NexGen Realty
Phone: (714) 362-8903
Email: info@nexgenrealty.com



Nexgen Realty can help you short sale!

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What We Do To Help 

  1. We Do Not Charge You A Penny.  We do not ask for a deposit, retainer, or anything.  When we close your sale the bank pays our full commission (which we share with the buyers agent.) 
  2. We market your property as aggressively as any standard sale.  The bank can tell when a lazy agent brings them a poor offer...our unprecedented success is due in large part to our marketing and submission efforts. 
  3. We negotiate Cash for you at closing!  Yes, you read that correctly...we have been successful getting our short sellers up to $3,000 at close to help with moving expenses. 
  4. It's not all about money with us....we enjoy helping people.  I know it sounds cliche and cheesy.  However, if you choose to work with us you will see we go well above and beyond money motivated work.  We will not pressure you or hound you.  We know a short sale is not for everyone and if there are other options we will point you in the right direction.  Give us a call....you'll be glad you did. 

Frequently asked Questions

 


National real estate companies, for the most part, have found success through the compartmentalization of tasks.  The realtor sells their services to the homeowner/buyer, the assistant does open houses and phone calls, the transaction coordinator deals with the paperwork, and so on.  This is not even mentioning the short sale negotiator that most of these companies outsource to when dealing with short sales.  The problem with this socialist method is that short sales are all about instant communication.  Let me elaborate...the bank's short sale staff is set up to move with the first person that is ready/capable to work with them at that moment.  So if they make contact and need something re-faxed, corrected, or a question answered and the negotiator has to call/e-mail the assistant, who calls/e-mails the agent, who calls/e-mails the homeowner....well you get the picture.  Needless to say, the bank will move on to the next file far before that multiplayer game of phone tag concludes.  Nexgen, on the other hand, has two points of contact for the bank and both of us will be completely up to date on your file.  So regardless of who is in the office at that particular time we will not skip a beat.  Once the banks see that we are always ready and willing to go we have found that the bank streamlines your file. 

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Of course it is......okay unfortunately it is not going to be that easy to ascertain the answer to that question.  There are a lot of factors that influence whether you should short sell.  For example, did you or your loan officer overstate your income, falsify documents, residency intention, or a job all together.  I hate to be the bearer of bad news but that was and is fraud.  Whether they would come after you is debatable and whether they would win a judgment is a question for a lawyer.  However, since the short sale process requires submitting hard evidence of your income, assets, and hardship it would be playing with fire to provide the bank with indisputable evidence of your prior act of fraud.  That being said, this is where a conversation would lead to a personalized answer to this question.  This is just one example of many that would dissuade me from doing a short sale for you if your application did indeed leave you susceptible to recourse.  Others are outlined throughout this Q&A.

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Prior to last year short sales often left buyers and sellers in a state of purgatory.  It is debatable whether it was the banks unwillingness to cooperate or the lack of a specific department to handle short sales that was the cause of this grueling process.  However, one thing everyone could agree on is that a year or more to buy or sell a house is an experience that you are not going to want to repeat.  Last Spring the government stepped in and tried to streamline the process and create more clarity for agents/buyers/sellers.  Click "What government or other programs have been implemented to help me?" above for more information.  As a result of these changes I estimate the average short sale is down to about 60-90 days for full approval  

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  • When would I have to move out of my home?

This is probably the most common question I am asked.  Afterall, many times your credit has taken a hit from the delinquent payments and the hardship has depleted your bank account.  So finding a new place and affording the deposit and moving expenses is very daunting. (which is why we try to negotiate $3000 moving expenses in your short sale everytime.)  That being said, some agents have their clients move out way before short sale approval, let alone closing.  Timing can be a little tricky with short sales so erring on the side of caution is definitely the easy way to do it from a real estate agent perspective.  However, there are a couple problems with that approach.  First, A vacant house (especially one that used to have a for sale sign) attracts vandalism which could affect the appraisal and the buyers financing.  Second, HAFA makes you agree to maintain the property in order to qualify.  Finally, in some cities your house can acrue fines for a dead lawn or unsightly condition.  Although it takes a lot more communication to time it, for the above mentioned reasons we do not have our clients vacate the property until just before closing.  When final approval is close we will give you warning......usually 30-45 days before you will have to be completely moved out.  That will have you out of the home about a week before closing.  So if your short sale takes 60 days to get approval and has a 45 day escrow you will have to move out  in just under 100 days from when we start the process.  That being said, if you have to move out because of a job relocation we can work with you to address some of these concerns and make it work.

