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Second Mortgage Default Issue

Posted August 20th, 2008

Norine:

Thanks for the info.  This looks like a viable transaction.

I am surprised that B of A is trying to foreclose while being in second position.  If the foreclose they will have to pay Chase or re-instate what is owed to Chase.  In this cases usually the second at the end does not foreclose and lets the first foreclose.  That way the homeowner is still liable to the promissory note on the second mortgage.  I would not be surprised if this happens.  Banks are savvy but often miss important details given the volume of defaults they have.  Most of this would happen at the last minute.  Chances are B of A will take a long time to start foreclosing despite all the noise they are making.  If they start prior to Chase,  then they will stall close to the trustee sale.  The reasons are evident.  If they foreclose the owner will not owe them anything.

I will show the intake to my partners.  We will reply to you tomorrow.

Thanks for considering me for your short sale needs.

Sincerely,

Oscar

Oscar:

 

Here goes:

 

A 4-Plex multi-unit  located in Stanislaus County

All 4 Units are rented $700 however one tenant will vacated end of Aug 2008O

Purchased in 5/2006 not sure what loan type with origination loan date of 5/2006

Foreclosing Creditor is B of A ….NOD not filed yet.

B of A have sent a notice to homeowner encouraging a loan work out.

 

 

Listing Info:  Off the Market as of today. It was listed for a brief couple week back in 6/08.

Representing Seller as a Selling Agent

Present "AS IS" CMA    $200k - $210k

Property Condition : Fair to Good (Alot of remodel done prior years )

 

 

Mortgage Info

!st  Chase Bank  $480k  payment est.   $3800   5mos behind in payments

2nd B of A         $150k  payment est.   $2000   5 mos behind in payments

        2nd is a result of refinancing.

Homeowner is in financial distress as Construction have slowed down dramatically.

They are just getting by to survive.  Using the rental income funds to help with their

living arrangements and daily survival so therefore they have not made any payments

to the bank since March 08.  No Bankruptcy or Divorce . Both very cooperative and

expectation is to avoid foreclosure. Do not own other real estate.

 

Please advise asap ….

 

Thank you. 

 

Norine

Settlement Letter Issues

Posted August 20th, 2008

Robin:

I am glad you got the settlement letter.  The statement you are referring to is very common.  Actually, in the course, I present a similar statement sample. That refers to people engaged in fraud.  That is not you.  This is my opinion, not legal advice.

Oscar

At 09:37 AM 8/20/2008, you wrote:

Hi Oscar,
 
I have a question about this short sale I have been working on with Litton Loan since I talked with you last.  Remember, I am in Springfield, Missouri, and have been trying to close on this house that had the fire damage. 
 
Litton faxed me an approval letter for $12K.  We were ready to close last Friday, but just 30 minutes before scheduled close, Litton says they had released the loan to another servicer, Real Time Resolutions, Inc., in Dallas. (we had asked for two more days which Litton had agreed upon but somehow it went ahead and was sent to RTR anyway)
 
I talked with them and faxed them what they needed, and today I received email from them, agreeing to $12K    —- BUT THEY INCLUDE THIS STATEMENT: 
 
"Real Time Resolutions, Inc. reserves the right to pursue loan contract or tort claims associated with the origination or purchase of the above referenced loan or property or with the settlement, such as fraud, negligence, perjury, or any other claims.  "
 
Oscar, I promised the seller she would not have any judgments against her, and she has no money, anyway.  (she is even in bankruptcy, not released from than until 2009)   I feel I have a moral obligation to her now not to allow RTR to pursue legal judgment against her. 
 
What can I do?  I was planning to call RTR and just tell them the deal wont go through this way.   Do you think they will agree not to pursue it?
 
Please reply immediately if you can, as everyone is waiting to close on this.
 
Thank you!
 
Robin

Florida Counties Pre-NOD Counts

Posted August 18th, 2008

Dear Friends,

As you may already know, through my web site www.RapidForeclosureData.com we offer pre-public record default data. 

This list is also known as the pre-nod, pre-preforeclosures, and 30-60-90-120 day lates. Presently we offer the best prices and most competive arrangements for this kind of info.

Our price per lead is $0.23.  We can do better for large volume purchases and subscriptions. Below is today’s count for several counties in Florida.

Florida Counties
Total 30-60-90-120 day lates  -  August 18th, 2008

CITRUS                         1158
 
HERNANDO                 2127
 
HILLSBOROUGH     13139
 
MANATEE                     3533
 
ORANGE                   14635
 
PASCO                        5270

PINELLAS                   8973
 
POlK                            6597
 
SARASOTA                4228
     
Total:                        59660

More Double Escrow Alternative Funding Questions & Answers

Posted August 18th, 2008

Wendy:

I am glad you are interested in double escrows.  This is how it works.

1. You create a transaction that needs to close the same day.  Hopefully you do it in double escrow. 
2. If that is not possible, we provide you double escrow alternative funding.
3. Our funding is for one day only.  No more than 24 hours.
4. This money is used to complete the aquisition part of the transaction.
5. Now that you are the owner you re-sale the transaction in your re-sale escrow.
6. If needed we can connect you with expert escrow services specialized in this type of operation.
7. We charge three points.

