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You may be facing foreclosure… so what are your options?!? Try to look at the situation more from a financial standpoint rather than an emotional standpoint. This way you can more successfully analyze which option might best suit your needs and desires to move you towards resolving your financial difficulty. One very important thing to remember: Time is of the essence. Take time to think through your situation and make a decision. Then, take action right away so you have enough time to complete the solution you choose.
Nine options when facing Foreclosure
1. Do Nothing – If a homeowner does nothing, they most likely will lose their home at foreclosure auction. Loan applications generally ask if the applicant has ever been foreclosed upon. Credit reports also disclose this damaging information. Not the best option.
2. Payoff/Refinance – Completely paying off the entire loan amount plus any default amount and fees. Usually this is accomplished through a refinance of the debt. New debt is at a normally higher interest rate and there may be a prepayment penalty because of the recent default. With this option, there should be equity in the home.
3. Reinstatement – Paying the entire default amount plus interest, attorney fees, late fees, taxes, missed payments and fees.
4. Loan Modification – Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment.
5. Forbearance – Lender may be able to arrange a repayment plan based on the homeowner’s financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements.
6. Partial Claim – A loan from the lender for a 2nd loan to include back payments, costs and fees.
7. Deed in Lieu of Foreclosure – Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained, all mortgage payment and taxes must be current. Most loan applications ask if this has ever happened.
8. Bankruptcy – This option can liquidate debt and/or allow more time. I can refer you to a qualified bankruptcy attorney.
--Chapter 7 (Liquidation) To completely settle personal debt.
--Chapter 13 (Wage Earner Plan) Payments are made toward a plan to pay off debts in 3-5 years.
--Chapter 11 (Business Reorganization) A business debt solution.
9. Sale – If the property has equity (money left over after all loans and monetary encumbrances are paid). The homeowner may sell the home without lender approval through a conventional home sale. In this case, the homeowner will get cash from the sale. On the other hand, a Short Sale, also known as a pre-foreclosure sale, can be negotiated with your lender by your Real Estate Professional if what is owed is MORE than the property’s value.
I affirm that I have read this and understand that I have several options available to me and that there may be more than those listed above. I affirm that I have been advised that I should consult an Attorney and CPA. Understanding this I know that I have the option to choose to use The Foreclosure Mitigation Company to assist me in negotiating the short sale of my home.
Kenny Wagner
The Foreclosure Mitigation Company
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How long will I have to wait to purchase a house again?
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Short Sale
2 years
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Foreclosure
5-7 years
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What are the potential IRS tax consequences as a result of a short sale or foreclosure?
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Mortgage Debt Relief Act of 2007, provides certain protections from 1099 tax liability if the short sale is on a primary residence. Every seller’s financial situation is unique and it is advised that the seller seek advice from a tax professional for their own specific circumstances.
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The tax consequences for a foreclosure situation have the possibility of being even greater, based on the amount of dollars the lender is not repaid when the borrower defaults on the terms of the loan.
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What are the potential credit consequences as a result of a short sale or foreclosure?
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According to new Fannie Mae guidelines, after a two year waiting period from the completed short sale, borrowers can obtain new financing for any type of property i.e., primary residence, second home and/or investment - no other restrictions apply.
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According to new Fannie
Mae guidelines, after the required five+ year waiting period from the completed foreclosure, borrowers will be required to make at least a 10 percent down payment, and will need minimum FICO credit scores of 680.
In addition, borrowers will be limited to purchasing primary residence only.
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Kenny Wagner
The Foreclosure Mitigation Company
**This is part of a short sale packet that was given to me by my short sale trainers when I was getting trained on how to help others to successfully complete a short sale. I was told that I was free to use this to provide to my short sale clients**
What is a Short Sale?
WHAT IS A SHORT SALE? A “Short Sale” or “negotiated settlement” or “short pay” occurs when a Lender agrees to accept less than the amount owed to payoff a loan as an alternative to foreclosure. If the property is worth less than the amount owed on the loan, then even if the Lender forecloses and takes back the property, they know they are going to take a loss. We can often convince a Lender that they will “do better” if they take less than what is owed now rather than taking the property back by foreclosure and trying to sell it later.
HOW LONG WILL IT TAKE? The Short Sale negotiation process can be a lengthy one. It may take several weeks or sometimes several months to get an approval. Many Lenders have several layers of bureaucracy, insurers, and investors that we will have to maneuver through in order to get a Short Sale approved. So it is important to be patient during this long process.