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  •   Do I have to pay anything to do a short sale?

If you qualify for HAFA then neither you nor the buyer is allowed to contribute to the banks loss outside of escrow.  Not only that but we have been successful negoitiating $3000 for relocation costs in our HAFA approved short sales.  Not HAFA?  Well, unfortunately, the waters get a little murkier trying to answer that question.  There are a lot of variables that will affect the lenders decision.  For example, did you cash out.......was it for home repairs or did you buy a car.  The bank is always going to try and get money out of you to contribute towards their loss...that is why you need a strong negotiator to work out the best deal possible.  The good news....a majority of the time our clients receive money at close of escrow

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  • Can I get any money out of the sale of my house?

We will try and negotiate $3000 "cash for keys".  That will be the maximum proceeds that you can receive.  I sometimes hear that "Joe Schmoe realtor will kick back a percentage of his commission if I go with him".  I understand wanting to walk away with as much money as possible, my blood flows red just like every other American.  However, this is a prime example of defrauding the bank and in the case of HAFA defrauding the government.  HAFA makes you and your agent sign under penalty of perjury that you, the seller, are not receiving any proceeds above and beyond the cash for keys.  Will you get caught?  maybe not........but while you are justifying it you might want to consider other Federal crimes that might yield more money like money laundering, embezzlment, or just dust off the old ski mask and hit up a teller at the bank.  Bottom line.....let Joe Schmoe go meet Bernie Madoff without you. 

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  • Can the bank come after me for money after we close?

This is a great question and one that is not asked enough by homeowners considering a short sale.  What you owe at close if anything is completely predicated on what was negotiated in the short sale process.  It is becoming more common for the banks to forego future recourse.  However, I still occassionally hear about an agent and homeowner who blindly assume.........and we all know what happens when you ass...u...me.  Bottom line, both the agent and the homeowner should be double and triple checking the contractual verbiage.  If there is any doubt pay a lawyer an hours wage to review it.  Oh yeah, and don't assume that just because the 1st lien gave up their rights that the junior liens have to follow suit.  Every contract is different.

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  • Is there any tax liability that I will be stuck paying if I short sell?

I am not a CPA nor do I prepare taxes.  However, in the interest of trying to provide something other than useless disclaimers let me try to answer the question.  Under the Mortgage Forgiveness Debt Relief Act of 2007, if the property was your primary residence and you meet the other criteria you will be exempt anywhere from 1 to 2 million dollars of cancelled debt depending on your filing status.  See Internal Revenue Code §108(a)(1)(E) for the full list of requirements and conditions.  The indebtedness discharge date has been extended to January 1, 2013.  As for California.....the California Mortgage Debt Foregiveness Relief Act provides the state law equivalent and mainly conforms to the requirements of the Federal Act.  However the exemptions are far lower at between $250K and $500K.  For more information see California law, Senate Bill 401, which conforms California Revenue and Tax Code Section 17144.5.  Most people I have spoken with fit easily within the confines of the relief act and are not subject to taxation on the cancelled debt.-back to top

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  • What about my HOA, property taxes, etc...do I have to be current or pay them?

Warning:  Do not fall too far behind on your HOA.  I had a client who had a supplemental HOA that was due about $500 in back HOA fees.  I negotiated the short sale to cover all delinquent property taxes and both HOA's with no recourse.  Everything was going good and we were about a week from closing when escrow ordered an update from the HOA.  Turns out they transferred it to a law collection company (Question:  what is worse than a lawyer or a collection company?  answer:  A lawyer collection company) within the last couple weeks since we had spoken with them.  The law firm instantly tacked on $5,000 to the $500 and were unwilling to negotiate.  They filed a judgment and were going to begin garnishing her wages.  The worst part, it is completely legal.  I was able to renegotiate with the bank to close this example, but it is a classic case of how cold and calculating your HOA will be.  All that being said, all reasonable delinquencies on your HOA and property taxes that matches your hardship will almost always be paid off by your 1st lienholder.

