We have been working with numerous San Diego short sales and we have noticed that if there is a second trust deed that was not a "purchase money" loan, collection agencies and attorneys are starting to surface.  California law states that if you have a "purchase money" loan a foreclosure is the end of the matter.  "Purchase money" means you took out a mortgage when you purchased your home or condo.  Some lenders like the Bank of America have first and second trust deeds on properties.  Although negotiating with the B of A was a nightmare, at least when it was over it was over.  The key with the B of A was getting it over.  That has all changed, or at least that is our impression with a couple of recent short sales. 

The Bank of America has launched a new online system called Equator.  You are able to upload all documentation regarding a short sale and you are assigned a negotiator.  You are then able to follow the progress of the short-sale approval process. Sounds nice and easy, and it is if you only have a first trust deed.  What we have started to see with second trust deeds is that the B of A is selling off the note to either a collection agency or an attorney and they are interjecting themselves into the transaction.  They want money.  They are supplying short sale releases reserving the right to sue you for the unpaid difference between the loan and the amount forgiven.  This is really very greedy and very crass, but a new industry has grown up around these short sales.  San Diego is no different than any other part of the country.  If this is happening in San Diego, it is happening everywhere else.

For awhile we thought we were imagining this, but I came across an article by Jim Wasserman at McClatchy/Tribune News.  He says exactly what we have been experiencing and this is making a bad situation even worse.  Imagine losing your home.  Losing your job.  Having some barracuda collection company or attorney sue you for money you don't have because if you had it you wouldn't be in the mess you are in.  Read this article, Years After Loan Default, Homeowners May Still Owe.  You may find this as irritating as I do.  One can only hope there is a fix in process for this.  The government is interfering in everything else.  You would think they could interfere to do the right thing for once.

If it sounds like I am on a bandwagon you would be correct. We watch people suffer every day and those who are out to benefit themselves from others' misery are slime bags.  My only issue is that the government usually makes situations worse, so I am not sure how this is all going to come out in the wash.

This is a series of articles by Sharyn and Victoria Crown, Downtown San Diego real estate agents specialzing in Downtown San Diego condos.  Visit us on  our San Diego Crowns Real Estate  Facebook page.

The news tells us all that lenders want to "help" with foreclosures.  I am not sure I believe that storyline.  Some lenders want to help you and some lenders say the right words but refuse to take the right actions.  The foreclosure and short sale markets are in upheaval right now.  Whether or not a lender will work with you if you want to keep your home is like a crap shoot in Las Vegas.

However, the National Association of Realtors (NAR), which is thousands of agents like us, really want to help our clients either keep their homes or sell them in shortsales.  We are tired of the runaround and downright incompetence.  Here is an article that may give you some direction as you face your choice to either take a foreclosure, a shortsale, or a stay in the property.

Please let us know if we can be of service.  Call or email us with questions.  We are seeing all sorts of lender behaviors and might be able to give you some insight on how to deal with  discombobulated lenders.  (I just love the word discombobulated).  We really are here to help you and explore your options.   We charge no fees for this service.  Just contact us.

This is a series of articles by Sharyn and Victoria Crown, downtown San Diego real estate agents.

Each lender is the same and different in their short sale processing.  However, the basics are still the same.  If you are thinking about a short sale, take a look at this simplified Wells Fargo processing.  All you need to do is click here Wells Fargo Short Sales, and you can review the documentation.  If you have any questions or need any help with a short sale just give us a call or email us. 

This is a series of articles about Short Sales and Foreclosures by Sharyn and Victoria Crown, Downtown San Diego Realtors.

If you are having trouble with your mortgage, there is a new law that Governor Schwarzenegger signed on October 11, 2009  This new law is Senate Bill 94 and if basically tells any person who is working on a loan modification or morgage loan forearance service affecting 1-4 residential units they do not have to pay any upfront fees or advance fees.

  In other words, any person, including real estate licensees and attorneys can no longer require a mortgage holder to pay them for services that have not been rendered.  This is very significant because we know people who have paid $3000+ for a loan modification service or a short sale service and nothing happens, other than the money is down the drain. 

In addition, any fees that have been collected after October 11, 2009 have to be returned.