BUT MY HOUSE IS GOING TO FORECLOSURE, WILL I HAVE ENOUGH TIME? Maybe, maybe not. Just starting a Short Sale will not automatically stop a foreclosure. However, many times we can convince a Lender to stop the foreclosure to let us attempt to negotiate the Short Sale. So, while there are no guarantees, it does not hurt to try.
CAN I STAY IN THE HOUSE? The key word in “Short Sale” is sale. The purpose of a Short Sale is to get the property sold. So you will be moving. This is not a program that can stop a foreclosure and allow you to keep the house indefinitely. It will be easier to sell the house if it is vacant, so you should make plans to move as soon as possible.
HOW DO I KNOW THIS WILL WORK? You don’t. We cannot, have not, and will not make any promises to you that this will work. Once you missed a payment, the Lender is in charge and can proceed to foreclosure if they want to. But we know they do not want to and we are very good at presenting alternatives to the Lender that they often want to accept rather than foreclose. We are very good at what we do, but NO PROMISES are being made as to whether or not the Lender will accept a Short Sale – they may or may not.
WILL I GET ANY MONEY FROM THE SALE? NO. A universal requirement of Lenders in granting a Short Sale is that the borrower will not get any proceeds from the sale of the property. The Lender is going to take a loss on your loan – they are not going let you get any money.
WHAT HAPPENS IF THIS DOESN’T WORK? Your house will likely go to foreclosure. A Short Sale is something we try after you have exhausted your other options.
WHAT IS A “RELEASE”? A Lender may offer to “release” its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off the obligations of the note. However, the note is not satisfied. Advantages: This successful Short Sale will allow the property to be sold and thus avoid a foreclosure.
Disadvantages: The remaining debt on the property (sometimes called a “deficiency”) still exists. You are still liable for the note – in other words – you still owe the money. Reality: It is not likely that the Lender will pursue the deficiency unless you have other significant assets, and if you don’t try a Short Sale and the property goes to foreclosure, you are going to have a deficiency anyway.
WHAT IS A “SATISFACTION”? A Lender may agree to accept less than it is owed as complete and total satisfaction of the note and release its lien against the property. Advantages: Your note and obligation to the Lender are satisfied for less than you owe. When the property is sold, the debt is paid off completely. Disadvantages: You may have some tax consequences that you should discuss with your tax advisor due to the fact that the Lender is making money you owe disappear. Sometimes our negotiations are successful in obtaining a satisfaction. Sometimes all we can get is a release.
WILL THERE BE TAX CONSEQUENCES? If we are successful in obtaining a full satisfaction, then there will be tax consequences just like winning the lottery, getting a raise, or finding a bag full of money. Essentially a satisfaction of a debt is like finding a bag full of money and you should consult with your tax advisor as to whether or not a successful Short Sale will result in taxes owed. However, we know of very few people who do not want to win the lottery because there may be tax consequences.
HOW CAN I HELP? The Lender will require a review of a financial package that usually includes: two months’ bank statements, two months’ pay stubs, two years’ IRS tax returns and other information. The leading cause of delay and even denial of our offer to the Lender is caused by the Seller failing to deliver these items in a timely manner. To help us succeed, please find as much of this information as you can right now and complete the a “Financial Worksheet” – this will help us work faster and increase our success.
Acknowledged this _______day of ___________, 20__.
SELLER(S):
Sign Name: ________________________________________
Sign Name: ________________________________________
BUYER(S):
Sign Name: ________________________________________
Sign Name: ________________________________________
Kenny Wagner
The Foreclosure Mitigation Company
I copied this from a colleague's website Matthew Smith @ http://www.shortsaledesmoines.com/?p=171
Matthew presented this so simply & clearly that I wanted to share it for your benefit.
Matthew Smith is a top notch short sale specialist in the Des Moines, IA market. If you are in his market & need help or have any questions please contact him as he comes highly recommended.
Kenny
If
you are a homeowner going through a foreclosure of Short Sale, it is
important that you become well versed on 1099C’s.
This will prevent 2 things:
1.)
A Coronary on or before February 2, 2010 when you receive your 1099C.
and
2.)
Having to pay taxes on monies that were ‘forgiven’
by your bank in the short sale or foreclosure
Let
us first talk about exactly what is a 1099C .
A 1099C is a Cancellation of Indebtedness form that a lender is
required to fill out when the forgive a debt greater than
$600. The lender is supposed so send these out to you before
February 2 in the year following the discharge of the debt.
Not all cancelled debt is considered a taxable event such as the
following off the IRS
website:
- Bankruptcy:
Debts discharged through bankruptcy are not considered taxable income.