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  • What about my 2nd or 3rd mortgage?  Do I have to pay them to short sell?

Subordinate liens have become more cooperative lately as well.  Most of the time a good negotiator can have the first lienholder pay the subordinates and have you walking away with no recourse.  Of course, it depends on the amounts, when you opened them, and sometimes what the money was used for.

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  • What government or other programs have been implemented to help me?
The government implemented a new program that started March 2010.  The program is called Home Affordable Foreclosure Alternatives (HAFA).  The goal of this program is to allow lenders to avoid expensive foreclosures and give incentives to borrowers who proceed with a short sale.  Not everyone will qualify and not all lenders will participate.  Some requirements are:
  • Your first lien was originated on or before January 1, 2009.
  • The mortgage is in default or behind on payments default is reasonably foreseeable. (loss of income, health, or valid hardship)
  •  The property is your principal residence
  •  The unpaid principal balance does not exceed $729,250.
  •  Your monthly mortgage payment including principal, interest, taxes and insurance exceeds 31% of your gross monthly income.
  •  You have a valid financial hardship and insufficient liquid assets to continue making your payments.
  •  The investor on your loan is NOT Fannie Mae or Freddie Mac.
 Advantages of a HAFA short sale:
  • Your first mortgage lender is supposed to respond within 30 calendar days with a decision regarding the short sale request.
  • Your first mortgage lender will pay up to 6% toward subordinate liens up to $3,000 each and $6,000 total.
  • All lenders release you of any future liability or deficiency judgement.
  • The lenders are not allowed to require you to make a cash contribution.
  • You can receive up to $3000 at close of escrow for moving expenses.

Updates to the HAFA guidelines as of February 1, 2011:

  • You are no longer required to have your monthly payment (principal, interest, taxes and insurance) exceed 31% of your gross monthly income.  You must still have a valid financial hardship.
  • If you have vacated your property in the last 12 months for any reason, you are still eligible to be considered for a HAFA short sale as your principal residence.
  • Your first mortgage lender are no longer restricted to the 6% cap to pay off subordinate liens, but can pay off any amount until the $6000 maximum is reached.
  • Your lenders are now required to issue an answer to the HAFA short sale request within 30 calendar days.
  • You no longer have to be denied a modification before requesting a HAFA short sale.  You can apply simultaneously for a modification and HAFA short sale.

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  • Do the above mentioned programs work?

I am amazed to admit that I am writing this statement but the government's programs have made a significant impact on the execution of short sales.  Unfortunately, they do not apply to everyone and not every bank participates. 

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  • I heard my bank won't do short sales.....so why waste time trying?

Put quite frankly.......because I don't believe it.  Foreclosure is a very costly alternative for a bank.  If you have a valid hardship and the short sale makes sense to me I don't see any reason I can't get it done.  My first rule with short sales is don't believe everything you hear.  The threat of and act of foreclosure is a very stressful and traumatic experience that can cause many people to exaggerate facts and circumstances.  The internet is loaded with them, as well as, outdated information.  As I have been constantly saying last spring revolutionized the way that short sales are executed.....so anything prior to that might have no relevance to a banks way of handling short sales today.

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  • I already received a notice of default....is it too late?

No it is not too late.  As a matter of fact the majority of the short sales I have done have started at or after the homeowner received a notice of default.

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  • I just received a notice of trustee sale...is it too late?

No it is not too late.  I have successfully closed a short sale that was within 48 hours of the actual trustee sale.  A notice gives you 30 days.  That is plenty of time to stall the foreclosure and get a short sale package in with the lender.  It will be more demanding than if you had started the process earlier, but it is very doable.

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  •  My house was auctioned off already...is it too late?

I originally put this in as a joke with the simple answer as an obvious yes.  However, I must add that there are circumstances where it is not too late and the lender can take back the property, if it does not sell at auction, and allow us to execute a short sale.

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  • I heard a short sale ruins my credit just like a foreclosure, so why bother?

