I Buy Florida Short Sales

Dealing With a Second Mortgage on a Short Sale

Paul Jerome (Seller Helps Buyer) — Thu, 14 May 2009 18:30:15 -0500

Anyone who closes short sales knows that these second mortgages can be tough to deal with. When the first forecloses, the second can still go after the borrower for the full balance by suing on the promissory note, so they tend to want to hold out for as much as they feel they can claw back on the short sale and their behavior can potentially kill the transaction.

Readers of the Broken Credit Blog know that I purchase short sales in Florida and throughout the U.S.A. Call me crazy but I like the challenge of orchestrating a perfect short sale strategy all the way down the finish line. And along those lines, here's an example of how to successfully deal with a second mortgage on a short sale.

Bear in mind that the second can offer a full release of liability, a lien release only, or a partial release with signature loan. The shorting second wants the seller to commit to paying back the deficiency while the seller wants a full release. Solving this negotiation puzzle takes time and a calculated strategy. Contrast this with the fact that the normal short sale submission involves a buyer who is extremely anxious and desiring/demanding to close within 30 days of contract. This is why the short sale and the type of release need to be negotiated in advance of any end buyer. Here's a follow up to Estoppel The Insanity:

HSBC Second Mortgage Crummy Short Payoff

Seller Counters By Crossing Off Crummy Terms

HSBC Gives In

I love a happy ending.

Florida Real Estate Agents Required To Be Licensed As Loan Originators?!

Paul Jerome (Seller Helps Buyer) — Sat, 28 Mar 2009 22:36:07 -0500

Has anyone seen the text on SB 2226? Loan originators must be licensed in Florida which I agree with; however, here's the definition of 'loan originator':

"an individual who, directly or indirectly, solicits or offers to solicit a mortgage loan, accepts or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender, processes a mortgage loan application, or negotiates or offers to negotiate the sale of an existing mortgage loan to a noninstitutional investor for compensation or gain."

Basically, anyone who is negotiang Florida short sales must be licensed as a 'loan originator' and that would include real estate agents as of this date because there is no exemption or at least none that I could see. I wonder if this is gonna sneak through unchallenged...??

C'est la Vie.

What’s A Short Sale Discount?

Paul Jerome (Seller Helps Buyer) — Fri, 13 Feb 2009 20:45:41 -0600

Let me dispel some myths here about short sales. Not all short sale approvals are created equal. Taking 30%, 40%, 50% off a mortgage balance is not that big a deal at this stage in the housing market.

You really see what dire straights the housing market is in firsthand when these extreme short sale payoffs are received.

Here's a first mortgage of $253k shorted for a net of only $82,195 which is "full and final satisfaction on the first mortgage indebtedness". Nice!

This one is $186k shorted for $59,100. Now, when the short payoff is silent as to the deficiency but references the purchase contract, then check with your attorney about including words to the effect of "this contract contingent upon (shorting lender) providing full release of liability with no rights to the deficiency" which may effectively produce the same result.

And I think we may have a new short payoff record. One of my negotiators called me a few hours ago to let me know that HSBC is accepting $15,000 as their net on one of our purchases. It's almost getting to where houses are cheaper than cars.

Thanks for tuning into this weeks episode of what's a short sale discount.

Rural Housing Short Sales

Paul Jerome (Seller Helps Buyer) — Fri, 06 Feb 2009 22:47:05 -0600

I hold a junior lien on a property where the first mortgage is in default. The first mortgage is a rural housing loan. One of my experienced loss mitigation negotiators worked with the seller for a couple of months to have the first mortgage verbally agree to a short payoff. This was at the end of 2008 and this was communicated to the real estate listing agent. The listing agent and my negotiator agreed at that time that the lender's value assessment was too high and that they would work together to challenge the value before requesting a formal short payoff and then closing.

Guess what? The listing agent stopped returning calls for my negotiator and once the listing agent knew of the agreed short sale amount he decided to bring a buyer in for this ‘approved short sale' and circumvent my negotiator to make a 6% commission on a rural housing pre-foreclosure sale and leave my negotiator out in the cold. Not nice and not ethical.

