How to Communicate with the Lender/Servicer

telephone-operators-70You need to communicate with the loss mitigation department. Another post goes into detail about how to get in touch with them in “Find the Loss Mitigation Department.” Now that you have found them, how do you establish communication.

I have written a book on negotiating, Create A Great Deal, the Art of Real Estate Negotiating. It discusses collaborative negotiation as the best way to get the highest quality agreement. You want to establish a collaborative atmosphere so that you can exchange information that will make it more likely that the agreement will go together, and close gracefully. You and the loss mitigation negotiator have the same goal: to convince the investor or other decision maker to approve the short sale. Most negotiators get a bonus for an approved short sale. So, find out how you can work together to reach the goal.

The first thing you want to do is collaborate to keep the file in the loss mitigation department. If it goes to the foreclosure department, your time to get an offer and get it closed becomes much shorter. Also, the foreclosure department is much harder to negotiate with, as their guiding principles are to get to the foreclosure sale or get full reinstatement. Collaborate with the loss mitigation representative to find out what you can do to help them keep the file in loss mitigation. Furnish whatever they need to keep the file from proceeding to foreclosure.

My friend, Joan Curry at RE/MAX UNITED, represented a family interested in one of my Raleigh, North Carolina short sale listings in 2005. The sellers were getting divorced and I was talking with the loss mitigation department, sending them information to show that the sellers are qualified for a short sale and emphasizing the marketing effort. On December 30, I was just walking out the door of my house in California to catch an airplane to Raleigh when I got a call from the lender. My primary residence was in California where I had one team of Realtors, and I had another team in Raleigh, North Carolina. I traveled back and forth frequently. The loss mitigation representative told me that if she did not have an accepted offer by the end of business that day, the file was going to the foreclosure department. I called Joan Curry as I drove to the airport to tell her I had to have an offer right now, encouraging her with the possiblity of a good deal if she met the time deadline. Sitting in the L.A. airport, I got her call with a very low offer. I presented it to each one of my clients separately, in the manner that you must in a divorce, and recommended a quick counter offer.

My sellers had to battle each other to savor the divorce experience. They came back with a counter offer that was a bit worse than my recommendation just as I was boarding the airplane. I called Joan with the counter offer and explained that I would land in Dallas just before the close of business for the lender. I hoped her clients would accept it, and leave that message on my cell phone. When the airplane’s wheels touched down, I turned on my phone long before it was allowed, and there was no message. While we were still on the runway, I called Joan. Her clients had a counter offer. I called mine as we taxied. They wanted to fight again, but I was able to keep the focus on the time. They accepted the counter. I called the lender as we neared the gate, but there was no answer at her desk. I got the receptionist, had my contact paged and she heard it just as she was walking out the office door. I confirmed that we had a contract. She wanted it faxed to her immediately, and I stiffled a laugh. In 2005, that would be hard.

Since she was not going to be back in the office until tomorrow morning, I told her it would be there, but she could just leave for the evening and it would be on her desk in the morning. When I arrived in Raleigh, Joan had the contract signed by the buyer on my fax machine. I got the sellers to sign in the middle of the night, going to each residence. I sent it to the lender, so it would be on her desk when she arrived. If I did not fulfill that promise, I would lose credibility. We had several more fights between my divorced clients, but we close the sale on time.

To make a long story long, do whatever is necessary to stay in loss mitigation. Before that, do what is necessary to establish rapport so that you will get a head up and a way to cure any problem that is coming up.

While all this sounds good, you cannot rely the loss mitigation department. That sounds harsh, but you cannot trust that they have any continuity or that they are properly processing your proposal. There is so much turnover and so many people working on your file that you have to take detailed notes of every conversation. You will talk with dozens of people with little consistency in their approach to the short sale. You have to keep the process on track by having every conversation documented. They put notes in their file. You need notes in yours. Write down their name, the date, the time and even which department they work in (some lenders have branch offices that cover the phones all over the US, so know there that person works to properly identify them). If you are able to refer to everyone you talked to, and when you talked to them, and confirm what they said, you will have a much easier time persuading the next person you talk to that certain commitments have been made.

Another way you cannot rely on the loss mitigation department is that you cannot count on them to notify you when they have made a decision. I called Countrywide on my regular weekly call to discover that they had turned down my short sale five days before, and they were closing the file because I had not responded with a new offer. I got a new offer in the next day, but the file was closed, so it went through the entire review process again. They will not call you, you have to call them. When they ask why you are calling so often, tell them the Countrywide story.

Dealing with loss mitigation departments is the ultimate in frustration. You start out talking only to gatekeepers, low paid staff whose job it is to convey simple information and get you off the phone. Do not get angry with them, as they put down everything in the notes in the file.

Call at least once a week, and preferably more, after you package is submitted and before it is assigned to a negotiator. You need to keep after the process to be sure the package does not get stuck somewhere, or routed improperly. Always be polite, and ask for the help of the people you are talking to. They will review the file and tell you what is missing, what needs to be done or what will help. You can improve your chance of success by first asking for their suggestions, then listening carefully.

Once you get to a short sale negotiator, that person does not make the decision. They put together the presentation for the investor or other higher level reviewer who makes the decision. Some of them you will not be able to talk to, they are too busy. So, your trial brief summary of the proposal will have to speak for you. Others will only communicate by email. An email does not properly convey tone and emotion. To correct, write in detail and do not say anything that you do not want passed on to everyone in the world. If you get to talk, great negotiating is more about listening than talking. So, listen actively, repeat back bits of what they said with an encouraging remark, and listen more. The first way to establish trust is to listen, as you do not people who do not listen to you. Again, if you want a course on negotiating, go to Create A Great Deal, the Art of Real Estate Negotiating.

One of the most frustrating parts of the loss mitigation review is having your file reassigned to another loss mitigation negotiator. The gatekeeper will try to tell you that this will not slow down the process. If you believe that, I would like to sell you the Brooklyn Bridge. If you can get in touch with the new negotiator, do not wait for the package to be sent by the lender. Send the package again directly to the new negotiator, as there is a decent chance that it will not get routed correctly, or that it will take a long time for the internal routing to work. Then, listen to the new negotiator, whether you are listening to faxes, emails or an actual telephone call.

In short, be persistent, be polite, ask for help, listen carefull and give the negotiator what she needs to succeed.

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