- Insolvency:
If you are insolvent when the debt is cancelled, some or all of the
cancelled debt may not be taxable to you.You are insolvent when your
total debts are more than the fair market value of your total
assets.Insolvency can be fairly complex to determine and the assistance
of a tax professional is recommended if you believe you qualify for
this exception.
- Certain
farm debts:If you incurred the debt directly in operation of a farm,
more than half your income from the prior three years was from farming,
and the loan was owed to a person or agency regularly engaged in
lending, your cancelled debt is generally not considered taxable
income.The rules applicable to farmers are complex and the assistance
of a tax professional is recommended if you believe you qualify for
this exception.
- Non-recourse
loans:A non-recourse loan is a loan for which the lender’s
only remedy in case of default is to repossess the property being
financed or used as collateral.That is, the lender cannot pursue you
personally in case of default.Forgiveness of a non-recourse loan
resulting from a foreclosure does not result in cancellation of debt
income.However, it may result in other tax consequences.
If
your lender does not issue you a 1099C and
you have had debt forgiven or discharged in the prior year, you
still are required to report this. If
you follow the formula under Section
3 on the IRS site you
can easily figure out the amount that was forgiven (you may need to
call your lender to verify the amount of the payoff prior to the sale).
Here
is the good news….
The
Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude
income from the discharge of debt on their principal residence. Debt
reduced through mortgage restructuring, as well as mortgage debt
forgiven in connection with a foreclosure, qualifies for the relief.
This
provision applies to debt forgiven in calendar years 2007 through 2012.
Up to $2 million of forgiven debt is eligible for this exclusion ($1
million if married filing separately). The exclusion does not apply if
the discharge is due to services performed for the lender or any other
reason not directly related to a decline in the home’s value
or the taxpayer’s financial condition.
More
information, including detailed examples and qualifications can be
found inPublication
4681, Canceled Debts,
Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.
So,
if you are like me, you may be saying now, “Ok, thats fine
and dandy, I understand I don’t have to pay the taxes
… but unpack this for me a bit, how do I actually go about
doing this? What forms do I need, what do I fill in the
blanks with?”
I’m
glad we asked that question, so here it goes. You need to get
yourself an IRS
Form 982 and
it looks something like this:
Now, if the only debt you are reporting forgiven that you are excluding
is due to a foreclosure or short sale then you only need to complete
lines 1e, 2 and 10b. What you do is go back to the 1099C that
you received from your old lender and go to box 2 (see below), That
number is what you will enter in box 2 and 10b of your form 982.
So,
that is pretty much it. If you have further questions about
the check out the following sites:
The
Mortgage Forgiveness Debt Relief Act FAQ
Publication
4681 Canceled Debts, Foreclosures, Repossessions, and Abandonments with
detailed examples
IRS
New Release IR-2008-17
Tax
Payer Advocate Service – 1-877-777-4778,
Home
Foreclosure and Debt Cancellation (good
for figuring out how to calculate your own 1099C income if bank fails
to send you one)
Kenny Wagner
The Foreclosure Mitigation Company
I mentioned previously (http://www.foreclosuretruth.com/blog/sean/are-foreclosure-sales-simply-h...) that as a society we don’t have the political will to foreclose on every mortgage in default. As a result, we see government interventions including foreclosure moratoriums, troubled asset relief, and new loan modification programs. However, these are at best stop gap measures — each failing to adequately reduce principal balances to address the core problem of negative equity.
It’s time to stop waiting for a government bailout or for the bank to come take the house. Homeowners in default don’t have to choose between the lesser evil of foreclosure or a government solution that leaves them a prisoner of debt. There is another way — a short sale.
A short sale is a sale of a home for less than the amount owed on the loan or loans. There are many reasons why a homeowner who receives a notice of default should take charge and aggressively pursue a short sale. First is the impact to the credit report. Dealing with debt via bankruptcy affects a credit report for 10 years vs. a worst case of seven years with a short sale. When it comes to buying another home, foreclosure prevents the owner from getting a Fannie Mae loan for five years as compared to two years for a short sale. Then there is the opportunity to negotiate a full release from all lenders, allowing the homeowner to settle with no concern of future collection efforts. And proactively negotiating a short sale doesn’t bear the stigma of foreclosure or walking away from a debt.
However, navigating a short sale is not for the faint of heart or the inexperienced. Lenders differ greatly in how they respond to offers. Some lenders, such as Wachovia, are aggressively processing short sales, while others, such as Bank of America, are more cumbersome. (You can get detailed information about specific lenders at http://www.foreclosureradar.com/short-sale-report)
In addition, the regulations can be confusing, even to some industry professionals. In August 2009 in California, Senate Bill 306 was approved, which made changes to the California Civil Code related to real property transactions. (See http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0301-0350/sb_306_bill_20... for the full text of SB 306.)
