Deeds in Lieu of…Is that on the Table for Sellers?

February 13th, 2009 category: Real Estate News

Sometimes, the stars align and things work out the way that they are supposed to.

In the current venue, it’s pretty sad that a deed-in-lieu of foreclosure would offer just such an assessment, but in comparison to a short sale or foreclosure…WHAT A DIFFERENCE.

2 long years That a deed in lieu of foreclosure is limited to ONE mortgage (as opposed to the “norm” of a big fat second) creates poor odds, but what a better way for sellers to go, if they are able.

While a deed in lieu of foreclosure can present the possibility of a deficiency in much the same way that a short sale can, it can also be negotiated away, as lawyers in NY often do for sellers of distressed property here.

Here’s the thing that occurs with a deed in lieu of, vs. a short sale: the sellers, under enough stress, are able to WALK AWAY. Close the chapter. Additionally, the bank is able to get the property on the market with an REO company within a few months…as opposed (in NY) to a year or two.

Deed Glove While it feels much like “picking your poison”, checking to see if a lender accepts D’s ILO is a worthwhile endeavor for a home seller. The time in a financial abyss is cut short, and while credit may be wrecked in much the same way that a short sale impacts credit, the ability to GET OUT is compelling.

There is no income for a real estate agent that encourages a deed in lieu of foreclosure. This action does, however, speed up the disposition of the property, getting it out of the landscape more quickly.

At least in NY, where it’s often two years for a property to find it’s way to foreclosure, this is an avenue that should be among the suggestions of Realtors working for distressed sellers.

To search available homes for sale on the North Fork / East End Long Island or condos on the North Fork of Long Island, click “north fork homes”, enter your area of interest and any parameters, and click “go”- properties for sale include Riverhead, Aquebogue, Baiting Hollow, Calverton, Jamesport, Laurel, Mattituck, Cutchogue, Peconic, Southold, Greenport, East Marion, Orient, and Orient Point, NY.

This entry was posted on Friday, February 13th, 2009 at 12:06 am and is filed under Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

46 Responses to “Deeds in Lieu of…Is that on the Table for Sellers?”

Barry Cunningham Says:
February 13th, 2009 at 9:18 am
In a short sale executed correctly, there can be no deficiency judgment as there has been payment made in full settlement of debt. We have completed over 200 short sales and the information as stated here is not correct.

Every payoff letter we get states that the payment made at closing satisfies and releases the borrower from the loan and note…hence no probability whatsoever for a deficiency judgment.

Please…if you are in foreclosure, NEVER go the Deed In Lieu of route if it can at all be avoided. Find a competent short sale experienced agent who knows how to proficiently prepare, market, negotiate and submit a fully documented short sale package and you’ll be light years ahead.

I have to disagree wholeheartedly with the information contained in this blog post.
laurie mindnich Says:
February 13th, 2009 at 9:30 am
Barry, thank you for your input.
In New York (unlike most states) the judicial foreclosure process takes an average of 444 days, often exceeding two years.
For many sellers, eliminating a two year financial odyssey is paramount- they want their lives back.
Because the deed in lieu of option permits the sellers to move on, with the same odds of no deficiency in a short sale, I stand behind the opinion that pursuing this alternative (as well as all others) is a viable suggestion, and should be considered in the “big” picture for sellers.
It was, in a recent case, a 90 day turn around for the sellers vs. the stress of either a two year foreclosure process, or the gamble of a short sale culminating in a release for the sellers. Short sales that have closed are NOT a 90 day process- more like nine months plus IF they close.
Again, your opinion is respected; I stand by the suggestion, and until short sales appear to offer a time frame that is 90 days or less in the majority of circumstances, there is no reason NOT to consider a return of the property to the bank via a deed in lieu of foreclosure. Sellers that have to get out need all avenues explored.
Barry Cunningham Says:
February 13th, 2009 at 9:43 am
Laurie,

Short sales are expeditious as the person coordinating it. We often get deals approved in literally days instead of the long drawn out process that afflicts many in the industry. One reason we, and others we know, have such a reduced time frame is because we know how to package a deal correctly and follow a very definitive process that makes the LM’s stand up and take notice.

I’m in it to MAKE MONEY. If I was sitting around for months waiting for a deal to close like many agents do I would shoot myself in the head or go sell cars. If anyone is experiencing short sale periods of “nine months” then something really …really..wrong is happening.

By the way, in interviews we have conducted with prominent attorneys, credit bureau administrators and individuals who have gone the route you suggested, the reality of the situation is that a Deed In Lieu of is looked upon by creditors in much the same light as a foreclosure. You may want to do the research on that. As someone may have given you erroneous information.

I’m also confused, in your post you say there IS the possibility of a deficency and after my comment above stated otherwise, you now say there is NO deficiency. So am I to believe that you do agree in part with my comment?

A Deed In Lieu of is a death sentence. Anyone who considers it is acting foolish and is being advised badly. Especially with banks being so aggressive in disposing and liquidating these non-performing assets these days.
laurie mindnich Says:
February 13th, 2009 at 10:05 am
Barry, it’s great that you’ve fine tuned the process in Florida (a non judicial state). In a perfect world, you have sellers who have no late payments on their mortgage, and no late payments on other credit cards, prior to attempting a short sale- this would indeed provide better credit protection. Absent that, the majority of short sale sellers have credit issues that will take years to rebuild.

