Short Sale Advice Needed

[t36tran]

A little background on my situation. Been saving for a down payment since 2003. Back in Nov. of 2012, I put in an offer on a house. The house is a 4 bed 2 bath with a 2 car attached garage. What makes it unique is a finished 4 car detached garage in the back. Being a car guy, this feature is very desirable to me. It was a short sale and there was quite a bit of interest. In order to get the inside track, I decided to hire the listing agent to be my agent. Had to up the amount twice to get my offer accepted. Final offer came to 456K. Fast forward to the present. I get an email from Blue Anchor Advisors. They are a short sale specialist company working for my agent to facilitate the short sale process. The rep informs me that if I am willing to bring 45K to the table at closing, I can get the house for 371K. The 45K would show up as a charge on the closing statement and go to Blue Anchor, who would use it to satisfy all secondary liens on the house. The rep stated that in 2013, the short sale laws have been changed and secondary lien holders can no longer go after the seller for a deficiency, so in order to get the deal done, we need to go this route. I really want this house, but something doesn’t seem quite right to me. I do not trust my agent or the rep because they have a vested interest in getting the deal done. Has anyone dealt with a similar situation? Any and all advice is greatly appreciated.

[bearishgurl]

We would need the address or at the very least, a zip code to help you properly. You didn’t state if you yourself verified the amount actually owing on any secondary liens or if you know the status of default or pending trustees sale on the first TD or any secondary liens.

Unfortunately, in your case, without that info, it is impossible to advise you properly.

And no, I personally am not looking for a “short sale” to get involved in.

If you would rather pm me with this info, that is okay, as well, but I may not be able to get back to you until the weekend.

I don’t know how the “CA short sale laws” were changed in 2013, IF they actually were. Perhaps another Pigg can answer that question.

I can see how you, as a buyer, would be attracted to a second, detached 2-car garage and why this is an “exceptional” property because of that (rare) feature.

[t36tran]

PM sent.

[SD Realtor]

SB931 and SB458 are most likely the legislation you are referring to however SB458 went into effect in 2011. I cannot comment on your situation without knowing more information. Interesting your agent is telling you about this now when they clearly knew this would be the case all along.

[t36tran]

I signed an addendum agreeing to the new 371K price and adding the 45K provision to my offer. The lender is suppose to issue official acceptance documentation in the next few weeks. Will be very interested to read exactly what it will say. This was the first offer I have ever submitted, so I am trying to be as cautious as possible.

[t36tran]

Update on the situation. There is a high probability the agents involved in this deal are trying to commit fraud. I have written my agent withdrawing my offer and cancelling his representation. Lucky I went with a mortgage broker other than the one they were really pushing. He was able to, after doing some research, paint a pretty good picture of how the scheme was suppose to work. I knew something didn’t seem quite right. Really sucks.

[SK in CV]

Sorry to hear this. I was hoping someone with short sale experience would chime in on this. It seemed kind of strange with the terms changing at the last minute, but having never been through it, anything is possible. Glad you ended up with someone experienced that could help spot the problems.

I’m curious if this is common. Anyone else ever heard of something like this happening?

[SD Realtor]

There are several different forms of how this could have transpired. One of the more common ones is a middle man. That is, there already may have been an accepted offer on the home by an investor. Say that offer is already done and accepted for 371k. Now another buyer comes along and he purchases the home for say 450k and he thinks he is buying it direct from the short sale lender. The escrows would close at the same time. If it is done properly, the investor ownership of the home could be shielded in say some company name. It is doubtful that was what happened here. As hard money lenders we ran into an investor who was going to use our hard money to do this. He was working with a listing agent who had the short sale listing. The listing agent also had a buyer so they had it set up well.

This is a good example of a pitfall of working with the listing agent directly.

The original poster may want to file a complaint with the dre or at least contact the broker.