Some analysts have said they expect that SB 306 will dramatically speed the short sale process. In reality, SB 306 doesn’t address the overall short-sale timeline, just steps in the process after the agreement is executed. Specifically, a lender now must respond in writing to a request for a short-pay demand statement in 21 days. Since lenders already have a similar requirement for requests for a payoff demand for loans not in default, this will not likely improve short sale timelines dramatically.
When it comes to distressed properties, a REALTOR® is in the best position to partner with a homeowner to secure an offer on the home and negotiate a short sale with the lender. Proactive REALTOR®s use tools like ForeclosureRadar.com to locate homeowners best suited for short sales, to track the process and to monitor the status of the property during the short sale. Tracking and monitoring is important to insure that the property isn’t foreclosed on before the sale is successfully completed, a matter of interest not only to the sellers, but also to the buyers.
Finding an agent that is a good fit is more challenging when facing foreclosure. A few key questions will help verify that the agent has the knowledge, experience and infrastructure to handle a short sale scenario, such as:
- How many short sales have you handled in the last year? How many were successfully closed?
- Have you worked with my lender before?
- Do you work with the lender directly or with a short sale processing company?
- Can I get three references of homeowners for whom you have executed a short sale?
Homeowners should also seek advice from a qualified accountant and real estate attorney.
Foreclosure is not necessarily inevitable. A homeowner who receives a notice of default should contact a REALTOR® to investigate the possibility of a short sale. It can offer the quickest and cleanest path to financial recovery.
Kenny Wagner
The Foreclosure Mitigation Company
Hello Neighbor,
If you find yourself in a position where you owe more than your home is worth and you need to sell, a short sale may be your best option. But don't get taken for a long, stressful ride by a self proclaimed 'expert'...
"What is a short sale?"
Simply put, a short sale is a real estate transaction where the homeowner owes their lender more than what their property is worth and they need to sell. In a short sale, the lender must approve and accept less than what they are owed as full payoff (this means they may settle for $400,000, even if you currently owe them $500,000...even if the loss is hundreds of thousands of dollars).
Are you facing a financial hardship that you know will decrease your income?
Are you getting behind on your mortgage and you're not sure if you can catch up?
Or do you just need to sell quickly but your home is worth less now than when you bought it?
If you are facing any of the situations above, and you think a short sale might be your best option, then read on. If you're still not sure and just want more info, then email us to request a free copy of our article "The 9 Alternatives When Facing Foreclosure"
Don't worry. It's not your fault...
You gotta remember, we've all had our ups and downs in life and a lot of other good people are also in the same tough spot as you. Life seems scary when you're facing the reality of foreclosure and I know how you feel when you just don't wanna answer the phone any more...
We all agree that we're in the middle of a national mortgage crisis and that, in many cases, homeowners who have bought or refinanced in the last few years have been seriously abused by unethical lending practices!!
You bought your home and hoped (like we all did) that it would increase in value (and some folks were even promised it would!), but most likely the harsh reality is that now your home is worth less than when you bought it and the value is still declining sharply.
I've helped hundreds of homeowners in this position to get the help they deserve. I've also, helped train hundreds of real estate professionals both locally and across the nation to do the same for their clients.
It's sad but true!
Did you know that nearly 90% of the homeowners nationwide who try to "short sale" their home will end up losing their home to foreclosure due to an uneducated or lazy agent?
Don't allow this to happen to you!
I hate to say this about my fellow agents, but the majority of them that are "trying to help" have not been properly trained and sadly, they are misinformed as to how to even negotiate with lenders. Some even get so far as to submit your 'short sale packet' and then just sit back and wait for a response! In the end, they simply don't know how to help you and you will become one of those "90%" that were not helped.
"Short sales are not easy!"
...unless you seek the help of an expert agent with a proven track record. I have been personally trained by a former Chief Loss Mitigator who is a career loss mitigator and asset manager with 20 years in the business (he is ultimately the guy at the bank who accepts or declines short sales). Actually, I went so far as to make him my partner and train my entire office. We are now helping save even more folks from foreclosure.
We have successfully negotiated short sales for hundreds of families and as you can see from my recent approval letters below (I swap out some of my recent approvals every couple months, so you will notice these will have been from within the last 90 days), we actually get the banks to say YES to our short sales. Before you agree to have an agent help you sell your home, ask him/her to show you just one short sale approval within the last 6 months... I doubt they can.
