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Short Sale Agent Poll: Miss Payments or Not?

By
Real Estate Broker/Owner with Rulnick Realty, Inc.

Short Sale Agent Poll:

1.  What is your experience getting Short Sales approved with sellers up-to-date on mortgage payments (i.e. no missed payments)?

2. If you have been successful, which banks were you dealing with?

It's Wendy!

Wendy Rulnick, Broker,  Rulnick Realty, Inc.

Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida:  Destin, Fort Walton Beach, Santa Rosa Beach, Navarre, Niceville and vicinity.

1-877-487-9639 or 850-650-7883 ext. 204

www.ShortSaleForeclosureHelp.com

www.RulnickRealty.com

 

Posted by

"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-259-0422

email itswendy@rulnickrealty.com

www.rulnickrealty.com property searches and community info

Wendy Rulnick helps real estate buyers and sellers on the Emerald Coast of Florida.

Rulnick Realty

 

Comments (27)

Bo Buchanan
Kettley Realtors - Oswego, IL

Wendy - I haven't done one yet, but I have a client with Bank of America and we are going to attempt it.  He is now in Iraq and his family has already moved out of the house and moved back in with relatives.  We are hoping this is a compelling enough story. 

Jun 01, 2008 03:27 PM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Heather- Thank you for sharing.

Sidney- I had a similar experience.

Fernando- Thank you for the input.

Bo-  It does sound compelling.

Jun 02, 2008 12:51 AM
Rob Jacobs
Short sale pathways - Rockwood, MI
Short Sale Specialist

I've had several go through without being behind. It is not necessarily the servicer but the investor that decides. I can have 10 identical deals with wells fargo and only one may be approved because they all have differents investors. The second liens are the ones that I have trouble getting through without being late.

Jun 04, 2008 03:18 PM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Rob- Thank you for sharing and enlightening all.

Jun 05, 2008 12:22 AM
Kelly Spinosa
Crossroads Realty - Sea Girt, NJ

I would also agree that it is much better to be in default with your payments. It is hard enough to get a response from them.

Jun 05, 2008 04:16 AM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Kelly- Thanks for your input.  We are certainly seeing varying experiences.

Jun 05, 2008 10:45 AM
Allen D. Butler
The Realty Butler llc/West USA Realty, Inc. - Peoria, AZ
MSSC, GRI, CDPE

Miracle of all miracles, I just closed escrow on a short with Countrywide yesterday in which the homeowner missed no payments. It was a transfer hardship, and it was the most pain in the ass short sale I've done in the last year. Countrywide rejected the short sale twice. Took 4 1/2 months to complete. I siimply would not let it die on the table: "Breathe, damn it!" I think it's just sheer tenacity that gets the job done on short sales. Countrywide also just approved a short sale in which my client (Seller) provided NO FINANCIAL DOCUMENTS. Not one. Just a hardship letter. Countrywide is simply retarded. Strange days. I've been slowing down on the short sales. I refer them out now. I'm WAY to busy with REOs now.


Allen

Jun 05, 2008 06:10 PM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Allen-  It is strange and mystifying that there is no consistency. And it proves you are absolutely right- tenacity is the key to success.  Great experiences.  Thank you for writing.

Jun 06, 2008 12:08 AM
Rob Jacobs
Short sale pathways - Rockwood, MI
Short Sale Specialist

one day we're beating a dead horse and then the next your approved. The squeaky wheel really does get the grease in a short sale, used in moderation of course. You want them to know that you're not giving up without getting under their skin.

Jun 06, 2008 01:53 PM
Anonymous
Sam

I have put in an offer on short sale lender is Wells Fargo about 4 weeks back. Realtor tell me that she has verbal yes from negotiator, and them negotiator sent another list of documents required. I am confused to really do the inspection or wait for approval from lender in writing, please advice. At what time should I have attorney review this contract?

Jun 06, 2008 03:49 PM
#17
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Sam- Your purchase and sale agreement should stipulate when you do your home inspection. It may be after Short Sale lender approval or may be within a certain number of days after you had an executed contract.  Your Realtor should explain that to you. You should consult an attorney as soon as you have a concern.  Good luck!

Rob- Good advice.

Jun 07, 2008 02:03 AM
Sidney Jimenez
Keller Williams Realty SW - Pembroke Pines, FL
CDPE, ASP

SAM--If they're still submitting paperwork it sounds as if you don't have an approval as of yet. I would advise for you to have your client spend any money until they have a written approval. Your contract should have a provision to give the buyer 30 days after a written approval from the sellers lender in order to do their inspection and financing. Check your local board for an addendum or write it in your offer is none is available.

