As a licensed California attorney with decade of real estate experience, Michael Gaddis, J.D. has the in-depth knowledge and expertise needed to effectively negotiate with lenders and banks to assist homeowners with their distressed properties. His successful track record of over 100 successful short sales and nearing 1000 successful loan modifications speaks to his ability to fortuitously handle the many trying obstacles that arise through these transactions. If you have exhausted all other efforts and you know it’s time to short sell your home, Michael Gaddis, J.D. will ensure the process runs as smoothly and timely as possible.
Why trust this difficult time and rigorous, complicated negotiation to a sales agent when you can have an Short Sale Attorney and Expert protecting your interests? Contact Michael Gaddis, J.D. today to schedule a complimentary initial consultation. You may be surprised as what you discover when you get your questioned answered by a professional. It is not uncommon for our clients who are “certain” they must sell their home, to discover they have other options for recourse. Most Realtors’ sole objective is to sell your home, ours is to understand your scenario and give you all your options and to protect your best interests. Find out what all of your short sale options are when you meet with a Real Estate Broker and Attorney.
What is a short sale? A Short Sale is a loss mitigation tactic utilized by lenders in which a lender agrees to accept less than the unpaid principal balance on a loan securing real property because, by doing so, the lender avoids the additional fees and costs associated with foreclosure. The amount remaining after the conclusion of a short sale is called a deficiency. The benefit of a short sale to the borrower is that the deficiency is typically waived by the lender and reported to the credit bureaus as “settled for less than the agreed upon amount”. This reporting, while negative in nature, is far better than having a reported foreclosure.
When to Short Sell
The answer to that question, while seemingly simple, is much more complex than one would anticipate. The first question a homeowner needs to ask is why is short sale even a consideration at all. Homeowners tend to fall into categories. The first category of homeowners are those that are concerned about the value of their house. These homeowner's only concern is how much they owe on their loan versus its currents market value. The second category of homeowners are those that are more concerned with obtaining an affordable payment. Even further some people who think they "have" to short sell may be candidates for loan modifications...
Tuesday, June 17th, 2014 by Michael Gaddis, J.D. Realty Group
The most frequent search term used to locate my short sale website is “Short Sale Timeline“. According to my website’s analytics people from all over the country are searching for information pertaining to the length of time a short sale takes to complete. While I provide a general time breakdown of short sales in my article located at http://sdshortsaleattorney.com/short-sale-timeline-how-long-does-a-short-sale-take-to-complete/ I think it is necessary to provide some updated information regarding short sales. First, short sales do not happen overnight. They take time. Much more time than a standard equity sale. Short sales require an additional, time consuming, step I will call “Lender Approval”. Lender Approval is when the short sale is evaluated by the homeowner’s lender to ensure that the offer is acceptable to the lender’s investor. There are several stages within the Lender Approval process that are necessary before the lender will issue an approval.
One of the most important parts of the Lender Approval process is “Property Valuation”. Property Valuation is when the lender hires a 3rd party real estate broker or appraiser to provide them with an independent opinion of value. The lender could use an automated valuation module (“AVM”), order a Broker’s Price Opinion (“BPO”) or order an appraisal. BPOs are used the majority of the time. BPOs are completed by local real estate agents and are usually more accurate than AVMs and much more cost effective to obtain than appraisals. The goal of Property Evaluation is to ensure that the submitted short sale offer is at, or close to, Fair Market Value (“FMV”). The lender has an obligation to the investors of the note to obtain an offer as close to FMV as possible. Waiting for the lender to order a BPO and to receive the results back typically takes 1-3 weeks.…
Monday, June 16th, 2014 by Michael Gaddis, J.D. Realty Group
For most homeowners, the decision to short sell is made only after an extensive amount of intense internal turmoil. Usually, homeowners decide to short sell only after realizing that fighting for a loan modification is futile or that, under their circumstances, that any resulting loan modification will not be in their best self-interests. Short sales are difficult emotionally for homeowners. Most have put enormous amount of time, money and sweat into their home. Once the decision to short sell is made most homeowners are quick to “circle the wagons” and start preserving as much money as possible. Many quit attending to maintenance issues, quit paying property taxes, quit paying for insurance and some even quit paying their homeowner’s association (“HOA”) dues. Homeowner’s rationalize all of this because they are not getting any money out of the sale of their home so the best way to recapture lost investment is to stop paying for ancillary costs related to the home. Of all of the things that a homeowner could stop paying perhaps one of the more challenging ones is HOA dues. Since 2009 HOAs have taken a beating from homeowners who have decided to stop paying. Many HOAs were forced into insolvency and many others were on the verge of going under. Homeowners that continued to pay their homeowners saw the effects of their HOA’s financial stress through deferred maintenance of common areas, raised HOA dues, closure of non-essential HOA maintained areas (pools, spas, clubhouses, etc.), etc. Homeowners who were at odds with HOA for failure to pay their monthly fees typically received fines and penalties for other issues related to deferred maintenance of the property as well. Homeowners would have a “add it to my bill” mentality. HOA bills that would have been $15k for past due HOA dues became $27k due to fines for things such as failure to maintain landscape, failure to repair a fence, failure to move a satellite dish, parking an RV or trailer in the driveway, etc. All of these fines added up to a monstrous past due HOA bill. For years HOAs sat back while accounts receivables increased.
