Christine Browning - Top 5 Short Sales

7/30/2019 Christine Browning - Top 5 Short Sales

1/16

T Fur Rs f Srt Ss Mr

Compliments o your Top 5 in Real Estate Member

The Transparent Approach to a Real Estate-Related Crisis

Wikipedia Defnition

Short sale (real estate) - In real estate, a short sale is a sale o

real estate in which the proceeds rom the sale all short o

the balance owed on a loan secured by the property sold.

Hh recover

H recoup

Hh by reap

Hf render

Editors Note: Although this publication ocuses primarily on the subject o

Short Sales, it is important to note that a potential Short Sale outcome represents

only ONE possible resolution or homeowners acing a mortgage-related crisis.

Real Estate Network


2/16

A

s we move orward in the second decade o the new millennium,

we continue to experience a global real estate-related crisis o

epic and historic proportion. Specically, the subprime lendingcrisis continues to adversely impact homeowners, nancial institutions,

lenders and society at large.

Leaving to historians the task o chronicling all o the causal actors o this per-

vasive and devastating nancial downturn, we can all agree that an acute lack o

transparency played a catastrophic role by inciting unrealistic and unsustainable

real estate purchasing decisions.

Accordingly, mindul o the need or greater real estate-related transparency,

RISMedias Top 5 in Real Estate Networkis now making The Four Rs o Short

Sales available to homeowners, lenders, nancial institutions, buyers, attorneys

and real estate agents...all prospective participants in a short sale transaction.

The Four Rs o Short Sales is distinguished rom other proessional publica-

tions on the subject by our eort to concurrently examine the interests oall

potential stakeholders to a short salenot just one. Within this publication, we

reveal the specialized inormation that uniquely applies to each individual party.

The importance o our ull-transparency approach acknowledges that the

interests o lenders and home sellers can be divergent.

Moreover, the interests o buyers and real estate agents

representing homeowners are not always congruent with the

interests o a loss mitigation executive or a nancial institu-

tion in general. And clearly, the duciary responsibilities o

an attorney pertaining to short sale resolutions also depend

upon whom they are representing.Thereore, The Four Rs o Short Sales is not solely written

or nancial institutions, home sellers, buyers, real estate

agents, attorneys or clients, but instead has been created

or all interested parties, including the general public.

For the purpose o presenting complex inormation in as

practical and simple a ashion as possible, we have seg-

mented the inormation we believe to be ediying or all po-

tential parties in the short sale process into our distinct

categories, each beginning with the letter, R:

Th Fr Rs Shrt Sls:

RecoveR: Hmwrs h th t rr m .

Recoup: Lrs h th right t r s mh

thir l bl s ssibl.

Reap: Byrs h th right t xt t r th bfts

thir isi t by i this mrkt.

RendeR: attrys rl stt gts t kw hw t

bst rr thir sitbl rrit skills sris r

th bttrmt thir lits th mmity.

We suggest that a real

estate agents role

regarding short sale-

related decisions be

limited to providing real

estate inormation and

not to dispensing tax,

legal, investment or

nancial advice. The

inormation agents

provide should be limited

to their real estate-

related marketing, sales

and pricing expertise.

2010 RISMedias Top 5 in Real Estate Network

We recommend that

homeowners consider

all options whenseeking a resolution

to mortgage-related

nancial challenges.

The short sale is just

one possible outcome

that homeowners should

evaluate when acing

a distressed mortgage

situation.

A short sale takes

place when one or more

lenders who hold liens

that secure a property

agree to release their

lien(s) upon receipt o

less money than the total

amount owed as denedby the mortgage.

Compliments o your Top 5

in Real Estate Member


3/16

Millions o homeowners are

being challenged on how

to best proceed when the

value o their property becomes less

than the loan amount they owe

compounded by their inability to

pay their mortgage or stay in their

home.

Faced with such dire circumstances, right-

ully concerned homeowners are advised

to meticulously evaluate all their options

beore making a decision; especially a de-

cision that may have both short- and long-

range consequences.

A short sale describes an agreement by

a lender (or lenders) to accept the sale o

a property in which there is a shortage ounds necessary to pay o the outstand-

ing loan balance along with a number o

the lender-stipulated criteria being met. It

is vital or homeowners to not only seek

the advice o a trusted pre-oreclosure

proessional, but to also be wary o pre-

oreclosure predators.