The best part is, my business partner, has taken his tips and tricks from working INSIDE THE BANK and taught my team and I exactly how to ethically BEAT THE BANK... 93.2% of the time!
My partner most recently worked for IndyMac Bank, a top ten lender, as the head of their HELOC loss mitigation division. His insider knowledge and broad base of industry contacts allows us to get our approvals faster than any other agents in Southern California! In fact, we are constantly solicited by agents nationwide to 'help them' get their short sales approved.
Now it's up to you...
I am ready, along with my team of experts, to go to battle for you. Are you ready to take a serious look at your options and see how a short sale can help you:
- Avoid paying TAXES on the money the bank loses at foreclosure! (Yes, you may have to pay taxes on the amount of loss to the bank if the home goes to foreclosure!)
- Save your credit from the "Foreclosure" ding
- Avoid Bankruptcy
- Avoid Foreclosure
- Relieve the stress that this financial burden has become
- WITH NO OUT OF POCKET FEES OR ANY UP FRONT COSTS OF ANY KIND! …or in other words, you pay me nothing and if I do my job and save you from foreclosure, only then will I get paid by the lender!
If you have any questions that will help you better understand how the short sale process works, please contact me at me directly.
Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company
702-204-3945 Direct
206-971-5003 Fax
See Below for a sample of successful results...approval letters for short sales.
![]( "Countrywide Approval")
Not all agents can do a short sale and not all people qualify for our help. I am here for you if your situation meets the following criteria:
- You have a valid hardship
- You have little or no equity in your home
- You are unable (or soon will be unable) to pay your bills on time
- You want to work with an expert
If you're not sure and just want to find out if you qualify, give me a call and I will walk you through your options. Believe it or not, you may just need help getting a temporary reduction in your payments to 'catch up'. In any case, call me to talk about the several options that you may not be aware of.
If you don't know what else to do and you don't call me at 1-702-204-3945, what will it cost you in damaged credit, frustration and stress? If I am unavailable when you call, I have my assistants taking calls from 6am to 10pm Pacific time Monday through Saturday.
I know how you feel and I can help.
Sincerely,
Kenny Wagner
1-702-204-3945
KennyWagnr@gmail.com
P.S. Don't let the lender's abusive scheme take advantage of you and cause you to lose your home to a foreclosure auction! Save your credit and have peace of mind dealing with an expert.
P.P.S. If you are still not sure, call me directly to see what I can do for you AND at the very least learn what your options are.
See Below for a sample of successful results...approval letters for short sales.
          
Kenny Wagner
The Foreclosure Mitigation Company
I found this fascinating quote today:
Good news from Washington, D.C., today. The Obama administration announced new details under its Foreclosure Alternatives Program (FAP) enabling servicers and borrowers to pursue short sales and deeds-in-lieu (DIL) of foreclosure in cases where the borrower is generally eligible for a Making Home Affordable modification but does not qualify or is unable to successfully complete the three month trial period. The program, effective through 2012, requires that prior to proceeding with a foreclosure, servicers must determine if a short sale is appropriate.Short Sale Rules Streamlined, Jun 2009
You should read the whole article.
Kenny Wagner
The Foreclosure Mitigation Company
I am looking for 2-3 key Realtor partners in the following states – NV, WA & CA. With that said, I have written this to give you an overview of what I do and how I work with Realtor partners and most importantly…What’s In It For You by working with me & The Foreclosure Mitigation Company.
What I do, in a nutshell, is I buy pre-foreclosures, foreclosures & short sales with the sole intention of reselling the home immediately to an end buyer for profit. I negotiate the short sale for a successful closing. I only make money when I can create equity from the short sale and get the property sold. And how I find these short sales to buy & sell, is by exclusivelypartnering with Realtors. By working with me…you make your full commission (3%-6%) with an opportunity to make an additional bonus of 1%-2% and you work less.
My Short Sale Criteria & How I Work Short Sales
My short sale criteria for consideration are as follows:
• Market value of $100,000(NV) $300,000(CA,WA) minimum, no maximum
• Higher End Preferred – ie min. $100K above Median Price Range
• Pretty House / Desirable Area – No Ugly Homes/Rehabs
• Multiple mortgages/1st & 2nd with a large 2nd mortgage – preferably same lender
• The seller must be in imminent default
• Sellers must want to sell their home and move on.
• Sellers must be cooperative on the collection of the short sale info required.
