Quit claim deed or foreclosure or short sale? Which is better if you are between a rock and a hard financial place? Let's see how fast I can get to the point and cover what is really a very detailed and complex subject.
First, if you are unable to make your mortgage payments, will the bank just let you quit claim deed it back to them? No. Banks have been refusing to do this for decades, although every once in a while I hear a rumor of it happening somewhere. I think it happened in St. Louis in 1987. People talk about it all the time, but it is as rare as Mermaids. Even if it was a wise financial move for a bank to do, they are instructed not to by their legal counsel, in part because if they suffer a loss, they probably cannot recover on their HUD insurance or VA guarantee. They can recover on their insurance for losses only if they go through the foreclosure process, or in other exceptional circumstances. So they won't go there.
Second, what about a short sale? A short sale happens when your home is sold for less than the balance of the mortgage. This is happening fairly regularly in the hardest hit real estate markets in the country, but on the Olympic Peninsula in Sequim or Port Angeles, good luck trying to get a short sale through, unless a local bank actually holds the mortgage (very rare). Seriously, the short sale departments of large banks are typically on the east coast, and there is almost no one to talk to, no one who will return phone calls, and no one will respond to faxes. I'm dead serious. I've had three solid offers accepted by sellers but we could not get the banks to even respond, and trust me, we were communicating with the right short sale departments. I've written elsewhere about the chaos in the banking system when it comes to short sales and foreclosures.
Third, a non-judicial foreclosure in Washington is almost certainly the most likely scenario if you are unable to make your mortgage payments. It takes a minimum of 6 months, but banks typically take 10 months to a year. They cannot come after you for a deficiency if they suffer a loss in a non-judicial foreclosure, but if the bank decides to do a judicial foreclosure, they could come after you for their loss. They only consider doing the later if you have a lot of assets they can chase.
Sequim boundary lines are often in dispute. This is important if you are a buyer of homes or land in the Sequim area. In many areas of the country, like Sequim, subdivisions and short plats grew out of larger family farms. There are only two dairy farms left in the Sequim area, and we no longer have large scale cattle grazing. What we do have is many subdivisions that were platted by many surveyors and engineers over a period of at least 100 years, and advances in technology have identified some old survey mistakes.
Add to that the overlapping barbed wire fences built in 1947, give or take a couple of decades, and it is easy to have an agricultural area with boundary issues on large or small lots. How can you avoid serious boundary line issues?
First, makes sure your Realtor is sharp on these issues. Second, be sure to have a contingency in your purchase agreement that gives you the legal right to check these boundary lines out before closing. Third, know what you are dealing with. Many buyers have killed a perfectly good transaction because they did not understand the legal issues, and they jumped to conclusions. Don't make a mountain out of a mole hill. If the two feet is irrelevant to your intended use and enjoyment of your three acres, let it go rather than get into a ridiculously stressful and expensive legal battle.
When you purchase a property, know what you are getting into, and that includes the boundary lines and the driveway or other easements that effect your property. Sequim boundary lines are often in dispute, but if you are careful, get good guidance from your Realtor, and solid legal counsel, you will make wise decisions that will bless you for the next 30 years.
Sequim short sales are a black hole, or perhaps I should say can be a black hole. The last three Sequim short sales that I wrote up all were great transactions, except they were short sales and the banks refused to make a decision. All three died a natural death because the banks simply would not respond to the price.
Imagine this: you write an offer on a home that is a short sale in which the fair market value is less than the current mortgage balance, so the bank must accept less than what is owed to them. The bank's other option, which is very unattractive, is to foreclose on the home. Foreclosure takes a bank about ten months and a lot of money. The statutory non-judicial foreclosure can be done in about six months, but banks cannot move that quickly. In this example the seller and you sign a Purchase and Sale Agreement, which your agent submits to the seller's bank for approval as a short sale. For example, the mortgage balance is $256,000, but you agree to buy it at $225,000.