At all costs, homeowners must ensure

that they are not exploited or manipulat-

ed during this most vulnerable period o

homeownership. Regrettably, the burgeo

ing short sale marketplace is attractin

hordes o unscrupulous individuals wh

are seizing any and all opportunities t

prey upon beleaguered and unsuspectin

homeowners who are not aware o th

range o options available to them whe

experiencing the growing challenge o u

side-down homeownership.

One example o this reprehensible, i no

predatory-like, behavior is when a sel-pro

claimed short sale expert proesses grea

concern over how a homeowners dignit

will orever be tarnished should they mak

the wrong decision regarding how they re

solve their troubled mortgage-related cha

lenge. Ironically, and unsurprisingly, th

concept o dignity is oten less likely t

be introduced when the decision relates t

the sel-interest o the so-called expert.

It is imperative that any homeowneseeking to determine i a short sale is i

their best interest, be able to distinguis

between their own interests and the in

terests o lenders, buyers, investors, an

real estate-related proessionals, and ho

these dierent interests may infuenc

their decision. We have compiled a serie

o questions that will serve as an impo

tant precursor or homeowners to conside

prior to their pre-oreclosure decision.

RISMediasTop 5 in Real Estate Network

Homeowners

recoveringandregaining control

The StandOne Takes on

Short SalesDepends on

WhereOne Sits.-Allan Dalton,

Co-founder & President, Top 5


4/162 RISMediasTop 5 in Real Estate Network

8What are my options as a home-

owner when my property is in orheading toward deault? What is a

better or more likely outcome or

me and why?

- A short sale or a repayment plan?

- A short sale or a orbearance

plan?

- A short sale or a loan

modication?

- In the case o an FHA loan, a

short sale or a partial claim?

- A short sale or a short sale/assumption agreement?

- A short sale or a deed-in-lieu o

oreclosure?

- A short sale or a bankruptcy?

WhaT hoMeoWneRSneed To aSk and leaRn

RegaRding ShoRTSaleS and oTheRopTionS:

While this publication, by its defnition, ocuses more on a short sale resolution than any other pre-

oreclosure or oreclosure option, we emphatically suggest that any homeowner acing a potential

oreclosure o their property review all options available, and preerably, with legal counsel.


5/16

8Within the short sale packet

presented to the lender, there

is a hardship letter that home-owners must provide. How

important is this component in

causing the lender to approve

the short sale?

8What types o hardships would

a lender generally consider

avorable toward my appeal or

short sale consideration?

8What are the tax implications

o a short sale?

8What is the Mortgage Forgive-ness Debt Relie Act o 2007?

8What eect will each alterna-

tive have on my immediate,

mid-range, and long-term

credit?

8How do I know i my property

and I may be considered or a

short sale?

8I a lender agrees to the short

sale option on my property,

can the bank still proceed witha oreclosure?

8How would I initiate the short

sale process?

8Should I contact a real estate

agent?

8Should I contact an attorney?

8How would multiple liens on

my property impact short sale

approval?

8Am I responsible to continue

making mortgage payments i I

have intentions o applying or

a short sale on my property?

8As a homeowner, what incen-

tive do I have to assist in the

sale o my property i I am notgoing to receive any proceeds

rom the sale?

8Does a Listing Agent repre-

sent me (as the homeowner)

or the bank i I have intentions

o gaining short sale approval

rom the lender?

8Is there a real estate commis-

sion paid in a short sale? I

so, who pays it?

8On average, how long does ashort sale process take?

8Which process has a more

adverse eect on my credit

rating: short sale, oreclosure,

bankruptcy, or deed-in-lieu o

oreclosure?

8What is a deciency judgment?

8Should I take the word o my

real estate agent i he or she

tells me that I probably will not

have a deciency judgment?Should I have an attorney try

to have this guaranteed as

a condition o the short sale

agreement?

8Am I more likely to be respon-

sible or the deciency judg-

ment under a short sale or a

oreclosure?

8When is a bankruptcy preer-

able to a short sale or to a

oreclosure?

8How important is the short

sale package or kit to a lender

when applying or a short

sale?