[t36tran]

Couldn’t sleep. Quite angry today. I am going to post all the details that I am aware of to try and get the word out about these guys. Address of the listing is 4107 Tim St, Bonita Ca. Listing agent is Don Pelletier of Keller Williams. Short sale negotiator is Jim Sullivan of Blue Anchor Advisors. When you search for Blue Anchor, it directs you to Nationwide Short Sale Solutions based in Florida. Their website does not list an address or DRE license number. Searching for a DRE license number in Ca. for Jim, Blue Anchor, or Nationwide came up empty. Jim is not authorized to perform any kind of real estate transaction in Ca. Even though Don Pelletier is suppose to be my agent, in six months of “representation”, I have spoken to him on the phone twice and had some email interaction. Never met in person. I’ve also had some dealings with his subordinate, David Weintraub, also only through email and phone. I believe they did this intentionally so they could claim plausible deniability if needed. Now for the scheme. There is one outstanding mortgage at 637K on the house. Taxes have not been paid in 2012 and 2013 totaling a little over 3K. In conversations with Jim, he had mentioned that they had an “investor” that had been in negotiations with the bank. The “investor” had decided to drop out, but their negotiated price at $371K was still good. This was strange to me because I thought they had submitted my offer for 456K back in Nov. 2012. Why would the bank accept an offer for 371K over one for 456K? Turns out my offer was most likely never submitted. Of course when I heard that I could get the house for 371K, I became somewhat blinded and decide to mostly ignore the little voice saying this sounds a little too good. Of course the caveat was the payment of 45K to Blue Anchor to help settle the “secondary liens”. When I asked Jim what specific liens were on the property, he became evasive. Now, I’m ignorant of real estate law, but it seemed weird to me that I would be paying 45K to a 3rd party with no ownership interest and trusting them to pay off all the secondary liens. Searching records, only the 3K in property back taxes has come up as a secondary lien. Again, I wanted to believe the deal was still legit, so I reasoned as long as things are done through a title/escrow company, I should be covered. But when Don filled out the original sales contract, he also specified the title and escrow companies to use. I do not know how extensive this scheme is, so I’ll leave it at that. Hate that I let the prospect of a good deal somewhat cloud my judgement. The old saying really is true. If it’s too good…
There is one more catch. When I submitted the original offer, Don had me open up escrow and deposit 5K. Hope there are no issues with getting my money back. Thanks to everyone for providing input and assistance. Yes, I do plan on filing a complaint with the DRE.

[bearishgurl]

[quote=t36tran]Couldn’t sleep. Quite angry today. I am going to post all the details that I am aware of to try and get the word out about these guys. Address of the listing is 4107 Tim St, Bonita Ca. Listing agent is Don Pelletier of Keller Williams. Short sale negotiator is Jim Sullivan of Blue Anchor Advisors. When you search for Blue Anchor, it directs you to Nationwide Short Sale Solutions based in Florida. Their website does not list an address or DRE license number. Searching for a DRE license number in Ca. for Jim, Blue Anchor, or Nationwide came up empty. Jim is not authorized to perform any kind of real estate transaction in Ca. Even though Don Pelletier is suppose to be my agent, in six months of “representation”, I have spoken to him on the phone twice and had some email interaction. Never met in person. I’ve also had some dealings with his subordinate, David Weintraub, also only through email and phone. I believe they did this intentionally so they could claim plausible deniability if needed. Now for the scheme. There is one outstanding mortgage at 637K on the house. Taxes have not been paid in 2012 and 2013 totaling a little over 3K. In conversations with Jim, he had mentioned that they had an “investor” that had been in negotiations with the bank. The “investor” had decided to drop out, but their negotiated price at $371K was still good. This was strange to me because I thought they had submitted my offer for 456K back in Nov. 2012. Why would the bank accept an offer for 371K over one for 456K? Turns out my offer was most likely never submitted. Of course when I heard that I could get the house for 371K, I became somewhat blinded and decide to mostly ignore the little voice saying this sounds a little too good. Of course the caveat was the payment of 45K to Blue Anchor to help settle the “secondary liens”. When I asked Jim what specific liens were on the property, he became evasive. Now, I’m ignorant of real estate law, but it seemed weird to me that I would be paying 45K to a 3rd party with no ownership interest and trusting them to pay off all the secondary liens. Searching records, only the 3K in property back taxes has come up as a secondary lien. Again, I wanted to believe the deal was still legit, so I reasoned as long as things are done through a title/escrow company, I should be covered. But when Don filled out the original sales contract, he also specified the title and escrow companies to use. I do not know how extensive this scheme is, so I’ll leave it at that. Hate that I let the prospect of a good deal somewhat cloud my judgement. The old saying really is true. If it’s too good…
There is one more catch. When I submitted the original offer, Don had me open up escrow and deposit 5K. Hope there are no issues with getting my money back. Thanks to everyone for providing input and assistance. Yes, I do plan on filing a complaint with the DRE.[/quote]

