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Day 1: Preparing for Success

The Basics:

What, Why, Who?

Before we hit the accelerator, let's review the basics-the what, why, who of short sales.

What Is a Real Estate Short Sale?

In the world of real estate, a short sale refers to the sale of real property for a sum less than the amount owed on the property. Said in different words, a short sale is a solution for homeowners who are "upside down" on their mortgages. If a homeowner meets a series of criteria, their mortgage lender may agree to (short) sell the property to a qualified buyer, accept less than the full balance due on the loan, and forgive all or a large portion of the difference.

Upside Down
A tenn used to describe borrowers who owe more on their loan than their property is currently worth.

A real estate short sale is based on the simple concept of a settlement. Have you ever allowed someone to repay you less than the full amount he or she owes? Maybe after you hear the person's honest explanation, you realize that something is better than nothing. So, you settle: 'Just give me twenty bucks, and we'll call it even." This is the concept behind a short sale. Real estate short sales are typically initiated to help homeowners or property owners in financial distress avoid foreclosure. Let's look at where short sales fall along the foreclosure timeline.

7 Days to Success with Short Sales

The Foreclosure Timeline

If the seller An insolvent cannot reinstate property owner the loan and has receives notice not sold the from their lender property to repay that they are in the debt, the default of their lender will initiate loan and havce a certain number of ; the 1~<>aI I foreclosure days (typicaly 30 to 45) to cure the process and set a date to sell the default. If the property at public property owner must sell and can auction. The demonstrate a property and title will. pass to d,e hardship, the highest bidder. lender may agree to (short) sell the property to a qualified buyer for a discounted loan payoff

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Foreclosed property not sold at auction becomes real estate owned (REO) by the lender. Because this property is a liability (versus an asset) to the lender, they are ea"er to sell the property and dear it from their balance sheets. They will often hire REO sales agents to list an.d sell the properties for them.


Note: Foreclosure procedures vary from state to state and ate governed

by state laws and statutes. Take time to get educated about the process in your state. Legal foreclosure is a costly and risky process that both sellers and lenders typicaly wish to avoid. For this reason, it makes good economic sense to pursue other options when it is cleat that full repayment of the debt is an impossibility. So, as one strategy to mitigate their losses, banks

Day 1: Preparing for Success

will often accept a short sale settlement for less than what is still owed on the note.

Why Are We Hearing So Much About Short Sales Now?

While the real estate short sale transaction has been around for decades, the current foreclosure crisis in America has brought new attention to the strategy. In 2008, approximately one million homes were lost to foreclosure. Distressed properties (short sales and foreclosures) comprised nearly 40% of all U.S. home sales. Looking at 2009, the Federal Reserve estimates that lenders will likely initiate 2.25 million foreclosures this year. This doubles the number of foreclosures seen before the crisis. In addition, other 2009 estimates suggest that as many as 15% to 20% of all mortgages are "under water."

Under water
A term used to describe an asset (such as real estate) that is currently worth less than the outstanding balance on the loan it originally secured.

like no other time in real estate history, mortgage lenders are willing to consider short sales as an alternative to foreclosure and a way to mitigate their mounting losses. Banks are becoming increasingly convinced that their tactics of yesteryear will not work in today's troubled times. Mortgagors once used the mere threat of foreclosure to motivate homeowners to comply with the terms of their loans. A simple letter hinting at foreclosure was all that was needed to send most homeowners scrambling for cash. In panic mode, they would beg, borrow, or even steal to keep their homes and protect their credit. No more.

7 Days to Success with Short Sales

Unprecedented numbers of homeowners today are in so much debt and hardship that they are numb to threats of home foreclosure, repossession, or negative credit reporting. Millions of homes are under water and their homeowners are drowning fast. These are the people who need short sales the most.

Who Really Benefits from a Short Sale?

Now, let me say that I believe in finding ways to help homeowners keep their homes if this is what they desire. Home retention is always the first option I discuss with prospective clients. In fact, this is the philosophy underpinning the Obama Administration's homeowner affordability and stability initiatives. These plans focus on strategies to help homeowners retain possesslon of their primary residence-low-cost refinancing, loan modifications, and low mort"oage rates. For eligible individuals, the banks are offering inaedible deals-such as mortgage payments down to 31% to 38% of the individual's gross monthly income. J[ see it as my responsibility to encourage homeowners to exhaust these options, if keeping their home is what they desire and if it feasible for th= to do 'So. UnifoJrtunately, a large number of the homeovmers facing foreclosure have hardships that leave them no altematiV'e but to liquidate their properties--divorce, death of a spouse, medkal illness, job los'S, job transfer, and other challenges. These are homeowners who must sell. As you will learn, pre-qualification is an essential step to determine if homeowners desire and are in a position to stay in their homes or if they are forced to sell. The latter become my short sale clients. The short sale is clearly a win for these distressed homeowners. But more than this, the short sale is a true win-win solution for all parties.

Day 1: Preparing for Success

Ii:] Homeowners Win!-Homeowners are able to sell their property

and avoid foreclosure.

Ii:] Buyers Win!-Buyers are able to acquire a property at a good


Ii:] Lenders Win!-Lenders mitigate their loss by getting the majority

of their money back on a loan that is facing default. Real Estate Agents Win!-Agents are able to earn a commission for their role in the sale of the property.




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Lenders are willing to settle with a short sale because the alternatives for them are to Incur the cost of eviction and repossession Carty the cost of the property during the foreclosure process Incur the expense of repairs and improvements in order to make the property marketable

7 Days to Success with Short Sales

In addition, because the short sale helps stop foreclosures before they happen, this solution ultimately helps the economy and the real estate market. Studies suggest that just one foreclosure in a neighborhood can

result in an additional drop of approximately 9% in property value and home equity for neighboring homes. When you get into the short sale business, you are helping to prevent foreclosures that can further depress home values in your market. Clearly, the short sale is a win-win for all parties involved. Let's dig down further into the opportunity short sales offer real estate agents.


Owner owes more than house is worth

A Buyer makes an offer that is less than the mortgage (market value)

Seller aceepts offer / offer is contingent on Lender's approval

Seller submits a Short Sale Package to Lender

Lender approves or denys

If approved, the sale may proceed

Day 1: Preparing for Success


Overview of the Short Sale Process

The gJ'eat thing I have discovered about short sales is that they are basically all the same in their structure. They progJ'ess in a linear fashion. They are predictable. This also means that they can be monotonous. For this very reason, many agents working short sales quickly become bored with them. But, to me and to many others, the fact that short sales are structured and routine is a supreme blessing. When it comes to work, I am highly project- and task-oriented. I like to begin a project, work it, finish it, and check it off. That's the way I approach real estate, and that's what attracts me so much to short sales. Because you will be following the same steps over and over, you can, in time, absolutely master the art of short selling-and create your own success.

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7 Days to Success with Short Sales

Steps in the Short Sale Process

In the days that follow in 7 Dqys to Success with Short Sales, we will look at
each step in the short sale process in careful detail. We'll move along the flow of the process model below.

The Short Sale Process

Notice that Steps 1 tlttough 5 are perfo=ed by the short sale agent. Then, as the seller's lender is completing Steps 6 tlttough 9 with the short sale file, the agent is running parallel with their own set of tasks. Then, both sides close the file and get paid in Step 10.


Bank acknowledges receipt of the file. This can take 10 days to a month


A negotiator is assigned. This can take 30 to 60 days. A BPO is ordered. The bank probably will refuse to share the results of the BPO. A second negotiator may be assigned. This can take another 30 days


The file is sent for review or to the PSA. This can take 2 weeks to 30 days.

The bank may then request that all parties sign an Arm's-Length Affidavit.

The bank issues a short sale approval letter.

After all this, the Buyer may still decide to cancel


7 Days to Success with Short Sales

2. Administrative and Organizational Skills

Any agent who aims to master short sales must be organizedsupremely organized. Gathering the information and documentation for the short sale package requires administrative skills and great efficiency. One of the goals of the 7 Dqys to Success with Short Sales program is to teach you how to build a volume business that runs like a well-oiled machine. In these 7 Days, you will learn how to implement a proven short sale system and leverage tools for greater efficiency.
In addition., short sale transactions carry more liability. The environment

is more litigious. Strong administrative and organizatiollill skills will help you stay on top of the process and avoid potential legal challenges. I often share with people that short sale processing is a lot like processing a health disability claim. Insurance companies demand thorough documentation to justify paying on a disability claim. "Who are you? How did nhe injury occur? "What steps did you take to prevent injury? "What is the extent of the injury? ... " And in many cases, there is back-anel-forth negotiation about what must occur if the claim is awarded---the terms of the payout, which physicians you will see, the rehabilitation plan, and so forth. When we say you must have administrative and organizational skills, imagine that you'll be working with individuals who think and operate much like these disability claims officers.

3. Negotiating Skills, Patience, and Tenadty

Processing short sales requires negotiaring skills, patience, and tenacity. Once the short sale package has been submitted to the lender for approval, there are many steps that must be managed. As a short sale specialist, you will need to demonstrate an in-depth knowledge of these steps. You will need to know this stuff as well as (or better than) the loss mitigators working at the banks. The more you know, the better you will be at negotiating the details and getting more files approved.

Day 1: Preparing for Success


As you already know, short sales typically run on a longer timeline than other real estate sales transactions. Sometimes, it feels like the plan is to "hurry up and wait." The short sale process can take from as little as three weeks to several months. I have had some take a year! Patience is a virtue and a requirement for the successful short sale agent. As you will learn, short sales require the ability to stick to it. Many agents give up on short sales because they don't have the perseverance or the patience. What they lack is a system to help them manage the details and streamline the processing activities. Once these are in place, short sales are more than worth the effort!

Do you possess these critical skills?
The good news is that you don't have to take on all short sales tasks by yourself. There are a number of ways to run a short sale business.


7 Days to Success with Short Sales

Welcome to Day 2
Welcome to Day 2 of 1 Days to Success with Short Sales! In this chapter, we begin the process.

The Short Sale Process

As you will learn, Step 1: Pre-Qualify the Prospect is the most important step in the process. If you thoroughly and diligently prequalify your prospective short sellers using the system we teach you, everything else will fall into place. In other words, your success is determined by this step. You will learn about the four key criteria that determine a seller's eligibility and how lenders view the qualification process. In addition,

Day 2: Pre-Qualifyingthe Short Sale Prospect


since government-insured loans are handled a bit differendy, we'll spend time discussing how to qualify sellers with those loans. Your best support tool in this step of the process is the Short Sale PreQualification Questionnaire. This document will save you time up front and potential hassles that could develop later. We'll walk through how to use this questionnaire during the interview with your prospect. In Day 2, you will also find tons of scripts you can use with homeowners to help them understand the process and to demonstrate your knowledge and your compassion for the situation.



7 Days to Success with Short Sales

Start the Process with Careful Pre-Qualification

The first and most important step in the short sale process is to prequalify your prospect. This initial interview will tell you whether or not the prospective seller will qualify for a short sale. As you will learn as you work towards mastery of short selling, this is the step in the process that will determine your success.

Where 00 You Find Short Sale Prospects?

For this chapter, we are going to assume that you have identified at least one prospect :md you are ready to learn how to pre-qualify them for a short sale. However, you may be asking, ''Where do I find short sale prospects?" Lead generation is critical to any business, and the short sale business is no different. Becoming a skilled lead generator is necessary for the success of a short sale ",,<>ent. For this reason, we have devoted an entire Bonus section of 7 Days to Success with Short Sales to the subject of building your business through lead generation and team growth.. At this point in your learning, howeveil:, lead generation is not the first priority. Your first goal should be to get educated about the steps in the short sale process. Once you feel confident about your ability to follow the process and successfully work two or three deals through to approval and closing, you can develop a marketing strategy that works for you.

Day 2: Pre-Quafifying the Short Sale Prospect


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The Purpose of Pre-Qualification

Pre-qualification means that you will be screening your seller prospect against a series of criteria to determine if they will likely qualify in the lender's eyes for a short sale of their home. We refer to this step as "prequalification," since it is the lender's role to actually "qualify" the seller or not. The pre-qualification step is the most important step in the short sale process because it determines your success or failure. With a 20-minute phone call, you will know with a 90% degree of certainty whether your seller is a solid candidate for a lender's short sale program. It is important to note that, in this step, success is defined as an approval, not a closing. A closing is different; other factors are involved in closing
a file.

When I was less experienced with short selling, my pre-qualification step was more like a hope and a prayer! I was not always certain about the outcome for my sellers. Now, we are so confident about our 7 Day Systems pre-qualification process that if a lender denies one of our short sale proposals, the next step is to investigate and possibly even dispute. In most cases, the loss mitigator has missed something or there has been


7 Days to Success with Short Sales

a miscommunication or an oversight. This is particularly true for short sales involving government-insured FHA mort"o-ages (see "FHA Short Sales" later in this chapter).


Day 2: Pre-Qualifying the Short Sale Prospect


The Four Most Important Short Sale Qualification Criteria

Lenders require that homeowners meet the following four criteria in order to be considered for a pre-foreclosure short sale:

2. 3.

The homeowner must be experiencing a hatdship. The homeowner must owe more than the home is worth. The homeowner must be in arreats (past due) on their mortgage account. The homeowner must be able to show that they can no longer afford the property or afford to bring money to closing. They must be financially insolvent.


Typically, if your seller meets all four criteria, the short sale proposal will be straightforwatd, and you should experience a greater than 90% success rate for getting these short sales approved, provided that your short sale proposal package is prepated and presented correctly. When interviewing a prospective short seller, it is best to use an interview questionnaire-such as the one offered by 7 Day Systems-to sequence your questions and gather the most relevant information. Before we discuss how to use this pre-qualification questionnaire, however, let's review the four qualification criteria in greater detail so that you will understand what you are listening for in the interview.


7 Days to Success with Short Sales

Criteria #1: Hardship

Hardship is typically something beyond a person's control, an external situation causing a person to no longer be able to meet an obligation. While tbere are several reasons a homeowner might experience a hardship, tbe following are tbe most common.

1. Loss of Income
.. .. II .. Loss of job Temporarily out of work for any reason Wages cut New job tbat pays less

1. Increased Expenses
III III III III Mort"oage payment increases Property tax increases Family emergency Additional family members in household (new baby, parents, in-laws) Overextended credit; high minimum payments Other unforeseen expellSes



3. Medical Problems
II .. .. Medical bills Medical condition resulting in decreased income Medical condition preventing homeowner from living alone/unassisted Mental healtb issues


Day 2: Pre-Qualifying the Short Sale Prospect


4. Death in the family

Death of a spouse or other family member-typically, results in loss of income and/or increased expenses

5. Divorce/Absolved Relationship
Division of marital home Forced move/sale Loss of income Increased expenses

6. Job Transfer
Forced move/sale

Criteria #2: The Homeowner Is Upside Down

In order to qualify for a short sale, a homeowner must owe more than their home is currently worth. A homeowner must be facing "negative equity." Early in my career, I listed a property for a homeowner who was in financial distress and behind on their mort,,<>age payments. I worked through the steps in the short sale process-only to discover that the homeowner was not "short"! In other words, the homeowner was indeed experiencing hardship and facing foreclosure, but they had equity in their home. They could sell their home and make money on the sale. They did not qualify for a short sale. It was a tough but important early learning lesson for me!


7 Days to Success with Short Sales

Negative Equity
A term used to describe the situation in which the outstanding balance of a loan is greater than the current value of the asset originally used to secure the loan, For example, if you owe $15,000 on your car loan, but your car is currently worth only $10,000, you have $5,000 of negative equity, Properties with negative equity are said to be "under water," Borrowers with negative equity are said to be "upside down,"

The Seven Most Common Reasons a Seller Is Upside Down (or Has Negative Equity in their Home)
Negative home equity can ~esult from several different factors, The follo"",-ing are the most common :reasons: 1, Person bought at the height of the market and the market illts now declined, Person paid more than the property was worth, The area has become less desirable for any number of reasons, so property values illtve declined. Person purchased the home 'with little or no money down and wants to sell within a few years of purchase, and the property value has not increased during that time, Therefore, the costs associated with selling the property may create a balance due at closing, Person refinanced the home (with a high appraisal value) or took out a home equity loan and now has little or no equity, Person bought in a very new subdivision or recently developed area has not appreciated (or has depreciated) in value,

2. 3.




Day 2: Pre-Qualifying the Short Sale Prospect



The market is soft because there is too much builder (new home) inventory or too many existing homes on the market (buyer's market).

How to Confirm that the Homeowner Is Upside Down

Initially, during the pre-qualification interview, you are really just taking the homeowner's word for what they own on the loan. To move forward with the short sale, however, it is essential for you to verify what the homeowner actually owes on their mortgage so that you can confirm that they are upside down and how many months in arrears their account is. The best thing to do is to order a payoff statement from their lender as soon as you take the listing. Ask the homeowner for a copy of their most recent mortgage statement, since this will also be very revealing. Do a comparative market analysis (CMA) on homes in the area to detertnine selling price. Run an estimated net sheet (HUD-l Settlement Statement) to account for all costs of selling the property. If the homeowner doesn't at least break even after paying all seller closing costs, they are short.

It is important to note that if the homeowner owes exactly what the

home is worth, they are still short-for example, if they owe $250,000 and their home is currently worth $250,000, they are still technically upside down because closing costs will cause them to fall short. If you detertnine that the homeowner is not actually upside down on their mortgage, you don't have a short sale client, but you still have a new listing and now you know how to proceed!


7 Days to Success with Short Sales

Criteria #3: The Homeowner Is in Default

Most banks are looking for a homeowner to be in default on their mortgage before they will consider doing a short sale. If the homeowner is 60 days or more in arrears, banks typically operate with a greater sense of urgency in processing the short sale. Interestingly, being in default is not a hard and fast qualification criterion. I have successfully negotiated many short sales for homeowners who were not behind on their mortgage payments-not yet, anyway. For example, maybe these homeowners are dipping into their savings accounts or getting their family's help. If you can prove that the homeowner has had a recent hardship and that default is imminent, the bank may still agree to do a short sale. In my experience, I ha",e assisted sellers who were transferred to jobs in other cities or states, and this forced them to leave and sel:l the property. Now, these short sale cases are much more difficult to work and can take longer to process. The ~ender will consider these cases a much lower priority than those with accounts that are several months in default. The longer the account sits in default, the higher the priority the short sale proposal will be to loss mitigators. So, it may seem tempting to tell your clients to just stop making payments, go into default, and get the attention of the loss mitigaror. But, remember, your job is simply to infonn the homeowner about how the process works. They will need to make their own decisions and weigh out the importance they place on preserving their credit or on short selling their home in a timely fashion.

Short Sale Agent: "Well, you know, Raymond, these lenders are dealing with several hundred short sale files. They have to assign a priority to each. The files that are not in default (and the ones that are only a few months behind on payments) will get a lower priority.

Day 2: Pre-Qualifying the Short Sale Prospect


The lender wants you to keep making your payments because they want to mitigate their losses. That's their job. But the reality is that when you make your payments, you are preserving your credit-but you're not helping your situation. You're probably hurting it. You may be making payments, but you are likely not bringing down the principal on your loan, so you will still owe more than the value of your home in this current market. You will need to weigh out these choices for yourself. I just want you to be educated about how this all works."

Criteria # 4: The Homeowner Can't Afford

the Home
Again, initially, you will be taking the prospective short seller's word for it that they are financially insolvent. But, as you move forward in the short sale process, the Personal Financial Statement you ask them to prepare will establish whether or not they can afford to keep the home. In this document, homeowners will list their income and their expenses. When the lender reviews the Personal Financial Statement, they will look to see whether or not the homeowner's expenses exceed their income. In addition, the homeowner must provide information on their other assets--checking and savings accounts, retirement and investment accounts, and so forth. This information will establish whether or not the seller has funds to bring to closing.


7 Days to Success with Short Sales

Short Sale Qualification from the Lender's Perspective

Many real estate agents who decide to pursue the short sale market segment are surprised and frustrated to learn that each and every lender has their own info=ation requirements for short sales! Each lender will ask you to complete and submit a package of info=ation to demonstrate your client's candidacy for a short sale. If there are fifty lenders in the game, there will be fifty different short sale packages. Some short sale training systems advise you to call or to visit the website of each individual lender's loss mitigation department to request their unique short sale package. We have a berter wayl The beauty of the 7 DtlYs to Success with Short Sales system is that I have suocessfully incorporated all of the various lender requir=ents into one comprehensive short sale package. "More is better" is my motto. "When you begin using this comprehensive package, you will understand that, in some cases, you may be submitting slightly more info=ation than a particular lender requires-but it will never be less. For example, the Personal Financial Statement format that I have developed and that I ask my clients to complete is more detailed than that required by some lenders, but this ensures that you won't have information gaps and oversights.

Day 2: Pre-Qua1ifying the 5hort Sale Prospect


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Most short sale packages contain more than 50 pages of information about the homeowner's situation. The essential elements of the submission package include: Hardship Letter listing Agreement Letter of Authorization Financial Statement Recent Bank Statement(s) Recent Paycheck Stub(s) Fully Executed Purchase Contract on the Property Buyer's Pre-Approval Letter from their Lender HUD-l Settlement Statement (also called HUD-l Estimated Net Sheet) Comparative Market Analysis (CMA) (optional)


7 Days to Success with Short Sales

FHA Short Sales

The process for handling government-insured mortgage loans is unique enough in the short sale business that it deserves additional explanation.
In 1994, the Department of Housing and Urban Development (HUD)

introduced the Pre-Foreclosure Sale (PFS) Program. The pw:pose of this program is to help homeowners with FHA loans-that is, loans insured by the Federal Housing Authority (FHA)-to avoid foreclosure and find a way to transition to more affordable housing. Before 2000, all FHA loans in default were mitigated through HUD. In early 2000, HUD decided to pass the responsibility of loss mitigation on. to the individual HUD-appro"ed lenders (mortgagees). HUD began to train and encourllcge these lenders to offer sellers facing foreclosure the PFS Program as a loss mitigation option. Historically, banks have often opted to foreclose on properties-even when a short sale would offer a better option for the homeowner, buyers, and community---"because of the complexity and time involved in the short sale process. So, to incentivize both sides of the transaction, HUD began offering $1,000 per file to loan servicers for each completed short sale and a $750 to $1,000 incentive per transaction to homeown.ers. (As a sidebar, the problem with this model is that the incentive is given to the loan servicing company (the bank), not to the individual loss mitigato:tS processing the files. So, the historical and the bottleneck at the loss mitigator levd remains.)
In February of 2009, the Obama Administration released the Making

Home Mfordable (MHA) program to offer assistance to an estimated 7 to 9 million homeowners by reducing mortgage payments and preventing avoidable foreclosures. The Foreclosure Alternatives portion of the MHA program is meant to help prevent costly foreclosures by providing incentives for HUD-approved lenders and for borrowers to pursue short sales and deeds-in-lieu-of foreclosure. Under this program, lenders may receive up to $1,000 per completed short sale file, and borrowers

Day 2: Pre-Qualifying the Short Sale Prospect


may recetve up to $1,500 expenses.


compensation to assist with relocation

Deed-in-Lieu (OIL) of Foreclosure

Term used when a borrower voluntarily transfers all ownership and interest of a property back to the lender (mortgagee) in order to satisfy the loan that is in default.

Dealing with FHA short sales, for me, is particularly rewarding because they follow some very specific and documented criteria-whereas conventional loans are not as standardized. For this reason, FHA short sales are much easier for me to pre-qualify.

Rules, Guidelines, and Criteria that Differentiate FHA Loans

The following are the rules, guidelines, and criteria (as published in the FHA Guidelines revised in December 2008) that differentiate short sales with FHA loans from those with conventional loans: 1. The loan must be in default. At the time the short sale is closed, the loan must be in default (which HUD defines as delinquent more than 30 days). Lenders may exercise their discretion to accept applications from borrowers who are facing imminent default (and who are not yet in default), but by the time the short sale is completed, the loan must be in default. The seller must occupy the property as a primary residence. HUD does authorize lenders to grant reasonable exceptions to non-occupant borrowers when it can be verified that the need to vacate was related to the cause of the default (e.g., job loss, transfer, divorce, death). The property cannot be used as a rental for more than 18 months immediately preceding the short sale approval.




7 Days to Success with Short Sales


Seller must complete an Application to Participate HUn Form 90036. This form is available from HUD's website at or at You (the listing agent) will receive from the lender an Approval to Participate HUn Form 90045 when they have approved the short sale file. This document will spell out the details of the approval. The seller will be paid a consideration fee of $750 to $1,000 from HUD for a successfully completed short sale. This amount is typically paid at dosing. This incentive is designed to keep the seller motivated and to reward them for completing the process. In reality, however, much of this incentive will likely go toward any closing costs that HUD won't pay (e.g., unpaid HOA dues). So, the seller may see very little, if any, of this incentive.



Day 2: Pre-Qualifyingthe Short Sale prospect


Application to Participate

Pre-foreclosure Sale Procedure

u. S. Department of HDII5ing an.d Urban Development

OMS App",vo] No. \'S0Il041l4


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Approval to Participate Pre-foreclosure Sale Procedure Property Sales Information Property OCl:Ilpancy & Maintenance
U. S. Department of Housing and Urban Development

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F<!d=l H""slnlt Commi"iooO\"


Homoownor. Nom.:

l'ublit ... pomnt burdon fur Ihl~ conttion ofinftmnooon;' cstimoo:d 1<1 .\'Crogo 9 minu1C$ p",. rooponoo. ",eluding the IOn<: for "",'ewing i,,_.!ian., """"'hleg ~~l'''''g dam ""om"" S'lth""ns ond mnlntai"",s the d:tt.a~ ond oompleting ond;; tho cotl""'lon of inform.ti"", Thi. ",ronnotion 1~t1::qnired "'obuill benefllS. HUD may 110(00110<:1 this Infoanation, ""d you an> not,.,,<;IlitOO to compleJO this f<>nll. unl= it di,;ploy. a oum::n~ ""tid OMS 0<llUrQl1!\llJl\><:r. Section. 2()4 of\he li....rng Act!i.llthori:-:<.~", S=Iory 10 p"y OIl I""""",co doim !hot hridg<o<!b. gop botweon the folt market proeotlk from lb. ffUD-aJlpf<Wod lhird l"'Itf;ol. ofa p"'porty. n", ""'P<>Od",,!'. maybe [""d... (fl1<)J"\(:'Igo!O")' """1<>10'" umI I)OIl\O<lI\.U',.. wlto Ole otternpt",<: 10..,lllhoit propolll.. priort" fcreel",=- nePrivn<:y ACt of 1974 "lodge!; ... =oes of >nii.denOOlity to"'<p"ndoOl>. HUD S,,,,,,,,,lly disci","", tlli. dlila"nly;" 1<:>1"''''"' to aFm>lem oflnfonnation. roqui1:'t.


ControINurnb<r.1 FHA CnooN.."ber:


F'11o'O:i"',lud roo.OO<Iol




Ple:as~ R~lld

TbisInfontlQtlQn CQrdnDy.

~a:Ii)~CO bolow. pta.

Usa other sid. fot contin


",ti,",,,,,,,,,,hmny",,"clu .. tl>, rno.dcio~ .f)'Otlrr~ mnko "''''''''If 1")'monUl ~ there a'. any se<:ond II

(U""odditionlll.M'*' I


ookn<>wIlilO obol "';;.:::':





Appro''al to P~rtId\HIte other COSts nonmtUy paid by the buyer. you must pay for these Y<lut ;p!<=nl'iI w participule in the HUD Pro--fon:~IOS\1n) Il);Pemle:s.. You must also pay promli:d real estate laxes and Sale prooedure bas b= npproved. By sij;rlingthls furm and assessments lit closi~!l. Yonr mo~ c:J.1l cx:plain wbich saI<:s remming to die above referenced mortgage\: wil1tin 7 da)'li. y<l~ COsts mQy be deducted from HUD's silo proceeds. agreeing to olbide by the foJlowing COnditi<lDS of lheprogrnm. Relocation Services Property Sal~. Jnformation A ",location ~ a.lIiliatc:d with your employer rnay "The property mw.11x: lis1ed f<lts:!le with n llcen.'ed contribute a flXcd sum towards the proceeds of the PFS, without R""IIPI unrelated to you within 7 dny~ ofyoUl' receipt "fthis altering dlcann's length naturcofthcsnlc. This contribution letI~r for a list price ~l ,>r n= $ _ _ _ which i~ the 'AS IS~ simply reduc.m the shortfuU be!W= th~ proceeds and W vulue indicated on th~ upproisaJ <lfY<lnr proper!)'. The listi.og amount ow~'Ii On the motlgngc nolC. As with any other PFS, BgrecIllCIlt must include the foU""ing "Pedfic ""n<::cllation such a =attion must result in. the outright sale of die property clullS(: in the event die terms of n ""l~ arc ooucccptlblc to Qod c:mcellution of the FHA mortg:Igc ins=e. HUO: ~Sel1er mny cancel this ngremnmt prior to the ending daw Occupancy and Property MIIlnterumc:e ofth<: listing JlI'riod without udvan~ no~ce to the broker, and You are responsible for property rnaullenanre and \\'ithout payment ofa commission or any other coosidcrJtion If repair umil olosing. This indudes but is nOllimili:d to cutting th~ propcrt)' is conveyed to the martgage insuJcr or the mortgage the gross, IlIlOW removal. n:gular interior and exterior cle:rning, holder." The sale completion is subjectto upprovtll (under HUD imm<'<llate repair ofbmken doors;md windows. and p:lying guidelines) by the mtll"tg:tgec. utility bills as tb~ become dU1:. If the property is \'aCantor '(<lut d=itin~ to (lbtain a signed Contr:lct ofSlllc from bocomes vacnm: during markctiJlg, you mWll inform your a qu:tlifi~d beyctV; If you !)ave not been oble mortga.gct: immediately and ensW"t: that the property is protIletcd !(l obtain an :lCcept;lhle con!t;lct by that date, yoormortg:lgee from fte=ze d:imDge by "winteri:ciog' plumbing pipes. You may must recommence foreclO;<llI"<: or accept a deed.ill.lieu of nmmge with yoor :Sal~ agellt!(l provide property ll1.Iliolen;mo: foreclosure. but you will continue !(l oe responsible forthe cottdition oftbe Acceptable Term. ofSal~ b(}mc until it is sold. Onmage;md repai:r <:lqlenses resulting Program crileria require that "!leI" amount payable to from fire. flood Or other natnml ~a= must be reported HUD as a result of this sile. after nllow:tble expcn:<cs "ill be ~ imm<'<liatoly to tbe insurance company and to your mortgagee. 1= $ ,(ou must ""hmit yoor proposed Borrower's lDcentive Compl!llSlItIoo Ccmtrm:\ ofSal~ far approval to the MortS:tSce Cont:lct nmtl~d If you mlcces.rul1y cl05e a sole of your home under this above. The sile = t be an """n!m's length~ trnIlsaetion; th~ buyet procedure. )'{)U Wlll be pnid compensation ofS750 a! dosing. cannot be a member ofyour family, business associale, or oth<=l" Y<IIlt C<lmp~(}n Wl11 increase to $1.000 iftbe,.,1e of yow: favO!"Cd P"rty. No hldd<!rll.ctJ1u or special OJIdCl"Stllndings cnn c:cist propt:T!y closes on orbcforc Yoo may clcc( to bt,tween )'lu, die ooycr. upprai"~r. ~t"" Qgent or~ee. If receive casll or apply rome or all of the campem!a~OIl to sales yoo ncgoti:lle with a blIY<=l"!o P"Y for dii<COWlt points, a home coom: nOl paid by HUO, for =pJe, discount points. or hmrn: warranty, rep:tin< notl"llqUircd for a new mortgage, tnlnSfcr tllws or wnrruntj plans. Y(Ill m:.y also ur.e it to pay offjunior liens.

Qu..tlo"" <:oo.....uru: .oilY "rtbb Informutloa, oryour respn"';;bWtleo la th~ ('r..reredos= Salel'""""dure. mm'! b. direeted til th. eonll&ct p.,wn nI VOIn" mortg.g<. om"" nI lb. abo td.JIh<Io< ."""bet.
r"""Ht1 p.<JU(I.1S(lMr.IOO3)
",C Htm.lbook4);lO.!

Approval to Participate HUD-9004S Application to Participate HUD-90036


7 Days to Success with Short Sales

The HUD Mortgagee Letter and How to Use It to Your Advantage

As you likely know, on an FHA loan, the government will protect all or a large portion of the lender's investment in the loan against default. These HUD-approved lenders, however, have a responsibility not to lose money for the government. They have a responsibility to mitigate loss on the government's behalf. (And, as we mentioned, these lenders also receive financial incentives to complete short sales.) So, to explain the Pre-Foreclosure Sale Program and encourage their approved lenders to offer this program as a loss mitigation option, HUD aeated a document called the Mortgagee Letter. The Mots,o-agee Letter is written as a memo, but it is really a short training manual on how to do a short sale from the FHA loss mitigator's perspective. Sadly, the number of foreclosures in the U.S. now necessitates that more lenders organize whole departments dedicated to loss mitigation. WhiJ.e many banks are inexperienced with loss mitigation, an even greater number of individuals serving as loss mitigators are inexperienced and poorly trained. Most have not even read the BUD Mortgagee Lettereven tho~h it is the definitive mMlual for processing govemmentinsulOed short sales. As an agent interested in pursing short sales, it is critical for YOU to understand the control wielded by the Mortgagee Letter. .. Loss mitigators processing FHA loans must comply with the rules outlined in the Monz,aagee Letter. Individual lenders cannot insert their own criteria or processing preferences into the FHA short sale process.


Day 2: Pre-Qua\ifyingthe Short Sale Prospect







=A.'lTsuJ\Jn\lJI.l'rgllll'ot~ n.:n.m~"':UIO=~


December 24, 2008



Single Family Servic1ngManagers
Pre-Foreclosure Sale (PFS) Program - Utilizing the PFS Loss Mitigation Option to AssistFamilies Facing Foreclosure



Hlgh foreclosure rates continue to have devastating effects on families and neighborhoods. The Federal. Housing Administration (FHA) remains committed to taking actions to help families avoid foreclosure. Since being introduced as anationalprogram in 19941> the PFS Program has helped thousands ofmortgagots in default to avoid foreclosure and transition to more affordable housing. The PFS Program can help many families who today are: facm,g foreclosure. The PFS loss mitigation option allows a mortgagor in default to sel! bis or her home and use the sale proceeds in satisfaction of the mortgage debt when the proceeds are less than the amount owed
'This Mortgagee Letter (MI.) serves to remind mortgagees of the relieftbal: tbe PFS Program ~an bring to borrowers with FHA-insured mortgages. To fucilitate greater use oftbis program, FHA has cocsolidated in this ML the requirements of the PFS Program that have been issued over the yellfS, andhas updated and clarified those requirements where needed, to better address the problems aced by mortgagors today and provide greater .flexibility in ~ocsiderio.g a mortgagor's candidacy for participation in tltis program.


Key Fe~$ oftlJ.e PFS Program

Establishing Market Value Mortgagees are retcinded to ensure tbatpropemes in the PFS program. are sold at Of Ilearfair market value as established by an independent appraisal. prepared by an appraiser on the FHA Appraisal Roster.

lJinimum List Price Requirements - Properties offetedfor sale under the PFS program are to be listed for sale atno less than the ~as-is" appraised value as determined by a ~urrent FHA appraisal. obtaioed and reviewed by the mortgagee. Negative Equity The ratio of 6~/& for the fair market .. ruue (FJl.fV) to the outstanding mortgage ba.1an~e (mc1udmg unpaid principal and accrued interest) has been. updated to address events in the current housing market, and replaced with tiered net sales pro~eeds.

1 The regulatials for1he PFS Program ere codifiediD24CFR203.310.

Page 1 of18

FHA Mortgagee Letter 2008-43


7 Days to Success with Short Sales

All of this is great news for you the short sale agent! If you learn the ins and outs of the Mortgagee Letter, you will know exactly how to get your FHA short sales approved! You'll know exactly what the lenders will expect from short sale candidates. So, pre-qualification will be a snap. The Mortgagee Letter explains HUD's position on financial analysis, property value, property condition, contracts, sales period, inspections, closings, and more. Once you learn the directives of the HUD Mortgagee Letter, you'll find that you will be the one educating loss mitigators! You'll know the rules of their business better than they do. Information is power! I'm seeing more educated loss mitigators these days, but I can remember that, on a basis, I used to have this sort of conversation with loss mitigators about denied files:

I<inoUy: "Carla, I understand what you';re saying about this file, but this is nat the way it should be done .... " Loss Mitigator: "What do you mean? That is the way we have been doing it for years." l<inoUy:"WeU, I understand, but on page 30 of bhe Mortgagee Letter, it e)qplains that ..." Loss Mitigator: "What Mortgagee Letter? What are you talking about?" <escalation to supervisor... > Loss Mitigation Supervisor: "Yes, iKnoHy, you're right. You know, we reaUy haven't taught our people that section of the Letter. That's a nuance that we really haven't gotten into with them .... But, you're right. We'll approve the file."
Download a free copy of the latest FHA Mortgagee Letter (rev. Dec. 2008) from or from the U.S. Department of Housing and Urban Development's Homes and Communities website at offices/ adm/hudclips/letters/ mortgagee/.

Day 2: Pre-Qualifyingthe Short Sale Prospect


Prepare for the Pre-Qualification Interview

Now that you understand a bit more about tbe criteria you are listening for, let's discuss how to approach tbe pre-qualification interview witb your prospective short seller.

Streamline Your Process with a Phone-Based Listing Appointment

When I first began short selling, I approached my short sale listing appointments just as any otber listings-face-to-face appointments at tbe property and a five-page glossy presentation to showcase my business philosophy and my marketing plan. I even had a PowerPoint presentation I forced my clients to sit through! Over time, I began to realize tbat my sales presentations and elaborate marketing plans were not required for tbese pre-foreclosure properties. I learned tbat I could be even more successful witb a 20-minute, phone-based listing appointment. I've had agents ask me, "Honesdy, Knolly, are you trying to say I don't have to view tbe property and meet tbe client in person before I work witb tbem?" Yes, tbat is exacdy what I am saying! Let's look at tbe time otber short sale agents might spend on tbeir short sale presentations and compare it to tbe time required witb my system: Talking to tbe client on tbe phone (initial discussion) Travel time to and from tbe client's home: Explaining tbe short sale process to a client: 30 minutes 1 hour 2 hours



7 Days to Success with Short Sales

That's up to 3% hours per listing! A phone-based appointment (with email followup)willsaveyouupt02t03hoursperlisting.At 50 listings per year, you will save about 150 hours of your life-almost a full month of workdays! You may be asking yourself, "What will the seller think of this approach!?" The prospect will follow your lead, so it will be important for you to educate them on why a face-to-face meeting is not necessary initially.

Prospect on the Phone: "So when will you be coming out to see my home?" Short Sale Agent: "You know, Caml, it sounds like you have a wonderful home. My team is eager to see it. Howeer, the bank doesn't reatly care what ,I think about the value of your home. What I mean is, once I 00nvince the bank to agree to do a short sale on your horne, they wiU hire their own independent appraiser who will come out and view your home and set a va'luation based on its condition. So for right now,1 wiU need to focus my energies on getting your short sale approved. In order to get the process going quiddy, !I wiH need to send you my short sale package and get that information back from you first, before my team member goes out to put up the sign and Lockbox and take some photos." Prospect on the Phone: "Okay. But who will let me know what I need to do to the home to get it ready for sale?" Short Sale Agent: "That's a great question, Carol. We won't be recommending that you do anything to the home that will cost you money. The truth is, since you won't be netting anything from the sale, the last thing you probably want to do is spend more money on a home you no longer can

Day 2: Pre-Qualifyingthe Short Sale Prospect


afford. For that reason, we will be selling your home 'as-is.' My only suggestion is to clear out as much clutter as you can. Other than that you're _ okay." Prospect on the Phone: "That sounds good to me. What kind of marketing do you guys do?"


Short Sale Agent: "Carol, our team has an extensive marketing plan for homes we list. However, with short sales, marketing is not what sells the home. Short sales are price-driven. Our marketing strategy will be to price the home very well so that we can quickly generate a contract and get the bank working on getting your short sale approved."

Gather Preliminary Information on the Property

Before you conduct the interview with a prospective short seller, you need to gather as much preliminary information as you can about the property and the neighborhood/market. Obtain the complete property address. Look up the tax records for the property. Do a CMA, if possible, to research the trends in the area. Prepare your Short Sale Pre-Qualification Questionnaire.

Expect to receive some inbound calls off of your marketing. Respectfully address the caller, but stay on track with your plan to get prepared before the fortnal pre-qualification interview with a new prospect.

Prospect on Phone: "Hello, Knolly? This is Carol Carter. I was referred to you by Maureen Jones. She told me you might be able to help me. I think what I need is called a short sale."


7 Days to Success with Short Sales

Short Sale Agent: "Carol, I am so glad you called and that Maureen sent you my way. I am absolutely going to be able to help you! Now, what's your address? ... " Prospect on Phone: "I'm at 123 Oak Street, here in Austin ... " Short Sale Agent: "Fantastic. Now, Carol, Maureen told me you were going to call. I've got something going on right now, and you deserve my complete attention. I need to talk to you about this. Are you going to be available around 3:00? We can do this by phone. I'm sensitive to your time, and I want to make this as painless as possible for you. So, I'U just caU you at 3:00, then. Okay? ..."
For outbound calls th2.t you make to short sale leads, you will be "bie to p~epare in advance =d roll right into fie questions on the Short Sale Pre-Qruilification Questionruilre once you get the seller on the phone.

Get into the Short Seller's Frame of Mind

As you Me discovering, short sales are ver), different from traditional listings. This is also true about the sellers tbemselves. The short seller's emotional fnme of mind puts them in a very different place. Before you speak with a prospective short seller, it is ctitical that you appreciate their fume of mind and prepare for it appropriately. Typically, agents come into listing appointments with high energy-read), to sell their prospects on their services and capabilities. Drawing on both facts and feelings, listing agents give sales presentations-almost perfotmances-to persuade the homeowners to select them over their competitors. Sellers are eager to sell their home for top dollar and move on to the next phase of their lives, and they're eager to find the most talented salesperson to help them do this. As a traditional listing agent, ),ou might say something like, "You know, Joe, I am so happy you called me. As one of the top ten listing agents in the city, I use the latest tools

Day 2: Pre-Qualifying the Short Sale Prospect


and techniques to get my clients' home sold for the most money in the least amount of time ... " Short sellers, on the contrary, are In the middle of a crisis. Due to hardships and financial challenges, they are being forced to sell their homes. Regardless of whether they qualify for a short sale, these homeowners are still distressed and facing challenges that they cannot handle on their own. For those sellers who have only negative equity in their homes (i.e., they are upside down), they cannot sell for a profit or even a breakeven. They are desperate to get out of their situation, and they need help. Typically, these sellers have sought you out for your short sale expertise, and you may not have any competition for the listing. As these sellers see it, you are their only hope for turning the situation around. Sellers who are distressed and/or upside down are typically facing a myriad of financial problems. It is important to have a thorough understanding of exacdy what the homeowners are facing, so that you will be well-informed and prepared to interact with them throughout the short sale process. Some sellers simply need to sell because they have been transferred to a job in another location. Others are facing a death in the family, medical problems, or divorce. Some of these individuals are just a heartbeat away from foreclosure or even bankruptcy, and they're scared of what the future might hold.

Build Rapport and Trust

So, instead of going in selling, your objective with short sellers is to listen to their story and build rapport and trust. You are going to need total access to information and details regarding their situation, and they need to know they can trust you. It is essential that your clients open up to you and lay everything on the table. This may be difficult for them to do. Human beings are very slow to trust one another.


7 Days to Success with Short Sales

Welcome to Day 3
Welcome to "Day 3: Gathering Infonnation for the Short Sale Package." In the previous chapter, you learned how to conduct the critical prequalification interview to gather a preliminary set of details about the homeowner's situation. In this Day 3 of learning, we will focus on the next step in the process-how to collect the key documents that will help you to verify this information and to move forward with the homeowner.

The Short Sale Process

YO" a",

Day 3: Gathering Information for the Short Sale Package


It is dw:ing this phase of the process that yow: "prospect" officially becomes yow: "client" with a signed listing agreement. And, furthermore, if their situation qualifies, they will become yow: "short sale client." As we mentioned earlier, new short sale agents are often surprised and frustrated to learn that each lender has a unique set of requirements for short sale documentation! In this chapter, you will learn how to gather and prepare a documentation package that will satisfy the requirements of all lenders across the board. It is a rare occasion for lenders to request their unique format after receivillg a package that follows the format developed by 7 Day Systems .

.-----~-"I c,oVl-sLcler tnLs step LVI- tne proc,ess to be C'lVl-

ex.teVl-sLoVl- of tne pre-q"wLLfLc,C'ltLoVl- step. The LVl-tevvLew Ls 'RolA.Vl-cl oVl-e/ C'lVl-cl LVI- Lt 1 gC'ltner sOVVl.e preLLVVl.LVl-C'lr1J lA.Vl-verLfLecl LVl-forVVl.C'lHoVl-. Now, 1 WC'lVl-t to see Lf tnese prospec,ts C'lre goLVl-g to pC'lSS 'RolA.Vl-cl TWO.' wLLL tneLr C'lc,tlA.C'lL cloc,lA.VVl.eVl-tC'lHoVl- VC'lLLclC'lte tnC'lt tne(j C'lre eLLgLbLe for C'l snort sC'lLe?"



7 Days to Success with Short Sales



Documentation Necessary for a Short Sale Package

In order for a lender to consider offering a settlement on an under water property, they must be provided with thorough documentation explaining the homeowner's situation.

The Checklist
A complete short sale documentation package must contain the followingitems:


Hardship Letter Listing Agreement Letter of Authorization Financial Statement Recent Bank Statement Recent Paycheck Stub(s) Fully Executed Purchase Conttact on the Property Buyer's Pre-Approval Letter from their Lender HUD-l Settlement Statement (also called HUD-l Estimated Net Sheet) Comparative Market Analysis (CMA) (optional)


61 61


o o


Day 3: Gathering Information for the Short Sale Package


Additional Documents for VA Loans:

o o

The most recent two years' tax return

Additional Documents for FHA Loans: The most recent two years' tax return Application to Participate HUD FORM 90036

Immediately after you complete the pre-qualification interview, send your short sale client a follow-up email with a checklist of the documents they will need to gather for the proposal package. Include in this email a link to your website FAQs.


7 Days to Success with Short Sales



To: Subject: Short Sale Info - 123 Main Street

Hi Porcia,

Good talking to you today. Based on your situation, the short sale is likely your best option. Also, we will get an offer over to CiliMorlgage to postpone the loreclosure. Can you emaH or send the payoff info you have (or your most recent mortgage statement) along with any leiters you have received kom your lender? You can also get more information about the shortsa'le process, along with oommonquestions and answers at: Keep in mind that appl1ing for a short sale is like appl1ing for a loan, so the lender asks for lots of documents. However... it is well worth it when you get into the program, since they wiill forgive the balance owed. And they will also pay my fee and the diosing costs. I have attached an information sheet and a checkl,ist of the documents we


I need. We basically do all the work-so you'll be in good hands! Thanks again! Knolly
Sample Follow-Up Email

Day 3: Gathering Information for the Short Sale Package




Listing Specialist

Phone: (512) 206-0060 - Faz: (512) 53::':-0626 -



Many sellers in today's market have little Of no equity; that is, the seller owes close to

Of more than the property is worth. In these





often willing to

accept less than the full amount due, commonly rsferred to a ''short pay" or

Many homeowners who are "upside down" on their mortgage opt to simply walk Ciway from their home and allow it to foreclose. The short sale cffers a much better option and provides a win-win for the lender and the homeowner.
from the lender's perspective a short ssle sS!V9S many of the high costs 35figciated wjth the foraciq:;.llre process attomey fee's, the eviction process, delays from borrower bankruptcy, damage to the property, costs associated with resale, etc. 11"1 a short sale scenario, the lender gets their money faster and is able to cut their losses.

Once you are approved for.a short sale, the lender will order an appraisal of your property to determine the market value. Once the value is determined, the lender will allow KnoJJy to sell your property at market value. Once sold, the remaining debt is usually forgiven. The lender often expects to collect 90% or more of the appraised value, so you may still accept an oftSr [ower than the appraised value. The bottom line is... If your home is worth less than you owe, you can still sell it via a short sale-without bringing ;,ny money to closing! Knolly Williams is one of Austin's premier short-sale listing specialIsts.

Short Sale Checklist

In order to be considered for;, short soI!Ile, you must provide the following .. AUTHORIZATION 8: HARDSHIP LETTER (included in this package, if loan number and last 4-digits of Social Security number are missing, fill in and sign and date) FINANCIAL STATEMENT (included in this package, fill out sign &: date) RECENT BANK STATEMENTS for past 2 months RECENT PAYCHECK STUBS for past 2 months COPY OF CURRENT MORTGAGE STATEMENT COPY OF YOUR PROPERTY SURVEY - Thll5'.ll'ey is <I drawn map of tne properly shOl'ling fmce ~nes and hew the home sits on the let. Thl!f& wiD b$ ~ Stete ri Te:<2ls Se4I sbmped on the ~ ~Ion!l w~h the Mme of ~ ,ompany thst perl'orrned the survey.

PLEASE FAX ALL REQUIRED DOCUMENTS TO Listing Manager: Morris Thompson - Fax #: 512-532-0626

Sample (Conventional Loan) Short Sale Infonnation Sheet and Checklist


7 Days to Success with Short Sales

Special Note about Timing

In the checklist of items for the short sale package, you may have noticed that three documents were missing their checkmarks:

o o o

Fully Executed Purchase Contract on the Property Buyer's Pre-Approval Letter from their Lender HUD-l Settlement Statement (also called HUD-l Estimated Net Sheet)

These three documents are essential to the short sale package, but they cannot be completed and added to the package until a buyer is under contract for the property. Tills means that you will begin the process of collecting the necessary documentation for the short sale proposal, but these hst three documents will come a bit later in the process. We'll discuss these documents both in tills chapter and in "Day 5: Receiving Otters and Submitting the Short Sale Package."

$pedal Note about Properties with Second Liens

There is additional work to do when performing a short sale on a property that has more than one mortgage lien. If the first lien is found short, the second will be as well. This basically means that you will have to do twice the work because you will be submitting a copy of your short sale package to both the first and second lien holders. Lenders who are in a second lien position must agree-along 'With the first lien holder-to the short sale in order for you to sell the property. Most such lenders will readily agree, as they will typically get nothing if the property forecloses. Indeed, as foreclosures have been on the rise in recent years, more and more second lien holders are becoming fearful that they will not make any of their money back. Proactively, they are offering homeowners special early payoff incentives and so forth to try




Day 3: Gathering Information for the Short Sale Package


to recoup their money before the homeowner faces a short sale or a foreclosure. Years ago when I fIrst began doing short sales, the fIrst lien holder would negotiate directly with the second to settle the short sale. This made my job easier, and the second lien holders were more convinced that they should act quickly. These days, the fIrst lien holders are so swamped that they are not willing to take on this additional task.

Be sure you know your numbers!

You need to know exactly how much the seller owes on each mort,,<>age loan. Order payoff statements from each lender to determine what is owed. Next, see if the net proceeds from the short sale (the amount left over after all expenses are deducted) will be enough to cover the fIrst lien. If so, the fIrst lien will be paid in full and whatever is left will be offered to the second. If the remaining proceeds are not enough to cover the second lien, this lien it is short. In these cases, you will focus your negotiating efforts on the second lien holder. You won't need to spend time negotiating with the fIrst lien holder. If both liens are short, you will offer the bulk of the net proceeds to the fIrst garger) lien and a nominal amount to the second lien. Typically, the fIrst lien holder will not agtee to offer any more than $1,000 to $3,000 to the second lien holder. Now, be sure not to make this rookie mistake: The net proceeds from the sale must always be applied towards the primary lien fIrst. You cannot apply the proceeds to the second lien fIrst and pay it off because it is a smaller lien amount. It doesn't work that way. First comes fIrst! So, if you determine that your client's fIrst lien is short, then the second one is short as well-by default. We will further discuss the special steps you must take to process a short sale on a two-lien property in this chapter and again in "Day 5: Receiv-


7 Days to Success with Short Sales

ing Offers and Submitting the Short Sale Package." At this point, as you read about the specific documents required for a short sale proposal package, remember that if there are two liens on the property and they are both short, you must prepare and submit a separate package to each lender.


Day 3: Gathering Information for the Short Sale Package


o The Hardship Letter

The hardship letter is one of the key components in the short sale package. This brief letter explains the hardship the homeowner is experiencing and helps the lender determine whether this homeowner is worthy oflender assistance.

Strategies for Success

Don't ask your clients to write their own letters!
Some agents ask their clients to write their own hardship letters. While it's critical to get accurate information from your homeowner client, it's not the best idea to ask them to author the actual letter. The hardship letter must be professionally crafted, sttategic, and persuasive. As a short sale specialist, you are in a better position to determine which information is relevant and which will be disttacting or unconsttuctive. After you compose the letter, you will, of course, present it to your client for their review and signature. Another option would be to allow your client to compose a first draft-that you then revise, following the format that we recommend in this chapter.

Keep it short!
Avoid the temptation to create a long, drawn out, two-page document. In most cases, the hardship letter should be between three and six sentences. I have learned from experience to keep it brief. I tell the banks only what they need to know to make a decision. Typically, I take three sentences to explain the unique elements of the homeowner's situation, then one to two standard closing sentences. (See samples.) I am cautious not to inadvertently give lenders ammunition that they can use to disqualify the short sale.


7 Days to Success with Short Sales

There's no need to exaggerate or dramatize the situation.

I have found that it is unnecessary and ineffective to exaggerate or dramatize the situation. There's no need to "lay it on thick"! Your objective should be to present an unvarnished, honest statement of yom client's hardship.


Don't send "supporting documentation," unless requested.

Some agents recommend sending various supporting documentation along with the hardship letter. I have rarely had a lender ask for copies of death certificates, pink slips, hospital bills, and so forth to back up claims made in the letters. My policy is to send this documentation-if requested. Don't ask your clients to spend their time and energy collecting these documents until needed.

Don't overthink itl

Don't ovel1:hink the hardship letter! Don't try to figure out ways to get into the mind (or heart) of the loss mitigator working the case. State the facts of the case simply and succinctly, focus on the reasons for default, and that's it.



Day 3: Gathering Infonnation for the Short Sale Package


Sample Hardship Letters


Date: _ _ _ _ _ _ _ __ From: James Martin
To: Wells Fargo Loss Mitigation

Property Address: 109 High Tail Loop, Cedar Park TX 78630

LOAN Account #: 0182533521

Last 4-digits SS#: 4432
To Whom It May Concern: I recently had a change in jobs and am now working in another city. r have just placed my home for sale; however I have tried to sell it before with no success. My area has a high number of foreclosures and property values have dectined. Unfortunately due to my hardship, I have to move and can no longer afford to keep this home. I have to sell my home and based on the market conditions I have no alternative but to seek a short sale.

Sincerely and Respectfully Submitted,

James Martin

Sample Hardship Letter 1


7 Days to Success with Short Sales


Date: _ _ _ _ _ _ _ _ _ __
From: Mindy Karmi

Property Address: 12813 BOBBYSOCK DiRIVE, AUSTIN, TX 78748

LOAN Accoul1t #:
Last 4-digits SS#: 6674

152104687 ad 152104607

To 'Whom It May Concern:

Due to circumstances beyond my control, 1 was (!tut ,of work for three months this y.ear; between April. 2008 and June 2008. In order to .continue making paymeflts on ,this home 1 had to deplete my savings and borrow money. With my new jo.b~ my expenses are roug:h.:ly SI,200 per month more 1itaJll .n: make.
Unfortunatdy I can no longer afford to make my mortgage payments. I have to sel1 my home and have no alternative bru: to seck 'a SincereJy and Respectfully -Submitted.

Mindy Karmi

Sample Hardship Letter 2

Day 3: Gathering Information for the Short Sale Package



Property Address: 907 YASMINE, AUSTIN TX 76574

LOAN Account#:
Last 4-digits SS#: 4677


To Whom It May Concern: Our property taxes have gone up by over $4,200 per year since we purchased this home. We also have incurred many additional expenses including gasoline and other costs of living. We now owe the IRS over $7,000. Also, Jennifer is pregnant and facing increased medkal expenses, Unfortunately we can no longer afford to make our mortgage payments. We have to sell our
home and have no alternative but to seek a snort sale.

Sincerely and Respectfully Submitted,

Darin Miner III Jennifer Miner Sample Hardship Letter 3


7 Days to Success with Short Sales

A Loss Mitigator's Take on a Sample Hardship Letter

Take a look at this sample hardship letter and the comments that a loss mitigator might make about the statements. In other words, notice how many holes can be punched in this short sale request.

From: Heather Homeowner


Hardship Letter/Short Sale for 555 Oak Terrace, City, State 78577

To 'VI'hom It May Concern: I'm a single mom who purchased our home at 555 Oak Terrace in October 2005. At that time, I had just started my own business as a cosmetics sales consultant. I had great hopes for generating an income to support my mortgage and lifestyle with my daughter.

Unfortunately, sales were very slow the first SL'C months, and this put me into a desperate situation with my mortgage and my credit cards. To supplement my cosmetic sales, I began to wait tab!es at a local restaurant and my parents loaned me $4,000, which didn't last long. After struggling for months to make my expensive mortgage payments, I had no choice but to put my house on the market. In April of 2Cl06, I put my home up for sale as a For Sale By Owner. I set the original asking price as $240,000. I didn't get any offers at this time because most buyers were concerned about the water damage in the living room-caused by roof damage the house suffered duting a storm in late 2005.

e I could not

make the repairs, so I lowered the asking price, but still had no offers. Over the next couple of months, I lowered the home price three times,

(continued ... )

Day 3: Gathering Information for the Short Sale Package


finally settling at $170,000. This price was the lowest I could go and still cover final costs. I am not anticipating any profit. The home still has no offers. I have now decided to list the house with a real estate agent, instead of as a FSBO. I think this will make a difference. I realize that I can no longer afford the home I am in. I have
given up on the cosmetics sales business, as it seemed too competitive in

my area. ., I am waiting tables full time. In my current situation, I cannot support a mortgage payment of $2,200 per month. I fear that foreclosure is around the corner, and that would have a devastating effect on my credit. I am requesting assistance in avoiding foreclosure action. I deeply appreciate your assistance and understanding. If you have any questions, or need anything further from me, please contact me.

Best r""""rds,

Loss Mitigator's Thoughts

"Are you saying you purchased a home at the same time as starting a new business? Do I smell loan fraud? Did you purchase the home on speculative income? Sounds like you deceived us about your employment." 49 "So, did you have prior experience with cosmetic sales? What do you mean 'hopes'? Did you do your research about the costs for this start up? Sounds like you were gambling with our money. This doesn't sound like a hardship to me. You took a risk (with our money) and failed."

"What's going on here? In the documents you signed to get your mortgage, you promised to maintain the property. Are you not keeping your commitment?"

., "Did you not do your research on the market before you entered this business?"



7 Days to Success with Short Sales

o Listing Agreement
As soon as you complete the pre-qualification call, begin preparing the listing agreement. Set a goal to send the agreement to your client by fax or email the very next day. The bank will require that a copy of the signed listing agreement be a part of the short sale package you submit.

From: KnollY@knolly.oom To: Subject: Listing Agreement - 123 Main Street

, Hi Porcia,
I've attached a copy of the 'listing agreement that we discussed. This is the

dooument that will aJllow me to Illst your home for sale. Please print, sign,

I and fax the signed document to my 01lice: {5121532-0626.

If you have any questions, be sure to calill me!

Once I receive the sligned agreement, my assistant will! schedule a time to come out and take photos, place the slign, and instal'l thelookbox on your home. Thanks again, Knolly Sample Email Requesting Signed Listing Agreement

Day 3: Gathering Information for tile Short Sale Package


Strategies for Success

For the most part, the short sale listing agreement is the same as a traditional (non-short sale) agreement. There are, however, a few unique strategies you can implement. Add a special provisions statement. While formats may vary for listing agreements, all typically include a section used to explain any special provisions. To this section, we recommend you add a statement such as: This listing agreement is subject to seller's lender approval of a short sale.

This statement protects the seller and makes them feel more comfortable knowing that they are not "locked in" if they are not approved for the short sale. Consider adding a statement about price instead of a dollar amount. In the sales price section of the agreement, we recommend that you not state a dollar amount, but rather add a statement such as: Sales price to be determined by lender.

This will give you maximum flexibility and will allow you to adjust the price as necessary, without having to go back and get your client's permission each time. Again, because the seller cannot make any money from the short sale transaction, they are likely much less interested or engaged in the pricing strategy or potential price reductions. However, if they are concerned that this statement will somehow mean that their home will be sold at a cut rate, reassure them that their mortgage lender will want to get the highest price for the house. Lenders have an investment in this and they want to mitigate their loss.


7 Days to Success with Short Sales


Some states may not allow a statement to be added instead of the price in a dollar amount. Our team has not heard of any challenges to this strategy, but you will want to be educated on your particuhr state and local guidelines. If your broker takes particular issue with this strategy, you could add a listing price of market value or slightly under and a statement such as: III Seller grants listing agent the permission to adjust the list price as stated in paragraph X as market conditions dictate.

Set a long ,contract term/length.

The length of your listing contract should be based on your market, but we recommend that you make it at least a six-month contract to cover all possible issues and delays in the transaction pmcess.

Set the (lommission at 6%.

In my experience, it typically works best to simply put "6%" for the agents' commission. Some shol"1: sale specialists advise stating a commission of ''7%'' or "8%," so that there will be room to negotiate the bank down to 6%. I believe banks can easily see through this tactic-making it ineffective and unnecessary. If they're going to offer 6%, then that's what they will do. If they're going to offer 5%, then that's what they will offer. They're not going to look at a listing contract with "8%" noted and suddenly up their offer to meet the agent halfway.


Day 3: Gathering Infonnation for the Short Sale Package


o letter of Authorization
As first discussed in Day 2, you will need written authorization to speak with your client's lender(s) about their financial information. To make this request from the lender, you will need the last four digits of your client's Social Security number and a signed authorization statement. Remember that it may take up to 72 hours for the lender to process the Letter of Authorization and give you access to the client's account. If a foreclosure date has already been set for your client, every day counts!
Note: If your client has mortgage loans from two different lenders and both loans are short, you will need to complete (and your client will need to sign) a Letter of Authorization request for each lender.


7 Days to Success with Short Sales

November 10, 2008

From: Joseph Caters


Property Address: Last4-digiuSS#:
LOAN Account#:

lCJJ$ ..Q.uj,t!!.t.w..~w.J,~!!,~..e.~ ,';l';,1(.~'2; 4763



[ authorize ~ r.eail. estate ageBl: KnoB! '\iW.mrJ:s and his associates B'~bam Riorilanand Mmrls ''I'homp.ron ,ofThe KDoRy 'If.eam!Kdler "'"illi.ams Realty amd escrow 'officer ''!racy Jrute.S @fEla"'T.lfJ.e to:discuss!lbis account on my _Iilf'

Please add them to my account ,as p,a:dies ,3l!tthQrizoo to receive information. , owect ,all cGmrmmications T~Cfu:tg my short sale ilransacti@nto them. 1 also aathC!lme the use of any incentiv<e toward '~mses mcmred on ,my behal:t:
"lie1: 512-294-2143
Fax: 512-532-0'626

Sinee.n>ly -andRespectfully Submitted, Joseph 'Cater.s


Sample Letter of Authorization

Day 3: Gathering Information for the Short Sale Package


Cover Sheet and Request for Payoff Information

With your authority to discuss your client's account, the first thing you will want to do is order a payoff amount for your client's loan(s). On the Knolly Team, we submit the Letter of Authorization simultaneously with a request for the loan payoff amount. Our fax cover sheet explains the request. Note that the Letter of Authorization will often need to be faxed to a different fax number from the loss mitigation department's number (the number you will use for the rest of the short sale package). Check with the lender to make sure your authorization letter gets to the right place. You can obtain the telephone and fax numbers of the lender's authorization department by calling the lender's customer service number and requesting them.

