Wayne 's Blog

Lenders want Promissory note signed

2008-08-28T06:32:49Z

Hello everyone, it's been awhile since I've posted anything and to be honest I'm needing my ActiveRain fix.

I wanted to share something with you concerning promissory note requests by lenders as a means to facilitate a short sale. It is becoming more frequent that lenders, mostly in junior position but not always, want a sizable note signed before they will release their lien. Sometimes it reasonable and advantagous to the debtor to take that route, but when the debtor is truely insolvent and has faced a real hardship what do you do?

We had a client with a loan through HSBC who is known for being tough. They insisted on a $54,000 note from the client before they would approve the deal. A lot of people would just sign it with no intention of ever paying it (which I don't advocate) but these folks just couldn't do it. I wrote a letter to the mitigator and her supervisor explaining the true hardship and that these folks wanted to do the right thing, and by signing a note they know they can't afford would be wrong. I asked them to please forgive the debt and allow these people to move on. HSBC responeded with a new approval letter stating it was a full satisfaction with zero balance due.

The moral of this story is to always ask for what you want, and do it in writing so that the people on the other end can have time to digest it. Many times trying to verbally get something like this accomplished is futile. Alway do it in writing and never give up.

Wayne

Are Short Sales more difficult?

2008-07-17T20:32:42Z

I got a call from a Realtor today and he had a question concerning short sales. Let me give you a little insight first. The Realtor I refer to is proficient in short sales and so he has been around the block with how to handle mitigators. His question was, are short sales getting harder? As I relayed to him, times have changed from a month ago, and they continue to change rapidly. It's common place to have junior liens want notes signed, and not small ones. On a HELOC you can count on a note at a large portion of the balance. The government is messin around with Freddie Mae and Mac, who knows what that doing to the guidelines everyone got used to? Its thrown them out the window.

For someone in the Real Estate game you better be of the mind set that change is good and think of new methodolgies to perfect your craft. Too much dwelling on how things used to be and you will soon be out of business.

Short Sales still continue to be a viable way out of a bad situation for most people, however one must be very cautious and open minded when pursuing a resolution.

Stay positive and be creative and you'll be ready to handle your next short sale.

Wayne Garab

Mortgage Forgiveness Debt Relief Act of 2007

2008-06-23T19:55:04Z

http://www.irs.gov/individuals/article/0,,id=179414,00.html

The IRS gives answers to the most commonly asked questions regarding the Mortgage Forgiveness Debt Relief Act of 2007.

What is the Mortgage Forgiveness Debt Relief Act of 2007?
The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does that mean?
Usually, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude certain cancelled debt on your principal residence from income.

Does the Mortgage Forgiveness Debt Relief Act of 2007 apply to all forgiven or cancelled debts?
No, the Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes.

What about refinanced homes?
Debt used to refinance your home qualifies for this exclusion, but only up to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified.

Does this provision apply for the 2007 tax year only?
It applies to qualified debt forgiven in 2007, 2008 or 2009.

If the forgiven debt is excluded from income, do I have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on Form 982 and the Form 982 must be attached to your tax return.

Do I have to complete the entire Form 982?
Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.

Where can I get this form?
You can download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please allow 7-10 days for delivery.

How do I know or find out how much was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by January 31, 2008. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982.

Can I exclude debt forgiven on my second home, credit card or car loans?
Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion.

If part of the forgiven debt doesn't qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the "insolvency" exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent. A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982.

Short Sale lender doesn't care if you have cash buyer

2008-06-08T14:55:40Z

I've had repeated questions from buyers agents and title companies concerning expediting the short sale process because there is a cash buyer. The Short Sale lender doesn't care if you have cash buyer! Most lenders, and "there are always exceptions" are so swamped with short sale files, they are using what I call the "Putting out the hottest fire" method of prioitization. Files with the closest sale dates are being dealt with first and the rest in decending order.

