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PMI Company Wants To Have Seller Sign a Note

I received a question from a REALTOR today, who read:

A Realtor's Guide to "PMI & Short Sales"

Let's call her Susan. She explains:

I have done several successful short sales in my career but recently felt the "sting" of the bank claiming they will submit our current offer on the table for approval... providing the seller agree to sign a note to the PMI company for 15K for 10 years at $125.00 a month. If he refuses they claim the short sale will be denied.

The outstanding loan balance is 132,000
Offer amount 117,500
Offer amount will net the bank 104,980
BPO 119,000

My seller is refusing to sign such note and sees no alternative except to file bankruptcy. In your experience, what are my chances or choices If can get the bank to agree to a lesser amount of say.....half of what they are asking for to satisfy the PMI company.

Susan, I see three options:

1- Calculate the net present value of the "note" the PMI company wants (using a 6% return, that number is about $2100). Propose that the lienholder take a $2,100 hit to the payoff and offer that amount up to the bank). You may have to contribute part of your commission and the buyer's agent's commission to get the first lienholder to agree to this.

2- Figure out the net proceeds to the bank if the home were to be acquired through foreclosure (and subsequently sold asa REO). Sales costs, at $119,000, would be about 8%, which is about $9,500. This means that the "net proceeds" would most likely be $109,000...BEFORE foreclosure costs. The first lien holder and the PMI company would probably split up those foreclosure costs so you're awfully close at the current sale amount. Present these numbers logically to the first lienholder and the PMI company.

3- Walk from the deal and abandon the listing. It sounds like the seller is ready to do just that and file bankruptcy in an attempt to eradicate the loss. The threat of BK (or actual filing) may force both the lienholder and PMI company to look at this scenario differently.

DISCLOSURE: I'm not an attorney nor do I play one on television. You may want to seek advice from your Broker's counsel. Most of the time, however, the PMI company is "playing chicken" with you; they want to see if you can help them "get a little something". I think option one is a good one.

Posted by Brian Brady- America's VA Home Loan Broker on 01/02/2009 07:21 AM

Comments (48)

Short Sales, Foreclosures, Bank Owned in the Training Channel

pmi and short sales

Originally posted at: America's #1 Mortgage Broker: PMI Company Wants To Have Seller Sign a Note

48 Comments on PMI Company Wants To Have Seller Sign a Note

JAN

Clarification here. This is not a PMI as in Private Mortgage Insurance required of the seller when they purchased the home.

This is MI, Mortgage Insurance taken out after the fact by the Lender on the loan itself. This is a big distinction. Why did the lender do this? Because it was a subprime loan and/or a known risky loan to which they knew would probably fail.

We have run into this on several occasions. Guess what? They will not let you know until you are almost at the very end of negotiating. We have tried to find out up front to no avail. When they package up these loans there are usually several investors involved. It is quite complicated. The loans are then assimilated into some type of tier system. Each tier has a rating. Depending on what tier your particular sellers loan is in will depend upon how cooperative and forgiving they will be.

We had a seller who was willing to pay $50,000 note , no interest for a period of several years and the MI wanted $90000. To make a long story short both loans were the original purchase loans, the seller after consulting with an attorney decided to let the house go into foreclosure.

We had a buyer for $350000. The seller was willing to put in $50000 . That adds up to $400000.

6 months later this same home went pending as an REO at $250000.

Now what has come out and will remained to be seen is this: It appears the MI may be able to come back and collect from the seller the amount they paid out in losses to the sellers lender.

So stay tuned for follow ups in this arena.

Bottom line is this with anyone facing short sale and/or foreclosure PLEASE check with a Real Estate Attorney preferably one experienced with shortsales and foreclosures and judgments before proceeding with either.

There are cases where foreclosure will turn out to be more in your clients interest than a short sale.

Everyone is trying CYA on these deals. I'm sure its going to get more interesting as '09 gets hit with the next three tsunamis in the financial and RE sectors.

Grab a surfboard!

In our state the real estate agent are extremely restricted in communicating with the lenders when a property becomes distressed. This new law is making it harder for troubled sellers. They need to seek out legal help here.

JAN

Clarification here. This is not a PMI as in Private Mortgage Insurance required of the seller when they purchased the home.

Good clarification, Terry but I don't think that distinction was made. The REALTOR who asked this question specified that it was the PMI company and not the reinsurance lenders seel from MI companies for non-prime loans.

It appears the MI may be able to come back and collect from the seller the amount they paid out in losses to the sellers lender.