Start building your database of bank contacts! Checkout the 7 Days to Success with Short Sales Toolkit CD! You'll find more than 250 unique contacts for lenders and their loss mitigation departments. More than 40 of the top lenders are included in this instant database!


7 Days to Success with Short Sales



Knolly Williams, Realtcr

ShortSaIie US'TlNG MANAG:R Direct: {512J 234-21.43

Fax: (512) 532--0826





Loss M"rtigaficm Dept Arm: JobnSmib


Morris Thompson Short Sam 'tlsting 'Manager2 wicoV\l!ir





LGAl'1 PA'I'Off REQIlI:5f

AdriTe:ss: 11Z11B Quiet Water Lane. AI::IS'fion, TX 7S332:

Oje:Jll1Name: Joseph Caters
i.ast.4-dUgits SS#: 41SS :t.G:intifulnlbEr. 7874432231

on:taIaII Ilftur:mu!'ila}ooent.l.affi ~the~ ~to>::a:rJeG:a ~Mm~ 3DG'R pn:psty.

7/lB ~~t5lIl21e.goOO'tt:mI.lgllJ: Dei::ember17,2Ooo


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'lpil';tom;, ~ tb I'm nEGlJa'le- 1:1 ca3 me- ~ -dt S!2-2i4-Zl43 Of erna:




Sample Fax Cover Sheet Requesting Loan Payoff Information


Day 3: Gathering Information for the Short Sale Package


o Financial Statement
All lenders require a financial statement from homeowners applying for a short sale. Think of the fInancial statement as your client's financial budget. On the financial statement, your client will list their expenses and their income along with assets and liabilities. Whereas the pre-qualifIcation step relied on your client's recollections, opinions, and perspective, the financial statement is gtounded in the factual realities of the situation and will validate (or invalidate) the client's initial statements. Much of the lendet's decision to approve a short sale rides on the financial statetnent and the hardship letter. Your clients should be able to complete the financial statement with few challenges. It's essentially a simple budget statement and should be selfexplanatory. As a short sale agent, however, you need to be very confIdent and knowledgeable about this document so that you can effectively analyze the data and draw conclusions.


Again, I have spent years processing short sales, and I have learned a gteat deal about what lenders are looking for in the financial statement. The 7 Day Systems Personal Financial Statement represents a comprehensive document that will more than satisfy the information requirements made by the major lending institutions. There is only one important instance in which I recommend using the bank's own financial statement format if it's going to serve your client best. We'll discuss that exception later in this section.


7 Days to Success with Short Sales


Sample 7 Day Systems Personal Financial Statement

Day 3: Gathering Information for the Short Sale Package


Strategies for Success

Let's look at a few key sections and points on the Personal Financial Statement form.

Be strategic (and accurate) about listing Borrower and Co-Borrower information.

Make certain that you understand your clients' situation so that you can properly counsel them on how to complete the Personal Financial Statement form. On occasion, you may find that two borrowers are formally listed on the mortgage loan, but one of the borrowers is not currently honoring their responsibility to make payments. For example, you might have a client who is going through a divorce, who has just been widowed, whose coborrower has just walked out, or something similar. In these cases where only one borrower now lives in the home and is struggling to make payments alone, you should ask your client to complete only the ''Borrower'' side of the Personal Financial Statement. You want to advise your client to complete the form so that it accurately reflects the income that is being conttibuted to the household and being used to make loan payments. (Remember, that all parties listed on the mortgage note(s) must be in agteement about selling the home.) If such circumstances need to be futther explained for the lender (loss mitigator), you may add a simple statement to the hardship letter. Now, if both borrowers still live in the home, but only one is employed (earning) and conttibuting to the loan payments, both the Borrower and Co-Borrower portions of the Personal Financial Statement should be completed. The non-conttibuting borrower's income would be listed as


7 Days to Success with Short Sales

Thoroughly capture all monthly expenses.

What is great about the 7 Day Systems Personal Financial Statement is that it captures approximately 30% more expense line items than most other forms. In other words, your clients will be asked to document every little thing that costs them money. This will only help in building the case for what a month-in-the-life looks like for this homeowner. When your clients fill out the Monthly Expenses portion of the financial statement form, they should enter actual expense amounts (i.e., their bill amounts) instead of the partial amounts they may be paying towards these bills. For example, I've had clients enter "$0" for the monthly mortgage payment because they were not currently making paymentsI Instead, they shoul.d have listed the amount of their monthly mort,,~e bill. For the credit card monthly expenses, ask your clients to put either their monthly minimums or the monthly payment amounts if they aim to payoff the balar>ce in 12 month s. Once you receive your client's completed Personal Financial Statement, review the document thoroughly and "nitpick" over the details. Look for more expenses that your clients may have missed. Host a phone conference cail with your client and ask questions to probe and jog their memory. For example,

( Scr.i.Pk!) Agent: "Have you had any car repairs thjs year? . . '..

_ _, ..... .... No? Ok, but what do you typically budget for car . . maintenance each year?" Agent: "You noted $0 for dental expenses. Do you not go to the dentist? What about your three children? Let's figure out what two cleanings a year would cost for your whole family. Then we'll divide that by twelve." Agent: "Did you say your husband has already started his new job in the other city? Is he paying rent on a place there? We need to add that to the rent line item."

Day 3: Gathering Information for the Short Sale Package


I had one client who failed to note that she had more than $60,000 in school loans. She had not been making loan payments for months, so she just forgot to add those payments as an ongoing monthly expense.

Compare the expenses to the income.

To qualify for a short sale from the lender's perspective, the homeowner's total monthly expenses must be more than their monthly income. (Or in some cases, proposals will be accepted when the income is just slightly more than the expenses.) I do not share this rule with my clients. I don't want them to manipulate the data or be dishonest in their documentation. I don't want them looking for ways to pad the expenses total. Their objective should be to capture the facts as accurately and thoroughly as possible. You, as the short sale specialist, however, should know what you are looking for in the financial statement. If monthly income greatly exceeds monthly expenses, then you need to go back and recalculate or find out why your client cannot make their mortgage payments. The document is telling you that they will not qualify for a short sale settlement.

"If !jO['( deterVlA.~""e tViClt Cl cl~e""t's VlA.o""tVil!j ~""coVlA.e ge""['(L",,el!j exceeds tVie~r VlA.o""tVil!j expe""ses b!j Cl co""s~derClble ClVlA.O[,(""t (~500 Cl VlA.o""tVi or VlA.ore), tVie"" !jo['( VlA.Cl!j ""eed to co ['(""sel tneVIA. Clbo[,(t WCl!jS to ~eep tne~r nOVlA.e. Tne!j VIA.~gnt q[,(CllLf!j for Cl loCl"" VlA.od~f~CC!tLo"", for eXClVlA.-ple. If tne!j stLll VIA.['(st sell, tne!j wLll ""eed to follow tne trCld~tLo""Cll -process ~""steC!d of req ['(estL""g Cl snort SCl leo n


7 Days to Success with Short Sales

Use the lender's own financial statement form when ...

The 7 Day Systems Personal Financial Statement should serve you and your clients well with all lenders. However, if you have a case in which your client's assets and liabilities are presenting a conflicting message, you may opt to use a less detailed form-such as the ones used by some lenders. For example, I had a client who was struggling to make mortgage payments, and he owed more than the market value of his home. But, when he submitted his financial statement to me (using the very detailed 7 Day Systems form), he listed a 401K retirement account as an asset with a balance of $300,000 and another IRA account with additional money. This presented a very different message about his financial position. So, we decided to take a look at the financial statement form used by his specific mortgage lender. Their form required less information about assets and liabilities. So, we submitted the with all information required by the lender's form, and no other questions were asked. My recommendation is to always begin with the 7 Day Systems form because this will require that your client provide very detillled information about expenses. Even if you switch to the lender's unique form, you "'W-illeasily be able to transfer the total expenses that you gathered in detail on the 7 Day Systems form.

Day 3: Gathering Information for the Short Sale Package


o Recent Bank Statement

The lender will want a complete and recent copy of the homeowner's bank account statement. If the homeowner uses online banking, most lenders will accept a statement printed from this online source. We recommend obtaining two-months-worth of statements from your client.



7 Days to Success with Short Sales

o Recent Paycheck Stub

The short sale proposal package should include a recent copy of your client's pay stub---if employed. If your client is self-employed, the lender may want to see a copy of the previous year's tax return. If two borrowers are on the loan and both are living in the home and contributing to mortgage payments, both will need to submit pay stubs and/ or tax returns. We recommend obtaining two-months-worth of pay statements &om your client(s).


Day 3: Gathering Information for the Short Sale Package


o Fully Executed
Purchase Contract
This component of the package will be added later.

At this point in the process, you may not have identified a buyer for the property. However, the final short sale package should include a fully executed purchase contract signed by all parties. Most banks won't consider doing a short sale without a contract on the property. Under the Special Provisions section of the contract, we recommend you add the following statements:


"This contract is subject to and contingent upon seller's lender approval of a short sale." ''Property is being sold as-is."

Note: Some Multiple Listing Services (MLSs) and local boards have specific addendums that they require to be included with a short sale offer or contract. Make a point to familiarize yourself with these fottns.


We'll discuss the guidelines for buyer contracts in "Day 4: Listing and Marketing the Property," and we'll discuss how to review offers and prepare the contract documentation in "Day 5: Receiving Offers and Submitting the Short Sale Package."


7 Days to Success with Short Sales

D Buyer's Pre..Approval letter

This component of the package will be added later.

Along with the executed buyer's contract, you will also need to submit a buyer's pre-approval letter as part of the short sale package. This informs the seller's lender of the buyer's approval to finance and purchase the home without complications. We'll discuss the buyer'S p:re-"'pprovalletter further in ''Day 5: Receiving Offers and Submitting the Short Sale Package."


Day 3: Gathering Information for the Short Sale Package


o Estimated HUO-1
Settlement Statement
This component of the package will be added later.

Once you have an offer on the property, you will be able to move forward with an estimated HUD-l Settlement Statement (also called "estimated HUD-l net sheet") to add to the short sale package. This settlement statement is extremely important because it shows the bank how much they will net out of the transaction.


Settlement statement

U.S. Dipartment of Houslng

and UrtNln [)QlII!lopmllt'lt


Sample Portion of a HUD-l Settlement Statement


7 Days to Success with Short Sales

Strategies for Success

Make sure you are working with a settlement agent who understands short sales. The HUD-l Settlement Statement IS a complicated document to complete for a traditional real estate transaction-try a short sale transaction! Even though the settlement agent (an escrow officer or attorney) will be working under your direction, it is critical for this individual to understand how to draw up HUD-l Settlement Statements for short sales.

Consider developing a training document to help settlement agents (esorow officers/attorneys) draw up HUD-1 Set~.lement Statements in the manner that will be necessary for short sale processing. Check out the sample training document on your 7 Days to Success with Short Sales Toolkit CD!

As a standard requirement of their job, a settlement agent knows how to enter in the "settlement charges" such as commissions, fees, taxes, and so forth. The challenge comes in accurately documenting the summary of the seller's side of the short sale transaction. At this point in the process, you have already been authorized to speak with your client's lender(s) regarding their accounts. If your client has two liens on their property, you have ordered payoff statements from both lenders. These payoff statements will help you determine whether one or both of the liens are short. Again, it is possible for the sale of the home to generate enough net proceeds to completely payoff the first..

Day 3: Gathering Infonnation for the 5hort Sale Package


lien holder, but not the second. Other times, you will need to request approval for a short sale from both lien holders. Every market is different. In my experience and in my market, I have found that in 75% of the cases with two property liens, both liens will be short. In a traditional real estate sales transaction, the payoff amount for the loan(s) would be noted on the seller side of the document (lines 404 and 405 of the HUD-l). In a short sale, "payoff amount" is an irrelevant factor in the settlement equation. A short sale means, by definition, that the lender will be accepting an amount that is less than the loan's actual payoff amount. So, what does this mean for the HUD-l form? As the short sale agent, you must carefully direct the settlement agent to enter figures that will (hopefully) satisfy the settlement positions of both lien holders. The figure on the next page, illustrates how the bank(s)' net proceeds would appear on the HUD-1. We'll discuss the details of completing the HUD-l Settlement Statement further when we reach "Day 5: Receiving Offers and Submitting the Short Sale Package." At this later point in the process, you will have the remaining puzzle pieces necessary to complete the HUD-l-sales price and dollar amounts that should go to each lender (if more than one lien).


7 Days to Success with Short Sales

Sample HUD-1 Settlement Statement Showmg Seller's Side

Day 3: Gathering Information for the Short Sale Package


( Market Analysis (CMA)

o Comparative


While optional, the Comparative Market Analysis (CMA) is highly recommended. Yes, the bank will order their own appraisal or broker's price opinion (BPO). However, you can help inform the bank's thinking early on by including your own CMA in the short sale package you submit. Some short sale training systems teach agents how to get the bank to agree to a low ball listing price (lower than market value)-when they know that the property will quickly and easily sell for more (with little or no improvements). These strategies appeal to investor agents who will buy-and-flip or buy-fix-and-flip their short seller's property. These strategies also appeal to agents who know they can find a buyer who will pay market value or higher--allowing the agent to pocket the difference. These strategies are not the strategies of 7 Dqys to Success with Short Sales. We recommend that you practice the same CMA strategy you would with any seller-short sale or traditional sale-who needs to sell within 30 to 60 days. In fact, my rule of thumb is to price the property at an amount that would create an offer within 15 to 30 days. Price the property to move. Price it right; price it correctly. Price the home at the best price within reason for a quick sale with active marketing. The CMA format recommended by 7 Day Systems is short and sweet. It's a synopsis document that can be assessed at a glance. We find that this format works to our advantage-particularly when banks say they don't want to see the listing agent's CMA. They will look at this short, concise, persuasive document.


7 Days to Success with Short Sales


Average price per square foot $58.69

per foot

Square footage of subject property: 2376 Square Feet. Average days on market 76 to 120 days Notes: There is a definite downward trend toward a lower price per square foot compared to sales from several years ago. There are many foreclosures and pre-foreclosures in the neighborhood.

Kn:olIIy ~nams, Associate Bro'ker




Sample Comparative Market Analysis

Day 3: Gathering Information for the Short Sale Package


o Additional Documents
for Government-Insured Loans
When you are processing a short sale on a property with a governmentinsured loan, you will need to submit additional documents in the short sale package. For VA Loans:


The most recent two years' tax return

For FHA Loans: The most recent two years' tax return Application to Participate Form (HUD-90036)

Recent Two Years' Tax Return

Both VA and FHA lenders will require homeowners to submit copies of their tax returns for the two years prior to the short sale-regardless of the homeowners' employment status.

Application to Participate Form (HUD-90036)

For clients with FHA loans, HUD requires homeowners to complete an application in order to be considered for a short sale. The Application to Participate (HUD-90036) must be completed by the homeowner. You will submit this completed and signed form with your short sale package to the seller's lender. The lender, in turn, will be responsible for submitting this document and other pertinent information to RUD. (Note: This application form is for FHA loans only.)


7 Days to Success with Short Sales

ApplIcation to Parliiclpale P.J9.1'O:reck:aJra sate ~me


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JIttvuj! ~_t 'lhIoo.p.a.a'="~4U1b'1 DtIIII...",1}M:'j k _ _ ~_1h _ _ ... tiIlb'nlt.'!lNU.'$.lIi:NI*'J*I c:f'lUl',


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Application to Participate HUD-90036


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Day 3: Gathering Information for the Short Sale Package






Additional Documents for Your Client's File

In addition to the list of documents that must be formally submitted to the lender in the short sale package, you will need additional research documents to do your work. Collect the following documents and add them to your client's short sale file:

-I -I
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Recent Mortgage Statement-preferred, not required Homeowner's Association Statement-preferred, not required Loan Payoff Information-requested from lender(s) Property Survey-requested from homeowners (or from the settlement agent used at their closing) Property Tax Information Title Search-requested from title company/title attorney



7 Days to Success with Short Sales

Email From: To: Subject: Property Survey - 123 Main Street Hi Porcia, We need a copy 01 the survey plat of your property. The survey is a drawn map of !he property showing fence :lines and how the home sits on the lot. : There wlll be a state seal stamp on the survey along with the name of the company that performed the survey. Please fax the sUlVey to us at (512) 532.0626. If you cannot find a copy of the survey, please check with the litlecompany that you used when you closed on your home. We willi need Ihis surv,ey document in order to close the sale on your :property. 11 helps to have a copy of the survey in our fi'le now, rather than waiting until the lasl minute before closing. Than'ks again, Knolly
Sample Email to Client Requesting Property Survey


There may be options to help you stay in your home or avoid foreclosure. Please read this letter carefully.

Titanium Solutions 3023 HSBC Way Fort Mill, SC 29707

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RUSSELL & KIM DUANE 5209 Fawn Valley Ct Antelope, CA 95843-6401 Dear RUSSELL & KIM DUANE Loan Number: #####4865

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September 28, 2011

As your home loan servicer, we want to work with you to determine what options may be available to help you stay in your home or avoid foreclosure. Please read this letter carefully. We will be sending a representative to meet with you at your home to collect documents that will help us conduct a review of your loan to determine if there are home retention options or foreclosure alternatives available for you. The representative will be from Titanium Solutions. When our representative visits you at your home, you can expect the following: You will be shown the representative's identification and, to protect your privacy, our representative will verify your identity by asking to see photo identification such as a driver's license. You will be provided a copy of this letter without the enclosures. Our representative will gather the required financial information, as described in the enclosed checklist. Please have copies of the required financial information ready for our representative to take with him/her. It is important that you have all the documentation ready when the representative comes to your home. If you have recently sent information to us, our representative will confirm that we have received it and if it is complete. Once we have all of your necessary financial documentation, we can evaluate your options and we will contact you to explain those options.

To schedule the visit on a day and time that is most convenient for you, please call Titanium Solutions at 1.877.803.0039 Monday through Friday from 9:00am to 7:00pm EST. If you do not want a representative to visit your home, please let us know by calling that same number. If we do not hear from you, our representative will attempt to visit your home over the next 7 to 10 days. We urge you to provide the requested information to Titanium Solutions so we can work to determine if assistance is available to help you avoid foreclosure. If you have any questions about this program or the documentation that we need, please call 1.877.803.0039 from 9:00am to 7:00pm EST.

Home Loan Team

Bank of America, N.A.


Checklist Request for Modification and Affidavit (RMA) Household Expenses and Liabilities Worksheet Dodd-Frank Certification Form Authorization and Acknowledgement Form Third Party Authorization Form

In order to expedite this process Bank of America, N.A. is working with a third-party company, Titanium Solutions. Federal law requires that we communicate to you that Bank of America, N.A. and Titanium Solutions are debt collectors. However, the purpose of the communication is to let you know about your potential eligibility for programs available to help you avoid foreclosure. Mortgages funded and administered by an Equal Housing Lender. Protect your personal information before recycling this document

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Complete and sign (by all borrowers) the enclosed Request for Modification and Affidavit and Household Exoenses and Liabilities Worksheet. 2. Copy of the last year's e-filed or signed tax retl:lrns for all borrowers. Please include all and schedules even if blank. 3. Complete the Dodd-Frank Certification Form. 4. A current utility bill showing the borrower's name and property address. 5. Fill out and sign the Authorization and Acknowledgement Form. 6. If the property is subject to homeowners association or condominium fees, a copy of a current bill or assessment. 7. Return the required income documentation. This documentation includes:
For each borrower who receives a salary or hourly wages Copy of most recent pay-stubs showing at least one month of compensation and year to date earnings (for all jobs) For each borrower who is self employed Most recent quarterly profit / loss statements (with year to date profit) Two most recent bank statements showing receipt of such payments (all pages) For each borrower who has income such as social security, disability or death benefits, pension, adoption assistance, public assistance or unemployment Copy of benefits statement or letter from the provider that states the amount, frequency and duration of the benefit, AN D Two most recent bank statements showing receipt of such payments (all pages) For each borrower who is relying on alimony, child support or separation maintenance as qualifying income Copy of divorce decree, separation agreement, other written agreement filed with the court, or decree that states the amount and period of time over which it will be received, AND Two most recent bank statements showing receipt of such payments (all pages) For each borrower who has rental income or if you are current on your mortgage payments Copies of the most recently filed signed federal tax return with all schedules, including the Schedule E - Supplemental Income and Loss If no Schedule E is available because the property was not previously rented, then please provide a current lease agreement and two most recent bank statements or cancelled rent checks. For each borrower who has non-wage income (part time employment, bonuses, tips, and investment income) If the non-wage income is more than 20% of total income, copy of documentation describing the nature of the income (for example, an employment contract or printouts documenting tip income) If you have questions about the paperwork required please contact us at 1.877.803.0039.

Important Information Keep a copy of aI/ documents for your records. Do not send original income documentation. Continue to the next page if your house is listed for sale or you also wish to be evaluated for PreForeclosure Sale (Short Sale) or Deed-in-Lieu of Foreclosure Programs as other alternatives to foreclosure. If you do not wish to be evaluated for Pre-Foreclosure Sale or Deed-in-Lieu programs please check and sign here 0

To be evaluated for Pre-Foreclosure Sale or Deed-in-Lieu of Foreclosure Programs; please provide the following information in addition to documentation requested on the prior page of the checklist.
Documents requested in pOint 10 apply if you have your home listed with a real estate agent. Documents requested in points 11, 12, and 13 apply if you have a valid and signed purchase contract in hand to be evaluated by Titanium Solutions. The originals of the enclosed documents, signed by all borrowers on the loan:


8. Third Party Authorization Form Only sign and return if you would like Bank of America, N.A to discuss your request for a Pre-foreclosure Sale of your property with a third party acting on your behalf such as realtors or attorneys. 9. Please provide us with the lead contact name and phone number for us to be able to gain access to the property to perform a FHA property appraisal. We require that all utilities to the property be on so that the appraisal can be completed. 10.lf applicable, please provide a copy of the current Listing Agreement with your Agent/Broker. The Listing Agreement must contain the following verbiage: "Seller may cancel this agreement prior to the ending date of the listing period without advance notice to the broker, and without payment of a commission or any other consideration if the property is conveyed to the mortgage insurer or the mortgage holder." 11.lf applicable, please provide a copy of the Purchase Contract signed by the buyer and seller that contains language that the sale is contingent upon the seller obtaining approval from Bank of America, N.A. Also when participating in a FHA Pre-Foreclosure Sale, the maximum seller concession that HUD will allow is 1% only if the buyer is getting a FHA loan. If there is more than one purchase contract, the seller may submit ONE offer to Bank of America, N.A for review. 12.lf applicable, a copy of the statement of the seller's closing costs or HUD-1 settlement statement. The figures in these statements must be accurate because Bank of America, N.A approval will be based, in part, on the figures submitted with the package. The maximum commission paid on a pre-foreclosure sale is 6% with the exception of the State of Washington which may be less. 13.lf applicable, all other lien holders must provide written notice of their willingness to release their liens before Bank of America, N.A will issue an approval letter for the FHA Pre-Foreclosure Sale. In most cases, no proceeds will be given to any of the other lien holders to release their lien.



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Borrower's name Social Security number Home phone number with area code Cell or work number with area code Date of birth

Co borrower's name Social Security number Home phone number with area code Cell or work number with area code Date of birth

The property is my: The property is:
Mailing address

o Keep the Property o Primary Residence o Owner Occupied

o Sell the Property o Second Home o Investment o Renter Occupied o Vacant

E-mail address

Property address (if same as mailing address, JUS Wrl e same


Is the property listed for sale? DYes DNo Have you received an offer on the property? DYes DNo Amount of offer $ Date of offer Agent's Name: Agent's Phone Number: For Sale by Owner? DYes D No Who pays the real estate tax bill on your property?
Dido D Lender does D Paid by condo or HOA

Have you contacted a credit-counseling agency for help DYes DNo If yes, please complete the following: Counselor's Name: Agency Name: Counselor's Phone Number: Counselor's E-mail: Who pays the hazard insurance premium for your property?
Dido D Lender does D Paid by Condo or HOA DNo

Are the taxes current? DYes DNo Condominium or HOA Fees DYes DNo Paid to:

If yes: DNo DChapter 7

Is the policy current? DYes Name of Insurance Co.: Insurance Co. Tel #: Filing Date:

Have you filed for bankruptcy? DYes DNo Has your bankruptcy been discharged? DYes

DChapter 13

Bankruptcy case number

Additional Liens/Mortgages or Judgments on this property:

Lien Holder's Name/Servicer


Contact Number

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I (We) am/are requesting review under the Making Home Affordable program. I am having difficulty making my monthly payment because of financial difficulties created by (check all that apply): D My household income has been reduced. For example: unemployment, underemployment, reduced payor hours, decline in business earnings, death, disability or divorce of a borrower or co-borrower. D My expenses have increased. For example: monthly mortgage payment reset, high medical or health care costs, uninsured losses, increased utilities or property taxes. D My cash reserves, including all liquid assets, are insufficient to maintain my current mortgage payment and cover basic living expenses at the same time. D My monthly debt payments are excessive and I am overextended with my creditors. Debt includes credit cards, home equity or other debt.

o Other:
Explanation (continue on back of page 3 if necessary):

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Second ~ortgage Payment Insurance Property Taxes Credit Cards / Installment Loan(s) (total minimum payment per month)
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The following information is requested by the federal government in order to monitor compliance with federal statutes that prohibit discrimination in housing. You are not required to furnish this information, but are encouraged to do so. The law provides that a lender or servicer may not discriminate either on the basis of this information, or on whether you choose to furnish it. If you furnish the information, please provide both ethnicity and race. For race, you may check more than one designation. If you do not furnish ethnicity, race, or sex, the lender or servicer is required to note the information on the basis of visual observation or surname if you have made this request for a loan modification in person. If you do not wish to furnish the information, please check the box below. BORROWER

Ethnicity: Race:

o o o o o o o

I do not wish to furnish this information Hispanic or Latino Not Hispanic or Latino


o I do not wish to furnish this information

o Hispanic or Latino

Ethnicity: Race:

Indian or ~Iaska Native

Black or African ~merican Native Hawaiian or Other Pacific Islander White Female
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Name/Address of Interviewer's Employer

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Interviewer's Name (print or type) & /D Number Interviewer's Signature Date

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Interviewer's Phone Number (include area code)

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In making this request for consideration under the Making Home Affordable Program, I certify under penalty of perjury:

1. That all of the information in this document is truthful and the event(s) identified on page 1 is/are the reason that I
need to request a modification of the terms of my mortgage loan, short sale or deed-in-lieu of foreclosure. 2. I understand that the Servicer, the u.s. Department of the Treasury, or their agents may investigate the accuracy of my statements and may require me to provide supporting documentation. I also understand that knowingly submitting false information may violate Federal law. I understand the Servicer will pull a current credit report on all borrowers obligated on the Note. I understand that if I have intentionally defaulted on my existing mortgage, engaged in fraud or misrepresented any fact(s) in connection with this document, the Servicer may cancel any Agreement under Making Home Affordable and may pursue foreclosure on my home. a condemnation notice; and there has been no change in the ownership ofthe Property since I signed the documents for the mortgage that I want to modify. 6. 7. I am willing to provide all requested documents and to respond to all Servicer questions in a timely manner. I understand that the Servicer will use the information in this document to evaluate my eligibility for a loan modification or short sale or deed-in-lieu of foreclosure, but the Servicer is not obligated to offer me assistance based solely on the statements in this document. I am willing to commit to credit counseling if it is determined that my financial hardship is related to excessive debt. I understand that the Servicer will collect and record personal information, including, but not limited to, my name, address, telephone number, social security number, credit score, income, payment history, government monitoring information, and information about account balances and activity. I understand and consent to the disclosure of my personal information and the terms of any Making Home Affordable Agreement by Servicer to (a) the u.S. Department of the Treasury, (b) Fannie Mae and Freddie Mac in connection with their responsibilities under the Homeowner Affordability and Stability Plan; (c) any investor, insurer, guarantor or servicer that owns, insures, guarantees or services my first lien or subordinate lien (if applicable) mortgage loan(s); (d) companies that perform support services in conjunction with Making Home Affordable; and (e) any HUD-certified housing counselor.

3. 4.

5. That: my property is owner-occupied; I intend to reside in this property for the next twelve months; I have not received

8. 9.

Borrower Signature Date

Co-Borrower Signature Date

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Be advised that by signing this document you understand that any documents and information you submit to your servicer in connection with the Making Home Affordable Program are under penalty of perjury. Any misstatement of material fact made in the completion of these documents including but not limited to misstatement regarding your occupancy in your home, hardship circumstances, and/or income, expenses, or assets will subject you to potential criminal investigation and prosecution for the following crimes: perjury, false statements, mail fraud, and wire fraud. The information contained in these documents is subject to examination and verification. Any potential misrepresentation will be referred to the appropriate law enforcement authority for investigation and prosecution. By Signing this document you certify, represent and agree that: "Under penalty of perjury, all documents and information I have provided to Lender in connection with the Making Home Affordable Program, including the documents and information regarding my eligibility for the program, are true and correcf' If you are aware of fraud, waste, abuse, mismanagement or misrepresentations affiliated with the Troubled Asset Relief Program, please contact the slGTARP Hotline by calling 1-877-sIG-2009 (toll-free), 202-622-4559 (fax), or Mail can be sent to Hotline Office ofthe Special Inspector General for Troubled Asset Relief Program, 1801 L st. NW, Washington, DC 20220.
page 3 of3

Dodd-Frank Certification
The following information is requested by the federal government in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203). You are required to furnish this information. The law provides that no person shall be eligible to begin receiving assistance from the Making Home Affordable Program, authorized under the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et seq.), or any other mortgage assistance program authorized or funded by that Act, if such person, in connection with a mortgage or real estate transaction, has been convicted, within the last 10 years, of anyone of the following: (A) felony larceny, theft, fraud, or forgery, (B) money laundering or (C) tax evasion.
Ijwe certify under penalty of perjury that Ijwe have not been convicted within the last 10 years of anyone of the following in connection with a mortgage or real estate transaction:

(a) felony larceny, theft, fraud, or forgery, (b) money laundering or (c) tax evasion.
Ijwe understand that the servicer, the U.S. Department of the Treasury, or their agents may investigate the accuracy of my statements by performing routine background checks, including automated searches of federal, state and county databases, to confirm that Ijwe have not been convicted of such crimes. Ijwe also understand that knowingly submitting false information may violate Federal law.

This Certificate is effective on the earlier of the date listed below or the date received by your servicer. Borrower Signature Date

Co-Borrower Signature Supplemental


Account No: ______________________ Borrower Name: __________________ FHA Case#: ___________________ Property Address: ____________


I have described my financial condition in the enclosed Financial Statement and certify that all information presented therein as well as all attachments are true, accurate, and correct to the best of my knowledge. I understand that submission of this information in no way obligates Bank of America, N.A, the investor or the Mortgage Insures to provide assistance to me. By sending this Financial Statement to Bank of America, N.A, I hereby authorize Bank of America, N.A, the Investor and the Mortgage Insurers to:

Order a credit report from any credit agency Order a title search from any title agency Verify the accuracy of the information contained in this Financial Statement, including without limitation, any current or previous employment information.

I agree that I will notify Bank of America, N.A immediately of any material change in the financial information that I have provided herein. If I fail to do so, or is determined that the financial information provided herein has been misrepresented by me, and Bank of America, N.A, the Investor or the Mortgage insurers make decisions which would not have been made had the true facts been known, then (1) I shall be liable for all costs incurred or damages suffered by Bank of America, N.A, the Investors or the Mortgage Insurers, and (2) Bank of America, N.A shall have the right, in its sole discretion, to terminate any arrangement or agreement that has been extended to me based, in whole or in part, on the inaccurate or incomplete information that I have provided.

Submitted this

day of

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Name (please print)

Name (please print)


Account No: ___________________

I Hereby authorize BANK OF AMERICA, N.A ("BANK OF AMERICA, N.A") to discuss my request for a Short Payoff with the individual(s) that I have identified below as my designated agent(s) (hereinafter the "DeSignated Agent"). Further, BANK OF AMERICA, N.A is hereby authorized to negotiate the terms of a Short Payoff. I understand that I will be fully responsible for reviewing any information that is sent by BANK OF AMERICA, N.A to my Designated Agent. This Authorization will remain effective until I specifically notify Bank of America, N.A's Workout Department in writing that this authorization is of no force and effect. My Designated Agents are: (Insert name)

(Insert name)

(Insert name)


1 __


1 __
Co- Borrower


Borrower Name' _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Loan Number_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __


$ $ $ $ $ $ $ $ $

$ $ $ $ $ $ $ $ $


$ $ $ $

$ $ $ $


$ $ $ $ $ $ $ $

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Borrower Name' _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Loan Number_ _ _ _ _ _ _ _ _ _ _ _ _ _ __

Are you currently employed?

yes_ _ __

No_ __ No _ __ No _ __ If your home is vacant, how many months has it been vacant? _ _ _ _ __ If you have tenants, how long have they been in the home? _ _ _ _ __

Is your home currently vacant? Yes ___ Is your home currently being rented? Yes

Generally, financial hardship includes a number of factors involving a reduced income and/or increased expenses. Please check the reasons why you are currently unable to pay your mortgage or bring your mortgage current.

Reduced Income See comment about checkboxes. Check the item(s) below that describes your current situation: Death of wage earner Illness / Disability of wage earner (receiving disability) Illness / Disability of wage earner (not receiving disability) Military Duty (Reducing or interrupting income)

Increased Expenses


Check the item(s) below that describes your current situation: One time increase - situation that caused increase is no longer an issue) IJ


Unexpected or unplanned expenses, lasting less than 12 months - i.e.: car repair Unexpected or unplanned expenses lasting longer than 12 months - i.e.: Ongoing health expenses Increase in housing expenses (Need for relocation or duplicate housing caused by divorce, job transfer, or other necessary relocation) An excessive amount of debt


Reduction of Pay (Cut in hours, overtime, salary, commission, bonus, etc.) Unemployment with payments (layoff, termination, shutdown, etc.) Unemployment with no unernployment benefits

Please provide any additional detail you want us to consider when reviewing your application jor assistance:

Borrower Signature : _ _ _ _ _ _ _ _ _ _ _ _ _ _ __



7 Days to Success with Short Sales

Welcome to Day 4
Welcome to Day 4 of 7 Dqys to Success with Short Sales! You've started collecting the documentation you need to submit a short sale package for your property. In this next step in the process (Step 3: List & Market the Property), you'llleam how to move forward with the property sales process.

The Short Sale Proc;ess

YOIl are Ihere!

In "Day 4: Listing and Marketing the Property," we will discuss the techniques for posting the short sale listing on the Multiple Listing Service (MLS). And we'll get into the details of one particular document

Day 4: Listing and Marketing the Property


that will make your life a lot easier: the Short Sale Disclosure and Agent Guidelines. Your approach for marketing a short sale listing will be very different from the approach you typically follow with traditional listings. We'll discuss why this is so. And before we end this day of learning, we will discuss why it is important to contact the title company or attorney to open a file and initiate a title search on the property.


~I ~I ~I


-I -I


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7 Days to Success with Short Sales

Pricing the Home

Do I need to wait for the bank to run their appraisal/BPO before I set the price of the home and list it on the MLS?
1% ,.

Even though the lender will ultimately determine what they will accept for the sale of the home (the settlement), they want to wait until further in the process to declare this amount. This means that the short sale agent should move forwa~d with a standard Comparative Market Analysis (C]'v1A) roevaluate the best price for the home. It is only after the price has been set and the home attracts a buyer with an executed offer that the lender ",-ill begin the process of negotiating for their final settlement figure. The lenders want the buyers to "tip their hand first," so to speak As first discussed in "Day 3: G<tthering the Information for the Short Sale Package," your pricing strategy for a short sale property should not differ drastically from your strategy for any other home that needs to sell within 30 to 60 days. Price the home as you would for a highly motivated client with equity. Price the home to move. This typically means that you will price the home right at market value or slightly lower.

Day 4: Listing and Marketing the Property



t1llve t1llo( ple~ttl of Ilge~ts Il~o( M~-lLc,e~seo( L~vestors IlS~ vvce t10w to vvcll~LpV<.lllte Il C-MA, t10w to L~fLV<.e~c,e tt1e bll~~'s 1;PO Ilge~t, Il~o( t10w to o(ec,eLve loss vvcLHglltors. T11etl ~~ow tt1llt tt1e o~ltl WlltJ to bV<.tI Il st10rt sille for c,t1ellp Il~o( fLLp Lt for Il sV<.bstll~tLlll profLt Ls to c,o~vL~c,e tt1e bll~~ sovvcevlOw tt1llt tt1e properttJ Ls wortt1 less tt1ll~ Lt llc,tV<.lllltJ Ls. Tt1Ls Ls wt1tJ bll~~ te~o( to O(LstrV<.st Ilge~ts Il~o( L~vestors. I o(o~'t pllltJ tt1Ls gllvvce. I belLeve vvctJ stlstevvc waL t1elp people leilr~ tVie bV<.sL~ess Il~o( t10w to vvcll~e vvco~etJ tt1e rLgt1t WlltJ."

A solid, well-researched CMA is your key. When you run your comparatives, make sure that you pull 30- or 60-day reports. That is, you should compare your client's property to homes that have sold in less than 60 days on the market (DaM). Your client's neighborhood may be averaging 200 DaM, but the lender is not going to wait 200 days for a sale! Now, when I say to use comps of homes that took 30 to 60 days to sell, what I actually mean is, I use comps for houses that took 30 to 60 days to sell once they were priced correct!J. Many times I will use a comp on a house that technically took over 100 days to sell. However, when I research the sales history, I can easily see that the price was adjusted and the home then sold within 30 to 60 days of the last price adjustment. Such comps are also usable. By using 30- or 60-day comps for your pricing, you are pricing the home cortectly and setting yourself up to generate an offer quickly. Once you have completed your CMA, stand behind it and communicate to the other parties in the process. As we discussed in Day 3, even


7 Days to Success with Short Sales

though banks say they don't want or need your CMA, make sure that it's a part of the short sale package you submit. This will help prevent unreasonably high lender appraisals. like any industry, there are many opportunities for corruption. I have heard of BPO agents who intentionally value properties too high so that the homes will not sell and will go into foreclosure. Of course, this doesn't really benefit their bank clients, but their strategy is to be there (i.e., be the trusted agent) when the bank needs to engage an agent to sell the property as an REO foreclosure property. Sneaky, huh? This is not a regular occurrence, but this is another reason you want to communicate your CMA and pricing to the banks and to the BPO agent.


Day 4: Listing and Marketing the Property


Posting on the MLS

Over the years as a short sale specialist, I have worked to perfect my system for listing and marketing distressed properties. Many of the procedural steps for posting a short sale listing on the Multiple listing Service (MLS) are similar to the ones you would follow for a traditional listing. We'll focus on what makes the process unique.

Agent Comments
When listing a short sale on the MLS, I always disclose to other agents that the property is a short sale. For example, I add the following statement in the Agent Comments section (not viewed by the general public):

Short sale subj ect to seller's lender approval.

There are different schools of thought on whether or not you should disclose the fact that the property is a short sale. It may be true that some buyer's agents will be less motivated to show a home that is a short sale (due to the longer-than-average close time). However, I believe full disclosure of the fact that the property is a pre-foreclosure short sale is the most ethical practice and it is, indeed, required by many real estate boards. You can also regularly update your comments in the MLS to alert agents about the current status of the short sale. For example:

Short sale subject to seller's lender approval. Package already submitred to the lender. Short sale subject to seller's lender approval. BPO already ordered.


7 Days to Success with Short Sales

Short sale subject to seller's lender approval. Almost approved. Short sale is already APPROVED by seller's lender at list price. Quick close!

Short Sale Disclosure and Agent Guidelines Document

I can remember a time in Texas when we were not required by our boards to disclose a property's short sale status, nor were we required to disclose the procedure and expectations to the buyer's agent. Because I knew it would ultimately benefit all parties, I made extra efforts to disclose the status of the property and inform buyer's agents of the process. In fact, for each new buyer'S agent, I would devote at least 30 minutes expla.ini1l.g the process. [ sounded like a broken record. Then, I evolved my system and developed acomprebensive document to educate both buyer'S agents and their clients about how to mal,e an offer on a short sale property: The Short Sale Disclosure and Agent Guidelines. Each MLS system is different. Some systems will allow you to upload a document for other agents to access and download. Because this is the case in my area, I simply upload my Short Sale Disclosure and Agent Guidelines document to the MLS for each of my short sale listings. Another strare"oy wonld be to add a comment to the MLS stating that buyer's agents must email you for a copy of this document before submitting an offer.

Day 4: Listing and Marketing the Property





~I ~I

-I -I


"As CI snort sCile s-pec,LCllLst, (joO{. snoO{.loi O{.vcoierstClvcoi tnClt (joO{. wGll be, Lvc effect, eoiw)Clhvcg otner Clgevcts wno -plw)e offers ovc (joO{.r snort sCile lLshvcgs. Tne Snort sCile DLsdosO{.re Clvcoi Agevct yO{.LoidLvces oiOC,o{'V1Aevct wm nel-p (j 00{. eoi O{.wte CI vcoi set ex.-pec,tCltGovcs for bO{.(jer's Clgevcts Clvcoi tneLr dLevcts."

-I -I -I -I -I -I

On our team, we require that the Short Sale Disclosure and Agent Guidelines be signed by both the buyer's agent and their buyer client before we will submit a short sale offer or ,executed contract to the lender. I ask that the buyer'S agent read the document first and then call me with questions. This streamlines the process.

-I -I






7 Days to Success with Short Sales

Having explained this, we also understand this ",reates an obligation for the buyer to provide the




Short Sale Disclosure and Agent Guidelines

TO: Real estate agents and buyers looking to make an offer on a short sale listing

I IMPORTANT: This signed document must be returned with the offer. I

What is a short sale? A short sale rarers to the sale of real property for an amount less than the amount owed on the property. The lender (FHA, VA, Of Sank) agrees to accspt less than the full balance duE' on the debt and usually "forgives" all Of a large port101'l of the difference.


'Sf)mt Slrlw:


tKlWly laM 30-69 -dt''t5 to e!n:;e They can take longer, and the

closing t'late tlf::ro :days bey.oml1:ile -o&r l>I!lbmission daw. When on ,mffer is recejyru;\ AErfB $hart sa'\e a.pproval, an ~frer wlll take '5-10buslness 00% for aP)llrovaV11!eniak

final cl~mg dabs is contingent 1:IpOn the 'lender. If Ithe ibuyer must 'be in the .home SOONER t:hn this time firame~ OR cannotto~r~ deklys beyond 60 days.,. they should NOil"m.!Ike lin offer. This time frame is dependant on where the file is in ~he oShort 'Sale proceS"s- For example, Jf 11na) S"hort sale CIlproliai has been .gr:,mted, tloe.m the prOc:ss5 call take, .as 20 days. W,e .nac:tImmend a


2. COMMISS10NS: Ca.rnmissUlm 'I'r0y ",ot exceed '6% on FHA Hens-Split is SO/58. For

Ttens". lJhe ;!ender may only ,pay


5-0/SC. W.e won't koow L!11til they


.a 'rour1ter~ftier.~ ' :etteck Ml.!S ,listing um:Ier BUYERS "'"GENT PERCEmA-CE.

3. SPECIAL .PlROVISIONS1 A:II .offers MUST include :the follO'wing .contimgetTIcies~ '?r<wert't' is be'in:g sOld 1 IS. (DUE! to severe -Icrrss -being ~;:_ikem Iby tbe lem!hu, rep.<!Lr.s cannot

Ibs rni3l!ls by ~hese1ler'or"ti1B ,lender.} =t!Iye!!?!Wl!mnt <ifgle !S'ClD-!!Iditionn! "-I!!\'9n1jn-aJ ,"pnrM/a! gf'Sellgr's Igndcrtmrllnr'H! 10 "
~~ Pfl~irn!'

f\!!!!t'er ",,;0 Jm '.grmnt,ed e 'lQ-dlW !i!lswdjipn 'Mr;od gt ...9 plu....1" j,he 'irl5psdt:ian :perWd will COlITImerrtee 'I.ll1lCe tr.e <!irllYsrs agent rec,eilJ;eS 'written :nctific:ation fum, ~hs ltrtillg agE!m: t:hat the short sale sppr:01!edby the seller's 'lender. DurirLg the inspCtion'pSl'k,d, buyar Ima}' terminate the 'c:ontr.!ct for<lny rElasoJ:l arml i'in)' -ea-rnest moroie~ will be rslease-d b8ck to

4.. a..OSING COSTS: 1.ende.r will pay typical <100 ,eustom.ary closing costs such as title policy,
c:ommiissians, ,stc.

FHA 'Shor1: SalB' BOO 'Wi~ alfow 'Up to J:% of the b\:lyer's mortgage amount for closirtg cost-to be ,included In the "Seller's Cos:!:" on the HVD~l for ali trao-rzaetions that mvclll>'i 'NEW FHA-insured mrJ rtgages. ,0.,. C(!II'.MENT,IOI!I.!Al Short Sale: SeHer's ,[anrlsr 'M,'!'Y OR 'lolA), INOT f:-AV :em'l buyer's ciQS;rlg-CCls:t or ass:ist3nce Prtl'9roams. Yau ar-e welcome to SUbmit ')-our 1!lfffi::or, on C0NY 'liens, with th~ =s:ts inclutWd a11td we will fJJrw.ard tlil the sellar's ,Iender-they will make iJb-e (!ecision em whetharto pay.
5. SURVEY:"11tre se'lleramnot be abligallerl,to pay fora SJ.:IlVi8y~ end,the sell-er's ~eJ)derwill Rot 'p.ay for '!he survey ,Olil the se!De-r':s IbShlillff. ,"here ,ear:. ilia no "OI:mgabioJ:l ClaLl$9'u t!loi'it 'lEquests the se'l1er toO 1l'ay the cmt of ip1"-OV,ldirlg a $lll'ltey, ATTIiElR :EXPENSE, because -rille short sale leiWer (sener's mortgage :company) WIlli 't.10T pl.ay that a-perrse ,under aray ocir=lrru7t-=, and the seller ,[5

.prolWited from c-orntribu.tillg fina,1cJa!I'1i to t!:l-e transaC'tion. In ,other warcis, 'jfj:h9 sener fails to ,proviOe the SUnray and/or sl'\}'! the :presc!lib~d UJIIl9 period, s/he '1>'rould 'bEl in breach cefcontract. The document woulD co-nta"in a promfse that the Stllier cannot fulfill-thus forcil1'2l- ,breach ofcontraec.

7 Day Systems Short Sale Disclosu:<e and Agent Guidelines

Day 4: Listing and Marketing the Property


A Closer Look at the Short Sale Disclosure and Agent Guidelines

The Short Sale Disclosure and Agent Guidelines document that I have developed is more comprehensive and detailed than any document I have seen used by other agents or real estate boards. The purpose of the document is to get helpful information into the hands of the buyer'S agents to make their life easier-=d, in the process, make YOUR life easier. When you prepare and implement a document like this, it will also demonstrate your knowledge and expertise in the business of short sales. Note: You will need to develop your own version of the guidelines document that complies with the rules of your MLS. Use the version on the Toolkit CD to help you get started. Our 7 Day Systems document begins with a brief definition of a short sale. The remainder of the document highlights the policies and guidelines for specific sections of the purchase contract:

Short Sales usually take 30 60 days to close. They can take longer, and the final closing date is contingent upon the lender. If the buyer must be in the home SOONER than this time frame, OR cannot tolerate delays beyond 60 days, they should NOT make an offer. This time frame is dependant on where the file is in the short sale process. For example, if final short sale approval has been granted, then the process can take as few as 20 days. We recommend a closing date of 30 days beyond the offer submission date. When an offer is received AFTER short sale approval, an offer will take 5-10 business days for approval/denial.

Commission may not exceed 6% on FHA liens-split is 50/50. For Conventional liens, the lender may only pay 4-5'%--split 50/50. We


7 Days to Success with Short Sales

won't know until they provide a "counter offer." Please check MLS listing under BUYERS AGENT PERCENTAGE.

.-----~-"Mtj -poLLc,tj Ls to s-pLLt tne c,ovvcvvcLssLovo SO/SO wLtn tne butjey's Clgevot. you vvcust tJec,LtJe tj0UY owvo -poLLc,tj j ust be ClWClye tnClt LevotJeys ttj-pLwLLtj WClvot to see Cl SO/SO s-pLLt, iAvotJ Lf tnetj see ti-lClt ovoe iAgevot Ls iAc,c,e-ptLvog Less tniAVO sOfa (Let's SiAtj, Cl 2'(0 wvvcvvcLssLovo), tnetj wLLL iAutovvciAtLc,iALLtj stClvt ClskLil'vg wntj botn [lgevots wovo't iAC,c,e-pt tnLs Lowey c,ovvcvvcLssLovo. AvotJ thetj vvcLg nt just tJedde to c,oV1A;eclowvo fyo,VVC ClLLowLvog Cl totiAL sfo c,ow.;vvcLssLovo ovo tne sClLe to iA 4'(0 c,oVlA.vvcLssLovo, foy eXClvvc-pLe. It's iALWClk:JS best to nClveCl SO/SO s-pLLt yLg nt

tJowvo tne vvcLtJtJLe."

All offers MUST include the following contingencies:
II ''PropertY is being sold AS IS." (Due to severe loss being taken by the lender, repairs cannot be made by the seller or the lender.) [Note: even if your state uses an "As Is" contract, lenders will want to see this statement in the Special Provisions section.] ''The contract of sale is conditional upon final approval of seller's lender andlor HUD." "Inspection Period: Buyer will be granted a 10-day inspection period at no charge. The inspection period will commence once the buyer'S agent receives written

Day 4: Listing and Marketing the Property


notification from the listing agent that the short sale file is approved by the seller's lender. Duting the inspection period, buyer may tenninate the contract for any reason and any earnest monies will be released back to the buyer."

Lender will pay typical and customary closing costs such as title policy, agent commissions, etc. On FHA Short Sale: HUD will allow up to 1% of the buyer'S mortgage amount for closing cost to be included in the "Seller's Cost" on the HUD-l for all transactions that involve NEW FHA-insured mo~<>ages. On CONVENTIONAL Short Sale: Seller's lender MAY OR MAY NOT PAY any buyer'S closing cost or assistance programs. You are welcome to submit your offer, on CONV liens, with these costs included and we will forward to the seller's lender-they will make the decision on whether to pay.

The seller cannot be obligated to pay for a survev. and the seller's lender will not pay for the survev on the seller's behalf. There can be no "obligation clause" that requests the seller to pay the cost of providing a survey, AT THEIR EXPENSE, because the short sale lender (seller's mortgage company) will NOT pav that expense under any circumstances, and the seller is prohibited from conttibuting financially to the transaction. In other words, if the seller fails to provide the Survey and/or any Affidavit in the prescribed time period, s/he would be in breach of contract. The document would contain a promise that the seller cannot fulfill-thus forcing a breach of contract. Having explained this, we also understand this creates an obligation for the buyer to provide the cost of a survey. It must be understood that the


7 Days to Success with Short Sales

short sale lender sees the survey as a "buyer expense," since it is a document that is required by the buyer'S lender. As a professional courtesy, we will work diligently to obtain an existing survey from the seller and will provide it to the buyer'S agent, but we make no warranties or claims as to its accuracy or validity. The survey provided will NOT be accompanied by an Mfidavit.


The lender will not pay for any residential service contracts or home warranty on behalf of the buyer.


We recommend a SO/50 split for the BOA Transfer Fees. This makes the cost equitable between buyer and seller.

We only work with the bank on one offer or contract at a time. In the event that we receive multiple offers on this property, we will not counter for your best and final offer. Our policy is to select and submit the best offer, so bear this in mind when submitting your offer.

TI,e offer must include a pre-approval letter from the buyer's lender if 3rd-Party Financing is being accomplished. NOTE: if the offer is a CASH offer, the lender will still want to see a document that shows proof of funds available.


In many cases, the property is being sold at a reduced price and the seller is in a hardship situation and cannot afford to have utilities turned on. Once the file is approved, our standard procedure is to ask the buyer(s) to tum the utilities on in their name if they wish to do an inspection. Since the file will close in several weeks and the utilities will

Day 4: Listing and Marketing the Property


be in the buyer(s) name anyway, this is our standard protocol. In the event that the buyer chooses not to move forward with the transaction by exercising their termination option or the short sale lender does not go forward with the contract, the I(nolly Team will reimburse the buyer(s) for costs associated with turning on the utilities .

.-----f)-"WneVe I fLrst stlAvteo! LVe tne snovt slALe b14sLVeess, I w014Lo! t14rVe oVe tne 14HLLtLes LVe VOLk:) VeIAVOLe, b14t tnLs betlAVOLe IA nlAssLe IAVeo! IA vtsR lAS I LLsteo! VOLore IAVeo! VOLore snovt slALe pwpevtLes. Ac,tLve 14HLLHes lAre Veec,esslArk:) for tne LVespeC-HoVe, IAVeoi tne LVespec,HoVe tk:)pLwLLk:) nlAneVes IAfter tne snovt slALe nlAs beeVe IAnroveoi bk:) tne LeVeoier. It Ls rlAre tnlAt Lt w014LoI Veeeol to nlAneVe before. So, Ltj14St VOLIARes seVese to nlAve tne b14k:)er go IAnelAoilAVeo! t14rVe oVe tne 14HLLHes LVe tneLr VelA VOLe IA Veo! pIA k:) for tne LVespeC-HoVe. If tne b14k:)er o!ec,LoIes (oI14rGVeg tne LVespec,HoVe perGool) Veot to p14rc,nlAse tne propevtk:), VOLk:) telAVOL wLLL reLVOLb14rse tneVOL for tneLr 14HLLtk:) set14p c,osts. n

The Short Sale Disclosure and Agent Guidelines document closes with a summary statement to help set expectations for the buyer'S agent and their client: In closing, the short sale program offers the buyer an excellent opportunity to get a great deal-provided the buyer is patient. For those of us accustomed to fast-paced real estate sales, the short sale process can be particularly frustrating, aggravating, and slow. In the end, however, the short sale process is a win-win program. Investors/Buyers, Lenders, Mortgagees, and Agents all benefit from the successful short sale. Investors/Buyers can purchase the property at or below market


7 Days to Success with Short Sales

value. Lenders get the majority of their money back. Sellers get the relief they need and are able to sell their property and avoid foreclosure. And Real estate agents can facilitate the transaction and receive compensation (commissions) from the sale of the property.

Make certain that along "With any offer, the buyer's agent and their buyer client submit a signed Short Sale Disclosure and Agent Guidelines document. This "Will help protect you against potential liability. Indeed, if issues arise, you may need to refer to the document and remind the buyer's agent and buyer that they signed and agreed to these terms.


Day 4: Listing and Marketing the Property


Listing Marketing
Sellers of traditional (non-short sale) properties have high expectations for your marketing plan. They want to know the details of how you intend to sell their home for the highest price in the least number of days. The reality is that price sells homes-not marketing. But perception is reality. These sellers perceive that heavy marketing is always necessary. Sellers of short sale properties are ill a different mental place with different expectations about the sale of their home. As discussed before, they want to turn the entire process over to their agent and wash their hands of the details. And, because you have already educated them about the process and how the lender will ultimately determine the settlement amount, they are not likely to be interested in the details of how you will market the home to sell. I really rely on talented buyer's agents to recognize a good deal when they see one and bring it to their client's attention. I do not devote a lot of budget to heavy marketing. Virtual tours, for example, are well worth the effort and the expense for traditional listings, but not necessary or cost-effective for short sale listings. Note that your short sale clients may not want their neighbors to know that they are in a short sale situation. So, you must be respectful of this and ask for your client's pennission to disclose the situation when developing any publicly displayed marketing materials for the property. On the other hand, you may have other clients who have already relocated out of the neighborhood, for example, and who don't mind publicizing the fact that the property is selling as a short sale. When you formulate your strategy for marketing the short sale property, never forget that listing marketing is always a great way to generate additional listings and buyer leadsl


7 Days to Success with Short Sales

Title Search
After you have posted the new short sale listing to the MLS, send an email to the title company or attorney to open a file and begin a title search for liens on the property. Note that the title company or attorney that you will use is negotiable. However, it is customary for the party paying for the title policy to choose who will perform the title work. In the case of short sales, the seller's lender will pay for the title policy. Regardless, it makes sense for all parties to work with an experienced escrow agent.

, From.:

To: Trac",@thetitlecompany.oom
Subject: Open Title for Short Sale on 123 Main Street

Hi Tracy,

We need to open a @e file for the property :Iisled below, which willi be a : short sale. I have attached ~he lax information and a copy of (he property survey.

PROPERTY ADDRESS: 123 iMain Street OWNER NAME: Ben Johannsen As soon as 1receive the offer, I will forward a separate request for the HUD-1 Settlement Statement. Thank you, Knolly

Sample Email Requesting Title Search on Property

Day 4: Listing and Marketing the Property


IRS Tax Liens

One very important reason for performing a title search is to identify all outstanding liens on the client's property. In cases where the homeowner has not paid their income taxes, the IRS may place a federal tax lien on the property. Actually, the lien covers all of the person's property including the home. Typically, you can convince the IRS to remove the tax lien (from the house) by requesting a Certificate of Discharge of Property from Federal Tax Lien (publication 783) with the IRS. The reason the IRS has placed the lien on the person's home is so that they will get paid whenever the person sells their property. If you can convince the IRS that the homeowner is upside down and that there will be no resulting proceeds from the sale, the IRS may agree to release their lien. Along with your request, you will need to include some supporting documentation such as the purchase contract, the payoff statement from the bank, and so forth. I have had to deal with IRS tax liens on several occasions, and they are not fun. However, there is no way to move the short sale transaction forward until the IRS tax lien has been removed. This entire process should be coordinated in conjunction with your title company or attorney. Make certain that you are working with a title agent who knows the ins-and-outs of the partial release of lien process. For more information and complete instructions, go to and search for "Publication 783."


7 Days to Success with Short Sales

Day 4 Wrap Up
Congratulations! You have completed Day 4, and now you are more than halfway through 7 Dqys to Success with Short Sales. This day of learning focused on steps you follow once you have taken a short sale listing and you are ready to market it for sale. In particular, we shared tips and tricks for posting this unique type of listing on your MLS system. In order to work efficiently and see the greatest success in short sales, you must help others around you understand the rules and the process. For this reason, I developed the Short Sale Disclosure and Agent Guidelines document to educate buyeis agents and their clients about how to make an offer on a short sale property. This document (which should be customized to comply with your state and local board and MLS) provides an explanation of and guidelines for the closing date, commissions, special provisions, closing costs, the survey, the home warranty, HOA fees, multiple offers, the buyer's pre-approval letter, and what to do about property utilities. You won't believe how much time you will he saving by implementing this Short Sale Disclosure and Agent Guidelines. Let the document do the work for youl Once you have priced the home coxrectly and posted the new listing on the MLS, you've done most of the work you need to do in terms of marketing this short sale property. Aggressive, high-exposure marketing plans are not necessary for these properties. They are priced to move and competent buyer's agents should be able to help spot these deals for their clients. Before going much further in the process with this new short sale listing, you need to get all of the "cards on the table." Contact the title company or attorney and initiate a title search immediately to identifY all

Day 4: Listing and Marketing the Property


outstanding liens on the property. Cross your fingers that the homeowners aren't facing tax liens from the IRS. But if they are, you
will know what to do to clear the path for the short sale transaction.

Day 4 Action Items

1. 2. Familiarize yourself with the local board and MLS rules for posting short sale listings. Open the Short Sale Disclosure and Guidelines document on the 7 Days to Success with Short Sales Toolkit CD. Review the document and customize it to reflect your business policies and the guidelines of your state and local boards.

In Day 3, we began the process of collecting the essential documents for the short sale package. Then in Day 4, we took a break from the package prep work in order talk about how to get the property on the market and how to start attracting buyers. Things will heat back up again with the next day, "Day 5: Receiving Offers and Submitting the Short Sale Package." In this day, the remaining puzzle pieces will fall into place, and you'll be ready to submit your expertly prepared short sale proposal package to your seller's lender. Let's do it!


7 Days to Success with Short Sales


II Welcome to Day 5 II Working with Buyers and Buyer's


Reviewing Offers Preparing the Final Short Sale Documents Submitting the Package to the Lender Day 5 Wrap Up



7 Days to Success with Short Sales

Welcome to Day 5
Welcome to "Day 5: Receiving Offers and Submitting tbe Short Sale Package"! In this day of learning, we'll talk more about working witb buyer'S agents and tbeir clients.

The Short Sale Process

V;ou are here!

You will want to be very systematic about reviewing purchase offerswhetber you receive one or multiple offers for your short sale listing. As we discussed in Day 4, tbe Short Sale Disclosure and Agent Guidelines document outlines your expectations and requirements for tbe purchase contract. Tbis document will become important once again, as you review each offer against your criteria.

Day 5: ReceMng Offers and Submitting the Short Sale Package


We will also discuss how to prepare the final documents and submit the entire short sale proposal pacbtge to the lender. At this point, you should be ready to add the last outstanding documents-the purchase contract, the buyer's pre-approval letter, and the estimated HUD-l statement-to the pacbtge. We'll teach you the 7 Day Systems tips and tricks for organizing the pacbtge, preparing a coversheet, and sending the documents to the lender. You have been asked to absorb quite a bit of detailed instruction thus far in 7 Dqys to Success with Short Sales. Hang in there! And let me remind you that your careful pre-qualification work and the your attention to detail during the pacbtge preparation will payoff immensely when you see that you have laid the path to a successful short sale approval!



7 Days to Success with Short Sales

Working with Buyers and Buyer's Agents

Obviously, you need a buyer to close the short sale deal, but what you must remember is that you need a buyer (their offer) to even start the process with the lender! Banks won't "work the package"-that is, banks won't begin reviewing a seller's short sale proposal-without a buyer offer on the property. Technically, FHA short sales can be approved without an offer in place, but most banks are in the habit now of waiting for an offer.

Educating Buyers and Buyers Agents

As discussed in "Day 4: listing and Marketing the Property," the Short Sale Disclosure and Agent Guidelines document goes a long way in educating buyers and buyer's agents and setting their expectations for the uniqueness of the short sale. Your website F AQs are also a helpful .resource.

Day 5: Receiving Offers and Submitting the Short Sale Package


"I oV\,c,e hCld Clv\' ClttorV\,etJ C,OV\,tClC,t V1A-e VLCl wtLfLed Letter wLth the th reClt of Cl LClWSkLt. The LV\,tLV1A-LdCltLV\,g Letter c,LClLV1A-ed thClt I hCld treClted hLs dLeV\,t kV\,fClLrLtJ bec,Clkse hLs dLeV\,t nCld skbV1A-Ltted Cl ()Clsn offer oV\, Cl prD"perttJ. IV\, ClC,tkClLLttJ, we hCld rec,eLved three offers oV\, thLs properttJ Ilv\'d hLs dLeV\,t's c,Clsn offer WClS the Lowest of tnese offers. AppClreV\,tLtJ, tne prospec,tLve bktJer Clv\'d hLs
bktJer's ClgeV\,t hCld fClLLed to LV\,forV1A- tne ClttorV\,etJ of tne Short sClLe DLsdoskre Clv\'d AgeV\,t CikLdeLLV\,es. After c,oV\,skLtLV\,g wLtn V1A-tJ broRer, we seV\,t tne ClttorV\,etJ Cl c,optJ of tne gkLdeLLV\,es, sLgv\'ed btJ nLs c,LLev\'t. NeedLess to SCltJ, tnllt WClS the eV\,d of tne stortJ, Cl v\'d we V\,ever hell rd froV1Atne ClttorV\,etJ ClgClLV\,."

