Head spinning.
I was contacted last week from a Century21 agent in California to see if I would accept a HAFA short sale lead for a referral fee. That in itself should have been my red flag. Century21 has an in house referral system, I know as I used to work for them. This C21 REALTOR spoke with my colleague who takes my calls after finding my information on Zillow.com as a short sale specialist. Once everything was officially signed I received the owners information.
In receiving the owners information, I mean everything including social security number, etc. (another red flag of caution). I contacted the owner of the home to introduce myself. Come to find out homeowner had no idea who this REALTOR was in California. I figured it was a friend or relative helping this owner out. I still do not understand how an agent in California received this Arizona homeowners personal information.
As the guidelines for HAFA can change and/or updated, I took a refresher class on Friday with Desiree Montgomery who also is the authority behind the MSSC (Master Short Sale Consultant Designation). In this class I was informed that to qualify for HAFA you must first be denied from a loan modification program. The short sale has to be initiated within 30 days of the denial and you can not be within 60 days of your foreclosure date.
This homeowner is within 60 days. I informed the homeowner that I did not believe she qualified for the program based on this criteria alone. She was a little confused as she was "told" she was qualified for HAFA. The benefits of doing a HAFA short sale over a traditional short sale include full deficiency release of all lien holders (yes, juniors too) and "up" to $3,000 relocation assistance at a successful close of escrow.
Since this is a government program, you can imagine the hoops (rules) that must be adhered to during the entire process. Even the banks do not understand the process themselves. Most banks (if not all) refer their denied loan modification candidates to 3rd service party providers to try and complete the HAFA program. If they do not qualify for HAFA they can try a traditional short sale if their home has not foreclosed by then.
Back to my story. The owner has me contact the person that promised her the moon and stars. It is a law firm. (Why not the bank of her first lien?) I email and call with no return communication. I wanted to know the denial date of the loan modification and I wanted to know how the owner qualified for HAFA considering her foreclosure date was less than 60 days away. I also emaiedl the agent in California just to let her know the status of the listing and the challenges. She informs me to just do a traditional short sale. I responded that I would prefer to do a traditional short sale but unfortunately the owner has been told differently. I wouldn't appreciate it if someone told me "Hey, here is $3,000 to do a short sale" and once they have me, "Oh, by the way, sorry no money, honey". I do not do business that way not to mention the legal liability I have now incurred if the home forecloses when I knew all along the owner/home would not qualify for HAFA.
Here is the kicker. When I told the agent in California that I emailed/called the person who promised the owner the moon and stars she said "I know, they forwarded the email back to me to answer, which I have done". WHAT?!?!?!?!? This agent knows nothing about the homeowner or her situation. She is a REALTOR in California. She answered my questions by saying "Do a traditional Short Sale."
This is my opinion as I have no facts to base this on, only a guess to what is happening. Please pay attention. Homeowners that are being denied a loan modification are a huge source of referral leads. The banks are sending these leads out to the 3rd Party Service Providers to see if they can help the homeowner short sale the home. These 3rd Service Providers are seizing the opportunity by baiting the homeowner to call with the $3,000 relocation assistance if they short sale their home. Thus the homeowners are calling. The 3rd Service Providers (knowing that most will not qualify for HAFA nor care) are then sending the leads out to agents who pay to receive these leads. These agents then find an agent in the area to help the homeowner who has no clue their personal information has been passed around like a cold at a day care.
If I had taken this listing I would be up against some tough questions to the owner of this home as to why she is not getting her $3,000 and why is her home foreclosing? Now the ball is in the homeowners court as I present the truth and facts about how she has been mislead to believe all of this nonsense just so someone can collect their referral income. And.....of course to add insult to injury, this is on top of the homeowner already being beaten up by the bank trying to complete a loan modification that was ultimately denied. Big surprise. My heart goes out to these people trying to do the right thing when no one else is.
I am telling you, these loan modification and short sale programs are just a band aid/facade to keep the public "thinking" the government is actually trying to help. Even for those that successfully complete one by the Grace of GOD they will still be upside on their home from now until eternity (ok a little exaggeration there). The banks are not reducing the principal. Just the opposite. They are tacking on their loss (usually from a loss in rate reduction) to the principal of the homeowners loan so the homeowner can be underwater even more. Kind of sounds like the cash loan shark places doesn't it? Seriously do not see this ending anytime soon. think positive, think positive, think positive............
