Short Sale Seller: "I Just Want OUT!"

By
Real Estate Broker/Owner with Rulnick Realty, Inc.

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.

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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

 

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"It's Wendy... It's Sold!"

Wendy Rulnick, Broker/Owner Rulnick Realty, Inc.

Call Wendy Rulnick 1-850-650-7883 ext 204

email itswendy@rulnickrealty.com

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Wendy Rulnick is the marketing choice for sellers on the Emerald Coast who want to list and get their homes and condos sold in Destin, Sandestin, Bluewater Bay, Santa Rosa Beach, 30-A, Watercolor, Seaside, Rosemary Beach, Seacrest Beach, Kelly Plantation, Regatta Bay, Destiny and more.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Eugene Demchenko 11/27/2008 10:58 PM
  2. 1 1 12/06/2008 11:38 PM
Topic:
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Location:
Florida Okaloosa County Destin
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Short Sale Specialists & Pre-Foreclosure Education
Short Sales Specialists
Short Sale REALTORS®
Sharing Information of Short Sales
Tags:
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Rainmaker
1,139,487
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

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.  

Nov 16, 2008 09:36 AM #12
Rainer
102,647
Jean Groesbeck
Coldwell Banker Bain - Anacortes, WA
Broker, CRS, e-PRO, ABR, ASP, CNE, IMS

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!

Nov 16, 2008 10:18 AM #13
Rainmaker
284,306
Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

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

Nov 16, 2008 12:41 PM #14
Rainmaker
594,564
Laura Giannotta
Keller Williams Realty - Atlantic Shore - Little Egg Harbor, NJ
Your Realtor Down the Shore!

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

Nov 16, 2008 10:26 PM #15
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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. 

Nov 17, 2008 12:34 AM #16
Rainer
6,811
Dawn Harmon, San Diego Realtor, Broker/Owner
Pacific Homes & Estates - San Diego, CA

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.

Nov 17, 2008 01:34 AM #17
Rainer
2,873
Ginny Krause
Atlantic Coast Title Group, LLC - Palm Beach Gardens, FL

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.

Nov 17, 2008 01:51 AM #18
Rainmaker
1,006,145
D B
Quakertown, PA
e-PRO, Realtor - Bucks County PA - 610-952-3578

I enjoyed reading all your comments here.  Thanks

Don

Nov 17, 2008 08:53 AM #19
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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.

 

 

Nov 17, 2008 09:04 AM #20
Rainmaker
360,422
Lynn Pineda
Keller Williams Realty - Coral Springs, FL
Coral Springs REALTOR- Promises Delivered

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 17, 2008 02:12 PM #21
Rainmaker
1,139,487
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

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.

Nov 17, 2008 10:50 PM #22
Rainmaker
275,970
Keji Ogunleye
Fairfax Realty, Inc - Greenbelt, MD
GRI, SFR, KejiYour Realtor

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

Nov 17, 2008 11:49 PM #23
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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 18, 2008 01:14 AM #24
Rainer
23,444
Travis Duncan
Aloha Properties of the Carolinas - Charlotte, NC - Charlotte, NC

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...

Nov 26, 2008 12:38 AM #25
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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

Nov 26, 2008 02:07 AM #26
Rainmaker
511,620
Elva Branson-Lee
Solid Source Realty GA - Atlanta, GA
CDPE - Atlanta Real Estate & Short Sale Agent

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.

 

Nov 27, 2008 04:38 PM #27
Rainmaker
367,712
Lance Owens (RS)
LUVA Real Estate - Kailua-Kona, HI
Getting transactions done, when nobody else can!

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 28, 2008 02:03 AM #28
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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.

Nov 29, 2008 02:18 AM #29
Rainmaker
367,712
Lance Owens (RS)
LUVA Real Estate - Kailua-Kona, HI
Getting transactions done, when nobody else can!

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

Nov 29, 2008 03:08 AM #30
Rainmaker
497,201
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

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...

Nov 29, 2008 03:11 AM #31
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