All Forum Posts by: Clifton Jones

The person or company that is handling the negotiations on your behalf should be asking to have this foreclosure date postponed while the short sale is being negotiated. That is all that you can do.

If your negotiator has not already done this, then I would recommend that you do not use them on any other short sales, as this is one of the first things they should have taken care of when contacting the lender on this short sale.

You want to always make sure that the person negotiating on your behalf understands how to negotiate for investors. Most negotiators that realtors use only submit the package and don't truly negotiate. A real negotiator attempts to justify the price submitted by emphasizing the repairs needed, the lowest comps in the subject area, the crime rate in the area, any sex offenders in the area, etc. As the above illustrates, a real negotiator identifies anything that can help in the negotiation and presents them in order to justify the price.

At the same time, you as an investor should never start a short sale with the highest price you are willing to pay. The best way to do this is to inform your negotiator what your highest price is for the property, then let them make the submissions. They should start the short sale with a price considerably below your highest price, then during negotiations, work up to that price, if they can not obtain the Acceptance Letter(s) below it. Doing it this way, it allows you to save money, as sometimes the final price can be a lot lower than what your top price would have been.

Hope this helps.

Tom, another approach can be to have it listed at the amount owed to the lender through the first BPO. Whoever meets with the BPO agent can just inform him/her that the listing is what is owed to the lender and does not reflect the fair market value. I know a handful of realtor/investors who use this approach. This usually keeps other offers from being submitted.

You need to make sure that does not violate the realtor's ethical obligations, so that will be up to the realtor to make that call. But, if it is done, you can then lower the price at any time and be able to justify the reason it was lowered. This is assuming that the price you eventually sell at will be lower than the amount owed to the lender(s).

Jana, I agree with others that you want to avoid BoA, but here are the answers to your questions: the information they are asking for is the current owner's information. Equator is not a lender. They are a third party and have multiple lenders that utilize their service, or are in the planning stages to do so. They do not know, nor do they care, that you are reselling the property. They want the Proof of Funds for the A-B transaction, which means your Proof Of Funds.

Most of the time, the BoA negotiator will continue to show up as GENERIC until both you as the agent/negotiator and the homeowner fill out all necessary tasks. With Equator, both the realtor/negotiator and the homeowner are assigned tasks to complete. They will require the homeowner to call in and fill out information. You can get around this, but it is tiresome. Just have the homeowner do this because even if the offer is declined, you should be able put in a new offer without the homeowner having to fill out all of their tasks over again.

Yes. First, you should have whoever is negotiating demand an interior BPO (unless you find out the drive-by BPO will work for you). If you have to, take pictures of the needed repairs and have them sent in to show why an interior BPO needs to be performed.

Also, do not get caught up with how much is owed versus the current market value. I constantly deal with properties that have lost more than half their value. There are properties in my area that were worth over $1,000,000 that are now worth between $350,000-$400,000. What a Seller owes has no bearing on what the property is worth or what a lender will accept through a short sale. It can have an affect on whether a deficiency is required, but hardly ever affects whether a short sale will be approved.

Send that Acceptance Letter to your lawyer and ask them for a written opinion on the legality of that portion of the letter. If the opinion comes back that the 30 day hold is illegal, then have him contact Wells Fargo, requesting they remove that requirement from the Acceptance Letter, intimating that he will take it to court, if they do not remove it.

I do not recommend taking them to court, but your lawyer can speak as if you will do this. If they still refuse to remove it, then you can either live with the 30 day hold, close A-B with one title company, then the B-C with another agency, or you can go further and take it to court, which is not recommended.

You should have whoever is negotiating with the lender request that the foreclosure date be moved, so that there is time to negotiate this short sale. Usually, a lender will automatically do this, but it is ALWAYS best to verify with the lender.

This is something that the negotiator should be doing as the first step in the process. You need to know who the negotiator is and get updates from them at a minimum weekly.

The approaching foreclosure date will nor usually have any bearing on the speed of the short sale. Lenders usually just push the foreclosure date out in order to negotiate the short sale.

