But I Want to Keep my House

A conversation with the nice lady who was referred to me this morning was a reminder of why so many properties go to foreclosure auction unnecessarily. I feel bad for her. Her common law husband passed away around this time last year and with him what little income they were surviving on. She has been trying to get on disability income since that time. Meanwhile the house payments are far enough behind that the bank began sending back the payments she was able to scrape together.

At this point she is five weeks away from the foreclosure sale date. There is about $50,000 equity in the property. She doesn’t even need a short sale. We could sell her home and she would walk away with thousands of dollars which she and her 9 year old son desperately need. Instead she is going to attempt to find someone to help her get the bank to work with her even though they have refused for the past year. It’s bad enough to see a struggling homeowner have an unnecessary foreclosure when they could have avoided it with a short sale on their property, but this is much worse.

I know there are many reasons why a distressed homeowner wants to hold on to the home they are losing but it’s hard to watch. It’s hard to watch because I know the inevitable outcome; despite the time, energy, and emotion I’m sure she will put into trying to save her home, and it is devastating. It is a hard reality to accept but sometimes things just don’t end up the way we had envisioned. However, trying to force something that is not realistic can often times result in a worse outcome than just leaving the home you love. In many cases that outcome may haunt a person much longer than necessary. This is usually the case with a distressed homeowner who refuses to let go of their house and be proactive in avoiding foreclosure.

I have found that people who are struggling with an unmanageable mortgage do one of two things. Either they become proactive and are able to avoid foreclosure, resulting in a better scenario with less recovery time down the road. Or they bury their head in the sand and find themselves in a worse situation down the road than when they first realized they were headed for foreclosure. It is up to each individual homeowner which way they want to go. Unfortunately many times doing the right thing includes the difficult decision of letting go.

“Grant me the courage to change the things I can, serenity to accept the things I can’t, and the wisdom to know the difference.”


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Citibank Short Sale Process

One of the largest lenders with a high volume of short sales to process is Citibank. Like many of the large banks Citibank has made efforts to improve their short sale processes for more efficient timeframes and quicker short sale approvals. Also like most lenders, Citibank has a few steps in their process that are different from other lenders. It is important to be aware of these steps that differentiate one lender from another in order for the transaction to go as smoothly as possible in the shortest amount of time, creating the best experience possible for all parties involved.

Citibank requires their customer (the borrower on the loan) to contact them directly to initiate the short sale process. The borrower can call Citibank at 1-866-272-4749 Monday through Friday 8 AM to Midnight ET; Saturday and Sunday 8 AM to 8 PM ET, to notify the counselor they are listing the property for a possible short sale.

Citibank will request the following documentation to get started:

  • Loan information (balances of 2nd mortgages, automobile loan, or student loans, etc.)
  • Pay Stubs – Copies of 2 most recent pay stubs including year-to-date earnings
  • Bank Statements – Most recent personal checking, savings, money market, mutual fund, stock and bond statements.
  • Property Info – Current property tax and insurance statements
  • Homeowner’s Insurance – Policy Declarations page
  • *Self Employed? – If self employed provide a quarterly or year-to-date Profit & Loss Statement.

Citibank will require the borrower/homeowner to create an online profile on the Citibank website for submitting required docs and communication with Citimortgage.

Here are a few ways the Short Sale Specialist Realtor can be Proactive:

  • Evaluate whether the loan is Freddie or Fannie by going to the Fannie Freddie lookup sites.
    • For Freddie:
    • For Fannie:
    • If the loan is Freddie or Fannie, have the borrower request consideration for the Standard Short Sale Program (which is the HAFA II program)
    • If the loan is not Fannie or Freddie have the borrower ask for the HAFA program. It is a good idea to educate the borrower about the HAFA program and the benefits available.
    • Assist the borrower in completing the short sale package so it is ready to go when the initiation call is made. The HUD-1 from the purchase of the property should be included in the short sale package for Citibank

Once Citibank receives the short sale package with the third party authorization letter they will begin communicating with the short sale specialist realtor. The short sale specialist realtor can then proceed through the short sale process to:

  • Secure a Purchase Contract
  • Obtain contract approval
  • Close the property and complete the short sale transaction


Click here for Citimortgage Resources including:

  • Citimortgage Process Step-by-Step form
  • Citimortgage Contact and Escalation Info
  • Important Website Links
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Posted by on March 28, 2013 in Uncategorized


Bank of America FHA Short Sale Process

The US Housing and Urban Development Administration term for an FHA short sale is Pre-Foreclosure Sale. There are specific guidelines and documents required for an FHA pre-foreclosure sale. The basic guidelines as well as the short sale approval come from the HUD administration.

