There is No Such Thing as an APPROVED SHORT SALE in Massachusetts or New Hampshire

There is No Such Thing as an APPROVED SHORT SALE in Massachusetts or New Hampshire

shortsaleapprovedOk, let me explain before everyone goes into panic mode. Yes you can have an approved short sale in Massachusetts or New Hampshire. We have hundreds of approvals in both states. An APPROVED short sale means there is a contract to purchase the property, and a lender has agreed to the price of the sale and issued an approval. Most approvals include the approved buyer’s name, approved seller’s name, approved proceeds, approved settlement costs, and of course have verbiage regarding the deficiency and lien.

What I see inexperienced agents do is advertise their listing as an APPROVED SHORT SALE. Most agents who have experience with short sales know if they are listing a property and there is no purchase contract then there is no SHORT SALE APPROVAL. What they should do with their listing is say, “Lender has approved list price” or in the case of a FHA sale where you have an ATP (Approval to Participate) already and a number you know the seller’s lender will accept is state the lender has ISSUED ATP for the sale at list price. If you had a buyer drop out after the short sale was approved, you still cannot market it as an APPROVED SHORT SALE. You should put a disclosure similar to, “Lender recently approved a sale at list price”

Anyone marketing a short sale as an APPROVED SHORT SALE in Massachusetts or New Hampshire is misleading a buyer, and if you see a listing like that, I encourage any buyer’s agent to ask the listing agent for a copy of the approval letter. What you may get back is an approval for a past buyer, or ATP approval, so you must keep in mind that if you are submitting a new offer, based on an approval for someone else at the same price the lender CAN still counter and up the offer. Just because the previous buyer was approved at list, does not mean your same offer will be approved.

Short sales are already confusing enough to have something this misleading out of the gate.

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

Broker Nick Aalerud & Maryann Little Short Sale Mitigation, LLC AA Premier Properties, LLC Serving Massachusetts and New Hampshire Homeowners with short sale negotiation.

CLOSED! Amesbury Massachusetts Short Sale – Fannie Backed with Tom McGuirk

CLOSED! Amesbury Massachusetts Short Sale – Fannie Backed with Tom McGuirk

Amesbury MA Condo Short Sale

Amesbury MA Condo Short Sale

This was a condo that Tom brought to us to negotiate, that actually had another agent listing it, but he admittedly had no short sale experience.  He thankfully knew Tom who has a TON of default property experience or short sale experience in Massachusetts and New Hampshire.  I actually have lost count as to how many deals I’ve worked on with Tom, but any with Tom are a pleasure.

This was a FNMA backed condo so we immediately knew there would be a counter and we prepped the buyer. So we definitely called it and FNMA through Seterus as a servicer countered, and our buyer accepted. FNMA will ALWAYS counter. Sometimes their counters are completely off the mark and some thankfully are within range of what a buyer is willing to pay.

What we didn’t account for was a bogus condo association statement.  Fannie wouldn’t allow the overdue condo

Tom McGuirk - Short Sale Realtor

Tom McGuirk – Short Sale Realtor

charges which left it up to us to be creative.  The problem is the statement we got was not even remotely accurate.  I will tell you this was not the condo associations fault, but that’s all I can say.

I AM happy to say that between all of us, agents, attorney, our firm we were able to get the condo dues paid and this deal closed.  Not the way I wanted, but any closed short sale is still a win!!!

Thanks to Tom, Julie in my office, Grugnale Law and Seterus for approving the sale!

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

We negotiate short sales in Massachusetts and New Hampshire with many lenders such as, GMAC, Bank of America, AHMSI, Seterus, Wells Fargo, ASC, Chase, Select Portfolio, HSBC and many more.

CLOSED! Framingham Massachusetts Short Sale FANNIE MAE BACKED!

CLOSED! Framingham Massachusetts Short Sale FANNIE MAE BACKED!

Framingham MA Short Sale

Framingham MA Short Sale

Once again I have to give a shout out to Keith Shaw.  Keith is out of Keller Williams and we started to work together last year.  We’ve done several Massachusetts Short Sales together, but I think this MAY have been the longest and toughest one.  This property was up for foreclosure auction more than once, and the first offer we sent in Fannie Mae rejected and countered with over a $70,000 difference.  We were FLOORED.   So, we did a value dispute and Fannie countered at the original counter price.