When someone trys to get the lender to break their protocol because you have a buyer with cash, or your seller is going to file bankruptcy, they don't even flinch. Unless you have the ability to reach a very high placed policy maker or decision maker within the lending institution your dealing with, you will be met with the standard answer.....we will get to your file as soon as we can. A lot of lenders are now giving their processors 30 days to respond before they will even allow you to ask for an update.

It's a frustrating process but I see things getting better each day. These defaulted loans cost everyone when a short sale falls apart due to a buyer that just walked. Lenders are scrambling to streamline their systems to limit the lost deals.

Best thing to do is to make sure your buyer is preparred to wait 60 days to get their offer accepted. Respect the lenders system in place that day and be courtious and prompt with your follow up calls. Make sure your follow up conversations are noted correctly in their system. Get them to read back to you what was noted. If the timeline has lapsed and you still can't speak to someone about your file, escalate it to their supervisor.

Short sales are challenging and getting upset won't help. Learn what their rule for the week is and manuver through it professionally.

To your explosive success!

Wayne

Short Sales frustrating......Unless

2008-06-02T20:04:21Z

Short Sales frustrating......Unless (edit/delete)

Frustrations are being felt by many Realtors and buyers alike right now. The banks are very overloaded and under staffed to handle the flood of short sales. One Mitigator I deal with at countrywide is working 430 files at once. As with any business, focusing on your core duties as a Realtor will yield more consist ant results. Core duties being selling Real Estate. When you try to incorporate doing short sales into your daily routine, the administrative nightmare compounds exponentially.

What if you outsource the short sale management and negotiation headaches just as a Dentist outsources the preliminary stuff to a dental hygenist. While you focus on selling properties and helping homeowners, our expert team of negotiators and administrative people will get you the written approvals so you can close escrow.

Whether you use our company or someone else to outsource these short sales to, it will completely revolutionize your Real Estate business. Even for Realtors that consider themselves experts with short sales, the amount of time to complete one is counter productive to your core business.

Take a look at our website and if you would like us to help you realize sizable profits and zero headaches with short sales, give us a call.

www.RealtorShortSaleSuccess.com

PS. We allow free 24/7 access to a live real time web data base so you can follow and track the progress of all your files. Your sellers and buyers will also love being able to see exactly what stage of the process the file is in. No more he said she said junk. (If you allow them access of course)

Short Sales frustrating......Unless

2008-06-02T14:42:20Z

Take a look at our website and if you would like us to help you realize sizable profits and zero headaches with short sales, give us a call.

www.RealtorShortSaleSuccess.com

short sale negotiation tracking

2008-04-30T20:17:52Z

Hey gang,

For those of you Realtors bright enough to use our negotiation service. Yes I said bright enough. Think about it, how can you as a Realtor be effective selling Real Estate when you spend 10, 15, 20 hours doing administrative work on short sales? You can't! The most successful businesses understand the importance of focusing on the core duties that make you money and outsource the rest.

To see some interesting services we can provide take a look at the link provided.

http://www.realtorshortsalesuccess.com/

We also incorporate a web based tracking system so you can view whats going on in real time. Never again wonder what stage of the process your deal is in.

Wayne Garab

new countrywide short sale policy

2008-04-19T15:52:15Z

For those of you doing short sales, I was told by a Countrywide mitigator that investment homes and second homes will not be getting short sales approved. As with Ocwen, I am wondering what the investors that own these loans are going to do. I'm sure the lenders are ticked off by the number of investment short sales after the debtor has taken all the money out of it, but a short sale is still better than the alternative. Anyone getting the same story?

On a positive note I also heard Countrywide is creating an entire department and adding staffing just for short sales. It's supposed to be up and running by May 1st.

Wayne

Four listings to give away!

2008-04-07T15:06:14Z

Hey group, I am still in need of Realtors wanting a free listing! We need agents for the following areas. One Orlando property, two properties in North Port, and one in Port Charlotte.

