Jacksonville Florida Short Sales, Pre-Foreclosures and Foreclosures

Jacksonville Short Sales : Will The Seller Continue to Market the Property After The Contract And Submit Other Offers to the Bank?

Jacksonville short sale buyers and Jacksonville short sale sellers have to have one characteristic in common...patience. 

We strongly believe that both the buyers and sellers of Jacksonville short sales need to understand going in what could possibly happen down the road.  This advance understanding can help you work through issues that arise later.  And issues do usually come up on Jacksonville short sales...it's just the nature of the transaction.

What happens after you get the Jacksonville short sale under contract?  If you are using the standard contract addendum for the Jacksonville real estate market with no modifications the seller may continue to market the home after the home is under contract.  If you are a hopeful buyer under contract on a Jacksonville short sale what does this mean to you?

Once the current Jacksonville short sale is under contract the listing has to be put in a contingent or pending status in the Jacksonville MLS system.  This means it will no longer show up as fully active in the MLS.  This, by itself, will eliminate many buyers.  It will show up either as Active-Contingent or Pending.  The listing agent can specify that back-up contracts are being taken. 

What happens if the seller of a Jacksonville short sale gets another offer after they are under contract?

The language in the Jacksonville short sale addendum states that if the seller receives subsequent offers and intends to submit it to the bank or banks then they have to let the buyer know within 24 hours of receipt of that Jacksonville short sale offer that they intend to submit to the lienholder/ bank.  At that point the buyer, who is under contract on the Jacksonville short sale has five days after delivery of the notice to terminate, in writing, the Jacksonville short sale contract.  If they do not terminate, the buyer understands that the seller can submit the second offer for consideration by the lienholder(s) / bank(s).

As a buyer, unless the issue is tackled in advance, you can wait patiently on that Jacksonville short sale approval then have another buyer come and outbid you later in the process and end up with the property.  There are ways to potentially eliminate this risk.  However, as the buyer of a Jacksonville short sale you need to understand that this is in there.

Read what you are signing.  Understand what you are signing.  Consult an attorney with any questions about what you are signing.  Be educated.  (...and this is not legal advice...consult a real estate attorney! )

Wells Fargo Short Sale Approval of Atlantic Beach House in Jacksonville Florida Area

We just got a short sale approval letter today for a great house within walking distance from the beach in the Jacksonville Florida area.

The seller experienced a dramatic change in circumstances after they purchased the home a couple of years ago.  This made it impossible to continue to make the mortgage payments.  They contacted us because they knew we were Jacksonville area short sale specialists with a proven track record.

We love Wells Fargo short sales and this was no exception.  We got our approval within 5 weeks of initial short sale submission of a complete and detailed package.

The seller is bringing no money to closing and Wells Fargo is waiving deficiency rights.

Let us know if you need our help too!

Bank of America HELOC Approval for a Jacksonville Short Sale!

We just received an approval for a Jacksonville short sale from Bank of America as the second lienholder.  This particular loan was a HELOC which almost always means a particularly hard transaction these days.  HELOCs are known for demanding cash at closing from the seller at an amount higher than most first lienholders will contribute.  Often these demands are much higher than the seller, who is facing a hardhip, can even consider paying.

The basic theory is this...many lenders look as HELOC loans as "play money."  From our experience working Jacksonville short sales with HELOCs as the second, an assumption is often made by the banks that the money was spent on vacations and "fun" stuff.  As a result, there is more of a "punish the borrower" attitude that we have seen. 

In this case we were able to obtain a  Bank of America HELOC NO CASH CONTRIBUTION REQUIRED AT CLOSING approval for the Jacksonville short sale!  Bank of America's approval indicated that they were willing to take only $3,000 to release the lien and allow the short sale to proceed.

Bank of America (BOA) Oakleaf Plantation Short Sale Approval and Closing in Record Time!

We love helping sellers avoid foreclosure through short sales.  We are  Jacksonville short sale specialists that know how to get approvals.  When this seller of an Oakleaf Plantation townhouse came to us, the situation seemed bleak...however, knowing our abilities and refusal to give up we took the listing hoping to make this one more seller that didn't have to endure the horrible process of foreclosure.

At the time we took this listing our last BOA / Fannie Mae approval had taken 6 months to get.  BOA was known to be slow and many buyer agents would not even take their buyers to BOA short sales anymore.

When this contract came in, Equator had recently been implemented for Bank of America short sales.  Many agents still do not like Equator, we LOVE it!!!  We are very strong in technology and welcome any technological improvements that arrive on the scene.  If you know how to use it, Equator is a wonderful tool that can greatly speed up your BOA short sale approvals.