The best part is I called CITI and had a nice discussion with the negotiator and told him the amount they wanted was absolutely crazy and that there was no way we’d get that price.  He basically said, “Sometimes Fannie just wants to foreclose.  They obviously think they’ll get more in foreclosure, so they’ll wait it out.” He was so cavalier about the whole thing I was disgusted.

This property SAT from last June until the first quarter of this year with no offers, so I have to ask, did this rejection

Keith Shaw, Keller Williams Short Sale Agent

Keith Shaw, Keller Williams Short Sale Agent

of the first lower offer make sense for Fannie?  Absolutely not.  They received NO MORE money by doing this a year later even though we got a $20,000 higher offer.  WHY because the mortgage payments missed for that year were $21,000 – It was a WASH.  I don’t make the decisions for Fannie, but I just don’t see why you won’t even consider countering to a REASONABLE amount on a sale.  They could have just COUNTERED $20,000 higher the first time, but nope, it was a $70,000 difference which we all knew would not happen.

So, thankfully Keith stuck in there and got the higher offer in and we closed a YEAR later.

Thanks so much to Keith Shaw, Julie in my office and of course everyone at Grugnale Law!

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

CLOSED! Lowell Massachusetts Short Sale with Wells Fargo!

CLOSED! Lowell Massachusetts Short Sale with Wells Fargo!

Tim Shanahan - Short Sale Agent

Tim Shanahan – Short Sale Agent

I’m trying to keep up with our closings and shout outs to amazing agents, like Tim Shanahan, but I’m SO far behind in posts.  This Lowell, Massachusetts Short Sale was the first I had ever had the pleasure to work on with Tim.  I hadn’t worked with him before, and anyone that knows me knows I’m nervous to work with new agents.  Tim is AWESOME to work with.  He put my mind at ease from the moment I spoke with him on the phone.

This sale was NOT an easy one by any means either.  This was a Wells Fargo first and second and neither side spoke to each other.  THANK GOD I found out the first was backed by Freddie Mac, because I was able to put a ticket in their ear about Wells.  Realistically Wells was doing fine, but the value came in too high and thankfully the buyer was good enough to give us his appraisal to dispute it.

The one thing that drives me NUTS though, is a buyer side title company or attorney who every single week are looking for an approval when the ENTIRE TIME I had quoted them 60-90 days for approval, and when we get it IN that time frame, the buyer isn’t ready to close?!?!?!  Go figure, but that’s exactly what happened on this sale.  The interesting part is we were told two weeks prior to approval the buyer was ready, but apparently he wasn’t.  I will say this one went down to the wire for the buyer, but  his side did manage to close it on the day his rate lock expired, so all in all it was a total success with a LOT of stress that was unnecessary.

The sellers were happy as they got a full deficiency release and I was not sure that would be granted.

Thanks to Tim Shanahan, Julie, and of course Meghan and Noreen from Grugnale Law.

 

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

CLOSED – Salem MA SHORT SALE with Bank of America and Greentree

CLOSED – Salem MA SHORT SALE with Bank of America and Greentree

This was an investor sale.  We have numerous short sale rehabbers, flippers, etc., in Massachusetts who market and then will ask us to negotiate through the mess of the loan.  We are very lucky to work with them.  The investors that work with us ALL KNOW that if we cannot get the house for the price all parties can agree on, they kindly will step out of the scene so we can try to obtain an offer that will satisfy the bank.

This Salem, MA property was this type of sale.  It was a duplex actually owned by an investor and his father.  They were excellent to deal with.  Paperwork came in fast and there was no delay which is a huge part of the short sale puzzle.  The selling investor was selling multiple properties off so thankfully we were able to reuse a lot of the same paperwork.  Interestingly, they called us LAST WEEK to negotiate even one more sale.  This particular seller has worked with us on FOUR properties.

We have been very lucky on every sale thus far that not one lender decided to pursue the deficiency, ask for a note, or cash at closing.

We had this sale approved in 30 days.  Both Bank of America and Greentree agreed on settlement and we closed!!

Thanks gang for all your hard work!!

Massachusetts MOST BUSY SHORT SALE NEGOTIATOR!!