I didn't think that the seller was legally responsible for the shortfall, in California, for foreclosed purchase money loans. I'm quite interested to see how this might pan out, Terry. I appreciate the contribution.

Very interesting post and comments Brian. Between mortgages and credit cards, I suspect bankruptcies will run rampant this year. I'm amazed that many of the Banks aren't talking yet... I have to say I steer clear of foreclosures/short sales.

"You may have to contribute part of your commission and the buyer's agent's commission"

Good grief!!! When did the real estate agents become a party to a the transaction, the asset and/or assume the liability???

This is one of the causes of so many short sales failing when good agents with good buyers don't show them because they, the buyer's agents, have no confidence that they will be paid. Experienced agents don't represent banks because the banks can't be trust to cooperate with responsible case management.

Banks want agents to not only assume the contingent risk of the transaction closing in which case we are paid nothing, or agree to a hand-out from the seller/mortgage company without having any level of decision in the outcome.

Banks have many resources for loss recapture, carry forward, etc. Real estate agents do not. We can't claim a loss on our tax return when our commission is lowered.

Someone stop me!!!! I'm just fed up with financial institutions and many sellers/buyers believing that real estate agents should subsidize this mess.

The bank agreed to a listing fee and the listing broker agreed to a co-op. If the listing broker and buyers broker and their agents perform, they should be paid. Otherwise, the listing fee and co-op is simply an inticement.

I think we need more consumer bankruptcy filings. The loss of credit and the loss of money is appearing far lower in a consumer bankrutpcy viling, 7 or 13 than the scenarios offered by the banks.

Interesting...the whole thing makes no sense. Bankruptcy filings might be the new breed in getting out temporarily from these short sales.

No one institution is to blame for this current mess...However, banks need to get a clue and start working to find solution that can help borderline cases stay in their homes. Big problem is that they are overwhelmed, not well trained, and it's impossible to find the person with the authority to negotiate a deal.

I represented buyers over the summer who were trying to buy a foreclosure. We went in with several offers over three months, took the time to bring in a contractor and have a detailed report of what needed to be done to justify the offer. The bank finally told us not to come back with another offer, they didn't want to hear from my clients again. (I still tried again, to no avail.) The bank ended up closing 5 months later for $40K less than my client's highest offer. And they had the carrying costs of the house for 5 months too. Made me nuts. I lost the clients, too b/c they ended up buying in another state.

Brian,

I agree with Lenn but wish she would clarify her last paragraph.

AMen AMen Lenn great comment . I am 100 percent with you on this. How dare the lender. I guess they can as they have the $$$. A lot of which that evil person Paulson gave them

When will the banks understand they no longer have the upper hand in these deals. If all the homeowners who are upside down on their mortgages or in default decided to just walk away from their properties and file bankruptcy 2008 would look absoulutely wondeful in comparison to this proposed scenario. The bank's attitude right now should be one of capitulation. Take any reasonable offer on any distressed property and work feverishly to arrange realistic, workable, loan modifications with those homeowners currently in distress. Then and only then will we see a turnaround in the market.

I haven't seen this before.

But I like option number three.

Banks are not in any position to be negotiating these types of terms.

Since the "New Real Estate Market" began (arguably in 2005), the industry has been chasing its' tail. We have to do our best in representing the conSumers. Which means, we have to be incredibly informed and up to the minute on Short Sales, Foreclosure and Alternative Financing.

Since all 50 States have turned housing information directly over to the consumer, we are challenged to "morph" into a new "high brid" Realtor who has intrinsic, accurate and reliable knowledge and resources to guide our clients through these unchartered waters.

My question for discussion is: WHERE IS THE NATIONAL ASSOCIATION OF REALTORS? ARE THEY GOLFING AND ENTERTAINING EACHOTHER?

THE NATIONAL ASSOCIATION, WHO IS PAID TO REPRESENT REALTORS, HAS AN OPPORTUNITY TO ENHANCE OUR VALUE AS REALTORS! THEY HAVE THE OPPORTUNITY TO REPRESENT US ON THE NATIONAL LEVEL AS REALTORS AND POSITION THE REAL ESTATE COMMUNITY TO LEAD THE COUNTRY (INCLUDING THE LENDING INSTITUTIONS) THROUGH THIS VERY DIFFICULT TIME.

If you agree, I recommend that you write or email the National Association for Realtors today. www.nar.org Email: presidentsreport@realtors.org.

If you choose to do nothing, nothing will get done.

