San Jose Short Sale Agent: Silicon Valley Foreclosure Prevention Specialists

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.

Another short sale approval came in today.    Another young family can now move forward and use the $3,000 check to help them relocate.  This was a HAFA short sale and another $6,000 from the proceeds were given to the second lien holder to help settle their claim.  After submitting the offer, it took less than 45 days to get the final approval.   This approval again, contradicts the rumors floating around out there that HAFA automatically causes delays in short sales.   HAFA deals with deadlines and was designed to speed up the process.

It was good for the bank, the seller and the buyer.   The house may not have sold for the amount borrowed, but we received a fair market value offer that was sufficient to pay monies to all parties involved to get them all to settle.   A happy day for all.  A good day for all.
Wells Fargo Approval

The word is getting around.  JP Morgan Chase and other large lenders are actively encouraging homeowners who are in distress and not able to make their mortgage payments by offering them incentives of up to $25,000 if they are successful in short selling their homes.  So far this has only been information from third parties and other sources whose clients were solicited by mail.   Today, I learned that one of my colleagues had a client reach out to him because Chase had wanted the borrower to do a Short Sale with a CDPE designated agent if they wanted to receive $25,000.   Silicon Valley Homeowners, if you receive this type of letter, you need to contact a CDPE designated short sale specialist like myself.

I need to point out that not everyone is automatically extended this offer.  You must be the recipient of a letter specifically offering you the money.     But one thing is certain: this is no joke, this is happening because the lenders like Chase have figured out that they can still make more money by permitting short sales to be completed than go into foreclosure.   Banks never do anything unless they can make money as the end result.

If you follow this blog, you know one thing I really hate are frauds against people facing distress.  Nothing worse, in my opinon, than taking advantage of people who are desperate because they are about to lose their homes.  It’s targeting one of the most vulnerable segment of society in order to make a few bucks.  Those fraudsters are the worst scum in my opinion.

I found a blog by a Realtor named Monique Bryher in Southern California who writes about various California Real Estate Frauds, it is called Califorinia Real Estate Fraud Report.  I found it to be an excellent place to learn about the fraud of the day, if you will.  I wanted to take a moment to talk about it because it is well orgranized by topic and because you can also receive a weekly report about the fraud du jour.

The best way to avoid being victimized is to be educated about scams.

http://www.californiarealestatefraudreport.com/

Check it out.

As a San Jose Short Sale Agent, I can tell you that one of the most difficult situations to deal with in a distress scenario involves an HOA which has filed a lien on the property for non-payment of dues.   What is even worse is an HOA that hired an attorney to sue the homeowner for non-payment of dues, slapped on a bunch of indiscriminate fees and penalties and demonstrated absolutely no willingness to compromise to reach a mutually agreeable settlement because they have a default judgment in their hands.

Asking for the unpaid dues is obviously expected, however, the attorneys piled on additional fees and surcharges in the complaint, among them items like: interest of 12% per annum, late charge of 10% per month, lien fee of $1300, collection cost of $500, litigation guarantee fee of $600, plus additional collection and attorney fees.  The total of lien amount was roughly $16,000 but the non-dues fees came out to be approximately 50% of the total amount.

When dealing with lenders, whether it is the first or second, everyone is operating on the principal that compromise is necessary to achieve the ultimate goal of completing a short sale to avoid a foreclosure.  In this case, that goal was punctuated by a Trustee Sale scheduled only weeks away.  Whether the second lien holder tries to negotiate for 10% or 50%, there is the underlying understanding that everyone has to give a little to make the deal happen in the end.   This fundamental concept, by which everyone operates in the distressed market, gets tossed out the window when an attorney with a default judgment is on the other end of the phone.  WE DO NOT NEGOTIATE becomes the mantra.  And because of the default judgment, there is no incentive to take less, even though the other parties are taking substantially less.  They knew she had a steady job, so even if the property foreclosed, they would pursue her after the foreclosure.

