San Jose Short Sale Agent: Silicon Valley Foreclosure Prevention Specialists

The San Jose Short Sale Agent  shouted with glee today to celebrate the victorious outcome of a family which was able to successfully fight its battle against foreclosure today, as I was feeling proud and victorious.  The family which had endured the humiliation of being turned down for a loan modification by their bank, feeling they were without recourse, had come to me only two months ago to try a short sale as their last hope.   They felt they were at their wit’s end.   They came beaten and  humiliated.  It was bad enough they had to live through the indignity of unemployment which triggered their horror story, but their bank had refused to modify their loan or otherwise assist them.

But today they were victorious because the same bank which refused their loan modification request, had approved their Home Affordable Foreclosure Alternatives Program (HAFA) short sale and were willing to pay them $3,000 to help with their relocation costs and also had going to pay nearly $4,000 to pay off their HOA delinquencies and additional funds to pay off their delinquent property taxes.   Unlike two months ago, now the family felt they were getting vindicated.

That joyous feeling lasted a few hours as I read this  article today describing a different outcome for a person with a similar hardship which is headed towards a different outcome.   I obviously do not know the full details of Darlene’s situation besides what was described in the article below.   However, what I do know is that she was unemployed, suffers from cancer and fell behind in her payments which led to her foreclosure.

Typically three things have to be present to qualify for a short sale approval:  1) hardship (typically economic hardships) ,  2) monthly income short fall (meaning more goes out than coming in)  and 3) insolvency (meaning no assets).   In Darlene’s case, she certainly would have met the hardship (cancer plus unemployment);  the article mentions she is living on pension, social security and unemployment so I would assume she had a monthly short fall and probably did not have much assets set aside.   She certainly sounds like she would have been a good candidate for a short sale.

Additionally, if  this were her only home (primary residence), and as she was obviously delinquent on her mortgage payments and her unemployment and other income sources would probably have resulted in her paying more than 31% of her monthly income, there is a good chance she would have qualified for a HAFA short sale as well as Wells Fargo participates in that program.   If she qualified for a HAFA short sale, then she would have received $3,000 relocation assistance and up to $6,000 to pay off her second loan, if she had one.   Rather than being evicted with nothing to  her name or perhaps a small stipend – otherwise known as cash for keys – to get her out, Darlene could have saved herself the humiliation of being evicted from her home of 41 years and walked away knowing that she would have settled her debts with Wells Fargo and other lien holders.   She could have walked away selling her home with the bank’s blessing plus money in her pocket, rather than having the bank evict her and her neighbors of 41 years watching this happen.

The unfortunate aspect of this tragic story is that Darlene probably did not know that the HAFA option was available to her.   People in Darlene’s demographics do not often have the benefit of being able to research alternative options to foreclosures on the internet and take advantage of those solutions and the accompanying benefits like my clients did when they reached out to me two months ago.  Both of these people had similar hardships – unemployment (but Darlene’s case was worse because she also has cancer which was probably rapidly draining her bank account) – yet the outcomes will be dramatically different and each of these families will be celebrating the Holiday Season this year  in different states of minds.   It did not have to end this way for Darlene except that she was unaware and regretfully no one around her had given her the requisite  information.

If you are reading this blog entry, please share what you have read, so that people like Darlene do not have to suffer through foreclosures due to lack of knowledge regarding alternative options.   Please tell your grandparents, parents, neighbors or others who may be unable to surf the net for answers that there are alternative options to foreclosures; they don’t have to endure the humiliation of an eviction.  Please share with them that there is a Federal Government designed program to help out people facing foreclosures by offering them different alternatives.

 
San Jose Foreclosure Case is Both Tragic and Complicated

I am mad as hell as I write this entry.  Once again, dual track foreclosure has proven to be alive and well and being practiced by one of the large banks in Silicon Valley.

What is dual track foreclosure?  Simply put, it is when the lender agrees to work with homeowners on a loan modification request, but also continues its foreclosure effort  simultaneously.  If the homeowners are being given the chance to work on a loan modification, why not stop the foreclosure effort until the resolution of the modification request?   The problem is that by permitting the homeowners to work on a loan modification, it gives them the false impression that the foreclosure action has halted during the loan modification process.   Those homeowners whose loan modifications are rejected are discovering that their homes are being foreclosed soon thereafter, often not giving them enough time to prepare to deal with the loan modification, let alone the foreclosure.     In even worse scenarios, the homeowners are being foreclosed on while they are anxiously awaiting answers to the loan modifications.  Homeowners are given false hopes of saving their homes through a loan modification, but while they are working through the process, their homes get unceremoniously snatched away without warning.    

