Yesterday we touched on cash contributions and promissory notes. There seems to be an increase in requests for these things over the past few weeks and months. Fannie and Freddie seem to be the leaders in this trend.
In Arizona, there are no deficiency rights. If the home goes to foreclosure, the bank has almost no recourse on that money. However, that trend is starting to reverse and we are seeing it now all of the time. If you are seeing that increase in trends, we'd like to hear about it. Please mention what state you are in also.
We are initially always saying no to these requests. In our initial meeting with homeowners, we are making sure that they are writing their hardship letter even better. It doesn't have to be more detailed. You just need to say something about why you can't make the payment. Typically, a reduction in income, medical problem, or job transfer are the best reasons for a hardship. We are also making sure that when homeowners fill out the financial analysis form, they include EVERYTHING. Lots of homeowners forget about things like car repairs. They are legitimate expenses and banks are taking a closer look at financial analysis forms.
We continue to see these waves and trends in the short sale industry. We want to challenge you to come up with a way to combat the problem. If you do run into the problem, we would encourage you to say no. If you say no, they usually cut the request in half.
We are very interested in what your thoughts are on this topic. We want your feedback on this. What are you experiencing in your short sale business?
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