It seems Loan Servicing companies are pushing their delinquent borrowers to do a Deed-In-Lieu rather than a Short Sale.  This has been cause for speculation among Realtors doing Short Sales.  Why would the banks want to do DIL in a down market (Florida), when a Short Sale now would net them more money and help the homeowner get their lives and their credit back?  I have a saying:  Everyone works their pay plan. Find out who gets paid and you’ll understand their behavior.  In this case, of course lenders are pushing Deed-In-Lieu.  Look at their pay plan:

  1. They avoid all the legal costs inherent in a foreclosure.
  2. They get to sell or rent the property (and at the very least, preserve it).
  3. They can pursue the borrower for the deficiency afterward.
  4. They can insert fine print in the DIL agreement preventing the homeowner from filing any future claim against the bank for wrongdoing (e.g., robo-signing).

Deed-In-Lieu means the borrower gives the deed to the bank instead of relinquishing it through the foreclosure process. It releases the lien on the property but the debt is not forgiven. It’s also called “Friendly Foreclosure” because IT IS STILL A FORECLOSURE!!! Ever had a car repo’d? Whether you send Ford the keys or they come get the car…it’s still a REPO.

NOTE: In Florida, lenders (and HOAs) have up to 5 years to file for a judgment. Things may be bad for the borrower now, so the bank just waits for them to get back on their feet to get a judgment. Once they have a judgment, the lender can pursue the borrower for up to 20 years (10 years plus a 10 year extension). Lenders can get a judgment and put a lien on a borrower’s other assets (including other property) down the road.
NOTE: California is a non-recourse state, which means the bank can’t come after you after a foreclosure. Unfortunately, that does not apply to 2nd mortgages or HELOCs or HOAs — they can come after you with a vengeance!
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St. Petersburg FL – I am following up on a question from Arman. His loan was owned by Fannie Mae and the company handling the loan for Fannie Mae was rejecting an excellent Short Sale offer for no reason.

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

Here is a quick recap of possible steps that Arman could take:

Step #1: Call his lender and demand a written letter explaining why they are declining the Short Sale offer.

Step #2: Write down what his projected personal losses are going to be if the property is foreclosed upon instead of sold as a Short Sale.

Step #3: Call his lender and tell them that, if the Short Sale offer is rejected and the house is foreclosed, he has documentation ready to present in a legal action to recover his losses, specifically, those he detailed in Step #2.

Here is the basis for Arman’s argument:

First, the company handling his loan is not his lender.  That company (in this case, a company owned by IBM) was hired by Fannie Mae to service the loan by collecting payments and to act in Fannie Mae’s best interest.  By not accepting the higher Short Sale offer, they were not doing everything they could to help Fannie Mae net the most money from the property sale.

As the mortgage owner, Fannie Mae had a duty to minimize its losses and was negligent in allowing their servicing company to operate against the best interests of Fannie Mae, resulting in negligence toward the homeowner.

As a result of their negligence, Arman will have a foreclosure on his record.  We all know that a foreclosure will be much more damaging to his credit history, but he will have other damages from a foreclosure.  In a Short Sale, the lien is released and the debt can be fully forgiven.  In a foreclosure, the debt is not forgiven and Arman would owe the difference between the unpaid mortgage and the sale price of the home.  Since foreclosed properties sell for 20% less than comparable Short Sales, he would owe and be pursued for a much higher amount.

Arman believes that, when he gets in front of a jury to show how this company’s negligence caused Fannie Mae to lose $15,000 on the sale of the home and that it hurt him financially as well, the jury will award damages in a heartbeat.

In tomorrow’s blog post I will detail the specific damages Arman might ask to be compensated for by the lender.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jennie@blackburninvestors.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 727-599-5418.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our St. Petersburg Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this, Jennie Blackburn.

Jennie is a Real Estate Agent at Blackburn Investors Realty.

Phone: 727-599-5418. jennie@blackburninvestors.com.

Rebuilding lives…one home at a time.

Jennie Blackburn specializes in loan modification assistance and short sales in St. Petersburg Florida. St. Petersburg Loan Modification Help, St. Petersburg Short Sales. St. Petersburg Short Sale Realtor. Short Sale Realtor. St. Petersburg FL Short Sales. St. Petersburg Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Jennie Blackburn’s personal views and do not reflect the views of Blackburn Investors Realty. This information on St. Petersburg Short Sales: Are homeowners able to sue their lender for damages after a foreclosure is provided as a courtesy to our viewers to help them make informed decisions.