The Key Benefits to a Homeowner of an FHA Pre-Foreclosure Sale:

  • No Deficiency Judgement
  • Up to $1,000 Relocation Assistance

The following is an overview of the sequence of events and tasks in the FHA Pre-Foreclosure process for Bank of America and the Short Sale Specialist Real Estate Agent:

1. Agent – Have the distressed homeowner call the Customer Relations Manager number (1.800.669.6650) to request the FHA pre-foreclosure program.

2. Bank of America – Reviews the request to determine if the borrower is eligible for the program.

3. Bank of America – Assigns a short sale specialist to the file and sends out a welcome package to the borrower and the short sale specialist realtor.

4. Agent – Review the welcome package and supply requested documentation.

5. Bank of America – Orders title, appraisal, and issue (ATP) Approval to Participate.

6. Agent – Facilitate access for appraiser. Review appraisal and dispute if necessary.

7. Agent – Send executed Listing Agreement and MLS sheet to short sale specialist. Market property and update MLS sheet every 30 days.

8. Agent – Once an offer is received on the property, send executed contract, HUD-1, and Buyer Disclosure to short sale specialist.

9. Bank of America – Verify accuracy of all documents and issue closing instructions.

10. Agent – Email preliminary HUD-1 and closing docs on close of escrow.

11. Bank of America – Confirm closing date and issue Approval letter.

The following Documents will be required:

  • Bank of America Third Party Authorization form
  • Recent 30 days consecutive pay stubs for all borrowers
  • Recent 60 days bank statements
  • Hardship letter explaining the reason for default
  • Occupancy certification

Very important to make sure all documents requiring a signature are signed and dated.

NOTE: Beginning in the second quarter of 2013 Bank of America short sales will be processed online on the Equator system. The short sale specialist realtor must have an account set up on Equator to process the FHA short sale.


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Posted by on March 25, 2013 in Short Sales


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They Call Them Zombie Foreclosures

What’s worse than having your home foreclosed on? Having it come back from the dead to haunt you after the foreclosure. Many previous home owners are learning that having their home foreclosed on may not be the end of their mortgage troubles. In some cases the foreclosure never even took place and they still own the home along with all of the responsibilities that accompany it.

In Colorado the lenders have up to 6 years after a foreclosure auction to pursue the deficiency and attempt to collect their losses from the borrower. Most of the time the lender does not recoup all of the money owed them on the note for the property and they have the right to collect. This is one reason it is in the homeowner’s best interest to work out a foreclosure alternative such as a short sale, so there are specific terms agreed upon by the borrower and lender. This is a much better option than walking away from the foreclosed property and looking over your shoulder wondering when and if the collector will show up.

Other properties are coming back to haunt their homeowners as a result of a foreclosure that never took place. In some cases the homeowner was told the property would be foreclosed on so they vacated the property, but the foreclosure never happened. Realty Trac estimates there are around 2 million properties on which the foreclosure process was started and never completed. These distressed homeowners are contacted months or years later to discover they owe money on HOA fees, water bills, and property taxes. Many times late fees, attorney fees, etc have been added on and accumulated to a bill in the thousands. Some of these homeowners filed a bankruptcy to avoid the financial obligation of the deficient mortgage debt and told by their bankruptcy attorney to just let the property go back to the bank in foreclosure. Later they find they have these new bills from the property because they are still the owners.

All of this makes it impossible for damaged credit to recover. Credit these days affects every aspect of our financial lives from interest rates to insurance rates.  Zombie foreclosure that come back to haunt makes it difficult for a homeowner who lost their home to move on with their lives. There are many good options to avoid foreclosure. If you are a struggling Denver area homeowner feel free to contact me to learn what your options are to avoid foreclosure.