8On my own, can I prepare a

short sale package/kit, and i

so, how would I go aboutdoing it?

8Will lenders tell me what I

need to have prepared in a

short sale, or do they only

make this inormation avail-

able to real estate agents and

attorneys?

8In selecting a real estate

agent, when the prospects o

a short sale are desirable, is

it more important to choose

a real estate agent who is

very competent in overall real

estate sales and marketing

and not as knowledgeable in

the short sale process, or is it

better to select a real estate

agent knowledgeable in the

short sale process, but very

inexperienced or ineective

in real estate sales and

marketing?

As a homeowner,

what incentive doI have to assist

in the sale o my

property i I am not

going to receive

any proceeds rom

the sale?

RISMediasTop 5 in Real Estate Network 3


6/16

Just as homeowners do not purchase real

estate with the intention to recover,

lenders do not extend mortgages with

the intention to recoup lossthat is cer-

tainly not the desired primary business model

o nancial institutions. Regrettably, many o

the nest and most respected lending institu-

tions, however, are now working through a

period o unprecedented nancial stress re-garding non-perorming loans.

While it would be both presumptuous and unnecessary

or RISMedias Top 5 in Real Estate Network

Members to educate loss mitigation specialists or

nancial institutions, in general, as to the nancial

consequences and individual strategies available

regarding distressed properties, we do believe that,

otentimes, some o the ollowing are under-examined.

lenders

recouptorecover all orpart oF a loss

4 RISMediasTop 5 in Real Estate Network


7/16RISMediasTop 5 in Real Estate Network 5

There is a considerable amount o inormation available in the

public domain regarding oreclosure, pre-oreclosure, short sales,

repayment plans, orbearance, loan modication, partial claims,

assumption agreements, deed-in-lieu o oreclosure and other

solutions or challenged properties. Homeowners who are acing

a distressed property-related decision are encouraged to research

online or answers to these questions as well as additional

inormation. We also encourage homeowners to visit

www.top5inrealestate.com or the specic answers we

are providing.

Here are some actors nancial in-

stitutions need to consider when re-

viewing a short sale option:

8When a real estate agent deems

it necessary to alert cooperat-

ing real estate agents that their

listed property is a potential short

sale (so that the buyer does not

unknowingly enter into a condi-

tional negotiating process), how

does this announcement, priorto a lenders consent, impact

the marketing, property value

and, ultimately, the negotiating

position o the lender?

8Should a lender do business with

a so-called Short Sales Specialist

who strategically advertises Stop

Foreclosures to homeowners--

when their intended approach is

either most likely or solely a short

sale outcome? Does the practice

o labeling properties as possible

short sales beore they ociallyenjoy short sale status undermine

the value o all homes within that

marketplace?

8How can a lender best identiy evi-

dence within a short sale pack-

age/kit that the listing agent has

placed much greater emphasis on

supporting a lower short sale

agreed-upon price than they

have upon marketing or a

greater selling price?

8How can a lender best deter-

mine how dedicated a listing

agent truly is to not just sell-

ing a home, versus selling a

home or more, particularly in

a climate where almost all low

oers can be justied or ratio-

nalized as being the best or theonly possible oer that could

be brought to the lender?

8What can lenders do to pre-

vent the real estate industry

rom becoming a oreclosure

prevention industry instead

o an industry o world-class

marketers, dedicated to bring-

ing back property values or both

presently challenged and uture

home sellers?

8When should a lender who holds

a subordinate lien on the prop-

erty being considered or short

sale agree to or choose to resist a

short sale resolution?

8When properties are promoted as

being distressed, or as potential

short sales, does this labeling

stigmatize not only the subjec

property but all other properties

and does this practice potentially

damage the lenders greater loan

portolio as well as the asset value

o all homeowner properties? I so

should lenders communicate thei

concern to the real estate industry

regarding how properties they have

mortgages on are being marketed

given our economic climate?

8Since a homeowner does not stand

to receive any money rom the

short sale, how can they best be

motivated to enthusiastically sup

port a marketing eort designed

to realize an optimum sales price

o their property?

8Should a lender be concerned

when a real estate agent is rep

resenting both sides o the trans

action against the backdrop o

a seller desperately seeking to

avoid oreclosure and a banks

predisposition toward short sales

versus the protracted, costly and

legally cumbersome oreclosure/

REO alternative?