Let me know if you have any such transactions.  My phone number is 971-222-3734.  I look forward to doing business with you.

Sincerely,

Oscar

Double Escrow Alternative Funding Questions & Answers

Posted August 17th, 2008

Myrna:

Thanks for continuing this conversation. 

If the lender instructs to not allow double escrow no escrow officer will do it.  That would be illegal.  In that case the buyer needs to bring cash.  That is the reason we are offering Double Escrow Alternative Funding.  It is called "alternative" because the buyer is not really doing a double escrow.  The buyer is paying for the property and re-selling it.  If there are escrow instructions not allowing this, then there is no deal.  That is rare.

Keep in touch.

Oscar

At 01:27 PM 8/15/2008, you wrote:

Thank you Oscar.  I am amazed how irresponsible title and escrow companies not complying with the lender’s instructions not allowing any double escrows. Integrity matters when you are doing your fiduciary responsibility to your clients including the lenders.  I can see how many people get rich by doing this and I am awed.
 
Myrna R.

On Fri, Aug 15, 2008 at 1:22 PM, Oscar Morante <oscar@bestshortsales.com> wrote:

Myna:

Thanks for your feedback.  In a short sale the discounting creditor needs to be paid as per the settlement agreement.  That is what they get paid.  What happens later is another subject.  There are plenty of title companies and independent escrow doing this in California and nation wide.  I keep the names confidential. 

I do appreciate your opinion and enjoy these email exchanges.

Sincerely,

Oscar

At 12:40 PM 8/15/2008, you wrote:

Profiting more and paying off the lender after a property is purchased is not allowed by any lender, therefore, it is illegal.  Please let me know whom you are dealing with in California, specially title companies that allow this type of transaction.  I would like to know.  Thank you.

 

Myrna R.

On Fri, Aug 15, 2008 at 12:37 PM, Oscar Morante <oscar@bestshortsales.com > wrote:

Myrna:

Thanks for your feed back.  We have closed a number of this transactions in California recently.  Please let me know where is it written that it is illegal to buy a property with money and re-sell it.  I will read the material.

Sincerely,

Oscar

At 12:32 PM 8/15/2008, you wrote:

Being an escrow officer for 27 years, I do shy away on double escrow transaction.  It is against the law to transact a business this type of business in the State of California. 

 

Myrna Reyes

 

On Fri, Aug 15, 2008 at 11:49 AM, Oscar Morante <oscar@bestshortsales.com > wrote:

Dear Friends:

I am glad so many of you are active in the Short

Sale Biz.  This business is booming.

Double Escrow Alternatives

One of the things I do is provide double escrow

alternative funding.  The rate is 3%.  Contact me

if you have a double escrow that requires

acquisition money funding.  Some title companies

get cold feet when they see this kind of re-sale

profits.  Our rate is 3 points and can fund

within as soon as 72 hours.  If you give me more

time better.  We also have the right escrow

contacts to close your transaction just about

anywhere nation wide.

Example:

We just funded a double escrow alternative in

which our client earned just short of $400K.  I

felt envious! The client brought a ready to go

deal.  At the last moment the title company got

scared of him making that much money and was

about to trash his deal.  We provided the money,

expert escrow attorney service and RAPID ACTION.

The result:  The client walked home with a huge

check.

Contact me if you need any such funding at

oscar@bestshortsales.com

Please provide the following:

1- Acquisition contract

2- Acquisition settlement statement

3- Re-Sale contract

4- Re-Sale settlement statement

Real estate transactions are perishable items.

Because of this we will reply you very soon and

let you know either way about what we can do for

you.

Within 10 days we will have a double escrow

alternative web meeting.  Email me at

oscar@bestshortsales.com if you would be

interested in attending.

I look forward to doing more business with you.

Sincerely,

Oscar

Bestshortsales.com

9220 SW Barbur Blvd

Suite 119 - Box 159

Portland, OR

97219

US

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–

With much aloha,

Myrna T.F. Reyes

San Diego Central, Inc.

www.SanDiegoCentralRE.com

myrnatfreyes@gmail.com

Member: BBB, SDAR, PSAR, CAE, NNA and FACCSD

THIS ELECTRONIC MESSAGE, INCLUDING ANY ACCOMPANYING DOCUMENTS, IS CONFIDENTIAL, intended for the sole use of the addressee(s), and may contain information that is privileged and exempt from disclosure under applicable law. If you are neither the intended recipient nor responsible for delivering the message to the intended recipient, please note that any dissemination, distribution, copying or the taking of any action in reliance upon the message is strictly prohibited. If you have received this communication in error, please notify the sender immediately. Thank you.

Double Escrow Alternative Funding

Posted August 15th, 2008

News from the Trenches and Looking at the Future

Posted July 30th, 2008

I don’t know about you, but presently I am negotiating short sale transactions in which the homeowners have not made payments for almost a year. The most interesting thing is that these clients are not yet in foreclosure. As you know, I am in Portland, Oregon. In Oregon, the foreclosure process lasts 120 days. This means that if the creditors start foreclosing today, these homeowners will have at least one third of a year to live at the property for free. Banks must not want to foreclose!