We see all kinds of things today...hadn't run across this one yet. Thanks for the heads up. I would never let my sellers sign or agree to such a thing. They could be in debt forever.

I have made a point to stay clear fo these types of properties, both from selling and buying. To much a head ache to have them come to you at the last minute (after you have put 60-80 hours trying to get answers and make a deal work) only to ask you not to take a commission. Work for free...none of can afford to do that.

The liability of the seller after the transaction is completed depends on whether the lender only realeased the collateral, thereby freeing up the home to be sold, or whether they released the debt in its entirety, as I understand from one of our attorneys. It is a question that the seller needs to ask.

We did have one insurance company ask the seller to sign a 15 year 0% interest note for about $13,000, that was 25% of the loss. He felt it was in his best interest to do so, he got the home sold and moved on with his life. He did not want to take the chance of losing the buyer while waiting for more negotiation. He felt it was fair if they forgave the debt, not just release the collateral.

I have one seller that told them no, go ahead and foreclose, and they agreed and dropped their demand. If the first forecloses, they get nothing anyway in a lot of cases. A few thousand is better than 100% of $0.

I am going to give everyone some insight into this STAGED mess yes i said it STAGED .... I got this info from a reliable source in WASHINGTON. This BAILOUT PACKAGE the banks got was planed for years ago.... remember twen the news stations were running reports on how the economy is sustained by the housing industry? ok let me say this again THE ECONOMY IS SUSTAINED BY THE HOUSING BOOM !!!! ..... BIG CLUES AND RED FLAGS THERE..... The economy can't be sustained by housing growth, it is the other way around ...a good economy pushes home prices up ... DO YOU REALLY BELIVE THAT BAILOUT PACKAGE WAS PUT TOGETHER IN 2008 IN 2 - 3 WEEKS AS THEY HAD US BELIEVE ? DO YOU THINK THIS IS A COINCIDENCE THAT BANKS HAD NO STRINGS ATACHED ON WHAT TO DO WITH THE MONEY ????/ YAH RIGHT .... WE HAVE BEEN HAD !!!! .. .THIS IS THE BIGGEST "PONZY" SCHEME OF THE 21ST CENTURY.

Banks need to get a clue that people are walking away from the homes becasue they can't afford to pay any more payments without a job, a job they might have lost because the mortgage meltdown. No one should be made to pay back on a loan to the evil banks are trying to get anyone to pay after they have lost the house . They got our tax money and they want the poor folks to be in debt forever on a loss they had no control over. Banks are the ones that dumped inventory on the market at 50 % less lowering the prices in a neighborhood .... then they have the nerv to come back and demand that people pay the difference for the next 30 years ... on a loss they ( the banks ) created. People already have taken out the money of 401K and retirement to pay for a mortgage and lost any other investments that they might have had in the stocks... is gone ....

So no more short sales where the bank benefits from.... everyone that can't pay for their homes should file for bankrupcy protection and let banks figgure this out by themselves ....

I think they should go back to the mortgage broker who originated the loan to make up the shortfall. Seriously Brian, nice of you to suggest that the agents should kick in to cover it. In reality, it often happens, but our value as agents in short sales is completely undercompensated even at whatever our "full" commission might be. The Realtors pockets are the last places sellers, buyers or banks should be looking.

Brian, A good short sale negotiator (me) will get this promissory note negotiated. And there ain't no way I'm throwing in commission to do so. The PMI companies almost always ask for a promissory note to be signed when the seller can afford it. This should have been ascertained at time of listing.If the seller has funds in the bank, ira, mutual fund or whatever chances are they will be asked to pay a promissory note.

I have had a note requests of $135,000 negotiated down to ZERO and one for $50,000 settled for $1,500 at closing.

When a PMI company comes back requesting the seller sign a note I take it as an acceptance of my short sale request. Now all I have to do is negotiate the note.

Also,the seller could sign the note and then file bankruptcy after the closing or negotiate after closing. It is in the PMI companies best interest to come to terms so the transaction can close. My job is to make sure they understand this.

Lenn wrote: "I think we need more consumer bankruptcy filings. The loss of credit and the loss of money is appearing far lower in a consumer bankruptcy filing, 7 or 13 than the scenarios offered by the banks."

What I meant was, if the banks/PMI Co/MI/etc., are going to play hardball with short sale owners, tie them into long term notes to mitigate the bank's losses and still give the consumer impaired credit with a foreclosure on their credit report or a report of short sale on their credit report, what's the incentive for the consumer to play????

A foreclosure is the worst thing a consumer can have on their credit report.

