Jon Griffith

Where Does My Mortgage Payment Go?

June 30, 2010 By Jon Griffith 1 Comment

This question was prompted recently by a client who had questions about whether or not they needed to be behind on payments in order to qualify with their lender to sell their home short of what they owe. The simple answer is: “it depends on who the investor is.”

Before I comment on the topic, spend a few minutes watching this phenomenal presentation by Jonathan Jarvis, outlining the flow of money during the high times in the real estate market back in 2005.

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Now that you have somewhat of an understanding of what happened back then, you can see that the company to whom you make your payments may not necessarily be the company who actually owns your house. It’s likely that they simply process the payment, take a small portion as a processing fee, and send the rest to the real investor.

So, where does your mortgage payment go? It goes to the investor who actually bought your note.

(Note: It’s possible that the investor who currently holds the note paid far less than the value of the note because the original investor went bankrupt, which means they may stand to make money on the short sale, rather than lose money.)

Sometimes that investor requires that you be delinquent by at least 30 days before they’ll even consider approving a short sale on your property. Some investors are wiser than that, and they realize based on your financials, that you will soon be delinquent anyway so “what’s the point of waiting.” After all, if they recommend you fall behind, it will affect their cash-flow too.

Nonetheless, if the investor won’t pay attention to you, which is happening every day, then it’s possible that you may need to fall behind. This basically forces you into a strategic default instigated by the recommendation of the lender. It’s ludicrous, if you ask me.

Filed Under: Short Sales

Close Of Escrow in the Short Sale World Is A Squeaky Beast

April 23, 2010 By Jon Griffith 3 Comments

When a normal real estate contract is written, the buyer requests a close of escrow date, which is typically dependent upon multiple conditions being met. There are a lot of people involved, a lot of documents involved, and contractual time lines to follow. Normally, that time frame is somewhere around 30 to 45 days. In the case of FHA financing, it’s on the longer end. In the case of a cash purchase, it can be as quickly as Title can complete their work, or simply a matter of days.

When a buyer writes an offer on a Short Sale, there is no close of escrow date. Instead, the close of escrow date typically reads, “See Short Sale Addendum.” In the Short Sale Addendum, you’ll see on line 38:

Close of Escrow: Close of Escrow shall occur thirty (30) days or _________ days after delivery of Agreement Notice.

The Agreement Notice is the letter that your lender(s) provide upon reaching an agreement to sell for less than you owe on the property. According to lines 22-23 of the Short Sale Addendum:

Agreement Notice: If Seller and Seller’s creditors enter into a short sale agreement, the Seller shall immediately deliver notice to buyer (“Agreement Notice”).

Once the letter(s) reach the buyer, even though there has been initial contract acceptance by the seller at the start of this process, for the purposes of the contract time lines, we consider this the date of contract acceptance. Technically, we have already had an executed contract during the entire negotiation period, with a Short Sale contingency.

In most of the short sales that I have listed, I make sure the buyer and seller understand that we are going to fast track this to closing within 21 days of the Agreement Letter receipt. I do this on line 38 of the Short Sale Addendum because 9 times out of 10, the agreement letter affords us only 30 days to close, and the last thing we want is to run up against the expiration of this letter, coupled with a potential impending Trustee Sale date. And, since we’ve had so much time for the buyer to sit around and basically do nothing, it’s assumed that the financing documents are already in order. This is why it is critical, buyers, to have all of your documents ready to rock at your lender so when the agreement letter arrives, your lender will be able to push forward.

The Squeakiest wheels are typically caused by buyers’ lenders not having everything they need to proceed. While most transactions outside of the short sale world are relatively smooth, even with all of the turbulence the transaction can experience, COE in a Short Sale is more of a balancing act and must be taken very seriously. Lenders don’t like to bend once they’ve made their decision.

Filed Under: Highlight Reel, Short Sales Tagged With: lender, short sale

Synchronizing ZipForms Desktop on Multiple Computers

April 17, 2010 By Jon Griffith Leave a Comment

Every so often I do a tech tip that inevitably helps others in the real estate community. This is one of those times.

ZipForms is a great tool that most of use now to create and fill out the various contract documents associated with a real estate transaction. ZipForms Online is the online version, which by most standards, I would find perfect for what I need to do, but there’s something about the online version I don’t like, which is why I’ve been using the desktop version.

The desktop version is installed locally on your hard drive which allows you to work offline. As connected as I typically am, I decided that blowing $60.00 every month on a mediocre wireless access card through one of my cell providers wasn’t a great use of my money, considering that I’m usually near a WIFI hotspot.