As stated, the “odds” of a deficiency judgement in either scenario exist- to suggest otherwise would be irresponsible on this end.
I see enough short sale effors end up as foreclosures to stand firmly behind the suggestion that sellers consider a deed in lieu of foreclosure in the event that their bank accepts them- no alternative in NY is offered without a caveat that the process be overseen by a lawyer to advise of all ramifications. For some sellers that owe a few hundred thousand over “market value”, the response of some banks has been slower reach acceptance- the values here are just now becoming compromised by bank owned closings.
Perhaps when values truly reach a bottoming out here, banks will be more inclined to accept the larger losses.
Florida and New York are two VERY different scenarios at the moment, until we “catch up” to market reality here.
I believe that you’re successful with short sales; I also believe that there are alternatives in the absence of a market in which sellers/buyers are put through the wringer.
Barry Cunningham Says:
February 13th, 2009 at 10:16 am
Laurie…I am going to stop here and go on with my day. I wish you a good weekend as well.

Your statements indicate someone is REALLY giving you wrong information and as you continue to respond with said erroneous information it makes it hard to have a real discussion of the issues.

Have a great day…and by the way…Florida is NOT a non-judicial state. The foreclosure process down here most assuredly goes through the court system. Like I said above…it’s of no use to discuss things when you have such bad information.
laurie mindnich Says:
February 13th, 2009 at 10:30 am
Barry, as you stated, you’re in short sales to make money.
To ignore alternatives, such as a deed in lieu of, is a difference of opinion. If you have a link detailing the credit ramifications (factual) of both alternatives, I’d love to have it on the site- so far, I’ve been unable to locate something in writing detailing each (likely because credit is often decimated prior to a short sale effort- hard to pinpoint without all credit histories being “like”).
If Florida is a judicial foreclosure state, my apologies- my assumption was that most states are absent that albatross.
If a seller in NY is not provided ALL alternatives, they’re being incorrectly counseled; to presume that there “will be no deficiency judgement” is incorrect, irrespective of your own transactions.
I appreciate the input; don’t agree, but appreciate it.
“Bad information” isn’t our call; it’s the call of the home seller, their lawyer, and their real estate agent.
laurie mindnich Says:
February 13th, 2009 at 10:47 am
http://homebuying.about.com/od/4closureshortsales/qt/060907SScredit.htm

Here’s a link that offers some insight…
Barry Cunningham Says:
February 13th, 2009 at 10:48 am
I just submitted a lenthy comment to you and it was deleted..hmmmmm
laurie mindnich Says:
February 13th, 2009 at 10:58 am
Barry, I don’t delete comments- yours are very welcomed, and offer an angle that sellers should be aware of. I have no idea where it went.
Barry Cunningham Says:
February 13th, 2009 at 11:05 am
2nd one just got deleted
Barry Cunningham Says:
February 13th, 2009 at 11:06 am
nope…only single sentences are now being allowed..I have been silenced
laurie mindnich Says:
February 13th, 2009 at 11:17 am
Barry, there is clearly something wrong- mine are permitted with no problem.
Because you have a highly successful short sale business in Florida, your link is being provided to any readers seeking your “take” on short sales. That we have different viewpoints is to a sellers benefit:
http://www.realestateradiousa.com/blog
george simpson Says:
February 18th, 2009 at 4:51 pm
Is this guy “Barry” real?
Barry Cunningham Says:
February 18th, 2009 at 5:28 pm
George..if this comment gets thru you will know that I am!
Barry Cunningham Says:
February 18th, 2009 at 5:31 pm
There are VOLUMES of information on the site regarding short sales. We actually have written the book..or books about them.

We have successfully trained over 2,500 realtors as to how to successfully execute short sales and all about distressed properties.

We have had guest speakers at our classes who are prominent tax attorneys, and even had LOSS Mit reps speak.

I don’t venture forth opinion. What I write is cold hard fact. i run a business, I can’t justify things on opinions.

I would never counsel a client with an “opinion”. People use our material and we have been published in journals across the Country and we have been asked to speak and teach at many real estate boards and for national franchises.

We have over 200 WRITTEN testimonials. We have been featured in many national publications.

I say this to underscore the fact that opinions are useless in a legalistic endeavor such as short sales.

I would never have submitted the link above but you asked me to do so.

To show you I have no ill feelings I will offer you a complimentary enrollment in our course and that’s an olive branch.

Laurie, the fact that you asked for a link for information indicates that maybe, just maybe did not have all of your facts straight.

Your commentary sure indicated as much.

By the way..that article you linked to is a travesty. Weintraub is COMPLETELY wrong. What is it with real estate agents not understanding clear law.

Fact: In a short sale you are SATISFYING the mortgage , albeit at a loss. Once the loan is satisfied and released THERE IS NOTHING ELSE OWED.

Hence, no possibility of a deficiency…c’mon Laurie…it’s the LAW! It’s also common sense and elementary understanding of a satisfaction of a mortgage.

Until realtors begin educating themselves seriously and taking their business seriously…this housing debacle will continue.

I challenge you..I implore you to stop with the rhetoric and regurgitation of unadulterated, categorically false information.

We spent literally tens of thousands of dollars on research and development BEFORE we even offered our course and seminars to market.

