Bankruptcy Law & Practice MCLE Meeting

DuPage Bar Center – Classroom

October 23, 2019

11:45 AM – Noon Welcome/Introductions Arthur Rummler, Section Chair

A few words from The Keller Group of Charles Rutenberg Realty – Today’s Lunch Sponsor

Noon – 1:00 PM Program

Short Sales and Bankruptcy

Heather J. Keller - The Keller Group of Charles Rutenberg Realty

Speaker’s Bio is attached

Financially challenging times can be stressful for families and can put a lot of strain on relationships. Families deserve to be educated about the ins and outs of the short sale process. There are a lot of moving parts to a short sale and it is important to have the right professional team of attorneys and real estate agents working together during a short sale.

Next Meeting: TBD

DCBA Events: October 26th-Member Appreciation Family Day–Morton Arboretum

November 15th & 16th – GAL Training – 421 Building -Auditorium

Earn CLE Online!

DCBA OnDemand CLE is Now Powered by IICLE The Illinois Institute for Continuing Legal Education (IICLE®) and the DuPage County Bar Association (DCBA) are excited to offer a new IICLE®Share collaboration to provide DCBA members a high quality and reliable online learning experience. Members can find the link to The Illinois Institute for Continuing Legal Education (IICLE) on the DCBA website under “Legal Community”OnDemand CLE Online CLE Catalog. You must be logged into your DCBA Membership Profile in order to view courses for free or at a reduced price.

View & Print All CLE Certificates through the DCBA Website:

Manage Profile -> Professional Development (under content & features) and choose the icon to the left of each meeting to print your certificate directly or choose to have them emailed to you to save to your computer (you MUST be logged in to view this feature)

BIO – Heather J Keller

“To Be Successful… Challenge Yourself to Do Things Outside of Your Comfort Zone or Else

You Will Never Move Forward and Have the Chance to Succeed.”

Born and raised in Southwest Lower Michigan, Heather made the decision in 2006 to take

action, “make herself feel uncomfortable”, and moved to Chicago where she landed a job

as a licensed Mortgage Banker with a large, downtown mortgage bank. That decision turned

out to be the best one she ever made. She met her husband Chris while working together at

the bank, and they both saw the coming wave of Short Sales, so they founded a Real Estate

Investment Company built just around Short Sales. Being at the forefront of the Short Sale

boom, Heather has gained valuable experience and knowledge of the ins and outs of these

banks and how they process their Short Sales. It was and continues to be very helpful as Short

Sales won’t ever completely go away.

Whether it is buying or selling, a regular sale or a distressed sale, Heather has a genuine, true

passion for Real Estate. Although, it can be challenging and demanding at times, she loves a

challenge, problem solving, and her background as a Short Sale Expert gives her an

advantage over many others in her field. Her driving force and motivation is to stay committed

to the process for her clients.

In the world of Real Estate there is never a “regular work week” or the norm. Every day brings

a new challenge. It isn’t “work” when you have a true passion for helping. It is the love for

people, the art and challenge of negotiating and the feeling of accomplishment when it

closes. For the families who are facing Foreclosure to see the relief and smiles on their faces

during this difficult financial and personal time. For the Sellers who are selling their current

home to move into a bigger home due to a growing family, the joys on their faces when the

process is finally completed. Or, for the 1st Time Home Buyer, handing over their 1st set of keys

to their new home! Whatever the situation may be… It is very rewarding!

In the end, after weeks, sometimes months of hard work and dedication, the most gratifying

part of Real Estate is after the closing when the families and clients, who Heather assisted say

“Thank You.” It is a small gesture, a sincere one, and a great feeling of accomplishment and

that she made a difference. Real Estate is not easy! After all those stressful days and nights, it

is worth it in the end. “It is the ‘little things’ in life that truly matter,” says Heather.

Heather resides in Elgin with her Husband, Chris and two Sons, Brixen and Coulston. She

treasures quality family time and the “little things” in life. Spending time at their cottage in

Harbor Country each Summer and trying to stay off her phone and iPad researching the Real

Estate market. “It is hard to get away from something you love so much but breaks here and

there are good,” said Heather.

