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A Goldmine of Advice From A Short Sale Negotiator

I appreciate the advice left by a short sale negotiator (loss mitigator) on several of my posts about working short sales in our Bradenton, Florida real estate market. They comments were left anonymously and are greatly appreciated. Here's what a loss mitigator had to say,

On my post: Short Sale Package Cover Letter I suggested a cover letter be sent to the lender with the offer and documentation.

Negotiator's Comment:
I am a negotiator for a mortgage servicer and I can tell you that with the volume - your cover letter isn't getting read - we need the short sale package with the owners financial info - the signed offer and the estimated HUD - thats all i ever looked for - we do almost 2000 workouts a month - no time to read needless letters from realtors - sorry guys

On my post: Short Sale Loss Mitigators Receiving 150 New Files Each Day I wrote about how overwhelmed they are.

Negotiator's Comment:
Negotiators in loss mitigation departments are overwhelmed - we have gone from 12 negotiators one year ago to 80 and still can't keep up with the volume. Remember we do more than just short sales. Right now we are telling realtors 30 - 45 days for answers - that is longer if we are not notified before an offer and are able to get a full appraisal - so prepare ahead of time if you imagine you are in a short sale situation. My office is closing approximately 2000/month so they do get approved. Frankly, some realtors are easier than others - we all have a job to do and I can not get every offer approved because there are many variables ie, investor guidelines, PMI insurers - so don't argue when I get frank - if we are getting paid in full then it makes no sense for us to settle for a low ball deal -

Refrain from leaving messages daily because those are the realtors I aviod - i prefer email because then I don't have to make you feel good and argue values with you - needless wasted time - we all have guidelines and arguing isn't going to change the facts. I am honest and usually will let a realtor know what the bottom line net to bank is that I can accept...did you hear that - its the NET not the offer thats important. Also cash deals make no difference to the morgage company - we get paid in cash at every closing - if you hang on to a non qualified buyer shame on you...

On my post: Lesson #8: The Hardship Test for a Short Sale I wrote about 8 possible hardship scenarios.

Negotiator's Comment:
The hardship qualification is really to see if the homeowner can sign a note for the deficiency balance - either part or all of it - and the letter isn't the determining factor there...its the credit report that gets pulled. A short sale is approved for any borrower and is based on the fact that the value is less than what is owed - the hardship is what happens to the loss. And the letter is just a small factor - don't waste your time making it sound believable. As far as ARM increases goes - as a negotiator if I saw that as a hardship you'd lose your sale - and many realtors have lost their sales due to ARM increase. I turn those short sales into Loan Modifications - lenders have gotten quite creative in keeping homeowners who have been paying in their homes...so be careful with that hardship in your letters.

There you have it folks, straight from a Negotiator. Again, my thanks to our anonymous commenter.

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Dan Forbes, PL is a licensed Broker-Associate and Certified Residential Specialist. He leads the Forbes Advantage Teamat RE/MAX Gulfstream Realty's Lakewood Ranch Office in Bradenton, Florida.

To learn more about buying a home or selling a home in the Bradenton - Sarasota Florida Real Estate market please visit Dan on the web at BradentonFloridaRealEstate.com ; TheRealEstateZoo.com; The-Short-Sale-Expert.com ; and BradentonRealEstateClub.com

Call Dan Forbes today: 941-713-5760 or toll free at 800-756-3068.

Posted by Bradenton Florida Real Estate - Dan Forbes on 03/15/2008 08:39 PM

Comments (13)

short sales, foreclosure, bradenton florida real estate, short sale expert

13 Comments on A Goldmine of Advice From A Short Sale Negotiator

I just talked to some folks today who want to sell their house and they owe more than what the house is worth. I don't think they can show a hardship - the wife was laid off her job, got another one right away, althought she says it is #30,000 a year less. They are current with their mtg payments.

03/15/2008 08:52 PM

by Mary Aguilar (John Saar Properties)

Dan: I'm bookmarking this. Thank you for compiling this and sharing.

03/15/2008 08:59 PM

by Matt Grohe CRS, GRI, ABR (Remax Real Estate Concepts)

Mary- Maybe she can qualify b/c it's loss of a job or loss of income, which she can document ($30K less is a lot less for most people!).