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

Fannie Mae will Make Things More Difficult for Short Sales in August in Massachusetts and New Hampshire

Fannie Mae will Make Things More Difficult for Short Sales in August in Massachusetts and New Hampshire

 

As if short sales weren’t difficult enough with lender red tape, lost paperwork, lenders forcing homeowners onto auction sites when they already have marketing and gotten an offer, and dictating unfavorable terms to already financially struggling homeowners, Fannie Mae has decided they will not pay ANY money towards secondary liens that aren’t actual mortgage liens.

fanniemaeYes, you heard right.  If there is a municipal lien on a property for let’s say an overdue water bill that has also accumulated penalties and interest, Fannie Mae won’t pay.  Although it doesn’t say, I’m assuming this goes for all Federal and State tax liens on title.  Unfortunately in my business I’ve seen HEFTY federal tax liens and we’ve always been successful in negotiating those liens down and rolling in a payout from the proceeds of the sale, but nope, Fannie Mae has drawn a line in the sand.

This is how the new announcement reads:
https://www.fanniemae.com/content/announcement/svc1409.pdf

Servicing Guide Announcement SVC-2012-19, Standard Short Sale/HAFA II and Deed-in-Lieu of Foreclosure Requirements

Fannie Mae is revising its policy on subordinate lien payments for short sales or Mortgage Releases to prohibit use of the $6,000 from the sale proceeds to settle non-mortgage liens. The $6,000 in available subordinate lien release funds must be used only for subordinate mortgages or deeds of trust recorded in the land records that constitute a valid lien against the property. The $6,000 in available funds must not be used for other types of liens, including but not limited to:

§ homeowners’ association (HOA) liens,

§ judgments,

§ mechanic’s liens, and

§ materialmen’s liens.

 

If such other liens impede the closing of a short sale or Mortgage Release, the servicer must submit the case to Fannie Mae for prior written approval. As a reminder, the servicer is required to protect the priority of Fannie Mae’s mortgage lien and must clear priority liens for delinquent HOA dues and condo assessments on properties acquired through foreclosure or deed-in-lieu of foreclosure as outlined in Announcement SVC-2012-05, Payment of Homeowners’ Association Dues and Condo Assessments and related sections of the Servicing Guide.

This pretty much stops any sale with any type of secondary non-mortgage lien in Massachusetts as it’s a super lien state.  There are certain liens that can TRUMP the mortgage including Condo Dues.  I’m not sure WHY no one has pushed back on this, but no condo association is going to give up their position with no payment…and homeowners who don’t have a dime to their name cannot afford to pay these liens, so that leaves it on the buyer.  This will minimize the buyer pool, excluding any FHA, VA, USDA borrower because the buyer will have to have CASH to pay off secondary liens and what do you think a buyer is going to do in that circumstance?  They will DEDUCT that amount from the purchase price NETTING Fannie Mae less, so this new announcement doesn’t help them at all.  Cash buyers are always lower buyers.  No buyer is going to pay full price for a property knowing he has to pay another $15,000 in cash for liens!!!!!  No federally financed buyer will have the cash on hand to assist with the liens.

This is a very poor move on Fannie Mae’s part and I don’t think they thought this through at ALL.  The only crumb of possible hope they gave us is if the lien impedes the closing of the short sale the servicer must submit the case to Fannie, which in my experience is a waste.  I have YET to see them approve a secondary non-mortgage lien since last Fall.

 

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

The Current State of Short Sales

The Current State of Short Sales

Missing your mortgage payment?

Missing your mortgage payment?

Short Sales in Massachusetts, New Hampshire and multiple other states, are vastly different in comparison to the sales in the mid to late 2000′s, or even back in the 90′s.  Nick and I both started in short sales separately around the 2007 mark and there have been a LOT of changes.   When we started Short Sale Mitigation in Massachusetts, the process was quicker, smoother and a lot more phone work.  You can negotiate a short sale today with very minimal phone work depending on the lender, but it’s not quicker or smoother even though there have been many attempts by lenders and investors to STREAMLINE the process.

Lenders have made attempts to increase privacy, and security of files by introducing platforms like Equator and Res.net or have introduced “secure emails”, however this secures information for the lender, but not for the borrower of the loan.  The homeowner does not get a copy of the correspondence on these platforms, nor a copy of any requests in order to expedite the file.  The lenders have all the control in the platform used to negotiate the sale, and Equator boasts that it’s automated software will  ”automate a client’s daily processes, facilitating efficiency, transparency and compliance.”  That statement is laughable.  Anyone who has tried to enter a financial form or HUD through Equator knows it’s not efficient for the person inputting the data.  If you’re dealing with Bank of America there is a minimum of five steps to complete before they will open a short sale on Equator.  Oh how I long for the days back in 2008 where you just had to fax in a complete package and have the lender tell you they didn’t receive it, when you have a clear confirmation receipt.