HOAs attempt to exact revenge when homeowners attempt to short sell their home. First, HOAs can provide a financial obstacle to a successful short sale. Typically, the HOA will have filed a lien against the property thus ensuring that their spot in line. They must be dealt with. Sometimes 1st and 2nd lien holders will agree to pay off the HOA from the short sale proceeds. However, fewer and fewer lenders are agreeing to pay the HOA. The lenders are forcing either the buyers or the homeowners to rectify the HOA issue. Second, HOAs are no longer just sitting around waiting for the house to foreclose or for the homeowner to start short sell. Instead, HOAs are pursuing foreclosing on their interests. HOAs theorize that if they foreclose on the house and become the legal owners of record, they could evict the non-paying homeowner and then rent the house out for as much as possible to begin recovering their past due HOA payments. The HOAs understand that the senior lienholders could still foreclose thus extinguishing their legal rights but the HOAs are banking on being able to rent out the property for as long as possible. Third, if the homeowner is foreclosed on by the first lien holder the HOA will continue to pursue the homeowner for any past due HOA payments.…
Wednesday, June 4th, 2014 by Michael Gaddis, J.D. Realty Group
Michael Gaddis, J.D. Realty Group recently obtained a short sale approval for Michael Gaddis’ listing at 7053 Leeward St., Carlsbad, CA. The process has not been easy or without its problems. To date, 2 different buyers have backed out during the lengthy short sale negotiation process. The current approval is the 3rd approval that Michael Gaddis and his staff have had to procure so far. The reasons the previous buyers backed out had nothing to do with the property, the buyers just got fatigued by the amount of time that Bank of America, the servicer of the loan, was taking to issue an approval. By the time that Bank of America issued the approvals the buyers had moved on.
The irony is that the homeowner is participating in the cooperative short sale program at Bank of America which allows Bank of America to become involved in the marketing process of the short sale. Since Bank of America was involved in setting the price one would imagine that approving the short sale would not take a long time. However, the short sale process for this particular property has been laborious. Bank of America has repeatedly closed out the short sale process without cause only to reopen it and start from the beginning. Thankfully, Michael Gaddis, who is also a licensed California attorney, contacted several Senior Vice Presidents (“SVPs”) at Bank of America and advised them of the nonsense that had been transpiring during this particular short sale. The SVPs intervened and the short sale was put back on track.
The reality is that every short sale has its share of problems. Some more than others. In attempting to obtain an approval for 7053 Leeward St., Michael Gaddis had to stop six (6) Trustee Sales. When asked about the difficulties faced with short sales Michael Gaddis smiled and said, “Short sales are definitely not for the faint of heart.”
The current buyer has remained patient and steadfast during the approval process. Another key to a successful short sale is selecting a buyer that will remain patient, is flexible and committed to the property. Selecting the wrong buyer can be disastrous. Investors tend to be the most fickle buyers and will frequently bail without much notice. Buyers that are purchasing the property for their owner occupied home are usually more committed to the process.
Michael Gaddis is hopeful that this transaction will close on or before July 25, 2014. …
Friday, February 21st, 2014 by Michael Gaddis, J.D. Realty Group
Short Sale with Second LienCloses for Oceanside Homeowner of 55+ Community
Short Sale with Second Lien Video Transcript
**Video Auto-transcribed by Youtube, please excuse any inconsistencies.
Hi I’m Michael Gaddis. I recently closed a short sale with a second lien in Oceanside located at 3673 Mira Pacific Street this property is located at 55 and older community and has significant deferred maintenance the property had was encumbered by to reach the first was with SLS and the second lien was with real time resolutions, or RTS as the as is commonly the case when you have a person second lien holders that they are withheld by different servicers there was a battle the first lien holder SLS wanted to give the second lien holder RTS twenty one hundred dollars are eight percent other outstanding balance of course RTS wanted more money after haggling them down I eventually got into agree to 4,000 you know you’re probably thinking well four thousand is not 2100 well I approached the other agent buyer’s agent might all about problem I said it seems that we are at an impasse you know a SLS only wants to get 2100 RTS once 4,000 well after discussions you agree to approach her buyer to see what his idea less the buyer told his agent that he was willing to bring in the nineteen hundred dollars problem solved right actually not the problem is that SLS was not going to allow for third-party contributions to the second lien holder at all from NOLA period in other words SLS was telling RTS you’re getting a percent you’re not getting anything that’s it so we had this battle over egos going on between us a lesson RTS in fact we conference called RTS and as a less together an RTS pitch their point and as a less was still saying no now SLS at something interesting they said that it was based on their investor guidelines that basically their investor worse preventing them from allowing third-party contributions well I asked to do their investor was they told me and they said it was Bank of America well just so happens I know people obey America so I went to Bank of America and I told you about the problem Bank of America said well that should be adaptive an issue we can allow for a third party contribution let me research it so after the research that they can to find out they don’t own the loan anymore they sold %uh servicing rights mean the ownership rights of two nations star well it just so happens I know people in Nation star to so I want a nation star and I told Nation star the same day and they told me it shouldn’t be a problem but let me investigate in the meantime I approached RTS about it in fact I approached a very high level executive at RTS about it and I told him about the problem so apparently he had some contacts over at Nation star as well so between the executive at RTS and my cell we were able to get a very high level nation star executive involved who authorized SLS to allow for the third party contribution to go through so that we can close the short sale this is a classic case how you know short sales most believe holders can become very, very difficult situations for your average real stage it the only way that I was able to navigate through this was I had to take my realtor cap of in but my lawyer had on in trying to get someone over there who had some sort of a power to look at this objectively and say it doesn’t make sense for us to let this thing go through I it was a very good offer on the house the house was an a you know had a lot of deferred maintenance SLS didn’t want to take this ass back they were getting a very good offer on it was a good deal for everyone involved and that age to the intervention executives at Bank of America nation star an RTS we were able to close this Short Sale with a second lien.…