Watch for upcoming foreclosure dates
When taking a short sale listing on a property owned by distressed borrowers that have missed a few mortgage payments, it is vital for agents to be aware of any looming foreclosure dates. For the last several years, many beneficiaries have been sued for wrongful foreclosure, but that doesn’t change things for short sale listing agents.
One of the most common problems faced by a short sale listing agent is the looming or unknown foreclosure date. That date is like a deadline: if the transaction doesn’t close by that date, then the property will be sold at auction (or revert to the Trustee). To avoid the stress of working around a foreclosure date, any real estate agent with a short sale listing should be very aware of any upcoming dates. In fact, some agents even find success in convincing short sale lenders to postpone auctions in order to entertain the idea of approving a short sale transaction.
Some states (California, for example) have even passed legislature that prohibits certain forms of dual-tracking (actively pursuing two things at once, such as foreclosure and loan modification). But, overall, it is the agent or short sale negotiator’s responsibility to work with the short sale lender in order to get an auction date postponed so that the short sale can be completed.
How to postpone a foreclosure
Here are four tips for how to get an auction or foreclosure date postponed:
- When you take the short sale listing, order a property profile or preliminary title report. Check what items have been recorded against the property. If there is any foreclosure activity, add those dates to your calendar.
- Have the seller open any and all mail, and alert you immediately if there is information about a pending foreclosure or foreclosure filing.
- Contact the short sale lender regularly. Sometimes short sale lenders change dates and do not record those changes in the city or county. So, check in with the short sale lender regularly in order to see if there are any new dates on the calendar that pertain to the subject property.
- Remind the short sale lender of upcoming dates. Don’t just wait for the short sale lender to contact you. If you want a bank employee to postpone an auction date, you need to be proactive and assertive. Notify the bank that the date is looming and that the seller is really motivated to continue in the short sale transaction.
On a side note, mortgage lenders are not always the foreclosing party. For example, you may find that a homeowner’s association is the party that will be foreclosing. If that’s the case, you need to work with the HOA to settle the matter before your client loses the property.
The key to a successful short sale is to be mindful and attentive to any looming dates. Imagine what happens when you miss a loved one’s anniversary or birthday? Well, if you miss a foreclosure date, the consequences could be far worse!