Short Sale Strategies- When The Lender Blames The Investor- Case In Point

By
Real Estate Agent with International Properties and Investments LLC

There were a lot of questions and comments on the featured post- Is Your Loan Modification Or Short Sale Being Turned Down? - that I wrote last week. That post was reblogged 36 times and it keeps on going. Important information needs to be spread- education is key. The more that we get important information out to agents and consumers, the more empowered we will all be during these next few years of doing short sales.

When the lender who is the servicer; also known as the asset management company blames the investor you can take it to the next level, call their bluff- so to speak.

Let me give you a case in point. This one is one that happens often. Please bear in mind this won't work with every servicer. I preface this post that this has to do with Florida state which is a deficiency and judicial state.

  • The loan was originated with Indymac. There is only one loan on this property.
  • Indymac is no longer a viable lender.
  • One West Bank is handling Indymac files.
  • One West Bank is called the Asset Management Company or Servicer. Either terminology is commonly used.
  •  FDIC owns the note on this file. FDIC is called the investor. Of course, there are shareholders.
  • Our Seller is an attorney.
  • The negotiator from One West Bank processes the file quickly.
  • The buyers- Husband is an agent and wife is an appraiser. Purchase price accepted by One West Bank= $480,000 and no reduction in commission. 
  • The negotiator is excited that she has her approval in for the property and quickly emails us the demand letter.

We always forward our demand letters on to our sellers and allow the sellers to decide what their next step will be, consult with their attorney, etc. 

We have a clause in our short sale addendum that our attorney drafted for us to protect our seller in the even they can not perform by the terms demanded by their lender. It is our sellers' walk clause.

Our seller informs us that he will not close without the deficiency removed. One West Bank has left their pursuing deficiency in the demand letter according to Florida State Law. In Florida, a deficiency may be pursued up to 5 years from the date of the closing.

Nestor contacts the negotiator to let her know not to get so excited so fast. The terms are not agreeable to our seller. One West Bank ( Indymac) must remove the deficiency clause and allow our sellers to be free and clear of any future judgments or deficiencies.

The negotiator says, "We can not do that because it is a Florida state law that mandates that we have the deficiency in the demand letter." Excuse me? The Florida law has nothing to do with whether you remove the deficiency or not.  You are using the Florida law as your scape goat so that you don't have to remove the deficiency paragraph. We are not that stupid. You can negotiate even when the law says you can pursue the deficiency. The law does not state that you as the creditor HAVE to pursue it.

Nestor tells her that she must get this waived. She says it will take her about a week to see if her supervisors will allow her to remove this paragraph. The answer she brings back is that the investor will not allow One West Bank to remove the deficiency!

Now, if you read my post about, Is Your Loan Modification or Short Sale Being Turned Down? you know that the sevicer; One West Bank is blaming the investor who is the note owner for not releasing the deficiency.

Why would they be blaming the investor? Because of the PSA agreement being so vague in dealing with protecting the investor's best interests. If the investor wants to seek a deficiency later on and finds out that the servicer released it- they could sue the servicer for the loss on his investment. It has nothing to do with the investor themselves, it has to do with the servicer's fear of the unknown and the PSA being so unclear in this regard.

So what to do?

You go direct to the investor. We knew this to be FDIC. So Nestor starts his research into who all the players are in the FDIC, procures all of their email addresses and phone numbers. Then he proceeds on to start calling and emailing. Nestor has the patience of Job when it comes to this sort of research and calling. Not me, that is why we make a good team.

He gets clear to the top of FDIC and speaks to a decision maker there. At the same time he is also still insisting with the negotiator that she must release the deficiency clause and she is sticking to her guns, she is not budging and says her hands are tied by her managers.

FDIC is shocked that we can not get this deficiency removed based on the hardship of our clients, the sellers and the great offer price on the property. FDIC states this is NOT their policy and they have NOT insisted upon this. Nestor gives them the file, the case, the names, etc.

As Nestor is working through the maze and connecting the dots within 2 weeks we get an email from the negotiator that suddenly One West Bank's policy has changed and that she now has the authority to remove the deficiency clause from the demand letter.

This proves the point that this was a policy based in fear of the servicers and not the policy of the investor.

We closed on the property 2 weeks later and our seller has no deficiency and is free and clear of any future consequences to his short sale decision. Needless to say, the seller being an attorney was amazed at our tenacity and the way that Nestor did not let go and give up. Never give up.

