Complicated and Frustrating Roseville Short Sale with a Happy Ending...Thankfully!

If you follow me on Facebook or Twitter, or if you read my blog post about the little fly fishing trip I just took, you will know that last week I closed a short sale that posed some insane challenges...who knew a clerical error from the 2nd lender could cause such stress!!

In the middle of April, I listed a short sale in Roseville...within a week or so, I had a few offers. Cool beans. I immediately submitted the offers to both the first lender (CitiMortgage) and second lender (Bank of America, formerly Countrywide), along with all of the other necessary paperwork. Within just a couple weeks of submitted all of the documents, I had written short sale acceptance from the first lender. YAY!

I continued to call the second lender, and followed up several times per week. I provided additional short sale related documentation a few times when it was required, and went through the chain of a few short sale negotiatiors, etc. The 2nd lender was taking a while to complete its analysis, and fortunately, I was able to negotiate and obtain written extensions from the first lender. Finally, when I called to check in with the 2nd lender on July 10th (a Friday), I was informed that the short sale was showing "APPROVED" in their system, and that the written approval document was going to be emailed to me by the following Monday.

I immediately called the buyer's agent to let her know of the great news! The buyer had already completed his inspections and was ready go! The first lender's latest extension was valid through August 15th, which would allow the buyer plenty of time to close escrow.

Monday rolled around, and the short sale approval document did not arrive. I called the 2nd lender, and they said it was on the way. Tuesday...still no approval letter. What was the problem? I called Bank of America's Short Sale Support Department to find out...the Final Negotiator (or Closer, as they are now referred to), was not returning my voicemails or emails.

Turns out that for some reason, they emailed the short sale approval document to the wrong email address!! UGH...annoying, but not the end of the world. I gave the lady I was speaking with the correct email address. Each day, I anxiously checked my email waiting for the document to arrive. Each day, I again called and emailed the Closer without response. Each afternoon, I called the Short Sale Support Department...I got several supervisors and managers involved, and was promised every time that the approval document was "on its way." A week passed...then almost another week passed. I had spent MANY hours on the phone trying to track this document down. Finally, on Friday, July 24th, I called to leave yet another voicemail for the Closer's manager, and got an "out of office" voicemail greeting that had another manager's direct number. That manager answered!! He confirmed my email address, and said I would have the approval document within an hour.

Sure enough, as promised, an hour later at 4:30pm the approval document arrived in my email inbox. SUCCESS, I thought! I opened the attachment, and was shocked at what I read. The short sale approval document named an incorrect purchase price (it was actually lower!), and it named an incorrect person as the buyer. WHAT!?!?!?

I tried calling him back, but he did not answer. This Bank of America short sale approval was not re-assignable to a different buyer. It was after hours in Arizona where they are located. I called the buyer's agent to let her know what was going on. Of course we both freaked out...it took 2 weeks to get the short sale approval document emailed to me, and it was all wrong! Providing the 2nd lender's approval document was a condition of obtaining the buyer's loan! There was nothing I could do until Monday, July 27th...and time was running out! CitiMortgage had told me that there would be no more extensions to their approval. The buyer had already paid for his appraisal and several inspections, and was out of pocket close to $1,000.

I arrived to the office EARLY on Monday and started pleading with Bank of America's Short Sale Support Department to correct their mistake and get a new approval document over to me. I called and emailed all of the same managers and supervisors...after several hours on the phone (as if I did not have anything else to do), I was told that one of the conversations I had back in June had been entered into their system incorrectly. Duh! Several new managers and supervisors and hours on the phone later, I finally was emailed by the Closer. Wow - lucky me! The first contact from the Closer ever! She asked me to email her the correct information, which I did immediately. Finally, on Wednesday, August 5th, I received a new approval document via email with the correct information! WHEW!

So two days later I left for vacation. The very last day of my trip, on the way home, the Escrow officer with Placer Title called me to let me know of another hiccup. There was a problem with the allocation of costs on the final closing statement...I would explain it in great detail, but doing so would not make much sense unless you know all of the terms of the short sale approval which I can not get into here. 8 or 9 calls to the Closer, supervisors, managers, and the Short Sale Support Department at Bank of America over 4 or 5 hours driving home from Utah finally got us the answer we needed...we successfully closed escrow on Friday, August 14th.

Let me just tell you - for anyone who thinks real estate short sales are easy or require little expertise, you are wrong. Aside from being extremely persistent, all of what took place was completely out of my control. Thankfully this had a happy ending.

City of Sacramento wants your input for their "K Street Vehicle Traffic Study"

The City of Sacramento departments of Economic Development and Transportation are conducting a study to determine the benefits and impacts of returning cars to K Street in Downtown Sacramento.

Per the City of Sacramento Department of Transportation website - "...The study will examine options for incorporating vehicle and bicycle traffic to the current pedestrian and light rail activities on the K Street Mall between 8th and 12th streets. It will analyze circulation and traffic, pedestrian and bicyclist patterns, and the potential for accommodating parking. The study will also include alternatives for all existing and necessary infrastructure."

