to get that package into the Lender’s system.
- It allows us the Lender to assign that package to an Asset Manager.
- It allows the Lender to tell us what they’ll accept. We now have a baseline.
- That allows us start negotiating.
“But what if the Offer is withdrawn or by the time the lender comes back to you, the buyer has bought something else?”
That’s ok. The hardest thing about a short sale is getting to the part where the Lender is actually working on a package. Getting that package into an Asset Manager’s hands is really Step One. The rest is easy.
There will be other offers. When they come in (and they will) the time consuming work will have already been done.
Ever see a Short Sale close in three days? We have. It’s because the groundwork had already been done.
That’s why making a backup offer on a Short Sale in progress might be one of the smartest (and quickest) ways to get accepted and closed.
Go ahead and send a thank you card to the first offer. You owe them!
Labels: Negotiation, Short Sale, Short Sale Negotiation
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Thursday, February 28, 2008
Here is one UGLY example
I have a client who is dire need of a Short Sale to get out from under her mortgages.
She's upside down primarily due to the reasons I explained in my post, "You Can't Fix LTV".
In simplest terms, her homes value has dropped dramatically because the homes around her have drastically dropped in value.
Yes, she has no income. Yes, she has no chance to loan modify. Yes, she bought at the market high with the wrong loans and little to nothing down. But as I started looking at the "other" reasons why the neighborhood is in such decline and found a horrid tale that can only be described as Ugly, Ugly, Ugly!
How Ugly is UGLY?
There are currently 82 REOs in the neighborhood.
There are 139 NODs (soon to be REOs)
How about the record high HOMICIDES last year?
What about the other crimes?
How does 631 separate incidents in the last 90 days sound?
My package includes over 300 recent news stories about this neighborhood.
I don't know about you, but if I was a Loss Mitigation Specialist and had an offer presented that would keep my company from owning this potential soon to be REO, I'd take pretty much anything that came my way.
We shall see. The Listing Agent has a couple of real offers and I'm putting the Short Sale Package together today.
Labels: Negotiation, Notice of Default, Short Sale, Short Sale Negotiation
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!
Monday, January 7, 2008
What a short sale is NOT
One of my favorite writers and all around great people is Rosemary Brooks. Understanding what constitutes a Short Sale is critical. Understanding what a Short Sale is NOT - equally critical!
Recently she offered up this excellent list of common misconceptions.
You can find her original article here on her Mother & Daughter Blog
If you need an agent, you simply can't find any better -
Give Rosemary a call at 866-750-8282
A Short Sale is NOT
A sale under market value
A Short Sale is NOT
Bank owned (foreclosed) house
A Short Sale is NOT
House being sold at public auction
A Short Sale is NOT
A home that is paid for and the being sold for under its Market Value
A Short Sale is NOT
House is sold on the county steps for the highest bidder - Trustee Sale
A Short Sale is NOT
When you turn your home back to the lender under the DIL process
A Short Sale is NOT
Lender does not grant approval for short payoff but you lose the house at the end of the foreclosure time-line
A short sale is when you owe more than your home is worth AND you list and receive a formal offer that is approved by the lender BUT it is for less than what you owe on the mortgage.
And contrary to popular belief you DO NOT HAVE to be in default to be considered for a short sale.
And BEWARE of verbal agreements. Get it in writing... the only was it is an agreement.
Labels: Negotiation, Short Sale
Listing Agents, and even Private Investors.
Don't work harder - Work Smarter!