by Michael-Edward Cruz, California Real Estate Broker.
Have you heard? The government is trying to motivate lenders to avoid foreclosure.
According to statistics the sister program HAMP has been able to help about 9% of homeowners in trouble. Yes I said 9%, I think the average Realtor has been able to short sale about 20% without the extra help.
We have been able to close about 95% of our short sales because we understand the process. And in my case 95% was never a number I thought was even possible. It took hard work and perseverance but I made it.
I believe short sales have been an issue for two main reasons.
1. The staffing departments in loss mitigation departments exploded and this caused a huge learning curve and lack of adequate systems.
2. The mentality of these departments was that of a collections agent. Not actually mitigating loss but gambling to see how much they could get. I traded stocks for many years and some people said I was gambling, but my level of trading risk was nothing compared to these departments. They hang there risk on another agents appraisal-which many are unqualified to give, they lack any knowledge in real estate. Those talented and qualified loss mitigation agents are buried by thousand of request.
These departments have been filled with loan officers that went broke when the housing bubble bust. They had not been in business long enough to learn the fundamentals of selling homes and negotiating selling terms. They went from making an insane amount of money to broke. Now they are just looking for a steady paycheck.
I lost count of how many times lenders have foreclosed on a home which they would have made more on a short sale. Either because of price, commission, closing cost, basically the normal cost to sell a home, AND THEN sell it one to two months later for 20 to 30% less.
It’s not surprising that some Realtors refuse to touch short sales. Not to mention buyers who don’t want to wait for what seems like forever.
So do I think this HAFA program will work? I sure hope so but I am not going to hold my breath.
To me this will just serve to confuse more people and waste tax payer money. But if it works then great, because both Realtors and Homeowners need the help.
So is it all bad? THE ANSWER IS NO
There are many variables involved. All properties cannot be short sold but we need to go back to basics. Homes are held as collateral for money that is owed. With that you can begin to change the way you think about short sales.
It is all about education and negotiation, the Realtor is key to this part of the process. You need to work with an agent that can educate lenders as to the process, make it easy for them.
Yes make it easy, they have thousands of files, the agent needs to keep it simple. Then they need to negotiate intelligently, don’t sumbit offers with huge discounts, while this might work once in a blue moon. You will just cause the file to get tossed.
And you the seller is the second key. When looking to short sale your home you need to ask yourself a few things.
1- Can I repair my credit after a short sale?
2 – Is my loan a recourse or non-recourse loan?
3 – Do I have a Realtor that understands the short sale negotiation process?
4 – Do I have a valid hardship?
5 – Am I commited to settling these debts?
When you prepare this questions ahead of time, you can ensure a smoother short sale process.
Why waste your time trying to get a loan mod or a short sale that is never going to happen.
Why start with a process you are not committed to.
There is life at the end of this and yes your credit and your stability will return to normal.
We have helped many people reduce there housing expense by over 2/3. Our services are free to you as we are compensated by the lenders and or buyers. And because time is of the essence we encourage you get informed asap!
We look forward to helping the governments efforts to help people in foreclosure. While we are unsure of HAFA’s success, we are still committed to the process.
If you or someone you know is in danger of foreclosure call our short sale experts right away.
Michael-Edward Cruz 951-572-2789
Troy Huerta 760-420-5498
If there is no answer leave a message, if they are not on the phone with a lender they are helping clients.
: 41.635, -0.295) Chase are all adapting to the new reality by hiring more staff with proper short-sales training. The fact that banks are willing to accept these sales should limit the housing market’s downside in the year ahead.