Chapter 1
Introduction
In this chapter expert Oscar Morante explains what is needed succeed in short sales. An specific mindset, body of knowedge and business premise are needed to succeed in this business.
Objective:
- Introduction to short sales
Outline:
- Short sales premise
- Competence in short sales
- Benefits of short sale education
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Chapter 2
Foreclosure Situation
This chapter analyzes the long term implications of foreclosure for both the homeowner and creditor. The short sale alternative vastly mitigates or resolves this issues. It is in providing a solution were the business opportunity is created.
Objective:
- To understand the implications of foreclosure on borrowers, its impact on lending organizations, and the benefit of short sales as amiable solutions.
Outline:
- Homeowner’s predicament.
- Creditor’s plight.
- Short sales are a reasonable compromise solution.
Time:
Chapter 3
Foreclosure Causes
This chapter examines the multiple causes of default and foreclosure. This allows the real estate professional to quickly assess situations and determine success probabilities. It is this knowledge that allows the real estate professional to be selective, work with the winners and set aside time wasters.
Objective:
- The objectives of this chapter are to understand the reasons property owners default, and be able to gauge their motivations to avoid foreclosure. With this knowledge it is a lot easier to properly select clients.
Outline:
- The underlying causes of foreclosure
- Selecting Clients
- Client Selection Criteria
- Prospect Avoidance Criteria
Time:
Chapter 4
Foreclosure Cycle
This chapters explains the cycle properties go through their service live as they pass from being privately owned, to bank owned (REO), and back again to privately owned. This knowledge is integrated with the alternatives available to the homeowner in default together with the implications of each option.
Objective:
- The objectives of this chapter are to understand the path of properties in default, grasp important technical definitions and know the options available to the homeowner.
Outline:
- The Foreclosure Cycle
- R.E.O. Departments
- Default Resolution Alternatives
- Foreclosure
- Short Sales
Time:
Chapter 5
Collateralization & Foreclosure
This chapter examines the multiple ways real property becomes collateral securing an owner’s debt payment obligations. The main clauses that allow foreclosure are explained together with their implications and applicable foreclosure methods.
Objective:
- The objectives of this chapter are to understand the implications of debt payment obligation, how properties become collateral to secure debt, what is foreclosure, as well as the two types of foreclosure.
Outline:
- Real property is collateral to monetary debt.
- Obligation
- Collateral
- Colleralization
- Liens
- Types of Liens
- Foreclosure
- Types of Foreclosure
- Judicial Foreclosure
- Power of Sale
- Non-judicial foreclosure
Time:
Chapter 6
Mortgages
This chapter provides a clear working understanding of how mortgages exactly work. The two types of mortgages together with their foreclosure process and payoff are examined.
Objective:
- The objectives of this chapter are to understand how mortgages work and their foreclosure process.
Outline:
- Mortgage definition
- Workings of a mortgage
- Mortgage types
- Common mortgage
- Power of sale mortgage
- Mortgage Foreclosures
- Judicial Foreclosure
- Non-judicial foreclosure
- Mortgage Payoff
- Sample document analysis
Time:
Chapter 7
Trust Deeds & Trust Deed Foreclosure
This chapter provides a clear working understanding of how trust deeds exactly work, are organized and why are they used so much. Trust deed foreclosure and payoff are examined.
Objective:
- The objectives of this class are to understand how trust deeds work and their foreclosure process.
Outline:
- Trust deed definition
- Workings of a trust deed
- Trust deed foreclosure
- Trust deed payoff
- Sample document analysis
Time:
Chapter 8
Statutory Liens
This chapter shows the different types of statury liens, how and why they are imposed in the property. The foreclosure, short sale and payoff implications are examined.
Objective:
- The objectives of this chapter are to understand how statutory liens are created, how they work, and the different types of lien that exist.
Outline:
- Statutory lien definition
- Judgments
- Types of statutory liens
- Statutory lien foreclosure
- Lien payoff
- Sample document analysis
Time:
Chapter 9
Title Deeds & Ownership
Properties in default are properties with title problems. This chapter provides a clear understanding of the critical concepts of title, deed and chain of title. This highly affects the marketability of the property and the ability to obtain financing for it.
Objective:
- Quickly identify title complications in a short sale transaction.
- Understand the title issues affecting the marketability of a property.
- Avoid creating transactional complications that may slow or even terminate a transaction.
- Accomplish this is by dominating the subject of ownership over a property.
Outline:
- Foreclosure and title problems
- Title & deed
- Chain of title
- Lenders and chain of title
- Title condition
- Deed of Title
- Short sale title problems and solutions
- Title red flags
- Types of deed
- Sample document analysis
Time:
Chapter 10
Short Payoffs and Tax Implications
There are two types of short payoffs: Short sales and release of lien. This chapter explains the two types of short payoffs, the differences, and the documents associated each one together with their tax implications.
Objective:
- The objectives of this class are to dominate how short payoffs work, clearly distinguish the two short payoff types and understand short payoff tax implications and solutions.
Outline:
- Short Payoffs Definition
- Types of Short Payoff
- Short Sale
- Release of lien
- Purchase Money and Non-Purchase Money.