Now imagine that you and the seller and your agent and the seller's agent are all waiting for the bank to approve the sale. And waiting. For days. For weeks. For months. Welcome to the world of short sales. By the way, this example is a true Sequim short sale that died simply because the bank never made a decision.
This is why I am suggesting that trying to buy a house as a short sale can be a black hole. You simply never hear from the bank. Meanwhile your Purchase and Sale Agreement deadlines all expire, and your agreement dies a natural death. And everyone is still waiting and wondering what happened, but there are no answers.
There are no answers because there is no human being to talk to at the short sale department of the bank which is on the east coast or somewhere. There is no phone number for you or your buyer's agent to call the short sale department of the bank, and when your agent talks to the seller's agent about this, the seller's agent says, "We don't have any way of getting the bank to move on this. They have the paperwork, but they don't respond. Sorry."
And so you wait. And wait. But nothing happens, and your Sequim short sale dies a natural death.
May I suggest you don't waste your time on Sequim short sales, and go with the hundreds of incredible homes for sale by owners in our MLS. It will save you time, stress, and probably money too. You can start here with SearchSequimMLS.com
Sequim water view homes for sale: this is one of the reasons so many retirees move to Sequim. It is true. We do have many gorgeous custom homes for sale with water views, but how do you define a water view?
You know the old saying, "Beauty is in the eye of the beholder?" There are many water views, but some are better than others, and some are much better than others.
Want to get a peek at some Sequim water view homes for sale? Take a look at these:
If you are buying real estate in Sequim, Washington, you may want to consider a buyer's agent. More and more consumers are becoming aware of the potential and obvious conflict of interest when a Realtor represents both the seller and the buyer in the same transaction. Is it legal? Yes. Can it be done? Yes. Is it a good idea in most cases? No.
In 1983 the Federal Trade Commission concluded that 72 percent of all buyers believed the agent they worked with was representing their interests. The report was the catalyst for a nationwide legislative movement that forced the real estate industry to disclose who their Realtor represents. By 1988, most states had disclosure laws. This also woke consumers up to the need to be sure they addressed this issue when hiring an agent. Agents began to respond to the need as buyer's agents.
Janet Branton, executive director of the 44,000-member REBAC (Real Estate Buyer Agent Council) said, "A survey conducted in 2001 found 46 percent of home buyers used buyer representation. Buyer representation is not the exception anymore, it's the norm. Consumers now know they have the right to be represented."
Here's something I find interesting. Many buyers from outside the Sequim or Port Angeles area will see a sign and simply call the agent off the sign. That's fine, but here's where it gets interesting. The majority of these callers assume that the listing agent they call can represent them as their agent, too. Many hire that agent to write an offer on that agent's listing without any thought to the inherent conflict of interest. I've interviewed many buyers and other agents, and there is almost never any attempt by buyers to interview their agent, to do their due diligence on experience and knowledge, or to discuss dual agency.
Dual agency is legal in Washington, and it is codified as legal in RCW 18.86. That certainly doesn't prove it's in your best interests. As much publicity as dual agency has gotten (and all the lawsuits over it), and as much as "buyer's agency" has been discussed and written about, many buyers are still unaware of the need to hire their own buyer's agent.
I think a buyer needs his own agent, representing his or her interests and not the interests of the seller. I strongly recommend all buyers find an agent they can trust to represent their interests. Dual agency is a conflict, in my humble opinion.
Enough said today on this subject. Buying a home in Sequim or Port Angeles? I would love to represent you as your exclusive buyer's agent. Twenty years as a real estate lawyer and now a broker, I will bring what you need to the table to negotiate the best price and terms. Email me or call me at 360-775-5424. I'm Sequim Buyer's Agent Chuck Marunde. You can read Sequim's largest real estate blog at http://SequimRealEstateNews.com.
