Introduction to Loan Modification, Short-Pay REFI, Short Sales and Avoiding Foreclosures
Now you can be a part of helping homeowners that qualify, modify or REFI their existing loan to a more affordable payment thus allowing them to keep their home. For those homeowners that don’t qualify, their next alternative will be a ‘Short Sale’ to save their credit. Now you can position yourself to be the Agent that will help them.
We have created a ‘Clients Assist’ Division to help our Agents and Clients through this current housing market and at the same time allowing a pro active approach to some very negative items; loss of home, loss of credit, worry, anxiety, etc.
Sue M. Traweek has been appointed as Director of the ‘Clients Assist’ Division of Clients First Realty, LLC. Sue has an extensive real estate background. Her real estate career over the past 10 years plus, covers land development, acquisitions, sales, investments, entitlement, office management and construction management. She is currently a licensed agent and active REALTOR in the State of Arizona. Sue obtained her Master of Business Administration from the University of Phoenix along with her Bachelor of Science in Global Business with Specialization in Marketing from Arizona State University. Sue graduated from ASU in 1998, Magna cum Laude. You can contact Sue @ 480-252-4616 or e-Mail her at Sue@ClientsAssist.com .
Prior to this, most Agents depended on outside companies (escrow, title or specialty companies) to handle the negotiation with the mitigation departments of the varying banks and lending institutions. The varying companies covered ‘Short Sales’, different loan modification programs and now short-pay refi products but none did them all. In addition, when you send your ‘Clients’ to another company you normally give up a large portion of your commission plus you end up losing any involvement in the transaction and possibly the ‘Client’ completely. This ‘pass off’ concept is not good for the ‘Client’ or career minded Agents.
Another item that normally happens with 3rd party companies is ‘singularity of purpose’. They are either a ‘Short Sale’ assistance provider or a loan modifying package facilitator. Clients First Realty, LLC, through its ‘Clients Assist’ Division has developed a three phase plan to best serve our ‘Agents’ and their ‘Clients’. Once you understand the process you will easily see that our professional approach is a complete concept of services that our ‘Clients’ deserve and also will provide the highest level of satisfactory results.
Banks and Lending Institutions DO NOT want to foreclose on a ‘Clients’ home if there is any way to resolve the issue. Our ‘Clients Assist’ Division will negotiate with the lenders on our ‘Clients’ behalf to obtain affordable terms. Some of the results that could happen are reduced mortgage payments, reduced rates, fixed rates instead of variable rates, reduced loan balances, 3 to 12 months without a payment and the main concept of saving the ‘Client’s’ home. There are new programs being offered by the government and private institutions daily, which will allow banks to be proactive in loan modifying instead of foreclosing. A foreclosure DOES NOT benefit the bank or the homeowner.
Some of the reasons Agents may have avoided ‘Short Sales’ or loan modification for their ‘Clients’ could be the time involved. An Agent could spend up to 80 hours with lenders to get one (1) ‘Short Sale’ or modification package approved. An Agent may not be sure about the bank mitigation process or have an established relationship with the different banks or lending institutions. Agents may not know the foreclosure process and or the timelines when counseling a homeowner.
The Agents that have been most successful in listing and selling ‘Short Sales’ are the ones that have received predetermined pricing on the subject property from the lenders. This allows the listing Agents to expedite the process and truly assist their fellow Agents that have qualified buyers.
With ‘Short Sales’, some of the ‘Red Flags’ that lenders have started to look for could be: 1) Homeowners that are evasive or hard to work with. 2) Undisclosed liens on the property, in addition to the mortgages. 3) Mortgage fraud, where one or more of the people on the loan(s) can not be found. 4) Where the homeowner is not under any hardship, such as loss of income, sickness, etc. 5) Where the homeowner has thousands in the bank and is simply looking to walk away from the negative equity in the property. These types of ‘Short Sale’ listings can prove a waste of time for all parties involved. In most cases, there must be a verifiable hardship in evidence to get the lending institutes to consider the request.
However, the Short-Pay REFI may be considered in some of the cases listed above, allowing the banks to avoid worsening a situation at a later date.
WHAT IS A SHORT-PAY REFI?
This process is similar to a ‘Short Sale’ but, instead of the property being sold, it is refinanced with a new lender. Short-Pay Refi is unique in that it allows the borrowers to keep their home, lower their payments and eliminate the upside down equity in their homes while reducing their principal.
WHO SHOULD GET A SHORT-PAY REFI?
For those borrowers that still have decent credit, ficos, income and no mortgage delinquencies (late payments) but are upside down in their home (owing more than it’s worth), a Short-Pay Refi is the perfect solution. The new loan may also be getting them out of a high interest rate, interest-only or adjustable rate loan.
WHY WOULD THE LENDER AGREE TO A SHORT-PAY REFI?
Simply put, foreclosing on a property requires large legal fees and then the home is typically sold at a substantial discount off of the fair market value. The Short Refi allows the loan servicing entity to avoid the majority of the legal fees and lets the new lender create the largest loan available, based on the fair market value. When a Loan Modification can’t solve the problem, a Short Refi becomes a very powerful alternative. (Many loan servicing companies are not lenders)
The ‘Clients Assist’ Division of Clients First Realty, LLC will be offering this service and at the same time educating our agents, brokers and staff on the basic '3 phase plan' to assist clients in their current housing rejuvenation or liquidation needs. We created a ‘Clients Assist’ website, forms and documents necessary to implement this program. Through the website, both Agents and ‘Clients’ can start the initial process plus continue to monitor their individual transaction.
Our goal as a ‘Company’ is to develop and perfect a system, providing a valuable service for the ‘Clients’ and ‘Agents’ of Clients First Realty, LLC. Helping a ‘Client’ is not only our responsibility but should also be considered an honored privilege.