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.

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

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.

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.

After the three months or 90 days which are given to cure the default, the next step is the filing of the Notice of Trustee Sale (NOT or NOTS).   This is otherwise known as the Auction Date or Auction Sale where the home is sold to the highest bidder at the steps of the County Court House.  If a homeowner were unlucky, they may receive this simultaneously as their loan modification is being rejected – a victim of dual track foreclosure.

Sample NOTS
As you can see, the instrument is used to answer the following:  a) how much is owed after penalty and interest, b) who is owed this money and c) where the auction will take place.  It is sort of the Who, What and Where of the foreclosure process.

This is the last step in the foreclosure process.  The homeowner can stop the foreclosure process by paying the full amount listed there before the sale date; or seeking alternative options like a short sale or deed in lieu.  When you receive this notice, you really must act fast.

You hear the term all the time.  Notice of Default, (NOD).  If you google the term, you get pages and pages of definitions and suggestions on what to do.  But after reading all of the material, could you identify it if you saw it?

As the San Jose Short Sale Agent, I try to explain the significance of this document and try to describe what the documents looks like to my clients, but most cannot visualize it.   However, I don’t blame them, because even for me, in order for me to learn or absorb something: I need to see it, feel it or experience it before it will register in my brain.  I supposed we are all the same in this regard.

Instead of always trying to describe this document, I decided I would show everyone a sample.  This way, they will know when the official foreclosure process has begun and certain timelines have been established.   This is when things get very serious.

Sample NOD
As you can see from a real NOD from one of my clients (relevant information removed), the document simply identifies three things:  a) how much do you owe, 2) to whom do you owe said money and 3) when the sale date (a.k.a. auction date)  can take place if said money is not paid.   If the default amount is not paid by the end of 90 days, then the agent of the beneficiary can file a Notice of Trustee Sale (NOT or NOTS), which will describe when and where the property will be sold.

If you see one of these documents in the mail, then it is time you seek help from someone who can stop the foreclosure process.

I got a call yesterday from an out of area agent who wanted to get some information about short sales because he searched on the web and found me as one of the top San Jose Short Sale Agent.  Like many Real Estate Agents, he did not really understand and did not want to learn about short sales, so he wanted to get some information that he could pass along and refer the relative to me.

One problem: a Trustee Sale date was scheduled one week ago.  For those who are not familiar, a Trustee Sale is also known as an Auction Date.   The homeowner wanted to stop the foreclosure but the Agent was not aware of the Trustee Sale Date.

This illustrates and highlights an issue I want to discuss today: when dealing with foreclosures, inaction leads to action.  Being afraid of the prospect of losing one’s home is understandable, but allowing that fear to transform us into acting like a deer in the headlight is not an option.  You must take action one way or another.

In the case above, the homeowner was afraid and did not know what to do and that fear led her into inaction.  But we must remember, she had months of notice as to what was eventually coming.

The typical non-judicial foreclosure process looks something like this in California (remember, this is a simplified description for illustration purposes only, each case and timeline will be different):

• Homeowner misses 2 to 3 mortgage payments.
• Lender sends Notice of Default – giving 90 days to re-pay delinquent payments plus interest and penalty or will lead to Trustee Sale or Auction Sale
• Typically within 21 days of missing the deadline issued on the Notice of Default, a Notice of Trustee Sale date is scheduled at the courthouse steps
• On the scheduled date and time, the property will be put on auction for sale

In a typical scenario like above, we are looking at minimally 6 months, from missing the first payment, before an auction date is set to sell the property; sometimes it takes much longer.   During this time, in addition to the numerous phone calls, letter and the actual notices are sent to the homeowner’s mailing address.   The homeowner had plenty of notice as to what was eventually coming, so whether she wanted to pay off the delinquent monies, or request a loan modification or do a short sale, she could have contacted the lender to slow down the process or find out alternative options available to her.  There are methods to delay or extend the trustee sale date.

What is my point?  She knew she wanted to stop the foreclosure, but by the time she decided to do something about it and reached out to someone for help, it appears, it was too late.

The lenders generally do not want to foreclose on a property because they can make more money using other foreclosure prevention methods. So if the intention is to prevent a foreclosure, the homeowner must take action, reach out to the lenders to request a loan modification or to a Realtor to do a short sale, or call me and I can answer questions you may have if you are in Silicon Valley, but take some sort of action before the trustee sale  date is scheduled.   In a foreclosure situation, by not doing anything, you have actually chosen to expedite the foreclosure process.

Things are back to business as usual in the Foreclosure arena.

Continued……

When I tried to explain the situation to Negotiator A that Negotiator B was out sick and I would try to get the approval to him before 10 AM the following morning, he told me it was too late.  He assured me that because I missed the deadline he gave me, he could not stop the sale.  I refused to concede and told him I would get it to him before the sale, even if it was too late and a waste of time.  I would not give up my effort or hope.

Needless to say, despite my protest to him that I would not give up, I felt devastated inside.   How was I going to get an approval a matter of a few hours the next morning when I couldn’t get anyone on the phone?  Things looked truly bleak.

I started calling at 7 AM the following morning and got Negotiator B, her executive office and a senior manager involved and yelled, screamed, threatened and otherwise made a lot of noise to a lot of people.  I was such a pain and made so many calls, I managed to get an approval letter generated in 3 hours!

By the time I got the letter in my Inbox, it was 10AM.  By the time I was able to send the letter to Negotiator A, it was 10:05 AM, 5 minutes after the sale date. When I called Negotiator A to check his Inbox, he told me not to waste his time.   He wasn’t even going to bother sending the approval letter to his superiors to attempt to stop the sale, but I begged and cajoled him into forwarding it, despite being a few minutes late.  I just had to hope for the best.

Three days later, Negotiator A still claims not to know what happened, but I called the Reconveyance Company and learned that the sale was stopped and the sale date has been postponed.  Why Negotiator A will not give me details about the extension and status when Negotiator B and the buyer both keep calling to find out what is going on  is beyond me.  But all I need to know for right now is that the auction was extended and we have more time to close this sale.

“Never Give Up” is emblazoned on the side of Queen of Apostles Church on my route home.  I’ve read this for years and perhaps that phrase had embedded itself deeply into my consciousness, but that was exactly how I felt on that Monday after Thanksgiving.  If I had given up because Negotiator A told me it was not possible, or even when I felt hopeless upon discovering Negotiator B called in sick on the due date, then I would not have had the pleasure of telling the sellers that I was able to get the auction date extended and to give them hope that we will succeed in fighting their foreclosure; and it makes me feel pretty good about myself too.