Posts filed under “Foreclosures”
Mike Konczal of RortyBomb puts together a spectacular series of flow charts that explain in the simplest of terms how the bank foreclosure process went off of the rails, in Foreclosure Fraud For Dummies. > How Courts Process Foreclosures > Errors Began in the Syndication Process > From A-Z, Fraud is Endemic in the Entire…Read More
“In the West, this formal property system begins to process assets into capital by describing and organizing the most economically and socially useful aspects about assets, preserving this information in a recording system—as insertions in a written ledger or a blip on a computer disk—and then embodying it in a title. A set of detailed…Read More
Gretchen Morgenson’s front page NYT piece is your must reading for today. She lets the facts speak for themselves; Calling these failures “problems” understate the case dramatically, but WTF: Its front page NYT. All of these errors “involve documents that must be submitted before foreclosures can proceed legally.” (Sweet!) The flawed legal practices are so…Read More
Attached is a court order quashing a foreclosure service process service (PDF here; embed here) because of a counterfeit court summons. Apparently what’s happening is that private process servicer companies may not be serving people with summons, and are simply counterfeiting the documents so they can keep the fees without doing the work. That means…Read More
From today’s WTF file, the Florida Mortgage Mill Machinery, hard at work: “When Jason Grodensky bought his modest Fort Lauderdale home last December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage. Grodensky knew nothing…Read More
I thought this piece from Greg Fielding, a longtime real estate agent, was especially informative. Greg has experience in selling high end property and low end foreclosures, raw land, short sales, development work, apartment buildings, and working with investors,
He blogs at Bay Area Real Estate Trends, about both local markets and the bigger global environment. He covers most of Alameda and Contra Costa counties and lives in Danville with his wife and three kids.
A Short Sale is a very different type of transaction than a normal sale with equity. Parties in the transaction have a different set of priorities, expectations, and concerns. The Short Sale Listing Agent needs an entirely different skill-set.
Here is everything you need to know about how a short sale works. (from a Seller’s perspective
Most of the same considerations you would have when selling under normal circumstances still apply: De-clutter, touch-up the paint, keep the landscaping tidy, etc. Here are some of the extra issues that Short Sellers face and some questions they often ask…
What should you look for in a Listing Agent?
More than anything, you need an agent who has a decent amount of experience with short sales and has shown exceptional market knowledge. Fancy fliers, glamour-shots, and a “neighborhood specialist” won’t do you any good in a short sale. And don’t hire a “Short Sale Expert” just because they call themselves one.
A great Short Sale Listing Agent will have:
- Good Short Sale experience. Seeing as how we’ve been doing them for 4 years, an agent you hire should have done at least 20 or so successful short sales. Be wary of someone who says they’ve done hundreds…many of them won’t have the time or inclination to give you the extra effort when you need it most.
- Excellent industry and market knowledge. Short sale transactions are so much longer and more complex. It seems like there are a lot more things to go wrong. A good short sale agent needs to understand appraisals, different lending standards and practices, inspection and repair issues, and generally be the kind of person who can come up with the solutions needed to keep a deal moving forward.
NOTE: Some agents hire outside short sale negotiators to process the transaction with the Seller’s bank. If you are hiring an agent is going to effectively outsource their work, it is really this other company you are hiring. Ask tough questions accordingly. The biggest concerns here are that your listing agent may not be engaged and working as hard to keep your deal together AND some of these outside firms may charge you additional money.
Should you stage or spend any money on repairs?
No and No.
Do you have to be behind on your mortgage payments?
This is one of the most common misconceptions about short sales. I have personally closed short sale transactions where the sellers never missed a payment.
The issue is one of hardship. The bank will want to see that you have a legitimate reason why you can’t continue making your payments. If you have a legitimate, provable hardship that justifies why you cannot continue to own the house, then you will be a great candidate for a short sale even if you are current on your mortgage. On the same note, exaggerating your pain by not making your payments when you still could probably isn’t going to help you any. The bank will see your pay stubs and your bank statements anyway.
Obviously, credit scores are a big concern for Short Sellers. In theory, a Seller with zero or very few missed payments will have less credit damage than a Seller with many months of missed mortgage payments.
Having said that, I’m not necessarily recommending that would-be Short Sellers continue making their mortgage payments. There are other factors to weigh in that decision…