Rosemary Brooks -Mother & Daughter (866)-750-8282

Just when you thought you knew all you could about Short Sales and nothing else would surprise you .... you find out that there is a few more things that will throw you off course and tick you off!

While working with W A W U...*&^%$ - I experienced a deliberate delay of reviewing/negotiating a request for short sale approval.  Probably one of the oldest tricks in the book --- and why didn't anyone tell me?

I followed their procedures to the "t".  I Sent in the complete package with an offer that at list price: complete package - including:

• Purchase Offer
• Short Sale Addendum
• Buyer's approval letter, Proof of funds, copy of earnest deposit
• Owners hardship, W2, recent paystubs
• Estimated HUD
• BPO with comps to match
• pictures of the property
• Listing agreement & MLS Listing

1. Sent all these documents in which amounted to about 50 pages - faxed in and (sent fed exp copy)  
2. Waited and then checked back to be sure all documents were received and logged into their system
3. Waiting and then called back to check to see if the file was being worked on
4. Waited and then called back, and back, and back to be sure everything was rolling smoothly (was told that the file had been assigned to a negotiator and that I would be hearing someone soon.  Well this did not fool me... I know when they say soon --- it really means later!
5. Waited and called back again to check status was told the negotiator was working on the file
6. Waited and then call to check status and was TOLD that they had sent a letter to the owner/borrower letting them know that they needed two documents: Purchase agreement and HUD!!!

          * Now I do not have to tell you I was more than a little upset to hear that after all this time (about 2 months) they are now saying that they are missing documents and not only that the two most important documents!  When I know they have the documents somewhere on their side.  That I have confirmation that my full fax were confirmed, I had notes of when I called in and was told that they all the documents and that someone was working on it and......

Why in the world would they send the letter to the borrower to tell them what they needed from me the agent?  If they had to send it to the borrower why would they not at least email me, call me, fax me or mail me a copy of the letter too.  They had all my contact information!

Have you ever hear of this?  Banks need some standard on these short sale requests.

↑ Grab this Headline Animator

Wanta leave a lesson in patience.....?  What to be able to define patience without a loss for words? During this foreclosure maze, there is always something new to learn.  This is about the process of purchasing a Fannie Mae product.  Recent news on foreclosures have reported that Fannie Mae & Freddie Mac have more foreclosures on the market, but promises to have even more once the moratorium is lifted.  So learning about the process of Fannie Mae requirements will help all involved in the transaction.

If your answer is yes and you feel you can deal with it, MAKE AN OFFER ON A FANNIE MAE property.  Both you and your agent will quickly learn how to HURRY UP and WAIT!  Purchasing foreclosed properties are much different from a traditional purchase, well check this out...

Here are a few tips on how purchasing a Fannie Mae property goes:

1. Submit the offer - make sure you do not try to purchase under the listed price! If you want a credit, add that credit amount to the list price.  Back off from asking for inspections, repairs, all the escrow, transfer fees and do not try to top it off with a home warranty.
2. Keep in mind, not to say Fannie Mae will not pay escrow, transfer fees 100%, it is noted that they are more known not to agree to pay 100% of these fees.  It is not automatic.
3. Agent - check the MLS to see if the listing agent added attachments that you will need to submit with the offer.
4. Listing agent will submit the offer and the terms.
5. Be prepared to be countered back - remember to not ask for more than 10 days inspection time
6. Once all the countering and multiple offer forms have been filled out and returned - WAIT.. for the bank to decide which offer they like
7. Once your offer has been accepted by the bank... the listing agent will send you somewhere around 70 pages to sign.  (Bank's acceptance, if you are in California it will be CA state Disclosures) All these documents must be submitted back to the bank -- all signed and in order. Along with these documents will need to include pre-approval letter, earnest deposit check, proof funds, and the bank's copy of Lead disclosure.  Every documents must be signed and initialed properly by buyer, both agents.

          * the good thing about signing all these documents upfront is that once it is done, its done. The second thing to remember is that you will get the Property ID (Natural Hazard Disclosures (CA requirement) and you will still get a preliminary report during the escrow process.

Now here is where the W A I T I N G starts.  Fannie Mae then go through what they call QC process.  This can take a long time to bring back an approval of the offer!  I know , I know... most think you have already been accepted but they say right on the message back to the listing agent -- this is not accepted until you receive an executed contract from Fannie Mae.

So not only are you waiting a long time...you really do not know that you have been accepted until you get that signed by Fannie Mae executed contract back!  And believe me..... there will be a long  W A I T I N G  P E R I O D.  Thanks for the patience.

