I remember when I was a new LAPD officer. I was a young 21. Moved to Los Angeles from a small mid-western town. Not much as far as life experience. I was also very “Trusting”. I was a believer in something called “Human Honesty”. It did not take long, working the streets of Los Angeles, before I realized that some people lie. Others lie very badly.
It is not in all cases. Also, it is not the Short Sale Sellers that are lying. By the Short Sale Seller I am referring to the “human being” that is experiencing the hardship. They are not the problem. In fact, after they get over the “emotional” pain associated with making the decision to short sale, I have heard comparisons made, that short selling was like having 100 pounds lifted from their shoulders.
It’s some of the banks. Not all of the Banks that have Short Sale processes in place and not all of the banks that don’t have short sale departments. Some of Each. I am not going to get into name calling. I am also not going to “name names”. Mother taught me better 🙂
I am only going to let you know how to best protect yourself. When you are working with a Short Sale Expert or Experts, make sure you heed their warnings about you wanting to grab the “loan modification” hook or the “principal reduction” hook. You may just have the carpet pulled out from under you faster than you can say “I’ve been lied to!”
Case and Point. We had a large bank. This bank was in the process of approving the short sale we had on the table. The file had been completed, including the listing contract, executed by all parties. We had an offer on the home we were selling as a short sale, which was also executed by all parties. The Seller had completed the short sale package that we know the bank required. All was good in the world. In fact, the bank – the one that had the first position on the short sale – the 80% loan – asked for a HUD to be sent. That is a break down of costs and anyone that knows short sales gets the fact that means the bank is close to approval.
My sellers received a phone call from that very same bank. They offered them a principal reduction. Which was different than the Loan Modification they had been denied for three times in the past, before they contacted my Santa Clarita short sale team.
My short sale seller called me and asked what I thought. I said, “I’m all about you being able to save your home. If you think this is legit – I will do what I can to get you out of contract with the buyers. Take heed, if they don’t let you out of the contract, they can come after you legally – meaning the buyers…” He understood and I started to do my magic. The buyers understood, according to their agent. We prepared some fancy verbiage on paper, got signatures from all parties and the deal was cancelled.
During the next 30 days, I kept checking in with the seller. He said everything looked good and the bank was going to reduce his principal down to fair market value – that was $250,000.00! Heck, that sounds like a great deal, I thought.
Two days later, I received a panic call from the seller. There had been a notice of Sale posted to his front door. He had also been door knocked by someone stating they were the new owner. He wanted to know what was going on. I did some research with my friends at Title and the property had been sold at auction.
Be Safe – Get good advise and hire only Santa Clarita Short Sale Experts.