Homeownership during divorce
Endorsed by NAR for Foreclosures and Short Sales
Short Sale & Foreclosure Resource
Struggling to make your mortgage payment?
Today we sharpened our short sale and foreclosure sword – YES, it’s a battle! Armed with a new designation from the National Association of Realtors (NAR); called Short Sale & Foreclosure Resource (SFR), now we’ve got the most recent tools to fight a foreclosure and win.
There’s plenty of talk about a potential foreclosure wave once all the COVID forbearance terms have come to an end.. so its important to stay fresh on bank policies, foreclosure timelines, and tools to use to save your property from foreclosure, right?!
Yes, we made it through the recession of 2007-2011 closing plenty of bank owned properties and short sales, but that was 10+ years ago. Platforms and policies have changed.
REO stands for ‘Real Estate Owned‘, and is a common term for a property that has been foreclosed. REO’s are property the bank comes to own because the borrower defaulted or could not financially afford to remain in the property. As a foreclosure resource, we can help you STOP your property from becoming a foreclosure, and we can also assist banks in selling off their REO inventory.
Who’s involved in distressed property situations
Servicer – who you make your mortgage payment to, they may or may not own your loan.
Investor – beneficiary entity who owns the promissory note & mortgage or deed of trust on a property.
Borrower – party in distress; typically struggling to make payments or need to sell when equity is negative.
Buyer – potential purchaser of the home
GSE – Government Sponsored Enterprises (Fannie Mae, Freddie Mac, and others in the secondary money market)
Important Foreclosure Terms to Know
Deed in Lieu – Involves swapping your keys in exchange for relief on the mortgage. Sometimes this will lead you to a 1099 for the money returned. Never do a deed in lieu before you understand the tax ramifications.
Loan Modification – Loan Mods are a permanent change in one or more of the terms of your loan. These must be approved by the investor, servicer, and you. It typically reorganizes the mortgage into something more affordable so you are able to stay in your home.
Notice of Default (NOD) – Official notice of default, and begins your foreclosure timeline. All borrowers have at least 90 days to bring a loan current after a NOD is filed.
Notice of Trustee Sale (NOS) – Official notice of when the foreclosure or auction will take place.
Foreclosure Sale – The actual sale of the property where the title is transferred. Homeowners become tenants upon sale, and lose rights to property ownership.
What are my options to avoid foreclosure?
There are many, but you need to act fast and regularly. One place to check is the Consumer Financial Protection Bureau (CFPB) to help you resolve any shady practices in your loan.
Another option is HHF – Hardest Hit Fund which has been extended through Dec 31st 2020. This program is in 18 states and it helps struggling homeowners with mortgage assistance.
MakingHomeAffordable.gov has many trusted routes you can take, be sure to research so you know your most up to date options. Here are their current tips to avoid foreclosure.
Furthermore, there are local nonprofits in many areas who can connect you with the right resources to save your home. Contact Angie by text at 949.338.7408 ASAP if you would like an Orange County referral.
Reinstatement vs Redemption period
Reinstatement is the 90 days you have to reinstate your loan after you’ve received your official Notice of Default (NOD). Redemption periods do not apply to all states, and they begin after the property is sold in a judicial foreclosure. California is NOT a redemption state with judicial foreclosures…once the property is sold at auction it is gone.
How long does it take to foreclose on a property?
Every state is different, and has different laws. It usually takes anywhere from 90 days to 3 years, depending on the condition of the market.
Short Sale to Avoid Foreclosure
In order to complete a short sale, you must show hardship. Every bank defines this differently; but it can include illness, job loss / unemployment, divorce, 50+ mile job relocation, business failure or natural disasters.
Most banks have a ‘Short sale package‘ available on their website, and this includes a list of the documents you need to submit in order to be considered for a short sale. Some of the common items requested in a packet are:
Listing agreement
Short sale disclosure form
Listing agreement addendum
Authorization to release info form
Federal & State disclosures
Before you fill out the paperwork above it’s important to check for recourse in your state, or you could owe a tax bill on the amount you’ve been forgiven. If you’re unsure about this, check with your CPA.