$200 for DCBA Members $400 Non-MembersRegister online at: www.dcba.orgSend payments to: DuPage County Bar Association 126 S. County Farm Road, Wheaton, IL 60187

Session One: Friday November 15, 2019 from Noon - 5:30pm (Registration 11:30am) - GAL Appointment 101

- Substance Abuse/Mental Health Issues and Restrictions on Parenting Time

- Domestic Violence and Family Center Services

- DCFS/Children’s Advocacy Center/VSIs

- Special Needs Children

- 604 Evaluations

- Working with High Conflict Parents

Session Two: Saturday, November 16, 2019 from 8:00am-1:00pm (Registration 7:30am)- Children’s Panel

- Ethics-related Matters

- Gender Identity Issues

- Drafting Allocation Judgments/Facilitating Settlement

- Probate Matters

- Relocation

Program Location: DuPage County Administration Building Auditorium 421 N. County Farm Road in Wheaton, IL

By attending both sessions, you can earn up to 10 hours of CLE credit (PRMCLE awarded

based on final agenda). Attendance at both sessions is required to be placed or remain on

the approved GAL list used in 18th Circuit Domestic Relations Division.

The DuPage County Bar Association and the 18th Judicial Circuit Domestic Relations Division

Guardian Ad Litem Training Program

Short Sales and Bankruptcy Wednesday, October 23, 2019

1. Bio – Heather J Keller

2. Introduction

Who Has Completed a Short Sale?

Who Dislikes Short Sales?

• Why?

3. Getting Started – Identification

How Does The Keller Group (“TKG”) Approach a Seller Facing Foreclosure?

Why Short Sale and Not Foreclosure?

• Avoid Foreclosure on Their Credit Report

• Move Out on Our Time vs the Lenders Time

• Relocation Assistance, if Qualify

• Get More Time in the Property

• Waive the Deficiency

Questions?

4. Getting Started – Criteria

Who is a Good Candidate?

• Behind on Their Mortgage – Must!

• Demonstrate a Financial Hardship – Must!

• 1, 2, or 3 Mortgages – No Problem!

• IRS Tax Liens – No Problem! **TKG Has Contact Downtown Chicago**

• State of IL Tax Liens – No Problem! **Usually Require Some Contribution to

Release**

• Behind on Property Taxes – That is Okay!

• Nothing Else Can be Done with Foreclosure Defense

• Chapter 7

✓ Someone Who Doesn’t Want to Keep the House But May Want

More Time

• Chapter 13

✓ Someone Who Decided the Payments Are Way too Much

✓ Case Dismissal

Traditional Sale vs Short Sale

• Traditional Sale

✓ Has Equity Even Though Behind on Mortgage (Could be 1, 2, or a

Few Months)

✓ Still Sold “As-Is”

✓ Sample Story (Naperville)

• Short Sale

✓ No Equity

✓ Months or Years Behind

✓ Always Sold “As-Is”

✓ Sample Story (Evanston)

Questions?

5. Important Info – Short Sales and Hiring a Short Sale Expert/Specialist

Short Sale = Complex with a Lot of Moving Parts; Time-Consuming

Don’t Hire a Friend or Family!

Family Cannot Buy the Home – Must be an Arm’s Length Transaction

Keys to a Successful Short Sale

• Communication

• Knowledge

• Expertise

• Experience

Questions a Seller Can Ask When Looking to Hire a Short Sale Expert/Specialist

• How Many Short Sales Have You Closed in the Past Year?

• Can You Show Us the Short Sales You Have Closed?

• Do You Have a Team That Helps?

• How Many Short Sales Do You Have Listed Right Now?

• Can You or Someone on Your Team Help Us Find a Rental When the Time

Comes?

There are a lot of Agents out there who claim they are “Short Sale Experts.” Not sure what they

think an Expert means… But Closing a hand-full of Short Sales DOES NOT make you an Expert

nor does Listing Short Sales but allowing an Attorney to handle the process. A Short Sale Expert

is someone who has years and years under their belt with many different kinds of Short Sale

Closings. Not one Short Sale is the same. There is always issues that come up and an Expert

knows how to properly navigate through the issues with the end goal of helping the

homeowner avoid Foreclosure!

Questions?

6. Listing a Short Sale

May Be a Difficult Time for a Seller

Strategy #1: Aggressive List Price

• Seller Who Has an Upcoming Auction Date and Has Not Filed for

Bankruptcy

• Seller Who Has Filed for Bankruptcy Last Minute to Temporary Stop the

Auction Date

• Seller Who is Just Ready to be Done!

Strategy #2: Higher List Price; Gradually Lower with Time

• Seller Who is Not as Far into the Foreclosure Process and Has Time on Their

Side

Questions?

7. Short Sale Offer – Yay!!!

Short Sale Offer Executed – What’s Next?

Transaction Coordinator (Bonnie Hillegas) Will Send an Email Titled: Request for

MC & Settlement Statement for (Insert Subject Address)

EXHIBIT A: Sample Email from Bonnie Hillegas

Bonnie’s Email Will Trigger You as the Attorney to Request the Master (Title)

Commitment and Prepare the Settlement Statement

Attorney Fee: Always Ask for at Least $3,500; Worst the Bank Will Say is NO or

Ask Us to Lower the Fee

Title Company? – Doesn’t Matter to TKG… But Shouldn’t Take Forever to Get

Commitment/Statement; Few Days at Most

Need Help Preparing the Settlement Statement? – No Problem!