Sequim home buyers from California, Arizona, Nevada, and around the western states are a pleasure to work with. I love being a Buyer's Agent, and the great news for my buyer clients is that I cost them nothing.
I can say it is a pleasure to work with great clients who understand what they want, know how to do their due diligence on the Internet, know what they can afford, have good credit, and know how to make decisions in a timely fashion.
I created some powerful Internet resources for anyone looking at Sequim, and they are all absolutely free. Here they are:
A growing number of homeowners around the country are using a foreclosure defense that may help them retain their homes. It’s called “Produce the Note” and we want you to know this is not a mere technicality that should be treated lightly by the lender or by the Court.
Everyone needs to understand the importance of this issue. When a lender can’t produce the original note, allowing a foreclosure to proceed puts the homeowner at risk of owing that debt again to another party in the future. Therefore, great caution must be taken before a judge can allow someone who can’t produce the original note to cash in on your home.
What if Your Lender CAN’T Produce the Note?
So, what happens when the lender tells the Court it can’t produce the original note, because it is lost? Let’s start with the basics. If a lender wants to foreclose on a property, it has to be able to show that it is, in fact, the appropriate person to whom the money is owed. That right to foreclose belongs ONLY to the person who has legitimate POSSESSION OF THE ORIGINAL NOTE - not a copy, not an electronic entry, but the original note itself with the original signature of the person(s) who allegedly owes the money along with appropriate raised notary seal and signature. So, if you are faced with a foreclosure, you have every right to demand that the person or entity trying to take your property, first prove to the Court that they have the legal right do to so in the first place by proving they have legal possession of the original promissory note.
In my opinion, an original mortgage note is much like legal tender and should be guarded and protected as such by the person holding such an asset. Loosing an original mortgage note is like loosing a $100 bill or a gift card or a lottery ticket. What if I scratched that million dollar ticket and just stuck it somewhere and misplaced it? Do you think I could just show up at lottery headquarters and claim my prize without having the winning ticket? The same principle applies to the person or entity claiming to be the legal holder of an original mortgage note. He who holds the note holds the key.
What the Lender Must Do
What often happens, however, is that the lender claims it doesn’t have the original note, because that note has been lost or destroyed. If the lender is making such a claim, the law requires the lender to prove all of the following under the “Uniform Commercial Code”, which is a set of laws governing commercial transactions that many states have adopted. It contains a specific provision on this subject (Section 3-309) which states that a person can enforce a promissory note without having the original, BUT only under certain limited circumstances.
1. The person or entity has to swear and attest that it no longer has the original note; 2. The person or entity has to prove that it was properly in possession of the note and was entitled to enforce it WHEN it lost possession of the note; 3. The person or entity has to prove it didn’t “lose” possession simply because it transferred the note to someone else (i.e., it’s not really lost); and 4. The person or entity has to prove that it cannot produce the original note because the instrument was destroyed or its whereabouts cannot be determined or it was stolen by someone who had no right to it.
All of these matters have to be definitively proven by the person or entity trying to foreclose on the property. It is not the obligation of the borrower to prove or disprove any of this. The borrower can challenge the right of the person or entity trying to foreclose and demand proof.
The Court’s Important Role
It is up to the Court to determine whether the lender has satisfactorily proven why it no longer can produce the original note. The Court also has to be satisfied that when the original note was lost, the person trying to foreclose on the property had possession of the note at the time it was lost. Until the Court has been satisfied of all of this, the foreclosure cannot proceed.
It is also important for the Court itself to understand that this issue is not merely a “technicality” and the judge should not be satisfied with anything less than full proof of this issue. The Court itself needs to appreciate the fact that if it should agree that an original note has been legitimately lost (and allows the foreclosure to proceed) it is the borrower who is still at risk.
Why? Because incredibly, even if a Court has found that the original note is lost and the foreclosure sale is finalized, if someone later turns up with the original note and proves that it is the proper holder of the note, and not the person who foreclosed on the property, the original borrower is STILL LIABLE.
