Arizona Short Sale “Experts” Abound in 2010

Homeowners searching for help with a short sale might be unnerved to find that almost all of the real estate agents advertising in their city are promoting themselves as “Short Sale Specialists” or “Short Sale Experts,” or some other exemplifying adjectives. With so many experts out there, how can a homeowner be sure they actually have an “expert” to help them? Let’s start out by stating unequivocally, there simply is not any licensing or certification from any governing body anywhere that places restrictions on who can process a short sale, nor are there universal standards on how they can or should be done. Finding a good short sale agent to help you involves the search for knowledge and experience. They’re gonna need both.

It might be helpful to define the word “expert” itself. I suppose common sense dictates that anyone claiming to be an expert at anything would have to exhibit the following qualities:

1.) A deep and current knowledge of the subject

2.) Plenty of current experience with the subject

How much knowledge is enough? Consider this: if you had to hire an attorney, a CPA, a doctor, or a mechanic, how much would you expect them to be “up-to-date” on current trends, law, or practice in their subject? My guess is, most folks would like it if their representative was as current and cutting edge as possible. Until 2009, there was virtually no formal educational training for agents in short sale negotiations. Now, there are many training/coaching/certifying entities. Some agents have been certified by the Distressed Property Institute (CDPEs) to handle short sales, others get trained and certified as “Master Short Sale Consultants,” while other agents may have no certifications because they don’t really need any; these might be agents who are either research hounds, or are very experienced and engaged in the practice.

In regards to the subject of experience, consider the same example. How many cases like yours would you like for the attorney you hire to have tried? How comfortable would you be if your mechanic reassured you that he had dealt with exactly this same problem on numerous occasions? Experience also has a shelf life. If I was a short sale expert back in the late 80s, I might have a foundational knowledge of the subject, but might be well behind in the current methods being used to perform short sales. So, how is the homeowner to select a true expert? By getting the answers to just a few questions, when interviewing short sale experts:

1.) Ask them to tell you about the latest laws and programs that are in place to help you in your situation.

*Here, you’ll want to carefully gauge to the agent’s overall knowledge on the subject. Does he or she speak with authority and confidence on the subject, or can you hear lots of paper shuffling in the background? How much detail is he or she able to go into? When there’s an expert on the other end of the line, you can definitely tell.

2.) Ask them for records of actual success.

*Here, you’ll want actual records of success. Not stories, not letters of reference from beaming clients, actual records. The specific document you want is called a “Closed MLS Plano.” Ask them to show you at least a few recently closed short sale transactions. On an Arizona Regional MLS Plano, you’ll see the following data strip (click image for larger view) near the bottom of the page:

 

The highlighted portions show that it was a short sale (Short Sale Apprvl Req), it took 144 days to complete, and it closed escrow on 12/14/09. Ask for the agent to show you at least 3 of these that are fairly current.

If you can get a good feel for the knowledge level of the agent, and be assured that they actually have experience, you’ll be well on your way to selecting a good representative. That’s not to say the experience is guaranteed to be good, but at least you can be confident that the person is really at least experienced. Beyond this, it all comes down to customer service. At the bare minimum, I think decent service dictates that your representative be able to educate you, answer your questions, communicate with you on progress, and guide you along the way.

Here’s to hoping you never need a short sale expert!

Free Loan Counsel Available Now!

By Phone: (602) 499-4798

or by Email: therealtybutler@gmail.com

*Disclaimer: We DO provide loan counseling services and process short sales for our clients. Please also remember: I am NOT an attorney, and neither do I play one on TV or the Internet. None of these pontifications should be construed as specific legal advice. If you need specific legal advice regarding your personal situation, give us a call. We can help you ourselves, or provide a list of housing counselors that are free!

Why Loan Modifications Fail

According to the latest report by the Dept of Treasury, loan modifications are failing at an alarming rate. Consider: of the 728,000+ attempted loan modifications done so far through the government’s HAMP program, only slightly over 31,000 have been successful.  Stated differently, if you attempt a loan modification, you have a 23% chance of success. Why can’t people get loan modifications completed?  Let’s take a look.

According to reports from banks, homeowners are to blame because they don’t turn in the paperwork required, nor do they make trial payments.  Homeowners, on the other hand, say mods are failing because lenders are losing paperwork, foreclosing on “accident,” changing terms mid-stream, simply ignoring them, or denying them loan mods based on some mysterious formula.

 There are in fact many homeowners who can qualify for a modification who have decided they don’t want one.  These people who “failed to complete the process,” probably came to the conclusion (after months of emotional hell) that it’s best to ditch the home and start over.  Once these families have been through 6 months of fighting with their lenders about a modification, they start to realize a few things:

 a.)    their credit is already ruined

b.)    the “fix” is somewhat iffy, and temporary

c.)    there is a real chance they’ll be going through this again in 5 years

 These facts add up fast, and signing on the dotted line to temporarily modify an already shaky loan is the last thing these people want. 

 Homeowner accusations of lost paperwork, accidental foreclosures, and unfair dealing are all absolutely true, when viewed in a certain light.  The reasons that banks appear to be unfair in their dealings is probably for a different reason than many think, though. What many fail to realize is that getting three huge bureaucracies to agree, in writing, to give away free money, and coordinate this free money give away on a specified date is no small feat. It can actually feel a lot like trying to trick a gang of bullies into poking each other in the eye while you make a quiet escape.  That’s not to say it can’t be done, just that it’s . . . tricky.  It really helps to understand the bureaucracy part of the equation to understand why you can’t get help from your bank.

 The servicing lender you send your bill to every month? They don’t actually own the mortgage to your house. They’re just “servicing” that mortgage for an investor. So already, you’ve got one road-block. Your servicer can’t actually make a decision regarding modifying or short selling your loan.  Oh, and that lovely and gracious representative on the other end of the line you call for help? She’s about 20 people down the chain of command in this organization that can’t make a decision anyway.  Not only that, she’s likely a low paid “temp” with little incentive to be helpful or friendly. And to make matters worse, she knows absolutely nothing about the process, your file, your problem, or the bank she works for! She’s just reading from a screen that contains very little information. She couldn’t help you even if she did have the best customer service skills in the world. I could actually write an entire book on the process, and the steps that have to be followed, and the executives who need to sign off, and this book would leave a lot of questions unanswered. Imagine, if you will, that you would like the federal government to send you a detailed report of every dollar you’ve paid them in taxes and what they spent it on.  Yeah. It’s kind of like that.

 The housing crisis is an absolute mess. The processes in place for helping troubled homeowners are very confusing, very time intensive, and anything but guaranteed.  Lenders will continue to blame homeowners, and homeowners will blame lenders for lack of progress on the issue.  There is one certain fact that everyone knows, but we’re hiding from and delaying at all costs: there will be millions of families moving out of their homes and renting in the coming years.  The millions of the homes sold between 2000 and 2008 are the crumbling, decaying, “foundation” of all of our household wealth. It is and has been crumbling. Those who abandon ship now will suffer for a time, then thrive and grow again. Those who continue to “re-arrange the deck chairs” on this sinking ship will be floating on a life-raft for quite some time.

Next time, I’ll detail for you the governments new program to “streamline” this process. . .

Free Loan Counsel Available Now!

By Phone: (602) 499-4798

or by Email: therealtybutler@gmail.com

*Disclaimer: We DO provide loan counseling services to our clients, but we NEVER charge the homeowner money. Please also remember: I am NOT an attorney, and neither do I play one on TV or the Internet. None of these pontifications should be construed as specific legal advice. If you need specific legal advice regarding your personal situation, give us a call. We can help you ourselves, or provide a list of housing counselors that are free!