Most banks won't even discuss short sale until the consumer is 3 months or so in arrears thereby impairing their credit for years.

A bankruptcy will be on the credit report for many years, BUT, the consumer can get a mortgage loan after 2-3 years FHA/VA and 3-4 years conventional and have no more debt.

The bill in Congress that would permit bankruptcy judges to modify mortgage loan balances failed. It could be revived in light of the more than $Trillion Dollars that's going to be handed out to the banks with no relieve for the consumer.

Sorry Brian. I don't want to hijack your post, but the question was from Brenda Harmon above.

This is a very interesting conversation.

Lenn

I have been representing short sellers for a while now. The transactions have gone from impossible to worse. I too, have had several deals die at the bitter end, because a Mortgage Insurance company has come into play at the last minute, demanding a Note to be signed by the seller. I have no choice but to recommend that my client seek bankruptcy counsel advice (because, sometimes paying the Note is cheaper than filing bankruptcy, but most times, if the client is eligible to file a Chapter 7 bankruptcy petition, they are better off not signing the Note). Dropping the "B" bomb has not seemed to do too much to improve the MI's demands.

On another note (no pun intended), I recently had the following situation, which is driving me nuts - any suggestions?

At closing, client took out a first and second mortgage with First Horizon. The second mortgage was sold to OCWEN (we think - can't really follow the trail of who owns what), then it went to UMLIC (again, not really sure about ownership of the loan). Client fell behind in payments, and we negotiated a short sale, and obtained approval from both lenders in August. Of course, our buyer then decided that he did not have time to close - he was going on his honeymoon. When buyer got back from HM, we got a second approval, closing to occur by the end of September. Buyer's financing could not be put together in time!!!!! Finally, buyer got financing put together, but neither first nor second mortgage holder would respond to us for a month. Second mortgage holder (btw, dealing with the same negotiator whether the holder of the loan was OCWEN or UMLIC) finally approves transaction, but, must close within 24 hours, or they are selling the loan, and won't be able to tell us who the new holder of the loan will be for 60 -90 days! Of course, buyer's lender was not able to put together a closing package until three or four days later, when second mortgagee says - too late!!!!! What is going on? We can't get information as to holder of the Note. Anyone else run into this type of problem? Any suggestions?

They need those notes so AIG can go on their little junkets. The irony is, they created this mess and mostly it's the little guys who end up paying. Banks and insurers don't care about sales, they care about the balance sheet and how this will be recorded on them. I hope we see a change in this methodology in the coming months. Right now it's circular logic and not going anywhere.

Interesting - I have not run into this yet, but thanks for the advice! Happy New Year!

Hi Brian, Sounds like there isn't anyone eager to make this deal work. No one is giving. I would recommend that the realtor walk away. I'm sure they already have invested too much time.

Greg

I recently had a seller actually make a claim against a PMI for the amount of the loan. At the trail the sellers lawyer ask Who pays for the PMI, answer Seller, what is the PMI for? answer in case seller defaults on the loan. The seller expects the PMI company to pay off the loan and give her the home. Now the mortgage company has come back with resetting the the loan at a fixed rate and a lower interest rate. They seller is not accepting it. She is saying this is what PMI is for and since she bought the insurance it is to cover her not the mortgage company. Interesting Uh.

It's all a part of the negotiations.

JAN

A few thoughts:

1- Lenn said that the bank agreed to the commission in the listing agreement; that's not so. The seller agreed to the commission in the listing agreement; the offer was presented to the bank. The seller is the client.

2- Many of you are criticizing my suggestion of commission reduction. While I agree that "it's not fair" to reduce your fees, we live in an unfair world right now. Banks are controlling the market because they are party to the transactions. While it is most certainly unfair that the PMI company is holding the deal hostage, they are.

3- This happens to loan originators a lot. While we fully disclose settlement costs, deals change (appraisals are the biggest culprit) causing settlement charges to change (seller renegotiates contributions to increase net for a failed appraisal). I sometimes encounter buyers who fall "$800 short". Is it "fair" that I cover that shortage? Hell, no but I do. Why? I don't want to hold the deal hostage. I don't want to have two agents lose commissions, a seller lose the deal, and a buyer walk away with a bad taste in her mouth about our industry. Sometimes, I ask both agents, the seller, and me to share in that shortfall, in order to get the deal done.

I want to remind everyone that these are extraordinary times. Extraordinary times call for extraordinary ideas.

A foreclosure is the worst thing a consumer can have on their credit report.

