How I Snatched a Short Sale From Foreclosure Three Times- Once After The Public Trustee's Sale

So another year has slipped by and despite all of my resolutions to be disciplined and do better than in previous years, I have only a handful of blog posts to show for a whole year of work. I feel bad about this. My husband and colleagues say to me- "Blog." Yet I procrastinate. I try to think of what to blog about and then typically I think of something while I am in the car. By the time I get to a computer I forget what it was that I thought I had to say. So here I sit, before my computer-resolute to start the New Year off by blogging, trying to think of all the real estate wisdom I could share, of all the lessons I have learned in 40 or so transactions this year.
Unfortunately the only thing that comes to mind is a true tale of my most challenging short sale.

It began like most transactions; a friend called me and said she had a friend and colleague who had been through a messy divorce and needed help selling her home, which her ex-husband currently occupied, could I talk to her? Naturally I agreed and called the friend- let's call her Hope- for reasons you will see as this tale unravels. The first time I spoke to Hope, she was about to be remarried, her ex-husband and her 2 grown children were living in the house and hadn't made a payment in over 6 months. The value of the home was substantially less than the first loan not to mention the second and of course the house was headed for foreclosure and Hope's credit was headed down the proverbial crapper.

Since Hope was still on title and the notes with both lenders I had her sign a third party authorization and made inquiries on her behalf, after which I was convinced the only way to get her out form under the house would be via short sale. Somehow we managed to get both Hope and her ex-husband to sign listing agreement, addenda and all doce required for a short sale, We quickly got offers and submitted the highest one to the first lien holder- the infamous OCWEN FEDERAL. I should probably mention that we submitted a complete packet, as we always do, offer, lender letter, HUD, copy of earnest money, listing agreement and all of the sellers doc, including tax returns, pay stubs hardship letter etc After a week or so we called Ocwen to confirm that they got the packet and were reviewing the offer (I am a bit of a dreamer). We were transferred to Ocwen India where our negotiator was named Geeta Punjabi. Now Geeta asked for duplicates of many docs and had us faxing to her daily- the largest fax I recall was 68 pages- who cares about those trees anyway? After 6 weeks or so of this Geeta continued to assure me that approval would happen "by Friday"(maybe I should have asked, " which Friday?")

Meanwhile the trustee's sale was looming precariously close and Hope was a nervous wreck as was I. Geeta assured me that the sale would be postponed because they were working an offer. Because this wasn't my first short sale and I am cursed with a non-trusting nature I called a friend of mine who is an attorney. He drafted a legal document for Hope to take to court, a Demand for a Temporary Restraining Order (TRO in attorney speak). So we held on to the doc until the day before the foreclosure sale and when neither the promised short sale approval nor the postponement of the trustees sale had come through, Hope and I went to court to plead her case. To both of our surprises she was granted a temporoary restraining order forbidding Ocwen to foreclose for another 60 days. We filed the document in all of the right places to get the foreclosure stopped and notified Ocwen's local attorney. As you might imagine noone was very pleased with this. The attorney called and informed me that I had no right to stop the trustee sale, I politely informed him that it was my client who had pled for the restraining order and the Adams county Judge who had granted it, therefor much as I would have liked to take credit, I could not. He wasn't amused.

Well we went right to work badgering Ocwen to accept that offer. Then, to our dismay, the buyer pulled out of the transaction saying it had taken too long to get approval. So we put it back up on the market and got an offer within a few days for more than the last offer and it was from a well known local agent and the buyer was a family member. WOW! We could not believe our luck adn quickly got a HUD and submitted it to Geeta, along with a termination of the previous offer. We requested a substitution of buyers which was denied; so we had to resubmit every doc- again, who cares about those trees?For the next 2 months we pushed, we shoved, we begged, we pled and we threatened, all to no avail. Geeta continued to promise approval by Friday and we continued to have no idea as to what Friday she was actually referring. By now buyer was getting nervous and we were frustrated but our next big break came when Geeta went on vacation. After much whining and complaining we managed to get a manager in India who reviewed the file and discovered that Geeta had submitted the file inocmplete. He resubmitted the file to Fannie Mae.

