FORECLOSURE EXPRESS VS. LITTLE ENGINE THAT COULD

By
Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY

 

I recently saw a blog where the statement was made that, "Most banks will not stop the foreclosure process and start the short sale process until you have an offer on your home."  Our experience is that this is inaccurate advice - let me explain.

The delinquent loan process at the lender has evolved into a two track system. The first track (think a railroad track) is what I call the FORECLOSURE EXPRESS. The lender has come to realize that the loan mod and short sale processes are seldom successful the first time around, are sometimes fraught with ill-intentioned borrowers seeking to drag out the process of losing their homes (or income property), and get tied up in the backlog of the attorney's office and Clerk of Court's office.  Thus they put the foreclosure in process "no matter what".

The parallel track of the process is the short sale or loan mod process. This railroad track has chugging along the "LITTLE ENGINE THAT COULD".  This engine needs all the help of the broker, seller, attorney and closing agent to move this through the process.

The problem is the FORECLOSURE EXPRESS needs to be slowed down. That does NOT happen with the introduction of a short sale!  It is still a race. 

Well, you say - this just is not logical.  LOGIC!?!!!? When was the last time you used logic in a short sale process with the lender - and you were right???????????

The fact is, unless you yell and scream, and maybe not even then, the foreclosure track does not speak to the short sale track.

So, I think it misleading to simply say that when you introduce a short sale to the lender the foreclosure is stopped, is very misleading and frankly, just incorrect advice.

Copyright 2010 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660  RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com

See our easy to understand articles at:

TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. April Solomon 05/15/2010 02:08 PM
  2. Dick and Dixie Sells 06/02/2010 10:07 PM
Topic:
ActiveRain Community
Location:
Florida
Groups:
All Things Florida
Keller Williams 'Rainers
Century 21 Network
Florida Realtor® Network
PALM BEACH COUNTY SHORT SALES
Tags:
florida foreclosure
palm beach attorney
palm beach foreclosure
forecloure advice
foreclosure palm beach
stop foreclosure short sale

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Ambassador
1,826,605
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

 I don't understand your post. . I have successfully stopped banks from foreclosing a property in a certain date because we had a short sale offer. The yelling and screaming is a method we have to use, I agree with that. . . . by we did stop foreclosures before.

May 15, 2010 12:47 AM #1
Rainmaker
1,138,390
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Hi Richard. If you go back and read my post you'll see that the part you quoted are NOT my words. It's part of an ad that is the premise of my article. I still love you though :)

I completely agree that having a contract on the table will not stop a foreclosure. The foreclosure process, at least in Florida, keeps right on moving forward. However it has been my experience that the best way to POSTPONE the foreclosure is to have a contract on the table.

My post is about the unethical and perhaps illegal practice of submitting fake contracts to the lender and advertising that this will stop a foreclosure.

May 15, 2010 12:56 AM #2
Ambassador
1,826,605
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

After reading Bryant's post. . now I understand it.

May 15, 2010 01:07 AM #3
Rainmaker
253,801
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Good Morning BB!

OK, I now see that the paragraph AFTER the headline is also from the other "ad".  Nonetheless, if I read it as a statement of fact, then others might also - maybe use quotes (" ") around the whole section?

I do absolutely agree that having a short sale negotiation in progress with the lender is a factor in stopping a foreclosure, but there are plenty of caveats to that occuring.  Disregarding the foreclosure because of the short sale negotiations will lead to a default and then an uncontrolled nosedive into a foreclosure judgment - and borrowers need to be aware of that legal issue.

May 15, 2010 01:24 AM #4
Rainmaker
1,138,390
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

No problem. I went back and edited to make it clearer that that was not me speaking. I'm way smarter than that :)

Have a great weekend.

May 15, 2010 01:45 AM #5
Ambassador
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Richard,

our experience was that when we tried to contact Lenders regarding shhort sale, they asked whether we had an offer. When not, they just told us to contact when we have one

May 15, 2010 11:27 AM #6
Rainmaker
4,000,864
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Great information Richard.  While it's not logical, I've seen banks foreclose on homes while having significantly better short sale offers that were just not processed in a timely manner.

May 16, 2010 01:51 AM #7
Rainmaker
495,240
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Richard - Common sense would dictate the lender would postpone the foreclosure when they say they will, when they have a legitimate short sale offer.  Common sense does not always prevail.

May 18, 2010 12:17 PM #8
Rainmaker
253,801
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Wendy -

Case in point in Palm Beach County.  Short sale offer completely submitted.  Here are two real examples - this happened twice to clients of mine.

In one case (the pending g short sale case) the foreclosure sale takes place even though the short sale negotiator for the bank put in an email that the sale was being cancelled and the borrower did not have to appear at the sale since it was cancelled.  Guess what - the sale occurs and now the bank won't look at the short sale and has it listed as an REO.

In the other case the short sale actually closed on Thursday and the bank got its money on Friday and called off the sale, but the attorney did not get the message and the sale occured and a third party was the winning bidder.  The bank is seeking to vacate the sale.

 

May 18, 2010 04:21 PM #9
Anonymous
Steve

Question-- If notice of  final judgement of mortgage foreclosure is published and a property is scheduled for auction at courthouse, is the Selling Agent required to disclose that fact in a short sale contract/negotiation made 14 days after the notice?

Jul 30, 2010 05:30 AM #10
Rainmaker
253,801
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Steve

I am not sure what state you are referring to, but if there is a pending foreclosure, I would think that this is material information that if known to the broker should be disclosed to the prospective or contract buyer.

Jul 30, 2010 03:57 PM #11
Rainer
33,652
Harj Gill
Speed Equity® - Olympia, WA
As featured on NBC's "Saving You Money"

I think I'm finally coming to the end of my education for the day. My brain hurts.

Aug 08, 2010 08:17 PM #12
Rainmaker
1,076,867
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Richard, your point of the attorney not knowing about the halt of the sale is so important. There are so many parties involved that it is impossible to guarantee any outcome until it is over.

Feb 11, 2011 04:26 PM #13
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Richard Zaretsky

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