Every lender reports differently to the credit bureaus so you should thoroughly read the short sale approval letter to satisfy yourself of the verbiage that will be reported.  There are differences that occur when you come to purchase another home in the future:

  1.  Under a standard foreclosure, you will not be able to purchase another home for 7 years from the date it occured (if it was as a result of extenuating circumstances which is up to an underwriter's discretion, you may be able to purchase in 3 years but must have a 10% down payment and can only purchase a primary residence)
  2. Under a standard short sale, you will be able to purchase another property in 2 years with a 20% down payment and 4 years with a 10% down payment (if it was as a result of extenuating circumstances which is up to an underwriter's discretion, you may be able to purchase in 2 years with a 10% down payment).

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  • Can't I live in my house for free longer if I just make them foreclose?

 

When This mortgage mess hit the fan in 2008 the banks were completely caught off guard and did not have the staff capacity or short sale/foreclosure departments big enough to deal with the onslaught of delinquencies.  Given enough time even banks eventually figure things out though and get their house in order.  Currently, the foreclosure process with a large majority of the banks is as efficient as I have ever seen.  So to answer the question....no.  Actually most short sales (depending on when they are initiated) actually stall the foreclosure proceedings.  Most banks policies are if you are making a good faith effort at a modification or a short sale then they will automatically postpone any trustee sale.  That does not mean that you can just keep applying and getting denied for a modification and stay in your house an extra year, that scam was played out last year and the banks are very aware of modification squatters.  To summarize, an 18 month foreclosure process from initial delinquency in 2008 is now a 8 month foreclosure process in 2011.    

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  • I have already provided all my documentation for a failed loan modification....will I have to send it all again?

I wish I could tell you that you would not have to supply everything all over again.  In fact, I wish I could tell you that once I send it to them I won't have to send it 7 or 8 more times because "they didn't receive the fax".  The fact of the matter is, there is no way around preparing all those documents to send over.  The only way we can alleviate the pain is by being comprehensive upfront and anticipating the future documentation that the bank will ask for.  That way you are not getting a call from your agent every day asking for you to send them the latest bank request. 

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  • What if we don't get an offer on the house?

Unlike most realty companies we actually market our short sales as aggressively, if not more, than any standard sale we are listing.  The reason being is simple, a lazy real estate agent gets a lazy offer.  Banks do their research!  They have done their own BPO's or sometimes full appraisals, they have pulled an automated value search to double check the value, and they deal with enough offers that they know when one is garbage.  If you and your realtor submit an offer with no deposit, contingent upon them selling their house, no proof of downpayment, and an FHA loan....you might as well save a whole lot of time and energy and let the bank take the house.  That is a poor offer with way too many variables that can prevent it from closing.  The bank wants the price they want and the ability to close when you say you will with as few contingencies as possible.  Your real estate agent has to make that happen through communication with buyers agents and marketing.  You can't just stick a sign in the front yard and wait for a quality offer.  So back to the question....I personally have never had that problem, I usually have a qualified offer at fair market price within 2 weeks.

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  • Does Nexgen use a seperate short sale negotiator?

No.  We have the old school mentality that meeting with you face to face and learning of your hardship personally gives us more motivation and determination to get the bank to agree to our terms.  Not only that but someone has to pay for the negotiator.  It is either the seller or the buyer, as most agents will not give up their commission (even though they are drastically reducing their role in the short sale).  If it is put on the buyer many buyers will refuse to put an offer or try and build it into the price (both problems).  If the seller pays it....now you are taking away from the benefit of the short sale.  In addition, like I said in the earlier answer you want one or two professionals working on your file not 4 or 5.  If you are getting 4 different calls from different representatives everyday imagine how the bank feels when they have 100 files they are dealing with. 

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  • How long before I can buy a new home if I successfully short sale?

Under a standard short sale, you will be able to purchase another property in 2 years with a 20% down payment and 4 years with a 10% down payment (if it was as a result of extenuating circumstances which is up to an underwriter's discretion, you may be able to purchase in 2 years with a 10% down payment).

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Real Estate Broker - CA. Dept. of Real Estate, License # 01517298
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