Understanding and Surviving the Housing Crisis

No escrow deposit or signed instructions but Buyer refuses to cancel.

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Tue, 23 Apr 2013 16:29:17 -0700

I have a situation where escrow never received the buyers deposit AND no escrow instructions have been executed by either party. We are now into this transaction for 2 months and the closing date is no later than 90 days from acceptance of the purchase agreement. Buyer still wants the home but will not deposit money or return signed instructions. Seller provides buyer with a notice to perform followed by a signed cancellation instruction. Buyer refuses to sign cancellation.

Seller is forced to open escrow elsewhere because the escrow company will not allow a new transaction to begin without a cancellation of the prior transaction signed by the buyer.

What constitutes a valid escrow? Nothing other than the listing agent sending over a fully executed purchase agreement to escrow pursuant to the deposit and executed escrow instructions. The buyer must cancel an escrow that he refused to open through the deposit of funds and signed escrow docs.

Not happy!

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

What is a Zombie Foreclosure? You Need to Know.

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Thu, 21 Feb 2013 19:20:46 -0800

Homeowners think that when they receive a notice of foreclosure from their bank, it’s time to move out. But sometimes banks unexpectedly dismiss the foreclosure, and the home’s title remains in the name of the owner who thought he or she had lost the property.

Homeowners who aren’t aware of this practice can find themselves the holders of so-called “zombie titles.” A regular title becomes a zombie title when a homeowner finds himself or herself being mindlessly pursued by mortgage servicers, local governments and debt collectors for bills related to a home she thought she no longer owned.

For a variety of reasons, lenders may hold off on completing a foreclosure because they simply don’t want the house back, or because they have too much inventory on their hands, or because the costs of foreclosing do not justify completing the foreclosure. Banks are not obligated to foreclose and take legal title to a property if they feel the loss or potential liability is too great.

The bank may not tell the homeowner it has stopped moving forward with the foreclosure or canceled it altogether. The bank may not attempt to notify the homeowner because it isn’t legally required to. Even if it does try to notify the homeowner, it may not be able to locate a homeowner who has moved out and has new contact information.

Just because you moved out of a house doesn’t mean you automatically stop owning it. The house remains yours until someone else’s name is on the title. This change of ownership often happens after the bank sells your home at a foreclosure auction, but if the foreclosure process stops, your home won’t make it to auction.

After you vacate your home, a multitude of scenarios can occur placing you at risk for financial, legal and emotional distress. The home could be damaged and vandalized by criminals and you are held responsible for the damage. If your property violates local housing codes or ordinances, you could find yourself on the hook for those violations.

If your home is subject to local housing code violations that go unresolved, you may one day receive an unexpected bill, have your tax refund garnished or even be sued by the county or municipality for the cost of any repairs the government made on your behalf. If the house falls into such disrepair that the city decides to demolish it, you could be on the hook for a bill ranging from $10,000 to $30,000.

As long as you continue to own a home, you can continue to incur liability, including penalties, fees and accruing taxes no matter what you may or may not assume.

Zombie titles can plague home buyers, too. According to public record, Wells Fargo foreclosed on Richard R’s Florida home in 2007. The bank later changed its mind and transferred the title back to Richard R., but Richard R. never got the message. In 2010, Wells Fargo sold the home — which it didn’t own — to Brian and Holly, who didn’t learn about the mistake until it was caught by the county property appraiser. Brian and Holly now have hundreds of thousands of dollars tied up in a property they can’t even sell, because they don’t technically own it. The title is still in Richard R’s name.

This case may be extreme, or it may not be. The point of this information is to make the homeowner aware of disastrous pitfalls that could occur following a foreclosure proceeding that may or may not occur. Do not assume you are free to walk away. Verify the status of the title to your property by contacting the county tax assessor’s office or through the help of a qualified real estate professional. Knowledge is key and you need to know the facts regarding ownership, title and how you can protect yourself.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Top 5 Mistakes to Avoid when Purchasing a Move Up Property

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Tue, 19 Feb 2013 00:22:32 -0800

Before you list your current home for sale there are some issues that you should consider. Chances are that when you bought your first home you were moving from an apartment or family and all you had to consider was getting in or out at the first of the month. There are much larger issues to consider when moving up to another home. Some of these issues are financial such as juggling two mortgages while waiting for your former home to sell. Maybe you won’t have the luxury of qualifying for two mortgages and you will be forced to cancel escrow on the move up property. Possession issues arise if your former home closes escrow before your move up property is vacated. What happens if the sellers of the move up property are counting on your timely performance in closing escrow so that they can purchase their move up property and your buyer is delayed?

There are many scenarios to be aware of when contemplating the purchase of a move up property. In order to avoid the more obvious mistakes, we have provided the top obstacles to avoid below:

Top 5 Mistakes to Avoid When Moving Up To a Larger Home

1. Attempt to Find the Ideal Property Without Using a Licensed Realtor.

Most of us want to improve our lifestyles and move to a more spacious or luxurious home. The problem is that sometimes it is not realistic given our current financial situation: college funds, retirement savings, aging parents, unexpected property taxes and many other complications. If you are searching for a home through local advertising or driving by a real estate sign, you may be disappointed that the home is already sold or out of your price range. Find out if your agent offers an exclusive buyer search program or other house hunting system that can cross match your needs and price range with what is available on the market. This approach can cut down on precious time that you can’t afford. Hire a Realtor to perform their job so that you can perform yours.

2. Ignoring Repairs and Improvements to Prepare Your Home for Sale
Many homeowners have put off necessary repairs and improvements year after year as they go about their daily lives with the attitude that they will get to them someday. Today is the day! If you plan to sell your property for the highest possible resale value, you need to take inventory of all the repairs needed before you list you home. Speak to your agent and ask for a list of recommended repairs and improvements to ensure you are well prepared. Contact Move Up Properties for a complete list of items buyers consider “deal breakers” and avoid losing top dollar in the sale of your home.

3. Not Securing a Buyer for Your Home Before Purchasing Your Move Up Property
In nearly all cases, it is best to sell before you purchase your move up property. Having your former home sold or in escrow at the time you make an offer on your move up property provides you with the ability to negotiate a better purchase price, acceptable terms and have your offer considered before the rest. If you place the “cart before the horse” by falling in love with a move up property before you have your former home in escrow, you could be forced to negotiate from a position of desperation. Remember that you want to buy low and sell high, not the other way around. Put together a back-up plan in the event your former home does not sell as planned such as placing a contingency agreement into your purchase offer. This will provide you with the ability to opt out of the purchase agreement, if necessary while protecting your good faith deposit. Other options include renting your former home, performing a lease to own contract, obtaining bridge financing as a short term measure to cover your purchase with the understanding that your former home will be sold very soon.

4. Failing to Get Mortgage Approval
Sometimes homeowners who already own a home and are looking to move up fail to see the importance of getting a mortgage pre-approval. Mistakenly, they assume because they have an existing mortgage that they will have no problem getting another. It is always wise to sit down with a home mortgage lender as your first step in the move up process. Provide your lender with updated income information, list of your assets and liabilities, pay stubs, 2-years income tax returns and other relevant financing information to determine your maximum purchase price. Offers you make should be complete with a pre-approval from your lender including your credit scores, proof of down payment and a copy of your earnest money deposit. A well prepared offer with all of these items makes your offer more appealing than an offer riddled with various financial or sale contingencies.

5. Choosing your Agent wisely. Almost any agent will show enthusiasm to list your home for sale but choose your agent wisely and base your decision on:

a. Ability to use technology to market your property worldwide to buyers, 24/7.

b. Reviewing with you a comprehensive Marketing Analysis of home sales in your area.

c. Ability to offer a written detailed 30-DAY MARKETING PLAN that will get your house sold at the highest possible price.

d. Be sure that the agent understands the volatile situation you may be exposing yourself to in the event you locate the home of your dreams BEFORE you sell your existing home. Your agent must be prepared to implement safeguards to protect you while providing you with the best chance of completing both transactions concurrently and successfully.

Working with a full-time professional real estate agent is a must. Choose your agent by asking questions of them. Find out how knowledgeable they are about homes currently for sale in your price range as well as a list of properties they have recently sold. Can your agent recommend a reputable lender capable of offering alternatives or suggestions that could mean the difference between successfully moving up to that larger home or not. Don’t be put in the position of “having” to sell at less than optimum values because you don’t want to lose your dream, “move up” property.

Are you ready to sell your current home and move up? If so, contact us today and you will receive a prompt response from one of our full-time, professional Realtors at no risk or obligation.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

What the Fiscal Cliff Means to You

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Fri, 28 Dec 2012 11:16:40 -0800

The news is full of stories about the looming fiscal cliff and what it may do to our economy, our businesses, and our personal lives but many of us don’t even know what the so-called ‘fiscal cliff’ actually means and how it can impact us. Allow me to cut through the confusion and give you an understanding of what the issues are and how they may, or may not affect you.

Let’s start with ‘What is the Fiscal Cliff’?

The term ‘Fiscal Cliff’ is a popular shorthand term used to describe the possible adverse impacts on the economy from a number of existing laws taking effect. The fiscal cliff is made up of two parts.

The first part consists of the scheduled expiration dates of various tax breaks which include tax cuts enacted in 2001 and 2003 under President George W. Bush, the payroll tax holiday enacted under President Obama and an array of other tax breaks. These tax breaks were designed to put more money into the hands of the consumer which would parlay into more spending thus creating more jobs thereby strengthening the economy. The designated tax breaks are set to expire at midnight, December 31, 2012.

The second part includes automatic spending cuts including $1.2 trillion dollars in cuts to the defense and domestic programs resulting from The Budget Control Act of 2011. The Budget Control Act of 2011 was enacted to resolve a dispute concerning the public debt ceiling. Deficit spending previously appropriated by Congress had reached its maximum. Republicans in Congress refused to approve an increase in the debt ceiling unless deep spending cuts were approved. The Budget Control Act was created to immediately lift the debt ceiling while implementing a mechanism to provide two additional increases. Unless Congress enacts changes to The Budget Control Act, these spending cuts are scheduled to take effect on January 2, 2013.

What are the effects if the present laws remain unchanged?

A Wall Street Journal article dated May 16, 2012 citing a J.P. Morgan study estimates the following impact as viewed in dollar and cents. $280 billion dollars will be extracted from the economy effective January 2, 2013 pursuant to the implementation of the scheduled tax cuts, $125 million dollars from the expiration of the Obama payroll-tax holiday; $40 million dollars from the expiration of emergency unemployment benefits; and $98 billion dollars from The Budget Control Act spending cuts. In all, the increase of taxes and spending cuts add up to about 3.5% of the GDP, half of which are derived from the Bush tax cuts. According to the Congressional Budget Office, this would reduce the overall deficit by an estimated $560 billion dollars, but the vast severity of the cuts could send our economy into a recession resulting in the loss of nearly two million jobs.