Legislative efforts were made earlier in the year in California to try to stop this deceptive practice by the lenders, but it never passed.   The lobbying efforts of the lending institution were sufficient to get the bill killed in the California Senate.  The despicable practice is still not illegal and being widely practiced.

Being the San Jose Short Sale Agent, I received a call from a prospect today who was referred to me by a recent client for whom I completed a successful short sale.  He wanted me to help him because he spoke with someone at Wells Fargo who kindly informed him that they denied his loan modification and by the way, they are going to foreclose and sell his home (court house auction) next week.   Here is an example of a dual track foreclosure at work.

This homeowner had trouble making his mortgage payments because his wife had lost her job.  They went from a two income family for which they qualified their loan to a single income family.  They had been working with Wells Fargo since April of this year to get qualified for a loan modification.   After months of providing documentation, they were told a few days ago that their loan modification was being rejected.  And also, by the way, the foreclosure auction (Notice of Trustee Sale) had been scheduled for next week.  When the homeowner asked if he could get a 30 days extension to hire a Realtor to do a short sale, they rejected that request as well.

I would love to help this homeowner, but the problem is, with less than a week to go before the auction date, I cannot stop this trustee sale from taking place.  Even if I had a viable offer in hand, most lenders and Wells Fargo, specifically, will not stop the sale if the sale is scheduled to take place in less than 7 days.    Had the homeowner called me a week or two ago, I could have worked some magic, but now with less than a week to go before the sale date, he is out of options.   Had he not relied solely on the bank to and taken other steps, we could have prepared him for a HAFA short sale and probably gotten him $6,000 to pay off the second lien and another $3,000 in relocation expenses.  Instead, he will get nothing for months and months of waiting.

Some of you skeptical readers out there may be wondering if I may be exaggerating how often dual track foreclosures may be occurring in the real world?  More often than  you would like to believe and sometimes with confusing results.

Family Fights to Keep Home After Accidental Sale – Local News – Sacra Men To, CA – Msnbc
For homeowners out there who are  working on loan modifications, do not put all of your hopes into that one basket.  The chances of homeowners getting successful permanent loan modifications are small to begin with, most receive a temporary modification or are summarily rejected like the person who called me today.   So protect yourself and  consider multiple options, do not make the mistake of believing that the lender will have your best interest at heart.

This is the dilemma that over 6.3 million homeowners must face today: they can’t afford to keep their home, but they cannot afford to sell it either. Truly a situation where these homeowners are stuck between a rock and a hard-place.

These are both financially and emotionally difficult times for these homeowners and also ideal climate for swindlers to come swooping in. However, there is a solution available for these homeowners without falling victim to fraud. I invite you to do your due diligence and find an agent who can help you out of this dilemma who has the experience, the skill set and references to protect your financial future.

Change the Course Report

There is enough information floating out there for everyone to know that foreclosure can be devastating with many negative repercussions in our lives.  Most who are in this situation will have to endure numerous adversities:

1. Having your foreclosure show up on public records for 10 years
2. Having to declare your foreclosures on all future loan applications
3. Deficiency claim exposure to the lenders for their loss
4. Dramatic decrease in your credit score
5. Being unable to qualify for a new home purchase for a minimum of 5 years

Besides these misfortunes, there is now another very troubling consequence which is especially onerous in these difficult times when people are looking for jobs.  In California where the unemployment rate is still above 11%, people seeking jobs need any advantage they can muster up to gain an edge over other job seekers.  If they had to endure foreclosures, it seems now the cards are further stacked against them.  It’s bad enough that a person would have lost their home to foreclosure, now that unfortunate circumstance may prevent them from getting a job.  Here is another reason to choose Short Sales over Foreclosure for homeowner who are having trouble paying their mortgages.

We’ve been told by our researchers at CDPE for a couple of years now that employers were using foreclosure records to eliminate candidates, but the attached video and article puts some hard data behind the warning.   According to the video, it seems 60% of employers are now pulling credit reports on all employment candidates and using the information in their screening and hiring decisions.

