New wave of foreclosures and short sales in 2012

According to RealtyTrac the number of foreclosure filings declined by 3% in November. Foreclosure filings have been artificially depressed for more than a year now due to the robo-signing scandal that has slowed the processing of paperwork with the banks while they have taken homes out of the foreclosure pipeline in order to clean up their books. The paperwork issues are nearly resolved which means the possibility of banks repossessions and NOD filings will come back stronger than ever. Even though we are experiencing a seasonal decline; Novembers numbers suggest a new set of incoming foreclosure waves, many of which will roll into the market as REO'S or short sales sometime early next year.





The number of notices to homeowners who have missed at least one payment have fell as well. I have had many people tell me that they have missed more than one mortgage payment and have not had any lender correspondence sent to them. A report from a housing market analyst for IHS Global insight says; there are as many as 6 million mortgage borrowers who have missed payments, and with the economy still struggling, in most cases, their problems will be resolved through either a short sale or a foreclosure.



It is coming. I believe 2012 will be a massive year for short sales. I have alot of homeowners I know who are on the fence and trying to save their homes. The question still remains; is it realistic in this economy? Is it better to stop the bleeding now and move forward shedding all the baggage that seems to be weighing us down on many levels? Or keep holding on to things that no longer do us any good. . There are people facing serious illness, divorce, job less and death. I know that seems harsh to say but that is the reality of where we are. I don't know about you but I am ready for a new wave of peace and if that's means surrendering to what is in order to allow something better to come in; or just take the next indicated step. Trust and allow, maybe what we feel we are losing will come back even better than what we could have ever imagined possible. I am holding that faith for myself and others and in the mean time cleaning up my side of the street to be ready for the miracles that could potentially take place.




Helping homeowners facing these difficult situations to see things in a different light may bring some much needed clarity in order to move forward and make a decision to help achieve their goals.




The following steps in order can help you achieve this with your clients



1. Listen



2. Go over all options available



3. Pre qualify



4. Help the home owner come to the conclusion on their own on what best fits their needs after going through all the pros and cons of each option. After explaining options verses their personal circumstances they will have a better understanding of where they are at and the importance of moving forward.




5. Set expectations and shed some light on future positive outcomes in taking action and getting on the road to recovery.




(Quote) Develop an attitude of gratitude, and give thanks for everything that happens to you, knowing that every step forward is a step toward achieving something bigger and better than your current situation. ~ Brian Tracy



Lotus Realty Group is hiring REALTORS. Please contact us for more details.



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?





Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS




At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Is it giving up OR just finding a different solution

When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps.


"Confucius "



So many times in life we get attached to people, places and things and when the ball suddenly drops we become fearful. We reach and grab for these things as if they define who we are. What will I be if I am not a husband, a wife, friend, business owner, homeowner. The list goes on and on. We ask ourselves "what did I (we) do wrong? How can I fix this? How can I hold on and stop the bleeding? We jump from one possible solution to the next. Desperate. Finally, all possible solutions seem to fail and we realize our back is against the wall. We become tired and feel like we have given up as faith and hope in ourselves and others feels lost and long forgotten along with the goal that seems to have gotten buried under the murky water it feels we are swimming in.



The goal? When we start out in life with a plan it usually consists of four basic human needs:



1. Peace



2. Love



3. Prosperity



4. Happiness



We get jobs, we get married, buy a house, nice cars and have children. We accumulate "The stuff". The belief that the house and cars, money and even a husband or wife is the key ingredients to achieving the four basic human needs I feel has become backwards in the minds of society. When the "STUFF " goes away we become bitter and disappointed and feel we have failed or people have failed us. Did we really have the four basic needs with all the STUFF if within a matter of minutes they fade with the loss of material things? In my opinion and my experience; its all a shift in perception. What if we could tell ourselves; if the GOAL is to be peaceful, loving and happy THEN prosperity follows because it comes from within you; WITHOUT all the STUFF and nothing is truly lost and nothing has failed. It is not a matter of our plan failing, its a matter of maintaining the only goal that counts which is personal fulfillment and all else will follow. Its magnetic. When our current plans (not the goal) come to an end as all things do; we simply make a new plan.



I hear it in the voices of distressed property owners. I see it in their faces. I understand how hard it is to watch your life spiral out of control. Unfortunately, this happens to be something I know alot about. I can only speak from my experience and one of the things I have learned in many hardships I have had in my life is I have to dust myself off and try again however; at the same time realize I have not failed. I am rich because I GET the blessing of another day at life, another day to swing.



REALTORS, It is my hope when you are sitting down with a homeowner who is losing "STUFF" that means the world to them; that you listen. Really listen. They are scared and truly need someone to relate to what they are going through. I guarantee you it will mean the world to them. Also, walking them through step by step, play by play will gain their trust and respect. I think we can all agree that is important to us as Real Estate professionals. Its not about the transaction its about relationships we build.



"LOTUS REALTY GROUP IS HIRING REALTORS" PLEASE CONTACT US TODAY FOR MORE DETAILS"



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?




Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS





At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Recap of obstacles in a short sale transaction

REALTORS, with the holidays just around the corner and the year coming to an end, I have been reflecting on all of the short sale transactions we at Lotus Realty Group have closed this year and the progress we have made in our systems and organization. These improvements have enabled us to close deals more effectively and efficiently helping REALTORS grow their businesses by expediting their short sales and freeing them up to do what they do best, PROSPECTING!




I believe in helping homeowners in default who truly have a hardship and the only way to ensure that we are successful in doing so is to:



a) Take the right deal.



b) Have an organized, structured system in place to ensure nothing falls through the cracks.



c) Have experience with the banks and know what they want.



d) Be tenacious and follow through.



e) Be a master negotiator.



f) Have a Real Estate attorney that can educate you and keep you abreast of the ever changing legal issues.



This year has been a learning curve for all of us. Lender guidelines are constantly changing, market values are dropping rapidly and more and more homes are going into default not to mention all of the legal issues attached to short sales. As we move into the 2012, I want you all to be armed with the right tools to go out and help as many people as you can.



All short sales have obstacles to closing, some that are out of our control, but mostly ones we can control. Throughout the year I have written newsletters to assist you in a market that has become inundated with short sales. An archive of these can be found on my website at WWW.LOTUSREALTYGROUP.COM.



Here is a recap of the top 10 obstacles to closing short sales that we have learned in 2011:



1. Home owner not being qualified and expectations not being properly set.



2. Non-cooperative clients.



3. Incomplete short sale package.



4. No listing history.



5. Low ball offers.



6. Homeowners not continuing to pay the HOA throughout the short sale (I would start telling clients to continue to make their payments if they can otherwise it turns into another lien we have to negotiate.)



7. Buyer's lenders not cooperating and forcing us to file unnecessary extensions and putting us at risk of losing approvals.



8. Sellers not forwarding updated financials on a monthly basis for us to send to their lender.



9. Preliminary reports and statements of information not being looked at for other liens attached to the property.



10. REALTORS...DON'T TAKE A LISTING THAT HAS A SALE DATE IN TWO WEEKS.



I believe if we can pay extra attention to these obstacles and do our best to handle these issues up front we will save time, money and be much more effective and efficient together.



EXTRA TIPS FOR THE MONTH:



1. Some lenders have their own short sale financial packets that they require to be filled out. I have had several homeowners frustrated because they feel they are filling paperwork out twice. It would be helpful to know who the lenders are upfront. Once you know this call me and I will let you know what that particular lender will require. It will save a lot of time and effort on your seller's part if we can get them the right paperwork from the beginning.



2. Chase will be switching to Equator mid 2012..



3. Foreclosure filings are on the rise and there are going to be many opportunities for you to help someone in this situation ( See attached article on CNNMoney) http://money.cnn.com/2011/11/17/real_estate/home_foreclosures/index.htm




(Quote) Unless someone like you cares a whole awful lot, nothing is going to get better. It's not. ~Dr. Seuss


We at Lotus Realty Group want to thank all of you who out source your short sales to us. We truly enjoy working with all of you and guiding you and your clients through this frustrating time.




Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

Crack down on short sale approval extension requests

Bank of America is now cracking down on extension requests. There are over 500 different investors and each has their own set of guidelines. I have mentioned before that the banks are going to be more aggressive on NOD filings; they are also going to be stricter with extension requests. From the investors stand point; if we have to keep requesting extensions then we do not have a qualified buyer. The investors faith that the buyer can perform grows thin. The investor will let the home go to foreclosure.




The investors are fully aware that most buyers lenders do not treat short sale transaction time lines seriously. The investors are going to be paying extra attention to this and are going to be firm on closing on or before the approval date.




Citi Mortgage is also cracking down. I just had a negotiator tell me if I do not close on time and have to request an extension there will be a $5000 dollar fine. Who do you think will be responsible for that? The buyer.



Please note: If the homeowner is 12 months plus delinquent and you have already had 1 or more extension requests then you have most likely exhausted all of your extensions and are at HIGH RISK of being denied.




The goal is to minimize our risk and avoid foreclosure. The way to do that is to follow procedure and once the approval is given; the buyers lender needs to be on top of the transaction to ensure we close on time. Paying attention to all of the deadlines as all of them are very time sensitive. We just do not have room for error anymore. We are going to see alot more short sales come on the market but the success rate will be low if organization and follow through are thrown to the waste side.




Anytime I have had a major issue with a transaction it was always involving a buyer not able to perform. I had a transaction recently I was negotiating for a REALTOR. There was a sale date on the property and we were told we had to close by the date given. The buyers had plenty of time to close but the the buyers lender was not making the file a priority. I had to call the supervisor and underwriter myself to push for docs so we could make our close date. My file was at the BOTTOM of the pile. I had to fight my way to the top of the pile with attitudes from all different directions. I was successful in closing the deal but was all of this really necessary? We have to ask that question.




The bottom line is there is going to come a time ( it is already starting to happen) where negligence will not be rewarded with extension requests. It is imperative that we all do our part. What ever key roll we play in this transaction; to follow through to the best of our ability. If we are all fulfilling our own roles then there is no reason we can not close these deals on time.







Here are some tips to help you avoid this pitfall:



1. Have all buyers get Desk Underwriting approval.




2. Put a call in to the buyers loan officer and make sure they are aware of all pertinent information in regards to sale dates, approval dates and investor guidelines.




3. Set expectations with buyer and their lender that " NO EXTENSIONS WILL BE GIVEN"





Remember, you may get lucky once or twice; but its that one time that you lose, the home goes to foreclosure and you are faced with the awful task of telling your client. Not to mention all of the time and effort it takes to put a short sale together that was lost. How much is your time worth? How much is your client worth. I can almost bet I know the answer to both of those questions as both are equally important. Let's do our best to avoid these pitfalls UPFRONT so we can have the outcome we all desire.




( Quote ) “Do more than is required. What is the distance between someone who achieves their goals consistently and those who spend their lives and careers merely following? The extra mile.” Gary Ryan Blair




REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?



Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.







LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS







At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...







400 S. Sierra Ave. Ste.102 Solana Beach, CA 92075



858-764-7300



http://www.lotusrealtygroup.com

Short Sale Negotiating!!! Holiday Special at Lotus Realty Group.

Dear REALTORS,





Lotus Realty Group will be running a holiday special on our original 1% negotiator fee. Any short sale transactions that come in ABOVE $350,000 between November 1st, 2011 thru December 31st, 2011, we will be offering our services for .5%. (A HALF A PERCENT.)




I wanted to share with you exactly what the 1% negotiator fee covers when you outsource your short sales to Lotus Realty Group:




Why use Lotus?



1. Qualified, experienced and professional staff. Everyone employed at Lotus Realty Group are licensed REALTORS.




2. # 1 Real Estate Attorney, David Bright. David Bright is my attorney at Lotus Realty Group. My short sale package has all of the disclosures to protect all parties in the transaction. All disclosures were either co-created with David or approved by David. David is a huge asset to have on our team and he is always available for my clients.




3. Experienced negotiators with all of the large financial institutions( and the small ones) and are able to handle all of the banks requests and requirements before the file hits their desk.




4. We have a stream lined process that allows our company to handle all files with ease. Our organizational skills are like no other. Nothing falls through the cracks.




5. In addition to negotiating your file Lotus Realty Group offers the following assistance to REALTORS:




A) Prospecting



B) Prequalifying



C) Full short sale package readily available to hand off to your clients to get started.



D) Pricing and listing



E) Marketing




6. Lotus Realty Group will only take qualified short sale transactions. We will only take deals we know we can close and not waste time on deals that do not make sense. This allows us to maintain our excellent track record of closing short sales.




7. Weekly updates




The goal is to build your pipeline with the right deals. If you have thirty in your pipeline on a regular basis you will be closing 2-3 monthly.



The questions to ask your self are:







A) Can you do the negotiating yourself and build your pipeline to where it needs to be?



B) Does it make more sense to hire a company for less than the 1% fee for negotiating your file where there is a lack of service and legal protection to save a little money and in return lose sleep at night?







Here a couple suggestions to help you with the 1% negotiator fee:







1. Ask the buyer’s agent to split the fee with you. If the buyer’s agent understands what it is he or she is paying for to ensure the deal closes it has been my experience that they are willing to contribute.







2. Offer 2.5 % to the cooperating broker in the MLS and 3.5% to the listing agent if you have to carry the full 1%.







REALTORS, we have truly created a system that works. Where do you see your business headed? What number do you need to make next year? Have you thought about it? Have you written it down? What do you need to do to execute your business plan? Where is your time best spent?



I would like to end with a short story. When I first started my business I had my hands in several cookie jars. I was door knocking and taking listings, working with buyers, looking into a property management service as an addition to my business, and becoming my own broker to build a brokerage. It was EXHAUSTING!



When I changed my business model and decided to focus ONLY on negotiating for other REALTORS and perfecting that system all of the sudden I looked up and everything had come full circle. I get 3-5 of my own listings monthly by referral only. 6-10 new transactions from other REALTORS monthly. I have created this on a $500.00 monthly marketing budget. Sign calls come in and I hand it over to one of the agents on my team . We are still in the process with the paperwork at the DRE to become our own broker but it is happening. And it has all happened by laser focus on one particular part of the business.



I would like to encourage you to evaluate your current status and consider allowing Lotus Realty Group to help you achieve your goals.



(Quote) "Persistence is the ability to maintain actions regardless of your feelings. You press on even when you feel like quitting. When you work on any big goal your motivation will wax and wane like the waves hitting the shore. Sometimes you’ll feel motivated, sometimes you won’t. But it’s not your motivation that creates results - it’s your action.



Persistence allows you to keep taking action even when you don’t feel motivated to do so, and therefore you keep accumulating results. Persistence will ultimately provide its own motivation. If you simply keep taking action, you’ll eventually get results, and results can be very motivating." – Zig Ziglar





Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS




At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...




Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

SB-458! How it is effecting negotiating with 2nd lien holders

Since the SB-458 was passed on 7/15/2011, stating that 2nd lien holders can no longer pursue for deficiency judgment I have experienced difficulties negotiating with subordinate liens to accept the typical 10% of the payoff balance. The seconds are wanting more due to the inability to pursue the homeowner once the short sale is complete. They are tired of hearing the same argument that we all know is not just an argument but a true statement; they will get NOTHING if the home forecloses. If you are dealing with extremely large balances I can assure you the 2nd lien holders are going to give you a run for your money.