t36tran, you never mentioned to me that the LA was Don Pelletier and I never checked. I just saw that it was an “out of area” broker (Carmel Valley – not “out of area” but far enough away to be “questionable” to me). A red flag because there are many brokers who grew up within a one mile radius of that property. IIRC, Don is a south county local. He never struck me as one to pull a fast one. Had you told me who the LA was, I could have possibly assisted you better.

I tried to assist this poster extensively without document examination as I have an intimate lay of the land, having lived and worked in the immediate area for many years. Based on his preferences, this property would have been outstanding for him if acquired under $450K if he got a full inspection/enginnering rpt and received it vacant at COE (poss problematic). The document examination was to be performed tomorrow morning. I am convinced there are actually TWO outstanding loans on this property.

t36tran, for a variety of reasons, even though the transactions “smells fishy,” I am not yet convinced that you should have withdrawn your offer yet.

Perhaps a Pigg with REALIST can help as I do not have a current subscription.

I’m sorry to hear about your withdrawal, tran.

Seller is a longtime San Diegan or possibly a native (35+ years).

***********************************************

edit: Okay, back from my early morn HS trek. Drove by subject property which is located 9 houses from one of the most well-known exclusive enclaves of south county (Wheeler Ridge). Six houses to the northwest is a newer street with six newer spec homes with 270 deg pano views, all in excess of 5000 sf.

There is no “For sale” sign in the yard but there is a big sign to the left of the front door (tenant operates day care biz).

The flood control channel (county easement) is shared with two neighbors behind (uphill, on Choc Cliff) as I suspected.

The driveway visible to the street appears to be top-quality and poured within the last few years. There are no cracks visible on the approx 17-20 yds visible from the street. The RV gate is 18-20′ wide and also of very good quality. As I stated before, seller has poured at least 70 yds of concrete in recent years, IMO. I also stated the newer rear garage/workshop would cost ~$65K to build today if you didn’t build it yourself.

I did not find any active businesses registered in CA with the name, “Blue Anchor” or “Blue Anchor Advisors.”

http://kepler.sos.ca.gov/

Not sure a “negotiator” between the 1st and 2nd TD HAS to be licensed to do biz in CA. (Any SS agents know?) The most current first and second TD were taken out on this property in tandem in January 2007 with the notorious (likely subprime) Countrywide/MERS. B of A undoubtedly acquired them in 2008 but filed an assignment of one of the loans (the 1st TD?) to BNY Mellon in January 2013 (sold off at discount and/or likely in anticipation of new lender filing an NOD, IMO).

I find it odd that buyer here was recently asked to deposit $45K “out of escrow” in order to make this deal go through IF the deposit was to be truly “out of escrow.” AFAIK, the 2nd TD is still outstanding. No NODs have been filed on the property, but of course, that doesn’t mean seller isn’t behind in payments on the 1st TD note and/or the 2nd TD as well.

