Mrcardle employed Encompass Realty ® to sell his house at fair market value but fair market value is less than originally owed, so Manny, Broker of Encompass Realty ® started the short sale November 2007. After over 50 phone calls Litton Loan Servicing gave a short sale approval on about February 2008. But one week before Litton Loan Servicing fax over the approval, the buyer would not wait 4 months and cancel and bought another property.

Encompass Realty ® received another offer February 2008, and Litton Loan Servicing stated it should take two days for an approval. Mean while the real estate market is still declining in most areas. Litton Loan Servicing promised May 27th 2008, in about 48 hours we should get the approval. This is now 3 months later. May 30th, 2007 .Encompass Realty® received the fax approval and guess what, buyer cancels and buys another property couldn’t wait 3 months. Who is to blame them.
So the question why would any buyer make an offer on a short sale? why wait so long? agent for Century 21, who does not want to be name, stating that the agents are being told not to make offers on SHORT SALES properties for sale.

In speaking today with Anthony with AZCO Properties says that a good percentage vacant REO vacant properties are getting broken into and what is getting stolen are taking cooper plumbing, AC units and more.
Manny Caballero of Encompass Realty ® stated he just got off the phone with Ocwen they stated Ocwen is not doing short sales? What is Ocwen Financial Corporation up to? Manny is also stating Indy Mac is charging to process a real estate Short Sale.

take example of a short sale with Encompass Realty ® who is currently negotiating with a bank:
Property Purchased in March 2005 with a $ 143,000 purchase price. The first mortgage is foreclosing with a sale date May 21st, 2008. There was a second mortgage taken out by the owners to remodel their house. The second mortgage is with Washington Mutual, aka WaMu.

In a real estate foreclosure situation when the first mortgage reaches the foreclosure auction date and nobody bids to purchase the property, it goes back to the bank as a REO, which is a good chance in today’s real estate market. What happens to the second mortgage? The second mortgage loses their investment.
So with the foreclosure sale date approaching, Encompass Realty ® has been trying since early April 2008 to obtain a short sale approval on the second. The second mortgage investor would get back 25% of the loan amount which is unheard of in a real estate short sale. Normally a second would only be allowed to bet only $ 1,000 to $3,000. Washington Mutual doesn’t return phone calls. Stay Tuned.
Realtors may want to rethink making offers on real estate short sales. Unless you can wait months, Manny states he rather make offers on REO and real estate resale’s.

What is a real estate short sale? A: Simply, the real estate home owner owes more than fair market value.

Why would a bank accept a real estate short sale?
A: Most real estate markets it would cost the bank more money to complete a foreclosure, pay attorney costs, pay to maintain the property for sale, pay to make repairs, pay pay pay. It costs a bank about 20% to 45% of the existing mortgage to sell the property as a REO due to declining.

What makes short sales so hard?

1. A BPO (Broker Property Opinion) agent that wants to remain anonymous, states in order to get many BPOs from Clear Capital (http://www.clearcapital.com/) the real estate agent was told to increase their opinion of value because Clear Capital had to “maintain good relationship with the banks so they can make money” The banks uses a BPO to determine if a offer for a short sale is a good offer, but are they getting incorrect information? According to the anonymous agent, Clear Capital pays these agents about $50.00 to $ 85.00 to do the job a licenced Apprasier or a Real Estate Broker. I wonder what the percentage of real estate property goes back to the bank? In most states, Clear Capital is in violation of Real Estate Law, where most states require its the Real Estate Broker that can pay a real estate agent not Clear Capital.

2. Banks or Servicing agent for the bank are not staff to handle real estate short sales. Encompass Realty ® states in April 2008 some banks are taking up to 4 months to approve a short sale, most real estate buyers can’t wait that long and canel the transaction leaving the real estate company 30 days to find another buyer.

3. Banks or Servicing agents for the banks finally get ready to approve a real estate short sale, like Countrywide, in April 2008, told the listing broker to reduce his and the selling agent commision in order to get an approval. Companies like Countrywide and others are “Interference with an existing contractual relation occurs when an outside party interferes with an existing contractual agreement between two other parties. ” Because Country wide and companies like them are infact open to a lawsuit because they are interferring with a existing contract between the listing brokerage and the seller and the listing brokerage and the selling brokerage. Its a time bomb that could have a class action law suit just waiting to happen.

4. BPO’s, banks not paying for a apprasial from a licenced apprasier, or getting a Broker Property Opinion from a Broker who has many years of experience rather an typical agent with less than 1 year experience is most likely getting the wrong information such as the BPO’s from Clear Capital.

Encompass Realty ® states the #1 reason people are in a real estate foreclosure is ” job loss”.

#2 reason people are losing their homes to foreclosures? Bank are not willing to lower their interest rate or convert the arm mortgage to a fixed rate. Thats right, Federal Goverment has a program call “FHA Secure Program”, Encompass Mortgage LLC reports they had referred 50 people that qualify for the “FHA Secure Program” but the bank with the licence to do FHA insured loans added more conditions outside the lending guidlines of HUD and rejected the 50 people for any refiancing. If we know of 50 people who could not get a loan per the FHA guildines from a Bank that has a FHA licence should the bank have a FHA licence.

#3 reason people are in foreclosures is really they were put in bad loans and they really can’t affored the property or the bad loan. In most cases banks could lower their payment or those qualified for the FHA Secure Program refiance them to a lower payment would reduce the “wave of real estate foreclosures”

Companies like “Walkaway Program LLC” are starting left and right. We recommend Walkaway Program but there is so many companies that don’t help anyone. Buyer Beware..

In California and Arizona people are putting their house keys in the mail, mailing their keys back to the lender, ” Jingle Mail”
People facing foreclosure are feed up waiting for the bank to approve payment arrangements to get out of foreclosures and lack of communication or their property values are declining so bad, that “Jingle Mail” is increasing.

Banks and their servicing agents better pay attendtion, as of today in the Arizona MLS, there are 45,559 residential houses for sale and of that 6,533 for sale are owned by the bank, thats 14% of the homes for sale today are owned by the bank. Encompass Realty ® believes that number is really 30% because the time it takes to get a foreclosed property ready to sale is taking time due to the sheer number of foreclosures.

What is the future for Banks? Class Action Suits from Real Estate Brokerages and sellers? More Foreclosures because banks can handle the sheer number of calls for help on payment and short sales?