Real Estate Blog - Short Sale Seller: "I Just Want OUT!"

Home : Blogs : Wendy Rulnick "Its Wendy!" Destin Florida Short Sales : Destin Short Sales & Real Estate Blog

Short Sale Seller: "I Just Want OUT!"

I recently listed a Short Sale condo for sale in Destin Florida. The property had been converted from apartments a few years ago. It is a one bedroom, 920 square foot ground floor unit. There are 32 units for sale in the complex. The condo fees are a whopping $225 per month. The last and only recent sale was for $115,000 back in June. My seller, whom I'll call "Ms. Samuel", paid about $170,000 for the property in December 2005. We put it on the market for $98,900. You can see the challenges in selling it.

Anyway, while I was at the seller's home taking photos, we chatted about her financial circumstance. Her lender is Countrywide. She said when she bought the unit, she was making $13,000 per year in income. How is that possible? How can anyone making $13,000 qualify for a purchase of a $170,000 unit, even with a substantial downpayment? Ms. Samuel told me she never got a truth-in-lending statement until the closing, and did not even know how much money she would need to bring until she was at the closing table. This Destin seller also said her mortgage broker never explained what type of loan she was getting. She didn't care about that anymore. She just wants out. She lost one of the two jobs she had, and her current position, in the resort rental industry, has cut her hours by 25%. She hasn't made a mortgage payment in three months.

As I always recommend to my sellers, I asked Ms. Samuel if she tried speaking with Countrywide to find a solution to her high mortgage payment. "Yes," she said, "I track everything. I've called them 17 times. 17 times! I could not get anywhere. I even tried calling Bank of America, since they purchased Countrywide. I am done with it!" She said she knew her options were short sale, deed-in-lieu of foreclosure or foreclosure. I told her that a short sale would be better on her credit in terms of repurchasing another home more quickly than the other options. Ms. Samuel said, "CREDIT? I don't care about my credit. I'm not buying anything again anytime soon. I just want OUT."

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Search Destin FL real estate

Short Sale Pre Foreclosure Help.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204

Email itswendy@rulnickrealty.com

Wendy Rulnick specializes in real estate sales, short sales, traditional sales on Emerald Coast of Florida: Destin Florida real estate, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field. Wendy Rulnick, Broker and Realtor, has been selling real estate for almost 20 years. She has won numerous awards, including the coveted ADDY for advertising design. An expert marketer of real estate listings, she negotiates successfully to her dients' advantage. She is supported by a team of top buyer specialists. She lists and sells homes, condos and townhomes.

All Rights Reserved. *Short Sale Seller: "I Just Want OUT!*" Contact Wendy Rulnick regarding Destin Florida real estate and vicinity. Copyright © 2008 by Wendy Rulnick.This site, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information

Subscribe in a reader

Subscribe to It's Wendy's Blog by Email

Posted by Wendy Rulnick "Its Wendy!" Destin Florida Short Sales on 11/16/2008 11:31 AM

Comments (31)

Short Sales in the Sales Strategies / Tactics Channel

destin short sales, destin short sale realtor, countrywide short sales, destin real estate market

Originally posted at: Destin Short Sales- Emerald Coast Florida Real Estate: Short Sale Seller: "I Just Want OUT!"

This post has been included in Florida Information Okaloosa County, FL Information Destin, FL Information
Post is included in group: Sharing Information of Short Sales
Post is included in group: Short Sale REALTORS®
Post is included in group: Short Sales and Forclosures ONLY
Post is included in group: Short Sales Specialists
Post is included in group: Short Sale Specialists & Pre-Foreclosure Education

31 Comments on Short Sale Seller: "I Just Want OUT!"

NOV

2008

Hi Wendy

What the lender did to this buyer is criminal; I believe the lenders and well as the customers can commit mortgage fraud.

Good luck and success

Lou Ludwig

I inherited a seller from an agent that left the business, similar situation, just wanted to get out, ex-husband took off (after getting a large equity loan on the house), no more alimony payments either. We tried whatever possible to contact the "nice" people at the 2 banks she had loans with, to no avail.

She decided to abandon the house, got a rental and just had the house foreclosed on. Her attorney looked into it, she would be better off having the foreclosure, than have the outstanding debt amount that she would never be able to pay off. What surprised me: she was able to buy a brand new car while going through this....... So my plan is to avoid short sales as listings..... a lot of work - kudos to you for doing it!