Questions?

JOB OF ATTORNEY (When Working with TKG)

Pull Master (Title) Commitment

Prepare Master Statement/Settlement Statement

Attorney Review Period

Prepare Closing Documentation for Seller (Typically, Seller Will Pre-Sign)

Deal with HOA (if Applicable)

Chapter 13 Court Approval (if Applicable)

Close the Short Sale

Get Paid!

Questions?

8. Gathering Paperwork & Submitting the Short Sale Offer Packet

TKG Handles Everything – Start to Finish!!!

Another Reason for the Seller to Hire a Short Sale Expert/Specialist

• Each Lender is Different – Expert Must Know What Documents to Collect

Depending on the Servicer

• Equator

• Res.net

• FHA vs Conventional

• HomePath – Fannie Mae **Great System**

Twice Weekly Updates

• TKG Uses DotLoop to Provide Weekly Updates

• Updates Provided on Tuesday and Friday

May Require Attorney Consent Letter if in Chapter 7 or Chapter 13

Questions?

9. BPO/Appraisal and Submitting 2nd & 3rd Mortgage Packets

BPO = Broker’s Price Opinion

Most Lenders Order Two… BPO by an Agent and Appraisal by an Appraiser

Takes a Few Days for Report to Get Back to Lender

Once TKG Finds Out the Amount Allowed to 2nd Mtg (1st Determines), Packet is

Submitted

Timing is Key When Dealing with a 2nd and 3rd Mtg

BPO/Appraisal = Typically Expires within 90 to 120-Days

Fannie Mae & Freddie Mac = $6,000 Allowed to 2nd Mtg (If 3rd Mtg; Split the

$6,000)

Other Lenders = 10%, Depending; Others Less

Questions?

10. Negotiations!!

Most of the Time a Counter-Offer Will be Presented by the Lender

FHA = HUD Needs to Net 88% of the Appraised Value

• May Request a HUD Variance for Lower Net of 86% or 84%

• ATP = Approval to Participate

Conventional = Fannie Mae Usually Likes to Gross 90% or More of the Appraised

Value (Sometimes Can Ask for Upper Management Review)

Knowledge, Experience, and Expertise Plays a Key Role in Negotiations – Every

Bank/Investor is Different – TKG Has Dealt with Every Bank Out There!

Can’t Make the #’s Work with Both Buyer and Lender?? – Put Back on the

Market as an APPROVED Short Sale

Questions?

11. Short Sale – Approval Letter

EXHIBIT B: Approval Letter

TKG Reviews and Determines Approval Letter is Accurate

Once Confirmed, We Find Out When Seller Can be Out of the Property (if

Applicable) and Email All Parties the Approval Letter

Must Meet Deadline… Can Usually Ask for 1-Extension (Might Have to Send Back

Through Approval Process – Not Ideal and Could Need Another BPO/Appraisal)

TKG Gets Weekly Updates on Buyer’s Financing (Typically, Monday); Keeps

Everyone on Target!

Questions?

12. Relocation Assistance

How Does a Seller Qualify?

• End Investor Must be Willing to Participate

• Still Live at the Property

• Must Demonstrate Financial Hardship (Example: Oak Lawn)

TKG Always Asks for Relocation Assistance – We Request by Submitting it on the

Settlement Statement (If You Don’t Ask – You Will Never Know!)

No Guarantees! Not Something We Can Negotiate – Either Qualifies or Not

**Seller Knows Up Front**

Paid by Title Co at Closing (Usually Lender Will Request a Copy of the Relocation

Assistance Check)

At Least it is Something Rather Than Nothing for the Seller - $3,000 is a Good Start

for Them to Get Back on Their Feet

Questions?

13. CLOSING!!!

TKG Responsibilities

• Will Submit Settlement Statement for Approval (Need at Least 48 to 72-

Hours Prior to Closing)

• EXHIBIT C: Sample Email from Heather J Keller (RE Settlement Statement

Approval from Lender)

• TKG is Here in Case Issues Arise at Closing (And, Sometimes They Do!)

Attorney Responsibilities

• Send Final Numbers to Title Co to Prepare Final Settlement Statement

• Pre-Sign Documents with Seller

• Handle HOA (if Applicable)

• Schedule Closing

• Close!

Q & A – THANK YOU!

Time Permitting… Crazy Short Sales

Aurora Short Sale

Long Grove Short Sale