Down the Short Sale Rabbit Hole with Pamela

Marketing short sales...`How do you know I'm mad?' said Alice.

2011-09-27T09:33:00.000-07:00

Marketing, and pricing, homes that are short sales is different. (You are getting this from a good source because I’ve been a real estate broker for 30 years.)

Buyers – those who want a home to move into soon - are wary of short sales and they have reason to be. Even if they offer the full listing price, or more, they may never own the home. Sometimes, but not always, the time it takes for the short sale bank to approve (or disapprove) a short sale is absurdly long.

So… the listing price has to be super attractive to buyers. However if it’s too low, and the short sale bank(s) don’t approve the sales price, everything grinds to a halt. If the buyer can pay more, and wants to, negotiations may proceed with all parties and the short sale may be approved. The good news is that most short sale banks understand the issues and have an allowable variance between the offer price and the banks determination of value.

If you are the seller, what does this mean to you? Prepared to be surprised by listing agent pricing recommendations and frequent requests for price reductions. In the end, short sale sellers can’t collect a dime anyway. We need to locate the price-point where buyers make offers and the short sale bank will approve.

`But I don't want to go among mad people,' Alice remarked.
`Oh, you can't help that,' said the Cat: `we're all mad here. I'm mad. You're mad.'
`How do you know I'm mad?' said Alice.
`You must be,' said the Cat, `or you wouldn't have come here.'
From Alices Adventures in Wonderland by Lewis Carroll, 1865

HAFA, HAMP, Reinstatement and Repayment - Advice From A Caterpillar

2011-09-18T09:34:00.000-07:00

`Come back!' the Caterpillar called after her. `I've something important to say!'
This sounded promising, certainly: Alice turned and came back again.
`Keep your temper,' said the Caterpillar. From Alice’s Adventures in Wonderland by Lewis Carroll, 1865

I have moved into the home that is in foreclosure. I woke up here this morning. The utilities are on in my name. This home is now my Primary Residence.

The landscaping is overgrown and the lawn is brown. There’s work to do and I’m doing it. I am really tired but will not give up the battle.

EMC called to ask if I would like to pay my entire past due balance. Ha Ha! Since it’s something in the area of $30,000, I declined. Did I tell you that they would not accept regular payments from me? They have given me two options:

Reinstatement – which is to pay the entire amount past due. Including late charges and the bank’s fees for having someone take pictures of the home and give an opinion of value (referred to as a BPO for Broker Price Opinion).
Repayment Plan: with a repayment plan, the lender compiles our past due payments, late fees, miscellaneous fees and property into a lump sum then this amount over a number of payments (usually 6 or 12 months). Of course these payments are combined with the regular payments, which makes the monthly amount that’s due huge. In the past, I was on a Reinstatement plan with EMC. It was awful.

It is my distinct pleasure to inform the EMC representative (who called me) that the house is now my Primary Residence. Since I realize that some of these representatives are very inexperienced, I do him the favor of further informing him that I now fully qualify for either a HAMP loan modification or a HAFA short sale. He says that he will make a note on my record. When there is an active application for the HAMP or HAFA program, there are government guidelines to cause participating banks to delay foreclosure. This is good.

The very next day, I receive a call from Chase (who purchased EMC) to tell me that I do not qualify for HAFA because I do not actually live in this home. Really???

Speed Moving and the Foreclosure Sale Date

2011-09-07T20:46:00.000-07:00

This post is about Speed Moving - a relentless push to relocate immediately. Why the rush you ask? Because according to Bank #1, I am in Active Foreclosure.

Here’s my Forced March situation now…

Speed Packing: I get to pack up one home in a big hurry

Speed Moving: to the next house (still in a big hurry)

Quickly Un-Pack (don’t miss a step or stumble please)

Make the house look market ready.

Really? I need to make this home ready to sell, quickly, because Foreclosure looms like a Jabberwock with his nasty talons poised over my credit rating and eternal financial life.

Did I mention that it’s 102 degrees outside? And yes, I am a busy real estate broker (a full time job) so all this packing, moving, unpacking and gardening gets handled evenings and weekends. Time for sleep is a bit scarce.

I have renewed sympathy for homeowners who have been through a foreclosure action. A Cash for Keys offer (from the bank that foreclosed) is good but two or three weeks to move is an intense timeframe.

