How can I find out if the house I'm renting is in foreclosure?
Tina L. Carson City, NV
Contact a local title company and ask them to check their Notice of Default list, or go to: www.rentalforeclosure.com. On May 20th, 2009 President Obama signed Public Law 111-22 "Protecting Tenants in Foreclosure Act. You should also note that the Nevada Legislature's AB140 Sections 2 and 6.7 which goes into effect on October 1st, 2009, requires that if a sale of property is a residential foreclosure, a separate notice must be served upon any tenant or subtenant. All the Best!
"Is it true that FannieMae has told banks (loss mitigators) to pay listing agents their commission on short sales?" What about FreddieMac? How do I know if my seller/borrower has a FannieMae or FreddieMac loan? Mike D. Las Vegas, NV Yes! According to FannieMae, "preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to the real estate to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6% of the sales price of the property in aggregate." The policy went into effect on March 1st, 2009. For FannieMae Loans go to: http://loanlookup.fanniemae.com/loanlookup. We're waiting for FreddieMac to make a similar announcement. For FreddieMac loans go to: https://ww3.freddiemac.com/corporate
Steven Kitnick offers in-class continuing education and training for Nevada real estate licensees, as well as online courses for licensees & pre-licensees throughout the United States. Visit: www.NevadaCE.com
The seller can avoid having a foreclosure on their credit report; conceivably live in the property "mortgage free" during the lengthy short-sale process; and it's the "right thing to do" when in default. Walking away from the property is irresponsible and unfair to the lender. The short-sale is a respectable option*.
Leslie Carver, Team Carver, Prudential Americana Group, REALTORS, Henderson, NV, and a Certified Short-Sale Professional, includes the following contract language when representing a buyer. This language allows a buyer to cancel the contract and receive their earnest money deposit ("EMD") back with written request, but without a signature from the seller(s) after an agreed-upon time period has elapsed.
Earnest Money Deposit Language for the Short-Sale Contract: If Seller is unable to perform _____ days* after acceptance of offer, Buyer has the option to cancel this transaction for any reason and receive a full refund of earnest money deposit without any further signatures required. Escrow Holder, Equity Title of Nevada, is not to be held liable or responsible for any loss or damage which Buyer(s) or Seller(s) may sustain by reason of the above addenda to the contract, nor for failure of any of the conditions of this escrow, nor for the recovery of said money for any reason whatsoever should this transaction cancel under the terms above. All parties hereto are aware and understand that Equity Title of Nevada will follow the instructions to cancel this transaction and all other instructions as it relates to the cancellation upon written instruction from the Buyer(s) to proceed with the cancellation and return of the earnest money as set forth.
*The amount of time given is determined by you! This language should be in an Addenda to the original offer.
This clause commits the buyer to the purchase of the potential short-sale for the time period specified without fear of an earnest money deposit dispute arising during that period. This clause should also assure the listing agent that the buyer is commited to purchasing the property and will "hang in there" for at least a fixed period of time. Las Vegas area listing agents who are ignoring or circumventing their MLS rules related to the status of their listings, eg. ER (Available) or C (Contingent) should take heed of this clause.
Nevada is a "recourse" loan state. It is not a "walk away state." Creditors could "go after" borrowers/sellers and seek a judgment for any deficiency for a home loan. Here's what two Certified Short Sale Professionals had to say when I asked them whether Countrywide or any other lenders were seeking deficiency judgments in Las Vegas, Nevada. According to Don Lainer of the Platinum Elite Team at Prudential Americana Group, REALTORS, "No bank is doing anything systematically or consistently for that matter. The negotiation skills of the listing agent will be pivotal to the seller's results. At this time, we are not experiencing any issues with Countywide regarding this matter." Leslie Carver of Team Carver also at Prudential Americana Group, REALTORS stated that, "I haven't had Countrywide or any lender go after my clients, yet. Countrywide seems way too overwhelmed to go after borrowers/sellers." Caution! Do not advise clients on this matter. In the case of a short sale, be sure to negotiate with all lienholders that the money they receive in the "short payoff" will be in FULL SATISFACTION of the debt, and that they therefore waive any right to seek a deficiency judgment. Clients should always consult with legal and tax professionals in this matter.