↑ Grab this Headline Animator

Times have changed and will continue to change for a long time to come. This foreclosure situation is not just going to disappear or get cleaned up anytime soon. The market is in decline and there are alot of "real good deals", low priced properties. This means there will be more "smaller" deals hitting the table. There will be sellers (banks and homeowners) that will be assigning and letting you list properties that will not be the big pocket book commissions or fees.  But nonetheless, they have to be maintained and sold too. 

We as agents have to be able to be flexible with the changing times or we will not survive.  Loan Officers have to change as well -- if they want to survive this wave.  There will be more smaller loan requests - which will mean the loan officers will get less pay for doing the loan.

Are you finding out that loan officers really do not want to do the smaller loans and are pushing away business because it will not bring in the large price for the loan?  Is the right to the borrowers? After all the property prices have dropped especially in certain areas (such as San Joaquin Central Valley: Stockton, Modesto, Merced, Oakland and other major cities in Northern California) -- this include Short Sales as well as Bank Owned REO properties.  There are properties out there that are selling for less than $50,000 which means that all commissions, loan pricing and "take home" money is going to a smaller amount. 

But we still have to keep in mind that this is still a customer that is entitle the same good service as the large pocket.  One thing to remember the small purchase or loan can turn into the referral or come of a life time.  Never throw any customer to side and treat them as if their request is not large enough to be serviced!

I have encountered this one time too many and just had to rant!  Thanks for listening.....

↑ Grab this Headline Animator

Due to the mass foreclosures (bank owned homes) being sold and given the damages that are coming in on all the various reports and inspections, the banks are now starting to take a hard look at how to minimumize the vast amount of repair expenses they are encountering.  Right from the start the bank came out with they are selling these homes "as is" and they are exempt from having to disclose much about the property because they have never lived in or inspected the property.  They leave all that up to the buyer to do PRIOR to submitting an offer.

However, as mentioned in As is simply means "as is" or is it that simple?  and as we know the inspecting PRIOR has fallen by most buyers.  The buyers are making their offers and bidding over multiple offers only to get the acceptance and then try to break down the bank and have them go against the "sold as is" rule and end up getting all the damages repaired during the escrow process.

The first bank that I have heard is working on a process for the agents to help them figure out what damages fall under what FHA will require to be repaired in order to sell the property and what damages will not be called by the FHA appraiser as a condition to give the property a clear on the FHA appraisal - that bank is Saxon.

Saxon is now in the process of implementing a process of distinguishing FHA required repairs verses Repairs that are not FHA required.  This new process should help to reduce the numbers of issues that arise during the REO closing process.

I have ran into situations where the buyer is concerned about the termite report that they got from having a termite inspection (lets say came to $7500) and the seller is more concerned about the FHA appraisal conditions (that are exposed wiring, turn hot water on to have it checked, loose steps or stairway....etc).

So what are some repairs that you have noticed that would not fit into the FHA required repairs.  The FHA repairs usually show up on the FHA appraisal as an addendum to the appraisal and those conditions is required to be repaired in order to get the appraisal cleared.

Questions: 

1. What are some of the FHA required damages that will need to be repaired in order to pass the appraisal?
2. And have FHA lightened up on their FHA appraisal requirements?  
3. What about Conventional lender requirements how will the seller deal with those requests? 
4. And finally will the conventional loans looses their requirements as well?

 What are some of the repair requests that you have had buyers ask that you did not feel fell within the FHA required repairs?

↑ Grab this Headline Animator

Agents, I just wonder if  you are explaining to your buyers what "as is" really mean or are  you letting them tell you how they are going to get it?

Offerrs come in with written notice on it that the buyer understands what "as is" is and they are buying this property in as is condition.  They sometimes bid high and then come up with a laundry list of "repairs" and ask for a credit for the repairs!  And as we know most buyer inspectors do not miss reporting anything... and sometimes will over state the damages because they are working for the buyer.

This is a very important part of the purchasing foreclosed or short sale home that every buyer should know.  Investors usually know more about this than owner occupied purchasers.  Some buyers know the work arounds and will try to use them on each and every purchase they make an offer on.  Sometimes it works.... sometimes it does not.

The banks are not liking this and if the company is Wilshire you may find that they reject the request and seem to not want to do business with that buyer.  Although this technique does work with some banks, it is becoming wide known this is what the buyer is intending on doing and so the bank will simply not approve the request for the credit or to do the repairs as requested.

Some will flat out reject, some will cut the number down to only the items that will fall under FHA inspection guidelines and not pay for the rest.

As is means simply "as is"

So yes, there are several games that you can play which trying to buy a property for dirt(y) cheap and No not all banks are equal approving your requests just because you are escrow.

↑ Grab this Headline Animator