Do these effects justify a change to the current laws?

This is the subject of the heated debate occurring in Congress right now. While no one wants to pay more in taxes, we cannot continue to spend more than we earn without facing serious consequences. In order for survival we have a responsibility to bring our budget under control, if not for ourselves then for our children and grandchildren who will inherit our fiscal mismanagement. Therefore, something must be done to protect the long term.

However, the impact on the economy from a renewed recession cannot be ignored. This has led to extensive talks both inside and outside of Congress to extend the tax cuts and replace the reductions in spending with more targeted cutbacks. Since both parties agree that the Bush-era tax cuts should be extended for the vast majority of Americans, we may notice more money missing from our paychecks. However, it is unlikely that we will suffer any long term negative impact as the spending cuts will not occur all at once. They are scheduled to be phased in gradually over a decade.

Conclusion – Repairing our Federal Budget is Necessary

To some degree, our Government now stands at a crossroad where action is needed. If we do nothing, then we risk the repercussions of a renewed recession. Yet, if we choose the easy fix by administering band-aids, we continue to undermine our economy by continuing on the same course of irrational logic that has lead us to the position we are in today. Any change to the existing laws will likely increase the deficit by either reducing income or increasing spending. Maintaining the status quo should not be an acceptable solution. We must increase income while decreasing spending. The challenge to our lawmakers is no different from the challenge we face each month with our own household budgets. The test of their leadership will be whether they can work together to make the necessary changes for the sake of our nation.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are upside-down on your mortgage or facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine which options are best for you.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

CREDIT REPAIR FRAUD ALERT - DON'T BE FOOLED!

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sun, 30 Sep 2012 00:07:57 -0700

Watch out for individuals claiming that they can perform credit repair services to increase your FICO scores so you can purchase a home. Don’t do it! Don’t believe it! It’s a SCAM! This information is provided based on reports obtained through individuals recently victimized in and around the city of Indio, CA.

How do these fraudsters convince you to turn over your hard earned money?

a. These crooks will prey upon their own kind. The Hispanic community tends to trust other Hispanics, especially those who appear to be very experienced and “father-like”. A smooth con will attempt to provide you with a sense of ease and comfort in a situation that should cause you apprehension and fear. It is that “fear” that these crooks prey upon.

b. They provide you with a series of success stories on how they were able to perform a “home purchase miracle” when no one else could. As you listen to the stories of their ability to place families into homes in less than 30-60 days by using their guaranteed and proven plan, you will begin to listen more intently without noticing that they are casting their net upon you, pulling you into their web of deceit.

c. The crooks operate their schemes in a relaxed atmosphere like public swap meets and festivals where an individual might attend as a FREE day for the family to spend time together looking at exhibits, vendors, eating food of all sorts, collecting free samples, receiving free neck messages and balloons for the kids. You are happy, comfortable and speak more freely than you would under different circumstances.

d. You will notice other people surrounding these fraudsters, listening intently to how they perform their tricks. If other people appear interested then it could create the illusion that their operation might actually work.

e. Just like the others before you, you also sign up for a phone appointment to get this program started to begin your path towards home ownership. If it all sounds too good to be true, then it usually is. Listen to your gut instinct.

f. The Hispanic communities located in economically challenged areas hit hard by the recession are ripe for this type of crime. Many do not speak English very well, if at all. They can communicate with these thieves in their natural language which appeals to their overall sense of trust and belief that what these crooks are saying is true. The victims begin to overlook the red flags as their instinctive sense of caution comes down.

g. Just because someone speaks Spanish and may share the same or a similar background with you does not mean that you can or should trust them. Scammers are experts in fraud and gaining a victim’s confidence. When you believe you have common interests with someone and believe in the same faiths and traditions, you are more inclined to trust and ultimately be taken advantage of. Quite simply, verify, verify, and then verify again before you trust anyone with your family and your money.

h. The thieves have a well thought out plan in their selection of venues to operate from preferring to operate at small swap meets or outdoor festivals. The less fortunate, out of work, God fearing husband and father is tempted by his thoughts of a better home and life for his struggling family. The victims will pool their money together to pay the thousands of dollars needed to provide a better home for their families.

i. Many victims do not own a computer or use the internet as a source of information to verify the credentials of the crooks. Many do not speak English well enough to communicate the crime to the proper authorities or choose not to for fear of appearing ignorant or irresponsible. Or when the crime is finally reported, the thieves have closed up shop never to be heard from again.

j. Victims of mortgage, credit, loan modification or real estate related crimes pay thousands of dollars up front and in advance of any services provided which in itself is a crime. Both the California and Federal Acts contain requirements for consumer disclosures, written contracts, and numerous protections against false and misleading statements. They also both contain prohibitions against charging or receiving any money or other consideration before fully performing the credit repair services the “repairer” has agreed to perform. Stated otherwise, both the California and Federal laws preclude the collection of “advance fees” for credit repair services. Under almost every circumstance, do not pay for financial related services before they have been performed.

k. The contracts provided, if any, are typically copied from other related service companies. The agreements are not dated or signed by the fraudster promising the services and little to no contact information is provided. There is no state licensing number. They will “forget” to provide you with a copy of the signed contract when you leave. Never sign a contract without receiving a copy of what you signed immediately to take with you. Review the contract for blank spaces or empty lines that could be filled in later by the criminal. Do not sign a contract written in a foreign language or without a proper translator. The contract should be signed by all parties with a clear understanding of the duties to be performed, the cost of the service, how it will be collected, what you can do in the event you choose to cancel and what the refund policy is. You will never be able to collect your money in a court of law if you don’t have any documents to prove that the terms of your agreement were breached.

l. The thief will tell you that they will call you as soon as the victim’s credit score is high enough to purchase a home, typically within the next 30-60 days, which will NEVER happen. Many victims find out that their credit report was never obtained to begin with. If your credit report was obtained by a third party, demand that you receive a copy of the report for your records.

After a few months have passed you may receive a phone call stating that your file has been declined because you failed to deliver the requested documents needed to repair your credit score. Even if you know that you delivered the required documents, they will tell you that you that they are still waiting on updated information from you. They will tell you that it’s too late to do anything further without collecting additional money from you. Remember, these are all lies to perpetuate their deceit and defraud you of your money. Demand to see the letters sent to your creditors, which creditors were contacted and the results from their requests. Was anything ever done to repair your credit score?

m. Never, ever pay someone for services using a money order, Western Union, cashier’s check or money gram. And never, ever give anyone a check made payable to “blank or no name”. The thief will tell you not to fill out who the check is payable to because they do not know what credit reporting company they need to send it to or they have a stamp with the company name to use for convenience. DON’T DO IT!! That check is going to be cashed using the crook’s name or immediately deposited into their bank account. Even if you receive a receipt for your cash payment, you can count on never seeing that money again. It is very easy for a criminal to say that they never received your cash payment if your case needs to be tried in court. If you received a receipt for the cash payment, the thief could claim that the receipt is fake and no money was ever received from you.

n. You may be told that you are approved for a loan and asked to begin looking at homes to purchase. Request your updated credit report showing the items that were corrected or removed and how it affected your FICO score. Request a letter from the lender who approved you for a loan. Contact the lender to verify the information and more importantly, contact a lender of your own choosing to provide you with a second approval to confirm your eligibility for a home loan.

To sum up the red flags to look for when confronted with this type of fraud remember the following:

There are no miracles in financial or credit repair services. Request references.

Beware of individuals who make promises and guarantees.

Credit repair services cost an average of $300 to $600 depending upon the number of items needing attention. Beware of anyone attempting to collect a fee outside of this range.

Hispanics will prey on their own kind to gain trust through the Spanish language.

Credit repair scams often begin at swap meets or outdoor fairs among low income communities.

Advance collection of fees is illegal in California in nearly all circumstances.

Never pay for services using a money order, cashier’s check or cash.

Never provide a check for services with blank spaces. Do not agree to have your check stamped.

Always receive a complete contract for services with contact information, licensing info, date the service is to be performed, terms, defined cancelation and refund policies and a clear understanding of what is expected of you. Full disclosure and open communication at all times.
Take any approval to a lender of your choosing to verify your eligibility and prove that the credit repairs were performed.

DON'T BE FOOLED!!

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Am I still liable for past due HOA dues once my home is foreclosed on?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Mon, 09 Apr 2012 09:28:33 -0700

A foreclosure action will not necessarily remove you from any future liability for the amount owed and I would not recommend conceding to a foreclosure action if at all possible.

It is highly unusual for an HOA to complete a foreclosure action to collect on past due fees when there is a first trust deed against the property. If the HOA forecloses then they become the owner of record subject to any senior liens due against the property. The HOA would be obligated to make your mortgage payment from that point forward. If your home is upside down with no equity there would be no incentive for the HOA to carry the liability of a property that shows no sign of recovery through a subsequent resale of the home. They could possibly, lease it out and collect any rents they can until the first trust deed holder finally forecloses due to their lack of payment from the HOA. Once the first forecloses then the HOA’s ownership interest is terminated and any right to collect rents cease. However, they can STILL go after you for the balance due.

Here in California, the HOA is obligated to provide you with a request for a meeting to discuss your delinquency and how to resolve it. If a resolution is not reached then the HOA will file a lien against the property. After the lien is filed then the HOA has the right to collect through a non-judicial foreclosure action by providing you with a Notice of Default and intent to sell. Only when these official notices are properly served upon you and you have not made any arrangements for repayment will they file the final Notice of Trustee’s Sale which includes the date and time for the auction to occur. AND, if the HOA takes the property back through a trustee sale the homeowner has a 90 day right of redemption period before every last method of retention is exhausted by the former owner.

When a foreclosure action occurs by any lien holder any junior lien holders carry the right to sue for a deficiency judgment, except when the lien is established as purchase money to obtain the property when it was originally purchased.

Typically, an HOA lien for past due HOA dues is wiped out in a foreclosure. That does not mean that your obligation to pay the past due dues has been wiped out. It becomes like an unsecured debt. As with most unsecured debts, the only sure way to eliminate them from collections would be to settle them, make payment arrangements and only as a last resort, include them in a bankruptcy discharge.

DISCLAIMER:
****DIANE WHEATLEY IS NOT A LICENSED ATTORNEY. THIS EMAIL IS COMPRISED OF HER OPINIONS,
OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE.
PLEASE CONSULT WITH AN ATTORNEY BEFORE RELYING ON OR TAKING ANY ACTION BASED ON
INFORMATION IN THIS POST****

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Credit Card Collection Agencies are Preventing Short Sale Closings

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Fri, 09 Mar 2012 00:22:00 -0800

Many collection agencies have resorted to recording liens against the borrower’s property instead of the bank levy or wage garnishment option. What I don’t understand is how these collectors think that a lien for an abstract of judgment is of any real value when these properties are hundreds of thousands of dollars underwater. There is not a dime extra for anyone who is party to a short sale. The first lender is agreeing to accept only half of the original loan balance to release their lien (typical example), the second lender receives no more than $6,000 to release their lien and in California even the property tax collector will agree to step aside by way of a partial lien release to enable the transaction to close. So who gave these credit card collection agencies all the power to refuse negotiations and force these homes into foreclosure?