When properties

are promoted as

being distressed,

or as potential

short sales,

does this labeling

stigmatize not

only the subject

property but all

other surrounding

properties?


8/16

Todays buyers deserve to

reap rewards. Why? Al

most all media has been

pummeling whatever home-buy

ing enthusiasm American con

sumers might have or severa

years now. With prices down and

inventory up in most markets to

day, why would a potential shortsale property be o interest to

buyers?

Todays savvy and sophisticated buyers

who understand that virtually all markets

are cyclical and who take action because

o the enormous liestyle choices present

ed by todays severely depreciated home

values, stand to reap enormous benets.

We can say with great condence that

an undeniable benet to buyers, more

than that o investors, is the liestyle se

lections now available or credit-worthy

and opportunistic buyers. Beore buying a

short sale property, however, you should

consider the ollowing:

As pointed out earlier, a short sale is

not a short sale until the closing. Clearly

the investor or owner-occupier has many

choices accompanied by avorable pricing

in most markets today. Short sale buy

ers anticipate, expect, and will most likely

not close on a property unless the reward

eclipses the risk o purchasing a short

sale property.

Financial institutions, responding totheir own market experience, have gener

ally made credit less available. In an eor

to protect the asset value o the loan port

olio, large contingents o the investor and

buyer markets have been deemed less

than creditworthy. Fewer qualied buyers

results in less demand. And because ou

economy is based upon supply and de

mand, less demand translates into lowe

prices.

BuYersreapcreate rewards

From tHe BeneFit oFa sHort sale

6 RISMediasTop 5 in Real Estate Network


9/16RISMediasTop 5 in Real Estate Network

There is a considerable amount o inormation available in the public

domain regarding oreclosure, pre-oreclosure, short sales, repayment

plans, orbearance, loan modication, partial claims, assumptionagreements, deed-in-lieu o oreclosure and other solutions or

challenged properties. Homeowners who are acing a distressed

property-related decision are encouraged to research online or answers

to the questions as well as additional inormation. We also encourage

homeowners to visit www.top5inrealestate.com or the specic answers

we are providing.

Whr y s my rtity t r rwr

i th rhs rrty tht is hl

shrt sl rslti?

Beore buying a property marketed in

a short sale context, consider the

ollowing:

1. How much less should I oer on a

property once I learn that the real

estate agent has labeled it to ellow

agents as a possible short sale, even

though the bank hasnt yet classied

the property in such a ashion?

2. Do some real estate agents represent-

ing a potential short sale situation

make it a practice o building into the

listing agreement pre-agreed or time-

interval-based price reductions? I so,

can I assume that the longer I wait,

the greater the discount I will enjoy?

3. As a short sale contract is subject to

third-party approval, exactly who is the

seller o the property and with whom

am I doing business?

4. How can I best determine whetheror not the seller o a so-called poten-

tial short sale property signicantly

overpaid when they purchased the

property?

5. Since short sale properties are ex-

pected to be purchased as-is, given

the absence o nancial gain or the

home seller, how late in the negotiat-

ing process should I seek an apprais-

al, given the potential adverse eects

on the value o the property?

6. How should a buyer negotiate with a

lender on a short sale situation when

the lender is not typically subject to

property conditions disclosures, and

the seller, given their nancial situa-

tion, may not be a viable party regard-

ing uture recourse?

7. How will I know o subordinate liens or

other claims to the property, and how

will this impact my negotiations and

the time necessary to close?

8. Please explain to me what options,

other than a short sale, the primary

lien holder has with regard to the dis-

position o this property.

9. Under what circumstances is a short

sale a better option to the bank with

regard to the disposition o the loan

on this property?

10. Where do you see my opportunityto reap a reward in the purchase o

a property that is hopeul o a short

sale resolution?

11. Under what circumstances would the

bank reject or not consider my oer to

purchase this property?

12. What would you recommend we do

strategically to best ensure the banks

acceptance o my oer to purchase

the property?

13. With regard to price, what would you

recommend to best ensure that thebank accepts my oerand accepts

my oer at the lowest possible price?

14. What is the banks decision-making

process in the consideration o my o-

er to purchase, and how long should I

expect this to take?

