Disregard Lender Rules Regarding Short Sale Commissions
July 9th, 2010
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We are going to talk about a commission dispute that we had on a file that was being handled by Bank of America. The financier on the file was HSBC. The file was rejected regardless of the offer being the same as the BPO. We came to find out that they sold the mortgage to Condor Capital.
Condor Capital is an asset management business that sells REOs and buys ugly stuff and they capitalize on it. They are more of an investor in this affair out for yield. They did not necessarily do any loans. So, Kevin formally began working with them on July 1st.
Condor Capital reviewed the papers and noted that the commission was at 6%. They asked that we decrease the commission to 5%. They really wanted to make the commissions 5% of their net sales price, which was buy price excluding the buyers closing costs. Kevin replied to them informing them that he was not prepared to do that. He knew that they liked the bid because they had previously told them it was a fine bid.
Condor Capital replied that their policies only allowed them to give 5% commissions. If Kevin did not accept that rule, they would simply foreclose on the property. This foreclosure proposal got Kevin a bit upset.
It was apparent that they were out to make more cash rather than find a win-win situation for both groups. Kevin explained that he could get them a poorer bid and agree to the inferior commission, but that wouldn’t be a win-win situation for either party. The policies they were using were not in the best interest of either group. At the end of the day, you need to set up policies that help all groups productively complete deals.
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Fred Weaver is a founding co-owner of Group 46:10. He has been working in the financing/real estate business for over 7 years. Fred began his real estate career by working for a large wholesale bank as a processor and rate/lock specialist for home mortgages. After 2 years in the business, Fred transferred from the banking side of home loans to the mortgage side. While on the mortgage side of financing, Fred gained experience originating mortgages and processing files for Morgan Capital of Arizona, Inc.
Kevin is a founding co-owner of Group 46:10. He began working in the real estate business in 2007 after spending 8 years working in the finance industry for companies such as Bank One, Green Tree Financial, & GE Capital.