Wells Fargo Paper Pushers are a PAIN!
In the past several months, Wells Fargo has taken on a new policy wherein they want a copy of all lien releases for any outstanding liens on the property PRIOR to submitting the file to the negotiator for review. They are now pulling their own title work and reviewing it to make sure that all liens are being reported to them. This may cause a huge battle because often the Second Lender will not approve the lien release until they have the written approval from the First.
I have always said that Wells Fargo is one of the strictest Banks that requires a crazy amount of paperwork for them to move forward. We recently had a file wherein the second mortgage, even though they had a second mortgage on the property, took the Sellers to court on the Note and received a Final Judgment against them. The seller was even garnished. However, in Florida, if you are head of household, you can stop the garnishments if you do not agree with the garnishment, so that ended. We have been fighting with a Negotiator that cannot put the second mortgage payoff and the Final Judgment Payoff together as one.
The Bank Negotiator keeps asking for another payoff from Citi Financial which is both the second mortgage and the Final Judgment Plaintiff. She just can’t get it thru her head! We have gone over her head multiple times to a supervisor and she refuses to submit our file. I requested a copy of her title work so we could see what she is seeing, but she just keeps sending us the recorded page number of the Judgment. We have contacted Citi Financial and they said yes this payoff includes the mortgage and the Final Judgment. We have asked Citi Financial to state that in their letter but they complain that this is a standard letter and it will not be tailored to the request of the First Mortgage Company.
So … What do you do??? I have requested our title company to provide us with current marketed up title to verify that they have all lien releases and we can move forward. Marked up title is usually done at closing if the Buyer and/or Seller has an attorney, just to confirm that that are no more liens on the property and that they can guarantee the title free and clear from all outstanding liens.
At this time, we have submitted this information into Wells Fargo and asked for a supervisor as the Negotiator is not a title agent and has no idea what she is doing due to the fact that there are over 7 liens on this property and she doesn’t understand anything. All I can say is that many of the Banks have no intelligent life form working there to understand this process.
Many of the processors and Negotiators are thrown into Short Sales without knowing what is right or wrong. They just follow a checklist and if your file does not fit in their standardized checklist then it will not get through. That is why your Title Company may need to help you and/or the Bank supervisor needs to help. If that doesn’t work then send an email directly to the investor of the loan such as Fannie Mae, Freddie Mac or FHA, stating in the subject line of your email “Wells Fargo does disservice to FHA!”
That is my next step if she doesn’t move this file through as I am fit to be tied and I want this deal to close. It has not yet been submitted to the investor for final review and she is withholding a deal that can close immediately once it is approved.
Know your lender and learn the key things to tell your negotiator to get your deal through.
Join me at my 3 Day Live Event in February. Stay tuned to hear about a short sale deal that I just negotiated and closed with my partner. We could wholesale it for a profit of $20,000, but we’ve chosen to rehab and sell it for a profit of $40,000-50,000. I will tell you more in the next article, but remember, short sales DO work and people are cashing in BIG checks on short sales!!!
Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move ahead in your real estate dreams for 2015!!
Happy Negotiating!
Kimberlee Frank
Like me on www.facebook.com/foreclosuresgonewild
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YEAR-END BLOW OUT FOR SHORT SALES!
Experienced Negotiators, you and I, know that December is time to help the banks clear their books. Since many of the Bank Negotiators get bonuses, they want to see as many short sales close as possible in December.
Recently, we fought on several deals wherein the Banks kept asking for higher counter offers. Holding off until the beginning of December can put more money into your pocket. In Florida, the Banks pay all property taxes in the end of November, just before the due date, so they don’t get penalized. After that date, when you make offers, the taxes are paid and the Bank’s net has increased versus what they would have received in the month of November when taxes were not yet paid. Recently, we were fighting with a lender over $2,000 on the purchase price because the bank wanted a specific net. You might say ‘that is not much,’ but once the taxes were paid, the bank’s net was higher.