I have a client who is a disabled veteran. He is ill and has a true hardship. The first is BofA and the second is Chase. I have approval from the 1st. The 2nd balance is quite high and they are asking for 30%. I am just a tad shy of the traditional 10% towards the payoff. Chase refuses to take it and is willing to let the home go to foreclosure. I definitely have a fight on my hands but I am always up for the challenge.




I am also seeing a rivalry between Bank of America and Chase. If it is not a HAFA qualified borrower and there is a second lien, typically BofA will only contribute $3000 to the 2nd payoff. I have had two transactions now with Chase in first position and Bank of America in 2nd position and let me tell you; Chase is giving Bank of America the same courtesy no matter how large the balance is. The table has been turned in these instances and 10% is off the table.




Originally when SB-458 came out it was such a win for homeowners to be able to short sale their home without the ramifications of a deficiency judgment. Don't get me wrong, there are many instances where some transactions go smoothly but the ones that don't are problematic. For my client that is a disabled veteran; he has a true hardship. He is ill, has no money, and is unemployable. All parties have rallied together to get this 2nd lien holder- Chase, $19,000. I have never even seen a 2nd get that much no matter how large the balance is. And they are still willing to foreclose.



I feel that because of this new law and this power struggle that is taking place; 2nd lien holders are going to be more problematic in the future. I feel it is unfair to these homeowners that truly need the help. What good are these new laws that are being implemented if the banks are going to keep tightening up their guidelines and their greed to make it nearly impossible. OR..are they calling our bluff. Stay tuned.



We can only do our best with the information we have at any given moment. In the future taking short sale listings it would be in your best interest to make sure you know the following up front:




- Who are the lenders ?( 1st and 2nd )



- What are the balances?



- Where is the money going to come from?



I say this for the following reason: if you know who the lenders are you will know how much the 1st is going to give to the 2nd payoff. If you know the balances up front then you will be able to determine what it is going to take at minimum to satisfy the 2nd. Lastly, knowing the answers to the first two questions, you will be able to determine if you need to pull money from other parties to get the deal done.




Do not be afraid to ask a seller or buyer, even agents ( god forbid) but it may be necessary at one point or another if they would be willing to voluntarily contribute to the cause. It is going to get ugly. The best we can do as always is pre-qualify and set proper expectations. But we have to be willing to ask the uncomfortable questions.




It truly troubles me to see these issues continue to get worse. I have to believe there are good hearted people in the corporate world who wants to lend a hand to those in dire need of help and at the same time help our market recover faster by avoiding foreclosure.





In these uncertain times I cant tell you how many homeowners I talk to who are in fear. Everything is uncertain in their lives and they want to get through this process and get back on their feet pointed in a more positive direction. Uncertainty cannot be helped. Nothing is certain. But cooperation is key. If we cannot cooperate together; we as REALTORS, homeowners and the banks ( SECONDS); we will all be chasing our tails.




It is my hope that when the government passes these NEW LAWS that they think them through so we can truly STOP the bleeding. It appears that we are now just plugging holes one after another in a barrel to stop the leaking.






(Quote) My basic principle is that you don't make decisions because they are cheap; you make them because they're right.

Ronald Reagan




REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?




Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS




At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...



http://www.lotusrealtygroup.com/  858-764-7300

Changes to the HAFA Program through Bank of America

Bank of America released an article today on the current changes they have put in place with the HAFA Program ( Home Affordable Foreclosure Alternative Program)that went into effect on October 15th, 2011. I would like to encourage everyone to go to the Bank of America website for more information regarding these changes. I would first like to share who qualifies for this program as I still have many questions in this regard from REALTORS and homeowners on the guidelines.





Who qualifies for the HAFA program?


a) If the loan was originated on or before January 1, 2009





b) If the loan is past due or if the homeowner believes they will be missing a payment in the near future.





c) If the property has been vacant or rented out for less than 12 months, and the homeowner has not purchased another property in that time frame.





d) If the property is not vacant or condemned.



e) If the unpaid balance on the loan is no greater than the following:



1 unit: $729,750



2 units: $934,200



3 units: $1,129,250



4 units: $1,403,400


f) If the loan is not a Fannie Mae or Freddie Mac backed loan



g) If the homeowner has a true hardship and qualifies for a short sale



Incentives for homeowners through the HAFA program
After completing the program a homeowner may receive $3000 to assist with moving, rental and other relocation expenses.


Please note: Once the homeowner receives a letter from their lender to enroll in the program they have 30 days to respond. They will need to call the number on the form and let the lender know they would like to proceed with a short sale and pre qualify for the HAFA program.




Current Changes to the HAFA Program with Bank of America effective 10/15/2011




a) Borrowers may use their incentives to pay for transaction costs such as overdue utility bills or minor repairs, etc.

b) Bank of America will contribute up to $6000 toward the payoff of second lien holders.




I think these new changes will be very helpful. I just had a second lien issue today that was remedied due to the $6000 that BofA is contributing. I also feel if there are extra costs in the transaction a homeowner can help with using their incentives;that would solve problems at the end when trying to figure out where the money is going to come from,which happens alot in short sales.



Bank of America will want to see the home marketed for at least 120 days. If there is a sale date on the property, the sale date will be put on hold while the home is in the pre screening and marketing stage. There are two documents that will be required:



1. RMA- ( Request for Modification Affidavit)


2. Dodd Frank Cert- (Wall Street Reform and Consumer Protection Act)




Many of you that work with Lotus Realty Group have seen these documents requested by us. Once they are sent they need to be signed and returned as soon as possible to keep the file flow in continuous movement forward.





I have had many calls from clients and REALTORS who are not sure of the forms and the time lines; or if they qualify. It is important to make sure we are pre qualifying and setting proper expectations with our clients and the only way we can do that in an effective and efficient manner is to educate ourselves on these programs. This will also ensure we are giving our clients correct information and not setting ourselves up for an over promise and under deliver situation.




This information will be helpful on listing appointments with distressed homeowners. If you have any further questions in regards to this program or general short sale information, please feel free to give us a call. Either my staff, or I will be able to assist you.



Extra Tip

When pre qualifying your clients I would find out if they are aware whether or not they have MI. ( Mortgage Insurance) Any loan that has MI will need to get approval from the MI company before the short sale can proceed.



(Quote) A classical work doesn't ever have to be understood entirely. But those who are educated and who are still educating themselves must desire to learn more and more from it.

"Karl Wilhelm Friedrich Schlegel"




REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?



Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS




At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...




Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

Foreclosure Back Log Deepens

Delinquent borrowers are spending more time in their homes without making mortgage payments due to the foreclosure backlog. Once borrowers start missing mortgage payments they spend an average of a year and nine months, or 611 days in foreclosure before banks repossess their homes according to LPS mortgage monitor. That is more than twice as long as three years ago, when the average was 251 days. Earlier this year, the average was 523 days.





The number of defaults in the pipeline has been huge and there are more problem loans than ever before. With so many bad loans, servicers have had to prioritize which ones they can work with and which they need to push aside.




My number one concern is that some homeowners who are facing foreclosure and know they will not be able to afford the home any longer; are not making an attempt to short sale their home. Why should they? If they are able to stay in their home mortgage free until the bank gets more effective and efficient in filing NOD'S and starting the foreclosure process. This mentality I am afraid is very common but here is the problem with that way of thinking; the banks ARE becoming more effective and efficient and it is only a matter of time before they have a strong system in place and they are turning foreclosure notices like MAD. The lenders want these off their books. It will happen.




It has been my experience that homeowners either don't know what their options are or they are simply frustrated and need some guidance. I have spoken to many delinquent homeowners who have changed their minds at the last minute realizing that they did not want a foreclosure on their record however; in most instances it is too late.