Why Buyers Walk

The number one reason buyers walk out on a short sale is because they aren't educated on the process. They get frustrated with the length of the process, and they are unfamiliar with the negotiations common to this type of sale. My friends Fred Weaver and Kevin Kauffman, agents in the Phoenix, Arizona area, have pioneered a strategy to help mitigate their risk when working with buyers. They ask their prospective short sale buyers to deposit non-refundable earnest money with the title company or attorney. As they explain it, "our seller only commits to one buyer and we expect the same commitment level from the buyer." Here's how this technique works. As the listing agent, you ask the buyer to sign an agreement stating that you the listing agent will work to get


7 Days to Success with Short SaIes

the property's short sale approved within 90 days. Along with the purchase contract, the buyer will deposit a non-refundable earnest money amount (say, $500) with the title company or attorney. If the buyer walks on the contract before the 90 days are up, this money will be released from the title company or attorney to you the listing agent. On day 91, the buyer has the option to terminate the contract and get the earnest money back. As the listing agent, you do not have to close on the property in 90 days, but you are committing to doing your best to get the short sale approved in this time frame. You might, in fact, opt to add a statement such as the following to your Short Sale Disclosure and Guidelines document III "Buytt agrees that $500 of the earnest money deposited shall be non-refundable within the first 90 days of the date of the contract. If 90 days from the contract date. have passed and the seller's lender has not issued a short sale Approval Notice, the earnest money will convert from non-refunGbible to refundable."

Investor Buyers
As we have discussed, the 7 Dqys to Success with Short Safes system is most
appropriate for investors who wish to buy-and-hold. Most buy-and-flip investors want to make at least 10% off a deal. Because most short sales (versus foreclosures) are priced at or very near market value, the only way for the investor to make close to 10% on tlle deal would be to somehow influence the bank and its BPO agent. I know from my own years of experience, I have never seen a lender knowingly settle for 30% less than the property valuation, for example. While I still think that short sales are a wonderful investment opportunity, investors will typically not get a "steal." They will be able to buy properties at or slightly below current market value. These deals are a great opportunity for investors who wish to purchase a property, hold and rent it for a few years, and then sell. This buy-hold-sell strategy can

Day 5: Receiving Offers and Submitting the Short Sale Package


be particularly effective in areas that have experienced a significant decline in property values due to a market over-correction. For investors who prefer to buy-and-flip, shott sales may not be the best opportunity, since lenders are trying to actively mitigate their losses by getting the highest price they can for the properties.

"At-Arms-Length" Rule
Another point to remember when working with buyers is that the lender will require the transaction to be made "at arm's length." In other words, the buyer cannot be related to the seller or be a close business associate.



7 Days to Success with Short Sales

Reviewing Offers
We recommend that you follow a very systematic process for reviewing buyer offers. The steps that we follow in our system help us save time and avoid errors.

Compare Offer to Agent Disclosure and Guidelines

When an offer comes in from a buyer, we first check to see that it complies with the directives we outlined in our Short Sale Agent Disclosure and Guidelines document. II II

Closing Date Commissions Special Provisions As Is Conditiorul upon seller's lender's "'pproval Inspection period Earnest Money


Closing Costs Survey Residential Service Contract (Home Warranty) HOAFees Buyer' s Pre-Approval Letter


Day 5: Receiving Offers and Submitting the Short Sale Package


What If the Offer Is Not Properly Structured?

The buyer'S offer (purchase contract document) must be structured and completed in the way that the banks expect to see it. When my team receives an offer on one of our short sale properties, we immediately review it against the Short Sale Disclosure and Agent Guidelines document. In nearly 90% of the offers we receive, some section of the buyer contract has been completed incortectly or left blank. You have at least three different approaches to addressing this situation: 1. You can go through the document and make the appropriate changes yourself, send it to your seller for their initials, then send it back to the buyer's agent and ask them to have the buyer initial the changes or edits and resubmit. You can create a Review Sheet with a checklist of your criteria items pulled ftom your Short Sale Disclosure and Agent Guidelines. Use a check, "x," or asterisk system to denote to the buyer's agent which sections of the offer need revision. 3. You can use a set of boiler-plate emails to communicate with the buyer's agent about the ettors in the offer.


On the Knolly Team, we follow this third option. We send a "try-again" email to the buyer'S agent, reiterating specific guidelines and asking the agent to submit a revised offer. In fact, we typically copy and paste passages directly from our Short Sale Disclosure and Agent Guidelines document. Rather than calling the buyer's agent or marking up the document, we just send this email. Agents who have prepared offers for foreclosures will be familiar with this "try-again" approach. Banks require that agents submit offers on their REO properties a certain way. They won't correct the documents or give lengthy explanations; they will just reject the offer/contract and ask for a revision. We follow this same model because it saves times and it is effective.


7 Days to Success with Short Sales

Email From: To: Subject: 907 Country Lake Drive-Short Sale Offer Linda, After reviewing all offers, we have selected your buyer's offer to submit to the seller's lender to begin their short sale review process. There are, however, a few necessary updates per the Short Sale Disclosure and Agent Guidelines.: Page 2 Sect '6-C: Survey-You have Box 1 checked. You must, instead, oheck Box 2. The seUer'slender will not accept the conlract wffih Box 1 checked for Ihe following reason:
Q. 'IUhe seller allready has aneJ<iisting survey, and is agreeable

rih providing it, can't we just check Para 6-C-(i)?

A. No. On a short sale, 'Para 6-C-(2) must ALWAYS be ehecked. Para 6-C-(1) includes a default remedy that the sel'ler is unable to agree to. The end of the paragraph reads, "If Seller fails to furnish the existing surveyor Affida",it within the time prescribed, Buyer shall obtain a new survey at Seller's expense no later than 3 days p:rior to Closing Date." This dlause creates andbligation that Ihe se'llercannol fulfill because the short sale lender (seller's mortgage company) will NOT pay this expense under any circumstances, (continued ...)

Sample "Try Again" Email Sent to Buyer's Agent (Note: Some language here is based on Texas Resale Contract.)

Day 5: Receiving Offers and Submitting the Short Sale Package


and the seller is usually prohibited from contributing financially to the transaction. In other words, if the seller failed to tum in the Survey and/or Affidavit in the prescribed time period, s/he would be in breach. In the event of breach, the document would contain a promise that the seller cannot fulfill. Having explained this, we also understand that para 6-C-(2) creates an obligation for the buyer. It must be understood that the short sale lender sees the survey as a 'buyer' expense, since it is a document that is required by the buyer's lender. As a professional courtesy, The Knolly Team will work diligently to obtain an existing survey from the seller and will provide it to the buyer, but makes no warranties or claims as to its accuracy or validity. The survey provided will NOT be accompanied by an Affidavit. I have attached a copy of the survey which is attached to the MLS listing. Page 2 Sect 6-E-(2) Property HOA-You have checked that the property is NOT subject to mandatory membership, but it does have a mandatory membership. Special Provisions-There are no problems with the provisions (seller's responsibility) you have listed. In addition to these, we need the following per the Guidelines and per the requirements of the seller's lender: 'Property is being sold AS IS.' 'The contract of sale is conditional upon final approval of Seller's lender and/or HUD.' And we recommend the following be added, to ensure the buyer knows when the "option" period begins: 'Option Period will begin once the contract of sale is 'approved' by the Seller's lender and/or HUD.' (continued ...)


7 Days to Success with Short Sales

Once we get these updates back, we will have the seller execute the offer and forward it along with their short sale package to the seller's lender to begin the review process, Note that we have changed the listing to "PB," and will only take back up offers until your buyer contract is approved or countered, If you have any questions, please let me know! Thanks!


On the Knolly Team, we attempt to respond to offers within 24 hours and email the buyer's ."oent a notice of any necessary chilllges, We know that if the buyer's agent does not make the <:hanges now, they will have to make them later-when the lender discovers the errors, Lenders ",;n typically allow themselves a minimum of 1(l business days to review and respond to a short sale package and an offer, on<:e the file has been assigned to a loss mitigator. Some lenders take up to 3{) days! If they kick back the buyer contract and it's resubmitted for a second review, they will again take, at minimum, 10 business days to review and respond. Now you've lost 4 or more weeks in this cycle! When lenders receive a short sale package and an offer that have been prepared according to our strict 7 Day Systems guidelines, they know they have the real deal on their hands. They know they won't be able to shove this package off to the "needs revision" pile!

Review for an Acceptable Price Offer

When we receive offers on our short sale properties, we are looking for an offer price very near to the CMA or list price. The lenders are not our clients, but we have come to anticipate how they will react to certain offers. We know they are looking for reasonable offers.

Day 5: Receiving Offers and Submitting the Short Sale Package


I recommend you advise your clients not to countersign low-ball offers. This is the script I use with a buyer's agent who submits a low-ball offer on a short sale property:

Knolly: "This offer is so low-based on our market research on the property's value-that we do not believe the bank will accept this offer. We will go ahead and submit this as an offer [i.e., an unexecuted contract], but we will continue to market the listi ng for a better offer. If we receive a more reasonable and acceptable offer, we will submit that forward as an executed contract."
This strategy is another time-saver for us. If we submit a low offer as an executed purchase contract, we will set ourselves up for more complicated negotiations, as the bank will counter to try to get a price that is more in line with their BPO. Some investor buyers will intentionally submit very low offers, and they are not surprised or concerned about the strategy to send forward their offer unexecuted. You might wonder if it is a waste of time to send the lender an unexecuted offer. As we discussed earlier, the lender wants the buyer to "tip their hand first." They want to see what kinds of offers are possible before they spend time working the short sale package. We have learned through experience that lenders will go ahead and start working a file (i.e., reviewing the proposal package) with just an offer. They will move forward and order their BPO to assess the value of the property, and they'll reach a determination about what they will take as a settlement for the short sale. The lender will ask for an executed contract when they are ready to approve the file. Meanwhile, the unexecuted offer allows us to continue marketing the property for a more acceptable offer.


7 Days to Success with Short Sales

What about Multiple Offers?

It is not uncommon to receive multiple offers on your short sale listing. There are three things I want you to remember about taking multiple offers:

2. 3.

Establish a policy on multiple offers and publish it. Submit only one offer or contract at a time. N ever take multiple contracts without appropriate backup addendums.

Your Policy
Be prepared for how you will handle multiple offers. If you do not establish a firm policy and communicate it, you will set yourself up for a lot of grief and unnecessary conversations with frustrated buyer's agents. I have defined my policy and published it in my Short Sale DisciosW'e and Agent Guidelines document. Let's look at that policy ",,"2in: III Multiple Offers: We only work with the bank on one offer or contract at a time. In the event that we receive multiple offers on this property, we will not counter for your best and Enal offer. Our policy is to select and submit the best offer, so bear this in mind when submitting your offer.

You see, my strategy is to get the lender working on only one offer at a time. This means that even if the lender is working on an unexecuted offer and my office receives a better offer, we will wait until the lender has processed the package on their desk. I find that it is most effective to allow the lender to do their job without confusing them with two or more offers.

Day 5: Receiving Offers and Submitting the Short Sale Package


Multiple Contracts
Now, what you need to avoid at all costs is multiple executed contracts-a very different situation than multiple offers. Some agents just getting into the short sale business make the mistake of assuming that short sales follow a different set of rules regarding the legal contracting process. I recently consulted with an agent who made the mistake of sending two buyer contracts forward-the second contract offered $50,000 more for the property. When the lender saw the higher one, of course they want to take it, but they were legally bound to continue working the current executed contract to completion. So, the lender countered the first contract and raised them $50,000. When the prospective buyers were unable to pay this higher sales price, the lender rejected the contract and began working the second-more appealingcontract. This messy and time-consuming situation could have been avoided if the agent had submitted the first offer as an unexecuted contract. As in traditional real estate, once your have an executed contract, you may take backup offers, with the appropriate addendums and so forth. Again, just remember that traditional real estate rules regarding offers and contracts apply to short sale transactions. Be sure to utilize your local and state :MLS protocols when handling multiple contracts.

Submitting a New Offer after a Buyer Walks

I have consulted with many listing agents who have gotten themselves into a jam with the lender because they were not certain what to do when the buyer of their short sale listing walks out on the deal. My advice is to allow the lender to continue to process the package that they have through to approval. Then once you receive word that the short sale has been approved, you simply thank the lender for the approval and let them know that they will need to change out the names of the buyer on the contract because a different buyer will actually be purchasing the property. Also, if any financial terms have changed, you


7 Days to Success with Short Sales

will need to submit a revised HUD-l statement for approval, since the net proceeds may be different.
The mistake that you want to avoid is telling the lender that you have lost the buyer midstream. The lender will halt the process and wait for you to resubmit with new buyer information. In most cases, they will close the file. To re-start or re-open the file could cause a delay of 30 to 60 days or more! Again, simply allow the lender to process and approve the seller's information and the short sale request using the buyer information that they originally received. If this buyer does not follow through on the transaction, that's okay. Simply inform the lender that different buyer information will be used for the final purchase documentation. As long as the purchase offer is the same as or better than what you had originally submitted, the lender will move forward with the file.

"IV\, Vel1LLttl, I see tne fi-yst offey I vec,e~ve lAS a 'guv\'eI1 "p~g' offev. Tnts w..alj oy IM;lAtJ Mt be tne offer tnat IM;IAR.eS t to tneevwt of tnt pyocess. -gut, tVie [w..portlAY\-t tVivcg Ls tVilAt tl1Ls Ls tne offer tn&lt gets tVie baLL voLLLvcg! Qu~te oftevc I get t0e snort s&lLe rYo"posaL 1A"p"pYDved wt0 oV\,e offer, but theY\- closed wtn dLffevevct fLv\'&lL offev."

Day 5: Receiving Offen; and Submitting the Short Sale Package


Preparing the Final Short Sale Documents

We began the process of collecting the required short sale documentation back on Day 3 of 7 Dqys to Success with Shori Sales. At this point, you are ready to prepare the final documents and fax the entire package to the lender. When you submit the short sale package, it is imperative that you include all required documentation at that time. Leaving documents out or having pages out of order will delay the processing of your file.

The Checklist
A complete short sale documentation package must contain the following items:

o o
o o o o

Hardship Letter Listing Agreement Letter of Authorization Financial Statement Recent Bank Statement Recent Paycheck Stub(s) Fully Executed Purchase Contract on the Property Buyer's Pre-Approval Letter from theit Lender

HUD-l Settlement Statement (also called HUD-l

Estimated Net Sheet)

Comparative Market Analysis (CMA) (optional)

7 Days to Success with Short Sales

Additional Documents for VA Loans:

o o o

The most recent two years' tax return

Additional Documents for FHA Loans: The most recent two years' tax return Application to Participate HUD FORM 90036

Remember, if your client has two mortgage 'liens on their property and both are found to be short, you will need to prepare and send a short sate package to each lien holder. ilf the first lien is not short, you will not need to send a package to this Uen holder. If, by chance, both liens are held by the same tender and both Hens are short, you only need to submit one package to this lender. Just make sure to put both lien numbers on the package documentation.

Ii! Fully Executed Purchase Contract

on the PrQperty
We've already discussed the steps you need to take to review a buyer's offer and to detennine whether to send the offer to the lender in an executed or unexecuted state. If the lender begins work on the short sale package with just an unexecuted offer in place, they will contact you for a final executed contract before they grant approval for the short sale. Once you are ready to submit a fully executed buyer contract to the lender, you will send the offer to your seller client for their signature. Then, you will send this signed document to the title company or attorney to be receipted. Next, you will forward the receipted copy back

Day 5: Receiving Offers and Submitting the Short Sale Package


to the buyer's agent. Then, you will include a copy of this fully executed buyer contract with the other documents of your complete short sale package.

o Buyer's Pre-Approval Letter from

Their Lender
Lenders require documentation to demonstrate that the buyer will receive the necessary funding from their lender/third party. They will not proceed with the process without knowing whether this buyer is ready, willing, and able to complete the transaction. Even if the buyer makes a cash offer, the seller's lender will still want to see a document that shows proof that funds are available. Note that you will still need to submit a buyer'S pre-approval letter even if you ate only sending the buyer's offer up as an unexecuted offer (versus an executed contract).

o HUD-1 Settlement Statement

Once you have a buyer offer on your short sale property, you can formally request an estimated HUD-l Settlement Statement (also called a HUD-l Estimated Net Sheet) from your title company or attorney. In our system, we simply send an email to the settlement agent to make this request. Our email includes the key information for the HUD-l form and a copy of the buyer contract.


7 Days to Success with Short Sales

Email From: To:

Subject: Request for Short Sale HUD on 1022 W South Street

Hi Tracy, Please prepare an estimated HUD-1 on the following property, which will be processed as a short sale: Liens: Sal,es Price: Commission: Pre-Forediosure Fee: Processing Fee: Estimated HOA Fee: Closing Date: Sel!ler: Buyer. ONE $238,000


$495 $500 Aug 20, 2010 Dalilene Moses James Gergin

I have attached a copy of ~he buyer's purchase contract If you have any questions, please contact me or one of my team members. Thanks again,


Sample email requesting HUD-l Settl.ement Statement (One Lien)

Day 5: Receiving Offel5 and Subrnittingthe Short Sale Package


Email From: To: Subject: Request for Short Sale HUD on 10700 Bella Mar Circle Hi Tracy, Please prepare an estimated HUD-1 on the following property, which will be processed as a short sale: Liens: Sales Price: Second Lien Amount Commission: Pre-Foreclosure Fee: Processing Fee: Estimated HOA Fee: Closing Date:

TWO $400,000 $9,300 6% $980 $495 $500 Aug 20, 2010 James Thomas Michelle Ingram

Seller: Buyer:

I have attached a copy of the buyer's purchase contract. If you have any questions, please contact me or one of my team members. Thanks again,


Sample email requesting HUD-l Settlement Statement (Two Liens) Note that in the sample emails shown here, I have added a ''PreForeclosure Fee" and a ''Processing Fee." We'll discuss these fees further in Day 7 when you learn strategies for supplementing your commission.


7 Days to Success with Short Sales

Even though the title company or attorney has researched the title and you have obtained a purchase offer with purchase details, the HUD-l statement that you request will still be an "estimate" because it will not yet show the buyer's side of the transaction. The buyer has not yet received the specifics of their loan and so forth. The reason that the lender wants an estimate at this point, however, is so that they can see the net proceeds they will receive from this sale. The title company that I use processes approximately 5 to 7 HUD-l requests for us each week. They guarantee to have the HUD-l back to us within 24 hours, but oftentimes they return it the same day. For your short sale business, make sure that you work with a title company or attorney who can process your HUD-I requests quickly and accurately.

Who Should Prepare the HUO-1 Statement?

You certainly have the option to prepare the HUD-l Settlement Statement yourself, and you may choose to use some of the software or online tools that are being marketed for this purpose. (Remember to check with your broker and your MLS guidelines!)
In our system, we al.ways prefer to work with an experienced title

company for this step in the process. ] have learned from e]"-pe11ence that it pays to have a knowledgeable settlement agent run the title search and identifY all outstanding unpaid taxes, additional liens, and so forth tied to the short sale property. The worst thing to have h.appen is to submit an HUD-I to the lender, only to find out later that the numbers are all wrong because there was an outstanding lien (e.g., delinquent HOA charges) not accounted for in the settlement.

Day 5: Receiving Offers and Submitting the Short Sale Package


Sample HUD-l Settlement Statement Showing Seller's Side


7 Days to Success with Short Sales

As I stated, I prefer to work with a title company rather than preparing the HUD-l statement on my own. Furthermore, I prefer to work with knowledgeable and capable settlement agents. To help everyone get educated and on the same page, I have developed a training document that explains how to draw up HUD-l Settlement Statements in the manner that will be necessary for short sale processing.

July 27.2009

Knolly WHUams




1,sm s. 'MO-PAC EXP.RESSlN.D.,Y, Sl:.IlTE rDl!l, AUsr:rN, IX 7:8746

Offic-e: .(512) 732-3'888 FaX'. ,,(512) 532-0526

w.vw.Koony.1:Om -kno'liy@knoUy.cllrn

INSTRUCTIONS FOR. TITIE/ESCIlDW COMPANY CTeatinga 'HUD-l for aShort Sale T:cansaction
"'Thzik yru for~-with 'as .onthis transact:iun. Because ,short ~ are quite differ.ent: than st:.uld.3fd 1:'e2ii,estate1c:lru:actinm, 1 hmre ,putto-gctbct' 'Ibe followinginf1lt'Dati on , "I'Iobith rou =1 find help:fu1.
Wb:atiis a shnrtsa1e? A$hol!!: .:\ale.rr.fers !ethe sale of ~t'otl property for i\.!\ :l.mouw.les'~ thm the amount O":.>erlon the po;:pecty. The tender: '(Ma, VE-., or lB3nl0 ::t~ .to; than the ful1. b:il:l..t1<le due on 'the debt :md. usw1ly "f~,eS" iIl-o!'a~ p:>rtion ofthe.diff=nce.

Prelimiw:ty Estii.J:nal:ecI. HUD-ll.. OIl Shol;t sale twlsa.ctions, the scl1e1"s leo.det !tquiU's ,tb:ll. we submh iI. ~"E::t:imlIted HOD-l Settle=t St:aremem:a:J.ongwitb. h wnw.ct/offet: "Thqwi!J. usethisdocumeJIl:tc.

kndu'Wlil!l thtll. reoci~ w~ is ~d

Li:nc.5@O.. P.aydiOflirst~<r:e.ln2a...lll thoee'il'entth2ttbe &stHenis sbott, tllereh no.need fOl:Yro to order .a ~.fffrom.:the le:nder. 1'll of the: seIler oosts 'Will. be st2:tod on th.~ iF.ruD-l ill thcir appl'Opli:It~ fields,. and th~ {after::ill oth<er 'o:osts bmr~ b~el'l w'btmcted} "This is the'~ ~ net ~.1lhis w.iII. be ,tfu, amOWll: stmd in li:n~ 3'04 Please do not put 1h.e net p!:~ amoontin !me -Gre, astbis knoti:l:l.uppro.ved fbnn:l!:.ofthe short sale lend,er. 3OS. ~:Of secaa:d~-e 103D.:iEr.t tJb.,e evem tlW: t.heze i~ a second lien on ,the propel:ty, there is.DO need foryou to arl.u lly.tyefffrom the secondb :bolder. We~mjn!:trud: you on:the 'Settlement llm<:l<Int Ito phce on this line. Jl:'s typioilly $1,OOOto $'5,000.
I..ine613. line 603 must:m:ooot; $0.00

Onpo:!perties with two liens mere the &stli.cnis NOT shart lin the event thst onlytbe seoondlien i$ sl:Jort,. then the fuIl. payoff =ou:.U: to the Jmt lien holder 'w:iD. be p1ace:l. o.n line 504. 'We 'wiI1 the p:ayo:ff amount from. the first lien holder 2nd send tt to YOIl. .AlI of the other seller o:>$tSwill ~ ;Wed on the HOD-l, in their appropriate fields. The seoondlien hclderw:ill then whilteuerislefl This =ntwill beplacci in line


505. 'Iharlk ynuin advaru:e! Please crmt:act!he Knolly Team:at 5:122J6.oooo if you have :any questions or email 1X1J 1istiogmanager, Morris "lhompson:mOIris@k:uoJly.c::om

@2009KnollyWllllams'7 Day Systems

Training Document for Tide/Escrow

Day 5: Receiving Offers and Submitting the Short Sale Package


Submitting the Package to the Lender

Once you have gathered all necessary documentation, you are ready to submit the complete shott sale proposal package to the seller's lender (Step 5).

The Short Sale Process

Follow Up Relentlessly
Gather Info

for the Package

Negotia!e& Counter

You are here!


7 Days to Success with Short Sales

Prepare a Coversheet for the Short Sale Package

As part of ow: system, we send each short sale package with a coversheet that lists the items included within the package. This coversheet helps the lender easily see what documents we are submitting, and it also serves as a final preparation checklist for us. We have found that this simple coversheet helps to speed the review process with the lender and illustrates to them that we are organized and knowledgeable about their requirements. The des>gn of yow: coversneet should be intentional. If you don't already have one, develop a logo for yow: business. Create a design that will help set your documents apart visually from the many others on a loss mitigator's desk. A memorable logo ",'ill payoff over time.

Start marketing yourself as a "Short Sale a: Loss Mitigation SpedaUst." Put this descriptive title on your fax ooversheets, your business cards, your email signature block, and other malMketing materiails. This gets the attention of lenders, seUers, and buyers al1d helps them feel more conftdel1tthat you know what you are doing within this unique area of rea!l estate.

Day 5: Receiving Offers and Submitting the Short Sale Package




Knolly Williams, Associate Broker




1801 S Mo-Pac, Suite 100, Austin, TX 78746 Direct (512) 906~2882 Fax: (512) 532-0626

* *

= iPhone:



Knolly Williams, REALTOR Associate Broker






o Urgent 0

For Review

Please Comment

Please Reply

LOAN NUMBER: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Address: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

Client Name: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Last 4-dlgits SS#: _ _ _ __
On behalf of our mutual client, t am submitting the following docs for short sale approval consideJation. Having reviewed the lnfonnation, the client appears to me to meet the hardship requirements for short sale approval.

In addition please find a Short Sale Executed Contract on the above property.
Documents Submitted: Hardship Letter Recent Bank statement

o o o

Listing Agreement

Recent Pay Stub{s)

o Comparative MarketAnalysls (CMA)

o Financial statement

Purchase Contract 0 Estimated Net Sheet - HUD 1 Buyers Pre-Approval Letlerfrom Lender Your Estimated Lender Net: $ _ _ _ _ _ _ __

ContractArnount $ _ _ _ _ __

Closing Date: _ _ _ _ _ _ _ _ _ _ _ __

Short Sale Coversheet (for package with executed contract)


7 Days to Success with Short Sales

Note that our fax coversheet design also clearly identifies the package as an "**Urgent Short Sale Request**." In the current foreclosure crisis, mortgage lenders are processing an unprecedented number of loan modifications, short sales, and foreclosures. If you don't take care to send your short sale package to the correct person and clearly identifY your documentation, you're sunk. Depending on the documentation I am sending, I reference the package as a "Short Sale Request and Executed Contract" or a "Short Sale Request and Offer."

Organize the Documents


Organize the documents in the package according to the list of items on your coversheet. :Make sure you have me loan number at the top of every page of the package. The easiest way to do this? Create a bibnk docmnent with your client's loan number printed in the very top margin. Then run the pages of your short sale p"ckage through your printer to print the loan number at the top of every page. jLook on your 7 Dqys to S uceers with Short Safes Toolkit CD for a document with a sample page header prepailJed for this task.]


Day 5: Receiving Offers and Submitting the Short Sale Package


Fax the Package

Once you are confident that your package is complete, simply fax the entire package to the lender's loss mitigation department.

,------ T~ . . 1p------,
You'll find more than 250 unique contacts for lenders and their loss mitigation departments on your 7 Days to Success with Short Sales Toolkit CD! More than 40 of the top lenders are included in this instant database!

If the lendet you need is not on your 7 Dqys to Success with Short Sales Toolkit CD, you may obtain the telephone and fax numbers of the lender's loss mitigation department by calling the lender's customer service number and requesting them. To find the lender's customer service number, refer to the seller's mortgage statement or search for the lender online. It is certainly frustrating that facsimile (fax) is still the lender's preferred method for receiving these lengthy packages. Digital upload would make more sense, but that's not the standard at the present!

Fax Do's

Do include a coversheet Do include the client's loan number on every page Do make certain the pages are in order

2. 3.


7 Days to Success with Short Sales

Fax Don'ts
Don't fax your package to the wrong depru:tment! Make sure you are using the fax number for the Loss Mitigation Depru:tment of your seller's lender. Don't overload your fax machine. Some fax machines cannot handle documents of this length. You may need to "babysit" your machine and feed it individual pages. Or you may need to upgrade your machine. Don't fax your package in batches as you recelve the documents from your seller or the title company. Wait until you have a complete set of documen.ts, and fax the en.tire package at one time.





7 Days to Success with Short Sales

The Mitigation Process

Once you have submitted your short sale proposal package to your seller's lender, you cannot rest on your laurels. The next steps in the process will require the negotiating skills, patience, and tenacity that we spoke of on "Day 1: Preparing for Success with Short Sales." We'll look at what happens to your short sale file from the moment it's submitted to the moment it's approved-and yes, we mean "approved," because we're not going to have a file "declined"!

. .
II ..


Setup Loss mitigator is assigned

An appraisal or BPO is ordered

Counters and negotiations File is approved

Note: As you are learning the techniques in this chapter, t=ember that if your client has two mortgage loans that are both found short, you will need to follow the same set of activities for both lenders.

Relentless FoUow-Up
Throughout this chapter, we will remind you of the importance of follow-up and the importance of a call schedule. Timeblocking is critical.

Wait 4 to 7 days-After you fax the package documentation to the lender's loss mitigation department, wait 4 to 7 days for them to receive the package and upload it (scan it in) to their system.
Call 2 times per week-Once you have given them this


initial grace period, start calling 2 times per week to inquire about the status of the file. We'll talk more about the key questions to ask.

Day 6: Processing the Short Sale


Call once per week-Once the file has been assigned to a loss mitigator, plan to call once a week to get updates on the progress of the file.

You'll find more than 250 unique contacts for lenders and their loss mitigation departments on your 7 Days to Success with Short Sales Toolkit CD! More than 40 of the top lenders are included in this instant database!



7 Days to Success with Short Sales

The Setup
Lender Receives and Sets Up File
The first step in the loss mitigation process is for the lender to receive the faxed file and begin to set it up for processing. This is a preparation step and is typically handled by a very small group of administrative representatives in the lender's loss mitigation department. Even in the largest banks, Loss Mitigation will be a small department, and within it, an even smaller group will handle the file setup process-possibly 2 to 6 people. For example, I recall that when I was working short sales back in 2005, Wells Fargo had just one lady responsible for setting up all short sale files-that is, all short sale files for all of Wells Fargo! Ca:n you imaz,oine? She was the gatekeeper, and I got to know her very well! The shift in the housing market has likely made many of the larger banks inc~ease their staff in these departments, but it is still a very specLalized activity for banks. Just remember that when you submit your Shollt s.ale package, you will be sending it to a very small number of people...An~ over time, they will start recognizing YOUR package, and you will sw.: devceloping a relationship with these key individuals. As we mentioned on Day 5, most banks require that you fax all documentation to their office, but a few banks will receive short sale p,;:kages by mail. Many, many banks are moving to an electronic fax '(ef,",,) system that will allow them to receive your faxed documents ms PDF files attached to an email. This most surely is a times aver on their end. Regardless of the technology used, it will typically take the setup agent up to 7 days to enter the documents into their system and prepare the short sale file for processing. This setup agent's job is to perform a compliance check on your package to determine if it meets the lender's basic format and criteria.

Day 6: Processing the Short Sale


After you fax the short sale package to your client's lender, wait 4 to 7 days before placing your initial call to the loss mitigation department. This will allow them time to set up the file. The minimum time the bank requires for setup is 72 hours, but I find that if there is no critical urgency (i.e., imminent foreclosure), it is fine to wait up to a week.

Lender Performs Initial Review of Finandals and Hardship Letter

The lender's setup agent will review your client's financial documentation and hardship letter to make sure that the short sale proposal meets the very basic criteria for the program. For example, if the fInancial statement indicates that the seller has enough monthly income to cover their expenses, the short sale claim will be denied, or if the hardship letter does not indicate a legitimate hardship, the claim will be denied. If both the financial statement and the hardship letter look good, the setup agent will move to the next step.

Lender Reviews Package Contents

The setup agent's next step will be to review the short sale package for complete contents. Are any required documents missing? Is some key number or bit of infortnation missing from the package? Is the loan number indicated on each page? Are the documents (or pages) out of order enough to suggest an incomplete package? If the setup agent determines that the ille is incomplete, they will set it aside--<Uld they will not tell you! There will be no courtesy phone call to you. I've even had a setup agent return a package by mail to the seller


7 Days to Success with Short Sales

-who is typically avoiding all mail from their lender. (That could have cost us quite a bit of time in the process!) To the setup agent, an incomplete file indicates a waste of time, and they will move on to other assignments. If you don't call their office for a month, let's say, they will let the file die. It is essential for you to proactively investigate the status of your file.

Plan to call the loss mitigation department 2 times per wee,k (i.e., every 2 to 3 days) to inquire about the status of the file. There is a delicate balance between catling too often and not enough. This is the call frequency we have found to be effective in our system. Occasionally, the setup agent wiU teU you when to caU back for an update. 'It is courteous to ask them when they would like for you to caU back. If the answer is vague, faU back on 2 times per week.

The Five Key Questions You Must Ask

Once you begin calling the lender's loss mitigation department, your objective is to ask key questions to establish the status of the file.

The questions you ask of the loss mitigation department's setup agent are critical! On your initial phone call, begin to ask the 5 key questions that will inform you of the status of the file.

In my career as a short sale specialist, I have successfully worked more than 450 short sales. I have trained my team to follow my system, ask

Day 6: Processing the Short Sale


these key questions, and commit themselves to relentless follow-up. This system has been highly effective for us and it will be for you as well.

1. "Will you verify that you received the file?"

First and foremost, you need to determine if they received your package. The fax transmission could have gone to the wrong department, been misplaced, or gotten lost in cyberspace! Or, your package may simply be in a stack of other transmissions that still need to be scanned or uploaded into the loss mitigation department's computer system.

2. "Is the file complete?" and "Is anything missing?"

Next, determine if they consider the package to be complete. "Are any documents missing? Is there anything else you need from me or from my client?" Again, if a required document or piece of information is missing from the shott sale package, the entire file will be set aside, rejected. While it may seem appropriate and courteous for the setup agent to notify you of the problems with the file, they will not. It will be your responsibility to ask proactively because they will not volunteer any information. If you don't ask, they won't tell! The setup agent will also be checking to ensure that the package is in order. This is why it will be critical for you to include your client's loan number on each page of the package. Consider how many short sale proposals some of these lenders are receiving. If you do not identify your faxed pages and they accidentally get shuffled into another client's file, you're sunk!


7 Days to Success with Short Sales

Above all else, you need to remain patient with the bank. Be nice, courteous, and respectful. You will gain nothing by being rude, abrasive, or discourteous.

3. "Has a foreclosure date been set for this property?"

When you speak to the loss mitigation setup agent, be sure to ask if a foreclosure date has been set for your client's property. Don't assume that you aiready know the answer, and don't assume that your client does either. Your client may not be paying attention to their mail or they may have miscalculated how many mortgage payments they have already missed. You must find out if your client's property has been placed on a foreclosure rimeline. This -will tell you how much time you have to process the short sale-in other words, how urgent the situation is. For example, I have called a loss mitigation department and asked this simple ,question only to learn that the property has a foreclosure date just two weeks out! Obviously, I immediately requested a postponement, but it was not a fun exercisel As an aside, you should know that you can request a postponement right up to the day before foreclosure. Lenders may not be eager to make this adjustment for you, but it can be done. The postponement (new date) can be keyed into the computer up to the day before the foreclosure-if you can demonstrate that the seller is working with you (a short sale specialist) and the property is being actively marketed for buyers. Some lenders -will only postpone the foreclosure date if a complete short sale package with a conttact or offer has been submitted.

Day 6: Processing the Short Sale


Why are you calling the setup agent as often as 2 times per week? If your file must be re-sent, if you must provide some missing information, or if a foreclosure date has been set, you need to know this immediately! You need as much time as possible to react. In addition, you should be prepared to keep on top of this calling schedule. Your short sale file could get tied up in the setup step for 30 or even 60 days-even if the file is complete and ready to process.

4. "Has the file been assigned to a loss mitigator?"

The next big question to ask will determine how fax yow: file has gotten within the department. If the lender has assigned a loss mitigator to the file, you know you have gotten past the gatekeeper and passed through to the next step! If possible, ask for the loss mitigator's contact information: Name Direct phone number Direct fax number Email addres s

If a loss mitigator (or "negotiator," as they axe sometimes called) has not yet been assigned, be patient and make certain you have asked yow: other four questions. Tell the setup agent that you understand that the file has not yet been assigned, and that you will call again to inquire about the status of the file. At some point, the setup agent may know which loss mitigator is likely to receive yow: assignment. Try to get this name if possible.


7 Days to Success with Short Sales

.-----__ T ,' _ _--, . irrip,





When you call a loss mitigation/short sale department, be prepared to wait on hold for a long time. They're swamped. When I'm making my weekly calls, I typically call from a separate phone. While I am on hold with the lender, I am conducting my regular daily business on my other phone. When the lender comes to the phone, I quickly hang up on the other call (sometimes mid-sentence!) and give the lender my undivided attention'!

5_ "WiI'l you please update the notes in the file to show that I caned ... "
At the end of each call, ask the setup agent to update the notes in their system to reflect the key points of your conversation and the action items you have discussed. If you don't ask them to do this, they often won't, and you need cO develop a history in the lender's notes. Since most calls are typically monitored or recorded, they will add the notes if you ask them to.

Day 6: Processing the Short Sale


Sample Script: Calling a Loss Mitigation Department about a New File

Review the sample script below. The 5 key questions you must ask the loss mitigation department's setup agent are underlined in the script. Variations of the script follow at the end to account for different responses.


LM Dept: "Hello, this is Saxon Mortgage, Maria speaking. Can I have your loan number please?" Knolly: "Hi, Maria, this is Knolly Williams. I'm the real estate listing agent on this property, and I have authorization to discuss the account. The loan number is 2348879874." LM Dept: "Okay. I do see here that you have authorization on file. Can you verify the property address for me?" Knolly: "Yes, the property address is 211 South Main Street, Austin, Texas 78747." LM Dept: "Can you verify the name on the account?" Knolly: "Yes, the names on the account are James Sandifer and Carol Sandifer." LM Dept: "Can you verify the last 4 digits of the primary borrower's social security number please?" Knolly: "Yes, it's 3868." LM Dept: "Okay. Thank you. What can I do for you?"


7 Days to Success with Short Sales

KnoLly: "Thanks, Maria. I submitted a short sale package on this file last week-on September 21st. Can you please verify that you received the short sale package?" LM Dept: "Okay. Hold on ... I'm looking at the notes here ... hmmm ... Yes, I do see that we received the package. It was updated into our system on September 23rd."
[If they have not received the package, see variation below.]

KnoUy: "Thanks Maria. 1submitted a complete package. Can you verify that you have everything you need?" LM Dept: "Uh ... hold on ... let me see here." KnoUy: "No problem, take your time." LM Dept: "Okay, thanks, KnoHy. Yes, I do see that we have a complete file here. We don't need anything else at this time."
l[If mcomplete, see vwtion below.]

KnoUy: "15 there a foreclosure date set on this property?" LM Dept: "Uhh, wait a minute here ... No, there is no foreclosure date set." KnoLly: "Fantastic, Maria."
[If a date has been set, see variation below.]

KnoLly: "So, has the file already been assigned to a loss mitigator?" LM Dept: "No, it hasn't been assigned yet."

Day 6: Processing the Short Sale


[If mitigator has been assigned, see variation below.]

Knolly: "Okay. Can you tell me, Maria, when it will be assigned?" LM Dept: "No, I don't know when that will happen." Knolly: "Okay, I understand. So, it sounds like you have a complete file, but you don't know when it will be assigned to a negotiator, right?"
LM Dept: "Well, yes. That's what I show as of

right now." Knolly: "Okay, great. Do you happen to know which negotiator it will be assigned to? I've recently worked with Charles Wells and Sandy Newton on files."
LM Dept: "No, I don't know who will be getting this one."

Knolly: "Okay, I understand, Maria. If you can, I'd like to see if Charles can get this one, if possible. [laugh] When should I call back for an update?"
LM Dept: "I would say to try back this time next week."

Knolly: "Great. So, I need to call back on October 5th. Now, will it be assigned to a negotiator by then?"
LM Dept: "Well, I really don't know for sure."

Knolly: "Okay, Maria, thanks again. One more favor ... Can you please update the notes in the file to show that I called inquiring about the status of the file today, and that you indicated that the file is complete, and that you asked me to call back on October 5th?"


7 Days to Success with Short Sales

LM Dept: "Uh ... Well, sure. I can update the notes on the file." Knolly: "Thanks so much for doing that, Maria. I will be updating my notes as well." LM Dept: "Okay then. Is there anything else I can help you with?" KnoUy: "That's it, Maria! You've been very helpful. "

Sample Script Variations

If the p.ackage was NOT received:

CSc~~P1!Q Knolly:"nanks, Maria. I submWted a short sale - ....}; package on this file last week-on September 21st. Can you p'iease verify that you rec:eived the short salle package?"
LM Dept: "Okay, hold on ... I'm looking at the notes here ... hmmm ... No, I don't show that we received anything." Knolly:"Thanks, Maria. I submitted a complete package. 'How long does it usuaUy take for the file to update into your system?" LM Dept: "Well, it usuaUy takes at least 72 hours, but right now our scanning department is running a little behind schedule." Knolly: "Okay, I understand. Can you verify the fax number I should be sending the package to?" LM Dept: "Yes, it should be faxed to 866-9880099. " Knolly: "Yep. That's the number I have on file. 'Hmmm ... So, do you think I should give it a few more days?"

Day 6: Processing the Short Sale


LM Dept: "Yes, I recommend you give it a few more days to roll over into our system." Knolly: "Okay, Maria, thanks again. One more favor ... Can you please update the notes in the file to show that I called inquiring about the status of the file today, and that I faxed a complete short sale package on September 21? You indicated that the short sale package has not yet been updated to the system, and you have asked me to call back on October 5th , to verify that the package has been received." LM Dept: "Uh ... Well, sure. I can update the notes on the file." Knolly: "Thanks so much for doing that, Maria. I will be updating my notes as well." LM Dept: "Okay then. Is there anything else I can help you with?" Knolly: "Just one more thing-has a foreclosure date been set on this property?"
[Continue standard script from here.]

If they received an incomplete package:



Knolly: "Thanks, Maria. I submitted a complete . ' package. Can you verify that you have everything you need? LM Dept: "Uh ... Hold on ... Let me see here." Knolly: "No problem, take your time." LM Dept: "Okay, thanks, Knolly. Well, I do see that we are missing the hardship letter and page 8 of the listing agreement. We also need the Sandifers' most recent pay stubs. We don't need anything else at this time."


7 Days to Success with Short Sales

Knolly: "Okay. Those pages must not have come through on your fax. What number can I fax these missing documents to?" LM Dept: "Fax them to: 8669880040." Knolly: "Okay. To whose attention shall I put it?" LM Dept: "Put it to my attention: Maria at extension 11323." Knolly: "Okay Maria, I'll fax that to you in just a bit. "
[Continue with standard script. Ask remaining key questions.]

'If there is a foreclosure date set:

C~!fi) ~~o~Zr~i~ there a foreclosure date set on this

LM Dept: "Uh, wait a minute here. Yes, it looks like we have a sale date of October 6th." KnoUy: "Oops! ... Okay, we need to get that postponed right away. l1he short sale package I submitted is going to net Saxon much more than a foreclosure would. Maria, can you put a rush on reviewing this file and put a postponement on the foreclosure or do I need to speak with a supervisor about getting the foreclosure postponed?" LM Dept: "Well, I can try to discuss this with a supervisor and see what we can do." Knolly: "Awesome, Maria. Can you place me on hold while you talk with your supervisor about this?" LM Dept: "Uh ... well ... Let me discuss this with the supervisor and call you back."

Day 6: Processing the Short Sale


Knolly: "Okay, Maria. What's your supervisor's name?"

LM Dept: "Sarah Reed."

Knolly: "Okay. Also, can you put a rush on getting this one assigned to a loss mitigator?"

LM Dept: "Yes, I'll work on that as well. What number can I call you back at?"
Knolly: "Call me back at 512-448-4111 or call my cell at 512-999-9999."

LM Dept: "Okay, I sure will."

Knolly: "Okay, Maria, thanks again. One more favor ... Can you please update the notes in the file to show that I called inquiring about the status of the file today, and that you indicated that the file is complete, and that there is a foreclosure date set for October 6th ? You also indicated you would discuss with Sarah Reed about getting the foreclosure date postponed, and that you would try to put a rush on getting this file assigned to a negotiator. Can you update your notes to include all of this please? Let me know if you need me to repeat anything."

LM Dept: "Uh ... Well, sure. I can update the notes on the file."
Knolly: "Thanks so much for doing that, Maria. I will be updating my notes as well so that I'll have everything I need in case I need to speak with Sarah directly."

LM Dept: "Okay then. Is there anything else I can help you with?"
Knolly: "Yes, when should I listen for your return call?"


7 Days to Success with Short Sales

LM Dept: "Uh, well ... I can call you in a few days." Knolly: "Great, Maria! You've been very helpful. I'll look forward to your call in the next few days. " If a negotiator has already been assigned:


KnoUy: "So, has the file already been assigned! to a loss mitigator? LM Dept: "Yes, it looks like the file has already been assigned to a negotiator." KnoUy: "Great. Can you tell me, Maria, who it has been assigned to?" LM IDept: "Yes, it was assigned to Jack Smalls." ,Knolly: "That's great. Can you give me Jack Smalls' direct contact information?" LMOept: "Yes, his number is 604-778-9989." KnoUy: "Great, does Jack have an extension?" LM Dept: "No, that's his direct line." KnoUy: "Okay, good. What's his fax number?" LM Dept: "Uh, let's see here. It's 604-778-9963." Knolly: "Fantastic, Maria. And what's Jack's email address?" LM Dept: "Uh, well, we're not allowed to give that out. You can call him, though." Knolly: "Okay, thanks, Maria. I want to give Jack time to review the file. Can you tell me when he received the file?"

Day 6: Processing the Short Sale


LM Dept: "It looks like he just got it a few days ago. " Knolly: "Okay, Maria, thanks again. One more favor ... Can you please update the notes in the file to show that I called inquiring about the status of the file today, and that you indicated that the file is complete, and that the file was assigned to Jack Smalls on September 24th?" LM Dept: "Uh ... Well, sure. I can update the notes on the file." Knolly: "Thanks so much for doing that, Maria. I will be updating my notes as well." LM Dept: "Okay then. Is there anything else I can help you with?" Knolly: "That's it, Maria! You've been very helpful. "

Sometimes you will be working more than one unassigned file with the same lender. In this case, when you call the loss mitigation department, you can ask about multiple files while you are on the call. This will cut down the overall time you are spending on hold!


7 Days to Success with Short Sales

A Loss Mitigator Is Assigned

If everything looks good with your client's short sale file, the file will be assigned to a loss mitigator. Be prepared, however, it could take 30 days to 60 days for the file to get assigned. These time frames are a factor of our curtent market. Before this market shift, I had never heard of a file

taking 30 to 60 days to get assigned. Times have changed. Banks are

overwhelmed with pre-foreclosure and foreclosure files. Don't forget that patience and diligence win out.

The Short Sal,e Process

You are

Moving to a loss mitigator means the setup team has performed their preliminary review, and your file seems acceptable or "do-able." They reviewed for blatant disqualifications, and your file passed the test.

Day 6: Processing the Short Sale


How Files Are Assigned

The lender assigns short sale files to individual loss mitigators according to what appears to be a round-robin system. You may request that a file go to a specific mitigator, but the lender may not consider your request. It depends on the lender. I have always wondered, as well, if I am drawing unwanted attention to a particular loss mitigator if I regularly request them by name. Will others wonder why I want to work with one person and not others on staff? Occasionally, a short sale file will go to a supervisor before it goes to the individual loss mitigator. This step really does not affect the processother than adding a review and a signoff for quality control.

Countdown to the Loss Mitigator's Review

The loss mitigator has typically 7 to 10 days to review the file once they receive it as an assignment. They will likely devote approximately 20 minutes to their initial review. Mitigators (also often called "negotiators") will review files in an order based on the file's priority level. During the setup agent's review of the file, they will assign a priority level based on the foreclosure date set for the property. If, for example, the property's foreclosure date is set for within 30 days of the time the file is entered into the system, it is considered urgent and the setup agent will escalate it as such. As you will recall, in on the Knolly Team, we draw attention on our fax coversheet to the urgency of the short sale package. Because we have the authority to call on the seller's behalf, we typically call the lender to ask about the foreclosure date. So, if we know in advance that the file requires expedited processing, we will draw attention to this on our coversheet.


7 Days to Success with Short Sales

Package Review
Now, it is time for the assigned loss mitigator to perform their review of the short sale file. They will review the package details to determine whether the package is "approvable" prior to ordering an appraisal or BPO. Here is how the loss mitigator reviews the file:

Hardship Letter-The loss mitigator will review the hardship letter to verify that there is a legitimate hardship. It should be noted that many hardships may appear to be self-inflicted (i.e., simply a result of the homeowner's own choices). Perhaps the homeowner bought more home than they could afford, they were fired from a job (due to incompetence), they switched careers resulting in lower income, they relocated for personal reasons, they started a risky bu.sinessendeavor, and so forth. If your short sale client elaborates in too much detail on the hardship letter, the loss mitigator may find cause to reject the file. (Review our discussion on Day 3.)


Listing Agreement-The loss mitigator will review the listing agreement to examine when the home was listed and how long it has been on the market. They will also use the agreement to detennine the current list price. They will check to make swce that the listing agreement is fully executed.
Letter of Authorization-The loss mitigator will review the file to make sure a current Letter of Authorization is on file. Many lenders require the authorization to be dated within the past 90 days, or else they may require an updated letter with a more recent signed date.



Financial Statement-The loss mitigator will review the financial statement to make sure that the client is bringing in less income than they have in expenses. (Review discussion of this on Day 3.) They will also verify the

Day 6: Processing the Short Sale


stated income by reviewing the seller's bank statements and pay stubs. Recent Bank Statements-The loss mitigator will review the most recent bank statements to compare them to the financial statement. If a person's deposits are more than their stated income, this will be questioned, unless the homeowner recently experienced a reduction in income (i.e., job loss, pay cut, etc.). The loss mitigator will also be looking for any large recent withdrawals or surplus funds in the account. For example, if your client recently withdrew $8,000 from their bank account, this will be questioned. Also, if the statements show a large surplus of funds (enough to make at least two or more mortgage payments), this will also be questioned. Recent Pay Stub(s)-The loss mitigator will review the seller's most recent pay stubs and compare them to the financial statement and bank statements to verify the homeowner's income. Fully Executed Purchase Contract on the PropertyThe loss mitigator will review the purchase contract and notate any changes to the contract that they may require. If an unexecuted offer has been submitted, the lender may, at this time, require that the offer be executed before they move forward. If they move forward with the unexecuted offer, they will require an executed contract prior to issuing an approval on the file. Buyer'S Pre-Approval Letter from their Lender-The loss mitigator will make sure that this important document is in the file. HUD-l Settlement Statement-The loss mitigator will review the HUD-l to see if there are any items that they will not pay. They may not tell you what expenses they will not pay until after the BPO or appraisal has been ordered.


7 Days to Success with Short Sales

Seller's Credit Report-The loss mitigator will occasionally order a copy of the seller's credit report. They will use the information on this report to detertnine if the seller is telling the truth about their situation. If they can see that the seller is up-to-date with all of their payments except the house, they may determine that the seller is simply trying to sell their home and get the bank to pick up the tab for the deficit. On the other hand, the seller's credit report will typically present a telling tale of woe. Many accounts will be in artears and the lender will be able to see that the seller is truly in trouble.

Once the loss mitigator has completely reviewed the seller's file and cross-checked the various documents against each other, they will determine if they believe the hardship story that is being told. 1 they don't quite believe the story, they may decide to do some further investigation. This can lead them to attempt to contact you for some additional information or they may try rocontact your client directly. Be aware of one particular strategy used by some loss mitigators. On occasion, a loss mitigator might contact your seller client directly to obtain more information, verify information, ask questions, or discuss the possibility of a loan modification as an option. I do not recommend that your seller (the homeowner) correspond directly with the lender at all. Here's why. Inadvertently, your client could rWsstate some information or give an inaccurate impression of the situation and put the short sale proposal at risk. For example, I once had a client who received a call from their lender's loss mitigation department. They inquired about my client's situation, and they asked if he was currently living in the property. (Mind you, I had already told them that my client was indeed living in the property.) My client answered, "No." Because the loan was an FHA loan, this information immediately disqualified the seller from the short sale program. When I asked my client why the short sale suddenly went from "Approved" to "Declined," he told me about the call he had received. I

Day 6: Processing the Short Sale


asked Illm, "Why did you tell them you had moved out?" He said, "Well, I'm working in Houston every week." I asked Illm, "But where are all of your things? Where do you still receive mail? Where do you live when you come back to Austin at the end of each week?" He answered, "In my house." "So, Carl," I said, ''You're commuting to work. You haven't moved out of your home. There's a big difference." The sad conclusion to this client's story? He had ruined the short sale proposal, so he had to sell his home in a traditional sale and bring $8,000 to the closing table. This was a terrible lesson learned. I recommend that my clients use the following script (or something like it) when they receive a call from their lender:

(SCriP "I am.ment~ll~ and emotiona~ly incapab.le of . ~..., .. , handhng thlS nght now. I am m a place m my llfe
. where I can't handle this. I have hired Knolly Williams and his team to be my representatives. Please contact Knolly Williams."


Another solution would be to host a three-way call with the seller client and the lender. Once the call starts, I announce, "The seller has hired me to represent them." And I will jump in and rephrase questions if I believe my client may be confused or misled by the lender's questions. Ofrentimes when the loss mitigator contacts the client directly, they will ask the seller what their hardship is, and they will ask the seller to verify their income and expenses. Why would the loss mitigator ask the seller these questions when they already have the answers? The loss mitigator may be digging for any information that they can use to decline the file or they simply may want to verify that the seller is telling the truth. The seller should always stick to the hardship letter and the financial statement. If the seller ever speaks directly to the loss mitigator, they simply should recite the information right off of the hardship letter and the financial statement. The seller should not elaborate and delve too


7 Days to Success with Short Sales

deeply into a conversation with the lender without having you on the call with them. As previously stated, the lender may try to entice your client to do a loan modification. You should have already covered this (Day 2) with your client. So, if the issue of a loan modification comes up, your client simply needs to reiterate what is on the hardship letter-no more and no less. They simply need to tell the lender that they have "no alternative but to seek a short sale."

Your Mindset Is Key!

When you interact with. loss mitigators and other members of the lender's staff, you must adopt the right mindset ",bout the short sale request and the approval process. II II III Put yourself in their shoes! Act like a parmer, not an adversary! Remember: They hold the cards!

You are going to need to befriend the loss mitigator. Approach them with the right mindset and start building a relationship. The worst thing that you can do is make them feel that you do not respect how hard they .are working on your file and other files at the same time. These are people with feelings. You want them to know you care and you respect the work they are doing.

Day 6: Processing the Short Sale


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snokLoi be ljokr C1pprOC1c,n wLtn tnese LeV'voiers."

So, you should know that going into it, many loss mitigators are going to be reserved, defensive, or even adversarial towards you. If your opening line is, "Have you even looked at my file?" the loss mitigator is going to immediately put on their fighting gloves. Now you have upset them, and guess whose file is going to the bottom of the stack! In addition to dealing with hostile short sale agents, loss mitigators often have to deal with inexperienced and uninformed agents. I have had some mitigators share with me that they feel like they are constantly educating agents. It takes time and energy to explain the steps of the process over and over again to new and untrained agents. This is one reason why many loss mitigators don't answer their phones! On the 7 Dqys to Success with Short Sales Toolkit CD, we have provided you with a list of numerous bank contacts. As you begin processing short sales, you will add the contact information of your favorite loss


7 Days to Success with Short Sales

mitigators to this list. As time goes by, you will learn that you can sometimes go through the "side door" when you have a new short sale file. For example, you can easily contact a loss mitigator you recently worked with on a file and ask if you can fax the complete package directly to them and have them walk it over to the setup team. This can be very helpful when you have a short timeline and the foreclosure sale date is in the near future. This side-door strategy is particularly effective at smaller banks, but my team and I have even used this approach at the largest ones. By the same token, if a file is taking too long to get through the setup process, I sometimes contact a loss mitigator or supervisor I've worked with in the past and have them look into the situation.

As you are building rapport with the loss mitigator, you want them to understand that you-with your knowledge and expetience--are going to make their life much, much easier. Your goal is to let them know that you are different and that working with you will be a smooth and easy process. You want the loss mitigator to enjoy working your file and to work it as quickly and efficiently as possible. Building that relationship is key. In fact, just this one technique can save you wee'ks in the process! And, the more time you can save, the more money YOllcan maketaking more listings and closing more deals.

Before the file goes to a loss mitigator, you will want to call the department 2 times per week (every 2 to 3 days) to find out if the file has been assigned. Once it is assigned, however, you will want to back off your calling schedule to once per week. This schedule shows your eagerness, but also your respect for the hardworking loss mitigator and their efforts.

Day 6: Processing the Short Sale


Sample Script: Initial Call to Loss Mitigator

As you will notice in the following sample scripts, it is important to reverify some of the information you received from the setup agent. The setup agent could have missed something in the flle that the loss mitigator has now found. For this reason, it is best practice to repeat some of the key questions asked earlier.

C~~~i~j) Loss Mit: "Hello, this is Jack Smalls speaking."

Knolly: "Hello, Jack, this is Knolly Williams. I'm a short sale specialist and listing agent with the Knolly Team in Austin, Texas." Loss Mit: "Hi." Knolly: "Jack, I'm calling for a status update on a file you're working. I do have authorization to discuss the account." Loss Mit: "Okay Knolly. What's the loan number?" Knolly: "The loan number is 2348879874." Loss Mit: "Okay ... hmm ... Can you hold a second?" Knolly: "No problem." Loss Mit: "Alright, I see here that your authorization is on file, Knolly. Can you verify the last 4 digits of the primary borrower's social security number, please?" Knolly: "Yes, it's 3868." Loss Mit: "What can I help you with?" Knolly: "Can you please verify that you have a complete file?"


7 Days to Success with Short Sales

Loss Mit: "Yes, I do see that we have a complete file here. We don't need anything else at this time. " Knolly: "Is there a foreclosure date set on this property?" Loss Mit: "A sale date? Hold on ... Wait a minute here ... No, there is no foreclosure date set." Knolly: "Fantastic, Jack. That's good to hear. You know, Jack, you won't have anything to worry about with me. I'm a short sate specialist and my team has closed over 42 short sales so far this year. I only work with clients who quaUfy for a short sale, so you won't have to spend your vatuable time educating me on the process." Loss .Mit: "Wow, KnoUy. That sounds good, man." i(;noHy: ''Well, thanks again, Jack. Oh, by the way, have you already orde'~ed the BPO?'" loss Mit: "No, the BPO hasn't been ordered yet." Knotty: "Okay. Can you tell me when it will be ordered?" Loss Mit: "Uh, !let me see here. Well, I'll need to just review bhe fille one final time, andl'U probably order the SPO by the end of next week." KnoUy: "Okay, great! Do you already know who will be assigned to do the BPO?" Loss Mit: "No, not at this time." Knolly: "Oh, I see. Well, can you note that I will be the point of contact for the BPO agent?" Loss Mit: "Sure thing."

Day 6: Processing the Short Sale


Knolly: "Great. The BPO agent can call my office number at 512-448-4111 or my cell at 512-9999999. " Loss Mit: "Okay. I've got that noted here. Looks like that's alii need for now." Knolly: "Okay, thanks again, Jack. When should I call back for a status update?" Loss Mit: "I would say to try back in two weeks." Knolly: "Great. So I need to call back on October 18th then. Will do. Do you think you can have the file approved by then?" Loss Mit: "Well, [laugh] I really don't know for sure. I'll see what I can do!" Knolly: "Thanks, Jack. I know you've got so much on your plate right now, so I really appreciate you taking the time to speak with me. I'll call you back on October 18th. Shall I call you at 10 a.m. or is 2 p.m. better?" Loss Mit: "Uh, well ... I'm here all day. Just call me at 2 p.m. That's better for me." Knolly: "Okay, Jack, thanks again. One more favor ... Can you please update the notes in the file to show that I called inquiring about the status of the file today, and that I will call again on October 18th to see how the BPO turned out?" Loss Mit: "No problem. Will do." Knolly: "Thanks so much, Jack. I will be updating my notes as well. You've been super helpful. Talk to you then!"


7 Days to Success with Short Sales

Sample Script: Initial Voicemail Message for Loss Mitigator

If you cannot reach the assigned loss mitigator on the phone, just leave a message stating your questions and your contact information.

Script! . "Hello Jack, this is Knolly Williams. I'm a short . sale specialist and listing agent with The Knolly Team in Austin, Texas. I'm calling for a status update on a file you're working. I do have authorization to discuss the account. The loan number is 2348879874 and the last 4 digits of the social are 3868.
Jack,1 just need to verify that you have a complete file. Also I want to make sure that there is no foreClosure date set on the property.

:t'm a short sate specialist, and I only work with dients who quailify for a short sale, so you won't have to spend your vatuable time educating me on the process.
I aliso want to see if you've already ordered the SPO on this one. I'U be the point of contact for the BPO agent. Anyway, can ),Iou please ca'll me at 512-448-4111 or ca'lt my cell at 512-999-9999. I won't take much of your time. You can also email me at knol' Thanks again Jack. I know you've got so much on your plate right now, so I really appreciate your taking the time to speak with me. I look forward to hearing from you!"

Day 6: Processing the Short Sale


An praisal or BPO Is Ordered

In the next step in the process, the lender orders an appraisal or a Broker's Price Opinion (BPO) of the property to inform them of the property's current market value. This is the beginning of the lender's due diligence phase. The lender will use their own appraisal/BPO report to establish what the home is worth, so they can decide if the offer submitted is acceptable.

The Short Sale Process

Follow Up Relentlessly
Gather Info for the Package List& Market the Property
. Order AppraIsal Youare here!

Negotiate & Counter


7 Days to Success with Short Sales

Some lenders will order a BPO and others will order an appraisal. As a rule of thumb, when lenders are processing a conventional loan, they will typically order a BPO, and when they are processing an FHA or VA loan, they are required to order a full appraisal. A BPO is more akin to a comparative market analysis (CMA), although it's a bit more expanded. A BPO will typically be 1 to 4 pages in length (including photos, etc.), while an appraisal can be 20 or more pages. The purpose of both documents is to arrive at a market value of the property.



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"wheV\. the LeVl-oiev ovders (lVl- (l"FP~'(lLs(lt ov -g,PO, (jov~ shouLoi taRe thLs as (l vev(j goool SGgVl-.IV'~ fact, (It tViLs 1poLVl-t,1 LLk:,e to sa(j thVlt (joVi. l1(lve vec6veol (lVl- 'Vi.Vl-s1p0f.?,eJl\, sl10vt sVlL:en-pprovaV5sseVl-hnLL(j.' the hVlVl-f.?, Ss S(l(jlVl-g tViVlt the(j have evev(jthLVl-g the(j Vl-eeol fvow.. (jovl, VlVl-d thel::j have deci.deDi to w..we fOVvviiVd wLth tVie short sViLe. TlrIe(j vl(lve yevtewed the ?Vlck(lge VlVl.-d detev.w..LVl.-td tViVIt !jouv seLLey qVi.(lLLfLes fov tVie shorr sViLe ?vogriiw..."


