DIARY OF A SHORT SALE

So why do short sales take so long, here is a detailed chronology of a recent short sale through HomeEq Servicing.

Late June, 2009

Before we even started the short sale we qualified the sellers to see if they would meet the average requirements for a lender to approve the short sale. The sellers had adequate income but due to the stress of their financial situation they chose to part way and filed for divorce.  Independently neither one of them could keep the home afloat.  The home is in North Corona of the Inland Empire and was approx. $300,000 upside down, the sellers owed $615,000 on a home worth around $310,000. The seller had already received a Notice of Default and a Notice of sale with a sale date of August 14^th.

Late June, 2009

Prior to putting the home up for sale we contacted the bank with our situation in an effort to obtain pre-approval of the short sale.  After four phone calls and the submission of a full short sale package including the divorce filings we obtained approval to move forward.  We were not given a price range at which the servicer would approve the sale.

July 13, 2009

The listing agreement is signed and the property is listed for sale, the home was entered into the MLS four days prior to the date of first available access, July 17^th, with a market listing price of $310,000.

July 13-17, 2009

We received five offers above the sales price site unseen. We contacted these people and let them know that it was important that they see the home once the lock box was installed on the 17^th.

July 19, 2009

After a new toner cartridge and 40 phone calls a day we have received 21 offers on the home, the highest offer being $383k from a no no buyer, no down and no closing costs, that was not the offer submitted.  We continued to get calls and offers for two days following. The listing was put on hold.

July 21, 2009

We call all the buyers back, most of them with no hope of a back up position, four with back up position and one to be submitted to the bank for the short sale.  The buyer was not all cash even though we had four offers that were. The buyer had 20% down, high ficos and prequalified through a good lender, the sales price was $350,000.

July 22, 2009

We received the HUD-1 from our escrow company and submitted the complete short sale package with all materials previously submitted plus our listing agreement and the complete purchase agreement, about 80 pages of documents.  Each page with the account number hand written in the top right hand corner. We call to verify that the fax was received.

July 29, 2009

We contact the servicer to see how things are coming along. We are told to call back in 5 days and the packet should be assigned.

July 31, 2009

We call the servicer and told to give them 5 more business days to get it assigned.

July 31, 2009

Not assigned yet, told to call back on Monday.

August 3, 2009

Hurray, the packet is assigned to Paula, told to give Paula a week to review the documents.

August 4, 2009

Called the servicer again concerned about the foreclosure sale date.  Come to find out the foreclosure sale date was cancelled.  No word on the package yet as they were still reviewing the files.

August 10, 2009

Advised new law as of June 1^st and that there was a moratorium that is delaying all the files.

The sellers vacate the property and turn off all the services.

 August 13, 2009

Called servicer still reviewing packet, no one would put me in contact with Paula either through the phone or e-mail.

August 13, 2009

Received a call from the servicer inquiring about auto loans and employer information, all questions answered while on the phone.

August 14, 2009

Nothing to give me, just keep waiting.

August 18, 2009

Called and received a few questions from the person on the phone which we were able to answer while on the call. It required that we provide a couple more documents which were faxed within a couple hours. Without prior notice from the servicer we get a call from someone trying to do a BPO.

August 19, 2009

The BPO company had access and they were nice and professional.  It really is good to ork with professional Realtors.

August 20, 2009

Received a call from the servicer, they needed another copy of the HUD-1, for one reason or another they did not have it. Faxed it within 10 min. of their call.

Notified that the file was complete and that a negotiator would be assigned in the file.

August 21, 2009

Called to find out the negotiators name is Gloria and she would need 10 business days to review the file.

August 25, 2009

Called the servicer nothing yet, they need ten business days.

September 1, 2009

Nothing yet, this time told 7-14 business days for review. Frustration is here.

September 3, 2009

Told by the seller that the home has a notice in the window. I call the servicer for more info.  Come to find out it is the servicers property preservation service keeping an eye on the property.

September 8, 2009

Received a call from the servicer with some HUD-1 changes requested. Lower the commission to 5%, name the servicer in the HUD-1 and remove the taxes paid.

Upon contacting escrow they refuse to remove the taxes since they will need to be paid to close.

By noon we send the updated HUD-1 and explain our not removing the taxes.

September 9, 2009

Called the servicer and spoke with Shawntee, the new negotiator and explained the changes to the HUD-1.

Received a call back from Shawntee that management must review the file before we can get word on the file. Upon a second call I am told it will take 7-14 days for management to review the file.

September 11, 2009

Received a call from Shawntee that the net needed to be increased by approx. $900.

Notify the Buyer that the sales price will need to be increased by $900, they complain and stand firm stating all their trials and tribulations since putting in the offer.  The grass is dead now and they have been waiting for weeks only to get more of the same.

September 14, 2009

I will contact the servicer and tell them no more money on our side and see what they say.