Foreclosure will do TWO things:will do two things:




1. Damage a homeowners credit far worse than a short sale due to the period of missed payments.




2. Keep our market depreciating.




This can be bad on so many levels. Here is one scenario:



Lets say a homeowner decides he or she is going to stop making their payments. They try a loan modification but they are not successful. 12 months has went by without a payment and then they decide they want to short sale the home because they don't want the foreclosure to damage their credit. Here is the problem; their credit has already been hit significantly due to the period of missed payments. Not only that; but now the home has depreciated in value even more which will effect the actual offer we get on the property verses what the bank will want to net in order to allow the short sale to go through.




Here is how this should have been handled in my opinion:



The homeowner realizes they can no longer continue making their payments. They hire a Real Estate professional to have a strategic plan of action in place to short sale their property. ( BEFORE THEY ARE MONTHS BEHIND)



This is in the homeowners best interest for the following reasons:




a) It gives us time to get a short sale through without an NOD getting filed giving us the freedom to market the property and negotiate without racing against time lines and still allowing the homeowner to stay in the property while the short sale is taking place. They are becoming delinquent but it is in a controlled manner with a plan attached.




b) Allows us to help the homeowner transition into a rental with a payment they can afford.




c) Allow us to help our client enroll in a credit recovery program to help them buy a home again in 18-24 months vs 5-7 years with a foreclosure on their record. A home that is actually APPRECIATING.




d) Helps us do our part to avoid flooding the market with REO properties.




There has been alot of fear and confusion brought about with the housing market crash. Add the unemployment rate and it feels chaotic for most homeowners experiencing difficulty. But I would hate to continue to see people give up and not take the next indicated step in recovery. It is up to us to be able to educate these homeowners with the truth and reality of the situation. Once we can break that barrier then we can help them get back on their feet with grace and grounding and help them achieve their goals. Scrambling at the last minute does not do anyone any good in the grand scheme of things.







(Quote)



“Nothing profits more than self-esteem, grounded on what is just and right.” John Milton"





"Lotus Realty Group is hiring REALTORS. For more information please give me a call."



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?





Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.




LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Huge decline in home sales to Investors

An article on CNN Money I read today explains that the sales of homes to investors have declined more than half over the past five years. The article also states the number of investors who are flipping properties has fallen even faster. ( Please read the below link for more details)




With a majority of the homes for sale on the market being short sales I can see why the number of investor sales have declined. I have a lot of phone calls from agents who want to put offers in on my listings and they are typically 70 % or more BELOW what the bank wants to net. All cash offers with the assumption the investor can close quickly is not as favorable as it may have been at one time.



There are alot of factors the lender will take into consideration when approving a short sale as we have discussed before and they are as follows:



1. Was the property marketed for a substantial amount of time?



2. Is the home owner a true candidate for a short sale?



3. How much of a loss is the lender going to take on the transaction?



Investors need to drive the price down for the transaction to pencil out for them at the end of the day and the lender is trying to net as much as possible to minimize their loss. You can see how this can pose as a problem. Now, lets add the flippers. We are all aware that lenders are not fond of flippers in a short sale. There are also alot of legal issues attached to flipping.



I can appreciate investors looking for deals but the bottom line is if we want to get a lender to approve a short sale we are going to have to slow down and have a strategic and ethical plan in place to get the lender to play ball. The goal is to bring the seller, buyer and lender together and create a win win situation. It has been my experience that investor offers are not very effective in achieving that goal.



Here is a scenario I would like you to consider:



I had a call today from an investor out of state who has not viewed my property but would like me to write up his offer significantly less than what it is listed at. My listing is at a good price that will cause it to sell with no problem. Here is the issue; I have 3 liens I have to satisfy with the lenders. I have a strong listing history on the property, a qualified candidate for a short sale and buyers willing to pay list price. Though it sounds nice to double end a deal, I am not going to try to drive the price down with the knowledge that I have on this transaction. My duty is to help my seller avoid foreclosure and show the bank that I have done my due diligence. If I went down that road I could open myself up to alot of legal issues and potentially lose my license not to mention the respect of my client. What would you do?



The problem is this is happening with investors all day long. This is just one scenario. It is not a situation to take lightly when you have this type of responsibility on your hands.



I believe there are certain situations in a short sale where an investor offer would be helpful. Here are two circumstances:tor offers can be useful for the following 2 circumstances:



1. Your property is a condo with the following issues:



a) Low occupancy rate



b) The building is in litigation



c) Flood issues



In this case it would be hard to get a lender to lend money with these types of issues and a cash offer would be the only option.



2. Any property that has insurmountable damages such as foundation issues.



These are the only two reasons I would accept an investor offer on one of my short sale listings and typically it is after I have created a strong listing history to submit with the offer.



As the market changes I feel we must change with it with ease and grace to do the best we can for all parties involved. One deal at a time.


(Quote) It is through cooperation, rather than conflict, that your greatest successes will be derived.
- Ralph Charell


http://money.cnn.com/2011/09/29/real_estate/flip_this_house/index.htm



"Lotus Realty Group is hiring REALTORS. For more information please give me a call."



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?



Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.

LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...


400 S. Sierra Ave. Ste.102 Solana Beach, CA 92075
858-764-7300
http://www.lotusrealtygroup.com

Most common pitfall in a short sale transaction

One of my goals has always been to help REALTORS maneuver through the pitfalls that can occur in a short sale transaction. There are more than a few however; one in particular has been a reoccurring issue and has become one of the top 10 most crucial points in short sales today; BUYERS LENDERS.

When a buyer chooses a loan officer to work with it is usually a family member, a friend or a referral from a friend. Have you ever been in a situation where you were in need of a particular service; you had a friend in the business applicable to your situation; so with a sense of obligation you entrusted this person to handle the details but in the end you didn’t get the service necessary to accomplish what you needed to accomplish?

I have negotiated over 100 transactions and a majority of them were for REALTORS where I was not in control of what vendors were used. In my experience I have seen short sale transactions nearly blow up at the end due to a buyers lender of choice not following through in a timely manner and ignoring the following;

1. Is this buyer truly qualified?

2. Deadlines

3. Short sale approval dates

4. Foreclosure sale dates

5. Getting docs out in a timely manner to fund and record on the approved date from the short sale lender.

Yesterday I had an experience with one of my own listings. More than 2 months ago I had set expectation with the buyer’s agent before accepting her offer. I explained the special circumstances in which my sellers were in. They are elderly people. Not in the best of health and had moved out of state. They do not have access to technology. All document collection and signing has to be done by mail and the sellers turn time is 3-4 weeks. We have a close date of 10/03/2011. The home is in active foreclosure status. I explained there could be no room for error on this and the buyer’s lender truly needed to be on top of the loan to ensure we can get docs in an appropriate time frame to fund and record on time. If we requested an extension we would run the risk of the short sale lender asking for updated financials and then they would have to resubmit for approval. With my sellers turn time of 3-4 weeks I would not be able to coordinate all parties and deadlines to close this deal. We would all be chasing our tails.

I received a call from the buyer’s agent and her broker that we would need an extension due to the buyer’s lender WAITING ON APPROVAL FROM THE UNDERWRITING DEPARTMENT.

Unacceptable! I called the loan officer and she said there was nothing she could do. I requested the number to the underwriting department and called to speak with the supervisor. He informed me they had a 3 day turn around. They had the file since 9/23/2011. We had already went over there so called 3 day turn time. The supervisor was kind enough to look a little deeper and sure enough our file was at the bottom. With ONE CALL I was able to get that file moved to the top and should have docs out by Friday to make our close date.

I have realized after running into this issue repeatedly that no one else is going to treat my file with the respect and attention that it needs and it is my responsibility to be on top of all parties involved in the transaction ICLUDING the buyer’s lender. The reality of situation is as follows:

1. Extensions are not raining out of the sky these days. Short sale lenders want to close in the time frames they allow. Some files have already had their max allowable extensions. One more can cause the deal to blow up.



2. Short sales are time sensitive. When there is a foreclosure sale date on a property and we continuously ask for extensions are luck is wearing thin. It is imperative that the buyer’s lender is working the file from the beginning to the end paying attention to crucial dates and putting the files in HIGH PRIORITY STATUS that have these important deadlines and special circumstances listed above.