- Purchase Money
- Non-purchase money
- Default implications
- Deficiencies
- Sold Out Juniors
- Non-Recourse Loans
- Short Payoff Solutions
- Short Payoff Settlement
- Short Payoff Settlement Letter
- Non-Arms-Length Transactions
- Short Payoff Tax Implications
- Sample document analysis
Time:
Chapter 11
Short Sale Timeline
Short sales are time driven transactions. This chapter is about time use strategy. It presents how to make the best use of the available window of opportunity.
Objective:
- The objectives of this chapter are to use time effectively, have the right time expectations and properly time short sale actions.
Outline:
- Short sale timeline flow chart
- Timing connecting with prospects
- Timing commitments
- Timing negotiation
- Developing exit strategies
- Timing closings
- Timing foreclosure sale postponements
- Windows of opportunity
Time:
Chapter 12
Listing Agent Timeline
When it comes to time use, short sale agents have additional time issues to consider. This chapter is about how to time actions and expectations such that events happen in the right order.
Objective:
- The objectives of the chapter are to use time effectively, have the right time expectations, and act based on listing agent short sale demands.
Outline:
- Listing agent timeline flowchart
- Timing listing agreement
- Days on the market
- Timing price reductions
- Accepted offers
- Withdrawn offers
- Timing closing
- Timing foreclosure sale postponements
- Extending listing agreement
Time:
Chapter 13
Bankruptcy
Short sales are highly associated with bankruptcy. This chapter explains how to deal with bankruptcy properties such as to go along and benefit from the process. Not to work against it.
Objective:
- Understand bankruptcy from the short sales point of view.
- Identify issues before they become problems.
- Handle transactions, by using the effects of bankruptcy in your favor.
- Not by fighting against them.
Outline:
- Bankruptcy Definition
- Bankruptcy types
- Chapter 13
- Chapter 7
- Exemptions
- Bankruptcy timeline flowchart
- Length of each stage
- Legal implications
- Debtor actions
- Creditor reactions
- Additional bankruptcy issues
- Quality of the bankruptcy service
- Bankruptcy case information
- Sample document analysis
Time:
Chapter 14
Short Sale Processing 1 – Contracts
The best way to conclude something correctly is to start it right. This chapter explains how to organize a purchase and sell agreement such that it is effective for short sales.
Objective:
- Understand the short sale processing documents.
- Know how to arrange a purchase & sale agreement effective for short sales.
Outline:
- Use of short sale processing flow chart
- Generic Agent Agreement Sample
- Short Sale Purchase & Sale Agreement
- Step by step completion of short sale purchase & sale agreement
- Detailed explanation of each action
- Acting per short sale requirement
- Setting up for exit strategies
- Needed contingencies
- Handling closing costs
- Reducing transaction expenses
- Setting up for extensions
- Sample document analysis
Time:
Chapter 15
Short Sale Processing 1 – Disclosures
Short sales require an arsenal of properly prepared documents. Full disclosure and adequate disclosure of all transaction conditions and possibilities make short sales smoother and prevent post transaction problems. Other important documents are also presented in this chapter.
Objective:
- Understand the short sale processing documents.
- To comprehend the reasons for needed disclosures.
- Know the additional documents needed for short sales
Outline:
- Use of short sale processing flow chart
- Disclosures
- Agent disclosure
- Additional documents
- Sample document analysis
Time:
Chapter 16
Short Sale Processing – Title Report
Default and foreclosure proceedings are title problems. This chapter teaches the critical skill of knowing how to read and interpret title reports. The success of the short sale depends on resolution of the title problems.
Objective:
- Know the use of each of the short sale documents.
- Understand title reports from the short sale vantage point.
- Be able to develop an effective discount strategy.
- Quickly set aside transactions with no potential.
Outline:
- Short sale document use
- Preliminary title report analysis
- Subordinations
- Title condition timeline
- Seniority order
- Discount decisions
- Short sale situation analysis
- Negotiating with multiple juniors
- Setting aside unfeasible transactions
- Use of short sale processing flow chart
- Sample document analysis
Time:
Chapter 17
Short Sale Processing – HUD 1
The HUD 1 is the RESPA compliant settlement statement required by the vast majority of banks for closing short sales. This document shows who gets paid what and how much. Understanding and controlling the HUD 1 is critical to ensure maximum profit. Not knowing how this instrument operates inevitably leads to lower earnings.
Objective:
- The objectives of this chapter are to understand the HUD 1 form, be able complete it based on the purchase and sale agreement instructions, modify payoffs based on the transaction’s needs, and effectively apply the HUD 1 in short sales.
Outline:
- The HUD 1
- RESPA
- Understanding the HUD 1
- Preliminary HUD 1
- Step by step completion of a preliminary HUD 1
- Use of short sale processing flow chart
- Sample document analysis
Time:
Chapter 18
Short Sale Processing 4 – Short Sale Package
The short sale package is the set of documents a creditor (bank) requires in order to expedite and approve a short sale. This chapter shows exactly how to put together a short sale package approvable by creditors.
Objective:
- The objectives of this chapter are to understand the requirements of the short sale package, learn how to best present the material, know what to include, what not to include, as well as the “dos” and “don’ts” of short packages.
