good morning. office meeting short sales revisited dec 1, 2009

• LENDING UPDATE RIDGEGATE MORTGAGE

Good Morning

OFFICE MEETING

SHORT SALES REVISITED

DEC 1, 2009

SHORT SALES THE BASICS:

SHORT SALES IS WHERE A BORROWER (SELLER) GETS THEIR LENDERS’ PERMISSION TO SELL THE PROPERTY FOR LESS THAN THE AMOUNT OF THE MORTGAGES PLUS CLOSING COSTS, AND TO DO SO BEFORE A FORECLOSURE SALE.

SHORT SALESWHY DO SHORT SALES?

ACCORDING TO EQUATOR (B OF A)

“THE NUMBER OF SHORT SALES HAS INCREASED EXPONENTIALLY”.

ACCORDING TO MARKET RESEARCH FIRM CAMPBELL COMMUNICATIONS, “SHORT SALES ARE EXPECTED TO MAKE UP A LARGER PART OF THE MARKET IN THE NEXT TWO YEARS”.

SHORT SALES RELEASE OF LIEN & RELEASE OF DEBT ARE

TWO VERY DIFFERENT THINGS.

MANY LENDERS WHO COOPERATE IN A SHORT SALE ARE WILLING TO RELEASE THE LIEN, BUT ARE NOT RELEASING THE DEBT.

YOUR CLIENT MUST UNDERSTAND THIS, AND APPROVE IT AFTER CONSULTING WITH THEIR CPA & ATTORNEY.

SHORT SALES SELLERS OF SHORT SALES MUST BE

AWARE & APPROVE OF POTENTIAL FUTURE OBLIGATIONS.

AGENTS CAN NEVER SAY TO SHORT SALE SELLERS - YOU WON’T HAVE TO WORRY ABOUT PAYING ANYTHING REGARDING THE 1099’S, OR ANY POTENTIAL FUTURE OBLIGATIONS.

SHORT SALESLISTING AGENTS ON SHORT SALES:

NEED TO CONSTANTLY CHECK FORECLOSURE DATE & STATUS.

MUST DO A BETTER JOB MAKING SURE THE SELLER WILL QUALIFY FOR HARDSHIP AND SHORT SALE. WILL THE SELLER SIGN A PROMISSORY NOTE?

SHORT SALESLISTING AGENTS ON SHORT SALES:

IN WRITING, REQUEST SELLER TO CHECK WITH C.P.A. OR ATTORNEY TO CONSIDER LOAN MOD, BANKRUPTCY, SHORT SALE, OR FORECLOSURE.

HAVE LENDERS TERM SHEET APPROVED BY TAX ADVISOR OF SELLER.

SHORT SALESQUESTION:

WHEN REPRESENTING A BUYER WHO MAY BE INTERESTED IN WRITING AN OFFER ON A SHORT PAY LISTING, WHAT QUESTIONS SHOULD WE BE ASKING THE LISTING AGENT?

SHORT SALESSHORT SALE ADDENDUM:

T HER E ARE T W O SHORT SAL E ADDENDUMS

SSL A – SHORT SAL E L IST ING ADDENDUM

SSA – S HORT SAL E ADDE NDUM

ON FOR M SSA IT IS IM PE RAT IVE THAT YOU CHE CK OFF T HE APPR OPR IAT E BOXE S

SHORT SALESSHORT SALE ADDENDUM

ITEM A. ON FORM SSA MUST HAVE A DATE WHICH ACTS AS A DEADLINE FOR SHORT APPROVAL.

WHEN THE DEADLINE FOR SHORT SALE APPROVAL EXPIRES YOU MUST USE A CAR FORM ETA – EXTENSION OF TIME ADDENDUM TO EXTEND THE DATE FOR SHORT SALE APPROVAL

SHORT SALES

SHORT SALE ADDENDUM

ITEM B.1. ( II) SHOULD BE CHECKED – THE TIME PERIOD IN WHICH ALL DATES START, SHOULD COINCIDE WITH SHORT SALE APPROVAL THAT IS ACCEPTABLE TO THE SELLER.

SHORT SALESSHORT SALE ADDENDUM

ITEM B.2 . ( I I ) SHOULD BE CHECKED – THE BUYERS DEPOSIT SHOULD NOT BE PLACED IN ESCROW UNTIL WRITTEN SHORT SALE APPROVAL, AND THAT IT IS ACCEPTABLE TO THE SELLER. EVIDENCED SELLERS WRITTEN ACCEPTANCE OF LENDERS TERMS. SELLERS SIGNATURE WITH THE SIMPLE STATEMENT OF “ACCEPTED” FOLLOWED BY A SIGNATURE, WOULD SUFFICE

Short Sales

Trouble Areas

WE HIGHLY RECOMMEND YOU CHOOSE THE OPTION WHERE YOU DO NOT PLACE THE DEPOSIT IN ESCROW UNTIL YOU HAVE SHORT APPROVAL WITH SELLERS APPROVAL OF SHORT SALE TERMS.

SHORT SALESTROUBLE AREAS:

REPORT TO MLS WHEN OFFER IS ACCEPTED BY SELLER – EITHER BACK-UP OR PENDING.

CAN’T GIVE MONEY TO SELLER @ C.O.E. WITHOUT KNOWLEDGE & APPROVAL OF LENDERS!! ASK LENDER TO APPROVE CASH FOR KEYS.

SHORT SALESTROUBLE AREAS:

PROJECTED WAIVE OF CLAIMS ON DEFECTS OF DISTRESSED PROPERTIES

DO A GREAT JOB ON YOUR A.V.I.D. ALLOW SELLER TO REVIEW T.D.S. WITH

THEIR ATTORNEY. USE HOME WARRANTY PLAN

SHORT SALES

MANY SECONDS ARE NOT COOPERATING BECAUSE THEY HAVE MORTGAGE INSURANCE, AND CAN COLLECT ONLY WHEN THERE IS A FORECLOSURE.

BANKS ARE NOW STARTING TO PAY ATTENTION TO BUYER REMOVING THEIR CONTINGENCIES SOONER.

SHORT SALESFROM ATTY @ BRAINSTORMERS:

BANK OF AMERICA HAS SEPARATE DEPARTMENT TO SEE IF ORIGINAL LOAN WAS MADE FRAUDENTLY.

ATTORNEY GROUPS AND INVESTORS ARE BUYING THESE SHORT SALE LOANS FOR $.05-.25 AND LYING IN WAIT

SHORT SALES

ACCORDING TO YAHOO

“ATTORNEYS HAVE REPORTED THAT THE FINE PRINT ON SHORT SALE CONTRACTS FROM MAJOR LENDERS HOLD BORROWERS RESPONSIBLE FOR THE UNPAID MORTGAGE BALANCE, AND LENDERS HAVE PURSUED COLLECTIONS IN COURT AFTER THE SALE”.

SHORT SALES WACHOVIA – SHORT SALES DEPT.

HAS A NEW SHORT SALE PLATFORM.

HAS A CLOSING RATIO OF 90% ON THEIR SHORT SALES.

THEY ARE AVERAGING 38 DAYS C.O.E.

CURRENTLY IN NORTHERN CALIF. SUPPOSE TO BE IN SO. CALIF IN THE SPRING.

SHORT SALESWACHOVIA SHORT SALES DEPT.

OFFERING S.S. SELLERS INCENTIVE OF 1% OF PRICE WITH MIN OF $2,500 TO SELL SHORT INSTEAD OF FORECLOSURE.

ALSO MAY OFFER SMALL SUM OF MONEY TO HELP WITH MOVING EXPENSES

SHORT SALESWACHOVIA SHORT SALES DEPT.

WORD IS WACHOVIA WILL SIGN OFF ON “NO RECOURSE”.

