I just received a request from an REO company to do a pre-approved short sale for one of their clients. I am already doing this for several other clients, so I said I would take care of it for them.
I got to the home to speak with the homeowner, and as is usual, they said they were in a modification. Generally, they are trying to get the loan MOD and the bank has denied it, then the bank contacts the AM they are hiring to get the homeowners to SS. Everyone so far has been trying to get one, and are in denial to the bank saying no. Here is the twist though, this homeowner said they were already IN the modification, had been with CITI for 14 months. Citi sold the note to another company, but "the paperwork didn't get transfered."
Now if we assume this is accurate, a thought occured to me. Banks will sell nonperforming notes to investors, often at 30-35% of face value. The investors can sell this as a "short sale" below face value, and still make a profit. They would of course have to entice the homeowner to SS, or proceed to foreclosure. however, they would have no reason to want a loan MOD to go through. In addition, if you or I were the investor, if we didn't sign up for HAMP, would not have to do a MOD. Big money can be made on this sort of investment. I have not seen any evidence of this, but on paper, I think it can be done. Any thoughts?
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If that was not done and your sent out by the investor you could be considered part of a Scam. Also you will want to find out if this is a Fannie Mae or Freddie Mac owner occupied loan as it will still have to go through HAFA. This is pretty easy to do if you have the address of the property and know the right web sites to get the information.
In the next few months you can expect that as the Bank try to direct Short Sale Listing there will be two presentation by agents.. Do you really want to do business with the Guy the bank sent out?... the other presentation will be I will protect your interest.. and they have already given someone the price... I will work for you...
I find many people are really not that trusting of anyone with a Bank... You will hear more about "Qualified Written Statements" from Title 6 of RESPA in the day, weeks and months to come... Servicers are scrambling to get ready for them now. I am going to post something about Title 6 at my consumer based HAFA site later tonight if I can get the server to respond.. take a look at www.hafa.us
We received a few short sale assignments last month from an investor that obviously purchased a portfolio of defaulting 1st loans and wanted to liquidated them as short sales. They asked us to contact the homeowner WITH A WRITTEN AGREEMENT TO APPROVE ANY SHORT SALE OFFERS IN 3-5 DAYS AND GIVE THE BORROWER $5,500-$9,500 BACK AT CLOSING, AND FORGIVE THE DEFICIENCY!!!
Sadly enough, none of the three have listed their property yet!! One of them (the one that was offered $9,500) insisted that they were still trying to do a loan modification! They just couldn't understand the FACT that their lender doesn't want to do a loan modification!
So again Greg, it is being done right NOW!