3. We as agents cannot sit and accept when a loan officer says there is nothing they can do. That statement cannot be further from the truth. There is always a solution. The bottom line is a loan officer has to be willing to go the extra mile to make it happen and if they are not then there is a lack of taking responsibility on their part and treating each file as a high priority.

Is the goal not to close deals so that EVERYONE WINS?

Experience has taught me that there takes a certain level of aggressiveness and tenacity to complete short sales. We have to be willing to take it to the next level if necessary and not accept anything less than an excellent performance in all parties involved in the transaction to get the results we need and if we cannot find it in others, well, and then we must do it ourselves.



Tips of the day:

a) Have a trusted lender to get DU (Desk underwriting) approval for any buyer on your property.



b) Set proper expectations with all buyers’ agents; they need to be on top of the buyer’s lenders to make sure they are doing everything in their power to ensure a smooth transaction and treating all deadlines with care and concern.





c) When a loan officer tells you “There is nothing else I can do” DO NOT ACCEPT THAT. I have seen mountains move miraculously at the last minute when a fire is lit.



(Quote) “Working together, ordinary people can perform extraordinary feats. They can push things that come into their hands a little higher up, a little further on towards the heights of excellence.”



The location for our Event with David Bright on 10/6/2011 between 11:00 am and 1:00 pm has been moved to the Cardiff Library. At 2081 New Castle Ave , Cardiff, Ca 92007. We will send out reminders to all that have R.S.V.P




REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?



Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP

PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...

Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com




"Lotus

Obama’s score card on programs to help the troubled housing market

CNN Money released an article discussing a recap of all of the programs Obama has initiated to help rescue the troubled housing market over the years. As you all know there have been several. Each has had their pros and cons but have not been 100% effective; or they have not yet come full circle on the benefits to the home owners experiencing difficulty. Please click on the link below for more information.



I have worked with alot of home owners over the years and have had the opportunity to see many different hardships. One commonality I have observed by most home owners experiencing difficulty paying their mortgage and facing the reality of losing their homes is that they want to hold on as long as they can. They will try anything to hold on to their homes where their memories were made; where their children grew up, or simply because they are comfortable with the lifestyle they have built for themselves over the years.




When these programs are born to help home owners hang on what I have seen is alot of false hopes being made and ultimately the home owner loses anyway due to the programs not being executed properly; or it is too late as the home owner is too deep in the process for anything to be done, or they simply do not qualify for these programs.



I have been reflecting over the last week about our market and life in general. I am seeing the true nature of the human condition. In my own life I have recently experienced alot of changes. As a business owner and a woman who is very passionate about what I do and the people, places and things that I love I can tell you that I do not let go of anything without claw marks. I pro longed the inevitable changes even with an awareness they would have to one day because I was not prepared to handle the discomfort that I knew the detachment would cause. I reached a place where I had to choose; to either continue the way things were or surrender, allow and trust that the situation would heal and be replaced with something better. As painful as it was, with faith in my heart, I had to let go of the outcomes. Sometimes I have to do this hour to hour and sometimes minute to minute daily.




I had to do some searching within myself to see if the attachments I had were serving me anymore. Was it worth the stress, the pain, the worry and the sleepless nights or did I want to be whole? I had to accept the choices that I made. Not judge them anymore but accept them and realize that something’s just cannot be controlled or fixed. It is not that those things I let go of are no longer special to me or that I have lost the memories. The memories are really the only thing that lasts forever.



Change is frightening for alot of people if not all people. The fear of what is on the other side and what life will look like without these so called things we just cannot live without. The true definition of fear is being afraid that we will lose something we already have or not get what we want and desire. I have found in my own life experience that anytime there is fear it is because I have created it. Sometimes the only way we can rebuild a solid foundation is to tear down the one that is swaying back and forth and knocking us off balance. I heard someone say once “What a beautiful mess". It does not feel so beautiful at the time but I do know that once the dust has settled things are clearer to move forward on a positive note with lessons learned and a future full of possibility.




Even though my experience is different in nature the energy behind it is the same. We are all trying to get to the same place we are just following different maps. REALTORS, you are going to run into many homeowners who are holding on for dear life and not ready to make a decision on what to do. It is my hope that you may be able to relate your human experiences with theirs to help you to connect with your clients and also here the undertone of what they are saying to you. I can almost bet 99.9% of the time; their hesitancy is based out of fear.




Ask them the following questions:



1. Can you afford to make your payments?



2. Even if the bank modified your loan, do you see your financial picture improving in the next year to continue payments for the life of the loan?




If the answer is NO to both of those questions then most likely these programs are not going to be very helpful.




http://money.cnn.com/2011/08/31/real_estate/obama_housing_scorecard/ ( Obviously it is still important to make sure you go over all options possible to get to the right one for your clients situation. )




I believe if we are able to relate to our clients from the human condition and human experience we will be able to help them move through the agony of prolonging the inevitable faster.



(Quote) "The greatest test of courage on earth is to bear defeat without losing heart."



"Lotus Realty Group is hiring REALTORS. For more information please give me a call."



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?



Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...



Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

California Tops in Short Sale Fraud

LOTUS REALTY GROUP



I was sent an interesting article last week in San Diego Life style magazine from a client of mine and I wanted to share it with you. The synopsis of the story is that the FBI has announced a crackdown in short sale fraud and then Freddie Mac announced they will be teaming up to go after agents who are not operating properly. Freddie Mac short sales have increased from 4% of completed workouts in 2000 to nearly 14% in 2010. The California Department of Real Estate has also issued a consumer alert.



California has become one of the target markets for short sale fraud. Since there are one or more Real Estate professionals involved in a short sale transaction, the goal is to reach out to Realtor Associations in target markets to educate on the top issues in short sales today in hopes to help Realtors avoid short sale fraud. http://www.sandiegolifestyle.info/2011/08/short-sale-fraud/



There were a lot of comments from other REALTORS stating that the information in the article is misleading. Let’s go over some of the possible short sale fraud scenarios.


(Scenario 1)


Falsely indicating on a new short sale listing that there is an offer on a property in order to discourage legitimate offers and protect an accomplice's planned low bid.


Well, we all know that happens a lot in the industry. It is not a big surprise. Here is the bottom line; as a listing agent your fiduciary duty is to your seller and the short sale lender, not the buyer. The lender has a certain amount they want to net that may or may not be realistic but if you have your clients best interest in mind and want to be successful in the short sale then you will market that listing properly. Showing the bank you have had it on the market for a substantial amount of time. Go a step further and show the bank actual data of home sales; how fast they are moving and where prices are going. You can only work with one offer at a time so make sure you can prove it is the highest and best.


Value disputes on properties have become one of the biggest hold ups in short sales. What is even more interesting to me is that there are all of these Real Estate surveys stating that the lenders are holding up short sales. When short sales first came on the market there was a 10% close rate and a 9 month turn time. We are down to 2-4 months. 6 months max. It has been my experience that the top reasons short sales take longer to close are for the following reasons:



a. Home owner not prepared to show documents or hardship.



b. Negotiating HELOCS



C. Lost documents



d. Value issues



e. Non communication between all parties.


It is my opinion that all of these issues are in our control. The only situation out of our control is if a loan gets sold to another lender. Here are some tips to help you to work with the lender:


1. Have your client and the lenders best interest in mind.



2. Pre Qualify your client and make sure they are short sale candidates and are prepared to submit all documentation to show their hardship.



3. Create a listing history with extensive market data.



4. Submit a complete short sale package.



5. Set proper expectations with all parties.



6. Rule of thumb; the higher the offer the more gracious first lean holders will contribute to second lien holders.



(Scenario 2)



Manipulating the short sale listing price by making the house look more distressed than it really is (reverse staging), inflating repair estimates.