Working with Appraisers or BPO Agents

Be the Point of Contact
When the lender orders an appraisal or BPO, they will typically ask you who the point of contact will be. In other words, "Who should the BPO agent or appraiser contact for access to the property?" You want to be the point of contact. This will ensw:e that the BPO agent or appraiser contacts you prior to physically going to the property to perform the valuation. As you noticed in the call scripts, it is important that you give the loss mitigator your contact information and let them know you are the point of contact for the appraiser or the agent doing the BPO.

Day 6: Processing the Short Sale


Do Your Best to Ensure a Correct Appraisal

Appraisers and BPO agents may appraise the home incorrectly for one of the following reasons: The BPO agent may only do an exterior BPO. While the home may have good curb appeal, it may be a wreck on the inside, or it may be very dated. If the appraiser or agent does not take into account the interior condition of the home, the property valuation will be skewed. The appraiser or BPO agent may not be familiar with the area. A high valuation may be rendered simply due to the agent's lack of experience with the area, part of town, subdivision, or current market conditions affecting the

The appraiser or BPO agent may be using the wrong comps. When there are several comparable properties to choose from, it is imperative that the appraiser or BPO agent select the right ones as comparables. For example, some subdivisions have sections that are valued higher than others, and this may be overlooked when the appraiser or agent pulls their comps. Or, an overvaluation may result if the report considers properties that took longer than 60 days to sell (as discussed in Day 3). In addition, the appraisal or BPO may be assessed using comparable properties that were completely remodeled, updated, or in far better resale condition than your listing. And, considering the fact that BPO agents typically make around $50 for doing a BPO, the faster they can get it done the better. Sometimes, they will delegate the task of performing BPOs to an agent with less experience.


7 Days to Success with Short Sales

The BPO agent may have the wrong ulterior motives. Most agents are honest, and I don't see this scenario happening very often. However, when a property

forecloses, it typically becomes a bank's REO (real estate owned) property. This means that if the property does go into foreclosure, the BPO agent or someone from their company or team has the potential of getting the property as an REO listing to sell on the bank's behalf. A BPO agent may use higher priced comps in order to prevent the short sale from getting approved so that they can get the foreclosure listing later. For these reasons it is imp=tive iliat you get your information into the hands of the BPO agent or appraiser before they go out and do their valuation! If they do not cont"ct you first, they will not be afforded the insight that your infolTIlation can bring, and you may find yourself with an overpriced approved short sale that no one will buy.

Share Your Analysis with the Appraiser or BPO Agent

When I am contacted by the appraiser (or BPO agent) who will be doing the appraisal, I 'will !lSU~y give them a politeearfuJ:! I ask the appraiser for their fax number or email address, and I send them the following: III The hardship letter My own comparative market analysis (CMA) The first page of the oontract, which shows the sale price A list of repairs needed and a repair estimate (optional)

This information helps them know what I am thinking-my starting position. And this lets them know iliat I am on top of my game, and I know how this property should be valued. My other objective is to get to know the appraiser/BPO agent-but stay at arm's length. I want them to be educated about how I arrived at my CMA numbers, but I do not want to appear that I am trying to coerce

Day 6: Processing the Short Sale


them or tamper with the process. I want to stay close enough, however, to assist and to facilitate the process whenever possible.

Sample Script to Use with Appraiser or BPO Agent


: BPO Agent: "Hello, Knolly, this is Pauleen with Homelite Realty. I've been asked to do a BPO for your listing over on Sagebrush." Knolly: "Hey, Pauleen. That sounds great!" BPO Agent: "Well, Knolly, I need to get into the property. Is it still on lockbox?" Knolly: "Yes, it's still on lockbox, and it's vacant. When are you going out to do the BPO?" BPO Agent: "Uh, I'll probably get out there sometime tomorrow afternoon or so." Knolly: "Great! When do you need to turn in the BPO?" BPO Agent: "They gave me five days to do it. I'll have it back there by Wednesday of next week." Knolly: "That sounds awesome, Pauleen. That property is a very interesting. My office has sold several properties in that subdivision. I need to send you a few pages of information about the property that you may find helpful. Can I fax that to you or do you prefer me to email it?" BPO Agent: "Oh, well, just email it to me. My email " Knolly: "I sure will. What's your phone number, Pauleen?"


7 Days to Success with Short Sales

BPO Agent: "It's 512-977-9922."

Knolly: "Thanks again, Pauleen. I promise I won't call you since I know how busy you are. I'll just keep it here in the file, just in case."
BPO Agent: "No problem, Knolly!"

Knolly: "Okay, Pauleen! I appreciate you."


Day 6: Processing the Short Sale


The Lender's Decision: Three Possible Outcomes

Once the property valuation is completed, the appraiser/BPO agent will tum the report in to the bank. The loss mitigator on the case will typically have 7 to 10 days to review the report and compare it to the purchase offer you have in your package. When they have reached a decision, it will be one of three possible outcomes: 1. 2. 3. Decline Counter and Negotiate Accept and Approve

Let me offer a word of clarification before we move forward. At this point in the process, the focus is on the buyer's offer and on the house value, as determined by the bank's BPO. The short sale proposal has, for the most part, been "approved" at this point. So, if the deal is declined or negotiated, it will be because the structure of the purchase is unacceptable or undoable in someway. If the offer is accepted, you can celebrate because this is the final approval you need to close this deal!

1. Decline
Let's first talk about Decline as an outcome, since this is the least likely scenario you will experience. A straight "decline" is rare. Typically, the file will be tossed back to you with a counteroffer.

Unacceptable Price
The lender may decline the short sale contract due to an unacceptable price. About 15% of the time, the lender will simply decline the deal and not present a counteroffer. Furthermore, they may not even let you know how the BPO came in-that is, they won't let you know what


7 Days to Success with Short Sales

value their agent or appraiser gave to the property. This is a tough situation. One of the larger lenders in the nation starting following this practice not long ago. Now, when they decline an offer based on price, they won't give you advice on how to counter. Typically, they just simply say, "Have your buyer submit a revised offer." When you inquire, they will not disclose to you the price that they want. They may, however, let you guess at their price requirements! In a couple of cases, I have felt like that I was playing the classic "High Low Clock Game" on the Price Is Right television show!

KnoUy: "WHit you accept an offer of $300,000 to $310,000?"

Loss Mit: "Not likely. "

Knolly: "Will you accept an offer of $310,000 to

Loss Mit: "il don't think so. "
Knotty: "WiU you accept an offer of $320,000 to $330,000?"

Loss Mit: "Probably so."

You will recall that I have a fondness for FHA and VA loans because they follow rules. For these loans, lenders will always order a fuJI appraisal (not a BPO), and they are required to give the homeowner (or you as their listing agent) a copy of the appraisal if you ask for it. FHA and VA lenders are looking for a minimum of 88% of the appraised value of the property. That's a rule. You can count on it. And they are required to tell you the minimum amount they will accept on an offer. (See the section is this chapter titled "The Approval Process for FHA Short Sales" for more information.)

Day 6: Processing the Short Sale


Lenders SetvlC1ng conventional loans don't follow these same rules. They may be looking for 88% of the appraisal, or maybe 92% of the appraisal, or maybe 90%. It's a guessing game each time. And when a conventional lender gives you no insight into the results of their BFO, you are at an even further disadvantage. If the contract is declined and you know with certainty that the offer is priced right at market value, you will need to dispute the appraisal or BFO (see discussion below).

2. Counter and Negotiate

A straight Decline is rare and a straight Approval is rare. The more common practice is for lenders to negotiate the terms of the contract via counteroffers until both parties are in agreement.

BPO/Appraisalls Too High

If the lender makes a counteroffer based on an appraisal or BFO that is too high, you have a problem. Getting the right value on the property is absolutely critical. Many short sales die because the valuation comes in too high. In these cases, the lender is essentially asking for more than the home is worth. This could force you into a situation where you have an approved short sale, but no willing buyer. When this happens, you will need to write a formal letter of dispute, challenging the high appraisal or BFO.


7 Days to Success with Short Sales


"Consider it SOL~.;3 Office: (512,,) 206-0Q60 Fax: (512) 5~.062~ www.Knoll... comknollu6)


January 23, 2009



Attn.:JU.sthi M)'19 r$
Fax;: 666-675-8471
RE: Address:

1825 -King Fish, Round Rock, Texas 786E4

Dear Jl,lstin.
J hal/e

'neen ma~ketil'l,g ,Has propem for 'Some timewitb '(j list .pric.e: of $134,000. ~he present crffer ls the BEST oJ;te we l:ial'B received.. Your m~ssag-e me!1licned that I'he bank would ~kB n-o ~es$ than $140;000, UnfortI.ll'l3t,etY,1he appraisal'came in too HIGH


am oertain that the agent who dicllhe 8Pa ;knuws his business weI!, -and it is not my lntemtion to cMlerl,gB him. I :feel, :hOlll<ever, that 'Something mtlSt'have ibe.en ove!'lookedl.

As 'Or.le of the top 10 RlEALTORS fuAugtln .(oot of almost 9;500 agents). Ili81 and se~-ne.,.r~ 1m homes per rear. Pait M mil abrrt:y to sell these- Iwme.s, $ my salel's wiUingness to pricr; their homes >fflihin what the maJ'ketwi~ 'be;ar. Please. see 'nIy Market Analysis attachC!'tL

The C'r..Irl'lmt market lfaiUB ofthis'home)S' -$133;900 - $135,000.

me ;buyer has counterea Willl {heir1l.est and final offer)rru {If'$135,DOO,


Kn-oll)' l,'{,jiiiams, HEALTOR

F otmalletter of dispute

Keep in mind that the lender may counter even though they will accept less. This is old fashioned negotiating. If the buyer counters the lender's counter, take the new amount back to the lender. You may have to go back and forth until an agreement is reached.


Day 6: Processing the Short Sale


Note that if the lender counters with an amount that the buyer is still not willing or able to pay, and you can't get either side to budge, don't despair! You still have an approved short sale. Put the property back on the market, find an agreeable buyer, and get it closed!

Promissory Note Is Required

Some lenders will absolutely refuse to do a short sale without some kind of financial contribution from the seller. I recently had a transaction where the second lien was owed $32,000. This second lien holder refused to grant the short sale without my client agreeing to a promissory note of $9,600 (i.e., 30%). The terms of the note were to be five years (60 months) at 0% interest, for a monthly payment of roughly $160 per month. I explained to the lender that my client had no future income prospects and that he could not agree to the promissory note. This halted the sale, so we negotiated back and forth. Mter weeks of wrangling, the lender finally agreed to accept $1,600 (i.e., 5%) with monthly payments of $26.67 per month! The loss mitigator made it crystal clear that if the sellers did not agree to these final offer terms, they would foreclose on the home---period. Needless to say, the sellers agreed and we sold the home. It has been my experience that lenders will request a seller contribution---a nominal cash amount at closing or a promissory note-in about one out of every four deals, so be prepared for it. Here are options for you to pursue: Your fitst response is to just tell the truth-your client has no money and cannot agree to a promissory note. If that doesn't work, negotiate the note down. Negotiate the terms to the lowest amount you can (5% to 10% of the lien amount), paid over the longest term (5 years) with a 0% interest rate.

At times, your seller may not understand that the promissory note is the best option they have and the only way that the short sale will go through. Signing a promissory for a percentage of the lien amount (paid


7 Days to Success with Short Sales

over time) is certainly better rban facing foreclosure, wbich will result in long term damage to rbeir credit and may result in a judgment against rbem for rbe resulting deficiency balance. Your client should keep in mind rbat even if rbey agree to a 10% promissory note, for example, rbey will still be forgiven 90% of rbe note through rbe short sale settlement! That's really good. In cases where rbe lender requires a promissory note, rbe seller will not be able to sell rbe property wirbout it. It is imperative that rbe lender remove rbeir lien from rbe home in order for rbe seller to sell.

Samp:le Script: What NOT to Say to Your Client Regarding a Promissory Mote

c~~~;tj) ~~::~.~~!, Wayne, I've got some bad news from

Client: "Oh no. What are they doing now?" Agent: "Weill, they want you to sign a promissory note'!" Client: "A promissory note? Wi'lat's that?" Agent: "Welt, they won't agree to forgive the total amount'! They want you to sign a note agreeing to pay $2,000!" Olient: "What?! Man, forget them. They can just take back the house! 1'[,[ let it foreclose!" Agent: "Gosh, Wayne. I don't know why you're bank is being so stubborn!" Client: "I'm tired of this whole process! I think we're just going to walk away!"
Tbis is rbe WRONG, WRONG, WRONG approach-yet, tbis is rbe approach I see agents take all of rbe time!

Day 6: Processing the Short Sale


Sample Script: What You SHOULD Say to Your Client Regarding a Promissory Note
Here's a sample script for the kind of conversation I have with a client regarding a promissory note. This is the RIGHT way to approach the

(SCriP~) Knolly: "Hi, Jo~n, I've got some really good news


from the bank. Client: "Good! Let's have it!"


Knolly: "Well, John, as you know, you owe about $40,000 on your second lien. The good news is the bank agreed to forgive 80% of it! So they're willing to wipe out $32,000." Client: "Okay." Knolly: "John, that's still exciting news because they are willing to forgive most of what you owe. But since I didn't think 80% was acceptable, I kept negotiating with them. In fact, it's taken me over a week, but I've finally gotten them to forgive 95%! That means they are forgiving $38,000 of the $40,000!" Client: "Well, that's more like it! Thanks, Knolly! So, who's going to pay the $2,000?" Knolly: "Well, John, your bank wants you to pay it. But hold on! I've got some good news about that too. I know you don't have that kind of money, so I did a lot more negotiating and the bank has agreed to let you pay it AFTER we close on the house. AND they'll give you 5 years to pay it at 0% interest. Gosh, John, that's a heck of a deal. That's only $34 per month to save you from foreclosure. "


7 Days to Success with Short Sales

Client: "Well, that sounds pretty good, Knolly! Thanks, man. I appreciate what you've done." Knolly: "You're welcome, John!" Client: "But, Knolly... What happens if I decide I don't want to do a promissory note?" Knolly: "Well, John, I've thought about that too. And the ball is in your court. But if you decide not to sell your home and dedde to let it go into foreclosure then you will have a foreclosure on your credit report for the next decade. That can really tank your credit. Did you know, John, that many employers now pull a copy of your credit report when you apply for a job, and many require you to disclosure if you've ever had a foreclosure?" Client: "Oh yeah? Hmmm." Knolty:"And John, if the lender comes after you legally and wins a judgment against you, you couLd be liable for the entire amount plus any resulting legal fees. If you decide to go the foreclosure route, you wiU definitely want to discuss this with al1 attorney to get you some good tegal advice on how your lender may pursue you after the foreclosure. " Client: "Yeah, I guess you're right." KnoUy: And, you know, John, your legal fees to an attorney could likely be higher than the amount of the promissory note! And the attorney won't give you 5 years to pay! My advice is to take what you can get and move on. Let's close on the home so you can get this nightmare behind you." Client: "You know what, Knolly? You're right. Let's do it!"

Day 6: Processing the Short Sale


This Promissory Note is made on September 10, 2008. For Value received, and intending to be legally bound, the undersigned individual(s) (the "Obligor(s)") promise(s) to pay to the Litton Loan Servicing LP, its successors and/or assigns (the "Obligee"), the principal sum of (U.S. $2656.80), Two thousand six hundred fifty six and eighty cents, plus interest at an annual rate of the lesser of 00.0 % or the highest rate permitted by law, payable in equal monthly installments of (U.S. $22.14). The first installment is due upon signing of this note, and subsequent payments are due on the first day of each month, commencing on December 1, 2009, and continuing until the principal sum outstanding and any late charges or other amounts due and owing under this Note are paid in full. Obligor will make monthly installments payable to Dyck-O'Neal, Inc. and deliver them to: Dyck O'Neal, Inc. , P. O. Box 13370, Arlington, Texas 76094 or to such other servicer or such other address as Aron Valderama may hereafter designate in writing to Litton Lon Servicing (Dyck O'Neal, Inc.). Obligor may prepay the unpaid indebtedness hereof at any time in whole or in part without prepayment charge or premium. Obligee will apply partial prepayments to the principal; partial prepayments will not affect the amount or due date of monthly installments, except that the final payment date will occur earlier and the final installment may be smaller than scheduled. Failure of the Obligor to pay any installment on or before the first day of the month in which it is due, Obligor agrees to pay a late fee on such installment in the amount often percent (10%) of the regular payment, to the extent not prohibited by applicable law. Installment payments will be applied first to the longest outstanding installment. In the event the Obligor fails to make payment of any installment due hereunder by the thirtieth day of any month, the entire unpaid balance of this note plus any unpaid late fees and other sums due hereunder shall at the option of the obligee become due and payable immediately. The Obligee may exercise this option to accelerate regardless of any prior forbearance, and shall not by any act of omission or commission be deemed to have waived any of its rights or remedies hereunder unless such waiver be in writing and signed by Obligee.

Sample Promissory Note (page 1)


7 Days to Success with Short Sales

The Obligor consents to the Obligee commencing action on this Note at any time after acceleration in the State of Texas, and the Obligor expressly agrees to be bound by the jurisdiction of the appropriate court in the State. In the event the Obligee takes action to collect any sums owing hereunder, the Obligee may also recover from the Obligor all costs of such action, including costs of suit and other expenses in connection therewith, including a reasonable attorney fee for collection, to the extent not prohibited by applicable law. The Obligor hereby waives presentment for payment, protest, demand and notice of nonpayment and agrees that, without affecting ObUgor's liability, the ObUgee may, without notice, renew or extend the time for payment, or accept partiail payments.

This Note shall be the joint and several obl,igations of all makers, sureties, guarantors and 'endorsers and shaU be biinding on them and ti1eir successors and assigns. Any notice to Obligor sihall be given by maUing such notice by certified mail addressed to Obligor at the address staled bellow or to sudm other address as Obligor may designate by written no~ice 10 the address 10 which payments are made. Obligor shC1lilgive such notice within 30 days of any change of address. the even! anyone or more of the provis,ions conlainedin th,is Note shaH for any reason be held invalid, illegal or unenforoeable in any respect, such invalidity, iillegallity orunenforceability shal'l be conslrued as if such ,invalid, mega! or unenfOfceable provision{s) had never been contained herein. This Note and thecibligations of the undersigned shaU be governed by the laws oHme State. Obligor: John Ramsey (Signature)


Sample Promissory Note (page 2)

Day 6: Proces5ingthe Short Sale


HOA Dues Are in Arrears (or a Lien Exists)

It is not uncommon to have a client with a large past-due HOA bill. And as we have discussed, most lenders frown on paying delinquent HOA dues, so you will need to strongly negotiate for the lender to pay them. Or, you will have to work with the seller to find creative ways to try to remove this barrier to the short sale deal.

Final HUD-1 Does Not Match Preliminary

Lenders will request a final HUD-l Settlement Statement when they are ready to approve the file, but if the final HUD-l does not match the preliminary, estimated HUD-l, they may reject the deal. Also, if the HUD-l comes back showing net proceeds to the lender that are less than the amount previously estimated, then you will need to explain this to the lender in detail. Often a discrepancy is due to the file being approved many months after the original proposed closing date, which means you may have several months in additional tax proration, resulting in a lower net amount to the lender. We will discuss more about this in "Day 7: Closing the Transaction and Getting Paid." You must stay on top of the details of the HUD-l throughout the short sale process.

Have a knowledgeable settlement agent prepare the HUD-l for you. Scrutinize all line items. Be conservative in your tax proration. Check the close date on the documentation-as it will likely change.


7 Days to Success with Short Sales

IRS Tax Lien or Other Liens Exist

A short sale deal cannot go through if IRS tax liens or other liens exist against your client's property. As we discussed earlier (Day 4), it is imperative for you to run a tide search at the beginning of the process and review it thoroughly (or better yet, have an expert do so). This tide search will reveal all liens against the property. IRS tax liens (that include a lien against the property) can be removed, you just need to follow the request process.

PMI Company ~Is S'lowing Things Down

In the event that a loan has Private Mortgage Insurance (PMI), the PMI company will have to review the short sale file after the lender has given it theli okay. PMI companies provide insurance on loans in the event of default-thereby minimizing the exposure and losses incurred by the lien holder. Because t!he PMI company will take the hit, they also have to sign off and give their '"pprova} of the transaction. Since the lender has already reviewed the file, this is mme of a formality, and the PMI company will almost always agree to move forward with the short sale, as they realize that this will mitigate their losses. In some cases, they may request additional information, and they may also slow down the processing of the file while they are reviewing it. IT the file is "stuck" with the PMI company, you can request to escalate the file to a supervisor at the PMI company, but you will rarely be able to speak clirecdy with someone at the PMI company.

Foreclosure Has Not Been Postponed

As part of your system, you should ask both the lender's setup team and the assigned loss mitigator about the property's foreclosure date. And you should check repeatedly for updates to this status.

Day 6: Processing the Short Sale


Also remember that even if the foreclosure date has been postponed, it has not been stopped. In other words, the date is still on for some time in the future. Make sure you know the date and set a reminder on your calendat to readdress the issue as the date approaches.

First Lien Is Not Short

The proposed short sale deal could be rejected by the first lien holder because the first lien, in actuality, is not short. In other words, the debt on the first lien will be satisfied completely by the sale. This is an error on your part for not checking the payoff atnounts earlier. By this point in the process, you should be awate of the status of both loans, if your client has two mortgage loans. I consider this a rookie error, and yet I know that experienced short sale agents and teatns continue to make this mistake--patticularly as they start handling more and more short sale deals. It's easy to overlook in the details. If there is a second lien, you will immediately tum your attention and your negotiations to this lender. And you will continue to work the short sale with them-and with the funds that will remain after the first lien has been satisfied.

3. Accept and Approve

Lender Approval Letter
Once the bank is presented with an agreeable contract, they will issue an official approval letter. Congratulations ate in order! You have accomplished your objective. The seller can now sell the house. The bank will get their maximum return, and you will get paid. Now that's a win-win! The loss mitigator has a certain number of days-S days for an FHA loan and 5 to 10 days for a VA or conventional loan-to prepate the approval letter. To a standatd template, they will add the specific criteria for your short sale. The letter will typically contain the contract sales


7 Days to Success with Short Sales

price, the minimum net proceeds payable to the lender, and the terms of the short sale agreement. Most banks will forgive all or a large portion remaining balance on the mortgage loan. Others will require that the homeowner remain liable for the amount forgiven, and some will even want a promissory note for a portion of the debt forgiven, as we have discussed.
First Franklin
P.o. Box

Loan Se-~-ices



RB: 'Loan


Property Address
Dear Loan CUstomer ~

This l'e'tter details' t.he 'terms of the conditio..'"' a:-pp:r:ovcd' by ou:r ,company o.f a short pay-oU on the a!bove referenced loan. Please note this is NOT FINAL the berms of thi.s approval have :been and we 'receive al~ the ll".ateriaJ.s required. The of approv~. are:

Sal.e Ptic'e:
Certified Pay-of Punds no less than:



Transaction must close on




We must receive ,the funds :by 2 pm ET.: The real eStat,e commission must be
Seller{s) mus't

more than




procee.ds from the saJ.e.


Final closing' figures must be fa:xed to us' 48 hours prior to the closing.


Seller(s) ~ write a letter requesting that'al~ rema~g escrow funds {if applicable) be applied to the indebtedness. 'this includes any tax and/or insurance refunds.

Please see the second page for materials that ~~st be,provided after closing along with mailing and wiring information"

Sample Short Sale Approval Letter (page 1)

Day 6: Processing the Short Sale


The following materials MUST be provided immedia't.ely after the closing:


A certified eheck for $356,170.95 representing the pay-off a..-:tount. If funds are sent hy wire, prov,ide the Fed :refex-enae nUIllber for
confirmation. of closing. Wire transfers must be received witliin 24 hours


A copy of the final signed J..1JO-~" If the final signed mJD-l . is not available. a true and certified copy of tbe unsigned,

final HOD-l.

-:t;>e provid.ed..

We also request that you send'the fOllo~g: ~ Copy of signed Buyer{s} ana Seller(s) Closing Statement(s), if



:n.ishursement worksheet., and Copies ,of all'checks issued.


Forward ALL required items to the mailing address listed below:

Loan Services
ATTN: LOSS Mitigation, 24-220 150 Allegheny Center Mall PittsbuxSh, PA 15212 O~ FAX TO: J:f wiring pay-off funds, please 724-49S-0qS3

Bank: ABA: Acct:

Bar.k of America

~e the following info:mation:

Home ,Loan, Services, !nco

Mortgag~..~:" . LoanN~~r:~

upon satisfaction of the .required terms, inclu.4in9', but not limited to, the receipt of the proceeds and all required material, the appropriate documents will be sent to release the lien. If you have
any questions, I am. available to assist you at aOO-522~5035, ext. 11'730. betlleen S am and,S pm, Eastern Time, Monday through Friday.

I /~:"'::.rv" ~.-......ihci


Loss Mitigation

You should consider this letter as coming'from a debt collector' as we sometimes actas a debt collector .. Any inormation provided by you will be used to oollect this debt. However, if you a...""e in bankruptcy or have received a bankruntcy discharge for this debt, this letter is not an attempt to collect~the deDt, but notice of possible enforcement of our lien against the collateral property: LM902/SAM

Sample Short Sale Approval Letter (page 2)

Approved HUO-1 Settlement Statement

For conventional, FHA, and VA loans, there is one last step in the approval process: the lender must approve the final HUD-l statement. As we have mentioned, the preliminary HUD-l may be different from the final statement. Things can happen--other liens show up, taxes must be adjusted, closing dates change, and so forth. Typically, the lender will word the approval letter so that it says you must close by a


7 Days to Success with Short Sales

certain date. Lenders generally allow 21 to 30 days from the date of approval for the closing. Some allow 45 to 60 days.
In addition, with this final check, the lender wants to make sure other

line items have not been slipped in or changed-affecting their net proceeds. If the lender's net proceeds are less than the amount they approved, a revised approval letter must be received from the lender.

The Approval Process for FHA Short Sales

FHA short sales typically follow a three-step approval process and, in many ways, the approval steps are very similar to the process for conventional loans that we have been discussing-these short sales just require more paperwork and they follow a tighter set of rules. F.irst, the client (selle;:) must be approved into the short sale program. Second, the purchase contract will be .reviewed and either accepted or rejected. Third, the final HUD-l settlement statement from the title company or attorney must be reviewed and approved.

1. The dient(seUer) must be approved into the short sale program.

Before otdering an appraisal on the property, the loss mitigator will determine if your client meets the criteria for the short sale program. If your client is approved, the loss mitigator ",-ill complete and fax or email you an Appwval. to Participate Form HUD-90045. (Discussed on Day 2.) TIUs document indicates that your client is officially approved into the Pre-Foreclosure Sale (PFS) program and eligible to do a short sale unde;: HUD guidelines. YOut client must sign and you must return the Approval to Participate Form HUD-90045 within 7 days of the date you receive the form. TIUs document does not indicate whether or not the current offer/ contract will be approved.

Day 6: Processing the Short Sale


Among other things, the Approval to Participate Fonn HUD-90045 document spells out the following:


How much you can list the property for. This amount is the amount of the appraisal. Your deadline to obtain a signed contract. You will have 120 day (4 months) to obtain an acceptable contract. The minimum net proceeds HUD requires. The minimum net proceeds are 88%. For example, if a home is sold for $100,000, the minimum net proceeds will need to be $88,000, after all seller closing costs are paid (i.e., real estate agent commissions, property taxes, escrow and tide company fees). Mter the property has been on the market for 30 days, the minimum net proceeds acceptable is 86%. After the property has been on the market for 60 days, the minimum net proceeds acceptable is 84%.

By studying the HUD Mortgagee Letter 2008-43 and applying what you have learned in 7 Derys to Success with Short Safes, you should be able to get approval for all of your FHA short sale clients.

2. The purchase contract will be reviewed and either accepted or rejected.

Next, the file goes to the second checkpoint in the FHA short sale approval process. The loss mitigator processing the FHA short sale will review the purchase contract submitted to make sure that it complies with the ctiteria spelled out in the Approval to Participate fonn. The mitigator will then complete a Sales Contract Review Form HUD90051 and accept or reject the contract by checking the appropriate box at the bottom of the fonn. The loss mitigator only has 5 working days from the receipt of an executed contract to respond back with this fonn. It will typically be faxed or emailed to you. If the contract is rejected, the lender will list the reasons why, so that the contract can be resubmitted. But remember, by applying what you have learned in the 7 Derys to Success system you won't ever have purchase contracts that are rejected!


7 Days to Success with Short Sales

3. The final HUD-1 settlement statement from the title company or attorney must be reviewed and approved.
And lastly, the lender must approve the final HUD-l statement to ensure that no changes have been made that alter the terms originally proposed. This step is standard for all short sales, but on FHA short sales, the lender will require 48 hours to review and approve the final HUD-l statement prior to closing the transaction. This is strictly a formality. The approvalletrer may state, "final HUD-l must be sent to us within 48 hours prior to closing." As long as the final HUD-l matches the approved Sales Contract Review Form HUD-900S1 you will be fine. More information about this process is discussed in "Day 7: Oosing the Transaction and Getting Paid."


Day 6: Processing the Short Sale


Additional Tips for Your Success

Keep the Seller Informed
It is imperative that you keep the seller info=ed about what is happening during the entire short sale process. In our system, we do this by providing the seller with notes from our phone conversations with the loss mitigation setup department and the loss mitigator. Our client receives a weekly status update from us via email. We try not to call them with these updates as the seller typically wants to remain in the background. If you are not keeping the seller engaged throughout the process, it will become easy for your client to disconnect from the house and the transaction-particularly if they have already vacated the property. The more they distance themselves (because they are uninfo=ed and uninvolved), the harder it will be to keep them motivated through to closing. The worst thing I can imagine is to have a file completely approved and have the seller NOT perfo= (show up at closing) due to apathy.

Keep the Buyer's Agent Informed

In the same way, we provide the buyer'S agent with a weekly email update containing the notes from our conversations with the lender. We are careful not to send the buyer'S agent any sensitive or personal info=ation regarding the seller. Keeping the buyer's agent info=ed keeps you proactive, and this results in fewer buyer agent inquiry calls and emails, and less frustration for the buyer-since they will clearly be able to see that you are working the file.


7 Days to Success with Short Sales

Get on the Loss Mitigator's Good Side

Some folks make a sport of being discourteous to clerks who work in customer service. They call with rude and harsh tones and talk down to people. While most customer service representatives have to grin-andbear-it because "the customer is always right," they can retaliate in other ways. Loss mitigators are human beings who have feelings. Most of them don't seem to particularly love what they do, and that may be due in part to the way they ate treated. As I have already stated, it is essential that you are diplomatic, tactful, and couneous to the loss mitigators working your files, even if they do not reciprocate. Try your best to keep a level head at all times. If you ever do blow up, be quick to apologize. You .need to make sure that the [oss mitigiltor is on your side.

'MtJ t)'\-c,t hCls beel-'\- thClt the Level of ves-pec,t ClVcOi " m-p-povt tJ0H gaLl-'\- wttl-1 Cl Loss W.ttLgiltov wLL'l o!LvectLtJ LVvCpClC,t how qH~ddtJ tJ0HV ~Le Ls wVIA.-pLeteo!, how wstJ the :pvoc,ess wLL be, ... Cll-'\-o! the LLlzeLLhooo! thilt the fLLe wLLL be Cl!p-pvoveol! Do tJ0HV best to wLI-'\- the fClvov of the Loss VlA.LtLgCltor ClssLg\l\-toi to tJoHvfLLe lN


Day 6: Processing the Short Sale


Factor 1: How Quickly Your File Is Completed

Courteous Real Estate Agent: The file will be rotated to the top of the mitigator's stack. Discourteous Real Estate Agent: The file will it be rotated to the bottom of their stack.

Remember, the quicker you get your files approved, the more clients you will help, and the more money you will make.

Factor 2: The Ease of Working the File

Courteous Real Estate Agent: If something about the file is wrong or incomplete, the loss mitigator will coach you on what needs correcting so that they can quickly

stamp your file as Approved.

Discourteous Real Estate Agent: The mitigator will look for everything they can find that is wrong with your file, causing delays. They can nitpick the file with such scrutiny

that you will really wonder what hit you. For example, they may place your file on hold for missing initials on a page. This causes some agents to push back too hard, which digs them even further in the hole with the loss mitigator.

Factor 3: The Likelihood of Getting the File Approved

Courteous Real Estate Agent: The mitigator will look for ways they can get your file approved quickly. Loss mitigators are typically given parameters and variances that they can employ when approving files. They may be willing to use their more relaxed criteria so that your file can get

approved without delay.


7 Days to Success with Short Sales

Discourteous Real Estate Agent: The mitigator will look for ways they can get yow: file declined. If something

about yow: file is wrong, they can quickly decline (and close) the file and get rid of you. If a file is closed, you will have to resubmit the entire short sale package or appeal to a supervisor to have the file reopened. Either way, the mitigator will be happy that they are no longer dealing with you--as someone else will likely get the file the next time around. Use these tips to yow: advantage. Ensw:e that you do yow: best to get on and stay on the loss mitigator's good side throughout the process. You and this loss mitigator may meet again on a transaction down the road. rt'5 much better to have an ally on your side.



7 Days to Success with Short Sales

Welcome to Day 7
Welcome to the last day of our 7 Days to Success with Short Sales! We've covered quite a bit of ground, from first qualifying a prospect, to gathering the short sale package, to listing the property and taking offers, to submitting the package and working it through to approval!

Tlte Short Sale Process

You are here'!

In Day 7, we will cover the last remaining techniques and tips to help you reap the fruits of your labor. Let's close the short sale and get paid!

Day 7: Closing the Transaction and Getting Paid


The Closing Process

Once the file is completely approved, it can move forward to closing just like any traditional transaction. After the lender approves the short sale, the pressure will be on the buyer to close. While the buyer may have waited for weeks or in some cases months, now they may be the ones holding up the deal. It is important that you are as patient with the buyer's agent and the buyer as they were with you. However, the lender may only grant a 2- to 3-week period for the file to close, so the buyer must be ready to act quickly once the deal is approved.

The Title Company or Attorney's Role

In our system, we lean heavily on the title company to help facilitate a smooth closing. The title company we use is responsible for obtaining all closing documentation (instead of me or someone on my team). I have trained the escrow officers we use how to work directly with the lender's loss mitigators to obtain the final approval letter and all other necessary closing documentation. Besides passing on responsibility, this technique has another benefit. An escrow offer will carry much more weight or authority in the minds of loss mitigators. If an escrow officer calls, this signals to the loss mitigator that the deal is very close to closing and the bank is very close to getting their money. They will be more inclined to make things happen. I consider the escrow officer handling my file an integral part of my short sale team. That is why I only close with title companies, attorneys, and escrow officers who are willing to assist with the extra steps required to close a short sale transaction, with limited involvement from my team.


7 Days to Success with Short Sales

Once we have a short sale file approved, we basically allow the escrow company to take over. The escrow company contacts the loss mitigator and gets them anything they need (usually updated HUD-ls and contract amendments) in order to close the deal.

"OlAe hVvl-e, I hCII;:! 0 Short soLe ClgelAt OIAe! fYielAe! wLL VVle OIA the e-LosLlAg e!CltJ foy olAe of hLs LLstLlAgs. He WClS veytJ e!LstrtAught. He hoe!justrwLtzee! tVitAt tneLr wptJ of the LeIAe!ey's ApcpYOVClL LetterhClDi IAOt buVv ucpe!Cltee! wLtn tne fLV\-lL, 0ffLe-LClLe-LosLVv6 oIC1te. Tne htle C-DVVljJCllAlj'S htAlAe!s ') , were t"L-ee! bee-Cluse thetJ e-ouLe! Vvot Cle-t wLth out 0 IA CiCCHyClte '~ e!OCUVI>ttlAt. AlAcI VVltJ f",LelAe! hOld beelA tvtJLVv6 to yetAcVl tne .~ Loss VVlLtLgtAtor tALL c{Ci,'-1-wLth M LucR..!~




:~ ,,~~

.~ ~
I ~<~


Tne LessolA LeCiYlAee!,.noweve,r, Ls ti1C1t ljou VVlUst stCl(:j OV\. tocp of tALL Vvee-esstAYt;! fLvvaL oIocuVVle'lAtotLoVl 01' troLIA !::J0HY title offLcers to clO thLs foy !::J OH."


Necessary Documentation
Final HUO-1 Settlement Statement
Oftentimes, after a file is approved, there are things about the HUD-l that change. Remember that the lender has been working from an estimated HUD-l Settlement Statement. The final HUD-l may be slightly different from the one the short sale lender approved. Whenever there are changes that will delay the closing date or reduce the net proceeds to the lender, you will need to get a revised approval letter from the lender in order to close the transaction.

Day 7: Closing the Transaction and Getting Paid


The following are the three most common items that change on a HUD-1 after the file has been approved:


Net proceeds are reduced due to items on the settlement statement costing more than estimated

2. 3.

Net proceeds are reduced due to buyer's change in terms The closing date is delayed beyond the short sale approval date

Let's take a look at these and see how they can be avoided.

Proceeds Reduced Due to Taxes. Because short sales take a while to close, the final closing date can vary substantially from the originally projected closing date on the original contract. For example, the contract may state a closing date of May 31, but the file may not actually close until July 31. This means that there will be additional prorated taxes applied to the seller's side of the transaction. In states like Texas, where property taxes can be $500 to $1000 per month, this can dramatically skew the net proceeds to the lender. Proceeds Reduced Due to HOA Fees. Homeowner's association (BOA) fees can also catch people off guard. When an escrow officer completes the first estimated net sheet, they may not have an accurate figure for what is due to theHOA.
To avoid having to go back to the lender and get a revised approval on a file, I recommend that you estimate for worst case scenarios. Have the escrow officer draw up the settlement statement with a closing date that is 60 days beyond the contract date Gust to be safe). You can also pad the HOA fee and other fees you think may change. When our escrow officer prepares a HUD-1, we have her charge $1,000 or $1,500 to the HOA fees line


7 Days to Success with Short Sales

item, just in case. If the HOA dues come back as an amount due of $600, for example, then that's fine. The lender will never give you grief about getting more net proceeds than they requested. Proceeds Reduced Due to Change in Buyer's Terms. Sometimes buyers will change their terms midstream. For example, the buyer originally offered $180,000, but now they want to revise their offer to $175,000, or they want to roll in closing costs and so forth. When this happens, you will need to submit a revised HUD-l to the loss mitigator. Sometimes the buyer drops out of the deal altogether, and you are now working a new contract! TIus is covered in Day 5. When this happens and the net proceeds are reduced, you will need to get a revised HUD-l to the loss mitigatnL :111 Closing Date Is Changed or Delayed. Make sure the loss mitigator working your ille recei,"es a revised HUD-l as soon as you know the estimated HUD-l will change (preembly before the Ele is approved). For example, if the HUD-l in your file runs through September 15, and it's akeady September 1 and the file still hasn't been. approved, send a newly revised HUD 'with a closing of October 31 to the miJ:i"oator.

FHA Sates Contract Review (for FHA Loans)

We discussed the Sales Contract Review Form HUD-90051 in Day 6. This document pertains to FHA short sales only. If the amount being paid to the first lien holder on the HUD-l is the same or more than the amount in the Estimated Net Sale Proceeds column of the Sales Contract Review form, then you are good to go. The lender will require 48 hours to review the HUD prior to closing, but that's only a formality.

Day 7: Closing the Transaction and Getting Paid


If the net proceeds end up being less than the amount required on the Sales Contract Review form, then you will need to trace down the discrepancy. As we've already discussed, the culprit for the discrepancy is probably additional property taxes, HOA dues, and so forth. The loss mitigator should issue you a revised Sales Contract Review based on the new HUD-l, as long as the minimum net proceeds are at least 84-88% (see Day 6) and the additional fees are acceptable seller closing costs. You will need to submit the revised HUD-l along with a letter requesting a revised approval.

Final, Final Approval Letter

By following the techniques I've outlined for you in this section, you will greatly minimize your need to request revised approvals from the lender. However, the need may arise from time to time. The technique I have found most effective is to email and/or fax a formal request letter to the lender. Either you or your escrow officer can do this. In the request, you should outline the new terms requested (e.g., the revised closing date, or new net proceeds), and briefly explain why the terms have changed. Having to go back to a lender for a revised approval is time-consuming and it is never fun. But don't fret-lenders understand that this does happen, and they will typically oblige when you present the request properly. Communication is key.


7 Days to Success with Short Sales

Email From: To: Charles Subject: Request for Revised Approval Letter-Loan # 11287035 Charles.

Thanks again for your APPROVAL on this short sale file.

;1 have attached the 'REViISED HUD~. It shows proceeds to Bank of

Amenica in the amount of $163, 188.35. This is a slightly different amount from Ehe original HUD-1, because the original showed the taxes prorated thmugh Aug 11; however the closing dale is now Sap 24. The difference is

11'1 order to ctose this transaction, I will need a revised App:roval Letter
with net proceeds to 'Bank of America of $163, 188.35 and a closing date of September 24. Thanks so much for your assistance on thiis file, Chaties. Can you please

fax over an updated approval leiter so that we can close Ihis transaction?
Please do nol hesitate to conlact me or the escrow officer if you have any questions.

Humbly and respectfully submitted,

Knolly Williams Short Sale Listing Specialist Fax #: 800-555-2345

Sample Email Requesting Revised Armrov,al

Day 7: Closing the Transaction and Getting Paid


Closing Day
I highly recommend that you host a private closing-that is, the seller and the buyer will close separately. My primary reasoning for this is to protect the feelings of my client, the seller. In a short sale situation, the sellers are typically not happy about the sale of their home. At this point in their lives, they are experiencing some life change and hardship that has necessitated this sale. They usually do not even want to know the details of the settlement. They are relieved to be at the end of this process, but they are far from happy about the overall situation. On the other hand, this is a special day for the new homebuyers. They are delighted to have purchased the home at a good price and are excited to take possession of the home today. Two very different sets of emotions. Closing the transaction with the buyer and seller in the same room can only be described as extremely awkward and embarrassing for everyone. Years ago when I used to close both parties together, 1'd have the seller on the verge of crying, while the buyer was telling everyone what he planned to do with the kitchen and cheerfully asking about where the seller was moving, and so forth. Back then, I made a decision to never close the buyer and seller together.

Should You Attend the Closing?

This is a very interesting question. I think the answer will be different for different people. Personally, I stopped attending short sale closings years ago. And consider the time I am saving! It takes approximately 30 minutes to drive to the title company; 30 minutes to close; and 30 minutes to drive back to my office. Add another 30 minutes for incidentals. That means at least 2 hours per closing. Multiple that by 100 closings and that's 200 hours per year-almost 5 weeks spent in a closing room! Some of you will think you absolutely have to attend the closing, and I can understand that. I thought the exact same way years ago. "What will my client think of me if I don't attend?" Then I developed a technique


7 Days to Success with Short Sales

that has helped me immensely. I have my clients do what I call a preclose. I explain to them that for their privacy and convenience, I won't be attending the closing.

Sample Script: Explaining the Pre-Close


Knolly: "Hi, Jane. Wow! I am so excited that we were able to get your file approved so you can close on your home and move on with your life." Client: "Thanks, Knolly, me, too." Knolly: "Jane,1 know this is a very difficult time. 1 have found from experience that ... for my short sale clients ... dosing on their home is not a particu1larly fun experience. ~lthough you're eager to move on, what you're going through stilt hurts. " Client: "Welt ... 1 never thought things would tum out this way for me. " Knolly.: "I understand that, Jane. I'm praying for you." Client: "I appreciate that." Knolly: "Listen, Jane, as a courtesy to my cUents, and to protect your privacy during this difficult time, I provide what I caU a private pre-close. May I explain?" Client: "Sure, what's that?" Knolly: "Well, Jane, typically when a home closes, both the buyer and the seller are in the room together signing papers. 1 have found that this can be very awkward. Since this is a short sale, we really don't need the buyers to know any of your personal details. Also, most of my short sale clients want to get in and get out."

Day 7: Closing the Transaction and Getting Paid


Client: "Yeah .. .1 understand." Knolly: "Well, Jane, it's up to you, but I've discussed it with the title company, and they have agreed to allow you to do a private pre-closing. This should only take about 15 minutes for you to zip in, sign the papers, and get on with your life. The buyers will come at a separate time. If you decide instead to close alongside the buyers, the closing could take an hour or more and it won't be private. Which do you prefer?" Client: "Well, I'd prefer the private closing." Knolly: "I agree, Jane. That's what I recommend. I'll let the title company know, and they'll arrange a time. Unfortunately, I won't be able to attend your private pre-closing, but the title company will have all of the instructions they need from my office and from your lender." Client: "Oh, that's no problem, Knolly." Knolly: "Okay, then. I'll let Stacey at the title company know you want to do a private close, and she'll get it scheduled. I wish you the best, Jane. I know life will get better for you once this monkey is off your back." Client: "Well, thanks again, Knolly. I appreciate all your help."
So, you may ask, what about making a last impression at closing? Doesn't that help lead to more referrals? Well, yes, it does. But keep in mind that because you have been keeping in constant contact with your client, they know that you worked very hard on their behalf. They will remember you! But if you really want to go the extra mile, you can try a technique that my escrow officer taught me. Purchase a gift certificate to a great restaurant and write a handwritren thank you note to your client. Your


7 Days to Success with Short Sales

escrow officer will present the envelope to yow: client at closing. This will more than make up for yow: absence!

Sample Script for Escrow Officer to Use at Closing


Escrow Officer: "Thanks so much for coming in today and signing, Jane." Client: "No problem. I'm just glad to get this over with ... " Escmw Officer: "I understand, Jane. KnoLly wanted me to do this private pre-dosing especiaUy for you. He's not here because he respects your privacy at this difficullt time. " Client: "I understand." Escrow Officeir: ":K:noUy dropped this off [present envelope] and asked me to give it to you personally. He knows how difficult this is for you, and he wanted to at 'least treat you and your daughter to dinner 'On him." Client: "Oh, wow. Gosh. WeU, thank you." Escrow Officer: "You're wekome Jane. He wrote a tittte note ~or you as welL"

As you can see, with the right technique and scripts, you can provide yow: client with a private dosing and still give them a wonderful experience even when you are not present! You can provide the title company the gift cards and personal note well in advance of closing. They can hold the envelope in the file.

Day 7: Closing the Transaction and Getting Paid


Closing Costs
Seller Closing Costs
The lien holder who is short will typically agree to pay customary seller closing costs. This includes the real estate commission, property taxes, title policy, and escrow/closing fees. They often will not pay for other items such as surveys, home warranty/residential service contracts, homeowner's association (BOA) dues, buyer'S closing costs, home repairs, or agent transaction fees.

Property Taxes
If your client owes outstanding property taxes for the current year (or a previous year), the lender will typically agree to pay them as part of the seller's closing costs.

Buyer Closing Costs

On an FHA short sale, BUD allows up to 1% of the buyer's mortgage amount for closing costs to be included in the "Seller's Costs" on the BUD-I. This allowance only applies to transactions where the buyer is using FHA financing. For example, if the buyer is getting an FHA loan of $150,000, then BUD will pay up to $1,500 of the buyer's closing costs. BUD will still need to net 84% to 88% of the appraised value. (See the discussion on Day 6). If the buyer is not getting an FHA loan, BUD will not allow any buyer closing costs to be added to the transaction.


7 Days to Success with Short Sales

On conventional and VA loans, the buyer may be able to roll in closing costs, as long as the short sale lender receives their required net proceeds. Oftentimes, lenders will not allow any closing costs to be included, but sometimes they will.


Day 7: Closing the Transaction and Getting Paid


Proceeds from the Sale

Seller Can Not Receive Funds at Closing
On a short sale transaction, the seller may not receive any funds from the deal. The only exception to this is when the seller has an FHA loan, in which case HUD may offer them a consideration amount of $750 to $1,000. Because the lender is forgiving all or a large portion of the loan balance, they will absolutely not allow the seller to receive any funds from the transaction. If the net proceeds end up being more than the bank agreed to receive, these additional funds will typically go back to the lien holder accepting the short sale.



7 Days to Success with Short Sales

1.. Lead Generate for Short Sales

25 Great Marketing Ideas for Generating

Short Sale leads

I have trained many agents over the years, and the one question that I get asked over and over is, "How do I get short sale prospects? What kind of marketing should I be" My philosophy has always been: "first you !earn, tnen you earn." Therefore, I don't recommend that you go out and try to get a .lot of bllsmess until YOIl thoroughly understand what you are doing. Now that you haV'e completed 7 Days to Success with Short Sales, you are ready to implement what you haV'e learned ",bout the process. Then, you can turn your focus to marketing that will generate short sale leads. The national media continues to report that many )\mericans owe more on their nomes than they are worth. Some of these upside down homeowners want to sell; others absolutely HAVE to sell.. There is business out there for Y0U-YOIl just need to find it! There are several ways to generate short sale listing leads. The following are the 25 that I have found to be most effective.
In reality, I only use about six of these strategies. You can pick and

choose the ones you like-experiment. With these effective marketing ideas, you find that you will have more prospects than you can hand.le!


BONUS: 7 Strategies for Building Your Short Sale Business


25 Great Marketing Ideas

2. 3. Print advertising to local agents for referrals Email blast to local agents for referrals Direct mail marketing to local agents for referrals Yard signs, used in addition to your agent sign Place an ad in the yellow pages Take out a classified ad Say it loud with a billboard ad Network with some good bankruptcy attomeys Subscribe to default list service

4. 5. 6.


10. Call on expired listings

11. Send direct mail to expired listings

12. Hook 'em with door hangers 13. Farming to FSBOs (for sale by owner)
14. Online marketing and blogging

15. Take it to television 16. Farming on foot

17. Call agents to help them take their listings from OLD
to SOLD 18. Sphere of influence postcard campaign 19. Write articles (published in print or on the web) 20. Partner with loan modification companies

21. Conduct short sale training classes

22. Back of business cards or specialty business cards 23. "Just Sold!" postcards to distressed areas 24. Partner with debt consolidation companies

25. Partner with "we buy houses" investors


7 Days to Success with Short Sales

Idea #1: Print Advertising to Local Agents for Referrals

Short sales are absolutely a niche market. Many agents want nothing to do with them for various reasons. You can market your services to local agents and pay them a refertal fee in exchange for feeding you their upside down sellers. Since they are out working in the marketplace every day, other agents could easily become your best source for a steady flow of short sale listing leads. As these agents are contacted by homeowners who want to sell but are upside down, you can become their go-to short sale referral agent. havce fOUlJ.d print advertising to be very effective. You can place your print .ads in local trade publications, such as newslerters published by your boaitd or MiLS, and any other magazine, newsletter, or publication that is ,circulated to other agents in your area.

In yow: advertisement, you want to identiry YOlli'self as the local short sale specialist and publish your referral fee. You can also include quotes from other agents who have used your servioes.


EDollV Williazns
Listing & Short Sale Specialist


"I can negotiate with their lender to accept less than the full balance due ... And forgive the difference_ .. "~L.......





Sample print ad advertising your services to other agents

BONUS: 7 Strategies for Building Your Short Sale Business


Idea #2: Email Blast to Local Agents for Referrals

Sending an email blast to the agents in your area might tum out to be very cost effective. I have successfully emailed to agents of my local board for many years. You can contact your local board for a list of board members with email addresses. If you are unable to obtain a list from your local board, you can rent or purchase an email list from one of several online vendors. Search online for "real estate agent list," and you'll find several companies that offer such lists. Many internet service providers (ISPs) limit the number of emails you can send out per day or addresses you can include per message (cc and bee), so you will need to check with your ISP to find out what your limits are. Larger ISPs typically don't allow more than 1,000 emails per day and 100 email addresses per message. If you need to send more than the limits your ISP has set up, I recommend that you subscribe to an email marketing service. These services allow you to set up template emails and send hundreds or thousands of bulk emails at a time.

A Note about Being CAN-SPAM Compliant

In 2003, Congress passed the CAN-SPAM Act. 1bis act was enacted for the purpose of controlling and regulating unsolicited email. For more information and to see how you can be CAN-SPAM compliant with your email campaigns go to


7 Days to Success with Short Sales




Earn an EASY 25% Refe.l" Fee! . .

nUT' teart! dues .all the Wllrk!

mlls.rtt Shnrt Sale.s Prru:es:::;m:l!
Dear F.ellow Agent.

if you have a cHent that owes more than their home is worth, we can negotiate with:their lender to accept 1ess than the :fW] balance .due... And forgive the difference! Just get us y-o-1:lr .client' and 'liIjumber. and well dG .all the rest!
W.e have s1Wcessfufly negotiated hundreds of sbmt sales -itb 'WashID,gt\m Mutual, Chase,. Wells Fargo, Countrywide, Citi. Mortgage, EMC and many morel.If you ihave a client fu.1t owes more tban
their home is worth ... WE CAN HELP'!


Let my team do an the ~'ork, 'while yon sit back anti collect "an easy 25% Referral 'F~e.

Call Morris Thomp.I>n, The Knolly Team Short Sale Specialist at (512) 294-2143 or .email

Sample iEmail Blast

Idea #3: Direct Mail Marketing to Local Agents t:or Referralls

Who said direct mail is dead? When I am marketing to business professionals, such as other real estate agents, I have found that a multitiered approach is best. In other words, to reach the agents effectively in your market, it's a great idea not only to email and advertise in local trade publications, but also to send a direct mail piece. Postcards are very effective for a direct mail campaign because, unlike letters, they don't require opening. You can design a postcard that is

BONUS: 7 Strategies for Building Your Short Sale Business


similar to the email or print ad you have and mail it to all of the agents in yOUl: local board or target area. You can contact your local board for a list of board member and mailing addresses. If you are unable to obtain a list from your local board, you can rent or pUl:chase an address list from one of several online vendors. Search online for "real estate agent list," and you'll find several companies that offer such lists. 10 lieu of postcards, you can also send a letter that includes yoUl: business card and any other marketing piece inside the envelope. It's also a great idea to maintain a database of agents you have worked with. As you are referred short sales, keep a database of referring agents that you can market to on a regular basis. You can easily get an additional 50 listings per year by simply having a database of 10 busy listing agents who refer you 5 clients per year. If you maintain a high success rate, agents will be eager to refer their short sales to you again and again.

Idea #4: Yard Signs-Used in Addition to Your Agent Sign

In addition to yOUl: regular yard sign, you should consider making some inexpensive yard signs that you can place on your listed properties. You've probably already seen this idea at work. Have you ever had a neighbor who had a roof installed, a home remodel, a new fence, or a new pool? Oftentimes, these companies will market themselves by placing a small sign on the property. The marketing sign serves as an endorsement from the homeowner. Similarly, you can use these small yard signs to market yOUl: specific short sale services. Obviously, many homeowners will be sensitive about putting up such a sign, and you will need their permission. If the home is vacant, the


7 Days to Success with Short Sales

homeowner will likely be more receptive to such a sign going up in their yard. You may want to place this sign closer to the home so it doesn't distract from your For Sale sign. Also, some homeowner associations frown on having more than the For Sale sign posted, so you may want to check with the HOA for their restrictions regarding sign placement. These signs are a wonderful idea because ofrentimes entire neighborhoods are distressed, and there are likely other homeowners in the area who need help .


Sample Yard Sign

Idea #5: Place an Ad in the Yellow Pages

Advertising in the yellow pages may appear to be an idea whose time has passed. However, specific target markets still seem to perform well in this advertising medium. There is still a good-sized segment of the population not immersed in the internet age. I have had good results marketing in the bankruptcy and foreclosure section of my local yellow pages. I recommend you keep your phone book ad (and ad budget) small, but noticeable and effective.

BONUS: 7 Strategies for Building Your Short Sale Business



Williams bQ
the mortgage balance owed, and forgive the difference"

Usting & Short Sale Specialist <0< "r will negotiate with your lender to accept less than

Sample Ad for Yellow Pages

Idea #6: Take Out a Classified Ad

Consider running a print advertising campaign targering homeowners facing foreclosure. I ran a very effective ad in a local classified newspaper for some time. Now, I stick mainly to the internet, but print advertising can still be effective. Almost every town has a small classified newspaper: Greensheet, Thrifty Nickel, Bargain Book, etc. These publications are widely read, and advertising rates are usually very economical. To be effective, however, you will need to maintain your ad for a long time. You will need to advertise consistently for 6 months before you know if your ad is generaring sufficient leads or not. If it is too costly to advertise weekly, then consider running your ad every other issue. Once your ad has been running for at least 3 months, people will begin to rake notice and even refer their friends who are in trouble. As I mentioned, being consistent is critical to success with this type of advertising. Let's say Betty Jones has been seeing your ad for the past 4 months. Then Betty runs into a friend who mentions that they are facing foreclosure, and they don't know what to do. "Wait a minute," Betty


7 Days to Success with Short Sales

tells her friend, "I think I know someone who can help! I've been seeing her ad in the Penny Saver. Hold on, I'll go get it."

Idea #7: Say It Loud with a Billboard Ad

Who says billboards are stricdy for soft drinks, car dealerships, and fast food? In 2003, I moved to Harlingen, a small town in south Texas. At the time, I had just started selling real estate, and I wanted to do some BIG advertising to jump start my career. Just for grins, I decided to inquire about pricing. Upon meeting with the sales representative, I was surprised to learn that billboard advertising (m 1futt small town) was much more economical than I thought. I prod $500 per month for four well-placed biihoards. It wasn't long before folks all over town began to recognize me at !ocalrestaurants, the movie theatre, and so forth. 'Of course, the big cowboy hat I wear didn't hutt either!
In a smaller community, billboards can be very effective. In larger cities,

their effect may become diluted by all of the other marketing (e.g., other billboards and store signage). In larger markets, billboards may also be cost prohibitive. There are so = y homeovmers facing foreclosure today that reaching them in a big way may make a lot of sense for you.

Idea #8: Network with Some Good Bankruptcy Attorneys

In 1992, I went to work as an administrative assistant for a prominent

bankruptcy attorney in Austin, Texas. I was blown away by the sheer number of individuals in financial distress who would come into his office day in and day out. He had a machine going! He used to place a quarter-page ad marketing his services in our local classified paper. There, he advertised a free one-hour consultation. He also had a toll-free number for individuals to call for a pre-recorded message about how easy it was to file bankruptcy and how it could wipe their slate clean.

BONUS: 7 Strategies for Building Your Short Sale Business


During his one hour consultation, I noticed that he was highly successful at converting these inquirers into clients. Many of these same bankruptcy clients would actually be great candidates for a short sale. The reason most individuals file for bankruptcy protection is because they are in debt way over their heads and want it wiped away. Some file specifically to stop foreclosure. What many people don't realize is that bankruptcy treats unsecured debt differently from secured debt. With unsecured debt (such as credit card debt), a Chapter 7 Bankruptcy puts a stop to all collection activity and wipes the slate clean. The debt and the creditor go away. With secured debt (such as a mortgage or car loan), the same bankruptcy filing will stop all collection activity; however, since the debt is secured by collateral, the collateral is typically repossessed. So, in essence, although a person can file bankruptcy to put an immediate stop to a foreclosure of their home, they are only buying time. As a secured debt, the home can still be foreclosed on once the bankruptcy runs the legal course. When that happens, the person is left with both a bankruptcy and a foreclosure on their credit. I call that "the double kiss of death" to a credit report. Research indicates that the foreclosure has a far more devastating effect on a person's credit than a bankruptcy does. If a person truly needs to file bankruptcy due to the mountain of unsecured debt they have, it would be far better, in my opinion, for them to do a short sale first and then file a bankruptcy. This strategy will eliminate the foreclosure posting on their credit file. Bankruptcy attomeys are a npe source for financially distressed individuals and potential short sale clients. Every day, these specialists deal with individuals who are at the end of their rope. Even if these people have already filed bankruptcy, a short sale is still their best option if they can't keep their home and the payoff balance on their home is


7 Days to Success with Short Sales

more than their home is worth. Bankruptcy attorneys can refer these clients to you.

Idea #9: Subscribe to a Default List Service

As economic conditions worsen, I have seen a rise of companies that sell the names of individuals who are behind on their mortgage payments. Here's an email I received recently:

Hi thefe, Knol'ly. Quiok question ... 1 was

cu~iousif you

might wan! to contact households that

are behind on their mortgage payment? My company pulls credit data from the bureau on homeowners that are 3D, 60, 90 days la\e on ~helr mortgage. Given some geographical areas, we send over a spreadsheet wj~hinformation on these highly motivated, distressed households. ,Induded is a wea:llh of ti'lters such as mortgage amount, credit score, number of trades, etc. Ibis data is NOT public record since a Notice of Defau~ has not yet been : filed. This means you cange! 'in touch with these famUies before your competition knows Ihey exist. If there's any interest, please reply back and I'll send over a ralecard and some filters for you to review,

While I haven't personally used any of these service providers, I have to admit that a list of individuals who are behind on their mortgage payments could be very, very valuable. These folks need you and you need them. I haven't looked into the legalities or legitimacy of these companies; nevertheless, I know of a few short sale practitioners who do subscribe to such services and say they are having some success.

BONUS: 7 Strategies for Building Your Short Sale Business


Several companies also publish NOD (Notice of Default) lists of homes that are coming up for foreclosure sale. This is public information and is typically posted on a public website hosted by the appraisal district in the county where the home resides. Although you can pull this information yourself, these companies compile the information, saving you rime. You can make it a point to contact these homeowners and make them aware of your short sale services. Bear in mind that the homes on the list may be just weeks away from foreclosure, so you'll have to act fastvery fast!

Idea #10: Call on Expired Listings

Before I made a name for myself in the short sale arena, I worked tirelessly and fearlessly on expired listings. In fact, I have successfully marketed to expireds for many years. In my experience, the number one reason listing agreements expire is due to pricing. In most cases, these homeowners have tried pricing their homes at break even, but even that was overpriced for their market and not good enough to generate an offer. For those who qualifY, a short sale may be the perfect solution. Many of my listings come from former expired listings. These are sellers who are upside down and qualified to do a short sale, but didn't know there was away out. I have found that the most effective way to contact these sellers is by phone. It can be rime consuming, but also very lucrative. There are basically three different ways to approach these calls.

2. 3.

You can make the calls yourself, one by one You can hire someone to make the calls You can use automated calling with a call service

If you make the calls yourself, it's best to rimeblock at least a few hours each morning and an hour in the evening to make these calls. If you hire


7 Days to Success with Short Sales

someone to make the calls for you, make sure they are GOOD on the phone. There are also auto-dial services where you can pre-record a message and have it "blast" out to a bunch of phone numbers. This is a real timesaver, but obviously not as personal. When calling expireds, I used an auto-dialer service that could call approximately 250 expireds in a few minutes time. I told the system to leave my pre-recorded, 30-second message only for individuals who did not pick up the phone and to disconnect the call if a "live" person answered. Yes, the systems they have now can detect if the phone is picked up by a live person or an answering machine. Next, I pulled the list of the "live" answers and caiIled them directly, since I knew for sure they were homdWhat a timesaver! This appmach is very effective.

(~r,!!0 "Hi, II'm looking for


"My name is with The Knolly Team witjh Keller WiUiams Realty." "We've gotten severa! calls from potentiall buyers aoout a home we just SOLD in your subdivision at ,--_-::-_ _ _..,..-. ;1' alike to let these buyers know about your home on _ _ _ _ _ _ _ _ ' Are you still interested in selling?"