15. What is an REO property?

16. In general, would a buyer benet more

by buying a bank-owned (or REO) prop

erty than a short sale property?

17. What would you estimate the length o

time to be between the acceptance o

my oer and the closing?

18. Is it worth the wait?

19. What is the benet o buying a short

sale property as opposed to buying a

conventional property?

20. How do I learn about the relevant

local real estate market during the

last year or so, and how can I get

predictive data regarding estimates o

uture prices?

21. Can I benet by buying a property

that was marketed as a distressed

or short sale property and turn right

around and sell (fip) it or more by re

moving the stigmatized labels?

22. I I buy a short sale or oreclosed

property and want to x it up and sel

it, what could I do quickly to get the

best return on my investment?



Ensure that your real estate agent can:

1. Explain all options available to home-owners who are struggling to pay thei

mortgage.

2. Apprise homeowners o the need toevaluate the potential consequences

to their credit depending on which

property/mortgage resolution option

they choose.

3. Facilitate the presentation o theinormation listed above (short sale

kit) on behal o the homeowner.

Remarkable real estate skills, demonstrat

ed results and experiential knowledge are

required i both the homeowner and the

lender, along with their respective needs

are to be placed rst. Appreciable talentor skills are not required to merely comply

with the administrative short sale paper

work required by lenders. However, it does

require unique talent to maximize a homes

value in a challenging marketplace so tha

the homeowner can recover as capably as

possible, so that the lender can recoup as

much o their outstanding loan balance as

possible.

real estate agents and

attorneYs. . . render . . .tHeirmost noBle eXpertise to tHoseFacing a HardsHip

R

eal estate agents knowl-

edgeable in the successul

execution o a short sale

realize that in order or lenders to

agree to a short sale, it requires

that each lenders short sale ap-

plication process be meticulously

adhered to.

(continued on page 10



Grl Rqirmts r Shrt Sl Kit

Each lending institution has unique requirements or the submission o a Short Sale Kit or

Package. Anticipate that you will be required to submit the ollowing documents with your Short

Sale Kit or Short Sale Package submission:

8 Documents that memorialize your relationship with the homeownerand the proposed short sale transaction

- Completed lender-supplied Short Sale Form (as/i required)

- Signed authorization to represent the homeowner

- Signed homeowner disclosure statement regarding the nature o a short sale trans-action (advisable even i not required by lender)

- Letter signed by homeowner agreeing to accept the terms o the proposed solution

8 Documents that dene the proposed shortsale transaction

- Signed listing agreement

- Signed contract to purchase

- Evidence o buyer unds, mortgagecommitment letter or both

- Preliminary HUD-1

- Escrow instructions

- Preliminary title report (i required in thejurisdiction)

8 Documents that dene/establish the homeowners position and situation

- Hardship letter

- Completed request or Copy o Tax Return

(IRS Form 4506)http://www.irs.gov/pub/irs-pd/4506.pd

- Copies o past two (2) annual taxreturns

- 1099s and W-2s

- Paycheck stubs or the past twomonths

- Bank statements or the past twomonths

- Prot/Loss statement or sel-employedhomeowner

- Personal nancial worksheet and personal/amily budget

8 Documents that dene the premise o the proposal youwill present

- Competitive Market Analysis or Broker Price Opinions

- Analysis o local market conditions

- Description o your marketing eort as well as a description o your results andyour ndings

The tasks here, while vital, should not be conused with

the real estate agents primary challenge and responsibil-

ity to market said property to the best o their ability on

behal o the homeowner and to the beneft o the lender, in

exchange or the proessional ee being charged, and not to

merely lower the price in order to preempt oreclosure and

guarantee a commission.



Remember that the higher the ultimate

sales price, the more likely it is that a

bank will grant short sale approval or a

homeowner. Higher prices are a result o

optimum marketing. Merely reducing pric-

es and then justiying a lower price as a re-

fection o a troubled marketplace should

not be the mindset o any proessional realestate agent seeking to become a part o

a solution. It is or that reason that within

this publication we provide homeown-

ers and lenders with key questions they

should concern themselves with regard-

ing what type o real estate agent is best

suited to handle the needs o a nancially

challenged homeowneran agent who

can maximize the value o the property

or sale, while remaining administratively

vigilant in meeting the documentation re-

quirements o each particular lender/lien

holder.