These are listings that require short sales..........However don't start running away just yet.... We are going to make it an offer to good to pass up. WE DO THE NEGOTIATIONS FOR YOU!! You do what you became a Realtor for in the first place....SELL REAL ESTATE!!

We will utilize our negotiation service to help you sell these properties. If your interested in collecting a check where we do most of the work, give us a call. 904-215-2848

For more details:

*********************************

http://realtorshortsalesuccess.com/services355687.html

*********************************

To your explosive success!

Wayne

EMC Stepping up to the plate

2008-04-03T19:52:56Z

Hey gang, just a short note to let everyone know that the lender
EMC, more accurately "EMC the servicing company" just accepted and
sent an approval letter for one of our DHS clients. I know I know,
your saying so what! Well...once they got the file to the mitigator, they
told us what the BPO was at and what offer they would accept.Here's
how it looked. They had a BPO at $125,000 and said they would accept
a $109,000 net. We had a buyer put in an offer at $115,000 with a
net to EMC of $101,000 and they took it. Thats an 80% net to EMC,
just like the List Price Calculator laid out.

Pretty cool when things work the way they are supposed to. Anyway,
the moral of the story is this; Some lenders are getting their act
together, speeding up the process and taking large discounts.

Keep the short sales coming and we'll keep getting you approval
letters.

Wayne

PS. They paid a full 6% commission and a $425 processing fee. If the
discount taken wasn't so deep they would have paid 7%

I need agents to give listings to!

2008-03-21T07:01:40Z

We have an abundance of leads coming through our office and need to distribute them to short sale proficient Realtors throughout the state. Currently we need Realtors in the following areas. Orlando, North Port, and Port Charlotte. If you want free listings of properties requiring short sales and have us do the negotiations for you....thats right, we'll do all the dirty work while you find a buyer and close escrow.

Please send your contact info to Rivercityhome@bellsouth.net

Wayne

Beware of Ocwen

2008-03-19T19:53:29Z

I wanted to know if any of you are dealing with Ocwen on a short sale?
It came to my attention last week that Ocwen had gotten out of the
short sale business. Their supposed reasoning was they got paid more
in fees when a home goes through foreclosure vs doing a short sale,
among other reasons. I learned today from an Ocwen mitigator that 1st
position liens will no longer be negotiated for a short sale. All
current approval letters will be honored, but no more will be issued.
Second position liens will continue to be short sold. As I stated
earlier, this is what I was told, I have no official conformation at
this point. If anyone has heard something other than this, please
respond so we can stay one step ahead.

To your explosive success,

Wayne

Best Short Sale Training in the State according to.........

2008-02-07T14:22:41Z

Hello everyone, we wanted to make sure all of you Active Rainers seeking short sale training don't miss the next awesome opportunity to spend some time with us here in Jacksonville.

For details open this link:

www.How2DoShortSales.com

Getting the BPO ordered fast!

2007-12-17T20:14:54Z

Hello everyone! I've been reading a lot of different strategies on AR pertaining to short sale tactics and methods. As we hone our skills through daily interaction with lenders and other professionals, great little tidbits are revealed to make life a little easier. One such tidbit is this weeks tip.

I'm a big advocate of not having to raise the listing price once it's become active. I say this because the list price on a home that your about to embark on a short sale is extremely critical. Price it too low and the offers will be rejected, price it too high and your still looking for a buyer 6 months later. So now the question is how do I price it at the correct price and still get the BPO ordered fast?

We here at River City Home Solution have created a "Listing Price Calculator" that will allow you to set your listing price accurately to ensure competitive pricing and have confidence that your short sale will be approved when the offer comes in. OK, now your looking for your buyer and you need the bank to do the BPO to get the process rolling.