Jun 07, 2008 02:21 AM
Brandon Watson
Team Sandy Blanton Realty, Inc. - Pensacola, FL
Short Sale Expert

Wendy, I don't think we've had 2 short sale situations thus far where the owners were not behind on payments. In the first situation, the short sale was rejected by Countrywide since it was an investment property- this wasn't the rule when we listed the property. In the second case the owners of the home have made every attempt to keep their credit in good condition untilt they found a suitable rental home. They moved out last week and plan to make no more mortgage payments- we'll see how that plays out.  To gauge if the homeowners are eligible for a short sale you have to have the whole picture. We ran into one seller who was current on their payment and able to do so until they maxed their credit card out! We told them to stop making payments immediately and we sold the home a couple months later. Although I don't think that being current on payments would have made any real difference in that situation, being behind on payments almost certainly helped. Some agents think that a seller can simply stop making their payments and qualify for a short sale- this has not been the case in our experience. There has to be a hardship beyond simply not wanting to make the payments any more. If a seller doesn't qualify for a short sale there is still hope! You may be suprised what the lender will do to avoid a foreclosure. In the case of the investment property with countrywide, interest on the $400k note was lowered from 12% to 4% for 4 years making the property a positive cashflow again! In this case, we made no money but we made a client for life by simply suggesting a workout with the lender!

Jun 07, 2008 12:14 PM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Sidney- Thank you for your erudite contribution.

Brandon- There was a rumor going around for a while that Countrywide would not allow short sales on investment properties.  I had a Countrywide investment property short approved three weeks ago, and one with a "verbal" approval right now.  Maybe it was the end-investor on the one you had rejected who made the call.  I am leary of telling people to stop making payments. That is incredible how you got the rate down to 4%.  You are right, that's a customer for life!

Jun 08, 2008 06:43 AM
Sidney Jimenez
Keller Williams - Miramar, FL
CDPE, Short Sale Expert, 954-665-9449,

WENDY--I had to look up erudite. Thanks!

Jun 08, 2008 07:07 AM
Anonymous
marlene heeseman

I have just listed my house for a short sale due to divorce a year ago.  My mortgage is presently current making the minimum payment on a pay option arm so my mortgage is going up over $1000 a month.  I spoke with a short sale specialist yesterday and she told me that I need to stop making mortgage payments because if we send in an offer and the mortgage is current, they won't do anything with the offer.  I've been trying really hard to keep my excellent credit and thought that I could sell the home as a short sale with current payment status and take less of a hit on my credit than if I stopped paying the mortgage.  What are your thoughts?  I'm really confused as to what to do at this point.  Thanks, Marlene

Jun 12, 2008 04:48 AM
#23
Anonymous
Sidney Jimenez, CDPE

MARLENE--You really shouldn't have anyone tell you to miss your mortgage payments being that it affects your credit and that should be taken into consideration. With that being said, there are lenders like Countrywide that have a policy of not accepting short sales unless there is at least one missed payment. The reason for that policy, more often than not, is because these lenders are really swamped with short sales and they are making an effort to concentrate on just the files that are in immediate jeopardy.

I've had success in convincing a lender that there needs to be consideration given to my client even though they are still current but cannot sustain the payments due to their hardship, like a divorce. The front line employee will almost always shoot you down but you can plead your argument to the supervisor of the loss mitigation dept.

Something else to take into consideration is that the policy can change again from today to the day yuo receive and offer on your property. In the event you get an offer and the policy is still current then you should speak with the buyers and consider trying to get a longer closing date to give you time for the negotiation.

I hope this helps!

Jun 12, 2008 06:40 AM
#24
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Sidney-  Thank you for sharing your experience and knowledge with Marlene.  I concur.  It is a serious and personal issue to decide to stop making mortgage payments.  Finance guru, Suze Orman commonly advises sellers in Short Sale situations to stop putting money into the "hole".  Each of us has to question hard and make  a tough decision as to whether it is worth it for us to sustain our daily lives, through shelter, food, clothes and gasoline, or to spend funds perhaps by charging up credit cards and pulling on equity lines to feed a mortgage payment.   Good luck, Marlene!

Jun 12, 2008 08:31 AM
Michelle Schoen
The Permanent Record, LLC - Denver, CO

I never, never, never recommend that they stop making their payments.  The liability issues of having told someone to do that could be devastating.  I'd rather not be responsible for someone going into foreclosure because I told them to stop making payments. 

I've had quite a few short sales approved where the homeowner hadn't missed any payments.  If you have a true short sale with a valid hardship, they don't necessarily have to miss any payments before the bank will begin working with the homeowner.  In addition to short sales, I also try to figure out if a loan modification or a forbearance would keep them in their home if they'd rather not sell.  I think it's very important that we offer a full range of services to these clients.  They're already in distress.  Going through their financial situation and finding the best solution is always the best thing to do for these clients.  If we can keep a family in a home, why not try?!

Michelle Schoen
Short Sale Negotiator
The Permanent Record, LLC

Jun 15, 2008 04:35 AM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Michelle-  Excellent advice.  The owner/seller has to make that very difficult decision. Thank you for sharing.  Wendy

Jun 15, 2008 06:33 AM