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







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



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