Peter Nielsen

We've had a breakthrough! The first mortgage holder, Select Portfoio Services, sent a fax yesterday saying that they have approved the short sale on this condo in Benicia that has been the subject of this narrative. And the approval is good through May 5th. With this in hand, I called back the 2nd mortgage holder, Countrywide. Their negotiator called me last week saying she wanted an updated financial statement from the borrower. She also said that once it gets to her (after the weeks it winds its way through the bureaucracy) she has only 72 hours to approve or decline the request and close the file. Since I didn't have approval yet from the first lender, I said it may take a little longer. She told me that it is possible to re-open a file within 30 days and gave me her email address to send the updated financial statement. I emailed that right away.

Yesterday, when I received the approval letter from Select, I emailed the Countrywide negotiator to give her that news and to make sure she had received the earlier email with the updated financial statement. I asked her to confirm receipt of the email, but received no reply. Today I called to tell her that we're ready to go, but was screened out by the "customer service" person who told me that the request had been denied and the file closed. I told her that the negotiator had told me that she could re-open the file within 30 days. The person I'd reached this time on the phone said that it was not possible to have me speak with that negotiator nor was it possible to re-open the file, unless we were to begin again at the first stage of the process and work our way back through to the "second phase" negotiator again. I couldn't believe this! How could they possibly want to start all over again, and sit on this non-performing asset for additional weeks or months when everything was now in hand to make a decision? (And I can just imagine that by the time it came around again, the clock would have run out the first mortgager's approval.)

I asked to speak with a supervisor, but was told that would do no good, since she would not be able to do anything for me either. I asked to speak with a supervisor all the same, and after being put on hold for 10 minutes, her supervisor did come on the line. I explained the circumstances to her, and to her credit, she "instant messaged" the negotiator, who agreed to take my call. After reviewing the file, she asked me to send her the HUD1 closing statement that Select had approved, showing that Countrywide would get paid a small amount -- and also to email her the seller's most recent bank statements to show that she is not in a position to "make a contribution". Since it's taken so long to get to this point, I've now asked the seller to give me February's bank statments, since the last one I have is the January one. She said that with that, she "may" be able to re-open this file. I sure hope so, because it would make absolutely no sense for them to foreclose on this property, which is their alternative. (Coincidentally, the seller told me yesterday that she received a letter from them saying they were going to do just that!) Stay tuned for the conclusion to this story...

To read the previous segments, you will find them on the blog on my website at www.MarinRealtyExperts.com. For questions or comments, give me a call at 415-29-0487.

I got a call yesterday from the Countrywide "2nd Phase Negotiator." She told me that their expectation when granting a short sale is to be paid 10% of the amount of the loan outstanding. In this case, that's $6800 on a 2nd loan of approximately $68,000. However, she also said that the borrower would need to make a financial contribution. She didn't have the most recent financial statement from the borrower, that shows that she is flat broke, so she asked me to email that to her, which I did.

Meanwhile the first lender is still waiting for their BPO (Broker Price Opinion) to be completed, which they say should be done by this Friday. Hopefully, when they get that, they will assign their own negotiator with whom I can talk regarding Countrywide's request, and their own position on the short sale.

To read the previous segmnts of this story, you can visit the blog on my website at www.MarinRealtyExperts.com. Any questions, feel free to contact me. Peter Nielsen 415-299-0487 or Peter@MarinRealtyExperts.com.

It's been 10 days since my last update on the process of getting this short sale approved. Countrywide now has the appraisal that they ordered (even though this seemed unnecessary as described in Part 7 of this saga.) When I called 2 days ago, they had just assigned a negotiator, whose name I was given. And today she called me! She says that she has everything that she needs and will be moving the package to a "Phase 2 negotiator" who will run the analysis and get back to me next week. Here again, since theirs is a 2nd mortgage, I don't see any point in running any analysis, since the proposition to them is simple: either they agree to a token payoff, or the first lender will foreclose and they will get nothing. What's to analyze?