St. Petersburg FL – The Stop Foreclosure Institute recently received a question from Arman.

Here is his question:

I am a Seller trying to avoid foreclosure. My agent has a buyer and his offer is with the lender from last seven months. Now the lender told us that Fannie Mae investor refused the short sale offer and the house is going to foreclosure early next week. The lender’s own appraisal shows the house is worth $120K. The offer we have is for $150K. I told the lender that it is unlikely they will receive and offer for 150k after the foreclosure. She replied and said, ‘We or some of our investors will buy it!!!’ I don’t want a foreclose on my record. Is there anything I can do to stop the foreclosure? Thanks a lot for your help…Arman

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

Arman gave me more details. I will relate them here and then tell you what I recommend that he do. He told me the loan is owned by Fannie Mae, and a third party lender is “servicing” the loan for them.

I have negotiated many short sales. The only reason a lender should turn down a short sale is when their numbers (from an actuarial viewpoint) show that they will reduce their losses with a foreclosure. That has always been the case on any short sale I have ever negotiated. (Or I should say most of them. Some have been rejected for other reasons, but they are almost always monetary reasons.)

Here was my recommendation to him:

Step #1: Call up and demand a written letter explaining why they are declining the Short Sale offer.

Step #2: Write down what your projected damages will be if the property is foreclosed upon instead of sold as a Short Sale.

Step #3: Call up the company handling the loan servicing for Fannie Mae. (Remember, the loan servicing company is not your lender. They are paid by Fannie Mae to do their job in a competent manner.) Tell them if they reject the Short Sale for no reason and the house is foreclosed, then you will be suing them for the specific damages you outlined for them in Step #2.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jennie@blackburninvestors.com. I will contact you for a free consultation. When we talk, I will explain how the process works in detail. If you prefer, then you can call me directly at 727-599-5418.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our St. Petersburg Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this, Jennie Blackburn.

Jennie is a Real Estate Agent at Blackburn Investors Realty.

Phone: 727-599-5418. jennie@blackburninvestors.com.

Rebuilding lives…one home at a time.

View My homes for sale at www.StopFloridaForeclosureNow.com.

Jennie Blackburn specializes in loan modification assistance and short sales in St. Petersburg Florida. St. Petersburg Loan Modification Help, St. Petersburg Short Sales. St. Petersburg Short Sale Realtor. Short Sale Realtor. St. Petersburg FL Short Sales. St. Petersburg Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Jennie Blackburn’s personal views and do not reflect the views of Blackburn Investors Realty. This information on Question from homeowner: I want to avoid foreclosure, but my lender won’t let me is provided as a courtesy to our viewers to help them make informed decisions.


St. Petersburg FL – Negotiating short sales is tough. In my opinion, some of the banks are not making good financial decisions. “We won’t approve the file without the financials completely filled out,” they say.

Or, they tell you the numbers won’t work when the investor guidelines actually say to approve the short sale. If the agent doesn’t know who owns the loan (or their short sale guidelines), then the bank negotiators can lie to them. They don’t know any better. Let me give you an example.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

The Stop Foreclosure Institute recently closed a short sale where the owner of the loan was the Federal National Mortgage Association, also called Fannie Mae.

The bank’s appraiser said the home was worth $220,000. Because of prior experience with Fannie Mae Short Sales, I knew what percentage of the appraised value that they would accept. The short sale offer being presented would net them $6,000 more than that number.

The negotiator countered. She said the buyers needed to pay even more for the house. We asked the buyers if they would raise their offer.

The buyers told us that it was their highest offer. They had looked at many other homes for sale. If their offer wasn’t accepted, they already had another home in mind to purchase.

Most agents don’t know the guidelines for short sales. They would have taken the short sale negotiator’s answer at face value. As a result, the short sale would have been rejected.

The buyer would have bought the other house and the seller would be at risk of losing the home to foreclosure.

Fortunately, we knew the short sale guidelines. Because we knew the numbers and the guidelines, we were able to push the negotiator for an approval. The file was approved and the sale closed a little while later.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jennie@blackburninvestors.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 727-599-5418.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our St. Petersburg Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thanks for reading this and I welcome your comments.

