Comments on: Short Sale Supervisor Talks to a Real Estate Agent – Recorded Conversation

By: Carl Perella

Carl Perella — Sat, 27 Feb 2010 03:10:26 +0000

Help I am getting scammed as we speak.We were sold on short sale and it has become a tool smoke screen so they can forclose on us.
WE NEED TO EXPOSE FREDDIE MAC NOW….
I HAVE ALL E-MAILS SIDE DEALS TO PUT AND END TO THIS LEGAL ROBBERY.
OUR BUYER IS A MILITARY POLICE SHE LEAVES FOR WAR ON 3/1/10 PLEASE HELP HER STAY IN THE HOME!

Please call 1-413-531-5030

By: Brad

Brad — Tue, 16 Feb 2010 23:52:54 +0000

I just had that happen on a short sale condo listing in Seattle. Bank of America is the servicing unit for the first. The loan was through Countrywide and there is a second that BofA owns. I believe the first is owned by either Freddie or Fannie – BofA won’t release that info however.

So here’s the deal. Evidently Old Republic wanted a $6,000 payoff from the investor in order to move forward – I’m assuming they insured the loan. Well, the investor will only give them $3,000 and has also agreed to pay the errant HOA dues to the association, which is roughly another $3,000.

I got a call from the BofA short sale rep two weeks ago saying that Old Republic wanted $3,000 out of the agent’s commissions in order to proceed. Now the sale is $186,900 so the commissions are not that big to begin with. I asked him if the first position creditor would agree to that since they refused to give more but I could not get an answer back from him. Instead, he sent me a secured email stating that the short sale was declined after 7 months of effort on my part. Yet they (BofA and the investor) had only worked on the file for 2 weeks – they had been ignoring me the whole time prior to this taking place.

So I’m not sure if they were going to disclose to the investor or not but it sounded a bit fishy.

Cheers and good job on your reporting guys!

By: Scott

Scott — Fri, 12 Feb 2010 03:06:59 +0000

It seems to go better if you hire a professional negotiator on your side, I have one that I pay 30% of the listing commission to, and I never give up a dime. If the 2nd lien holder is not talking to the person that can fork over the cash, it puts them in a ‘take it or leave it’ position.

Either way, short sales are not binding for the seller/buyer, have the 2nd lienholder put it in writing what they will take, and ask the buyer to come up a little higher in the price, or put it back on the market as an approved short sale at the higher price and you will probably get it if you close quickly.

Have the first lienholder issue their approval indicating a “net proceeds to first lienholder” then if you get a little in that area, the contract price just needs to come up a little to accommodate it or the buyer needs to come in with some more cash, or whatever. The real estate agents need to stay out of it, and it all has to go through the HUD.

As for being “illegal”, it is probably not, if paid in advance of closing. The note is an amount owed to the second and we know half of these people probably “have” the money to make their payments, or at least a payment on the 2nd for heaven sake. If it is 15 days before closing and the borrower makes a “regular” or at least a big payment on an open loan that they legitimately owe the money and the payment on, there isn’t anything wrong with that. It can easily be stated as “have the borrower pay down their balance to ‘x’ and we’ll approve the remaining $8k or whatever from the first as fine. There isn’t anything wrong with that at all, it’s called paying their obligation they committed contractually to do. It doesn’t matter either whether its the borrower, mom, dad, or the man on the moon, but if they haven’t made a payment in 7 months, its a legitimate request.

By: Vicktor

Vicktor — Wed, 10 Feb 2010 03:16:14 +0000

It is our opinion that Short Sales will become the blood line of the industry for the next few years. Attorney will be out in force trying to sue agents for mistakes to make their living. Lenders created the problem and now they need agents to help them sell the toxic assets. They try to milk the agent by asking them to do all the work investing hundreds of man hours at a reduce rate. Agents commissions should be agreed upfront when the short sale offer is send. If the banks do not pay the full 6% commission, in my opinion the short sale should be terminated. We are a part of the solution, not the problem. We are professionals and should be treated with the respect a reverence that our hard work, knowledge and service to our communities deserves.

By: been there, VA

been there, VA — Wed, 03 Feb 2010 17:37:32 +0000

Sounds like they have been dealing with GMAC mortgage. Almost verbatim a conversation I had with their “specialists”

By: Jeff

Jeff — Tue, 02 Feb 2010 22:41:49 +0000

My dad taught me the Golden Rule of business 40 years ago, he said: “those who have the gold make the rules!”

This is a no brained – it’s clearly fraud. All of us should record our calls & report them to the appropriate authorities. Ask them to respond to an email you generate that outlines their fraudulant request.

They can & will get away with it if we do nothing.

By: Christopher

Christopher — Tue, 02 Feb 2010 17:39:39 +0000

Not sure I buy it.
A second can negotiate for a payoff (or paydown) simultaneously with the first. Indeed, if the first blocks the second, the first can be liable for an interference with contractual relationship claim.
Off HUD payoff? That’s a problem; IF the second’s payoff is generated from the HUD-Statement related transaction. If the second is being paid in a separate transation? No HUD.
The devil is in the details. Always.

By: Lisa

Lisa — Mon, 01 Feb 2010 23:06:06 +0000

I work as a facilitator who helps deal directly with the bank on behalf of the Realtor. We have been successful at many of these but not without having to correct the bank several times as to what they can or can’t do. Those stories are endless…

I did have one recently that brought up some questions in my mind related to all of this. I had one that the 2nd wouldn’t release without the seller signing an “Acknowledgment of Service of Summons & Complaint as legal action”. It was assigned to an attorney for collections. This would allow the 2nd to go after the seller for a judgment after the closing. How is that appropriate when the 1st has to “take what they can” and the 2nd who took a higher risk of not being repaid would have the option to pursue a judgment? They took a month of going back an forth before giving this response and at that time they knew the seller either had to do it or the house would foreclose. The house ultimately foreclosed.

On another note…this conversation sounds exactly like what our wholesale reps would say to justify why we should should “white out” or “play with the numbers” regarding stated loans and resubmit several years ago. Just because someone tells you it’s OK, everyone is doing it, etc…doesn’t mean it’s OK. You have to find out for yourself. This was not alright and why we are in this predicament. What I find difficult is getting “good information” when I have an issue. Thank you, for having this site and for everyone sharing their experiences.

By: Wisconsin

Wisconsin — Mon, 01 Feb 2010 21:12:05 +0000

Wow…did this sound like conversations I’ve been having with the 2nd. My advice…go with you gut or use the red flag test as described earlier. They make it all sound ok but deep down you know it’s wrong. After thinking about all the 2nd said and speaking with the title company we all agreed it was fraud and should be disclosed to the 1st. Guess what the 1st said…”We have already stated what we will pay the 2nd. ‘If the seller should happen to make a payment to the 2nd, that’s not really our business’ “. In this case “the payment” would have been the amount the second wanted in addition to the amount from the 1st. My comment to the 1st…”So you take a see no evil, hear no evil attitude.” The 1st promptly denied that.

Long story short…as much as it pained me to let let a seller down or participate in something I felt wasn’t on the up and up…I came to terms that the sale will probably fall through.

By: Danny Shepard

Danny Shepard — Mon, 01 Feb 2010 20:59:14 +0000

The problem is that not everyone in the real estate industry is held to the same standards of accountability. New regulations should be put into place for lenders. As part of those regulations, second lien holders should be entitled to a fair percentage of a short sale. This will continue to encourage them to make loans, such as an 80% first, 20% second mortgage situation. If the home went into a short sale, the second lien holder should be entitled to 20% of the proceeds.