If you want to know the truth about the government programs to help you do a loan modification (HAMP) or short sale (HAFA) please consult these links. I still cringe thinking of the amount of personal information flying around that people have no idea about with these loan modifications. Do not trust the banks or any mail. If you need assistance on a short sale research yourself a reputable person you can trust to tell you the truth.
HAFA: http://makinghomeaffordable.gov/hafa.html
HAMP: http://makinghomeaffordable.gov/index.html (Same website, just home page for loan modifications)
I just felt the need to get this information out there.
Tuesday, November 23, 2010
Tuesday, November 16, 2010
How To Become a Real Estate Grand Master and Have Your Best Year Ever
Taken From Broker Agent Social: http://www.brokeragentsocial.com/article/967/how-to-become-a-real-estate-grand-master-and-have-your-best-year-ever
Great motivational article. As I read it, I thought this just isn't about real estate but about life in general. Even to become a better human, couldn't learning something new every day whether it is a word, a culture, a personality help bring about some better contribution through your life?
I turned 40 this year so wouldn't that make me a "Grand Master" of my own life? Truly, we should grow wiser with age and all learn to live more fuller and meaningful lives. Not always the case though as lives are constantly going through the trials and tribulations, the cycles of bio rhythms. I feel the journey to self discovery has just begun.
Baby steps always when life becomes overwhelming. Never stop learning. Verbally appreciate something or someone everyday.
Great motivational article. As I read it, I thought this just isn't about real estate but about life in general. Even to become a better human, couldn't learning something new every day whether it is a word, a culture, a personality help bring about some better contribution through your life?
I turned 40 this year so wouldn't that make me a "Grand Master" of my own life? Truly, we should grow wiser with age and all learn to live more fuller and meaningful lives. Not always the case though as lives are constantly going through the trials and tribulations, the cycles of bio rhythms. I feel the journey to self discovery has just begun.
Baby steps always when life becomes overwhelming. Never stop learning. Verbally appreciate something or someone everyday.
Sunday, November 14, 2010
Phoenix real estate strategy of 'flopping' examined (from Arizona Republic)
http://www.blogger.com/post-create.g?blogID=7163329180838770632
I have all kinds of questions with this article.
I have never did a short sale where the bank relied on my comparables. The banks complete their own evaluation (BPO - Broker Price Opinion) and often times have to do two because the approval process takes so long. Which brings me to another point. When listing a home that is depreciating at 3 to 5% a year and it takes the bank 4 to 9 months to finish a deal, isn't it reasonable to list the home taking into account what the value will be by the time the home finally closes. The banks have wised up to this AND intentionally try to complete the BPO as soon as possible to get the highest dollar only to sit on the file for another 3 to 6 months afterwards. Over the course of the transaction the buyer watches the value fall and ends up backing out of the deal. The agent has to find a new buyer on an overpriced listing now and a bank that will not cooperate in lowering the price off of the BPO that was completed 3 to 4 months prior. If you should convince the bank to redo the BPO they have now wasted that $50 -$150 at their own game.
Another thing this article does not talk about is that many of the homes up for short sales are thrashed inside because they were investor specials run into the ground. Many short sales need carpet, paint, sometimes the appliances have been ripped out and backyard/pools have been totally ignored. I had one where toxic "things" were left in the garage. The bank never worked with me on the price when I explained what was involved in selling the home hence the lower price. The home went to foreclosure AND sold less then what my original offer was. I hear these stories all the time.
Banks use BPO's because they pay the Realtor $50 to $150 to complete one as opposed to an appraisal completed by a professional appraisal company ($450-$550). The BPO's (ordered by the banks) are completed by Realtors who base their information strictly off the internet and many times (not all) never visit the home. The banks do not know the condition inside and the evaluation comes back at a higher price.
These investors come in, fix up the home, they may carry the note or carry a portion of a note if the buyer does not have enough cash to purchase the home. Please tell me how this "buyer" is going to "buy" this home from the bank. Banks do not carry notes for people with bad credit. For this risk of unconventional financing isn't it plausible for the buyer to pay "more" for the home. Kudos to the investor for selling a home, making another homeowner who "consumes" for their new home.