Even with that in mind, there are certain limitations to the online version of Zipforms that have nothing to do with Zipforms, and everything to do with the internet connection that you’ve joined for the time being. Sometimes coffee shops just don’t have the bandwidth I need to get my contracts written. I tend to work much faster than an internet connection can accomodate, so being able to do the meat of the work offline, create my digital packages to send to my clients, then connect and send is much more efficient.

The Problem

ZipForms desktop is fantastic when it comes to offline editing of files. It’s not fantastic when you’re someone who not only uses multiple applications on one computer, but multiple computers. I have a desktop at home, a Windows based laptop, and now, a MacBook Pro. The desktop version stores all of the information about your transactions on the computer you’re using, not on the internet, so you cannot access a contract written on one computer on the other…unless you employ the following tool…

Microsoft has a great synchronization tool that allows you to choose a folder, or set of folders on one computer that can be synchronized through the internet to another set of folders on another computer.

ZipForms Desktop stores all of your transactions, clauses, templates, etc., in the same folder on each computer, so it’s quite simple to setup synchronization between those folders to ensure that all of the changes you make in one transaction are nearly immediately available on all of the other computers involved.

Getting Started

Before you can sync files over the net, you’ll need to create a Windows Live Login. I know, this is probably one of many options on the internet, but to date, it’s the most reliable I have used, and even though it’s a Microsoft product, which I typically cringe at, it works.

Head over to http://login.live.com and create an account if you don’t already have one lingering around from years past. Once you have an

Filed Under: Uncategorized

Soonr.com Is Almost Everything I Need

April 9, 2010 By Jon Griffith Leave a Comment

Soonr.com is an online cloud. It’s a place where I can store specific files permanently so they are away from my computer. It works in the background, simply monitoring folders that I specify on my MAC or PC. When a file is added or changed, the Soonr.com agent which is always running sends that changed file to my cloud on Soonr.com. Coupled with the iPhone, it gives me a very easy way to access those files.

What Soonr.com doesn’t do is what I really need it to do, and that is keep not only files on one computer synchronized to the soonr.com website, but also synchronized to another computer.

All of my transaction documents, contracts, HUD-1′s etc., are stored in a set of folders which is nested beneath a single folder on my desktop. Since I use two different computers for most of my work, having quick access to the most recent file on each computer is vital to my productivity and it’s one of the main reasons I am able to deliver such quick responses to document requests.

In order to make sure that a folder on one computer appears on the other computer as well, I employ a simple program called Windows Live Sync. I’m not a big fan of Microsoft products, but since both of these computers that I’m using are PC’s, and I’ve been working with Microsoft products for years, I figure it’s the best I can do for free. Windows Live Sync does what Soonr.com doesn’t. It monitors a folder on your computer, synchronizes it with the Windows Live website, then synchronizes it with any other computers that have been assigned to the same folder.

At the end of the day, a process might look like this. 1) I create a new PDF file in the transaction folder. 2) Windows Live synchronizes it with all of the computers I have setup for synchronization. 3) Soonr.com shuttles the file up to the Soonr.com site so I can view it from any computer, AND from my iPhone.

With both tools implemented, not only do I automatically duplicate my files for a quick backup to my other computers, but I also send a version to my cloud at Soonr.com, ensuring it’s permanently preserved.

Soonr.com treats each computer separately, and doesn’t link the two together, which means you won’t see a file on one computer that you created on another computer without accessing the Soonr.com site directly and downloading the file.

Until Soonr.com implements this feature, I’ll stick with what I have, which is working just fine.

Filed Under: Technology

Short Sale Follow Through

April 3, 2010 By Jon Griffith 4 Comments

(May 11, 2009 - Photo by Clive Brunskill/Getty Images Europe)

As a listing agent specializing in short sales, I have run into many situations that raise red flags throughout the short sale process. One of those is finding out that the home owner isn’t prepared for the commitment involved in pursuing the short sale.

When you enter into a short sale listing agreement with your brokerage, represented by your REALTOR, you are hiring them to not only market your property, but also negotiate the short payoff to your lenders. While there is no official difference between a short sale listing, and a regular listing, the fundamental game-plan that we implement when we market your property is quite different than a traditional sale.

Your agreement to sell short is taken very seriously by your agent because of the amount of work that is involved after receiving an offer. It also must be taken very seriously by you, the owner. If at any point in time you doubt whether or not you really intend to walk through the process of a short sale, then you may not be a true candidate for a short sale. You see, even if your circumstances would support a short sale, you need to be completely committed to the process and you need to see it through to the end, whatever result that may be.