The purpose of this presentation is to show, Realtors and Investors, why working with us on your short sale properties is extremely beneficial. We are a preferred investor with the majority of lenders and have direct contacts to expidite the process.
- 1. Selling Real Estate Using Short Sales Morgan McDonald Jonas Elliott, Sr. David Ayala LMS of SWFL Loss Mitigation Services 1870 Clayton Ct. Estero, Fl 33907 O-(239)689-7672F-239(689-7079) www.gulfcoastbesthomebuyer.com
- Educate you on how to capitalize in this down market & make additional commissions thru short sales.
- Educate you on how to help homeownerswho are desperately looking for help by understanding their options.
3. Important Information!
- What is LMS of SWFL, LLC:
- A short sale OUTSOURSING, negotiation
- Realtors, sellers and lenders
- Here to assist realtors with short sales
- Here to provide solutions
4. What is a Short Sale?
- Occurs when a lender agrees to except less money than what is currently owed on the property to allow transfer to a new buyer.
- Not just for pre-foreclosures or loans in default.
- Can be negotiated on all mortgages plus junior liens.
5. What if you could.?
- Outsource all the short sale negotiations to an expert
- Pay no fees (seller, buyer or agent)
- Check case status online 24/7
- Title and escrow with a proven expert
- EARN FULL COMMISSIONS when properties transfer
- Working the Foreclosure Market
- Short Sales: What, When and Why
- Steps in a Short Sale Flow Charts
- How Short Sales Can Benefit You
7. Case Study - typical deal
- Payoffs are at or more than the value-
- Cant currently sell home to cover what is owed
- No equity in property when closing costs and commissions are factored in
- Homeowner wants to get out of situation
- Realtor wants to outsource extra work involved in short sale negotiations with lenders.
8. The Foreclosure Crisis
- Increase in the number of ARMs and rising interest rates:
- Nearly 25% of all mortgages 10 million carry adjustable interest rates.
- Source: Mortgage Bankers Association
- One in 8 households with ARMs that originated in 2004 and 2005 will default on those loans.
- Source: Moodys Economy. com
9. The Foreclosure Crisis
- 1/8 of all mortgages are considered
- 60% of all new foreclosures are
- Source: Center for Responsible Lending
10. The Foreclosure Crisis
- The crisis isnt limited to conventional, sub-prime loans:
- 12% of FHA loans are either in foreclosure or delinquent.
- Source: Mortgage Banking Association
- As one advocate put it, This is the worst time for foreclosures basically since the
11. The Foreclosure Crisis
- Prime loans drop from 66% to 45% of the market from 2002-2006.
- Sub-prime, Alt-A, piggybacks (80/20s), ARMs, interest only and other exotic mortgages take over the majority of market (51%) for 1 sttime ever in 2006.
- Credit Suisse Mortgage Report 2007
12. The Foreclosure Crisis
- "Thebiggest growth departmentin all of the mortgage-lending servicing departments over the last year has been theloss-mitigation department . That is the department dedicated to finding solutions to defaulted loans other than foreclosure .
- Source: Bruce Juenger, President of the Association of Real Estate Owned Managers in Los Angeles
13. Chicago Federal Reserve Study
- Lenders lost about $50k per foreclosure
- Lenders re-coup an average of only 59% of the original loan amount per foreclosure
14. Market Size - Nationally
- Nationally 4.95% of all homes were delinquent at least 30 days behind
- Nationally 1.19% of all homes were in the foreclosure process in varying stages.
- Sub-prime and FHA had highest %
15. Market Size - Florida
- One of the worst performing states is Florida,14.84% of all loans are delinquent, as reported by the Mortgage Banking Association.
- SWFL has routinely been in top 3 areas in ENTIRE COUNTRY for foreclosures.
- Lenders own 8% of all homes in LEE COUNTY bank owned
16. Working the Foreclosure Market
- Working with People in Foreclosure
- Homeowners rely on your knowledge and advice. You have an obligation to maintain the high standards of technical competence and integrity
- Always place the best interests of the homeowner above all else, and disclose fully the facts representing the true costs, benefits and limitations of any recommendation.
17. Working the Pre-foreclosure Market
- Stages of the Foreclosure Process
- Collections 1 st90 days delinquent
- Pre-foreclosure 90 days - 12 months
- Short Sale Potential in this stage!!!!
- Foreclosure Sale Sheriffs auction
- Redemption Period 30 days or less
- REO Department until liquidated
18. Working the Pre-foreclosure Market
- Options for Homeowners in Foreclosure www.hud.gov
- Forbearance / Repayment Plan
- Deed in Lieu (voluntary foreclosure)
19. Working the Pre-foreclosure Market
- Options for Lenders with loans in Foreclosure
- Workout Plan / Repayment plan
- Deed In Lieu (voluntary foreclosure)
20. When Will a Lender Consider a Short Sale?
- On loans in default, or where default is perceived or inevitable.
- When a lender receives an offer that is higher than what it expects to net by foreclosing.
21. Why Would a Lender Consider a Short Sale?
- Lenders are in the business of loaning money, not managing and selling real estate.
- Non-performing loans reduce what can be loaned by 2-8X the amount of bad debt.
- Lenders have Loss Mitigation Departments responsible for mitigating ,orminimizing , losses from defaulted mortgage loans.
22. Steps In a Short Sale
- Refer an owner in foreclosure, or expects to be, who is both interested in selling and participating.
- We determine the likelihood of success based on the ability to negotiate a discount and the ability to resell the property.
- We confer with the sellers and listing agent to explain the process and coordinate required documents
23. Steps In a Short Sale
- We prepare, submit and negotiate the short sale package, driving the entire process for all lien holders.
- We prepare a repair estimate.
- We make an investor offer to start the process.
- LMS requests the lender to postpone auction (if needed).
- LMS follows up on offer & triggers a BPO (Broker Price Opinion).
24. Steps In a Short Sale
- A BPO is ordered by the lender to obtain the as is value, which is used to determine if the loan can be discounted and by how much.
- Once our offer is accepted by the lender we will supply you with the value for you to list and market this property
25. Steps In a Short Sale
- The negotiated settlement will stipulate the lender is to pay all seller closing costs, including real estate commissions.
- We will handle title and escrow to transfer property to end buyer.
26. The Interior BPO
- The most critical point of the entire short sale process.
- Opportunity to validate the offer.
- Whatever the BPO comes in at, the lender views that # as the FMV.
- Lenders want approximately 85-100% of new BPO.
27. Risks for Agents
- Waste time and energy on listings when an acceptable discount could not be negotiated.
- Upset agents and brokers when they lose a buyer because the process took too long or the commission was reduced by the lender.
- Unable to find a buyer in time.