The difference between a Short Sale Agent and a Short Sale Expert

 When it comes to doing an  Orlando short sale, many things come into play. One of the most important aspects of this particular home selling process is the agent that you choose. Your agent will be doing all of the negotiations for you with your bank as well as with the potential buyer; therefore, you have to trust your short sale agent.  In order to trust your agent, you should know important things about them before turning the steering wheel over to them when it comes to selling your home.  When picking an agent, it’s absolutely crucial that you do your research on that person.
             The first thing you should do is research the agent’s background and area of Expertise. The best way to research the company is to utilize online search engines. Simply type in the company or the agent’s name followed by “reviews.” Within seconds you should be able to find numerous reviews from previous clients that will help you to determine the reputation of the company in which your agent is associated.  Also, as with anyone that you hire, you should take into consideration the agent’s real estate experiences. You can also ask the agent to provide you with references, which you can call to obtain detailed information from previous Short Sale clients. References can provide you with the best information about what to expect if you need to do a short sale on your house.
            The problems occur when a homeowner hires an agent to do their short sale but the agent has never done one before.  Short sales are not easy and not all realtors have the skills, work ethic or experience required to be an expert short sale agent.  When homeowners make the mistake of not hiring the right agent for the job, the result can be disastrous resulting in your home getting foreclosed on.  If you’re in the market for a real estate agent that specializes in doing short sales do your research and find out everything that you can about the agent before making your decision.  You’ll be glad you did.

A Wrench gets thrown Into Florida’s Foreclosure Process

      In a very interesting case here in Florida, the 4th District Court of Appeals ruled that a foreclosure affidavit from a bank employee testifying to the validity and existence of original loan documentation on several Wellington, Florida foreclosures was hearsay because the employee had no first-hand knowledge of the documentation itself.

      In other words, when challenged to prove the existence of paperwork showing that the bank owned the loan and could initiate foreclosure, the bank instead got an employee to swear that he or she saw “computerized information” showing the documentation – without having any knowledge of the document, the original contract, or anything else related to the case.  Can you believe it?!

     This is pretty much the same thing as robo-signing, so it’s no wonder why the Court of Appeals decided to rule in this manner. To say that it has disrupted residential foreclosures in the state is an understatement, though, so it will be highly interesting to see what now comes out of a Florida we are already ridiculously behind on foreclosure processing.  I can’t wait to see what happens next.

Short Sales Fraud On The Rise In Florida

The incidence of fraud relating to short sales is expected to rise by 25 percent in 2012. The loss to lenders and servers is projected to be more that 375 million dollars. Unfortunately, Florida is one of the states that is most at risk.

The Federal Bureau of Investigation prosecutes mortgage fraud. Their definition is, “Any material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan.” The reason that short sales have become attractive to those wishing to perpetrate fraud is that the loans are held by the second lender without any equity. In order to make any money at all on the transaction, they must either receive a portion of the payment made to the primary lender, or be paid a fee by the seller. Sellers and buyers are often in a hurry to close, and so are susceptible to giving in to the demands of the second lender, especially if they are not supported with the knowledge and experience of a real estate professional.

One technique is the back-to-back closing, in which a property is resold on the same day as the original closing. For this to occur, there must be two unrelated contracts, one for the short sale lender and a contract with a third-party for purchase of the property. The contracts are processed in the reverse order, so that only the most alert Escrow agent will notice anything suspicious.

Some unscrupulous investors will list a property that they have no authority to list, at a price that is lower than a lender will accept as a short sale. The intention is to create a bidding war, select the highest bid while negotiating a low price with the lender. The investor then completes a back-to-back closing and keeps the difference.

Other suspicious transactions include those with a sale price of 10 percent or more higher than the prior, short sale price within less than a month; a sale price within three months that is 20 percent or more over the short sale price; and a transaction within six months that has a price of 40 percent or more than the short sale price. Some of these transactions are legitimate, when a buyer has had the revenue to undertake and complete improvements on the home.

Homeowners looking to purchase, as well as those looking to sell, a short sale property must be aware of the different types of fraud that are being perpetrated. Agents and other real estate professionals must be educated about them as well, because they are the best resource for protecting buyers and sellers from falling for fraudulent practices.

For the reasons described above, it is most often the junior or second lenders that are involved in fraud. All investors and lenders used should be assured as legitimate by checking their license status and reputation. An “arm’s length affidavit” should be prepared, which attests that there are no undisclosed agreements between any parties. This document is required by many primary lenders.