Every day the Banks are making minor and/or major changes on how they do short sales. What was once an easy short sale system now varies depending upon each Lender. Many lenders will want the Sellers to use their own in-house short sale package, even though my detailed generic package pushes the deals forward. Sellers really don’t have a true concept of how much debt that they have when it comes to reporting all of their debts. Many of them will not even include a debt on their financial statement to the lender, just because they are choosing not to pay it. In my short sale system, I have created a detailed short sale package with forms that are used to help my Sellers make sure that everything is included and maximize their chances of short sale approval.
In January of 2014, Florida allowed a law to be passed that the Short Sale Lender may receive a Deficiency Judgment at the time of the Foreclosure while the Lender still has the asset (property) in their portfolio and didn’t even sell it yet. Before this law was passed, the Short Sale Lenders could foreclose on the property and then they have a choice whether or not to either forgive the debt or pursue the Sellers. If they forgive the debt, they still issue a 1099 (Forgiveness of Debt Form) which means the Sellers would have to pay taxes on the amount that the bank has forgiven. Or the Lender could go after the Sellers again by filing a new lawsuit for a Deficiency Judgment on the balance that is owed AFTER the Lender sells the property and releases it from their portfolio. Many Short Sale Lenders are amending their complaints to request this immediate deficiency judgment. Sellers are blind to the new changes and they are burying their heads in the sand, thinking they are living in the house for free and then letting the property go to foreclosure with no repercussions.
As Investors and Realtors, we need to inform the Sellers of all of these changes. I can’t even believe that Florida would allow such a law to pass, as the Short Sale Lenders have no accurate clue how much they have as a deficiency because they have to hold the property which costs them interest, maintenance, taxes, insurance, management, and realtor fees. This amount could even be more if the Short Sale Lenders decide that they want to fix up the property and then sell it. So … what amount have they added to the deficiency judgment amount against our Sellers for all of these fees???? I am assuming they are using the SWAG theory….a Scientific Wild Axx Guess!!! This is an amount “guess-timated” by the Lenders, and the Sellers are not arguing that amount. Therefore, the Short Sale Lenders are getting paid more and more money. This amount, even with a deficiency judgment issued, can be written off by the Lender at any time by passing the buck to the Sellers with the 1099 Forgiveness of Debt.
For the short sale deals that I am working, I am finding that the Short Sale Lenders who have Fannie Mae as their investor underneath are inflating the value of the home by an additional 20% of what it is actually worth. What does this mean for the negotiator? It means you have to make changes on how you are arguing over value. I have gone at this in two different ways, buying notes and also providing appraisals. I am getting deals approved and closed that nobody else is able to do.
If you are dealing with Nationstar, you will be working with Homesearch.com which is their new auction site. This is a pain in the butt!!! No matter what the offer, Nationstar is never, and I mean never, happy with the offer; it is never high enough for them. Therefore, this means that on these deals you need to be ready to fight. Nationstar makes promises to Listing Agents that if the buyer doesn’t have a Realtor then the Realtor can double dip and get the commission on both sides. I have written lots of articles about Nationstar who is just a servicer for other lenders. I have also called and complained to the National Association of Realtors about all of the false advertising where Nationstar is stating “Short Sale Approved,” on their auction site. Well, if it was truly approved, then what about giving me the approval letter for the existing buyer that I presently have on the property?
I love short sales and to fight, as I do it, on behalf of my Sellers. There is no voice for the Sellers; however, when they do a short sale with me, they get control of the outcome instead of the Short Sale Lender.
Stay tuned for new tips on how to work around Short Sales by purchasing Notes and providing Appraisals for values. I will keep you all informed monthly. However, if you are working on a short sale NOW, you need to be able to maneuver through all of these changes so you can close your deals.
I am speaking at IRC on October 16, 2014 and holding a One Day Training on November 8, 2014 to teach you how to get through your deals, still help the Sellers and also make money. Make sure that you attend, as the tips and the secrets that I will be providing you will not only help you on short sales but on any type of transaction that you are attempting to do, wholesale, lease, lease option, option, subject to and more. Get ready to move forward in your real estate business and I will see you then!!!
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Kimberlee Frank Broker Short Sale Expert
Kimberlee Frank is known as “The Real Estate Junkie,” for her unique ability to find ways to creatively help buyers and sellers no matter which direction the real estate market is heading. Kimberlee had already worked as a legal administrator for an Attorney, Builder and Broker for 18 years when she began her Real Estate career in 1998. She dotted the i’s and crossed the t’s on hundreds of real estate transactions and thousands of documents, making her an expert in real estate documentation. Kimberlee’s success began in Fenton, Michigan. She specialized in selling, purchasing, renovating, retailing and lease optioning single-family homes. She has helped many sellers get rid of their “headaches” and helped many buyers find their dream homes!
Since 2003, she has specialized in foreclosures and short sales. After realizing how many families were being forced out of their homes due to financial difficulties, Kimberlee had a heartfelt obligation to use her experience to help those families. She has mitigated and closed over 500 short sales with the mortgage companies, saving Sellers from going into foreclosure. In 2006, Kimberlee and her family moved to Florida. She lives in Oviedo and her Sell Fast Realty Office is in Winter Springs, serving residential and commercial sellers and buyers in multiple counties in Central and Southern Florida.
Kimberlee is also a Trainer and Mentor and has created several different “How To” systems on real estate. Her unique strategies continue to educate real estate professionals across the country. If you have a proven system to help others out of hardship, why wouldn’t you duplicate it and share it with as many people as you can? Kimberlee continues to work with this philosophy!
Kimberlee Frank has been featured on ABC, NBC, FOX, CBS as well as Wall Street Journal, Newsweek, USA Today and numerous other publications. She is the bestselling author of “Big Ideas for Your Business” (Advantage Media 2009). She was also selected as the #1 Short Sale Expert by America’s Premiers Experts.
Please contact Kimberlee at her office at 407-888-3433 to schedule a Free Facts About Foreclosure Seminar. She has numerous testimonials from sellers, buyers and other real estate professionals who are familiar with her giving heart. Whether it is 1 person in need or 1,000…..Kimberlee will educate them on real estate and give them a solution with a peace of mind!
Are you unsure what to do with your house? Do you need to educate yourself about your options. Click the following link Free Facts About Foreclosure for more information.
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