In my last post I had mentioned that I was dealing with a PMI (private mortgage insurance) company during my short sale negotiations. Some of you guys didn't realize that this was one of the entities involved in the decision making. PMI is almost always required when the home is purchased with less than 20% down and is paid for by the home buyer BUT it can also be purchased by the lender even if the down payment was 20% or more. If you are dealing with short sales this is one of the first questions you want to ask the lender, "Is there PMI Insurance?". It affects the negotiations, so you need to know.
There are actually 3 entities that may have an interest in the negotiations, the Lender, the PMI Company and the Investor. The Investor could be Fannie Mae or Freddy Mac or any of the other secondary mortgage market Investors.
If there is PMI and an Investor involved it has been my experience that the PMI Company has the most weight in whether or not the deal will be accepted. This makes sense since they are the ones that have insured the loan. The Lender will usually accept what the PMI Company approves. If Freddy Mac or another Investor is involved they too have to OK the deal after the PMI Company. I haven't dealt with FHA or VA yet but I'm sure their process will be similar. I hope.
So there is much more involved in getting a short sale approved than just getting the Lender to accept the deal.
If you understand the process and know what you are doing, these deals are not complicated, they are just very time consuming. I am by no means a short sale expert, yet. But I am a very quick learner and I'm getting better at them everyday. Short Sales do not have to suck!!!
Anyway, I hope this information helps you. Let me know if you have any questions and also let me know if you feel any of this information is incorrect. I don't think it is but hey....I've been wrong before. I just can't remember when. :)
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BB, Short Sales are interesting. As far as I am concern, you are the expert.... AJ
Short sales are out there ad I bought one- The only problem is to get everyone on the same page.
All the best.
Bill
BB:
That was great info. Sometimes, it always seems like you have to make 3 sales to make 1. Sell the buyer on purchasing. Sell the seller on taking it. Sell the appraiser on the price, etc.. I'm learning more and more about short sales and you provide some really good info.
Question, totally off the subject of this post. Are there any good deals on DVC and what is the availability of being able to use them in November for NAR? Trying to finalize my travel plans and I would love to stay at one of the resorts and spend lots of time at Disney World and drive up to the Expo.
Jessica, I have no idea about DVC. Give my brother Kinn a call 866-544-2919 he'll be able to help you out. I won't tell if you spend the convention at Disney!!! We plan on spending it in the bar:) Fortunately the IRS doesn;t require us to wear ankle tracking bracelets....yet!!!
BB:
I will call him tonight. No, I guess I better not do that. It will be very late/early back on the east coast. I will call him tomorrow. Can you give him my e-mail? jessicahorton@briorealty.com.
The phone stays glued to my ear all day and e-mail is so great.
I hear ya! I tend to let go a bit when I am away from home and the prying eyes of the little church ladies, "Well, isn't that special...could it be mojitos?" There are some pictures of Jason and I at Broker owner training in Denver floating around the net somewhere. Nobody told us that alcohol consumption is different 1 mile up. We didn't learn a darn thing that week. =]
Hey Shortie...
Got something to sell?
Over :)
P.S. I guess that will be the last time you tell me what to say on your blob...Ooops...Blog :)
TLW...ROAR!
Oh...
Hi Jess-A-Bellveau :)
Don't mind me...I am nicknaming everyone again :)
TLW...ROAR!
BB - This makes alot of sense. I don't do many shorts but I totally understand now that the PMI company has role. Thanks. Short sales, lender approval, PMI - sometimes it all makes me feel like I have PMS!
BB, short sales- with your input- will only SUCK just a little bit less- and I thank you for that!!
I had the PMI company nix a sale this year and what I could never understand was when the house went into foreclosure for 25% less than the offer.
BB - The more I learn about short sales the more I realize how much more there is to learn. The discussion around PMI has been an eye opener. Just one more thing that could potentially derail a transaction.
Jeff
Bryant....I love that graphic....I don't know where you guys come up with all this funny stuff. Short Sales....a way of life....I don't think they are going away for a while! Great post.
We just need the banks to call us and talk to us we are not the enemy we can be the solution.
BB
Very interesting point about the PMI and decision process. For some it is not worth all the hassle, but if you understand the process at least a little better, you have a greater chance of succeeding in the long run. I love how you have unveiled the Wizard behind the curtain..now to just follow the yellow brick road all the way to closing.
Bryant- PMI can be the toughest part of the negotiations. We simply will not take NO for an answer and we won't take higher than market value for an answer either. Sometimes you have to get the seller to call on a 3way to explain their hardship directly to the PMI company, after you find out who that is! Which takes some skill in and of itself. Then you deal direct with them and you can get them to be more reasonable.
We just got one approved and the PMI wanted a note back, we had the seller get on the phone direct with PMI, which she did not have on her property when she bought it. The lender bought it after the market started going down. That is why sometimes the seller will say they don't have PMI but then we find out from the lender that they do. This does not have to be disclosed to the seller. Anyways, this seller told them about how her husband is a Vietnam disabled vet and they are just flat broker. They waived the note and accepted the deal which was over the appraised price BTW.