There are so many acronyms flying around out there that it can be confusing if you don't use them all the time. So, I have taken a few that show up fairly often to help out our non-professionals and professionals alike who read these blogs.

MHA - "Making Home Affordable" program introduced by the Obama Administration on 2/18/09

HASP - "Home Affordability and Stability Program" - Program under MHA for stabilizing home ownership. 

HAMP - "Home Affordable Modification Program" program under MHA for modifications. Servicers              enter into a contract with MHA and are offered incentives to do loan modifications.

HPDP -"Home Price Decline Protection" program that includes incentives to support modifications in markets hardest hit by falling home price.

HAFA - "Home Affordable Foreclosure Avoidance" program for Short Sales/Deeds-in-Lieu

USPAP -"Uniform Standards of Professional Appraisal Practices" - Appraisals need to be performed in accordance with USPAP under these programs

SS - Short Sale- In a short sale the servicer allows the borrower to sell the property at its current value, even if the sale nets less than the total amount owed on the mortgage.

DIL - "Deeds-in-Lieu" The lender agrees to take back the deed rather than foreclose on the property.  Typically a short sale needs to have been attempted before this option is available.

CDPE -"Certified Distressed Property Experts" a designation aquired through training that includes understanding of the new MHA programs.

Hope this helped someone wondering what that acronym means.  But remember it takes more than a designation behind your name or knowing the meaning of an acronym to be an "expert".  It takes experience!  Always check references on any professional you intend to give your business to!

Short Sales get a bad rap.  I see comments posted all the time about why people hate short sales.  "They never work out".  "The banks have an evil agenda".   Then you have the people that claim they close on every short sale they handle.  I don't know which is worse!  The hype!  The misinformation!  The out and out BULL! 

Short Sales are lucrative.  They meet a need in the population we service.  For many homeowners in financial distress, they can be the best option possible.  "About half of short sales never close. We see it as a big lost opportunity, and we need to improve the rate we close them,' says David Sunlin, vice president in charge of short sales at Bank of America."   This is a true statement - but why?  Has anyone considered the other side? Now I am going to make a lot of you ANGRY.

If you don't know how to do a short sale and you won't take the time to get educated or use a company to process your short sales. STOP DOING SHORT SALES!!!!  Get out of the way of those of us who do.

I am in the unique position to have insight into both sides of the process.  My company does short sales.  My Mother worked on the other side as a loss mitigation negotiator.  Short sales are a process.  Is it a perfect or even fairly proficient process?  Well.... that depends on which lender your working with, what negotiator you get assigned too, what kind of loan your working with?  I could go on and on!

The bottom line is..short sales are a somewhat complicated and time consuming endeavor. Add to that the high turnover ratio of loss mitigation negotiators and you sometimes have the blind leading the blind.  We need to take out the flotsam, you know that stuff that floats around and gets in every bodies way.  That would include the new investor who just finished what I call a "Silver Bullet"  seminar or boot camp.  The are the ones that will be a millionaire in 3 months working 4 hours a day from the deck of a yacht somewhere off the coast of a tropical paradise.  OK, maybe I am exaggerating , but you know what I mean.  They clog the system with low ball "cash" offers they can't close on unless they get an end buyer.  Don't get me wrong, I love investors.  About half my clientele are investors, but they close when I get an approval.

The other major clog is RE agents that are attempting to do a short sale but don't have a clue what they are doing or are unwilling to do the necessary follow up .  By this I mean the agent that sends in three offers at the same time,  doesn't label documents properly,  or are too busy to get the paperwork to the lender when it is requested.  Again I could go on and on but I will spare you.

My point is each and every piece of paper that gets sent in to the lender needs to be processed.  The flotsam gets in the way of real offers that are well prepared.  Now, it is true that once you get assigned a negotiator the well prepared package will get the attention deserved.  The lenders have been doing a pretty good job in restructuring the systems to be able to dump the flotsam, but still it takes time.

SO, if you want do short sales - go for it!  BUT, get educated or get a company that specializes in doing short sales. 

One more word to the wise- and this is for Realtors and Homeowners alike.  Do your due diligence!  Whether you are hiring a Realtor or a company to handle your short sales. Do your homework before you entrust your business to anyone.  Make sure they are knowledgeable about short sales.  If they are doing these everyday they should be on the front line as far as information on how the packages are processed.  This can be invaluable to you.