Furthermore, you must get approval. Approval is a gift.. even though it doesn’t feel like it 😦 Not only do you need approval from your mortgage company, you’ll also need approval from any and all junior lienholders including 2nd mortgage, HELOC, & other liens. If you do not have approval from ALL liens then the short sale will not happen, which is why you need to communicate with your debtors early and often!
Sometimes additional costs will be paid by the investor, but you have to know how to work this into your Estimated Closing Statement (HUD1).
Short sales and foreclosures are TOUGH to navigate. Please reach out to us if you need help. Angie keeps everything confidential and will always help you with creative thinking so you have the most options with your home. Contact her at 949-338-7408!
Furthermore, Angie would love to connect with Asset managers, outsourcers, distressed property managers, and others in the banking industry who are looking for a quality agent who effectively works bank systems to get REO properties sold.
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Looking to Buy or Sell a Home? See You January 18th!
8th Annual OC Home FairÂ
Looking to buy or sell a home? Investment property? Just curious about becoming a homeowner? Renting and want to own? WE have an event for you!Â
5 OC Home Fair Class Highlights
#2 Finding up to 90K to Buy Your Home – Down Payment Programs
#3 Real People – Real Estate Success Stories
#4 How Student Loan Debt Can Fit Into your Home Buying Picture
#5 Home Buying 101 – Pre-Purchase Counseling
Click here to register, just enter your information and select the class you want to attend!
Fight Foreclosure & Win – Orange County Real Estate Stories
This week we had the unfortunate task of stopping a foreclosure sale. Long story short, the buyer’s wire didn’t get to escrow in time for escrow to move the funds to title, & title to pay off the existing loan. This put our divorcing sellers in a terrible hands-tied position and at risk of losing the 150k+ in equity they still had in their home. We had to basically drop everything & work all day & night long to save this property from being sold at auction.
I want to share how things unraveled and how we stopped the foreclosure sale, in case other Realtors or homeowners need tips on how to stop their own foreclosure or auction sale.
It Takes a Team to Fight Foreclosure
First off, I want to point out this is never a one person job. At least TWENTY people were involved & acting fast (or slow) to help pull this off. I will be giving credit where credit is due as you read on. There were at least 10 people CC’d on every email. Outside consultants who had nothing to do with this deal were called. LinkedIn connections & messages were sent. Social media posts were fired off.
It all started with an incorrect payoff demand that had Friday’s date instead of Monday or Tuesday. The property auction was scheduled for Tuesday 8/7 at 1pm. The bank HAD to be paid off before that time. Escrow brought this to my attention the previous week, stating the attorneys who were acting as the trustees for Flagstar Mortgage were not getting them the updated payoff demand. For the record, the buyer was SUPPOSED to bring his funds to escrow on Friday, but he was ‘too busy’. Gee, thanks. Attorneys moving slow, cash investors moving slow…us prodding cattle.
Come Monday, I was told at 9am by the buyers agent Clay Matthews of New Western Acquisitions that the wire had been sent. Great, we made it in the nick of time! We thought. Until escrow calls me at 11am stating they still don’t have the funds. I call Clay again, and he stated the funds have been wired, he will call B of A. Well, in his call he discovers the girl who sends out all the wires for B of A was supposedly on vacation, so the wire did not get to escrow until 1pm.
Foreclosure Sales are ALWAYS messy
This still should have been ok, but enter in technicalities, wire cutoff times, & paranoid high ups at Corinthian Title. Although escrow got the wire to title, title refused to ‘pay off’ the loan because Flagstar Mortgage would not receive the funds until Tuesday morning, and their ‘payoff demand’ expired Friday. They had an ok from Flagstar to press the payoff until 5pm on Monday, but not a moment afterward.