Dan- Well, I LOVE your posts. Everything here makes sense. Thanks for passing along the LM's responses. So, what do YOU do when the LM (one in particular that I'm working with for a Seller) specifically tells you she DOESN'T use her e-mail b/c it's just "one less thing to worry about" and doesn't answer her phone EVER (I spoke with her directly once so far), usually has a voicemail that is full and not accepting messages, and, the one time I COULD leave a message (last week), I of course have not gotten a return phone call. Aaargh! I could pull my hair out. We have a good cash offer, the BPO has been completed but I can't even find out the value to give hope to either Buyer or Seller...

03/16/2008 07:03 AM

by Lisa Spalding (Watson Realty Corp.)

Hi Dan, it's great that you have gotten these comments and are able to share them.

03/16/2008 07:05 AM

by Keith Perry - REALTOR® -West Metro Atlanta (Coldwell Banker)

That's excellent Dan. How cool would it be if we could get this guy to join AR? He would be very popular very quick!!! His commnets are interesting. It kind of contradicts the "short sale" gurus who are sending over 300 page packages. Personally, I have always believed simple is best. But I'm sure all loss mit reps are different.

It really does boil down to investor guidelines and PMI.

03/16/2008 08:06 AM

by Bryant Tutas-Tutas Towne Realty, Inc

Dan, this is excellent. Thanks so much for putting it out there. Every bit of information that helps us understand the process and how to help the consumer is GOLD. This inside perspective is very helpful. Couple of little new pieces of information for me personally. Thanks again!

03/16/2008 09:28 AM

by Jeanean Gendron ~ Redding & Shasta County Specialist (Real Estate Professionals--GMAC)

I had never listed a short sale and the ones I was on the buy side or the agents have told me that it was "mess" I suppose that was the reason, I was never interested in listing them, but this is all great information..

03/16/2008 11:43 AM

by Konnie MAC Northern Virginia Real Estate (Konnie McKee )

In the 70’s people had equity in their homes and credit card debt was not maxed out by as many as it is today. It was a much different time, so much so its very scary today. I read an article called

The number one question in San Diego real es tate

http://www.sandiegolawyerforyou.com/san-diego-legal-services.htm

03/17/2008 04:38 PM

This one's worth bookmarking. Advice straight from the horses mouth. <g>

03/18/2008 02:54 AM

by Chrystina Tovani - Sacramento Metro Living (RealtyOne)

That's definitely some great insight... thanks for sharing it, Dan.

03/20/2008 03:56 AM

by Fairbanks Real Estate Broker Jesse Clifton (Jesse & Kathy Clifton, REALTORS - 907.699.6024 - )

Great post. I actually just got a short sale approved and closed last week. The stipulation was that the lender would charge off the $250k owed (less the offer for market value) and the seller would recieve a 1099 at the end of the year since his mortgage was upside down. His tax attorney said that with all of the write offs of the loss, he probably wouldn't owe more than $30k (dont quote me on this...just what the seller told me). Anyway, the seller also spoke to the IRS and he was told that he could set up a payment plan for the monies owed. My seller was all for this since he could no longer continue making payments on a $650k loan and he faced foreclosure as the only other alternative. Also, he was able to salvage his majority of his credit, which was very important to him since he ran another lending institution is Ohio. He is going to let me know exactly what transpired at the end of the year (like the real amount owed to the IRS and the point hit on his credit).

From Virginia

06/19/2008 09:08 PM

by Lisa David

Great post! Always nice when the 'other side' gives some advice.

07/14/2008 02:33 PM

by Nick Dailey: Northern Kentucky Real Estate Agent - Short Sale Specialist (RE/MAX Affiliates)

Good post. There is some valuable insight there.

I think the worst part about the negotiators, whether it's due to their lack of time or personality, is that in most cases their responses never share any detail or background so that you feel like you undrstand why or why not.

Sales people who stop talking after someone says "no" aren't in sales for long. For me, I want to at least take information back to my clients so they can understand why they were shot down. Telling them no without an explanation is the real source of frustration for me.

07/31/2008 11:40 PM

by Piero Marinucci (Long & Foster Real Estate)