About Kissimmee's Poinciana

In my opinion.....no...it’s not.

And here’s why. The Lenders want as much money as possible for the property. They want the property exposed on the open market to attract a Buyer at the highest price possible. They want it to be an “Arm’s Length Transaction”. The Landlord (Seller/borrower) and the Tenant have a “business relationship”. In direct conflict with most “Arm’s Length Transaction Affidavits” they “Share a business interest”.

Here’s what three of the major Lenders say about the “Arm’s Length Transaction”.

• Wells Fargo Arms Length Transaction Notice:No party to this contract is a family member, business associate, or share a business interest with the mortgagor. Further, there are no hidden terms or special understandings between the seller or buyer or their agents or mortgagor.

• Bank of America Arms Length Transaction Notice: The Parties acknowledge and agree that the Subject Property must be sold through an “Arm‟s Length” Transaction. Arm‟s Length means two unrelated parties characterized by a selling price and other terms and conditions that would prevail in a typical real estate sales transaction. No party to this contract is a family member, related by blood or marriage, business associate, or shares a business interest with the mortgagor (Sellers).

• SunTrust Mortgage Arms Length Transaction Notice:The Short Sale must be an “arm’s-length” transaction. The property may not be sold to anyone the seller has a close personal or business relationship with, including family, friends or neighbors.

Now folks, I know there are exceptions. I know that some lenders in some cases will allow the Tenant to purchase the property. But what’s the advantage to the Seller? I can’t think of any. To me it’s just an easy fix to try and soothe a Tenant that doesn’t want to move.

And it’s risky. What if the Seller spends several months trying to have this exception approved by the Lender only to have the Short Sale denied over it? Now they have just wasted good time that could have been spent finding an “Arm’s Length” Buyer.

Recently I had a Seller who was being pressured so hard by the Tenant to sell her the house that the Seller almost cancelled the listing over it. The Tenant who is staying in the property, at a reduced rent, is telling the Seller that the price doesn’t matter and that the Lender will have no problem with it and blah blah blah. The main problem is that the Tenant can’t afford the property and is trying to pressure the Seller into accepting a offer that will cost the Lender about $25,000. This is EXACTLY why Lenders do not want the Seller to sell the house to the Tenant.

This particular Short Sale is a Bank of America Florida Enhanced Co-op Short Sale. It gives the Seller a full “Waiver of Deficiency” and is paying the Seller more than $10,000. Because of these great incentives Bank of America gets to control the price and wants an “Arm’s Length Transaction”. Isn’t that fair? I think so and I’m glad the Seller now agrees.

So folks, play it safe. Don’t be bullied into making a costly mistake. What say you?

Recently, I was sitting on my adjustable, vibrating, craftmatic, tempurpedic bed enjoying my morning coffee and "working" on ActiveRain, when my phone rang. I answer...."Good morning Tutas Towne Realty, this is Broker Bryant your local area Real Estate expert, how can I help you on this beautiful sunny Florida morning?" Well, maybe I didn't say EXACTLY that, but it was close.

Anyway, a very pleasant lady on the other end starts asking me about one of my listings. She said she was a Buyer, so I answered her questions about my listing and then asked her if she was working with a Realtor. "Yes, I am, and I'm just helping her out today" Then she started asking me about a few ofmy other listings and wanted to know if they were vacant or Seller occupied. I politely told her... “I can’t give you this info but please have your agent give me a call.”

Well, I guess she didn't hear me because then she asked me if the properties were on electronic lox boxes or did she need a code. She wanted to look at them between 12:00 and 1:00. I asked her again if she was an agent because I thought maybe I had misunderstood her. After all, she was very good at asking for showing instructions.... polite, informed, clear speaking and very precise with her questions and her showing times. But nope, she confirmed again she was a Buyer and was just helping her agent out. I eventually managed to get it through to her that I could not give her this information and that she really needed to have her agent give me call. She finally understood and hung up. I never did get a call from her agent.

So what do you think? Overzealous buyer?Redfin? ZipRealty? Is this the way of the future? “If we are giving you back a commission rebate then you need to arrange your own property showings?”

Whatever it was, I adjusted my bed upward and cut on Regis and Kelly. I hope I didn't miss a sale!!

Are you facing foreclosure in Florida?

Hi Folks. There was a time when all Short Sales were “Distressed Sales”. That time has now passed. There are many Short Sales on the market where the Seller has no financial hardship at all. The only hardship they have is that they have to move and can’t sell because they are underwater on their mortgage.

