Rocklin Short Sales: 6231 Swan Court – Sold!
The Toughest Short Sale Ever!
Rocklin short sales are never easy. Sometimes they drag on for so long that, while waiting on word from the bank negotiator, you forget you’re even working on it until the other agent or the bank contacts you months later to say “hey, remember me?”
I thought I had seen a few tough ones, and I have but this one took home the prize as the toughest Rocklin short sale I’ve ever done.
I started talking to the sellers in February 2013 about selling the home. They had gone to my facebook page, click here, my Youtube page, said they had seen some of my short sale videos and would I be interested in helping them get their home sold. I said “of course I would” and we got the home listed.
So How Many Loans Was That?
When I met with the sellers, they explained to me that they had a very tough time making ends meet and understandably so. They explained there were 2 loans, one of which was a refinance in 2004 and 2 simultaneous bankruptcies in progress. I thought it was a lot but I got together with my negotiator and we got all the documents together to go forward.
Upon contacting the title company, we got a preliminary title report that reflected an additional loan/lien against the title of the house that the sellers didn’t know about. Upon discovering this, my negotiator said she didn’t see any way to get this done. She handed the file back to me and quit!
Not being a quitter, I sought out the advice of the best negotiator I know. Dianne and I got together on the file and she said that she was pretty sure she could get it done. Dianne had been doing short sales for 20 years and had seen it all..so she thought.
We got all the paperwork together and submitted it to all three banks. Throughout the process we had also been in contact with my clients bankruptcy attorney to make sure there were an open lines of communication between all parties.
Ok Is There a 3rd Loan or Isn’t There?
From the proceeds of sale, we were going to be able to pay off the first loan in full. Then the second and the third would split the remainder but the third was playing hardball. That’s when we, Dianne that is, found the third had already been paid off in the refinance in 2004 but the credit line hadn’t been closed as is customary. Whatever amount there was left on this loan was discharged in the bankruptcy the following year.
So in reality, there was no 3rd loan but there was still a lien on the title of the house. This explains why the sellers didn’t know about it.
Finding this out took some creativity. The seller had lost the records we needed to find out the information on the refinance and thus, how the bankruptcy had affected the loans. Additionally, they couldn’t remember what title company they used for the refinance. (not uncommon)
We had nothing to go on.
We were able to get the deed from the county which we hoped referenced the title company used for the refinance. I said to Dianne that there must be something on the deed that reflected where it came from even if it was just a fax origination line or something. Sure enough it was there and we were able to contact them for the documentation we needed. That was the turning point.
At this stage, just before we found the title company for the refinance, most agents and negotiators would have thrown up their hands and stopped working on it as it was just too complicated with the potential for liability but we kept at it being the gluttons for punishment that we are LOL.
You Want What?
So after finding the records, we were close to getting this done. This was the critical step.
The third lender, even though they were not owed a dime by the seller, wanted $30,000 to release the lien on the house so we could close. $30,000! That was like blackmail in my opinion as they were asking for money they had no legal right to.
They were paid off in the refinance in 2004 then whatever balance was left was discharged in the bankruptcy in 2005.
The sellers owed them nothing and to make things worse, the sellers had been making payments on a loan, prior to the bankruptcy, they owed nothing on for years which led them to the financial difficulty in the first place. There will be a lawsuit around this one I guarantee it.
Summary
We had:
1) 3 loans; 2 is considered tough!
2) 2 bankruptcies; a chapter 7 and a chapter 13 at the same time. I didn’t know this was possible.
3) No records. The refinance paperwork, specifically the HUD 1, which is a formal summary of costs from any real estate transaction, from the refinance had been lost.
4) A lender who wanted $30,000 just to release the lien with NO money owed them after the balance had been legally discharged through the bankruptcy.
5) 2 title companies.
6) 1 bankruptcy attorney. He was involved in this as a requirement of law. My negotiator actually new more about what she was doing that he did about what he was doing.
7) Buyers who were going to be homeless if we didn’t get this done sooner than later. They ended up moving in prior to the close of escrow.
I think that was it. Looking back it was amazing we were able to pull this off. After working on this for 11 months, it finally closed in January. It was a ton of work but finally got done.
Looking for an agent to help you sell your home but owe more than it’s worth? Despite the market improvement over the last year, there are still a lot of folks in this situation. Give me a call, I might be able to get it done for you as I did for my clients on Swan Court.
Buying or selling a home in Rocklin? If so, I’d like to help you. Please call or text me directly at 916-532-7653 or click here, for my contact page.
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