So, we need an updated payoff demand then. But escrow had been asking the attorneys representing Flagstar at Zieve, Broadnax & Steele since last week, & they had not given it to us. Now when we call & email 3x on Monday we get a response….it was ‘too close’ to the sale date; they refused to give us the updated document, and said they needed permission from Flagstar. How. Convenient.Â
I called Flagstar, and in traditional foreclosure loophole fashion, they proceed to tell me that the attorneys at Zieve must stop the sale, they have no control anymore. I get the name & extension of the rep & proceed to call back Zieve, Broadnax & Steele, who never answer the phone and have a lovely one star review on Google. I go on their website & find out who the partners are, and I email their Foreclosure Attorney along with our rep. Katherine Walker emails me back a bunch of legal mumbo jumbo but states if I can get Flagstar to request a postponement, then she will postpone the sale. An inch of progress.
I know I’m out of time and this finger pointing / permission needing / document requirements will go all the way up to the foreclosure if I can’t cut through the BS and get to a decision maker. I start with my partners first.
Begging, Borrowing & Pleading to Stop a Foreclosure
I call Teresa at Corinthian Title and she advises me that there is no way to record title if a wire is still out, absolutely none. I say fine, just pay it off tomorrow very first thing, and she advises me no, that can’t be done either, because the demand expires today. I request that she simply pad the payoff with additional funds so even if more money is owed for this one day, we still get the proper payoff over, even if it’s too much. I plead my clients case to her and still get nowhere. I realize she is just doing her job…but SOMEONE over there should be able to help me, so I ask her to connect me with an individual who CAN authorize this.
She puts me in touch with Mike Godwin, CEO of Corinthian Title, who I plead with further. Mike explains he ‘cant insure’ the title when it is in this risky of a position, and he can only record it IF we get the payoff demand AND if we now get a sale date extension. (Basically perform a freaking miracle so he can CYA) I asked him what the real risk is here and I still don’t understand what it was. I reminded him my clients have 150k in equity in this house and the bank is drooling to take back this property…and he has the power to help them, or to devastate them right now. He still refuses to record the title. Eff. I have exclusively used Corinthian for ALL my title deals since our reps moved there & this is what we get for it??? Seriously!?!!! Shame on you, Mike Godwin.
I literally hang up with policy-pushing Mike & cry. But I have to keep moving on. This is SO unfair. I can’t leave it like this. Please know…..this is where MOST Realtors would have thrown up their hands. It’s 4:45pm & no chance of a title recording today anymore. The sale is mid day TOMORROW.
Fine. If my partners wont’ help then maybe I can network. I then reach out to a real estate attorney I know to see if he knows the attorneys at Zieve, because attorneys all seem to be in the same ‘bro’ club. No luck. I ask him what for SURE way we can stop the sale at 1pm tomorrow, & he advises my clients would have to declare bankruptcy. I can’t recommend THAT to them. They are already so beat down from their divorce. I call my client with an update and he reaches out to a well connected attorney HE knows. They also email and leave a message for Katherine Walker with no reply.
Delay Foreclosure with Social Media
Sigh……..the clock ticks on… so I guess it’s time to swallow my pride & go social. I had already tweeted Flagstar on my own a couple times with nothing yet.
I proceed to search Flagstar Mortgage on LinkedIn to find someone in loss mitigation. Sweet, they are in Michigan. I’m from there, so maybe these people will show some love. I send out connection requests and nice customized emails to all of them pleading my case. While doing that…LinkedIn pops up an alert that states ‘Your connection with the most connections to Flagstar is Desiree Patno’. I know her from Homeownership Day & NAWRB. She’s BEYOND busy. I decide not to bother her.
I humbly create an Insta message recruiting my friends to help. I ask them to send a specific tweet Flagstar. I know that banks HATE being pounded on Twitter. They care more about their reputation than they do your case, so I’ve gotta pelt that to get your case handled.
I smile through my tears as friends & other do-gooders tweet out my message. I ask the buyers agent Clay to help….crickets. Oh, but he did manage to give the keys to the property away & his clients started moving in. Before close. My clients asked me about it and I literally had to tell them that I cannot focus on who is moving into your house right now…I have to stop your foreclosure. How embarrassing….status = sh*tshow.
Engage National & Local Organizations to Postpone Foreclosure
It’s about midnight, and I still can’t sleep. I decide it’s my ego that is causing me not to contact Desiree, so I email her & her trusty assistant Lucille begging for Flagstar contacts & email addresses.
I set my alarm for 5am, because thats 8am in MI, when Flagstar opens. I fall asleep praying.
I wake up at 5am & see that 12 friend tweets later, I have a DM from Flagstar that someone ‘will call me’. Excellent. Waiting. Desiree also emailed me back at 3am wanting more details. I sent them to her at 5am.
At 7am I call one of my clients and ask him to call Flagstar again & plead. We still don’t have resolution, & this sale is happening in 6 hours.
Desiree Patno calls me at 8am & gives me her contacts. YES….now I have two email addresses, and one appears to be a C level! Score for Women in the Housing & Real Estate Ecosystem being a truly VALUABLE resource to be a part of. If you’re a female reading this, join NAWRB. Now we’ve got real progress. I send both of them LinkedIn connection requests with a private message.
Another outside consultant who is an attorney advised me I must get a Flagstar email, and CC all, not just all the attorneys. He said copy EVERYONE on EVERYTHING. I usually hate doing that, but I do know it’s effective in knowing exactly where the buck stopped for accountability. I’ll do whatever I have to in order to get this closed, I can’t have a foreclosure looming on my record, or my heart, for that matter.
I send an email to Zieve & CC the new Flagstar emails, even though I have no idea if they can help or not. Zieve, Broadnax & Steele reply VERY quickly. Ooh, we must be on to something here. We have a few more back & forth & they try to take the Flagstar email addresses off the string. I add them right back on. It’s 10am and we are still going back & forth without resolution, but making small steps of progress. Will it be enough, though?
Meanwhile…Still pelting Twitter. I try CCing OC Register, Orange County Association of Realtors, and use #homeownershipmatters. This is what you call ‘making a stink’. Why haven’t they called me back yet??? Will @flagstar be a zero or a hero????? Is it seriously going to end like THIS?
11:08am Flagstar’s C level Alessandro Dinello accepts my LinkedIn request. No response, but I know he read it, and that’s all I needed. Someone who can make a decision to press a button.
At 11:57am I receive a call from David Woods with The Office of the President at Flagstar Bank. They advise me they cannot speak to me unless I get a client on the phone. I call him, no answer. I call her, no answer. SERIOUSLY??! I text him & ask the nice man on the phone if I can try to call him again. He finally picks up, and confirms it’s ok to speak with me. The Flagstar person explains that because of Twitter, our case was escalated to the Office of the President and it is now being constantly monitored. We explain to him that we need Flagstar to advise the attorneys at Zieve to postpone the sale. He says he won’t keep us in suspense any longer, that they have just done this, and will give us a 7 day extension. I would have cried of happiness but my client was still on the phone. I receive an email from Zieve while David was still on the line that they have received the request to postpone the foreclosure, and will oblige. I tell David he is my hero, and I get his direct contact info as he promises to quarterback any lagging parties for me. I wish I could find him personally on social but I can’t find him anywhere?! Regardless, I tweet out a success & thank you to my social outlets, so everyone knows Flagstar did the right thing.
The attorneys at Zieve, Broadnax & Steele sent the extension and updated payoff demand to Corinthian as Flagstar advised them to do. Corinithian closed the deal by the end of the day now that they had the miracle documents they requested of us. All that work just to buy a few needed hours of time.
Reflecting back, I honestly don’t know if this was saved by Twitter, or by NAWRB email contacts, by random attorneys calling Zieve for me, or a combo of all of the above. I DO know the grace of God was definitely involved!!!!