"We are very familiar with your subdivision, and it took us on!ly days to sell that home, even
though it had been on the market for months with another agent." "If you sold this home, where would you go next?" "How soon do you have to be there?" "Our team has worked with hundreds of sellers who were previously unsuccessful at selling. The home at was on the market for

BONUS: 7 Strategies for Building Your Short Sale Business


days before they called us to come sell it and sold it in days." "We're one of the top 5 Keller Williams teams in the area. Are you familiar with the techniques we use to sell homes?" ... If a Short Sale "I've noticed that many of the folks in your area want to sell but still owe a little more than the market is fetching." "May I email you some more information about The Knolly Team?" "For homeowners who qualify, lenders are now allowing them to sell their home at current market value and forgive the difference." "Now, to qualify, you have got to have some kind of hardship. Lenders are looking for things like loss of income, increased expenses, medical issues, job relocation, divorce ... Things like that. Have you experienced a recent hardship?"
If this prospect sounds interested and has a hardship, transition into your Short Sale Pre-Qualification Questionnaire (See Day 2) .

... If Prospect Can't Talk Right Now

See if you can send them an email about your services. Get their email address, and leave them your website address.


7 Days to Success with Short Sales

... Don't Need to Sell and Don't Have a Hardship "You know, , based on what I'm seeing in your subdivision, if you really don't need to sell right now, you shouldn't. You should wait. The problem is there are many who really do have to sell, and those are the ones who should be selling in today's market."

Idea #11: Direct Mail to Expired Listings

In addition to your call campai"ons to expireds, you may consider a direct

mail. campaign as well. I have found direct mail to be very, very effective---a1though it can be expensive. A simple letter with a small survey questionnaire has worked for me. In the letter, I share with the prospect what I have to offer and educate them on the option of a short sale, depending on their situation (and whether or not they qualify).

BONUS: 7 Strategies for Building Your Short Sale Business


days before they called us to come sell it and sold it in days." "We're one of the top 5 Keller Williams teams in the area. Are you familiar with the techniques we use to sell homes?" ... If a Short Sale "I've noticed that many of the folks in your area want to sell but still owe a little more than the market is fetching." "May I email you some more information about The Knolly Team?" "For homeowners who qualify, lenders are now allowing them to sell their home at current market value and forgive the difference." "Now, to qualify, you have got to have some kind of hardship. Lenders are looking for things like loss of income, increased expenses, medical issues, job relocation, divorce ... Things like that. Have you experienced a recent hardship?"
If this prospect sounds interested and has a hardship, transition into your Short Sale Pre-Qualification Questionnaite (See Day 2) .

... If Prospect Can't Talk Right Now

See if you can send them an email about your services. Get theit email address, and leave them your website address.


7 Days to Success with Short Sales

... Don't Need to Sell and Don't Have a Hardship


"You know, , based on what I'm seeing in your subdivision, if you really don't need to sell right now, you shouldn't. You should wait. The problem is there are many who really do have to sell, and those are the ones who should be selling in today's market."

Idea #11: Direct Mail to Expired Listings

In addition to your call campaigns to expireds, you may consider a direct rruill campillgn as well. I have found direct mail to be very, very

effective-although it can be expensive. A simple lette;: with a small survey questionnaire bas worked for me. In the letter, I share with the prospect what I have to offer and educate them on the option of a shan sale, depending on their situation (and whether or not they qualify).

BONUS: 7 Strategies for Building Your Short Sale Business





Offlca: (512) 91)G.ua2; Fax: (512) 532..o62ti*knolly@knoUy.c:om

PleueDeUver To: Judy Mitchell

1934 Dapple Lo Austin, TX 78746

"One of Austin's ~ Realtors!"

(out f9,500

loco:! "l,'IlIll) Awtiu au,;n ... Jo=1

January 23, 2009 Dear Judy, Many sellers in today' s market have little or no equity; that is., the seller owes close to or more than the property is worth. In these situations, lenders are often willing to accept Jess than the full amount due, commonly referred to as a "short sale.... Now more than ever, you can take advantage of this option.
I average selling between 6-10 short sale listings per month. I will negotiate with your lender to accept less than the amount owed and forgive the difference.

J am convinced that, with my approach, your home will sell. With a Shnrt Sale YOll can basically Jist your home for FREE. since mv fee is paid by the lender - all while protecting vour credit rating! If you still have an interest in seJling this property, and have not re~listed with another real estate agent, tben fill out the short sale application below and can me TODAY at 512~9{)6-2882, email or fax it

QUICK SHORT SALE SURVEY: Property Address: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Do you NEED to sell this home? DYes ONo Do you owe more on your home than it is worth? 0 Yes 0 No 0 Not sure Are you behind or struggling to make your mortgage payments? 0 Yes 0 No Are you living in the property now? 0 Yes 0 No Additional Infonnation: ,Fax this survey to: (512) 532-0626 or emw1 to knolly@knolly.comorcaIl(512)906-2882 For more infonnation, visit my web site:
Your Friends In Real E_state,

K!jolly Listing & Short Bale Specialist

Sample Direct Mail to Expired listing


7 Days to Success with Short Sales

Idea #12: Hook 'em with Door Hangers

In some cities, there are certain neighborhoods or parts of town that are full of homeowners who are upside down and feeling trapped in. These homeowners bought into a neighborhood where values have since declined for various reasons. These areas are often riddled with foreclosures and others who want out. By regularly farming your short sale services directly to these areas, you can become the agent that these homeowners tum to when they are ready to sell.. Phtcing door hangers can be very effective. You can also slip a the door. In my market, I have contracted with a highly reliable person who will canvas an entire neighbomood for 12 cents per home. This can add up, but it's much more economical than mailing.

Ildea#13: Farming to FSBOs

(For Sale By Owner)

Many For Sale By Owners choose not to hire .an agent because they owe so much on their home that they cannot afford to pay a real estate COmnlJ[ss,on. You can awessively market to FSBOs, letting them know that it costs them nothing to hire you to sell. their home via a short sale, since your fees will be paid by their lender. You can reach these potential prospects by phone, in person, or with a direct mail campaign.

Idea #14: Online Marketing and Blogging

Since many homeowners in trouble often search the internet for a solution to their situation, marketing your services online is essential to establishing yourself as the local area expert.

BONUS: 7 Strategies for Building Your Short Sale Business


You should have a website (or a section of your current site) dedicated exclusively to your short sale business. This site should educate clients on what a short sale is and how they can benefit from your services. For ideas, check out my consumer website at Additionally, you will want to have an online contact form (lead generator) for sellers to fill in their information and send it to you electronically. Effective online marketing also includes blo&,oing, Craigslist ads, online articles, and various forms of search engine optimization (SEO). This all helps establish you as the area expert.

Idea #15: Take It to Television

Another potentially effective way to reach homeowners in trouble is via television advertising. TV commercials can actually be a lot cheaper than you think, and I've heard from many agents who swear by them. Depending on your market, local cable TV ads can be as low as $5 to $10 dollars per 30 second spot. An effective ad would be one that is specifically targeted to distressed homeowners. For example, the ad might say, ''Behind on your mortgage payments? Facing foreclosure? I have successfully helped folks in our area avoid foreclosure, and I can help you too. Call me now at 512-9999999 or find out more at ...

Idea #16: Farming on Foot

Remember back when salesmen weren't afraid to sell? Okay, maybe you're too young! Back in those days, salesmen peddling everything from pots and pans to encyclopedias would go door to door in search of a ready buyer. Although perhaps looked upon as less than noble, the successful ones were truly titans of the sales industry. And they did this not for glory, fame, or rewards. They did it simply to feed their families. Some were good at it; I mean, really good.


7 Days to Success with Short Sales

These days, many real estate agents are afraid to knock on doors. This isn't cold calling; it's cold knocking! And yes, it is scary. But let's say you just sold a home in the area. You could proudly knock on doors with the following script:

c. sc~"1!0 Agent: "Hi, there ... My name is John Smith, and I ..... ..... / recently sold the home at 511 Plymouth Stone. It's just a few streets over. We closed on it yesterday. "
[Perhaps you can hand them a just-sold postcard of the home at this time.] Agent: "I was able to help this fami1ly even though they owed :more than their home was worth. I negotiated with their lender to forgive the difference. Who do you know in the area that is looking to seU?"
Don't be scared! Getting yourself in front of people is a great way to hone your crat and pick up new clients (and database contacts).

Idea #17: CaU Agents to He' Them Take lp Their Listings from OLD to SOUD

"olsatJ. ThLs ~s a yeaLLtJ gODcl Ollle, tJ'aW I LLlse Lt bewv~se Lt's YeCI'L'LtJ aIII OYLgLIIlJ1L ovce that wViIle to Ville fYOVill Olll hLgh! No IsLclclLlIlg!n

You already know that other real estate agents are a great source for short sale leads, right? Why not contact agents who have old inventory that you have identified as overpriced?

BONUS: 7 Strategies for Building Your Short Sale Business


Here's how it works:


Let's say you just sold and closed a home via short sale. Now, look up all the other homes that are currently for sale (active listings) in the same area and print out the list. IdentifY the ones that have been on the market for a while (longer than normal). Then call the listing agent and let them know you just sold a home in their area via short sale and, if their client qualifies, you can help them sell their client's home too.


Referting the listing to you could be a smart thing for the current listing agent. The listing may be close to expiring and the seller may be ready to try a different approach. Rather than lose the listing, agents who are not savvy at short selling could still earn a nice referral fee for handing the listing over to you.

Sample Script Short Sale Agent: "Hey, Jim, this is Karen with the Tallhouse Team. I'm calling about your listing at 438 Springhill. I noticed it's been on the market for over 120 days. I just sold one at 418 Springhill. Based on my client's situation, we had to sell that one as a short sale. Has you seller considered doing a short sale?" Other Agent: "You know, Karen, I'm not sure. They do owe quite a bit on it, and we've already priced it at break even." Short Sale Agent: "Well, Jim, if your sellers would be willing to consider this option, I can see if they qualify. I'd be happy to do the short sale, and we could partner up or you could refer me the listing and I will handle everything."


7 Days to Success with Short Sales

Idea #18: Sphere of Influence Postcard Campaign

You aheady understand that marketing to your sphere of influence (SOl) is critical to your continued survival in the real estate game. In additional to the slick marketing you are currently doing to bolster your business, you should consider creating a specialty piece that directly promotes your short sale business to your sphere of influence. I prefer jumbo postcards for this. The purpose of this marketing piece is to create awareness about your short sale business, not necessarily to solicit the recipients. Your piece could say, "KNOW SOMEONE FACING FORECLOSURE? I CAN HELP!" The more you sp~ead the word about your services and how short sales work, the more folks you will have out in the field helping to promote you. Every day, the people in your database are :running into friends and family members who are in trouble. Why not Jet them know that YOU are the one who can get the job done? I have observed that referrals from my SOl are more open, honest, and trusting. Since they were referred by someone they trust, they immediately put their trust in you.

Idea #19: Write Articles to Be Published in Print or on the Web

Few things give you more instant credibility than getting something published in print If you really want to establish yourself as the go-to person in your field, sharpen your pencil and start writing. Initially, it will be easier to get your articles published online through your blog and other online article services. As you begin to hone your writing skills and style, you will want to begin soliciting newspapers and magazines to publish your helpful information about short sales.

BONUS: 7 Strategies for Building Your Short Sale Business


The more you educate others, the more you are seen as the authority in your market.

Idea #20: Partner with Loan Modification Companies

These days, banks are really ttying to help homeowners to STAY in their homes. To encourage home retention, lenders are offering loan modifications and refinancing options to those who are eligible. There are many emerging companies that will assist homeowners (for a fee) in getting their loan modified. While it may be true that homeowners can do this themselves, many homeowners are just too emotionally drained to deal with their lender. Many of these homeowners will not qualifY for a loan modification, due to their lack of income. If they cannot afford to make the monthly mortgage payment, their only likely option is to sell or face foreclosure. If they are upside down, a short sale is their best option. You can partner with non-competing companies that offer loan modification services. They can send you their prospects who can't qualifY for a loan modification, and you can send them prospects who want to do a loan modification in lieu of a short sale.

Idea #21: Conduct Short Sale Training Classes

Once you've done a number of short sales, you can begin to teach other agents how to do them. ''Why would I do that?" you ask. Well, as you have learned, short sales are very technical and they take a while to learn. You can teach a one- or two-hour class and still only scratch the surface. After attending your short sale class, some agents will siruply not want to get involved in short sales and would prefer to refer these arduous transactions to you, the expert.


7 Days to Success with Short Sales

Teaching short sale classes is a very good way to establish yourself as the market expert and will typically produce lots of leads for your short sale practice.

Idea #22: Back of Business Card or Spedalty Business Cards

The back of a business card is a prime marketing canvas. If you are a short sale specialist, you should use the back of your business card as a small advertisement. You can also consider printing specialty business cards specifically for your short sale practice (if short sales are just a portion of your business). Don't overlook this inexpensive but effective advertising medium.

Idea #23:" Just Sold!" Postcards to Distressed Areas

For years, agents have debated the effectiveness of Just Sold and Just Listed postcards. While the debate continues, a Just Sold postcard campaign targeting areas that are distressed can prove very efective. Oftentimes, homeowners wonder how in the world you were able to sell the home down vhe street, when other homes in the area have been on the market for months. Why not let them know your secret weaponthe short sale! A targeted Just Sold postcard campaign can do just that.

Idea #24: Partner with Debt ConsoUdation Companies

Debt consolidation companies are running a brisk business these days. People buried by debt are trying to do whatever they can to get out ftom under that mountain. Oftentimes, people who have a lot of debt will also consider selling their home (their largest debt of all).

BONUS: 7 Strategies for Building Your Short Sale Business


You can partner with some of these companies, making them aware of your short sale services. In fact, you can consider that you are both in the same line of work-hdping folks in difficult financial situations. While the debt consolidation company is busy negotiating a settlement on the homeowner's debts, you can be negotiating the settlement on their home via a short sale.

Idea #25: Partner with "We Buy Houses" Investors

I have recently partnered with a "we buy houses" investor. This investor is constantly coming across folks who have to sell, but if the numbers don't work and if the homeowner is upside down, he refers them to me. lt's a win-win!



7 Days to Success with Short Sales

2 . Partner with a Processor

Many agents who have chosen to specialize in short sales ate preoccupied with the daily duties of running a growing short sale practice. As a consequence, however, they often begin to neglect the details and commitment required to effectively process their files. The processing phase of a short sale is a l~othy one and requires tenacity and persistence to achieve a satisfactory outcome.

If you fiod that you don't have the time or the patience to process your short sales on your own, you can easiJ.y partner with a short sale Pl'ocessor. Here's how it works..
Shott sale processors typic2'lly charge either a fiat fee of $7S() to $l,S()O per transaction or a percentage (30% to 50%) of the listing agent's commission. This nee is payable when the transaction closes. In addition to their fee payabilie at dosing, some short sale processors also cbarge the seller ~ non-refundable fee of $350 to$50Cl payable up front.

Screening Your



The most important thing to look for when biting one of these tbirdparty comp~nies is not their fees, but their experience and conversion rate. Here are some questions to ask a company you may be considering hiring: II How many short sales have you processed? (preferably over 100) How long have you been processmg short sales? (preferably over 2 yeats) What is your success rate? (What percentage do you get approved)? (preferably over 85%)


BONUS: 7 Strategies for Building Your Short Sale Business


Your Responsibilities and Their Responsibilities

Your objective when partnering with a processor is to build a fantastic duo. You do the front end work and the processor does the back end. Here is what you will be doing: Generate the short sale lead Pre-qualify the prospect Obtain the listing and place property on MLS Get the home under contract

Here is what the processor will be doing: Prepares and submits the short sale package Contact the lender until file is assigned to a loss mitigator Remain in constant contact with the loss mitigator until file is approved

Once the file is approved, you will have to decide who will do the final contract-to-close work. Some processors will do this work for an additional fee. In this case, the file will remain with the processor until closing. As a rule of thumb, I don't recommend that you hire a processor until you are getting a steady stream of at least 5 or more short sales listings per month. Once you are getting over 10 listings per month, you will want to consider hiring a processor as part of your team (See Bonus section 3).


7 Days to Success with Short Sales

3 .. Build a Short Sale Power Team

As you begin to take on more and more short sale clients, you should consider building an in-house power team to handle the processing and other tasks associated with successfully completing your mounting supply of short sales. The most important initial hires to your team will not be other real estate agents-they will he administrative people. Because short sales are so heavily administrative, your administrative staff can perform more than 90% of the processing tasks.

First Hire: Short Sale Processor

My very first hire was Barbara Riordan. I hired her to assist me with the time-consuming task of processing short sales, thereby freeing me up to generate more leads. Likewise, your very first hire should be a Short Sale Processor-thact is, an administrative assistant who can process your short sales in-house. Tills person will. I:>andle Steps 6-10 in the short sale process.

The Short Salle PrOGeSSor's Duties

II Maintain complete short sale file Review entire package for accuracy Contact title company/attorney, lender, other agent, and seller to give full introduction, contact information, and copy of the conttact Contact lender to verify receipt of complete short sale package Maintain constant contact with lender to assist with any additional documents or information required by lender


BONUS: 7 Strategies for Building Your Short Sale Business


Make weekly calls to lender to verify the progress and current status of the file Keep all parties involved throughout the process Once file is assigned to a negotiator (loss mitigator), establish rapport and verify that complete package is intact Submit any additional documents needed Contact BPO agent or appraiser to verify when the property valuation will be completed Send BPO agent or appraiser a copy of the hardship letter (if seller approves), the first page of the contract, and CMA Maintain contact with the loss mitigator to insure that process is moving forward efficiently, and that negotiator has everything needed to process the short sale file Receive approval or counteroffer from negotiator and relay to buyer'S agent Obtain short sale approval

Second Hire: Short Sale Listing Manager

I waited until a year and a half after I hired Barbara before I hired Morris Thompson, my Short Sale Listing Manager. Morris basically is what I call my "set-up man." He takes the file all the way from the beginning up to the contract stage. He has allowed me to concentrate on being the "rain-maker" for the team. With training, this person will be able to conduct your initial interview with the client, receive buyer offers, and manage the process all the way to the purchase contract. This person will handle Steps 1-5 of the short sale process.


7 Days to Success with Short Sales

The Short Sale Listing Manager's Duties

III Pre-qualify the short sale prospect. Conduct initial interview with prospect and complete short sale questionnaire to assess eligibility for short sale Order loan payoff amount from seller's lender Do comparative market analysis (CMA)/intemal BPO Send seller a list of documents needed for short sale Draw up listing documents and email to seller Send Seller's Disclosure Notice and ail other addendums to seller Receive and organize complete short sale package Set listing appointment Take photos Put up sign Put up lockbox Take listing notes; fill out .listing checklist Request copy of seller's survey Input property into l\1LS Input photos into MLS Input property and client details into contact database Upload Seller's Disclosure notice to MLS Upload Short Sale Disclosure and Agent Guidelines to MLS Initiate complete listing marketing plan Submit acceptable offers to seller for signature Review contract for accuracy and completion










BONUS: 7 Strategies for Building Your Short Sale Business


Have contract receipted at the title company/attorney Change status of listing on MLS to "Pending" Compile and collate package with conttact and all short sale documents Submit (via fax or email) complete short sale package to lender Deliver file to short sale processor

Third Hire: Contract-to-Close Coordinator (optional)

Your third and final administrative bite will be a Contract-to-Close Coordinator. This bite is optional because, truthfully, you can train your processing person(s) to complete these final steps. While it looks like a lot of tasks, the final steps to close out a short sale listing are not very time-consuming. This is Step 10 of the short sale process.

The Contract-to-Close Coordinator's Duties

Email title company/attorney with seller's mortgage information, HOA information, payoff amount, social security number (last four digits), marital status, birth date, and commission split Get inspection time and date from buyer's agent and inform seller and listing agent of that information Obtain signed seller's disclosure regarding all parties involved File any amendments to contract regarding sales price, repairs, etc. Remind buyer's agent when option period ends Get Disbursement Authorization and make sure title company receives it


7 Days to Success with Short Sales

l1li l1li l1li l1li

Obtain existing or new survey, if applicable, by date due Obtain appliance manuals from seller Confirm lender has ordered appraisal Make sure survey and BOA information has been obtained and received by title company/attorney Find out about if there is a POA (power of attorney) Confirm conttact contingencies have been resolved and all amendments have been received by title company/attorney Get all utility information from seller and forward to buyer's agent Set date and time of closing

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Remind seller to bring driver's license to closing Remind buyer's agent to do a walkthrough 2 clays before closing After closing, change the status on ~fLS to "Sold" Prepare Just Sold cards if applicaJble


Monftor Team Performance

Once you have your complete administrative team up and running, and closing multiple transactions per month, you will need to assess, from time-to-time, how efficient they ate as a unit. Processing will be the area that tequires the most monitoring and the most twealting. This is where short sale transactions can bottleneck if your team is not running smoothly. Tweak, tweak, and tweak. Once your well-oiled machine is operating at maximum capacity, you may find it necessary to add even more talent. If so, you may simply add an administrative assistant ot two and cross-train them to assist your already trained power team.

BONUS: 7 Strategies for Building Your Short Sale Business


In fact, make sure that each of your team members is cross-trained (trained to do other team members duties) in case a team member is out sick, on vacation, or quits. Building a great team can be very rewarding, once they are all. properly trained.

Administrative Team Pay Structure

Your core team members will be compensated one of several ways: Hourly: Pay a Processor $8 to $12 per hour or more, depending on your market area. No compensation per file, just an hourly wage. Salary only: Pay a processor a monthly salary of $1 ,200 to $1,500 (part time) to $2,500 to $3,000 (full time) or so, depending on the hours they work and the going rate in your area. Salary plus bonus: Pay a processor a flat monthly fee, say $1,500 per month (full time) PLUS $300 to $500 per file closed.

Per IDe fee only: Pay a processor a per-file-closed fee of $300 to $500 or more per file closed, depending on the volume of files you are closing per month and their income needs.



7 Days to Success with Short Sales

4 .. Find and Hire a Short Sale Listing Agent

Hiring a Short Sale Listing Agent (or team manager) means you have reached a point in your career where you find it necessary to "fire yourself' and Me someone to run your operation. The difference between hiring a listing agent and a listing manager (admin) is that tbe listing agent will be a licensed real estate agent. Here are some of the situations that may lead you to recruit a short sale listing agent: II You are highly entrepreneurial and, tberefore, too busy witb other endeavors to properly m=ge and oversee your team on a daily basis. You want to focus all of your energles on dollarproductive activities (lead generating and marketing) and [et others do the rest. You are ready to retire or semi-retire from the business and need someone to take over your duti,es. Short sales are just a segment of your real estate practice, and you need someone to oversee that "department" of your operation.




As you would expect, finding the right person to take over your short sale operation may not be easy. You need someone who can uphold your high standards and move your operation forward. Your compensation for this person can be a set monthly lncome, monthly income plus a bonus per closing, or just a percentage of each transaction.

BONUS: 7 Strategies for Building Your Short Sale Business


As far as job duties are concerned, your listing agent may do any of the job duties that the listing manager does (see Bonus section 3), or they can simply oversee the entire team, filling in where needed. Ideally, you will f11ld someone who is already on your team and can be promoted to this position. Otherwise, I highly recommend that you find someone who has a thorough understanding of short sales-perhaps someone who is already a short sale listing agent in your market.



7 Days to Success with Short Sales

5 .. Find and Hire a Buyer's Agent

Once you have a steady stream of listings and a well-oiled operation, you will want to consider hiring a buyer's agent. A buyer's agent who has a good understanding of short sales will be able to educate prospects and should be able to convert many buyer leads to closings. Buyers who are drawn to short sale listings are typically looking for a good deal The fact that you have great deals all the time (and many of these deals have not yet hit the mmet) will be a great asset to an enteq>rising buyer's agent.

Sample Script
Buyer: "Hi, this is Jehn.I'm calling abeut yeur hO'use O'n .Map'le Run ... Is it still available?" Buyer Agent: "Hi, JO'hn, thanks fO'r caUing! That's a great home-and it is still available. You iknO'w, Jehn, based O'n the fact that you catlled me abO'ut this heme, it loO'ks to me like you want to' get a gO'O'd deal. NO't enly dO' we have that O'ne, but because we work with So' many pre-foreclosures, we are getting new deals in every week. Also, we have several that haven't hit the market yet. Let me email you some informatiO'n about those."
Since you are providing the leads, a typical split with a buyer'S agent is 50/50 or 40/60 (that is, 40% to you, 60% to buyer's agent). Tfyou have a good listing inventory (12 or more listings) and you do not have a buyer'S agent on your team, you are foregoing a good amount of potential income.

BONUS: 7 Strategies for Building Your Short Sale Business


6.. Organize Your Office for Success

Having an organized office will contribute to the well-being of your staff and allow you to get more done with less effort.

Office Furniture
I suggest you purchase office furniture from a used office furniture dealer. Look for these dealers in the yellow pages. Please don't buy new furniture--except maybe for your chair. New, top-quality office furniture is expensive and not necessary for your short sale office. Some people look to express themselves through their office furniture. Don't. Get something that works, looks decent, and is affordable. If you do purchase new, look for discount items and assemble them yourself. That's half the fun!

A Decent Desk
Don't get just any desk, and certainly don't buy one because it looks impressive. First and foremost, the desk you choose should be practical. I once purchased a glass desk for my office manager. The desk looked great, but there was nowhere to store files and paperwork! Make sure the desk you purchase has a drawer for storing pens, pencils, paper clips, and so forth. Make sure that the desk has several additional drawers and preferably a built-in file drawer for handy access to the files you use daily. Make sure your desk has enough space for your computer, as well as an adequate work surface. A desk that is at least 5 feet wide should work well.


7 Days to Success with Short Sales

A Good Chair
A good chair is essential to working effectively for long periods of time and will help you prevent long-term back problems. The chair you select should be comfortable, ergonomically correct, and should offer great lumbar support. Personally, I prefer a chair that has arms as opposed to the armless (task) chair. Make sure that the arms on your chair will slide under the top of the desk; otherwise you will be bumping them into your desk quite often. You can sp=d from $300 to $500 for a great chair; however, try to find one for less than $100 to $200. The right chairs will give you and your team a comfortable day at the office and could help prevent chiropractic visits down the road. Besides selecting the right chair, don't forget to sit up straight and practice good posture when you are worlring!

TaSk Table
A task tab1e is very important. You v;cilluse this table to setup your short sale package, mru:keting mailouts, and so forth. Unlike your desk, which is used for daily work, this table can be used for all kinds of tasks. I su&,,",,st you purchase a sturdy, 4-foot folding table for these tasks.

You will need to keep your files neat and in a systematic order. A lightweight, metal, two-drawer file cabinet will help you do just that. Use the file cabinet for active files, not storage. I suggest you archive any files that have closed over a year ago, and the best practice is to store all files (preferably in hard copy format) for at least 7 years. You may choose to purchase a separate filing cabinet for this purpose.

BONUS: 7 Strategies for Building Your Short Sale Business


Book Shelf (optional)

A bookshelf is a smart purchase if you have a few business books and no place to store them. You will want to build a collection of reference books and training materials for your growing team-and inspirational leadership and sales books for yourself! A small, two-shelf bookshelf should meet your initial needs. You can also use this bookshelf to store magazines, printer paper, stationary, and so forth-thereby, allowing the bookcase to double as an office supply cabinet.

Printer Stand (optional)

A printer stand with storage shelves is useful because it allows you to store paper, labels, and stationary underneath. I, however, store my printer on top of a small file cabinet.

Office Equipment
Whether you buy new or used, I suggest you purchase office equipment from a reputable retailer---one that will allow you to make returns or get support if something doesn't quite work.

When it comes to computers, there are many choices out there. And since technology changes every week, I will keep my suggestions generic. I suggest you purchase an entry-level computer, which will be the best value for your money. You don't need any special bells and whistles, just a good fast, business computer with a good amount of storage space.

AU-in-One Printer/Fax/Scanner
You will be usirg a scanner to create email-able documents to send to your clients, to the lender, and to other agents. You'll also use the fax machine quite a bit. Be sure to select a device that supports multi-page document scanning and faxing.


7 Days to Success with Short Sales

My team uses an all-in-one printer/ fax/ scanner at the office. And each of my team members has one of these at home too, since they often call lenders and fax documents after hours.

Since you will be spending a great deal of time on the phone, you should consider investing in a good corded or cordless headset and a speakerphone. My short sale processor has two phones. She uses one to call and check status of short sale files and is often on hold for 30 minutes at a time. While she's on hold, she uses the other phone to Illilke short calls and to receive calls. You'll also want to ensure that you 2nd your team members can make long distance calls from yom: office phones. Good reliable equipment is as important as good systems. Make sure your equipment is up to date and operating at mmcimum capacity.



7 Days to Success with Short Sales

Short Sale Q & A

As a short sale trainer and coach, my students send me questions every day. The following represents a collection of some of these real-world questions and answers. I think that understanding the issues that these questions address will help you as you move toward short sale mastery.

Question #1: "Does the bank have incentive to close a short sale if the loan has PMI?"
"From a buyer'S agent perspective, my thought is that if the loan has PM} or if it is a guaranteed loan, I should just let that listing go. The bank will continue to get their money up until auction time, and they will not be motivated to work out the short sale. Is that true? I would appreciate your perspective on this."

Knolly's Answer #1:

The bank always bas an incentive to do a short sale versus a foreclosure. Of the more than 450 short sales I've done, many of these had PMI (private Mortgage Insurance), and we still haGl a 90+% success rate on the ones with PM!. Why? Well, the issue lies with the PM! company. They will NOT want to be left holding the bag, and they will want to MITIGATE their losses. We recently bad a seminar at our sales office, and the speaker revealed that, based on national averages, a lender loses roughly 40% when doing a foreclosure versus a 19% loss when doing a short sale. Think about it. In a scenario where there is PMI, who is the loser? The PMI company. So while there may not be a huge incentive to the bank, there will be one to the PMI company. The same is true for FHA and VA loans-since they are government insured, the lender often loses very little. However, if HUD found out that a bank was not actively mitigating their losses, that bank could lose its right to do FHA/VA loans and could suffer other penalties.

Real World Questions and Answers about Short Sales


In the case where a loan has PM!, the bank has an obligation to mitigate their own losses and those of the PM! company. They will be obligated to disclose to the PM! company their options and the bottom line. The PM! company will almost always find it better to do a short sale.

Question #2: "How do I make a negotiator understand that my client cannot afford to sign a promissory note?"
"I was told by the negotiator that my seller would probably be asked to sign a promissory note because there is PM! on the property and our offer is more than $100,000 short. However, the offer we submitted is the market value for the property. My seller is getting food stamps for groceries right now, the husband is working two jobs, and the wife has just lost her second job. They moved away from our area for better jobs. When I spoke to the negotiator about this, the negotiator said she pulled a credit report and could tell that my sellers were keeping up with their car payments and credit card payments Q.ate on one). It appears that she is putting a lot of weight on this credit report. I would appreciate any information you could give me. I expect approval within the next week. I would like to know how I can help negotiate a promissory should they ask my seller to sign one."

Knolly's Answer #2:

Sometimes a promissory note is unavoidable. What your client needs to understand is that if they choose NOT to sign the promissory note, it won't change the fact that they still owe the money per their mort;"aage agreement. Currently, the note they have on the property is SECURED by the property (as collateral). A promissory note is UNSECURED, just like credit card debt. Depending on the laws in your state, if the home is foreclosed, your client could end up owing the deficiency amount Gucigment) PLUS legal fees associated with the foreclosure.


7 Days to Success with Short Sales

Given the choice, I would take an UNSECURED debt versus a secured one any day. As it relates to the promissory note, cry and beg if need be. Even let the bank know your client is willing to allow the home to go into foreclosure instead of signing the note. If that doesn't work, then your client will likely be faced with having to accept the promissory note or foreclosure. On promissory notes, the rule of thumb is "5 for 5"-a 5 year note at 5% intenest. Try to negotiate it to 5% (or 10% ma...,,) of the forgiven debt. So, if the deficiency is $100,000, try to negotiate a 5 year promissory note of $5,000 at 0% interest (interest free). This will result in payments of $83.33 per month. This is a much better option than foreclosure.

Question #3: "Our short sale has been approved but the buyer stili doesn't have their financing. What do we do?"
"JI am representing the seller on a short sale. The buyer waited until AFTER the short sale was approved before applying for an FHA loan. (The person I hired to process my short sale did not do their job in edUCl<ting the buyer agent, and I was too igoorant to understand that you do not wait until then to apply for mortgage.) We went under contract in October and the bank approved the short sale in late December. It is now March.
The buyer has already missed the first TWO dosing deadlines and STILL does not have a mortgage in place. At this point, I don't even have approval for another extension. The person I hired to process the short sale has asked for a third extension, but the bank has not responded. With no approval, there seems to be no point in continuing. I now have another offer for the same price in front of the short sale processor, but she is reluctant to release the curtent buyer and deposit monies to start all over. Help!"

Real World Questions and Answers about Short Sales


Knolly's Answer #3:

It sounds to me like you are being strung along. You are now over 90 days past the approval date! Wow. First of all, the buyer should NEVER have been given that long to close! Buyers should always be ready to close within 2 to 3 weeks from the date the bank approves the short sale. After the BPO / appraisal is ordered, we let the buyer's agent know they need to get cracking on their loan as we expect approval within weeks. Also, if a deal stretches out too long after the bank has approved, the short sale lender will begin to think they are being misled, and the seller runs the risk of being foreclosed on, as the bank will likely lose patience (and trust) in you. When I have buyers who take more than 30 days to close, I don't typically extend their closing date. Instead, I place the property back on the market as an APPROVED short sale. At this point in your case, make sure that this first buyer can indeed close. Talk to their lender and be absolutely sure you are comfortable with them getting the deal done in the next 10 days. Keep the seller's lender informed at least 3 times per week. If you are not comfortable (and the buyer's are out-of-contract), you need to get the property back on the market right away and get a new contract.

Question #4: "How do you go about working with an expired short sale listing?"
"I am wondering how you go about working with an expired short sale listing? Would you just have the homeowner switch everything over to you? Do you have to completely resubmit evetything? 1'd imagine there would be a proper process in working with expireds, as you don't know how thorough the previous agent was and you also don't want to irritate the loss mitigator. Any tips?"


7 Days to Success with Short Sales

Knolly's Answer #4
See if there is some way you can get a copy of what (if anything) was submitted to the bank to this point. Most of the time, you will find that a complete package wasn't submitted because the property likely expired before an offer was received. If an offer and package were previously submitted, you really need to see the hardship letter and the financial sratement. If you can't get a copy of the package, send your Letter of Authorization to the bank and then begin calling the lender to find out how far along the shott sale process is, and what else (if anything) the bank needs. If nothing was submitted to the bank, you can pick up the listing and work the short sale.

Question #5: "What do I do when the bank expects more than the home is worth?"
"I illive a shott sale that is raking a long tin1e. I do not believe it is possible to get an offer at the current list price of $448,000. In fact, a home right down the street just dosed this week for $325,000, and it W2;S the eX2:ct same floor pl= and in 'excellent condition. The loss mitigator informed me th2t I was not allowed to list the property for any less th2t $448,000 or they would proceed willi foreclosure. I have been extremely professional with her and she has granted two extensions on the foreclosures. The lender National City does not have their own foreclosure! short sale department as they have "farmed" all of their business out to a thirdparty company. Have you ever had a loss mitigator telling you what you can list a property for? Do you ignore them and reduce the price in hopes of getting an offer? I have never experienced a short sale like this before. Thank you for your input!"

Real World Questions and Answers about Short Sales


,Knolly's Answer #5:

It sounds like the BPO or appraisal came in high-which is not

uncommon. This typically happens when you don't have the opportunity to speak with the BPO agent before they go out to do the BPO. At this point, you will need to submit a BPO dispute letter, along with a copy of your market analysis (including the home down the street), showing the true value of the home. This should prompt the bank to reorder a new BPO / appraisal. See the sample BPO dispute letter on the 7 Dqys to Success with Short Sales Toolkit CD.

Question #6: "How can I go around the loss mitigators?"

"Do you have anyone at Chase who will respond? I am dealing with a negotiator who will not return my phone calls. I have her boss' number and have left several messages for him, but he does not call back either. I need to find someone there who cares."

Knolly's Answer #6:

I have worked with several mitigators at Chase. Typically, when you go "around" a mitigator to their boss, this will prejudice your file, and they may take LONGER to work it. So there is a delicate balance between overkill and calling just enough. Yes, it is true that we oftentimes have to escalate to a manager or supervisor, but use caution. Exhaust all avenues in contacting the loss mitigators first. Try faxing a letter (or email if you have their email address). If you are still not getting any feedback, then go around the mitigator. It's also helpful to keep a list of loss mitigators from various banks that you've worked with in the past. This way, you can contact the loss mitigators you've worked with directly and see if they can help get you in contact with their colleague or a supervisor who can help you.


7 Days to Success with Short Sales

Question #7: "The second lien holder says they must approve the short sale before they will release the lien. What do I do?"

''1 have bank approval on an offer, after many trials and errors. I started with an outside negotiator for this short sale, and totally forgot about the second lien holder, mostly because the seller listed them in his bankruptcy and they were discharged. Now at the eleventh hour, -when I am asking them when they will release the lien, they are sending me guidelines and asking for all the typical statements and records required by the fu:st lien holder. I fought hard with the fu:st to get to an approval Must I now submit everything to the second lien h.older again., and where will the funds typically come from to offer them? By the way, they want to knock down our commission by one percent from 6 to 5%. Can they do this?"
Knolly's Answer #7:

When a property has two liens that are both short, you have to submit a complete short sale package to both lien holders and receive approval from both of them. It's always best to send the complete package to both at the beginning. The second lien holder shouldn't take as long to generate approval as the fu:st. The first lien holder will be the one offering funds to the second. But if you didn't include any funds for the second lien holder on your original HUD-l net sheet submitted, you will have to revise the HUD-1 net sheet and get another approval from the first lien holder at this point. To answer the question about commission, yes, they can cut your commission. Fight to keep it at 6%.

Real World Questions and Answers about Short Sales



Question #8: "I have an FHA short sale. The buyer has asked for 3% in closing costs. What should I do?"
"I just received an offer on a short sale listing of mine. The seller has an FHA mortgage. The buyer asked for 3% in closing costs contribution. I read the FHA Mortgagee Letter and it states the following:

Change in Allowable Closing Costs - Subject to the stated ratios, HUD allows up to 1% ofthe buyer's mortgage amountfor closing costs to be included in the "Seller's Costs" on the HUD-l for all transactions that involve a new FHA -insured mortgage.
So what happens if the buyer is going conventional? Still a problem? We are in the middle of the offer right now and I do not want to make any mistakes and lose this buyer (good offer)."

Knolly's Answer #8:

Back in 2000, when the FHA PFS (pre-Foreclosure Sale) program was revised, HUD would not allow any closing costs to be rolled in. Now, they will allow up to 1% IF the buyer is getting a new FHA loan. If the buyer is not getting an FHA loan, then the buyer can NOT roll in ANY closing costs. I know this doesn't make sense, but that's the rule. Since the buyer is asking for 3% closing costs and going conventional, the conttact will NOT be approved. See if the buyer is able to re-write the offer with no closing costs rolled in. If not, you need to shop for another buyer. The rule simply doesn't make sense to me because many buyers need to roll in 3% or more towatd their closing costs. On the flip side though, I suppose HUD is trying to shy away from encouraging folks to put zero down, which some think perpetuates the mortgage crisis (and short sale crisis) we are in now.


7 Days to Success with Short Sales

Question #9: "The bank wants my seller to switch to a loan modification instead of a short sale. Is this common now?"
''1 just had a bank pull back on a short sale because they said that due to the Obatna stimulus package they were going to be able to offer the current owner a lower interest rate and make the payments more tolerable and therefore the owner was no longer interested in consummating the short sale transaction. I know that the short sale is subject to the seller's lender approval and that neither party is required to perform on the transaction up until they get final lender approval. So, it seems that the bank has the right to do this. I was just wondering if you have had it happen before. I wonder if this is something that we can '. expect to go on ill"LUe near " mture. "

KJnoUy's Answer #9:

YES, sadly, I have heard of this becoming more and more of a common occurrence-although it happens very rare]y to me. And here's why. Before we list a home, we make absolutely CERTAIN that the seller has NO DESIRE (or ability) to keep the home. If they want to keep it, I make sure they exhaust all opportunities to do so with the bank, and 'will even assist them in keeping the home (at no charge), since I believe home retention is always the best option jf it is poss1ble. I pre-qualifY my clients to make sure they don't want to do a loan modification. Many banks are getting very desperate to KEEP homeowners in their home, so they are offering unbelievable options! Banks can reduce a person's mortgage payment down 31 % to 38% of their income! It is very frustrating to put in months of work on a short sale transaction, only to have the lender come forward at the eleventh hour with a sweetheart deal. It's great for the homeowner (sometimes), but it's like a kick in the mouth to the listing agent, buyer'S agent, and the buyer.


Real World Questions and Answers about Short Sales



Question #10: "I have a property that is not moving. Can I reduce the listing price to below what the lender is asking for?"
"I have a short sale property ... initially put it on market at $235,000. Offer accepted 10 days later by seller for $210,000 plus $6,000 towards buyer's closing costs. Seller's lender came back at $220,000 and paying no closing costs. Buyer walked .... Property waS put back on the market 3 weeks ago at the $220,000. The house has been shown about 20 times since, with no offers. Feedback is that house needs too much work. Is it okay to reduce listing price below the $220,000 figure OR ask buyers' agents to bring all offers? Seller's loan is conventional. They are getting out of the house due to divorce."


Knolly's Answer #10:

Congrats! Looks like you've got an unofficially approved short sale! It is not uncommon for a lender to counter an offer like they did. This does NOT mean that they will not take less. You will need to INSIST that the lender accept a reasonable offer by "gently" challenging their counteroffer. Perhaps $210,000 is the magic number. Contact the loss mitigator and let him/her know that you have had LOTS of showings and no one will make an offer because of the condition of the property. Submit proof of the showings if you track them electronically. Also submit a list of needed repairs. Let the mitigator know that if they will take LESS--say $210,000, you are likely to generate another contract. If they still won't budge, you will need to submit a BPO Dispute Letter. See the example on my Toolkit CD. Works like a charm.


7 Days to Success with Short Sales

Question #11: "My clients have been through Chapter 7 Bankruptcy, now they want to sell their house in a short sale. What's your advice?"
''The homeowners want to sell their house via a short sale, but their bankruptcy attorney squashed that idea without explanation. These folks, who claim that they still own the house, filed Chapter 7 in November 2008, and it was discharged in April 2009. I have my own thoughts on this, but would like to hear what your experience has been in this arena. The existing loans are 80/20; both conventional Thanks."

Kinolly's Answer .#11: An active bankruptcy will KILL a short sale (as the lender cannot legally speak with you while the file is actively going thtoughthe bankruptcy pmcess). However, since the property is a secured "-Sset, in many states the bankruptcy itself does not take away the lender's rigbt to forecloseonce the file is discharged from the bankruptcy. So, while a bankruptcy may discharge the outstanding debt (deficiency) resulting from the foreclosure, a person will walk away with a foreclosute AND a bankruptcy on their credit report. That's the double kiss of death to a person's CUfl'ent and furore credit.
If a person needs to file bankruptcy to wipe out unsecured debt, it just makes more sense to do the short sale FIRST and then file bankruptcy for the other debts, that way there is no foreclosure reported on their credit. At this point, I recommend they move forward with the short sale to avoid a foreclosute on their credit report.

Real World Questions and Answers about Short Sales


Question #12: "The first lien holder won't approve the short sale until my client is officially 30 days delinquent. What can I do?"
''1 currently have a client who has a first lien with American Loan Servicing (ASC) and a second lien with Litton Loan Servicing. Second lender, Litton approved the short sale with no problem. First lender ASC would not approve the short sale, as the client is not delinquent. ASC said their investor requires the client to be 30 days delinquent on their loan before they could be approved for a short sale. Client does fall into the loss of income, which they proved on their financial statement to ASC. Client did not qualify for the modification with ASC. ASC instructed client to obtain a REALTOR and do a short sale, which is what client did. Now, ASC is not approving the short sale because client is not delinquent for 30 days. I have spoken to two different managers in the loss mitigation department and they are not budging. Has you ever run into this and is there anything else that could be done other than wait for the client to be 30 days delinquent?"

Knolly's Answer #12:

Some lenders have adopted the really lame policy of reqwnng homeowners to be delinquent prior to accepting their short sale application. To me, the most proactive approach for lenders would be to ASSIST sellers who mayor may not be currently delinquent but who can prove that they will no longer be able to pay their mortgage at some verifiable time in the future. Unfortunately, unlike FHA and VA short sales, on conventional loans there are no hard and fast rules (across the board) regarding delinquency. Each lender has their criteria as it relates to this. If they are being pig-headed, then you should just have the borrower NOT make the next payment, since the lender has, in effect, made this a


7 Days to Success with Short Sales

requirement. Obviously, the missed payment would ruve a derogatory impact on your client's credit. Alternatively, the seller could wait until they truly can no longer make the payments and then apply for a short sale.

Question #13: "I'm currently processing a short sale for my client, but the lender is still sending notices about default and foreclosure. How will this affect the short sale?"
''Weare working with a seller on a short sale with first mortgage ,'lith CitiMort"aage. We have a fully executed contract (close to our CMA) and a short sale packet was faxed in 2 weeks ago. (And after several tries, they acknowledge they ruve the packet.) So far no negotiator has been assigned to the account. Yesterday, our seller received a letter from CitiMortgage stating:

This letter will sen~ as n.otice that your mO?tgage is still in default. Al/ reasonable efforts ajJ(JT:dedyou to .C1fre this default haJJe failed. Your loan has been ref=ed to the following legaljirm to begin foreclosure proceedings ... (name of attorney's in Tampa Florida) ... If you haJJe aJZ)i questiotlS regarding .foreclosure proceedings on your mortgage, please contact the .ahove attorney. '
Does this letrer ruve a direct impact on our short sale status with CitiMortgage? Should we he doing anything in response to rbi, letter? Any advioe would be appreciated!"

Knolly's Answer #13:

This is a typical situation. Keep in mind that the loss mitigation department and the collections/foreclosure departments are typically operated as separate entities in most mortgage furns. Therefore, the foreclosure process can be moving forward at the same time the short sale is being processed. Oftentimes, homeowners are getting letters from both departments.

Real World Questions and Answers about Short Sales


The trick is to get short sale approval as soon as possible in order to stop the foreclosure. Always verify with the loss mitigation department that there is no foreclosure date set. If a date has been set, you will need to get it postponed.

Question #14: "First, what is an 'auction date'? And how do I help my buyer buy a house that is in pre-foreclosure with an auction date approaching?"
"My first question is, 'what is the auction or sale date?' And my second question ... I have a buyer who wants to purchase a house that is in pre-foreclosure and is pretty close to the auction date. The property is vacant and is not listed. I'm finding it very hard to locate the owner-though I have a name that I located in the tax records. I tried the White Pages & Zaba Search in order to locate a phone number. Needless to say, I have been unsuccessful. It looks like the owner just walked away from the property. Do you have any suggestions on how I can locate her?"

Knolly's Answer #14:

To answer your first question, the auction or sale date is the date the property is going to foreclose/be auctioned off for sale. Most properties are not purchased at auction, and end up going back to the bank. They then become REO (real estate owned ... by the bank) properties. And to your second question, if you have a title/escrow company you work closely with, get the address over to them and let them work their magic and track down an owner. You will need to work quickly! You'll have to 1) find the owner, 2) convince them to do a short sale (if it's short) and let you represent them and 3) submit a complete package along with the contract on the property. You're going to have a busy few weeks, but this is doable. Get busy!


7 Days to Success with Short Sales

Question #15: My buyer is considering a short sale that is $60,000 overpriced! What can I do?"
"I have a buyer and an executed conttact that was faxed to Countrywide on Friday. The foreclosure is set for next month. The appraisal from Countrywide is $360,000. My CMA-and I looked at every property available to me in the area-puts the home in the $299,000 to $310,000 range. Included with the offer is a dispute letter and a copy of my CMA. What can I do that will help my buyer with Countrywide? Are there any other avenues I should be taking and what should I expect from Countywide?"

Knolly's Answer #15:

Sounds like you are b>tsicaily doing the listing agent's job for him/her! Since you have already submitted the conttact WlITH the BPO dispute (good work), you will need to make sme the listing agent contacts the bank every 1 to 2 days . .A loss mitigator should already be working the file, so it shouldn't be hard to get them to agree to do another BPO or a newapprais2l. Since you don't have authority to discuss the account, you will need to let the listing agent deal with the bank direcdy. However, since it appears that you have more experience with short sales, you may have to gently educate the listing agent to keep things moving in the right direction.

Question #16: "WiU the bank honor a short sate on an investment property?"
''1 was on your short sale call today, and I have learned a fair amount already. I'm looking forward to the entire curriculum!
Will Bank of America honor a short sale on an investtnent property? My clients are heavily upside down and want out. They are afraid that Bank of America will come after their other assets (401K, etc.) before honoring the short sale. Any thoughts or suggestions?"

Real World Questions and Answers about Short Sales


Knolly's Answer #16:

Yes, I do many short sales on investment properties. Bank of America and most other lenders will do a short sale on an investment. You will have to be careful how you word the hardship letter. The financial statement and hardship letter will detertnine if your clients qualify for the short sale or not. Besides examining the financial statement, lenders also review the borrower's bank account statement, pay srubs, and their credit report to get a complete picrure of the person's financial health. As far as their 401IZ, the lender typically won't go after that-but they might ask your clients to sign a promissory note. Depending on the client's financial picrure, some lenders may also ask for the seller to contribute some funds at closing.

Question #17: "Will the lender in a short sale agree to pay seller's closing costs?"

Knolly's Answer #17:

YES-the lender will typically pay all customary seller closing costs such as title policy, commissions, taxes due, and escrow fees. Typically, they will NOT pay for buyer closing costs such as appraisal or survey, and they oftentimes will not pay any HOA fees.

Question #18: "When should I submit the package to the second lien holder?"
"1 just started a short sale with a $480,000 first lien (Aurora) and $140,000 second lien (WAMU). My current offer submitted is $435,000. The first lien package has been submitted. When should 1 submit the second lien package? Thanks again for all of your help."


7 Days to Success with Short Sales

Knolly's Answer #18:

Wow-that's quite short. You should submit both short sale packages to both lien holders at the same time. The first lien holder will likely only offer a max of $7,000 (5%) to the second lien holder ... and possibly less.

Question #19: "My clients are afraid their lender will pursue a 'deficiency judgment' for the difference on the short sale. What should I tell them?"
''1 need your professional advice again. I'm working a deal with Countrywide. It's a first and second. I have approvals for both liens. Only took 8 weeks to get these! Yikesl My client, the homeowner, is concerned about the second paragraph in which Countrywide states that they may pw:sue a deficiency judgment fo~ the difference. rve asked Countrywide to amend or omit this vtlbiage as we are requiring Countrywide to accept the short sale and forgive all the difference. The negotiator said that this is the only document approved by their legal department. Period. My client is now scared to proceed with the sale and I'm not sure how to advise her., other than to seek an attorney's advice. I'm guessing you've come across many short sales involving Countrywide. Any suggestions?"

KnoUy's Answer #19:

What is your client's recourse? If your client refuses to sign, what will they do instead? Allow the property to foreclose? If it forecloses they will still remain liable for the debt. My advice to them is to SIGN the agreement! Once the property closes, the bank will be left with an UNSECURED amount. As it is, the lender has a SECURED note for the full amount. Often, lenders will not amend their boilerplate language. It's "take it, or leave it." I advise they take it.

Real World Questions and Answer.; about Short Sales


Question #20: "Our short sellers are changing their minds and pursuing loan modifications in the middle of the short sale process. What can we do to prevent this?"
"It was great meeting you at Masterminds last week! Thank you for sharing so much of your knowledge on short sales with the group! Your streamlined syst=s are amazing and your video is great! I wanted to get your opinion/insight on something ... In South Florida, we are experiencing about 80% of all MLS sales as distressed property. Our sales office has well over 400 short sale listings and the balance REOs. One of the challenges we have run into recendy is loan modifications. We had three transactions last week die because, at the eleventh hour after the short sale was approved and accepted, the seller changed their mind and decided they would like to attempt a loan modification. That killed the short sale right in its tracks. The lender closed the short sale file and opened a loan mod without guarantee it would go through. Have you had this happen and if so, do you have anything built into your system to lessen or eliminate it from happening?"

Knolly's Answer #20:

Before we list a home we make absolutely CERTAlN that the seller has NO DESIRE (or ability) to keep the home. If they want to keep it, I make sure they exhaust all opportunities to do so with the bank, and I will even assist them in keeping the home (at no charge), since I believe home retention is always the best option if it is possible.
If you don't pre-qualify your clients thoroughly, this will continue to be a probl=! Review what I say about this in Day 2 of 7 Dqys to Success with Short Safes.


7 Days to Success with Short Sales

Question #21: "How much should we pay the processing staff in our new short sale processing company?"
"I plan to join a few other partners and start a short sale processing company. The company would do all the short sale processing and negotiation of the short sales that I bring and a few other REALTORS only in my local area. We don't want to get too big. Can you please share how you structure your short sale processing company as far as the going rate you pay the negotiator/short sale processor staff who calls the banks on your behalf? Based upon your knowledge, do you do an hourly rate or a contact rate/flat fee based upon each approved short sale?"

I<Jnolly's Answer #21 :

Consider one of two different plans:

Plan #c Pay a processor $8 to $12 per hour or more. No

compensation per file, just an bourly wage. Of course the going rate is different depending on your area, but that's a good Texas rate.

Plan #2: Pay a pmcessor a flat monthly fee, say $1,200 to $1,500
per month PLUS $300 to $500 per file dosed. Each processor should be able to handle 30 to 40 :files, depending on their hours. Really efficient prooessorscan handle more. Por more detailed information on setting up a processing company, refer to the Bonus Section.

Question #22: "Who should I recruit as processors for my team and how should I pay them?"
"I have several related questions for you ... Wbat type of people do you find to be your best processors? Out-of-work loan processors, exREALTORS, ex-mortgage broker'S, stay-at-home moms? Do you have the processors work from a home office or come into your office? Based upon your experience, which one has worked best: the hourly rate

Real World Questions and Answers about Short Sales


or monthly flat fee plus bonus on closed file? If you pay the hourly rate, how do you have them track their hours? Also do you have them as independent contractors or employees?"

Knolly's Answer #22:

"I have had the most success with ex-business professionals who want to work only about 25 to 30 hours per week. They are very reliable and can work from home. Right now, my team works from our sales center's main office, where I rent an office. I like this option for the synergy. Before that, they worked from my home office and they've also worked from their home offices. Any way will work. The same team members have been with me since I began working short sales. My short sale admin staff are all "employees," and I pay them hourly. My folks are on the honor system. They actually work more hours than they bill me for! If you truly want to "lead with revenue," a "per file" option is best. However, many won't want to work that way. It takes a certain type of person to want to work on commission. I think the independent contractor route is better if you can structure it correctly and if your setup will legally allow you to do it. Ask your CPA how you should structure this and how to set things up in compliance with the IRS! You can have your independent contractors start their own sole proprietorship or LLC. Then you will pay their company a transaction fee per closing. But watch out! You don't want them getting the idea they can do it on their own (without you!)

Question #23: "The second lien holder wants 10%. How can I get them to negotiate?"
"I have an approved short sale through the first lien holder (Citi) and they are willing to give the second lien holder (National City) $5,000, which I was told is the maximum allowed from Freddie Mac. The


7 Days to Success with Short Sales

second came back and they said they wanted a minimum of 10%, which is $17,000. How can I get them to move from that position?"

Knolly's Answer #23:

Have the first lien holder (Citi) put in writing that the max they will pay is $5,000. Then send that letter to the second. You may need to speak to a supervisor at the second lien holder's department if they don't take it. Otherwise, your seller may have to accept a promissory note for the $12,000 difference. Keep negotiating! Get me an update on how this
turns out.

Question #24.: "What do you tell the lender when you lose your buyer?"
"What do you do, in terms of notifying the lender, when the buyer withclxaws after the package has been submitted to the lender?"

IKnoUy's Answer #24:

Having worked short sales for more than 6 years, I have come to ASSUlME that the first buyer will back out. In fact, sometimes, the first TWO contracts will fall because the buyers get tired of waiting. If you notify the lender that the buyer has walked, then the loss mitigator will promptly (and happily) CLOSE the file. Then you will have to start FROM SCRATCH with a new contract and short sale package. y:tkes!!! Therefore, my strategy is to CONTINUE allowing the lender to move forward with the short sale process based on the contract they have. I do NOT notify them that the deal has busted. Meanwhile, I promptly place the property back on the market and attract another buyer. ONCE the file is approved, I simply inform the bank that the names on the contract will change. Sometimes other terms will change slightly as well (sale price, etc), in which case, a new HUD-l is submitted.

Real World Questions and Answers about Short Sales


The bank doesn't care WHO is buying tbe house, so if tbey simply need to change tbe buyers name on tbe approval letter-it's no big deal. This strategy is much better tban having tbe bank continue to close and re-open files. This will save you weeks, if not montbs, of time.

Question #25: "What do you think about allowing buyers to put in offers with no escrow down?"
''In Florida, often agents do not have tbeir buyers put any escrow down until tbe bank gives tbeir approval for tbe short sale. Wbat are your tboughts on this process? Often buyers are putting in offers all over town because tbey have no skin in tbe game."

Knolly's Answer #25:

If you have a fully-executed contract, you need to collect earnest/ escrow money. Of course, tbe conttact will be subject to seller's lender approval of a short sale, but escrow money should accompany tbe contract and it should be receipted by tbe company or firm handling escrow. If you are submitting an unexecuted offer, earnest money required. (See Day 5 for more information.)


Question #26: "My FHA short seller never filled out the Application to Participate Form. What should I do?"
"Regarding tbe Application to Participate for FHA loans ... Wbo sends tbat to tbe seller? Do we as tbe agent or does tbe lender? The reason I ask ... I have a FHA short sale and my seller never filled out tbat form."

Knolly's Answer #26:

The Application to Participate Form HUD-90036 should be filled out by tbe seller and sent witb tbe short sale package (for FHA loans only). You will need to send your seller tbe form to fill out. You can find tbe form on tbe 7 Days to Success with Short Safes Toolkit CD or at


7 Days to Success with Short Sales

The seller cannot be approved for an FHA short sale without this form in the package. Not including the form with your original package could hold up your package from even being processed-resulting in weeks of delay.

Question #27: "What documentation is necessary for a Loan modification?"

"This may be out of the parameter for this course but, if your client wants to apply for a loan modification with current the lender verses doing a short sale, what information should they provide to their lender (for example, financials, hardship, etc)? I would like to be able to advise them on this issue if possible."

KnoUy's Answer #27.:

If a person wants to do a loan modification, the infoffi1ation they send for a 10= modification is very sinlllar to that which would be supplied for a sbort sale. They main difference is that the loan mod info must
prove that the seller CAN afford to keep the home, where-as the short sale documents will endeavor to prove just the opposite. The main dUng lenders look at on a loan mod is the nnancial worksheet. The seller must show that they now have mo~e income than expenses 3n order to qualify. I've helped several clients (who I thought should keep their home), get loan mods. The seller will need to contact their lendcr and let the lender know that they wish to do a loan modification. The lender will then send them an application. Many lenders now have a loan modification option on their website where the homeowner can apply for assistance online.

Real World Questions and Answers about Short Sales


Question #28: "I'm working a short sale on an investment property and the lender has denied the short sale unless my client signs a promissory note. What can I do?"
''We had a bad experience with the 30-day delinquency 'rule' for a Countrywide short sale. Our seller's property was an investment property. He would 'qualify' for a short sale (according to the negotiator) once he was 30 days past due. So, he stopped making payments. Once he was delinquent, we found out that Countrywide had mortgage insurance on a second loan with them (it was an SO-l 0-10 loan-SO to the first, 10 to the second, and 10 down). The mortgage insurance company then denied the short sale because it was an investment property (and they are trying for leverage to get him to sign a promissory note)."

KnoUy's Answer #28:

Investment properties are typically "trickier" than owner-occupied. I've had good success with mortgage insurance companies, as they typically have more of a vested interest in mitigating their losses than the lenders do. But sometimes they will hold out for that promissory noteespecially on investment properties.

In lieu of foreclosure, I recommend the seller sign a promissory note. (See Question #2 above.)
Question #29: "What do you think about more and more lenders reserving the right to pursue deficiency judgments after the short sale?"

''1 just want your take on something ... It seems as if all the approval
letters I'm getting nowadays are purposefully not specific regarding deficiency judgments. I have been successful in the past in negotiating this into the letters. But for the past couple of months, most of the big lenders I'm dealing with are refusing to change the verbiage. They are saying, 'we can't change that. It's been approved by our legal department.' I'm talking specifically about Countrywide/BofA, Chase,


7 Days to Success with Short Sales

and Citi. None are guaranteeing that they won't go after the clients for deficiency. Are you finding this to be the case nowadays? Are we finding a new 'status quo'?"

Knolly's Answer #29:

Yes, you've hit on something here. Here's my long-winded reply to your simple question: Yes, I have noticed that some lenders are reserving the right to pursue the client. For example, BofA's approval letter states, "BAC Home Loans Servicing, LP and/or its investors may pursue a deficiency judgment for the difference in the payment received and the total due, uo!less agteed othe='ise or prohibited by law, if the short sale closes on the loan referenced above." In practice though, I've never seen a bank go after a client for the balance after a short sale is finalized. Of course, there isn't anything that will prevent the lender's pursuit EXCEPT the language (terms) in the short sale approval letter. Banks are in a very vul.neraHe position right now. Their hacks are a"o-ainst the wall amdthey don't Like it. Short sales are becoming more prevalent and although they do save banks money, no one likes to lose. While there are many homeowners who are being helped through a time of crisis, some homeowners aJre taking advantage of the system (and getting in on the frenzy). My guess (or theory) is that some banks w:illLikely want to investi"o-ate (or audit) their files in future years to tty and find any short sales transactions that they deem were illegitimate (not at arms length). For example, they can easily look up a property that sold short 4 years ago, and see who currently owns it, etc. If their investigation reveals that the owner manipulated the system (perhaps a relative of the homeowner purchased the home, which is a big no-no), they will probably tty to get a deficiency judgment.

Real World Questions and Answers about Short Sales


As I stated earlier, banks are being very quiet on tbis issue right now, and are not pursuing folks currently. But since so many are now reserving that right, it makes one wonder what their motivation is. Bear in mind that ultimately the BANK has the power. The reality is that if the seller does NOT agree to the short sale approval terms and their home forecloses instead, they will still likely be subject to a deficiency judgment AND ruin their credit. Let's say you were to go to your local bank and take out a business loan for $20,000. After 2 years of paying on time, you fell on hard times. If you went to your banker and asked him to have his institution forgive the note, you'd probably be laughed out of his office (or thrown out). If by some unknown miracle he did agree to forgive the debt, you certainly couldn't dictate the terms!

In my view, the greatest tbing the bank does in a short sale is release their lien from the property. Without that lien release, the person could NOT sell their home. If the bank ever comes back for a deficiency, it will be an unsecured debt at that time.
Assuming that a person has no other option but to sell their home, my advice to them is to take what they can get.

Question #30: "Will FHA approve a buyer loan for a short sale property that needs plumbing repairs?"
''1 showed a buyer a short sale today which needed plumbing repairs. We know that the bank will not pay for such repairs. The buyer is going FHA, and said that he believes that FHA will not approve a purchase where plumbing work is needed. I can't irn"t,oine how that could be correct. So, I'm just putting tbis out to you for a quick answer."