In about a week we received approval for the short sale on a Thursday morning. Excellent news right? Not so much. The buyer decided she didn't want the house anymore and Ocwen foreclosed on the house the same day they approved the short sale. I had no idea what to do- so I called the attorney owner of my favorite title company- First Integrity Title (yep that's a plug for them). He counseled me to request that the foreclosure sale be rescinded. Well that did it- Ocwen India had no idea who or what rescinding a foreclosure sale was so we finally got the file transferred back to Ocwen US!! We requested that the sale be rescinded and meanwhile put it back on the market and started praying.The sale was rescinded and we got another offer, this time it was a cash offer which was darn lucky as the scheduled closing was in less then 2 weeks. I called Ocwen US and explained the situation and once again asked for a substittution of buyers, which I was once again summarily denied. I was also informed that the sale had been rescinded and the approval letter signed for the first buyer and that they, Ocwen,wouldn't sell to the second buyer, who was actually the 3rd or 4th buyer we had procured for the property. This was interesting as the net to the bank was exactly the same, as was the closing date and all other terms. The only things that were different: the buyer and the fact that he was paying cash, which we all know made him a safer bet from the get-go.

After a sleepless night I got up and compared the 2 offer contracts to see if I could ferret out what was causing Ocwen to push back. I couldn't see anything different except buyer number one was named something on the oreder of Suzy WASP Sweetheart and buyer number 2 was named something on the order of Jose Fernando Marquez. HHM, I thought and then I called the buyers agent- Lupe and said," I think your client is being discriminated against." She and I talked and decided that if Ocwen declined to sell the property to him he should probably file a Federal Fair Housing complaint against Ocwen and Fannie. Since I love being the bearer of good news I called the negotiator at Ocwen and the foreclosing attorney and informed them both that if they didn't sell to the current cash buyer they probably ought to brace for a federal Fair Housing Claim. Well that got everybody but the attorney's attention (he once again scolded me). However, by the end of the next day we had a new approval letter and I had talked to the regional manager at Fannie as well as numerous other suits. the closing went off without any further troubles after a mere 18 months adn numerous offers. My commission for this little exercise?

Less than $750, as I had conceded the rest to help my client get to the table. But it was worth every minute to get her to the table and to have the opportunity to beat the bank that was so intent on simply taking the proeprty back, without any regard for the people involved. My advice to anyone facing a short sale with Ocwen? RUN - Run and Hide. And if youare intent on pursuing it- cozy up to a nice attorney adn settle in for a really long but interesting ride.

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Short Sales...Not For The Feint Of Heart

I have always had a fascination with the English Language and having studied linguistic anthropology I became even more interested and even a bit amused. Did you ever think about the way we say things like "how much does that run," when what we really are trying to ask is how much does the item cost? Why do we do that?

American idioms are a great source of entertainment- we use phrases and words in ways that native speakers typically understand without thought but are completely confusing to the non-native speaker. We say things like, "lipstick on a pig." I get the idea behind it - a quick fix to make something seem more attractive than it is... but really? Who had the chutzpah to put lipstick on the pig and did they really think it made the pig better looking? I wish I could have seen this little event- I can't even successfully give my cat a pill- I can't imagine getting the pig to hold still long enough to get a lovely shade of mauve applied to it's whiskery mouth. Perhaps my vision of applying the lipstick to the pig is too grounded in the literal or concrete ...but still what a fun visual.

In all fairness, I have to say that even though we have tortured the language with our slovenly grammatical habits and imprecise use of words, the language has never been all that clear. We have always had multiple meanings for words, and much of spoken language is contextual and non-verbal. We say the word "bear," which sounds just like "bare," and from the context of the sentence we determine which version of the word is being referenced and apply meaning to the sentence- all in the blink of an eye without even conscious thought. But what about when we get confused about the the meaning? Like the term "short sale," which is a source of great confusion for native speakers and non-native speakers alike.

The popular misconception is that a short sale will move through the transaction process and close more quickly( shortly in terms of time if you will), which it will not. A short sale is perhaps the longest transaction a buyer and seller can experience. The term "short" comes form the idea that the seller in this transaction is asking their lender to release their interest in the property. their lien, for less than the full amount that is owed- in effect allowing the seller to sell the property "short." There are a lot of component parts in these transactions: the seller must answer the question of why they stopped making payments or why they feel that they will no longer be able to make payments and they must demonstrate a true hardship. If they are able to do this then the next step is to establish the value of the property- or asset as it is known. The seller's lender will generally order a BPO (Broker Price Opinion) to get a guideline. After which, they may order an appraisal or another BPO. Once the lender is satisfied with the value they will respond to any offer that is on the table. There a lot of misconceptions about this portion of the transaction as most banks will not respond to a seller's request to short sale until they have an offer in hand- then they will evaluate the seller's docs and the buyer's offer. If the seller has a failed offer then they can honestly say their short sale has been approved, but it is important to remember that each offer is evaluated on its own merits. Just because a short sale was accepted at a certain price previously, there is no guarantee it will be again.

