We wish you a merry Christmas! We wish you a merry Christmas! We wish you a merry Christmas And a happy New Year! Glad tidings we bring To you and your kin! Glad tidings for Christmas And a happy New Year!

Broker Bryant and The Lovely Wife (pretend we are singing it works better like that) ROAR!

I offer a  service for homeowners negotiating short sales.  I call the lender and proactively offer a lien on the new home for the deficiency balance.  It avoids the lender suing for a deficiency judgement (ruining the borrower's credit) and allows the bank to keep the loan performing.

I offer this for a fee of $1,000, payable upon close of escrow from the sale.   I have negotiated four this year , each time the Realtor paid the fee.

Merry Christmas back at ya Broker Bryant and your "lovely wife."

Brian,

I know that some lenders are negotiating transfers of the deficient amount, and I applaud your proactive work in negotiating early with the lender. 

However, if a seller can't find the money to pay the shortfall on their current mortgage, then presumably they have no cash left for a down payment  Assuming they haven't messed up their credit and can even qualify again, they'll need 100% financing.  That in turn means there is no equity left for the lender to collateralize. 

For the sellers who are not buying again right away, there will no home to collateralize, so the deficiency would have to be converted to an unsecured loan.   Investors don't believe there is high probability of being repaid in these cases. 

Thanks for the comment.  I will dig into how the investors respond to this lien transfer.  Again, I think caution is advised. 

Good information. Most homeowners looking at foreclosure are in very tight spots, but we can help many of them "if" their primary difficulty that go them there in the first place has been resolved. However, we do have other programs to assist them including Deed in Lieu.

Credit ratings are inevitably effected - you are right about that! And don't let people think they are out of the woods if they have declared bankruptcy. Lenders can still go after their homes. The State of Colorado has a law protecting homeowners from this and do not allow lost mitigation people to do business there.

The situation Brian stated above is all too often the case. The earlier you can assist homeowners to avoid foreclosure the better it works for them. Unfortunately, some folks are so far upside down there isn't much anyone can do for thiem whch is a shame. 

Good luck and good lending. 

I posted on another article you wrote.  Just to clarify, with the proper negotiations and with an understanding of the 1099 and credit reporting, you can have a clean credit report (besides the mortgage lates) which will show the loan as "paid in full".  I have a client I helped this year that was never late and did a short sale ($84K loss to the second and $45K loss to the first).  His credit was not dinged at all by the short sale and both lenders were forced to report the loans as 'paid in full'.

-Trent