Here's the reason for my post. The rural housing program mirrors the old FHA pre-foreclosure sale. The required net is 82% but on the old FHA program HUD would allow $2,000 to discharge junior liens and presently that has been raised to $2,500.

For some reason the listing agent's title company decided to wait until the afternoon of the day before the closing to call me to request that I discharge the lien (free of charge no less) while the real estate agent makes an $8,000 commission and leaves my negotiator, who obtained the short payoff, out in the cold. Now, not only is that not nice, that's also not a very bright move.

The rural housing program could have permitted the lien be discharged through the shorting lender's net and/or my negotiator could get paid for her work. Instead, and at this point, the way that it will close is for the sales price to be reduced by a few thousand and the real estate commission to be reduced by the same amount and then the lien release fee will be listed on the buyer's side of the HUD1. In essence, it comes out of the real estate agent's commission. The buyer (who is a cash buyer) pays the same acquisition price for the house, the lender nets the same, the HUD1 is in compliance, and the listing agent makes half of what he intended. This was not the intended way for this to close. The real estate agent could have made max commission by working with my negotiator instead of trying to snake the short payoff. But that's ok. I forgive him.

So, this is a lesson for anyone that is working short sales on rural housing loans to be mindful of junior liens and for those realtors who take payoff letters from 3rd party negotiators and try to leave them in the cold, shame on you.

Another (Un?)Successful Short Sale Closing in Florida

Paul Jerome (Seller Helps Buyer) — Wed, 15 Oct 2008 22:32:32 -0500

A mortgage with a $211,657 balance on a home that's worth considerably less. A contract comes in at $100k, another at $120k, and another at $170k. Which of the three contracts should the seller accept?

The logical answer is for the seller to accept the $170k contract, right?

Let me tell you why I feel that's probably the wrong contract to accept to get the property sold.

The seller accepts the $170k contract and the listing agent puts the short sale package together to submit to the shorting lender. The lender orders a BPO and, by the time the lender counters, the $170k buyer is gone. Now what?

The shorting lender is looking for a $170k buyer. Why shouldn't they? You've already shown them that there was one buyer who (for a moment and before he came to his senses) was willing to offer $170k. He's since changed his mind and made offers on other properties or closed on another one similar for $155k.

This is a subtle problem with short sales that doesn't get talked about much. Lenders are debt collectors. They don't care about customer service. They don't care about anything but generating the highest net present value on the disposition of this property. The lender wants you to bring another buyer at that high price and you can't. Plain and simple. The property is headed to foreclosure.

Had the seller accepted the contract from an honest, ethical investor at $100k who was willing to play the games that the shorting lender likes to play, then the short sale could have been pre-approved at a lower amount and prepared for any buyer that wanted to offer the lower amount.

The result would be that the $211,657 mortgage debt could be negotiated down to $103,625 and sold to a buyer with FHA financing at $116,500. This one closed yesterday.

This is what I do. I buy, process, and close short sales with a team of a few dozen employees and contractors in Clearwater, Florida. I also provide FHA financing to buyers of short sales. I have seven different exit strategies and among my favorite is to purchase the property for cash, although we have a fail safe of terminating our contract and substituting another buyer that purchases directly from the seller. You make the real estate commissions.

If anyone reading this has any single family homes for short sale and there is a documentable hardship story that can be presented to the lender in order to obtain a full release of liability, then contact me and we'll see how we can work together. But whether we work together or not, please make sure you are giving your sellers a fighting chance to sell their short sale by avoiding the subtle and not widely discussed pitfall that I have described above.

Paul 702-988-2560

Call me anytime or visit my blog for free information on how to get your credit issues resolved.

Testimonials Are Nice

Paul Jerome (Seller Helps Buyer) — Thu, 02 Oct 2008 18:26:19 -0500

Here's a great testimonial today from Lynn: Lynn Buys a Home!

OMG! This is a wonderful site. I had never checked my credit before, now divorced, wanting to buy a home and it was now necessary. I have brought my score up 85 points in 7 weeks thanks to this site and your free credit seminar. I was approved for my loan today thanks to you.

