Tuesday, December 15, 2015

Why Agents Shouldn't Shy Away from Short Sales

Taking on a Short Sale File: Why Agents Shouldn’t Shy Away

Many real estate agents would say that they try to avoid taking on short sale listings due to the time, energy and potential denial of approval from the lender. They are afraid that their commission from the sale would be lowered or denied after the hard work they put in. Due to the uncertainty in the time frame of a short sale file to get qualified, approved and buyer offers in, an agents time can become consumed if working alone.

One thing that these agents don’t consider; why are you taking it on alone?

The answer is: they shouldn’t.

Kayser works with agents (buyer & seller) on a daily basis to ensure that homeowners in short sale situations are covered completely from beginning to end. Starting with getting qualified, approved and finally closed, our file managers work with the lenders directly to make sure that this process goes smoothly and that any issues during are resolved as soon as possible. The agent in this situation does exactly what they do on their regular listings; they get an offer on the property. During this process, Kayser does not take any fees out of the agent’s commission at closing and agents are recording full commissions on closed files.

Working as a team instead of shying away from these files, agents can be a homeowner’s hero and help them gracefully out of a difficult situation.



The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Tuesday, December 1, 2015

The Counter Offer

Be ready for counter-offers and respond with caution

Although lender counter-offers are not part of every short sale, they do come into play and must be handled properly. There are four main possibilities in most lenders’ counter-offers:
  •      Lender may counter for a higher offer from the buyer
  •     Lender may request the seller make a cash contribution at closing
  •     Lender may request the seller to sign a promissory note at closing
  •     Lender may counter to have the closing costs adjusted

The fourth of these will be non-negotiable in many cases as lenders generally have set limits on closing costs.

However, the first three are crucial and be negotiated carefully to ensure the best outcome for the seller.

If the lender counters the offer from the buyer, there are two crucial steps that the seller’s side must take:
  • The seller must first go back to the buyer and request a higher offer…any increase in the buyer’s offer improves the chance of approval, even if it does not fully meet the counter from the bank.
  • If the buyer is not willing to increase the offer to the full counter made by the bank, then the seller’s side will have to bridge the gap by challenging the lender’s value.
If the lender counters with a request for a cash contribution and promissory note, there are two crucial steps that the seller’s side must take:
  • The seller must not panic and accept the counter just to get the deal done – the lender’s request for a cash contribution or a promissory note is very rarely a “take-it-or-leave-it” proposition
  • The seller must then craft a sound response explaining that the cash contribution or payments on a promissory note are simply unaffordable. The response should be supplemented with supporting documentation (such as pay-stubs and list of monthly expenses).


Since 2013, requests for cash and/or promissory notes have become far more common, but remember it does NOT necessarily have to be accepted to complete the short sale. These requests from the lender are simply a counter-offer and your short sale can be approved even if you reject their request to pay any cash and sign a promissory note. However, please remember that this needs to be skillfully negotiated for the most favorable outcome for you as the seller. And as always, each case is different, so make sure you are represented by an experienced professional.



The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Wednesday, November 18, 2015

Kayser Case Studies Video Blog #2

The choice of a lawyer is an important decision and should not be based solely upon advertisementsThis web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Kayser Case Studies Video Blog #1

The choice of a lawyer is an important decision and should not be based solely upon advertisementsThis web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Tuesday, November 17, 2015

Short Sales: Why knowing the benefits over Foreclosure may help your future.

Distressed homeowners are overwhelmed, so it is important to ensure that they are well informed. Many people don’t know that there are options when they’re behind on their mortgage. The assumption in the past has been to walk away from the property and let the bank foreclose, as many homeowners were unaware of the short sale and its benefits. 

There are two primary benefits to a homeowner in opting for a short sale rather than letting the bank foreclose.

First, a foreclosure significantly damages the homeowner’s credit. Credit has become an even more powerful factor in different facets of life. A foreclosure can impede one’s ability to simply obtain a credit card or finance a piece of furniture. However, the impact can be as drastic as compromising one’s employment or security clearance. In addition, homeowners who have foreclosure on their record will generally not qualify for a new mortgage for at least 7 years. Although ones FICO score rebuilds over time, this DOES NOT remove the Foreclosure on your credit report for up to 10 years.