Don’t know if we will get this one closed, yea the agents could kick in $450 each and get it though the door but to be honest with you I would rather flip the bird to the servicer and hope transients move into the home before they take it back should they not approve it as is.

September 15, 2009

We sent a letter trying to negoatiate out the last $900, I don't know if the servicer will accept the offer to settle at the last HUD-1 net but we will see.  I basically said that all parties involved have discounted their services as much as possible and the buyer has no interest in raising their offer.

I expect for them to hammer us home and say no net no deal.

OK, I was wrong, the servicer lowered their net request to $324,200 which we were able to get to through lowering the title insurnace fee the $80 needed.

We updated the HUD and faxed it over, we expect to get a confirmation letter from the servicer to open escrow with.

In the end the banks and servicers don’t care to make the short sale or renegotiation process easy or fair as they get paid more to foreclose.

I will continue to update this blog until this sale completes.

Empire Realty is your real estate source for useful and money saving information.

It's important to stay in tune with the changes in the market. Call Empire Realty for your next personal real estate consultation at (909) 579-6611, or visit us on the web at Empire Realty.

For information on purchasing or listing your next home in Upland, Rancho Cucamonga, Alta Loma, La Verne, Mira Loma, Riverside, Corona, Chino, Chino hills, Ontario, Claremont or anywhere in the Inland Empire call Empire Realty at 909-579-6611 or visit us on the web at Empire Realty.

Empire Realty is your one stop shop for information and Full Service at a Discount.

I have purchased a few homes over the last  year, I have been good at making sure there are good cash flows and I have seasoned the homes for over six months, but I still can't get a decent refi with cash out.

It is amazing that I can not find anyone to refi these homes to pull some cash out so I can buy more homes.  Today I was talking with some people and I get the same line that the seasoning must be 1 year and then I will only be able to go to 75% LTV. 

Cash is not flowing yet and it is really cramping investors that are interested in purchasing homes in an effort to increase their value and hold them for decades to come.

Go Figure!

RJH

We updated our home page to include foreclosure searches provided by foreclosureradar.com.  We placed the search dead center on the home page to make it easy for those interested in locating foreclosures.

I have used foreclosureradar.com for a couple years now and have come to rely on their information in identifying area trends and in finding homes to plan on purchasing.

Enjoy the tool and browse around our website for useful information and tools.

You can visit the site at http//www.empireteam.com

Take care!

Empire Realty is your real estate source for useful and money saving information.

It's important to stay in tune with the changes in the market. Call Empire Realty for your next personal real estate consultation at (909) 579-6611, or visit us on the web at Empire Realty.

For information on purchasing or listing your next home in Upland, Rancho Cucamonga, Alta Loma, La Verne, Mira Loma, Riverside, Corona, Chino, Chino hills, Ontario, Claremont or anywhere in the Inland Empire call Empire Realty at 909-579-6611 or visit us on the web at Empire Realty.

Empire Realty is your one stop shop for information and Full Service at a Discount.

I purchased an invetment property on April 11th and I still can't get the loan out of underwriting. I have had to jump through so many hoops, full corp credit credit reports K-1's 2 times, direct calls to credit reporters to get a account initiation date and now the appraiser stated there were no utilities, in checking with the broker I found that they were on, I put them in my name just in case. 

What is going on, it is amazing the level of detail being required to get a simple 20% down $94k investment property loan out the door.

I really worry about our industry when the lenders can't get their S*&^ together.

Take care!

RJH

Hey Everyone,

OK, we have a trend.  It looks like the second wave of foreclosures is starting to come through the door, gotta love those Alt-A failure rates. Both San Bernardino and Riverside counties logged the highest notice of defaults (NOD's) in March.  The trend line is really picking up, if this continues for the next couple months the market will be flooded with new inventory.

The numbers of cancelations have increased about three fold from their lows but they are still very low, this is a sign that loan mods and work outs work for a very low number of those losing their homes.

Enjoy!

Empire Realty

Empire Realty is your real estate source for useful and money saving information.

It's important to stay in tune with the changes in the market. Call Empire Realty for your next personal real estate consultation at (909) 579-6611, or visit us on the web at Empire Realty.

For information on purchasing or listing your next home in Upland, Rancho Cucamonga, Alta Loma, La Verne, Mira Loma, Riverside, Corona, Chino, Chino hills, Ontario, Claremont or anywhere in the Inland Empire call Empire Realty at 909-579-6611 or visit us on the web at Empire Realty.

Empire Realty is your one stop shop for information and Full Service at a Discount.

Hey Everyone,

OK, we have a trend.  It looks like the second wave of foreclosures is starting to come through the door, gotta love those Alt-A failure rates. Both San Bernardino and Riverside counties logged the highest notice of defaults (NOD's) in March.  The trend line is really picking up, if this continues for the next couple months the market will be flooded with new inventory. 

The numbers of cancelations have increased about three fold from their lows but they are still very low, this is a sign that loan mods and work outs work for a very low number of those losing their homes.

Enjoy!

Empire Realty