[bearishgurl]

I don’t see Pelletier as intentionally or blatantly violating the law. A longtime San Diegan (or poss native), he has been licensed with DRE since 1984:

Don has the following professional Designations, and areas of expertise, and as a result, can better assist you.

Equator Platinum Certified Agent-Don is certified in both REO and Short Sales on the EQUATOR platform.

Certified Luxury Home Marketing Specialist (CLHMS): Don is one of only a few agents in San Diego that has received the prestigious “CLHMS” Designation as an expert in successfully marketing multi-million dollar luxury homes.

Certified Default Property Expert (CDPE): This designation is particularly helpful to those who are struggling with their home mortgage(s) and need to understand their options. We are often able to help save families from foreclosure.

Pre-Foreclosure Specialist (PSC): This certification focuses heavily on the recent HAMP and HAFA Federal programs to help families avoid foreclosure.

REO Default Certified Professional (RDC-Pro): This Designation provides specialized, advanced training in foreclosures-and specifically how to best service asset managers on a day to day basis.

Certified Resident Specialist (CRS): Requires extensive training in seller representation (less than 5% of REALTORS® have this Designation).

Accredited Buyers Representative (ABR): Specialized training in Buyer Agency and representation.

E-Professional (e-Pro): This designation is issued by the National Association of Realtors. It is specialized training in the use of the internet and email to efficiently streamline the transaction process for our clients.

8. RE/MAX Hall of Fame Award, the Chairman’s Award (highest RE/MAX award for individual agent Productivity & volume) and the Lifetime Achievement Award. These awards are not what’s important. What IS important is that they are based on productivity – which means we are consistently and effectively achieving results on behalf of our Clients.

9. For the past three years in a row, Don has been the recipient of the “Best in Client Satisfaction” award. This award is based on an independent survey of approximately 23,000 San Diego home Sellers and Buyers, from the previous year. They are asked numerous questions about their real estate transaction experience, and then they are asked to rate their agent.

10. Don receives 88% repeat and referral business, so instead of having to constantly “prospect for business”, Don can spend his time focused on his Clients.

AFFILIATIONS AND RANKINGS

EQUATOR PLATINUM CERTIFIED,*REO.com*RES.NET*National REO Brokers Association (NREOB),* Certified Distressed Property Expert (CDPE) *REO Default Certification (RDC-Pro) )*Certified Luxury Home Marketing Specialist(CLHMS), Pre-Foreclosure Specialist Designation (PSC)*Asset USA Short Sale Certified*Certified Residential Specialist (CRS)*Accredited Buyer Representative (ABR)* Member of RisMedia’s Top 5 in Real Estate.

AWARDS AND ACHIEVEMENTS

• Appointed Chairperson of the San Diego Association of Realtor’s ‘Professional Standards Committee (Ethics and Arbitration Committee)

• Sixteen Years as a member of the SDAR Professional Standards committee

• Century 21-Hall of Fame Award – 1991

• RE/MAX Hall of Fame Award – 1996

• Lifetime Achievement Award – 2003 – this is RE/MAX Internationals most prestigious award.

• RE/MAX Agent of the Year – 2006

• Member of RIS Media’s Top 5 in Real Estate

• 2008-2010 Five Star: “Best in Client Satisfaction” Award (San Diego County)

http://activerain.com/pelletierhomes

In my memory, Don has had many listings in south county in past decades.

tran, are you CERTAIN that the $45K you were recently asked to deposit was to be paid “outside of escrow” (i.e. not shown on the HUD 1)??

[SK in CV]

BG, It’s unclear to me whether that extra cash was outside of escrow. Maybe our poster can clarify. At least once, he indicated, though vaguely, that it was through escrow.

I’d like to know if these intermediary “short sale specialists” are common. If they’re involved in negotiating loan transfers or payoffs, they’re required to be either licensed RE brokers, or licensed lenders through the DOC. I suspect lawyers are allowed to do it too.