An abstract of judgment lien recorded against a property can be released through the use of a partial lien release which allows them to have the ability to collect from the debtor at any other time in the future by attaching itself to any other asset the borrower owns instead. If the home goes to foreclosure because of their lack of cooperation they still have the legal right to collect on their judgment through a wage garnishment, bank levy or attaching to a subsequent real property the borrower owns. Why hold up a short sale transaction that has ZERO ability for repayment of the debt when they have other options for recovery?

Has this happened to any of you too?

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Are there Restrictions when Selling Property Purchased at a Property Tax Auction in California?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Wed, 07 Mar 2012 19:15:59 -0800

I was recently contacted for an answer to this question and found the answer to be one that I was not aware of. The answer was graciously provided to me by a Senior Title Officer with Chicago Title.

Q. Is there a restriction in the state of California that prevents a buyer who purchased a home through a property tax auction from transferring title during the first year following the auction? In other words, if an investor or buyer purchases a property through a property tax lien sale or auction, is he restricted from reselling that property for a period of time because he cannot obtain title insurance when it transfers it to a subsequent buyer?

A. The buyer at tax auction can re-sell the property within a year however they may have trouble obtaining title insurance. Title companies typically will not insure until one year has passed due to the fact that there is a one year right of redemption if a junior lien holder or former owner was not properly notified of the tax sale. After a year the title company requires a letter from the Tax Collector showing proof of all notifications sent, this is reviewed before insurance can be issued.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

When will I ever master this business?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Thu, 01 Mar 2012 21:59:28 -0800

With each passing year in this business I consider myself that much more experienced with the workings of a real estate transaction. I even go as far as believing that there can’t be a deal breaker out there large enough to pass under my radar without plenty of advance warning. But each time I begin to feel my sense of confidence rise to a level of “I can do no wrong”, acts of nature surely knock me down a peg or two to remind me that such a level will never exist – not in this lifetime. I compare this type of artificial confidence to the naivety associated with the sinking of the Titanic. “God himself could not sink this unsinkable ship!” so many proclaimed back in the day.

I have a terrific client who was sent to me by a local Branch Manager with Bank of America’s Home Loan Division. No to point fingers or blame this “oops” moment on any particular entity, I just thought it compliments my inflated sense of confidence for this blog post. Moving on…. I find the perfect home for my client and write a strong offer for him which includes his solid gold pre-approval letter issued by no other than B of A! I immediately present my offer to the listing agent for acceptance. My offer is accepted with little difficulty and my client is delighted. My confidence begins its rise to a level that feels as if I’m walking on air; light and happy as if I’ve got my head in the clouds. Why should I need to worry about this transaction with my client’s solid gold Bank of America approval letter provided to me as if it were a “get out of jail free” card.

Throughout the process I begin to get to know my new client little by little. We discuss his occupation as a deputy sheriff with nearly 30 years on the job. I meet his grown daughter who is also in law enforcement and enjoy listening to the two of them banter back and forth about their experiences on the job. They begin to talk about “mom” and how she’s doing now compared to the married years of so long ago. They reminisce about the old days and look forward to the future when dad will be living just a few blocks away from his daughter when this purchase is all said and done. We are all so happy.

During my moments of “bliss” I begin to hear references to “the divorce”. “The divorce” begins to push the clouds floating around my head away as I begin to see it before me like an unveiled dimension to my client’s current situation. Wow! My client is in the middle of a divorce, not past it. He is purchasing a home for himself while still legally married. Hmm…could this be an obstacle for him in his blissful pursuit to reside closer to his daughter? No way! Mr. Branch Manager from B of A would have certainly smoothed the way around this blatant fact before handing me my “golden letter”. Oh! And they currently own the home that “mom” lives in right now. Imagine that!

We are now 30 days into this transaction with only a few weeks ahead to close escrow. I feel so ignorant not to have picked up on this fact before now. My client must have his non-purchasing spouse agree to have her credit checked, her debt analyzed and of course the always necessary notarized signature on a Quit Claim Deed removing her from any right of title to the newly purchased community property asset that I was so confident about procuring. Wee!! Like taking candy from a baby! Wee!! Whoever said “ignorance is bliss” was spot on with this one. The clouds are gone, the sun is glaring at me and once again I question my ability to successfully perform my job. I know, I know. Another lesson learned from the book that will never have an ending. My “golden letter” just turned into ------.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Vacant Short Sale Listing - Who is Responsible?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Tue, 28 Feb 2012 23:30:19 -0800

I have several short sale listings. A majority of them are occupied by the homeowner. Occassionally I have sellers who are fed up with the process and wind up moving out prior to the short sale completion but they typically remain in the area and continue to check on the status of the property as we also do. However, I currently have a short sale listing where the homeowner has moved on and out of the state completely. After the home had been vacant for about a month the lender slapped a vacancy sticker on the window and changed the locks. I immediately contacted the lender to inform them that I have a buyer in escrow ready to close the short sale transaction. The bank sent me the key Fedex.

After two buyers have walked during the purchase process the home has remained vacant and unfortunately vandalized several times. Apparently the rear slider doors have been lifted out of the tracks and removed for easy access. I believe that I resolve this security breach with each subsequent visit only to find another avenue discovered for entry. The condition of the home is slowly disintegrating to the point that it is far more of a burden on me than an asset. The particularly interesting aspect to this story is that Bank of America has never set a foreclosure date on the home. It appears as if they do not want to take it back. So I ask myself, who is ultimately on the hook for liability with regards to this home?

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Upcoming Changes to the HARP 2.0 Refinance Program

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Tue, 28 Feb 2012 22:59:32 -0800

Look Out for Upcoming Changes to the HARP Program

HARP allows homeowners facing difficulties refinancing their mortgage through conventional methods to apply for a refinance of their mortgage. A homeowner that is current with their monthly payments but unable to refinance due to a drop in the value is the typical prime candidate for the HARP program. The ultimate goal is to allow a homeowner to do a mortgage refinance for a lower interest rate and overall monthly payment. Here are the general eligibility guidelines for HARP:

There is no loan-to-value cap in the new HARP, for fixed-rate loans. This is the most significant change of HARP 2.0. Under previous versions of HARP, the LTV could not exceed 125%.
The loan on your property is owned or guaranteed by Fannie Mae or Freddie Mac. Determine if you have a Fannie Mae or Freddie Mac loan by going online (check Fannie; and check Freddie) or by calling 800-7FANNIE or 800-FREDDIE (8 am to 8 pm ET).
At the time you apply, you are current on your mortgage payments. You can have one 30-day late payment in the past 12 months, but none within the past 6 months.
You have a reasonable ability to pay the new mortgage payments. Editor’s note: Fannie Mae removed the "reasonable ability to pay" clause.
The refinance improves the long-term affordability or stability of your loan.

HARP Changes for Lenders and Effects on Borrowers

The following is a summary of key changes found in HARP 2.0. Some key underwriting details are not yet announced, and are expected to be released before March 2012.

Limited Liability

What’s new: A key provision of the new HARP is that it limits lenders' liability in cases of loan default. Essentially, Fannie and Freddie will not force the lender to buy back a non-performing loan.

Effect on the borrower: This change should greatly expand HARP's reach. Lenders will be much more eager to offer HARP loans, where they were previously reluctant. With more lenders participating, you will have an easier time getting a HARP mortgage.

Lender Fees Dropped

What’s new: Fees that Fannie and Freddie charge lenders for high LTV loans are being cut.

Effect on the borrower: The reduced fees are passed on to you, making your loan cheaper. If you are financing to a 15-year or 20-year loan, the fees are cut even further.

Credit Score and Income Requirements Relaxed

What’s new: As long as your new HARP monthly payment is not more than 20% greater than your current payment, specific credit and income guidelines do not apply. The lender will have to determine that the borrower is an “acceptable credit risk” (and what that means is yet to be determined).

Effect on the borrower: A low credit score or high DTI is not enough to automatically disqualify a borrower. Also, if your family is now a one-income family when it was a two-income family on the original loan, you only have to show proof of one income, as opposed to conventional loans where all borrowers listed on the application must document income.

Underwriting Requirements Relaxed

What’s new No. 1: Mortgage Payment History: A HARP lender can approve a loan that has one late mortgage payment in past 12 months as long as it did not take place in the last six months.

Effect on the borrower: You won't be counted out for a mortgage late, when that could normally eliminate your ability to get refinanced at the lowest rates available. If you have a recent mortgage late, you can still apply for HARP once you meet the relaxed mortgage late requirements.

What’s new No. 2: Relaxed Foreclosure & Bankruptcy rules: Your HARP loan could be approved, regardless of how recently a borrower filed bankruptcy or experienced a foreclosure.

Effect on you: Normally, if you filed for bankruptcy or experienced a foreclosure you would have to wait years before you could successfully refinance.

Occupancy Requirements Relaxed

What’s new: Owner Occupancy: HARP loans are no longer restricted only to owner-occupants.

Effect on the borrower: You can now use HARP to refinance your second home or investment property.

Lenders Must Show that a Borrower Benefits from the Program

What’s new: Lenders must show that the HARP mortgage borrower derives one or more of the following four benefits in the new loan:

1. Reduce the size of the monthly payment.

2. Change to a more stable loan product, such as moving from an adjustable-rate mortgage to a fixed-rate mortgage.

3. Reduce the interest rate.

4. Reduce the loan amortization term (moving to a shorter-term loan).

Relaxed Condominium Requirements

What’s new: HARP eligibility used to require that no more than 10% of units in the complex be owned by one person and that no more than 20% of owners in the complex be behind on their HOA dues. These requirements are now removed.

Effect on the borrower: More condo owners will now qualify for HARP. If you own a condo, qualifying for the HARP program is no longer dependent on your neighbors' finances.

Condominium owners have perhaps the best reason to be optimistic. Lenders are being relieved of the responsibility (for HARP refinance loans only) to ensure that condo projects meet the often strict project approval requirements of Fannie Mae and Freddie Mac.

Borrowers living in condominium projects that have seen a sharp increase in the number of renters or those that have experienced some level of budgetary stress will be much more likely to find relief under HARP 2.0 than they have under existing programs (as long as their loans are owned by Fannie or Freddie).

Hold Your Horses

Although applications could be submitted for the new HARP 2.0 mortgages in December 2011, there are those who believe the bulk of HARP mortgages will not be approved until March, 2012. Both Fannie and Freddie must update their automated loan underwriting/approval software by March 2012. Until then, while lenders may approve HARP mortgages by manually underwriting the loans, loans that are manually underwritten expose the lender to greater risk. If a manually underwritten loan defaults, the lender will be required to buy back the loan.