Negotiating with these attorneys has been the worst experience to date for me.   It would be a bit different but for the default judgment in their hands; at least there would be some sort of room to maneuver.  After literally having begged for some relief, we managed to reach a settlement for 90% of the value of the lien.  The relentless threat of pursuing her after the foreclosure, in conjunction with the seller not wanting to have to file for bankruptcy to protect herself from the attorneys and the impending foreclosure, led to the signing of a promissory note plus some cash.   At least it was finally over and they agreed to release the claim and let the short sale proceed.

What did the seller and I both learn from this experience?  Pay the HOA dues at all cost.  Had she paid it, we would not have dealt with the 50% ancillary fees and costs that were padded on the complaint.   She certainly would have saved a lot more money and we both certainly would have endured less emotional distress.

I have said this many times, but my personal pet peeve is hearing of scammers who try to take advantage of people who are victims of these economically difficult times.    It is bad enough that many homeowners are suffering and find themselves in a situation where they are unable to pay their mortgages.  But far worse to believe they are victimized again a second time when they put their hopes on people who profess to be there to help.  Sometimes even the lenders are engaged in practices that are bordering on scams called dual track foreclosure.

Every time one of these scammers is identified, I get worked up and get into my crime busting mode…….   So here we go again.

The first tell tale sign of a fraud or scam is that the so called service providers are asking for payments up front, before any work has been performed.  ALWAYS BE LEERY OF THESE REQUESTS.  There are multiple variations of these pay-first scams.

A recent scam identified by the California Department of Real Estate (DRE) involves up front payment to join a class action lawsuit which promises extraordinary home mortgage relief.  A brief description of the con has been reposted below for review purposes.

QUESTIONABLE AND/OR FALSE CLAIMS OF THE SO-CALLED MORTGAGE LOAN

DEFENSE OR “MASS JOINDER” AND CLASS LITIGATORS.

A.  What are the Claims/Sales Pitches?

They are many and varied, and include:

1. You can join in a mass joinder or class action lawsuit already filed against your

lender and stay in your home.  You can stop paying your lender.

2. The mortgage loans can be stripped entirely from your home.

3. Your payment obligation and foreclosure against your home can be stopped when

the lawsuit is filed.

4. The litigation will take the power away from your lender.

5. A jury will side with you and against your lender.

6. The lawsuit will give you the leverage you need to stay in your home.

7. The lawsuit may give you the right to  rescind your home loan, or to reduce your

principal.

8. The lawsuit will help you modify your home loan.  It will give you a step up in the

loan modification process.

9. The litigation will be performed through “powerful” litigation attorney

representation.

10. Litigation attorneys are “turning the tables on lenders and getting cash settlements

for homeowners”.

In one Internet advertisement, the marketing materials say, “the damages sought in your

behalf are nothing less than a full lien strip or in otherwords [sic] a free and clear house if

the bank can’t produce the documents they own the note on your home.  Or at the very

least, damages could be awarded that would reduce the principal balance of the note on

your home to 80% of market value, and give  you a 2% interest rate for the life of the

loan”

There are many varieties of scams identified and collected by the DRE over the years, some of them are listed below in the Consumer Alerts page for your benefit.    http://www.yourhome.ca.gov/fraud_warning.pdf

Homeowners in distress, I know you are in desperate situation and are seeking any and all assistance you can find, but please don’t let your situation cloud your judgment.  Be the wise consumer that you always have been.  Please check on the people who profess their desires to help you.  Know who you are dealing with before you give them any money.

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.

This is one thing I advise all of my clients who have HOA (Home Owner Association)  payments: please do not fall behind on HOA dues.  HOAs are playing hardball and much harder to negotiate with than lenders.

As a matter of fact, I have one right now, where we are dealing with the attorneys that the HOA hired due to back dues not being paid.  It is a sticky mess with threats and the attorneys demanding fees and refusing to settle for less, etc…

Richard provides an excellent breakdown and it is actually happening to one of my clients as he described in his post.

Steve