It's no secret that investors routinely seek out properties to purchase at 70 cents on the dollar or less. Create a relationship with a reputable investor. Have them make an offer on your listed property thats 70% of FMV. It will be rejected and your BPO has bee ordered. In the odd event it's accepted....great, everyone wins again.

The key here is to be able to list the home at a competitive price so a bonifide buyer can scoop it up, and get the bank to get the ball rolling by ordering the BPO. Using the "Listing Price Calculator" takes all the guess work out of pricing the home and getting an approval.

For more information on getting your hands on this awesome tool, visit our website at www.RealtorShortSaleSuccess.com

Whether you use the Listing Price Calculator or not, you can still have one of your investor associates make the 70% offer.

Wayne

One on One Short Sale Training

2007-11-22T09:17:45Z

There are times in our lives that an opportunity comes along that's just to valuable to pass up. Some folks get "analysis paralysis" trying to determine if it really is a good deal, while others see the opportunity for what it is and act on it.

HERE IT IS!

We have been asked to do our Short Sale training workshop to a select group of Realtors in Ponte Vedra. This workshop will be different in the fact that it will be with a very small group of 20 people. The workshop will also be held in the conference room of the brokers facility.

The same awesome training presented to large audiences will now be done on a one on one basis. No big overheads, no microphone system, just me and you working and teaching together.

The Ponte Vedra office has 10 people committed to this training and have generously offered 10 empty seats to other Realtors wanting this exclusive one on one training. We will be holding the training on December 5th from 10am till 2pm. These empty seats will fill up fast so if your the type of person that has an excuse for not jumping on this life changing opportunity immediately, don't bother. We will not allow any more than 20 people in this workshop.

For less than the cost of two tanks of gas, you will see how to take short sales and turn them into a commission generating machine!! These seats will be offered on a first come first serve basis for the ridiculously low investment of $129.00. You will receive the complete Short sale training manual and forms CD, and 4 hours of intense one on one training within our small group of 20.

Visit our Website to see some of what awaits you www.RealtorShortSaleSuccess.com

To become one of the 10 lucky people to join us; Go to the website and enter your information on the contact us page. We will call the first ten people to respond and invite you to join us.

To your explosive success,

Wayne

Get the junior lien holder to accept $1000

2007-11-19T19:51:31Z

Over the next few weeks we will sharing tips and strategies that have worked for us in our short sale business. In this declining market, housing prices have been dropping in value at alarming rates. The CEO of Wells Fargo just announced its as bad as the depression era. Kinda scary huh?

As professionals in this market we have to be able to buy and sell houses at lighting speed or risk the value dropping to levels below what the BPO came in at a month ago.

This is where this tip of the week comes in. When doing a short sale on properties that have two mortgages with the same lender, I like to get a sticking point out of the way fast. How much to pay the second position! In your very first discussion with the mitigator working the first lien, ask them what company policy is regarding payment to junior liens during a short sale.They will tell you $1000 is all they allow. Now when you begin negotiating with the second position (same lender different department) remind them of their own company policy. They can't dispute your $1000 offer since they are following policy.

Hope this helps,

To your explosive success,

Wayne

Lender only willing to pay 4%......

2007-11-08T06:28:48Z

What do you do when a lender stands firm on only paying 4 or 5% commissions on a short sale? In the past, 4 and 5% were expected on a short sale. In todays troubled climate, 6 and 7% are becoming more prevalent as it should be.

Lets talk about how to turn the lenders narrow thinking and stingy ways around. Here's the scenario:

A property has three mortgages, 1st=$155,000, 2nd=$53,000, 3rd=$12,000 The Fair market value (not appraisal) is between $210,000 and $220,000. Good neighborhood, clean place, an average middle class home. Minor cosmetics needed to get the home to it best condition.

The 2nd lender is foreclosing and believes the value to be $233,000

The Realtor working this transaction has said the lender is standing firm at the 4% commission. Lets get some dialogue going on this and see what you think. I'll reserve my thoughts and comments for a little while to see what ideas and concerns come from this.

