Category Archives: For Realtors

REALTORS: Avoid This Pitfall & Close Your Short Sales More Successfully!

I’m going to share a valuable lesson that I learned several years ago through the “School of Hard Knocks.”  This is when I was just getting started doing short sales.  Hope that you will chuckle, but more importantly, hope that this will prevent you from making the same mistake!

This involves doing a short sale on a property that has the 1st and 2nd mortgages with the same lender (referred to below as ABC Bank).

We prepared the short sale pkg meticulously, as we always do.  We got the authorizations signed by the borrowers for the 1st and the 2nd lenders (same bank) and faxed both of the authorizations to the same fax number (given to us by Customer Service).  We faxed the entire short sale package to the Loss Mitigation fax number that Customer Service of ABC Bank gave us.  About 2 days later, I was planning to call to follow up, to ensure that the package had been received.  To my surprise, Edward of ABC Bank called me first, to say that, “I am your Loss Mitigator on this file.”  Great!!  We now had Edward’s email address, phone #, all contact info, and he had assured us that he had received the package.

About a week went by, and I called to get status to find out when the lender was going to do a BPO on the property.  I was told to wait another week, and I called again.  After leaving multiple phone and email messages for Edward and getting no response for about 2 ½ weeks, I then just talked to the Loss Mitigation customer service phone rep who answered the phone lines.  After reviewing the file, he gave me astonishing news:  “We can’t order the BPO.  The 1st has to do that.  They haven’t even assigned a mitigator to this file yet.”   I pointed out that the 1st and the 2nd were ABC Bank, both the same lender.  I pointed out that Edward had called us first, stating, “I am your Loss Mitigator on this file.”  Nonetheless, to my amazement, he told me that the 1st was not in an office just down the hall.  The 1st was not in an office on another floor of this building.  The 1st was not in a different building in a different part of this city.  No, the 1st was in a different CITY and STATE altogether!! Not only that, the 1st had not even seen the short sale package, had not received the authorization, etc.  The 2nd Loss Mitigator (Edward) did not even communicate with the 1st.

Wow!  Was my face red!!!  Well, to make a long story short, the deal closed just fine.  I dropped what I was doing, faxed the authorization immediately to the 1st lender, faxed the entire short sale pkg immediately to the 1st lender, got the name & contact info for the Loss Mitigator for the 1st, and closed the deal.  It did take longer because the 1st was 2 ½ week behind the 2nd as far as evaluating the deal, approval, etc.  Now, I deserve most of the fault for this, but being a “newbie” at that time, I took Edward’s word for it when he said, “I am your Loss Mitigator for this file.” He absolutely did not state, “I am your Loss Mitigator for the 2nd lien for this file.”

So, lessons learned:  Never, ever, ever assume that the 1st and 2nd liens for the same bank are covered/handled by the same group of loss mitigators. In fact, always assume the opposite.  Always assume that you will be talking to 2 different loss mitigators in different cities, states, etc.  Treat the lenders like they are from 2 different banks, companies, etc.  Then you will be pleasantly surprised if and when you find out that you only have to deal with one person for both the 1st and 2nd liens!

This could have ended very badly.  We could have lost much more time finding out that the 1st was entirely different; we could have lost a buyer who got frustrated with the delays, etc.  But there are so many ways that a short sale can go wrong.  Put success on your side, and make sure to do the little things well, to dramatically increase your chances of closing!

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Short sale within 90 days from listing!

Successfully closed short sale within 90 days from listing! See how we helped this couple come out of their financial hardship and how it influenced their personal life!

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Attention All Agents! Here’s How to Make Sure That You Get Your Full Commission with Short Sales

Did you know that Lenders cannot ask agents to accept commissions below 6% on short sales if FNMA owns the loan?

I know that I am in the minority when I say that I love short sales. I do!! But a lot of agents hate them, because of all the extra time, headache, and aggravation involved. Also, a lot of banks try to make you knuckle under and tell you that the short sale is approved, but they will only pay you 4% total. This is really frustrating and aggravating after you have spent many hours on hold, faxing in the huge packages, etc.

Did you realize that the lender cannot make you reduce your commission if the loan is owned by FNMA? It’s true! This ruling is actually a year old. It came out in March 2009. Basically, if FNMA owns the loan, the lenders CANNOT make you accept less than the negotiated commission of 6%. (If you signed an agreement with the Seller to list the property for 7%, then you are out of luck. They can lower it to 6%. ) The lenders cannot condition the acceptance of a short sale based on a lower commission.

It is very simple. Basically, you must have 2 items:


  1. Contract with Seller that entitles you to 6% commission
  2. Loan MUST be owned by FNMA

But how do you know if the loan is owned by FNMA?

Let me show you this simple way find out if FNMA owns the loan. It takes no time at all. Best of all, it’s free and amazingly easy.

Go to this website, fill in the property address and hit “Get Results” button. It will tell you if the loan is owned by Fannie Mae or not:

Simple as that!

“Short sales” have always been somewhat notorious among real estate agents for a lot more work and a higher risk of commission cut offs by lenders. However, Fannie Mae has taken a positive step for encouraging agents to do more short sales.

Thanks to this new policy introduced and implemented by Fannie Mae, real estate agents do not have to compromise on their well-deserved commissions any more if the loan is owned by FNMA and if the commission is not more than 6%. Here is the excerpt from the Fannie Mae release:

No Negotiation of Preforeclosure Sales Commission

Effective March 1, 2009, closing of preforeclosure sales may not be conditioned upon a reduction of the total commission to be paid to real estate agents to a level below what was negotiated by the listing agent with the borrower, unless the fee exceeds 6 percent of the sales price of theproperty in aggregate. Servicers are reminded that they must continue to obtain any approvals that may be required by interested third parties in connection with preforeclosure sales.

References: Servicing Guide, Part VII, Section 504.02: Contacting Selected Borrowers.

Click here to view the complete document on FNMA’s web site.

(See page 2, Section: “No Negotiation of Preforeclosure Sales Commission”)

So according to this ruling, as long as contract calls for 6% or less as agent’s commission, lenders CANNOT negotiate that down if the loan is owned FNMA. This has definitely brought peace of mind to the real estate agents, giving them more confidence and encouragement to do short sales.

I really hope that this helps you. I hope that you can close more short sales and help more people. More importantly, I hope that this helps you earn the 6% commission that you so richly deserve.

Still not sure about doing short sales?

I would love to help. As a licensed real estate broker in California, I have over 90% success rate in getting short sales approved and closed (On average, short sale success rate is only 15%-25% nationally).

Please contact me if you would like me to negotiate your short sales for you. I will take the headache and drudgery out of short sales and make it a truly fun experience for you.

Feel free to contact me at 909-972-1616 or email me at

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