Can't blame her a bit for just wanting out and pretty upsetting that the lender got her in there in the first place. You would think these lenders would find a way to have better communication with their clients holding loans that are in trouble - are the lenders waiting for the infamous bailout money thinking they will be rescued with all their foreclosed on properties so they don't care or worry about it as much? Seems like there attitudes have still not changed - they're not looking out for the consumer they are just looking for an easy way to save their butts. Sad. good luck - I know you'll get it done for her!

Lou - That was the worst case I've seen of overqualifying someone. She showed me her tax return and I took a double-take!

Martine - Another sad story. Amazing about the car loan. Car dealers are really hurting, so I almost cannot blame them.

Valerie - I hear the same thing from most of my sellers trying to negotiate their rates. There are a few nice exceptions. Thanks for the luck.

Wendy - it's so important for people in this situation to know whether or not they'll be relieved of their liability. They may not think now that they'll even buy another house, but a lien for their deficiency could prevent a purchase 20 years from now.

Sharon - Absolutely. And straight foreclosure is the worst!

Wendy

I had a similar situation with a brother and sister who bought a house for their family of 6 adults (elderly parents, unemployed sister, and a blind sister). Their realtor got them hooked up with a loan broker (out of business now) who set them up with two loans. One with Downey Savings and the other with National City. No money down, 103% loan. They were thrilled at that time to be able to buy a house.

Less than a year later, they're struggling. They can't afford the payments, and are several months behind on their loans.

They asked me for help. They couldn't even go through loan modification because they really couldn't afford it. So we tried to do a short sale, only to find out that Downey Savings won't approve short sales, and won't take deed in lieu of foreclosure either because there's a second loan. So the brother and sister have dismal options: foreclosure or bankruptcy.

Pacita - That is sick. And banks that don't do short sales are ruinous.

I have an offer with the same lender in on one of their REOs. The accepted it verbally through their real estate agent and said we would have the needed papers the next day to open escrow. That was about 8 weeks ago. They now can not give us any time-line for the docs. they are absolutely incompetent.

Wendy, This lady needs legal advice. What's going to happen when she submits 2 years tax returns to CW and the income doesn't match up with what she declared on her loan application? This is one of those situations that can cause a seller a lot of grief. Lying on a loan application is a federal offense. Unfortunately, ignorance is not a defense. She was probably taken advantage of during the loan process but unless she can prove the application she signed was altered after the fact, she could be opening a can of worms by going for a short sale .

Bryant - That's interesting. I didn't get into what *type* of loan she has. You could certainly be right about stated income. Hmmm... I think she was lead into what she signed, personally. Good points.

Randy - Seen that. I could only guess "which" lender it is...

I guess I am making a lot of assumptions. Asking sellers if they bought using a stated income loan and if their tax returns will match up is something I always do. Maybe I'm just being overly cautious but I sure would hate to sell them on a short sale only to get them into a whole heap of crap because of it.

I have heard that more than once. It is really sad what has happened, and the fact that the bank won't call her back makes it worse!

Just amazing what lenders will do and what buyers will let them do to them.

NOV

2008

Wendy, that's tough situation. If she used a real estate agent in that purchase, that's a sin. I had a similar situation, my clients (facing foreclosure) got no HUD1 etc at their closing. My client used the sellers agent in that deal, and I have to hold that agent at least partially responsible!

Laura G

Bryant - That is pretty cautious. Have you seen any lender actually reference the loan app when processing a short sale? I think that's too detailed for them. Too much work, processing, different department. The other thing is if the bank checked, they'd have to request older tax return, let's say three years ago, and compare it. Way too brainy, in my opinion. BUT, there's nothing wrong with being cautious. It's the best way to conduct business.

Gene - Correct!

Laura - I cannot blame the real estate agent. Different department, in my opinion. Realtor is not title agent or loan officer. Of course, if there was collusion and intent, different story.

I have to wonder why a woman making $13k would think she could afford a $170k house....simple math here......we are quick to pounce on the big bank but the borrower has some accountibility....this one seems pretty simple to me.

Dawn- I agree with you, I realize there are some shady folks in this industry. But consumers need to make educated decisions, and that was not one of them.

I enjoyed reading all your comments here. Thanks

Don

Dawn & Ginny - True. Consumers sign the documents, should know what they are signing. I know some were mislead, but most thought they'd still have incomes to be able to cover payments.

Don - Thank you.

Wendy, it's horrible to hear and how often these type of stories are being made. It is very clear that this mortgage should have never been made and look what your customer has had to endure. It's awful.