Click here to take the survey.

Erin's Sacramento Short Sale Experiment - Part III

Time for my third installment of Erin's Sacramento Short Sale Experiment! I am sure ya'll are just on the edge of your seats to find out just what has transpired in the world of short sales in our Sacramento metro area? For those of you not following along at home, or perhaps if you are reading this for the first time, my short sale experiment is tracking a few different Sacramento zip codes to see what how the short sale activity increases or decreases over time as compared with traditional resale listings (where there is a seller with equity in a "normal transaction") and to bank-owned resale transactions. My hypothesis at the start of this experiment: the number of short sales will grow over time, as will their dominance in our greater Sacramento marketplace (overall percentage of listings). I have continued to list more short sale properties. Let's see how this new data compares to the "control data" for the experiment and also to last month...

95624 is the section of Elk Grove closest to Hwy 99. As of right this second according to MLS, there are a total of 268 active listings there. 188/268 listings are short sales. The median price in that zip code in July 2009 was $233,000 according to Trendgraphix (an increase over last month). The result vs. the control data? Control data was 68.6% of all active listings in 95624 were short sales, vs. 72.5% last month, vs. 70.1% this month. INCREASE over the control data, but a decrease over last month. Number of YTD closed short sales - 122.

95610 is a section of Citrus Heights. As of right this second according to MLS, there are a total of 124 active listings there. 85/124 listings are short sales. The median price in that zip code in July 2009 was $199,000 according to Trendgraphix (a slight decrease over last month). The result vs. the control data? Control data was 60.3% of all active listings in 95610 were short sales, vs. 55.6% last month, vs. 68.5% this month. BIG INCREASE. Number of YTD closed short sales - 54.

95826 is a section of Rosemont and College Greens. As of right this second according to MLS, there are a total of 101 active listings there. 64/101 listings are short sales. The median price in that zip code in July 2009 was also $184,000 according to Trendgraphix (unchanged from last month). The result vs. the control data? Control data was 62.2% of all active listings in 95826 were short sales, vs. 63.3% last month, vs. 63.3% this month = INCREASE. Number of YTD closed short sales - 30.

95864 is a section of Sierra Oaks, Arden Park, and Arden Manor. As of right this second according to MLS, there are a total of 161 active listings there. 34/161 listings are short sales. The median price in that zip code in July 2009 was $285,000 according to Trendgraphix (a decrease over last month). The result vs. the control data? Control data was 17.0% of all active listings in 95864 were short sales, vs. 15.8% last month, vs. 21.1% this month. BIG INCREASE. Number of YTD closed short sales - 11.

95818 is a section of Midtown, Land Park, and Curtis Park. As of right this second according to MLS, there are a total of 83 active listings there. 18/83 listings are short sales. The median price in that zip code in July 2009 was $365,000 according to Trendgraphix (slight decrease over last month). The result vs. the control data? Control data was 16.0% of all active listings in 95818 were short sales, vs. 21.5% last month, vs. 21.7% this month. INCREASE. Number of YTD closed short sales - 9.

95819 is a section of East Sacramento. As of right this second according to MLS, there are a total of 72 active listings there. 10/72 listings are short sales. The median price in that zip code in July 2009 was $404,000 according to Trendgraphix (an increase over last month). The result vs. the control data? Control data was 19.7% of all active listings in 95819 were short sales, vs. 20.0% last month, vs. 13.9 this month. BIG DECREASE. Number of YTD closed short sales - 5.

So in summary - of the six Sacramento area zip codes I am tracking for my experiment, 5 of them experienced an increase in the number of active short sale listings...2 of the zip codes posted pretty large proportional increases, and the one decreasing zip code I am tracking posted a very large proportional decrease. My phone definitely keeps ringing and I continue to receive emails - I am fielding lots of inquiries from homeowners looking for more information and insight from my short sale experience...buyers too are really curious about the short sale process since they are encountering so many short sale listings in our marketplace. Also (you will be aware of this if you follow me on Twitter or Facebook), I closed many of my own short sale listings since the last installment of Erin's Sacramento Short Sale Experiment.

Until next time!

Erin's Sacramento Short Sale Experiment, Part I
Erin's Sacramento Short Sale Experiment, Part II

New Listing - 3174 17th Street, Land Park / Sacramento 95818

Charming Brick 2 bedroom, 1 bath, 1,203sf Cottage in Land Park! Contractor's own home features many modern amenities of today while retaining all the charm of yesterday. Renovated kitchen offers granite counters and backsplash, gas stove, dishwasher, and built-in eating bar. Spacious bedrooms with lots of closet space. Updated bathroom with tile counters and tub surround. Beautiful wood flooring throughout. Dual pane windows. The back yard is an outdoor oasis with a built-in swimming pool, surrounded by hardscape and planter beds featuring lush landscaping. Detached 2-car garage. Close to local eateries, transportation, William Land Park, & just minutes to Downtown. Offered at $449,000, subject to lender approval of short sale. For more photos and additional detail, please visit http://3174-17thstreet.com/.