Remember, that once the taxes are paid, they are no longer on the HUD as a deduction to the banks net, so by default the bank’s net increases. Did the bank still pay them either way? Absolutely, but that doesn’t affect us. The investor’s offer no longer needed to be increased to reach the bank’s net and that’s all we needed. The investor’s offer was now right in line with their value to receive short sale approval.
On another deal, the party who signed the Mortgage Note was deceased and the other parties listed only on the deed had no financial responsibility. The intention of my partners on this particular deal was to find an end cash buyer and close back to back. Therefore, we were delaying in countering. The Bank kept calling about the counter offer and then the very next day, we received an approval letter for the amount submitted minus $500.00, which the Buyer would have to pay. The possible profit on this property is around $20,000, as a wholesale, and even more if fixed up and then flipped. Why did the Bank Negotiator send the approval letter without waiting on a counter offer? Because he gets a bonus and he needs to get it off the bank’s books by the end of the year.
Negotiators may or may not get bonuses, however, they are required to meet their numbers by having a specific amount of deals approved as a short sale, deed-in-lieu or suggest taking it to foreclosure and get more money. It is very important that you, as a Negotiator, find out if the bank negotiators get bonuses.
I have two files that have huge City Liens. The first deal wanted over $11,000 and we offered $1,000, they countered our offer at $9,585 and said take it or leave it. I countered at $1,500 and they came back at $5,325. I countered at $3,000 and they said they would accept this offer. This lien that grew to over $11,000 was just for rotten facia over the garage and some dirty driveway concrete, it was ridiculous! The daily fines grew out of control. Since Fannie Mae wanted a higher price than the Buyer would pay, the Buyer said he was willing to pay up to $5,000 towards any liens on the property. Currently, there is a water lien of $1,500 and now City lien of $3,000. We have submitted our HUD to the Bank for final approval.
I have another file in Ft Lauderdale that has a $16,500 lien just for a dirty pool and because the seller did not file a vacant affidavit with the City because the seller had moved out. This lien was just placed on the property in April, 2014, only 6 months ago. What a great fee to pay the city for going out to the house one time and finding it vacant with a dirty pool. Not happening! This matter is set before the Judge on December 16th, wherein I will personally appear and get it reduced, as my partners are buying this property. I will keep you informed as to the outcome.
The next lien battle was unexpected. We had received an approval letter from the Homeowner Association on a deal which is set to close before December 10th saying they wanted $3,300 for the Homeowners Association Dues. The fees were negotiated down to $2,800.00. Then we needed to confirm that there were no transfer fees and/or application fees for the buyer. Well, boy, were we hit with a shockerr!! A new company had just, in the past couple weeks, bought out all of the outstanding dues for the Homeowners Associations and sent us a new bill/estoppel for $7,500.00. I had to literally go toe to toe with this Attorney/Investor who wants to personally buy all the houses with the outstanding dues and fix them up and flip them himself for full profit. He told me that his intention was to foreclose on all of them and buy them. I asked him ‘what would one less house make a difference?’ and would he let us close with the $2,800 versus the $7,500. After going back and forth and asking him if he sent this offer to the Board of Directors for consideration, he finally accepted the original offer/estoppel of $2,800 that was not even expired yet from the previous attorney. The trick on this deal is to understand the Homeowners Association is run by a Board of Directors who live in the neighborhood. The Board just hired attorneys to represent the outstanding accounts owed to the Homeowners Association. I always send my offer to both the Attorney and the Board for consideration, because in the end, it is the Board of Directors who have to personally live next to the vacant homes.
During this Christmas Holiday, take the time to tell everyone you know how much you appreciate them and love them. Remember, even though it is Christmas, Sellers still need to sell their homes and need to make big decisions either to let it go into foreclosure and/or do a short sale. This is the best time to market your letters as they are getting many Christmas cards…… so keep marketing!
The most recent deal my partners and I closed just last week was in Tarpon Springs with a profit of $17,000 plus. so now is the time to take action!! Attend my 3 Day Live Event in February and learn how to have profitable deals and increase your income to new levels in 2015!!
Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move ahead in your real estate dreams!
Happy Negotiating!