We have vetted out all of the nuances of the foreclosure process and we have navigated every labyrinth of possible pitfalls and traps along the way.

That is why we are successful and that is why are clients are successful. It’s also why we have hundreds of written testimonials attesting to our success.

I don’t seem to see any testimonials on Weintraubs article.

Like I said, we deal in fact, not opinion. However, hey if it works for you so be it.

let me know if you’d like the free enrollment into our course.
laurie mindnich Says:
February 19th, 2009 at 11:33 am
Hey, George!
Barry is “real”- he has a Florida company that is advanced in the short sale arena.
The info provided on this end has merit, however if a person is convinced that short sales are a better alternative (with each seller being different, I disagree) then there is no problem offering that vantage point- a seller considering alternatives should look at EVERY possibility.
The article is the result of a situation in which a protracted process would have been very problematic for the sellers; while short sales with an efficient listing agent can certainly go well, what has to be taken into account (from a time frame standpoint) is days on market of actually getting a valid offer.
I have no problem with short sale proponents- would do it myself under the right circumstance- but am not budging with respect to the responsibility of real etate agents to encourage exploration of ALL alternatives (in addition to a prerequisite that their own lawyer provide all disclosures and outcomes with these alternatives). It’s ultimately the seller’s choice, and life.
Additionally, as the majority of short sales are prefaced with missed payments, the credit ramifications need to be clarified to sellers, as I’m sure that Barry provides to his clients.
thanks, George, and I’ll certainly consider your course, Barry- there is no downside to agents getting really good at the short sale process (once all avenues are explained to sellers).
Barry Cunningham Says:
February 19th, 2009 at 11:53 am
Laurie as a part of our pre-qualification interview with a client (yes, we pre-qualify them BEFORE we agree to take them on as a client and we do not just take anyone) we tell them their options AND provide them with access to Fr.ee legal counsel that WE pay for.

Their options are explained fully including DIL and even bankruptcy.

Here in Florida we also give them a 72 hour cooling off period before moving forward.

Once all of the options are explained..we have NEVER seen one single client EVER choose the DIL route and that’s HUNDREDS of clients.

So I guess I agree with you in the fact that all remedies are to be explored and explained, but in the end, once said explanation is given and contemplated, there is really only one way to go for 99% of those in distress.

By the way..said explanation and education to the Selelr is a part of our short sale process …not instead of it.

Like I said above, our lawyers have been very throrough and many have been corporate counsel for very large banks that I can’t mention.

But a proficiently executed short sale process, which by some of the questions we get from people is STILL unbelievably beyond the grasp of most agents, is what is causing so many problems.
laurie mindnich Says:
February 19th, 2009 at 6:17 pm
Barry, we also rely on lawyers- if a deficiency agreement is demanded signed by a seller from a bank (as we’ve seen) at the start of a short sale approval, and a lawyer informs a seller that a short won’t move forward without the possibility of a shortfall out of the sellers pocket, we aren’t (as real estate agents) going to jump in and advise sellers in a way that their own lawyer hasn’t.
While that may fly in the face of a system that works, NY operates with lawyers in almost all transactions. To offer contrary advice would be insanity on the part of a real estate company (ours, or any other). And, I hate lawyers. But, it is what it is here.
Barry Cunningham Says:
February 19th, 2009 at 6:59 pm
I challenge you..I absolutely CHALLENGE you to show me a successfully completeted short sale that resulted in a deficiency judgment.

It simply is NOT POSSIBLE. Laurie…I don’t know what you have been told. I don’t know what your experience is…but this is NOT AT ALL POSSIBLE. Especially in the manner in which you just described.

What you just wrote is of no sense whatsoever. You may really want to contact your attorney again to have him explain to you things.

I can not be more adamant and vehemently disagreeing with you than I am. You ARE WRONG…NO BANK ANYWHERE can demand a deficiency judgment be signed…in fact, with all due respect, I know what you are, or may be referring to…but it’s not a deficiency judgment.

There’s only one person and only one way such a judgment can be rendered.

Realtors MUST stop thinking they know the law and seriously understand the process.

What you MAY be referring to is the practice that some banks are doing wherein they are requesting selelrs to sign promissory notes to start the short sale process.

That’s a far cry from a deficiency judgment.

As the term implies…a judgment is an order of the Court. No person can demand such a judgment and no person can sign such a judgment.

Laurie, I know you mean well…but your argument is lost due to you not really understanding the judicial process and accordingly you not wanting to listen is causing more and more miststatements like your comment shown above.

There is no part of the short sale process or the foreclosure process that we don’t have vast experience with. In fact we have TAUGHT many attorneys.

I challenge you, or anyone you know to tell me that there is the possibility of a deficency judgment after a successful short sale.

To say that is a true oxymoron. So it is not a matter of belief anymore. I have thrown down the gauntlet.

You said in the 4th paragraph of your post the following..:deed in lieu of foreclosure can present the possibility of a deficiency judgement in much the same way that a short sale can”.

I challenge you to find ANY lawyer..in ANY atate who will agree with you that a Seller is liable for a deficiency judgment in the event of a successful short sale. You are simply wrong. It is not possible and I am willing to speak with ANY one anywhere in any jurisdiction of any Court and prove otherwise.

That being said, I think you may really want to research the terms you are speaking about.