I have seen foreclosures get dumped onto the market at ridiculously low prices and pending within hours. The banks are listing these foreclosure based on the SAME bpo's completed for the short sales. I CAN SAY THIS FROM PERSONAL EXPERIENCE. So for this article to say the bank isn't getting a fair chance at the best buyer is far and few between and no different then what is happening with foreclosures.
What people do not realize is that the banks sell some of these homes to investors in blocks (portfolios) completely discounted to investors already. So where is the fairness in that to the taxpayer. There have been numerous cases where the banks intentionally declined a short sale in order to collect the insurance of the full amount after foreclosure.
I am sorry but this article just irked me because it gives no credit to the people who are trying to move this economy and doing the best they can despite all of the insider politics happening with the banks and short sales.
Investors have been flipping homes for years. This is what they do. If the bank is stupid enough to let a home go for below value (which they do anyway with foreclosures and bulk portfolio sales), ignoring their own appraised values then so be it. There must be a reason. Investors are thinking "outside of the box" to make this economy move and all the banks want to do is whine and complain some more.
Please.
I have all kinds of questions with this article.
I have never did a short sale where the bank relied on my comparables. The banks complete their own evaluation (BPO - Broker Price Opinion) and often times have to do two because the approval process takes so long. Which brings me to another point. When listing a home that is depreciating at 3 to 5% a year and it takes the bank 4 to 9 months to finish a deal, isn't it reasonable to list the home taking into account what the value will be by the time the home finally closes. The banks have wised up to this AND intentionally try to complete the BPO as soon as possible to get the highest dollar only to sit on the file for another 3 to 6 months afterwards. Over the course of the transaction the buyer watches the value fall and ends up backing out of the deal. The agent has to find a new buyer on an overpriced listing now and a bank that will not cooperate in lowering the price off of the BPO that was completed 3 to 4 months prior. If you should convince the bank to redo the BPO they have now wasted that $50 -$150 at their own game.
Another thing this article does not talk about is that many of the homes up for short sales are thrashed inside because they were investor specials run into the ground. Many short sales need carpet, paint, sometimes the appliances have been ripped out and backyard/pools have been totally ignored. I had one where toxic "things" were left in the garage. The bank never worked with me on the price when I explained what was involved in selling the home hence the lower price. The home went to foreclosure AND sold less then what my original offer was. I hear these stories all the time.
Banks use BPO's because they pay the Realtor $50 to $150 to complete one as opposed to an appraisal completed by a professional appraisal company ($450-$550). The BPO's (ordered by the banks) are completed by Realtors who base their information strictly off the internet and many times (not all) never visit the home. The banks do not know the condition inside and the evaluation comes back at a higher price.
These investors come in, fix up the home, they may carry the note or carry a portion of a note if the buyer does not have enough cash to purchase the home. Please tell me how this "buyer" is going to "buy" this home from the bank. Banks do not carry notes for people with bad credit. For this risk of unconventional financing isn't it plausible for the buyer to pay "more" for the home. Kudos to the investor for selling a home, making another homeowner who "consumes" for their new home.
I have seen foreclosures get dumped onto the market at ridiculously low prices and pending within hours. The banks are listing these foreclosure based on the SAME bpo's completed for the short sales. I CAN SAY THIS FROM PERSONAL EXPERIENCE. So for this article to say the bank isn't getting a fair chance at the best buyer is far and few between and no different then what is happening with foreclosures.
What people do not realize is that the banks sell some of these homes to investors in blocks (portfolios) completely discounted to investors already. So where is the fairness in that to the taxpayer. There have been numerous cases where the banks intentionally declined a short sale in order to collect the insurance of the full amount after foreclosure.
I am sorry but this article just irked me because it gives no credit to the people who are trying to move this economy and doing the best they can despite all of the insider politics happening with the banks and short sales.
Investors have been flipping homes for years. This is what they do. If the bank is stupid enough to let a home go for below value (which they do anyway with foreclosures and bulk portfolio sales), ignoring their own appraised values then so be it. There must be a reason. Investors are thinking "outside of the box" to make this economy move and all the banks want to do is whine and complain some more.
Please.
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