Short Sales for Selling BrokersC-8053

CE Forward School of Real EstateS-1655

Jillayne SchlickeInstructor Number I-0651

Agenda

Short Sales for Selling BrokersC-8053

IntroductionsObjectivesBoundariesMarket UpdateQualifying the BuyerQualifying the Listing Broker Qualifying the 3rdPSSNQualifying the PropertyLaw, legal issuesSS FraudTips for NegotiatingQuizRecapClose

Objective•To learn how to determine which short

sales have the best chance of actually closing.

•To leave class with a series of interview questions to use so you’re not wasting your time or your homebuyer’s time.

Boundaries

Short Sales from the

Selling Broker Perspective

Foreclosure

Tax issues

Listing a Short Sale

Law

Time

Market Update

• National Mortgage Settlement• Foreclosure Fairness Act• MERSWA State Supreme Court Opinion• OCC Settlement with large banks for procedural

errors• Fannie, Freddie, +Banks have all turned positive

towards SS

National Mortgage Settlement• 26 Billion• Includes Chase, BOA, Wells, Citi, Ally• 9 more servicers may join the settlement adding

another 4 billion.• Borrowers who were harmed via wrongful

foreclosures (yrs 08-11) will receive $2,000.• Delinquent borrowers may receive principal

write-downs.• Some underwater borrowers may be able to refi • Banks will have 3 years to come into compliance• Banks/servicers will have new foreclosure

standards• Does not release banks from criminal liability

Section 6: Law and Legal IssuesWA State Foreclosure Fairness ActHB1362 Is resulting in delaying trustee sales across

the state. This may or may not be a good thing, depending on your point of reference.

Homeowner can request a face-to-face meeting

Homeowner can request mediation* but the request MUST be via a HUD Housing Counselor or attorney.Must be before an NTS was issued. *Owner occupied only$400 cap on mediation paid 50/50 borrower/lender and paid in advance.

WA State Supreme Court Opinion•Aug 16, 2012•Lenders cannot foreclose in the name of

MERS.▫Solution: Lenders will transfer their title

interest from MERS back to the lender before foreclosing.

•Homeowners who were foreclosed on prior to Aug 16, 2012 with MERS acting as beneficiary can sue their lender…but the homeowner is going to have to prove harm.

•More judicial foreclosures inWA?▫IMO: No.

Dodd Frank Rules Finalized

•Expected THIS WEEK from the CFPB•Consumer Financial Protection Bureau•Definitions:•QRM = Qualified Residential Mortgage

(will define what we use to call A paper prime loans)

•And•QM = Qualified Mortgage

(requires verification of the ability to repay)

Section 2 Case Study:Qualifying the Buyer

•Your homebuyer understands that short sales sometimes never close and despite your better judgment she is insisting that you show her short sales.

•Break into small groups. Come up with a list of 10 questions to ask the buyer to determine if she is a good candidate to buy a short sale.

Section 3 Case Study:Qualifying the Listing Broker

•Small group brainstorm: Come up with a lit of 10 questions to ask the listing broker before showing a short sale to a qualified buyer.

•Elect a group leader and share your list with the class.

Section 3 Case Study:Qualifying the Listing Broker• How many liens on title?• How many times have you work w/ X lienholder• What are your expectations for close date• Seller package• Price? How arrived at price?• Are sellers prepared to sign a note if MI ins asks?• Has there been prior lienholder appvl? IN

WRITING• Assuming seller’s hardship is appvd…how often

progress reports…..Feb 1st rule for regular updates• Is LB prepared to escalate• NTS recorded?.........

Section 4 Case Study:Qualifying the Third Party SS Negotiator•Come up with a list of 10 questions to ask

the listing broker about any third party negotiator that will be doing the listing broker’s job of negotiating.

•Share your list with the rest of the class.

Who has to have an LO License?•Anyone who negotiates short sales for a fee

•Exceptions▫W-2 employees of law firms▫Non profit HUD-Approved Housing

Counseling Agencies▫Licensed Listing Brokers ONLY charging their

normal, customary commission

▫Check here www.nmlsconsumeraccess.org

Section 5 Case Study:Qualifying the Property

•In your small groups now come up with a list of 10 questions to ask the listing broker about the subject property

•Share your list with the rest of the class

Section 5 Case Study: Qualifying the Property•Fannie/Freddie?

Consider HAFA

HAFA “Short Sale Letter to Seller”

•FHA, VA, USDA?•How many liens on title•How many people on title

Section 5: Qualifying the Property•Delegated Authority

•If the loan is held in a pool of mortgage-backed securities, the loan servicer may have “delegated authority” from the investors to approve short sales in order to avoid foreclosure as long as the offer comes in at X% of the BPO. If the loan servicer does not have delegated authority, investor approval could take from 2-4 additional weeks.

Section 6: Law and Legal IssuesWA State Foreclosure Fairness ActHB1362 Is resulting in delaying trustee sales across

the state. This may or may not be a good thing, depending on your point of reference.

Homeowner can request a face-to-face meeting

Homeowner can request mediation* but the request MUST be via a HUD Housing Counselor or attorney.Must be before an NTS was issued. *Owner occupied only$400 cap on mediation paid 50/50 borrower/lender and paid in advance.

Section 7: Short Sale Fraud

•Short Sale FraudAny misrepresentation or deliberate omission of facts that would induce the lender, investor, or insurer to agree to the terms of a short sale that it would not approve had all the facts been known.

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Section 8: Short Sale Negotiating Tips

•Review the handout: Short Sale Negotiating Tips for the Selling Broker

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Section 8: Short Sale Negotiating

•CASE STUDY

•Are Short Sale Buyers Overpaying?

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Section 9: Short Sale Quiz

•Test your knowledge….take the short sale quiz!

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Recap, close

•End-of-Course Handouts•Certificates•Evaluations

•Where to go on ceforward.com for more resources

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Evaluation

•On a blank sheet of paper please write a narrative description of your experience in class.

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Short Sales for Selling BrokersCourse Number: C-8053

Jillayne SchlickeInstructor Number I-0651

CE Forward.comSchool of Real EstateS-1655