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Short Sales- HAFA Guidelines and The TEN Day Dream Short Sale

Short Sales- HAFA explained- this is the third part in our series on analyzing the HAFA guidelines. 

Today I started getting links and calls from Real estate agents around the county and even two agents from Miami. They all were saying, this is great. Did you read the Sunsentinal today? They say that short sales are only going to take ten days now! Yeah! Right! What planet did they just fall off of to believe that is even remotely possible. Oh, but this is what the government is forcing the banks to do. Yeah! Right! Again! NOT! 

This ten day approval time is being taken out of context. I am sure that many in the media are quoting this statement without preface to get readership and get folks excited and then read their paper more. I left a comment- Did you read the 43 pages of the HAFA guidelines?

Why are you giving false hope to homeowners who are in a short sale situation or will need to go into the short sale situation soon? 

Please read the series I am writing in regards to HAFA. 

Here is the first post: The Truth about HAFA Part I

Here is the second post: Defining HAFA Part II

Know Your Facts About HAFA Before You Blog it. 

In this post I want to clear up the rumor that lenders are going to have to approve short sales within ten days. This needs to have a qualifying statement. 

The ten day time frame is AFTER a lot of other things have transpired up to that point. 

On page 8 of the HAFA Guidelines it states: 

'Approval or Disapproval of Sale- Within ten business days of receipt of the RASS and all the required attachments, the servicer must indicate its approval or disapproval of the proposed sale by signing the appropriate section of the RASS and mailing it to the borrower." 

So this does not mean that from the time of the offer to the time of the acceptance or rejection has to be ten days. It means from the point in time that everything is done on the file, the package is in, the BPO is done, the borrower is qualified for the HAFA program, the offer is turned in and the HUD meets the net the servicer is looking for. 

That is obviously not a ten day closing or a ten day short sale. Let's just use some common sense. If you ever have done a short sale with Bank of America you know that most of the time it takes months to do a short sale. There is no way they can implement a system in which you go from start to finish in ten days. Remember, the investor still has to approve most files. Just ordering, receiving and analyzing a rush BPO takes a week. 

When something sounds too good to be true, it probably is. 

The next part of the problem is that these guidelines are for non GSEs. Freddie mac and Fannie mae are not going to use these guidelines. They are special (or so they think they are) and will come up with their own guidelines. The problem with that is 8 out of every ten short sales we do- are GSE mortgage backed securities. Those short sales don't qualify for the HAFA program. That is over 60% of all the mortgages in this country. 

In order to be considered for the HAFA program: 

 

• The home must be the principle residence of the homeowner.
• The first mortgage must have taken out on or before January 1, 2009. 
• The mortgage is delinquent of will be in the foreseeable future- showing impending delinquency. 
• The unpaid balance owed on the first mortgage can not be more than $729,750. 
• The monthly mortgage payment has to be more than 31 percent of the homeowner's gross income. 

 

While it remains to be seen if these new HAFA guidelines will create any shortening of the time that it takes to get short sales from contract to closing it is more important for agents to understand the short sale process itself. 

Also, if you do not qualify for this HAFA program- you may still be able to do a short sale. We will just go through different channels. 

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. 

 

   

 

To  view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida: Call us today.

 

   

 

 

        

 

Copyright © 2010 By Katerina Gasset, All Rights Reserved.*Short Sales- HAFA Guidelines and The TEN Day Dream Short Sale* 

 

 

 

 

 

 

 

Door Knocking for Short Sales

In the past (late 1990's), door knocking on properties in default was a staple for any blue collar realtor working the pre-foreclosure sector.  We had a whole army assembled and equipt with data, scripts, knowledge of available options, compassion, and savvy.  You never know when you're going to get a cigarette flicked in your eye (it has happened) but you did it anyway.  Evenings and weekends were prime time and you expected to put in some work in order to continue your success.  At one time, we had over 200 listings with over 90% being short sales.  Many were obtained as a result of door knocking N.O.D.'s. 

As a national short sale trainer and a top active agent, I find much less door knocking being done as a major part of realtors' business plan.  However, it never ceases to amaze me how many times the top short sale agents in the respective towns I visit are "door knockers".  I always ask, "so, how did you get so many listings? What's the key to your success?"  I sit back and either expect them to say that they door knock or spend major dollars with direct mail campaigns. 

