Loss Mit Services

Short Sale Tip 11-12-09

Posted on 12. Nov, 2009 by ctlms in Short Sale, foreclosure

Some lenders just LOVE to cut commission.

Yes, unfortunately there are some lenders that have policies about how much is an acceptable commission on a short sale.  Many will approve whatever is normal in the area.  FHA, Fannie Mae and Freddie Mac all allow a maximum of 6% if it was in the listing agreement.  Don't forget to ALWAYS get at least a 6% commission when it is a short sale.

Now some lender such as Ocwen Loan Servicing have less favorable policies.  Ocwen's policy when they have to take a discount is no more than 4% commission no matter what.  Kinda.  They will sometimes allow 5% if they consider the offer to them to be "good".  They are also more firm on this policy when they are in the 1st mortgage position.

Now I am of the mind that "some rules are made to be broken".  And I think this is one of those.  Thus, whenever possible we go to bat HARD to higher commissions.

Obviously if every lender did this, agents would flock away from short sales in droves which is one of the many reasons why cutting commissions is just STUPID in the first place.  But the lenders are in control, unfortunately.

Anyway, with all that said...I just got an approval letter on a short sale where Ocwen was the second mortgage.  They approved an offer to them of 10% of their principal balance, just over $2,400, and with 6% commissions.

This took me calling every day for 5 days until I finally got a rep that would listen to why it made sense to Ocwen to accept the offer.  I'm not going to get into the specifics, but the point is, without that persistence, and knowing that not all rules are written in stone, this deal would have been capped at 5%.

Another thing to note about commissions and short sales has to do with the number of agents and brokerages involved with the offer.  If there is only one agent involved it is highly likely the bank will cut the commission.  Some lenders will cut it as low as 3% others will allow 4-5% when they would have allowed 6% with 2 agents.

Now it gets worse when there is only one brokerage involved.  Many lenders will, regardless of how many agents are involved, cut the commission when there is only one broker.  If there are two agents at the same brokerage we can sometimes get the lender to agree to the full commission, but not always.

The point here is if you are thinking of working a short sale as a dual agent, you may be better off referring the buyer to another agent, and preferably one in a different brokerage to assure the maximum commission.  No point in working both sides if you will only be paid for one.  And a referral fee for the other side is better than working it for free.  Having one brokerage has the highest likelihood of a cut in commissions.

So the point of the this Short Sale Tip is to know going in what likelihood is of a cut in commission.  You want to be informed of the chance of a commission cut and you definitely want to inform the buyers agent of it.  The buyers side will be very upset if they had no idea of the possibility of a commission cut and then after months of waiting for an approval, find out they are getting paid less.  And as with all short sales, always disclose in the MLS that commissions are subject to lender approval.

Check out our Website at www.CTLMS.com for more information about our services.

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As always Visit the Ask The Expert Page to leave your questions or contact me directly if you need immediate assistance at [email protected] or visit www.CTLMS.com

Short Sale Licensing Update 10-29-09

Posted on 29. Oct, 2009 by ctlms in Short Sale, foreclosure

License # 27332

So the day has finally come. As of 10-28-09 we have finally received our Debt Negotiators License from the CT Dept of Banking. 4 Weeks and 1 day after applying and many, many duplicate and "revised" documents later.

A list of licensed Debt Negotiation Companies can be found at the CT Dept of Banking Website by clicking Here.

The Banking Dept has also finally posted a list of frequently asked questions and their answers at FAQ.  Important answers and clarifications that have until now, not been in writing.

Now that this licensing ordeal is finally over, we can get back to work in full swing.  Many of you know that we have had to delay taking on any new clients during this process to avoid violating the new law.

Unfortunately the state was not prepared to issue licenses by the Oct 1 deadline when the new law went into affect.  But that is all moot now.

Our application was the first in and thus the first approved.  As of today, we are the only licensed Debt Negotiation firm in CT.

Check out our Website at www.CTLMS.com for more information about our services.

So look forward to my future email tips and tricks related to short sales and pre-foreclosure in CT.

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As always Visit the Ask The Expert Page to leave your questions or contact me directly if you need immediate assistance at [email protected] or visit www.CTLMS.com

Short Sale Tips For Every Office

Posted on 11. Sep, 2009 by ctlms in Short Sale, foreclosure

In Office Presentation and Q&A For Your Office

In recent months I have taken many calls and emails from Brokers, Agents and Homeowners.

The most common questions for Homeowners usually revolve around Credit, Deficiency and Tax implications of a short sale.

Brokers and Agents questions usually revolve more around how can I help them close a short sale listing they have, what is required of them in the process, what is it I do and of course how do I get paid for my service.

I have had numerous phone calls and personal meetings with many of the areas Brokers and top agents on these subjects.  Many even have their clients call me directly to answer their questions so the client can decide if a short sale is a good idea for them.

Yet I know that many agents still shy away from short sale listings because of the horror stories or past negative experiences.  Now, I cannot promise that every short sale transaction I touch will go smoothly or that every deal will close.  That is just unrealistic.

After all, we are dealing with lenders that have proven over the past several years that they wouldn't know a good idea if it were delivered to them on a silver platter and said "Bonus" on it.  Examples such as Bank Of America and their ridiculous timelines and outrageous requirements do justify much of the reluctance for many agents to become involved in a short sale.

But the fact remains that a client in need deserves your service.  Yet being prepared when a client contacts you and says I owe X while their home is worth Y is important.  Knowing a little bit of information to quell the anxiety of that homeowner will go a long way toward building their confidence in your ability to help them.

I know from past experience that a client in need of help with an over-leveraged property will be the best referral source you will ever get.  Helping someone out when they think there is no hope puts you on top of the mountain in their eyes.  It's a great way to build a long term referral base for your future.

Short sales are one of the biggest segments of property sales today.  Over 5 million homes are expected to be lost to foreclosure by years end.  Every one of those is a potential short sale listing because the vast majority have no equity.

Ask the agents that have worked with me and they will tell you that their short sale listings were some of the easiest.  Though some lenders are of the Bank of America variety, many are much more streamlined and efficient at processing their files.  Some of my recent files have been approved in as little as 5 weeks.  But most are closer to 60-90 days.  Bank of America is 6-9 months.  Talk about a waste of time.

Anyway my point is that knowing a little about the short sale process and the options for homeowners will greatly benefit every agent when a seller in need calls.  Even if all they know is "I have a guy that can help" and suggest the client discuss their options with me.

That is where our in office visits come into play.  If you think that a visit by me to your office would benefit you and your agents, that is something we can arrange.

I can let you and your fellow agents know how the  process works and what they should expect in a short sale transaction.  Setting the proper expectations with the seller and buyer is key in these transactions and knowing just a brief overview of the process goes a long way, especially towards the confidence of the agents involved.

In our office visits we touch on the foreclosure timeline, short sale timeline, required documents from the homeowner and best practices for the agent.  We also open it up for Q&A.

If you think your office would benefit from our knowledge and expertise let me know and we can set something up for you.

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As always Visit the Ask The Expert Page to leave your questions or contact me directly if you need immediate assistance at [email protected] or visit www.CTLMS.com