Can Bad Credit Keep You From Getting a Job_ – CBS News
In California, Governor Brown just recently signed AB 22 which prohibits employers from using credit reports in their decisions to hire employees, with some exceptions as mentioned in the video.   It states:

“New Labor Code section 1024.5 limits when private and public sector employers, except for financial institutions, lawfully can use consumer credit reports in connection with hiring and personnel decisions. Specifically, employers are permitted to use consumer credit reports only if the individual is applying for or works (or will work) in the following positions:

• a managerial position (as the term elsewhere is defined by California law);
• a position in the State Department of Justice;
• a sworn peace officer or law enforcement position;
• a position for which the employer is required by law to consider credit history information;
• a position that affords regular access to bank or credit card account information, Social Security numbers, or dates of birth, provided, however, that the access to this information does not merely involve routine solicitation and processing of credit card applications in a retail establishment;
• a position where the individual is or will be a named signatory on the bank or credit card account of the employer and/or authorized to transfer money or authorized to enter into financial contracts on the employer’s behalf;
• a position that affords access to confidential or proprietary information; or
• a position that affords regular access during the workday to the employer’s, a customer’s or a client’s cash totaling at least $10,000.”

It  seems there are a lot of  jobs that fall into these exception categories, as any type of customer service or  financial institution jobs or law enforcement jobs or any managerial positions  would seem to fall within the scope.  During these difficult economic times, interviewing prospects would probably would want to eliminate  any obstacle which would prevent them from getting on the short lists of candidates being considered for positions.  Having a foreclosure show up on your credit report and the employer questioning your integrity or reliability would certainly not be helpful in getting on that short list.

A prospective client came asking for help.  She had a short sale specialist working on her case for over a year.  The thing was, this agent was not even local (from San Diego) and would only tell her that things were going well for well over a year; not much communication, just that things were OK every few months.  The distance probably had something to do with the lack of continual communication.

Only recently, did she receive a call from him saying the lender would not be approving the short sale and would now be foreclosing. This came as a complete shock to her.  This was obviously a case of dual track foreclosure or simple negligence on the part of the agent.  She said the agent was basically backing out and telling her that he could no longer help her.  She wanted to know if I could help by replacing him.

It’s easy to wonder why someone would simply trust an agent for over a year and not ask questions or demand that she be kept apprised of the status of the short sale more frequently than a few times a year.  I pulled up the county record to see how much time was remaining on a Notice of Trustee Sale (NOT) and to see if we could save the short sale.  My search found that the NOT was filed over 3 months ago.  I needed to get more information.

I asked her to get a copy of her file since the agent was essentially firing himself and I needed to know what type of communication had been initiated and what the lenders had agreed to in writing.  I also asked her to get me a copy of the NOT to find out the attorney service handling the sale.

After a week or so, I followed up and not surprisingly, she got nothing from this agent.  Nothing in writing.  Not a copy of the NOT; not a rejection of the short sale letter from the lender; not a copy of the short sale package that was submitted on her behalf; not even a cancellation of the listing agreement; nothing.  Only words.

I wanted to help her, but with no documentation and only verbal statements, I could not commit myself to help her out of her predicament.  Given her particular situation, I seriously doubt anyone could help her with no documentation of what had happened before and being asked to step in only with the verbal understanding that foreclosure is imminent.

How could this individual have avoided this type of crisis?  I’m not going to go into allegations here without seeing any documentation, but it seems like the agent who professed to be a specialist perhaps was not so experienced.

I believe she did not have to be in this situation.  The best way to have avoided this crisis, in my opinion, was for her to have done her due diligence when hiring someone to help her out initially.   You really do not get a second chance when you are dealing with foreclosures.

First, she should have hired someone locally rather than someone who is 500 miles away to market and sell her home.  From what was described to me, he really didn’t know the local market and did not price it correctly nor put in a lot of effort to get it marketed correctly.  If she were not getting answers, she could have dropped in on a local agent to demand answers in a more timely manner.

Secondly, she is a young computer literate woman; she should have done some research into who she was hiring.  After all, she found me online.  She should have Googled the person’s name and see what was said about the individual.  She may not have gotten everything she needed, but she would have discovered if someone were alleging bad service or worse.  People may not write nice things about you, but if they felt mistreated, they will let the world know, from my experience.

Please distressed homeowners, do your due diligence before hiring someone to help you.

