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True Confessions about Short Sales: My Mom is A Bankster...

By Paul Francis

Real Estate Agent with Francis Group Real Estate

October 13, 2010 11:39 PM

My Mom is a Bankster

Rolling in Cash with Short Sales I now confess. The secret to my success in Las Vegas short sales has to do with inside information straight from my Bankster Mom. Over 30 years in the banking business eventually leading to her title of VP of Commercial Lending led to this insane corruption that I'm going to share.

The joys of playing in a vault full of cash pushing around a grocery cart full of cash... the insane responsibility of transferring tens of thousands of dollars of cash between bank branches for some summer job while going to college. It's all damming information that will bring the banking industry to it's knees!

Ever handled a Million dollars in cash? I have.. it's pretty damn cool. It really does not weigh too much. In fact... once you have a million dollars in cash in your possession... it really does not mean too much.

What I mean by that is the responsibility associated with that cash. Sure... we all dream about having that much cash in our possession and to be free to live like what we think will make us happy.

Enough of the fantasies and back to the point of this article. There really is no insane corruption when it comes to short sales that will bring the banking industry to it's knees. The only real secret I have concerning short sales is knowing that the banks do not have to automatically approve one.

Ok... Back to Short Sales...

Sorry... got a little sidetracked dreaming of the millions that could have been. Easy to do when you've actually had a million or two of cash in your hands... I'm pretty sure that some so called short sale designation specialists are selling you the same dream.

Today's Topic concerning Short Sales...

Set off by this comment on a Short Sales Discussion Board:

I was going through a short sale with Aurora and during final sign off by FNMA, the servicing was transferred to IBM/LBPS. I was told i would have to start from scratch so i faxed over the complete package. After several weeks of trying to get someone to talk to me to confirm the package was complete and recieved, with no success because of the authorization form issue, when i finally did get through, i was told the property went to foreclosure sale because they did not recieve a HUD1 in the package. I think the authorization form was a ploy to buy time to let it go to foreclosure. I had conference called the seller on the phone with them twice and at no time did they tell us they needed a HUD. As the listing Agent on the property, they could have contacted me or the client. I was told they had made several attempts but neither i nor the seller ever recieved a call from them. Nor, did they mention foreclosure sale or needing a HUD on any of the many conversations i had with them. I believe this is an illegal foreclosure sale but not sure what to do to rectify the situation.

"I believe this is an illegal foreclosure sale but not sure what to do to rectify the situation."

Really?

Are you kidding me? Are there really real estate agents out there that think a bank HAS to do a short sale or it's illegal?

You know... I keep coming across this over and over where today's short sale sellers think they are entitled to a short sale in comparison to my short sale sellers of 2008. Could you please point something in the legal contract / loan documents that states that a lender has to agree to a short sale if you can't make your payments?

Anybody... anybody?

State Laws... Anybody... Anybody??

Bankster Mom Says....

We are more then happy to work with our clients that have a True Hardship and modifying their loan or allowing a short sale if the owners TRULY have a hardship.

AKA convince Bankster Mom that short selling a property is in her best interest. DO NOT attempt to give poor legal advice that a Bank HAS TO take a short sale because there is NO SUCH thing.

Dear Real Estate Agents...

Bankster Mom will rubber stamp a short sale through if you can prove that your seller clients have a true hardship. (Trust me... Mom is a sucker when it comes to explaining a hardship like the time I.... PM me for details LOL!.) Submitting documentation through and automatically thinking that just because you have a buyer at today's value should entitle you to a short sale acceptance is just not going to cut it. You need to convince Bankster Mom that your client deserves having their short sale approved. Thinking that just because you submit some paperwork that Bankster Mom has to accept it... otherwise it's illegal is completely foolish.

My Bankster Mom does not like rude people. She's a farm raised gal where manners get you farther then rudeness. And guess what? ... she does not have to approve any short sale no matter what your fancy smancy Attorney says. Because the Truth of the Matter is that she has Attorneys working for her that probably went to better schools than your Attorney went to. (Sorry... that's the truth.)

Any other thinking is ludicrous... and anybody teaching otherwise is foolish. Stop leading sellers on that they are entitled to a short sale just because they want to do one.

Personal Consultations ARE MANDATORY.