Most banks won't even discuss short sale until the consumer is 3 months or so in arrears thereby impairing their credit for years.

Lenn, this isn't a foreclosure situation. The seller is requesting a short sale, in order to avoid foreclosure and bankruptcy. Foreclosure and bankruptcy are a drastic option to a note negotiation.

I noticed that nobody suggested that the buyer pay $2,100 more than the agreed upon price to facilitate the PMI company's discounted note. How come?

I think they should go back to the mortgage broker who originated the loan to make up the shortfall.

She's probably out of the business. Why not consider a higher sales price with the originating mortgage broker to "kick-in" part of the $2,100? I've had this happen before and am glad to share in the shortage with the agents and seller.

My point is this; you're all ranting because your check got reduced. Your check is eliminated and your client's credit is WRECKED in option three. While I agree that this is not a good situation, successful negotiation is a give and take from all parties; a win/win/win situation.

Let me make this less painful for you. Assume that the discounted note of $2,100 is accepted and the PMI company realizes that foreclosure MIGHT get them $1,000. There are seven parties to this transaction, all of which could "concede" $300:

1- The buyer increases the price $2,100. How can we find that buyer an extra $1,800 so that the original loan amount doesn't change?

2- The PMI company accepts $1800. (300)

3- The first lienholder shorts the payoff by $300 more. (600)

4- Both agents offer $300 (1200)

5- The mortgage broker credits $300 (1500)

6- The seller borrows $300 from a family member, friend, credit card, etc (1800)

7- The buyer pays $300 more, in downpayment.

This is REALLY a $300 problem (for seven parties) , now. Who wants to blow a deal for $300?

"I noticed that nobody suggested that the buyer pay $2,100 more than the agreed upon price to facilitate the PMI company's discounted note. How come?"

For me, I've become wary of suggesting higher prices. We have enough trouble getting appraisals for regular sales. Once the bank has the BPO or appraisal for a property listing, how can we get a higher one just to "make the deal work"?

Asking the buyer to offer a higher price just adds another element of risk. Buyers will seldom offer "more" in any transaction unless they are convinced that it's the only home for them and that there are multiple offers. Even then it isn't easy.

Especially when they may believe that home values will continue to fall. Isn't that what the media is reporting??

Where is all the money GIVEN to the banks? Was it to shore up their balance sheets because they screwed up? We had a buyer offer full price cash offer (500K) and walked away because the bank did not respond for weeks!! That was enough...we are not doing short sales if full sales don't work!!Pitiful!!

Brian, In a short sale we are submitting CONTRACTS not offers, to the lenders. We are not asking then to accept the contract we are asking them to accept a "short" payoff so a contingency can be removed from the CONTRACT and the deal can close. Anyone who submits and offer to the lender to see if they will accept it does not know how to handle short sales and is wasting time and clogging up the system.

The lender is NOT party to the contract(s)(listing or purchase). They do not control purchase price OR commission. They do have control over how much they will accept as payoff. If this figure is too high then a solution needs to be found. Part of this solution may be to have the seller sign a note or lower the expenses of the deal(commission). However lowering the commission in the deal does not mean the seller is off the hook for paying the FULL commission as agreed in the listing agreement. They can bring cash to closing to pay the difference and/or they can sign a note to the broker.

A broker should know before listing the property what lender is being negotiated with and how much commission they will "allow" almost all are 5% to 6% if there are 2 brokers and 4% of there is only 1 broker. Fannie Mae will allow 5%. Countrywide will allow 6% as will Wells Fargo and Washington Mutual. I just closed a CW and in addition to the commission I was paid 1% as reimbursement of costs to maintain the property for a total of 7%.

I also charge my sellers an upfront "marketing fee" to help offset my costs.

The commission on a short sale is truly a non issue.

Agents are getting screwed on short sales because they don't know what they are doing. Sellers are getting screwed because they are hiring these agents.

Short sales are serious business and need to be treated as such. Sellers need to seek legal and tax advice and then hire a broker that understands the process.

My biggest frustration is lack of education on the part of folks trying to handle these transactions. The public is being harmed and that goes against every thing being a REALTOR(R) stands for

Damn......I think I just wrote a post :)

Bryant Tutas is right, most agents don't know enough to be good agents in a short sale.

So, where do all of us uneducated agents go to learn this stuff?

I'm not suggesting that the loan amount be raised or new appraisal be obtained. If the sales price is raised $2,100, we just have a cash-to-close problem.

Short sales are serious business and need to be treated as such. Sellers need to seek legal and tax advice and then hire a broker that understands the process.