Here is the timeline for this Oakleaf Plantation short sale approval (BOA/Fannie) and closing:

• 6/08/10 Short sale initiated in Equator
• 6/23/10 Counteroffer from BOA negotiator. BPO came in too high, the contract was countered much higher than the Oakleaf Plantation townhome was worth. We submitted the buyer's appraisal along with our own comps, countered the Bank of America counteroffer and persuaded the negotiator to take the buyer's appraisal. The BOA negotiator revised and countered again allowing the home to be sold at the buyer's appraised price (Buyer had a FHA appraisal).
• 06/29/10 Negotiator was satisfied and sent the deal to the investor, in this case Fannie Mae.
• 7/09/10 The contract was accepted by Fannie Mae and BOA generated an approval letter....only 31 calendar days after the short sale was initiated in Equator.
• 7/15/10 We closed the Oakleaf Plantation townhouse that was a Bank of America Short Sale only a month and a half after going under contract!

Summary of the numbers involved in the Oakleaf Plantation / BOA Short Sale: 

• List Price - $75,000
• Sales Price- $75.000
• Amount paid for townhouse in 2005- $166,100
• Amount owed on loan- $153,000 approximate
• Net Proceeds to Bank of America/ Fannie Mae in Short Sale - $64,149
• Past Due HOA dues paid by BOA/ Fannie Mae - $3,880
• Required Seller Contribution - $0

See the Bank of America Approval Letter for this Jacksonville short sale here.

Have a loan serviced or owned by BOA, underwater and need to sell?  We can help (and if we can't we'll tell you upfront!)

Saxon Short Sale Approval on Walden Chase Home In Ponte Vedra Beach Florida

This Saxon short sale approval was on a wonderful home in Walden Chase in the Jacksonville Florida area.

Saxon issued this Jacksonville short sale approval on a Freddie Mac loan in only 2 days after we went under contract with this buyer!!!  But that's not the whole story (if only it had been that easy!).  This home had been under contract previously with another buyer.  We had explained the Jacksonville short sale process to the prior agent at length.  We had gotten assurances from her that she was not taking the buyers to other homes to look.  We had been highly suspicious because we figured out she was "cancelling" another short sale contract to buy this Jacksonville short sale listing.  We spent time explaining to this agent that the Jacksonville short sale contract is a binding contract with a CONTINGENCY for lienholder short sale approval.  She promised she understood and that her buyers were committed to this property.

One day when we called her to update her, we found out that they had put down a contract on a neighboring Walden Chase home at some point and that this home was now their number two???  To make a long story short, this agent had gotten her buyer into two legally binding contracts for a short sale (maybe more?).  Had both approvals come in at the same time, her buyer could have been left having to purchase both homes or having to forfeit her binder deposit for the home they chose not to buy.  We ended up with a short sale approval, but no short sale buyer!  This could have forced the seller into foreclosure, but we worked hard to make sure this didn't happen.

Luckily in the 11th (maybe 11th and 3/4) hour we were able to pull in a buyer for the same price and same terms as our prior approval.

We were able to submit the new deal to Saxon / Freddie Mac for approval and got our short sale approval letter issued two days later!

Details of Approval on this Walden Chase short sale:

• Original Purchase Price of this Walden Chase home - $343,000
• Loan Balance of first lien at time of Jacksonville short sale - $272,000 approximate
• Short Sale approval sales price - $220,000
• Payoff to Saxon / Freddie Mac - $198,961 (roughly 70% of loan balance)

 

To See a Sample of an approval letter for Jacksonville short sales from Saxon mortgage:

Jacksonville short sales - Saxon approval letter Walden Chase 

Jacksonville Short Sales and Deficiency Balances

This is not legal advice.  If you intend to take it as such, please quit reading now and consult an attorney directly.  We are not one!  Our dialog is strictly from a real estate transaction basis and is not legal advice.  We advise all of our short sale sellers to contact an attorney for specific legal advice.

There has been a lot of confusion recently on the deficiency balance issue when there is a Jacksonville short sale. If you have a foreclosure, Florida is a deficiency state, also called a recourse state.  This means that the lienholder(s) can pursue you for the deficiency balance (difference between what they recover and what is owed on the loan after all of the foreclosure costs are added)  This is unlike some other states that will not allow a deficiency after a foreclosure.  Florida foreclosure law can be found here.  This is also where you find details on a deficiency judgment in foreclosure. It is when you short sale that a lot of confusion comes in.  A very general definition that we sometimes hear of a short sale is "when the bank agrees to forgive the loan balance and lets you sell the home for what it is worth."  This makes us cringe.  This is NOT an accurate definition.  The bank is agreeing to a lien release.  What happens to the "balance" is a different story. Banks are not very forgiving these days.  It actually seems like the more they have gotten in taxpayer money, the less forgiving they have become. The truth is just because you complete a Jacksonville short sale does NOT mean there will not be a deficiency judgment down the road.

