Tag: Florida short sale process
Posted by http://www.floridashortsales.info - April 25, 2012 - News
What is the process for completing a short sale?
Florida Short Sale Process | Short Sales
The process of completing a short sale can seem difficult, but if you understand the process you will find out that it isn’t. But it is a long process .The first step to the process is sending the lender proof of hardship to show why you fell behind on your payments. Next a negotiator will be assigned, which can take 30-60 days. The negotiator will request paperwork to update them on your current situation. The paperwork will include, a hardship letter, a financial statement, tax returns, bank statements, paycheck stubs and other things depending on which lender you are working with. The Lender will then order a BPO (broker price opinion). A BPO determines the market value of the property. A second negotiator may be assigned which can take another 30 days. The file will then be sent to PSA (Pooling Servicer Agreement) for approval, which can take 14-30 days.
Posted by http://www.floridashortsales.info - January 4, 2012 - News
What is the Florida short sale process?
A
short sale can be an alternative to foreclosure, as the sale is an agreement between the owner of the property and any holders of liens on the property to release the liens for the amount the property is sold for, even if it is less than what is owed on any liens on the property. Lets face it, regardless of what you may have heard the lender does not want your property. Lenders are in the business of lending money, not operating a real estate company. So the lender has few choices when deliberating a
short sale.
- Foreclosure the property
- Offer a Deed in Lieu of Foreclosure
- Provide for a Short Sale
It goes without saying the lender would much prefer to have you stay in the home and continue paying as agreed. Many times in today’s environment this may not occur due to a
loss of income, forced relocation without the ability to sell the property, borrowers strategic default and some other variables. So think of yourself as the lender, you have squeezed the borrower as much as possible and can not get them to continue paying. Rather than foreclosing on the property you would consider a
Short Sale. A short sale is normally just more cost effective for the lender, trust me they don’t do them to please the government or its clients.
Spreadsheet Litmus Test
The lender will evaluate its options and pick the option that will yield the most return. If they foreclose the property may get tied up in litigation for twelve to eighteen months. After they foreclose they need to manage the property, market the property and ultimately pay a commission upon its sale. The foreclosure process always costs more than performing a short sale.
Avoiding foreclosure in Florida and attempting a short sale:
First, a
Short Sale Broker must make a detailed list of the liens on their property. The lien holder’s name should be listed, along with the amount owed and any information about dates that the lien was placed.
- Determining Lien holders
- Past Due HOA or Condo fees
- Past due property tax liabilities
- Code enforcement issues
- Possible rehabilitation of the property
A professional Short Sale Broker will identify all of the above elements and work with the Bank to process the short sale. The trick is performing the short sale and assuring the short seller (borrower) will not be forced to come to the closing with any cash. If the Short Sale is completed correctly and the proper documents have been presented to the lender correctly the short sale seller should not have to produce any funds at the time of closing.
Employing a Short Sale Specialist
Not just any company can handle a short sale. A property owner must employ a specialist in short sales, and should have the lien information readily available. The first step to finding a short sale specialist is making sure you work with a proven company that can prove they have been successful helping many folks. You may ask to see the payoff letters they have received from prior transactions as such proof. If they tell you they may not release any such proof and mention privacy issues just ask them to block out any personal information on the payoff letter. It should be that simple. I encourage you to take this step as to not get involved with unsophisticated agents or brokers as time is normally not on your side. Once most folks have decided to pull the trigger on a short sale they wish to be done with it. A unsophisticated Broker or Agent can take a three month process and turn it into a year assuming the bank does not foreclose in the interim.
Proof of Inability to Pay
During a short sale, the property owner must prove that they are not able to pay their mortgage payments before the sale can be approved. Once it is approved, an amount will be determined based on the value of the property and the amount owed. I always say its about the story. And be smart as I assure you the negotiator at the bank will be. Each and every short sale is preceded with a number of steps the lender will take to assure you can not pay. One such step is pulling your credit report. If the lender sees you are maintaining all of your other debts and have not fallen behind on credit cards and the like this will raise a red flag. As with any process there is a correct method and strategy that must be undertaken to get the deal done.