Jennie Blackburn, Realtor, CDPE, Certified HAFA Specialist

Jennie is a Real Estate Agent at Blackburn Investors Realty.

Phone: 727-599-5418. jennie@blackburninvestors.com.

Rebuilding lives…one home at a time.

View My homes for sale at www.BlackburnInvestors.com.

Jennie Blackburn specializes in loan modification assistance and short sales in St. Petersburg Florida. St. Petersburg Loan Modification Help, St. Petersburg Short Sales. St. Petersburg Short Sale Realtor. Short Sale Realtor. St. Petersburg FL Short Sales. St. Petersburg Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Jennie Blackburn’s personal views and do not reflect the views of Blackburn Investors Realty. This information on St. Petersburg Short Sales: How to know when the short sale negotiator is lying to you is provided as a courtesy to our viewers to help them make informed decisions.


St. Petersburg FL – What do you do when the house won’t sell for any more money, but the bank keeps on rejecting the offers? You can give up, but the seller may lose their home to foreclosure.

Ouch! Why not escalate the file and get it approved? Here’s an example of how it worked for the Stop Foreclosure Institute.

Discover how other sellers successfully did a short sale and request a free consultation by clicking here.

We had a house on the market for 4 months. We started the price at 200k and slowly brought it down to $169,900. We finally got an offer for $159,000. Since I knew the bank’s appraiser’s valuation, I knew the offer wouldn’t work.

The bank’s appraiser said the house was worth $195,000. Yes, after we had had the house on the market for 4 months!! Because I knew the loan owner’s guidelines, I knew that that current offer of $159,000 didn’t have a shot at getting accepted.

In order to get this file through, I had to do two things:

  1. Convince the bank that their valuation was inaccurate and that they should order a new value.
  2. Escalate, escalate, escalate the file!

Thing #1:

I send my own opinion of value, also called a Comparable Market Analysis, along with comparable homes for sale. I explain that the valuation they were using is inaccurate and that they needed to order another one.

Thing #2:

I ask for the bank negotiator’s supervisor’s contact info. Remember, most of our communications are e-mail. Two-thirds of the time they will e-mail me back the supervisor’s info. The other one-third of the time they will just start doing a better job on the file.

If the new bank appraiser’s valuation comes back within range, they will approve the file and we can close. On the subject house, the new appraiser’s valuation came back within range. We received an approval on the short sale and it closed a little while later.

Thinking about a loan modification? Our St. Petersburg Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.

Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at jennie@blackburninvestors.com. I will contact you for a free consultation.

When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 727-599-5418.

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thanks for reading this,

Jennie Blackburn, Realtor, CDPE, Certified HAFA Specialist

Rebuilding lives…one home at a time.

Phone: 727-599-5418. jennie@blackburninvestors.com.

View My Information at www.StopFloridaForeclosureNow.com.

Jennie Blackburn specializes in loan modification assistance and short sales in St. Petersburg Florida. Jennie is a Real Estate Agent at Blackburn Investors Realty. St. Petersburg Loan Modification Help, St. Petersburg Short Sales. St. Petersburg Short Sale Realtor. Short Sale Realtor. St. Petersburg FL Short Sales. St. Petersburg Realtor.

Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Blackburn’s personal views and do not reflect the views of Blackburn Investors Realty. This information on St. Petersburg Short Sales: What to do after the lender rejects the short sale offer is provided as a courtesy to our viewers to help them make informed decisions.


5 Reasons Foreclosure Prevention Is Like Halloween

1.       Tricks

I don’t know if kids do this anymore, but I remember part of the fun, the anticipation, of Halloween was coming up with a “Trick” to offer in exchange for candy – a joke, rhyme, hand stand, armpit noise or, if you were desperate, a song.  Foreclosure prevention is like that, except sometimes the trick is on the homeowner.  You go to the lender’s door, ring the bell, ask for short sale approval and the bank requests a trick.  You do the trick, even though it’s ridiculous (e.g., provide the birth certificate of your childhood pet), stick out your palm for your treat…and…and…what the?!…the lender requires another trick.  Six months worth of tricks and you might get a treat.

