Club Chaos Agents - All Things Hollish, Wacked, and Jacked

This is not the first time it has happened. Unfortunately, it won't be the last. And it wouldn't be nearly so much fun if every time I called the Wells Fargo office in Des Moines I wasn't disconnected after holding. If you don't know your party's extension, press 2. And you're zapped into voice mail hell or hung up on -- one or the other.

But I stop to consider the fact those employees at Wells Fargo in Des Moines had to get out of bed in Des Moines. I try to have empathy for them. It's 28 degrees in Des Moines this morning. Probably has snow on the ground. I'm a short sale agent in Sacramento, typing at my keyboard in my robe. Our high today will be in the 60s. I can be compassionate.

The problem started a few weeks back when we received short sale approval from the first lender at Wells Fargo. We have been waiting for the approval from the second lender and kept getting the run around. Wells Fargo said it had a title issue it was working on. I kept asking for clarity and an explanation. Finally, a negotiator disclosed there was a third deed of trust showing up in their search. He told us Wells Fargo had ordered the reconveyance and had sent the reconveyance last December to a lawyer in California to record.

Why did he think this even though it wasn't true? Because Wells Fargo owns a small title company that couldn't find its plant with two flashlights and a map. Of course, in California, we pull a preliminary title report on every file. Our prelim did not reflect a third deed of trust. We ordered the recon from Placer Title and sent it to Wells Fargo. The problem was Wells Fargo did not understand that our recons in California do not contain the name of the beneficiary.

There are 3 parties to a deed of trust. You've got your trustor (the borrower), the beneficiary (the lender) and the trustee (with power of sale). The reconveyance references the Book and Page number of the original deed of trust that it reconveys. Since the recon did not name the third lender in big fat bold letters, Wells Fargo ignored the recon.

Now, right here, you've got to wonder what kind of lawyer Wells Fargo employs in California. What kind of lawyer would receive a document for recordation in December and, come February, still not record it? I'd say it's the kind of lawyer who is lying on the beach somewhere in Hawaii or maybe scooting around in a golf cart in Arizona.

I obtained a copy of the original deed of trust, packaged it with the preliminary title report and the recorded reconveyance and sent it to Wells Fargo. Followed up a week later, and still received the same message. Yup, the recon was sent to California for recordation. Makes you wanna grab the guy by his tie and pull his face up close to yours so you can stare into those beady little vacant eyes and beat him on the head with your shoe.

Which is what I did yesterday. This morning when I called the supervisor at 6 AM, she told me the issue had finally been resolved and the file is now moving forward for approval. Ya gotta love a Wells Fargo short sale.

You can't stop people from killing themselves. I'm not going all Kevorkian here. I'm actually thinking about the story in the Sacramento Bee this morning about protecting people from themselves.

Not to try to understand how newspapers work, but I imagine the Sac Bee had an editorial meeting about how to run the story about preventing people from killing themselves at railroad crossings. We had a tragedy at Sacramento light rail on Saturday. A family of three, including a toddler, were killed when the train struck their SUV at a railroad crossing. Authorities say the SUV driver was trying to drive around the gate arm. The family rejects this theory.

As a result, the Bee ran a story about gate jumping. The reporter who wrote the story about risk-takers who try to jump the train will now have to monitor a live chat and address community concerns. It's a touchy situation. Whether this driver was at fault doesn't negate the fact that many drivers apparently try to jump the train. Part of the solution offered is to install double gates so drivers can't get around them no matter what.

How far do we go to protect people from harming themselves? You would think a simple stop, do not cross, would do the trick. Stop in the name of love, before you break my heart. Stop, only YOU can prevent forest fires. Except today you've gotta get your smokey on to get the message across. I saw that billboard at the downtown Sacramento mall and thought, oh, give me a break. Get your smokey on? You can tell I'm an old cranky person.

Cranky enough that I don't purposely try to alienate myself when working with other people. Sometimes, I see agents sabotage their own efforts. Especially in a multiple-offer situation. Earlier this week, I received 4 or 5 offers for a short sale. Short sale offers carry requirements and not all of them were met. But, still, I sent every offer as it arrived to the seller, like I am required to do. If agents were testy or argumentative, I passed along that information to the seller as well.