I disputed (only one item was left unchanged) since inaccurate information was all the credit bureau seemed to have. I paid off collections in the order of earliest to latest for PFD. I sent return receipts for validation which were ignored and so removed. I opened a secured card since I didn't have any open revolving credit. I became a joint owner of Sears credit with my Mom. And BAM! all added up to to points...EX 82pts, Equ 85 pts, and 65 pts TU. (* Note to readers that TU is much slower and harder to battle in my case)

I can't thank you enough. I am so proud of myself. If i can do it then anyone can. I am a single mom and a home owner! I have never handled the credit arena before but this site has taught me well. I am going to continue to grow..... just as soon as you teach me how the buckets work. LOL

Lynn

Paul Buys Short Sales!

Paul Jerome (Seller Helps Buyer) — Mon, 29 Sep 2008 19:08:36 -0500

Click Here: Contact Paul's Short Sale Team

Paul Buys Florida Short Sales

Paul Jerome (Seller Helps Buyer) — Wed, 24 Sep 2008 17:17:01 -0500

Hello Floridians,

Do you have a Florida short sale?

I am currenty purchasing Florida short sales!

So, if you have a Florida short sale for sale, then let's talk!

Paul@SellerHelpsBuyer.com

(702) 988-2560

We are also hiring experienced short sale processors to add to our dream team in the Tampa Bay area of Florida.

Sell Me Your Florida Short Sale

Paul Jerome (Seller Helps Buyer) — Sat, 06 Sep 2008 15:39:42 -0500

Hello Florida real estate agents and Florida sellers,

I am interested in talking with you about purchasing your Florida short sales. I am a cash buyer.

Do you have a Florida short sale listing on a single family home with total indebtedness of $400k or less?

Is the seller past due and experiencing a documentable hardship? Let's get that property sold!

I own a loss mitigation company with professional short sale negotiators that have decades of experience, so you will handle the real estate side and my people will deal with the bank.

I also own a mortgage company that provides financing to short sale buyers throughout Florida.

You can send an email to Paul@SellerHelpsBuyer.com to schedule a phone call. Don't delay!

Paul Jerome Porvaznik

(702) 988-2560

Paul@SellerHelpsBuyer.com

Looking for a BUYER for your FLORIDA SHORT SALE?

Paul Jerome (Seller Helps Buyer) — Wed, 27 Aug 2008 17:51:15 -0500

Hello Active Rain Community,

If any of you have short sales in Florida, you'll be pleased to learn that I'm purchasing short sales throughout the state of Florida.

I am a cash buyer and I'm presently looking for single family homes with $400,000 or less total indebtedness.

I have the dream team of short sale negotiators working under Loss Mitigation Time, LLC at my expense to handle all of the negotiations with the bank so that you won't have any of the headaches.

I also own a mortgage company and provide financing to buyers of short sales in Florida.

Call or email me today and let's get your short sale/s sold!

Paul

Paul@SellerHelpsBuyer.com

c/o Seller Helps Buyer

(702) 988-2560

I Buy Florida Short Sales

Paul Jerome (Seller Helps Buyer) — Wed, 06 Aug 2008 18:15:03 -0500

Hello Florida Homeowners and Real Estate Listing Agents,

I'm actively looking for single family homes in the state of Florida that are available for short sale.

I am a cash buyer and can write a contract wth you to purchase the short sale this week.

If I write a contract to purchase your Florida short sale, then you will be assigned a negotiator at my loss mitigation company who will walk you through the transaction from beginning to end.

I also own a mortgage company that is licensed by the Florida Office of Financial Regulation and a member of the Better Business Bureau.

I look forward to closing your Florida short sale/s.

Best Wishes For Your Future,

Paul

P.S. If you would like self-help free information on how to avoid foreclosure, then feel free to check out my blog.

Paul Jerome

c/o Seller Helps Buyer

702-988-2560

Hiring Short Sale Processors in Tampa Bay Florida

Paul Jerome (Seller Helps Buyer) — Sat, 12 Jul 2008 14:32:37 -0500

Loss Mitigation Time, LLC is looking for short sale processors for our Clearwater, Florida office.