2.       Treats

Possibly the best part of Halloween – the treats!  For a kid, heaven is having to use two hands to lug home a pillowcase weighed down with candy.  Sorry, there is no candy in short sales. But there are treats.  For a homeowner, the treat is to “hit the reset button”, to be released from an oppressive situation & constant lender harassment, without the stigma of foreclosure.  For lenders, the treat is being spared the cost to preserve vacant property and the legal cost involved in foreclosure.

3.       Costumed Characters

Every year, the National Retail Federation publishes a list of the most popular costumes (Michael Jackson in 2009; Spiderman in 2004), but some costumes are classic:  Zombie, Super Hero, Vampire, Witch.   I have yet to encounter Spiderman in any short sale transaction, but I’m convinced that a prerequisite for hire as a bank’s short sale negotiator is Zombiehood.  Bank Negotiators and Zombies. Not. Human.  Not human!  Both have that risen-from-the-dead, jerky, robotic shuffle.  And they l-l-l-o-o-o-v-v-v-e feasting on human flesh.   As a Realtor specializing in short sales, I have witnessed scenes of chaos and panic as whole neighborhoods are consumed by Hells Fargo’s (Goo-For-Brains) Zombies.

4.       Terror

Halloween and Short Sales elicit more than just fright; they both give birth to Terror.  Fright is like a sudden shock – painful, but not enough to leave a noticeable scar and it’s over quickly.  Terror implies something more intense.  Dictionary.com’s definition of terror is “extreme fear in the presence of danger or evil”, and describes it as “prolonged…and may refer to imagined or future dangers”.   For months, homeowners behind on their mortgage payments (1 of 5 Florida homeowners) dread opening the mail or answering the phone.  They lose sleep at night, imagining the worst, nightmare images of the Bank of Evil tossing their belongings in the street as the neighbors look on.  Halloween terror is also prolonged, but only until the movie is over.

5.       Spooky Houses

For homeowners, the place that once represented the future, their piece of the America Dream, is now laced with cobwebs.  Windows that formerly framed Norman Rockwell holiday scenes are now hidden behind tightly drawn curtains.  Crabgrass replaces flower beds.  Picket fences, once proudly painted white, fade to gray in the moonlight.

Disclaimer:   My husband, the historian, read this and explained that “trick or treat” actually referred to a bribe, as in, “Hand over the sweets and I won’t egg your house.”  Whatevs, Honey


When Homeowners have financial troubles, the last thing they fall behind on is the mortgage, but the first thing they stop paying is the Association dues. Because of this, many Condo & Homeowner Associations in Florida are squeezed for funds and have become aggressive in pursuing every penny. They now have legal representation, have been successful in litigating similar cases, and are not as likely to back off.  
 
What bank negotiators don’t realize is that if the property goes into foreclosure, it could end up costing radically more than just the delinquent Condo fees.
 
1.       Special Assessments:
 
Unlike delinquent maintenance fees, Special Assessments are not extinguished in a foreclosure because they are part of the property’s cost basis. In other words, the assessed amount becomes real estate — part of the property.  Example: Structural improvements or repairs not covered by association reserves. Delinquent maintenance fees are part of an Association’s receivables, but assessments are part of the real estate itself. As this assessment directly affects the tax valuation of the property, it cannot be separated from it. Which means when a bank forecloses and the property becomes an REO, the entire assessment must be paid, plus the back due monthly fees and the Association’s legal fees, penalties, and the bank’s legal fees.
 
2.       HOA or COA:
 
One wrinkle to check for is whether the property is governed by a Homeowner’s Association or a Condo Association.  Currently, in a Florida foreclosure, the bank would only have to pay 12 months* of Condo Association dues (or 1% of the original loan amount, whichever is lower) in order to deliver clear title to the next owner. However, litigation in Florida is less certain regarding unpaid back dues owed to HOAs after a lender forecloses. 
 
3.       Attorney Fees:
 
Another thing the bank negotiator may not be thinking of is that, even if they only have to pay 12 months of past due monthly Condo fees after a foreclosure…what about the legal fees owed to the Condo Association’s attorney? Judges are lawyers. You think lawyers look out for other lawyers? 
 
The bottom line is that foreclosure will cost a bank more than just a few months of fees and it is in the lender’s best interest to negotiate these costs as part of a short sale, rather than dragging its feet until foreclosure.
 
*only 6 months prior to new legislation in 2010