I have written in the past on several cases some various situations in which real estate agents may be at risk from seller clients in short sale cases.
However, as I read the lawsuits, real estate agents are very often at liability risk from the other agent in the transaction, in situations in which your E&O insurance may not provide protection.
One such a situation involves short … (17 comments)
Through these articles, or blog posts, I have been attempting to educate agents concerning the many, many issues of misinformation that have provided in short sale books, courses, and training seminars. Since I really have more of a warm heart of a teacher than a lawyer, I want to be of service to those of you who appreciate it.
So, I have helped bring clarity to who owns the note, the secondary market investor (SMI), and who approves short sales, the SMI, not usually the servicing lender the … (34 comments)
The "banks" here includes both the servicing lenders and the secondary market investors, and it is usually (but not always) the secondary market investors who approve the short sales.
The problem first came about when the mortgage crisis hit and people began losing their homes en masse. The Treasury Department did little at that time. This crisis also increased almost exponentially the numbers of short sales being processed … (8 comments)
short sale course: Short sale systems: Leveraging for success
- 10/04/09 06:21 AM
I watch a lot of short sale real estate agents, investors, and other business people struggling to stay on top of all the many details in running a successful business.
Moving a short sale business from a start-up or even a stumbling position to an income-producing successful business is all about conforming your business to a successful model and then creating systems that are either automated, performed by "trained monkeys", or minimize the amount of time taking care of the business of business.
Short sale Systems, or any system for that matter consists of people, technology, checklists, … (3 comments)
The promissory notes are usually for a small to moderate percentage of the deficiency balance, paid over ten (10) years, with no interest. The promissory note requirement is usually a good deal, and see my other articles on this subject concerning predicting when a promissory note will be required.
However, many homeowners are in severe financial distress, and the thought of having another payment following the short sale is not a happy one!
The question then comes to the issue of when a promissory note will be required as a condition of approval of the short sale. Since the debtor owes the entire deficiency, a promissory note with no interest and easy terms for only a portion of the balance is not unreasonable. Although usually the secondary market investor (SMI) requires seeking the deficiency balance after short sales, but sometimes it will be the servicing lender.
I am poviding merely … (22 comments)
short sale course: Deficiency balances in short sale cases
- 08/25/09 05:47 AM
Many homeowners and agents alike as what the odds are they will be required to pay a deficiency balance after a short sale. Many bank release documents will not specificially state whether the short sale will be in full satisfaction of the debt.
We've noticed a gradual change from a willingness to include language forgiving the debt to some even stating specifically that they are leaving open the possibility of seeking the deficiency balance, even though in fact they may not likely pursue it, unless of course, the debt is far in excess of the fair market value and the … (14 comments)
As an attorney who has not only sold real estate (well, for a year and a half, that is), and has represented and dealt with servicing lenders and secondary market investors (SMI) over the last 20 years, I have a unique understanding of these entities and relationship with them. A number of those institutions have managers and executives who are friends of mine, … (139 comments)
short sale course: Short sale strategies: Requiring the lender to produce the note
- 08/19/09 04:51 AM
There is circulating a popular legal concept for the homeowner to require the lender to produce the original promissory note in the event of impending foreclosure. The lender who is the holder in due course (this is legal speak for the entity that actually owns the Promissory Note) must prove that the debt is due when the servicing lender forecloses on the property.
To produce the note is sometimes very difficult because the note may be in the possession of the servicing lender, the secondary market investor, or someother entity as the note passes to various … (9 comments)
Under this law, there is a 3 day delivery time period plus the 3 day right of recission period to review the Truth In Lending documents before the lender can charge them any fees, such as the appraisal. This means the buyer's lender can get started preparing for closing on day 7. It also means then that a 30 day escrow will be … (1 comments)
Recently we had a case where an agent reported that the homeowner of a home being sold as a short sale had just died. What happens then? Can the home still be sold in a short sale?;)
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