Comments on: Hey Short Sale Expert…Do You Have A Good Lawyer?

By: What Happens When Short Sales Fail?

What Happens When Short Sales Fail? — Fri, 26 Feb 2010 15:00:35 +0000

[...] Hey Short Sale Expert…Do You Have A Good Lawyer? I was reading a post on my favorite real estate social network and the writer was stating something I hear quite often. That you need to be very aggressive in making sure the bank does not reduce your commission. In fact the writer of the post I mentioned said: [...]

By: The Short Sale Lawyer

The Short Sale Lawyer — Sat, 09 Jan 2010 07:51:26 +0000

I do not think the Realtor’s commission should be reduced since it is negotiated between the owner and the Realtor.The banks loss mitigator will not reduce his salary to help out the negotiations. Realtors need to remember that Being A REALTOR is a profession not a hobby. That being said, I commend those who are willing to take a hit on their commission in the name of securing a short sale…

As to the comment on law suits and being sued I think when and if the law suits come down, those who worked haphazardly will have to account for their activities… I see it almost everyday… I always state to everyone I work with that I will demand, disclosure, disclosure and more disclosure. Short sale negotiators may be running afoul of the law on issues that come to negotiating contract terms and drafting documents even when they are just dictating terms to mortgage brokers, other attorneys or loss mitigators over the phone.

I write this hoping that you are either negotiating your own short sale or are using a lawyer, the scenario above may be compounded if you are using a so called negotiator.

Realtors and principals my not be informed or apprised of what is going on between the negotiator and the loss mitigator.

When a negotiator is not disclosing information or is making arbitrary decision I would say get rid of them, you need to be assured that you are working above board and they are not putting the home owner or you, the Realtor at risk.

By: crystal gomez

crystal gomez — Fri, 20 Nov 2009 19:29:38 +0000

Caludia, Ask your agent. I know when we do short sales the homeowner is never ever responsible for paying any fees. What state are you in?

By: Barry Cunningham

Barry Cunningham — Thu, 19 Nov 2009 00:16:17 +0000

Claudia depending upon what state you are in, that fee based contract may be illegal..especially if the real estate agent presented it. He is not an attorney and that alone is a red flag and should be cause for great concern. Tread carefully here and ask an attorney you trust to review everything before singing ANYTHING.

By: Claudia

Claudia — Wed, 18 Nov 2009 20:13:07 +0000

I’M doing an short sale with my agent on my home. He bought by some attorney client fee contract from an law office. If the short sale do not go thru or the short sale is cancel do I Have to pay the attorney?

By: crystal gomez

crystal gomez — Mon, 17 Aug 2009 16:15:20 +0000

Thanks Bob. Will do;)

Crystal Gomez

By: Bob

Bob — Mon, 17 Aug 2009 15:27:43 +0000

Crystal, in California the Foreclosure Consultant Act has very strict requirements regarding who can be a “Foreclosure Mitigation Specialist” and the fines include jail time.

The California Attorney General’s office is very aggressive in enforcing this. You should with a call to the AG’s office.

By: crystal gomez

crystal gomez — Mon, 17 Aug 2009 01:44:39 +0000

Fantastic information. I am a private real estate investor/short sale specialist and I constantly need to be informed as to the legalities of my business. I stay on top of all changes within the industry and follow them precisely. I have my own attorney (Ron Ballard) but would love to obtain info on your fees and experience. Having a blog like yours is great. Thanks for the information.

Crystal Gomez, M.A
Short Sale Specialist
Foreclosure Mitigation Specialist

By: Barry Cunningham

Barry Cunningham — Tue, 14 Jul 2009 03:25:23 +0000

nybody can sue anybody I guess. You have a question that you need to pose to a lawyer. However I would report the agent to the ethics board and fire them immediately…if what you say is true

By: hk

hk — Mon, 13 Jul 2009 21:27:46 +0000

I’m a seller doing a short sale on a condo in Orlando.My real estate agent is handling the transaction. Six months ago he found a buyer and the paperwork was supposedly submitted to the bank through a short sale negotiator he was dealing with.Recently I found out from the bank that no paperwork was submitted. I called my broker and informed him and he told me to send new documents to him that the shortsale negotiator had messed up. Can I sue either one or both for loss from mortgage and maintainance payments for the last six months?