No Missed Payments
Until a short sale is complete, we recommend staying current on HOA or Condo fees. I also recommend maintaining your property and liability insurance until which time the short sale has been completed. A short sale can be an effective alternative to foreclosure, but property owners must remember to follow the
Florida short sale process to complete a successful short sale.
Please call with any questions
888-496-0167
Posted by http://www.floridashortsales.info - December 20, 2011 - News
They can make you crazy
Strategic Defaults
The question I get often is what do we do now. Many times my answer is very straight forward and applies to most folks that find their
properties upside down. If you owe $250,000 on a mortgage and the property is only valued at $125,000 I think you better think long and hard of a proper strategy. Lets face it, the odds of that property growing in value to $250,000 (Parr value) may take ten or fifteen years and maybe longer. The simple answer is no one really knows what will happen. But I know this much, you do not own anything. What I mean to say is you have a major liability rather than an asset. Not a good way to look to the future for retirement. The way I interrupt this scenario is you are renting the home from the lender. And if each and every dollar you pay towards the mortgage is not adding to principal then what is the sense.
I would never tell someone to
default on their mortgage but I would tell each and every client to think about capital preservation and long term financial planning. In that vain we need to think about what is best for you and your family. And to think the lender cares about your situation you would be sadly mistaken. The lender cares about one thing, squeezing as much cash from you as possible. There comes a point where you need to sit back take a deep breath and understand the consequences of what you do today and how that will effect your financial well being in the years to come.
I too have been in a similar situation as I owned a good size building company from 2001 through 2008. I found myself upside down to the tune of two million dollars. I took quick and swift action to clear the deck and get ready to fight for another day. I realized that the loses had already impacted my financial health and knew I needed to get the monkey off my back to allow for improving my personal financial health.
At the end of the day I sat back and evaluated how such actions would effect myself and my family and decided the proper course of action was to rid myself of what had become worthless inventory. This allowed me to get back to building the kind of financial well being required for my family.
Working With Your Lender
Can you fax that document one more time
Working with your Lender is not an experience many of us wish to ever do again. Many have learned just how poor some of these major institutions are run and have such a bad taste in their mouth they rather never call the lender again. I don’t blame you, after working with the lenders day in and day out for almost four years I have come to have a real appreciation for my staff members that endeavor that task each and every day. Hearing a lender say, can you fax that back over is enough to make a sane person crazy. Where did the last 95 page fax go to? If I told you how many times we have heard this it would be enough to make your head spin. I learned early on the lender is not your friend. With the advent of a new system called
Equator things have improved, the problem is very few of the lenders have adopted the system. At one point when I managed the Law Firm I hired a
loss mitigation specialist that had worked with Ocwen Bank and a Regional director with Freddy Mac. The stories they told me were almost unbelievable.
But having worked in the trenches since 2007 it all started making sense. What most people do not realize is these institutions typically dealt with very few
short sales and
foreclosures. The loss mitigation department for a large institution was made up of only ten or less employees. These days that number could easily be in excess of 500 for a large lender. Normally these institutions would handle questions by clients, receive payments and send out statements. Really simple when you think about it. So what did the geniuses do in 2008? Fire almost 250,000 folks working in the banking business.
Then it started, up to 25% of all homes found themselves to be under water (40% in Florida), where the value of the home was much less then the current mortgage balance. To add additional fuel to the fire the unemployment rate in the united States soared to over 9% nationally. Talk about a squeeze play. The
mortgage defaults started piling up at such a high rate the lenders could not handle the onslaught of
Loan Modification request,
Short Sale requests and requests to perform a
deed in lieu of Foreclosure. A mess to be sure.
As we fast forward to the start of 2012 the landscape looks as bad today as it did three years ago, and many think much worse. The level of shadow inventory in the United States is so immense it’s enough to make your head spin. Some say it may be 2017 by the time we dig ourselves out of this mess. A shadow inventory represents those properties that are literally in limbo, houses that could be foreclosures on but are not, or home that have been foreclosed and have yet to be put on the market to be sold.
