Certified Short Sale Agent

If you have been thinking about a short sale in Atlanta for any length of time you might have seen or heard about real estate agents who are supposedly certified short sale agents.  The truth is that you can get your certification to do short sales by simply putting your butt in a seat and sitting through the class.  It’s bad enough that there are real estate agents out there claiming they are certified short sale agents but what this video is about is that one agent in particular is advertising a completely bogus certification that only they have.

This particular agent is CDRS certified – to see the kind of crappy stuff that passes for certification see for yourself.  Not only this, but this agent claims to be the only agent in Georgia, while I found several with this certification.  She’s the only one that paid extra for their marketing package.  At the end of the day, all this BS is to get more listings!  Short sales are not about listings, this makes me sick to think that home owners are losing their homes because they hired an agent that cared more about the listing than actually completing the short sale.

This kind of deceptive practices could cost someone their home and I am hoping that it’s not you.  Foreclosure is a big deal, it puts the responsibility about what to do with the deficiency squarely in the bank’s hands.  Please interview your real estate agents, yes you need a short sale specialist, but you should care less if they are a certified short sale agent.

Key Questions For Determining Short Sale Expert Status

Last time we talked about the other people that try to help. There are certainly well meaning individuals out there that are qualified and can help.  However, more often then not, these “other” people are looking for another angle to get paid on the short sale than just what the bank has to offer.

Real Estate Agents

Although it’s a bit biased opinion, Real Estate Agents are typically the ones that you should be turning to, especially if the only debt you are dealing with is your home.

You probably know by now that completing a short sale is much, much better then giving up and quitting and letting the bank take the home via foreclosure.  You probably also know that although, much better than a foreclosure, the short sale will affect your credit.

What you probably don’t know is that in most cases a deed-in-lieu of foreclosure and a loan modification will as well.

Your loan modification (depending on the type) is essentially a settlement or restructuring of debt.  Ever see those debt consolidator commercials that say, “no bankruptcy needed?”  Just like a loan modification (which you can do yourself) you could do this with your creditors as well, as in you could negotiate a lower payoff or better terms with your creditors.

The catch is that there’s usually some damage to your credit involved.   This information comes straight from Wells Fargo, who told a client the other day that this modification would be recorded and adversely affect their credit.

The same can be said of a deed-in-lieu where you are basically settling or agreeing NOT to pay the debt.

To understand why this happens you have to refer over to the pie chart and see how it “hits” your credit.

See the largest part of the pie?  35% to payments?  Keep in mind that 99.9% of the time you will not qualify for any of these things without missing a payment, so that’s damage number 1.

The second part of this is settling which is like missing one big payment or all of the remainder payments.  It’s kind of like dropping an atom bomb on your credit. Depending on how this is recorded it could very well stay on your credit for 5 years or more.

Finally, there’s the issue of forgiveness of the debt in the case of the deed-in-lieu that could result in a collections account being opened.

We understand that everything is going crazy right now, but if you keep your wits about you, you can often avoid some damaging things and come out better in the end.

Here’s your scenario:

PMI (Private Mortgage Insurance, also known as Mortgage Insurance) company has a policy on the shorted loan that says they will pay the investor 20% of the loan amount.  So if you have a 400K loan, that’s $80K total payout.  In order to pay this, the insurance policy has certain things in place to make sure, just like any insurance policy, it’s designed NOT to be paid out.  Some of those actually related to short sales.

In a short sale, the investor would like to get the insurance to cover their loss on this. In most cases,  20% of the total loan PLUS whatever the investor gets through REO Sale = MORE THAN YOUR SHORT SALE.

That’s a big fail.

This is why you see Bank of America short sales getting so many complaints.  The investor is saying, “I want to help you, but based on my due diligence and my insurance policy, you need to bring another 20K to the table.” Dead deal.

According to business week, this is a common practice, one that makes it scary to even think about a deed in lieu or a foreclosure.

Deficiency judgments were rare in the 15 years since the last real estate slump, said Ben Hillard, a former investment banker who now is a real estate and corporate attorney at Hillard & Rogers in Largo, Florida.

“The banks have been too underwater with foreclosures to spend much time on deficiency judgments, but that’s beginning to change,” Hillard said in an interview. “This is going to be the next big crisis.”

The key (which is alluded to in the article) is to know your options and have a specialist help.

• Make sure the wording is correct and forgives you of the debt.
• Be happy if you get the 1099, that means the bank has “written off” your debt – in exchange of proper wording.
• Know your state laws – Georgia gives 30 days for banks to pursue a deficiency judgment.
• Know what type of loan you have on the home.  Home Equity “LINES” are different than “LOANS” and are treated differently
• Know your situation – are you really in a great situation but carrying the mortgage note on this home is a drag?  You could be a target as this next quote suggest.

The likeliest candidates for deficiency judgments are so- called rational defaults, said Larry Tolchinsky, a real estate attorney in Hallandale Beach, Florida. In those cases, people who are current on their mortgages decide to walk away from a property because its value has sunk so far below their loan balance they have no hope of recouping the loss.

About 21 percent of American homeowners owe more on their mortgages than their properties are worth, according to Zillow.com, a Seattle-based real estate data firm.

“Walking away from a property comes with a cost, especially for people who otherwise have good credit,” Tolchinsky said in an interview. “The bank is going to pull your credit report, and if you’re current on your other bills they are going to come after you and potentially ruin you.”

If you want to explore your options, feel free to contact us.  A short sale at least keeps you in charge as much as possible.  A foreclosure is the bank “TAKING” the home and a deed-in-lieu is basically giving up, if there’s no negotiation for forgiveness.