Sorry, I thought I had mentioned what the 1st mortgage was on the property worth $630,000-$640,000. The homeowner owes $360,000 on the 1st $360,000, as well as the $500,000 on the 2nd.

I have two NPN's that I am looking to purchase. Both properties are in the process of foreclosure and I would usually handle these as a short sale. But, in these cases, I believe it would be easier to get the properties via purchasing the notes. So, I need advice on how to go about submitting an offer (i.e. % to offer, based on note).

The first note is a 1st mortgage and the lender has told me the payoff for the loan is $79,900. They are willing to sell the note, but they need to see my offer. The property is a condo worth approximately $59,000-$62,000 and there are past due condo dues in the amount of $3,500. The owner is currently working on a Deed-In-Lieu, so he would be willing to perform a Deed-In-Lieu to me, also. My first question is what else do I need to know about this loan to be able to offer a price? The second, if that is all I need to know, what would be a starting price to offer, and what should be the maximum price?

The next note is a 2nd mortgage. The homeowner owes $500,000 on the 2nd. The property is worth $630,000-$640,000. The homeowner is in foreclosure, but is willing to sell as a Sub-2, if we can purchase the 2nd mortgage. We have not spoken to the lender, so I do not know whether the 2nd is for sale on this property or not, but if so, what would be a valid price to offer? The 2nd lender is not going to buy out the 1st mortgage and then foreclose, so they will be pretty much screwed, if the house is foreclosed on.

Any help would be greatly appreciated.

Per your original statement, your title company claims that this property needs to be in a land trust in order for the "C" lender to be able to start underwriting the loan. This was what I got from your explanation, but this will crate a problem, not just because of the shady appearance of the land trust, but because of the problems this will create on the A-B side of the deal..

The problem you will have, and what everybody is trying to explain, is "B" is not currently on title. Since "A" is still on title, the lender for "C" can not start the underwriting process for the B-C contract (which is not really true, but that is another story).

Now, if you were to have the homeowner move the deed into a land trust, then the lender for "C" could POTENTIALLY start the underwriting, but this would cause problems in the A-B transaction, because the property has changed owners from "A" to the land trust. This would then make your contract null, since there was a new owner (moving a property into a trust is deemed a sale in some, if not all states, hence a new owner). This would cause the short sale to start over again, for most lenders.

POTENTIAL SOLUTION: Contact the lender for “C†and explain the entire scenario, that you are purchasing the property via a short sale and then turning around and selling it to “Câ€. If you can provide the Acceptance Letter (with all prices removed), then that would also help show that this sale will go through, if they will underwrite.

If the lender for “C†will still not underwrite, then explain this situation to “C†and recommend a mortgage broker that he can use that will be able to underwrite while the property is still owned by “Aâ€. Remember that “B†has nothing to do with the issue in this transaction. The problem is you title company is stating the lender for “C†can not start the underwriting on the B-C transaction while the property is still owned by “Aâ€. This could just be your title company's belief, or they could have received this information from “Câ€'s lender. If the latter, then speak with “C†and explain that his lender will not underwrite until you are on title and that this scenario will not work for you. You require them to be able to close on a certain date and that whoever they use will need to underwrite the loan before you are on title. You should explain the A-B, B-C scenario, so “C†will understand why this is the case.

To break down your question to it's ultimate issue, you want to know how to get the “C†lender to underwrite the loan for “Câ€. Forget the land trust, as it will cause more problems than it will resolve. If your title company has a problem with this, then find a new title company. Any title company who states that you must have this in a trust to make this deal work is either ignorant of this type of transaction, or they are attempting to persuade you to do something that is not in your interest, but to their benefit only (providing them with more money).

You will be dealing with BOA and (maybe) Equator, if BOA is the servicer of the loan. I do know that in my service area, Mellon almost always use a servicer for their contracts, but that may not be the case in your area.

I state MAYBE Equator because I have just initiated about 3 new short sales that have not been added to Equator. They have not been assigned a negotiator, but neither have they been assigned to Equator. It looks and sounds like they will not be, based on conversations with BOA.