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How to Prepare a Successful Short Sale Package

When I negotiated my first short sale transaction back in November of 2004 there were very few systems in place and some lenders didn’t even seem to know what a short sale was. I can remember automatically faxing the same short sale package once a day for several days to certain lenders because it might take 2 weeks for the package to show in their system. If that one fax didn’t go through or was lost or shredded by the lender it would be another 2 week delay for them to receive the next. Over time most lenders have become more sophisticated in their methods of receiving and processing short sale packages. However, receiving short sale packages via fax is one thing that has not changed for many lenders. Bank of America began several years ago using the Equator online system to upload documents and process most non FHA short sales. Wells Fargo, Chase, and a few other lenders have recently jumped on board with the Equator process, but it is best to contact the lender and find out if they require faxing the package or receive it by some other method.

When you make the call it is a good idea to ask if they have proprietary documents you are required to complete or if they will accept the short sale specialist realtors generic forms for items like Borrower Financial Information forms, Third Party Authorizations, etc. There may also be specific required documents depending on the type loan and short sale program the borrower qualifies for such as FHA or HAFA (Home Affordable Foreclosure Alternatives).

The following is a list of documents that are generally required by most banks when submitting a short sale package:

Third Party Letter of Authorization

It is best to submit this document as soon as possible by itself first and include it again with the short sale package. Again, call the lender if you are not familiar with their practices because some lenders have a separate fax line for this and others use the same fax number as used for submitting the other short sale documents. Sometimes this document has to go through an approval process before it is available in the system allowing the short sale specialist realtor to speak to the lender about their client’s account, and negotiate the short sale. Include any support staff and escrow officers who may need to speak with the lender during the process. For example I have my assistant and title closer on the authorization form so they can speak to the lender for various aspect of the process they are involved with.

Hardship Letter

This all important piece of the short sale package allows the borrower to tell the story to their lender of how they got into the situation they are presently in, what they have done to try to remedy the situation, and why a short sale is the best solution to avoid foreclosure. It must be signed and dated by the borrower, with the loan number at the top of the letter.

Borrower’s Financial Information Sheet

Some lenders require their proprietary form to be used and others will accept a generic version. This document will show the borrower’s income and expenses. In most cases when a seller is applying for a short sale this form is going to show that the expenses exceed the income and thus the mortgage payment is no longer affordable. The document needs to be signed and dated by all borrowers on the loan subject to short sale.

Listing Agreement

In Colorado, this will be the Real Estate Commission approved Listing Agreement including the name of the Brokerage firm, individual broker, names of sellers, full property address, list price, terms of listing including commission, signed by all sellers on title and the listing broker. All pages should be initialed as well. It is typically a good idea to have some clause written into additional provisions stating that the contract is contingent upon the lien holder’s approval. Some lenders (and HUD for an FHA loans) have specific language they need included. We also add the verbiage “Sold as is”.

Fully Executed Purchase Contract

Check with the lender to see if they will accept electronic signatures. This will save a delay in having to go back to the parties for wet signatures and initials. Short sales on FHA loans must be wet signatures. It must be signed by all parties including both real estate agents, and initialed wherever required.

Proof of Funds

A pre-approval letter from the buyer’s lender, or Proof of Funds in the case of a cash buyer, must be submitted along with the purchase contract. This shows the short sale lender that the buyer can perform once short sale approval is obtained.

Last 2 Bank Statements

The last 2 bank statements for all bank accounts must be submitted along with the short sale package. Checking, savings, business (if self employed).  All pages front and back, even if they are blank. This is not a printout of the online account. They must be the actual monthly statements. The pages of most statements are numbered so don’t leave any pages out or they will assume you are hiding something and you will be required to submit missing pages. This is another common delay in the process. If there are large deposits or withdrawals provide a written explanation of what they are.

Last 2 Tax Returns

Submit all pages of the federal tax returns, signed and dated for the last 2 years. If taxes were filed electronically the form needs to be signed by all parties on the tax form and dated in the required spot before submitting to the lender. If the tax returns have not been filed a signed and dated letter of explanation along with extensions needs to be submitted along with the 2 most recent tax returns actually filed.