I honestly think that anyone who is doing this ruins valuations for those of us trying to do it right. Again, another reason that the short sale process is SLOWER than what REALTORS would like the time frames to be. The answer is quite simple in my opinion. Make sure the repairs you are documenting are VISIBLE. Roof leaks for instance create mold. Unstable foundations may require structural reports from certified professionals and some cases there are termite damages. The short sale lender is not going to cover these repairs. Typically if you have these reports and pictures up front and let a buyer know about them in hopes they will commit to the deal and offer a fair amount they feel good about, I do not feel that is short sale manipulation. I believe that is working smart. Preventing a buyer from backing out after we get approval due to non disclosure or a lender not covering damages.




(Scenario 3)



Flipping Schemes. A buyer buys a house at a short sale without putting down any of his own money and sells it a few hours later to a legitimate buyer at a much higher price.




(Scenario 4)



Manipulating the HUD-1 settlement statements so a flipper can skim away net proceeds from the sale for himself or other parties in the transaction without seller or investor knowledge.




Those of you who follow my events with my Real Estate attorney David Bright and read my newsletters I am sure you can guess my position on scenarios 3 and 4. That is short sale fraud at its finest.




In all of this I want to drive home one key point; the more people try to manipulate the system to make a quick buck the SLOWER short sales will take to close. Due to all of these legal issues it has forced lenders to investigate deeper, create new forms such as the NO FLIP AFFIDAVIT from GMAC and fight values.




I have seen record breaking turn times and in those transactions proper procedure was followed to a T. If we want a successful outcome we need to remember that we have to work with the lender. Not against them. As we move forward into this short sale market there are so many people that need our help. We as agents need to support our families as well. Intention is everything. Are we going into this transaction only for ourselves? Or do we really want to help?



One thing I have seen in this market is a lot of emotional stress and pain. If we are only trying to take from people that are already losing that does not keep clients coming back. I don’t know about you but I would like to set up my revenues for the future. Do right by my clients and build long lasting relationships with them to ensure repeating customers and referrals. And of course, stay under the radar with the FBI.




(Quote) Character is doing the right thing when nobody's looking. There are too many people who think that the only thing that's right is to get by, and the only thing that's wrong is to get caught. ~J.C. Watts



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?




Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...



Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

Job relocation and how it is impacting selling homes in today’s market

I was reading an article in Market Watch the other day in regards to job seekers deciding to pack their bags and move for a new position, according to a report released at the end of July by Challenger, Gray and Christmas. At the first half of the year, about 9.4% of job seekers relocated for a job, up from 7.6% within the same window of time in 2010, according to the outplacement consultancy firm. That is from a survey of about 3000 job seekers; many of the respondents are Managers and Executives.


Since there has been little improvement in the housing market in 2011, one might say the increased relocation in the first half of the year is due to the fact that prolonged unemployment is compelling more job seekers to relocate DESPITE the challenges of selling a home in this market. At some point, the job seeker may decide that it is worth taking a loss on their home sale to be employed again.




What about the seller that has a home that has depreciated in value significantly due to the housing crisis and CANNOT be sold traditionally? Not all homes in today’s market are equity sales and I am sure you would all agree that there may be more homes out there in pre-foreclosure and underwater than there are equity sales and the numbers are rising at an increasingly high rate.



I had clients recently in a similar position. One of the seller's company had went bankrupt and she was forced to take a position in Los Angeles . Not only did she take a pay cut but now she had to drive back and forth every day with gas prices at its highest level. The couple realized that they would not be able to continue the way they were. They needed to relocate to Los Angeles. They could not afford to pay rent there and a mortgage here. They had no choice but to sell their home.




Here is the challenge; this home is in San Elijo Hills. As you all know that is one of the highest depreciating areas in San Diego and one of the largest default areas as well. This home would never be able to be sold as a traditional sale. I was able to negotiate this hardship with the bank and they accepted a short sale.




I wanted to remind everyone that job relocation is a hardship in this market. A home owner has to be able to take care of their family. If they are forced to take a position somewhere else and there is no equity in the home a short sale is possible.



Lenders are adamant more than ever to keep foreclosures off their books and a short sale would be the best option for all parties involved. I am not confident that all homeowners going through this type of hardship understand what all of their options are. We have an opportunity to help families who are about to make some difficult decisions to make the right one.




Some families may decide that walking away would be the best option. As a Real Estate professional, we can explain the importance of trying to short sale verses walking away. Clearly a foreclosure on their record will impact their credit much worse than a short sale would. Also, if a homeowner is trying to seek employment elsewhere and a foreclosure is on their record that may impact the employer’s decision to hire. Some companies run credit checks and foreclosure may be a determining factor in either termination or not hiring at all.




I believe with the high unemployment rate and the downturn in the market we are going to continue to see this type of hardship. I would be on the lookout for families you can help to make the right choices giving them all possibilities to help accomplish their goals. This is also a great way to market you as a Real Estate Professional in the short sale market targeting families that need to relocate for a job position but cannot sell their home traditionally.




(Quote) We are the creative force of our life, and through our own decisions rather than our conditions, if we carefully learn to do certain things, we can accomplish those goals.

Stephen Covey



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?



Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...




Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

Why pay a short sale negotiator fee?

Dear REALTORS,



I wanted to thank those of you who came to my event last Thursday with David Bright. It was so nice to see you. We covered some very important topics in the short sale market. For those of you we had to turn away due to full capacity we apologize. Lotus Realty Group and David Bright will be having educational events every 3 months. We will be sure you are able to attend the next one.



One topic in particular I would like to go over in this news letter is all issues pertaining to a negotiator fee. I know that most of you do not want to pay a negotiator and parting with a 1% fee is painful for most of you. One of the questions for David Bright was; can the buyer pay the negotiator fee or is it the listing agent’s responsibility?



For those of you who have followed my events with my attorney David Bright understand that he feels very strongly on this matter. His reply was simply “The listing agent’s responsibility. Having a buyer pay a negotiator fee has a lot of dark ally’s in this industry today. As a business owner and having built my company to where it is today with a lot of sacrifices I cannot afford to go down any of those dark ally’s and one of my goals has always been to protect my clients as well. Homeowners and the REALTORS I negotiate for. I take pride in the fact that our company has a strong reputation of ethics and integrity along with our success rate in closing short sale transactions.



I was reflecting on the situation that drove us into this type of market in the first place. The lending industry liked to call it creative financing. Now, there are companies out there trying to do creative short sales and charge less money for their services to drive in the business. I am in my third year of business and I have seen these companies come and go.



I know how long short sales take to close. I also know how many you have to have in your pipeline to stay afloat. Not to mention the right team to handle the short sales from start to finish and how many deals that need to close on a monthly basis to make the numbers work to keep business doors open. But most importantly, from a legal stand Pointe, short sales have become a liability with all of the CREATIVE short sales taking place. Lenders and the DRE have extra eyes on short sale negotiators. Is it worth the headache and the risk to try to save some money or does it make more sense to hire a team of professionals who has your best interest in mind. A company who will protect you and your client.



I would like you to consider this; there are so many sides to a short sale transaction. As a negotiator I am negotiating the hardship, contributions and values. If a company is willing to give up their worth and accept less for their services, how hard do you think they will fight when negotiating your file? That saying, you get what you pay for is exactly right.




I wanted to share with you exactly what the 1% negotiator fee covers when you outsource your short sales to Lotus Realty Group.




Why use Lotus?



1. Qualified, experienced and professional staff. I was very mindful when hiring people for my company to assist me in executing my strategic, streamlined process to allow Lotus Realty Group to run like a well oiled machine and at the same time; people that would be a good reflection of who we really are and what we have to offer. Every person employed at Lotus Realty are licensed REALTORS.







Our staff:


Cari Drolet- Founder/CEO- 14 years in the industry from Lending to Real Estate. Licensed REALTOR, CDPE.