NOV

2008

Wendy, You're probably right that the lenders would never check. I guess my problem is that so many of these properties were bought to flip. And many were bought by fraudulent means. When I talk to a seller who is a student but was able to pay $275,000 for a house in 2006, nEVER made a payment, NEVER moved in and now they need to short sale at $110,000, I just don't feel inclined to help.

While the lender and the broker have their own blame in this mess, the seller also has some responsbility as well.

Lynn - I wish I had a video of her telling me how she felt. She just doesn't care anymore.

Bryant - Yeah, deals like that sound suspicious, but then again you are in SOUTH Florida right? We didn't have as much fraud, I KNOW we had some. It was attempted on me and one of my sellers about two years ago. Offer for $100,000 more than list price, the "extra" going to "third party" company at closing (turned out to be owned by mortgage broker), buyer never viewed home, was from Michigan. Agent was furious my seller didn't take offer, left me threatening messages. I reported all to Florida Division of Financial Services. They could never nab him because it didn't close!

Keji - I think in this case it really was lack of knowledge, but I totally agree, we are always responsible for our own actions.

NOV

2008

Lenders do at times, go back and look at the loan for the property you are trying to short sale. If it smells of fraud they can & will deny a short sale in some cases, but not all. This situation may be one of those. The problem is the lenders don't have to state a reason for not excepting a short sale, & usually don't.

Another thing you have to watch out for is condos, they are the hardest to short sell...

Travis - The volume added to their current workload must be reducing the amount of research they are doing.

NOV

2008

There's a lot of finger pointing now, but there was Greed on everybody's part. Just a few years ago, it seemed everybody was buying and selling houses. When Wall Street had discovered how to bundle mortagages together and sell them to investors, lenders began raking in new business by making it easier and easier to homebuyers to qualify for new and exotic loan products. And now, this is what we get. People desperate to get out of homes they never should have gotten into.

Aloha Wendy,

I just dont by her story, and beleive me - I am not sticking up for the lenders! But what job in the world only pays $1,100. a month, tax return or not - your not getting the whole story here - she talks about losing her second job - so now she makes $550. a month, then, that got cut by 25%, so now she is making $412.50 a month. Poor old me - I got cheated by the mortgage crooks out there???

I know you are pretty sharp, or at least I get that imperssion by your quality blogs - you dont really believe that whole story - do you?

Lance

NOV

2008

Elva - True in many cases.

Lance - I sat on her couch and looked her in the eye. I do believe her story. I bet she got a stated income loan. I don't want to say more because it is a current, active listing. My point in writing this post was really to emphasize the current attitude of many short sale sellers, they just want their situations to "end". Most of the comments posted on this blog, however, were about the loan compared to her income, which I find quite interesting. Sometimes responses go that way. This particular seller did put a good bit down, I believe, because she got a divorce settlement. But, like I said, I have to restrict my comments. Thank you for the dollar analysis.

Thanks for the reply Wendy,

I have seen that look before - it really is hard, it even drains me on some days. I have about 10 short sales listed right now, and it is the same thing - they all just want out! We have a huge problem here though - they just enacted a law that restricts your commisions if you become a - Distressed Property Consultant - and the simple act of calling the bank for your client can put you in that catagory. Agents wont even go near short sales now. I just cant turn my head on these people, they call,, there in tears, they are missing work, the harrassing phone calls - its too much for many of them. Can you imagine handing your client the offer and saying - ok now, call the bank, send them this - even that can make you a DCP,

I am still taking these on, and I hope that the NRA, or our local - Kona Board of Realtors - can do something to change this law - it was just slammed together, without much thought.

Hope I dont become the first test case.

Lance

Wow, Lance, that is horrid- your new state law. Florida has just determined that real estate agents are EXEMPT from a similar law here, if their only fee is from a standard real estate commission. You should get your board involved to fight that. It hurts consumers...

This blog does not allow anonymous comments

Wendy Rulnick "Its Wendy!" Destin Florida Short Sales

Destin, FL

More about me…

Rulnick Realty, Inc.

Address: 12889 Emerald Coast Pkwy West, Ste. 107-A, Destin, FL, 32550

Office Phone: (877) 487-9639 x 204

Cell Phone: (850) 259-0422

Email Me

The market. Smart sellers. The Emerald Coast of Florida.

Subscribe in a reader Subscribe to It's Wendy's Blog by Email

Visit Short Sale Basics

Wendy Rulnick - Rulnick Realty - Destin Real Estate on Facebook

Links

Archives

Find FL real estate agents and Destin real estate on ActiveRain.

Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.