Miracle of Miracles…The Short Sale Lender Called ME!

I got a call from a loss mitigator yesterday. Did I just get punk’d by Ashton Kutcher?

When I saw the red hold button blinking on my phone, and my office manager IM’d me that this particular mitigator was on hold, my body reacted as if someone needed immediate medical attention. “Drop everything!! Get a doctor!! Code Blue!!”

You always HOPE that the bank will call you back. They rarely do, but despite the fact you still hold on to that tiny shred of hope, that morsel of divine intervention.

This was a 2nd lienholder. We were waiting on approval from them, to take $1500 on a $20k payoff. We already had approval from the 1st, and the funding close date is 10days away.

So as I stared at the hold button, I hesitated to release it. As I have a tendency to do sometimes, my mind raced to the worst case scenarios…

The mitigator was calling to say they wanted full payoff and wouldn’t settle for less.

They were calling to say they knew about the simultaneous closing and no dice, they’ll take the house to auction.

They needed 600 more days to review the file.

They had to do another BPO.

He was leaving the company and another mitigator was taking over the file.

The FDIC just raided them and were being absorbed by Bank of America.

The loan was bundled in a CDO and they couldn’t find the note.

I picked up the phone. His name was Mark. He said he was calling to say he was writing up his review for submission, and his opinion to the investor was to approve the deal. He’d have an answer for my by Monday or Tuesday. I thanked him and hung up the phone.

I took myself off the oxygen tanks and breathed a sigh of relief. And then something happened. I felt really special. Heck, I should feel special. Nobody else gets a return phone call from loss mitigation.

Is it okay to feel cocky sometimes?

End Buyer Funding on a Short Sale

If you’re having issues and snafus closing your short sale deals because of your end buyer’s lender, you may want to look at controlling that aspect of the deal. It’s becoming more and more prevalent these days that snags arise as conventional lending guidelines and seasoning issues get goofier and goofier.

I found that when I have an end buyer use my lender, there aren’t any problems in closing deals. But when the end buyer uses their lender, the chance for something going haywire is so much greater.

This happened to me last week. As soon as I got short sale approval, I told my listing agent that I wanted to shuffle the buyer to my lender. She said the buyer is pretty insistent on using their mortgage broker. I called the broker and introduced myself. I explained that since short sales are so time sensitive, and had to close by a certain date, that I preferred to have the buyer use our lender, who can close very quickly.

The broker said she had 21 years experience with fast closings and VA loans. She never had a problem. The buyer was a vet. Against my better judgment, I didn’t press the issue to use my lender. BIG MISTAKE. 7 days before the close date, and 8 days before the foreclosure auction, the buyer didn’t qualify for his VA entitlement. I was ticked at myself for not following through. This could have been avoided entirely if I used my guy.

We immediately put another offer in to the short sale lender. The investor was Freddie Mac. They declined the offer, saying it was too close to the auction to review and they wouldn’t postpone. So they took it to sale.

All I can say is: control as many aspects of the short sale as possible.

Another Successful Short Sale

We just got approval on another short sale. No matter how many times you do this, it’s always exciting getting that approval letter spitting out of your fax.

We had a cash buyer lined up for a while, and because the price of the house was so attractive, the buyer stuck with us. We created a sweet spread for a profit of $31k.

The cool thing about this deal was that because it took awhile to get approved, we submitted a lower offer than the original one they were reviewing. We forced another BPO because the investor’s guidelines required a new valuation of the house after 60 days of non-decision and no movement on our offer.

So the delay in getting us an answer actually helped us create a greater spread.

It’s very frustrating when your short sale offer takes forever to get approved. Buyers get fed up and rescind their offer. But the upside is…after so many days you can request another BPO to be done.

If you’re in a declining market, you WANT to make sure the bank does another valuation. And when this happens, make sure you submit a new offer…much lower than your previous one.

We’ve done this on a good percentage of our short sales with great success. Try it…you’ve got nothing to lose.

Short sale negotiations is my thang

Been negotiating short sales now for over 6 years. Started before all the hullabaloo of the foreclosure tsunami and the subprime meltdown. I remember it being so much easier to negotiate with loss mitigation because they weren’t so swamped with files. A few weeks was average for a response and approval.

Over the years, I’ve personally negotiated tons of successful short sales in many states around the country. The experience of being on the phone on a daily basis talking to banks, lenders, lienholders, the IRS, creditors, and vendors has really given me an education in how to negotiate effectively.

I LOVE to negotiate.

You get to really know the psychology of negotiating by doing it every day. How loss mitigators think, why they say the things they do, the tricks they’ll use to get the most money for the banks, who makes decisions and who doesn’t. It’s helped me to handle every objection and tactic in the book.

Also, being a part of several Short Sale mastermind groups over the years with some of the top short sale investors and realtors in the country has really skyrocketed the learning curve. As you know, there’s no substitute for experience and just diving into the fire. We share information, push each other to fine tune our businesses, and give one another total support. The great thing about being in a short sale mastermind is that we keep each other accountable. Everyone is the group is a performer. If we don’t do what we say we’re gonna do, it’s adios. I feel very fortunate to be a part of the masterminds.

Can’t wait to share what I’ve learned with you, so you can make your life and business easier and much more profitable. Stick around for negotiating strategies, tips, and real life loss mitigation stories on how to plow through the muck and roadblocks to get your deal done.

Where it all began…

My wife, 1 year old daughter, and I were living in Los Angeles back in 2001. The townhouse we were renting was haunted. No joke. Saw shadows moving, sounds, noises all the time. What bugged me most was that I was paying rent and the spirits were squatting rent free.