Enjoy!!!

Training Opportunities

2007-10-27T12:48:23Z

It's been a busy week, two live training seminars teaching short sales to Realtors. Both events were filled with professionals wanting to better their lives as well as the lives of their clients. As we work to educate more Real Estate professionals in the art of doing short sales, one can truly see the benefits this will bring to the economy as a whole. As Jim Rohn puts it: "Don't wish things were easier......Wish you had more skills"

That's exactly what over 150 Realtors did this week. Because of their commitment to continually hone their skills, homeowners will reap huge benefits. Wait a minute, so will the foreclosing lender, so will a new buyer, and lets not forget the Realtor that just deposited a commission check!

Joy Huber, the training director for the Northeast Florida Association of Realtors seen the need for her members to get this extremely important training and found a way to not only coordinate the event that is reaching over two hundred members but also paid for it with NEFAR funds. Thats an organization that truly cares for it's members and our community. Thanks Joy!

For those that continue to seek training and share with others, the sky's the limit on how many people we can have a positive impact on.

To Everyone's Explosive Success!

Wayne

Loss Mitigation Department...

2007-10-22T20:18:34Z

The loss mitigation department for any lender seems to be overwhelmed with short sales these days. Each mitigator is working 50-100 deals at any given time. This makes it difficult to get the attention and time from them for more than 5 minutes. The sad part is it takes anywhere from 10-30 minutes on hold to even get the chance to speak to them them. This can make for a long transaction. This is also unfortunate for the Investors that have backed the loans. Sometimes it seems as though if the actual Investor that funded the loan got involved they would lose a lot less. Mostly because some of the mitigators go strickly by protocal and don't do out of the box thinking. I have seen deals where the mitigators and their supervisors rejected an offer that was truly in their best interest. All beause they didn't think outside their computer. I know they deal with a lot of investors that are trying to get the house for cheap but what they don't seem to pay alot of attention to is what these investors actually know about the hosue. The investors know exactly what the lender will lose if they take the property through a foreclosure. Therefore, they have done their research on the values, repairs and closing costs. Investors would make for a great loss mitigator (LOL). So when they submit an offer they are usually giving a good number. However, the mitigator misses this part and rejects an offer that would have saved them money.

They have so many deals they are attempting to mitigate but aren't doing it well. Don't get me wrong some mitigators are really great to work with. Ones who spend the appropriate time on the file and really listen to what the investor is saying about the house and the value. Thank god for a few good peas in the pot! Hopefully these lenders will hire more mitigators and begin to do creative things to insure they don't pass up a chance to minimize their loses. With the foreclosure market the way it is, it definately needs to be stream lined and effective.

Who all is involved in a single real estate transaction?

2007-10-08T20:15:59Z

I thought I would list everyone that is involved in a single real estate transaction. I think we may sometimes forget how much everyones services are needed in the Real Estate Industry. Without the help from so many people a transaction could be delayed or even fall through. If you are any of the following here is a thank you for all of the work you do.

Sellers
Real Estate Agent
Buyers
Loan Officers
Appraisal Groups
Inspector Groups
Loan Processors
Mortgage Brokers
Real Estate Brokers
Lenders
Closing Attorney
Title Company
Contractors
Surveyors

I am sure I have missed a few people. If so, please don't hesitate to comment with those people. They shouldn't be forgotten.

It's amazing how many people we rely on to complete a single transaction. Which I guess is part of why it can be difficult at times to get it closed. Regardless of how many teeth you have to pull there is a lot of gratification once it's closed.

Cheers to all involved!

High Dollar Homes Needed

2007-10-08T20:02:38Z

If there are any Realtors out there that have high dollar homes (with lots of character) at a bargain deal please let me know. I have a group of investors that are looking for these types of homes to renovate then re sell. They must not be at market value for they only purchase below valued homes.

