Why Short Sale Lenders Want Promissory Notes

Why would a short sale lender ask for a promissory note or cash contribution from the seller? The emails below, from Bank of America negotiators, will show you exactly why:

EXAMPLE 1: Santa Rosa Beach Florida Short Sale
"Please be advised, that before we discuss the closing costs you have to talk to the sellers regarding contribution to mitigate the loss.
The reasons:
* FICO in the high 700, never late on any account, continue to make payments on all credit cards
* good deposits
* good income on tax returns
Requested contribution: Promissory note of 12,000, payable in 8 years, 125 per month, 0 interest."

EXAMPLE 2: Destin Florida Short Sale
"Seller is currently paying off a car at 453.00 per month and several credit cards paid on time, Seller is getting deposits of 3000 and 2500 every other weeks on her bank accounts. I'm sure she can afford 333.33 per month.
The note is 0% interest for 5 years at 333.33 per month. There is no way we are releasing the liens debts over 684K without the seller contribution."

Both of these examples show how financial information is scrutinized by the short sale lender. Apparently, good credit, few delinquencies and regular income make the seller a candidate for contributing to the shortfall. In other cases, the lender, servicer, or mortgage insurance company may request a contribution due to its loss amount or policy. It is best to prepare your seller in advance.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
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Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
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Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field

Welcome Debbie Gremillion!

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Debbie Gremillion, Realtor®

Debbie is a Florida Licensed Sales Associate since 2005 and has worked with residential properties from Pensacola to Destin, serving all of Escambia, Santa Rosa, Okaloosa and Walton Counties.
Prior to that Debbie worked as a Title Agent (Real Estate Closer) for over 12 yrs throughout the state of Florida, as well as 15 years in Banking experience.
She comes to us with great knowledge of military family transfers, as a spouse of retired military. Stop in to say "Hello, Debbie!"

Office: 850-650-7883 ext. 205
Cell: 850-292-6657
E-mail: debbie.gremillion@rulnickrealty.com

Fort Walton Beach Short Sale Appoved in 2 Days!

This week I had my all-time record fastest short sale approval. It took two days.

Here is what happened:

Property: Investment condo - Fort Walton Beach FL
Seller Hardship: Loss of Income
Lender: BB&T
Original Purchase Price: $640,000
Mortgage Balance: $550,000
Contract Price: $380,000
Submitted: 6/22
Approved: 6/24
Conditions: $30,000 promissory note negotiated directly between seller and BB&T

The key to this quick approval was both the lender and the package. Unlike many other lenders, BB&T will start a dialogue directly with the homeowner prior to the short sale listing. They assign a negotiator in advance. They do not suggest a list price. BB&T did not order an appraisal, either, so they must rely on internal valuation models. The package I sent had no missing items, and the buyer, price and terms were strong. After I received the approval, I called the buyer’s agent, a wonderful lady with whom I have worked before. She could not believe it, since we allowed over 90 days for lender approval in the contract. She was stunned. She said:

"Wendy…. Wendy…. Wendy… Oh my!... I don’t usually drink, but I think I’ll have a Margarita".

I told her "Have two!"

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Sign up for "SHORT SALE BASICS FOR REALTORS" Webinar - Four Sessions Left, all available on MP3

Destin FL Real Estate
Destin Short Sales & Pre Foreclosure Help.
Read Destin Real Estate Blog

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy to sell your home or buy a home: itswendy@rulnickrealty.com
Call Wendy Rulnick, Destin real estate agent, to list and sell your home or condo or help you buy a home or rental property on the Emerald Coast of Florida in Walton, Okaloosa and Santa Rosa County- Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Crestview, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

"All Things Are Difficult Before They Are Easy"

A few weeks ago my life started to change. I was asked to step outside my boundaries and outside of my comfort zone. What happened? I “met” Bryant Tutas- otherwise known as "Broker Bryant" . You may have heard of him- he’s one of the best-known real estate bloggers around. His writing is insightful, direct, witty and often very funny. He’s got quite a following.

Anyway, in the past several months I started to notice Broker Bryant’s comments on my blog posts and others. I noticed we were “simpatico”, of like-mind, on many topics, notably short sales. We exchanged a few emails, and a couple of months ago, Bryant asked me if I was interested in doing a joint venture. Among other things, he wanted to know if I would do a live webinar with him about short sales.

Well, ignorant me, I did not even know what a webinar was! I had to look it up. If you don’t know– a webinar is an “online live educational presentation”. Bryant and I would teach real estate agents about short sales. That idea scared the heck out of me, but how could I say “no”? I love short sales! I love discussing them, analyzing them, doing them and answering questions about them. I welcome calls from agents in my area or around the country looking for information or direction on short sales. I love helping the consumer with short sales. And that is what I do all day. So does Bryant.

But what would we have to offer that would be different? There are a lot of “classes” about short sales. The difference here is that we are both practicing real estate agents who spend 90% of our time listing and selling short sales. And we do them from beginning to end. Bryant and I do all our own negotiating, we don’t refer out to a law firm, title agency, assistant or loss mitigation company. (Not that there is anything wrong with that). We are the ones on the telephone on hold with the negotiators- every day, getting sales closed. We think that our practical experience with the day-to-day workings of short sales can benefit others. We want to share what we've learned in a forum to provide concrete knowledge.