We take our business, our courses and our research very seriously and like I have told you…we have worked with the best attorneys in the Country and vetted all parts of this process and don’t just have an opinion..we know for a fact.

That is why I speak with such emotion and conviction in this regard. The consumers MUST be given correct information and agents must be admonished from giving erroneous advice.
laurie mindnich Says:
February 19th, 2009 at 8:33 pm
“in the event of a SUCCESSFUL short sale”, Barry- I have absolutely seen banks that will not enter INTO a short sale situation without a seller signing that a deficiency will be imposed on the seller AND THAT IS IN THE FORM OF THE PROMISSORY NOTE (?)- it was part of the OK offered by the bank to even engage. Call it what you want; it was determined by the lawyer for the seller to be to their detriment.
Semantics that stand corrected- but clearly you agree that some banks DO require that a seller acknowledge the possibility that there will be an amount owed by the seller to the bank in the event that a shortage is taken(which then introduces the bk option later)??
Your clarification is welcomed.
I would understand your rather insulting “take” a bit more if this were a post suggesting authority in a short sale situation- it was not written for that purpose.
Further, even were I to accept your generous invite to seek out the “solution” that you’ve engaged in for short sale sellers, there will never be a time where it would seem appropriate to generalize, because this is a mercurial market with each day offering another challenge/learning experience for everyone.
I’d also challenge YOU to offer a link that provides a better credit outcome for sellers that engage (score), taking into account the REALITY that most sellers are behind on many aspects of their financial lives before engaging. THAT would be helpful. I have been unable to locate a definitive response to this query, other than a few links that explain it in a murky fashion. You want blanket acceptance without providing your OWN backup- I’d love a link that shows definitively WHAT sellers are facing in a credit score drop. That was the crux for a seller that desperately needed a house gone, without marketing time that would deteriorate further a life that was in purgatory. Except now, you’ll indicate that I’m deleting your comments…
laurie mindnich Says:
February 19th, 2009 at 8:57 pm
So that I understand: your objection is to the term “deficiency judgement”, as opposed to “deficiency” via a promissory note? Fair enough. I’m not in a place where I can edit the post, but will confirm your verbiage, and make the correction.
MONEY OUT OF THE SELLERS POCKET, AS DEEMED BY THE BANK AT THE ONSET OF A SALE.
Certainly not the same verbiage; same result from a sellers pocket.
I’ll let you have the last word, should you decide that it’s to your benefit somehow, but I’m not taking any bait from an insulting comment (although I get the passion part- I have my own agendas for which passion makes my delivery somewhat compromised on occasion- and I really don’t care any more than you likely do).
Barry Cunningham Says:
February 19th, 2009 at 11:14 pm
Laurie, as the architect of hundreds of successfully closed short sales and the creator of what is arguably the top rated short sale course on the market, and with thousands of successfully trained real estate agents, and with books and published articles in publications across the Country, and countless other accolades, I feel that my credentials, experince and background provide me with the foundation of my basis.

I say none of this to pat myself on the back but to rather underscore what I have stated above herein.

I am not seeking to insult you, I am seeking to admonish you from incorrectly making statements as was written. I am not dancing poetic on jargon, I know the terms all too well.

By the way…I have had banks pull the promissory note trick as well. We teach agents how to get the banks to rescind this demand.

It’s all in the negotiation. NEVER had one client have to sign such a document and we have shown many agents and investors how to make this work as well.

By the way, you ask for a link as to the information regarding credit…simply read our blog. There are literally volumes of information about sort sales including the answer to that which you seek.
laurie mindnich Says:
February 20th, 2009 at 12:16 am
The link would provide it all, Barry. Your statements are of value; back them up and we’re aok (not that you are after that kind of confirmation- but I am). Short sales have similar ramifications to foreclosures or deeds-in-lieu of, and that’s all that this suggestion of seeking all alternatives was promoting. Income for real estate agents or not.
Dancing poetic is a fair appraisal of how your views are accepted- link to short sale credit scores as a better way to go (presuming typical sellers who have to miss payments in order to simply get a response from their bank) and we’re good- with no reasonable expectation that your own motivation to sell a system will supercede the importance of this info for sellers.
No money is made by real estate agents from a deed in lieu of; makes your agenda a bit…speculative, without proof of a higher score in the absence of a deed in lieu of.
Except, for the purpose of being superior in all real estate endeavors, your short sale invitation will be accepted as much out of curiosity as a hope to offer sellers the best possible alternatives. Links, please.
I do appreciate your passion for your own methods- thank you (sort of, you $*#@-ole).
laurie mindnich Says:
February 20th, 2009 at 12:18 am
You just compel the last word on this end- my shortcoming. But, my blog, with apologies.
Barry Cunningham Says:
February 20th, 2009 at 1:10 am
No apologies needed…no worries…I love it when “professionals” are reduced to not being able to speak…it amuses me.

Like I have said before, go to our blog, link has been included above and the information regarding credit…along with literally volumes of information about sort sales including the answer to that which you seek….are available there.

Are you saying a link to some other article carries more weight than articles on our site…even though we have been the basis for some of the other articles printed out there?

I am FAR from being superior in all real estate endeavors…never ever would say that. Also I don’t try to be. However I DO try to be the absolute best in those areas which I focus and specialize. For instance I don’t know jack about 1031 exchanges…so I don’t speak or teach about that what I don’t know. Could not even offer an opinion on a 1031 exchange.