If these intermediaries are common, it’s just one more indication of how totally inept lenders are. They’re doing thousands of short sales. They should have people in house to do this sort of thing, rather than pay a 3rd party extra cash. This may be a perfectly normal short sale transaction, but based on info provided, it smells very fishy.

[bearishgurl]

[quote=SK in CV]BG, It’s unclear to me whether that extra cash was outside of escrow. Maybe our poster can clarify. At least once, he indicated, though vaguely, that it was through escrow.

I’d like to know if these intermediary “short sale specialists” are common. If they’re involved in negotiating loan transfers or payoffs, they’re required to be either licensed RE brokers, or licensed lenders through the DOC. I suspect lawyers are allowed to do it too.

If these intermediaries are common, it’s just one more indication of how totally inept lenders are. They’re doing thousands of short sales. They should have people in house to do this sort of thing, rather than pay a 3rd party extra cash. This may be a perfectly normal short sale transaction, but based on info provided, it smells very fishy.[/quote]

In PM (I hope the OP doesn’t mind), he first indicated he was asked to pay “…45K to the short sale specialist outside of escrow at closing.” I didn’t advise him on that one way or the other because I didn’t actually know how much was currently owing on the two loans and neither did he.

I DID explain to him that the LA (didn’t know his/her identity) was acting as a “dual agent” in this case but signed his/her first contract with the SELLER. Therefore, their fiduciary duty was primarily to the seller.

If I HAD to have a dual agent in order to acquire this property, I feel Don Pelletier would have been much preferable to use than the majority of assclowns out there. I know where I have seen Don now. He works with settlement judges outside of local Family Law depts as an “expert consultant.”

But however “legal” dual agency is, I don’t fundamentally believe in it and think it should be banned in CA. At the very least, the practice invites distrust in buyers because they don’t feel they are “represented properly” even if they are.

I DO think tran’s offer was submitted to the lender because he states he deposited his earnest money check with Don. I can’t see Don collecting the check for his brokerage trust fund without submitting tran’s offer.

$416K is MORE than a fair price for this property, in the absence of soil subsidence problems or a structural problem and IF the OP was delivered the property vacant and free of vehicles.

I gave the OP a recco to a good soils engineer and advised him repeatedly to have a contingency in his counter offer to deliver the property vacant to him a COE and schedule his final walk-thru three days before COE so he could personally check as to its vacancy and make sure all of seller’s vehicles were gone.

Seller was storing his vehicles in the rear garage/RV pad he built. The OP stated he now lived in Rosarito, BC.

It is very possible that there are cash backup offers for more than $500K and the property will appraise (if all is structually sound). The OP will NOT find another deal like this in SD County for this price range. It is a one-time deal as it had an exceptional *newly-built* garage/workshop on the premises and was located atop one of the best streets in Bonita.

As to Blue Anchor, I can’t comment. The 1st TD holder appears to be based in NY and the Countrywide/B of A (subprime?) second has been likely long ago sold off to an investor of an unk location. It very well could have been BNY Mellon’s decision to use Blue Anchor or maybe that is who Don uses to negotiate with out-of-state lenders.

The LA was still marketing the property on the MLS to obtain backup offers in case tran backed out, as is customary with SS’s.

[bearishgurl]

[quote=SK in CV] . . . I’d like to know if these intermediary “short sale specialists” are common. If they’re involved in negotiating loan transfers or payoffs, they’re required to be either licensed RE brokers, or licensed lenders through the DOC. I suspect lawyers are allowed to do it too…[/quote]

They are “licensed” . . . in Florida:

http://www.corporationwiki.com/Florida/Plantation/blue-anchor-advisors-inc/25809016.aspx

I’m not sure if that matters.

http://en.wikipedia.org/wiki/The_Bank_of_New_York_Mellon

BNY Mellon is based in NY and G@d only knows where the other “investor” is located.

edit: … and YES, I agree that the Big Banks are horribly “inept.”

[SD Realtor]

To the op this dors sound like it was a middleman effort.

[Author]

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