Last 2 W2’s

Last 2 years W2s need to be submitted for every W2 wage earner on the loan to verify wages reported to the IRS by the employer. If self employed provide 1099s and a Profit and Loss statement.

Last 2 Pay Stubs

Initially submit 2 pay stubs no matter how frequently you are paid. Another good question to ask the lender is if they want the last 2 or for a time period. Some lenders will say the last 30 days for example. If there is an unusually high amount of income on a pay stub because of a bonus or over time that is not typical, it is a good idea to provide a written explanation of that.

Preliminary Estimated HUD-1

The HUD-1 is a document used at closing to show all of the expenses, money coming in, and how it is dispersed. An estimated HUD-1 is used with the short sale package to show the lender an estimate of expenses for the transaction that will be taken out of their proceeds from the sale and the net amount that will be paid to them after closing. This is normally prepared by an escrow or title company closer. It must be completed with the full property address, seller’s names, buyer’s names, buyer’s lender information, and an estimated closing date. Because some of the expenses on this document increase over time it is a good idea to make the estimated closing date about 3 months out, since we don’t know how long it will take to get an approval on the short sale. A HUD is not an easy document to understand and was complicated even more by revisions in 2011, so it’s not a bad idea to include a worksheet to assist the individuals reviewing the short sale package in understanding the HUD.

Additional Documents for your Short Sale Package

Because of so much fraud in the past most lenders require a signed and dated IRS form 4506-T to be submitted. This allows the lender the ability to check the IRS records and see that the tax forms submitted are the same as those filed with the IRS.

It is a good idea for the short sale realtor to provide a CMA or at least 3 comparables for the property that substantiate the value. Once listed on your local MLS a copy of the MLS listing sheet and listing history for the property should be submitted by the Short Sale Specialist Realtor.

If repairs are needed on the home, provide 3 estimates for repairs and photos of the damaged areas needing repair. Also photos to show condition if carpet needs to be replaced, etc. is a good idea.

Specific types of loans such as FHA and short sale programs such as HAFA will require additional forms specific to those programs. Check with the lender regarding those documents.

Common Delays in the Process

The most common delays in a short sale process are missing or incomplete documents and missing signatures, dates, and initials. I could write an entire article on the detailed items that cause delays on each of the major lender’s proprietary documents alone. The thing to be aware of here is the fact that any missed signature, signature not dated, or missing initial where required, will cause a delay. Do not leave blanks empty. If the appropriate answer is N/A fill it in.

Also realize that a delay in the short sale process for something as simple as a missing date or initial is not a delay of a few hours or even a day. When a processor at the bank rejects a document for a missing item, that requires the short sale realtor to get the document to the responsible party for completion, the return of the document, and the document to be resubmitted by the short sale realtor. The document then must be uploaded by someone in the document imaging department of the bank, where it waits for a week or more until the file comes back up in the queue for the processor to once again review the file. During this time other documents are becoming stale and may need to be updated by the time the file is reviewed again.

As you can see there is much to be said for submitting a complete package in the beginning, and not giving that employee of the bank any excuse to set the file aside. I am a short sale specialist realtor in Denver Colorado.  If you have questions regarding the short sale process feel free to contact me. I am most familiar with the process in Colorado, but I will help you any way I can.



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Servicemembers Civil Relief Act

I think most of us would agree that the last thing a person fighting overseas defending our country should have to worry about is their home being foreclosed on back home and having their family put out on the street. According to the U.S. Department of Housing and Urban Development there may be some help in this area.

The “Soldiers and Sailors Civil Relief Act” was completely re-written and re-named the “Servicemembers Civil Relief Act”. The bill was signed into law by President Bush on December 19, 2003. This is the law that now governs legal protections for the members of the United States Military.

Legal Rights and Protections

Service members on “active duty” or “active service”, or a spouse or dependant of such a service member may be entitled to certain legal protections and debt relief pursuant to the Service Members Civil Relief Act (SCRA). In some cases these rights extend to Reservists and members of the National Guard when they are called to active Federal service.