Allan Herman from RE/MAX Benchmark in Las Vegas, NV says, #1WORK WITH A SERIOUS BUYER! If you're working with "a low ball artist" it's time to move on. Most offers are selling right around 97% to 98% of list price. Educate your buyer on what properties are selling for. Show them the recent closings to support your claim. #2 DON'T BE AFRAID TO HAND DELIVER YOUROFFER! But also, send your offer via email just in case your offer gets lost in the shuffle. #3 TRY TO BUILD A RELATIONSHIP WITH THE LISTING AGENT! It's a lot more difficult with "the heavy hitters." Although the decision rests with the asset manager, if you're on good terms with the listing agent and there's two offers that are similar, your personal relationship may get your offer accepted. #4 MAKE YOUR OFFER AS SIMPLE AS POSSIBLE! Remember, your probably competing with multiple offers, so the more you ask - the harder it's going to get your offer accepted. Make sure you explain that to your client. #5 SELL YOUR CLIENT TO THE LISTING AGENT! If your client is a cash buyer provide the written and verifiable documentation. If your client is financing the tranaction and they have a 800+ FICO score, let the agent know! If you've closed deals with your client before, let the listing agent know! #6BE PERSISTENT! Keep following up with the listing agent (phone calls, emails, knocking on their door) regarding the status of your offer. The listing agent wants to work with an agent who takes care of business. #7 MAKE SURE THE OFFER IS COMPLETE! A signed purchase agreement that includes an earnest money deposit. If financing or cash, then a pre-approval letter and/or proof of funds. #8 KEEP THE CLOSE OF ESCROW DATE SHORT! The longer the escrow, the more the bank loses. #9 TAKE INVENTORY OF THE PERSONAL PROPERTY! Before you write an offer, make sure you have a detailed list of the personal property set forth in the purchase agreement. When performing a final walk-thru verify all items are still on the property. Many properties have been vandalized. #10 TYPE YOUR OFFER! It's far more professional to have a type written purchase agreement than a handwritten one.
Some short-sale listing agents may be circumventing the intent of NRED Form 636 and 637 which went into effect under SB69. They are presenting offers directly to the seller's lienholders. Their intent appears to be avoiding having an offer presented and accepted by their seller's subject to lienholder(s) approval, thus, requiring them to place the listing in a contingent status, according to local MLS rules.Consider the following: Nevada Real Estate Division (NRED) Form 636 Waiver Form states, "In representing any client in an agency relationship, a real estate licensee has specific statutory duties to the client. Under Nevada law, only one of these duties can be waived. NRS 645.254 requires a licensee to "present all offers made to or by the client as soon as practicable." This duty made be waived by the client. Last May 2008, it came to my attention that some Nevada real estate licensees were using Form 636 so they could submit offers directly to the Seller's lienholder(s). According to Mr. Jan Holle, Compliance/Audit Investigator/Nevada Real Estate Division, "The intent of Form 636 was to allow limited service brokerages to be in compliance with NRS 645 that states 'All Offers Must Be Presented.' The intent of Form 637 was to allow a mechanism for a buyer's agent to deal directly with a seller if this was in agreement with the seller and the seller's agent." The question was posed, "so the seller signs NRED Form 636 which allows the listing agent not to present all offers. Who presents the offer to the seller? Mr. Holle stated, "It could be the buyer's agent or an unrepresented buyer. In the case of a buyer's agent presenting the offer - Form 637 Authorization To Negotiate Directly With Seller would need to be in place along with Form 636. If a buyer was unrepresented, Form 637 would not be required... there could be many scenarios depending upon whether or not there are licensees involved on the buyer's side, seller's side, or both, and what type of services are provided by the brokerage(s). NRED Compliance/Audit Investigator Jan Holle was asked about this scenario: The seller is represented by a full service brokerage. The listing agent has the seller sign Form 636 only! The listing agent places the listing in the MLS and then advertises it in various media. The agent receives an offer from a buyer's agent to purchase the property. How does the seller know of the offer, receive the offer, or respond to the offer, since they waived a duty owed to them to have offers presented to them? The buyer's agent can not talk to the seller without written permission from the seller and their broker. Mr. Holle's reply to this scenario was, "Using the form [636] in this manner and having the seller's agent receiving the offers was not the intent of the waiver. Using this form in this way could place the seller's agent in violation of NAC 645.632 as he/she for whatever reason is receiving the offers. If the seller's agent is receiving offers, then it is his/her duty to have the seller respond to the offer, and provide the buyer or buyer's agent with written notice of acceptance or rejection per NAC 645.632. If the seller has waived the right for the seller's agent to present all offers than the seller's agent should not be receiving the offers. If the seller has waived the right for the seller's agent to present offers than the MLS should state that buyer's agent is to present offers to the seller. If the form [636] is not being utilized correctly, then the Division should be notified via a complaint form."
According to Kathryn Bovard, Broker/Manager of Prudential Americana Group, REALTORS in Las Vegas, NV, one of the best advice tips she's seen comes from PAGR agent Debbie Tuttle.
"12 Questions to Ask The Short Sale Listing Agent"
Have you ever closed a short sale before?
How do you handle offers? Do you submit them all to the bank, not having your sellers sign (which, in effect, means there is no valid offer and acceptance) and let the bank figure it out? Or do you use multiple offer protocol, notify all agents to submit their highest and best offers, review them with the seller, have the seller accept or counter the best offer and them submit to the bank(s) for acceptance?