All of this verification of seller status and asset value can take a while so the informed, "would be short sale purchaser" should plan on 30-60 days to get a response to their short sale offer. Once agreement is reached on the offer price the bank will typically give a 30 day window in which to close with a per diem amount payable by the purchaser for any delays in closing. When contemplating purchasing a short sale properties there are additional considerations:

• Short sales are never guaranteed, neither to the seller, the buyer nor even the agents
• Contrary to popular belief banks do not have to accept a short sale- they can opt to foreclose, take ownership of the asset and do with it as they please.
• If a bank participates in short sales it is as a courtesy to the borrower
• If you decide to write an offer on a short sale property- do not get married to the idea- your odds of getting it are much narrower than on other types of transactions including REO properties, which are already owned by a bank.

When opting for a short sale, whether you are a would be buyer or a would be seller find yourself an agent who has experience with short sales and plan on a long and sometimes frustrating transaction. Short sales, although ubiquitous in the current market place, are not for beginners nor are they for the feint of heart. Contracting with a broker who has the certifications but lacks experience will do you little or no good as every short sale deal is different and good brokers learn from each transaction they successfully complete. A broker can never guarantee the outcome when they attempt a short sale but if they have a strong track record- your odds are better, so ask how many short sales they have attempted and how many they have successfully completed. If you are a seller this is especially important as you are relying on them for a great deal. As a seller you need a broker that is prepared to go the extra mile for you- to fight for you and creatively problem solve the obstacles that are guaranteed to pop up. Best of Luck to all in your real estate endeavours.

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Aah eet's dat time again...de time when all of my human friends and colleagues are compelled to clean like crazy people. They clean their homes, they clean their cars, they organize their desks, they run around saying they are cleaning up their lives and their acts and so on, like a pack of crazy yapping female chihuahuas. All of dis' hoopla for what? If it is so important why they not do it all the time? Why just at the beginning of a new year- and den dey are back to their old slovenly habits.

I say it is good to be a dog right now- We are not bothered with such silly ideas. We know what is important- a spot in front of the fireplace to stretch out and soak up some heat after a long romp in the snow. We know it is better to chase squirrels and unsuspecting cats rather than chasing our own tales and we know that there is a limit to what we can clean up. We are okay with that. We know that we can depend on our pack to get us through whatever comes our way, whether our pack is composed just of other dogs or our human companions, even if there are dreaded cats in our pack- they will all be there for us. Humans would do well to follow our example: appreciate what you've got- never forget to say thank-you even if you have to do that by wagging your tail and licking someone's hand (or their face) and always ask if you need help. It's good to ask politely first- a quiet whine or a nudge, but if you don't get what you want it is also good to bark loudly.

In my real estate practice I see so many people struggling with their mortgage payments and their homes and they do so without asking for help. They don't whimper, they don't nudge anyone- sometimes they don't even confide in their own packs. I think this is a basic failing... People don't realize that if they are having a hard time making their mortgage payments there are places they can go to ask for help. THERE ARE FREE- COMPLETELY FREE- RESOURCES TO HELP PEOPLE OBTAIN A LOAN MODIFICATION. A loan modification can take many forms...it can defer morgtage payments for a number of months to allow a person to get back on their feet. It can reduce the interest rate- thus reducing the payment- it can even reduce the principal amount of the loan or any combination of these options. And if a person truly can't keep their home or doesn't want to keep their home any longer they should pursue a short sale.

Short sales are less damaging to credit. They allow a person to live in their home without making anymore payments until it sells and in most cases the bank will reward the homeowner with $1000-1500 for pursuing a short sale instead of sending the house to foreclosure. I think this makes infinite sense- stay in your home- save some money for the move and maybe even get a reward from the bank to help with the move. The property owner will have at least 90 day after the NED (Notice of Election and Demand for sale) is filed and served and most short sales are taking more like 120 days or more. That's 4 months to save for your move.

Max says, "the smartest thing a property owner who is behind on their mortgage can do is contact a my friends and Colleagues Carole & Greg Higgins." They are experienced real estate professionals (Realtors) who can quickly help you evaluate your situation, and your options. If you want to seek a loan modification they will refer you to one of the many non-profit organizations who specialize in helping homeowners modify their loans at no charge to the property owner and if you watn to pursue a short sale they will do that for you again at no cost to you.

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