South Florida Real Estate and...

Good info!  I can see where the newspapers could jump on this and mess somethings up.  Thanks for digging a little deeper.

Newspapers are uniquely unqualified to report anything beyond headlines.  Their "headline" training is one of the reasons they are going out of business "en mass".

Nice recap Katerina, even when those of us that have the package complete, it takes more than 10 days just for them to upload the file to their data base. I've been waiting 6 weeks for a complete file to be uploaded to a small credit union in MI.

In the meantime the pipes froze, I got two bids each at 12K worth of damage.

Of course I sent them, have left messages, sent the bids etc,

Still no response.

Thanks for doing the research on this and letting us know the skinny on it. Glad I read this before letting my buyers know life might have gotten a little sweeter for them. Any chance the new ruling will shorten the length of time it takes to get an approval on a short sale?

Thanks for sharing your knowledge of short sale transactions. Sure would be nice to have a standard procedure.

What she said. (Lenn)

Nestor and Katerine. thank you for bringing all these information together. You make it so easier for all of us to get our info right here in Activerain

Just shows again where reality and what is reported in the news do not match up. We do alot of short sales as well and getting the file complete, the special lender specific forms done, the bpo ordered and completed (and reviewed) plus investor approval (and not to mention the PMI folks) is the time consuming part. Looks like time line for mailing a letter is the 10 day requirement! Not going to move anything any faster! Great blog post Katerina

10-days? That would have been a dream come true and we would all fall off the planet when that happens. Which world does the media live in anyways?

What a great service you do for us here on ActiveRain. Thank You for the information. Where is the light at the end of the tunnel?

Great information and you are so right - so many things are "short handed" by the media and consumers don't get the whole story.  

Also, just because "guidelines" are in place doesn't mean the banks will play ball.   One of the agents I work with who has been trying to do alot of the short sale listings reported this week that commission is still being cut on almost every transaction, most of the time with no notice until closing.  

My understanding is that by the time a home went on the market that the negotiator would have had the appraisal, and approved a price point.  You are so right that the delays are around getting the appraisal or bpo done.  In theory, but only in theory, if the house went on the market at a price already approved by a negotiator, and that a a complete package was submitted, it would be possible to respond within 10 days.  The problem is that the negotiators are working in response to an offer, instead of leading with market research.  They are at a distance, the only they know about a property is what we tell them in black and white.   I don't see it turning around from anyones 'suggestion.'

I'm working with a few clients right now that are purchasing short sales. We have done our job to educate them and let them know that it will not be a 10 day process. They are understanding and are excited about proceeding as they are first time home buyers.

The entities that need guidelines are Freddie and Fannie. Combine them with bank of America and you ask yourself, why do I do short sales? Thanks for your clarity and accuracy. Also, congratulations on being famous enough to be taken out of context.

Nestor&Katrina--Don't cha just love the media? Of course all the details got lost in the headline! The writers have never had to do any form of transaction. Even in the best cases without a short sale loan, the closing process and approval process is taking longer. Your post is one step closer to helping those who need help understand that short sales always will take time. This hopefully will prevent a completed package from sitting for weeks or months on someone's desk....maybe.

We should all know by now to be very careful about what we read in the papers.

Thanks for your post

tony

Nestor & Katrina,

Your paragraph at the end with respect to type of agent needed to do short sales really struck a chord with me.  We don't have lots of short sales in Pullman WA and for that we are all most thankful.  But I am seeing more and began to wonder if I should begin down the educational path....after reading I am not really sure it would be a good fit for me. 

That being said I would love to learn more...if you were to consider this, where would you start given your experience now?

Lori- I would start with the short sale superstar training that Broker Bryant and Wendy have. Then I would buy our manual on how to do short sales ( it is at the editor so it is not ready- anticipated goal of completion is April 15th). After that, I would go and get the designations. We just got the SFR designation and Nestor and I had to basically teach the whole class, because the teachers did not have the right information. We kept correcting them. We have worked with CDPE agents here who are no more qualified to do a short sale than those who don't get that designation. SOrry, just the truth. The only real value we find behind the designations is that professional people here in our area do look at those as worth initials after our names. But they don't give you experience! 