You wrote that “No money is made by real estate agents from a deed in lieu of; makes your agenda a bit…speculative”

Nothing to speculate about. I think I said in my original comment that we have strict qualifying that a Seller must go through in order for us to even take them on. I also said we only take them on AFTER all their options have been explained and they have been given a 72 hour window to decline our services.

So there’s nothing at all to specualte about..let me remove any confusion. We only take on deals that make sense for US, we only take on deals that make us money. We are in business to make a substantial profit and if we take on a case 2 things are certain.

1. The client’s foreclosure WILL be stopped and they will end up in a MUCH better situation than they were…and

2. We will make a substantial profit!

We don’t need the practice and we’re not a non-profit organization.

So with that being clearly stated, there’s no hidden agenda to be concerned with.
laurie mindnich Says:
February 20th, 2009 at 3:44 pm
Reduced to “not being able to speak”? You’re charmingly delusional (or don’t know me well).
What is most curious to me, as I asked, is exactly what can a seller anticipate in a credit score drop (if the referenced article is incorrect) in the event of a “normal” short sale scenario in which it’s not only the house that is in arrears- a one sentence response would work, but a link is preferable.
I’m home now, so will remove the incorrect “judgement” from the post- the rest is completely acceptable, and will remain.
Barry Cunningham Says:
February 20th, 2009 at 4:45 pm
Geez Laurie….real simple. Credit scores are dependent upon a number of factors. No one can doubtlessly predict how credit will drop but from those we have interviewed and from clients we have helped restore credit after the fact, here is what has been found.

I did give you a link..I said go to the Real Estate Radio USA website and you’ll find scores of short sale info there including credit info on short sales.

I guess that does not suffice for you so what are you looking for…a link from some other blog???

Here’s an idea…why don’t you go to the source as we did. Call Experian, Equifax or a credit bureau and do your own interview.

Absent that…we know from expeience that a DIL is often looked at quite the same as a foreclosure in the eyes of the credit bureaus and other creditors. ESPECIALLY if the wording on the Deed is not written specifically to protect the homeowner (which we also teach).

As hort sale, being as it is completed BEFORE the finality of a foreclosure, is merely reported as late payments up until the time of the payoff. Again, the only way to make sure that it is reported as such is in the way the mortgage is satisfied and released and the specific wording therein (which we also teach).

I thought this would be quite obvious as a short sale is merely the payoff of an existing loan albeit late…and that’s how it is reported.

You can now go back and “change” your wording of what you initially erroneously wrote, and if you insist that your ideas and “opinions” are “acceptable” to YOU…here’s only hoping that those reading this and those who may seek counsel from you understand that this arena of real estate requires much more than opinion and after the fact changing on the jargon…to fit one’s acceptability.

Distressed property owners need to be seeking out experts and those who know the nuances and labyrinth’s of the entire process rather than the obstinance of opinion that you have displayed here.

From the outset of my commentary here, I knew, and wrote that you were wrong…I also knew why you were wrong and what you were mistakingly referring to. And I gave you opportunity to find out what you were saying was in err.

But you chose to respond in anger and hold fast to an opinion that was baseless. All I can say is you are unfortunately not alone.

There are sadly so many agents out there who take finger to keyboard without really knowing fully of that which they write.

What I will commend you on however, is your willingness to continue discourse and not fold and censor as so many others do when they find they are wrong.

In that you have earned my sincere respect and admiration.
laurie mindnich Says:
February 20th, 2009 at 5:31 pm
Barry, here’s what I find interesting about your condescending remarks: if you read the post, a deed in lieu of worked out better for a seller due to a very pressing need to exit the property in a FAST fashion. When the deficiency via promissory note (as acknowledged, not a judgement- semantics, but worthy of the change) was presented with the short sale option, it was determined that for a variety of reasons, it was not in the sellers best interest. Yes, a lawyer was involved.
This is likely a case in which you would take a “pass” as well. As long as you’re picking and choosing, for reasons known to you, there are a multitude of sellers that WON’T be using your services for a short sale.
Why the vitriol over an alternative that offers a faster resolution for a seller than either a short sale that falls apart (I’m sure you can establish, and decline those)- but to acquiesce and let the foreclosure drag on for two years of the sellers life is ludicrous if an alternative is available- AS STATED!
If you interpreted the post as suggesting that all short sales are worse than dilo’s, perhaps looking to the presentation is the answer (on this end).
Bottom line: sellers need all alternatives.
Bottom line #2: your state averages 130 days of a foreclosure nightmare for sellers; NY averages 444.
Thank you for acknowledging what the article stated, as well: from a credit report standpoint (I looked into it on the Fannie Mae site, but wanted additional info) reneging is reneging. I recently read a newspaper article whereupon the lawyer and real estate agent suggested that in 90 days, the seller of a short sale would have their credit “restored”- too much info out there that isn’t correct, because we (here) haven’t SEEN the result.
We have friends who, a year and a half later, have no record of their foreclosure on their credit report. So, even facts sometimes AREN’T.

