BACKGROUND:  

 In Lee County Florida, approximately 1500 to 2000 notices of default (lis pendens) are being filed with the county courts each month.  In many cases, these defaulting homeowners purchased at the peak of the market and subsequently saw their home values disappear, or were given loans by irresponsible lenders with no hope of ever repaying.  Efforts by these homeowners to secure some type of loan modification from their lender(s) have fallen way short of the mark. Efforts for short payoff agreements (short sales) have also not been a good alternative as only 20 to 25 % ever make it to the closing table. A typical short sale can take 4 to 6 months from the original listing to the closing table. Potential buyers get discouraged with the wait and move on to other buying opportunities. Listing realtors find the delays and non-cooperation of the lender’s loss mitigation departments to be more than they are willing to accept, so they avoid short sales. Many of the defaulting seller/homeowners have no options;  no ability to repay the back payments, owe more than the home is worth, liabilities exceed their assets, and have no money to bring to closing to make up the shortfall involved in the cost to sell, so they just sit and wait for the inevitable...the judicial foreclosure and ensuing damage to their credit for the foreseeable future.

 In April 2010, there were 1190 homeowners who lost their homes to Foreclosure in the Lee County courts.

On the other hand, mortgage holding lenders are overwhelmed with their non-performing loans and are not adequately staffed to deal with short sale offers. Even though on average, a short payoff agreement will result in a savings (lesser loss) versus a forced judicial foreclosure of $35,000 to $50,000, or more, the lenders are not efficient in responding to short sale offers, unless they are dealing with an aggressive and experienced negotiator for the buyer or homeowner. Lacking any modification or agreement, the mortgage holding lender eventually forces an expensive and time consuming judicial foreclosure, and subsequently contracts with a listing realtor to sell what then becomes a bank real estate owned property (REO). Many times by then, the property needs additional repairs, it may have been vandalized, AC units, appliances, and fixtures stolen, and is in need of paint, carpet, etc. The lender wants to get rid of the property, so they sell  quickly at a discount to the market, receiving substantially less than what they could have realized through a successful short sale agreement.

There are some real estate agents who attempt to handle the short sale negotiations themselves, but are unskilled and untrained, and are no match to go against the trained and skilled loss mitigators of the lenders. These agents do not have the experience, expertise, or the time, do not market the property properly, and some simply give up. If they ever do happen to get a short sale agreement, many of those real estate agents mistakenly assume that post closing deficiencies and seller signed promissory notes are normal,  and let them become a condition of the closing agreement. Other agents are delegating their responsibilities to third party negotiators who may be self serving, unskilled, and untrained, do not have the same fiduciary duties of the agent, and may be creating an avenue for future litigation when the short sale is unsuccessful. 

The IISS system provides value for all involved parties. We utilize experienced and skilled negotiators to come to an agreed negotiated settlement with the lender(s) that saves the distressed homeowner from a credit destroying foreclosure. We are saving the lender potentially $35,000 to $50,000, or more vs. a forced judiciary foreclosure and eventual REO resale, and gets a non-performing asset off their books.  We are providing our realtor participant with the opportunity to earn more than double commission of a typical   A-C short sale, and with no wasted time involved with the Bank’s loss mitigation departments. We are providing a buyer with an opportunity to buy at a discount without the delays and uncertainty of a typical short sale contract. And, it compensates the IISS team with an opportunity to profit from  buying from the Bank at a substantial discount to what is owed, and then reselling to a subsequent buyer at a discount to the market.