As for Select Porfolio, the new loan servicer that took over a package of loans from the previous servicer that I had been dealing with, when I called them the other day to make sure they had everything they need, I was told that they have only the HUD1 (estimated closing cost statement) and the Seller's income statement. Since there are many more pieces to a short sale package (listing agreement, purchase contract, etc.) I was also told though, they will would order a drive-by BPO (Broker Price Opinion). I suggested that they contact Countrywide, since they have already done 2 BPOs and now have a full-blown appraisal as well. But of course, the 2 lenders don't talk to each other, so of course that's not an option.

I then attemped to fax to them the 40 pages that they should have had available from the previous servicer. After faxing 20 pages, the transmission failed, so I called to see if they wanted me to just fax the remaining 20 pages, or to start over from the beginning. I was naive enough to think they might actually have a person who could check the fax machine to see how many pages made it to them. When I phoned in, after going through the usual couple of layers of phone tree, punching in the loan number, etc, I got someone on the phone who said that there was no such loan on file. When I pointed out that I'd spoken with someone just the other day, and that they found the file in the computer, it occured to me that they may have assigned a new loan number. Sure enough, they had. However, even though I have the old number, and so do they, they would not speak to me, since I didn't know the new loan number! At that point, I lost patience and told him that all I wanted to know was how much of the &*$(!fax made it over the wire. But of course, the fax goes directly into the computer, and it takes a minimum of 24 hours before they have access to anything new that is sent in, so even if I were authorized to talk to him, he wouldn't be able to tell me what I wanted to know. So, I faxed over the 2nd half of the package and will give them a call in a day or two to make sure it made it into their system -- after I find out the new loan number from the woman who has defaulted on her mortgage.

At a meeting of the local Independent Brokers Network, it was reported that 43% of all home sales in Marin County during Jan-Feb 2009 were "distressed" property sales. That includes bank-owned (REOs), pre-foreclosure (Notice of Default recorded) and Short Sales (loan is more than the property is worth). For a county that has long believed that it was relatively immune to the downside of the real estate market, that is a surprising statistic. Equally surprising is that 51% of all Marin sales were under $500,000 and 23% were under $300,000. It wasn't that long ago that finding a condo in Marin priced under $300,000 was nearly impossible.

Another interesting statistic presented is that only 320 out of 669 distressed properties were listed on the MLS. Fortunately, our MLS is hooked into another system, Realist, which just added the capability to search for distressed properties from county tax records, so it's now possible to identify the "hidden" distressed property market here.

If you would like information on how to purchase foreclosure properties in Marin and Sonoma Counties, visit my website at www.MarinRealtyExperts.com/BuyingForeclosures/REO's.

Peter Nielsen 415-472-6243, Peter@MarinRealtyExperts.com

The wheels are slowing grinding on with this short sale. Last week when I called Countrywide, I was told that they would have an appraisal done by today. Today when I called, I was told that they now have a second BPO (broker price opinion) completed and that they are now going to order an appraisal! They said that I can expect a call between Wed-Fri of this week to schedule an appointment. I asked if I could speaks with someone that has decision-making authority, since spending $250-$500 on an appraisal will only be throwing good money after bad. Since this is a 200 unit complex with many identical units, and no others within a 3 mile radius, you can get a good idea what this condo is worth in 5 minutes by looking at the recently completed sales on the MLS.

Besides, whether the home is worth $90,000, $100,000, $125,000 or more is really beside the point, since Countrywide's loan is in second place and there is not enough money to pay off the first, so anything they receive will just be a token sum to allow them to avoid getting zero if the first lender forecloses. Common sense arguments do not seem to carry any weight, however since "investor guidelines" require that an appraisal be done. So, that's our next step. For the complete saga, you can read the prior posts on my blog at www.MarinRealtyExperts.com.

Peter Nielsen, (415) 299-0487 or Peter@MarinRealtyExperts.com.