In reality, this may turn out to be a beneficial law.  One never knows until a law goes into affect.  Sometimes there unintended consequences.  I don't know what they could be with this law, but we will find out in the near future.

If you don't get help on your mortgage, why in the world are you paying someone?  The short sale negotiators we recommend to our sellers, Premier Negotiators, LLC, do not get paid until the sale closes.  If the sale doesn't close, the negotiators don't get paid.  That is how it should be.  Going thru a short sale is stressful enough.  Paying for an unsuccessful short sale is dumb.  Sorry for not being politically correct here, but it is still dumb.

For those of you who are legally minded, here is a link for Senate Bill 94.

This is a series of articles about Short Sales and Foreclosures by Sharyn and Victoria Crown, Downtown San Diego Realtors.

If you think you want to purchase a short sale property, you will really have to make sure this is the path you want.  Every buyer in the world thinks if they buy a short sale they will be getting a deal.  Just remember, if it seems too cheap, you will be paying one way or another.

There are some tips to consider if you want to purchase a short-sale property:

1.  Work with a Realtor.  This is not  a road you want to go down by yourself.  These sales are unlike any real estate sales you have done in the past.  The bank will be paying the Realtor's commission, so there will be no additional cost to you.

2.  Determine your patience level.  If you get antsy and have no patience, this is not the type sale for you.  Short sales can take 30,60,90 days or even longer.  The bank negotiator may have 100 or 200 packages just like yours.  There is no threatening or coercing these bank employees.  They cannot afford to care.  They are overwhelmed.

3.  Have a pre-approved loan.  The bank won't even take your short sale under submission without verification that you are an approved buyer.  This is not a step to play around with because the bank negotiator won't even look at the file.  You will go to the end of the line and that is not a pleasant place to be.  It is between a black hole and the deep blue sea.

4.  Understand what a short sale is and what it isn't.  Some banks are trying to settle their mortgages.  Surprisingly enough, some banks don't try to settle their loans.  They have other hidden reasons for not settling.  If there is Private Mortgage Insurance involved, it may be more profitable for the bank to foreclose.

5.  Be prepared for an "as is" response from the lender.  In other words, don't expect repairs.  Most lenders are not paying for repairs and just don't care.  They are already losing money on the loan.  They are not willing to throw good money after bad.  That leads us to the next point.

6.  Have a physical inspection.  Do not use your father, your uncle, your aunt, your cousin or anyone else in your family or friend sphere unless they are licensed contractors or do physical inspections on a daily basis.  It there is an issue, and if you want to try and get the bank to fix it, and if you have ignored #5 above, you must have input from a neutral 3rd party.  Family and friends do not count as neutral 3rd parties.  In spite of  #5 above, sometimes a bank will allow a repair.  Just don't count on it.  Make sure you discover any defects prior to purchasing the property.  After the fact is not going to help you.

7.  Can you afford this property and any/all repairs?  Look over your budget.  Are you comfortable with the mortgage payment, taxes, insurance and any needed repairs?   Do not over buy because your finances might under deliver.  Be careful.

8.  Assume nothing.  Do not think a short sale is going to act like any other sale you have experienced.  These sales have a life of their own.  Sometimes there is no rhyme or reason as to why the sale proceeds the way it does.  These sales remind me of a Haley Mills movie I once saw, "The Castaways."  Maurice Chevalier sings a song that says, "Why cry about bad weather, enjoy it.  Each moment is a treasure,enjoy it.  We're traveler's on life's highway enjoy the trip.  Each lovely twist and byway, each bump and dip.  If there's a complication, enjoy it...."  Truer words were never spoken or sung in a song.  A short sale is an adventure.

9.  Don't assume the sale is a done deal.  Be willing to keep looking after your offer is submitted.   The short sale is not done until it is done, and even then there can be issues.  We closed a short sale where everyone signed off, or so we thought.  Escrow was closed.  The buyer was in possession.  The seller was gone, and then one of the mortgage holders decided they hadn't given their written approval to the title company and the escrow company.  It was after-the-fact, but everyone had to jump thru hoops to get the mortgage holder what they wanted.  All ended well, but it showed us these sales are like eating onions.  They can keep repeating.

This is a series of articles about Short Sales and Foreclosures by Sharyn and Victoria Crown, Downtown San Diego Realtors.