In the spirit o transparency, we would

be remiss not to point out the acute dier-

ence between proessionals and predators

regarding the subject o nancially-chal-

lenged homeowners and their respective

properties. Proessional predators are ac-tually callous regarding their indierence

to the ultimate sales price, as they are in

a race to gain compensation rom a short

sale o which they would otherwise be de-

nied through a oreclosure. Such agents

will justiy their underwhelming eort as

a consequence o their client, the hom-

eowner, not being able to monetarily gain

through a higher sales price.

We hope that the ollowing questions

will help all those involved in the short

sale transaction determine the depth

o the service rendered by agents andattorneys.

I y r hmwrsk yr gt:

8Do lenders agree to a short sale only

ater there is a short sale packet de-

livered to them that includes a sales

contract, or can they agree in advance

o a sales contract? I so, is the prop-

erty promoted as a short-sale approved

home?

8How will the agent send the lender theshort sale package: overnight, hand-

deliver, ax or e-mail?

8I you market my property at the lowest

legitimate price, will that lower price

adversely impact the lenders willing-

ness to agree to a short sale?

8I I provide you with authorization to

contact my lender, can you explain how

you will present my oer to the lender?

Since you will be representing our in-

terests in a critical situation, could you

role play the process with me?

8Do you have examples o hardship let

ters that other homeowners have in

cluded in their short sale package/kit?

8Will you try to secure the best price o

our home or the best short sale price?

I y r byrskyr gt:

8Can you tell me what the list-to-sales

price ratio is or homes that became

short sale properties versus othe

homes in the same price range within

this market that were not short sales?

8What percentage o the properties in

my price range would you classiy as

distressed properties?

8What is the 60- and 90-day mortgage

delinquency rate in our county/town?

8Will a lender accept an oer within a

short sale packet i there is a contin

gency that I rst sell my present home

and i you dont know right now, can

you ask the lender on my behal?

8Everything Ive heard suggests that a

lender will only review a short sale

kit when a signed sales contract

is included. Are there instanc-

es where lenders, with obvi-

ous stipulations, suggesta willingness to agree to

a short sale even beore

there is a sales con-

tract? In other words,

is it possible to get a

reading on the lenders

inclination regarding

short sales within my

price range and partic-

ular marketplace?

8What qualications, be-

yond your ability to com-

ply with the specic docu-

There is a considerable amount o inormation available in the public domain regarding oreclosure, pre-oreclosure,

short sales, repayment plans, orbearance, loan modication, partial claims, assumption agreements, deed-in-lieu o

oreclosure and other solutions or challenged properties. Homeowners who are acing a distressed property-related

decision are encouraged to research online or answers to the questions as well as additional inormation. We also

encourage homeowners to visit www.top5inrealestate.com or the specic answers we are providing.

Merely reducing

prices and then

justiying a lower

price as a refectiono a troubled

marketplace should

not be the mindset

o any proessional

real estate agent

seeking to becomea part o a solution.

(continued from page 8)



mentation requests o the lender, do

you possess that would make you the

ideal real estate agent to represent me

and impress the lender?

I y r hmwrsk yr ttry:

8What are the many options that

are potentially available to me, and

which ones do you recommend or my

situation?

8Tell me about your experience in writ-

ing, reviewing or negotiating contracts,

dealing with the release o loan bal-

ances, or with lien releases.

8I a short sale is not consummated,

what can you do as an attorney regard-ing other options, including oreclosure,

pre-oreclosure, short sales, repayment

plans, orbearance, loan modication,

partial claims, assumption agreements,

deed-in-lieu o oreclosure and other

solutions or challenged properties?

8Who is going to handle the negotia-

tions or my short sale proposal to thelender?

8Do you have malpractice insurance,

and will it cover a short sale contract?

8Can I be held liable or the dierence

between the outstanding loan balance

and the amount o money the home is

sold or? How has my particular state

ruled regarding deciency judgments?

8Can you ensure me that there will not

be a deciency judgment beore I sign

an agreement?

8Are deciency judgments an availableremedy to lenders in this jurisdiction?

8How can the resolution o my mort-

gage negatively impact my credit score

based upon the option I have taken?

