Another short steal

[bearishgurl]

[quote=SD Realtor]The sold price is contract price. That is what you enter on the MLS. You use other fields to identify concessions.

Please don’t cry me a river about affecting comps. I made many a posting way back when I complained that comps are horrible using the MLS. Not because of 10 or 20k missed due to additional cash needed to close but because of loan mods of large sums of money that are not recorded, and not identified in any manner. So you can be buying in a neighborhood where MLS comps say one thing, but 7 homes in near proximity have loan mods done that are not recorded or identified in any manner.[/quote]

Thank you, SDR. I understand what you are saying about loan mods. But my understanding is that (unrecorded) successful loan mods just modified the TERMS of the mortgage only. Have you known any borrower who received a permanent load mod in which the lender forgave principal (took a cramdown)? Should we CARE if these “mods” are unrecorded?

My question was just to verify what I have long suspected was a “usual and customary” practice on short sales today. That is, that a homeowner can remove equity (in the form of a 2nd TD or HELOC) and later “cry a river” to their 1st TD holder that they need a “short sale” and ask them to work out a deal to completely or partially “stiff” their 2nd TD/HELOC holder. Because they are either behind in payments to one or both lenders, the 2nd TD/HELOC holder ends up caving in order to get “something” so they won’t be wiped out on the steps. For this “something,” the 2nd TD/HELOC holder “forgives” the cash the homeowner (now “DS”) took out in years past and “releases” him /her. This “DS” may or may not have spent this cash. They could have put it away for a rainy day. No one really knows but it disappeared into thin air.

Meanwhile, the $7K, $12K, $20K or $30K in cash that a buyer “kicks in” to satisfy the “DS’s” 2nd TD/HELOC holder’s claim is NOT part of the purchase price and therefore in not included in the “sold comp” amount or as a starting point for the assessed value of said property. All the properties around that property (of the same model, block and/or tract) (even those of owners who purchased REO’s SINCE the bubble) have possibly just lost $7K, $12K, $20K or $30K in value. This is due to a new nearby “short-sale sold comp” which had an undisclosed-to-the-public portion of the sales proceeds “kicked back” to the previous owner’s 2nd TD/HELOC holder so these DS’s could be “released” and “come out clean.”

I agree, SDR, that “short sales” (involving more than one TD holder) really skew the SOLD comps on the MLS. Unfortunately, the sold comps on the MLS are approx 85% what appraisers RELY on when valuating a property.

It appears that ALL homeowners are paying for the successful consummation of “short sales,” some obviously far more affected by them than others.

Do I have this analogy correct, SDR. Or am I just “jumping to conclusions” here?

btw, I’m not taking this issue personally. On my block, the average current “encumbrance” is about $70K, lol, so there is no danger here of multiple “short sales.”

Oh, and I don’t sit on the computer all day “blogging.” It may just seem to you like I do because I can easily type a long post. I’m a quick study, the sh!t is in my head and I type fast. Currently, I’m reviewing and collaborating with counsel on all the docs I obtained on Holmes yesterday after our court appearance. And I have to be back in court in the early a.m. Contrary to what you may think, I actually DO have a “day job” as well as a “life.” ;=}

Another question, SDR. Do appraisers have access to any computerized information when valuating a nearby recent “short-sale” sold comp which would disclose the final disbursements that were actually reported on a HUD-1?

[jpinpb]

BG – I made an offer on a short sale. A friend of my DH who is a realtor put in the offer to the LA. It was LP offer that was below 2002 price on a condo. They accepted it. We were in escrow for 3 months, once approved, then things started moving quickly w/appraisal and inspection. Upon inspection about 4 months into it, we decided values have come down some more and it would be costly to fix everything. We withdrew our offer. We submitted another offer 20k lower. They did not respond and we were ok w/that. It ended up selling a 4 months later for 10k less than our initial LP offer to a sister office.

All this to say, short sales happen. It just takes time. Maybe there are some that seem like pocket listings. I’m not denying that. But I’ve come across enough in my monitoring of sales to know that not all of them are dual representation. I’ve seen both. It does take patience, that’s for sure.

[jpinpb]

BG – I made an offer on a short sale. A friend of my DH who is a realtor put in the offer to the LA. It was LP offer that was below 2002 price on a condo. They accepted it. We were in escrow for 3 months, once approved, then things started moving quickly w/appraisal and inspection. Upon inspection about 4 months into it, we decided values have come down some more and it would be costly to fix everything. We withdrew our offer. We submitted another offer 20k lower. They did not respond and we were ok w/that. It ended up selling a 4 months later for 10k less than our initial LP offer to a sister office.

