WHAT THE LENDERS WON'T TELL YOU ABOUT YOUR SHORT SALE!

I agree with the majority of points made.  I especially agree that if someone says they have all the answers.... run.  I am a virtual short sale assistant and deal with up 100 short sales at a time.  You hit it on the head when you said it take persistence and patience.  One variable that you didn't mention is the high turn over rate of the loss mitigation negotiators.  They are in a high stress job - they individually are assigned between 150 -200 files.  I have one recently closed deal where the negotiator was changed 7 times during the short sale. They really aren't the ogres that they are portrayed to be.  Be kind, courteous and respectful and they will usually respond in kind.

It is so important to have a well organized and COMPLETE package.  You need to respond to any requests in a timely manner.  Always anticipate when your financials or estimated HUD become outdated.  A package won't get into the system for something as simple as not having each page of the short salepackage labeled with the loan number. There are so many details and so much phone time involved in short sales that use of a short sale assistant/negotiator can be a good decision.  However if they tell you they have the secret, close them all or any other outlandish claims say thanks but no thanks.  Then interview the next company on your list .  There are alot of companies and individuals out there that do what I do.

Always make sure that they have a system in place to keep you updated on your file.  Nothing is more frustrating than to not be able to answer your clients questions as to how the short sale is going.  Also make sure that you ask to talk to other Realtors they have worked with.  There are new short sale assistants popping up everyday.  Make sure you work with some one that has experience. 

Dawn Uselding - A New Dawn Real Estate Services

A

Felix,

Sadly I think that you are right in everything you have stated.  I am sure the banks are overwhelmed with all the loans that are delinquent and in the foreclosure process.  They certainly did not have huge departments with staff trained to do this type of work a couple of years ago, and people have probably been retrained to try to tackle the job at hand.

Your statement about how they do not care about the feeling of the homeowers, I have to tell you as someone who many years ago was the manager of a bank collection department who had to write recommendations for loans to go into foreclosure, you cannot become attached to each and every borrower or you would probably end up losing your mind.  You have to just look at it as the job that you were hired to do.  You have to just look at the facts and do what has to be done.  It's not cold, it's self preservation of your sanity.

I can not imagine what it is like working in these areas in the current environment!  Think about that when you are dealing with some of the bank reps on these deals.

Oops, forgot to put my name and e mail on the comment above!

Thank you Dawn for adding your comments.  I fully agree about the change of negotiators and mitigators.  It happens all day, every day.  Also, as a helpful tip, whenever you're sending any trailing documents to them, be sure to put the loan number on each and every one of those pages.  Paperwork gets shuffled and can be lost within their piles of files. 

Also, one mitigator rep I spoke with told me that because they have piles of files, each are assigned a specific file number that's used internally.  If possible, get that file number if you can.  Anything that will help your deal move along faster will help to benefit you in the long run. 

So, when you call them you can use that file number to reference your questions or concerns to.  And, do whatever you can to build a nice relationship with whomever is handling your file.  As Dawn mentioned, they change out mitigagors and negotiators quite often so getting frustrated with one over past experiences will only cause your file to be put at the bottom of the pile and your deal will take far longer than you are prepared for.  They don't want to work with an agent who's complaining all the time.  It'll only make matters worse.  I know that some of these people can seem rather imcompetent or unpleasant themselves.  However, they're dealing with rude and obnoxious agents every day from all across the country AND they're the line leaders in the transaction so anything that will provoke them to not want to help you and your client will be to your detriment and not to you or your clients benefit. 

Paul,

Finally, someone mentioned the 90 day "flipping" FHA rule.  I was about to come unglued because no one had mentioned it and I think that is where everyone was getting their drawers in a wad.  I understand what you were calling transactional lending but as long as there is full disclosure and the appropriate doc's were signed (as is Colo law here) you are fine and as in the FHA "flip" you cannot sell to a buyer within the first 90 days of the last purchase date you should be fine.

I have been working short sales for a number of years and I have found that generally the magic number is 3.  Three what?  Three buyers you typically have to go through to get the sale done.  You have a good strong offer on the first buyer.  You have disclosed on the MLS that you are in process with all the seller information submitted to the bank but they are so back logged that they don't really care how long it takes.  It takes as long as it takes is their mantra.  The second buyer comes and it is less than the first offer and the buyers are a bit more patient but the bank process continues because your deal hasn't been in process as long as seller a, seller b and seller c so you call often and find yourself frustrated.  Then you find yourself stigmatized and buyer 3 comes and it is much less than the first two offers but you didn't tell the bank you lost buyer 2 and they have been plugging along and now you are on top of the pile and you have a new buyer with a lower offer but now the bank is ready to deal.  Thank goodness because you are totally ready to be done with it all.

You have jumped through all the hoops so your legs are sore, your phone bill is high for all the phone calls you have made and you have cauliflower ear for being on hold, your sellers is tired, you are a bunch less that what you could have gotten the bank 5 months ago, you have gotten the foreclosure put off, and your superhero cape is now tattered and torn but you are almost to close.  Thank Goodness.

Do we do it for the money?  Not entirely.  Like the old joke goes.  Why do runners run?  Because it feels good when they stop.  Same concept! :)

Wachocia is the only bank I know that has a streamlined short sale process.  From an agent in my office it works very well.  Of course they'll participate in a short sale if it makes sense to them, but at least they have a process, a manager who will meet with the agent, the homeowner, at the property.

In California it's illegal to charge a transaction fee.