I believe we can protect other people only so much. Somewhere along the line people might want to take responsibility for their own actions. Sellers don't always choose the highest offer. Sellers choose the buyer and the buyer's agent with whom they want to spend 2 to 4 months in escrow.

I was all primed to write about investors who are buying short sales this morning when I received an email from a buyer's agent who is representing herself. She's trying to buy a short sale in Elk Grove. I have to share this. The agent said she was withdrawing an offer she made yesterday that was too low. I had asked her to bump it up to meet the comps. She said, "According to Zillow.com, it is worth $XXX." As a licensed real estate agent, she has world class tools at her disposal to help her to determine market value but this agent relies on a worthless website such as Zillow? See, this is part of what's wrong with the Sacramento real estate market.

The other part is our local real estate market is exploding at the moment. We've got investors and buyers fighting over the same Sacramento-area properties. The reason is simple. Investors can get positive cash flow because of today's prices and historically low interest rates. This means an investor can collect more in rent than she pays for a mortgage payment. Many renters should be home buyers because it's costing them more to rent than to own.

Much of the inventory available for sale is a short sale. As a Sacramento short sale agent, I carry a large inventory of short sale listings. My goal is to put that short sale into escrow and close it. To accomplish that goal, I help my sellers to choose the best short sale offer. Is that an offer from an investor or a home buyer, in other words, an owner occupant? Which is the best buyer?

Most of the time, sellers prefer to choose the offer from the owner occupant. Why would they do that when the investor can wait forever and the first-time home buyer typically cannot? Because there are problems with offers from investors. For starters, if the short sale home is occupied by the seller and a Notice of Default has been filed, investor buyers must comply with the Home Equity Sales Act. Many of them don't and have never heard of this law. But if they don't comply, the seller can rescind the transaction 2 years later -- after the seller restores credit from the short sale.

Another problem is some investors want to hold title as an LLC, and short sale banks don't like to accept offers from an LLC. Additionally, some investors want to flip the property. Many short sale approval letters restrict flipping for 90 to 120 days. If that's the goal, the buyer will cancel upon short sale approval. And not to mention, sometimes the buyer's agent is acting as principal and, when that happens, the banks don't always allow the agent to receive a commission. These types of offers magically vanish when agents discover they are stiffed.

But aside from all of that, who is more motivated to wait for short sale approval? Who is more motivated to increase the sales price if the short sale bank demands it? Who is emotionally connected to the home, enough to jump through qualifying hoops the bank throws into the air? Which type of buyer does a seller feel attracted to? Mr. Money Banks who wants to rent out his home and retire with a big, fat, 401K? Or, Miss FHA first-time home buyer?

I'm not even going to talk about the investor who is trying to cancel one of my short sales because another came back on the market that caught his eye . . .

A producer from KCRA-TV Channel 3 is coming to my house tomorrow. She wants to film a quick news segment about short sales. She is certainly coming to the right place. Because one of the things she wants me to talk about is the importance of hiring a short sale expert vs. a regular real estate agent. I've been mulling this over as my first inclination is to say a seller should hire a short sale specialist because we know stuff other agents don't know. Like what stuff, you might ask?

Well, yesterday a seller called me from Rocklin. He asked me questions about a Bank of America Cooperative Short Sale. Then he asked me questions about a Fannie Mae HAFA short sale. I answered them, and that's when I discovered he is 3 weeks away from a public auction and his home is on the market. This seller is very unhappy that his agent put him in this position because she did not have the answers he needed when he needed them.

He said she went to a conference to get answers but returned with none. She put him in a Fannie Mae HAFA without qualifying him, and he lost a lot of time because he did not qualify from inception. He asked if I had heard of this group of real estate agents out of Elk Grove. I'll never say anything bad about another agent.  I told him he needs to talk with his agent about his problems. In fact, he should follow his agent's advice because I can't interfere (it's against the Code of Ethics) and he should try to close his escrow with his existing agent.

I believe if an agent is going to set herself out there as a Sacramento short sale agent, she should stay on top of the short sale business. She should know answers. She should be prepared to advise clients on all short sale programs. For example, sellers in California can apply for $5,000 in cash if they meet income guidelines and their lender participates. This program is the TAP, Transition Allowance Program, and it's part of the Keep Your Home California Program. Except you don't keep your home. You sell it as a short sale.

