Category: Mortgage Companies

Short Sale your home before defaulting on your mortgage

Posted on by Jenny Zamora

Short Sale your home before defaulting on your mortgage…More and more we are starting to see a trend in the world of Orlando short sales and that is,… lenders are increasingly more willing to approve short sales before homeowners actually default on their mortgage and fall into a pre-foreclosure situation. This is a huge deal for homeowners that have been wanting get out of their upside down mortgage and haven’t done so for fear of severely damaging their credit.

According to our records we found that in 2012 about 20% of our short sale files, were deals where the lender had not yet filed for foreclosure against the homeowner. A few of them were deals where the homeowner wasn’t even behind on their mortgage. I for one am praying that this trend continues…for everyone’s sake. It just makes good sense,… if the homeowner is trying to be honest with the bank by letting them know that they will be defaulting before they actually default, why shouldn’t the bank use this information to move things along faster before they start losing money?? It’s a win win situation for everyone involved. The homeowner avoids damage to their credit and the lender avoids losing big money by getting a head start on the whole process of getting the house sold. They don’t have to worry about the mortgage falling behind for more than a few payments and even more importantly,… they don’t have to shell out thousands of dollars in attorney’s fees to start the foreclosure process.

Also, by allowing these “almost distressed” homes to change hands much faster will most likely put them in the hands of new homeowners who have loans they can actually afford, which means they are more likely to be able to afford and maintain the property and these people will be more motivated to be responsible homeowner.

Most Lenders are still not seeing the “Big Picture”

Although some lenders are seeing the light when it comes to getting short sales done before waiting for the homeowner to default, the truth is that most lenders are just not having it. They have a strict set of guidelines that they follow to a ” T “, and there’s just no changing their minds…believe me I’ve tried. Dealing with these lenders can be frustrating, but it’s just part of being a short sale realtor.

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Ocwen outsourcing Orlando short sales to India

Posted on by Jenny Zamora

Ocwen outsourcing Orlando short sales- It used to be that the hardest bank to negotiate a short sale with was Bank of America… hands down. But ever since B of A has implemented the Equator system they are now one of my favorite lenders to work with. In the past year or so there’s a new leader in my list of the absolute worst lenders to work with, and the winner is………Green Tree but Ocwen is a close 2nd. Ocwen is extremely frustrating to work with and part of the reason is that they outsource their short sale department to to India. You can’t even call the negotiator directly anymore because your call goes directly to a call center. And the person you end up talking to is beyond clueless, all they are able to do is  take a message, and sometimes they even get that wrong. The only way to speak to your negotiator is to schedule a call back, which most times never occurs..If you leave it up to them, it will be weeks for you to get a call back. What I do is call every day until they get tired of me complaining…finally a call back, usually from someone other than the negotiator so you are back to square one..
I’ve always thought that the short sale negotiator should be a licensed realtor, after all… the whole job revolves around the buying and selling of real estate. How on earth is someone that is unlicensed, living half way around the world qualified to discuss short sale?
Ocwen is obviously trying to save a few bucks by outsourcing to people that work for $2-$3 per hour. However, this is one position that should absolutely not be outsourced! To be a good short sale negotiator, you need to be familiar with the real estate business, it’s just not something that you can fake.

 

Don’t get me wrong, Even in our company use we use VA’s [virtual assistants] for certain things like link building, compiling lists, etc. … but negotiate a short sale…are you kidding me?

 

Short Sales are too Important to Out source

 

I’ve said this a million times and will continue to say it. Negotiating a short sale is serious business and is usually one of the most important transactions that someone will ever be involved in. I really hope that Ocwen gets their act together especially for the mortgage holder’s sake

 

Orlando Real Estate Broker

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Strategic Default, more popular than ever

Posted on by Jenny Zamora

Although Orlando real estate prices continue to steadily rise, strategic default is as popular as ever. As homeowners come to us to list their Orlando properties for sale, the majority of them are upside down on their mortgage. The big problem is that there are several lenders out there that won’t accept a short sale unless the mortgage holder has defaulted on their payments. This puts the homeowners in a difficult position by forcing them to either continue paying on a mortgage that is way too high or stop making their mortgage payment. Most people faced with this situation these days are strategically defaulting on their mortgage for the sole purpose of pursuing a short sale with their lender. When you think about it…what choice do they have?

 

Don’t get me wrong…I would never tell a client to purposely default on their mortgage, but once I explain their situation to them, they almost always choose to stop paying their mortgage and pursue short sale. Honestly, I can’t say that I blame them. As a matter of fact, if I was in their shoes, I would do the exact same thing.