Kimberlee Frank
Like me on www.facebook.com/foreclosuresgonewild
Like me on www.facebook.com/sellfastrealty
Foreclosures Flying through Courts – Deficiency Judgments Soaring
In January of 2014, Florida passed a law that allowed the Banks to push their foreclosures through the court system faster than the normal 879 days that it used to take. I have seen foreclosures go through the court as quickly as 4 to 5 months because the Sellers, even though they do not have an attorney, do not take the time to file an “Answer” when they are served with the Summons and Complaint. An Answer, in which they themselves can file, simply states that they would like this matter set for trial. This letter includes the caption of the court pleading and their address and telephone number. They would have to file this Answer with the Court along with a Proof of Service that they mailed a copy to the Attorney representing the Plaintiff (Bank). Once an Answer is filed, the Court must slow down the Foreclosure proceedings to allow enough time for the proper hearings that are entitled to the Sellers.
I used to advise my students to wait to send marketing letters to Sellers who were in Foreclosure for at least 6 months. Times have changed! I am now recommending, due to this new law, that the marketing starts as soon as the Notice of Lis Pendens (a document letting the public know that the Sellers are in Foreclosure) is served to the Seller. Many Sellers are running scared. They are moving out before they even have time to fight the fight. I say “Don’t Run and Don’t Let the Bank Win” and do a short sale. Even if you are doing a Loan Modification and/or Short Sale, the Bank is still pushing through the Courts to get a foreclosure hearing date set. However, a short sale takes control of the Sellers destiny.
In addition to the new law that allows the Banks to go faster through the Court, it also allows them to get a deficiency judgment (amount that is owed, plus court costs and attorney fees) at the time of the final hearing while still owning the Asset (the house). How disappointing is our legal system that they allow the Banks to do this, as they do not even know how much the Sellers will owe until the bank sells the Asset! The Banks are then selling the Deficiency Judgments for pennies on the dollar and going after Sellers. Don’t let the Sellers get garnished when the Banks don’t even have a final number!
I am here to tell Realtors and Investors to start moving in on the Sellers now when they need you the most. Many of the Sellers do not know their rights and are sick (many of them physically), tired, highly stressed, broke and just downright scared. Tell the Sellers their rights and help them do a Short Sale. When there is a short sale pending, most often we are able to get the Bank to postpone the sale date as long as they Motion the Court at least 15 days prior to the hearing date. I say it again, “Don’t Let the Bank Win!!!” Help the Sellers out at the same time you are helping our economy and ourselves.
If you work with a Realtor and you are an Investor, you can tell the Sellers that you have the best of both worlds. First, you already have a Realtor which the banks ‘think’ they need to have involved. Unfortunately, many Realtors don’t even know how to negotiate a short sale or the many liens that are now popping up. And second, YOU are a buyer. The price doesn’t matter because it is up to the short sale lender to send out someone to get a broker price opinion (BPO) or an appraiser to counter the buyer and sometimes the bank will give their acceptable short sale listing price in which the Realtor must comply.
If you lost everything in real estate, then it is time to get back into it, as real estate is forgiving. There are very few houses on the market, which gives us a Seller’s market; however, when you work with the Seller from the beginning, you are able to make a deal when no one else can get a deal accepted.
Stay tuned for more updates on short sales and remember…. a large number of your short sales can become a subject-to, lease option, lease or even a straight purchase. Please don’t assume there is no deal because you don’t want to do a short sale. You will be pleasantly surprised to learn how you can create multiple exit strategies from a short sale deal! I am doing it every day and so are my students……turning short sales into profit! I just had a student close a deal that was a short sale. We negotiated it, flipped it, and never lifted a finger! The student walked away with $7,591.53 in his pocket. It works!
Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move ahead in your real estate dreams!
Happy Negotiating!
Kimberlee Frank
Like me on www.facebook.com/foreclosuresgonewild
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Changes in Short Sales – Are you keeping up?