By: Barry Cunningham

Barry Cunningham — Tue, 12 May 2009 12:52:56 +0000

Hi Lisa..what a nightmare. Unfortunately your situation is not unique. Where are you located?

Also, I want to make sure I understand something. You mention that you went all over town getting disclosures signed. But you DON’T mention if the Seller’s signed your contract extension.

If you don’t have an extension, then more than likely you don’t have a contract and the SELLERS could sell the house to anyone that they want to.

Don’t worry about the agent trying to sell the house from under you. She doesn’t own it. So she can’t.

However, if you are out of contract and she entices the Sellers to take another offer, you could be up the creek. How good is this relationship you have with these Sellers. If they want you to have the home then make sure that you get an extension signed.

Remember, listing agents work for the Sellers…not you. You have some digging to do.

Find out the answer and get back to us. Why would she want the keys? To put a lockbox on the house to show it to other buyers.

You need to delve into this.

By: Lisa

Lisa — Fri, 08 May 2009 04:30:22 +0000

I have a couple of questions – Im a buyer in the process of buying a short sale home. The sellers bank has accepted our offer and wanted to close by April 15th, but because we are doing a VA loan our mortgage company stated they were backed up and needed more time to process our loan application and requested an extension. So me and my husband signed the extension form, and I dropped it off at the listing agent who was suppose to get the sellers signature’s and then forward it to the sellers bank. Well, the listing agent didn’t even tell the sellers about the extension and the extension of course was never given to the bank so we missed our deadline and the listing agent had to resubmit all the paperwork again to the sellers bank for processing. What are my legal rights as a buyer when dealing with the listing agent. Can the listing agent really sabotage this deal. Im not sure what her motive would be. Me and my husband have gotten to know the sellers and keep in constant contact to keep each other up to date on each side of the process. We had to get the signatures’ of all parties for a FHA disclosure I had dropped off at the listing agent two weeks ago. The listing agent claimed she had fedexed it to one of the sellers and just hasn’t gotten it back yet, but it turned out that she never sent it to him. I spent an entire day traveling across town to get the sellers signatures’ and back to the listing agent for her signature for this disclosure form needed for the mortgage company. My husband tried to call the sellers bank directly to see if the listing agent actually did resubmit the paperwork again but he was turned away because they don’t have authorization to talk to him. We didn’t get a real estate attorney, which I now see we should have. Is it too late to get an attorney and can they do anything to speed up this process? Also how long do you think it will take for the bank to accept and process the paperwork again, it originally took 3 1/2 months to hear from the sellers bank the first time.

One more question, the listing agent is asking the seller for a set of keys to the house. What could this be for? We already had all the inspectors through the house. The sellers have been very accommodating and let us in after they moved out and cleaned up a bit. I understand that at closing the seller will be there and will be able to give us the keys directly. I have a bad feeling about this listing agent and really don’t want her having access to the house in fear she is trying to sell it to someone else.

Thanks in advance for any advice. This is a frustrating process, but it will be well worth it in the end if we get this house, our first home…

By: Are You Ready To Be Sued In 2009? | Real Estate Radio USA

Are You Ready To Be Sued In 2009? | Real Estate Radio USA — Mon, 05 Jan 2009 15:50:50 +0000

[...] we wrote about these so-called short sale experts almost a year ago and told you it was going to be coming. But so many agents didn’t want to [...]

By: Bob

Bob — Mon, 28 Jul 2008 17:27:51 +0000

When you take a short sale listing, you should have a working knowledge of the lenders involved before doing so. That alone would eliminate most of these so called surprises. For the majority of lenders out there, these policies don’t change from transaction to transaction.

If you are working with a lender for the first time, or for the first time in awhile, call and ask what their procedures and policies are. Some, like Ocwen, have sold off large portions of their portfolio to Wall Street ( you would be surprised about the market for bad debt) and those loans are not easily negotiated. Then decide whether or not to take the listing, because tying a distressed seller up in an exclusive listing where the agent is in over their head will get the agent sued.

I’ll bet Barry has a “Do Not Touch with a 10 foot Pole” list that he screens every potential deal against.

By: Ralph Nudi

Ralph Nudi — Mon, 28 Jul 2008 16:16:20 +0000

Barry,
I must say this is an EYE OPENING post. I have also been doing short sales in Kenosha, WI since before they were popular. One of the documents that I have my sellers sign explains that their lender may try to reduce the amount of commission paid to my company, and that if that compensation is reduced, I will not expect them to pay the difference.