You are at the end of your ropes and came to the conclusion that you can no longer afford to keep your home.  If there were a way to help sell your home and protect your financial future, would you seek help?

If the government had a program which would help pay for a portion of your loan obligation and also help pay for your moving expenses, would you seek help?

If the government had a program which would insure that the lenders would not come after you for deficiency that results from what you borrowed versus what you ultimately re-pay them, would you seek help?

If the government said until 2012, the IRS will not collect taxes on the gains that result from the lenders forgiving you for portions of your loan, would you seek help?

Many homeowners are continuing to suffer because unemployment rate is still 10% in Silicon Valley and loan modifications are still very difficult to obtain  or may be secretly a victim of dual track  foreclosure.  If you saw no other way out except to sell your unaffordable home through a short sale using the HAFA program to obtain all of the above-mentioned benefits, would you seek help?

If the answer to the above questions were yes, then you may be a candidate for the HAFA short sale program.  Most major lenders are participants of this program which was designed to help distressed homeowners avoid foreclosure.  It is one of the few government programs designed to help struggling homeowners that actually works.

However, time is running out and you may not be able to take advantage of all of these wonderful benefits after the end of calendar year 2012.  So please contact us to find out more and see if you can qualify for all of these free benefits, including money to help settle your other liens and help you move.  Help is available to you, not taking advantage of this program is wasteful and can be disastrous to your financial future.  You have an obligation to help yourself by finding out more.

You may be fortunate and not be in a situation to take advantage of these benefits offered by this program.  However, if you know someone who may be able to benefit, then please forward this link and help them take advantage of these benefits and free money.   You will be helping someone out a very difficult situation.  It may be the right thing to do.

I try in this blog to reach out to and deliver to the public , who may be looking for information, material that may prove useful to them. However, sometimes it is a challenge to try to verbalize the information in a manner that is easy to read and to comprehend. Writing proves to be a difficult challenge for your truly.

Sometimes, rather than reading about something, it is much easier to absorb the information by watching a video. Fortunately, the CDPE organization has published some videos which are short and to the point. Since they have made the effort to produce these little gems, I feel it is only right that I share them with my readers. Enjoy.

This first one answers the question: what is a short sale?

I got a chance to watch a couple of agents go at it with each other in a real estate forum trying to answer a question about doing short sales.   It was interesting, to say the least.  Besides the two main agents who proclaimed themselves the “experts” and hijacked the conversation, there were a few others who chimed in and made some comments.  But the question was never specifically answered.

The question posed was whether a lender will approve a short sale if the borrower had assets. He didn’t provide a lot of detail but wanted to either do a short sale or let his home go into foreclosure and he specifically asked not to get into a debate about the ethics in not paying his mortgage.

The argument or “discussion” in the forum quickly evolved into a big debate about the ethics of what people considered to be strategic default.  One expert proclaimed it was morally and ethically wrong to engage in strategic default and the lenders would not go for it. The other expert proclaimed morality and ethics had nothing to do with his decision and it was more about money.

As a San Jose Short Sale Agent, I tend to agree with the latter expert.  When you are dealing with short sales with lenders, the department you deal with is called Loss Mitigation.  Let me say it again:  Loss Mitigation.  Their job description is patently obvious: it is to mitigate or lessen the loss for the lenders.

Yes, there obviously are moral and ethical implications of not paying your mortgage when you have the financial ability to do so.   I firmly believe you should pay when you can and live up to your contractual obligations.  However, the question posed specifically asked not to judge the ethical implications but sought opinion as to whether a lender would agree to a short sale when the borrower stopped paying and was headed towards foreclosure.

There is no definite yes or no answer in these matters as the answer lies in the details.  It has a lot to do with how much assets the borrower has or does not have.  However, if the lender is faced between foreclosure and short sale, from my experience, the loss mitigation department chooses short sales over foreclosures.   At the end of the day, the primary decision will be about which method loses less money for the lenders, then, other factors like ethics and mortality can be entertained.

Why do you think big lenders like Chase and Wells Fargo are offering people up to $35,000 to do a short sale without even verifying their financial information?   HAFA recently amended its rules to state that servicers are no longer required to verify any financial information, but only to collect signed hardship letters.  Do these actions by large lenders and servicers sound like they are overly concerned about the ethical or moral issues surrounding foreclosures?