Some of the major lenders I've worked with who participate in this program in California are:

• CalVet (CA Department of Veteran Affairs)
• Guild Mortgage
• GMAC Mortgage
• Central Mortgage
• Everbank
• Flagstar Bank
• Saxon Bank
• US Bank

If your household income is below $90,100, as a seller of a short sale in Sacramento County (each county has different income requirements), you might qualify for TAP. That's money that can help a seller to pay for moving expenses, a security deposit and first month's rent for a new place. The seller must occupy the present home as a principal residence, produce a documented hardship and be in imminent danger of foreclosure or in foreclosure. It's not a loan, either. It's cash in hand at closing. You can use it for anything.

The TAP program began on February 7, 2011 and runs for 3 years. If you are in the middle of a short sale in Sacramento and you qualify for this program, you should contact TAP. And then ask yourself: why didn't my agent tell me about this? Probably because you didn't hire a Sacramento short sale agent. You probably hired a regular agent. And therein lies part of the difference.

Some short sales will forever stick with this Sacramento short sale agent because the sellers are such delightful people. In the end, it's all about helping the seller. And sometimes I work with sellers whom I suspect would be raked over the coals if their situation fell into less than honorable hands. There are some people who make me want to take extra special care of them; I feel protective. Like my recent HAFA short sale closing for this elderly couple in their 80s. They reminded me of my grandparents, long gone.

The first buyers who committed to buy this short sale were not very nice people. They agreed to put down 25% and get a conventional loan. But after we received short sale approval, these buyers changed their minds. However, not before they made the sellers move out, 5 days prior to closing. Then, after promising to close escrow, they canceled the transaction and left the sellers out on the street.

They canceled because they had somehow decided to change their financing status midstream without authorization and put down 20%. But their lender would not approve such a down payment because the property had a non-conforming structure in the back yard. A seller can't sue such creatures when they don't have any money.

Enter buyer #2. She agreed to put down 25%. We were clear with the buyer's agent and his mortgage broker that the down payment had to be 25% to get a loan on this property. Oh, but this that and the other thing, the mortgage broker did a dance. No, we insisted, the down payment had to be 25% to get a loan. Read my lips. Buyer went back and forth as we negotiated with the bank. The second loan meanwhile went to charge-off. The buyer's agent and mortgage broker were stunned to learn that she really did need to put down 25% as she agreed to do in the beginning. At the last minute, this buyer changed her mind and refused to honor her contract.

The poor sellers. They were distraught. But I was not about to give up, even though the sellers were almost ready to walk away. See, this is the secret to a short sale. You can't give up. Just because buyers cancel or lenders refuse to negotiate, if you keep pushing, you can make something work. You need perseverance. Creativity helps. Other agents would cancel the listing and get on with their lives. Well, other agents probably would not want to tackle a HAFA short sale in the first place. They have more common sense and less patience than this agent.

Enter buyer #3. Time to change tactics. No loan problems here, because this buyer could pay cash. I called the first lender and asked if I could produce a CMA showing declining values, would that bank accept a lower price. Turned out the bank wasn't really interested in receiving market value as much as it was in dumping this loan. Every so often it works out this way. We accepted the offer and sent the paperwork to both banks.

The second lender was not as generous. Because the loan had gone to charge-off, the lender wanted an enormous sum of money. It did not agree to participate in HAFA. This was a different department from the negotiator who previously had approved the HAFA. Rules change after charge-offs. Banks aren't required to approve a borrower for HAFA; it's voluntary. However, there was no enormous sum of money to give to the bank. It looked like we had reached a dead-end.

At that point, I took a deep breath and said no. This bank was simply misinformed. I could not in good conscience allow the bank to throw the seller under the bus. Not this little old man and his ill wife. So, I closed my email, shut off my cell and wrote the bank a letter. I explained the sellers' circumstances and literally begged the negotiator to reconsider. I must have touched a heart. The next thing I knew the bank said it would agree to take $6,000 from the first lender and release the seller from liability.

I almost cried with relief. At this point, I think I cared more about the situation than the seller did. There comes a time when sellers can become apathetic, and I believe these sellers were about there. But in the end, they received $3,000 and a full release of liability. The HAFA short sale closed yesterday. Those other two buyers? I'll remember them and the horse they rode in on as well. Just not fondly. A bigger person would forgive. I'm not that big.