Stephen Bick- Broker of record/Business partner. Charter Financial Analyst. (CFA, CMA, CIRA.) Business Management and compliance.



Lana Boyle- Director of Operations- Bachelors Degree in business management. Licensed Broker, CDPE.



Jennifer Talasazan- Sales partner/Loan modification/Debt relief. Licensed REALTOR with back ground in the lending industry.


Donna Rommano- Transaction Coordinator- Licensed REALOR.




2. # 1 Real Estate Attorney, David Bright. David Bright is my attorney at Lotus Realty Group. My short sale package has all of the disclosures to protect all parties in the transaction. All disclosures were either co-created with David or approved by David. David is a huge asset to have on our team and he is always available for my clients.






3. Experienced negotiators with all of the large financial institutions and are able to handle all of the banks requests and requirements before the file hits their desk.






4. We have a stream lined process that allows our company to handle all files with ease. Our organizational skills are like no other. Nothing falls through the cracks.





5. In addition to negotiating your file Lotus Realty Group offers the following assistance to REALTORS:




A) Prospecting



B) Prequalifying



C) Full short sale package readily available to hand off to your clients to get started.



D) Pricing and listing



E) Marketing





6. Lotus Realty Group will only take qualified short sale transactions. We will only take deals we know we can close and not waste time on deals that do not make sense. This allows us to maintain our excellent track record of closing short sales.




7. Weekly updates



The goal is to build your pipeline with the right deals. If you have thirty in your pipeline on a regular basis you will be closing 2-3 monthly.



The questions to ask your self are:



A) Can you do the negotiating yourself and build your pipeline to where it needs to be?







B) Does it make more sense to hire a company for less than the 1% fee for negotiating your file where there is a lack of service and legal protection to save a little money and in return lose sleep at night?



Here a couple suggestions to help you with the 1% negotiator fee:



1. Ask the buyer’s agent to split the fee with you. If the buyer’s agent understands what it is he or she is paying for to ensure the deal closes it has been my experience that they are willing to contribute.







2. Offer 2.5 % to the cooperating broker in the MLS and 3.5% to the listing agent if you have to carry the full 1%.




REALTORS, we have truly created a system that works. Where do you see your business headed? What number do you need to make this year and next year? Have you thought about it? Have you written it down? What do you need to do to execute your business plan? Where is your time best spent?



I would like to end with a short story. When I first started my business I had my hands in several cookie jars. I was door knocking and taking listings, working with buyers, looking into a property management service as an addition to my business, and becoming my own broker to build a brokerage. It was EXHAUSTING!



When I changed my business model and decided to focus ONLY on negotiating for other REALTORS and perfecting that system all of the sudden I looked up and everything had come full circle. I get 3-5 of my own listings monthly by referral only. 6-10 new transactions from other REALTORS monthly. I have created this on a $500.00 monthly marketing budget. Sign calls come in and I hand it over to one of the agents on my team and just recently our company became our own broker of record. We are still in the process with the paperwork at the DRE but it happened. And it happened by laser focus on one particular part of the business.



I would like to encourage you to evaluate your current status and consider allowing Lotus Realty Group to help you achieve your goals.





(Quote) "Persistence is the ability to maintain actions regardless of your feelings. You press on even when you feel like quitting. When you work on any big goal your motivation will wax and wane like the waves hitting the shore. Sometimes you’ll feel motivated, sometimes you won’t. But it’s not your motivation that creates results - it’s your action.



Persistence allows you to keep taking action even when you don’t feel motivated to do so, and therefore you keep accumulating results. Persistence will ultimately provide its own motivation. If you simply keep taking action, you’ll eventually get results, and results can be very motivating." – Zig Ziglar





Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS





At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...




Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

: Law against short sale deficiencies expanded to Junior Liens

I know most of you are aware of the great news in regards to the expansion of the deficiency law to junior lien holders. There is no doubt this is a huge improvement that will make negotiating with seconds much easier and much more successful. However, there have been some misunderstandings on these new rules and I wanted to clarify a few things so that moving forward you are able to set proper expectations with your clients.





SB-458



1. As of 7/15/2011 Senate Bill 458, prohibiting a deficiency after a short sale for one-to-four residential units, regardless of whether the lender is a senior or JUNIOR LIEN holder.





2. Effectively immediately on all transactions closing escrow.





3. A lender cannot require a borrower to pay any additional compensation in exchange for a short sale approval.





4. The law does state that this does not prohibit a borrower from voluntarily offering a monetary contribution to a lender in hopes of obtaining a short sale.





5. A lender is permitted under the new law to negotiate for a contribution from someone OTHER than the borrower, such as other lenders, agents, relatives, and the like.





When we receive great news like this it is easy to overlook some key points or not read between the lines and think it through. I have had several calls on items 2-5 so here are the Q&A in order:



Q. If my client completed a previous short sale or the home was foreclosed on does this law apply?



A. No, this law only applies to transactions in escrow from the date the bill was passed and all new short sales moving forward.







Q. Since the lender is no longer able to require a borrower to pay additional compensation in exchange for a short sale approval, does the lender have the right to reject the short sale?



A. Look at numbers 3 and 4. In number 4 it states that the law does NOT PROHIBIT a borrower from voluntarily offering a contribution in HOPES of obtaining a short sale. How I interpret this is the lender can reject the short sale in order to see if they can obtain a contribution where the hardship is not strong and the homeowner does not offer anything in good faith.



We still need to make sure our clients are true candidates for a short sale. If the homeowner clearly shows in his financials that he has money to contribute and it is therefore not a traditional hardship you will want to have an upfront conversation with the homeowner to lay the groundwork. The lender may or may not accept your short sale so a contribution may be in your client’s best interest.



If the homeowner can clearly show in their financials there is nothing to give they have a better shot at getting it approved. There are no guarantees so the best you can do is pre-qualify all clients and set proper expectations.







Q. Does this mean that the lender will no longer expect other parties to contribute?



A. This is one that really needs to be read all the way through. The lender can still ask for a contribution from agents and possibly relatives. Wells Fargo seconds almost always do this. Again, I would make sure that you set proper expectations with your clients in regards to voluntarily contributing depending on their circumstances to minimize your risk of coming out of pocket.



First lien holders are getting better at contributing 10% to the seconds but it is hard to say what their number will be until we get the approval in hand. Remember when they would only contribute 6%. Well I can tell you from experience that seconds are getting smarter and tougher and that they will try to pull dollars from as many places as possible to squeeze as much as they can. Remember that they are taking the biggest loss.



We still need to do our due diligence in the beginning to have a smooth closing in the end.







Please join # 1 Real Estate Attorney “ David Bright” and myself on 7/28/2011, at the Tamarack Beach Resort between 11am and 1pm for an educational event. We will be discussing important topics in the short sale market including this new senate bill, Equator and MARS rules. Please RSVP as there is limited seating at 858-764-7300 or email Lana@lotusrealtygroup.com.



(Quote) The very essence of leadership is that you have to have vision. You can't blow an uncertain trumpet.



Theodore M. Hesburgh

REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS







At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...







Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

Substitute a new buyer without restart in Bank of Americas Equator

LOTUS REALTY GROUP





I received the below email from Bank of America yesterday. I am sure some of you may have received the same but just in case I wanted to make sure you were all up to date on the latest news and programs and as usual give my advice on how to utilize this information to your benefit.



Bank of America now allows real estate agents to submit a backup offer on a transaction if the original buyer has walked away from the sale. This means you will no longer have to initiate a new short sale; instead, you can continue with the original transaction in Equator and still work with your same short sale specialist. This change will save you time by not having to repeat a number of process steps.