 

        

 

Search For Wellington Florida homes for sale

 

To  view Florida Short Sales- Click here. We know Palm Beach County Short Sales and Port St Lucie Florida Short Sales and will help you get your home Sold if you need to Sell your home and help you buy your home in Palm Beach County Florida : Call us today.

 

By TwitterButton

Short Sale Strategies- When The Lender Blames The Investor- Case In Point-was first published on South- Florida-Luxury-Living.com.

Copyright © 2009 By Katerina Gasset, All Rights Reserved.*Short Sale Strategies- When The Lender Blames The Investor- Case In Point

 

 

close

Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Tim Ludemann 09/22/2009 11:36 AM
  2. Kimberley Kelly, SFR, HAFA, GREEN 09/22/2009 01:03 PM
  3. David M. Childress 09/22/2009 02:10 PM
  4. Sandy Childs 09/22/2009 02:27 PM
  5. Roland Woodworth 09/22/2009 11:57 PM
Topic:
ActiveRain Community
Location:
Florida Palm Beach County Wellington
Groups:
Short Sales Specialists
Short Sale Specialists & Pre-Foreclosure Education
Short Sales and Forclosures ONLY
Short Sale REALTORS®
Sharing Information of Short Sales
Tags:
loan modification denied
short sales
short sale denied
short sale deficiencies
palm beach county short sale agents

Spam prevention
Show All Comments
Rainmaker
344,479
John Juarez
Prudential California Realty - Fremont, CA
CDPE, ePRO, SRES, GRI, PMN

Ad my kudos to the many you are receiving for this post! Great job on behalf of your clients. Thank you for sharing your experience. It helps to open all of our eyes to the job requirements, skill, and tenacity of doing a good job with short sale.

Sep 22, 2009 10:25 PM #61
Rainmaker
195,132
Jirius Isaac
Isaac Real Estate &TriStar Mortgage - Kenmore, WA
Real Estate & loans in Kenmore, WA

Good work, guys!  It jsut shows that the only way you can get these short sales done is to know what you are doing and be incredibly persistant.  they will just do everything to make the short sale fail.  (Which is why 50% of them do.)

Sep 22, 2009 10:32 PM #62
Rainmaker
133,730
Jennifer Kirby
Kirby Fine Homes - Minneapolis, MN
The Luxury Agent

I like it when the negotiator refuses to tell me who the investor is...like I can't find that information out! I usually just call the main bank line and ask someone on the other line, and they always tell me who it is. Why negotiators have to be so difficult is beyond me. I had HSBC tell me that they always make the home owner sign a promissory note for the defeciency, no exceptions. When the sellers told them they would rather the home go into foreclosure than pay another dime in the future, that "no exceptions" policy was quickly changed.

Sep 22, 2009 11:03 PM #63
Rainmaker
128,117
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

Way to beat them up!  It's a great story.  The moral of the story is its all about negotiations.

Sep 22, 2009 11:34 PM #64
Ambassador
1,590,372
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

I, too, wish I had a Nestor.  I just keep slogging through the roadblocks and appreciate your posts to further educate.

Sep 22, 2009 11:41 PM #65
Ambassador
602,832
Roland Woodworth
Keller Williams Realty - Clarksville, TN
Short Sale and Foreclosure Resource- SFR - Clarksv

One of my recent short sales had this situation where the lender blamed the investor for the counter offer $8,000 over the list price. The lender had given a min. sales price and we were above this amount. In the end.. We sold this home for the contract price, not the $8,000 countered price.

Sep 22, 2009 11:55 PM #66
Rainmaker
197,780
Mark Velasco
Realty Source, Inc (Luxury Homes Division) - Whittier, CA
Friendly Hills Homes for Sale - Whittier, Ca. Real Estate - Listings

Great post Nestor. The fact that they are not required to ENFORCE the law. Simple, yet, brilliant reasoning Nestor. Thanks for sharing

Sep 23, 2009 12:25 AM #67
Ambassador
915,104
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

Wow, if I ever sell my home I want Katerina and Nestor as my agents!  GREAT job for your clients and now everyone has benefited who ever deals with the same lender, thanks to the policy change.

Sep 23, 2009 06:13 AM #68
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Michelle- yes, we take short sale referrals. We just closed one sale in Tallahassee and another set to close in Miami also. Thanks for asking and yes, we will take them in Wellington.