Some buyer's agents do not know that when a buyer and a seller sign a purchase agreement for a short sale listing, they have entered into a binding contract to buy a home. I don't really know why agents often treat a short sale like the red-haired stepchild, but it's a real transaction just like any other real estate transaction.

This means if the buyer elects to cancel, a buyer can do so. The RPA contract put out by C.A.R. is written in favor of buyers. Probably because buyers sue more often than sellers. Sellers are typically happier after closing than buyers. It's rare that a seller feels that he or she got the raw end of the stick. But buyers? Whole 'nother story.

Some people believe that the only time a buyer cannot cancel is after all contingencies are removed, and that's a big fat lie. They can still cancel. Buyers can always cancel. But in that event, they could get sued because they don't have a contractual right to cancel, although that's where they will argue.

If a seller does not sign a buyer's cancellation, simply out of spite, a seller can be facing a $1,000 fine. The seller has no right to ignore the cancellation, if the buyer is within the time period to cancel. But that's after 30 days. So, you can't really force sellers to immediately sign a cancellation unless you're standing over them with a sledge hammer, and no agent has the inclination to do that.

But what happens when it's the other way around and the sellers want to dump a buyer? How is that handled? Before my sellers cancel buyers from a short sale transaction, we give them a chance. It's the fair and equitable thing to do, even if they are not fair and equitable to us. Besides, contracts stipulate. We send them a Notice to Perform. We spell out what we want them to do, and if they don't do it, we can unilaterally cancel them.

However, if you as a buyer wants to cancel, you need to sign a cancellation of contract. Not a withdrawal of offer and not an addendum. Buyers sign the top and bottom portion and date it, along with escrow information to release the earnest money deposit. Buyers also need to state a reason for the cancellation. When buyers sign a short sale addendum, agreeing to wait for short sale approval, the buyer is supposed to wait during that period of time. But bottom line, if a buyer doesn't want to buy, nobody can make 'em.

For more questions about a Sacramento short sale, call your Sacramento short sale agent, Elizabeth Weintraub, at 916 233 6759.

There are times in which I will behave myself. Not always, you can count on that. But when it's important, I can manage to do it. I step up to the plate. And I pride myself on that ability. After all, I am a Sacramento short sale agent. This means in today's market I possess super powers.

Don't believe me? You try closing a few short sales yourself and see what you're up against. It used to be a lot easier. I'm not sure what happened but lately it's the super powers that do the closing, not me. By super powers, I mean the people I rely upon, and they constantly out-perform themselves. My team members, transaction coordinator and escrow officers, not to mention my fellow real estate agents in Sacramento who represent the buyers. They all do an astonishing and amazing job.

If you'd like to see me behaving myself and talking about Sacramento short sales, you can catch this Elizabeth Weintraub YouTube video. Alternately, you can tune in to the program tonight on Channel 17. I did a public outreach broadcast a week or so ago. It's for a nonprofit, Americans Helping America. I think the show is at 10 PM. That's past my bedtime, so I'll have to ask my husband to tape it.

I don't have a lot of time to do things that I don't get paid to do, and when I do have the time, I like to make sure it involves lying on the beach with my husband somewhere warm and drinking Mai Tais. However, I also agreed to host a celebrity real estate forum next month. I think I need my head examined. There are only so many hours in a day.

But you know what they say, right? If you want something done correctly and expeditiously, ask a busy person to do it. You want to sell a short sale in Sacramento? You call Elizabeth Weintraub, 916 233 6759.

Every once in a while, I run into a client I have to reject. You'd think that as a successful Sacramento short sale agent I would want to work with everybody in Sacramento, but I don't. I don't respect people who would lie, cheat and steal. Sorry -- I'm not an asshole politician and I don't have to put up with that crap.

It's not a judgment call thing, if that's what you are thinking. Because people who would lie, cheat and steal expect others they hire to lie, cheat and steal right alongside with them. I don't live my life that way. No amount of money would convince me to start, either.

Besides, I enjoy an excellent reputation. I've worked hard to earn it. When a buyer's agent advises her client to enter into a contract with my client, I expect cooperation and consideration. I give the same in return.