All this to say, short sales happen. It just takes time. Maybe there are some that seem like pocket listings. I’m not denying that. But I’ve come across enough in my monitoring of sales to know that not all of them are dual representation. I’ve seen both. It does take patience, that’s for sure.

[jpinpb]

BG – I made an offer on a short sale. A friend of my DH who is a realtor put in the offer to the LA. It was LP offer that was below 2002 price on a condo. They accepted it. We were in escrow for 3 months, once approved, then things started moving quickly w/appraisal and inspection. Upon inspection about 4 months into it, we decided values have come down some more and it would be costly to fix everything. We withdrew our offer. We submitted another offer 20k lower. They did not respond and we were ok w/that. It ended up selling a 4 months later for 10k less than our initial LP offer to a sister office.

All this to say, short sales happen. It just takes time. Maybe there are some that seem like pocket listings. I’m not denying that. But I’ve come across enough in my monitoring of sales to know that not all of them are dual representation. I’ve seen both. It does take patience, that’s for sure.

[jpinpb]

BG – I made an offer on a short sale. A friend of my DH who is a realtor put in the offer to the LA. It was LP offer that was below 2002 price on a condo. They accepted it. We were in escrow for 3 months, once approved, then things started moving quickly w/appraisal and inspection. Upon inspection about 4 months into it, we decided values have come down some more and it would be costly to fix everything. We withdrew our offer. We submitted another offer 20k lower. They did not respond and we were ok w/that. It ended up selling a 4 months later for 10k less than our initial LP offer to a sister office.

All this to say, short sales happen. It just takes time. Maybe there are some that seem like pocket listings. I’m not denying that. But I’ve come across enough in my monitoring of sales to know that not all of them are dual representation. I’ve seen both. It does take patience, that’s for sure.

[jpinpb]

BG – I made an offer on a short sale. A friend of my DH who is a realtor put in the offer to the LA. It was LP offer that was below 2002 price on a condo. They accepted it. We were in escrow for 3 months, once approved, then things started moving quickly w/appraisal and inspection. Upon inspection about 4 months into it, we decided values have come down some more and it would be costly to fix everything. We withdrew our offer. We submitted another offer 20k lower. They did not respond and we were ok w/that. It ended up selling a 4 months later for 10k less than our initial LP offer to a sister office.

All this to say, short sales happen. It just takes time. Maybe there are some that seem like pocket listings. I’m not denying that. But I’ve come across enough in my monitoring of sales to know that not all of them are dual representation. I’ve seen both. It does take patience, that’s for sure.

[bearishgurl]

[quote=no_such_reality] . . . BTW, when I searched the other week of the very few homes that roughly matched our criteria, we’d already looked at and crossed off 1/4th of them before we bought. It’s truly sad as most of the ones we crossed off were equity sellers that are now locked onto a price they ‘got’ but fell out of equity.[/quote]

nsr, are you saying here that you previously made offers to sellers with equity? Those offers you made were not accepted in favor of buyers who were offering more but not as strong of a buyer as you, so fell out of escrow? Were these sellers then later forced to sell for less in a falling market or did they end up removing their properties from the market when their escrow fell out?

I don’t understand what you meant by the bolded portion.

[bearishgurl]

[quote=no_such_reality] . . . BTW, when I searched the other week of the very few homes that roughly matched our criteria, we’d already looked at and crossed off 1/4th of them before we bought. It’s truly sad as most of the ones we crossed off were equity sellers that are now locked onto a price they ‘got’ but fell out of equity.[/quote]

nsr, are you saying here that you previously made offers to sellers with equity? Those offers you made were not accepted in favor of buyers who were offering more but not as strong of a buyer as you, so fell out of escrow? Were these sellers then later forced to sell for less in a falling market or did they end up removing their properties from the market when their escrow fell out?

I don’t understand what you meant by the bolded portion.

[bearishgurl]

[quote=no_such_reality] . . . BTW, when I searched the other week of the very few homes that roughly matched our criteria, we’d already looked at and crossed off 1/4th of them before we bought. It’s truly sad as most of the ones we crossed off were equity sellers that are now locked onto a price they ‘got’ but fell out of equity.[/quote]

nsr, are you saying here that you previously made offers to sellers with equity? Those offers you made were not accepted in favor of buyers who were offering more but not as strong of a buyer as you, so fell out of escrow? Were these sellers then later forced to sell for less in a falling market or did they end up removing their properties from the market when their escrow fell out?

