A short sale is a frustrating experience. It can leave the homeowner and even the REALTOR disillusioned and negative about financial institutions in general however, CITI Bank is one of my top 3 Lenders I like to work with. Or should I say debt collector as banks no longer want to be addressed as the lender. Once a home owner defaults on their mortgage they are no longer a servicer of a loan; they became the servicer of a debt. I received an email from a client who was very disturbed by the amount of phone calls they were getting due to their missed mortgage payments. Please do not be mistaken. A short sale will help avoid foreclosure and help reduce the hit to your credit significantly but this does not stop the servicer of the debt from making all attempts to collect.
Additional Documents to include in the short sale package:
As most of the financial institutions, CITI Bank has tightened up their time lines. They want to get short sales off their books as fast as possible. Nevertheless; the deal still needs to make sense and the home owners have to qualify. CITI Bank has their own financial packet that needs to be completed. Some additional documents CITI may ask to include in your short sale package are the Deed of Trust and the original mortgage note. Mortgage coupons for existing payments may need to be provided as well.
Additional Requirements:
CITI Bank requires borrowers to be in default by at least one month and have no means to pay off the mortgage and other existing debts. This is where prequalifying the home owner is important. If you have a home owner who is continuing to make his or her payments, has a nice savings account and a surplus every month after all expenses are paid; they may not be successful with CITI or any other financial institution for that matter unless the home owner is prepared to make a contribution in the form of cash or a new note.
Time Frames:
I love working with CITI Bank because I know what they are looking for. Knowing that, I am not going to submit a package unless I have the following:
a) A qualified seller
b) A qualified buyer (with an offer in line with the value and or listing history so that CITI knows we aggressively marketed the property)
c) A complete short sale package with all of CITI’S applicable documents.
It has been my experience that if I follow these guidelines I will have a BPO ordered in 5-10 business days after submission, a negotiator in 2 weeks and an approval in less than a month. Add to this a 30 day escrow and we are looking at a closing in less than 2 months as opposed to the 3-4 months as most other financial institutions.
Extra tip:
CITI seconds tend to sell off the debt to a collection agency. We want to avoid this at all times. Once the debt gets sold to a collection agency we lose the power of leverage when it comes to the payoff. Most seconds will settle for 10% of the balance. Collection companies will want 30-40% and they will be firm on their request therefore hurting your chances of being successful. My suggestion is if at all possible, have your client make a payment every now and then while the short sale is in process to keep it in the system. This will reduce the risk of this occurrence.
The goal is to work smart. Effective and efficient. Knowing ahead of time what the financial institution requires will allow you to do the following:
a) Take the right deal
b) Gather the applicable documents that are required of that particular financial institution (as each has their own)
c) Educate your client on what to expect.
d) Give you more than enough time to build a solid proposal to get you the results you desire in a timely manner.
Furthermore, building a solid reputation as well which leads to REFERRALS!!
(Quote) It is better to lead from behind and to put others in front, especially when you celebrate victory when nice things occur. You take the front line when there is danger. Then people will appreciate your leadership.
Nelson Mandela
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
Tuesday, February 15, 2011
Friday, February 4, 2011
Subscribe to:
Posts (Atom)