That’s right. Someone took your home and the Court allowed it because it believed that the lender proved that the note was lost and it was the proper party. Then someone legitimate shows up in the future with the actual note and you still owe that person the money even though your property was taken with the blessing of the Court. Trust me, this is a very serious issue regarding post foreclosures and post pre-foreclosure short-sales. It has happened to three of our own clients! These homeowners had the need to sell their property by means of a negotiated short-sale (so they could avoid a foreclosure) only to find out that the entity claiming to have the legal right and authority to enter into such negotiations and accept such settlements sold their note to another entity and weren’t even aware of it. Several months later, the newly assigned lenders (now claiming to be the rightful owners of our client’s original notes) have since come forward and have also filed suite seeking to recover their entire outstanding principle balances owed to them (prior to the homeowners closing their short-sale transactions with the wrong note holders).
How fair is that?!?! It’s not! And that’s why homeowners need to start fighting back when someone is trying to take their home by foreclosure, especially since an overwhelming percentage of mortgages granted over the last 3 to 5 years have been packaged into securities and re-sold and re-assigned numerous times since the inception of the borrower's original note and mortgage. In some states, homeowners have better than a 50/50 chance of being successful in defending themselves against a completed foreclosure. Why wouldn’t anyone who owns a home do everything in their power to protect and defend it?
All the Best,
Rick D. Misitano, Senior Paralegal Law Offices of James M. Bosco & Associates Methuen Executive Park 240 Pleasant Street Methuen, Massachusetts 01844 Phone: (978) 687-8804 Fax: (978) 687-8872 boscolaw@comcast.net
Sounds like the title to a tantalizing new mystery book, doesn't it? A book like that might be chock full of suspense with the characters experiencing emotions ranging from confusion to frustration and a maybe even a dash of irritation.
Too bad that what I'm talking about here isn't fiction. For far too many home sellers, this mystery is all too real and common. Every day in our market sellers are wondering "What happened to my REALTOR®?"
Nancy and I handle a lot of sellers who have had their listings expire from the MLS for one reason or another. Sometimes it's price, and other times it's lack of attention from the listing agent. Here's a prime example:
Last summer we visited with a seller that had his home on the market for one year with another agency. His listing had expired and he was interviewing new agents. A really good move on his part - sellers should talk to as many potential agents as possible to find a good fit for both them and the agent. A few days after we talked, he called to tell us that he had chosen another agent but that it was a close call.
His house has now been on the market for over 560 days. When I pulled up the listing history in the MLS, I noticed that the listing had only been touched once over the past year - and that was to extend the listing agreement. In our MLS, agents input prospects to receive listings as they come on the market - the catch is that if your listing is there BEFORE the prospect is entered by the another agent, the prospect doesn't receive your listing. So for approximately 10 months, his listing has sat there unattended and has not been populated into the listing cart of ANY prospect after he was listed.
It's actually sad, isn't it?
The number one complaint I hear from sellers who have had their listing expire is "My REALTOR® stuck a sign in the yard and disappeared. I would have lowered my price if they had taken the time to do a market update every few months. I never heard any feedback from showings, and in the 100 degree summer my house was being marketed with a picture of it with snow on the ground. What gives?"
I believe that there are some agents out there that think the work stops when you get the listing agreement signed. That's just not the case.
The gentleman in my example above took all the right steps, he interviewed multiple agents and he didn't pick his agent based solely on price. So how can Edwardsville and Glen Carbon home sellers avoid becoming the main character in a bad mystery novel? Arm yourself with these 10 questions for any agent you interview.
1. How often will you communicate with me? How will you communciate with me? (If you prefer a call and your agent prefers e-mail, hash that out now. Communication is the foundation for a great team, and you and your agent are a team).
2. How long do you normally take to return a phone call?
3. How long do you normally take to respond to an e-mail?
4. Will you provide me with market updates that compare my house to ones that have closed as well as my active competition?