What I see as illegal is thinking that any home seller is entitled to a short sale just because they filled out your contact form and want to sell because they owe more then their home is worth. STOP selling the crap that homeowners are ENTITLED to a short sale just because they submit some paperwork.

Doubt me??

I'm more then happy for you to share some laws that state that a lender has to agree to a short sale.... If you got them... share them... Until then... Don't expect a Bankster to have to automatically approve your short sale -- even if you do supply all of the paperwork requested. There is nothing in your loan documents that you signed stating so and as of right now, there are no state laws I'm aware of that states a Bankster has to give you an approval.

I've Opened Up and I'm Being Honest...

Trust me... it's really tough to admit that your Mom is a Bankster. I've been living in the closet for a couple of years too embarrassed to share that my Mom is a Bankster but I'm coming out and being open and being honest. I think it's a step in the right direction and I'm feeling better to share this. Please don't hold it against me since my Mom got into the business long, long ago when Community & Honesty meant something.

Next... I think I'll come out and share how my roommates in college turned into Attorneys. That's going to be a little tougher to explain but I think I can do it...

Just part of my 12 step program into making America a better place...

Cheers!

Paul Francis, CRS
Prudential Americana Group - REALTORS
Las Vegas Short Sales
702-592-3058

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Cynthia Larsen

Cotati, CA

Independent Broker In Sonoma County, CA

PF - your post was a breath of fresh air. There are many agents attempting short sales who probably shouldn't be.

Oct 15, 2010 06:22 AM

Tracey Rosenblatt

BRITTON Group, Inc. - Satellite Beach, FL

SFR

Paul, You are absolutely right, the lender does NOT have to agree to a short sale (here in Florida anyway).

However, they will agree to a short sale only if there is a genuine hardship, and the seller has to prove they have a genuine hardship, then the lender will forgive all of the deficiency or part of the deficiency. (This is a long and excrutiating process).

A seller can do a short sale without the lenders approval, but, as long as the seller is fortunate enough for their property to sell before the lender forecloses they are still liable for the deficiency.

It is a case by case basis, and it's also down to attitude of the seller/s and Agent involved.

Oct 15, 2010 06:26 AM

Tracey Rosenblatt

BRITTON Group, Inc. - Satellite Beach, FL

SFR

Oh, and the deficiency has to be paid at closing.

Oct 15, 2010 06:29 AM

Judy Orr

HomeSmart - Scottsdale, AZ

Scottsdale AZ and surrounding towns

Any agent thinking a bank has a legal responsibility to do a short sale is an inexperienced agent. I have never done a short sale without a Hud-1, so that is another clue, IMO.

On the other hand, as others have mentioned (and I know was not the point of your post - but you dragged your Mom in), I'd like to ask Mom why more short sales are not approved? Even if there's not a true hardship (and I've heard the term strategic short sale here on AR), I believe the bank nets more on a short sale, which is usually in better condition, than on a foreclosure. They can also get rid of the property quicker in most cases and will not face the upkeep and other expenses. Are there better tax benefits to them doing foreclosures? It just doesn't compute to me.

Oct 15, 2010 07:03 AM

Marte Cliff

Marte Cliff Copywriting - Priest River, ID

Your real estate writer

We're living in an age of entitlement - everywhere you turn you see someone else who thinks they're "owed" something. It's time to correct that kind of thinking.

Oct 15, 2010 07:19 AM

Woody Edwards

First Choice Realty, Inc - Chesterfield, VA

A Realtor® Who Answers His Phone!

Great perspective on the subject. And, you are right! There is no law that says the bank has to accept your short sale. I'm getting ready to "release" a listing where the owner lied about how much he owed on the house. When I got the payoff, it is now a short sale, and he just wants out of the mortgage and thinks the short sale "should" go through.

Also, thanks for the good laugh! I really needed that.

Oct 15, 2010 08:34 AM

DEBORAH STONE

Balboa Real Estate San Diego, CA - San Diego, CA

Paul

Great post. I think you are right on with your information, and my comment may not be appropriate.

I wonder: When an institution has it within its power to perhaps lessen an economic impact so severe as to cause widespread national economic distress, it doesn't do what it can to keep the situation from worsening? We are not talking about a small percentage of dead-beats here---rather hundreds of thousands of poor souls that got caught in "the perfect storm".