Sep 23, 2009 09:00 AM #69
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Renee- I love your new photo! It looks like you are loving life there! Nestor has more patience than I do when speaking with these people at the short sale departments. Katerina

Sep 23, 2009 09:01 AM #70
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Jennifer- HSBC always does that and we always get that waived:) Of course, most of the reasons to get it waived are that the sellers are broke and have no money to pay. But when the sell is well off then we let them know before we take the listing that they will be contributing and if they are ok with that we will work with them. We have had 2 of them come back to renig on their end and we are now fighting the investors to let them go even though they have a lot of cash on hand. We will see how it plays out. There are those who really need the help and others who just are gaming the system. HSBC is easy to deal with when you know how:)

Sep 23, 2009 09:06 AM #71
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Jennifer- HSBC always does that and we always get that waived:) Of course, most of the reasons to get it waived are that the sellers are broke and have no money to pay. But when the sell is well off then we let them know before we take the listing that they will be contributing and if they are ok with that we will work with them. We have had 2 of them come back to renig on their end and we are now fighting the investors to let them go even though they have a lot of cash on hand. We will see how it plays out. There are those who really need the help and others who just are gaming the system. HSBC is easy to deal with when you know how:)

Sep 23, 2009 09:06 AM #72
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Hmmm UGG BOOTS seems to like coming on our blogs here:) Hey UGG; how't that spam working for ya?

Sep 23, 2009 09:08 AM #73
Rainer
3,416
Mike Dale
Weichert, Realtors - Elite - Encinitas, CA

I'm a big fan of using attorneys to negotiate my short sales (I've never had an attorney as a client like Nestor and Katerina).  As a realtor and loan guy in San Diego, I've been using attorneys for all my loan mods and short sales for almost two years.  I just found a group called the Loss Mitigation Network that espouses the same (www.LossMitNetwork.com).   Their free Ebook gave me deeper insight on how attorneys can litigate/negotiate far better than I.  I'm not a big fan of butting heads with lenders every day.  Plus, I've been hearing realtors getting sued and I won't put my license at risk.   This whole issue of lenders like Countrywide/BofA not giving full settlement language on approvals scares me to death. I'd rather have a layer of legal protection by having attorneys battle with the Big Boys.

Mike Dale

Sep 23, 2009 01:37 PM #74
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Mike- We only have one Florida BAR attorney in town who does short sales with any integrity. We have another biz attorney who refers all her short sale clients to us. We get a lot of referrals from attorneys who don't do short sales. Not only that, in California one of the biggest scams of all time since their scam on writing subprimes is an attorney in California who still is not disbarred. We have attorneys here who also take our clients money and run and we are left cleaning up their mess. Most of the lenders we work with are no longer paying attorney fees or short sale company third party fees. We have E and O insurance and we have several attorneys who list their personal short sales through us for negotiating their compromise. We have strong disclosures and Florida FAR BAR is pretty good with covering our seating sections. As long as you are honest and disclose all possible outcomes I think your license is fine. We even have a walk out clause for our sellers. If they don't like the terms their lender offers, they don't close. Katerina

Sep 23, 2009 03:36 PM #75
Ambassador
1,352,007
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Katerina,

Somehow it happened that I commented on several of the reblogs of your series of posts lately, and never on yours, and I want to correct the injustice.

I find these blogs phenomenal, and I am not using this word lighly. They are very good if not the best posts on these very important and less understood issues.

I am thankful to you for this information. It empowers us with the right perspective. It makes our lives a bit easier

Sep 24, 2009 08:17 AM #76
Ambassador
1,951,674
Nestor & Katerina Gasset
International Properties and Investments LLC - Wellington, FL
Realtors, Wellington Florida Homes For Sale

Jon- Thank you! I appreciate it very much. The first of these posts, the one right before this one was reblogged 38 times just on Active Rain and there were many other non AR folks who asked if they could reprint my article on why the short sales and loan mods get turned down. I take your compliment with honor and humble thanks. Spread the word. It is important to educate and then to understand. Katerina

Sep 24, 2009 11:00 PM #77
Rainmaker
235,583
Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

Hard work but it certainly paid off for you and your client in the end. Great job and thanks for sharing this information.

Sep 26, 2009 01:16 AM #78
Rainmaker
31,327
Joe Niece
REMAX Results - Eden Prairie, MN

I have to say that I normally do not subscribe to blogs but I love your articles.

Nov 05, 2009 11:09 PM #79
Rainmaker
188,020
Christina ONeal
At Home Real Estate Group - Ripon, CA
Realtor - Ripon California

Love your story of tenacity....Rock On!!!! Great Job :)

Feb 06, 2010 03:35 AM #80
Show All Comments
Ambassador
1,951,674

Nestor & Katerina Gasset

Realtors, Wellington Florida Homes For Sale
Search South Florida Homes!
*
*
*
Spam prevention

Additional Information