Can You Go For A Short Sale And loan Mod. At The Same Time?

You can do both at same time, but unless you charge for doing loan mod and it works, you won't make any money unless you charge for your services to do the loan mod.

Most loan mods end up as a short sale down the road anyway, but if you do real estate consulting, you can charge for it. I don't care what the banks say on their sites or in your bill, it is not as easy as it seems. They just don't want an agent or an atty involved who knows what they are doing.

If you want info on how to do real estate consulting and charge for loan mods follow this link: www.myreconsultants.com/PaulaBean/RealEstateProfessionalsOnly.html

It will teach you how to charge for services that you'd not ordinarily be paid for as it doesn't result in a sale.

There are many ways to make money in real estate without selling a house. Move or improve analysis, tax issues with property devaluation, etc. You can charge a flat fee, or hourly, it's what has made me more money than selling short sales or doing reo's.

Why would you want to conduct a short sale while the owner is working on a loan modification?

John Cleek

Most lenders (that I've worked with) will not allow both processes to go on at same time. Borrower must pick. Plus I would not want to be wasting my time, or a buyer's time in getting a short sale going and thru if the seller didn't even want to sell their house. If they are working on a loan mod.. let them do that first, then you're there if they decide down the road the sale is the right thing. My brokerage will not allow us to work on loan mods... we can not charge advance fees, and mostly borrowers can do a loan mod on their own or with the help of the wide array of HUD approved counselors. They don't need to pay anyone. I have guided clients to the right depts and the right people and the right paperwork to complete. But I hate when I hear people have paid lawyers thousands to get nowhere :( Unfortunately they can get nowhere on their own. Most of the loans where I am are not part of any of the Obama guidelines - we have actually very few fannie/freddie/fha/hud or anything else conforming. So most sellers here just have no help at all. But I have had a couple of clients get successful loan mods all on their own.

I have been working with a company that is paid by the lenders to make contact with borrowers who are either delinquent and facing foreclosure or who have made at least initial contact with the lender regarding loan modification but have failed to complete all of the paperwork required. Some are in the trial stage but need to submit additional paperwork. I make contact with them to encourage them to follow through.

My goal is to help them stay in their home. I don't get paid for this but I consider it a matter of paying it forward. I also know that if I make a sincere effort to help them and they ultimately find they can't handle the payments, they will likely ask me to handle their short sale.

The company also has a REO department and for those properties that end up in foreclosure in my area I will be the logical choice to list the foreclosure.

I was surprised to learn how serious the lenders are about loan modification. There are several thousand agents around the country doing the same thing I am doing.

John Cleek

John, is that Titanium or another?

I am representing the buyers in a short sale transaction where the seller had tried for the 4th time for a loan modification with Thornburg Financial. I had heard that the modifiction request had halted the short sale process in an attempt for the owner to keep/modify his loan but, they were turned down and the short sale process is back on track witha a BPO request.

I totally agree with Catherine! HOWEVER, there is more to this...

The question wasn't whether you can get PAID for both, but whether the processing one sabatoges the other? If you think about it-the goal of keeping the house or moving are diametrically opposed, so whose best interest are you working in? FIRST decide the client's goal! Clients sometimes will come to you and just ask for HELP! Its up to us to guide them, not just do what make us money! Did we forget ethics 101? Once the client has to move, or needs to avoid deficiency, then short sale is obvious choice, but it is the client needs to make an informed decision!

My experience is also that YES, MANY LENDERS WILL stop processing loan mod if short sale offer comes in or vice versa, of course that's assuming that the right hand knows what the left is doing...These are the same people who can't find the papers you just faxed in!!

Chandra Parker Doucette

Attorney At Law/CPDE

Boca Raton, FL

I have also found that if a client is trying to get a loan mod and getting no response, calling the lender (with your client) and telling them that you have a signed contract and will put it up for a Short Sale, will sometimes hasten the loan mod - if the lender was going to even consider it in the first place. Of course, then you send them a copy of the listing agreement. It sometimes works, sometimes doesn't, but if the lender is going to help them, this can further it along and if they aren't willing to work on a loan mod, you have the listing to get that Short Sale started and completed.

Chandra, as I said in my response, I have, and offer free resources to clients who want to save their homes. I believe (and some may disagree with me) that we have a moral obligation to be sure they've exhausted all efforts to save their home if that is what they want to do. We should be sure we have a list of resources for them. Non profit, hud approved counseling agencies who can help. Or phone numbers to the major lender loan mod depts. Our commission consideration should come a far second after doing a thorough needs analysis, and putting their needs first. If your client is working, has raised their family in that house and is falling behind because their payments have adjusted or interest rate adjusted, or have just a temporary hardship - they need to be working with that lender before a realtor "works them out of" their home. I see it though all too often.. saving a home is not even in the vocabulary of many realtors and that... is a horrible shame...