In addition, if the above criteria is met than the next part of the evaluation is:
1. What are the comps?
2. What in your gut do you feel the house will sell for in 90 days?
3. Can you sell it?
After looking at a few deals you will really to get to know what fits, however, I will initially look at ALL (i.e. less than $200K) of your or anyone’s short sales so you can get a feel for what kind of short sales I want and how I evaluate them.
My Process:
I will purchase the property directly from the homeowner. I will start the negotiations immediately. You will immediately list the property for me. And since you are listing the property for me, I can guarantee you a full commission because it isn’t subject to the short sale & the lender discounting it. I will have you start the listing at the top end of the market to show the lender good faith that we are trying to get as much money as possible. Moreover, to develop a listing history, I will then want you to drop the price by 3-5% every week until we find that end buyer. The market determines what the house is worth and the listing history will help the lender see this. By the time we find that end buyer, because of me sending an offer in immediately, a BPO or appraisal has already been ordered by the lender, my offer has been assigned to a negotiator and we’re close to getting mutual acceptance. It’s all in the timing. This significantly shortens the time line on closing the short sale with our end buyer which is a great selling point to an end buyer and buyers agent. And if we still have no end buyer but we know what the lender/investor wants, the listing can change to “lender verbally approved just need full price offer to move forward for quick closing”
How I finance:
I have several sources that I use. I primarily use private money and a warehouse line of credit which is used as transactional funding for quick turns.
When I purchase:
I will close on the property when I have an end buyer regardless if there is any profit or not. I realize as an investor not every deal will have a spread and my primary purpose is to stop the foreclosure for the homeowner & close the deal. i.e. If the banks BPO is too high or the investor who owns the loans is unreasonable regardless of the stats we have to justify my offer and we have an end buyer with a price they will accept, I will close directly from seller to new buyer and you still get paid. Typically I get paid directly by the lender or through seller concessions or a combination of both. If in the slim chance neither of these options happen, I will then ask the agents involved for a small consideration ($500 ea) for working hard to close the transaction. This would be the only time I would ask for this. If I am able to make a profit via a resell the agents will get their full commission and depending on the spread I will give a bonus which potentially could be an extra 1-3% for a total of 7-9% commission if you also find the buyer. I don’t ask for a submission fee or a portion of your commission to negotiate as you are finding with “negotiation service companies”. I find a lot of these companies are glorified “loan processors” with no finance & negotiating skills and they don’t know how to justify offers hence the poor success rate.
And Did You Know That Most Short Sale Agents Who “Do Short Sales” Have A 90%+ FAILURE Rate When Negotiating Short Sales According To The National Association Of Realtors? That Means The Average Agent Will Only Get 1 Or 2 (At Best) Out Of Every 10 Short Sales To Work. I Have A 90%+ Success Rate When Closing Short Sales Transactions. See A Sample Of My Short Sale Approval Letters.
If Considering Another Agent Or Negotiation Company, I Advise Asking Them For Their Most Recent Approval Letters From The Banks Showing They Can Get The Job Done… Most Can Not.
My Success Rate Is So High Because I Have Been Specifically Trained On Short Sales By THREE Of The Most Well Known Top Loss Mitigators In The Country & A Top Short Sale Attorney - (Jerami King – KK Consulting; Suzanne Erickson – American Loss Mitigation; Lee Honish – Short Sale Genius & Jeff Watson – Top Short Sale Attorney) On How To Negotiate A Settlement With Your Current Lenders So You Can Sell The Property, And Get Out From Under This Burden.
Best Of All, My Compensation Is Usually Paid By The Bank, So You Won’t Have Any Out-Of-Pocket Expense & You Keep Your Full Commission.
My spending cap:
I don’t have one. Regardless of the price point a short sale is a short sale and I find that lenders seem to be more willing to get the higher loan amounts off the books. I not only do Residential but also Commercial.
Who is the buyer:
I, or an Investor, is the purchaser of these homes. I am affiliated with a group of professional short sale investors. We don’t buy short sales together per se. We meet regularly via teleconference (as we’re throughout the U.S.) on strategies and best practices to complete successful transactions as the landscape is constantly changing and this is why I am good at what I do. I am not interested in holding any property (especially in this market) so I am not interested in holding any notes et al. I first started investing in 1989 in the Seattle area with “The Investors Edge”, a foreclosure newsletter group, and I have done the rehab & landlord thing and it’s not for me.
What is my market:
My market is WA, CA, NV, AZ & FL although I am always open to other markets provided I have a GREAT Realtor partner who knows their market. I currently have active short sales under contract in NV, WA, & CA.