While Bryant's advice is excellent, it's not answering the question. This agent is IN this situation RIGHT NOW. How might she find a solution that salvages the transaction and the seller's credit?

Brain, Her solution is to negotiate with the bank. She needs to counter offer the PMI companies offer. This is a standard procedure in a short sale negotiations which is why my comment pertains to this discussion. If an agent has to ask this question they should not be doing short sales without supervision. If the PMI company will not budge then the seller can either accept it or be foreclosed on. If the seller can afford the $125 per month then they need to sign the promissory and be done with it. Unfortunately sellers feel they are entitled to a short sale and refuse signing these notes because they feel they can just walk away scot free. They are wrong. These issues should be discussed at time of listing.

Your advice to "Susan" is actually very good. You are presenting the PMI company with options to get this deal closed. The only thing I disagree with is throwing the commission into the equation. As Realtors, our job is to do the best job we can to help qualified short sale sellers salvage their credit. It is the sellers sole decision on whether or not to sign a promissory note to do so. Their willingness to sign a note needs to be established at time of listing so we don't waste our time trying to help sellers who are not wiling to help us.

Good discussion Brian.

Their willingness to sign a note needs to be established at time of listing so we don't waste our time trying to help sellers who are not wiling to help us.

Ahh. That's the black pearl here- Thanks, Bubba; I didn't see that

Hi Brian, As previously said, the way to assist 'Susan' is suggest she or a short sale negitiator actually Negotiate! It helps when you know what to say & how to say it to get the response that really helps the seller.

This is laughable. Let me get this right...

The stated facts:
* The outstanding loan balance is 132,000
* Offer amount 117,500
* Offer amount will net the bank 104,980
* BPO 119,000

You are telling me that there is a BPO on this property that suggests that the buyer is purchasing this property at what amounts to 98% LTV and a discounted payoff of an OMG amount of 80% of the loan balance. Is that what I'm reading?

Who egotiated this deal? A newly licensed , wet behind the ear agent? OMG this is ridiculous! The problem here is a SEVERELY botched "negotiation". The bank's LM obviously knows they have a greenhorn on the hook who has completely blown this deal.

If the agent had competence this would have been addressed in their properly prepared short sale package.

If the agent is truly in a negotiation then decline the banks offer and counter. YOU ARE IN A NEGOTIATION!!! Act like it. There's not a bank on the planet that would let this deal die if it is a real deal.

What bank is it? What stage of the foreclosure is it? Is it a cash deal? So many questions and so many options...it's 2009 people...need to know your stuff here. Having these types of discussions at this state of the market means there are literally tons of agents out there playing "expert" instead of knowing what to do.

This deal is a no-brainer! Brian this is an easy deal for someone who knows what they are doing. Case closed...this is nuts!!

Brian, I've read through the comments. Excellent discussion and post topic BTW. But, what Barry says at the end here has bothered me too. What bank would walk away from this deal and allow the PMI company to jeopardize getting any money from a viable borrower? We're dealing with a rapidly depreciating asset. The BPO and offer have established the current market value; the PMI company needs to deal with reality. That's the job of a good negotiator.

@ Lola...you are so right. Something stinks here and for sure someone is DEFINITELY dropping the ball. Negotiation skills being honed is a must in these volatile real estate times. No time to be winging it!

JAN

It would seem that banks are seeking to circumvent the regs regarding their involvement in real estate, and doing so by way of seeking to control the transaction even more than previously...

And we see this trend increasing over hte next few months... unless the new administration comes up with some more relevant regulations, and forces the banks back to the line between lending and dealing in reale state.

I also agree with Lenn about the banks renegotiating commissions... just nonsense... but as long as agents let them do so, they will.

JAN

Brian-

I had this situation come up not so long ago. I wrote a post about it and got some great responses. If the folks are going to declare bk, they might as well, sell the house and put the note in the bk.

What I really think it comes down to though, is that the sellers made a promise to pay back that debt. It is their obligation to pay it back. I'd be interested to see how 'Susan' makes out!

JAN

Great post! I am working a short sale right now along with doing some REOs for CW. And man what a pain in the butt these are! The left hand does not know what the right hand is doing!

http://www.PeteElsner.com

FEB

Brian, this is an interesting and thought-provoking post and thread. I have been told that Sellers have been advised to sign notes - they're unsecured, so what can they do if they don't pay? Not saying I would advise someone (I too am not an attorney and I definitely do not play one on TV) to do that, but that has been mentioned more than once in conversations with other agents and consumers.

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