Enough about that. I am still nervous. We’ve never done this before- although Bryant has appeared on other webinars. So forgive us in advance if we goof up a little, or pause or stutter (especially me). What you will get, I promise, if you sign up for our webinar- is practical, usable, comprehensive information on short sales.

The first session of our five-part series is Saturday, June 27 at 11:00 a.m. Eastern. Join us.

Sign up for "SHORT SALE BASICS FOR REALTORS" Webinar

922 Pocahontas, Fort Walton Beach FL - Waterfront - Short Sale

Deep water views graced by tall trees... this is a unique hideaway in Fort Walton Beach Florida for boat and water lovers. and lot sits up high. Circular drive brings you to home set back from street for privacy. Magnificent oaks adorn lot. Tile floors throughout, wood-ceiling living room, happy kitchen open to dining room. Kitchen has recessed lighing, breakfast bar and warming oven, plentiful cabinets. Oversized covered patio plus screened porch. Master bedroom is restful, with French doors out to back. New dock- 1 year old with water, 4 extra posts set for a lift. Seller estimates can park 34' vessel, waters 4-10' deep at end of dock- can bow in a big one. Property includes delightful one-bedroom apartment, universal design, on left side of home accessed with separate entrance or through garage. Includes kitchen/living and bedroom, separate a/c. Tenant will remain at $750 per month. Separate oversized workshop to right of drive, segmented into two sides, with walk-up attic, and separate power. What more could you want?

Offered at $425,000

Call our Rulnick Realty team to help you buy this property at 850-650-7883

The Legends of Santa Rosa Beach - Short Sale

IMAGINE... Beautiful Gulf Views, Sugar-White Beaches, Emerald Water, Quiet Surroundings, Incredible Sunrises and Sunsets, Ultra-Relaxing Vacation... Sound Good? This is a beautifully redecorated townhouse at The Legends in Santa Rosa Beach Florida. It has new flooring throughout (07), offering over 1400 square feet of living space. The master suite has a king-size bed with a pillow-top mattress, whirlpool tub with separate shower in the private bathroom, and beautiful gulf views from the deck. The ' Surfin' ' room sleeps up to four on 2 full-size beds with it's own bathroom and walk-in closet.

The Legends is a beautifully landscaped complex in the heart of Santa Rosa Beach. This condo overlooks one of two pools, so finding a lounge chair at the pool is never a problem! Play sand volleyball or tennis right on the grounds. Quaint shops, incredible restaurants, and championship golf courses are all close by. BEACH ACCESS is less than 200 yards away, just a short stroll. Scenic Route 30-A offers a 17 mile long, paved, bike and jogging path, great for the morning exercise.This Santa Rosa Beach FL short sale is offered at $209,900.

Call our Rulnick Realty team to help you buy this or any other property. 850-650-7883
It's Wendy!

Destin Condos - Short Sales and Condo Dues

In Destin, Florida, and around the country, as time goes by with short sales, a new problem is growing-- unpaid condo association dues. I currently have two short sales pending with with over $20,000 in unpaid association dues. Short sale mortgage holders are growing weary of paying these huge back-fees to facilitate a short sale. Sure, I've had $10,000 or $12,000 paid to satisfy associations in short sales before. But the longer the short sale or bank action takes, the more the dues will start piling up. Now I have Bank of America balking at paying the association dues on a $300,000 Destin short sale. They want my seller, with no income at all, to pay a promissory note of $40,000 or cash at closing of $20,000, because of the $20,000 past due amount. How am I tackling this problem?

Brainstorming solutions is one of my favorite parts of negotiations. Here is what I found:

Florida Statutes, Section 718.116 states:

The liability of a first mortgagee or its successor or assignees who acquire title to a unit by foreclosure or by deed in lieu of foreclosure for the unpaid assessments that became due prior to the mortgagee's acquisition of title is limited to the lesser of:

1. The unit's unpaid common expenses and regular periodic assessments which accrued or came due during the 6 months immediately preceding the acquisition of title and for which payment in full has not been received by the association; or
2. One percent of the original mortgage debt. The provisions of this paragraph apply only if the first mortgagee joined the association as a defendant in the foreclosure action. Joinder of the association is not required if, on the date the complaint is filed, the association was dissolved or did not maintain an office or agent for service of process at a location which was known to or reasonably discoverable by the mortgagee.

In my case, there are about two years past due in condo fees. I have asked the association to agree to a compromise to accomodate the short sale. Basically, if the condo goes to foreclosure, they will only be paid 6 months dues by the senior lienholder.

If they could reduce the balance owed in any amount to allow the short sale to occur, then the association will gain by:

1. Immediate income to fund a project already in financial need
2. More than the minimal 6 months past due that a foreclosure action will pay them - at some later date
3. A new owner who will certainly be paying his dues on an ongoing basis, providing immediate cash flow

By agreeing to a lesser amount to allow the short sale, that does not mean the association will not pursue the homeowner separately for the balance owed. But a compromise can allow the short sale process to take place,both benefitting the condo project's financial position, and helping the homeowner solve his dilemma.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
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