Beware of the Short Sale Scam
Because of the large number of short sales and because they promise to remain strong for the next five years, they are the perfect playing field for unscrupulous scammers.
Unlicensed “Short Sale” negotiators are approaching homeowners in distress and asking for upfront money to negotiate with lenders. This is illegal. Only attorneys and licensed brokers can ask for money up front – and only after the Department of Real Estate approves the agreement with an individual seller.
These “so called” Short Sale negotiators, including some real estate agents are lowballing offers to overwhelmed banks. This is called “flopping.” The home is then flipped to a waiting buyer for a much higher price. Beware when you are asked to use one of these “floppers” title companies. This could be a clue you are involved in a flop.
Another practice that is happening with regularity is that often the holder of a 2nd mortgage on the property is demanding extra money outside of escrow in a “secret deal”, because they don’t want the primary lender to know. If you don’t play ball with them they will refuse to approve the sale. It is out and out blackmail and extortion. The government really needs to crack down on this practice.
Some homeowners, especially savvy, well-off owners who owe far more than their houses are worth, are hiding savings and income to persuade lenders to agree to short sales. Many can afford their mortgages, but know it will take them years to recoup their 2006 values.
If someone asks you for money to negotiate a Short Sale, you should probably look elsewhere for help. HELP IS FREE! There are many well qualified people who can help for free. Look for an agent who holds a CDPE or SFR designation. These agents have been trained to help you through the process.
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Posts Tagged ‘short sale’
Beware of Short Sale Scammers
Short Sale and Foreclosure Resource SFA
Having earned the CDPE designation was a great step in a quest to help homeowners facing foreclosure. Recently I added to that designation with the SFR which is the National Association of Realtors course with certification upon passing course materials and exams for those agents interested in working short sales. It stands for Short Sale Foreclosure Resource.
Sellers facing foreclosure deserve representation by knowledgeable agents. The vast majority of agents certainly want to do a good job for a seller in distress. Wanting to do a good job and having specialized training are distinctly different. The details, follow-up and timelines in the foreclosure process are very precise and require specialized training to insure the greatest possibility of success.
An agent would be much better advised to refer short sales to a verifiable short sale specialist, earn a referral and praise from their clients for their help than muddle through an unfamiliar process and possibly end up with less than a favorable result.
What is HAFA?
The Short Sale Seller Interview
Interviewing the seller in pre-foreclosure is an important part of the short sale process. Not all sellers will qualify.
There are 9 Ways to Avoid Foreclosure
What is a Short Sale?
So many people don’t understand short sales. I thought it would be nice to give you some information.
Pre-foreclosure timeframes in California
Pre-foreclosure timeframes in the State of California are as follows:
- You stop paying your mortgage for about two months
- The Bank files a NOD (Notice of Default) against your property and the clock begins to run
- 90 days after the bank files the NOD, the bank can then file a “Notice of Trustee’s Sale”
- 15 days after the bank files the “Notice of Trustee’s Sale”, the ability to redeem a property goes away
- 21 days after the bank files the “Notice of Trustee’s Sale”, the bank may sell your home at auction.
What we are seeing in practice is that the banks are not sticking to the 21 days to sale after filing the “Notice of Trustee’s Sale”, but are using an arbitrary number of 31 days.
Because the banks are so inundated with requests for short sales and loan modifications, the extra 10 days has been added most of the time to accommodate them. The sale date can be postponed by the bank and often is, if there is a short-sale in progress. Don’t become complacent just because a sale date has been postponed. The bank filed the original “Notice of Trustee’s Sale” to keep the clock running and to have control of the process. At anytime the bank can move to force the sale.
Many sellers don’t realize they have options when their home enters the foreclosure process. They do have options and it is in their best interest to seek them, even when they are not sure, if they can be helped.
Barbara Amstadter
Named 2009 "Realtor of the
Year", Barbara
Amstadter is a name well recognized in the local community. She served as a co-founder of the "Committee of 4000", representing the owners of 4000 leasehold parcels in a legal fight for "leaseholder" rights. She helped negotiate the final monetary settlement, the largest in US history at the time.
Susi Scholl
Susi brings extensive
backgrounds in escrow
and new home sales to the 22 year successful partnership of Barbara and Susi. She is, also, a recipient of the 15 year "Legend" award (bestowed on only 3 agents out of 66,000 worldwide at the time). Susi and Barbara have been ranked in the top 1% of realtors internationally year in and year out.
