Sell Fast Realty

Nationstar and Auction.com Take Advantage of Short Sale Sellers!

Friday, October 18th, 2013 at 12:07 pm

Recently we were working a short sale through Nationstar who requested that the Seller sign a document allowing Nationstar’s affiliate, Auction.com, to sell our short sale. Yes, you heard me correctly! We already had a buyer, submitted all the financials to Lender, and had the BPO (Broker Price Opinion) however, they hadn’t countered the buyer yet. The form that my agent and her Seller signed stated that Auction.com was allowed to hold an auction on the property and should my agent be a dual agent on both sides, that she would not get paid more than 3% commission. First off, I want all Brokers to be aware that agents do not have the right to sign away commission unless the Brokers previously allowed this right, nor do they have the right to sign away the Broker’s Exclusive Listing Agreement terms and conditions.

I was furious as Auction.com was advertising this house illegally and unethically to the public. They were advertising as Bank Short Sale Approved! Well, if it was approved, I would have already had the approval letter for my existing buyer that had been waiting during this short sale process. In addition, how can a Seller back out of my Buyer’s contract and enter into a contract with the winning bidder’s contract without having some legal ramifications? The winning bidder was to pay 5% to Auction.com for acting as auctioneer, place a deposit immediately with Auction.com plus all the forms that they had to sign which gave away all their rights for inspection with clauses saying that they would have to pay money to Auction.com for cancelling the contract. The highest bid was $80,000 plus $4,000 over and above to the auctioneer for conducting this auction. They forced the Listing Agent to hold their own open house but then reduced our commission as Listing Agent.

I went through the contract with a fine tooth comb only to find a lot of responsibility given to the Seller such as maintenance of the property, requirement to keep up the expenses associated with the property such as (homeowners association dues, taxes, insurance etc.) without any clear statement that Nationstar would not pursue the Seller for a deficiency judgment should this short sale be approved. The forms such as the Purchase Agreement and other forms stated that the Buyer could back out if they did not receive the following, which were not even provided to the Buyer.

1. Homeowners Association By-laws

2. Sellers Disclosures

Since this was an Auction that was held on Auction.com, you would think that they would have requested this documentation from us before they advertised the property. This was not so. In addition, the pictures they used were not the ones taken by the Listing Agent that were on the MLS. They informed me that the pictures they used were from the Broker Price Opinion that they obtained from Nationstar. Since I was the Broker and the agent had no right to sign any agreement with Auction.com, I did send them a cease and desist letter which they totally ignored and continued with their Auction.

The National Association of Realtors needs to raise their voice on this change. If they don’t, Auction.com will continue to obtain partnerships with other Lenders and start this auction process. They will be lowering the commission of the Realtors and the Sellers will not be protected by the forms that they are using.

The forms that are to be signed between the Seller and the Buyer would be perfect IF the property was already Bank Owned (REO), as the Bank is responsible for maintenance and expenses of the property. Many Sellers are in foreclosure because they don’t have the money to pay their debts. In addition, the forms stated that the Sellers would have to pay one-half of the cost incurred should they decide to back out of the contract.

This is just another way where the Banks are taking advantage of the Sellers. That is why I put the following verbiage in my contract for the protection of the Sellers “This offer is subject to the underlying mortgage companies taking a discount acceptable to the Sellers and the Buyers.” This means if I don’t get the deficiency judgment waived and if there is a cash contribution needed to close by the Sellers or a promissory note signed by the Sellers, they don’t have to agree to the contract.

Nationstar Short Sales

I have several Nationstar short sales that I am working on and my gut is that they are going to advise the Sellers if they do not agree to try Auction.com that they will deny their short sale. I am looking forward to the fight on behalf of the Sellers, as Nationstar is taking away the rights of the Sellers. In other words, do it my way or hit the highway!

Stay tuned to the new changes that are going on in Short Sale Land. I highly recommend that if you are doing short sales and are either an Investor/Buyer, Realtor or Seller, please pay close attention to the Lenders that are holding/servicing your Sellers’ loans. If you are not a Realtor and are able to get paid on the deal, you may not even want to deal with a Seller who has Nationstar as their lender or servicer.

Happy Negotiating!

Kimberlee Frank

www.SellFastRealty.com

www.ForeclosuresGonewild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

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Real Estate Investor Deal Profits $68,000 because of her MENTOR!

Wednesday, August 7th, 2013 at 8:20 pm

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Don’t question having a Mentor…..JUST HAVE ONE!

I remember when I decided to quit my job as a legal secretary and become a millionaire in real estate! I started with Carleton Sheets’ course. Once it arrived, I was to read it and take action. Yeah, right! I found that between my J.O.B. (Just Over Broke) and taking care of my children, I was busy and distracted, so the course sat on my shelf collecting dust. About 6 months later, I got a call from Carleton Sheets’ organization asking if I wanted to be in their Mentor Program. How much? They said $2,000.00. At that time, I had to make a crucial decision that would change my life.