Ideal Criteria:

Historic Area (not necessary)
Price below value
Renovations needed

Thanks to all!

Orlando Realtors.....

2007-10-08T19:47:00Z

I would like to get some feedback on Realtors in the Orlando area. We are gearing up to begin marketing for our next Realtors Short Sale Success Seminar and would like your thoughts on the whether the need for this is strong in Orlando. We have already done several in the Jacksonville area and have two more this month. We have joined up with NEFAR to put on a short sale seminar for them. The seats filled up fast which goes to show the need for it here in Jax is big. Is is the same for Orlando?

How many of you are proficient in short sales?

How many of you would like to learn how to or learn more from an Entrepreneur that has been doing this for years and knows a lot of secrets on how to do short sales?

How many of you know how to increase your listings with this niche?

What Realtors association do you belong to in Florida?

Thanks to all!

Foreclosure Statistics

2007-10-07T21:07:06Z

I thought I would breakdown for everyone exactly how many foreclosure filings there have been in 2007. Hopefully this will motivate Realtors to actively pursue these types of listings.

United States:

925,986 foreclosure filings in the entire country from January through June 2007
Averages to 1 in every 134 households

This is just outrageous! By now we have reached over a million filings this year alone. Unfortunately, this is here to stay. Now I'm not sure exactly how many went back to REO, but clearly there are tons of homeowners needing our help. Without us, who do they really have? The banks? Maybe so but from my experience homeowners have a difficult time getting help from their lender.

Florida:

102,213 of the total foreclosure filings this year came from Florida alone
Averages to 1 in every 81 households
26,203 foreclosure filings in August alone

For all of the Realtors out there that aren't trained in helping homeowners that are facing foreclosure, now is the time to dip in to this new niche.

Now to the solution to this problem. Until the entire economy gets back on track, one way for Realtors to contribute to the solutions is to get trained on how to deal with these situations. Did you know that alot of homeowners do nothing when they can't afford their mortgage anymore? They sit around for the entire pre foreclosure process, then before they know it their home is gone. This happens simply because they didn't know where to turn. Imagine how much gratitude you would feel if you were there for them when they needed you the most.

So, jump in and learn what you need in order to be apart of the solution, whether it is from attending workshops to learn or join forums and groups like this one. We at River City Home Solutions travel the state of Florida teaching Realtors about this niche. We feel obligated to share this knowledge with everyone we know and with everyones help we can change one homeowners life after another.

For more information on learning this new niche visit http://www.realtorshortsalesuccess.com/

The foreclosure statistics were found on Realtytrac.com. They do a great job with following the foreclosure market. Visit http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=2932&accnt=64847 to view the statistics in your state.

What are your Short Sale questions?

2007-10-07T09:31:55Z

We are interested to hear the most common questions Realtors have on short sales. Please comment with any general or specific questions you may have. Once we have received enough questions we will create a blog with both the questions and answers so that you may print it out for reference.

Thanks to all!

7% Commissions Paid on Short Sales!!

2007-10-06T16:35:44Z

We are proud to announce that in a recent short sale transaction the lender did not even hesitate at paying 7% commission to the listing agent. This goes to show that when you stay above the lenders bottom line number the coventional methods can be altered. Not only did the lender pay 7% commission, they also paid $5000 towards the buyers closing costs. This is unheard of!! The lender wants to recoup as much money as possible so helping the buyer with their closing costs (Even pre-paids) is definately thinking outside the box to get the transaction complete and money back in their pocket.

This particular loss mitigation representative understood that even with paying these unheard of costs they would still net a whole lot more than the foreclosure process even thought about bringing them. When you can get a hold of a rep like this one it makes the short sale process a lot easier and less stressful. Just remember most representatives do not think outside the box in any situation. They go by protocal. It is our job to bring supportiing facts and great negotiating skills to the table to show why they should accept our offer.

Just remember that just when you think the lender will not accept something, try it anyway! You might just catch them on a good day.