Given the protections that the lender will have once the automated underwriting programs are updated and ready in March 2012, it seems very likely that most loan originators will wait until March 2012. Be ready to move forward with an application, once lenders start taking them but be prepared for a very long process before your loan closes.

Before refinancing, borrowers should know whether their current loan is a recourse or non-recourse loan and also be familiar with their state’s anti-deficiency laws. Refinancing a non-recourse loan could expose the borrower to responsibility for a potentially huge financial obligation where no such obligation currently exists.

Recourse, Non-recourse, and Anti-deficiency

In some states, refinancing can remove the consumer protections, called anti-deficiency laws, which protect underwater homeowners who default on their mortgages. It is recommended that homeowners learn the anti-deficiency laws in their states, and determine if a mortgage refinance changes their rights. Anyone with a non-recourse loan should carefully weigh the decision to turn a non-recourse loan into a recourse loan.

Basic HARP Requirements

Not every upside-down home qualifies for HARP 2.0. Here is a summary of the basic requirements:

The loan must be owned or guaranteed by Fannie Mae or Freddie Mac
The loan was sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
The loan was not refinanced under HARP previously, unless it is a Fannie Mae loan that was refinanced under HARP from March through May, 2009.
The loan’s current loan-to-value (LTV) is greater than 80%.

More About HARP 2.0

How does mortgage insurance impact qualifying for HARP 2.0? Mortgage insurance on a loan should not block a refinance under HARP 2.0.

Readers who do not have Fannie, Freddie, or other GSE loans are not eligible for HARP 2.0. In late January 2012, President Obama proposed a similar plan for non-GSE home loans. See Obama Refinance Plan for more information on this proposal.

More HARP updates will be released both by lenders and by Fannie and Freddie, so keep checking with MoveUpProperties.com to stay updated on details of the new HARP program.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

HOW COULD THIS HAPPEN? My Story-Final Update

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Tue, 17 Jan 2012 22:04:50 -0800

How Could this Happen? Update from Original Post dated 2/19/2011 –

Just to update you again. My arbitration hearing is set for this Friday, Jan. 20, 2011. The board has my complaint with exhibits outlining all the details of my argument from start to finish. (Please read my post copied below from my original post dated I studied the packet I received from the board, California Code of Ethics and Arbitration Manual and reviewed all of my notes and contracts to refresh my memory to the best of my ability.

After paying my $300.00 filing fee and waiting patiently for my hearing date, I hope that I can prove my point in front of the arbitration panel. It really isn’t about the money so much as how wrong I believe it is for a fellow broker to be able to conduct their business in this manner. I know that I would never slash another agent’s commission unilaterally for the sole purpose of lining my pockets with a finer blend of satin. But with a more severe economy, other agents may not bat an eye at an opportunity to take all they can get.

We must remember that we all stand for something greater than ourselves. We must stand up for our profession by behaving as professionals. Whenever one of us takes a short cut or an easy way out it does not go unnoticed. Short cuts or acts out of greed or desperation will only deliver short term and short lived results. Don’t expect to build your business or reputation to a successful and respected one when you continue to cast aside clients and colleagues in your pursuit for the all mighty dollar. Our integrity and referral base may be the most valuable commodity we have and that should never be up for negotiation.

Wish me luck! Any words of wisdom are greatly welcome! Thank you.

ORIGINAL POST dated 2/19/2011 - How could this happen? Well I found out that it can and it will. Our commissions can be unilaterally compromised by any seller, not just a short sale lender when you least expect it.

A new referral client contacted me late January to look at homes with her fiancé. They are under a tight timeframe to purchase because they need to vacate their rental property no later than the end of March. Ok! Let's get started.

We look at several homes and find the one that is ideal for them on our second tour. I contacted the listing agent to verify that it is available. She answers the phone and almost acts as if she knew who I was as she was very kind, open and ready for an offer. Terrific.

I meet with my clients to write a full price offer with an allowance towards closing costs. Very clean offer but we need an answer sooner rather than later. The agent tells me to hold on with sending it over until I have all of the buyer's pre-approved financing information from their lender. So first thing Monday morning I receive the necessary documentation and confidently forward the offer to the agent who is acting on behalf of herself. She recently purchased the property in order to flip it.

Hey, a standard sale will work fine for my buyers as long as we don't have to deal with any chance of a prolonged escrow and for the right price, this will work. The MLS printout that I have states that the commission offered is 2.5% and there would be a $1,000 bonus if we could close by the end of February. I don't believe we will make the end of February bonus date, but it sounds as if the seller is willing to compensate fairly (enough) and ready to close quickly too.

The evening after I submitted our offer I get a response from the agent/owner. I receive a counter offer with an addendum along with a fully signed purchase agreement. She agrees to all of our terms with the exception of paying for the buyer's home warranty and section 1 termite. I call her to find out if she has a termite inspection report already since she just purchased the home herself. She does and immediately sends it over. There is approximately $800 of work to be performed and a $200 re-inspection fee.

I consult with my clients to determine what they would like to do. Their cash is very tight and a $1,000 could make the deal a bit uncomfortable for them. I tell them that the seller/owner recently increased the purchase price by nearly $4,000 right before we came into the picture and since we are giving her full price why not counter back asking her to pay for the section 1 termite. The worst she could do is say "no" and then the buyer would have to come up with the money themselves. Ah ha! Famous last words.

The following day we get a response to our counter offer. It comes in while I'm in the field on my Blackberry. I pull up the PDF copy on my tiny Blackberry screen, scroll down and see her signature of acceptance! Yes! This is great news. I wait to get back to my office to phone my clients with the good news.

At the office I pull up the full version of the signed contract and see something that I could not see on my tiny little Blackberry screen. The box was checked stating subject to attached counter offer. What? Oh man. So much for my eyesight. I scroll down to view the attachments. There is counter offer #3. It states that the buyer's agent agrees to accept 1.5% total commission. What???? Can this be truly happening? Can a compensation issue become a part of the negotiation between my clients and the agent/owner?

In order to gain final acceptance, I must have my buyer's signature on this counter offer. If I were to dispute this with the agent/owner by sending a 4^th counter offer back reverting to the terms already agreed to in counter offer #1 it could cost my client's their ability to purchase the home they want. I have a fiduciary responsibility to my buyers as outlined in the Agency Disclosure to not allow my own personal interests interfere with my client's ability to obtain a home.

Attached to the counter offer is a CBC form or that I must sign agreeing to the commission reduction. Oh brother. If I don't sign then they do not get the house. How very special is this? I know that I have no ability to refuse to sign. My only option is to contact the agent/seller directly to discuss this matter further without jeopardizing my buyers. I instruct my buyers to sign the counter #3 as their final acceptance of the terms of the contract. Now it is up to me.

I contact the agent/seller. I ask her what we can do about this compensation issue. She answers me with "what compensation issue ?". I knew right then that I was going to fight an uphill battle. I suggested that I would pay for the section 1 termite in exchange for the originally offered 2.5% commission. That is what this is all about anyhow. She said no. I suggested that we revert to her original terms outlined in counter offer #1. She told me that we cannot move backward at this point. We must move forward. Ok, how can I earn the compensation offered in the MLS? She did not give me any answer. I told her that I it was my fiduciary responsibility to act in favor of my client's desire to purchase her home and the only way for me to do that is to unwillingly sign her CBC form and in doing so I will be pursuing arbitration once escrow closes. Was she clear about that? Yes, she was.

And that is where I'm at. Trying to behave as if I'm as thrilled with this home for my buyer's sake while feeling utterly disgusted with the whole thing on the inside. I believe that I will prevail in arbitration pursuant to CAR's Legal network. It will be a lot of time and effort however that could have been so easily avoided. What a shame and a shocker! Agents, please DO NOT do this to your fellow colleagues. Bilateral negotiations are one thing but a forced compromise is not in the essence of good business practice or fair dealing.

UPDATE from 2/27/2011 - How Could this Happen?:

I want to give you an update on my ongoing escrow. I did contact the CAR attorneys again on Tuesday. The attorney told me that my signature on the CBC authorization form could constitute my uncontested agreement to the reduction of my commission. However, I told the attorney that I had written below my signature that my signature was provided only as a means to facilitate the purchase on behalf of my buyer and that I will be seeking arbitration immediately after COE. He said that was a good thing to do in order to prevail in arbitration.

The owner/broker did not like it however. She will not communicate with me now. After 3 messages to the owner/broker reminding her that I was waiting on the seller’s disclosures for my buyer’s signature I finally received them via email. With the disclosures she included yet another addendum #2 for my buyer’s signature. The addendum reiterated that my commission was reduced to 1 ½% evidenced by the signed CBC agreement where I indicated my disapproval of by stating that I would seek arbitration upon close of escrow. Her verbiage in the addendum read very ambiguously. She states that the buyer shall take full responsibility for the selling agent’s commission and not seek any legal action against the seller now or after the close of escrow. She also stated that the buyer has accepted the make, model and installation of the appliances and the central A/C unit installed with no further recourse.

The owner/broker emailed this addendum to my buyer’s lender and to escrow without mutual signatures. The lender had a problem with this addendum due to its implication that the buyer could be responsible for my commission therefore throwing off their cash to close. I told him to disregard the addendum as the buyers are not in agreement with it. I returned the signed disclosures to the seller only. The buyers have performed their appraisal, physical inspection and are now ready to close.

I’m waiting for her next move. My buyers understand what is at stake and wish to continue with the purchase. I will keep you posted.

UPDATE from SEPTEMBER 20, 2011 – How Could this Happen?

I'm back! Nearly 6 months later but I wanted to fill you in. I'm filing my request for arbitration with my board of Realtors tonight. I only have 3 days left to file with nearly 180 days passed.

As you can expect from my intent to arbitrate, we closed escrow on this deal with the reduction in my commission from 2 1/2 % to 1 1/2%. So even though I must pay $300 to the board for the right to arbitrate this matter I feel it is important. It is important to fight for what is rightfully ours. We cannot allow this type of behavior to reign in our industry. I'm certain that she thought she got away with it since it has been all this time now and with the cost to file vs. the reward she won't think that I would pursue such a petty matter.

Well it is not petty to me and it should not be petty to any of you either. Large or small we must stand up for each other and stop unethical treatment and behaviors met by unscrupulous individuals like the seller/broker in my situation. I realize that many of us cannot afford the necessary filing fees to get started when they may not be certain that they will prevail in the long run. Many don't pursue grievances like this one just because they cannot afford to. But who will if we don't?

I appreciate your profound support as represented in this post. It is all of YOU that have convinced me to move forward on this and stop other agents from being bottle necked into something that they are not happy with just because they are feeling bullied or without proper resources to move forward. I'll take one for the team! Wish me luck! (Continued to Jan. 17, 2012)

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

How to Deal with a Difficult Junior Loan in a Short Sale

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sun, 13 Nov 2011 02:46:21 -0800

We all know that the passage of California’s SB458 on July 15th changed how we process short sales. It’s most important aspect is barring junior lenders from having recourse against the borrower/seller or asking them for a monetary contribution or promissory note. Although the decline of short sale approvals has not occurred as severely as expected, real estate agents have been struggling to get junior lenders to cooperate in needed negotiations to successfully complete the short sale transaction. Instead a number of “work-arounds” have been created to get the junior lender’s full participation in final negotiations.