Did I just want to “dream” about leaving my 9 to 5 job or did I really want to take action and make it happen? I thought about it for a couple of days and I said “YES!!” The training was just the start. I was able to purchase 6 homes following the course. Working in my home environment with so many interruptions was the hardest thing I have ever done in my life! I can tell you one thing, if it wasn’t for the Mentor pushing me….I would have given up and quit!

Just like many of you reading this article, I attended multiple boot camps and ordered over $250,000 worth of courses. The only difference between where I am in real estate and where you are, is that I took action and hired a Mentor to continue to push me forward and hold me accountable. And a Mentor gives you the answers to EVERY question you have! I am only quoting one of my students, “Having Kimberlee is like having personal access to your own magical Real Estate Encyclopedia! She has answers and solutions for everything!” That’s gotta give you some relief right there about what a Mentor can do for you! Everyone learns differently. Some people are visual learners and have to come to a class room and be taught, other people have to physically do a transaction to understand the process, and then some can pick up a book and do exactly as it says in the course and become successful.

The reason I am writing to you is to encourage each and every one of you to take a stand and change your life and take action….NOW! You know what you have to do to move forward in your career as a real estate investor, whether it is to come to a classroom and learn, physically do a transaction or just pick up the course that you have on your floor, dust it off, and do it!!!

When choosing a Mentor, you do need to look at what they have accomplished. If they have “been there and done that” and have the t-shirt to prove it, then hire them. Once you hire them, it is your job to follow thru and participate! Each of my mentor students progress at their own pace. What I mean is when life gets in their way with all the interruptions, I make sure they don’t stray too far. If they follow instructions and keep marketing, which is the number one reason why real estate investors fail is that they stop marketing , then they make money. The student’s effort and intention controls the payoff in the end. But Kimberlee, you say, “I don’t know how to do this or that, or I always get stuck at how to prepare correct paperwork to protect me, or I don’t know how to negotiate or talk to buyers or get liens released, etc.” Your only job is to focus on the “what” and let your Mentor focus on the “how.” You just tell me what your desired end result is….what do you want in the pipeline by Dec 2013? And then let me guide you step-by-step on how to get there.

I want to tell you about two successful students of mine–a daughter/father team. They have been my Mentor Program students for almost 1 year. During that time, they closed on a couple of deals that I wasn’t involved in as a partner, which means that I didn’t share in the profits of the sale. To clarify, I still discussed these deals with them every week and mentored them on exactly how to proceed over each hump, but they made all the profits. They could not have closed these deals without the mentoring, though; there were several roadblocks I tore down for them that they simply did not have the experience to overcome.

Another deal in which we are partnering is a house in Ft. Lauderdale that is closing on August 15^th. It was a short sale where the student made an offer thru the MLS. The real estate agent was the negotiator and Ocwen kept increasing the price. I wanted to buy the property at $180,000. However, the student offered $190,000 based on the real estate agent’s unwillingness to submit any offer for less. The bank countered back at $201,000 and I wasn’t happy with that amount. I immediately took over the negotiating on the file with the consent of the real estate agent. I got an authorization from the Seller and I argued value on the property. We purchased the property on June 16^th. In order to increase our profit for a big cash return, we chose to do a rehab. The house wasn’t in that bad of condition at all except for a 2^nd story balcony issue on the front of the home. We purchased the property for $190,000 (yes, you read that right, we did not counter higher) and with all the rehab costs, we have $220,000 invested in the property. We installed new cabinets and granite countertops throughout, lighting fixtures, new hot water heater and several other things. I personally met this student at the house and taught her one-on-one and hands-on how to rehab a house. This is priceless time to have with a Mentor.

We formed the plan of what we were going to do to the house and I used my crew and some sub contractors. The house value was increased by $50,000 for only $25,000 in repairs. Normally, I do not list the property for sale thru the MLS, however, we did at a 2% commission for the selling agent and received 5 contracts immediately. The highest offer was $310,500 and that was accepted. When all the smoke clears, the total profit will be approximately $68,000 with a profit to the students of $34,000. Without a Mentor teaching her short sales and rehabs, she would not have been able to do the deal. So, what would you like to do? Make Ten$ of Thou$and$ or make zero? All I’m saying is that a Mentor is a very small investment compared to the very LARGE profit advantages! Just ask my students! My students are like family to me and I work with them one-on-one through each and every deal to ensure their success!

TAKE ACTION NOW! Stop making excuses, as they steal your dreams! Our market throughout is very hot right now! Find a Mentor today so you will become successful!!

I look forward to providing you with future tips, so stay tuned or join me at my next boot camp.

Happy Negotiating + Happy Rehabbing + Happy Mentor = Happy Profits!

Kimberlee Frank

www.SellFastRealty.com

www.ForeclosuresGonewild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

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Playing Hide and Seek with Lenders

Friday, June 7th, 2013 at 10:12 am

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Working an effective short sale can seem impossible if your Seller is not providing you with accurate information. The very first thing I require from all Sellers is a ‘complete’ Seller Information Sheet. My Seller Information Sheet is customized to specifically catch every pertinent fact about the Seller and the house.