5. When the seasons change, will you update your marketing materials?
6. Will you set me up in the MLS to receive automatic e-mails when something new comes on the market that my home will be in competition with?
7. Can I deal with you personally when I have a problem, or do I have to go through your assistant?
8. Will you provide me with a monthly status update about where my home is being advertised?
9. Even if you can't reach the other agent for showing feedback, would you please still call me and at least let me know that?
10. Will you change MLS descriptions every few months to give my listing a fresh look?
If you receive an unsatisfactory answer to any of these questions, move on to the next agent. The seller-agent relationship is not like an employer-employee relationship... it truly is a team effort and you must find an agent that matches your style for your home sale to be a success.
Questions about selling your home? Stop by Sacred Grounds Cafe in Edwardsville every Tuesday from 12 - 1 to have them answered. We'll be there talking all things real estate - and we'll even buy the latte.
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About the Author: Kristina Pratt is a REALTOR® with the Just Ducky Homes team at Coldwell Banker Brown Realtors in Edwardsville, Illinois. She and Nancy Milton help their customers buy and sell homes and investment properties in St. Louis' Illinois suburbs of Madison and St. Clair counties with special emphasis on the communities of Edwardsville, Glen Carbon, Maryville, Collinsville and Troy. For more information, visit their web site at http://www.JustDuckyHomes.com or e-mail Kristina@JustDuckyHomes.com
Recently I received a telephone call from a Realtor from another state. He introduced himself, told me he had found me through Active Rain, and knew so and so, and so and so - yada, yada......
After we had finished with our introductions, he told me he had a client that had a home in Mesa, Arizona, and they wanted to find someone to list it for them. As I began to question him on the circumstances of the sale, he said that the sellers just “needed” it listed. I prodded him further asking if they had taken out a second and if they were upside down. He said, "yes," and basically needed it listed in order to complete their purchase of a home through him.
He further went on to tell me that they didn’t really care whether they sold it or not, and he didn’t need a referral fee. Sound fishy? Yep, to me it did – and it was.
I told him this: “they are buying another home and bailing on this one,” aren't they? He hemmed and hawed, and pretty much acknowledged this to be true - actually he "thought" it "might" be the case, but “he didn’t know for sure.”
I told him that it is mortgage fraud knowing when you purchase one home that you are walking away from the other one!! You see, I have very strong feelings about this type of mind set. (See my previous post written in June 2008 on the Buy and Bail phenomena.) NO WONDER we are in such dire straits in America!! Guess who picks up the tab? US!!! People don’t think twice about their obligations to keep their promises – AND – this agent had never heard of the Buy and Bail scheme. Maybe yes, maybe no!! Hopefully all Realtors are aware of this egregious behavior and DO not assist buyers/sellers with transactions of this type.
One of the popular games in Clallam County as well as around the country right now is called, "Musical Chairs With Realtors." It's a game that some sellers of homes and land are playing without realizing the tragic consequences of losing. Here's how the game works.
An owner of either a home or vacant land hires a real estate agent to list and sell the property. The agent wants to list the property at a sellable price, of course, because the agent only earns a commission if he actually sells the property. The seller is a strong personality. The seller tell the agent what the property should sell for. The seller asks the agent his opinion, but everyone in the room knows the seller isn't really asking: the seller is telling.
An agent often cannot be certain the seller is wrong, because pricing property is not some kind of mathematical science. It is partly objective, partly subjective, and timing is everything for the right buyer at the right time and place. Often an agent is persuaded that a seller's property could be listed at a price the seller is quite adamant about. Who knows, the seller could be right. There are not any recent sales of anything exactly like this home or lot, so it is hard to definitively prove anything to a seller that will persuade him to reduce the initial listing price. But in so many cases, this agent can testify, as can many other agents, that sellers send strong messages that they are not to be challenged on the price. There are many ways sellers send this message, and those of us in the business know only too well how this works.