Then, the most important step is to find a mentor in your office or someone from another company you can cobroke a short sale listing with to get their experience into the transaction. Katerina

Joe- The biggest joke is on us. Freddie and Fannie are way too big and plan to get even bigger. They are above the law. They now have been given a blank check from the US treasury department for whatever their losing proposition wants. 90% of all mortgage backed securities will be owned by them before the end of 2011. They own most of all the toxic securities also. How do we have Freddie overseeing this HAFA program over private banks - sounds like a conflict of interest. Their shares are worthless too. 

Thank you Kartina, I have bookmarked, this info could not have come at a better time for me!

I knew this....but when I read your title, I had hope! I really don't think the short sales are ever going to get much better, banks don't want to spend money on a department that is losing them money. :(

A good reminder that media puts out what will sell, not necessarily the truth. Thanks for the excellent post.

There is no designation that will fully prepare anyone for short sales. All that can really be done is to prep tha agent for what can happen and hope that all of the angles are covered. There is just way too much going on in the frontlines and behind the scenes for anyone to know everything about every short sale. Thousands of banks with varying contracts and servicing agreements and hedge funds.... Ugg. I have been doing these 12 plus hours a day every day for 7 years and I still learn something new every day.

Good luck with your book. I wanted to write one but just don't have the time anymore.

I read this, too, and I thought, uh-oh, they have no idea what they're talking about.

Thanks for clearing it up.  The media is definatley giving false hope to people that are already in a tough situation.  It seems like very few distressed sellers will bennifit from this 10 day guideline.

Great Post :)

Great post, bookmarked so i can get back to it in detail

Great post.... Although not perfect it is hopefully a nudge in the right direction. One bank that SEEMS to GET IT is Wachovia. They have a pilot program here in So. Cal where we are able to get short sales "pre-approved" upon listing our shortly thereafter. A local bank rep will even accompany us on a listing appointment. They promise a 30-45 day closing. Well see.

It is VERY new and feedback is slow. I hope this program will be a shift for the rest of the major lenders / servicers and how they do business.

The missing link in this variable is an easy to understand public campaign in which homeowners who are fearful and hiding actually reach out because of available knowledge regarding options.

Thank you for the post!

Great post!   We are taking longer than ever in CT. 

Katerina,

The system & our government are creating two classes of people, "Those that have and Those that dont".  Yesterdays questioning of the banking CEO's showed us how they created this mess inorder profit from it.

Your correct, initials after your name doesn't mean you have the ability to complete these type of transactions, it's the references from homeowners who you helped avoid foreclosure. 

Oh and with Freddie & Fannie, they are nothing more then smoke & mirrors

When do you feel that a single process will be in place for short sales that will be mandated?  During our next sellers' market?  There needs to be a simplistic procedural manual that can be implemented by large and small lenders without the necessary 1-2 year phase in because of education.  Until this happens, everyone involved will have their own spin on the proper way to process short sales and both buyers and sellers will suffer untold consequences.....................chris

Well written and I agree, but hopefully we are headed in the right direction with Short Sales.

There are so many rules and regulations to follow, I can't see that there will ever be a "pleasant" short sale situation!

Jason- I would not want a bank rep ever with me on a listing appt. The bank rep is a debt collector. I am not. I am the seller's advocate. The bank rep is not. I do intake evaluations over the phone before I ever list a short sale to make sure we are on the same page and do the qualifying. Everything that seller tells me is in confidence. I don't work for the banks. I work for my sellers. I will not tell the bank anything to incriminate my client, they are on a need to know basis only. The sellers get nervous with the debt collector right there. I think there is a conflict there. 

Katerina: I did not read all of the comments here, and of course you have already mentioned this fact BUT . . . not every servicer is required to participate in the program, right?

I have spent a lot of time studying this document as well. My concern is with senior liens. They are not mentioned.  It has been my experience that a lender will pay past due property taxes because they are a senior lien and must be paid to obtain clear title. HAFA guidelines make it the borrower’s responsibility to obtain clear title which leads me to the conclusion that the borrower would have to pay any past due property taxes.  This could kill a short sale if the borrower doesn’t have the money to pay the back taxes.  What do you think?

Good article! It seems that almost all of the programs that are supposed to "help" distressed homeowners are in reality giving "false hope"  such as many of the loan modification programs that end up offering a reduction of only a few dollars a month. To expect a lender to approve or disapprove of a short sale 10 days after EVERYTHING is done is not helping at all, usually as we know the problem with lenders and short sales is getting them to do the things that must be done before a decision can be made and finalized by the "higher ups" at the bank.

Good post. We don't have many short sales in our area, but I want to be prepared for the influx.

