Accepting A Short Sale Counter Via Equator And Slipping In A Promissory Note Afterwards? What?

I've had this short sale listing for quite a while. The lender is Nationstar. It's under 100k, and it's clearly not going to make me or break me. But when I meet with my seller and commit to helping/saving them, I take that very seriously, no matter how much the house is worth. A foreclosure is a foreclosure, and will do anything and everything to save them. Oh, you should hear the stories… That will be a series of future blog posts. 🙂

Via Equator, they countered our original offer with specific terms that includes a line item for “Buyer Contribution”. My company has successfully negotiated 700+ short sales since 2005, so we've seen just about everything… We've been asked for the borrower to contribute $$ at closing, but of course, I always “strike” that off our counter offer.

In this case, there was nothing on that line and definitely no mention of a promissory note as terms of the accepted short sale. This property has a sale date of July 5, 2011, and if we didn't accept the terms (which we were only 5k apart), then it would go to sale. I got the buyer to come up a little with reduced commissions from the lender (no it wasn't Fannie Mae or Ginnie Mae). We still couldn't make the numbers work. So, instead of this going to foreclosure, If forfeited my commission to make the numbers work. That seemed like a better route to go than ruining the borrower's credit even more with the foreclosure. Saving my clients is always my top priority.

So, we accepted the offer (Nationstar's terms) yesterday. Today, I get this email:

“The last thing we need to go over is a promissory note. To help our loss we are asking the sellers for a promissory note of $83.34 per month over 10 years, this equates to be $10,000. Talk to the sellers about this, it will help us get the short sale approved. Also, often a settlement can be reached after the short sale is closed.”

What is that??? Nonsense! So misleading…

Here is the fine print in Equator… Boo! A racket…

The following facts related to the counter offer process are critical to closing short sales in Equator.

Fact #1: Your acceptance of the counter offer terms does not mean the transaction is approved

Acceptance of the counter offer means that Nationstar will take the next step of presenting the transaction for approval to the investor. In some short sales, multiple approvals may be necessary from others including the second lien holder, mortgage insurer and Nationstar senior management.

Fact #2: The terms of the accepted counter offer may be approved, declined or changed

Any of the parties reviewing the transaction can change the terms of the transaction, approve or decline it.

Fact #3: The counter offer may have an expiration date

Please reply to the counter offer before the expiration date. If you don’t reply by the expiration date the transaction will be rejected and you must restart the process by initiating the short sale and resubmitting documents.

Fact #4: The counter offer must be accepted via the offers management tool in Equator

To accept the counter offer, go to the “Workflow” section of Equator and select the “Offers Needs Response” link. Select “Counter Offer” and press the “Accept” button in the Counter Offer screen. You cannot accept a counter offer via an Equator email to your negotiator.

By understanding these key facts, you will be in a position to better help the homeowner complete a successful short sale transaction.