Terry Osburn, Broker Associate

Specific to California.......I have been approached by buyers as well as several colleagues of mine about writing multiple offers at once on various properties and see which ones win.........

In California, if a buyer writes up a mulitple offers and those offers are accepted by the various sellers that buyer is technically responsible for all of those accepted offers.

One colleague was even approached recently and refused, by a client, who insisted that she write up multiple offers and in the the course of conversation found out these "buyers" had every intention of lying on the purchase contract of being owner occupants and was going to approach tenants to allow their mail to be sent there so they could get lower interest rate......Simply that is Fraud........mortgage fraud........

Frankly, those agents who purport to clients to write up multiple offers most likely are cutting corners on their clients protection.

Will they get caught ? perhaps not? But as a listing agent I can tell you this........we do communicate among each other and if we know of an agent who has a questionable reputation and a history of doing such we will make sure our sellers are fully aware of that background.

I have nothing against getting a good deal. I do have issues with agents who skirt the lines of ethics and good faith.

Many listing agents that I have come into contact with recently are really frustrated with all of the time and effort they have put into these offers , especially on short sales, to have the buyers walk. One of the reason the bank owned properties has made it difficult to bid on their properties is to weed out the yo yo's and to deal with those buyers and agents who truly intend to follow thru with their commitment.

I also realize some agents cave in to buyers demands as they want the commission. My experience has been when you cut loose that buyer which is unrealistic, asking you to compromise your ethics and possible legal standing, another buyer will come forth to which you can hold your head high and move forward.

Part of our obligation and Professionalism is to act and perform in good faith.

In non recourse states no problem , right? WRONG! Most attorneys we have spoken with have stated with the verbiage change it could remove the protections that are now in place for our clients .

Attorneys are advising our clients NOT to sign short sale approval letters that state the lending institution, investors or mortgage insurance MAY have the right to come back after deficiency judgment.

With several attorneys interpreting this verbiage the same way gives cause to believe we have not seen anything yet in terms of backlash of this mortgage meltdown.

Many agents state go ahead and have the clients sign the letter and then do a bankruptcy.......CAVEAT..The laws of bankruptcy have changed as well.....many may very well need the property to qualify for bankruptcy. By telling them to go ahead and do a short sale with this verbiage could case them to be ineligible for bankruptcy as well as present them with a litigous situation in the future.

Herein lies our dilemma.

If you are in California I would urge you to contact your local congressional and legislative representatives and let them hear from you what is happening. I certainly have and will keep them apprised as to what we are running into.

Now we have had a couple of Countrywide representatives state that Countrywide at this time has no intent to go back after judgment, but they want to leave their options open if legislation changes to allow them to go after deficiency. It also mentions investors and mortgage insurers can retain the right to come back after judgment. If my client 's attorney states do not sign that approval with the verbiage as written I sure as hell am not going to talk them into signing it and take their chances. Does not matter what I believe.

Besides the games that are being played like passing the buck, dragging out on purpose short sale approval with the institutions or investors getting multiple BPO's as well as appraisals, accidently closing accounts, losing the short sale packages, attempting to get past the gatekeeper , thinking you are calling short sale dept when phone rolls over into another dept not associated with short sale and telling you that you are not authorized to speak on behalf of your client when you have made 5 calls in past weeks and spoke freely on your clients behalf, moving offices, changing phone numbers, hiring illiterate individuals or untrained individuals to answer the phones.....or my favorite..........let me transfer you to so and so......Hi my name is Terry and ......Oh, I need to transfer you to so and so........Hi, my name is Terry....Oh, I need to transfer you to so and so.....

While I will concede there are many things to be taken into consideration and that this whole scenario has been overwhelming for many lenders, I truly believe a lot of this nonsense is indeed a covert action by the investors and lenders to get around government regulation and to tell the government to get out of their business as well as to give the appearance they have abided by the recent laws and acts to address the loan modifications as well as short sales of homes and foreclosure. Loan modification will work for some. But most in the Bay area have loans and /or principals that are so upside down, loan modification will not work. If investors involved, which is the case with much of what we have seen in our area they have been more than resistant to loan modification terms.

We have successfully closed many short sales. It is this pattern we are seeing emerging with a few of the lenders that has us concerned. Most of this started after the government directives.

This past week an approved short sale, due to the verbiage in the written short sale approval, per legal counsel for the client will send this "Approved" short sale to bankruptcy and foreclosure due to this verbiage .

Do I think Countrywide will have the ability to gather the resources to go back after these non performing loans? I think they would be hard pressed to do so. However , for them to be insistent in adding this verbiage in all of their letters non recourse or recourse loans does leave them an opening for future litigation. How this would play out it in court room drama, I do not know and I do not want to be the one who tells my client to go ahead and do the short sale to end up in court a few years later and ask me why did I tell them to proceed with short sale under these circumstances?

Another low hit for a community as well as the devastation to the homeowner. More foreclosures is not the answer to stabilizing this market.

Actually , NO it may not be....

This is where we are going to see a lot of backlash within the next few months when the sh-t hits the fan.

There are mitigating circumstances to each particular situation. What may be right and work for one may not work for the other.

There may be penalties involved in a successful short sale that may find a foreclosure to give the best option in reducing a clients liabilityand /or a short sale may indeed be the better choice. This is why it is imperative that a seller check with a real estate attorney before making a decision to proceed either with a short sale and/or foreclosure. At the very least speak to a CPA who is knowledgeable of the short sale and foreclosure process and the penalities involved etc.

There are sellers who think because they allowed their home to go into foreclosure that was it , all done, nothing to worry about. Hmmmm, the foreclosure is usually on one loan. That leaves the other loan out there open and anxious to get their money back....

Each state has their own pecularities. California is non recourse state.

Then we have those who had a successful short sale who may be hit with judgment from the 2nd lender.

Remember, a HELOC loan had to be used entirely for capital improvement of the home.

I think there will be a lot of surprised and very distraught individuals within the next few months. Many will be forced into bankruptcy.

This is a mess that will have several ramifications and fallouts before some semblance of order has been met.

However this too shall pass. Our job is to give as much support as we can to our clients thru these hard times and to continue ourselves to educate and learn as much as we can to pass on knowledge even though the stakes and rules keep changing every day.

Even though the loan modification is only helping a few , Sellers, PLEASE speak to your lender first and see if a loan modification is at all possible. Yes, I know they have those on the phone systems who are not very knowledgeable or care but if you are persistent and keep calling back you will eventually find someone who actually knows what is going on and might be able to assist you.

Document every time you have called and get the name of the individual you spoke with.

Now I will tell all of those in trouble with their mortgages, there is LIFE after a short sale and/or foreclosure. Remember this.

You may have to reorganize a bit, change spending habits but there is life.

If a short sale is found to be your best option and you need help listing and procuring a buyer for a short sale please contact me. Catherine Myers and I have performed several successful short sales this past year.