KnoUy's Answer #30:

This is a great question for a lender (loan officer). Yes, it is true that when a buyer is getting an FHA or VA loan there are stricter guidelines regarding the property condition. For example, if a property needs a new


7 Days to Success with Short Sales

roof or foundation repairs, it may not be eligible for these governmentfunded loans. It would depend on the severity of the plumbing repairs needed. FHA may not grant a loan on a property needing major plumbing repairs. They will typically require that major issues be fixed prior to closing. One alternative is to have your buyer apply for an FHA 203(k) loan, which will allow the borrower to get a loan amount that includes the cost of repairs and escrows the funds needed toward repairs. For more information on this option go to

Question #31: "Shou:ldlsend the first lien holder's approval 'letter to the second lien holder?"
"I wanted to know if you ever send over the first lien holder's approva! letter to the second lien holder to get the second lien holder to move quicker for an "pproval. "What is your typical procedure vvith first and second lien holder letters? I don't want to disclose anything I shouldn't. 'lb.anks."

KnoUy's Answer #31:

You've touched a nerve and opened a wound. Darn you! Can you believe that in years gone by i[ NEVER had to deal with second lien holders??? If there were two liens on a property, the first lien holder did the courtesy of negotiating DIRECTLY with the second. This made lots of sense because the primary lender has much more power than lowly or me. That's back when loss mitigators were taking long lunches, answering every phone call, and waiting for something to do! How spoiled I was! Okay, enough reminiscing. Yes, it is always a good idea to send the second lien holder the approval from the first, and visa versa. Oftentimes, I get the second lien approved before the first, and I'll send that approval to the first lien holder. Of course, this is typically only a good idea ONCE the file has been

Real World Questions and Answe~ about Short Sales


assigned to a loss mitigator. Otherwise it will confuse the heck out of the front-end recipient and will end up in the black hole of nothingness. (That's the place many of our files end up, and we have to fax them over and over again). When one lien holder sees that the other has approved the short sale, it may prompt them to react in kind.

Question #32: "How do I get a federal tax lien removed?"

"We have a short sale with a federal tax lien of $93,000. If there is obviously no equity in the home, how can we get the Feds to take the lien off so this can close? The lender has agrees to approve the short sale if we can get this lien off."

Knolly's Answer #32:

In cases where the homeowner owes federal income taxes, the IRS may place a federal tax lien on the property. Actually, the lien covers all of the person's property including the home. Typically, you can convince the IRS to remove the tax lien from the property so that you can sell it. (See Day 4 for information on how to get the tax lien removed.)

Question #33: "The second lien holder will not talk to us. What do we do?"
''1 have a short in progress that has Chase as the first lien holder and
Bank of Florida (a local bank) as the second. The second bank will not negotiate with us. They will only talk to the seller. We have had many conversations expressing how the seller has selected us and signed an authorization for us to represent him. Still they will not deal with us. We then had the seller deal with them, and he had even offered to pay half of the loan on a promissory note. They will not deal-it is all or nothing for them! The second lien is a home equity loan that the seller took out to payoff his first wife in a divorce for her share of the home-so it is quite large. Now he is remarried and the second lien


7 Days to Success with Short Sales

holder feels his new wife should help him payoff this debt. Any suggestions? He was served witb a summons last night for tbe balance of tbat loan. They are playing bard ball."

Knolly's Answer #33:

Banks view home equity loans quite differently. Essentially a person has already squeezed tbe equity out of tbe home and used up tbe money. Therefore, banks take a very different approach and tend to want to recover as much of the loan as tbey =. Unlike mortgage lenders who are often eager to settle, home equity lenders operate more like brass

collections agencies.

When you have seconds that are home equity loans, they are very difficul.t (or impossible) to deal with. As you know, you need tbe cooperation of the lender in order to successfully complete a short sale. If they insist 011. dealing with the homeowner directly, do a three-way ca1! with you on the phone witbthe seller. Back in the 80s and! 90s, most banks didn't want to do short sales at all. They were very reluctant. Thett attitude was "PAY UP or we will FORECLOSE." It sounds like this hank is stillliviog in tbe past. That's ashame. See if you can i:alk to tbe president of tbe bank. The bank will have to be convinced mat they will lose it all if tbey don't play. UnfOr1:U!lately, with smaller banks, I have had them foreclose instead of compromise. Very bull-headed I know, but tbere is notbing you can do if tbe nut won't crack

Real World Questions and An5We!5 about Short Sales


Question #34: "This one sounds too complicated. Can I help this guy?"
"Knolly, I got the following email from a prospect last night:
I am currently considering selling my home as a short sale but have a few questions. I have a first mortgage with BofA for $175,000 and a second with Chase for $50,000. I recently filed Chapter 7 Bankruptcy and was discharged in March. I have been on a repayment plan with BofA since the bankruptcy and have contacted Chase to setup the same arrangements-however, after faxing my financial information to Chase's loss mitigation specialist I have not heard from him in almost two months. The second loan balance does not show on any of my credit reports, and I have not been receiving any monthly statements. Did this loan get written off on my bankruptcy or is Chase ignoring me? I've emailed the loss mitigation specialist a number of times and they go through-but still no response."

Can I hdp this guy? He's already made a deal with his first lien holder to repay, and I have no idea what happened with the second. Now he wants to see his home and he is upside down. It doesn't sound like I can help him from what I understand. I would really appreciate your input on this as I would hate to give him false information either way. Thank you so much in advance! Take care!"

Knolly's Answer #34:

Yes, you can help him. As far as the first lien holder (Chase) not contacting him back, this is VERY common. Homeowners who contact the bank directly are often placed on the back burner. The lender considers that the seller is SERIOUS once they hire an agent, and they are given more priority.


7 Days to Success with Short Sales

Once you get the listing, you can have your title/escrow company run a title report and see what liens are showing up. It is not likely that the second has released their lien, but it is possible. Regardless, since the bankruptcy has been completed (and is not active), if the prospect qualifies for a short sale, you can do it. NO problem.

Question #35: "Can a short seller's roommate buy the property? Will banks allow that?"
[Continuation of Question #34J "Okay, Knolly, I have some more information and yet ANOTHER question! So, it rums out the guy who contacted me is living in the home with a friend who owns the home, who happens to be the one that filed for ronkruptcy. BofA (the first) has set up a payment plan to help the homeowner get caught up by November, but they also rolled in some back pmperty taxes so the payments are going to be increasing even more shortly. And it sounds .like he will not be able to make the new payment. So doing a short sale is definitely an option. Here is tile tricky part, the roommate who does NOT own the home wants to be the buyer! He sounds like he's tryillg to lure me in by saying that if I listed and sold the home, I would get the full commission. Okay, sounds great. My concern is how would this fly? I know that you're not allowed to sell the property to a family member, which they are not, but I'm assuming the owner would still be living in the home, just as a roommate/renter this time. So the two friends' mles would be reverse<i Do banks consider this the same as if a family member were to purchase the home? And how would this be disclosed ... and what needs to be disclosed? Should I contact a real estate attorney to find out what's legal in my state (CA) or are the rules regarding short sales nationwide for the most part? I know I can definitely pursue the short sale, I just don't know that it would be proper to allow the roommate to be the buyer. I don't want to be tticky."

Real World Questions and Answers about Short Sales


Knolly's Answer #35:

Thanks for keeping things interesting! Banks want short sale transactions to be "at arm's length." The problem with that is that different banks have different definitions of what that means. Here's how HUD defines "arm's length":

'The sale must be an 'arm's length' transaction; the buyer cannot be a member of your familY, business associate, or other favored partY. No hidden terms or special understandings can exist betweenyou, the buyer, appraiser, sales agent or mortgagee. "
Having said that, it does sound as though this will be an impossible deal; however, that is only a likely assumption. The bank MAY still approve this transaction. The issue for you will be whether or not it is worth your time and effort to pursue, given that such a transaction may not meet the arm's length definition of the lender, and they may not grant a vanance. Rather than seeking legal advice (although this is a viable option), I think the best and simplest way for you to protect yourself legally is to provide FULL DISCLOSURE. It's that simple. If you decide to work this one, simply write the following in the special provisions section of the contract

"Special Disclosure: The buyer of this property is currently the seller's friend and roommate."

Working deals like this MAY seem like a waste of time, but I have always enjoyed working the more challenging ones, as they provide loads of experience. Again, if you go forward with this one, set the seller's expectation. Let the seller know that you will be providing the bank full disclosure and that this deal may not be approved. Run this one by your broker as well. If the seller does NOT agree with disclosing that the buyer is his friend and roommate, then WALK AWAY.


7 Days to Success with Short Sales

Question #36: "Will a lender require financial information from a co-borrower if that person has abandoned the home?"
"At one time, I thought I had heaxd that if one of the parties on title and on the loan abandons (leaves) the property, then the shorr sale lender should not require any information including financial information on that person. Example: If the husband has abandoned (left) the home ... Would the shorr sale lender require financial information fmm the husband?"

Knolly's Answer #36.:

If one of the co-borrowers has abandoned the relationship, I recommend that when the financial worksheet is filled out, only the income of the remaining borrower be tilled in. Keep in mind that BOTH parties will have to agree to the shorr sale and sign the contract and closing documents, etc. So you will need to make sure all parties are agreeable. If there is a divorce that has taken place already., get a copy of the divorce decree so that you can see which spouse was awarded the home. The party who was awaxded the property will have to cooperate with you in order to successfully complete the sho.rr sale. Be sme to explain in the hardship letter that there 1S a divorce, separation, etc. Ultimately, the lender will determine if they require the information from both borrowers. If they do, you will need to make S\1J:e tloe loss mitigator understands that there is only one contributor.

Real World Questions and Answers about Short Sales


Question #37: "What do you recommend homeowners write in their hardship letters?"
''1 just received a hardship letter that was handwritten and four pages
long! Is this good or bad? What do you recommend the homeowners write out for your 'few sentences?'?"

KnoUy's Answer #37:

I never give my clients the assignment of writing their own hardship letter, and I never allow them to write their own. During the Short Sale Pre-Qualification Questionnaire, I gather all of the information I need in order to write out the hardship letter for my clients. The bank simply wants to know what their hardship is and why they can't make their payments. As I point out in Day 3, drawing up a long-winded hardship letter can do them much more harm than good.


7 Days to Success with Short Sales

Sample Script: Portion of a Short Sale PreQualification Interview

(name of real estate company)

( Script!!.!i Knolly: " ... Frank, thanks for calling me earlier . . . ..;;;J today. Now, tell me, how did you hear about me?"

Prospect: "Well, we were looking in the paper, and we saw the big cowboy hat." Knolly: "Oh! You saw my cowboy hat! That's great! So, obviously you've got a situation right now. What's going on? Are you facing a medical situation?" Prospect: "Oh, no, no. There's nothing medical. See my wife and I ... she tost ..." [So now we know he's married . ] Knolly: "Oh, okay, you and your wife ... Your wife lest her job?" Prosp,ect: "Yeah, yeah. She lost her job and ... " KrloUy: "So, teU me abeut that. I mean, dees she have any jeb prospects? De yeu think you're going to get back en your feet anytime soon?" Prospect: "Well, no, 1 don't think so because ... I lost my job last year, and I had to take a different job ... a step down ... in my new company." Knolly: "Well, have you all ready talked to your lender about this?" Prospect: "No. I mean, I called and they won't work with me." Knolly: "Who's your lender?" Prospect: "Well, it's Countrywide."

Day 2: Pre-Qualifying the Short Sale Prospect


Knolly: "Oh, yeah, Countrywide. Okay. So, is it only Countrywide, or do you have another lender too?" Prospect: "Oh, yeah, we've got two." Knolly: "Okay. You've got another one. Maybe this one will be more receptive. Who are they?" Prospect: 'Oh, that's AmTrust." Knolly: "AmTrust. Okay. Well, now much do you owe on those loans?" Prospect: "Uh. I really don't know." Knolly: "Okay. Well, how much did you pay for the home?" Prospect: "Well, I don't even remember what we paid. " Knolly: "Okay. Well, you know, that's not uncommon. How much do you pay each month?" Prospect: "About $1,350 a month." Knolly: "So, let me ask you this, Frank. Right now with your current situation ... You say you're behind four months, right?" Prospect: "No, no! It's more like two months ... only two months right now." Knolly: "So, you know what, Frank? Your situation sounds very similar to something that happened to me. And it's one of the reasons why I advertise that I help people with foreclosures ... because of a situation that happened in my life. Have you got a quick minute? Let me just tell you about it." Prospect: "Sure. What happened?"


7 Days to Success with Short Sales

Knolly: [after personal story] "Look, I want you to understand what a short sale is, and what it's all about. So, I'm going to send you to a website that gives you more information. In fact, let me give you the website right now. It's . " Prospect: "What is that, again?"
(your clien't website)

Knolly: .. That's going to explain to you what a short sale is ... because you're probably wonde,ring how it works." Prospect: "Oh, no. We know all about the short sate ... " KnoUy: "Oh? Okay. Weill, ilook at it anyway. And (we) let me just teU you in a nutshell what I do: I speciaH~e in negotiating with your Lender to allow you to sen your home ... so that you don't have to bring any money to closing. The tender wiU pay aU fees. In fact, my services are absolutely free to you. " Prospect: "Wow, how can that be?" KnoUy: "You know, aU the information is on my (we) website .... You'll learn how I do this. But, for now, what I want to do, because I've got a short amount of time, I want to ask you a few more questions to see if you qualify for the short sale program ... Is there an HOA? ... "

If you are having problems making mortgage payments and you are considering a Short Sale of your home, you should contact the CalHFA Loss Mitigation Unit by calling us Toll Free at 1-877-552-4839. To qualify for possible assistance for a Short Sale: You must have a legitimate and valid financial hardship. The home must be owner occupied throughout the entire Short Sale process. If the property is vacant the Short Sale will be reviewed on a case by case basis. The property must be listed for at least 90 days. You cannot be attempting to obtain a loan modification. To apply for a possible Short Sale, you must submit a complete Short Sale package. The package must contain a valid offer on the property. In addition, the package must contain the specific required documentation listed below: 1) A completed Borrower Financial Information Form (form provided). Please be sure to fill in the form accurately. Include all of your expenses and income to present a complete picture of your current financial circumstances. A written dated and signed Letter of Hardship (form provided for your convenience). The important thing is that the letter describes in detail the full extent of your financial hardship. What is the cause of your hardship? Has there been a loss or disruption of employment? Has your available income and or expenses changed dramatically? Please be specific. A signed Borrower Authorization to Obtain Information (form provided). This will authorize CalHFA to access your Credit Report, order a property valuation, or property inspection if needed.



In addition, your package must include copies of the following documents (Please send copies, not the original of these documents): 4) Last two months pay stubs for each borrower and documents to verify any other income (e.g., disability, unemployment, SSI, child support, alimony, etc.). Last two years Federal tax returns for all borrowers on the loan. These must be complete tax returns including all schedules and W2s. If you own a business, we also need copies of the business tax return and the annual profit and loss statements for the last two years. 6) Last two months of bank statements for all checking and savings accounts. (Send complete bank statements, including all pages). Copy of Listing Agreement showing that you are actively marketing the property. Purchase Offer signed by at least the seller(s). Estimated HUD-1 or Settlement Statement. A Preliminary Title Report. A Comparative Market Analysis (CMA) or Brokers Price Opinion (BPO) that must include comparative values.



8) 9) 10) 11)

Mail the completed Short Sale package to: California Housing Finance Agency Loan Servicing / Loss Mitigation 1040 Riverside Pkwy, Suite 110 West Sacramento, CA 95605-1522 You can also Fax the package to us at: 916-326-6423

IMPORTANT NOTICE Please send a complete package with a valid offer on the property and all other required documents. The package cannot be reviewed until it is complete. If we receive a package that does not include a valid offer it will be returned to you. If we receive a package with three or more required items missing we will return the entire package to you and ask that you resubmit when you have everything. It will take approximately 45 days to review your package and evaluate your eligibility for a possible Short Sale. While your package is being reviewed, other actions relating to any loan delinquency up to and including foreclosure will continue. If your loan is currently in the foreclosure process, a complete Short Sale package must be received in our office not less than nineteen (19) business days prior to the scheduled trustee sale date. To contact CalHFA Loss Mitigation, please call:



BORROWER'S NAME SOCIAL SECURITY # MAILING ADDRESS Do you occupy the property? Yes No Yes No Is the property listed for sale? If so, with whom: Have you contacted your credit counseling services for help? Yes No Is it a rental? Yes No HOME PHONE # DATE OF BIRTH WORK PHONE #

email address: ______________________________________


Agents Name: Agent's Phone: Counseling Representative: Counseling Rep's Phone: Are the taxes current? Yes No Are there other liens on the property? Yes No

Do you pay Real Estate Taxes? (outside of mortgage payments) Yes No Filing Date: Attorney's Name: Attorney's Phone:

Have you filed bankruptcy? Yes No If yes, Chapter 7 Chapter 13


Monthly Income - Borrower

Wages Unemployment Income Child Support / Alimony Disability Income Rents Received Other (Please Specify) Less Federal and State Tax, FICA Less Other Deductions (401K, etc.) Total $ $ $ $ $ $ $ $ $ Wages

Monthly Income Co-Borrower

$ $ $ $ $ $ $ $ Total $ Unemployment Income Child Support / Alimony Disability Income Rents Received Other (Please specify) Less Federal and State Tax, FICA Less Other Deductions (401K, etc.)

Monthly Expenses
Other Mortgages / Liens HOA Dues (If any) Auto Loan(s) Auto Expenses / Insurance Credit Cards / Installment Loan(s) Health Insurance Medical Child Care / Support / Alimony Food / Spending Money Water / Sewer / Utilities / Phone Other (Please Specify) Total $ $ $ $ $ $ $ $ $ $ $ $ Home Other Real Estate Type

Estimated Value $ # $ $ $ $ # $ $ $ $ $ Total $

Checking Account(s) Savings Money Market Cars IRA / Keogh Accounts 401K /ESPO Accounts Stocks / Bonds / CDs Other (Please specify)

* Please briefly explain your hardship or reason for being delinquent:

"I agree as follows: My lender may discuss, obtain and share information about my mortgage and personal financial sitiuation with third parties such as purchasers, real estate brokers, insurers, financial institutions, creditors and credit bureaus. Discussions and negotiations of a possible foreclosure alternative will not constitute a waiver of or a defense to my lender's right to commence or continue any foreclosure or other collection action, and an alternative to foreclosure will be provided only if an agreement has been approved in writing by my lender. The information herein is an accurate statement of my financial status."

Submitted this _______________________________ day of _____________________________________________________ By ___________________________________________________________ Date ___________________________________ Signature of Borrower By ___________________________________________________________ Date ___________________________________ Signature of Borrower
Before mailing, make sure you have signed and dated the form and attach a copy of your most recent paystubs and bank statement(s) of your checking and/or savings account to it.

California Housing Finance Agency

Loan Servicing / Loss Mitigation 1040 Riverside Pkwy, Suite 110 West Sacramento, CA 95605-1522 Call Toll Free: 877.552.4839

On the following lines, briefly describe your hardship and current financial situation. Please be as accurate as possible so we can better assist you. Date: _______________________ CalHFA Loan Number: __________________ To Whom It May Concern:
____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________ ____________________________________________________________________________________

Sincerely, (Borrower signature) ________________________________ (Please print) ______________________________________ (Co-borrower signature) ______________________________ (Please print) _______________________________________

CalHFA Borrower Authorization to Obtain Information




give my/our permission to

California Housing Finance agency and/or the mortgage insurer to order an Appraisal/Brokers Price Opinion, Credit Report, and/or an interior Property Inspection.








Number and Street





Revised: 08/19/2009

California Housing Finance Agency

Loan Servicing / Loss Mitigation

Things to make your Short Sale process go smoothly

Remember, there is no guarantee that your Short Sale request will be approved. Each request is processed with close consideration to your hardship and the specific financial information provided. Regardless of whether your request is approved or not, here are some things that can help to move your short sale request through the process smoothly:

We must have a complete package. You should already have the list of items required. If not, the list is available on our website at: It is best to submit all items at once. If we only have some of the items, we have to hold the file until we have everything. If we receive a package with three or more required items missing, we will return the entire package to you and ask that you resubmit when you have everything.

We will always need your latest pay stubs and bank statements. If time passes and we have not yet completed your review, we will need your next month of pay stubs and complete bank statements to complete your package. When we send a package forward for consideration, it must always contain the latest pay information and bank statements. Bank statements must be complete. We need all the pages. It needs to be an official bank statement like you would receive from your bank by mail. The statement should show your name and address. Tax returns must be your complete return for all borrowers and must be the entire return including all schedules, attachments and W2s. Please call us Toll Free at 877-552-4839 if you have questions,

December 23'd, 2011 Attn: CalHFA - Loan Servicing/Loss Mitigation

CaIHFA Loan #022472-3 5020 A Street, Sacramento, CA 95819

Attached please find documentation to support the request for approval for a short sale on the above mentioned home. The package includes: 3'd person authorization letter signed by borrower Borrower Financial Information Form Letter of Hardship and proof of hardship document from UCLA medical center PayStubs for October and November 20 II Federal Tax Returns for 2009 and 2010 Two months bank statements for checking, savings, and current retirement account balance. Listing agreement and current MLS Purchase offer signed by buyer and seller Estimated HUD Current preliminary title report Broker Price Opinion dated 12/22/11, with photos of property and comparables.

Please let us know if we need to provide anything else for this request to be approved.

Thank you,

Kelli Boehm Ramsey Real Estate Group Cell 916-947-9814 Fax 916-760-0575

CalHFA Loan# 022472-3

1 of 130

Borrower: Kyll ... . . . . . e


December 14th , 2001 To Whom It May Concern, I, Kyle give my permission for CalHFA to

discuss my loan #022472-3, or any account associated with the property at 5020 A Street, Sacramento, CA 95819, with Daniel Ray Ramsey Jr. and any employee of Ramsey Real. Estate & Development Corporation. Sincerely,

Kyle SS#

Kelli Boehm Daniel Ramsey 0011916-947-9814 Ramsey Real Estate Group 759 47th Street Sacramento CA 95819 office 916-737-5656 fax 916-760-0575

CalHFA Loan# 022472-3

2 of 130

Borrower: Kyle_._ _

IXl No





Attorney's Phone:

Care I



on the property does not cover the expenses for the property - see hardship letter
; I

waiver of or a defense to my lender's right to commence or continue any in writing by my lender. The information herein is an accurate statement of


CalHFA Loan# 022472-3

3 of 130

Borrower: Kyle

Attn: California Housing Finance Agency Loan Servicing / Loss Mitigation 1040 Riverside Parkway, Suite 11 0 West Sacramento, CA 95605-1522 RE: CalHFA Loan # 022472-3 / / Dear Cal HFA Loan Servicing,

December 21, 2011


This letter is written to explain my current financial situation and the approval of a short sale of my property at 5020 A Street, Sacramento, CA 95819. Due to my degenerative medical condition I was forced to change jobs and move locations, and the rental income does not cover the mortgage expense. I was diagnosed with a disease called Friedreich's ataxia (FA) at age 17. FA is a degenerative, life-shortening neuromuscular disease. The degeneration of my condition has forced me to change jobs, which has forced a move to Pennsylvania. Previously, I had a job as a civil engineer at a firm in Sacramento. My job required me to be in the field the majority of the time. The progression of my disease made it unsafe for me to perform my job responsibilities. I now work for an organization called the Friedreich's Ataxia Research Alliance which is based in Pennsylvania. I have stayed current with my mortgage payments since the mortgage began in 2005 but now with the relocation, I am unable to meet my financial obligations in relation to this property. Enclosed are documents for the past 2 months to explain the financial situation I am currently going through. As you can see, if this offer is not accepted I will not be able to meet any of my financial obligations. I am embarrassed that I am in this current situation and would like to avoid further financial difficulties of continuing negative credit and mounting financial obligations. Enclosed is proof of my medical condition, and a complete short sale package. Thank you for your time and consideration. Sincerely,


CalHFA Loan# 022472-3

4 of 130

Borrower: Kyl .... . . . . .

UCLA Medical Q:.nleIC

Outpatient Consultation NEUROLOGICAL SERVICES

Date of Service:

FriQay. March 10. 2000

Clinical History: Kyle is an 18-year-old student. seen in Neurologic Consultation at the rql!est of Dr. Geraghty for a second opinion on management ot Fliedreich's alaxla Around the age of 13. the. patient notoo onset. while plaYing baseb.aII. of difficulty catching and throwing. Around the same\ime. he note;:i very mild difflcuJty walking down stairs. Over the inteFllening yealS. he has had very gradually progressi'#e problems with balance. Functionally. he is still able to ski and piay other sports .although he notes that he is not as good at them as he used IQ be. One of the early symptoms was spontaneous attacks of shiveJing mille body that were conceived of ,as "tremors." Recenlly these have not been occurring. Tilers has also been slight tremor of the hands with action, most notable when 1I1e patient is tlred, allhough again Illis is nol as prominentas Ihe balance problems.

This patient has had extensive testing for diagnosis of thls condiUon. According to the palient andfam~y. vitamin E levels. electrocardiography. and echocaro!O!Jfam were.aU obtained and were normal. I have asked the patient to have these-records forwarded to me so that they may be reviewed. Genellc tesling performed bY.Ath!laon 12103/99 conlimled that the patient is homozygous for the G-A-A mutation commonly associated wElh F,eKlrerch's ataxia. On the two anneafs.1l1e patient showed 777 and 454 G-AA~.

. -

Previous to this genetic tesllng, the patient had. numerous other diagnoslk; !ElS!s. ViSual evak.ed response testing on 09122199 was within normal limits. and EMG and nelVe ronduc1lon study on 09127199 oflhe righllower extremity showed no signs of peripheral neuropathy. "A somatosensory evokoo response test of llle. posterior tibial nerves bilateraUy revealed absence o.f Ctttical peaks with slimulation of the left posterior tibial neIVe. Testing for very loogchain fatly acids and phytanlc acid 0." 09129199 were within norrnal.liml1s. On fhg same dale, cerulo.plasmln was SO (normal2.5-tl3). On 07!15199. a panel otother genetic tesls for alaxlas-, Including analysis f mutatlonsassoclated with SCA_1, SCA-2.. SCA-3, SCA-tl. and SCA-? were all negatiVe.
Past M.edlcal History: otherwiSe unremarkable. Medications: For Ina past few. days. the patient

2 grams p.o. bJ.d . CoEnzyme Ql0 30 mg p.o.I>.i.d magnesium 50 mg p.o. q.d" and selenIUm.
Drug Allergies: None.
HOSpilaUzatlol'ls And Operations: Appendeclomy In 1.992.
[;"Ijuries: Sroken Ihumb. j

has been taking a combiflation of acelyl-L-cysleine

9SS. Br!lken wI'lst. 1994.

Sodal History; Noncontributory. The paRent is astu<lefll FamHy History; Noncontributory. Review Of Neurologic S.ystems: t</oncootributofl/ ElO(cept as nolelj OOove. COMPlETE REVIEW OF 14 SYSTEMS;. (Obtained by questl0l1l1alre and reviewed by Dr. Whilrnan)

Physlcal examination: The patient was, a pJeasant. heallhy-appearing young man In.oo distress. Mental Statlls Ex!.m~;atio,,:."rhe patient was alert, attentive, with nonnal concentatkln and able to gwe a clear history. Thera was a 1l1nt of scaMlng speech allhaugh this was by no means obv'aus. There was
Outpatient Consultallon


J;~~~~!!!5~;:__~::::::::::::::::::::::::=-=-=-:::::N:EU:R~O:~:OG:;I~:;:SERV:;;~;;Es ~
Lu,,,,.. e2-2472-3.' - - - - - -.
5 of 130


CalHFA Loan# 0224723

UCLA M.edical Center

Outpatient Consultation NEUROLOGICAL SERVICES

no ellidenoe of a laoguage disorcf8J". Craoial OaNes: Visual i;elds Wf!re full to oonfronlalioo Wrthollt extinctloo. Funduscopic examination (UndUaled) was uoremaTkable:. PupilS were equal, round and reactive to light, without afferent pupillary defeCt Saocades wete bnsk and accurate. Smooth pursuit was full and conjUgate, Without spontaneous or gaze..evoked nyslagmus. Facial sensation, symmeb:y and strengtl! were within normaillmlls. Palatal elevaaon, phonal/OIl, shouklershrug, and tongue wefe all oonnal. Motor examination: T~ere was no pronator drift Floe tlng8J" movements were very mildly slowed, more so

on 'the left. Rapid ,alternating movements were perfomled less well with tile left hand. On linger-nosefInger leslIng, there were very mild Inaccuracies bull10 frank iotenOOn tremor. There was an inconsistenl bilateral action tremor tIlat was not mudlJ more lhan physiological. Muscle bulk. tone and. strength wer,B Within normal limits. Deep tendon reflexes were absen!. The patient was able to sland with his feet logelher, although 'in the Romberg position, there was moderate sway. Casual gait as well as heel and toe walking were normal. AJlholighthe patlentwas able to walk in tandem. he had more difficulty doing this than expected for age. Toes were down.
Sensory e><am ination: Th.ere was no obvious deficit of-tactile sensation or joint J>O$ifkJn sense. Inaddilion lo tt~a above tests, the patient had a bran MRl on 00/18199. This was said to be unremarkable. However. there was a T2 Jjypeririteflsity in the region of the right petrous ape>< which was said fa possibJy represent "jn!!ammatory disease will1in a pneumatized petrous apex.' I have askadlhe patient to hal/e these films forwarded to me so that I may relliew them personally. Summary; Eighteen-year-old young man who, presents wllh at least a 5 year history of a very graduaUy progressive dislurbanceof balance arid. to a lesser degree. appendicular coordination. 00 e><aminalion, there ar:e mild abnormalilies Of posture and eooroinallon. as well as areflexia. I agreelhat these Signs. symptoms and genetfc testiog are mos!. consistent with ai diagnosis of FreidreidlJ's ataiXla. AltIloughtllere is no specific !realmenl tllat is highly effective for this disoo::ler.l have reCOmmernied a combination of supplements that has been effective in reducing symptoms of ataxia in some palients. I have recommended lhat lhe pallent switch to the buffered liquid formulation (If N-acelylcysteine 1 gram per 5 cc of buffered solullonat a ,dose of apjlroxlmalely 60 mg/kg/day. divided In 3 doses. For convenience, J recommended that !he patient sIart with 1000 mg p.O'. t.t<l. and' this dose may be adjusted depending on !he response an.d any side effects. Additionally, I agree with confinootioll of the, CoEnzyme Q10 arn:! selenium, and malJOesium. If this palient were to develop signs of cardiac disease. then one could certainly (lollSidertreallng Wilh laebenone. A clin icallrial of ldebenane in patients willi Freidretch's ataxia may be initiated at some point in lhe next year. As I menlIoned, I halle asked the patient to send medi;;ai records regarding the electrocardiogram and echocardlogfam to confirm Ihe absence of evident cardiac disease: The jlalient was encouraged to' remain active, safely pursuing activ~ies !hat challenge his balance and build muscle strength. The pa!1ent is to followup In Neurology Clinic With Dr. Periman.

GregoryWh11man, M.D. (P179sa)

Electronically signed (Sun Mar 1218:31:25 PST 2000) M05 checksum: Mcac08b1 Oab82a43ae3d32261 9611 ef

Oillpal....t consul~lIon NEUROLOGICAl SERVJCES

CalHFA Loan# 022472-3


Borrower: Kylj

UClA Meilioal Center

Outpatient Consultation

Dr. John Geraghty 11720 Education Street, Suite 3

Auburn. CA 95S02
Phone 53O-aZ3-3407

Kyle j 23190 Broadmore Court Auburn. CA 956{)3

Phone._ __

Susan Perlman, M.D.{P06339} UCLA Neurclogical Services

(3\D) 1'1tj.-ll~S

Gl1egory Whitman, M.D.(P1796S) UCLA Neurological Services

Ok,::t,ted~3If.or..::aoo 1~:2;!'

, sy: Gt'I!QCtYWhi~ iM.D. r(P179BS)

TQtlsa1bed::3I'1112COO f~e: By: 1RO:ROf063
Ref~ntfitrber.: M1-439135


Outpalient Consll/!aliOll

CalHFA loan#02247-2-3 ,-, -- ' - - - - - -----CalHFA Loan# 0224723 7 of 130



R=t'iClt. ::3T'I 'Ji2OOQ 12:57

J30.rfOw.e.t- ~'
Borrower: Kyle '

'~-Jv~ ~

State of California

Ca I BFA S" California Housing Finance Agency

CalHFA Borrower Authorization to Obtain Information




and _ _ _ _ _ _ _ _ _ _ _ _ _ give my/our permission to

California Housing Finance agency and/or the mortgage insurer to order an Appraisal/Brokers Price Opinion, Credit Report, and/or an interior Property Inspection.







5020 A Street


Number and Street






.. ~


Revised: 08/19/2009

CalHFA Loan# 022472-3

8 of 130

Borrower: Kyle



~ ~



Payrolls by Payellex, Inc.





0026 004S.LODS FtiooreithaAtaxia ReaearchAt

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5.208]3" 1

Soci.1 SecU/ity Medloare

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Fed Income 1ax

PA Income Tax PA Unamploy PA LST52 DIS L PA UWCHl.Che

218171[pjA DEN POST 7515: 935i4'


261 Direct Depos # 1195 0 oioo ! CheckAmt Chkg 1831 3,732\15






512E_~t~;1._~_~,. ~~.L ~ ...__ ,__.


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2$10 Net Pay



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00260045"008 Ftitldrokhs:AIRxia Re!iearch At

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Run Dale 11/23/11 08:13AM

Pl)fk;rJ Starl ~ I!nd Onlc

11/01111 ~ 1 ~J.10f11

P'mo I ut 'J.




9402. smn:iEL RIDGE NORRISTOWN PA 194()3

VOID THIS IS !lOT A CHECK _ . _.... _ . _. _. _ _. _. _ .. _. _ .. _. IJOLLARS







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---""-'----,CHECK INFOR!lllATlEON


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E..\RH,NGS ... - "ESCRip;;oN - - HRsiijr-liiS - --w,rrTHIS PERiOO(SI YroiiOURS "..... - -\7orsi ...
5208.33 THIS PIORIOO is!
Social SlZlcun-ly Mect:icare FOO Income Tax


9402 Sentinel Rh$ge NQmstowt'J. PA 19403-

Soc Soc #: xxx~xx-1532 Employe-e ID: 10 Home Oepartment: 150 Moothly

Pay Period: 10101/11 to 10131111 Chock Dale: 10!31'11 Check #; 11e:8 NET PAY AlLOCATIONS


)'1l) ($) :

PA lOCOOlO Tax PA Uo","pioy PAlSi52lSi PA UWCHlChe I

216.15 75.52 935.42 159.00


2187.00 755.20 9354.20 1,99.00 41.70


4.34 52.00


Cnedt Amount


0.00 3732.15 3732.15

0.00 .

37451.50 ; DEDUC'nOHS


130.00 130.00




7rtiS PERIOD (S)


YTOIS) 37451.50

PayrollsbY Ps"Che,,:;;;;"

.. -- . --- ....

10 of 130

0026 0045-L0Q6. FrJeeichs. AlaxIa Research AI a 523 Wasl Uwchlan Avenue- Oownlngtown PA 19335 (4S4) B1~015

CalHFA Loan# 022472-3

Borrower: Kyle t

DEC-21-2011 15:21 From:PAYSERV





Department of 1he TI'W&IIY ". JnktrN!l Rov~$eNice

Name, Address, IlndSSN

See separate instructions.

US I d" "dUall"COme Tax Return IVI " For the.,.r Jan 1 Dec 31. 2010, "other lax _ ileginn;;--'"
Yaur fir:l;t




lAS U2!! QnIy -

CD not WrtIe or


in ttu5


,2010, 'i".i!~I1._., __ ~.",,_ ,,20

OMB No, 1545.Q074

Your .adal MtUtfty DIHtlb&r

firs.t narne!l


11.- JOlnl re:tum,



liHit ~"""

SpaMe'&S('Idai.-u,ny .1Imber

Home;lrddrer.t:, (r'lUl'rltk!l~ and !l.1:NIe1). If yoo have a PO. 00)(,



9402 Sentinel


City, town or pOSI ottle!!!. U you h&wt a foreign addf1!J6S. ~ imtnlctiorrs.

.... ,.


Ap.;utment nO.

Mako sure the SSN(s)

. . Qbave and on tine PC



...._.-" ..

are correct
O<cking a box I>olow Will not

Eloction c.mpaign

Norristown ~ Check here If you, or your 'PO'" ~ filing jOintly, wanl $310 go to IhlS fund?
1 Z

PA 19403

0 You LJ Spouse

change your tax or refund,

Filing Status
Check only

Mamed filing "lntly(.... ~ only"", had i"""""')


one box.


,am. her. , .. 5 0 68 ~ Yourself,. tf someone can claim you as a dependent. de) rd check box 6a bOS_,," .. ......... " . .... - .. - . .._- ..
' ' "

Marned fIlmq sepalately. Enter spouse's SSN above & fun

Head ot household (With qualifying person), (So. Instructions.) It th. quallly'''9 pal""" IS a ""rid but not your dependent, enter 1his child's name here ... Qualifying wi";;(;) With deper1dent child

.... -..... 'l"~' =a~ .... _ _ 1

-,' "




(2) ~ondont'S socia security


.(3) D~ '~~~~~t'~:: :.: ;.~(~


.... _

Q) Flrst...I].~.~.
If more than four depondenls, see instructions and

to you

l.ast name


. --"'n dllelflcn:..

~m& tor ~"r


d\~d a,1~


& 111M!


with you




-,-_ ..,

.- ' ["1-' ='::''"'

.. _.
, "



check here .....


Attach Fonn(,) W2 h.rt, AbO

d Tatal ;;~;;b;( 01 exemptions claimed " " ' - - .... " 7 Wages, salaries, tips) etc, Attach Form(s) W2 s. TlOOIble inter..t Attacll Sch.Qule S It requrred , . "

. , . . ..
, " ,



" .

...... :n~ .......1



.... .. "._ ...


If jIlU did not

b Tax-exompt interest. Do not include on line Sa 911 Ordinary dividends, Attach Schedule B 11 reql.J!rId .. b OuallTlea dividendo ....... . . . . . . . . . . ........

W2G and 1099R iftB was withheld.

gel' W-Z,

10 Taxable retunds r credits. or offsets of s~te and local income taxes ..... ...... , " .. , . ..... . ........ . .... 11 Alimony received ..... ... .. . - . - " " " ..... " ... . . . .. . . .. . . 12 Busrness income or Ooss). Attach Schedule C or C-EZ . 13 Capillil gain or (los.). All Soh 0 rC<t<!. nn(It reqd, ok here . , ' , , , . . . . . . . . . . . . . ...
14 Other gains or (loss,",). Alta"" Foom 4797 " , , , ..... , .. .... 15a IRA dlstrinutions .. , ......... \ ~bTa)o!able amount. ..... .' .... ..... 16a Pensions and arlnUtlles. ,." 16~ bTaxable aITIount. . " 17 Rental real estate, ro'yalties~ partnerShips. S corporations, trustsr etc. Attadl Schedule E ..

I sbl .... ....


L~~t ~.:~~:

.' . " ' - - ...


55 500.



....... ".. ".-.!!!. -".'_.

10 11

1 325.
I--,--~--.- .-~



soo instruetions.


.,. . .

Enclose, but do not attach, any payment. Also, ~I"'" use ."" 100000V_

18 Farm rn('..6mo a( Ooss). Attach Schedule F

19 Unemploym.!l'lt compensation .........


. . . . . . . . . .. . .


Jb'T~~I~'~o~r~t:::::: ...... lOb 200S""ial,acurily",",efits '"'' '''' 2001 21 21 Other Income Combine the amoUnts in the'far ~iant-txiumnfoflint$ 7-thJOUiihl~ihis-li"yQiirlllbii~-. ~.-:. ~. ~. ~ .~: .--... 22 22 ........ 23 Educator oxpenses .. ..... .'."-


15b 16b 17 ............. .. .... 18 ..... 19

56 87l.


24 Certain


gOY\lmment Off~I,I$, Aitaeh ~orm 2106 or 2106, .." .. ' , . " 25 Health sawngs account deduction. Attach rorm 8889 .... ..... Z6 Moving expenses. Attach Form 3903 Z7 Ono-half of seltemployment lax . Attach Schedul. SE , 26 Self. employed SE"P, SIMPLE", and qualified plans."" , 29 Selfemployed health in::;urance deduction .. .. " . ........... 311 Penatty on early WIthdrawal of savirags . . 3l.a Alimony ptlid b Recipient's SSN ......

busine~s .expenses of reservists, perf{)t'm~

artists, and 'foo-Qasis


I I " , , "..

.,-,#,,-- ,- . . , . _ -


25 26

.__ ..

-----_ ......... ..

1 405.

............ S2 IRA ~.<lUcDon ...... . '" .. 33 33 Student loan interest deductJOIi . , . 34 34 TUition and ta .., Attach Form 8911." ....... 55 35 Domestic production: activities del,ICtion. Attach form aocJ3 ,. ,. 36 Add lines 23 - 31 a and 32 35 ................ ThiS is ,our adlust~~~ i;';';'~ ~ Sub~nct line 35 from line . FDf,AOl1l BAA For I)l$cIosuro~ PnvlllCY Act, end Peperwork ReduetfOl1 Ad: NotIce; sec scpztnIle Instrudi0n5.

!]- _._,.,._31. li'


1, 405. :;~,46G:


::. ,.

.. m

Fonn 1040 (2010)

CalHFA Loan# 022472"3


Borrower: Kyle


DEC-21-2011 15:21 From:PRYSERV





Blind, T<>\.I bo_ It Spouse was born before January 2, 1946, Blind. checked ~ b If YOl,lr spouse itelTllzes on <1 separate return, or you lNel'e a dl,l~l-smtus alien, check here. . .... 40 itemized d$ductlons {from Schedulo A} or your ~"mllrd dtduc:tlon (see Instructions) . 41 Subtract lin~ 40 from line 38
You were born before January 2, 1946, 42 Exomptions. Multiply $3,600 by the Tiumbor on line 6d .

39~ Check


D .


43 T.. ,~10 Inc..... Subtraclii,. mram line 41. If Iino 42 is more than Imll 41, I)q\(ll -0- ... _. _. 44 T.. (see instrs). Check il any taX is from:

. ........ _. _....... .

form 49n .... '1!i Altomotive minimum tox ($ee 'n.truenans). rOrm 6251 46 Add linas <14 and 45 .. . ....... . 47 Foreign tax credit. Attach Form 1116 if required ,. r-4;:7c-+_ _ _ _~. __1 46 Credil for child and de~ndenl O3r. expon..,. Atlach rorm 2441
49 EducatJon crodits from Form 8863, line 23 ...
50 5Z Retirement .saVltv.;;; contributions creQit. Attach Form 9880 . Residential energy credits. Attach Form 5695 ..

BFOrm(S) 8814

51 Child tax credit (see instructions) ...

53 other en _om FOrm: 0 3800 b 8801 C U_,,-__ ,..._L=..J...._ _ _ _ _ _-! 54 Add lines 41 througll 53. These are your total

_ _ ,.,, _ _ _-.:;$=-.;:S~U;o:btr!!ct line 54 from li"""~-,::!=-,54=is~",,-:,, ~l2!.!.=='-"=~:,.: .:.:~,~-'-=-'-"=:+_=+----'~~o!..!. Other 56 Self'''''ploymenl IlD. Attach SChedule .. .. . " .. Taxes 51 Unreported ""ial ""urily.nd Medicarelaxfrcrn Form: e b &919 ... 58 tax on lRAs, other Ql,lalificrl retirement plans, ~to. Attach F'0IlTI 5329 if {1lQ,\,Liled , . . . . . . Form(s) W2, box 9 b Schouul. H c Form 540~. line 16. Add i I




tax withheld

62 2010 es1tmated tax paymonts and amount applied from 2000 return

!f you hciVe'"aL.. 63 Making work pay credit. Attach Schedule M 64. Eamod incomo cre<llt (Ele) .... child, attach I b Nontaxable combat pay election. Schedule EIC. I 65 Additional child I.x credit. Attach 66 American opportunity credit from Form 8863, line 14 .
67 68 69 70 Firsttime horn~buyer credit from Form 5405, line 10 Amount paid with request for extension to file . E.xcess $OCi~1 security and tier 1 RRTA tax withheld Credit for federaj tax on fuels. AttaC!1 Form 413G


Qedit' from Rlrm: ,

D 2439

0 8839

0 88~1



is the amount )'OlI 0IHlIp2ht .

If Form 8888 is attached, checK here .....

deposit? See instructions.


Third Party Designee Sign Here

Joint return?
See instructions.

Do you want tQ aUow another person to discu!>!> this retuJn with tile IRS (see instructions)?

Yes. Complete belOw,

UmleI" ee-na/tioeo!i. of PQlj.lry. t &,dare that I hlil'! exmMd thit. f\9lL1m:;.n<;l ;EtOtnpanyino &dt1Jdu1o!i 0Ind "t::ItI!!Jt\eI\1S, and b;I tI1~ best of tl'lY knowlil!dQ6 and ooli,*, O>cy:iM true, comd", ..00 ~omplete.. ~ of pt'I'ltl~ (othor Ihoan t;1lI;~" is ba6&d on alllnfDmllltion af which pf"OQiIrtf h;r,!il :lny ki'low/&dg&.
Yot.l( signatuN)l

phontl' number

FDrAOH;? 12122110


Pre parer's
Use Oldy

CalHFA Loan# 0224723


Borrower: Kyl. .

IS. . . . .

DEC-21-2011 15:21 From:PRYSERV



(Form 1040)

Itemized Deduc;;tions

AItIlch to Fonn 1040.
.. S.., Instructions lor Schedulo A


and Dentol El<ponsos

CauUon. Do not include expenses rOlmoursed or paid by others, 1 Mechcal and dental expenses (see InstruCtions) , 2 Enter amount from FOf" lQ.1~ lin.311 ..... IL-'2'--l1______
3 Multiply line 2 by 7.5% (.075) ................ .

5 State aM local (check only one box): ZI ~ Income taxes, or

Tues You

UGeneral sales taxes

J'.. " . . "

........... .

Real e:>lato taxes (see instructions) ,

7 Ne'w I"rlDWr lfehJcle taxes from line 11 of the works~eet on page 2 (fof certain vehicl" purchased in (009). Skip th" line if l"U chookod box 5b .....

8 Other ta,es. List type and amount ,.

Imol'<l$l You Paid

'0 Home mtg Interest and points reported to you on Form

11 Home mortgage Interest nol n~p(lrted ta you on Form 1093. If pa~d to the person from wnom you bought the home, see instructions and show that person's name, Identifying number, 'Ind address ~


deduction may be IImired (see mstrs).

Your mor~,ge interest


Pomts not reported to you on Form 1098. See inrtrs for spcl rules _.

13 Mortgage insurance premiums (see instructions) . 14 Investrrlerlt U"lterest. Atta~h form 4952 if required.

(Soe i'strs.) . 15 Add Ilnes 10

Gifts to

. ................... .
14 .




16 Gifts by cash or eIleck. If you made MY gift of

moro, see instrs .


If you made a gift and

gol: a benefit for it, see Instructions.

l ' Other than by cash or chock. If any gift of $250 Qr

more, see instru.ctions, Over $500


must :attach Form 8283 if ......... .

18 Carryover from prior yeS!


Cos.olly and

Job Expo"""" Coi1ai n



JOb education, etc. Attach Form 2106 or

required. (See instructions.) ..

Unreimbursed employee expenses - job travel, union dues,




22 Tax preparation fees . 23 Other expenses - Investment, safe deposit box1 etc. List

--- - - -- -- -- - ., ,. " .. - - --- -- - - -- - -- - f-."-c-i----,,----I

type and amount

_________ ... , ...... ~.~ _____ _

24 Add lines 21 through 23

-- - .....,-- -- -- ------- ---- --... - - - --- -:=-+-----1

25 Enter ,mount from Form loJ, line Sg ..... 1_25=-'-_ _ _ _ __ 26 Multiply line 25 by 2% (.02) I i

28 Other - from list in instructions. List type and amount




29 ~AdC! the amounts in the far right column for lines 4 through 28.
Also, enter this amount on Form 1040. line 40




elect to itemize deductions even though they are less than your standard

BAA for- Papentlori< Reduction Ad Noti..., .... fonn 1040 i_Ions.

CalHFA Loan# 0224723 13 of 130



Schedule Po (Form 1040) 2010

Borrower: Kyl......


DEC-21-2011 15:22 From:PAYSERV




~ 'W""Se~

Moving Expenses
Attach to F0I1l11041l or r ..... 104llNR.

you can deduct your mOVing expEtnses.

Before you begin:




the Di~ Test and Time Test in the instructions to find out if Members of the Armw Forces in the Inslructions, If a~pJicable ..



1 Transportntion

and storage of household goods and personal effects (see: ins1ructi()\')$)

...... - . " ._- .....


2 Travel (including lodging) from your old home to your new home (see instrucbons). Do not include \he
........ ,' ........
I' . ', , ...



3 Add lirlas. 1 and 2 .

4 Enter Il1I:;! total amount your

.. ......
for the

. .....

...... ..

. ......


1,405 .

- - P . . . . . . . . . . . ... . . .
included in box 1 of your Form
emwo~er paid

- (;;. This amoun should be shown in box 12 of your orm W-2

exrensas listed

on lines' and 2 that

... - ..

5 Is line 3 more th.n line 47



and include the rASult on Form

You cannot deduct your mOvif1~~ense5. If line 3 is less tt'wn line 4, subtract line 3 from line 4

line 7, !'lr Form l040NR, line 8.


SUbtract line 4 from line 3. Er)tor the result here and

line 26. Tni,I,Ye"r mov'""

do<!udIon ............. "'.'.' .................. ' "


1040, line 26. or Form 1040NR.

BAA For Paperwork Reduction Act Notice, " " yOW! Wt mum ...Iruction$.

1 405 .. Form 3lI03 (20 10)



CalHFA Loan# 022472.3

14 of 130

Borrower: Kyle. . . . .L"tt

DEC-21-2011 15:22 From:PAY5ERU



(form 1040A or 1()4()
D~1'Imen1 Namll~)

OMS No 1545.0074

Making Work Pay Credit


Irite-mal R@'ienueSeNiC';t

of the T~ry

.. AltlIch to Form 1040A or 1040.

Atmeh'T'llnt Seq~t'lca No.


rohown on relult'l

Social Secf1n~y Administration ISSues saciaf secunty numbers.


your spouse) on your tax lelurn A SDCia/ securiry number does not include an identifICatIOn number issued by the fRS Only the You cannot take tht; making work pay credit if you

To t4lke the making work pay credit, you must inolucJe your sociaJ ~urity nurhbeT (,f filing a joint return, the number of either you or


be claimed as someone else's dependent or ifY0I,J are a nonresJdent 'f)/icn.

tmportant: Check the 'No' box on line la and see the instructions Ir:
(~) You have fl net loss from 8 busm&$~;, (b) You received a taxablC, scnolarshlp or fellowShip grant not reported on a Form W2,


(c) Your wages InCllJdo pay for work porformed while an inmlte in a penal Institution, (d) You received a pension or annuity from a nonqualified deferred compensation plan or a nongovernmcntel section 457 piaI'll or (tI) You are tiling arm 2555 or 2555-EZ.

1 a 00 )IlU (and your spouse iffiling joinlly) have 2010 W"dgiS of more than 10,451


IT marriol filing Jo;nlly)1


~ Yes. SkiP lines 1a through 3, Entor $400 ($800 IT married filing jOlnUy) on line 4 and go to Iina No. Enter your earned income (see Instructions) .. .. .. , ."..... r-1~''t-...

(see insiruc~ons) . .. .... " ' , 2 Multiply line 1a by 6.?% (.062) .

b Nontaxable combat pay included on line la

b l._,l.c::,-1- - " , , " - -



3 En10r ~4Q0 ($800 it married filing Jointly)

4 Enter the smaller of line 2 or fine 3 (unless you checked 'Yes' on line la) , 5 Enter the amount from Form 1040, line 3Er', or Form 1040A, line 22 ..... 6 Cnter $75,000 ($150,000 if married filing jointly)


55,466. 75,000."

r2' ..,.


7 Is the amount on line 5 more than the amount on line 6"t g] No.. Skip line 8. t::nter tne amount from line 4 on line 9 below.

Yes. Subtract line 6 from line 5

. .. .. ....

. , .....


8 Multiply line 7 by 2% (.02)

9 Subtract line 8



. '"



line 4. If zero or less, enter -0-

',._ 400.

10 Did you (or your spoU$, if filing jointly) receive an economic recovery p~yment in 2010? YOl J may have received tt)i~ peymeryt in 2010 it you did not,re90ive an eeonmic r.ecDllery payment in 2009 but you received
sacial security benefits. supplemental s;;.e!;Urlty Income, railroad retiremen~ b~n9fits. or veteran 5 disability

or pension benefits In November 2008, December 2008. or January 2009 (see instructions),

~ No. Enter -0- on Iinc 10 and go to fine 11.

Yas. Enter the total of the payments you (and YOUr spouse, if filing jointly) recelvea in 20 10. Do not enter more than $250 ($500 if married filing JOintly) ..... " . . ............ .

. ".,-.

10 11



MakIng work pay t:redit. Sub1ract line 10 from line 9, If zero 01' less, enter -0-. Enter the resuIt hero and on Form 1040, line 63; or Form l040A, line 40 .. , . . . . . . . . . . . . .. .' ... ,........ . ........ . " ....

"!tJf you are 1iIJng Form 2555, 2555~EZ, or 4563 or you are excludll"lg income from Puerto Rioo, see InstructiOns. BAA For Paporwork Reduction Act Notice. $1)0 your lax mum instructions. Schedule III (Form 1040A or 1040) 21:>10



CalHFA Loan# 022472-3

15 of 130

Borrower: Kyll'

DEC-21-2011 15:22 From:PRYSERV



Federallnfonnation Worksheet
... Kee for


Spo_: Last Name "
First Nama Middle lnitial ....

Part I - Personal Intonnation



Last Name ............ tII!!II!II-L---First Name . .!lI:J."'e'-_ _:::-::--____, Middle Initial .,,. .. ,.,. .. P. Suffix ... Social SecuntyNo, .,' . _

Occupation . , .... ~l?Q...k:iieii5i;p~e",r",s",o",n,:---;-=___:;Date of 8irth ....... ,. . ' - " ' 9(mm/dd/yyyy) or Age as 01 11112011 -zg--Date of death legally blind . ,. . f "m~il Address. .

Suffix, SOCial S"curily No. Occupation ..... ,. . . . ., . ,. _ _ _ _ _ _ (mmiad/yyyy) Date of Birth , . , or Age as of 11112011 .

Date of death

Legally blind , ..

Work Phone


E'mall AdOrsss WorkPhono


Ext .

Cell Phone ....... _ _ _ _ _ __


Home Phone.
Check to print phone number on Form 1040


Fax Number . ., . .,. UTaxpayerWork


City ...

9402 Sentinel Ridge


, Apt No.

.. Nq:;,ristown

.... PA

ZIP ewe,

. 19403

For~lgn Country ..
APO/f'PO/DPO <.ldc.lres..,. check jf appropriate ....


, ....... _.






Part" - fede~~_F!ling Status

1 2 Single Married filing jointly


0 Head of household

Married tlltli(! separately ~xpaycr did not iive wiih spouse ~t anytime during the year


[J i axpayer is eilglble to daim spouse's ex.emptlon (see He.ip)

If the qui:lhfyil1g person is e:. chile! but not a dependent:

Child's name , Qu~lLfylng wldow(er)

... _. _" .. __ . _.

Child's social sect.Jr11;y number ...... :::;,..,--:-:-::::-r"""'-. . , .... _. _ Year the spouse died ............. Il'- 2008' 2009

Part 11/ :: DependentlEamed Income Credit/Child a~~,~pendent Care Credit Information

Fi,st Nama Last Name


Social Security Number lIF:elationship



__"r-"" Lived with E Not


Education tuition and fees



tax: credit

qualified for child

taxIT~r In ..

Qualified child and dependent care expenses Incurred and paid In 2,010
-,_ ..,..-




~ ~T



0 0

1---'"'' "" '"




=_T" 11-~ution:

It' claiming enH!:! ether than taxpa';er's, see Re!:mOMhiD 10 He\?_


Part IV - Eamed Income Credit Information

Required to calculate EIC: y"" No

~ Was taxpayer's (and .spouse's if mamed flhng jointly) home in Umted StateS'. for more than half of 2010? Check Any that Apply:

!ills taxpayer or spouse quall1ying child for E1C for flr'lother person?

SociafS0CUfity card says Not V~id for Employment and SSN of tho taxpayer, or spouse if' married filing jointly, was obtainod to get rederaUy funded benefit. such as Medicaid (see Help) Taxpayer filing as head of household Artd lived

with nonresident alien spouse (fIJring last six months 01 2010

EIC was disallowed O( reduced in pre'Yious ye.c.1r and taxpayer required

to filo Form 8862

Taxpayer nohfted by IRS that EIC cannot be cl"'med in 2010



CalHFA Loan# 022472-3

16 of 130


Ky":e"'. . . . .

DEC-21-2011 15:22 From:PAYSERV




Electronic Filing InfoRtlation Worksheet

.. Keep for your records
Nam.(s) Shown on Return




Declaration Control Number Payment by Check (F"onn 1040-11) - Federal Bdanc:e Due
Date Form 1041lV was gIVen to client...... . ....... .

.. , ,.,

Electronic Retum Originator Infonnation

The ERO Information below will automatically calculate bas<!d on the preparer code entered on the Federal Infonmation Worksheet. If the ERO is no! the same as the preparer designated on the Federal Information Worksheet, enter a Preparer Code from the Flrm/Preparer Info to assrgn an ERO to this return.


to use ERO name instead of firm

name in electronic file ana on Forms 8878, 8879, & 9325 ....
Social Securrty Number or' PTIN


r.: irm Name


Individual T,ax Associat~~ _ _ _ _ _ ~

Employer Identification Number
fax Number

1900 S. Ocean 1l1,V9-;.:.-,#",2"B,--:___=:-:--:-_ _ 111!1. . . .

City State

ZIP Code

Elec.tronic Filers Identification Number (EF!N)

Pompano Beach

[-mail Address


a Preparer Code from the FitrnJPreparer Info to assign a different ERO to this return. (See Help) _ __

Paid Prepare,lhfonnation

Firm N<lme

lndividual Tax Associates



Social Security Number or PTIN

EmplOyer Idontitication Number

Phone Nurnoor

1900 $_ Ocean Blvd. #2,!!


ZIP Code

E -mati Address

Pomp,!no Beach Country


fax Number


If your firm is ONLY the ERO and the return being transmitted was not prepared by your firm, enler preparer code from the Alternative Ef Preparer Information to assign a paid preparer. (See Help)


Non Paid Preparer Infonnation

If the return was prepared or reviewed through an IRS tax assistance program, self.prepared by the taxpayer t or was prepared by another person who was not paid to prepare the return, check one of the following boxes that applies to this return.
IRS.revieWed .

IRS'prepared . Prepared by taxpayer or other non-paid preparer




CalHFA Loan# 0224723

17 of 130


DEC-21-2011 15:23 From:PAYSERV



Page 2

------------------------_._--Check this box to suppress Modemiled .,Fite format for the tax return . Check this bo. to force state only filing for all stiltes selecled 10 be filed electronically Returns rejected tor Taxpayer or Spouse name aoo SSN mismatch. Check this box to retransmit this return as an imperfect return. ThIs only applies to reject code 0501 and 0504 .............. . ......... Enter an 'in care of addressee', conijnuation of the address entered on the federal Information Worksheet, or name of personal representative.. . . . . . . . . . . . . . . . .._ _ _ _ __ If married filing joint and one spouse IS deceased. is the surviving spouse also the personal representative? ............ . ............... .. Check this box if your cllenl is in the U.S. Armed forces Wllh a stateside address . Check the appropriate box if the taxpayer (or spouse) last serVed in an area deSIgnated as a combat zone or qualified hazardous dUty area. Iraqi Freedom .............. , .... .. ..... .. Kosovo Operation ........ . Afgha~istanjEndunn9 Free~om Desert Storm .

Miscelhu,\)ous Electronic Filing Items


..Oyes DNa

Haiti ...... .


Former Yugoslavia _....

UN Operation. Joint Guard Joint Forge Northern Watch. Op~ration Allied Foree .. Northern Forge .... Combat Zane

.. .


, . Deptoyment Date ............ .

.... ." .


Preparing Form 8453: U_S.lndividliallm;ome Tax Transmittal for an IRS a-BleReturn

"lte Form 8453 Only If You Are Attaching Ono ot More olthe "oIlowing Fomr.; or Supporting Documents.

Che~k the applicable box(es) to identify the attachment., Form 2848. Power of Au(\rney and Declarabon of Representative. , , , .. Form 3115. Change in Accounting Method ............. . Form 3468, Histone Struclul'e Certificate. Form 4136. Credit for Federal Tax Paid on fuels ........ . Form ~713. International Boycott Report........ . ....... , Form 8283. Noncash Charitable Contributions (Declariltion of Appraiser) . , ........ . 1098C. Conlrtbutlons of Motor Vehides. Boa!:> and Airplanes. . . ......... . Form 8332, Releal of Claim to Exempijon for Child by Custodial Parent or Other Documentation Frm 8885 .. Health Coverage Tax Credit.... ..... . .. ...... .... . .... " ..... ~ form 8858. Foreign Disregarded Entines ........ . ..... . .... -.-."." ....... .... Form 8864. attach the CertJilcate for Blodiesel ....... , Acceptable substitute for Schedule 0.1. Continuation Sheet for Schedule D1 Appendix A, Statement by Taxpayer Using the Procedures in Rev. Proe. 200920 to Determine a Theft Loss Deduction Related to a Fraudulent Investment Arrangement ....................................... ~D

.. . . ,,,,,"
. . ..

CalHFA Loan# 022472-3

18 of 130

Borrower: Ky.'. . . . . . .

DEC-21-2011 15:23 From:PRYSERU




Form 1040

Fonns W2 & W-2G Summary



Keep for your records






Federal Ta

Slate WaDeS





1-- ,

,-, ..



55,500 2,951.


".- ..

.. ., .. . . .. .. . .


9 l 144,::..

Form W.2 Summary

Box No.



55, 5 oq"_


1 Total wages, tips and compensation: Non-statutory & statutory wages not on Sch C .... Statutory wages ,oported on Schedule C Foreign wages included in tOlal wages .


IJnrljp<:>rted tips. , , . . , ..

. ........... ..

2 T otallederal tax withheld . . . .. ...... .. 3 & 7 Total social security wagesJtips ... 4 Total social security tax withheld . 5 Tolal Medicare wages and tips , ..... 6 Tolal Modicare tax withheld 8 Tolal allocaled tips . 9 Tolal advance earned income credit 10 Tolal dependent care benet,ts , .. , .... 11 Tolal distributions from nonqualified plans ... , 12. Total from Box 12 .. , ......... . b EIec\ive deferrals to qualified plans ., c Roth contributions to 401 (k) & 403(b) plans ...

- -.." - - - - 9,144.
55.500. ___ -" 3,44J. 55,500_ 805.



55,500. 605.

. _ - - --_ ....

_- ----

Deterra!s to government 457 p!af?!S .... , .. " .



Deferrals to nOn-government 457 plans Deferrals 409A nonqual deferred comp plan. Income 409A nonqual deferred camp plan .....

- - - _..__. _._._--- - - - - _....- - - - -----


m 14a

Uncollected Medicare lax , ....... , .. . Uncollected social secUrity and RRTA lier 1 . - - - .. Uncollectod RRTA ~er 2 ......... . Income from nonstatutory stock opnoos . Nonlaxable combal pay .... , ..... . Tala! other items from box 12 . . ........ ..
Total doductible mandalory slate lax .. Total deductible ct>arilable conlfibutions ... , . T alai deductible employee expenses ,. Tolal RR T,er 1 wagas T ctai RR Tier 1 tax ......... . Total RR Toe' 2 lax , ........ , .. Tolal RRTA ~ps .... "., .... .. Total other items from box 14 " Total state wages and tips Tolal slale lax withheld, . Total local tax WIthheld " ......... , .......