I define a “work-around” as an alternate method used to achieve a task or goal when the typical method does not work. In the case of short sales, junior lenders who aren’t satisfied with what they may get from the first lender’s sale proceeds and barred by SB458 from receiving any funds from the borrower may refuse to do the short sale and hope they can do better if they sue the borrower after the first lender forecloses. Here are a few of the ways that creative and successful real estate agents are using “work-arounds” to save their clients from foreclosure:

1. Get Money from Someone Else - SB458 simply says that no lender can request a contribution from the Seller/Borrower as part of a short sale. It does not say that a lender cannot get contribution from others. First Lender: Typically the only money offered to junior lenders comes from the First Lender who gets the lion’s share of the sale proceeds. Generally, first lenders make more money from a short sale than they could from a foreclosure but they regularly refuse to give the juniors any more than $6,000. But if a foreclosure action should bring much less to the first lender than a short sale would, they could be convinced to share more with the junior to gain their cooperation and close the deal. Buyer: It is the Buyer who is bringing the money to the table. If the Buyer really wants the property, they may be willing to contribute money to the junior lender to make the deal happen. The Buyer’s lender may allow this contribution to be paid through escrow as a closing cost. Real Estate Agents: Although agents don’t deserve this, it is not unusual for lenders to look to the agents to cut their commissions to satisfy the demands of the junior lender. This is a “Hail Mary” approach that unfortunately penalizes those parties who put the deal together in the first place.

2. Voluntary Seller Contribution - SB458 states that a lender cannot “require” the seller/debtor to make any contribution. But nothing says that the seller cannot “volunteer” a contribution. While in reality, no one would imagine voluntarily providing money to a lender that is not demanded for, the drafters of SB458 allowed that a seller may do just that if they have the funds and they want to get the deal done. Typically this would be performed to satisfy a junior lender’s request that they receive “x” dollars more in order to proceed. While SB458 does not state who must pay this, the language of the request is that any other party in the short sale can do so, including the seller.

3. Re-write the Buyer’s Offer - If the junior lender holds out for more money than what is agreeable, the deal could die. If so, then some agents have gone back to the buyer and written a new short sale offer for a lower purchase price than the original deal… lower by the additional amount the junior lender wants to receive. The new offer is submitted and, if the first lender accepts the offer terms, the junior lender counters at the original offer price with the increased money going only to the junior lender. This has been proven to work although it can cause added delays in closing due to the processing of a brand new purchase contract.

4. Discount the Junior Loan - If the first lender refuses to allow money to be paid by the seller to the junior lender, then the sale could die and the home would go to foreclosure. Instead, prior to selling the home, the seller could negotiate with the junior lender to accept a discounted payoff of their loan. For example, the seller pays money to the junior lender and the junior lender accepts this as satisfaction of the debt and releases their lien. Then escrow can open without the threat of the junior making any monetary demands. Only the first lender is in the deal and the short sale closes. I’ve seen discounted loan payoffs occur for .10 to .20 cents on the dollar.

5. Discounted payoff before short sale - For some sellers who are upside-down on a property but have substantial other assets, there is a danger in doing a short sale in that the Hardship Application process requires that they disclose their personal assets. This can cause a junior lender to reject a short sale because they believe they can collect from the seller in a post-foreclosure lawsuit. In this scenario, it could also be better to negotiate a discounted payoff with the junior lender before you ever start the short sale. Now it is simply a business transaction: how much will the junior lender accept in exchange for a lien release? Again, 10-20% is common but generally no financial statements are required. If this works and the junior loan is extinguished, then the seller has a much better chance of concluding their short sale transaction as it is always easier to negotiate with just one lender rather than two or more.

All of the foregoing concepts are foreclosure-avoidance, short sale success strategies that real estate agents and their clients are actually using in today’s California real estate market. If you are having success with other creative approaches, please let us know. It is important to note that all agreements made before, during or after a short sale must be disclosed to the principle parties to adhere to the definition of an “arms length transaction”. All funds exchanged must appear on the Final Settlement Statement (HUD-1). No secret “on the side” deals are allowed as they would constitute mortgage fraud which bears severe legal consequences.

The information presented in this Article is not to be taken as legal advice. Every individual’s situation is different. If you are upside-down on your loan(s), especially if you’re facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Bank of America Did it Again

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Mon, 12 Sep 2011 01:51:18 -0700

Well Bank of America did it again. They foreclosed on a home owned by a single mother of five children, one a newborn last Monday after we were told numerous times that her short sale was approved.

This hard working mother of five commutes to work every day from Victorville to Manhattan Beach, a 103 mile one-way trip in order to keep a roof over her family’s head. With the job market in such a slump she cannot afford to risk her current employment and has been making this commute for nearly 4 years now. Until now.

She attempted a loan modification with Bank of America two years ago but was declined. She attempted the process again only to be turned down for allegedly not returning her documents to the bank by their deadline. When we met her earlier this year, her loan was not in default yet. With the news of her recent pregnancy, she began falling behind in her mortgage payments.

In April 2011, we listed her home in attempt to short sell it so that she could retain some hope of home ownership again by making every effort to avoid foreclosure. I am a HAFA certified real estate broker trained to work out short sales. She was a prime candidate for the program.

In May 2011, we received a full price offer on her home at $99,000 all cash. She was also served with a notice of default that same month from Bank of America. We tried to assure her the best we could that the short sale would be approved and not to worry about the bank foreclosing on her. We had plenty of short sale negotiations on homes with Bank of America that have been postponed for months if not years before the threat of foreclosure.

After submitting her complete short sale package, the new offer and estimated HUD-1 through the Equator system, we received a counter offer from the negotiator basically accepting the terms of the purchase agreement with some minor tweaks. The closing date was to be completed by September 23, 2011. Not a problem. We accepted all the terms. This was in July 2011.

This process was moving along quite quickly in comparison to other files we have worked. But no indication of any red flags or reasons to question the system. After submitting her most recent updated pay stub and bank statement, Bank of America stated that they were waiting on final investor approval before we would open escrow.

On August 10, 2011 she received a notice of trustee sale notice posted on her front door. The sale date is scheduled for September 6^th at 9:00 a.m., the day after Labor Day (no pun intended but ironic since she just gave birth to her new baby boy).

We began to call the negotiator immediately in an effort to postpone this looming sale date in light of the short sale approval we were waiting on. Bank of America assured us that the foreclosure date would be postponed but that it may not show up in the system until three days before the sale date. We called the trustee directly to verify that the sale date had not been postponed yet. On the first of the three days before the sale date we began to make repeated calls, email requests, Equator notifications regarding the pending sale date. Each time we are told that it should be postponed at any time. The trustee notifies us that an opening bid has been published for $64,000. What? How could that be possible when Bank of America is working on the $99,000 all cash offer we submitted two months ago? It must be a mistake. We kept calling.

Bank of America did not postpone the foreclosure sale as it promised to do. The home went to sale for $64,500. Oddly enough, it was not purchased by a third party. It reverted to the beneficiary to be sold as an REO. Fannie Mae failed this hard working woman, Bank of America failed her. And ultimately, we failed her miserably too.

How could this happen? What could we have done differently? We are attempting to contact the asset manager for Fannie Mae to inform them that we have an offer for $99,000. Bank of America told us that it would take a few weeks for the property to be assigned. I didn’t believe that and was correct when I was told that Fannie Mae introduced himself to my client by knocking on her door with the news.

My head is still spinning with ideas and attempts to understand why this home went to sale without a single postponement when so many others we have with Bank of America are declared “cancelled” for other unknown reasons. I’m furious and saddened by this foreclosure system we are forced to bargain with. Any thoughts?

DISCLAIMER:
****DIANE WHEATLEY IS NOT A LICENSED ATTORNEY. THIS INFORMATION IS COMPRISED OF HER OPINIONS, OBSERVATIONS AND INTERPRETATIONS AND IS NOT INTENDED TO BE CONSTRUED AS LEGAL ADVICE. PLEASE CONSULT WITH AN ATTORNEY BEFORE RELYING ON OR TAKING ANY ACTION BASED ON THE INFORMATION PROVIDED HERE.****

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Foreclosure Cancelled? But I've Already Moved!

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Mon, 05 Sep 2011 23:49:37 -0700

I’m witness to some odd occurrences with several of my clients, especially those associated with Bank of America. Some clients were in foreclosure, but their trustee sales were cancelled and never rescheduled. Or, the client makes partial payments for a year, gets turned down for a loan modification, and then B of A starts foreclosure proceeds. Or, the client attempts a loan modification over and over with no approval but once they list their home as a short sale they receive paperwork for a trial loan modification. Or, the client has been discharged from bankruptcy with no attempt by the lender to begin foreclosure.

This is happening all around us and I have a handful of clients experiencing one of these situations. One particular client recently discharged nearly $400,000 in mortgage debt with two lenders. The first is with Wells Fargo and the second is a HELOC with Chase, formerly WAMU. Neither lender has pursued foreclosure of the home as title remains in my client’s name as legal owner of record.

Two other clients have mortgages with Bank of America. Both clients attempted a loan modification and both failed. When we listed their homes as short sales earlier this year both sellers were desperately close to their scheduled foreclosure dates. We immediately began our rescue mission to postpone the sale dates in order to complete the short sale purchase transactions. One sale date was not postponed and went to sale the week prior. The other sale date was successfully postponed for 30 days. But don’t go away.

The property that went to sale was not sold to a third party or reverted back to the beneficiary. The trustee indicated that the sale was “cancelled”. Bank of America’s records showed that the property was foreclosed on. But when I questioned the bank about what the trustee had told me they did not have an answer. I asked the bank how I could upload a short sale offer on the property. I couldn’t because it was in foreclosure. After several weeks the file was released from foreclosure by the lender. Now, many months later, no sale date is scheduled and it remains “cancelled”.

A similar situation occurred with the other property. We were receiving systematic postponement dates every 30 days until the third month. On the third month we called for a postponement and were told that the sale was “cancelled”. Again, many months later, no sale date is scheduled and it remains “cancelled”.

With two out of the three properties currently vacant, the question is, now what? Is it possible for a homeowner to simply “walk away” with no threat of future liability?

I spoke with a real estate attorney who says that until the bank forecloses or the property transfers title through a short sale or deed in lieu, the seller remains responsible for the property taxes, insurance, security and condition of the property.

