It seems that the more time that passes the more well versed and the better known the players are in the short sale field. I have been able to meet some very interesting people in the mitigation departments of most of the major banks.
One of the things I did not expect is how far you can get with negotiation and agreement from any financial institution when you are cordial and kind. During most of our short sale negotiation, and for that matter most short sales, the process cannot start until a few things happen. There has to be an offer on the property in question, a hard ship letter has to be drafted, a permission letter from the seller that we can speak to the bank on his behalf has to be completed and signed, and sometimes the seller has to be in default.
Some of the most, more seemingly common, disturbing horror stories, are that the banks are instructing those that are attempting to short sale their properties, or even attempting to negotiate on their own, that they have to let the payment lapse for the mortgage.(boy can I run on...LOL).
With at least three sellers that we have represented in the past two weeks, being told that they have to let their mortgage payment lapse 30 days, then being told that they will not be allowed to do a short sale, that is simply hard to swallow. However, I am sure that those exist that are short selling their property just buy closer to the bottom of the market and not due to any hardship. To do this they get the banks agreement to sell their property for less than what is owed, approach a lender to obtain a loan for another property while theirs is attempting to be sold, they close the new home and let the one one go. I cannot be too critical of the banks watching out for their stockholders interests. But let us try to realize we are all in this together - Ultimately!
Representation is very important. It is not that we as agents cannot do better. It is that we don't have as much of an interest with the property regarding payments and collections. The bank can attempt all it want to attempt to obtain a debt from us as agents. However, this will do the bank no good, we are not the sellers. On 5 recent occasions, we have been able to get the bank to agree to the process before the seller's credit was hurt. FYI - the seller's could not afford the payment due to, in all 5 cases, job termination, and probably would not have been allowed to short-sale the home if they were not delinquent at some point. But we were able to get the bank to review the paperwork and approve the short sale prior to the owner's becoming delinquent.
It is all how you play the game. You know this rule all too well, treat others as you want to be treated. You can go into the negotiation "hard-style", and break yourself up against the rules. Or you can go in being flexible and have each attach slide off of you and be able to keep your composure and counter with brilliance, kindness and respect. It is amazing how many flies you can attract with honey isn't it?
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