There are very few servicers today that can get through a file efficiently.  Bayview is one of the smaller servicers that does come to mind, and of course if you are dealing with a small local credit union or bank, they tend to be fast and efficient, however we have found from experience they tend not to release the deficient portion of the note.  Today, after a submission with the larger servicers, it still takes a minimum of 3 days to “image” a letter of authorization, which some servicers have now gone to the extreme of ridiculousness on.  An authorization (LOA) is just a letter that informs the lender who is authorized to speak to the bank or lender regarding the homeowner’s account.  That could be anyone.  It could be the homeowners, brother, sister, kids, lawyer, agent, friend, co-worker, or just about anyone the homeowner deems to be a communication point.  Unfortunately, servicers like Nationstar and Bank of America really know how to thicken the red tape with their LOA’s. hafa They are now a two page disclosure in which you are DESIGNATING a licensed AGENT, that has to be signed by so many parties, that just the sheer nature of the first form in the short sale process would turn most underwater homeowners off.  This is not efficient by any manner, and it also forces the homeowner to possibly contract with someone they don’t want to.

If you are lucky enough to make it past the first stage of submission with some of these servicers, you then get assigned a PROCESSOR that will fine tooth comb your paperwork.  Usually once the processor gives the green light, which can take WEEKS you are then assigned to a negotiator.

 

I pity the homeowner that has a Wells Fargo FHA PFS (preforeclosure [short] sale) – It’s a tossup for me on whether Bank of America has the worst FHA PFS processing department, or Wells.  Last year I think I would have said Bank of America, but this year Wells Fargo takes the cake.  Plan a minimum of 6 months before you see an ATP (Authorization to Participate) letter from either servicer.  The ATP is the green light go for FHA borrowers in a short sale.  Both o need to explore retention options which can push homeowners into a loan modification review even if they don’t want a modification.  Many times homeowners have to call INTO a lender to do a questionnaire with a customer relationship manager, which even when completed, they don’t seem to get into their system leaving the homeowner in a black whole between loan modification and short sale and even if they opt out of the modification, getting the homeowner to the short sale department can still take 2-3 weeks, and then don’t forget about the review time.  This would frustrate any homeowner and of course ANY buyer of a FHA PFS.

The amount of affidavits, arms length transaction forms, short sale addendums, waivers, certifications, acknowledgements, disclosures, and any pullinghairoutother possible forms you think may accompany a purchase contract has had a major impact on the speed and efficiency of short sales today.  There were some possible derivatives of these forms back when I started, but not to the extent you see them today.  Lenders are so paranoid about short sale fraud, they have constructed every possible form to try to protect them.  Unfortunately some of the language in the forms doesn’t make sense at all.  We are led to believe there is wide spread fraud in short sales, through publishings from companies like Corelogic, but if you look closely at who is publishing the data, you’ll see these companies have something to gain by spreading panic in the field.  The fact of the matter is if you research the actual data pertaining to short sale fraud charges, you will see there is very little.  Lenders are highly suspicious of anything that sniffs a violation of an arms length transaction.  In reality there is no law stating you can’t sell a property to someone you know, or assign a contract.  In fact in Massachusetts recently the Attorney General is suing some of the big (F) investors; Fannie, Freddie and FHA due to the fact there are non-profits established in Massachusetts that will buy a property from a homeowner and then resell it to the same homeowner giving them a loan a bit above market rates for market value.  Of course the three F’s don’t like this, but there is nothing inherently legal about this.  Unfortunately lenders are so scared about losing money they have instituted restrictions on deeds and profitability on sales.  Buyers are forced to hold property a minimum of 30 – 90 or more days in many transactions or cap the resale of the property.  It’s ludicrous.

failedshortsaleWhat is troubling me now is the amount of paperwork homeowners and buyers must sign stipulating there is no relation that exists between the parties, keeping everyone on equal footing, however LENDERS such as Nationstar and Ocwen seemed to have formed relationships with companies like Auction.com and HUBZU to AUCTION their short sale properties.  At least Ocwen discloses the relationship between themselves and HUBZU, but none of the Nationstar paperwork is that forthcoming.  It’s extremely frustrating to see someone like Benjamin Lawsky a Bank Regulator out of New York an Steven Antonakes, deputy director of the Consumer Financial Protection Bureau publically call out the two servicers in question about their business practices, but neither has penalized the servicers for forcing homeowners to breach already existing contracts.  Both servicers are forcing homeowners to list their properties on  auction sites.  This practice legally implicates a homeowner and forces them to breach already in place listing agreements and even worse, purchase agreements with buyers.  Why this practice hasn’t been rapidly and swiftly put to a stop, I’m unsure, other than it seems the servicers have more power than the regulators.