To wrap it up:
· No fees or costs of any kind to you the Realtor or the seller in default
· We will purchase the home & start the negotiations immediately
· You get your full listing commission when we close
· We negotiate with our offer – it saves time; increases success rate
· You as the Realtor will retain the listing and your client
· No more long phone calls and frustrations dealing with loss mitigation
In other words…
- We will purchase the property.
- We do the short sale negotiations.
- You list and sell the property.
What’s In It For You:
You have the potential for more commissions – up to 9% total including a bonus.
It’s that simple!
You get to do what you do best:
· Find Sellers
· Find Buyers
· Market and List properties
I make money when I buy distressed short sales, create equity with the lender and then resell to an end buyer.
It’s win-win for everyone.
Another way to look at this is in this way:
If it takes you 25 hours to sell a home for a $12,000 commission, then your hourly rate is $480 per hour. If you were to also handle all the other aspects of the short sale including the negotiations and that took an additional 25 hours, your hourly rate would then drop by 50% to $240 per hour not to mention that you’ve taken time away from marketing and getting more listings which is hard to put a price on. I’m looking for a Realtor partner who understands the value of individual expertise, segmentation of duties and equitable partnerships to accomplish more.
Should we work together, I will provide you with all my short sale documents for you to use when contracting the homeowner/seller. I will give you an online “RSS Feed” (Online Link to a Webpage) that will keep you up to date on your short sales in progress so you can check it anytime to see the latest notes & updates from negotiations.
I hope I’ve answered your questions and that this email helps you understand a little more about how we would work together.
Here’s to good things for 2010 and beyond!
Best,
Kenny
Kenny Wagner
Short Sale Specialist
Foreclosure Mitigation Specialist
The Foreclosure Mitigation Company
1-702-204-3945 Direct
1-206-971-5033 Fax
kenny@tfmcpartners.com
Kenny Wagner
The Foreclosure Mitigation Company
Top 5 RE Agent Obstacles to Short Sale Success
- Commissions are discounted by lenders
- Lenders don't want the package unless they have an offer
- Execution & Accurate Valuation of the Interior BPO
- Have a buyer but the short sale process takes too long so they buyer walks
- Wasted time negotiating with the lenders when they should be promoting their properties and/or themselves.
This is How I (an Investor) Help RE Agents:
#1 Problem = Commissions are discounted by Lender
#1 Solutions
- Investor can guarantee a full commission on every deal that closes
- Agent markets the property to find the end buyer
- Listing Agent & Buyers Agent receive 3% commission each
- Agent who refers the property eligible for double commission - you make more money.
#2 Problem = Lenders don't want the package unless they have an offer
#2 Solutions
- Investor will make an offer on every short sale property the agent has listed as long as it meets our criteria
- Property must be in our "sweet spot":
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-Market value of $350,000 minimum, no maximum (Vegas $300k+)
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-$200,000 above Median House Values preferred
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-Move-In Ready - no rehabs or fix-ups
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-Multiple mortgages with a large 2nd mortgage.
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-No Condos, Townhomes or marginal properties.
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-Seller must be at least 30 days in arrears on the mortgage or about to be.
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-Sellers must want to sell their home and move on.
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-Sellers must be cooperative on the collection of the short sale information required.
- Investor offers immediately so it starts the short sale process
- Due to market - Better to start out low - we can always come up in price
- Once BPO is completed the investor will negotiate with the lenders and raise the offer price through negotiations
#3 Problem = Execution & Accurate Valuation of the Interior BPO
#3 Solutions
- Investor will perform BPO prior to lender BPO/Appraisal
- Investor will drive the price down to a "sellable" number
- Investor will follow-up with the BPO Agent to get the value
#4 Problem = Have a buyer but the short sale process takes too long so they buyer walks
#4 Solutions
- The Short Sale process is already started and BPO is completed
- Investor will coordinate with agent on when an offer can be accepted
- Investor will coordinate with the agent on the listing price depending on negotiations
- Once buyer makes an offer it can be accepted or countered immediately
- This ensures that when a buyer writes a qualified offer that is accepted the transaction can close in a timely fashion (30-45 days)
- Closing takes place in 15-45 days instead of 3-4 months because the package has already been submitted and the BPO already completed
#5 Problem = Wasted time negotiating with the lenders when they should be promoting their properties and/or themselves.
#5 Solutions
- Agent gathers paperwork from the Seller - that's it.
- Investor handles all the negotiations
- Investor will perform and complete the BPO with the Agent
- Investor will "sit on hold" all day if that's what it takes
- Agent will get twice weekly status updates via email
- Agent spends time doing what they do best - marketing and promoting themselves and their houses.