I don’t understand what you meant by the bolded portion.

[bearishgurl]

[quote=no_such_reality] . . . BTW, when I searched the other week of the very few homes that roughly matched our criteria, we’d already looked at and crossed off 1/4th of them before we bought. It’s truly sad as most of the ones we crossed off were equity sellers that are now locked onto a price they ‘got’ but fell out of equity.[/quote]

nsr, are you saying here that you previously made offers to sellers with equity? Those offers you made were not accepted in favor of buyers who were offering more but not as strong of a buyer as you, so fell out of escrow? Were these sellers then later forced to sell for less in a falling market or did they end up removing their properties from the market when their escrow fell out?

I don’t understand what you meant by the bolded portion.

[bearishgurl]

[quote=no_such_reality] . . . BTW, when I searched the other week of the very few homes that roughly matched our criteria, we’d already looked at and crossed off 1/4th of them before we bought. It’s truly sad as most of the ones we crossed off were equity sellers that are now locked onto a price they ‘got’ but fell out of equity.[/quote]

nsr, are you saying here that you previously made offers to sellers with equity? Those offers you made were not accepted in favor of buyers who were offering more but not as strong of a buyer as you, so fell out of escrow? Were these sellers then later forced to sell for less in a falling market or did they end up removing their properties from the market when their escrow fell out?

I don’t understand what you meant by the bolded portion.

[no_such_reality]

[quote=bearishgurl]
It appears that ALL homeowners are paying for the successful consummation of “short sales,” some obviously far more affected by them than others.
[/quote]

Those homeowners would be far more affected by not having short sales. The home would be foreclosed. The stripping and damage far worse, IMHO. The banks hammered and loans even tougher to get.

But, as you suggest, the MLS would have an accurate if even lower sales price.

Which frankly, I think the banks should eat it, kick the DSes to the curb and let everybody get on with it. However, certain people in positions of power think that over-all, kicking 1/4th of owners with mortgages to the curb is going to be somewhat disrupting to society.

1/4th nationwide are basically upside down with negative equity. Kick it hard down and it gets even worse. Why would they keep paying?

[no_such_reality]

[quote=bearishgurl]
It appears that ALL homeowners are paying for the successful consummation of “short sales,” some obviously far more affected by them than others.
[/quote]

Those homeowners would be far more affected by not having short sales. The home would be foreclosed. The stripping and damage far worse, IMHO. The banks hammered and loans even tougher to get.

But, as you suggest, the MLS would have an accurate if even lower sales price.

Which frankly, I think the banks should eat it, kick the DSes to the curb and let everybody get on with it. However, certain people in positions of power think that over-all, kicking 1/4th of owners with mortgages to the curb is going to be somewhat disrupting to society.

1/4th nationwide are basically upside down with negative equity. Kick it hard down and it gets even worse. Why would they keep paying?

[no_such_reality]

[quote=bearishgurl]
It appears that ALL homeowners are paying for the successful consummation of “short sales,” some obviously far more affected by them than others.
[/quote]

Those homeowners would be far more affected by not having short sales. The home would be foreclosed. The stripping and damage far worse, IMHO. The banks hammered and loans even tougher to get.

But, as you suggest, the MLS would have an accurate if even lower sales price.

Which frankly, I think the banks should eat it, kick the DSes to the curb and let everybody get on with it. However, certain people in positions of power think that over-all, kicking 1/4th of owners with mortgages to the curb is going to be somewhat disrupting to society.

1/4th nationwide are basically upside down with negative equity. Kick it hard down and it gets even worse. Why would they keep paying?

[no_such_reality]

[quote=bearishgurl]
It appears that ALL homeowners are paying for the successful consummation of “short sales,” some obviously far more affected by them than others.
[/quote]

Those homeowners would be far more affected by not having short sales. The home would be foreclosed. The stripping and damage far worse, IMHO. The banks hammered and loans even tougher to get.

But, as you suggest, the MLS would have an accurate if even lower sales price.

Which frankly, I think the banks should eat it, kick the DSes to the curb and let everybody get on with it. However, certain people in positions of power think that over-all, kicking 1/4th of owners with mortgages to the curb is going to be somewhat disrupting to society.

1/4th nationwide are basically upside down with negative equity. Kick it hard down and it gets even worse. Why would they keep paying?

[Author]

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