So, if you are looking to game the system, don't call me. I don't want to work with sellers who strip homes in foreclosure. Nor do I want to associate with sellers who have no intention of doing a short sale but simply want to avoid having to move. Some of these people hear that a short sale can take 6 months to 2 years to close, so they latch on to a Sacramento short sale agent, hoping they won't have to make a payment for 2 years and can stay put. They don't really intend to sell.

That's dishonest.

If you want to sell your home in Sacramento as a short sale in the shortest time period possible and with the least amount of hassle, I'm your real estate agent. If you don't, go make somebody else's life miserable.

I get a lot of phone calls from buyer's agents in Sacramento asking me who the lender is on a short sale. They are wising up and realizing that not every agent in Sacramento who lists a short sale is likely to close that short sale except, perhaps, for me. So, their broker has given them a list of questions to ask a Sacramento short sale agent. The problem with this approach is they don't know what to do with the answers they get.

They think multiple loans is a bad sign, which is not true. They hear Bank of America and they shudder, which is also not true. Bank of America has stepped up to the plate over the years and dramatically improved its short sales. If you are a seller who has a Bank of America loan, you are actually sitting in a primo position and you might not realize it. Don't listen to the hoo-haw among the neophytes. Bank of America is a great short sale bank.

I close a lot of Bank of America short sales. There are different types of B of A short sales. Some are Fannie Mae; they could be Freddie Mac or even a HAFA short sale. It would not be so hot to do a Fannie Mae HAFA short sale or a Freddie Mac HAFA short sale, but those are another long story, which I can explain if I take you on as a client and you have such a loan.

They could also be a Bank of America FHA short sale or a Cooperative Short Sale or a traditional short sale. You've got almost as many choices for a short sale at Bank of America as you've got loan options. And they are all different. A client laughed as she got off the phone with B of A saying it's just like ordering a pizza. Do I want pepperoni or sausage?

If you'd like to know about a Bank of America short sale for you in the four-county Sacramento area, call this Sacramento short sale agent for more information at 916 233 6759. I'll say it again: I close Bank of America short sales. I know how Bank of America operates (it changes all the time). I stay on top of this stuff. You're in good hands.

I was asked yesterday if an agent should tackle an FHA short sale or leave that type of short sale to the pros. For starters, I don't believe any seller should be held at the mercy of an agent learning how to do a short sale. The agent either has negotiated and closed a bunch of short sales or the agent hasn't.

If the agent is not a short sale expert, that agent should not learn how to become an expert at anybody's expense, much less a client's. That agent should work under supervision. As a Sacramento short sale agent, I speak from experience about that. When I started negotiating short sales in 2006, I didn't jump into the water blindfolded. But few agents can afford to be supervised or are willing to be supervised. So, here is my secret for doing an FHA short sale.

First, realize that FHA will not make it easy. FHA has 2 faces. The face of a borrower taking out an FHA mortgage and the face of a borrower in default or about to go into default. The rules are different for both. They are at odds with each other. On the one hand, the government wants to help and on the other it does not.

FHA will do its own appraisal. It will be a full blown HUD appraisal, not a BPO. Before you price that short sale, look at the comparable sales and the pending sales, because the pendings and active short contingents will be your comparable sales at closing.

FHA will not allow a 3% buyer closing cost credit. That's not to say you can't get an exception because, believe it or not, I have obtained an exception for an FHA short sale, but those are few and far between. This will, of course, eliminate almost all of your FHA buyers for that short sale. Remember the part about the two faces of FHA? FHA will guarantee a loan for a buyer to buy a home as long as it's not one of its own or one about to become its own.

You can get a 1% concession without much trouble. The key to an FHA short sale is the net to FHA. This is the secret. You don't have to meet the sales price set by FHA, but you do have to meet the net. The net is 88% of the appraisal. See, this is why you should have paid attention during math class. The best way to meet the net without messing with the sales price is to lower those closing costs. This means moving some of them to the buyer's side of the HUD. And there you have it. Straight from your Sacramento short sale agent.

Tip: If you can't figure whether the loan is an FHA loan, look at the original sales price vs. the original loan balance, and you'll find your answer if the balance is near 97-98%. Odds are 95% LTV is a conventional.