._~6~1~1.'-1_--__- - - _ _....;~U.,-



16 17


55,500. _ _ _ ,_ _ _--,5",,5'-<., !l..Q.Q.~ 2,951. 2,951. I~'

Borrower: Kyl~dlllj

CalHFA Loan# 022472-3

DEC-21-2011 15:23 From:PAYSERV


Fonn 1040

Form W-2 Worksheet

.. Keep lor your records


Name as shown on retLm

Ky 1"



. .-1 S~~I securile~_

._ _ . ._ _,


... 52-2122120

Employer Name.,... }!ri_edrei,chs Ata~ia Resea:a::ch. XL Name (cont.) . _ _. Street Address of p, O. Box po. B"x 1537 .. ___ . City . .spdn!l,ield.. State. VA. ZIP 22151

Foreign Addr ..

Foreign Counby .

" 0



[jOAutomaticaily calculate lines 3 ttwough 6 ~nd line 16. Caution: Box 12 entries for deferred compensation will change lines 3 through 6 automatically.

1 3 5 7

Wages t tips, other c()mp ... , ...__~?,.500 ~ Social security wages. ,;;5. 500~ Medicar. wages and tops . .~5, sq.!!.... Social security bps.. .. .... . _ _ _ _ _ _.

2. Federal tax withheld

4 Social sec tax withheld 6 Medicare tax withheld .... 8 Allocated tips

._ _ _~.,144. _... 3,441..


13b aRetiremonl plan Foreign source income eligible for exclusion on Fonn 2S55 Aotive duty military pay Box 12
Code .

Box 12 , Am9 unt .

II eOl< 12 code IS: A: Entor amount attributable \0 RRTA Tier 2 lax .... 1\'1, Enter am"unt attributable to RRlA Tier 2 tax ,
P: R:

Enter MSA contribution for

Double click to link 10 Form 3903. line 4 .. Taxpayer.

Taxpayer ........ . Spouse ......... . G: OEmployer is not a state or toeal governmont Box1S W: Enter HSA contribution for

Box 16 State wages, HpSL et<:.. 55 r 5~"_.

Box 17
State income



._-_ . ." - - "


Locality nal"(l_e_.

8ox18 _loc~t wages, tips. etc.,



~q,ca! inc~!l1e




Advanced EIC payment.. .. .. .. ... ............ .. .. .. .. . .. 9 Dependent care benelns (Check if employer furnished eare at work) .... , ,~D 10 Dependent car. beneilis Amount forreited from flexible spending account '" . Dislributions from Section 457 and other nonqualified plans (See help, it EIC, Olild Care, Child Tax Credit, .r IRAs.) 11



DeSCription or Code Fonn,W.2 _(O,l\.SDI '" _ _ .

CalHFA Loan# 022472.3

20 of 130

eorrower : Kyl . . . .lIIIg

DEC-21-2011 15:24 From:PAYSERV



Form 1040

Fonn W2 Worksheet Additionallnfonnation

.. Keep for your records



_ _ _ _ _ _ _ __
Fr.iedreichs Ataxia Research :At.


Employer Name _., _.

Part I

Statutoly employe.s
13a. StaMory employee Deducting expenses In connection wrth


this income

Part II

If deductIng expenss5, double click ID link

to Schedule C ...... .

Clergy, church employees, members Qf remgnized rdililous sects


Clergy only:
Designated hOl",ing or parsonage allowance . . .. .. . . . . . Smallest of (a) the designated housing or par'lOnage allowance. (b) amount spent on qualifying housing expenses, or (e) fair rental value. If no FlCA was withheld, check !he applicable box below Pay selfemployment tax on W-2 income only


1 2

~pay self-employment tax on housing or parsonage allowance only

Pay self-employment tax on W2 income and housing allowance "" Exempt from self-employment tax and has approved Form 4361

3 4

Non-Clergy only:

1 2


If no FICA was withheld, check the applicable box below

y self-employment tax on 1\11$ W-2 income

Form 4029

Exempt from slf.employment tax and has approved

Part III

Unreported TIp Income

H 1 TIps $20 or more in a month which were nol reported to employer . 2 Tips less than $20 in a month which were not required to be reported
3 Value of non"ch tips, such as tickets or passes, not reported ............. . Actual amount of allocated tips if different than the amount In box 8 .. . 5 !iJ!s paid oul through a tip-sharing arrangement ............................. . 6 DEmployer is. federal, state, or local government and bps are only subject to Medicare tax

--"-'''-'--H2 _ __ 1 _ _ _ _. H3! _
H5 - - - - .


Part IV

Substitute Fonn W-2

I. If substiMe Form W-2 needed. double-dlck to link this W-2 to a Form 4852 ..
Part V Inmate In a Penal Institution J a Pay from VIlQrk performed while an inmate in a penallnstitl.ltioli ..


any way)

Part VI

.. -....


Additional tnformation for Electronic; Filing and Certain Stales ($tH1 Help)
Third-party Sick pay Non-standard W-2 (handwritten, typewritten, or altered in


LjConected W-2 Control number (oplional) ........ .

Employee infonnation: Correcl to match employee information on W-2 Employee's SSN. . ..... 607-03::-1532 Suft First fl"lffie M.I. Last name ~K~Y~l~e~_ _ _ _ _ _ _ ~ Bryant
Mdross 9402 Sentinel R.!.dg"., _ _ __
Foreign Q)untry


ZIP code





CalHFA Loan# 022472-3

21 of 130

Borrower: Ky .. llIlId t

DEC-21-2011 15:24 From:PAYSERV




Interest and Dividends Summary

... KGAp 10r your records







Interest Summary
Totallnt......t ...


T""~IJI ..
.... --.~

"iis. G.wemmcnt"

Private Acti.ily Bot)!.


1 Selier-fH"Ianced mortgage ....... 1--2 From Schedule 8, Port I ... 3 Frorn Schedule B, Parjll ... .... . 4 From Kl Worksheets . . . . " ..... 5 Exempt"inter(':st dividends (net of adj.) ... f--.' .. . , 'f--.. 6 From f'orms. 6252 , .. ... , .... 7 From rorms 8814 . . .. . ... ' . S Subtotal .. . . . . . ... .. Less Mjuslmonts:





f - -......


- .. ..



.. ..


u.s. savit)gS bond interest

prelilously reported

., 10 Nominee distribution 11 010 adjustmant , " . , ' " ..... .... 12 ASP adjustm""! .. " ' ...... .. . ,

.. -.


13 Accrued Interest .

, . .. . . 1--' . ... -." .. ... .......

-"" .....'... ,.~"'

... ,,.... ..




14 Other adjustment ........ 15 Series EE and I bond eXClusion 16 Total Mjustrncnts ......
l ' Total to Schedula S, line 2 ...

. '"'

-.. "...'-.'.".
46 .

.....-, .. ,,, .



..... .... .. .... ..

18 Total to Form 1040, line 8b ..... ... 19 Total U.s. goven'1!'rJent intrprest . " . , ... 20 Total to form 6251, line 12 ... ... ..

.. .. .



... ,.

..' ...,

-_.._ - - - - - 1 From Schedule S .... 2 From K'l Worksheets

DIVIdends Summary ----TI-------Ordin8N Qualifted



- - - + - - _ .__ . . . .---

3 Subtotal
Less Adjustmonts:
4 Nominee distribution,

5 other adjustment . 6 Totar Mjuslmonts

7 Total to Schedule B. Iln~ 6

.... f - - - - -

Total qualltlCO clividends


9 Total capital gains .... Toiai nontaxable dlvJdonds


Capital Gai~;; Summary
:28% rme
Soc:Iion 1250

_._------+-Se<1lon 1202 60%

1 From Schedule B Less Adjustments:

1----".-- - - - / - - -

2 Ncminee distribution .. 3 other adjustment. 4 Toml Adlustments 5 Total to Schedule D 6 Total to Schedule D .2._..Tptal to Schedule D


.. ..


..f - - - - - - - -




CalHFA Loan# 022472-3

22 of 130

Borrower: Kyle ~

DEC-21-2011 15:24 From:PAYSERV






Fonn 1099G Worksheet Certain Government Payments

.. Keep for your records


Name(s) Shown on Return

Social Security No.

Kyle . . . .

Worl<sheel DesCliption .

california State Refund,.,.



Own<>rship (defaults to taxpayer}: Check ifTaxpayer .......... .. Check if Spouse. Check if Joint .... Payer's Federal ID number. Enter the abbreviabon of State or Locality issui ng this payment 10 a State abbreviation .......... .. locality abbreviation ........ .

~--~-I----,-- - - - -


Payer's name.

. ........ .

state of

Unemploymenl compensation. , . a Amount repaid ......... . 2 State or local income tax refunds, credits, or offsets .. 3 Box 2 amount IS tor lax .year .... 4 Federal Income tax withheld 5 Alternative Trade (ATAA) 6 Taxable energy grants ... 7 Agriculture payments ...... . (Doublec1ick) 10: a Link 10 Schedule F Line Ga, 40a .. b Link to Schedule F Line sa, 42 ... c Link to Form 4835 Line 3a ...... d Link to Form 4835 Line 5a ~ 8 Check if the amount in box 2 applies to income from

-_.. _ _--

a trade or business , .

(Doubleclick) to: a link to Schedul" Cline 6 . ~ b Link to Schedule F line 10,44 ... Enter the taxable portion of tihe amount in box 2 to be reported .' on Schedule C or F .. 9 Market gain ........... . a Link to Schedule F Line 6a, 400 ...

b Lmk to Form 4835 Line 3a. 10 b State identification no ....... . 11 State income lax withheld .. .


CalHFA Loan# 022472-3

23 of 130

Borrower: Kyle_S

DEC-21-2011 15:24 From:PAYSERV



Tax Payments Worksheet

.. Keep lor your records

Social Security NLutlber

Estimated Tax Payments for 2010 (If more than 4 payments for any state or locality, see Tax Help)






local ID






1 04/15/10.


04/15/10 06/15/10" 09/.150 0 01/18/11



04/!.;!/10 - - - , , - - - 0E;/l5/10

2 06/1SnO
3 09/15no_

". .....

.,- "




--"-- -----_..

4 01/!8/11



--_....., - - - - ..



- _......

.. ,-



----" -

- -..-- -_."-- -"."




Tot Estimated Payments ,





Tax Payments OtIIer Than Withhdding (If multiple stales, see Tax Help)






-.". 6 Overpayments applIed to 2010 .... "

Credited by estates and trusts

---'."-- -" -"
-. ......




Totals Lines 1 through 7 .. " 2010 extensions .... ".. " ". .....


'" "



Taxes Withheld From:


. ..


2,,1 951.


10 11 12 13 14 15

..... ...... ,,, .... .. Forms W-2."." ..... " , ... Forms W2G. ' " ..... ". .. ...... ,. ,. .... Forms lO99-R , ........ ". Forms 1099-MISC and 1099-G ....... . .. Schedules K' " " ' , ... ...... .. .. Forms 1099.INT, DIY and 010 ". 16 So"i<ll Security and Railroad Benefits , .... 17 Form 10998 ,," . " St -- Loc - " . 18. Other withholding ". St Loc -St Loc --" b Other withholding ... " Loc C Other wilhholding ..... ". S! 19 Total Withholding Lines 10 through 18c ........ 2D Total Tax Payments for 2010 " ..... ... ......


9 ,.144.

- - ,.. ,,"--



-_. . ..." - -

-- - - ' "


..... ..

,,........ ,..,..-



9,144. 9,144_,




2,9512,95}._ ID



Prior Year Taxes Paid In 2010 (II multiple states or localibcs, see Tax Help)
21 22



23 24

..... Tax paid with 2009 extensions, "........ .. 2009 estimated tax paid after 12/31/09 ... ... ...... Balance due paid With 2009 return .. . . .. . . . " . " .. Other (amended returns, installment payments. etc) ... ' ".


.. ....

-- _."





, , - --"'


CalHFA Loan# 022472-3


Borrower: Kyb . . . . . . .

DEC-21-2011 15:25 From:PRYSERV



Schedule A

State and Local Tax Deduction Worksheet



Nome(s) ShOwn on Return

Keep tor your records


State and Local Income Taxes

State income taxes:

1 State Income tax withheld . .... .. " ....... " ........ . . , . . . . . . . . ' - " , .. 2 2010 state estimated taxes paid in 2010 .... , . . . . . . . . . . ....... .. -, . .. - ... . ... " ... 3 2009 state estimated taxes paid in 2010 . , 4 Amount paid with 2009 state application for extension .. -, .. . " ... ., ..... , . ., 5 Amount paid with 2009 state income tax return ... , . , 6 Overp",yment on 2009 state income tax return "'Pphed to 2010 tax ...... 7 Other amounts paid in 2010 (amenoed relurns, installment payments, etc.) .,' ... " , . , . 8 State estimated laX from Schedule(s) K-l (Form 1041) ... ,



1 2 3 4 S S


2,951. .... ,....




11 12 13 14 15 16


19 20
21 22

Local income taxes: ... , Local income tax withheld , . . . . . . . . . . , . . . . .... . . , . . . . . . . . . , .... ., ....... ,. , . ..... , . , ,. , 2010 local estimated taxes paid in 2010 .. , '. , ,. ,. 2009 focal estimated taxes pa.d in 2010 . ....... .... , .. Amount p;;lid With 2009 local application for extension .. ...... " . ..... Amount paid with 2009 local income tax return .. .- ....... ... ............... ., OVerpayment on 2009 local income tax return "'Pplied to 2010 tax" .... . '" Other amounts paid In 2010 (amended returns, installment payments, etc.) .. , Local estimated lax from SchedUle(s} K-l (Fonn 1041) ., ............... Other: st.ate mandatox:y taxas ." Total Add I.nes 1 through 17 . ........ ... .. ... .... .. .... .. .... State and lOCal refund allocated 10 2010 ... , . ...... , , . , .... ..... .. " ...... ,. ....... , " . ... ....... , .. Nondeductible state income tax from line 28. Total reducUons Add fines 19 and 20. ......... ......... , . , " ..... , .. Total stille and local income tax dcdudion Line 18 less line 21 . , ' . .....


12 13

14 15 16 17




611 '-. .. ,

18 19 - ... 20
21 22

3,562 .

o. ,.,o.
3,562 .

Nondeductible State Income Tax (Hawaii OJlly)

23 Nontaxable federal employee ""OSI of living allowance ...... .. ," " .... .. .... 24 Adjusted gross income ........ .... . ........ .. .... , . , . " .......... 25 Add lines 23 and 24 . . , . . . . . . . . . .. . . . . . . . . . . . ..... .. ........ 26 Nondeduc6ble percent. Line 23 divided by line 25 .... , .. .............. . . . . . . . . . . .. Zl Hawaii state Income tax included in line 18 ...... . ........ 28 Nondeductible Hawaii state income tax. Multiply line 26 by line 27 .. .- . . . . . , , .

23 24 25 26 27 28




CalHFA Loan# 022472-3

25 of 130

Borrower: Kyle4

DEC-21-2011 15:25 From:PAYSERV



Charitable Contributions Summai)'

~ Keep

for your



NarIx;IC!:) Shown on


Cash Contributions Summlll'y






LiMit (Seh,K.l)







===2:,,!}O ~

iPortj[] ContributlonsSummory

(a) T"",.

~Fm.I""I" Property



(e) limit








Contribution c.rryOVOl'S to 2011



Non..eipltal Gimn Propctt)"


1 2010 conbibutiorui





Capital G.aIn





(n 20% Limit

2. 201 0 contributjoo~
allowed 3 CanyoI/.", ",.,,, a 2000 tax year . b 200a tax year .
e 2f:jJ7 tal( yea r .

_ _ _,-,-0:





,,, _ _ 0_,

d 2/XJ6 ta'IC year .

eM5 tax year. 4


allowed in 2010 CartyOVers

. ___ u~,

., .... ,........Q..=...

.. .-2.:..

.... ,~-=,_ _-"o_~


di$al10w0d In 2010 ~rryoverS to 2011 ~ iI From 2010

bFrom 2009 "From 200S
d Fmm 2007


_ _ _ ,.. ,. O~.

_ _ _ _ O . _ _ _ fl.


.... "- . CalHFA Loan# 022472-3


f from 2OO!;i {expifd) ..

"~-'-'-_. '.-"==.,.
26 of 130

Borrower: Kyl . . . . . .

DEC-21-2011 15:25 From:PAYSERV



Fonn lD4D
Line 40
Nom.(s) Shown on Return Kyle

Standard Deduction Worksheet



Keep for your records

US(!: thiS worksheet if (a) SOmeone can claim you, or your spouse it filing jointly, as a dependent; or (b) you or your spouse born before .konuary 2, 1946, or were blind; 1 Enter the amount shown below fef your filing status. Single or married filing separately - $5,700 Married filing joinUy or Qualifying widow(er) - $11 ,400 ~ .. 1 5,100. Head Of household - $8,400 2 Can you be claimed as a dependent? No. Enter the amount from line 1 on line 4. and go to line 5. Skip line 3,



Yes. Go to line 3. as our earned income" more than $650? Yes. Add $300 to your earned mcome, Enter 1I1e total No. Enter $950 Enter 1I1e smaller ot line 1 or line 3. If born after January 1, 1946, and not blind. enter th,s amount on line 6. Otherwise, go to line 5 It born belore January 2. 1946, or blind. mulbply the number on Form 1040. line 39a, or on Form 1040A. line 23a by: $1,100 ($1,400 if single or head of household) .. . ............ . Add lines 4 and 5. Ertter the total here and on Form 1040. line 40; or Form 1040A. line 24 ........... . .............. '




1Iamed income includes wages, salaries, tips.. professional fees, and other compenSltion received for
pe(sonal services you pertOr'med_ It also includes any amount received as a scholarship that you mu.~t include in your Income. Generally, your earned income is the \o\al 01 the 'lInount(s) you reporled on Form 1040, hnes 7.12. and 18, mmus the amount, if any, on line 27; or on Form I040A, line 7.

CalHFA Loan# 0224723

27 of 130

Borrower: Kyle ".. . . . .l1li

DEC-21-2011 15:25 From:PAYSERV



Earned Income Worksheet


Social Security Number

Keep for your records

Name(s) Shown on Reb..Jrn



- ....
Taxpayer Spouse



Part' - lEarned Income Credit Wks Computation

If filing Schedule SE:

.. ....... _-- . Net self-employment income Employee income. b Optional Method and Church



c Add lineS 1a and 1b "

...... ..... .. ....

, d One-half of self-employment tax . .... ., .. Subtract line 1d from line 1c .. 2 If not required to file Schedule SIE: .............. a Net farm profit or (loss) , b Net nonfarm profit or (loss) .............. c Add lines 2a and 2b ............. , .......... 3 If filing Schedule C or C-EZ as II statutory

..,- ...









employee, enter the amount from line 1

of that Schedule Cor C-EZ ............... .. , Add lines le, 2c and 3. To EIC Wks, line 5 ..



Part ii - f onn 2441. Standard Deduction Woricsheet and Scnedul" l Computations




... -

w ... ' , '


Net sel!-employment earnings Olne 4 aDove) .. , Wages, sala,ies, and tips less distributions from nonqualified or section 457 plans, etc .. _.. 7 Taxable employer-provided adoption benefits . 8 Add lines 5 through 7. To Fonn 2441, lines 19 ' ..... ........ . " , .. . and 20 ..... Taxable dependent care benefits ... , ... ..... 9" b Nontaxable comba! pay. . " ...... , ... 10 Add lines 8, 9a and 9b , To Form 2441, lines 4 , ........ .. _-_. ...... and 5 ... ,," . , " 11 Scholarship or fellOWShip income oot on W2 12 SE exempt earnings less nontaxable income ,. 13 Distributions from nonqualified/Sec. 457 plans. 14 Add lines 8, 9a and 11 througll13. 10 Standard Deduction Worksheel or Schedule L, line 3 .

5 6






5 5, 5.Q..Q\;:.~




-...- ....


- ... " ...








Part In -IRA Deduction Wortlsheet Computation


17 18 19


Nel self-employment income or (loss) ..... Wages, salanes, tips, etc .... Net sell-employment loss Alimony received Nontaxable combat pay. , Foreign earned income exclUSIon .. , Keogh, SEP or SIMPLE deduction . Combine lines 15 through

.. ...- - - - ----::--::--c::-:--:-_._. __ .5!>~,""5"'00"-'_'--1 _ _ _ _ _ _ 1 55, 500.

- - - - 1 - - . -..-

- - - - -......' - -



21. To IRA Wks.ln 2l:==5=5=,=5:::.0=.,.:::9':::""l:======l:==:.:.;>::.~=,=5=O=O=.


Part IV - Fonn 8812 and Schedule 1\1 Earned Income Computations


M'_ ..'.....


23 24 25 26

Self.emp loyed, church and statutory employees Wages. salaries, tips, etc __ .... ____ .. , , ... , .... Nontaxable oombat pay ........... " .. ____ .... __ Forergn earned income exclusion .... _... , ...... Combine lines 23 through 26. To Form 8812, lin e 4a and SChedule M. line 1a ... .......



28 of 130


- . ..,,-



---..- ....




CalHFA Loan# 022472-3

Borrower: Kyle lI; ~_

DEC-21-2011 15:26 From:PAYSERV



P ,19/27

Federal Carryover Worksheet

... Keep for your r"""rds


2009 State and Local Income Tax InformatiOll (See Tax Help)

- -..,------,-~

Slale or



-- ----- . - - ------Other Tax and Income Information

1 2 3 4 5 6

Estimates Pd Total WlthPaid With Total Ow.... Applied . ",A"-,fte",r~l.~~2J31=+-",hel,,dIPmts=='--t__-,R=etu=m"--_+---tpay!!1!!==n,-,l_ ~~!!L





- - - - - -"---1------ .--'-- --"---

T~~I==E. ~..' ..

~- ====='1 2



----..- - . - - . -..- - - - . -.. --------,---+-. ---_.1-----Filing status Number of exemptions for blind or over 65 (0 ' 4) Itemized deductions after limitation Check box if required 10 itemize deductions .. , . Adjusted gro~<; income. . . . . . . . Ta.liability for Form 2210 or Form 2210-1". Alternative minimum tax .. . . . . .. . .. . .... ...............

_. _____. J.. SIngle







. - - . - - ' - -~~
_ _, _ .

7 8

Federal overpaY~~p-l_ie_d_t~_n_ext_y_e_a_r_e_s~_m_ate_d_la_x_._~:"--_~J.:======:J.======

........--lL.. J -._--_.-_.--_. .------------ -,,--.----------_.2000

Qu;<:lcZoom \0 the IRA Information Worksheet for IRA InlOrnlation

Excess Contribution!'



9a ____ ._ _ _ _ ._____ 9 a Taxpayer's excess Archer MSA contribulions a.. of 12/31 b Spouse's excess Archer MSA conlnbutions as of 12131 b ---1-'--'lOa Texpaye"s excess Coverdell ESA <:Dntrlbutions as of 12131 .. 10 .. _,, _____________ _ b Spouse's excess Coverdell ESA <:Dntributions as of 12131 b _,, ___ ,_ _ ,_ _.______ 11 a Taxpayer's excess HSA contribotions as of 12131 11 a _ _ "_______~____

b Spouse's excess HSA <:Dnlributions as of 12131~~_~:"'_L_b=l-:====== ._______ _

------.--.-----.--.-.--.---..12 .. Short-term capital loss ..... 13a Long-term capital loss .... .....
b AMT Long-term capital loss ..... ............. b AMT Short-term capital loss

Loss and Expense Canyovers

,,-1------1----12" .______... _ _ _ _._ __



i 13a i ____,__________ .._

b __.,, _ _ _ _

------- -------

b _. _ _ _ _ ._ _ ... _ _ .. _ _

14 .. Net operating loss available to carry forward.

b AMT Net operating loss available to carTY forward. . .

-----------0> _ _ ,, _ _ _ . _

15 a Investment interest expense disallowed....

b AMT Investment interest expense disallowed . 16 Nonrecaptured netSectton 1231 losses from: a

15 a

. - - - - --_. _,, _ _,_________ _


20.10. b 20.09 c 2008

16a _ _ _.______.______ b

d 2007 2006..
2005 ._.__"_,,,_____

c _ _ _ _ ,, __ ._ _ _ _ _ _ d _ , _ _ ,, _ _ 1 - - - - e _ _._ _ _ ____ _
f ~....l.:-::======::l::=======

CalHFA Loan# 022472-3

29 of 130

Borrower :

Ky'e"I1 ~

DEC-21-2011 15:26 From:PAYSERV



Tax History Report

... Keep for your records
N;ame(s) ShOWn on FitufTI


~~----~,----- ~--2006 2007

----- --y"", Tax Histvry:

2008 2009


- .. --~I--FHing status Total Income

Adjustments ~o income


,.. _ .._---+
.. '~'---4-------+---------1f--'--+--


Adjusted gross income Tax Qxpense ..... .

Interest expense.
Contributions ...
Miscell~noous deductions

7,022. 17,336.

_-l-_ _ _ ~50 .


-+---1-----24 60.L

other itemize<j deductions

Totl:ll it~mized/standard deduction

Exemption amount .... , . ,

' , , ..

'1--,. _____ 1 _____

3,650 ...

Taxable income ...... .


.1---...- - - - \ - - - --1--


Alternative minimum tax

1" otal credits , .......... .

Other taxes



"1---.--'I---. "---J.. I---- ...---+9,544.':.,

Payments _.
Form 2210 penally
AmQunt owed.

.. ....... 1 - - -

Applied to next year's estimated tax , ...

Effective tax rater %

. . I -..----+--------jl-----+--- ,-+-----'&"-'.~

1--- . - - - - 1 _ _ _ --1----


--rax bracket % IS baSOd on I axablEl JnCome.

-rax bracket %




CalHFA Loan# 0224723

30 of 130

Borrower: Kyl ... . . . . .

DEC-21-2011 15:26 From:PAYSERU



Tax Summary Report

Name(s) Sho'M'l on


"1llng 5talt.lS
Nl.D"Tlber of exemptions .....


Gross In""",e
Wag... and salaries .
Interest and dividend income

Business income (loss) .. Capital gains (10SS<'.s) .... Pensions and annuities , .. Rems, royalties, partnerships, etc. Farm incom0 (loss) ..
Social security ooneflts ..

Othor income " . Total GI'<>!Is Inc""", ...

Adju~_nts 10 Inc:ome


__-=1::,4"-,0,,,,5-,-_ .
.... (Last year's AGI)

Adiuoted Gro lncome .... , ........... .


Itemized/Standard Deductions
Medical and dent.1 ... Taxes ..
Interest ..... Contributions . Q,$ualty or the:tt Ic:::ss(es) ...... " ..

Miscellaneous .. ToIlIlltemi%ed Deductlons ... Standard deduction

Exemptlon amount , ..

Income lax
Alternative minimum tax , Totli; Tues MforA C~i"'g Nonbusiness credits SusinlSSG credits ..

_ _-,3,,-, .665

.... ___ ~_ ~,665 .~_,

Totol Credits , Self.employment tax .

Other taxes

Total Ta........
Withholding .. Es~maled lax payments ......... . Olh.r payments , ToIlIl Pooymento . EstirMled tax penally.... . ........ .
Refund applied to next year's estimated tax ...... .


Amount Ovetp.oid ".

Amount Applied to E _ _ Amount Due

_---'5"-', 679 .

Tax bracket .. , , ........ , Effective tax rare ...... .

CalHFA Loan# 0224723 31 of 130

Borrower: Kyl!!lC. . . . . ..

DEC-21-2011 15:26 From:PAY5ERV



SMARr WORKSHEET FOR: Form 1040: Individual Tax Return

Tax Smart Worksheet

2 Tax .. , Check if from: Tax table" .. " " .. " ......... Tax Computation Worksheet (see in$lructions) , .. , Sch2du~e D Tax Worksheet , , , ...... , , Qualified Divideno$ and Capital Gain Tax WOrk$h$et . , .. , Schedule J.. ... ,........ .. " ..... , ......... " Form 8615 ...... " " ...... , Foreign Earned Income Tax Worksheet Addibonal tax from Form 8814 . , , Additional laX from Form 4972 ", .... ,' Tax from addibonal Form(s) 4972 Recapture lax from Form 8863 .... ,' ' , ....... . IRC Section 197(1)(9)(6)Qi) election for an additional tax Tax. Add lines A through F. Enter the result here and on hne 44
_ _...::3.,.. 665.

4 5

6 7

. . . . . :



SMART WORKSHEET FOR: Schedule A: Itemized Deductions

State and Local Taxes Smart Wol1!sheet
Enler sales tax information below. The greater of sales Iaxes from line' plus hne on line 1\:. will How 10 line 5. See Help, A

J. or income taxes

Income from Form 1040. lIne 38, ..... .. ....... , . ... . . . . . . . . ...... , 55, 46 11.::.. Nontaxable income entered elsewhere on return ..... " .. .. .... .. .. .... .. C Available income: 2009 refundable credits in exceS$ of tax , , O. -' D Economic recovelY Ilaymems .... . , " ... .... " " ... _-- .. " .......... . ... O. E Enter any additional nontaxable income ...... , ........ , . . . . . . . . . . , , "._-, F Tolal available income for sales taxes .. , ...... . .... . .... 55,466 . G Sales tax table information: Enter total (combined) state and local sales tax rate in column (d) lor each slate listed in column (a), If Jl;l, CA, CO, LA, NJ, NY, or SC in column (a): QulckZoom to Mise Global Options to enter default locality, ........ ... ~ or Double-clIck in column (d) to select your locality for each state entered .

--_ ..






Lived in State From

Lived In State

(d) Enter

State Tax Rate ('Yo)

Local Tax Rate ('Yo)


Tax Rate To 01(01/10 ].2/31/10 8.2500


(9) State Table Amount

(h) Local Sales Taxes

~) Prorated or Total Amount




-- -,,--H I





Total general sales taxes lrom table ,,,., ... , .. , . ........ " 780 . .. Enter additions to table amount (molor vehIcle, boat) .. , " , ... .. -'" Total sales from table plus additions to table amounl. .. ... ....... - , Enter actual sales taxes paid (in lieu of table amount) " .. - .. , .. " -. --. .. - - ' Total income taxes paid ., ..... " ' ..... .. " .. . . . -- . " .... - _ .. '" , . ..... ..



78a .
3,562 .


32 of 130

Borrower: Kyl"_ "iiPiE

DEC-21-2011 15:27 From:PAYSERV


. KyIIlllS_gllEiP:r

SMART WORKSHEET FOR: Schedule A: Itemi"ed Deductions



Mortgage Interest and Points Smart Worksheet

A Enter

a description and an amount for fully deductible mortgage interest and POints. Check the box if the mortgage was sold to another lender. <)r the mortgage tlas been paid off; the lender's name will not transfer 10 next year's retum. Check the box if the mortgage interest andlor points are not reported on Form 1098. No"', When the POints must be deducted over the life of the loan, enter this information <)n the Other Points Smart Worksheet.

~nder'S NameJDescription







Not on Form 1098


.. ,

... . ..








... '"'...





SMART WORKSHEET fOR: Schedule A: ltemiLed Oeductions

.~ 1.7.,..... .__1_T_o_t_al_h_o_m_e_m_o_rt_9a_g_e_'_n_,e_,e_st_a_n_d_p_o_1n_ts_lro_m_l_O_98~'_S_fr_o_m_d_e,_ta_i_"_._ _ _ _... ,. , ___ ..,',.:~~.36. 2 Enter amount to deduct on line 10 if different. .............
A Adjust Home mortgage interest and points ",ported on Fonn 1098: ...

SMART WORKSHEET FOR: Schedule A: Itemized Oeductions

Cash Contributions Smart WorkSheet A Miles dnven for charitable purposes: 1 All miles tor: a To perform charitable selVice .. ,. b To deliver noncash contributions c Total. Add lines a and b .. B cash contributions, enter name ot charily. type of charily. and amount;



Name <>1 chalily _ __ _





C~~rJ.table ~Rntrib!!ti?~",,,____ ,,.. ______ ,._._-,,2",5,-,O,,-~

------- ,---,-----------1---- --.--

------------------_...._- - -..
---_.---C Print tash contribution detail with filing copy?


..- - - - - - - -



33 of 130

Borrower: Kyle 1It

DEC-21-2011 15:27 From:PAYSERV

Kyl .. __



Generallnlormation Smart Worksbeet

SMART WORKSHEET FOR: Form 3903 (California to Pennsylvania); Moving Expenses



15 II ne E at 1'1111$1 50 I11Iles? Yes ~ You meet thiS test


Enter the new principal place of work for this move .. California to.,PeIlnsylyania If you are NOT in the military. enter the total amount your employer paid for your move (EnterOHlY if your Form W-2 ~(les not show an amount m Box 12 with code P) . _, .. ..,.."._ _ Enter the number of mIles from your g/d home to your new workplace ... _ ..' 3, 000'rn1"" Enter the number of miles from your aid home to your <lid workplace. 15 miles Subtract line D from line C. If zero or less. enter -D mn..

You do not meet this test. You cannot deduct your moving expenses. Do Not complete Fonn 3903. For foreign moves check here only if all the follOWing apply. . . . You moved in an eartier year You are clalmmg only storage fees while you are ....f1'j from tho United States Any amount your employer paId for storage fees is included as wages i~ box 1 of Form W2


SMART WORKSHEET FOR Form 3903 (California to Pennsylvania): Moving Expenses

Moving Expenses Smart Worksheet
Enter your moving expenses: A Transportation expenses for this move ............ . B Storage of household goods and personal effects ......... . C Travel expenses for thIS move (See Tax Help for new mileage rates) . Lodging expenses for this move .......... .. .. ...... .. ...... ..

_ _-,5,"-,,,0.

."---.. ,

SMART WORKSHEET FOR: Schedule M: Making Work Pay

SchedlJie M. line 10 Smart Worksheet

Economic recovery payment received in 2010? ...

....... f I~A~~o I ~~USErRi1

CalHFA Loan# 022472.3


34 of 130
Borrower: Kyl~J "

DEC-21-2011 15:27 From:PRYSERV




KYle_ SMART WORKSHEET FOR: Form l099G Worksheet (California State Refund) ... .. . .. !'onn 1099-G Electronic Filing Infonn;dion Smart Worksheet



Complete onIy if filing electronically -See Tax Help for additional info.

Payer 1
II CORREC1ED check here

Recipient 1


.. -'

Payer Infonnatioo:
State Identification Number.

68- 0204061 Name, street address, city, state, ZIP code and
telepnone number.

f' e@f<!ll Identification Number .


Recipient lnfonnalioo; IdenMcation Number , . ........ 607-03-1532




Street addre:;;S




Apartment No.

-_........ - - .


ot,,"'=""-__ _
", ...,.,'



._Zip code 19403



Accoun! No.


T Ellophone number

.,.--,-----,-- - - - : : - " ' Ext

----. ,._--'-


Recipient 2

Payer 2
It CORRECTED check here, '

"0 ..

-", ..


Payer Inlonnation:
State Identification Number _. _..

---'" Number ... -"' Name, street address. city, state, ZIP code and telephone number.
0 '

...._.. ..

Recipient Inlonnation: Id.entification Number , .... Name

- -..


Apal1m.n! No.

Street address




Zip code



Telephone numbet



AccOW1! No. (optional)






Recipient 3


Payer 3
If CORRECTED check ~re .. .. ,

..,,... ,

'"LJ ..
Recipient Inlonn.... on:

Payer Information: State Identification Number


Federal Identification Number telephone number.


Identification Number

Street address

ApaI1ment No.

Name. street address, {lity. state, ZIP code and


.. -,"







Zip code



-----,--l'elephone number


--'''- No. (optional) ,_ ...._-Account



CalHFA Loan# 022472-3


35 of 130

Borrower: Kyl. . . . . .

DEC-21-2011 15:28 From:PAYSERV






oMS No. 1545-0074

IRS e.file Signature Authorization

Do not _ to !he IRS. This Is "'" a !me ...tum .. Keep this fonn for your records. S< insITUctions.


Decl~ration Control Number (DCN)

Ta;;aYe'~\; I1OIm!!



. . . . . ._ _ _ _.


1 AdjuSled gross income (Form 1040, I,ne 38: Form 1040A, I,ne 22: rorm lO40EZ, line 4)
2 Total tax (Form 1040, tine 60; Form l040A, line 37) Form l040EZ, Bne 11) .
3 Federal income tax withheld (Form 1040, line S1~ Form 1040A, line 38; Form lD40EZ, tine f)

4 Relund (form 1040, lin.74o; Form 1OWA. lin.4\\>; Form 1040E4 1".12<; Form 104I).SS, Part I, 1".12.) .

for the taJ< year ..ding from my .I",tronic 110m tto IRS (a) (dille ,1,"",(,.,,;,; refund, If applicable. accoullt indICated in the 10 l~i..OtQunl I (B'fPS). In order fur and eft",t until I
1)f ta.xes ro recei\le confidential (PIN) bolow is my signallJre for my

late.r tl!!m 2


PIN: oh_ one box only



J,....ndividual Tax

AsSO"C=~:c'a=t:'e"s'--_____ ~.,, ___ to enter

i'iioalm DIIMIr

or generate my PIN


as my signature on my tax year

2010 fi1tleclronically filed Income tax return.

If you are entering your

I will enter my PIN as my signature on my tax ~ar 2)10 efectronicaUy filed income tax return. Check this. box only own PIN and your return is filed using ttle Practitioner PIN method. The ERO mustcomp!ete Part III below.

Your signall.lrfl


Spouse's PIN: choek on~ box only

oI authorize

_____ to enter or generate my PIN


Eat.r fin ","""",, !:Ittt


oown PIN and your return ,

as my signature on my tax year 2010 electronicallY filed income tax return.

I WIll enter my PIN as my signature on my tax year 2010 elec;trcnlc~lIy tiled income tax return. Cho(;:~ this box only if you Bre entering your is filed using tne Practitioner PIN method. The ERO must complete Pert III belOw.

Practitioner PIN Method Returns Only -

continue below

leart til Ieeiilfi;-ca-cfj'"o-n-a-nd"A;-u-;;th;-e-.n""ticati~ - Practitiol!,e.r. PIN Method Only '-'on

ERO"s EFINIPIN. Enter your six-digit EFIN followed by your fivedigit self'selected PIN,


__ .-.,"--_::::::::-=-. __

do not ......,

taxpayer(s) Indicated abOve. j ~onftrm that I am submlttlnglhl$ return In accordance With tho requirements of the Ptacttnoner PIN method and PubJlcatlon , 345, Handbook for Authoriloo IRS efiJe ProVIders of Individual Income Tax Returns.

certify 1hat.the abolJe numanc enby is my PIN, which


my ;3ignature. for the taxyear,2010


filed income


return for 'the

""",'" 03/03/11
ERO iIIlJ$t Remin This Fonn - Soo ....lrucIions Do Not S"bm~ ThIs form to 1he IRS Unlo$$ R"""""tod To 00 So

BAA For PapeIWOrk Reduction Aclllotic:e, .... your tax roIum instructions.

Form 8879 (20 I 0)

CalHFA Loan# 022472-3

36 of 130

Borrower: Kyle . . . . .M.*

DEC-21-2011 15:28 From:PAYSERU





Plaasa Indicate how the taxp"yer(s) PINts) .re entered into the program. T""Payer(s) entered PIN(s) .......... . ERO enterea Pnmary Taxpayer's PIN .. . ERC entered Secondary Taxpayer's PIN. ERG entemd Prim~r Ta.x>a 1> PIN and Seconda 'sPIN.

=-:--:--::--.,.." . _ , . - . _ . _ - - - - - - - ERO Detlaratlon:

I declare that the Information contaIned in this electronic tax return is the informatIon fumlShed to rflt? by 'ltle taxpayer. If the taxpayer furnished me a completed tax return, I declare that the information contained in this electronic mtwn is identical tC) l.htlt contained in the return provided by the taxpayer. If the furnished return was ~gned by a paid preparer, t declare [ have entered the paid preparar's Identifying Information in the appropriate portion of this electronic return. In am the paid prr.parer, under the penallleS of penury I declare that ( have examined ttlis electroniC return. and to ttle best of my knowtQdge and belief, it is true, correct. and complete, ThiS declaration is based on aU Information of which I have any knowledge.

a - Sig"ature of Electronic Return Originator

ERO Slgnatu",

1II1II signing this Tox Return by entering my PIN "'Iow.

ERO's F"IN (EFIN followed

by any 5 numbers)


S.II.soleot PIN

C - Signatu", of rllXpayerlSpouse
Perjury Statement:

- - - - - - - - - - - -................_ - - - - - - - - - - - - - - - -

Under penalties 01 perlury, I dedare that I ha'Ve examined 1his return, includtng any accompanYing statements and schedules and, to 1he best of
my knowledge and belief, it IS true, correct, and complete. Consent to Disclosure:

I consent to <::IlIow my Intermediato Service Provider, transmitter. or ElectroniC Return Originator (ERO) t() send my rerurn to I~S and to receive the following information from fRS~ (1) acknowledgement of receipt or reason for rei~on of transmission; (2) refund offset; (3) reason for any delay in processing or refun~: and, (4) date of any refund_

10m signing this TO)( Return ond Electronic FW1ds WllhdYowol Consent, if appliC<lble, by entering my Self-s.t.... PIN below
Taxpayer'$ PIN (enter any 5 numbers) _. _.

If you're filing a joint retum:
Spouse's. PIN (enter any 5 numbers)

. 02/24/2011


, .... .. .. CompletIon of thIS ~clJQn Indicates that I am requesting a refund of taxes cverp:rnd by or on bah:al1 o1lha decedent. Under penalties of perjury, I declare 1hat! have examined this Form 1310 claim, and to the oost'Of my knowledge and belief, it is true, correct. and complete,

o - Form 1310 Signature and Verification

- - - - - - - - - - - -..

__._ -

$iqn.D.irt;t ofPIlISCII"I Cbiming Refund (35 eh.1:I~1In'





CalHFA Loan# 0224723

37 of 130

Borrower: Kyle . . . . . .

DEC-21-2011 15:12 From:PAYSERV





ot til;!

rrlillilroury - lr.tern3.1 Rev!:'nue::Se/r~fc~

on pg 14.) Usa the

U.S. Individual Income Tax Return

Forth ill yeer JOIn 1- Dille 31, 2009, 01 oth er tliX year bej:jinnin!l

,2009, endil19


nMtwritltorsta Il'!inlhi..:s ;II:l'!