On top of that, the neighborhood where we resided was prone to crime. So just about every night, police surveillance helicopters whomped above us and blared their high beam search lights right into our bedroom window.

My daughter was having breathing issues due to the poor air quality. Couple that with the choppers and apparitions, I’m pretty sure the universe was sending my wife and me a message to get out of Dodge.

Well, I’m not one to mess with the universe, so I listened.

I was in LA because of my work. I was in the entertainment industry, freelancing at various production houses and studios in town: E!, Fox, Saban, NBC, writing and producing for film and television. Enjoyed my work, but had to do find a way to improve my daughter’s health and preserve our sanity.

In short, we needed a better quality of life.

Our goal was to get to Sedona, AZ. In fact, this was our goal for years. How to get there and what to do for work once I did get there were the answers I was looking for.

Well, as fate would have it, I was led to real estate. Don’t ask me why or how. I didn’t know the first thing about real estate investing. Didn’t know the language, how to get started, or even how to spell the word “howse.”

In a very short 3 months, between Feb and April of ’01, my life changed. With my wife’s insight to the world…my world… she said real estate ‘is it.’ She knew, I didn’t. But I listened.

We had very little money. I worked paycheck to paycheck. When I mentioned to her that I met a couple–who were very successful real estate investors who learned what they know at a ‘big shot guru’ real estate bookcamp–she said, “Go! This is it. This is our ticket out of here. I know it.”

I charged the $5k we didn’t have to our credit card and spent 5 days at a real estate seminar, feeling totally lost and depressed.

But something happened. I followed the “Action Guide” the guru gave us. The guide said that if I followed the steps outlined, I’d make $10k within 90 days. I never made $10k in one shot in my life.

45 days after leaving the bootcamp, my heart skipped a beat when one of the many offers I put in on houses in AZ got accepted. Needless to say, I was scared to death. Now what? Well, within 3 weeks we lease optioned the house for a $15,000 profit and $311 a month cashflow. I was floored.

Within 6 months, we bought 5 more rental properties in Northern AZ with none of our own money and moved out of LA and to Sedona in November 2001.

Today, my company specializes in short sales. We’ve been negotiating short sales for the past 6 years. Hundreds and hundreds of them.

I love to negotiate.

Stick around for some great insight and secrets on how to effectively negotiate mortgage and lien discounts with loss mitigators, creditors, the IRS, and any lienholder.

The road to real estate and short sale negotiating

I’m a descendant of the family of man. I grew up in Ocean Township, NJ over half century ago. Spent my youth at the beach negotiating waves and beating up my younger brother. My dad was a lifetime public school administrator and my mom was a nurse. Hard-working parents.

Really loved my childhood. My mother welcomed all the neighborhood kids into our house to play and raid the fridge. Jersey was a temperate clime, so we played baseball in the summer, football in the fall, threw blistering ice balls at each other in winter, and healed our wounds in the spring…only to repeat the cycle all over again. And beat up my brother.

As a kid, to make money, I’d go door to door negotiating with neighbors to use my services to rake the leaves or shovel snow or to buy greeting cards they didn’t need.  I remember always working, even at a young age, because I enjoyed it and the invigorating feeling of pulling my own weight. 

Graduated Ocean Township High School. Went to Emory University in Atlanta, GA in the 70’s. My hair looked like Linc from the Mod Squad. If the reference is dated, think Malcolm Gladwell or Art Garfunkel. Get the picture? Not pretty. Dates were hard to come by…no surprise there. 

Majored in Biology and took lots of sciences. Thought I wanted to go to Med School, but instead went to Dental School. But only for a year. Because while in college, my main love was comedy. Directed and performed in an improvisational sketch comedy group for 4 years. I left dental school after my freshman year and moved to Chicago to study with Second City. I found my bliss, my passion! 

Performed in two improv groups for a couple years, then started doing standup comedy. This was in the early 80’s. My standup career lasted 15 years. Moved from Chicago to New York City in ’85 and settled in at The Improv as my home club. Worked the circuit, went on the road, did some tv. Really loved making peeps laugh. When the club scene fizzled in the early 90’s due to over exposure and saturation, I started performing on cruise ships. Worked all over the Caribbean. Had a blast.

In ’95, my girlfriend (now wife) and I moved to LA. I was writing screenplays, so I figured LA’s the place to be. Plus, I just got a new agent who was very encouraging. While making the production rounds, I made my way as a copywriter and producer for tv and film promos, trailers, epk’s, movies, popular shows like Seinfeld and Frasier, kids’ programming, news and sports, and sales packages. 

Got married in ’96 to the most amazing woman on the planet. Been together 17 years and it keeps getting better. Our daughter was born in ’99. In ’01 we moved to Sedona to raise her in the clean air and natural beauty. My career also changed…drastically. Plunged into real estate investing knowing very little about real estate.

Took a bootcamp and WHAMMO! I’m an investor. Go figure. With my wife’s support (since we had little money, I needed all the help I could get) I learned how to buy houses with no money and no credit. In 18 short months we bought 40 houses with none of our own money. Rentals and lease options. Fell into short sales in ’03.  Found I had a knack for negotiating with the banks. Been negotiating short sales full time ever since.

So over the past few years I’ve taught and coached investors short sales and how to negotiate effectively. Feel very fortunate to have learned from some wonderfully talented, smart, and generous people. Belonging to several mastermind groups over the years has also helped. Invaluable, actually. I surround myself with people and businessfolk who keep me on my toes, honest, call me on my bs, and give it to me straight. We share ideas, strategies, and stay current with the market and all the changes and challenges that are taking place at lightning speed.

I’m a lucky man.

I still beat up my brother. Headlocks, mostly.

Now it’s time to share what I know with you…