I’ve enjoyed the insight, except, but for the word “judgement”, I’m not wrong. There are less painful alternatives worth looking into for sellers than a foreclosure, or a short sale that doesn’t work with their situation.
laurie mindnich Says:
February 20th, 2009 at 5:38 pm
Oh- and the response wasn’t in anger. The dialogue is very interesting due to some very good points brought up.
I will add this, because it is an interesting element in NY: real estate agents do not write contracts. They locate houses, and it is then turned over to a lawyer. The lawyers negotiate the inspection, and any other eventuality- they are the “GO TO” in the process once the house is located or sold.
I came from a place that was completely different.
The lawyers in NY provide all legal advice, which promotes complacency on the part of the real estate agents. If nothing else, it’s a reminder to not BE complacent, and offer as much in the way of assistance as possible without overstepping the “attorney state” authority here, which is self imposed by the real estate community.
Barry Cunningham Says:
February 20th, 2009 at 7:28 pm
Laurie, it’s not just semantics…you are discussing two very different documents altogether not in the least bit related. Far from just a semantics error. And I’m not being condescending. I am being direct.

You are right, we pick and choose our deals. Don’t you as well? Or do you take on any client who calls. I stated my reasons. I am only involved to make money. Which I openly stated as well.

You make it seem like I have alterior motives which I don’t. I clearly and without reservation state that we operate in the distressed property market to make as substantial a profit while doing so. Nothing to be embarassed by in that regard. A by product of such profit is that the Selelrs we work with ALWAYS end up being in a better FINANCIAL situation. If the Selelrs you speak of are in a better place emotionally that’s one thing. And I am glad that there are agents out there that do non-profit work to assist the emotionally challenged defaulted homeowner.

We work with those who want to be in a better place financially. In that regard, a short sale or any kind of sale is most assuredly better than a DIL or losing the home.

I’m not a caretaker and if your post was about helping the emotionally wounded ease their pain then I apologize.

This may sound cold and it may indeed be harsh…but I’m a Capitalist. I don’t have eyes for anything but numbers. I don’t care about emotions. I don’t even speak or even meet 90% of our clients anymore.

I don’t have to. I don’t even have to advertise anymore. People contact us. Some drop off the keys when they sign the papers. They know that we only deal with successful liquidations of property.

We speak to the bank in the same way and they appreciate it. I am in business to earn a profit and we have been executing short sales for 7 years. Way before they became the “in” thing. We used to do shorts on properties with equity. Aaah..the good old days.

Now we create equity. You never asked, but one of the reasons I seem so cocky to you is becasue I am so darn confident.

The reason we are so confident is becasue we know with a great deal of certainty that we most likely already have a buyer for every short sale deal we take on. (we teach that as well)

We also buy many of the deals we work on (disclosed fully) for future resale as well.

You see our success rate is so high becasue we are vested in just about every deal we take on and accordingly we MAKE SURE they get approved.

Being in the real estate liquidation business is VERY profitable and it has been and will continue to be for years.

I don’t have time to deal with whiners. If I don’t see the numbers, if the Selelrs are not cooperative, we’re out the door and we’ll leave the whiners to some other agent.

Our pipeline stays full..too full…with real deals and my seemingly condescending nature is becasue I know our deals close, we make money, our clients are happy, our buyers don’t walk, and MOST important, the banks answer are calls and approve most of our deals within 14-30 days becasue they appreciate the fact that we know what we’re doing and we speak the language they speak.

I can’t apologize for that, it’s a successful business model that allows for dozens of deals to close per month when so many others call this a bad economy.

Right now, this is just about the best economy I could ever want. (we teach that as well)

I had a partner I trained. He blew me away last month. He netted over 200k last month. Worked about 30 hours all month.

Kicking butt, taking names, and cleaning the carcasses is what it’s all about right now.

One of my favorite quotes is by John D. Rockefeller who said “the best time to buy is when blood is running in the streets”.

Well right now it’s running about knee deep and we’re frollicking in it..and making some serious jack.

Do I care about what alternative is best for an emotionally unstable homeowner. No! Go see a Priest, say a couple of Hail Mary’s and get over it.

Do I care if you’re in foreclosure and you want a way to make sure you are not financially scarred? Absolutely. Trust me, the Sellers we speak to wouldn’t have it any other way.

So if I misunderstood your intention of wanting to be a sounding board for the poor old seller who could not bear to go on, then I apologize.

But please don’t hand me ANY rhetoric about a DIL being better than a short sale from a financial perspective. That’s just plain not true.

I’ll submit to the emotional anguish maybe being less, but it’s definitely not something one wants to do who has their financial best interests at heart.
laurie mindnich Says:
February 20th, 2009 at 8:32 pm
Barry, I never stated that a dilo was better than a short sale from a financial perspective; I stated that a dilo, in this case, was better for the seller from an urgency standpoint, and carries the same potential credit ramifications (score) as a short sale, in addition to the same potential for a deficiency (incorrect- admitted- judgement- should have left deficiency only).
Sometimes, life creates urgencies that preclude the financial aspect that, relative to the idea of “moving on”, makes more sense.
Frankly, losing one sleeve of a shirt vs. the whole shirt still makes the shirt useless.
Banks will find a way to mitigate the credit of HUGE #’s of sellers- an unknown at this juncture. Seeking an exact figure (as I have) is unavailable without that crystal ball.
That you are an investor offers insight that compels me to suggest that were you to have bought the place yourself, the outcome would have been much better for the seller- no argument.
Absent that aspect (and with a shortage of investors, and an uncooperative bank) the outcome for this seller would have been worse had they simply taken the foreclosure route, or struggled with a short sale that had little chance of reaching a conclusion with the timeliness that was critical to the sellers.
I told you I’d look at the short sale offering that you have- we are NOT investors (I wouldn’t touch that one in NY, without the experience needed- disclosure notwithstanding). I thank you again for a very interesting dialogue, and can certainly see the benefit for a Florida seller in a bind should they choose to work with a company able to purchase the house and get rid of the nightmare, even if the person can be a bit of a jerk.
You’re not going to provide me with an example of the financial benefit, so I will go to your site (as others should) to see for myself what EXACTLY you mean by that, in dollars and cents.
laurie mindnich Says:
February 20th, 2009 at 8:40 pm
Except, unless you also run a bad credit erasing company, care needs to be taken to suggest that a short sale doesn’t leave a seller scarred.
Barry Cunningham Says:
February 20th, 2009 at 8:47 pm
Laurie..now that we have the whole “emotional” aspect out of the way…there still exists a major problem with what you say.

