Comments on: Should I be a Real Estate Loss Mitigation Expert?

By: Michael Patton

Michael Patton — Sun, 08 Nov 2009 07:06:56 +0000

I absolutely agree – our Real Estate licenses DO NOT empower us to negotiate the “release” of liability when doing short sales.

I’ve been successful in the past – and by the “skin of my teeth” been able to get every prior short sale listing completed with a total release of liability – but times are changing and the lenders aren’t being so agreeable anymore.

So, I will not take a listing unless the seller is willing to retain an attorney to negotiate… let me be an Agent, let the attorney do the things he’s better equipped to handle.

The fee’s are negligble in the big picture – and I’m keeping myself as far from being sued as possible.

Just think of how many agents/brokers are going to be sued when a seller is pursued for collection of a deficiency – whether you told them or not isn’t gonna matter a whole lot when they turn to an attorney for help… they’ll sue everyone involved!

It’s simple – I don’t want to be one of the targets.

Do what I’m good at – list and represent sellers in their SALE of property.

Refer the things I’m not good at – short sale negitations, home inspections, appraisals, escrow and loan applications/funding.

By: Krista Johnson

Krista Johnson — Sat, 07 Nov 2009 02:44:24 +0000

For clarification, the disclaimer specifies the owner does not need to hire any third party to negotiate their loan modification. Also, I am an active agent and do list short sales. I just don’t negotiate them.

By: Krista Johnson

Krista Johnson — Sat, 07 Nov 2009 02:41:45 +0000

I am a Real Estate Broker in California. The recent law changes mandate that we must put in 14 point bold that the homeowner/client can complete a modification on their own and that they do not need to hire legal counsel. That being said, I now work in a law firm that specializes in loss mitigation: loan mods & short sale negotiations, debt settlement, collections and BK. Loan mods and debt settlement seem to go hand in hand. In some cases, they cannot get a mod due to their high debt ratios. I refused to list a short sale and negotiate it myself. I do not know as much as the attorney and I am sticking to listing homes and referring mods & short sale negotiations. I also have a hard time with agents trying to do a modificaiton for no cost and then listing the home when it does not go through. I think that it is not in the best interest of the homeowner to use a Realtor to do a mod because the Realtor will benefit from them not obtaining a mod. I have heard it from agents themselves that this is their mindset. Stick to what you know, refer out what you don’t. The owner who pays a third party will not come back at you if it falls apart.

By: Michael Patton

Michael Patton — Sat, 24 Oct 2009 19:27:53 +0000

I think what we’re discussing here are a couple of different issues:

1. Loan Modifications – I will gladly provide any property owner with a BPO and a referral to the various “no charge” avenues (ie: HopeNow) that may be able to assist them in their quest to get a loan modification.

I track activity in my area as closely as I can and am simply not seeing much in the way of modifications that actually benefit the homeowner to a large enough degree – and most are deciding to go to a foreclosure or short sale once they realize they’re not going to get a principal reduction.

2. Short Sales are where I can help out the most. I’ve been certified (not that most of them are worth the paper those certificates are printed on) by 5 different teacher/associations on performing short sales – and I’ve concluded that the biggest disservice I can do for my client is for me to attempt to negotiate the short sale with the lender.

Yes, I’ve done dozens of them with success over the past 25+ years and never had one “stick” my seller my a deficiency note… but things have changed so much over this past 6 months or so that I now refuse to list a short sale unless the seller will retain an Attorney that specializes in these types of negotiations. If a seller will not spend a couple thousand dollars to protect their future then I pass on the listing.

It’s my belief there will be literally thousands of E&O claims against agents/brokers in the coming years. When the seller is pursued for a deficiency (all the forums I read indicate this is becoming quite the norm) they’re going to turn to every “deep pocket” they think had a hand in their misfortune.

Let me be a REALTOR and focus on those areas of the transaction that I’m best equipped to deal with and let the Attorney’s negotiate the areas that truly fall outside my area of expertise.

As to affordability – I’ve found that most people that aren’t making housepayments have thousands of dollars “tucked under the mattress” to help them get on with their lives – preserving what they can of their credit and assets is simply an investment towards that more successful future.

By: bficker

bficker — Fri, 23 Oct 2009 20:11:51 +0000

“As for the public thinking they can do our job, I now am a recent convert of the “Russell Shaw methodology of listing”, one of says, if you think you can do my job, go on and do it! ‘
So far, none of my listings sold by themselves.. So I’m not THAT worried..”

I have the same feeling towards loan modifications…

By: Jim Gatos

Jim Gatos — Fri, 23 Oct 2009 19:59:41 +0000

“Unfortunately, your general statement is correct. Most loan modification groups do scam people for what they could get on their own (By the way, most people would say the same about Realtors). But there are some of us who really do help people stay in their home and avoid foreclosure.”

Yes, I am talking about loan modifications…

As for the public thinking they can do our job, I now am a recent convert of the “Russell Shaw methodology of listing”, one of says, if you think you can do my job, go on and do it! ‘
So far, none of my listings sold by themselves.. So I’m not THAT worried..

By: bficker

bficker — Fri, 23 Oct 2009 19:10:45 +0000

Are you specifically talking about loan modifications? They are rampant here in Phoenix where there are really no guidelines set in place. We do help homeowners with loan modifications if that is what would work best for them. Most of the time a short sale is a better option. Yes there are scam artists out there, but there are also legit companies who do get much better results for homeowners who may not qualify for some of the standard gov’t programs. We’ve helped people cut $1,000 off their payment when the bank previously told them that they did not qualify for a modification.

Unfortunately, your general statement is correct. Most loan modification groups do scam people for what they could get on their own (By the way, most people would say the same about Realtors). But there are some of us who really do help people stay in their home and avoid foreclosure.