A bankruptcy attorney told me that my client who was recently discharged from the debt through bankruptcy technically didn’t own the property anymore and should drop the insurance and not concern himself with the status of the property anymore. However, I didn’t feel comfortable with this information. I consulted yet another bankruptcy attorney who stated that until the bank forecloses, my clients are still named as legal owner of record and therefore remain responsible for the taxes, insurance, security and condition of the property.

So it seems I’m in some sort of legal limbo here. As it has become clear to me that banks are “walking away” from their right to foreclosure, does that place the financial responsibilities squarely on the shoulders of the homeowner when the homeowner has walked away believing that the foreclosure sale has already occurred?

I receive letters and emails nearly every day from individuals who have moved out of their homes because it was in foreclosure only to learn months later that the lender never foreclosed. It looks like no one is addressing this “bank walk away” issue and now I’m receiving questions about the relevance of “vacancy insurance”.

If you have been approached with the need for “vacancy insurance” by your lender or are being sued for negligence associated with your vacant home, please share your story with me. I’m very interested in this latest aspect of today’s housing crisis and how to best resolve it, if possible.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

If you are considering walking away from your mortgage, you must read this first!

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Mon, 05 Sep 2011 01:25:42 -0700

I’m not sure if you have heard about or experienced the “bank walk away”. If not, it’s coming to a neighborhood near you. A bank walk away is generally a property in one of the following situations:

1. The bank begins foreclosure, the occupants move out, and the bank figures out they don’t want the expense of foreclosing on the property for whatever reason, so it sits empty. The borrower assumes that the foreclosure took place and moves somewhere else not realizing they still own it as the title continues to show.

2. The bank begins foreclosure, the borrower files for bankruptcy. The bank never files a Proof of Claim or moves to lift the automatic stay. The borrower’s bankruptcy lawyer tells them to move out of the house thinking the bank will take back the property, but the bank never does and the property sits vacant while the property owner sits wondering what the heck is going on. A lawyer may tell you that “You don’t own it anymore” which is WRONG. Don’t be fooled by the thought that once the bankruptcy is discharged that you can wash your hands of any future liability associated with it. That just is NOT true.

This is happening all around you, especially to borrowers who had loans with Bank of America and its predecessor, Countrywide Home Loans. There are people all over the United States who are either completely unaware about their continued responsibility for their former home or trying to figure out what to do with these homes that the bank didn’t foreclose on during the bankruptcy or post bankruptcy period.

3. The bank never begins foreclosure because it realizes that it’s never going to recoup any money and is never heard from again. People who were initially being foreclosed on are low income and were using the property as a place to live. When they move out thinking the bank is going to foreclose, guess what? It sits vacant open to vandalism and crime for months at a time, even years.

Now I cannot advise as to legal consequences resulting from a bankruptcy, but several lawyers have informed me that once the debt is gone, the lien is gone too. Yes, you heard that correctly: It might be that once the DEBT is discharged, the LIEN goes with it. If this is true, it means that the bank has to foreclose before the debt is discharged, otherwise they may not be able to foreclose later.

However, I am currently in escrow on a property in Long Beach where the property was included in a Chapter 7 bankruptcy and the debt was discharged. The client was no longer responsible for the mortgage payoff to the lender. My company then sold the property through a “short sale”. The lender in first position will receive their loan amount paid in full and the second trust deed holder will receive approximately 75% of their loan amount at the close of escrow. Both lenders submitted demands to escrow for their respective pay-offs.

This would indicate to me that the lien is not released through a bankruptcy proceeding but the borrower’s liability for the debt is. The lien can only be paid off through a deed in lieu, short sale or foreclosure AND until one of these actions is completed, the homeowner remains on title as the owner of record.

For those of you in foreclosure and bankruptcy, it wise to remember:

1. You own it until you don’t. If the bank never forecloses, it’s still yours. You are still responsible for the upkeep, maintenance and taxes on the property. Be cognizant about this. Continue to check on the property to ensure the security of the dwelling, condition and whether it may be the target of a fraudulent tenancy while you are still named as the owner of record.

2. If you are filing bankruptcy, talk to your lawyer about whether to remain in the property. Lawyers are advising homeowners to move out because they need to surrender the property to the trustee. In my opinion, it is best to remain in the property for as long as possible or until you are served with eviction papers.

Consider the financial impact on homeowners who have lost their homes due to hardship or catastrophic circumstances. What if the bank never forecloses? They could save thousands of dollars they desperately need while keeping a roof over their heads.

3. Consider the picture from the bank’s perspective. Why would or wouldn’t they foreclose during the bankruptcy or attempt to foreclose post bankruptcy? Are there obvious reasons why it would not be in their interest to attempt foreclosure? There must be an underlying financial reason that the banks are not foreclosing or could it be an inadvertent oversight or paperwork snafu?

4. More importantly, keep your insurance in place. The reason for this is because if the property remains vacant and you cancel the insurance who do you think will be personally sued in the event of an injury on the property, fire, theft or other property damage? Check with a lawyer on how to indemnify yourself if you’re in this situation, and check with your insurance agent on whom the payout should be made to if the debt has been discharged and whether you should carry vacancy insurance on the property. If you owe no further debt due to a bankruptcy discharge are you certain that the bank should be the recipient of the settlement?

5. Keep paying your HOA dues. This is for your own best interest. You are responsible for any and all HOA dues until you no longer own the property. Get too far behind and you’re going to be saddled with a lien until the bank forecloses or title is transferred out of your name. If you filed bankruptcy, you are still responsible for HOA costs after the discharge.

6. Be careful signing anything with the bank post discharge such as a loan modification agreement. Check with a lawyer before you do this or if someone is encouraging you to do this. There should be absolutely no reason to agree to a modification of a mortgage that you no longer have any financial responsibility for. Think about it.

I hope that these issues have enlightened you to the obvious and not so obvious perils associated with a “bank walk away” situation that could happen to you.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

The headache of negotiating, text messaging and contingencies. HELP!

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sat, 27 Aug 2011 15:30:28 -0700

I need to take some aspirin for my headache but I’m feeling so much pain from my recent real estate negotiation that I don’t think it really matters.

I believe that in any real estate transaction there is a time to STOP negotiating. Just when all parties have come to an agreement with NO additional issues to hash out my buyer is satisfied and ready to sign, thank goodness. But what do you do when the seller refuses to send over signatures on the final contract? Oh, my head hurts again.

The listing agent and I are familiar with one another, friendly and professional. When she needs an answer regarding an issue I always respond, by text message only. This particular listing agent will not communicate with me over the phone. She insists that all of her communications be made via text or email. I’m certain that this aspect of the negotiations is partly to blame but it is her choice, not mine. She is the listing agent and my client is the “lesser” buyer.

After almost three weeks of negotiating on this house my buyer has conceded to nearly every term the seller has demanded. Price, closing date, deposit, proof of funds, lender approval is all agreed. The snag this week was the fact that my client has a home in escrow which they were planning on using the proceeds from in order to complete this purchase.

Remember the days of contingent buyers? There are/were buyers who make offers subject to the sale of their existing home that will be listed to sell and close concurrently with the purchase and there are/were buyers who have their existing home in escrow with all contingencies removed and a $20,000 non-refundable deposit provided in good faith that all parties will continue to close within the next 21 days. My client is the latter one.

Yesterday my buyer agreed to waive the sale contingency of their home to satisfy the seller’s final demand. Since I relayed this information to the listing agent via text message on my Blackberry yesterday I have had no further communication.

No transaction is exempt of failure. I understand the client’s concern for the “what if’s” but the contracts provide certain timeframes for each party to complete certain actions in order to become 100% contractually bound to close escrow. The contingency period is the buyer’s right. The financing and appraisal contingency is another. Even though the sale contingency ran concurrently with these additional timeframes, the buyer arranged alternate resources in order to remove it from the deal.

My head is pounding with the thought of what is going to happen next. If only there was another home in the neighborhood that had similar features. Until then or until the end my buyer is left with no reason why this seller won’t sign. We have nothing else to offer and nowhere else to go. Help!!

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

What’s so Short about a Short Sale?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Thu, 21 Apr 2011 13:04:05 -0700

I find many homeowners who are afraid to ask what a short sale is. They are afraid to ask because by now you would think that everyone would know what a short sale is. But until now, they never wanted or needed to know. Let’s try to bring them up to speed.

It’s no surprise that the real estate market has hit an extraordinary low under the most extraordinary circumstances. We have never experienced anything like this before. We heard all the talk back in 2005 and 2006 of a real estate bubble. An overinflated real estate market that was ultimately doomed and due to burst at any time. Did we listen then either? Some did. But many covered their ears wanting to believe that the market appreciation would never end. Or if it had to, home values would “level off” before they would begin to rise once more. We could wait for that to happen while we are sitting on our personal nest eggs imagining what to do with all that built up equity in our homes.

Many refinanced their mortgages to reduce their interest rates to 1% while taking out as much cash as they could possibly get their hands on. These loans were as easy to get as candy at the candy store. Lenders were passing out negative amortization loans or option arm loans to anyone and everyone who put their hand out. They were told that there was no risk because they would simply refinance again when the interest rate was set to adjust in three to five years. Plenty of time and with home values on the rise a refinance would be a piece of cake. So have your candy and eat your cake too! Wow.

Sound familiar? You bet it does. Nearly 25% of all mortgages are underwater and climbing according to The Daily Record. That’s one in four homeowners who have no equity, no ability to refinance their mortgage and no ability to move because there is no feasible way to sell their home to pay off their existing mortgage. What to do?

The good news is that there are options. The bad news is that none of them are quick, efficient, pleasant or easy. One such option offered to a struggling, under water homeowner is a loan modification which is really a refinance under a different name. A loan modification is proving to be a pipe dream with a less than 5% chance of ultimate approval or success. But once they are declined for a loan modification they can qualify for a HAFA short sale which stands for Home Affordable Foreclosure Alternative. This is an Obama idea set up to prevent more homes from going to foreclosure where they ultimately become bank owned properties. Bank owned properties are those homes on any street that sit vacant with dead landscaping, broken windows, a deteriorating appearance, green swimming pools and a true eyesore to drive by every day on your busy daily travels.

According to Standard & Poor’s Shadow Inventory Report which we define as outstanding properties that are (or were recently) 90 days or more delinquent on mortgage payments, in foreclosure, or real estate owned (REO)—that haven’t yet hit the market.”

S&P claims there is over 40 months supply of this shadow inventory. In Layman’s terms this means that homes will sit vacant and abandoned for many months or years before they will be used for the purpose they were built – to house people.

How successful has the HAFA program been since its release in April 2010? Are banks actually cooperating with the idea of short sales over foreclosures? Some.

It is estimated that nearly 30% of underwater mortgages are successfully completing short sale approvals with lenders. This statistic is up from 10% in 2009 and 18% in 2010 according to the tracking firm DataQuick Information Systems.

Although a short sale approval is entirely voluntary by a lender it is apparent that many lenders see the benefit of approving a short sale over allowing a property to go to foreclosure. Banks calculate the difference in loss between what they stand to receive from a short sale vs. what they would ultimately lose through foreclosure where it will be added to their portfolio of existing REO’s or “Real Estate Owned”.