The players involved in a foreclosure or short sale are (simplified):

• The servicer. This is who you send your money to every month. (They can actually make MORE money when your loan is in default than when it's not.

• The noteholder. This is who has physical possession (supposedly) of your note. It can be VERY hard to get accurate information about who this is. Crazy enough, many servicers will refuse to tell a borrower who they actually owe the money to. Sometimes, we would argue, it's because they aren't even sure themselves.

• The PMI or MI company (mortgage insurance). Think you don't have this? Well you may be incorrect! Many people who put 20% down on their first mortgage are finding out that they do, in fact, have PMI!  We are starting to see this a lot.  Borrower puts 20% down to avoid PMI only to find out during the short sale negotiations with the lender that there is PMI because they are making a cash or note demand.

The short of it is that any one of these parties can decide you owe them money still....and then go after it.

The reasons to still do a Jacksonville short sale anyway even if a lender does not waive their right to later pursue you for a deficiency?

Faster Credit Recovery.  Current Fannie Mae guidelines allow you to purchase a home faster, sometimes years faster, if you complete a short sale instead of a foreclosure. FHA guidelines also allow you to purchase again years sooner if you sold your home in a short sale instead of having a foreclosure on your record. Many sellers tell us, "We don't care about that, we never want to own a home again."  I would be willing to bet that you will change your mind down the road.

You Control the Deficiency.  Once the home is foreclosed on you have no control whatsoever of the contract price or terms. The simple fact is that REOs / Foreclosures are almost, without exception, priced under Fair Market Value. This can translate to big $$$. For example, on one home we followed, the bank failed to act on a short sale (the home was only around $10,000 short of full payoff), the home was sold for $50,000 less once they foreclosed on the same home. Even though the bank FAILED TO TAKE THE SHORT SALE for $50,000 more they can still go after the seller for their own decision to underprice the home for $50k. This defies common sense...but it is happening. In a successful short sale you know roughly what the deficiency is that they may later pursue. In a foreclosure, you do not know how low they will eventually sell the home for, nor what outrageous expenses they will tack on to the bill to arrive at the deficiency.

There is a Chance That the Deficiency Can Be Waived. This varies greatly by bank or investor (whether you are in the HUD PFS program or HAFA) and seems to be in a constant state of change.  This may or may not ultimately happen.  But you can try to negotiate this when you are involved in a short sale.  This is not something you negotiate in a foreclosure.

You Maintain Your Dignity. Foreclosure is an emotional black hole. It is something that many people never get over.   In a short sale you feel like you are somewhat in control as opposed to a foreclosure where everything is out of your control.

Whether to short sale your home or not is a personal decision.  You have to weigh the costs and benefits to you and decide.  Regardless, you should be aware going in that a deficiency IS possible.  We work with both buyers and sellers of Jacksonville short sales and can help you determine if a Jacksonville short sale may be right for you.

Bartram Springs short sale approval with Bank of America

We just received another Jacksonville short sale approval! 

• Borrower status: They were already far into the foreclosure process and a judgment of default had already been entered when we started helping them with their Bartram Springs short sale listing.
• Amount paid for the home in Bartram Springs: $255,000 in 2007.
• Contract price: $181,000 (price approved by Bank of America with no counteroffers being made.)
• Bank accepted payoff amount: approx 70% of payoff balance
• Seller contribution required: $$$ None $$$
• Promissory Note required by BOA: $$$ None $$$
• Amount of closing costs paid by seller: $$$ None $$$, everything paid by bank
• Mortgage Servicer: Bank of America
• Noteholder: Fannie Mae
• Days on Jacksonville real estate market before first offer: ONE
• Number of offers received on the Bartram Springs home: 3
• How this seller found us: We were contacted by a fellow Jacksonville real estate agent who was a family member. She did not have an expertise in Jacksonville short sales and knew that she should refer them to someone who did.

Our Jacksonville real estate team is helping this couple get out from under their home that they can no longer afford when their only remaining option was foreclosure.  They had experienced a severe income reduction after purchasing the home.  Although a foreclosure default judgment had already been issued against them prior to us listing the property, we were able to postpone the Duval County foreclosure sale and help them get a Jacksonville short sale approval for the fair market value of the price. 

The Bartram Springs seller will now be able to get out without bringing any money to the table.  This will help them get back on their feet and begin to recover financially.  In addition, this will save them from having a foreclosure on their credit report, something that would have followed them for years.  With current loan underwriting guidelines you can purchase another home faster with a short sale on your record.  That is because when you short sale this is recorded on your credit report as some variation of "settled for less than amount owed" instead of the incredibly damaging foreclosure notation.