Below are several things that I need in order to review the deal and determine my exit strategy as an Investor and/or Realtor.

1. Seller(s) name, phone number, email address.

2. Property Address.

3. Their estimated value and how they came up with that figure.

4. Their asking price and how they can up with that figure.

5. Is the property listed or has it ever been listed?

6. Is the home vacant or occupied by the Seller or a Tenant?

7. If Tenant occupied, I request the terms of the lease, rent amount and security deposit.

8. Information about the house – beds, baths, square feet, lot size/location, garage, construction – brick/stucco, pool – operative or not, date purchased and amount owed.

9. Lenders/liens on the property, amount owed, adjustable or fixed, interest rate, monthly payment and does it include taxes and insurance.

10. Is there a Homeowners Association and if so how much? Yearly, Quarterly, Monthly. Are they current or behind and how much in arrears.

11. Name of the Homeowners Association.

12. If they pay their own taxes, how much is it and are they current or behind?

13. What type of mortgage do they have on their home? FHA, VA, Conventional 80/20 loan?

14. Will they sell the house for what they owe? If yes and it is upside down, then it has to be a short sale. If no, then after all the debt is paid off including closing costs, how much do they want in their pocket? Once they give me that amount, I ask them if that is the best they can do? Believe it or not, they drop it even more.

15. What are they going to do if they can’t sell the house?

16. Do they own any other houses?

17. I will also need to know what the values are on the home. I use my MLS, ReiFax, Zillow and Trulia for sold comps. When looking at the values, you should only go back 90 days.

Only after I have all this information am I properly equipped to structure a successful and profitable deal. You skip these questions and you are asking for trouble down the road that will kill your deal, maybe even at the closing table. If your Seller is not willing to provide you with the above information, then they are not as motivated as you thought. Most of my Sellers initially tell me that they are working on a loan modification or they have hired an attorney to represent them in the foreclosure action. Understanding what the Sellers want will assist you in making your deal happen. When they are attempting a loan modification, I ask they what they want from the bank. Is it a reduction of the principal or a change in their monthly payment? I will walk them thru why a loan modification may or may not work for them. If they have an attorney involved, I ask “What is the attorney doing for you? Are they doing a forensic exam to dispute the paperwork or are they stalling to either get a loan modification or get you more time in the home?” Understanding their expectations of the attorney will help you construct your deal.

Many loans have been sold off multiple times which may require you to do some investigation as to who is holding the loan that we are attempting to short sale. I am currently working a deal wherein the Sellers had two loans on the property. Both were with Countrywide and then bought by Bank of America. The short sale lenders that we deal with are typically the servicers on the loan, so many times we are not dealing directly with the investors of the money. Many people don’t understand this practice. The money was loaned by a group of investors, which could be REITs or Trusts. Then they give the money to the banks, who are servicers for their money, who in turn loan the money to the Sellers. The first loan on this deal went back to Bank of America who has no knowledge that there is a second on the property as the servicers don’t pull title work. And if you are not pulling title work well in advance of closing your deals, then you can expect some harsh last minute surprises. Please be proactive on this, I want to see you closing deals, not losing deals! The second loan was given to Litton Loans but is no longer active and was given to a collection agency. That is where the trail goes cold. I have sent an authorization to the collection agency and they are going to research who has the loan.

Do you remember when 60 minutes had busted the banks for Robo signing of documents? If not, you need to google www.60minutesovertime.com and look up Robo signing. Mortgage Electronic Registration Systems, Inc. (MERS) is an American privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. When a lender assigns their rights to MERS, no information is given to the public as to who now owns the loan. However, you are able to find out who is the servicer just by going to www.mersinc.org and click on “information for homeowner” and then “my mortgage info.” Then click the “online” link and you have several options to locate which lender is servicing the loan. I would recommend that you put in the MIN number which you can find on the front page of the mortgage or use the sellers name, social security number and zip code of property. With the help of MERS I was able to find that the second mortgage is with Ocwen.

In a worst case scenario, if it’s not a MERS loan and the seller has been out of the property for over a year, you can have them submit a new change of address with the post office which only lasts for 1 year. That way, all communication from the unknown party(ies) will come to them again.

Again, you must always, always have title work pulled first thing on your short sale deals. This tells you upfront if you are going to have any challenges with additional liens. The title company will conduct a search going back 40 years to expose any liens or encumbrances. They also conduct a name search. The name search will pull up any outstanding credit card judgments, civil judgments (child support liens) or any other liens. On my particular deal, there was a child support lien. Although the names were similar, in this case, the lien did not belong to my Seller. If it did, I would have had to also short sale that lien.

The best advice that I can give you on any deal is to have your team player ready that will work with you and do whatever is necessary to close this deal. In this case, it is my Title Company. I would also recommend having a relationship with more than one Title Company, as their rules and regulations change.

I look forward to providing you with future tips so stay tuned or join me at my next boot camp.

Happy Negotiating!

Kimberlee Frank

www.SellFastRealty.com

www.ForeclosuresGonewild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

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