As you already know, I present the Short Sales A-Z seminar all over the west coast. Many of the investors and agents who attend my classes have noticed the same. This is something new. Last year, banks would have started foreclosing right away. Nowadays, it is very common for creditors to wait almost a year to actually begin foreclosure.

This phenomenon is definitely increasingly common. Here is a non-scientific calculation that I just did. Lets look at the neighboring Santa Clara and Mateo counties at the south end of the San Francisco Bay area. This is a good area to analyze because it is one of the most affluent and even-keeled areas of the United States but also where real estate values escalated astronomically in the early 2000’s.

This analysis comes from information found at www.rapidforeclosuredata.com and www.foreclosure.com. Rapid Foreclosure Data tracks and sells pre-public record default data. This data lists people in default but not yet in foreclosure. Foreclosure.com keeps track of and sells notices of default lists. This data is extracted from public records and has the list of properties that are already in the process of being foreclosed.

From Rapid Foreclosure Data, as of today, July 25, 2007, Santa Clara County has a total of 4,135 properties 30 to 120 days in default. San Mateo County has 1,635 properties. The total for both counties is 5,770 properties. Normally, most banks start foreclosing at between 90 and 120 days of default. So the vast majority of these properties are not yet in foreclosure or entered into any public records.

Also, from Rapid Foreclosure Data, as of today, July 25, 2007, Santa Clara County has a total of 5,123 properties in at least 30 days of default. San Mateo County has a total of 2,025 properties that are at least 30 days in default. This total is 7,128 properties.

By subtracting the first group from the second group, we infer that as of today, July 25, 2007, Santa Clara County has 988 properties that are over 120 days in default. San Mateo County has 390 properties over 120 days. In theory, the majority of these properties should already be in the legal process of being foreclosed. Properties in the process of being foreclosed are widely referred to as pre-foreclosures. Rapid Foreclosure Data does not count properties above 150 days in default.

I don’t like to mix data sources because the lists are sometimes not totally compatible. But given that these are the cards that I have to play with today, and that this is not scientific, I’ll forgive myself. Hopefully, the next time I can do better.

According to Foreclosure.com, as of today, in Santa Clara County there are 1,755 listings of pre-foreclosures. San Mateo County has a total of 465 properties listed as pre-foreclosures. The total for both counties is 2,220. These properties are listed in public records. Public records are the source of information Foreclosure.com uses. For the most part, this data does not overlap with the data from Rapid Foreclosure Data.

By adding both data sources, we can see that in Santa Clara County there are around 6,878 properties in default. In San Mateo County, there are around 2,490 properties in default. Based on this, the default total for both counties is 9,368 properties.

There are several imprecisions in this calculation. I have mixed data sources. There are some duplications because properties with double mortgages get reported twice. There is some additional duplication because some of the properties listed by Rapid Foreclosure Data as being over 120 days late may also listed in the Foreclosure.com list. What makes up for this is that there are a large number of properties that are several months in default, but not yet in foreclosure. To be conservative, one can subtract the number of properties over 120 days in default given by Rapid Foreclosure Data from the number of pre-foreclosures obtained from Foreclosure.com. However, this will not add much precision, because as you know, trustee sales are postponed so often that pre-foreclosure numbers keep increasing because what should have been foreclose remains in the list for weeks. So I will leave it there.

This non-scientific calculation suggests the following:

• The number of properties in default but not yet in foreclosure is a few times larger than the number of properties actually being foreclosed (pre-foreclosures). There are 7,128 properties in default but not yet being foreclosed, versus 2,220 publicly recorded pre-foreclosure. This is an over a three hundred percent difference.
• Given that real estate in not appreciating as before and that a large number of those properties were 100% financed with adjustable rate mortgages, the majority of the properties entering default will become pre-foreclosures, and if nothing positive happens, they will become R.E.O.
• The numbers are so large that either banks can’t keep up with the defaults or are trying to not end up with more R.E.O. by procrastinating with the foreclosures.

Please do not hold me to any scientific standards. This is just a better than eyeball calculation. Make your own conclusions. I selected two very similar counties in a part of the country were real estate is supposed to be relatively stable. I am using this information to make my own investing decision in my own part of the country.

Who loses:

• Creditors who made bad loans.
• People who invested in those banks.
• Homeowners who paid too much for properties.

Who Wins:

• This is definitely a buyers market. Consumers and investors will have the chance of their lives. Someone said that in real estate you make money when you buy and you get paid when you sell. Well, this is it.
• Anyone who can provide a solution that mitigates the losses of those who are losing. This includes short sale experts, real estate and bankruptcy attorneys, and astute lenders.

Written by Oscar Morante, of Advanced Real Estate Concepts, LLC. More information about the author can be found at www.bestshortsales.com.

High Response Default List

Posted July 30th, 2008

Short Sale Proccessing Intake Form

Posted July 30th, 2008

Short Sale Processing Make Up Session

Posted July 30th, 2008