Do Your Short Sale Approvals Say The ‘Magic Words’?

My greatest duty as a Short Sale Negotiator is to be an Advocate for the seller.

The sellers that I deal with have often been run through the ringer by life in general, and their lender. They are often left without the strength to defend themselves against things they don’t understand.

“Deficiency Judgement? Forgivness of debt is taxable?”

Many of them have a hard time understanding the process, much less the consequences of a short sale if not done properly.  They have the misconception that selling their home on a short sale will be the last time they will have to deal with this situation.

I have a tremendous passion for defending those who can’t defend themselves.  This is why I push for HAFA, BofA’s Co-op, or the Chase Short Sale Outreach Program whenever possible.

All of these programs have a… waiver of the deficiency balance built in.

Balance Due – Amount Received = Deficiency Balance

Unless agreed upon in writing, the lender has the right to pursue the seller for the rest of the money owed to them after the short sale is complete.  There are exceptions to this, for example California just passed a law that forces lenders to waive the deficiency on ALL short sales done in that state.

It is important that the agent or negotiator involved in the short sale is trained and educated in this area. It is the equivalent of a clean divorce, or having to pay alimony or child support.

 

Thank You, Gracias, Merci, Grazie…

Lets take a look at some real life examples of the “Magic Words’ I have been referring to. They are just a small sampling off the language various lenders use to say the same thing.  A disciplined negotiator will look passed the fact that they got a short sale approval and fight for a clear waiver of the deficiency.

Below is an example from Bank of America’s Co-op Short Sale program:

Imagine the impact of the word release…

Your seller has been released from the burden of future financial hardship.  They can rest easy knowing that they can put this chapter behind them.

Here is an example from First Tennessee Bank:

“not to seek“…

pursue, chase, come after, badger, haunt

In other words settle down,  this debt has been settled.

 

Please, Por Favor, S’il Vous Plaît, Per Favore…

Of course not every lender will be so kind as to offer to waive the deficiency balance.  In fact, they will go as far as to say that their approval forms can not be changed, or that their legal department has only approved certain verbiage. This brings me back to my role as an Advocate.

I have used techniques from a simple “please” to actually getting the Federal Treasury Department to intervene on the sellers behalf. It’s amazing how things can change depending on who you speak with.

Here is an example of an approval that had to be escalated to a supervisor with the threat of the seller letting a foreclosure to happen before Chase would put this writing on their Short Sale Outreach approvals:

 

Release isn’t good enough here because they only said they would release the lien.

Their argument was that because they were giving the seller $10,000.00 as an incentive to complete the short sale, it made no sense for them to ask for that money back later.

I have given up trying to figure out what “makes sense” to a bank. I need to see it in writing.

Chase has since changed the standard verbiage in their Short Sale Outreach program as shown below:

Settled and released…

And Ten Grand in your pocket.

The “Magic Words’ take form in different ways with each lender, each short sale program, each investor.  But ultimately they take the shape of a heart felt “Thank You” when the process is over.

BE AN ADVOCATE…

 

 

Comments

  1. donte tribble says:

    Yes indeed!!! These approval examples are are music to my ears and is why I work diligently to get ANY amount waived for the seller..!!!

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