I love the part where you write:

Agents need to get educated in short sales if they are to do them. This is a great niche for those agents who have tough skin and are patient and understanding. If you are good with your communication skills and shine with your negotiation skills; then short sales may just become your best niche ever. 

All of a sudden there are so many "experts." I've been working short sales since before it was a fad... it's getting harder (to get cooperation from the servicers) NOT easier.

Excellent post...thanks for the clear explanation!

Hi Katerina,  As usual, terrific job of sorting through the flashy headlines to bring us the real scoop.  Much appreciated !

It's nice to know we have someone like you to keep us straight when it comes to short sales.  Thanks!

Hi, if anyone needs assistance identifying short sale prospects by homeowners who need help. Please let me know. We can target by credit ratings, sub-prime loans, ARMS and LTV's over 90% or a combo of all, thanks.

Dan
866.261.6770 x83 
MORTGAGE LATES 30 60 90

Bookmarked also.  I did have a short sale where than bank said they'd have an answer for me in 3 weeks. I didn't believe them, but they did! Goes to show, the small banks can do it if they want to, but I don't see any light in the tunnel for the big boys.

This is a very sobering post and in all honesty - exactly what we need to remember dealing with short sales. Let's not blind ourselves - Fannie Mae and Freddy Mac, which hold 80% of short sale mortgages will never be able to close in less than 3 months. On the other hand, I am wondering what is the actual ratio of successful short sale deals. I heard that 80% of them go nowhere and homes end up foreclosed anyhow.

fantastic information. The short sale process is ever changing - some good - some bad. Love getting experience from others to add to my own.

Thanks for putting this in layman's terms!  It's so much easier to read than the original guidelines!  Much appreciated!

everyone is looking for that magic pill ;-)

Katerina - You tell'em! It is such garbage the way the media does not report on real facts, or even do any fact checking to know whether what they are saying is truthful or not. I truly don't watch the news much anymore for precisely this reason...

Durn. I thought you were going to guarantee a turn a round of ten days if we took a short sale listing.

Joking. Thanks for the clarification.

Great post! I read through it and quickly understood as you did. There are so many sites out there advertising "learn how to close a short sale in ten days with the new federal guidelines", which if they ACTUALLY read the material they would know that is not true. Doing over 260 short sales myself I knew this wasn't correct. Glad to see someone esle out there actually getting out good information. Did you also see where they are not going to make it mandatory for all lenders to particapate? That's crazy!!

thanks for sharing your information to help us all learn more since short sales are a huge part of every Realtors world.  I learned something new and I am applying it already.

Thanks Katerina! I would be on the phone call your guys to help me understand this stuff if you didn't post it here. As always, you information really helps! Thank you.

Thanks Katerina,

Reminds me of when the HAMP program was announced...

As Lenn said above... and Agents need to read the actual program before running around spreading propaganda. It's amazing the rumours I'm hearing...

It's amazing how many agents think that HAFA is mandatory for lenders to follow...

It's just amazing...

No wonder why homeowners are so confused.

Nice post by the way..

Wow... Great post! Thanks a million for the information.

Thanks for your informative series.  I hope consumers are following along as well.

kp

10 days! WOW!! Now that's exciting. If we lived in fantasy land.

The media will certainly latch on to anything. They should be ashamed of themselves for giving people false hope.

Like you said, if it's too good to be true,......read the fine line.  There are very few short sales that will be approved in 10 days.  I did have one approved locally.....in one day.  Not true with the larger banks.

This is a perfect example of how the media reports just enough of a story to be dangerous. Thanks for the clarification, Katerina.

I wish it was 10 days.  It would make life so much easier, but the reality is I just don't see how this could happen.

I just wanted to say thanks. This was a good read. There is a lot of confusion in the market today regarding short sales. I deal with many agents, that are familiar but aren't experienced. People hear things about shorts and run with them, as you know it is all the buzz these days. The guidelines will help but as you said it will not apply to most of the mortgages. Short Sale education is key to success in today's market. We work with agents and handle all the negotiations. Besides paying full commissions, many times we can also provide a new buyer. If you have a short sale property above $500K, please contact me for an immediate contract.

Thanks Again!!

Great series -- I appreciate all the work you've done to interpret the mammoth HAFA guidelines for us all. No telling how many agents you're educating who otherwise would know nothing about HAFA. But for all those slamming the media as a whole, I humbly suggest we might foucs our energy on getting our own house in order. How can we expect someone outside the industry to accurately explain and interpret a process that the majority of the real estate industry doesn't understand themselves? Reporters are only as reliable as the sources they rely on -- and in most cases that's us!