Even if s short sale makes it all the way through the system, gets approved and closes they are still bogged down with red tape.  This is the first year I’ve seen wires returned on a closed short sale.  We’ve had three wire returns.  One had no reason for return, so the closing attorney had to just rewire it back, one lender felt they couldn’t read a signature, so they returned the wire, and one lender forgot to include an affidavit for closing so after the closing the attorney had to jump through hoops to find the buyers and sellers again to have an affidavit signed that appeared AFTER the closing, which should have been given to the sellers upon approval.

Homeowners will suddenly face more hurdles this August if their loan is Fannie Mae backed with Fannie’s recent announcement that any secondary property liens on title that aren’t mortgage related will not be covered out of proceeds from the short sale transaction.  This means if a homeowner has overdue condo association fees, and the association puts a lien on title, those dues will not be paid out of sales proceeds.  The same is true with executions from credit cards or municipal liens.  This puts homeowners who are already under a HUGE financial strain into even more of a spiral.

We are being led to believe we are in recovery, but our firm has seen the strongest growth in short sales in 2014 than over any other first quarter of any prior year.  Yes, mortgage delinquencies foreclosure rates are down, but keep in mind when a loan that’s delinquent moves into the HARP (refinance) program, that loan is now categorized as a refi and NOT a delinquent loan.  Keep in mind Transunion published that 60% of all loan mods end up in a re-default situation within 18 months.   Also any shadow inventory outside of FNMA and FHLMC are not required to be reported.  These programs are temporarily keeping foreclosure rates down.  Unemployment is still an issue in today’s default market.

Short Sales will be around for a while and it seems that even with attempts to streamline programs, the red tape is just making sales more difficult than easy.  It’s no wonder agents are steering clear of short sales and opting for third party help.  Forms for short sales keep changing and unless you are focusing on short sales for a living, you are likely not going to know about recent changes in the industry.  I see an increase in bankruptcy coupled with short sales and or foreclosures as homeowner still struggle with job loss, divorce and too much debt.  Even agency regulators can’t seem to step in and dictate any type of lender regulations in regards to short sales.  It seems as if we are all at the mercy of long, cumbersome short sale transactions where lenders are even dictating to lawyers how to do their jobs.  I would love to see a change in the market, but unfortunately year after year the state of short sales has gotten worse.

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire

CLOSED! Another Haverhill Short Sale THREE FAMILY with Debbie Kruzel – Chase

CLOSED! Another Haverhill Short Sale THREE FAMILY with Debbie Kruzel – Chase

Haverhill Massachusetts short sale - multi family

Haverhill Massachusetts short sale – multi family

We are very grateful Debbie Kruzel from Keller Williams puts her faith in our firm.  This sale was not easy.  The title itself was a WRECK and thanks to Meghan Grugnale we were able to actually straighten out an improper foreclosure.  That would scare MOST agents away as it is, but not Debbie.  I’m so happy she stuck with it because there were days even I couldn’t see the light at the end of the tunnel.

Thankfully this was Chase owned.  We gave Chase all the pertinent information on the file.  Interestingly we had another THREE family short sale in Haverhill literally sellign a few doors down and one sale definitely affected the other.  Initially offers came in pretty low, especially with such a horrific title report.  Not all investors would stick around for this either, but I’m happy Debbie found one that would.

With an in and out buyer, messy title and a servicer that’s NOT the  fasted in the world we were pretty thankful to get this one DONE!!

Debbie Kruzel - Keller Williams Short Sales

Debbie Kruzel – Keller Williams Short Sales

I could not have done this without the amazing support of Meghan Grugnale, Debbie Kruzel, Julie in my office and of course Noreen from Phenix title.  Any short sale is welcome in our neighborhood, ESPECIALLY the messy title short sales!!

Maryann Little, VP Short Sale Mitigation
Nick Aalerud, Exec VP Short Sale Mitigation, Broker New Hampshire / Massachusetts
http://shortsalemitigation.net
http://twitter.com/rapidshortsales
http://aapremierproperties.com
978-384-0032
603-505-4642 (f)
Stoneham, MA - Plaistow, NH
Short Sale Negotiation in Massachusetts and New Hampshire