- Agents can continue to find more listing and buying opportunities
- Investor does what it does best which is BPO's and Negotiations
Kenny Wagner
The Foreclosure Mitigation Company
So let me explain how I might be able to help. Our business primarily consists of the acquisition, redevelopment and rebirth of homes throughout NV, CA & WA. We purchase multiple homes per month, and all of our work is in the pre-foreclosure market.
Whoever your lender(s) are, I can assure you that we are most likely an approved investor with them and have previously worked with them to facilitate a successful short sale transaction helping the bank avoid having to own another house - an REO (Real Estate Owned or Bank Owned) property...which is the last thing they want. This does not mean we are affiliated with them. It just means we that we can hopefully take advantage of the relationship we have with them. And it means that we do a great deal of work with them on an annual basis.
Believe it or not, lenders DO NOT want to own your house and foreclosing on a house is a losing proposition for everyone involved.
There are two ways we can help. First, we can bring some clarity and hopefully some closure regarding this situation. Second, by helping you avoid a foreclosure we are also helping you to save your credit. There's nothing worse on your credit report than a foreclosure.
Our process is simple. We approach the bank and tell them we are interested in purchasing the house, and that you're interested in selling the house to us, but that we need to agree on a price. You see, most banks are dealing with a tremendous amount of foreclosures, so they've set-up loss mitigation departments. These departments are responsible for handling short sales and pursuing any alternative to the trustee sale/sheriff's auction.
The preferred method by banks for selling a property in pre-foreclosure is called a short sale. This is when the lender agrees to accept less than what's owed on the property to release the lien, and they may consider the account closed.
Like I mentioned earlier, all of our work is in this niche, and we are experts in this field. Banks do not want to own real estate; they do not want to be in the real estate business. As a matter of fact, strict federal guidelines exist on how many bad loans a bank can have on its books at one time. And if a certain percentage of their outstanding loans are considered bad debt, they can be fined, sanctioned and federally mandated. So they are eager to get rid of the property before they actually have to take it to trustee sale/sheriff's sale. This is where we come in, as an approved investor we have a strong likelihood of getting the job done.
If the property does go to trustee sale/sheriff's sale the county is going to have a drive-by appraisal completed based on the exterior of the property; the opening bid will be 2/3rds of this amount most of the time.
What we do for our initial offer is to try and intelligently guess (using existing market data) what the appraised value might be, which is usually a little bit lower than the actual value of the property, and then we offer the bank around what we think the opening bid might be at auction. The initial offer is almost never accepted, and the bank will usually make multiple counter-offers back to us.
After we make our initial offer to the bank, the next step is for the bank to order an interior inspecition of the property. This is called the BPO (Brokers Price Opinion), and it's the estimate of the quick-sale value of the house in its current as-is condition. This is NOT an elevated appraisal of the property, but rather a strong indication of what the property is right now.
If the property is in tough shape, that can actually help us. Each bank is different, but every bank has a different formula that they use to determine what percentage of the BPO they will accept to pay the property off. Usually this number is 85-95% of the BPO.
As long as the BPO is favorable, we have a strong chance of being able to purchase the house.
Let me take a minute to explain what the bank is likely to say after they complete the BPO. One of three things is going to happen: PLAN A would be where we submit our offer to the bank. The bank completes the interior inspection (BPO), and notifies us that we can purchase the property at our initial offer price or slightly higher. However, there are times when a BPO does not come in at a low number, so we go to PLAN B. This where the bank does the BPO (Interior Inspection) and they agree to take a discount off the balance, but the discount is not large enough for us to take the risk of purchasing the property and then fixing it up to resell. So in this case we must find a buyer as fast as we can, in which, because of our strategy, we are very successful in doing so.
PLAN C occurs when the bank responds and refuses to do a short sale. This is unlikely. Thirty for forty percent of the time, PLAN A works. Another thirty percent of the time PLAN B works. We come up short on the rest, which is extremely low for our industry.
Kenny Wagner
The Foreclosure Mitigation Company
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Kenny Wagner
Las Vegas,
NV
More about me…
Address: 260 E. Flamingo Rd., Las Vegas, NV, 89169
Office Phone: (702) 483-0890
Cell Phone: (702) 483-0890
Email Me
What's In It For You - A Realtor?? - IF...You Work with A Short Sale Investor
Homeowners
Know Your Options, Learn How To & Action Steps You Can Take When You're Behind in Payments - Are In Foreclosure - And Can't Sell Your Home Because You Owe More Than It's Worth
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