I have no sympathy for the banks handling of distressed properties or their a**-backwards practices and find them just as much----if not more so--- in collusion in this huge mess we are in.

Oct 15, 2010 09:10 AM

Annie O'Sullivan

RE/MAX Champions - Land O Lakes, FL

Making Real Estate easy for buyers and sellers.

Wow Paul all I can say is thank you. Thank you for bringing to light a common misconception regarding short sales. As an investor buyer of shorts, I cannot tell you how frustrating it is to deal with an agent with this kind of mentality.

Your entry was a pleasure to read!

Oct 15, 2010 09:57 AM

Gene Riemenschneider

Home Point Real Estate - Brentwood, CA

Turning Houses into Homes

Could you get me a job hauling loads of cash around? I am married so I am not used to handling large sums of cash anymore (Not to mention being a Realtor).

Oct 15, 2010 10:44 AM

Karen Crowson

Coldwell Banker Residential Brokerage - Rancho Bernardo, CA

Your Agent for Change

Very entertaining Paul. The agent you quoted had aa few red flags in my opinion. The belief that the bank has to say yes, a surprise about the requirement for a HUD1 and lack of knowledge that a foreclosure was filed. It's hard to believe that the seller wouldn't have received some kind of notice. Now maybe they didn't convey it to the agent. Did they have an auction date? Was anyone checking public records? Was there even a hardship letter in the packet? It doesn't appear that this agent had much experience doing short sales.

I've heard that a bank may be prohibited from pursuing a foreclosure while a soldier is on active military duty, but I do think they can proceed at a future date. It's called the Soldier's Act.

Oct 15, 2010 12:36 PM

Georgie Hunter R(S) 58089

Hawai'i Life Real Estate Brokers - Haiku, HI

Maui Real Estate sales and lifestyle info

This was educational - both the post and the comments.

Oct 15, 2010 01:04 PM

Jon Zolsky, Daytona Beach, FL

Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL

Buy Daytona condos for heavenly good prices

Paul, so many comments, that I feel guilty I did not read them all. The quote you used is ludicrous. If the agent did not know about HUD, then s/he shhould not be handling this transaction.

How we manage to screw up something and then say that it was illegal foreclosure?

Oct 15, 2010 01:25 PM

Jirius Isaac

Isaac Real Estate &TriStar Mortgage - Kenmore, WA

Real Estate & loans in Kenmore, WA

Obviously this agent did not have a clue. It is almost always in the best interest of the bank to do a short sale, & it is our job to show them that & get it done.

Oct 15, 2010 02:13 PM

June Stark

Elite Realty-Luxury Homes & Condos On & Off the Strip - Las Vegas, NV

Las Vegas Condos & Luxury Homes Expert

Great Article Paul! I had some hot shot attorney try to use their 'Bully Power" on Flagstar Negotiators, and the rudeness and arrogant attitude blew the sale big time! I have never had a short sale approved where an attorney has been involved - what does that tell you? I do not think the banks look kindly on these $300/hr negotiators - Hardship? Huh??

Oct 16, 2010 06:58 AM

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Oct 16, 2010 07:14 AM

#68

The Hollinden Team

EXP Realty - Louisville, KY

Serving the Greater Louisville area

Paul, your points are spot on. And, I think that the public now expects and demands a short sale. Somehow, they have forgotten that we are asking the banks and their investors to take a loss. Asking nicely is the least that we can do. However, it can be more than frustrating dealing with some negotiators.

Oct 17, 2010 02:54 AM

Wayne B. Pruner

Oregon First - Tigard, OR

Tigard Oregon Homes for Sale, Realtor, GRI

Good post Paul. It's a timely topic and you have some very good comments.

Oct 27, 2010 06:37 PM

Anonymous

How amusing of you to use the misery being felt by millions of Americans (caused, btw, by 'banksters' like your mom) and making it into a blog about underwater sellers feeling entitled to a short sale.

Millions of us can tell you that banksters ignored or rejected solid short sale offers for sellers with true hardships (you've maybe heard of unemployment? the recession?) for reasons no better than they couldn't assign qualified people to handle them in anything resembling a timely manner or repeatedly requested documents that had already been sent in. Meanwhile, the market has continued to decline, making the second or third or fourth short sale offer even lower. Perhaps banks don't have a legal obligation to accept a short sale, but I wonder: do they have a moral oblgation to work with people in something approaching an honest manner to help families and turn the economy around?