The benefit of a HAFA short sale is that it is designed to stream line the overall approval processing time, wipe out any recourse debt to the borrower, extinguish the threat of a junior lien holder from going after the borrower for unpaid debt and provide a monetary incentive to both the loan servicer and the homeowner in the form of a “cash for keys” agreement at the close of escrow. The bad news is that only a handful of homeowners are granted a short sale approval through the HAFA program after keeping the buyer and homeowner on hold for two to three months. If they are denied a short sale approval through the HAFA program the lenders will consider an approval using a standard short sale method hence, beginning the process all over again with no hope of a “cash for keys” incentive when they are done.

This song and dance number makes you wonder if the homeowner should have applied for a standard short sale approval to begin with since the buyer just walked away from the transaction because they found a better home around the corner and the scheduled foreclosure date is looming closer and closer.

Granted, the lender will place the foreclosure sale date on “hold” while processing the short sale approval but with a casual sense of urgency. Many times the lender will continue on calendar for the foreclosure sale date with monthly extensions provided on the final day just before the auction date; seemingly to make everyone involved sweat it out hoping and praying each month for another 30 day extension. And on occasion you will hear stories of properties going to sale in the midst of the short sale approval process only because one department forgot to notify the other department to postpone the sale date on time. Banks say, “Oops! My bad, so sorry for your loss. Now move along!”

You must remember that the banks are not people. The banks are strictly acting on their own agenda based on which scenario best benefits THEM, not the borrower. The borrower is begging for forgiveness to an institution for the unpaid debt they owe in order to sell their home. This constitutes tens to hundreds of thousands of dollars of debt relief to the borrower that the banks had planned on receiving when the loan was originally approved and secured by a signed promissory note and recorded deed of trust. Even though a rising sense of frustration and surmounting stress continues to build with each day that ticks by while at the mercy of a lender that doesn’t operate in any human fashion with feelings and emotion, the homeowner must try to remember that they could ultimately be free of a mass amount of monetary debt with the ability to once again purchase a home using government backed financing in as little as two years time. Keep your eye on that achievement and thank your lucky stars to be done with it.

So, what’s so short about a short sale? Nothing. The short is merely a term to describe that the lender will be coming out “short” on the payback of their loan balance while the borrower will be free to move on with their life and in time, forget about this chapter in history.

Written by Diane Wheatley, Real Estate Broker located in Southern California.

April 20, 2011.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Who Can Stop a Listing Broker from Slashing Your Commission after Acceptance?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sat, 05 Mar 2011 19:02:51 -0800

If a listing agent can unilaterally negotiate a commission reduction to the selling agent to seal a deal then why can’t a selling agent incorporate a commission increase on a counter offer or addendum in their negotiations as well?

I am in the middle of a negotiation nightmare with a seller acting as her own broker in the sale of a flip home she owns. The MLS clearly states that the commission shall be "x" (I don’t want to go into actual numbers in this post). My buyers elect to offer her full price, no concessions or seller repairs and a 30 day escrow. I include a copy of the MLS printout with my offer submission package.

To make this post short, I receive a counter offer the following day accepting the terms of my buyer’s offer with one change. Buyer’s agent shall agree to accept a commission percentage equal to “y”. Which is an amount equal to about half of the originally offered commission. All other terms are to remain the same.

So there you are. Clear, short, simple and precise. I have now become a part of my buyer’s purchase contract. I am advised by CAR’s legal network to be sure not to stand in the way of my buyer’s ability to purchase this home therefore, I must make the road nice and wide for the seller to force this short, simple and precise figure down my throat.

My clients are wonderful people and capable of providing me with many future referral business in the years to come. They would have stepped away from this purchase to protect my commission had I asked them to. But how could I ever ask a client to think of me before themselves when it comes to purchasing the home that they love? It is not as if homes like this one are an easy find. I could not stand in their way of an ideal opportunity to own a home that fits their needs so perfectly.

So, with that said, why couldn’t the shoe be put on the other foot? Why couldn’t a buyer’s agent request for more compensation than is advertised in the MLS to seal a deal? As long as the buyer agrees to it then why not include the increased amount in the purchase agreement, counter offer or amendment just like it happened to me? Or why not make a request for a portion of the listing agent’s commission so that the seller’s net proceeds remain unchanged?

Who’s to say that this does not become the “norm” in all real estate negotiations? We ask for home warranties, termite repairs and allowances for our buyer’s closing costs. Why not ask for more compensation to the selling broker too? What’s to stop this from happening? Nothing has stopped it from happening in my transaction. And, if you were wondering, I am the broker for my company and the seller is the broker for her company. I tried to come to terms with her on this issue until I was blue in the face. She would not budge.

Anyone want to challenge my new idea? I’m all ears………(let it be said that I am acting as a devil’s advocate in this post attempting to gain some insight on an issue that is burning inside me. I would NEVER do this to a fellow Realtor under any circumstances but what’s to stop others from doing it to you?)

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Can a listing agent reduce the cooperating agent's commission to seal a deal? New Update Posted 9/20/11

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sat, 19 Feb 2011 15:46:20 -0800

How could this happen? Well I found out that it can and it will. Our commissions can be unilaterally compromised by any seller, not just a short sale lender when you least expect it.

UPDATE from 2/27/2011:

I’m waiting for her next move. My buyers understand what is at stake and wish to continue with the purchase. I will keep you posted.

UPDATE FROM SEPTEMBER 20, 2011 -

I'm back! Nearly 6 months later but I wanted to fill you in. I'm filing my requst for arbitration with my board of Realtors tonight. I only have 3 days left to file with nearly 180 days passed.

Well it is not petty to me and it should not be petty to any of you either. Large or small we must stand up for each other and stop enethical treatment and behaviors met by unscrupulous individuals like the seller/broker in my situation. I realize that many of us cannot afford the necessary filing fees to get started when they may not be certain that they will prevail in the long run. Many don't pursue grievances like this one just because they cannot afford to. But who will if we don't?

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

ACTUAL EMAIL RECEIVED FROM AN UNCERTAIN HOMEBUYER - MANY MONTHS LATER.

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Thu, 23 Dec 2010 03:33:12 -0800

This email message came to me today from a client we closed escrow with in June 2010. It is from a client that I've written about in the past that continues to send me unsavory reminders of a transaction, however successful, that they feel was ....... Well, you read it for yourself and decide. I would like to have some feedback on whether my response was appropriate and justified. I realize that I can be a bit wordy in my writing but please take the time to read it and give me your thoughts. Happy Holidays!

Dear Diane, We are very easy going people and would've never said anything bad about our process because we just wanted to get our house, and honestly didn't know all the details like you guys did, etc. But enough time has passed and honestly, we were upset at how things went. We felt at times we were being taken advantage of, because we are so "green", etc.

We were signing away our life with no one to ask questions to (and were pushed quickly so the lender could make his money and more money for doing it faster). We felt and know we were lied to and honestly, that hurts us the most. We were lead to believe that we would receive a gift card after the closing and it never came.

I tell you this, because your company made a lot of money off of us. They made money on the sale of the house and the loan since we went through them (and they pushed for us to use their loan company). The lender even said that the realtor of the house we bought from will use him and his loan services since WE did such a good job. So now we gave them more business and not even a thanks.

My dad was here when the realtor came over to congratulate us on our closing. I asked my dad why she wanted to know where we shop for improvements to our house. He told me (my parents have bought many houses) that realtors do that to THANK YOU for the sale and because they make a lot of money at one time off of you. So, the just of this is are you guys unthankful of the money and now potential business we brought to your company?

Mr. and Mrs. First Time Home Buyers

(this letter is copied and pasted exactly how I received it today with the exception of their names)

My answer:

Dear Mr. and Mrs. First Time Home Buyers

I have read your email message to me this afternoon and would like to take this time to respond. As far as the service and support that you received throughout your home buying experience, I regret that you did not feel comfortable with certain aspects of the transaction. I understand how overwhelming the process can be and your unfamiliarity with all of the terms, contracts, timeframes and such can leave you feeling vulnerable at times.

You have a very strong opinion regarding whether or not a Realtor's commission is warranted or not. At least that is what I gather from the tone of your email. That is a common misunderstanding among home buyers and sellers in the real estate market. I believe that comes from the fact that we are paid on a commission only basis. Our earnings come in the form of a lump sum check paid ONLY at the close of escrow and ONLY if escrow closes successfully. Many people do not realize all of the time, travel, gas, research, negotiations, inspections, appraisals, contracts, etc. that we provide to our clients on a 100% contingency basis or for free with the hopes that escrow does indeed close.

There are many times that we work through all of the obstacles and perform our due diligence as a fiduciary to our clients only to have an element of the transaction fall apart just when we thought we could count on making our own personal rent or mortgage payment. The only certainty in this business is the certainty that a transaction is never over until it is over and that you cannot ever count on it until it is closed. This business is not for the conservative, cautious or the weak at heart.

We do what we do because we enjoy the looks on the client's faces when you hand them the keys to their new home. The warm feeling we have in our hearts that we are responsible for making home ownership a reality for our clients. We have provided the means to create houses into homes for families, couples, individuals for years to come. And we do that by taking on all of the tedious and stressful tasks that must be performed within the strictest of timeframes per the terms of the purchase contract. I have always considered Realtors like "stress sponges". We are the buffer between the principles so that the client does not feel uncomfortable negotiating directly with the other party and we absorb a majority of the stress, deal with the demands and as calmly as reasonably possible put our clients at ease in order to facilitate a successful transaction. Walking a tightrope is not an easy task but it can be rewarding when you make it to the other side.

So what I can suggest to you at this point is to sit back and look at the big picture. Instead of analyzing all the events that occurred in the past, focus on what you have today. Ask yourself "am I satisfied with the home that I chose?", "can I afford my monthly mortgage payment?", "do I enjoy the location that my home is in, neighbors, schools, parks, shopping, commuting to work?"

I reviewed all the documents and personally know that the lender provided the financing you needed, in the timeframe that you needed it and I believe at the interest rate that you found acceptable. You may have felt a bit of that stress I was referring to as it could not be contained in the sponge as well as we would like because certain aspects of the transaction needed to be performed when you were scheduled to be out of town. You may have felt "pushed" but in reality the agents needed to perform critical aspects of the agreement or potentially lose an important interest rate lock or prevent your closing costs from increasing substantially if it were to close escrow into the following month. I will attest that any urgency you may have felt was not due to the agent's attempting to gain additional compensation at the closing, it was strictly due to their fiduciary obligation with you.

The lender you used is not owned or managed by our real estate company in any regard nor do we profit from any transactions performed through them. They are a completely separate entity. I encourage their services strictly because I know that they can perform as promised and to date, have provided the best costs and rates to my clients. However, you were told that you could use any lender you felt would provide you with the best overall performance.