I have never had a lender kill a deal because I wanted to get paid… the problem is typically the selling price. Most lenders allow for a commission in the net proceeds if the price comes in within a percentage of their BPO or appraisal.

I have had them cut my commission, but that’s just part of the game, others pay me my full 7% commission and it evens out.

By: Barry Johnson

Barry Johnson — Mon, 19 May 2008 23:03:17 +0000

Hello Hileng,

You ask a couple of legal questions, so I am going to refer you to our legal expert here on the program, Erik Wesoloski.

As for letting the house go into foreclosure without any action, depending upon your which state you are in, the lender may be able to come after you once the foreclosure is completed. Just because the bank takes back the property at a foreclosure auction does not necessarily mean they cannot obtain a deficiency judgment against you as well.

Erik can be reached at 305-239-1020. He will be able to help you and answer your question.

By: Hileng

Hileng — Mon, 19 May 2008 17:54:17 +0000

I am a seller and hired an agent to do short sale. I have lost my jod due to disability sustained caused by an uninsured motorists. I have requested Countrywide to refinance, loan modification, buy back my house to the amount we can afford since we now have 1 income from my husband’s retirement, but all our request were denied citing low income. I have put my house for sale in July of 2007 and the listing expired, we had 6 buyers backed out due to long process of short sale. I have listed again my house to the present agent for 4 months, we have had 3 offers ut the 1st buyer backed out long process of short sale. We have purchase money loan, put down 5%, and have $80k upgrades in this house. We have used all our savings, equity from previous home and retirement in this house and we have moved out of the house. We were told by the first lender that if we put 5% down we didn’t have to pay PMI(Private Mortgage Insurance). But now Counrytwide told us that Old Republic the mortgage insurance wants us to sign a promissory note stating we will pay for the deficiency judgment which is about $86k on the 2nd mortgage. I cited section 580b but was told that the mortgage insurance is not mentioned in this section and that mortgage insurance will sue us for the deficiency judgment. I said then let the house foreclose. Then they told us that the 1st mortgage offered $14k to be applied to the 2nd mortgage and then they turned around and said they changed their mind and wants only to give $5k to 2nd mortgage. I reminded the Negotiator that my listing expires in 14 days, the value of the homes went down again to $215,000, my selling price is $290,000. The negotiator responded and turned around that the 1st mortgage is back to offering $14k to be applied to the 2nd mortgage. My question to you is, is it true that the mortgage insurance can sue us for deficiency judgment? Aren’t we covered by section 580b since it is a purchase money mortgage, we have not refinance, the reasn why we have 2 loans is because of jumbo loans and the original lender set it up as 1st and 2nd mortgage and then Countrywide bought the loan. Is it to my best interest to foreclose the house since Countrywide has been prolonging to make decision on the short sale. Your help is greatly appreciated.

Thanks
Hileng

By: barbara mcguinn

barbara mcguinn — Thu, 01 May 2008 15:10:21 +0000

In looking at information I obtained from the title co. I notice that in a trustee sale the bank was getting $50,000 to $70,000 less than the loan amt. due.
That is a loss even after they have taken someones home. I appears to me it would be better for the real estate market if they credit the owner with that amt.
to be applied toward the mtg payment only and let them remain in the home.
There would need to be guideline and standards but it would reduce the number
of houses on the market and help the home owner remain in their home.
It is just a thought.

By: Norm Fisher

Norm Fisher — Sun, 20 Apr 2008 01:25:24 +0000

This is an interesting post. I’m sure that you have a great lawyer but I think this line of reasoning is a little thin and I’d truly be surprised if a court would agree that an agent has a fiduciary duty to work for nothing. When it comes right down to it, it would always be in the client’s “best interest” to cut the agent’s commission to nothing and I don’t think that there are any “hardship” provisions in contract law.

That said, agents who choose to specialize in this area should probably be sensitive to the fact that everyone involved is taking a licking on the deal. I don’t know how you expect a lender to suck up $50K in losses while taking the “I’m not flexible” position.

By: Julie

Julie — Mon, 14 Apr 2008 22:22:15 +0000

Thanks for the feedback!