Second, banks may pursue homeowner for any deficiency owed after a foreclosure. The deficiency is the difference between what the bank was owed at the time of the foreclosure and the amount the property was sold for at the foreclosure. For example, if the homeowner owes $250,000 on the mortgage at the time of the foreclosure and the property sells in foreclosure for $125,000, then the banks could sue that homeowner for $125,000 (the difference between the amount owed of $250,000 and the foreclosure sale price of $125,000).

So why do people continue to only consider this option? The answer is simple, they just don’t know.

Short sales, reported as, settled for less than full balance,” have a completely different impact on homeowners’ credit reports. The likelihood of them being able to qualify for another home loan is high after just 2-3 years and protect their employment, credit score, etc. In many cases, the deficiency of the mortgage is “waived,” by the lender and will not be pursued after the short sale is closed.  

The benefits of working with a short sale negotiation attorney and real estate agent will make this process for distressed homeowners graceful and lift many of the overwhelming feelings off their shoulders. 


The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.



Tuesday, November 3, 2015

The Hardship Letter

The Hardship Letter: Telling your Story

As part of every short sale offer, your lender will require a hardship letter or statement. Below are the hardship letter directives from three different major mortgage servicers: 
  • “Explaining why the homeowner is unable to pay the mortgage; signed and dated within the last 60 days.”
  • “You'll need to tell us in detail about the financial hardship you're currently facing.”
  • “The first step is for you to provide us with detailed information about your situation, so we can see if you qualify and what kind of support you need. Your hardship letter helps us evaluate your situation and find the appropriate solution based on your income, loan and circumstances.”

These all sound simple enough, but they can also leave you with a lot of questions. There is more to drafting an effective hardship letter than you may think, so read the tips below and always consult an experienced professional before drafting your short sale hardship letter.
  • Know the programs. The loss mitigation programs for which you may qualify will depend on your loan servicer, the investor, and a few other factors. This is important because you must know the recognized hardships under these specific programs.
  • Identify your hardship. Once you know the hardships recognized under the relevant programs, identify your hardship specifically before going into details. Make sure all the details of your hardship are factual and relevant. Avoid “venting” and long, rambling explanations. These can cause the individual reviewing your hardship to miss the key points of your actual hardship.
  • Stay organized. If possible, tell your story chronologically so that the reader can follow. Begin your story with the start of your hardship and end at present day.
  • Make your request. Always clearly and unequivocally state that you want to be approved for a short sale. Although you may have a listing agreement or even an offer on your house, remember that some requests for help with a mortgage are for loan modifications, forbearances, or other programs that will have the borrower staying in the home. If you are looking to do a short sale, make sure your letter clearly states that intent.
  • Sign and date. Every hardship letter (and just about everything that is submitted to the servicer in a short sale) must be signed and dated. Also, note that many servicers require it to be dated within the last 60 days.
  • Include contact information. Make sure the servicer knows how to reach you and your attorney if you are represented. A phone number, e-mail address, mailing address and fax number should be provided if possible.
  • Handwrite (maybe). If you write legibly and have the time, you may want to consider handwriting your letter. Although this is not as essential as the tips above, handwritten letters add a personal touch to short sale request.




Friday, May 8, 2015

Why Expand?

Kayser Short Sale Law Center is an ideal platform for the expansion into the Chicago short sale market. Our state-of-the-art short sale negotiation processes have successfully negotiated with Lenders on behalf of Sellers and real estate agents for 8 years. Our top-flight team has the ability to STOP a Trustee Sale or Auction. Kayser's growing group of venture-focused attorneys and file managers have a 95% closing rate* and have the experience to negotiate the best terms for all parties including relocation fees and reduced liability for everyone. The firm covers the waterfront of legal competence: short sale negotiation, foreclosure prevention, and legal issues involving bankruptcy and foreclosure - among others. 


With Chicago being a large market for short sales, we want to provide the distressed homeowners of the Chicagoland area the same service that has successfully helped those in the state of Missouri for years. 


“Within the city of Chicago, the sale of foreclosed homes and short sales represented 21 percent of the existing-home sales in March, according to the Chicago Association of Realtors."



*Past results afford no guarantee of future results. Every case is different and must be judged on its own merits 

Wednesday, April 29, 2015

Servicing Violations


The article below discusses the actions being taken regarding servicing violations, specifically on Green Tree Servicing, LLC.  

A portion of the article is specifically related to short sales. Discussing the programs developed by the lender to assist borrowers who have trouble making their payments. 

"For troubled borrowers, GreenTree administers short sale and foreclosure relief programs provided by the owner of the loan. These “loss mitigation” programs provide alternatives to foreclosure."

Two major allegations against this lender are: delayed short sales and demanded payments prior to providing loss mitigation options. 

To read more on the issue...find the whole article at:



Thursday, April 9, 2015

Taxes!

As many of you are aware, April 15th is just around the corner. 6 days! If you closed a short sale in the year 2014 then this may apply to you. (See below for Tax Implications in a Short Sale)



Please note that you may be able to exclude some or all of your cancelled mortgage debt as a result of a short sale if you were insolvent immediately before the cancellation of debt. Please see pages 5 and 6 of the IRS pub 4681 and the IRS insolvency worksheet which will assist you and your tax advisor in determining if you qualify.

Please refer to the attached IRS pub 4681and consult your tax advisor for all tax information affecting debt forgiveness and your short sale.

In addition, borrowers who receive a 1099-C in association with a short sale, foreclosure, or deed-in- lieu should work with their accountant in order to confirm that the 1099-C was actually completed correctly by the borrower’s lender.


Always retain your final HUD-1 (estimated settlement statement) as well as any documentation related to the original amount of the mortgage. If the 1099-C has not been completed correctly, the borrower and a CPA can demonstrate the correct calculations to the IRS.
Check with your tax professional about a possible extension of the Mortgage Forgiveness Debt Relief Act for 2015.

IRSCircular230Disclosure: Any US federal tax advice contained in this communication is not intended or written to be used, and cannot be used for the purposes of avoiding penalties under the Internal Revenue Code, or promoting, marketing, or recommending to another party any transaction or matter addressed herein. This section is not intended to give tax advice. It is advisable to confirm the current tax laws with each case with your tax advisor. 



The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Thursday, March 26, 2015

Chicago Update!

Although the traffic of downtown Chicago has been an adventure in itself, our Principal Attorney Elizabeth Kayser and one of our File Managers Matt O'Toole have made some great headway in our Chicago expansion plans. 

Our company has done numerous short sales in the State of Illinois throughout the years, but we realize that no two short sales are the same; so to better serve our clients we’ve spent the time to learn the ins and outs of the Illinois short sale. We have built business relationships with those who share the same vision; to ensure the same best practices that have created success for us in our other locations. The ever-changing housing industry has us constantly searching for new improvements that will continue to propel the firm and our team toward our mission: A graceful exit from a difficult situation for a Homeowner. 

Elizabeth and Matt continue business meetings and networking through tomorrow before they will head back to St.Louis to debrief. 



The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Tuesday, March 10, 2015

FAQ of the Month - March




The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

Wednesday, February 4, 2015

FAQ of the Month - February

Question: Will I have to pay back the rest of the amount owed on my mortgage after a short sale?

         Answer:

As with most legal questions, it depends.

First, it depends on which state the property is located in. There are some states with anti-deficiency statutes that preclude banks pursuing the remaining balance on the loan (the legal term for the remaining balance is “deficiency”). However, anti-deficiency statutes are not common, so this question will often require another level of analysis.

Next, it will depend on the investor of the loan. Loans that are backed by Fannie, Freddie, FHA, and VA will allow for a full waiver of deficiency upon completion of the short sale and full compliance of the terms of the short sale approval. However, there are some narrow exceptions that may require the seller to make a cash contribution at closing to offset a sum of the outstanding balance in order to be granted a full waiver of the rest. These requested cash contributions are the exception to the rule and can even can be countered by the seller in some circumstances.

Finally, if a private investor has backed the loan, the waiver of deficiency will depend on that particular investors policy. Some privately held banks will negotiate the deficiency on a case-by-case basis. Although policies can vary, most of these private banks will primarily focus on the seller’s financial position in determining whether to waive all or part of the deficiency.
 


The choice of a lawyer is an important decision and should not be based solely upon advertisements This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.