Working w/ Realtors

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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.

Text of Working w/ Realtors

  • 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)

2. Goals

  • 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
    • & consulting service
  • 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


  • Case Study
  • The Foreclosure Crisis
  • Market Size
  • 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 in foreclosure
  • 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
  • AND
  • 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
  • Great Depression."

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
    • Refinance
    • Loan Modification
    • Forbearance / Repayment Plan
    • Partial Claim
    • Bankruptcy
    • Deed in Lieu (voluntary foreclosure)
    • Sell

19. Working the Pre-foreclosure Market

  • Options for Lenders with loans in Foreclosure
    • Workout Plan / Repayment plan
    • Deed In Lieu (voluntary foreclosure)
    • Short Sale
    • Sheriffs Sale
    • REO

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.
  • Neg