Understand Loss Mitigation and What It Takes to Negotiate a Short Sale

The Mind of Bank Loss Mitigator

Loss mitigators are confusing to society, and lenders can make the average realtors head spin. Lenders , realtors, and investors must work together to be successful, despite this confusion. What I mean is that each deal has its own complexity and you and the loss mitigator will need to work together to get the deal done.

There's just no other way. They say it takes two to tango, and similarly it takes an investors (buyer) and a lender together to form a deal. While the negotiator on your team will referee the deal. Unfortunately, to many of the loss mitigators, you are a page in a file. Such lenders often have hundreds of clients, and so, for the best deal, you need to set yourself apart.

For starters, you need to make their lives as simple as possible, by having all of the paperwork so that your bank can make you a page in their file. As simple as this sounds, missing just one form can set back the process by weeks or more! Many sellers will be resistant to giving you all the necessary paperwork up-front. However, remind them that the bank is taking on significant risk, and the more they know about the buyer and seller, the better off you'll both be.

Once you have the paperwork, assemble it into a complete package and fax it directly to the lender. If the lender is efficient, they should process your package within the week. After the lender has confirmed your package, you may begin negotiations... Unfortunately, many people break when it comes time for negotiations. Many, it seems, do not enjoy the face-to-face interpersonal competition that is negotiation.

If you follow the following list of aids, however, you should become a successful negotiator.

Negotiation Aids:

• As described above, make certain the lender receives a complete short sale package.

• Remain polite, but at the same time, be tenacious. You are one file in the lender's stack of hundreds, and so assert yourself and your package.

• FDMC, VA, FNAM, FHA, may be behind your loan. You'd best determine which one is dealing with your loan.

• Assert the effectiveness of your package and pressure the lender to create an interior broker price opinion immediately.

• Do not waste the BPO.

• Take a title report so you aren't left in the dark.

• Determine your BPO number.

• If you can't find your BPO number, negotiate a counter-offer.

• Be sure any counter-offers have additional evidence supporting the security of your offer.

• Remind everyone involved that you are a cash buyer and can close rapidly.

To truly understand the short sale, you must look through the eyes of the lender. Remember, lenders are putting their necks on the line for your benefit. As recent headlines have demonstrated, lenders can be ruined by foreclosures of bad loans. Individual lenders can lose more than $35k on a foreclosure, but losses have jumped as high as $60k in recent months!

In short, lenders have been brutalized with the financial crisis, and so great care must be taken in emphasizing the security of your transaction. Despite the rocky economic climate, if you can stick to the above advice, you can still come out on top.

Jeff Coga aka "The Short Sale Samurai"

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