 

How will it affect your Credit?
A short sale can have a lot less of an effect on your credit score than a foreclosure. But, it must be done correctly.
If your request for a shot sale is approved, your agent should ask your lender to report the short sale as “paid in full,” as part of the negotiation.

 

Many sources have reported that a short sale has about the same impact on your credit score as a foreclosure, however from experience with our own clients, that’s never been the case.  Most of the time, clients of ours that have completed an Orlando short sale, report that their credit score only dropped by 100 points, which can be easily fixed by a good credit repair company.

 

There are no guarantees when it comes short sales

 

It’s important for you to know there is no obligation what-so-ever on the bank’s part to accept a short sale payoff.
And you just won’t know until you begin the process.  You should also be aware that short sales can take several months to complete depending on who the lender is.

 

If you still want to learn more about shorts sales, visit us at OrlandoRealtyConsultants.com

 

 

 

Orlando Real Estate Broker

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Orlando Short Sale Negotiator confesses to using stall tactics

Posted on by Jenny Zamora

I’ve been doing short sales in Orlando since 2005 and something happened last week that has never happened to me before. I’ve been working on this Orlando shorts sale listing for the past 3 months. After negotiating with the bank we got the payoff approved at $192,000.00 and the buyers were ready to close. Each time I would get a hold of the negotiator he would say that I would have the approval letter the next day so I would then update my clients with the same update that was given to me. After hearing the same story from me day after day and week after week It got to the point where everyone thought it was all somehow my fault.

To make matters worse, the buyer got tired of waiting and walked from the deal, my client even talked about hiring another agent. The following day I received a call from the negotiator and I couldn’t believe what he told me. He actually told me that he was purposely stalling this particular file because he didn’t want it to close until the month of March. He explained to me that the bank can only handle a certain amount of loss per month and they had already hit their limit for the month of February. He then proceeded to explain to me how he was purposely stalling me by not providing me with the approval letter. When I heard this I felt like reaching through the phone and slapping him. That wasn’t possible so I did the next best thing, I gave him a piece of my mind.

All he had to do was inform me of what was going on from the start and everything would have been fine. The buyers would have had no problem at all waiting as long as they knew what was going on. After I vented my frustration with the negotiator I insisted that he personally call my client and explain the situation to him. Thank God everything is back on track and all is right with the world, we’re closing at the beginning of March.

Short sale negotiations can get complicated and can be extremely frustrating. If you’re in need of an Orlando short sale expert call me at 407-902-7750 for a free analysis of your situation.

Orlando short sale expert

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What happens when an Orlando Short Sales get approved for more than appraisal value?

Posted on by Jenny Zamora

When a buyer puts in an offer on an Orlando short sale property, that person believes that they are getting a great deal. Many times this ends up being the case and after several months of waiting…the bank approves the offer but don’t celebrate yet,…  there are still a few things that can make the deal fall apart.

The appraisal is a crucial and unavoidable part of this process. let’s say for instance that the bank approved your short sale offer of $100,000.00, the next step is to get your financing in line which means getting the property appraised, inspected, etc. The issue now is to get the property to appraise for at least the amount of the contract. If the property falls short on the appraisal, let’s say $95,000.00, then there’s a problem because your lender is not going to approve a loan for $100,000.00 for a house that just appraised for $5,000.00 less.

How and why does this happen?

Appraisers have to go off of recently sold properties only, not pending properties, or active properties. So even though the BPO may have come in at a higher valuation, the reason is that BPO agents have a bit more leeway on what comparables they are able to use. As opposed to appraisers, BPO reports may include active listings, pending listings, in addition to sold listings in order to determine true valuation.

Will the short sale lender adjust the approval price to match the appraisal price?

Most lenders will actually change their payoff letter so that the deal can go through. As a matter of fact, this is something that happens all of the time in our office. The only drawback is that it takes a bit longer because there’s a process which typically 2 to 3 weeks. It all comes down to how much of a hurry the buyer is in to buy the house. If the buyer is in a position to wait the extra time, then this actually benefits them because they get an even better deal than the original price.

Lenders like Fannie Mae for instance are less likely to lower the approval amount regardless of the appraisal value. I know what you’re thinking and I agree… It makes no sense.

What happens if the lender is unwilling to adjust the approval price?

There are a couple of different scenarios that may ensue if the lender doesn’t want to lower their payoff amount. One thing that can happen is that the buyer walks away and keeps looking for another Orlando short sale. Another way to get around this issue is if it’s a cash buyer that really wants the property. However, not too many people will purchase a property for more money than the appraised value unless it holds some kind of sentimental value for them.

Need help with a short sale? Call our office at 407-902-7750

Orlando short sale expert

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