Katerina, ditto what Lenn said and the newspapers should wonder why they have lost the public's trust - this is a prime example. Yellow journalism and inaccurate information, what a combination! Thanks for writing the series on HAFA - heck, I have a cash deal that can't even close within 10 days!

My clients read the Sun Sentinel too. I cannot THANK YOU enough for your post! I am re-blogging it and sending them to my website to reference it.

Up to tonight my response has been - "They do not have all of the facts. No way approvals will come in 10 days because there are too many things to be done and it is not possible to get all of them done in 10 days.

B U T B U T The newspaper said it is so, so it MUST BE TRUE!

NOT!

Again GREAT JOB on the post! Joy

I am so glad we haven't had to dela with too many short sales here. Only one in our whole community that I know of and we had two offers on it and both buyers got tired of waiting on the bank and jumped ship. I sold one of them another house. Thanks for your post.

Lisa- You are right and the agents that this reporter talked to did not even have the information correct although one of them did say he did not believe 10 days could be done. But he did not say that the ten days is not what the rumor says it is. I don't believe that the agents interviewed know the HAFA program either. Don't talk about something you don't know about without prefacing that you don't know. 

Melissa- Not every servicer is required. The ones that participate in the HAMP program must offer the HAFA program should their HAMP be rejected. Sellers can also opt out of the HAMP and go right into HAFA. Of course, the biggies- Freddie and Fannie are not a part of HAFA, which is most loans. The investors must also approve the participation. Seconds do not have to play the game either. This is just such a tiny drop in the bucket as far as who is going to be qualified for the program. We will see how it plays out. 

Tracey- That is one of my biggest concerns as well. On all of our short sales that we have closed, and that is many, the senior lien holders pay the taxes, a large portion of the HOA bill and all the closing costs. By concern is too, how are these going to be approved if the borrower is supposed to pay all these off, that has always been the requirement for a DIL- so why worry about a short sale-- the bank will sell them on the DILs while you have it listed. I see so many conflict of interests in this also. 

I think it will be a big failure, sorry to say, just as HAMP is a big failure for Florida property owners. And I don't know any junior lien holder that is just going to take half of the 3K if there is a third lender. 

Let me just say- this HAFA program really only applies to such a small segment of loans. In states like Michigan it may be a good program because the values never did go up a lot compared to places like Florida, CA, Nevada and AZ. 

If you do your math- 80 to 90% of all mortgage backed securities are now or will be by the end of this year, owned by Freddie Mac and Fannie Mae. SO that means that 80% of the short sales right off the bat are not HAFA qualified. 

SO let's say on the side of optimism- that leaves 20% of the mortgages that could be HAFA qualified. Out of those banks like Bank of New York Mellon and Deutsch Bank, Etrade and other smaller investors do not participate in HAMP and will not participate in HAFA. Deutsch Bank owns a lot of paper in CA. They like to foreclose. I think they want to own property in the U.S LOL. 

So that leaves about 10% of your market of mortgages that would fit into the HAFA program. Now do your math on how many foreclosures there were in 2009 and you will see this is nothing but a way to just try to get us all to shut up. it is like throwing a few crumbs our way. 

HAFA,HAMP, Huh?  I think I need an acronym dictionary!

I think they are going to be around for a while, short sales that is.

We need be able to deal with them , and your help is much appreciated

I'm starting to ponder who might end up being the "last short sale" and when it will occur.

Joy- Thanks for the reblog and spreading the truth about this. I know that responsible journaling is not popular but it should be. Too bad so many people believe things just because they are on the news. 

Boy, wouldn't 10 days be great? So would a flying carpet, a genie in a bottle, etc. LOL. Good post as always on this subject.

You always do such a wonderful job of really getting down to the nitty-gritty.  Thank you for the education!!! 

THis is an excellent catch and share.  The media will get on something and not let go until they destroy the true meaning and worth.  Glad you caught it and is sharing it.  I am going to re-blog this one to be sure more see it!

Katerina - another WOW from you. Re-blogging it right now :-)

Thank you for all the reblogs! I really appreciate it alot. Pass this important information along to dispel all the rumors out there! 

Great info.  I am about to read your previous posts on this subject.

I always love reading your blogs on short sales. They are always informative and thorough. Thank you.