One weird fact is that it seems there is a stigma attached to "door knocking" as well.  People who door knock or who refer to others who door knock tend to consider it "old school".  Almost like it is something only people with no other marketing options do.  That couldn't be farther from the truth. 

At the doors is where real estate business thrives.  Real people with real problems are out there.  Carefully constructed scripts and conversations along with a healthy knowledge of the subject matter can breed fantasctic results.  There is no short cut to success in real estate in this downturn.  Homeowners are desperate for knowledgable Realtors who will put the needs of their prospects first and help them find the most favorable solution to their real estate crisis.

Below, I have laid the groundwork for the mind-set for the 4 levels of door knocking your prospects:

1. Pre-foreclosure profiling - Homeowners who obtained risky loans during the span of 2004-2007

*Soft passive "Trusted Advisor" approach, informing homeowners in the area about foreclosure relief    options in case they know someone who may need more info (wink wink)

2. 30-60 day late on mortgage payment (credit lead)

* Soft semi-passive "Trusted Advisor" approach, in the area sharing current info on foreclosure relief options, laws are changing, stay informed, someone you know may need our help (wink wink), asking them if they have any questions about loan modification, short sales or any other relief options, positioning yourself as THE source for this info.

3. N.O.D. has recently been filed / recorded

* A little more forthright, confirming an N.O.D. has been filed.  Asking them if they have a "bullet proof" solution they are working on, offering a short sale as a plan "B", having conversation, not being pushy, talking about timelines and ramifications if their plan possibly fails

4. N.O.T.S. has been filed / recorded 

* Strong yet very polite, confirming N.O.T.S. has been set, making sure they understand what that means, politely probing their current status (many will be attempting to modify their loan), offering a plan "B" to increase their chances of avoiding forclosure, it helps to have a very good understanding of the Making Home Affordable program (www.MakingHomeAffordable.gov), being persistant.  This type of lead is not for a wimpy agent.  Got to know your stuff and be strong. 

Well, Ihope this post either confirms what you're doing (if you're a door knocker), or convicts you to get out there and help some people if you're not door knocking.  There is plenty of business out there...and you're not going to get it just by being on facebook :)

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"Give Us Your Commission or Else!"

 

 

The “gentleman” from GC Services, started out saintly and well-mannered.  But by the time we were through, he had ordered me to “Acknowledge” him when he spoke and "give him my money". Here is my story.....

I received approval from Wells Fargo, the senior lien, for a Destin area short sale.  The junior lien, Chase, is being handled by GC Services, a collection agency.  On this particular loan type, Chase is required by the investor to outsource the short sale and collections.

The junior balance is $40,000.  GC Services wants $13,000 to release its lien.  I got them a whopping $10,000.  $3,000  from Wells Fargo, $1,000 from the seller, and $6,000 from the buyer. 

The “gentleman” from GC Services said that $10,000 was not enough.  To make up the other $3000, he said I was to "take 2% of the 6% commission Wells Fargo was paying", and give that to him.

Not believing my ears, I told him I wasn’t “quite sure I understood" what he was saying.  He then said I obviously did not understand HUD's, and that page two was to state 4% to me, and page one, 2% to them.  I said simply,

“NO”.

The “gentleman” then stated that "if I refused, and the buyer made up the additional $3000, they would not issue an approval" unless my commission was cut to 4%.  This is similar to putting your hand in someone's wallet and pulling out the money, while holding a gun to their head. 

I called my seller.  I told her I was sorry, but "the commission cut was not allowed by our listing addendum" and explained the strong arm tactic.  She understood and agreed. The sale is off. 

I refuse to be threatened and forced to "give" someone part of my paycheck.  Would you?

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR     Rulnick Realty, Inc.

Destin FL Real Estate

www.ShortSaleSuperstars.com for agents

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email Wendy: itswendy@rulnickrealty.com

Wendy is a short sale and pre-foreclosure specialist and has been featured in "Kiplinger Personal Finance Magazine" and "Florida Realtor Magazine". Call Wendy Rulnick, Broker/Owner,to list and sell your home or condo on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County-  Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

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