I would think you might be more sensitive given that Vegas is one of the hardest hit areas in the country. Perhaps if banksters like your mom had accepted short sale offers (whether required to legally or not) whole neighborhoods there would not be empty.

Mar 23, 2011 03:01 PM

#71

Paul Francis

Francis Group Real Estate - Las Vegas, NV

Las Vegas Real Estate Agent - Summerlin Homes

@ PJ,

Sorry you misintrepret the article and think that it's about a comedy "using the misery" felt by Millions of Americans... The only comedy involved is that my Mom was a Bankster. If you understand the true reason why some of us use the term "Banksters", then you'll certainly understand that it's not for loving reasons. Some of us truly understand the system and why short sales get dragged on and on and on... All the while more money is printed up to keep some certain entities in business.

As an agent that has been primarily doing short sales for over three years now... I truly and fully understand the misery involved since I've pretty much had to deal with it for over 3 years. How do you think it feels to put hundreds of hours of work into a transaction just to have some loan servicer come back with absolutely ridiculous terms? (Yeah... I've heard of the recession and unemployment... maybe that's why I started doing short sales over three years ago when 90%+ of all real estate agents were avoiding them like the plague.)

HOWEVER.. that is not the point of this article. The point of the article is that homeowners are NOT entitled to a lender or loan servicer granting them a short sale. Over the past three years, I've come across more and more sellers who hear outrageous promises / advice... and I come across real estate agents who feel that because something goes wrong that the lender has committed some type of illegal act by NOT granting a short sale. (As highlighted in the article.)

You state:

"Millions of us can tell you that banksters ignored or rejected solid short sale offers for sellers with true hardships (you've maybe heard of unemployment? the recession?) for reasons no better than they couldn't assign qualified people to handle them in anything resembling a timely manner or repeatedly requested documents that had already been sent in."

And I'm FULLY well aware of that. I think you need to read the article a little closer to understand what it's all about before submitting the comment you did.

"I would think you might be more sensitive given that Vegas is one of the hardest hit areas in the country. Perhaps if banksters like your mom had accepted short sale offers (whether required to legally or not) whole neighborhoods there would not be empty."

What's truly insensitive are false promises made concerning the expectations and making false allegations such as pointed out in the article that something was "illegal".

Two years ago, a homeowner would be thrilled to get a short sale approval, today I'm coming across more and more homeowners that feel entitled to the Perfect Short Sale approval....

(By the way... whole neighborhoods here are not empty. You may want to get your news from somewhere else.)

Why do you think that is?

NO DOUBT that the short sale process should be handled FAR MORE EFFICIENTLY to get through this mess as Politicians pander for expensive program after program that really does nothing but delay the inevitable.

But the bottom line is... NO LOAN SERVICER or BANKSTER has to approve a short sale... PERIOD.

ANY REAL ESTATE AGENT advising sellers that they do is the true travesty taking place when it comes to these extremely frustrating deals...

AND That's What this Article Is All About.

All of the other issues involved with short sales... I probably have FAR more insight on these issues then you do with a FAR better understanding of why they get dragged on by the loan servicers.

I say this because your anonymous comment is completely off the mark from what this blog article is all about.

I'll give you the benefit of the doubt that you really did not read the article closely... and even if you did, I can tell you do not understand the meaning of the article. Besides... if you knew the difference between an actual Bankster and a Loan Servicer... you would know who the "Millions of Americans" statement should be directed to.

The bottom line is --- anybody guaranteeing a short sale approval for a homeowner is giving FALSE expectations. Any true short sale professional knows this and in today's day and age... there is no shortage of inexperienced short sale agents out there making false promises..

And that is the true travesty.

Thanks for the comment!

Mar 23, 2011 08:02 PM

Matt Robinson

Professional Investors Guild - Pensacola, FL

www.professionalinvestorsguild.com

Great post...especially the advice about not being rude. I love how some agents think that if they are mean and demanding to the negotiator that it's going to get them some where. They have 650 files on their desk, which means about 640 who are rude, and think their file is more important than the next. Want to get somewhere with a negotiator? Be the one guy or gal who is sugary sweet...it's a breath of fresh air, and gets you a lot further in the end.

Jun 10, 2011 06:29 AM