I can’t speak for other States, but in California, the recent changes in the law means if the lenders agree to permit a short sale, then the issues about deficiencies become null and void.  Once a short sale has been approved, the seller can walk away clean without looking over their shoulders.  Yet, another procedure that make completing a short sale more effective and efficient and preferable to foreclosure.  It’s all about money; if the institutions can make more money foreclosing, they will certainly choose that method, but everything recently is geared towards choosing short sales.  Yes, the lenders hate strategic defaulters, but they hate losing money even more.

So back to the question about would a lender approve a short sale if the borrower has assets?  It would depend on how much assets the borrower had and whether foreclosure would yield more money for the lender or a short sale.

Let us celebrate because I got another short sale approved today and another family can move forward with their lives.

As a San Jose Short Sale Agent, my days are frequently filled hearing many sad stories about the difficulties that distressed homeowners go through, or I am fighting with robot-like negotiators who just repeat company policies, rather than trying to exercise some discretion to help out and treat people as individuals rather than loan numbers.  You want to do the right thing to help folks in distress, but sometimes the situations and the institutions involved make it very difficult to do the right thing…..  It’s obviously not like this all the time, however, sometimes it can be very emotionally taxing.

So on those days when a successful approval letter comes flying through the fax or the email like today, it becomes a bright day worthy of celebration.  Yes, I know it is not polite to be crowing about my successes, but it is really more than that.  It is a celebration for the families who are enduring things most of us cannot imagine.

It is about another family being able to walk away without having to constantly worry about fear of a foreclosure sale date looming around the corner or the prospect of the Sheriff’s Department knocking on their doors to evict the family………

It is about another family fearing to answer the phone because the lenders or collection agencies are calling for the 5^th or 10^th time this day with more threats……….

It is about another family trying to explain to their children why the bank is trying to take away the only home they have ever known in their young lives and why they don’t know where they may be going next……..

It is about another family trying to explain to the world that they are not dead-beats, but victims of circumstance; that they are in this position because the mortgage had a hidden clause which stated if their balance rose above 115%, of their original principal borrowed, then their monthly mortgage payments would increase by 250% - but no one mentioned this when the mortgage documents were signed………

It is about another family finally having no other choice but to give up the home, but trying to preserve some sense of dignity to keep the family unit in tact during the difficult process in which they unfortunately found themselves………..

If I can help accomplish – especially the last point – then I have done a good job.   If I have helped another family move on to the next chapter of their lives, then I can feel like what I am doing really matters more than simply making another buck or completing another transaction.    If I feel like celebrating and crowing because another family can sleep better starting tonight, then please allow me to have this moment.  You see, because this celebration is about more than just me, it is more about another family.

Woo Hoo!  SB 458 is now the law in California!  This means the second mortgage holder must relieve a homeowner of any deficiency claim if they approve a short sale.  SB 931 made the same type of deficiency waiver mandatory for first mortgage holders, but the second mortgages were exempt.  This led the seconds to put a stranglehold on many homeowners, making unreasonable demands on distressed homeowners. NO MORE.  Short Sales mean paid in full.

As a San Jose Short Sale Agent, I believe this announcement is one of the most significant in the Short Sale process because it permits homeowners to simply walk away after the sale.  I spent many many hours negotiating with seconds to permit the homeowners to walk away without paying anything or paying as little as possible. The passage of this new law eliminates that whole unpleasant process.

Kudos to Governor Brown for having the compassion to help distressed homeowners.  Finally, some protection for the homeowners and not  just for the large banks.  We must allow short sales to process quicker and more efficiently, rather than drag on because of the seconds want to squeeze more blood out of homeowners who already suffered from negative equity and are losing their homes.  This new law makes it easier California homeowners to do a short sale now and avoid foreclosure because that little sticky issue with the deficiency claim is preserved after a foreclosure sale.   Now the reason for doing a short sale over a foreclosure becomes infinitely more clear.

CALIFORNIA ASSOCIATION OF REALTORS® applauds Gov. Brown on signing SB 458 into law

LOS ANGELES (July 15) – The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown on signing SB 458 (Corbett) into law. SB 458 extends the protections of SB 931 (2010), to ensure that any lender that agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans.

Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but unfortunately, the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

“The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce. “SB 458 brings closure and certainty to the short sale process and ensures that once a lender has agreed to accept a short sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.”

SB 458 contains an urgency clause making it effective upon signing.