Outline:
- Opening contact with creditor
- Creditor’s opening of negotiation
- Creating a short sale package
- Required documents
- Financial statement
- Hardship letter
- Supplemental (optional) documents
- Reasons
- Use of short sale processing flow chart
- Sample document analysis
Time:
Chapter 19
Collateral Valuation
Creditors valuate properties prior to making discount decisions. This chapter presents the methods and processes through which creditors determine collateral value.
Objective:
- To understand how creditors valuate collateral, the valuation fieldwork involved and the influence of valuations on short sale outcomes.
Outline:
- Valuations
- Collateral valuation
- Collateral value
- Valuation Method
- Types of valuation
- Appraisal
- BPO
- Influencing the Valuation
- Use of short sale processing flow chart
- Sample document analysis
Time:
Chapter 20
Processing 6 – Settlement & Closing
The skill of finessing the final stages of any real estate transaction is extremely valuable. When it comes to short sales and other distress transactions, this is skill is almost an art form. That is what this chapter is all about. It teaches exactly what it takes to close short sales effectively and get paid.
Objective:
- Understand how to settle the seller’s debt by the purchase and sale of the collateral property.
- Be able to distinguish the different types of settlement letter.
- Know how get further cooperation from the seller.
- Learn how to gain more time from the creditor.
- Know how to close the short sale transaction.
Outline:
- Debt settlement
- Settlement letters
- Types of settlement letters
- Final HUD 1
- Increasing homeowner cooperation
- Gaining more time
- Transaction funding
- Use of short sale processing flow chart
- Sample document analysis
Time:
Chapter 21
Exit Strategies – Concepts
The whole purpose of doing a short sale, or any other real estate transaction, is to earn a profit. There are multiple ways to get paid. These are called exit strategies. This chapter teaches how to select the right exit strategy for each situation.
Objective:
- To dominate the multiple ways of closing short sales, and come out of transactions with profit.
Outline:
- Exit strategy definition
- Short sale exit strategies
- Selecting exit strategies
- Obstacles to profit
Time:
Chapter 22
Exit Strategies – Cash Out
A cash out is the purchase of a property from the seller and payoff the creditor. This is the most simple exit strategy and the one preferred by real estate agents. This chapter shows the details for executing this type of transaction.
Objective:
- To know to purchase a property by transferring title from seller to buyer and cashing out secured creditors.
Outline:
- Transaction Description
- Transaction flow chart
- Sample document analysis
Time:
Chapter 23
Exit Strategies – Assignment of Contract
In an assignment of contract the original buyer transfers the right to purchase the property to another buyer for a profit. This chapter covers the details of this type of transaction.
Objective:
- Learn how to close a transaction by assigning a purchase and sell agreement to an end buyer.
- Be able to get the lender to authorize an assignment of contract.
- Know how to ensure the end buyer pays for the assignment.
- Be able to complete this transaction “zero” down.
Outline:
- Transaction description
- Ensuring closing
- Selecting An Assignee
- Not Losing Assignments
- Transaction flow chart
- Sample document analysis
Time:
Chapter 24
Exit Strategies – Double Escrow
A double escrow is the purchase and re-sale of a property the same day without using any cash. The property is bough with the end buyer’s funds. This chapter shows the exact details of how to close double escrows.
Objective:
- Learn to earn a profit from simultaneously buying and selling a property.
- Be able execute this transaction “zero” down
- Lubricate the transaction by collaborating with agents.
Outline:
- Transaction description
- Transaction keys
- Double escrow advantages
- Double escrow disadvantages
- Acquisition escrow
- Disclosures
- Ensuring closing
- Remarketing property
- Reselling property
- Resale purchase & sale agreement
- Reselling disclosures
- Resale escrow
- Keeping all resale profits
- Ensuring Closing
- Transaction Flow chart
- Sample document analysis
Time:
Chapter 25
Exit Strategies – Subject to Existing Financing
In short sales, purchasing subject to existing financing is the acquisition of property by settling with some creditors and taking over the payments of other loans. This chapter covers the intricacies of this type of transaction.
Objective:
- Learn to successfully acquire properties by taking over existing loan payments.
- Know how minimize exposure by identifying pitfalls.
- Mitigate the risks inherent in this type of transaction.
Outline:
- Transaction Description
- Transaction keys
- Advantages
- Disadvantages
- Risks
- Understanding non-assumable loans
- Non-assumable loan risks
- Mitigating non-assumable loan risks
- Closing Options
- Without use of escrow service
- Closing
- Transaction Flow chart
- Sample document analysis
Time:
Chapter 26
Exit Strategies – Subject to Existing Financing by Note Buying
In this type of transaction the buyer first becomes a creditor secured by the property. This is done by buying the promissory note and mortgage from the bank. Then the buyer secures title by negotiating with the owner and other secured creditors if they exist. This chapter covers the details of this type of transaction.
Objective:
- Learn how to acquire properties by buying the debt secured by the same property.
Outline:
- Transaction Description
- Risks
- Note buying process
- Transaction Flow chart
- Sample document analysis
Time:
