Elizabeth Weintraub • Sacramento Short Sale Agent • Land Park

I could say the seller should have called this Sacramento short sale agent sooner in the process. But so many drag their feet to the last possible worst moment. I could say the buyer should have increased his offer by $2,000 when I asked him to do it. But many buyers are dumb. I could say a lot of things about why this particular short sale went to public auction instead of to closing, like the rest of my short sales do. It is very, very rare to lose a short sale to auction.

Part of the reason is the investor is Fannie Mae. It's a well kept secret in short sale circles that Fannie Mae prefers to foreclose. Fannie Mae is a quasi-government entity. So, all of this talk you hear about how the government wants to prevent foreclosures and keep people in their homes is not necessarily true. It's a good sound bite but it's not the truth.

If the path to foreclosure is shorter than the path to short sale, Fannie Mae will choose the short cut.

I received the phone call that the seller wanted to avoid foreclosure and do a short sale about 3 weeks prior to the trustee auction. Against my better judgment, I took the challenge, listed and sold the home. We submitted the paperwork. This was last fall. Got the trustee's sale postponed. So, in one sense, we did buy the seller about 3 months of time. But in the other sense, they still lost their home. In a flash. Without warning.

Greentree asked us about a month ago to increase the offer. It was only a few thousand too low. But the buyer refused. At that point, Greentree said no problem, it would still submit the offer to Fannie Mae for approval. But yesterday, when we called to verify the home was pulled from the scheduled auction, Greentree said Oops. We didn't have time to call you. The investor, meaning Fannie Mae, rejected the offer and did not want to issue a counter. They instead demanded we go to immediate auction.

And that's how a seller can go from being told an approval from Fannie Mae will take 3 weeks to Oops, I did it again. Kind of gives new meaning to that Britney Spears song. Although, I prefer it performed by Richard Thompson. From now, on this is Greentree's signature song. But they don't deserve Richard Thompson's version. The least the damn bank could have done was call the agent. I don't know which is worse. Greentree or Fannie Mae.

Potential short sale sellers in Sacramento, please don't wait to call your Sacramento short sale agent. Don't wait for the Notice of Default to be filed before you take action. Get the process started early. Especially since HAFA, not to mention the 2007 Mortgage Forgiveness Debt Relief Act, both sunset in December 2012.

You can hire the wrong short sale agent. Especially in Sacramento where lots of agents are jumping on the short sale bandwagon. If you do, Fannie Mae will send your home to foreclosure instead of granting a short sale. It's the way of Fannie Mae.

But first, let me share with you that a client said the nicest thing to me yesterday. Really touched my heart. We closed his short sale in Gold River in 8 calendar days. Actually, we closed one day early, because we were up against the sale date and there was no way to postpone the auction. I prefer to be early than late. He said: "Choosing you as my agent goes down as one of the smartest things I have ever done."

I say we closed his short sale rather than I closed his short sale because, as a Sacramento short sale agent, I realize that no wo/man is an island. It takes a team to close. Without a good buyer's agent on the other side of the transaction, a seller could be doomed. That's why I help my sellers to carefully choose the buyer and the buyer's agent we work with. If a seller were to choose the wrong buyer and that buyer doesn't perform, the seller could be headed into a trustee's sale and not to closing.

This particular seller tried to do a HAFA short sale in the middle of this transaction. I called him when I found out and asked why. I discuss HAFA upfront with my sellers to determine whether they qualify. Remember, being eligible for HAFA and qualifying for HAFA are two different and distinct things. And this transaction was a Fannie Mae short sale, which would have made it a Fannie Mae HAFA short sale -- had the seller gone that route.

I told him not to do it. I urged him to talk to his lawyer. He was too close to the foreclosure date. It wasn't worth going after $3,000 if it would have meant going to foreclosure. Fannie Mae has a procedure by which they choose if it's more profitable for them to go to foreclosure and, if they are very close to the foreclosure date, they will choose foreclosure. Yes, your government, which basically runs Fannie Mae now as a GSE, wants families to lose their homes to foreclosure. It's easier. It's more profitable.

Don't believe me? Don't just rely on my years of experience with Fannie Mae short sales. Check out this August 18th piece from the Detroit Free Press: Fannie Mae Pressures Banks to Foreclose, Contrary to Promises to Keep Families in Their Homes.

We received short sale approval on the 15th of August from Bank of America. Our closing date was the 24th of August. Nine days later. The buyer elected to get a loan, too, when informed of short sale approval. I about had a heart attack. But you know what? It closed. It closed with a loan.

And people say we short sale agents can't pull a rabbit out of our sleeves. Hey, Rocky! Yup, nothing up my sleeve. Presto, chang-o.

If I hear the term "our mutual client" one more time, I'm gonna puke. OK, not really. But you know the sentiment. I get a lot of mortgage loan officers bugging me because I sometimes suggest that buyers start the loan process prior to approval. The horrors. I do this so the buyers can close. That's because short sale banks and mortgage loan officers are rarely in sync. The banks give us shortened periods of time in which to close, and mortgage loan officers tend to want a minimum of 30 to 45 days. We can't always get a short sale extension if the mortgage company can't perform.

These MLO guys can get pretty desperate. They clamor for that letter of approval. Over and over they email me begging if they can speak to the short sale bank. That tells me they know next to nothing about the short sale process. I don't know how one can be in the lending business in Sacramento and not be familiar with how short sales work. I'd venture to guess at least 30% of all transactions in Sacramento are short sales. As a Sacramento short sale agent, I close my fair share of them.

I have to tell them no, they cannot speak to the bank. And please stop nipping at my heels like some damn Yorkie. But I don't say that; I just think it. Even if they could talk to the bank, they couldn't tell them anything I haven't already delivered. I am not hiding the approval letter or delaying the process. I don't want them emailing or calling to ask if I've heard anything. When I hear, the MLO will immediately know. It's not something I'm likely to space out or forget about as I go about my daily short sale business. They should be calling the buyer's agent anyway, not me.

I got short sale approval yesterday on a home that is headed for auction next week. Because this is a Fannie Mae short sale, the bank will not postpone the auction. That's our government at work. We have to close prior to the trustee's sale date or it goes to foreclosure. This means we have to close in 8 calendar days. This wasn't a problem during negotiations because the buyer was paying cash. At the last minute, a few days before the approval letter arrived, the buyer announced he would like to get a loan.

Talk about a heart attack. There is no talking about a heart attack. I may as well just keel over now, gasp my last breath and collapse.

This was a property we had multiple offers for, lots of buyers crying for it. Thank goodness the buyer's agent has a level head. She helped the buyer start his loan early and docs are going to title today. One day after we received the short sale approval letter. How's that for swift action? But don't think about trying this for yourself. Getting a loan approved in record time like that is about as rare as a summer rain in Sacramento.