Do you live in the Tampa Bay area of Florida?
Have you successfully closed at least one short sale?
Do you have a passion for helping people facing foreclosure?

If so, then Loss Mitigation Time, LLC would like to talk with you.

We offer flexible hours. One day per week of your choosing must be spent working in our Clearwater, Florida office and the remaining days may be working from home.
You may choose your caseload and number of files from a minimum of three to a maximum of thirty.
Compensation of $1,750.00 to $5,000.00 per file.

For confidential interview contact:

Richard Roberts at (727) 459-4800

Loss Mitigation Time, LLC
19321 US 19 N, C-412
Clearwater, FL 33764

I Buy Florida Short Sales

Paul Jerome (Seller Helps Buyer) — Sat, 14 Jun 2008 16:50:06 -0500

If you have a Florida short sale sitting lonely without a contract, then call me and I'll buy it.

I own a Florida mortgage company, a Florida loss mitigation company, and I have cash to purchase your Florida short sale.

I'm hungry for Florida short sales.

Let's talk!

Paul

c/o Seller Helps Buyer

Paul at SellerHelpsBuyer dot com

(702) 988-2560

Free Avoid Foreclosure Seminar Online

Paul Jerome (Seller Helps Buyer) — Sun, 20 Apr 2008 21:40:18 -0500

How To Avoid Foreclosure Free Online Seminar

Free Credit Score Tips in 15 Minutes

Paul Jerome (Seller Helps Buyer) — Sat, 05 Apr 2008 14:45:22 -0500

Credit score requirements have been going up, up and up these days. Basically, if you have below a 730 and your LTV is above 60%, then FNMA has a .5% to 3% hit to pricing. What has happend is that all of the conventional conforming borrowers have flooded FHA and now the DE Underwriters desks are overflowing with FHA loans. As a result, the lenders have increased the credit score requirements for FHA. So, it's just getting more and more difficult for mortgage loan applicants to qualify for that perfect mortgage loan.

Enough of the bad news, now let me share with you a solution for those considering the purchase of a home.

FREE 15 MINUTE CREDIT SCORE SEMINAR

Florida Sinking Values?

Paul Jerome (Seller Helps Buyer) — Sat, 16 Feb 2008 09:34:40 -0600

Glub, glub, glub - home values are sinking. Zillow.com reports on February 12, 2008:

"The continued decline in home values means many U.S. homeowners saw equity slip away while more homeowners were pushed into negative equity situations, meaning they owe more on their mortgage than the home is currently worth. Nationwide, those at most risk of being underwater on their mortgage are those who bought in the last two years when most markets peaked. Of those who bought in 2006, 39 percent now have negative home equity as do 30 percent of those who purchased in 2007. By comparison, only 3 percent of those who purchased five years ago, in 2003, and less than one percent of all homes in the U.S., regardless of when they were purchased, have negative equity(3).

The rates of negative equity are typically higher in markets that have had significant value declines and relatively low median down payments. Parts of California, Florida, Nevada and Arizona, where the median down payments were zero to 5 percent during the last two years and year-over-year value drops in the fourth quarter were in the double digits have negative equity rates two to three times the national median."

Ok, enough of the bad news. The ideal solution, of course, is having these homeowners exit out of their home with a full release short sale. And that's what we do on Seller Helps Buyer.

I'm presently looking to add to my Florida team. We have a mortgage company, a loss mitigation company, and we procure the buyer and work the short sale at no upfront cost. You make the real estate commission. What could be better than that?

If you're looking for solutions in this marketplace, then I welcome you to join us!

Testimonials & Gifts for the Holidays

Paul Jerome (Seller Helps Buyer) — Thu, 27 Dec 2007 18:44:00 -0600

Testimonials are nice any time of the year. It's a way of saying thanks in words. First a holiday testimonial from Broken Credit:

Happy Holidays!

After a lot of credit cleaning, paying off bills and such, we were approved for our mortgage and put a bid on a house Monday and it was accepted Tuesday!!

