Questions that any agent must be able to recite like their ABCs. These are Short Sale 101 questions and it gets much, much more complicated from here. If you want to gauge their capability, this is a great starting point:
1. What does the term ATP stand for and what type of loan does it apply to?
A: The acronym stands for Approval To Participate and it applies to FHA short sales. It is the form from which describes all the specific terms for that specific FHA short sale.
2. What is the minimum number of days prior to a foreclosure sale date needed to request/get a postponement on a Fannie Mae or Freddie Mac short sale?
A: 31+ days. Anything inside that stands less than a 5% chance of being postponed. Fannie Mae and Freddie Mac are very deliberate in the way they proceed to foreclosure.
3. What is the generally accepted best way to escalate a short sale file at Bank of America?
A: Believe it or not, using Twitter. The social media group has tremendous exposure to the highest levels of senior management and a massive budget. They are the most effective avenue to putting the heat on the loss mitigation department which handle short sales. The short sale department is especially responsive when the social media group gets involved.
4. How long after a foreclosure in Maryland can a first mortgage holder pursue a deficiency judgment for the uncollected balance of your mortgage?
A: It is an affirmative legal action in Maryland whereby your lender must file for a deficiency judgment by confirming the sale of your property under foreclosure within 30 days of the foreclosure. After 31 days the window is shut on your first mortgage holder and they can no longer collect the balance.
5. How long after a foreclosure in Maryland can a second mortgage holder pursue their balance?
A: Generally seven years, however your lender can sell the debt to a collection agency for pennies on the dollar who can revive the debt indefinitely. This can pop-up years later unbeknownst to you in the form of garnished wages or liens on property or bank accounts. This is one of the largest dangers of letting your property simply foreclose.
6. On a short sale offer at what point should a potential buyer’s due diligence begin when you are the seller?
A: It must always be at seller acceptance. Most buyer’s agents will request it began at your lender’s approval of the short sale which could be 60 to 90 days later. If your agent allows this to happen and the buyer terminates 90 days into the process your odds of foreclosing are exponentially higher. Due diligence must begin with the accepted contract and run no more than 10 days. Time is generally not on your side and we’re not going to let a buyer’s agent waste what little you have left.
7. How many short sale offers may a seller sign and submit to their lender?
A: a seller may only enter into one legally binding contract at a time (with additional backup contracts that are designated specifically as backup contracts if the seller so chooses). Only one contract may be submitted to your lender at a time.
8. What is RASS and under which federally regulated short sale program is it applied?
A: The RASS form is submitted to the servicer when an offer is received to provide the terms and conditions of the short sale and together with the sales contract, provides settlement instructions to the settlement agent. The servicer will also provide the borrower a RASS, pre-populated with contact information for the servicer, the property address and the loan number. It is one of several forms for the HAFA program which is quite prevalent in the industry.
9. What is the minimum net proceed generally accepted on an ATP form?
10. What does the acronym QWR stand for?
A: Qualified written request and one of the avenues we can utilize to slow down the loss mitigation department if they are accelerating the foreclosure process.
If the agents you are interviewing do not know the answers to these questions in their sleep, and without hesitation, you are putting yourself in a precarious position because these are “crawl before you can walk” type questions. There are many twists and turns and these are just the basics. If they miss any of these or simply don’t know them right off the top of their head, move on quickly as they are not qualified to take on this transaction for you. If they have to tell you they will get back to you on ANY of these, you are working with the wrong person.
MAKE SURE ANY AGENT YOU CHOOSE HAS CLOSED AT LEAST 100 SHORT SALES – MINIMUM. ASK TO SPEAK WITH AT LEAST 5 THAT HAVE CLOSED IN THE LAST MONTH. MAKE SURE THEY HAVE CLOSED 10 WITH YOUR LENDER SPECIFICALLY. IT’S BEST IF THEIR TEAM ONLY DOES SHORT SALES BECAUSE THE PROCESS CAN BECOME “CHALLENGING” AND THEY MUST KNOW HOW TO HANDLE THE TWISTS AND TURNS.