There are also Short Sale Sellers that are just wanting to unload debt. These are Strategic Short Sales. These sellers have made a financial decision to dump a property that is drowning in debt with no hope showing. They have decided to quit throwing good money after bad and take their losses now.

In both cases the Lenders may very well agree to “settle” the mortgage for less than owed. You do NOT have to be facing foreclosure to work out a settlement with your lender!

When these Sellers borrowed the money they signed an agreement with the Lender. The agreement basically states that if you pay you stay and if you don’t pay you don’t stay. Pretty straight forward.

But what happens if you are paying but you still need/want to sell the property? Well there are 2 options. Bring the difference between what is owed and what you sell the property for to closing. OR work out a settlement with the Lender. This is what a Non Distressed Short Sale is. It’s making your Lender an offer.

And just like any offer the Lender can:

• Accept it
• Reject it
• Counter offer it.

My experience is that the Lender will accept it. BUT...if you don’t have a financial hardship the Lender may very well want you to participate in the loss. Participating in the loss is when you make a cash contribution, sign a new promissory note, or both, at time of closing. It’s an agreed settlement between creditor and debtor.

So.....if you feel trapped by your mortgage maybe there is a way out. Questions?

Related articles:

You Must Be A Deadbeat To Do A Short Sale!!

Do I Have To Miss Payments To Do A Short Sale?

Why Would a Lender Accept a Strategic Short Sale?

Not All Short Sales Are Pre-foreclosures

Are you upside down on your Florida mortgage?

Well I'm not convinced it does. Matter that is. Before I give you my opinion let me preface it by stating that I am not an Attorney. Nor do I know the definitive answer to the question. This article is just my thoughts as I try to think this through.

So here goes.

First, can a deficiency even exist if a borrower never owed the entity any money to begin with? Last I checked the debt was with the Lender NOT the Mortgage Insurance Company (MI). How can the MI go after a deficiency on a note they don't own? Hmmmmm......

Secondly, what the heck gives the MI Company the right to ask the borrower for a cash contribution or a note as a condition to approving the short sale? Wasn't the insurance premium paid....for INSURANCE!! Doesn't insurance pay out when a valid claim is made? Why are they requiring their risk to be subsidized. Shouldn't these losses already have been worked into their rates?

My suggestion: Next time a MI Company ask for a contribution from the borrower ask to see the policy. I'm guessing this policy will outline what is covered and what rights the Insurer has. My guess is that we will find that the MI Companies are asking for things that are far beyond the scope of the policy. What say you?

Are you facing foreclosure in Florida?

Yesterday was a pretty good day. I got to do the thing I enjoy most about Real Estate and that is negotiating. The good thing about negotiating is, that if I’m successful, I get to place one of my listings pending. That means that in 30 days or so, my Sellers can move on with their lives and I get paid. I love that, getting paid. One of my favorite things. The reward for all my hard work. Of course “The Lovely Wife” and the relative I never asked for, Uncle Sam, get most of it, but that’s OK, I really enjoy what I do and the money is secondary.

Anyway, I negotiated two deals yesterday. One was pretty straight forward, a fair price that my Seller agreed to and a two week closing. Now, I like two week closings but let’s be real. They asked for a two week closing on a 100% financing deal and put 25 days for a financing contingency and 21 days to do inspections. Math was one of my only strong subjects in school and for some reason these time frames just don’t add up. So, we decided to counter back with a 30 day close. Everything has been accepted and we are good to go. I guess the point on this one, is to, please, put realistic time frames in a purchase offer and make sure the closing date is not 10 days before the financing contingency runs out. Oh yeah, make sure the Buyers can do the inspection before the closing date.

Now, the second one was little more confusing. Maybe I’m missing something here. So here goes, a cash offer but wanting the Seller to give back $5,000 at closing. These Buyers want to give the Seller $200,000 cash and then have the Seller give them back $5,000 at closing. Now what the heck is this about? Does this make any sense at all? The only thing this achieves is giving my Seller more closing costs. Why would you give someone cash and then ask for some back?

Well, I had to call the other Realtor on this one and ask the question. His response, “They want to put up a fence.” Uh, excuse me, why don’t they just pay for a fence? They are paying cash right? He assures me that this is a cash deal. They are closing on the house they own in a couple of weeks and paying cash. I just don’t get it. I have negotiated hundreds of deals and this one I just don’t get. Maybe it’s not really cash. Now that sounds right. It’s not really cash and for some reason they think this will slip by. Oh well, I think I will have to sleep on this one. I think tomorrow I will have to get to the bottom of this fence thing. My Seller and I can have a good laugh in the morning. Humor really is good for the soul! I can't make sense of the fence!

Are you facing foreclosure in Florida?