Every day the Banks are making minor and/or major changes on how they do short sales. What was once an easy short sale system now varies depending upon each Lender. Many lenders will want the Sellers to use their own in-house short sale package, even though my detailed generic package pushes the deals forward. Sellers really don’t have a true concept of how much debt that they have when it comes to reporting all of their debts. Many of them will not even include a debt on their financial statement to the lender, just because they are choosing not to pay it. In my short sale system, I have created a detailed short sale package with forms that are used to help my Sellers make sure that everything is included and maximize their chances of short sale approval.
In January of 2014, Florida allowed a law to be passed that the Short Sale Lender may receive a Deficiency Judgment at the time of the Foreclosure while the Lender still has the asset (property) in their portfolio and didn’t even sell it yet. Before this law was passed, the Short Sale Lenders could foreclose on the property and then they have a choice whether or not to either forgive the debt or pursue the Sellers. If they forgive the debt, they still issue a 1099 (Forgiveness of Debt Form) which means the Sellers would have to pay taxes on the amount that the bank has forgiven. Or the Lender could go after the Sellers again by filing a new lawsuit for a Deficiency Judgment on the balance that is owed AFTER the Lender sells the property and releases it from their portfolio. Many Short Sale Lenders are amending their complaints to request this immediate deficiency judgment. Sellers are blind to the new changes and they are burying their heads in the sand, thinking they are living in the house for free and then letting the property go to foreclosure with no repercussions.
As Investors and Realtors, we need to inform the Sellers of all of these changes. I can’t even believe that Florida would allow such a law to pass, as the Short Sale Lenders have no accurate clue how much they have as a deficiency because they have to hold the property which costs them interest, maintenance, taxes, insurance, management, and realtor fees. This amount could even be more if the Short Sale Lenders decide that they want to fix up the property and then sell it. So … what amount have they added to the deficiency judgment amount against our Sellers for all of these fees???? I am assuming they are using the SWAG theory….a Scientific Wild Axx Guess!!! This is an amount “guess-timated” by the Lenders, and the Sellers are not arguing that amount. Therefore, the Short Sale Lenders are getting paid more and more money. This amount, even with a deficiency judgment issued, can be written off by the Lender at any time by passing the buck to the Sellers with the 1099 Forgiveness of Debt.
For the short sale deals that I am working, I am finding that the Short Sale Lenders who have Fannie Mae as their investor underneath are inflating the value of the home by an additional 20% of what it is actually worth. What does this mean for the negotiator? It means you have to make changes on how you are arguing over value. I have gone at this in two different ways, buying notes and also providing appraisals. I am getting deals approved and closed that nobody else is able to do.
If you are dealing with Nationstar, you will be working with Homesearch.com which is their new auction site. This is a pain in the butt!!! No matter what the offer, Nationstar is never, and I mean never, happy with the offer; it is never high enough for them. Therefore, this means that on these deals you need to be ready to fight. Nationstar makes promises to Listing Agents that if the buyer doesn’t have a Realtor then the Realtor can double dip and get the commission on both sides. I have written lots of articles about Nationstar who is just a servicer for other lenders. I have also called and complained to the National Association of Realtors about all of the false advertising where Nationstar is stating “Short Sale Approved,” on their auction site. Well, if it was truly approved, then what about giving me the approval letter for the existing buyer that I presently have on the property?
I love short sales and to fight, as I do it, on behalf of my Sellers. There is no voice for the Sellers; however, when they do a short sale with me, they get control of the outcome instead of the Short Sale Lender.
Stay tuned for new tips on how to work around Short Sales by purchasing Notes and providing Appraisals for values. I will keep you all informed monthly. However, if you are working on a short sale NOW, you need to be able to maneuver through all of these changes so you can close your deals.
I am speaking at IRC on October 16, 2014 and holding a One Day Training on November 8, 2014 to teach you how to get through your deals, still help the Sellers and also make money. Make sure that you attend, as the tips and the secrets that I will be providing you will not only help you on short sales but on any type of transaction that you are attempting to do, wholesale, lease, lease option, option, subject to and more. Get ready to move forward in your real estate business and I will see you then!!!
Happy Negotiating!
Kimberlee Frank
Like me on www.facebook.com/foreclosuresgonewild
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