Asian Journal- The Filipino-American Community Newspaper

Q: WHO pays for HOA Fees on short sales?

The bank/lender will have to include on the transaction. I have had lenders pay 3 years of back HOA fees and back taxes. They do pay HOA . It is my understanding this becomes a lien on the property at some point and will get paid even before taxes at times. If the property goes to foreclosure the HOA companies will then sometimes go after homeowners.

My understanding with short sales is that you don’t get anywhere at all with the process until you have an offer i.e., no assignment of a negotiator or even review of the file until then. If that’s true, then how are some agents getting negotiators assigned and/or asking price agreements made with the banks before they have the home even sold? I understand this could be if they’ve already lost out on a prior offer, but in some cases these are listings that are fairly new and have not received offers yet. Are these listing agents just misleading me so I will show the property and communicate to my buyers that the short sale is further along than it actually is?

Debt collection companies are out for the money. They will typically say and threaten with everything they can. The bottom line is that they want to get some money...as little as it may seem, it’s still something for them.

I agree with your lawyer. There is no legal way for the lender to go after the husband if he is not on the note. The way to play this, in my opinion, is to hit them with the same tactic. You will need the cooperation of the homeowners on this. The debt collector will need to feel that they can get stuck with little if they don’t cooperate with the negotiations. If they sense fear they will pounce. Tell them about the reality of having no other options but bankruptcy and they will stand to get nothing. Clients have to act as if they are not affected by the calls and the outrageous comments by the debt collector.

I’ve done many short sales where the people were current. You may have to be prepared to explain the hardship over and over again though. Be prepared to show credit card bills or savings account info if you have to appeal a denial. I had Wells deny a short sale because they were current, but I appealed, the deal was reinstated and we successfully closed. So you just have to fight for it. But it is no policy across the board that I know of. Be up front with the lender.

You mentioned her buying again? Have you talked to a lender. Almost all lenders I’m aware of have a 2 year seasoning requirement. This may change, or maybe it has changed for certain banks, but it is not a given she will be able to buy again soon. Plus, a short sale will still substantially hurt her credit. My perfect example is clients who just closed 6 weeks ago on a short sale. Never late , impeccable credit. But the notation of settled as agreed for less than full balance dropped their score 150 points. If your client isn’t into the 800’s now, dropping 100-150 points could be significant.

Most of the time on a short sale, we request the bank to waive the deficiency. Meaning, the bank will have to forgive the remaining balance of the unpaid debt. However, bank will issue a 1099 C which you will have to file as income, but your CPA will have to declare a lost in order to wash the gain. Speak with your CPA about how to file for your 1099C’s. In some cases lenders will insist to go after the homeowners for deficiency judgement and you have to be prepared to be bothered longer than expected.

As evidenced by some here , doing short sales also means learning how to manage your clients in distress.... It is heartbreaking for many to lose their homes. Others have resolved themselves to the fact and can move on. How do you respond and approach a homeowner you know is very emotionally fragile...and near the edge.... they have no money for counseling or insurance or their insurance does not pay or pays very little.

Again, I clearly help clients deal with this situation by making them realize that they are in this situation because they can’t afford the home any longer. I don’t pressure moving immediately, but they have to realize the sooner to move the easier it will be waking up every morning not knowing who is to knock on their doors, or what scary letters are coming from the lenders. Homeowners have to realize too that they have at least stop paying the mortgage 6 months to a year already. Therefore, cannot expect a free ride forever?

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For my honest opinion, call me direct be prepared to listen to my truthful and very direct advice. Call Ken Go at 1st Innovative Finance (888) 822- 5363 or write to: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Please be understanding to yourself, mistake can be made to better yourself in the future.

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( Published on July 1, 2009 in Asian Journal Los Angeles p. B3 )