An agent doesn't want to be rude or offensive, and without specific mathematical proof that the listing price should be lower, it is hard to say anything real intelligent or persuasive to a passionate owner who justifies every which way up one side and down the other why this property should sell at such and such a price. Sometimes it is just impossible to argue otherwise. Any agent worth his salt knows that if he argues with his client, he loses. We don't argue with our clients. It would be bad form and unproductive.
So the agent lists the property, but after so many months, usually three to six months, the owner has decided it's the agent's fault it hasn't sold, and it's time to try an agent that can sell it. Granted, some sellers don't blame the agent, but still the result is the same in that they hire another agent. (Honestly, even though a seller may say he doesn't blame the agent, he really does, or he wouldn't be listing with another agent.)
And the game of Musical Chairs With Realtors begins. The first agent notices that the new listing price with the second agent is way below the price the seller insisted he list it at. What does the agent think? The agent is thinking, "Wow! Why didn't my client list it with me at that price. I might have been able to sell it." This is an entirely legitimate question. To this some sellers would immediately reply, "Well, why didn't you tell me it had to be listed at this lower price. I would have reduced it and you would still have it listed." Not. Experienced agents try to tell sellers a hundred times that the price may be too high, but many sellers simply refuse to hear it in all the conversations. They don't want to hear it, and they direct the conversation to justifying the price each time.
But it gets better! Wait, there's more, to parrot the famous commercial.
The second listing agent is soon to be replaced by a third listing agent, only this time at an even lower price. Oh, this game of musical chairs is such a fun game for all of us. Who benefits? No one.
The seller is making the job of selling his properties hard for everyone, and he is sabotaging his own goal of getting the properties sold. The seller is also disrespecting every agent he hires and then dumps. And worse, with his property on the market so long, he has made his own property less desirable to buyers who no longer see it, even when he keeps reducing the price.
There may be an occasion when it is appropriate to change agents. Agents come in all different sizes and shapes, so to speak, and education, experience, competence, trustworthiness, and professionalism all play an important part to the discerning seller. (Note the word "discerning.") A seller might find out that his agent is not good at marketing and sales, and with some due diligence find an agent who is. But in the vast majority of cases from my experience, most sellers are playing musical chairs, rather than doing some deep investigation to find out who is the best.
This game of musical chairs is played all the time, every week in Clallam County and around the country. Not all sellers are playing this game. How many are or what percentage are playing is hard to say, but a substantial percentage are playing. It's too bad, too, because everyone loses when this game is played, and in this market who can afford to be a loser.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
First, if you are unable to make your mortgage payments, will the bank just let you quit claim deed it back to them? No. Banks have been refusing to do this for decades, although every once in a while I hear a rumor of it happening somewhere. I think it happened in St. Louis in 1987. People talk about it all the time, but it is as rare as Mermaids. Even if it was a wise financial move for a bank to do, they are instructed not to by their legal counsel, in part because if they suffer a loss, they probably cannot recover on their HUD insurance or VA guarantee. They can recover on their insurance for losses only if they go through the foreclosure process, or in other exceptional circumstances. So they won't go there.
First, makes sure your Realtor is sharp on these issues. Second, be sure to have a contingency in your purchase agreement that gives you the legal right to check these boundary lines out before closing. Third, know what you are dealing with. Many buyers have killed a perfectly good transaction because they did not understand the legal issues, and they jumped to conclusions. Don't make a mountain out of a mole hill. If the two feet is irrelevant to your intended use and enjoyment of your three acres, let it go rather than get into a ridiculously stressful and expensive legal battle.
Sequim short sales are a black hole, or perhaps I should say can be a black hole. The last three Sequim short sales that I wrote up all were great transactions, except they were short sales and the banks refused to make a decision. All three died a natural death because the banks simply would not respond to the price.
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