What legal Protections Are Service Members Entitled to Under the SCRA?

If a debt was incurred by a servicemember or servicemember and spouse prior to entering military service the interest rate cannot exceed 6% during the time they are in military service. In the case of a mortgage, trust deed or other security obligation in the nature of a mortgage this limitation on interest rate extends to one year after military service ends.

The SCRA states that in a legal action to enforce a debt against real estate that is filed during, or within 9 months after the servicemember’s military service, the court may stop the proceedings for a period of time, or adjust the debt. Additionally, the sale, foreclosure, or seizure of real estate shall not be valid if it occurs during, or within 9 months after the servicemember’s military service unless the creditor has obtained a valid court order approving the action. There are qualifications to this and the property must have been purchased prior to the time when active duty began.

The SCRA contains many other protections for active servicemembers in addition to those pertaining to home loans. For example, in certain cases leases can be broken without penalty.

How Can a Servicemember Obtain Information About SCRA?

Servicemembers should contact their unit’s Judge Advocate or their installation’s Legal Assistance Officer with questions about SCRA, or for assistance. A military legal assistance office locator can be found at

The U.S. Department of Defense’s information source is “Military OneSource”. A servicemember or dependant who is listed as entitled to legal protection can go to  or call 800-342-9647 for more information.

Download a copy of the entire 45 page Servicemembers Civil Relief Act (SCRA) or an abbreviated 2 page copy of a SCRA_Publication detailing some of the most common forms of protection provided by the Department of Defense

PLEASE NOTE: This is just a brief overview is in no way to be construed as legal advice. Please contact the agencies above or an attorney of your choosing for legal advice concerning your situation.


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How to Stop your Denver Area Property from going to Foreclosure

If you are facing foreclosure of your Denver Area property you have several options to avoid foreclosure. The main thing is to act now. No more waiting. The sooner you begin to check out your options the more you will have. As time goes on your best options may no longer be available.


If you are already behind on your mortgage payments your lender will be calling and sending out notices. Don’t ignore them. Communication is key even if you don’t know what to do and do not have any way to pay them. If you don’t want to talk to them respond in a letter so they know what is going on with you. You don’t have to be subjected to nasty collection calls but most lenders have developed a more humane approach to find out your situation and let you know what your options are. Most lenders want to avoid foreclosure as much as you do. If you are not sure which approach is best for you or don’t fully trust your lender to have your best interest in mind, contact a professional for assistance in determining the best approach for your situation.

What to expect

Once you are 30 days late on a payment for your Denver area home you are in default but not in foreclosure yet. Any time after you are 3 months behind your lender may file the Notice of Election and Demand (NED). That is the official step that begins the foreclosure process in Colorado. You will know because you will receive multiple copies via certified mail. Filing of the NED establishes a foreclosure auction date about 110 to 120 days out. At this point you have about 4 months before the auction of your Denver area property. This date can be postponed for up to a year at the discretion of the lender, but they have to have a good reason to do so. Having a foreclosure avoidance program in process and under review is the most common reason for a lender to postpone auction. Some lenders have a policy of not postponing, so do not wait to take action.

Here is a list of 10 alternatives to Avoid Foreclosure. Some will apply to you and others will not:

  • Short Sale
  • Refinance
  • Bankruptcy
  • Forbearance
  • Reinstatement
  • Repayment Plan
  • Rent the property
  • Mortgage Modification
  • Deed in lieu of Foreclosure
  • Service member’s  Civil Relief Act

Click on the link for a free report I am offering called “Your First Steps to Avoid Foreclosure” that goes into more detail on each of these 10 options.

Your Plan of Action

The following are steps you can take if you are delinquent, in foreclosure, or on the verge of missing a mortgage payment on your Denver area property.

 Your First 3 Steps in the Right Direction

1. Gather financial information (bank statements and paystubs for the last 2 months).

2. Communicate with your lender that you will be seeking foreclosure avoidance counseling.

3. Contact an educated real estate professional like me to learn about your options to avoid foreclosure.

Feel free to contact me any time for more information or assistance.





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