And or how long can they help prevent

as much credit damage as possible?

I y r byrskyr ttry:

8Can what ordinarily would be consid-

ered seller concessions be assumed by

the lender as part o the negotiations

even though short sales are supposed

to be as-is? (buyers should also ask

the real estate agent representing

them this question)

8What risks am I exposed to as a poten-

tial buyer o a short sale property?

8Are you amiliar with all o the ederal,

state and local provisions that protect

homeowners regarding troubled prop-

erties? Can you explain how each pro-

vision would impact each option avail-

able to me?8What is the dierence between a re-

course and a non-recourse loan?

8What is the possibility o reclaiming

your property ater a oreclosure sale

by the lender?

8Do I have any recourse against the sell

er or property conditions disclosure?

8Do I have any recourse against the lend

er or property conditions disclosure?

8What can we do to ensure that I do not

have liability rom any uture title de

ects or claims?

8What inspections and contingencies

should we incorporate into the agree

ment to best protect my position?

8Do I have to physically occupy the

property?

8How long do I have to own the property

beore I can sell it, and what actors in

fuence this decision?

8Can the legislation change with regard

to how long I can own a property be

ore I can sell it?

8Can the lender(s) proceed with oreclo

sure while we are awaiting the lender(s

agreement to our short sale contract?

8How long would you estimate the lend

er will need to reach a decision?

8How long ater the lender agrees to ou

short sale proposal should I expect to

close on the property?

I y r lrskth sllrs gt:

8Did you price the property in order to

guarantee a sale at any price to beat

the oreclosure, or did you price it a

market value?

8How did you or do you market proper

ties dierently when they are intended

or a short sale resolution versus a non

short sale property or sale?

8Did you promote, market, or label the

property as distressed either within

the industry or to the general public

even though it is not the property that

is distressed? Ater all, this property is

not a short sale transaction until the

lender agrees to the terms.

Who is going to

handle the

negotiations or

my short sale

proposal to thelender?



Remember that the best possible service

agents can render to their nancially challenged

clients is to advise them to consult an attorney

beore proceeding with any o the options

suggested in this list.

cHecK list For Homeowners: wHat toconsider BeFore pursuing a sHort sale

As a homeowner, beore moving orward with the short sale process, challenge

yoursel to make absolutely sure that you have exhausted all other options

available. Educate yoursel regarding the other choices that might serve your

particular situation better. Make sure you are ully versed on the details o the

ollowing options:

Traditional sale

Rent property

Repayment plan

Forbearance plan

Loan modication

Partial claim (or FHA loan)

Assumption agreement

Deed-in-lieu o oreclosure

Short sale

Foreclosure

Bankruptcy

Other

Homeowner Options Researched and PossibilityConsidered

(optional) I have reviewed all o the above options and I intend on contactingan attorney and a real estate agent to pursue: ___________________________


15/16

distressed propertYresource list

RISMedia and the Top 5 in

Real Estate Network oer

the ollowing list o recom-

mended inormational resources as

a urther example o our belie that

no one company, program or individ-

ual possesses the complete or de-

nitive expertise regarding a subject

as vast and complex as distressed

property and/or mortgage-related

resolutions. Thereore, it is both our

recommendation and our hope that

in addition to the legal and nancial

counsel you receive rom various

proessionals, that anyone reading

this publication will also diligently

research additional inormation to

ensure that any and all decisions

are made only ater all options are

ully vetted.

While we hope everyone acing a dis-tressed property decision and/or seeking

short sale inormation will benet rom

this brochure, our greatest hope at RIS-

Medias Top 5 in Real Estate Networkis

that homeowners, rst and oremost, take

every possible opportunity to stay in their

home. For that reason, we urge you to in-

vestigate all o the ollowing resources and

stay abreast o sweeping reorm, such as

the governments Home Aordable Fore-

closure Alternatives Program (HAFA) and

the Home Aordable Modication Program

(HAMP). These government initiatives

and many othersare constantly emerg-

ing and changing. We enthusiastically

encourage you to nd out i any o these

programs can be o signicant assistance

to you and your amily.

al crit Rrt

https://www.annualcreditreport.com

Created by the three nationwide consumer

credit reporting companiesEquiax, Ex-

perian and TransUnion, this site provides

consumers with the means to request and

obtain a ree credit le disclosure, com-

monly called a credit report, once every 12

months in accordance with the Fair and Ac-

curate Credit Transactions Act (FACT Act).