We got a rural development government loan and got a 5 percent interest rate for 33 years.

The house we are under contract with was on the market for 8 months and it went from 160,000 to 149900 and we offered 140000 and they accepted!!!

Closing is in 30 days.

Thank you BrokenCredit.com. you helped us out SO much!!!!!

Deborah

Next, a smile :) and a gift for my friends on AR.

The Raise Your Credit Score seminar has been updated and will be live in the next few days. Everyone else will have to register for it here, but my friends on AR can listen to it free here. Let me know what you think and let's make this a positive God glorifying 2008!

Paul

Quiet on the Blog

Paul Jerome (Seller Helps Buyer) — Sun, 09 Dec 2007 19:42:42 -0600

You can almost hear the birds chirp. :)

Some Strange Credit Repair Experiment

Paul Jerome (Seller Helps Buyer) — Mon, 03 Dec 2007 19:30:24 -0600

Some kinda strange credit repair experiment is going on at the Broken Credit Blog. They're nuts over there if you ask me. Wait a second; that is me.

A Credit Repair Experiment.

888-995-HOPE

Paul Jerome (Seller Helps Buyer) — Sat, 20 Oct 2007 22:21:42 -0500

This is a free phone line that is open 24/7 for any distressed homeowners seeking foreclosure counseling. The Homeownership Preservation Foundation provides expert counseling through HUD approved non-profit agencies.

According to Treasury Secretary Henry M. Paulson, Jr. remarks on "Current Housing and Mortgage Market Development" at Georgetown University Law Center on October 16, 2007:

"Recent surveys have shown that as many as 50 percent of the borrowers who have gone into foreclosure never had a prior discussion with a mortgage counselor or their servicer". This is a travesty!

Every mortgage and real estate professional should know there is a toll free number they can give to any homeowner in America having trouble making payments in this present housing crisis.

Let's all do our part to help these troubled borrowers by having this toll free number with us at all times throughout the week: 888-995-HOPE

Real estate and mortgage professionals CAN make a difference!

Paul

Short Sale Selling From a Loan Officer's Perspective

Paul Jerome (Seller Helps Buyer) — Sat, 20 Oct 2007 18:27:19 -0500

I'm a guest writer on Lenderama, one of the industry's top mortgage blogs. I thought I'd share an article written recently on how to generate short sale buyers. So, without further ado...

Sit and Watch - If You Prefer

Short Sales Added To Seller Helps Buyer

Paul Jerome (Seller Helps Buyer) — Fri, 19 Oct 2007 12:47:52 -0500

We added an option for short sales to our free real estate database. Real estate and mortgage professionals should be on the forefront explaining short sales to potential buyers. As someone who has been/ and is/ on the front line in talking to these potential buyers on the phone about short sales, I can attest that it is a sure fire way to put a sparkle in a buyer's eye.

Please join us by adding listings for free in our database at Seller Helps Buyer.

Thanks and have a great weekend!

Paul

Hardship Letter

Paul Jerome (Seller Helps Buyer) — Thu, 18 Oct 2007 14:46:51 -0500

Here is a sample hardship letter regarding Fred and Wilma Flintstone's request for forbearance. These days a 2/28 exploding adjustable rate mortgage is a sufficient hardship for a loan workout. The format should be similar to the sample letter.

Hopefully it helps someone to obtain a loan modification or forbearance.

Have a great day!

Paul

How Late is Late?

Paul Jerome (Seller Helps Buyer) — Wed, 17 Oct 2007 19:33:48 -0500

Ever wonder how the credit bureau scores late payments? How late do you have to be in order for your credit report to be dinged? Well, let's take a look at how late is late.

Negotiating A Loan Modification While You Are Current

Paul Jerome (Seller Helps Buyer) — Wed, 17 Oct 2007 17:15:10 -0500

Here is some guidance on obtaining a loan modification BEFORE you become past due on your mortgage loan.

