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

Starting today, December 1, 2011, Bank of America (BofA) makes the HAFA short sale process run easier and smoother by permitting them to be processed through the Equator system. The use of the Equator system made the entire short sale process at BofA go much smoother. It was only a couple of years ago, that BofA was often deemed to be the worst lender to deal with in the short sale arena. As the San Jose Short Sale Agent who has handled countless number of short sales with BoA prior to their transition to Equator, the changes in their service after converting to Equator were almost immediate. BofA went from the worst to best in a matter of months by a BBB (Better Business Bureau) survey. Unfortunately, the benefits and the efficiency of Equator were unavailable for those who were seeking HAFA short sales with BofA.

Until this announcement was made, all HAFA short sales had to be taken out of Equator and handled through their third party vendor call centers and fax machines. This meant things took longer and the inefficiencies of faxing documents to various fax numbers and non-employees came back into play. (But to be fair, even Wells Fargo which also uses Equator, takes the same approach with HAFA short sales and removes them from Equator). But with the announcement today that HAFA short sales can be processed through Equator, all is right with the universe. Now only if Wells Fargo will follow suit.

Bofa Announcement

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.

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.