I want to take a moment to thank the following people who helped me on Twitter, please consider following them:
- Natalie Newman –Â @NikNatNew
- Brian Kimball –Â @brianjkimball
- Jerra Morris –Â @JollieJ
- Keely Crum –Â @crumbelievableO
- Mike Langgle –Â @Langgle
- Lisa Combs –Â @LisaBethBrush
- Liz Lewis –Â @lizlewisnhb
- Steve Gould –Â @stevenrgould
- Nicki Walsh –Â @SignEase
- Angela Collins –Â @absolutelyang
- Nancy Bau –Â @NancyBau
- Natalie Duarte –Â @NatalieduarteMM
If you are an agent, know that Twitter is your secret weapon when you’re fighting foreclosure. It’s like Yelp though, you have to be in the space already to get somewhere. Signing up for a twitter account on foreclosure day won’t cut it. You’ll need your army of followers to help you out.
If you’ve found this post helpful or resourceful, please comment! If you’ve got more foreclosure delay tactics, please comment those as well. If you need help fighting foreclosure, do NOT wait, text Angie at 949-338-7408 immediately. This one was saved with one hour and 2 minutes to spare, maybe we can save yours too!
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Homeownership and Divorce: What To Do About Your House
The evil D word, nobody wants it, but it happens to 50% or more of us. Orange County sky rockets the national divorce average from 50% to 72%. Did you know that divorces spike in August and January? As summer winds down, we thought it would be a good idea to give you some pointers on this super touchy subject.
Listing your home during a divorce
MANY of our listings are divorce sales, and we strive to provide solutions to better protect our clients. It’s a HARD time, and we want to make it as easy as we can when it comes to the most important asset. For this reason, I just earned my RCS-D designation with Professor Kelly Murray, who has degrees from Stanford & Harvard Law. Watch this video to find out some important tips to a successful resolution of the house during a dissolution:
Real Estate Collaborative Specialist – Divorce
Did you know that less than 50 Realtors in Orange County, CA have this prestigious designation? Did you know the standard in divorce when it comes to real estate is an appraisal and a mortgage statement?? That’s IT.
- NO inspection reports
- NO previous title search for liens or secret mortgages
- NO insurance search to confirm the property can be refinanced
- NO preapproval to make sure the home can *actually* be refinanced by one party or the other on their own
Property division is permanent, and not all divorce attorneys are stellar when it comes to real estate handlings. Things you sign in mediation are binding, and sometimes you feel rushed into these decisions. CONTACT US for a no obligation conversation on how you can protect yourself before you ever walk into court or mediation.
Hard Scenarios You MUST Consider During Divorce
Scenario 1: “Oh, just let them keep the house.”
Are you sure about that? One late payment can be 100 credit points! Do you care about your credit score? Ask yourself: Can you or your ex ACTUALLY qualify for the refinance?
- For example: Can you use your alimony or support payments, and if so, how soon? Many banks have a 6/36 rule. They want to see 6 months consistent income, and receive evidence that 36 months of income will continue before they will lend.
Scenario 2: “It’s ok, I’ll just go buy another house.”
ASK: If you allow your ex to keep the house, will YOU still qualify for with your name on the old mortgage? Can you start your next chapter?
- For example: In the eyes of a lender, both parties don’t have 50/50 responsibility on a loan……you each have to pay 100% if the other defaults. Does this ruin your chances of qualifying for a second home in your name? Make it a point to find out before you make a promise you can’t keep.
Scenario 3: “I lost my job / health & I can’t pay.”
Consider what might happen in a worst case scenario. Would you be able to carry two homes to save your credit? Or possibly be willing to sell in a down market?
- UNFORTUNATE FACT: Only 25-30% of individuals regain homeownership 7-10 years after foreclosure. Don’t let your divorce put you into this pool.
If you need help deciding what to do with your house during a divorce talk to the proper Divorce Professionals who can give you the protection, tools, and timeline to make your future a success. We have an entire team waiting to assist you, from moving out all clutter for free to pulling the necessary paperwork to know what you truly owe and own on your properties.
Please reach out to Angie via phone or text anytime at 949-338-7408. Always confidential, always caring, always at your service.
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Orange County Real Estate Success 