When a Backup Offer is ready



you should send a message to your short sale specialist via Equator when the original buyer is no longer interested in the property. Your short sale specialist will then respond to you within two business days and ask if you have a backup offer ready to submit. If you have another buyer prepared to make an offer, the short sale can proceed without having to repeat the short sale initiation steps. The short sale status in Equator will change to "Marketing," and you will be directed to complete the following tasks within 14 business days:





· Complete the "Listing Data" task.



· Provide the marketing description.



· Review the marketing plan.



· Upload the offer. (To do this in Equator, locate "My Properties," then "Offers" and select "Place New Offer.")



If the "Listing Data" task is not completed and the new offer is not uploaded within 14 business days, the file will be closed.



When No Backup Offer Is Ready




This new process applies only if there's an available backup offer when a buyer walks. If you do not have a backup offer ready to be submitted, the short sale will be declined. In that case, you should return to marketing the property and initiate a new short sale in Equator once you receive another offer.




We work with many Equator transactions and obviously one of the biggest frustrations when we lose a buyer is starting all over as Equator typically works one offer at a time. This new system is great however, I wanted to remind everyone to pay attention to the last paragraph. If there is not a back up offer to replace the one you lost, you will have to start over and re initiate the short sale.




I would make sure that you have a couple back up offers on standby to avoid this issue. Time lines are much longer when we have to start all over and this only frustrates buyers therefore, we run the risk of creating a revolving door. If there are sale dates that we have to postpone, starting over will definitely pose a problem.



Setting expectations with the buyers is another way to keep them on the line. Knowing the time frame is key and sharing that with them. Every transaction is different and some will take longer than others so do not over promise and under deliver. I would also make sure all buyers are pre qualified and are not putting in offers all over San Diego County. We need to create a level of commitment which can only be accomplished by setting proper expectations and due diligence.



General Time Line: (These are subject to change with every deal)

1. File submitted



2. 7-10 days to upload into the system



3. 2-3 weeks processing time



4. Order BPO



5. 7-10 days for BPO to be submitted and assigned to a negotiator



6. Negotiator can take anywhere from 2-4 weeks to negotiate the file



7. Submit to the investor for final approval



8. Investor can take anywhere from 1-3 weeks (plus or minus)


It has been my experience when I slow down and do things properly in the beginning my transactions go much more smoothly in the end.






(Quote) Efficiency is doing things right; effectiveness is doing the right things.



"Peter Drucker"



REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?




Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS



At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...




Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

This real-estate scam can land you in jail......

This real-estate scam can land you in jail

In some cases, ‘flopping’ is a crime with serious consequences

http://www.marketwatch.com/Story/story/print?guid=1B883062-A0CE-11E0-9F46-002128049AD6



Dear friends and colleagues,

I wanted to share this article with you I read on Market Watch. Those of you who have attended one of my events with my Real Estate Attorney “David Bright" know how passionate we are about education in the short sale market to ensure we are all operating above board and in the same return protecting all parties involved in the transaction. Please take time to read it.




I found this very interesting. As a listing agent in a short sale transaction our fiduciary duty is to the seller and the lender. To help the homeowner experiencing a true hardship; to find a serious and committed buyer and bring the lender the highest best offer. PERIOD. There is no easy way around it. No short cuts. Though this process can be very frustrating at the end of the day if the process is done properly then it will be a win win for everyone. If it is not, then we run the risk of potential legal ramifications. I don’t know about you, but I would much rather be able to close my eyes at night and actually sleep.





The BPO agent’s fiduciary duty is to the lender. I personally have only ran into issues with BPO agents driving my values up not down. Which is why I have developed the listing history method. This helps me when I am in a value dispute situation. So, now we have" Flippers and Floppers" to watch out for. Ha!





It is unfortunate to me that so many people are willing to create situations such as these. This is not a market to mess around with. Our number one goal should be to help homeowners who really need the help avoid foreclosure. The only way to do that is to take on qualified clients; know what the lender is looking for and act accordingly to reach that goal upholding our integrity and ethics. .





I believe if we truly have our client’s best interest in mind all of our good intentions and efforts will come back tenfold.




(Quote) "There are seven things that will destroy us: Wealth without work; Pleasure without conscience; Knowledge without character; Religion without sacrifice; Politics without principle; Science without humanity; Business without ethics."

— Mahatma Gandhi




REALTORS, what is in your business plan this year? What are you doing to create a system that will allow you to build your short sale business? How often are you out there prospecting and how do you know if you are taking the listings that are going to be successful and not a waste of your time?




Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.





LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS




At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...


Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com

CITI Mortgage short sale incentives for borrowers

C.A.R News line came out with an article yesterday stating that the Senior Vice President of CITI Mortgage, the mortgage servicing arm of Citigroup, has announced they will be offering borrowers an average $12,000 in incentives to complete a short sale. CITI has a little over 16% of delinquent loans in a short sale program. Adding that has increased from 4% from 2 years ago.



In 2009, CITI offered an average of $1500 to qualified borrowers. In 2010, CITI increased incentives between $3000 and $5000. Present day, $12,000 for 2011.



Not only has CITI reached out to the borrowers instead of waiting for the borrowers situation to get worse and get them involved in their short sale program; Increased the amount of money at the close of escrow to help borrowers get back on their feet, they have also streamlined there short sale process. In 2009 the process was an average of 120 days from the listing to close. The average turn time in 2011 is 83 days.



I wanted to lay this out for those who did not read the article and explain how some of this can be misunderstood and can cause one to give misleading information to the borrowers but in the same return, may be a great way to encourage a borrower to take action.



As a short sale negotiator I see a lot of different programs out there banks are trying to implement. But keep in mind that there is still a pre qualification process.




To ensure the following:



a) Borrower is eligible to be in the short sale program



b) Receives the $12,000 incentive



c) Turn time of 83 days



The following needs to take place:



1. Borrower has to be pre qualified and fit the parameters of a short sale with proper expectations set.



2. Short sale has to meet the NET requirements the bank is looking for.



3. Have a complete short sale package submitted with all applicable documents.



The banks have definitely been pro active in completing short sales however, the deal still needs to makes sense. If you do not have a qualified borrower, that will kill the deal right away. The bank has a certain NET in mind. If you cannot meet the net requirements with the offer you submit, a listing history is necessary to negotiate with the bank. If you submit a short sale package that is in complete how successful do you think you will be getting an approval in 83 days if the bank is constantly tracking down documents, fighting the value of your offer or questioning your clients hardship? The goal is to streamline your own process before it hits the negotiators desk at the bank. This will help you achieve what you want in the time you want.



These incentives are a great way to encourage borrowers to take action and get involved in the short sale program but it is important that you do not over promise and under deliver. We preach about this a lot at Lotus Realty Group. I get a lot of calls about these types of incentives from borrowers and it becomes apparent very quickly that they do not understand the process in which it takes to get them there. And it all starts with asking the right questions and Pre Qualifying.



Extra Tip:

Before marking your calendar from 83 days to start, please keep in mind that if you do not follow the suggestions in this blog you will most likely run into longer time frames. Here is a typical time line:



1. File submitted



2. 7-10 days to upload into the system



3. 2-3 weeks processing time



4. Order BPO



5. 7-10 days for BPO to be submitted and assigned to a negotiator



6. Negotiator can take anywhere from 2-4 weeks to negotiate the file



7. Submit to the investor for final approval



8. Investor can take anywhere from 1-3 weeks ( plus or minus)




(Quote) You can't move so fast that you try to change [a situation] faster than people can accept it. That doesn't mean you do nothing, but it means that you do the things that need to be done according to priority.



“Eleanor Roosevelt”


Call us today and let us show you a system that works to help you expand your business and effectively and efficiently close short sale transactions.



LOTUS REALTY GROUP



PROFESSIONAL SHORT SALE NEGOTIATORS




At Lotus Realty GROUP, helping people ethically succeed is at the forefront of who we are...




Call today to find out how Lotus Realty Group can assist you in closing your short sale transactions or go to WWW.LotusRealtyGroup.com