Have you requested and received the short sale package from the bank, including the hardship letter?
And more importantly, has the seller completed the hardship package? Have you confirmed receipt of the package from the bank?
What communication, if any, have you had with the bank?
Has the bank approved the list price?
Have you received any other offers that you are waiting to hear back on from the bank? Has the property been approved for a short sale prior and not closed?
Does the loan have PMI (mortgage insurance) which may require another level of approval or a pre-payment penalty?
Is there 1 or 2 deeds of trust? Any other liens?
What is the name of the bank(s)? Is the loan FHA or VA - again may require additional levels of approval?
How long do you estimate that the lender will take to provide an answer to an offer?
How far away from foreclosure is the seller? Has a Notice of Default or Notice of Sale been filed?
Receiving the answers to these key questions should help you through the rough waters of short sales and into the smoother sailing escrow process.
Las Vegas, Nevada's Prudential Americana Group, REALTORS Sahara Office Broker/Manager KathrynB@PrudentialAmericanaGrp.com recently attended a National Real Estate Institute "Negotiating Bank Owned Properties Seminar" and condensed the highlights. #1 KEEP IT SIMPLE - This is not the time to write a novel. REO offers are sent electronically and are usually reduced down to the net. #2 CLOSE OF ESCROW - Try to close on or before the 25th of the month. It takes about 3 days for bank wires. Banks are assessed handling charges on the first. If they have not received the check before the end of the month ("EOM"), then there's an additional for them. #3 LIMIT CONTINGENCIES - Most banks will not accept a sale of another property contingency. #4 DO NOT ASK "WHAT WILL IT TAKE." Do not ask the listing agent "what will it take." Listing agents do not know what the asset manager will accept. #5 ASSIGNEE - Most banks will not allow a buyer to assign the contract. #6 AGENT/PRINCIPAL COMMISSION - Most banks will not pay a commission when an agent is acting as a principal ("Buyer") in the transaction. #7 BUYER LOAN PRE-APPROVAL- Banks prefer buyer pre-approval from banks rather than mortgage brokers. #8 TITLE INSURANCE - Sellers are not required to pay for title, so if the buyer wants to pay all the costs, then they can dictate the title company. #9HOMEOWNER'S ASSOCIATION ("HOA") - Banks will bring HOA current. Make sure to address it in your offer. #10 EXPECT ACOUNTEROFFER - Even if you come in at full list price, expect a counter. Counsel your buyer to expect it. However, you should still offer your "highest and best" offer to eliminate competition. #11 ALWAYS RE-COUNTER - Always keep in the game and re-counter. #12 MULTIPLE OFFERS - When there's multiple offers and you receive a "highest and best" request from the bank, it is usually a 24-hour timeframe, but, always check with the listing agent. #13 ASSET MANAGERS ARE NOT EMOTIONALLY VESTED - Asset managers usually have 400-500 files to process and get off their desks. #14 TIMEFRAMES - Response time may vary from 24 hours to two weeks. #15AS-IS - The Bank's position is that they're responsible for only known conditions. Be sure to read their AS-IS addendum carefully. Pay particular attention to a clause that states "if repairs exceed 5% of value, the property reverts to "as-is." #16 EXTENDING THE CLOSE OF ESCROW - If you extend the close of escrow ("COE"), make sure to extend the financing contingency, otherwise the earnest money deposit ("EMD") goes "hard." #17 DUE DILIGENCE PERIOD -Try to limit the "Due Diligence Period" to 3 days. #18 LICENSED INSPECTOR - Document your repair list by sending an inspection report to the listing agent. Your chances are fairly good that they will be taken care of. # 19 REPAIR WORK CREDIT -The buyer's lender will probably not allow for work repair credit at close of escrow. CERTIFIED FUNDS FOR "EMD" -Most banks will not accept bank wired earnest money deposit. They will ask for certified funds. #21 OFFERS ARE ACCEPTED ON THE "NET" - Make sure that everything you want the Bank ("Seller") to pay for, has the exact dollar amount specified.
The Mortgage Forgiveness Debt Relief Act of 2007 was extended for 3 more years! The Act now extends through 2012 under the Emergency Economic Stabilization Act. In addition to calendar years 2007-2009, the Act now includes 2010-2012! Additionally, you should tell your clients to ask their tax attorney or CPA if they might qualify for Canceled Debt & Mortgage Forgiveness under IRS Code 108 (a)(1)(B) Section 1401 - Insolvency exception, aka "Insolvent Debtor Clause" Remember: Never give tax or legal advice! Advise your clients or prospective clients to seek the counsel of caring and competent professionals.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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