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




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