You are still saying that in the DIL route that it (DIL)”carries the same potential credit ramifications (score) as a short sale, in addition to the same potential for a deficiency (incorrect- admitted- judgement- should have left deficiency only).”

This is a 100% categorically wrong statement and is not even remotely open to opinion! No reason to beat a dead horse but this is dead wrong. You are doing your readers a disservice by being obstant about this but hey..it’s your blog and your credibility. I’ll leave it at that. If anyone reading this wants clarification they know by now know how to get a hold of me.

You mention there being a “shortage of investors”. Where? And wh says that all we have as buyers are investors? It’s all in the marketing. (we teach this as well)

You stated this in your last comment…”You’re not going to provide me with an example of the financial benefit”…I apologize for overlooking this request. What is it you are looking for in terms of wanting to see an example of a financial benefit?
Barry Cunningham Says:
February 20th, 2009 at 8:53 pm
Laurie I did not see your last comment until after I responded.

Again you seriously err. In truth, the short sale does absolutely NOTHING to a person’s credit..except save it from having the dreaded “F” on it.

All of the information and damage and scarring done on one’s credit report is done becasue they defaulted on their mortgage and have not paid in months. The short sale did not damage it.

Let’s call it as it is. People don’t pay their mortgages, banks report that non-payment and continue to report said non-payment until such time that they either take the house back or the loan is paid off. And just how do you think that happens…from the proceeds of an agreed upon settlement in full…known to those now as a short sale.

So you are wrong..the settlement of the debt actually PAYS OFF THE LOAN AS SETTLEMENT IN FULL WITH FULL RELEASE AND SATISFACTION…(we teach how to have the settlement reported to credit bureaus as well..)

and you compare that to a DIL…please…your damaging your credibility here.

Laurie I like your spirit but your exposing your ignorance of the process by continuing to challenge what I am telling you.
laurie mindnich Says:
February 20th, 2009 at 9:23 pm
Barry, why is there an identical code assigned to all three? Don’t accept this without the link- I’ll dig it up for you to interpret.

YOUR SITE: first of all, locating the course requires scrolling a huge mass of (relevant) info, and feels like ads that run during Judge Judy, FIRST impression.

Once past that, the articles/links are very tempting to click on (assuming that I haven’t read them),and I’m returning to consume a few (or more).

The problem with the promotion of short sales by saying, “…you will be trained to exploit this very profitable niche of real estate with ease”:
Real estate agents sometimes have the compassion end of the business at the forefront.
You call it charity, I call it awareness of some pretty significant shocks.

The “niche” to be exploited, without clarification on your part, to most real estate agents is that the “niche” is the SELLER.
EXPLOIT and SELLER is an unacceptable connection to a real estate agent that has “fiduciary” in the verbiage of a listing.

In fact, EXPLOIT is AOK in an investment jargon, but not so much if you’re selling a program to real estate agents that are in it for the consumer.
What I’m getting in your responses, however, is that your efforts put the sellers interests first.
Which makes your program compelling- if the solutions favor the seller, fiduciary is intact.
laurie mindnich Says:
February 20th, 2009 at 9:30 pm
Barry, the REALITY is that many sellers have abandoned credit cards in order to keep the house.
If you’re able to contact anyone considering a missed house payment well before missing that first credit card payment, good for you.
That’s not the reality that I see.
And, stop trying to damage my “credibility” by damaging it without merit via the vitriolic attitude.
OK- you actually put in writing that a short sale does absolutely nothing to a persons credit.
It’s now my responsibility to establish if that’s true. If anyone beside you and me read this, good for them.
Barry Cunningham Says:
February 20th, 2009 at 11:09 pm
why is there an identical code assigned to all three??? Don’t understand the question…..

Laurie all I can say is we must be doing something right…tons of sales, tons of happy clients, thousands of agents have gone through our program, traffic out the ying-yang…makor citations from various publications…

My background is in marketing. Every article is original, every single one…our alexa ranking, and links show us to be a well read and accepted blog…and we make money which is all that matters to us.

We did not mince words..we knew exactly what we were writing and portraying. I don’t want whiny do-gooders looking to save the world taking our course. I want those who are in it to win it. Those wanting to make cold hard cash!!

Like I said earlier, I don’t take on clients that I can not make a profit from and I DISCLOSE that to each and every one and they sign a document to that effect acknowledging the same.