STILL SENDS OUT THE 1099’S. WORD IS THAT THE I.R.S. IS NOT TAXING THE SHORTAGE, BUT THE STATE OF CALIFORNIA IS.

SHORT SALESWACHOVIA SHORT SALES DEPT.

CREATING REPS TO VISIT OVER

ENCUMBERED HOMEOWNERS.

WILL GO ON THE LISTING PRESENTATION WITH YOU AND SELLER.

WILL PROMISE TO APPROVE OR DISAPPROVE SHORT PAY QUICKLY.

SHORT SALESWACHOVIA SHORT SALE DEPT.

HAS DRAMATICALLY CURTAILED THE AMOUNT OF PAPERWORK SELLERS MUST PROVIDE.

ASKING REAL ESTATE AGENTS TO ALERT THEM TO SHORT SALE LISTINGS, SO IT CAN ORDER APPRAISAL BEFORE OFFER COMES IN.

SHORT SALES BANK OF AMERICA – EQUATOR

PROMISING TO BE MORE COOPERATIVE!?

REDUCED ITS SHORT SALE POLICY OF REQUIRING 10% OF THE 2ND LOAN BALANCE, AND NOW WILL ACCEPT 5%.

EQUATOR WILL OFFER BORROWERS ACCESS TO 7 DAYS A WEEK, 24 HOURS A DAY, REAL TIME STATUS

SHORT SALES

FANNIE MAE & FREDDIE MAC

WILL NOT CUT COMMISSIONS ON SHORT SALES IF COMMISSION IS 6% OR LESS.

SHORT SALES WHEN REPRESENTING BOTH BUYER &

SELLER, LENDER WANTS TO SEE:

HOW LONG PROPERTY WAS ON MARKET? WAS IT MARKETED PROPERLY? DID YOU NEGOTIATE PROPERLY? WERE COUNTER OFFERS MADE? WAS DUAL AGENCY DISCLOSED? WERE BOTH PARTIES TREATED FAIRLY?

SHORT SALESPINNACLE SHORT SALE DEPT:

HOW IT WORKS LISTING AGENT REQUESTS A SHORT SALE

PACKAGE FROM PINNACLE SHORT SALE DEPT.

LISTING AGENT RECEIVES 60% AND PINNACLE SHORT SALE DEPT RECEIVES 40%.

PINNACLE SHORT SALE DEPT. DOES ALL BANK NEGOTIATIONS.

SHORT SALESPINNACLE SHORT SALE DEPT.

SUCCESSES: DEPT OPENED MAY 6, 2008 PINNACLE SHORT SALE DEPT. HAS

PERSONALLY MET WITH OVER 75 OF OUR AGENTS’CLIENTS.

PINNACLE SHORT SALE DEPT. HAS GONE ON 37 LISTING APPOINTMENTS WITH PINNACLE AGENTS.

SHORT SALESPINNACLE SHORT SALE DEPT.

SUCCESSES:

WORST BANKS TO WORK WITH: B OF A, LITTON, REAL TIME RESOLUTION

BEST BANKS TO WORK WITH: INDYMAC, WACHOVIA, ASC

SHORT SALESPINNACLE SHORT SALE DEPT.

SUCCESSES:

TOTAL FILES TO DATE – 196

ACTIVE FILES – 59

SUCCESS RATE - 95.5%

PINNACLE AGENTS

LETS TAKE ADVANTAGE OF THESE OPPORTUNITIES.

MAY WANT / NEED TO HAVE A SHORT SALE AGENT DESIGNATION.

UPCOMING EVENTS PINNACLE “TOP PRODUCERS”

BRAINSTORMING – THURS DEC 10 2009. STARTS AT 8:30 A.M. PLEASE ARRIVE ON TIME. BY INVITATION ONLY.

LAST OFFICE MEETING – TUESDAY

DEC 15

HOLIDAY PARTY – THURS DEC 17, 2009. STARTS AT 6:30 PM – CANYON CLUB IN AGOURA