The Importance of Home Retention/ Short Sale Appointment Preparation
Prior to any scheduled appointment with any potential customer I like to try to get-into-their-head. I want to understand their situation and their makeup as much as I possibly can prior to talking to them and without talking to anyone else.
It’s like the blank page of a coloring book, nothing but black and white outlines. When I meet with the borrowers, they’ll bring the color. But for now, I need to concentrate on the outline. I set out to become extraordinarily educated on the borrower, their personal situation and their property. The best way I know to do this is to do research in the public records.
The first step is to run the borrowers name and property address through the public records, the property appraisers’ and auditors’ websites. For those counties where internet access in not available yet, go to the records department of each of the previously mentioned authorities and run your request.
In order to bring the situation into focus, I copy each of the following documents from the public records or appraisers site if they appear.
The subject mortgage- From this document I can determine the loan origination date, the original balance and who the responsible parties under the mortgage are. The reason for this is that all parties that sign the mortgage will be required to sign the “Authorization to Release” form. All the names of such parties will appear on the mortgage.
The subject deed- From this document I can determine the date of transfer, (this will be important to help confirm whether the subject mortgage was a purchase or refinance), the amount paid if your state has a formula based tax that includes the purchase price in the calculations. In Florida our documentary stamps on the deed is .70 per one hundred dollars of the purchase price.). Additionally, you should be able to determine if the seller (at the time of the transfer into the current borrowers) was an end-user or an investor. It’s very important to my understanding of the situation to be able to make this distinction.
In the group of “friendly competitors” I frequently run with at the local foreclosure auction, we have made an interesting observation, and that observation is that some properties seem to be jinxed. These “jinxed properties” seem to re-appear at the sale every 5 years or so. Are these properties really jinxed? I don’t know, but there’s something about them that causes them to reappear.
My point is that, if you were going to meet a borrower of a property that has a history of showing up at the sale, wouldn’t you like to know? My suggestion is that you would. I’ll even go as far to say that you could fashion this information into an advantage when it’s time to negotiate with the lender. Just a thought…………….
The subject LP or Notice of Default- This document will (in judicial states) provide the case number (which in turn provides another source of valuable information), the name and complete contact information for the plaintiff’s attorney as well as confirms the date in which the action was initiated.
Tax Assessor Printout- This document will confirm the size of the subject property as well as the legal description, folio number among other facts. (This site is a great source of redundant information and is very important to confirm any already-in-hand facts.)
Additional documents to be on the lookout for include; any final judgments that have been entered against either borrower (assuming there are two borrowers), any previous LP’s or Notice of Defaults, (this might reflect a pattern of financial instability, however; being able to correct multiple defaults also shows remarkable resiliency)
Also, I try to become informed on any other legal actions (both pending and dismissed) in which my potential customer might have been involved in as either a defendant or a plaintiff. Not that the filing of lawsuits makes a huge difference one way or another, I simply prefer to know if the subject borrower is comfortable within the legal system and how many times they propelled the litigation by filing an action. I also like to know the type of action that was filed (for example; landlord-tenant) and whether the subject borrower used an attorney for the filing of the action. This information is all very relevant with regard to the makeup of the borrower.
As you can see, I believe in completely understanding the context of each situation being presented; as well as the mindset, and to a certain extent, the capabilities and fears of my potential customer. I’ll spend an hour or so prior to each appointment preparing for the borrower to color in my observations. I simply have to provide the outline.
Mr. Meyer is an accomplished real estate student, investor and trainer. He has participated in thousands of real estate transactions from foreclosure auction purchases and home retention (loss mitigation) to note and mortgage purchases and extensive foreclosure litigation.
Mr. Meyer will be launching a website in early 2008 (www.180LoanWorkout.com). The website is designed to address some of the concerns of delinquent borrowers, and to expose them to available options while gently guiding them towards a solution. This ambitious venture will require the participation of many local, well trained real estate investors, and may include intervening negotiations with lenders, home retention transactions and short payoffs and purchase opportunities.
Mr. Meyer currently operates Rockland Trust Corp (www.RocklandTrustCorp.com). Any questions or comments should directed to: Rich@RocklandTrustCorp.com
 E-mail: Rich@RichardBMeyer.com
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Richard Meyer is a proactive, create your own momentum, real estate theorist as well as the ultimate real estate student and a genuine outta-the-box thinker. (Whew, what a mouthful, I mean keyboard full) Rich seeks to convey a sense of humility, individuality and the importance of thinking outside the borders of conventional real estate wisdom when assessing default investment opportunities. He has personally participated in literally thousands of real estate transactions ranging from foreclosures (courthouse steps purchases) and home retention transactions to mortgage note purchases and (almost) everything in between.