Why do you tak eon clients that you don’t get paid on? I donate to charity..I don’t run one…

Just so you know, what the definition of a short sale is when they respond and when you look. I clearly defined what a short sale is.

Lastly..FYI…we don’t contact anyone in advance anymore and we don’t look for early defaults. That’s idiot land. We feast on carnage. We want those deals that the banks are just about to have jammed down their throats that’s the sweet spot. Seller’s who are terminable whose agents have let them down and they have explored all options…we primarily deal with the abundant amount of late stagers…so much low-hanging fruit it’s like a short sale buffet?

Agents have already failed, banks at their wits end…like I said we QUALIFY our deals. Here’s a hint as where the Grade A meat is…

What properties do you think a bank is most likely to act upon. One that goes to auction in a week or someone who just missed their first payment?

That’s the secret sauce Laurie. People call us becasue we are the last bus. We position iurselves as their last ray of hope and with the hordes or inept agents trying to wing it at short sales, we have our pick of the litter and banks LOVE us becasue we save them from their ultimate demise as well. That’s why our calls get answered and our deals get approved in as little as 30 days.

I picked up one that was slated to be auctioned off this Wednesday. We got the call on last Friday, got the deal signed on Friday night, had a contract on Saturday after noon, got the sale stopped on Monday and got approval to close this afternoon!

A 5 day approval! This is the EASIEST time in real estate to make money. We teach this as well…there is som much meat out there you can make an absolute fortune simply working our niche.

So while agents are out there running around just winging it, trying to help Sally and Joe homeowner who just missed their first payment and are scared sick and want to DIl’s for no profit…we don’t even stop at that exit on the highway…we stop at the flashing lights and seek to save those on the side of the road who most need help and are closest to death.

They love us, the banks love us and we make a killing…EXPLOTING the distressed property niche. You may want to give it a try…it’s absolutely unreal once you get the hang of things.

By the way, if one took fiduciary for real..they would not be promoting DIL’s.
laurie mindnich Says:
February 21st, 2009 at 10:42 am
Thanks for the insight, Barry- in the case of the transaction that was the crux of the post, being “closest to death” was not an option for these people- and remember, to get that close to an actual foreclosure has a realistic time frame of two years in New York- that was not on the table for these people, and it sounds as though you don’t swoop in until they’ve been through the ringer for a year and a half (or longer).
You’re certainly offering a misleading statement from a perception standpoint when you offer to consumers that a short sale doesn’t damage credit- SEMANTICS. So it’s the events leading UP to the short sale resolution, vs the actual short sale itself- except, their credit is destroyed by the time you ride in on your horse and save the day.

Your program is obviously a money maker- but has little to do with the reality that the best outcome for a select few COULD be a deed in lieu of, or NOT- but worth exploring either way.
We’ve come full circle, so I’ll sign off.
Barry Cunningham Says:
February 21st, 2009 at 11:11 am
Laurie, I wish you well and prosperity although that does not seem to be the ends to which you strive for.

I don’t mislead anybody. As you have seen , I don’t pull punches. You do not understand the process and that’s clear.

Not writing to convince you, just hoping to save readers from agents who write posts about short sales without the background to support it…even if it means visiting one blog at a time.

Our traffic and business seems to support this struggle.

The reason that a short sale does not damage credit, is becasue a short sale is not a debt oriented instrument. It’s not a loan, it’s not a mortgage, and it’s not a court ordered decision. It’s a payoff. It’s the END of a process.

Much as this comment is.
laurie mindnich Says:
March 11th, 2009 at 8:57 pm
Amen.
laurie mindnich Says:
April 27th, 2009 at 9:43 pm
Shocking, this revelation:
http://nctimes.com/articles/2009/04/25/business/z096c1b1a5c67baac8825759a00757a6f.txt?ref=patrick.net
Mike Benn Says:
December 24th, 2009 at 8:13 am
Hi, maybe this posting may be off topic but anyhow, I’ve been browsing about your web site and it seems genuinely neat. It is obvious that you know the topic and you seem fervent about it. I
Peter Wischmeier Says:
April 21st, 2010 at 5:18 am
Do you accept guest content? We would love to submit a couple posts here.
laurie mindnich Says:
April 21st, 2010 at 6:57 am
Hi, Mike- thanks, and best with your blog- let me know if you’d like any info on those that helped us get this up- happy to point you in their direction!
laurie mindnich Says:
April 21st, 2010 at 6:59 am
Peter, give me a call- happy to have alternative viewpoints here.
laurie mindnich Says:
April 21st, 2010 at 7:10 am
Interesting reviewing this post- I was really happy to have Barry’s input, despite a bit of vitriol. While it was certainly not true that a deed in lieu of impacted a consumers credit in the same manner that a short sale did (which was not suggested unless BOTH scenarios included the typical ruined overall pmnt history), new changes have leveled the time it takes to repurchase a home (per Fannie Mae), making the short sale and deed in lieu of (assuming no trashed credit in other areas) the SAME- while also indictating (per fannie mae) that until now, the short sale ramifications have been gray. What I could NOT find, and seek, is the point drop on a credit score- I’d feel better knowing that before any discussions (a lawyer is the final word for ALL consumers). If anyone knows, per the new fannie mae guidelines, I ‘d love to know.

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