You should always get references, more than one.  And really call them.  You would be surprised how many times you are given a reference that isn't even someone they did a short sale for.  Make sure they have been in business for at least a year.  There are many new "Specialists" out there.  They took a class and got a certification. So what - have they done a SUCCESSFUL short sale?  That would be the first question I would ask.  And if they tell you they close 100% of all short sales - run don't walk, to someone more honest.  Also they need to have a comprehensive system for handling your short sale and a way for you to monitor your short sale WITHOUT you having to call them and ask for a progress report.

Hi,

My name is Dawn Uselding,  I am new to ActiveRain and this is my first blog ever.  However I am not new to Short Sales.  And I am in the position of having insight on both the short sale negotiator and loss mitigation negotiators side. 

I have been doing short sales for 8 years.  I started in my own business helping rehabbers find and finance properties to rehab.  I did this for 2 1/2 years until I caught the eye of an investor.  We had been in competition on several properties over the years.  At one point he (the investor) called me about a property we had both wanted and informed me the sheriffs sale was in 10 days and he couldn't get the lender to budge.  To make a long story short, I closed the deal in 10 days and didn't pay a dime more than he had offered.

A month later after some negotiating on my own behalf I was working for that investor.  Now years later I am again venturing out on my own.  I am a virtual short sale negotiator.  That means I facilate short sales without being in your office.  Now why on earth would you need a short sale negotiator?  Isn't that cutting your commission?  Taking money out of your own pocket?  These are  questions I hear all the time. Let me tell you why a short sale negotiator is a good investment.

First you have to understand the other side.  The Loss Mitigation Negotiator!!  I have been blessed to be able to have an inside view into the other sides life.  You wonder why it takes so long for them to respond.  Well, until just recently my mother was a loss mitigation negotiator for Wells Fargo.  Did you realize that they each have a minimum of 50 short sales they are assigned.  That's the minimum, they can have over 175. 

Another tidbit I bet you didn't know is,  they receive bonuses according to how many files they clear (that means refused or closed on).  So if you send an incomplete package, your more likely to be refused, than notified that more documentation is needed or a page is missing. Then you have to submit all over again. So making sure you have all the documentation they need is vital.  However different lenders and servicers require different packages.  Do you know which lender needs two years tax documentation and which needs only one? Which one needs the last three months bank statements and which doesn't need any?  These are the details that make the difference between a complete package and an incomplete package. Are you aware of the standard breakdown of acceptable offers? For example:

• Fannie Mae        92% net of the appraisal
• Freddie Mac       92% net of the appraisal
• FHA                  82% net of the appraisal
• VA                    88% net of the appraisal
• Conventional     80% net of the appraisal

Those are general guidelines.  They are impacted by the investor holding the note, 2nd and 3rd mortgages and many other factors.  But they are a good starting point in knowing how good your offer is.

How good are you at negotiating liens?  Because, you know the short sale won't be approved until the liens are negotiated.  And as a Realtor you know how important the appraisal is.  The lender has never seen the property unless it is a local lender.  And did you realize that the appraisal is the starting point for negotiations, not what is owed on the property.

Having contacts with Loss Mitigation Negotiators can be huge!!  When a short sale package comes through from someone they know and trust it moves to the top of the pile of short sales they are working.  And why not, they are more likely to be able to close that deal and get a better bonus. 

Another question that I get all the time is - are you licensed?  The answer is no, I don't need a license.  I am not writing offers or offering legal advise to you or your clients.  I deal with you and my job is to present the offer as written with all the needed documentation and then to closely follow up on the offer and to be your liaison with the lender.  I ask the right questions to find out what is needed to get the deal done, and get that information to you.

As for payment, I do ask for an upfront retainer.  But my payday is at closing.  I get paid a 1% fee. My fee is on the estimated HUD as a closing cost and not part of your commission. However my fee is negotiable, by the lender, just like your commission. 

So, now hopefully you know a little more about why I think a short sale negotiator is an asset to your business.  Especially if you deal with alot of foreclosure properties or you have never done a short sale.

I am looking forward to your comments and would love to hear from you.

Have a blessed day!

Dawn Uselding