From The Adventures of Alice in Wonderland, by Lewis Carroll.
`Serpent, I say again!' repeated the Pigeon, but in a more subdued tone, and added with a kind of sob, `I've tried every way, and nothing seems to suit them!'
`I haven't the least idea what you're talking about,' said Alice.
`I've tried the roots of trees, and I've tried banks, and I've tried hedges,' the Pigeon went on, without attending to her; `but those serpents! There's no pleasing them!'

My Limited Options and the Housing Crisis

2011-09-04T08:28:00.000-07:00

I've seen that short sales and loan modifications are especially rough when the property owner does not live in the house. Most lien holders have a whole different set of evil requirements including large cash contributions at closing for short sales. For this reason, it seems a unique opportunity when the nice tenants who rent the house (that’s in foreclosure) tell me they plan to move. They need a one story home.

I discuss with them a crazy idea. They are engaged. They are willing to trade homes with me. It’s a good trade. I get a better position from which to negotiate a loan mod or short sale. They get a single story home and a swimming pool.

Here’s the quirky part, we have to move on the same day and the homes are next door to each other. (Did I tell you that?). There’s no down time for detailed cleaning and a breath or two. This move is going to be chaotic and crazy. It’s a forced march in 101 degree weather.

Yuck! I really don’t want to pack and move. Perhaps that’s why I’ve struggled to make payments on two houses while my credit rating took the hit (not to mention my stress level).

Another reason that I (previously) held on was my theory that real estate prices would come back before long. Silly me. There are too many big vested interests battling for funds - and government bailout monies rule the day. We property owners are just pawns. Guess it’s time for me to move

From Adventures of Alice in Wonderland, by Lewis Carroll, 1865...First it marked out a race-course, in a sort of circle, (`the exact shape doesn't matter,' it said,) and then all the party were placed along the course, here and there. There was no `One, two, three, and away,' but they began running when they liked, and left off when they liked, so that it was not easy to know when the race was over. However, when they had been running half an hour or so, and were quite dry again, the Dodo suddenly called out `The race is over!' and they all crowded round it, panting, and asking, `But who has won?'

What about the “Making Home Affordable” programs?

2011-09-02T14:35:00.000-07:00

I’ve been learning about the “Making Home Affordable” programs including HAFA short sales. There seem to be some nice bells and whistles including a requirement for some second lien holders (aka Bank #2) to come to the table and participate in the short sale.

My second lien holder is Bank of America (aka B of A or BOA). From my experience as a broke, B of A can use a push to participate! They are inconsistent, sometimes as slow as dirt to respond to a short sale offer.

There’s list of lien holders who participate on this website:

You may also find additional information that will be helpful to you if you are considering your options concerning your mortgage(s) Making Home Affordable - Participating mortgage companies

The Making Home Affordable program has some requirements. One is that the owner live in the home or has lived there in the past 12 months. That pretty much rules me out unless I move in. My tenants are really nice and so I may be running out of reasonable options for this property.

Did I mention that I don't want to sell this property?

I like it. It has a Giant Oak Tree and lots of other trees.

From Alice's Adventures in Wonderland, Lewis Carroll - 1865...The rabbit-hole went straight on like a tunnel for some way, and then dipped suddenly down, so suddenly that Alice had not a moment to think about stopping herself before she found herself falling down a very deep well. Either the well was very deep, or she fell very slowly, for she had plenty of time as she went down to look about her and to wonder what was going to happen next.

There’s a foreclosure notice in my mailbox

2011-09-01T19:46:00.000-07:00

There’s a foreclosure notice in my mailbox. This is not the first time. I was told that a loan modification was forthcoming. I have applied for this loan mod 5 times. Really! I was rejected for 2 different reasons. The bank (EMC) rotates the reasons for declining me. I am so sick of this.

Unfortunately I have two properties. The one with the foreclosure notice is rented to some nice folks. I used to live in that home. I liked it. Time passed, my situation changed and now it’s rented out. The home is worth half of what I paid for it. Seriously. I paid $425,000 and it’s now worth $245,000 on a good day. Wait… I want you to know that I improved the property too. That was then, this is now. I am considering a short sale. I’m a Realtor and know all about short sales. This makes it harder. I know about the pain I’m going to suffer. My options are grim but I still have a sense of humor.

From Alice’s Adventures in Wonderland, by Lewis Carroll,  1865...
Alice started to her feet, for it flashed across her mind that she had never before see a rabbit with either a waistcoat-pocket, or a watch to take out of it, and burning with curiosity, she ran across the field after it, and fortunately was just in time to see it pop down a large rabbit-hole under the hedge. 

In another moment down went Alice after it, never once considering how in the world she was to get out again.