You may order your credit report by visiting

the above reerenced website or by calling

(877) 322-8228.

Be advised that businesses that market

ree credit reports and request a credit

card number may actually be market-

ing services that can include subsequent

monthly credit reports or which your credit

card will be regularly charged.

Hud - u.S. drtmt Hsig

urb dlmt

http://www.hud.gov/oreclosure

HUDs website oers a wealth o inorma-

tion or those concerned about oreclo-

sure. This site oers:

- Contact inormation or HUD-approved

housing counseling agencies or each

state

- Inormation to help you discuss your

situation with your lender

- State and local oreclosure resources

and inormation

HUDs brochure, entitled How to Avoid

Foreclosure, discusses what happens

when you do not pay your mortgage, de-

ciency judgments, several alternatives tooreclosure and much more.

drtmt Jsti

The Department o Justice oers a list o

DOJ-approved credit counseling agencies

at the ollowing link: http://www.usdoj.gov/

ust/eo/bapcpa/ccde/cc_approved.htm

Frl Tr cmmissi

The Federal Trade Commission website

oers inormation on oreclosure rescue

scams at the ollowing link: http://www

tc.gov/bcp/edu/pubs/consumer/credit/

cre42.shtm

Frl Rsr Systm

The Federal Reserve System oers a great

deal o inormation on the topic o preore

closure/oreclosure and consumer credi

available by visiting: http://www.ederalre

serve.gov/consumerino/orclosure.html

Frl Tr cmmissi

The FTC presents inormation on credit

repair scams, including how you may

protect yoursel and how to recognize a

credit repair scam. The FTC also presents

an overview o your rights regarding credi

repair at the ollowing link: http://www

tc.gov/bcp/edu/pubs/consumer/credit/

cre13.shtm

Itrl R Sri

The IRS presents basic inormation on the

relationship between income tax liabilityhome oreclosure and debt cancellation

the Mortgage Forgiveness Debt Relie

Act o 2007 (together with questions

and answers regarding cancellation o

debt), the relationship between the can

cellation o debt upon income tax liabil

ity and much more: http://www.irs.gov/

newsroom/article/0,,id=174022,00.html

of cmtrllr th crry

The OCC oers important inormation on

oreclosure rescue scams and goes into

specic detail on lease-back or repur

chase scams, renance raud, bankruptcyschemes and how to nd legitimate lend

ers. For details visit http://www.occ.treas

gov/tp/ADVISORY/2008-1.html

RISMediawould like to thank Allan Dalton, co-ounder & president o the Top 5 in

Real Estate Network, or his immense contribution to this publication


16/16

abut RiSMs T 5 R estt ntwr

The Top 5 in Real Estate Networkwas developed by RISMedia, the leader in real estate inormation systems, and

is comprised o leading real estate agents rom throughout North America. Members represent a variety o highly

respected international, national, regional and local real estate rms. Top 5 membership is based upon agents

meeting a stringent series o requirements, including experience and results.

Please contact the Top 5 in Real Estate Member who presented you with this brochure or any and all o your

real estate needs.

Note: Not intended to solicit properties under contract or buyers or sellers under signed agreement with another brokerage.


Limit of Liability/Disclaimer of Warranty: The information and opinions expressed herein are presented with the understanding that they

do not represent any or all of the opinions of the Top 5 in Real Estate Member making this publication available to you. The information

contained herein is not intended to be a comprehensive discussion of the strategies or concepts mentioned. Nor is any information or

data discussed intended as tax, investment or legal advice. In pursuing any concept or idea presented, you should rely on your own due

diligence and on your own attorneys, accountants and other professionals to determine if such ideas or concepts are appropriate for you.

Although information herein has been obtained from sources believed to be reliable, RISMedia, Inc., the Top 5 in Real Estate Network

and its local member do not guarantee its accuracy or completeness and accept no liability for any direct or consequential losses arisingfrom its use. RISMedia, Inc., the Top 5 in Real Estate Network and its local member assumes no responsibility for any errors, omission or

damages arising from use of information contained herein.


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