Finally and most importantly, our company does not earn anywhere near the amount of commission they are entitled to when they work with a client that comes from an outside referral service. Regardless, we maintain the same level of service and dedication that any other agent would provide in exchange for almost half of the commission other real estate agencies would receive.

I've never had a client expect a gift at closing. If they did it would not be a gift. It would be a closing cost. I'm sorry that you were so dead set on one. The funds just are not available and that's a fact.

I know you don't agree but I don't believe that we will receive any referral business from your representation of our services. And no, we are not grateful for that. Do not worry yourselves about our unthankful behavior over new potential business you have referred our way. We will continue to focus on productive, professional relationships that will lead us toward thankful, appreciative clients that have earned our representation and commitment. Happy Holidays to you and to a prosperous New Year.

Diane Wheatley, Broker

Move Up Properties Real Estate

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

A warm response to my prior post "Did my buyers REALLY say that?"

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Wed, 27 Oct 2010 14:38:24 -0700

HALT !!! Did my buyers REALLY say that?

Wow! Thank you so much for the resounding response. I wanted to be sure that everyone knows that I’ve read each and every one of your posts however please forgive me if I do not respond on an individual basis as the count is now well over 300 posts within such a short period of time. I would never have predicted that my experience would have struck such a chord with so many of you. Your posts speak volumes and each one comes with its own unique value.

I feel like a huge weight has come off of my shoulders by all the encouragement you have provided me. You begin to doubt yourself when something shakes your core like this has.

I have not responded to their onslaught of text and email messages yet. When I first received the text's and emails I ran to the phone angry, sad and ready to give them a real piece of my mind. But then I gave myself a time out to cool off and poise myself which is almost always the best way. But I do have the need for closure and to reiterate to them all the services that I provided to them, the facts behind what I earned in comparison to what they may believe, that it is not polite to look into someone else’s pockets and the truth that a closing gift is not a staple of the real estate closing as they have been erroneously informed.

But then a part of me resents the idea of having to defend myself or prove my worth to these people. But I believe that they will continue to hound me until I address this outrageous issue with them. Your suggestions were awesome. I love Sonny's idea with the Bible, that is terrific, and Carol #61 made me laugh out loud, great suggestion! or Kathryn's #82 donation to charity is super too. Leslie #134, you think a lot like I do. Wouldn't that be a hoot! If I only had the nerve to pull it off without my blood pressure skyrocketing while trying to contain myself.

My philosophy has always been to "leave them smiling". This business is so much about the lasting impression we leave with them at the end of the day. I could eat crow and provide them with some worthless little piece of something that they will never believe is enough and take my chances that it’s better to provide them with "something" rather than being remembered as the agent that left them with "nothing" (in their minds).

I think that giving them a gift after they voiced their demand for one trumps the true meaning of a "gift". It would not be a gift anymore, it would be a closing cost. I've done that already. A gift comes from the heart. You can't make demands on someone's heart. It loses all of its meaning.

I am going to give some serious thought to telling them that I purchased a star in the heavens for them to cherish always and it took two months to find just the right one to match their unique tastes. I will point to it high above us using just the right finger. (now that was not professional and please know that I'm only joking). I will let you know the outcome of how it plays out though - while keeping the faith that I will still be able to leave them smiling.

At the very least I will walk away from this situation as the responsible, ethical and professional Realtor that I am and because of all of your support I can do that with more confidence and pride than ever before. Thank you from the bottom of my heart.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

HALT !!! Did my buyers REALLY say that?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Tue, 26 Oct 2010 01:53:47 -0700

I have been selling real estate for over 20 years and during all those years I have never experienced a real estate closing that made me want to pick up my things and leave the profession forever, until now. Is it due to the current economic times? Does it have to do with the record high unemployment rates in our county? Is it due to the credit crunch which makes financing so difficult for buyers? Is it because I am tired of working harder than ever for what seems to be a fraction of the income I made just three years ago? Nope.

I'm a survivor who has experienced many ups, downs and round and rounds. But above all, my real estate career has remained an exciting and rewarding one. Rewarding because I know that I have helped a family, a newlywed couple, partners or an individual find the home of their dreams. Nothing is more rewarding than handing the keys over to my client(s) as they begin a new chapter in their lives. One of the largest financial decisions they will ever make in their lifetime will become a reality because I could show them how to make it happen. I've spent years and years building lasting relationships resulting from my dedication and determination in providing so many people with their slice of the "American Dream".

Every single escrow closing comes with its own unique story. Let me tell you about a recent closing that truly broke my heart. I met a young couple through a referral service who were ready to purchase their first home after recently becoming married. I quickly came to know their likes and dislikes after our first few outings together. I found several homes that met their needs in almost every way. We wrote several offers before one was finally accepted. They quickly arranged for their immediate families to view the home to be certain that it was the "one". The families approved and we opened escrow.

I am always happy to assist referrals from agents in return for a 20-30% referral fee. In this scenario the client would receive half of the 30% as a rebate to them payable at the close of escrow. Based on the amount of the commission my company earned the couple would receive a total of $1,162.00. Not a bad chunk of change for a buyer who also received the best representation available from a real estate professional in a somewhat disreputable real estate climate. I also ensured their eligibility to receive the $8,000.00 first time home buyer tax credit offered by the Federal government that they had no prior knowledge of, negotiated a full 3% allowance from the seller to be paid towards their closing costs including a substantial reduction in their mortgage interest rate, achieved an early escrow closing date to accommodate their upcoming pre-planned family vacation and provided several thousands of dollars in existing home furnishings and upgraded appliances courtesy of the prior home owner's need to downsize.

It took a total of five months to conquer my client's ultimate wish list. But I knew I accomplished my goal and performed a job well done. I was proud to deliver another slice of the "American Dream" while continuing to build another lasting relationship for years to come. HALT! Stop the bus. This ride is not going anywhere. At least not with ME onboard.

After a two month joy ride of believing that these kids were lucky to have me to look out for them and provide them with so many incentives, credits and goodies it would make you think that home buying is as fun as going to Disneyland with Santa Claus, I'm slapped with a series of email and text messages requesting that I send them a THANK YOU GIFT! I failed to give them a thank you gift and they wanted it NOW! What?? The Hallmark congratulations card was not enough? I thanked them profusely in writing, what more could I afford to do? And the accusation stemming from Dad that I make "plenty" of money only deepens the wound that I created by not providing them with the obligatory "thank you" gift. It's been over two months now, oh the shame!!

Is this a sample of what is to come from our future "Gen-X" boom? The age of entitlement? Or has the proverbial "thank you" gift become a staple of the business, an unconditional act no matter how well you performed your job? What ever happened to a thank you gift for the Realtor?

Makes me wonder if ANY form of thank you gift would be sufficient now? Yuck.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

LATEST RENTAL SCAM BLAZING THROUGH THE SOUTHLAND – BEWARE!

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sat, 25 Sep 2010 05:31:03 -0700

Many of you already are aware of the various rental scams going on throughout the southland and other blighted areas of the country were foreclosure has left vast amounts of vacant homes ready to be pounced on by predators posing as landlords.

With as many vacant homes as homeless families out there it would only be a matter of time before this latest method of fraud would rear its ugly head. Let me explain.

A criminal can obtain lists of foreclosed homes in any area from just about any Realtor, foreclosure service or public records. The criminal tracks these properties to confirm that they are vacant or better yet, they have been vacant for some time. The ideal candidate is the vacant home that has a "combo" lockbox on the front door since it nearly certain that the combination can be obtained through MLS records, calling the representative from a for sale sign or knowing the common combo codes that have never been customized by the individual who installed it.

Now the criminal has "possession" of a vacant home through the use of a readily available key they removed from a lockbox in order to make copies for himself and his future tenant. The criminal is ready to begin advertising the home in free publications and online classified resources such as Craig's List. These rental listings are detailed with interior pictures they have copied from MLS listing resources and a phone number to call for more information.

The prospective tenant who is very eager to strike up an agreement with just about any landlord who will show sympathy and understanding regarding their recent hardship, foreclosure or short sale that has placed their family on the street with little alternatives due to their unsavory credit status. These former homeowners are willing to provide sums of cash up front to nearly anyone who will look past their poor financial position in light of a property they can once again call "home". First month, last month and a security deposit could total upwards of $7,500 to $10,000 easily handed over in return for a new beginning towards the rest of their lives.

The knowing criminal uses this desperation to his full advantage by forming what look to be authentic lease contracts, possession dates that begin immediately, keys and "lots of luck!" as they are off with the tenant's money never to be heard from again.

The tenant has not committed a crime. They proceed to move into their new "home" without a thought of the true identity of who they signed a contract with. How or why would they research these individuals to be sure that they are the true owners of the property? The criminals showed them a paid utility bill with their name on it as proof of what an average gas bill amounts to. Never mind that the home is completely vacant or that they were told to "look into the windows" if the criminal could not be there to show it to them personally. They were out of state completing their own move.

Never mind that there was a for sale sign rather than a for rent sign in the front yard or that the criminal was the sole contact and not the company shown on the sign. The criminal explains that they had been trying to sell the home until they lost all faith in their Realtor and decided to lease it out themselves instead. That sign will be coming down any day now.

And most of all, don't give a second thought to the fact that the tenant never met the criminal in person. They spoke on the phone, have a fully executed lease agreement left at the home for them under the mat with a set of keys. The tenant's money was wired to a bank account located in or near the state the criminal stated they reside now or left by Western Union to be picked up inside of just about any Wal-Mart across the country.

Sounds too simple? It is. And this is a true story running rampant across the southland. Now what about the tenant's rights? Don't they have a signed lease agreement and possession? Yes, it is a fraudulent contract but the tenant didn't contribute to the scheme. How do you pursue eviction? The true owner is long gone and doesn't care to revisit any more stress related to the home. The bank is yet to foreclose due to their backlog of trustee sales on the calendar. Whose responsibility is it to remove these tenants? Who has the power to evict a tenant holding an executed lease?

Interesting situation to say the least. An entire neighborhood is currently dealing with this same scenario down in Corona, CA. They have been joining together to figure out a way to evict a fraudulent tenant who lives nearby with absolutely NO certain method of how to proceed.

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098

Question? How long can a home remain in foreclosure?

Diane Wheatley, Inland Empire Expert (Move Up Properties) — Sat, 21 Aug 2010 20:17:48 -0700

How long can a home remain in foreclosure? Is there a statute of limitations on the amount of time a lender has until they must refile a foreclosure action or can it go on indefinately?

I have a colleague who has his home in foreclosure with Bank of America for four years now. I cannot locate the statute on this. Does anyone know the answer?

Thank you in advance!

Diane Wheatley, Broker

Real Estate Brokerage, Upland CA

(909) 981-5400 Upland Office

(909) 815-4499 Direct Cell

(888) 981-5589 Toll-Free

CA DRE Broker Lic #01873098