Back home in Sacramento...even Realtors need a vacation!

Realtors joke around that one way to get busy is to go on vacation! Well I was already busy, and of course still had my cell phone and laptop within reach just in case of a transaction emergency. Luckily I did not have to fight any fires until today when one of my short sales experienced a crazy hiccup - but that is an entirely different blog post for another time!

Well if you follow me on Facebook or Twitter, you will know that I just returned this evening from a week away. I went on a fly fishing trip to the Provo River in Utah! My husband and I take a fishing trip every year on our anniversary...past anniversaries have included fishing on the Trinity River in Northern California, the Sea of Cortez in Mexico, the Deschutes River in Oregon, the Puget Sound in Washington, the Columbia River in Oregon...we wanted to try a different state this year.

Neither one of us had ever been to Utah. What a gorgeous state! We stayed in a small hotel in Midway, UT (which shall remain nameless because it was nice, but roach and spider infested!!), which is about 20 miles from Park City, UT where the 2002 Winter Olympics were held. We hiked into different parts of the Provo River with a professional fly fishing guide two different days. The weather was unseasonably cool - mid-80's and cloudy, and it made for some great fishing! Our guide told us there are about 3,000 fish per mile in the Provo River! Over two days, we caught around 60 fish.

On the days we were not fishing, we tripped around Utah. We heard from some locals that Moose were native to the Wasatch Mountains - so we took a loooong drive through the mountains hoping to see one. We saw a few deer and some huge birds of prey, but alas no Moose.

Anyway...back to the grind tomorrow. I have a new listing in Land Park that hits the market tomorrow, short sales to negotiate, and about a million other things to catch up on.

Don't think your loan has Mortgage Insurance? Think again...

With the bulk load of short sales that I am negotiating, there is an interesting phenomena I am running into more and more these days.

Lenders are placing their own mortgage insurance policies on loans. This is not your typical private mortgage insurance (PMI) that a borrower pays on a loan in instances they put less than 20% down. Instead, the lender places it on the loan after it is originated at their own expense and without the borrower's knowledge. As a short sale listing agent, often times I will not even discover this information until I get to an advanced stage of negotiation. Low level lender customer service, collections, and loss mitigation departments will not necessarily have this information.

Why is this a big deal? The mortgage insurance company gets involved in analyzing the short sale, and has the final say in whether or not the short sale is approved!

So what does this really mean? Basically it means that the short sale approval will ultimately take longer to approve (longer is a relative term!). The mortgage insurance company, faced with having to pay a large claim to the mortgage company, sometimes will demand a larger payoff that what is being offered. If the insurance is covering a first position loan, the mortgage insurance company may ask the seller to pay a promissory note, ask the seller to make a contribution toward the close of escrow, or ask for a higher overall selling price in the short sale. If the insurance is covering a second position loan, the mortgage insurance company may ask for a larger payout from the first position mortgage, or that the seller makes a contribution to close the escrow. I have seen promissory note requests from mortgage insurance companies range from $10,000 - $92,000. I have also seen cash contribution requests range from $10,000 - $25,000. No joke!

You might think - if a seller has a large chunk of cash laying around, then why do they need a short sale?

These scenarios can be properly negotiated by someone who specializes in short sales...

New Listing - 3050 Tice Creek Way, Sacramento / Natomas 95833

Adorable 2 bedroom, 2.5 bathroom pull-apart Natomas townhome attached only at the garage. Lots of nice amenities such as tile counters, cherry cabinets, tile flooring, upgraded black appliances (washer, dryer, & fridge stay!), window coverings, and backyard landscaping. Low HOA dues only $82.17 monthly. Convenient location with close freeway access and shopping. Offered at $135,000 subject to lender approval of short sale. For more photos and detail, visit http://www.3050TiceCreekWay.com.

Trying a Sacramento FHA Short Sale?

Many Sacramento agents do not know the difference between the requirements for doing a short sale for an FHA loan vs. a conventional or conforming loan.

Even though FHA loans were not common during the peak of the market, many buyers who purchased homes after early 2007 did use FHA loans, and unfortunately some of those folks are needing short sale assistance due to job loss, state furlough, divorce, etc.

Let me just explain - these are much different than a non-FHA short sale. These short sales do go through the seller's lender, but must go through HUD (US Department of Housing and Urban Development) and require a HUD application for "Pre-Foreclosure Sale" to be submitted, and a special consumer financial counseling certificate.

If you have an FHA loan and are thinking about doing a short sale, be sure to inquire about the above mentioned items...if you fail to complete those additional requirements initially, your short sale could be destined for failure. If you are engaged in an FHA short sale, be sure to make sure you and your agent are on top of the additional HUD requirements. Be sure to request the correct FHA-specific items from your lender's loss mitigation department...and keep in mind, they may not even know the difference until you get to a more advanced phase of the short sale negotiation.