Your loan payments are made to a mortgage servicer, but that company is likely only an agent for the owner of the loan. The majority of mortgage loans in the U.S are packaged into pools and sold to individual and institutional investors through securitization. The owner of a securitized mortgage loan is typically a financial institution or bank acting as trustee for a loan trust. Under the Truth In Lending Act, "upon written request of the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation". In other words, you may write to your mortgage lender to determine the identity of the owner of your mortgage loan.

The parameters whereby a securitized mortgage loan may be modified are determined by its pooling and servicing agreement (PSA). Sheila C. Bair, Chairman of the FDIC, noted the following in her April 17, 2007 testimony:

When difficulty arises in making payments on a securitized loan, the borrower generally will not be dealing with the local banker with whom there might be an established relationship. Instead, the borrower will be dealing with a servicer. The servicer has responsibilities defined in the securitization documents that are substantially different than those of a lender. The servicer and the trustee are responsible for taking actions that are in the best interest of the investors who purchased portions of the securitization. Protecting the investors means determining the best alternative that would bring the maximum recovery on a defaulted loan on a present-value basis. If the servicer determines that a workout or modification of the loan achieves that goal, then there is an alignment of the investor/servicer/borrower relationship. However, if liquidation of the collateral (through a foreclosure or other means) results in the highest net present value of cash flows, the servicer may be bound by the terms of the securitization to pursue this approach to the benefit of the investor despite the resulting detriment to the borrower.

Even if a modification to the loan looks like the right approach, other factors might limit the servicer's options. Most securitizations are established as Real Estate Mortgage Investment Conduits (REMICs). The REMIC structure provides considerable tax benefits, (i.e., only the investors are subject to tax, not the conduit itself) but also includes provisions that could limit the flexibility of a servicer to modify a borrower's loan terms in a proactive manner. To qualify for tax-advantaged status, the pool of loans securitized in a REMIC must generally be treated as a static pool, which usually precludes modifying loans in the pool. An exception to this general prohibition allows for modifications when default is reasonably foreseeable. Once a determination is made that default is reasonably foreseeable, most securitization agreements provide significant flexibility for the servicer to modify terms of the loan. This allows for modification of terms when a loan has defaulted, but may prohibit changes to loans that are current.

The Internal Revenue Service (IRS) leaves it to servicers to determine what "reasonably foreseeable" means as it relates to default, which makes these determinations dependent upon the facts and circumstances of each mortgage. In many cases, servicers would likely need to seek legal determinations from outside counsel, especially with respect to whether a default was reasonably foreseeable, in order to modify loans in the pool. Some securitization documents indicate that once a loan is delinquent for a certain amount of time, for example, 60 days, modifications of the terms may be allowed, subject to REMIC laws. In some deals, the servicer must certify with a legal opinion that a modification of loan terms would not result in an adverse REMIC event. Therefore, while some flexibility is available, the specifics are often unclear. Further clarification regarding permissible modification activities under REMIC laws would improve the servicer's ability to work through problems with the borrower.

Aside from the restraints imposed on modifications by the REMIC structure, the PSA can also impose barriers to loan modification. The language in each PSA is different and each establishes the rules about how a particular securitization operates or what needs to be done to change those rules. Many PSAs contain more than 200 pages of dense legal verbiage. The PSA provides a blueprint as to how cash flows and losses are allocated and distributed to the various parties, and establishes the rules that the servicer must abide by in managing this critical function in the transaction. The PSA sets forth whether and how a servicer can modify the underlying loans in a securitization. The documents will also identify the other parties in the transaction who might have an important role in this decision.

Once you've learned the identity of the owner of the mortgage loan (i.e. Deutsche Bank National Trust Company, as Trustee on behalf of WaMu Mortgage Pass-Through Certificates Series WMALT 2046-2) then it may be advantageous to review the PSA. If yours was a publicly traded Mortgage Backed Security, the PSA will be available online at Sec.gov. Either way, it seems to me the issue will probably depend on what one deems "reasonably foreseeable".

If you found this article beneficial and would like more information on foreclosure avoidance, then please watch our free thirty minute seminar How To Avoid Foreclosure or locate several hundred articles on credit related subjects on the Broken Credit Blog.