L Label A (Se::e::im:;l

, '0

OMBNo.1545QQ74 Your social securitynumb@r




Othgrwise, pJe1l:So!! ~rlr.t



5020 },. STREET S}"CRAMENTO, C}" 95819

___.2--_11.Spouse's social security number

want $3 to X Single Married

Presidential ElectionCam ai n ... Cheokhe:reif ou.or ours DuselffiUn 'oinl

Filing status 1
Check only

""" p.'''," is" I:lhH<;j but nol your de~erldent, .!nler thiS

;, Yourself. I



... pag.17

~~~~~~~~~~::::::::~~~::::~~~~~~~~~~~~~~~~~~~~~~QnEeWhQ ~---------.. ------------+--..---..---t--------t-++c


' .lIved wltl1 yOU_ _

Last name


.dldl\Oth~$WltI1 YIJ
dUato dlVlHce



here ...

--------------------,-+-------+-------+-+-1- ~:~:~~~I\t~ ----.,-----------------+-------+-------+-+-1- ~l\tered above - 7

Sa Taxable In1erest.

56 92B.
b Tax~exemptinterest.Do"

Attach Fonn(s)
W2 her. Also attach Form5

93 Ordinary dividends, Attach Schedule B if required

b Quallned dividends (see page22)


LI=.lI-,-,-______ ....

1099 Riftax was withheld.

Taxable refunds, credits l or offsetsofstate and local income tixes (see pase 23) _ Alimony received 6y$lneGs income or(loss}. Attach Schedule C or C- EZ . .. ) Attach SchedlAleD i1 ro1!qLlired Capital gam or (10$$ 'Ir nl)lll!lqtJil'l!Id. checK here.

11 12 13

If you did not

see page 22.

14 Otherga.ln$~rl~~~~ch,~;~:, 158 IAAdlstnbutlo,~j.' . 't~":I;~J,:<rga

'~"": ;.,;;:;:,:z;

16. 18

enclos&, but do
not attach. any payment.Also. pleaseu$e
Fonn 1040~ V.

ftM.if;~~i~A'~tt' ..i$L~~;~"F # .~. i;%V '~~~~:~~WW;> . E:i:' Farm Inome:<.;ni'\'~7_ a""11"-il:I,~~~e. :'::""'". :::",,,,,. . .... :~ilt'~:t'~' 0'''' Unamploymentcompensatlon [n excessof$2,400 perrecipiel1t . _ _ . . . . . 1~ .~ b Taxable amt(see page 27} . 20. Social5ecurlty benefits 21 Other income. usttypeand amount (see page 29) __ ~_~ ., ____________________ _

17 Rental real eil~, rOJaiftiSt'jrtnersiJ!I\w' S corpo~n"'Jf~, ~hAttacn;l!'Bi.diliiiE

P~nsionsand~uitie$,;#H,f: '16a


~_'" ,1'-'

'''' ~iR "'.. ~~"" ::"',,:N, :,t~",ableamt%)~,

~m,.. ~',.":,,


~g~~' .&if ',!~~*~i~b, @,$1:~1~~~:




---_...---_._--:---_.. -------Educator expenses {see Certain (ee~ basis government

Adjusted Gross



26 27 28 29

Health Moving expenses.

$elf~ employed

SEP, SIf',tlPLI;, and qualified plans Self-employed health insuraneedli!duction (see page 30) 30 Penalty on earlywithdrnwaiofsavings 31a Alimony paid b Recipienf$SSN ~ 32 IRAdeduction {~e page 31} 33 S\udentloon inter&st deQuQticn ($So page 34) 34 Tuition and fees ded uctlon , Attach Form 8917 35 Domestio produotlon aetivitiesdeduction. Attach Form 6S0:3 36 Add lines 23lhrQugh 31 a. and 32 through 35 Form 1040 (2009)

KBA For Di5c:::!o5ure. Privacy Ad, and Paperwork ReducticnActNotice, see page 91.

'Form 0


FD10401V 1.25

38 of 130

Borrower: Kyl . . . . . . .

DEC-21-2011 15:12 From:PRYSERV



Tax and


Amot,mtfrom line 37 (adjusted groSSit'loome).



3S. Check

{8 YouWer~bornbeforeJanuarY2.1945,
_ ,

spouse was born beforeJanuary;2, 1945,

Deduction for~ Itemized deductions (from Schedule A) or your standard dedudlQn ($~e J~tt margin) . People who ~ check any b Ifyol,J are increasing your~;andard dedUf;ltion by certain real estate taxes, ne\l\f motor


boxon line 39a.39b, or


40b orwho

claimed asa

All others:


.... Subtract line 40. from lin" 38 . 42 Exemptions.lfline3S Is$125,100orlessand you did not provide h~using to a Midwestern displaced individual, multiply $3,650 by the number on line 6d. Otherwise. see page 37 . 43 Taxable Income, 44 Tax (see page 37).

vehicfetaxe5. ora net disaster loss, attaoh Schedulel and check here (see page 35)



Married lilin9

45 46


47 Foreign tax credit.



MSrrled tilln!J

widow(er), $11,400
Heild of

5\ 52

hOl,lJ;.qhold, 56,350

Credilforohlld and depend_nteareexpenses. Attach Form 2441 Education credits from form e663. line 29 . Retirement savingsCQratributionserediLAttaoh Form S880 . Child tax credit (... page 42) . . . " . . . " . . Credits kom FOJll1: 08396 b 08839 c ~ 5695 Oth!;!"raredlt& a 03800 /rQm Fgrm.

bOaa01 cO

54 Add In 471hrough 53.



57 68



If you nave.

61 tiZ

Federal inco me tax withheld from Forms W 2 and 1099 20098stimated tax payments and amount applied from 2008 return Making work pay and govemmentretiree credits. Attaoh Sch M . Earned income credit (EIC)

Schedule EIC.



72 If Una 71 is more than line 60, subtract line 00 from I Amount afUne 72you wantrefundedto you. If Form Routing number ...
Account number


. ..

; . '..



Paid Preparer's Use Only

CaIHF!IIIUO_)22472_3 FO(I)1 sortw$f-", C:l""lpyright 1996,
2010 HRB TOll:: Group. Inc.


39 of 130

Borrower: Kyle

DEC-21-2011 15:13 From:PRYSERV



SCHEDULE A (Form 1040)

Itemized Deductions
.... Attach to Form 1040. .... See Instruction5 for Schedule A (Form 1(40).


Medical and Dental Expenses

Caution. 00 not include expenses reimbursed or paid by others. Medical and dental expenses (seepageA.. 1) ________________ _

_._-_..__..-_._------_.....-..._ 2 Entaramountfrorn Form 1040,

3 Multiplyline2by7.S% (.075) I I

Taxes You


5 8


8 6

Interest You Paid


10 HomernQrtgage interest and



Personal interest is


12 13 Qualified mortgGtge Insurance premiums (see page A~ 7) 14 Investrnentinterest. Attach Forh'l4952 ifrequired. (See pageA-S,) 18 Gifts by co,hOr oheok.llyou made any glftol$250 or

Gifts to Charity
If you madea giftandgQta benefit for it,

17 Other than 11;1 Cartyoverfrom

see page A 8.
Casualty and
Theft Losses

19 Add

Job Expenses 21
and Certain



22 Tax preparation f@es

23 Otheraxpenses .. inve~fl1ent.

24 Add Iin.,21through23

28 Multiply line 25 by 2% (.02)

Enter alilountfrQm Fonn 1040, line 36 .

28 Other- fromlistonpagaA-11. Listtypeandamount ... ___ .. ____________________ _ other Miscellaneous Deductions



29 I,Form 1O4O,lIno 38, ovor$166.800 (over $83,400ilmarried filing .eparately)?




forlines4through 26. AI$O, enterthisamounton Form 1040, line 4Oa.

DYes. Your deduction may be limit~d. See pageA-11 forthe amount to enter

C:all~F~~;;~~~~~R:'~d~U:ct~io~n:A~c~t~~~~~~~~~~~~I~~~~~~~~~~~~~~~~s~c~hedUleA(FOrm1040~)i20.019 ~
2010 14Rij Tl:I~ G!o.:rp~i";.' 1.9

40 of 130

Borrower: Kyl..



DEC-21-2011 15:14 From:PRYSERV





2106 EZ

Unreimbufsed Employee Business Expenses

.. Attach to Form 1040 or Form lQ40NR.



This Form Only if All of the Following Apply.

You are a.n employee deducting ordinal)tal"ld necessary expensesattributabJe to your job. An ordinary expense is one th"lt is common and accepted in yourfle!d oftrada, business, or profession. Anecessary expense is one th~tl$helpful and appropriate

(or your business. An expense does not have to be required to be considered necessary.
You do notgetreiml:tursed byyouremp!oyerfQraoyexpenses (amQuntsyouremployerincluded in box 1 ofyolJr Form W- 2ar6 not considered reimbursements fQrthis purpose),
Ifyou are cl~imin9vehlcla expense. you

CaU1iQn:You can use the standard mileage you plil!leed the vehicle in service, or (b)

,. ".r,d.rd mileage rate forthe first year 00111011 period after 1997.

It~ Figure Your Expenses



. ..

Vehicle ex:pense using the sandard mileage rate. Complete Part II and multiply line Sa by SSt (.55) Parking rees. toils, and transportation. including, bus, etc., that did not involv!!! overnight travel or commuting to and from work.
,~~~.~~~~ J~~~.;\ ;,:)~~ &Ji <;~:;... :f.W>t Travel e>:pense while away from homeover9jWt, tnclut!~ I~m~, alPnEt~rrental.~l.19, i~~~" """.l O<O<~ .~!;l!_ ~'!l:i ' """ :<?':~,,&,~ onQtinclude meals and entertalnment :;1jW ffi!.~ .",*,%. ~~~\''''';:''' ~:);:'* . . ~~~ :;:~~. ~, ,.;t<oO ' <'"'' ~~ "'" ~j , dJW t$ '~J~~~f ,,,i><;~ '1't1l!:!" "~,, """" '~"?!-~; ~""'~"':5: ....", 6L1Slnes$expenses not included on nnes 1 th1'C;jJg&~1Jo nb'tlnclud"~l!al ;Rftainffient



.., "

. <AAl






:395. 1,600.


50% (.50). (Employees subjeetto ............ X DepartmentofTransPQl'ti!Itlol'I: (DOT) hoursofservle limits: Multiply meal expenses ineurred
Mealsand ent@rtainmentexpenses: $

while away from hOMe Oil business by 60% (.SO) instead of50%.


$1)0 instructions.) .

.M _ _ _

Total c:!t:penses. Add lines 1 through S. El'Iterhere and on Schedule A (Form 1040},line 21 (oron $(:h~dula A (Fonn 1040!if:W!m:!)' {A~m9.!l!esre$ervl~~e- bae'3tat~tlt@~~. .m~M~*J~~ local govemmentofticials, qUalifi(i;e~form&9 a~dlVldual!l.~.isaijUe~$ee ':'I:~j!~.'"""""]ff''''''''

'11W theinstructionsforspeclalrulesdn:Where ". .

aifiSts. Ji,iii'ithis ama "':'~n_

7 S

Infonnation on


,!od' S .. Ji" ..;tr~~. . ,.~~ :3 166. ;~;<:~~ '~;.if:m::r ~1~. ~:~~: . $~if. thjs Ilf@ oqllll:~f 'm~!dl):~'!lra",$l1lg vehicle expense on line 1 . .. ... ........-. --

""'il;'~" ''W ,~~'..\:~. ,~~~ #~i~





\MIen did you place yourvehicl. in service for busn ... u.. ? (month, day, year) ..


Of the total number of miles you drove your vehicle during 2009, entorthe number of miles you used yourvehiele for: 6uoloo.. .'l-..L~ 5 0_ _____ b Commuting (... Instructions)

AL!lil_()___ . _____ ... ___


.!..J._!?_________ _



If''Yes,'' isthe !!tvidence written'? .





For Paperwork Reduction Act Notice, see page 4.

Fo rm 2106 EZ (2000)


~Clrm"'C!"tw3r:;,eopyrl.!;lFil Ht~. 2010 HFl.B T;; Group. Irll'~

FD2106EZ 1V1.ll

41 of 130

Borrower: Kyle !

DEC-21-2011 15:14 From:PRYSERV





Residential Energy Credits

.. See instructions. ... Attach to Form 1040 or Form 1040NR.


Begin Part I: Figure the amount of any credit for the elderly or the disabled you are claiming.

Were the qualified energyeffiolency improvementso( resldential energy property costs for your main home loca!ed in the United States? (see instructions) .
C.ution: If ou checked the "No" oox au c"'Mf6m1~ th.l\lM~f ss y y !.~~\l '*'~".., 'h~!~ ~:r~ 3'W~y I" :~~[~, li1l1>:r.<tiI;;';; '~E~ ~itf

. '>:<j~..s:;;:..:,



=~~.1~<, ~W..t:...


00 not CQmp lete Pl;!;rt L

:;!'~1:= 2 Qualitiod enernyeffioiency Improvements Eile instr.uafO~~:h. ..;#i~ ,1m 1;1 @~"''',,.,> "~>:>'-'''"''"!"''::tw





Ajf i~m~d::>o~w

~i*,~~ m~'~:-:-I$,~~:~t



,a Insulation material or system $pecifically ani'.,mMiftY desigEWredudEAAeat IO$$or gai~your home


b Exteriorwlndows(including certain stann windows} and skylights

c Elcteri<Hdoors(including certairlstormdoors)


d Metal roofwith appl"Qpri:ata pigmented coatings, or asphalt roofwith appropr1:;1te oooling granulos, that are specifically and primarily designed to reduce the heat gain of your home, ~nd the roofmeetsorexceedsthe Energy Star program
requin~ments in effect at the tim@ofpurchaseorinstallation

Add Iines2a through 30 _ Multiply line 4 by 30% (,30)


Maximum credit.moun!. (If you jointlyoccupied the home. see instructions)



Subtract line 9 frotn line 8.lfzero or I!s:!i, slop. You cannottakethenonbusinessenergy

property cred~
KSA For Paperwork Reduction Act Notice, see instructions.

Form S6SS (2009)


"F'Qrm 5Qt"r'w:3re ~0f!yrlgnt 1996- 2010HRS T;sx Grllup. Inc.


42 of 130

Borrower: Ky1etl

DEC-21-2011 15:15 From:PAYSERV



Form 5695 (2009)


P"g" 2

Before You Begin Part 11:

Figurethe amount of any ofthe following oredits you claiming.
Credit rorthe ~Iderlyorthe disabled. Di$r;cl 0 f Columbia first.. time homebuyer credit.

Qualified plug-In electrle v(lhicie credit.

Qu~lifil;!cl plug-In e!lectricdrivemotorvehicle cre~it

Altl$!rnative motorvehicle credit

Residential Energy Efficient Property Credit (See instruGtions before completing this part.) Note. Skip lines 12 through 21 if
12 Qualified solareleetric propertytosts

only hav;;e;-:a~cr~e;;;d~it~~r;~~;d -fr-om-2-0-0-B.----------

15 Qualified gsothermal heatpump property costs 1. Add line. 12through 15 17 Multiplyline16by30%(.30) 1S Qualified fuel cell propertycosts
1& Mulliply 11M 18 by 30% (.30)

20 Kilowattcapacityofpropertyon line 18above ..______________ _

21 Enterthesmallerofline 190rline20 22 CreditcanyfolirVi')rd from 2008. Entertht! amount, ifany, from Y0l,Jr2008 Form 5695, litle 29

11'1 Pub. 972 (see instJl.lctions); Form 8396, line 11; Form a839, line 18: Form S859, line: 11; Form 8834, line 22; Form 8910, line 21; Form a9:36, line14;and Schedule R, line 24.

27 Residential energy efficient property credit, Enterthe smaller of line 23 Of line 26 . 29 Credit oanyro"."ard to 201 O. IfUne 27 is less than line 23, subtract line

Current Year Residential Energy Credits

29 Add lines 11 and 27. Enterhete. and on Form 1040. line S2, or Fonn 1O4ONR.line 48,

and cheok bQ}( eon that line


Form 5695 (2009)


Form Software ~opyrl9iit 19913 - 21:)10 HRe T;"x Grl;l\lJ), 1M

FD56S5.2V 1.7

43 of 130

Borrower: Kyle III!II~

DEC-21-2011 15:15 From:PRYSERU



(Form 1n40A or 1040)

Making Work Pay and Government Retiree Credits


OMS No. 10400014


":;':~:.:~ See the instructionslfYQu can beclaimed as.someone else'sdependent or are filing Form 1040NR.
~errormed while an inmate In a penal institution.

Cheek the "No" box below and seethe instructions If (a) you have a net loss frorn a business, (b) you received a taxable schoJafShip orf@!lowshipgrantnotreportedon a Form W-2. (c) yourwagesincltlde pay forwark
(d) yQU r~eeived a pension or~nnuityfrom a nonqualified

deferred compensation plan ora nongovermental section 457 plan, or (e) youare filing Form 2555 or2555- EZ.
Do you (and your spouse Jffili~9 joinlly) have
1ilinS jointly)?



Yes. Skiplin~1~through


Enteryourea",ed ino,m" (see i

NontaxBble combat pay il'1cluded on

line 1a {see instructionS) . Multiply line la by 6.2% (.062)

Enter $400 (S800 i/married filing Jointly).


7 lstheamounton line 5morethan tile amount on line 6?




Skip lineS. Entertheamountfromline4on Iine9b@low.

.. .....

Ys. Subtract line 6 frQIT'IUne 5



Enter .a.onlln.l0andgotolln.11.
Enterthetotalofth@paymentsreeeived byyou (and yourspouS8, if filing

jointly). Do not enter more than $250 ($600 If married filing jointly)

o~:~. ;n~e;~~~:;~~:~~,~:~:~~~~~i~~:n~~ilf~::if'rl
and the answer on line 11 is ''Yes'' f~liPth sPQusemw
12 13 Add lines 10 and 11 . Subtract line 12 from line 9.lfzero otlass, enter 0-

Did you (oryourspol,Ise, iffilingjolnUy) receive a pension or annuity in 2009forservicesperformed Elsan employee ?fthe U.S. Gover~ment ora~y U.S. state or local g~~Jtmm:~aLtroVf~~~~ot$f'R&1 security? Do not Include any penSlon or annuity reported on Form ~~~:;,.".oo .... ~ :~~ ~t~~:~ ~1o~ol<.:-><~",.>.,


" . ,. iW




1ig~~ ~ml

If you checked "YCls"on line 10, entet~ 0- (exception: enter $250 I(tlling jointly and the spouse who received the pen!ilion or annuity did notreeeiv~ an economic recovery payment described on line 10)


Makihg work pay and government retiree credlts.Add lines 11 and 13. Enterthe result here and on Form 1040, line 63; Form 1040A.line 40; or Form 1O4ONR, line SO


If you are filing Form 2555 2555- EZ. or 45630ryo~ art! excluding income fro ttl P'uerto Rico, see instructions. ForPaperwork Reduction Act Notice, see Form 1040A,1040, or 104ltNRinstr...ctions. Schedule MiForm 1040A or 1MG) 2009


-FormS"ciHwiOTrel:opy7ignt 19W 2010H RB fax GrQUp, Ine



Borrower: Kyle . . . . ._

DEC-21-2011 15:16 From:PAYSERV




For Privacy Notice, getfQrm FTB 1131.

California Resident Income Tax Return 2009




C1 Side 1


---~. KYLE



o o o o
o o

14 16

900 56949 23079 1185

72 73 74 75 76 77


o o o

3800 3803

o o

17 18 31 34

91 92
93 94 95


SeRGi 587(lA 5805 5805F DESIGNEE 1 'rPIDP 00058109 FN 431871840

o o o o o

42 43 44 45
46 61

63 64

o o o o o o o o




Sign Here


rorgo!! a

:;pouse'!.1 RDP's
Firm's n;!lme [or your.:, if 51:11 o:!IYlplOYlld) Firm',," ~dd rll5S

"lgn..iure Joint return'?' (";'1><;1 p"'ec 17)


)tQU w;!Int to


allo""aMther IHlfllon to (\I$ou:;.:this retum



pilEi=: 17)7

Prinl Third Party Dosignetl'S name

( 91 6 ) 447 -1 "'02"-'1=--_____
Telephone. Number

CalHFA Loan# 0224723

45 of 130 Borrower: Kyle Alan Bryant

DEC-21-2011 15:16 From:PAYSERU




I T , A



~ ~:~::d/RDP nnng

IIlIng jointly. (see page 4)

separately. Enter$pOI.l$E!'s/RDP'sSSN or ITIN above and full name here _ _ _ _ _ _ _ _ _ _ ,....... ~,.___..,.,~". _ __

Head of household (with qualifying person). (see page 4)

Qualifying widow(er) with dependent child. Enteryear'PQu IRDP died. _ __




status i dltrel"l!!!ntfrom ourfederal filin ~atus check the box here 6 Ifsomeon@canclaim oU or Gur ouse/RDP asade endent check the box here see iii! e7 7 P&rsonal: If you checked 1,3, or4above. enter 111'\ th@!bo)(.lfyouchecke<l :2 or5, illnt!!r2 in th~ bo)(. If you checked the pO}( on line 6, see p-.,ge 7 ........ . .. . . . .. . . . . .. . . . . .. . . ,7 8 Blind: (fyou (oryourspouse/RDp) arevisuaUy impaired, enter 1; ifbatf1 arevisualiyimpaired, enter2 B S Senior: If you (oryourspou.eIRDP) 0 9

our California filin

Whole dollars only
X $98=$ _ _ _ _-"-9::.8-'-,

X $98=$ _ _ _ __
X $98=$, _ _ _ _ __

10 Dependents: Enter name and

$98=$: _ _ _ __


, "

0 M

12 13 14 15 16 17 18

State wages fr(lm your Form(s) W- 2,

. 12

Enlerfederaladjusted gros.inC<:lmefrom Form 1040, line 37; Fonm 1040A, lin. 21; Form l040EZ,line 4 ,
California adJustments- subtraotlolis. Enterthe amount from SOMduie CA (540), line 37, oolumn B. Subtract line 14from line 13.lflessthan zero, eliterthe r@sultinparentheses(seE!page9) ............. California adjustrnents- additions, Enterthe amauntfrom Schedule CA (540), line 37, column C .

. ...... 14
15 ' , ..... ' . 16 . .......

California adjusted gross income. Combine line 15 and line 16. . . . . . . .

. ............... 17

57,84~"" 900 . ___,...56! 949 ~ _ _-';0-:,-;;-;-,0,-,-. ---':::--=:L=--Cc::.'-

Enterthe largerofyourCA standard deduction OR yourCAitemized deductions. . . . . . . . . . .

31 Tax. Cheek boxiffrom:


32 Exemption credits. Enterthe amount


33 Subtractiine 32 from line 31. Ifbos5thal 34 Tax. (see pag.l1) Check box iffrom:
35 Add line 33 and line 34 . . . . . ........... .
41 New jobs credit. arnountgenerated (see page 11) . .

33 _ _-=loL'.:=.O.:=.8..:.7-=-,

. 41 42

1, 087 ,

s c
C 0

p E "

42 43 44 45

New jobs credit, amount claimed (see page 11)



.............. 43

Code _ _ _ amount Credit To 121m morethan two oredits{see page 11) ........ .

........ 44

A T , s


47 _ _--::---,:-=_

o T



62 Ment~1 Health Services

63 Othertaxesand credit recapture (seepage 1 5). 64 Add IIn~ 48, line 61! line 62, and line 63. This is your total tax
71 California incomataxwithheld (see page 13) .. , ........ .

. ........ 63
04 o 71
o 72



2009CAestimated taxand otherpayment$ (SI:!t!page 13)


73 Real estate and other withholding (see page 13) , ................ ,' 73 ", .... ,74 _ _ _ _ __ 74 Exc SDI(orVPDI)wlthheld(se.pageI3) " ............ , Child and (lependent Car. Expen Credit (S.~illi!!l!9JlAI1!!Oh f<iJ:SB 3506*'i"'it"1~ . . , . f<~'1"''''''''''l':,' .3:$1 ffi!r <~~li~ .. r;<;,,><~, 15 Qualifying person 550(:laI Sflc urlty number .. i~:" ... , , 'i~W' H~~l' ..... ~:~~, 7S _ _ _ _ _ _ __
76 Qualifyin9 person's social security number

77 Enterthe arnountfrom form FTB3S06, Partl~ile8 .... :~gf.

78 Child ane! Dependent Care Expensescredtffrj'rn form

,j~~ii;m~~~$.. -1~]r. . ~~f

.~~P.ii@if.i{1~~"2~~~* --.-.-.-.-.-.-.-.-.-.-.-.-. . .
, ...... . ........ .

,jf4[ .... ~@t . 77

.....j~~,~!~tft ________

o 78

79 Add line 71 , line 72, line 73, line 74. iilnd 11M 78.lhese are YQurtotal payments (see p~ge 14} ....

1,325. 1,325.

91 Overpaidtax.lfline791$morethanline64,subtraclline64fffJmline79 ...


R~ ~

92 Amountofline91 you want applied to your2.010 estimated tax ...... , ~ XJD 93 OverpaId tax available this year. Subtract line 9Zfrom line 91 . I U o E 94 Taxdue. Irline 791:slessthan line 64, subtract line 79 from liM 64

, '

93 94



Use Tax. This is not a total Une (see page 14)

... " .. 85

Side 2 Form 540 Cl 2009 CalHFA Loan# 022472,3


46 of 130 Borrower: Kyle


DEC-21-2011 15:17 From:PRYSERV






California Seniors Special Fund. (see page 2Z) . Alzheimer's Djsease/Relat~d Disorders Fund California FundforSeniorCitizens ............ , ... __ .. "" .... " Rate and Endangered Speeil!!sPreservation Program State Children'sTtust Fund forthe Prevention of Child Abuse

Code .4M _401


.402 .403
.404 .405

California Breast Cancer Researeh Fund .. . CalifQmla Firefighters' Memortal Fund ... , ....... _........ ' ... " ......... .
Emergency Food For Famille. Fund .... , , ... .

.407 .408 .409 .410

Municipal Shelter Spay- Neuter Fund California Cancer Research FUnd .,

ALSfLou Gehrig's Disease Research Fund ....... , ... __ ... " .. , '
AY 0

.411 _412 .413 .414



110 Add CQQE! 400thraugh cod~ 414. This is your total contribution 111 AMOUNT YOU OWE. Add line 94, lio095, and line 110 (..ep.ge15).M.ilto FRANCHISE TAX BOARD, PO BOX942867 , SACRAMENTO CA 942670009 .

1 1




112 Interest, late retum penalties, emd late payment~nalties , .. ," __ 113 Underpaymentofestimatedt. CheckboX: U FTB580Sattached





N 0



Dr T

115 1 ( 3? 5. FRANCHISE TAXBOARD,PO : not attach a voided enQckora depositsHp (see 16). Fill In the information to aul:holrjzo: dil.~I:d Have you verified the roultln'9 arId ,'CC'O< All orthefollowin,g amountofmy refund (line 115) Issuthorized fordireet clapositinto the account ShoWn below: cneoking Savings R.outing number _ Type , Accountnumber .116 Direct deposit amount

The remaining arl'lOunt afmy refUnd (line 115) is authorized fordirect depQsRinto the aocountshowl'l bolow:

Routing numb~r

CalHFA Loan# 0224723

47 of 130

Form 540 Ct 2009 Side 3

Borrower: Kyle


DEC-21-2011 15:17 From:PAYSERU



P .1l/15





- Residents


C 7 8

See i!l""tructiQ"~

wages, salaries, tips, etc. See instructicnsbefore makiflg an entry in column Bore
Taxable interest.

. ........... , ....... .

(b) _ _ _",-_ _ _----,,---


Taxable refunds, credits, offsets ofslllte and l",oom~1i@le t.~~~~;~"

Alimanyreceived ......... ," ......

12 13


:~~~~q>:,., :l~!t ~~'t."~ I:'" *11 ........ ~~f. .. ,. J~~..



' , ' :, .,

Capital gam or (loss). See instructions ... ~s*-

. Othergatnsor(losses). _. _.... ,
IRAdistrlbutions. Se. instruotions,

........ ~",,*,0 . . . .



".;!:f;!!:f ?!;~%:(

Ii,);.,;,. m$~



"~~'S:IZ~>Y: ..

15 16
17 18

(0) _ _ _ _ _ __ F'eM;!onsand an.nuities. See Instructions. (a)

Rental real e~atet royalties, partnerships, S corporations. trusts, etc. . Farminco,"eor(loss)., ... " " " " "
Unemploymentoompensation in exce5S of$2,400 per recipient

--------t-------+-----........ 19 --------t-------17 18

to 21

Socialseountybenefits la) _ _ "_ _ _ _-,,

OtherineQma. .,,4\1~~~1t~~:, J~t a California lottery winnings . -.-., ~~ ~ . W . "']-,- . ~ ~w b Disaster loss carryover from FTB 3S05V ,~ili3806, 3~f:Qt.!eOit &! ~~f '!l'Oth L4iJ~rJI)' 'i!!!j$( ,~~i: c FederaINOL(Forml040,line21)
d NOLcarryoverfrom FTB3805V

f). & ~1.~~ot fr;;$:r~.,.,;~." ~~. .,!,~,:-. .;~.





fill-if \~1f*.,::,:, " :,~~. ,"..:.,~,".,~:~ . ~. ~~ ,

"'4~t~g!~J-~' .~. '~~~if ,~I~~*~!Jt l~f



Total. Combine line 7through line 21 in columnA. Add line 7through 11M 21fin
column Bend colutnn C. Go to Section B





governrnl!!nt officials ........ iJ ... . t ddt"*~


l~lh. ,..~u:

18 27

Moving expenses .... , ..... ![~~~~Jt!ilf ~~~,:~:, ~~Jft ,~ij~ ,~, One- half of salf- employment ta~'f'~0;;~~,~:' .... ::-'?~~~~~r.. . .... .i~~i . ... 1;~%. 28 Self- employed SEP, SIMPLE, and qualified plans .. , . 29 Self~ ernptoYe!d health insurance deduction .............. . an P&naltyon early withdrawal of savings . 31. Alimonypald Ib)Rocipienfs: SSN _ _ _ _ _ '_ _ _ _ _ _ __

UC10'Sr, t~~~!~ ~h.;~ \~~:.;'t,'$' .


.. ,, '1.a,' ...... ~mi~~. . ff]~



:"'"l~ tti;:. ~; ..






Add line 23 through line-:31 a and 11M 32through Iine35 tn.eolumnsA, B, and C.
See instructions

.. 36 __________





T(JtaLSubtrectline36 from li(l622in colurnnsA, B,and C. SeeinstrutloM ...

37 _ _~!..!.L-'e.:!-"L_ _ _ _-"-"-''''-_ _ _ _ _--l

ForPrivacy Notice, getfonn FTB 1131.



Schedule CA (540) 2009 Side 1

CalHFA Loan# 022472-3

Borrower: Kyle "" 1\1

DEC-21-2011 15:18 From:PRY5ERV

KYLE _ _
part II Adlustments to" Federallt6miZed Dedyctir:ms




Federal itemized deductions., Ac;lQ the amQuntson federal Schedule A (Form 1040), lines 4, 9, 15, 19, 20, 27,and 28 Enter total offederal Sehedull!' A (Form 1040), line 5 (State Disability Insurance, and state and loca!inoometax.. or

.... 38



General $ah~s Tax), line 7 (new motor vehlele tax), and line 8 (foreign incometaxesol1ly), See Instruetlo)'ls .............. 39
40 Subtractline39fromline3B ...

3, 071


Otheradjuslmentslncluding California lottery losses. See instructions. Specify _ _ _ _ _ _ _ _ __

...... ~~~i$'r:w:~::.: <-;r;s'ff

......... 41 42

42 Combinellne40and Une41



~~ f~r
< > ~



Is your federal AGI (Form 540, line 13) m%.\1:han t~e $h(l'#!,~~ur fili~~atus? Single ormarrled/RDP filing-,!!?:aratI~~ ."%'S.... ~~~Wr. ~~J SIJl60,739 ~~~0~~~~ -<'f}.~!J;M~'Y' &h .~1i? Headofhouseholcl ....... .";:;:~.;.:y:.f': ,,;"i'"",z,'(l:"'~';t' . -:.: ..~ _ __ ";;<;"i!241,11J


~;*:~ i'


~~lt%~~~ ~~:;..




:-1:""'' ' ' ' <


,,,,,~~, . dt"


... _ ___ . ..

Marriedl RDP filing jointly or qu.lifying wid oW(er)


.. 43

No. Tran$ferthe ~lTIounton line 42 to line 43 Yes. Complete the Itemized Deductions Worksheet in the instruotlonsfor Schedule CA (540), line 43


.. .. .. .. . .. 44



~j~f~if1 .ifi

Side2 ScheduleCA(540)2009


49 of 130




CalHFA Loan# 022472-3

Borrower: Kyle

DEC-21-2011 15:18 From:PAYSERV





of theTre.a5ury

IRS e- file Signature Authorization

li" Do not send 10 the IRS. Ttlls is nota taxfeturn.

OMS NQ, 1545-0074



Keep this form for your records. S@iI!! instructions.

Social security number

~D~eC~I.~~~ti~on~C~o~h~tr~OI~N~U~m~be~r~(D~C:N~)~~~~~~~~~------ ..--_O-----------------r-------------------------Taxpayer's name



Adjusted gross income (Form 104<1. lin. 38; Form 1040A, Ilhe 22: Form 1040EZ.lIn04) Totalt.. (Form 1040, IInoSO; Form 104<1A.line37; Form 104<1EZ, IIno11)
Faderal income tax withheld (Form 1040, line 61; Form 1040A, line38: Form 1040EZ, line 7) RerUhd (Form 1040.IIn073.; Form 1040A, IIn046.; Form I04OEZ.line12a; Form 1040 SS, Pa~I, lin. 130) .

Under penalties ofpe~ury, I decla.rethat I have examined a copyofmy electronlelr.dlvldual ineom!!!t2lx r4!!turn and accompanying schedules and statements for the tax year ending Deoen'lberS1, 2009, and to the bestofmyknowlcdg(!! rmd belief, itistrue, correct, and complete. I furtherdeclarethatthe amounts in Part I above are the inQQmetax return. I consent to atiow service provider, transmitter, o-relectronic return originator (ERO) to :send the IRS of the transmisslon, (b) an Indication of any refund I authorize the U.S, Treasury and its i I institution account indicated in the tax financial institution to debit the b~ dobit(ld througn tnc EJ~trorlic personal identification number (PIN) to to terminate the authorl%ation. To revoke a payment, I must contact the U.S. Trl!!asury FinancialAgent at no larerthan 2 business days prio rto the payment (settlement) date. I also authorize the financial institution$lnvolved inthe processing ofthe eleotronl~ paym&ntoftaxBsto receive confidential information necessary to answer inquires and resolve issuesrelati:!d to the payment. I further Clcknowledgt:! that the personal identification number(PIN) below ism'lsignature formy eleotronicincome tax return and. ifapplloable. my Electronic FundsWithdra.wal Consent Taxpayer's PIN: check one box, only


I authorize


to enter orgenerate my PIN

Entl!!rfive numbers, but do not enter all zeros

ERO firm name as my signature on my tax year20Q9 electronically nIed Income tax rl,!'tum.
PINandyourretum is filed using the Practitioner PIN method. The ERO must complete pare III below,

I will enter my PIN as my signature on my tax year 2009 electronically filed income tax return. Cheokthis box onl~ ifYQU are entering your own Your signature

CO PY,. O.NLY ,,- .~.

spou PtN: oheok 0 box only

o o

enter or generate my PI N ERO firm tm~ ~~~~ ,,~~;m;;;;;~;:~J;~~~;~;~:t~~~' as my signarure on my lax ye:Glr 2009 electronic'a:Ityfiled incomaiax refdi1t,~ . . . . . ,. . . . . .,.,.,. ."'. . . . . . . . ~
PIN and youfreturn Is tiled usingtJ1e Praotitioner PIN method. The ERO must complete Part III below.

I authorize

JII;;;;'" ;~r 11 .:gto j1r;t~' .It::;;"' ,~:~:,

'"WFWW'* Date ~ -"0"'1"-/ 2"'9,..1"'2 0"'-"'-1"'0__________ ... ...


Enter five numbers, but do not enter all zeros


I will@ntermyPINasmyslgnatureonmytaxyear2009 electronically filed income tax return. Check this box only if you are entering your own

Spous.'ssignature ~ ________~C~O=P--'Y~O=N!.!L:::.Y.!.-

_______ Date ~ _________________

Practitioner PIN Method Returns Only - continue below


Certification and Authentication - Practitioner PIN Method Only

ERO's EFINI PIN. Enteryourslx digit EFIN followed by your five- digitself~ $elaeted PIN. do not enter all zeros I ~ertifythatth8 above numerioel"ltry Ismy PIN, which ismysignab.lre for the tax year 2009 electronically filed incometax return forthetaxpayer{s) indicated above. t confirm that I am submitting this return in aocordance with the requirements ofthe Practitioner PIN method and pl!l)llcatloli 134S. HaJ1dboor:: for Authorized IRS e- file Providel'$oflndlvidual Income Tax Retl,lm~. . ERO'ssignature

_____________________________ Doto


ERO Must Retain lllis Form - See Instructions Do Not Submit lllis Form to the IRS Unless Requested To Do So
KBA For Paperwork Reductio" Act Notice, see page 2 ofform.

Form 8879 (2009)

form-softwljl,r~opyrtgnt 1986

2010 HRB r.-x Group. Inc;

FD8879D1V 1.0

50 of 130

Borrower: Kyle

.AII .

DEC-21-2011 15:19 From:PRYSERV








Your name

California e- file Signature Authorization for Individuals

Your SSN or ITIN



Spou..SlRDp5 SSN or ITIN

Part I Tax Return InfOrmalion{wholedoll.rsonly)

_......... 3
Part II Taxpayer Declaration and Signature Autnonzation (Be sur~ you get and keep a copy of your retum.)
Under penalties ycarondlns


tax return ~nd accompanying Bchedulesand statements forthe tlx

,and I

I furtherdeclarethii\t ~he information J

proyjded to orindi o/my I

agent to

return to


I i,oknowledge I read and I have selected a personalidentilicatlon nUlmber( FundsWithdra,wal Con.sent.

Taxp~yer's PIN:

check ono box only


louthorize HRE TAX GROUP

EROfirm name


Do not enter aU ZetO~

as my signature on my 2009 e- filed California individual income tax ret\.lrt'l

01(29/2Ql,Q._ _

I authorize
ERO firm name

to enter my PIN

Do not enter all zeros

aSMyslgnature on my 2009 e- filed California Individual income tax return"


Part n'(Cerlification and Authentlealion ~

Practitioner PI N Method only

___ ___.____ ._

ERO'5 EFINJPIN. en~ryoursix- digit EFIN (ollowl!!d by your five- digitself selected F'IN,

00 not enter illl zeros I certify that the a.bove numeric entry is my PIN. which is my signature forthe 2009 California individual Income taxretum forthetaxpayer(s) indicated above. [confirm that I am SI.1bmitting thisretumln aeeordancewith the requlrernentsofthe P~ctitioner PIN method and FTB Pub. 1345, 200ge- file Handbook for ALithorized a-file Pmviders,



_ _ _ _ __

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Dat _ _-"O..=l.!..I..=229:../-=2"'0'-=1"'0'--_ _

For Privacy Notice, get form FTB 11:l1.

FT6 8879 C2


CalHFA Loan# 0224723

51 of 130

Borrower: Kyle .. ..... 6II1II

DEC-21-2011 15:19 From:PAYSERU




All or portion of refund to direeldeposit

RQuting Transit Number(RTN) ,

1210003581 08458018311

Depositor Account Number (DAN) .

Type of Account


Remaining portion oftotal refund

Routing TIlInsitNumber (RTN) .

Depositor Account Number (DAN) ,

Type of Account.


CalHFA Loan# 022472-3

52 of 130

Borrower: Kyle "ltl

Bankof America ""'-


VYour Bank of America Prima Account Statement

Statement Period: November 10 through December 12, 2011

0845 E P EO-3

1 111.1 1 111 11 11.1


Account Number: 08458-01831

At Your Service

Call: 1.800.432.1000 - Customer Service

Written Inquiries Bank of America

Grass Valley Branch PO Box 37176 San Francisco, CA 94137-0176

Customer since 1980 Bank of America appreciates your business and we enjoy serving you.
Our Online Banking service allows you to check balances, track account activity and more, With Online Banking you can also view up to 18 months of this statement online and even turn off delivery of your paper statement. Enroll at

Tiered Interest Checking o Summary of Your Prima Interest Checking Account Beginning Balance on 11/10/11 Total Deposits Total Checks, Withdrawals,
Transfers, Account Fees Interest Paid Service Charge

+ 7,816.15

Annual Percentage Yield earned this period Interest paid


0.05% $.81 1 16 0 0

Number of ATM withdrawals and transfers

- 7,693.15
+ .08

Number of purchase transactions Number of 24 Hour Customer Service Calls Self-Service Assisted

- 25.00 $1,685.47

Ending Balance

Important Information About Your Account

A monthly service charge was applied to your Prima Account because on 11/28 your balance was below the minimum balance requirement of $10,000.

Checks Paid
Date Paid Number Amount




Continued on next page California

Page 1 of 3

CalHFA Loan# 022472-3

53 of 130

Borrower: Kyle "


Account Number:.

Statement Period:..:iiNo.viieiim.b.eiir.l0 through December 12, 2011

Account Activity
Description Reference Number

Date Posted

11/29 11/30 12/05

De~osits and Credits

On ine Banking transfer from Sav 6018 Confirmation# 2663033918 Friedreichs Atax OES:Payroll 10:42600800014594x INON:Bryant, Kyle CQ 10:9001907814 PPO Ref:011332010335559 ATM deposit on 12/03, Bank of America ATM #IPAN8135 (Card #653821989)

$2,300.00 008225 3,732.15 1,784.00

Total Deposits and Credits

Withdrawals, Transfers and Account Fees

$.91 18.09 41.42 55.10 100.00 144.36 1.16 3.59 7.60 20.00 96.65 20.00 50.00 .98 60.02 20.00 .78 161.22

11/14 11/14 11/14 11/14 11/14 11/14 11/15 11/15 11/15 11/15 11/15 11/22 11/25 11128 11/28 11/29 12101 12/01 12/01 12/02 12/02 12/02 12/02 12/02 12/05 12/05 12/05 12/06 12/06 12/06 12/07 12/07

Keep The Change Transferto Acct 6018 For 11/14/11 Check Card Purchase on 11/10 (Card #653821989), Gli'gre~houndlines1508 214-849-8966 TX Ref 112 692161314000491380063
PennS~lvania American Water Co Bill Payment

Peco nergy Bill Payment Cash with rawal on 11112, Bank of America ATM #ICA06781 (Card #653821989)
Corneast Cable Communications Bill pagment


Keep The Change Transfer to Acct 601 For 11/15/11 Check Card Purchase on 11/14 (Card #653821989),
Postnet San Die~o CA

Ref #242465113 9207399600029 Check Card Purchase on 11/14 (Card #653821989), Baja Fresh 111 San Oie~o CA Ref #2469216131900063 298055 Online scheduled transfer to Sav 6018 Confirmation# 6036800585 Check Card Purchase on 11/13 (Card #653821989), Dana Inn & Marina Resta San Diego CA Ref #24492791318118000168522 Online scheduled transfer to Sav 6018 Confirmation# 7196781396 Check Card Purchase on 11/22 (Card #653821989), Fara-Friedreich's 888-955-5455 PA Ref #24323001327123326010018 Keep The Chan~e Transfer to Acct 6018 For 11/28/11 Purchase on 1128 (Card #653821989), Arco Par-paint Rocklin CA Online schedu ed transfer to Sav 6018 Confirmation# 7157200468 Keep The Change Transfer to Acct 6018 For 12/01/11 Check Card Purchase on 11/30 (Card #653821989), Attm'436079943357nca 8003310500 GA - Recurring Ref #24493981334003157403946 Chase OES:Eliay 10:1231268394 INON:Kyle A Bryant Co 10:5760039224 W B Ref:011334012715114 Keep The Change Transfer to Acct 6018 For 12/02/11 Check Card Purchase on 12/01 (Card #653821989), Outback 4461 Lewisville TX Ref #24692161335000986567344 Purchase on 12/02 (Card #653821989),
Giant 6084 Norristown PA


2,301.92 .91 16.41 073764 68.68 200.00 1,945.21 1.71 19.05 37.24 18.14 20.00 110.66 .12 18.85

Northwestern Mu OES:ISA Pa6;mnt 10:1179301 Isapt;mt INON:Kyle Bryant Co 10:9000596 67 PPO Ref:01133501 244088 Online Banking transfer to Sav 6018 Confirmation# 2989261936 Keep The Change Transfer to Acct 6018 For 12/05/11 Check Card Purchase on 12103 (Card #653821989), Bikesport Trap~e PA Ref#24013391 37001329527840 Check Card Purchase on 12/02 (Card #653821989),
~s Restaurants 424 Lewisville TX

ef #24692161337000473954771

Pennsylvania American Water Co Bill Payment

Online scheduled transfer to Sav 6018 Confirmation# 7117743978

Corneast Cable Communications Bill Palmen! Keep The Change Transfer to Acet 601 For 12/07/11

Online Banking payment to Crd 7647 Confirmation# 6131540203

Continued on next page


Page 2 of 3

CalHFA Loan# 022472-3

54 of 130

Borrower: Kyle"."

Statement PeriOd.:N.oiiviie.miiibiie.r.11a0 through December 12, 2011

Account Number:,

Account Activity Continued

Reference Number Amount

Date Posted

12/07 12108 12/08 12/08 12108 12/09 12/09

12112 12112

Withdrawals, Transfers and Account Fees Check Card Purchase on 12/06 (Card #653821989), Penns Table Of Lionvill Exton PA Ref #24707801340980150129152 Keep The Change Transfer to Acct 6018 For 12/08/11 Purchase on 12/08 (Card #653821989), Wegmans Malvern PA Check Card Purchase on 12/07 (Card #653821989), Chipotle 1550 Exton PA Ref #24431061342206288000046 Online Banking transfer to Chk 5828 Conf# 2937517835; Feltman, Skylar Keep The Change Transfer to Acct 6018 For 12/09/11 Purchase on 12f09 (Card #653821989), Wawa 8033 Lionville PA Keep The Change Transfer to Acct 6018 For 12/12/11 Check Card Purchase on 12/10 (Card #653821989), Wegmans # 46 Malvern PA Ref#244450013451 00264868699 Total Withdrawals, Transfers and Account Fees

20.88 .82 24.56 28.62 682.49 .21 51.79 .08 48.92



$.08 $25.00

12/12 12/12

Interest Paid Interest Paid from 11/10/11 Through 12/12111 Service Charge Monthly Service Charge

0 Daily Balance
Date Amount




11114 11/15 11/22 11/25 11/28

$ 1,227.51 1,098.51 1,078.51 1,028.51 967.51

11/29 11/30 12101 12/02 12105

3,247.51 6,979.66 4,515.74 2,284.53 2.736.53

12/06 12/07 12/08 12/09 12/12

2,587.73 2,547.88 1,811.39 1.759.39 1,685.47

ATM Information

This period, you visited the following ATM locations: Bank of America's ATM Network #ICAD6781 Bank Of America, San Diego, CA #IPAN8135 Bank Of America, West Norriton, PA


Page 3 of 3

CalHFA Loan# 022472-3

55 of 130

Borrower: Kyle . . . . . .

Bankof Amadea ""-

0845 E P EO-4

Your Bank of America Prima Account Statement

Statement Period:
October 13 through November 9, 2011 Account Number::' At Your Service Call: 1.800.432.1000 - Customer Service Written Inquiries Bank of America Grass Valley Branch PO Box 37176 San Francisco, CA 94137-0176 Customer since 1980 Bank of America appreciates your business and we enjoy serving you.

1",111,1,"1"111"",11,"11,1 ~

Our Online Banking service allows you to check balances, track account activity and more. With Online Banking you can also view up to 18 months of this statement online and even turn off delivery of your paper statement. Enroll at Tiered Interest Checking

Summary of Your Prima Interest Checking Account $729.15 Annual Percentage Yield earned this period Interest paid year-to-date Number of ATM withdrawals and transfers - 5,676.31 Number of purchase transactions Number of 24 Hour Customer Service Calls Self-Service Assisted

Beginning Balance on 10/13/11 Total Deposits Total Checks, Withdrawals, Transfers, Account Fees Interest Paid Service Charge

$.73 2 28 0 0

+ 6,559.53

+ .02
- 25.00 $1,587.39

Ending Balance

Important Information About Your Account

A monthly service charge was applied to your Prima Account because on 11/07 your balance was below the minimum balance requirement of $10,000.

Checks Paid
Date Paid

* Gap in sequential check numbers.

Number Amount Date Paid Number Amount

10/27 10/31

1878 1880

$ 17.58 1,274.00

Total of 2 Checks Paid


Continued on next page California Page 1 of 4

CalHFA Loan# 022472-3

56 of 130

Borrower: Kyle . . . . . . .

Statement Period: October 13 through November 9, 2011

Account Number:

Account Activity

Date Posted

Reference Number


10/17 10128 10/31 11/01 11/08

Deposits and Credits ATM deposit on 10/15,

Bank of America ATM #IPAN8135 (Card #653821989) Online Banking transfer from Sav 6018 Confirmation# 5383945410 Friedreichs Atax DES:Payroll ID:42214600019247x INDN:Bryant, Kyle Co ID:9001907814 PPD Ref:011300012118490 Online Banking transfer from Sav 6018 Confirmation# 2819921495 ATM deposit on 11/08, Bank of America ATM #IPAN8015 (Card #653821989)


$377.38 500.00 3,732,15 500.00 1,450,00


Total Deposits and Credits

10/13 10/13 10/14 10/14

$,63 10.37 .53 46.47 2.21 8.70 27.45 56.35 008211 000775 60.00 63.59 69.70 20.00 .57 9.43 .53 36.47 1.20 6,99 24,65 043851 553169 014718 023476 42.82 58.64 60.70 .36 17.64

Withdrawals, Transfers and Account Fees Keep The Change Transfer to Acct 6018 For 10/13/11 Purchase on 10f13 (Card #653821989),

Giant 6478 Exton PA Keep The Change Transfer to Acct 6018 For 10/14/11 Check Card Purchase on 10/12 (Card #653821989),
Brickside Grille Exton PA


10/17 10/17 10/17 10/17

Ref #24013391286019094061986 Keep The Change Transfer to Acct 6018 For 10/17/11 Purchase on 10117 (Card #653821989),
Genuardis Star Exton PA


10/17 10/18 10/20 10/20 10121 10/21 10/24 10/24 10124 10/24 10/24 10/24 10/25 10/25 10/25 10/25 10/27

Check Card Purchase on 10/14 (Card #653821989), Amazon Mktplace Pmts Amzn.Com/Bill WA Ref #24692161287000092507612 Check Card Purchase on 10/15 (Card #653821989), Wawa 8003 00080036 Norristown PA Ref #24164071289637000042915 Cash withdrawal on 10/15, Bank of America ATM #IPAN8135 (Card #653821989) Purchase on 10/15 (Card #653821989), Bedbath&beyond King Of Pruss PA Check Card Purchase on 10f14 (Card #653821989), Southwestair52621061793 Dallas TX Ref #24036211288624729522384 Online scheduled transfer to Sav 6018 Confirmation# 6794136900 Keep The Change Transfer to Acct 6018 For 10120/11 Check Card Purchase on 10/19 (Card #653821989), Giant 6478 Exton PA Ref #24692161293000342913703 Keep The Change Transfer to Acct 6018 For 10121/11 Purchase on 10121 (Card #653821989), The Vitamin Sh Exton PA Keep The Change Transfer to Acct 6018 For 10124/11 Check Card Purchase on 10/23 (Card #653821989), Mychangeaddress.Com 888-375-4610 FL Ref #24129421296100003838591 Check Card Purchase on 10/21 (Card #653821989), Chipotle 1550 Exton PA Ref #24431 061295206288000621 Purchase on 10124 (Card #653821989),
Wegmans Malvern PA Purchase on 10122 (Card #653821989),


Wawa 205 Malvern PA Purchase on 10122 (Card #653821989),

Wegmans Malvern PA Keep The Change Transfer to Acct 6018 For 10/25/11 Purchase on 10/25 (Card #653821989), Wegmans Malvern PA

Peco DES:Checkpymt Check #:1879 INDN:0000000000002853037075 Co ID:1230970240 ARC Ref:011298009211776

Online scheduled transfer to Say 6018 Confirmation# 7154577969 Keep The Change Transfer to Aeet 6018 For 10/27/11

18.73 20.00 .06

Continued on next page California

Page 2 of 4

CalHFA Loan# 022472-3

57 of 130

Borrower: Kyle

Statement Account

November 9, 2011

Account Activity

Reference Number Amount

Date Posted

10/27 10/28 10/31 10/31 10/31 10/31 10/31 10/31 10/31

11/01 11/01 11/01 11/01 11/02 11/02 11/03 11/03 11/03

11/04 11/04 11/07 11/07 11/08 11/08 11/08

Withdrawals, Transfers and Account Fees Check Card Purchase on 10/26 (Card #653821989), Chfotle 1550 Exton PA Re #24431061300206288000632 Check Card Purchase on 10/27 (Card #653821989), Wintercheck Factory 917-623-2480 NY Ref #24492151301849301597938 Keep The Chanw Transfer to Acct 6018 For 10/31/11 Peco Energy ill Payment Purchase on 10/29 (Card #653821989), Giant 6084 Norristown PA Purchase on 10/30 (Card #653821989), Giant 6084 Norristown PA Check Card Purchase on 10/28 (Card #653821989), Brickside Grille Exton PA Ref #24013391302019876619977 Chase DES:E~ay ID:1213101159 INDN:Kyle A Bryant Co ID:5760039224 W B Ref:011301008610787 Online Banking transfer to Chk 2821 Confirmation# 1602364361 Keep The Change Transfer to Acct 6018 For 11/01/11 Online scheduled transfer to Sav 6018 Confirmation# 5716760228 Check Card Purchase on 10/30 (Card #653821989), Knockouts Haircuts Norristown PA Ref #24498131304702288201284 Check Card Purchase on 10/31 (Card #653821989), Attm'436079943357nca 8003310500 GA - Recurring Ref #24493981304003178448850 Card Services Bill Payment Check Card Purchase on 11/01 (Card #653821989), Outback 1064 Clermont FL Ref #24692161305000261265420 Northwestern Mu DES:ISA PaciEmnt ID:1179301 ISapt;mt INDN:Kyle Bryant Co ID:9000596 67 PPD Ref:01130501 941372 Keep The Change Transfer to Acct 6018 For 11/03/11 Check Card Purchase on 11/01 (Card #653821989), Subway 00038687 Clermont FL Ref #24164071306255130517117 Check Card Purchase on 11/01 (Card #653821989), Thai Blossom Winter Garden FL Ref #24071051306158182437404 Keep The Change Transfer to Acct 6018 For 11/04/11 Check Card Purchase on 11/03 (Card #653821989), Carrabbas 6041 Clermont FL Ref #24692161307000778770084 Cash withdrawal on 11/04, Bank of America ATM #1 FLN1556 (Card #653821989) Keep The Change Transfer to Acct 6018 For 11/07/11 Check Card Purchase on 11/03 (Card #653821989), Panera Bread #3354 Clermont FL Ref #2442733130871 0032584622 Keep The Change Transfer to Acct 6018 For 11/08/11 Online scheduled transfer to Sav 6018 Confirmation# 6975898783 Purchase on 11/08 (Card #653821989), Wawa 8033 Lionville PA
Total Withdrawals, Transfers and Account Fees

20.94 36.00 1.71 6.00 11.22 19.84 30.23

223773 001672

700.00 1,950.00 .25 20.00 65.00 120.75 282.00 21.00

200.00 .64 8.83 16.53 .48 18.52 005422 100.00 .92 10.08 .28 20.00 58.72


$.02 $25.00

11/09 11/09

Interest Paid Interest Paid from 10/13/11 Through 11/09/11 Service Charae Monthly Service Charge

Continued on next page California

Page 3 of 4

CalHFA Loan# 022472-3

58 of 130

Borrower: Kyle . . . . .

Statement Period: October 13 through November 9, 2011

Account Number:_

0 Daily Balance






10/13 10/14 10/17 10/18 10/20 10/21

$ 718.15 671.15 760.53 740.53 730.53 693.53

10/24 10/25 10/27 10/28 10/31 11/01

498.53 441.80 403.22 867.22 606.37 618.37

11/02 11/03 11/04 11/07 11108 11109

397.37 371.37 252.37 241.37 1,612.37 1,587.39

ATM Information

This period, you visited the following ATM locations: Bank of America's ATM Network

#IFLN1556 Bank Of America, Clermont, FL #IPAN8015 Bank Of America, lionville, PA #IPAN8135 Bank Of America, West Norriton, PA


Page 4 of 4

CalHFA Loan# 022472-3

59 of 130

Borrower: Kyle . . . .IIi'

Bank of America "'~


Your Bank of America Regular Savings Statement

Statement Period:
Account N

At Your Service



.. 11",11,1
RDG PA 19403

Ca II. 530-477-5404
Online: wvwv.bankofamerica,com

Written Inquiries Bank of America Grass Valley Branch

P.O. Box 37176 San Francisco, CA 94137-5176

Customer since 1998 Bank of America appreciates your business and we enjoy serving you.

Our Online Banking service allows you to check balances, track account activity and more. Enroll at

Summary of Your Regular Savings Account $7,836.08

Annual Percentage Yield earned this period

Beginning Balance on 11/01/11

Total Deposits

0.05% $7.35

+ 107.33
- 4,745.21

Interest paid year-ta-date

Total Withdrawals
Interest Paid

+ .29

Ending Balance

Savings Activity
Description Reference Number Amount


Deposits and Credits

10/31 11/01 11101 11103 11/04 11/07 11/08 11/08 11/14 11/15 11/15 11/22 11/28 11/29

Keepthechange Credit from Acct1831 Effective Online scheduled transfer from Chk 1831 Confirmation# 5716760228 Keepthechange Credit from Acct1831 Effective Keepthechange Credit from Acct1831 Effective Keepthechange Credit from Acct1831 Effective Keepthechange Credit from Acct1831 Effective Online scheduled transfer from Chk 1831 Confirmation# 6975898783 Keepthechange Credit from Acct1831 Effective Keepthechange Credit from Acct1831 Effective Online scheduled transfer from Chk 1831 Confirmation# 6036800585 Keepthechange Credit from Acct1831 Effective
Online scheduled transfer from Chk 1831

10/31 11/01 11/03 11/04 11/07 11/08 11/14 11/15

$1.71 20.00 .25 .64 .48 .92 20.00 .28 .91 20.00 1.16 20.00 .98 20.00

Confirmation# 7196781396 Keepthechange Credit from Acct1831 Effective 11/28

Online scheduled transfer from Chk 1831

Confirmation# 7157200468 Total Deposits and Credits


Continued on next page



Page 1 of 2

CalHFA Loan# 022472-3

60 of 130

Borrower: Kyll ...........

Statement period'iN.o.v.e.miib.e.ri.1 through November 30, 2011 Account Number:

[J Savings Activity Continued

Reference Number


Withdrawals and Transfers

11/01 11/29 11/29

Online Banking transfer to Chk 1831 Confirmation# 2819921495 Online Banking transfer to Chk 2821 Confirmation# 5063038970 Online Banking transfer to Chk 1831 Confirmation# 2663033918
Total Withdrawals and Transfers
Interest Paid

$500,00 1,945.21 2,300,00



Interest Paid from 11/01/11 Through 11/30/11



Page 2 of 2

CalHFA Loan# 022472-3

61 of 130

Borrower, Kyle . . . . . . t

Bankof America .....


Your Bank of America Regular Savings Statement

Statement Period:
October 1 throug',;,h.O.ct.o.b.eir.3.1,.2.011 Account Number.




RDG 19403

At Your Service Call: 530-477-5404 Online: Written Inquiries Bank of America Grass Valley Branch P.O. Box 37176 San Francisco, CA 94137-5176

Customer since 1998 Bank of America appreciates your business and we enjoy serving you. Our Online Banking service allows you to check balances, track account activity and more. Enroll at

Summary of Your Regular Savings Account

+ 91.06

Beginning Balance on 10101/11 Total Deposits Total Withdrawals

Interest Paid

Annual Percentage Yield earned this period Interest paid year-ta-date

0.05% $7.06

- 1,299.45
+ .37

Ending Balance


Important Information About Your Account

Your savings account earned $,36 in interest this statement period. The Interest Paid shown above reflects interest earned since your last payment date.

Savings Activity
Description Reference Number Amount


09/30 10103 10104 10104 10106 10/11 10/11 10/13 10/14 10/17 10/18 10/20 10/21 10/24 10/25

Deposits and Credits Keepthechange Credit from Acct1831 Effective 09/30 Keepthechange Credit from Acct1831 Effective 10103 Online scheduled transfer from Chk 1831 Confirmation# 7173287598 Keepthechange Credit from Acct1831 Effective 10104 Keepthechange Credit from Acct1831 Effective 10106 Online scheduled transfer from Chk 1831 Confirmation# 7133695235 Keepthechange Credit from Acct1831 Effective 10/11 Keepthechange Credit from Acct1831 Effective 10/13 Keepthechange Credit from Acct1831 Effective 10/14 Keepthechange Credit from Acct1831 Effective 10/17 Online scheduled transfer from Chk 1831 Confirmation# 6794136900 Keepthechange Credit from Acct1831 Effective 10/20 Keepthechange Credit from Acct1831 Effective 10/21 Keepthechange Credit from Acct1831 Effective 10/24 Online scheduled transfer from Chk 1831 Confirmation# 7154577969

$.49 .29 20.00 .30 1.34 20.00 2.55 .63 .53 2.21 20.00 .57 .53 1.20 20.00

Continued on next page



Page 1 of 2

CalHFA Loan# 022472-3

62 of 130

Borrower: Kyle _ _111__

Statement Period: October 1 through October 31, 2011 Account Numbe~

Savings Activity Continued






10/25 10/27

Deposits and Credits Keepthechange Credit from Acct1831 Effective 10/25 Keepthechange Credit from Acct1831 Effective 10/27

,36 .06

Total Deposits and Credits

$300.00 12.45 487.00 500.00

1Dill 10/12


Withdrawals and Transfers Withdrawal Online Banking payment to Crd 7647 Confirmation# 5345192074 Online Banking transfer to Chk 1831 Confirmation# 6345182947 Online Banking transfer to Chk 1831 Confirmation# 5383945410

Total Withdrawals and Transfers



Interest Paid Interest Paid from 10101/11 Through 10/31/11



Page 2 of 2

CalHFA Loan# 022472-3

63 of 130

Borrower: Kyle . . . . . . . .

b Northwestern Mutuar ~.Irr

insurance / investments / ideas"


Prepared For:

Kyle_ on December 21, 2011

Prepared By:

John Henry Lockwood, CLU I Financial Representative 1425 River Park Dr, Ste 100, Sacramento CA 95815 I 916.648.6448 I CA License: 0E6 0969
As Of: December 21, 2011

CalHFA Loan# 022472-3

64 of 130

Borrower: Ky'ele. . . . .

W Northwestern Mutual"
insurance / investments / ideas'

Information As Of: December 21, 2011

Investment/Variable Product Summary

Investment/Variable Products



Fund Family 2:

NMIS Account #

Product Type

Assets 1


Traditional IRA

Annuitant: Owner:

Kyle, Kyle_



Variable Annuity

$46,548.13 as of 12/20/2011

Direct Beneficiary:
Contingent Beneficiary:

Brokerage Investment/Variable Products Subtotal

Kyle Bryant

$46,548.13 $46,548.13

Prepared By: John Henry Lockwood, CLU [ Financial Representative 916.648.6448 I I
2010 The Northwestern Mutua! Life Insurance Company. All rights reserved.

CA# OE60969

Report Date: December 21, 2011 Page: 2 of 6


This report is not complete without the accompanying


CalHFA Loan# 022472-3

65 of 130

Borrower: Kyle

~I? Northwestern Mutual"

insurance / investments / ideas'"

Information As Of: December 21, 2011

Scheduled Payments

Monthly Payments
Payer: Insurance Service Account: Billing Method: Due Date:
Electronic Fund Transfer" Sticker Bank Of America, N.8.(1831)



Contract Number

Product Type

Monthly Premium

Allocated Dividend

Repayment Payment



Fixed Annuities Subtotal:

$200,00 $200.00

$0.00 $0.00




$200.00 $0.00
$0.00 $200.00

Additional Payment: Service Charge: Account Total: Total Scheduled Monthly Payments:


Generally, information shown is only for payments made through an active Insurance Service Account (ISA) or for ULife payments made by Electronic Funds Transfer (EFr). Please contact your Financial Representative for more information.

Prepared By: John Henry Lockwood, CLU I Financial Representative 916.648.6448 I I WVo/
2010 The Northwestern Mutual Life Insurance Company. All rights reserved.

Report Date: December 21, 2011

CA# OE60969
This report is not complete without the accompanying

Page: 3 of 6


CalHFA Loan# 022472-3

66 of 130

Borrower: Kyle . . . . . .11

~ Northwestern Mutual"

Information As Of: December 21, 2011

investments I ideas'"

End Notes
We have collected values for the assets shown in this report which were the most current available as of the date shown in the top right hand comer

of this report. For the most up to date values, and information on the Jag time in valuation availability for certain assets, consult your Financial

Accounts that have an entl)' in the "Fund Family" column are maintained (custodied) by the mutual fund family listed ("Direct to Fund" accounts).
NM1S and its clearing broker, pershing, do not hold or control these assets. This report reflects holdings and valuation information received from the mutual fund family. Northwestern Mutual and its subsidiaries do not audit or verify such information. Please review the account statements you receive from the mutual fund famHy for complete information on these assets.

"Nortbwestern Mutual" is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries and affiliates. The Northwestern Mutuai Life Insurance Company, Milwaukee, WI, customer service 1-800-388-8123 (life insurance, disability insurance and annuities) is not a registered investment adviser, a registered broker-dealer or a federally chartered bank. Securities and fee-based investment advisory programs are offered through Northwestern Mutual Investment Services, LLC (NMIS), Suite 300, 611 E. Wisconsin Ave., Milwaukee, WI, 53202, customer service 1-866-664-7737. NMIS is a subsidiary of The Northwestern Mutual Life Insurance Company and a dually registered broker-dealer and investment adviser, member RNRA and SIPC. Investment advisory programs and trust services are offered through Northwestern Mutual Wealth Management Company (NMWMC), Milwaukee, WI, customer service 1-866-664-7737. NMWMC is a subsidiary of The Northwestern Mutual Life Insurance Company and a limited purpose federal savings bank. NMWMC's investment products and trust services are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by The Northwestern Mutual Life Insurance Company, NMIS, NMWMC, or their affiliates, and are subject to investment risks, including possible Joss of the principal amount invested. Recommendations and/or transactions involving equities and fixed income securities may only be offered and/or sold by appropriately registered and appointed representatives of NMIS or NMWMC. The products and services referenced are offered and sold only by appropriately appointed and licensed entities and representatives of such entities. Each Rnancial Representative represents one or more, but not necessarily all, of the entities shown. If you have any questions regarding this report, please contact your Financial Representative. For general information, please visit us on the web at This report is provided as a courtesy to you for informational purposes only and may not reflect all policies, contracts, securities, or accounts you own. This is not an official reporting document for your assets. We encourage you to review and maintain the original, official reporting documents relating to the assets in this report (contracts, policy statements, account statements, confirmations, etc.). You should refer to the official documents when determining the value of your assets. Those official documents may also contain notices, disclosures and other information that is important for you to know and are reliable reference pieces if you have any questions about the accuracy of information shown in this report. The information in this report has not been audited or verified, and does not in any way alter or supersede the terms of any policy, contract, confirmation, prospectus or statement received from The Northwestern Mutual Life Insurance Company, NMIS, NMWMC, their subsidiaries or affiliates, or third party service providers or other organizations. Information presented in this report was gathered from multiple sources, including The Northwestern Mutual Life Insurance Company; Pershing, LLC, member FINRA, NYSE and SIPC (the clearing broker-dealer for NMIS accounts and most NMWMC accounts); and Albridge Solutions (data consolidation and performance reporting provider). In addition, all mutual fund holdings in investment accounts that are held "Direct to Fund" are custodied by the appropriate mutual fund family (or their designated transfer agent) and holding and valuation information is provided by that mutual fund family. This information is not a solicitation or a recommendation to buy, sell or hold any policy, contract, security or advisory program. This information should not be used for financial planning purposes. Payments made under a policy/contract, including benefit payments, are subject to the conditions, limitationS and exclusions stated in the policy/contract. Please refer to the policy/contract for exact details of terms, conditions, limitations and exclusions. Any decisions made by you based on the information in this report are made at your own risk. We have collected values for the assets shown in this report which were the most current available as of the date shown in the top right hand corner of this report. For the most up to date values, and information on the lag time in valuation availability for certain assets, consult your Rnancial Representative. The total at the bottom of the Table of Contents page reflects the aggregate value of all assets included in this report. Valuation methodology may differ from product to product. as described elsewhere in the report and in these disclosures. In some cases, valuations of investment and variable products presented in this report may differ from the valuations shown in your official account statements for those assets because of different pricing methodologies that may be used for statements versus this report. You should rely on the valuation information contained in your account statements, rather than this report. The values of Direct Participation Programs (DPPs), private, non-exchange trading Real Estate Investment Trusts (REITs), Limited Partnerships and certain other alternative investment vehicles are provided by a third-party intermediary, and therefore may not be reliable. Furthermore, the value for some of these assets may not be available; in which case the initial purchase price or a zero dollar value may be reflected on this report. The Northwestem Mutual Life Insurance Company and its affiliates do not guarantee the accuracy of this information. Any information concerning these assets should be regarded as informational only and should not be relied on.

Prepared By: John Henry Lockwood, CLU ! Financial Representative 916.648.6448 ! ! W\v\ 2010 The Northwestern Mutual Life Insurance Company. All rights reserved,

Report Date:

CA# OE60969

December 21, 2011 Page: 4 of 6

This report is not complete without the accompanying "Disclosures" pages.

CalHFA Loan# 022472-3

67 of 130

Borrower: Kyl . . . . . . .

Northwestern Mutuar
insurance / investments / ideas'

Information As Of: December 21. 2011

This report mayor may not reflect all holdings or transactions, their values, costs, penalties, surrender fees, charges, or proceeds. Accordingly, this report should not be used as a source document for tax preparation or other purposes. Only Official tax forms should be used when preparing tax returns. Please consult with your own tax advisor for specific tax advice. The Northwestern Mutual Ufe Insurance Company may pay dividends, which are an allocation of divisible surplus to a policyowner. Each year, the Board of Trustees, in its sale discretion, determines whether a part of the Company's surplus can be distributed to policyowners in the form of a dividend. The Board decides which policies. if any, should get a dividend and the amount of the dividend. There is no guaranteed method or formula forthe determinat"lon or allocation of this surplus. Accordingly, the Company's approach is subject to change. Neither the existence nor the amount of a dividend is guaranteed on any policy in any given year. Some policies may not receive any dividends in a particular year or years even while other policies receive dividends. Depending on the terms of the policy and personal choice, the dividend may be used to purchase paidup additional insurance, used to reduce premium payments, left to accumulate at interest, or taken in cash. The dividend, if any, is payable on the policy anniversary. Dividend scale changes, loans and surrenders or withdrawals will affect policy values. Changing dividend usage on your policy may cause total insurance protection to be reduced. This report consolidates your brokerage, variable annuity, and investment advisory holdings. However, the investment asset group(s) that this report depicts mayor may not be managed by NMIS or NMWMC as investment advisers. Keep in mind that NMIS and NMWMC are only investment advisers as to those assets that are within investment advisory programs. Because this report consolidates different types of investment assets, it should not be used as the basis for making asset allocation or rebalancing decisions for your investment accounts. Please refer to official performance reports (described below), account statements or other advisory account speciflc reports when considering rebalancing, asset allocation or other changes to your investment account holdings. Investment products are subject to investment risks, including possible loss of the principal amount invested. The Northwestern Mutual Signature Portfolios program is a fee-based advisory program offered by NMIS and NMWMC. The Northwestern Mutua! Signature Choice, Signature Annuities and Signature Managed Accounts programs are feebased advisory programs offered by NMWMC. NMWMC is a limited purpose savings bank. Investment products and advisory accounts offered by NMWMC are not insured by the FDIC, are not deposits or other obligations of and are not guaranteed by NMWMC or its affiliates and, like all investment products, are subject to investment risks, including possible loss of the principal amount invested. To help you see how your financial assets are currently distributed, we classified your investment assets among the following classes: cash, fixed income, commodities, real estate securities, int'l emerging mkts, int'l developed mkts, US equity - small cap, US equity mid cap, and US equity. large cap. This report will categorize your account holdings in slightly different asset class groupings than the NMIS and NMWMC investment adviSOry quarterly performance or other reports. Any variable annuities or variable life insurance policies you own are included in this breakdown by primary asset class, depending upon the subaccounts used within those contracts or policies. These values reflect the gross contract or gross policy values without accounting for surrender fees or adjustments for unpaid premium, if applicable. The underlying mutual funds in which variable annuity and variable life subaccounts invest are not available for direct investment. The Investment/Variable Product Holdings by Client section of this report reflects only the primary asset class for a particular security. Mutual funds, exchange traded funds and other securities may have holdings in multiple asset classes. Although only the primary asset class is reported in this section, in the presentation of your asset allocation in the Ovelifiew - Financial Assets section, the value for these securities is split across the appropriate asset classes. Therefore, for example. a fund that has a primary asset class of US equity Large Cap and a secondary asset class of Int'l Developed Mkts will show only US equity - Large Cap in the Investment/Variable Product Summary section while the dollar value of that position will be split across Large Cap and International in the Ovelifiew - Financial Assets. Your Financial Representative can provide information on how a specific fund is designated across the various asset classes. Negative cash/margin positions included in this report are related to either margin orto Loan Advance balances. Loan Advance borrowings have limitations on permissible uses of those proceeds. For more information, consult with your Financial Representative. For information about your holdings, including fees and conflicts of interest, see the applicable client agreement, program disclosure brochure and prospectus or similar disclosure document for the variable policy, contract, mutual fund, other security or product. NMIS and NMWMC, as subsidiaries of The Northwestern Mutual Life Insurance Company, are under common control with a number of other financial services companies. This affiliation offers many benefits and resources to NMIS and NMWMC, but also may create potential conflicts of interest. Conflicts of interest also may arise as a result of agreements between NMIS and third parties. For information on these conflicts, please see "What Every Investor Should Know About Mutual Funds" available through your Financial Representative or online at keypoints. Direct to Fund Accounts: Some investment assets included in this report may be "Direct to Fund" accounts, which means those assets are maintained and controlled by a mutual fund family or its transfer agent, not NMIS or its clearing broker, Pershing. You can determine whether your investment assets are Direct to Fund accounts by reviewing the "Fund Family" column in the Investment/Variable Products Summary section of this report. Accounts that have an entry in the "Fund Family" column are Direct to Fund accountS. For Direct to Fund accounts, this report reflects holdings and valuation information received from the mutual fund family. Northwestern Mutual does not audit or verify such information. Please review the account statements you receive from the mutual fund family for complete information on these assets. For 529 Plan Accounts: Accounts described as "529 Plan" accounts are state college savings plans. Some "529 Plan" accounts in this report are also UGMAjUTMA accounts, and are subject to state UGMA/UTMA statutes as well as 529 Plan restrictions. Please ask your Financial Representative for details on the restrictions applicable to 529 Plan accounts included in this report.

Prepared By: Jolm Henry Lockwood, CLU I Financial Representative 916.648.6448 I I W\

Report Date:

CA# OE60969

December 21, 2011 Page: 5 of 6

2010 The Northwestem Mutual Life Insurance Company. All rights reserved.

This report is not complete without the accompanying "Disclosures" pages.

CalHFA Loan# 022472-3


Borrower: Kyle


W Northwestern Mutual'
insurance / investments / ideas'"

Information As Of: December 21, 2011

NMIS is a member of SIPC (Securities Investor Protection Corporation), which protects the value of securities in customers' NM1S accounts up to $500,000

(including up to $250,000 for claims for cash). Direct to Fund assets held by outside mutual fund families are not covered by NMIS' SIPC coverage. In
addition, NMIS' clearing firm, Pershing LLC (Pershing), carries excess SIPC insurance coverage. Assets held at a custodial institution other than Pershing or other assets "not held" at Pershing, including but not limited to Direct to Fund assets, are not protected by the excess SIPC insurance policy. Information about SIPC is available upon request, or at and at For answers to any questions regarding an outside mutual fund family's SIPC coverage, you may either contact your Financial Representative or the appropriate mutual fund family, or refer to the mutual fund family's statement regarding SIPC membership. SlPC coverage does not protect against potential losses due to market fluctuation. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although money market funds seek to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such funds.

Prepared By: John

Henry Lockwood, CLU I Financial Representative 916.648.6448 I I

2010 The Northwestern Mutual Life Insurance Company. All rights reserved.

Report Date:

CA# OE60969

December 21, 2011 Page: 6 of 6

This report is not complete without the accompanying 'Disclosures" pages.

CalHFA Loan# 022472-3

69 of 130

Borrower: Kyle


Page 1 of3

Listing #11086887 $239,900 (LP)



5020 A St, Sacramento, CA 95819 * Beds: 2* Baths: 1 (1 0) (FH)* Area: 10819 Vr: 1948*

mActive Short Sale

Sq Ft: 950*


Lot Sz:

Charming 2 bedroom 1 bath in quiet and desirable East Sacramento. Hardwood floors throughout. Large patio and backyard. Great view of the quiet neighborhood in the front with a large front yard as well. Don't miss this opportunity to own in one of Sacramento's most desired neighborhoods!

Agent Co-Agent Office Co-Office

Daniel R Ramsey Jr.


(10: SRAMSDAN) Primary:916-737-5656 Secondary:916-737-5656 Other:916-761

Kelli A Boehm (ID: SRATHKEL) Primary:916737-5656 Seeondary:916737-5656 Lie: 01813767 Ramsey Real Estate & Dev. (JD:01DRRJ) Phone: 916-737-5656, FAX: 916-760-0575 Ramsey Real Estate & Dev. (ID:01DRRJ) Phone: 916-737-5656. FAX: 9167600575


Property Type
Subtype Description


Property Subtype(s)

1 House on Lot

Status Service Level

Area Subdivision Commission Type

mActive Short Sale (12/14/11)

10819 Coloma Terrace percentage of Sale

Commission to Selling Office Apx SqFt-Primary Res Lot Sq Ft (approx)


Var/Dual Rate

2.5 %
950* 4835*

Sq Ft Source Assessor/Auto-Fill Lot Acres (approx) Price I SqFt 252.53 0.111

Apx SqFt-Second Res

County Beds Year Built Map Book Cross Street Listing Date On Market Date Variable Price Original Price Occupant Name School County


8aths (FH)


1948* Thomas Bros. (PL,SA) 51st Street 12114/11 12114/11

1 (1


Map Coordinates Entry Date



239,900 Expiration Date 12/14/12 Jose Occupant Phone Sacramento (Elementary: Sacramento Unified; Junior High: Sacramento Unified; Senior High: Sacramento l

CalHFA Loan# 022472-3

. 7J) p.fJ30 _ . Borr9w~r KYJr "._at http://prospector.metrohst.netiscnpts/mgrqlspi.dll?APPNAME=Metrohst&PRGNAME=...IL/15/2u 1


Page 2 0f3

Confidential Agent Remarks Directions to Property Short Sale

-Current tenant is allowing showings from 10-12 on Saturdays."" CalHFA Short Sale w/wel[ documented ha lender approval. Any lender reduction in gross commission wiH be shared 50/50, between listing&selling bral H street east to lett on 45th, right on Brand, [eft on 51 st, to left on A street, and home is on the left. Yes

General Information
Zoning Census Tract Lot Dimensions Style Description Construction Foundation Exterior Roof Description Stories # of Garage Spaces Garage Baths Other Floor Covering(s) Laundry Description Dining Description Kitchen Description Kitchen Appliances No. Of Fireplaces Fireplace Desc

52 (front) x 91 x 50 x 89
Cottage/Bungalow Frame, Wood Concrete Slab Wood Camp Shingle 1 Story 1 1 Car Attached, Facing Front Tile, Tub w/Shower Over, Window Linoleum/Vinyl, Tile, Wood In Garage Formal Area Counter Tile Disposal, Range Gas F/S 1 Living Room


CC&Rs Site Description Road Description Pool Landscape Improvements Features Misc Air Heat Energy Features Water Utilities Sewer Bonds/Asmts/Taxes REO HUD Auction Existing Financing Tenns Security Features

Yes Shape Regular, Trees Few Paved, Public Maintained None Fenced Back, Sprinkler Auto F&R Sidewalk/Curb/Gutter Patio Uncovered Window Furnace Floor None Public District 220 Volts, All Public, Natural Gas In & Connected Unknown

No No No
Treat as Clear Cash, Conventional Smoke Detector

Listing Information
Showing Instructions Tenant Current Rent Possession Type Listing Call Listing Agent, Restricted Hours Yes

By Agreement Exclusive Right

Privileged Information
Picture Provided By Internet Approved Longitude / Latitude Agent Hit Counter Public/Client Hit Counter Agent to Submit Yes Yes

-121.437614/38.576256 17

* Denotes Information autofilled from tax: records.

CalHFA Loan# 022472-3

1.1 1>.1.130 _ .

Borr9J11~r' K'I:r~ . _ . iLl i 512u i i


04:40 PM
(Exclusive Authorization and Right to Sell)
~C.A.R. Fonn RlA, Revised


1/ 11






1. EXCLUSIVE RIGHT TO SELL: ____2Kyx:lh!ed.III!~~~=';_;;_:;_::;_::_::::::::;__;;::=;::::=:::;_------ ('Seller")

hereby employs and grants Ramse Real Est.ale and Develo men!:. beginning (date) 12(14(11 an en ,n9 a : "on a e 12 14 2012 the exclusive and irrevocable right to sell or exChange the r 1property in the City of Sa",,,,,,,,,,,,, to County of SacraTllento Assessor's Parcel No. California, described as: 502.0 A st:reet

("Broker") st,ng Portod") ("property"):

2. ITEMS EXCLUDED AND INCLUDED: Unle$S otherwise in a re.1 estate purchase agreement. all ~xtur.. and fittings that are attached to the Prop$rty are included, and personal property items are exduded, from the purchase price. ADDITIONAL ITEMS EXCL.UDED: ADDITIONAL ITEMS INCLUDED: . Seller Intends that the above i1:em$ be Elxduded or induded ill offering the Property for s~J~, but understands that (1) the purchase agreement supersede. any intention expressed above and will ultimately determine which items .re excluded and included in the sale; and Oi) Broker Is not responsible for and does not guarantee that the above exclusions and/or inclusions will be in the pt.lrcnase agreement.

3. USTING PRICE AND TERMS: A. The listing price shall be: two hundred thi.rty nine thousand nine hundred
B. Admtiona!




Dollars {$ fl39.66 of $10,000 every 25 days from first date of list, until


an offer lS




accepLe. Be

er to 0

er a Home warranty to
at his own cost.



4. COMPENSATION TO BROKER: Notice: The amount or rate of real estate commissions is not fixed by law. lhey are set by each Broker
individually and may be negotiable between Seller and Broker (real estate commissions Include all compensation and fees to Broker). A. Seller to Broker as compensation for services irrespective of agency relationship(s), either I!I 6 (six) percent
AND Of the
(1) I

a pest





entered into,

and ofthe~~~~~p~riC~ef),~orr~o~~~~~i~~i~~~~






"urena,~ the pr~~~~~~ entitled t~ compensation such offer expiration of Penod, or any extension). (2) If within calendar days Cal after the end of the listing Peliod or any extension; or (b) after any cancellation of this Agreement, unless othelWise agreed. Seller enwrs into a contract to sell, convey, lease or otherNise transfer the Property to anyone ("Prospective Buysr') or that person's related entity; (ij who physically entered and was shown the Froperty dunng the Ustin9 Period or any extension by Broker or a cooperating broker; or {ii} for whom Broker or any cooperating broker submitted to Seller a signed, written offer to acquire, lea&e. exchange or obtain an Qption on the Property. Seller, howevet, shall have no obligation to Broker under paragraph 4.A(2) unless, not later than 3 calendar days after the end of the listing Period or any extension or cancellation I Broker has given Seller a written natice of the names of such Prospective Buyers. (3) If, without Broker's prior written con."nt. t~e Property is withdrawn from sale, conveyed, leased, rented, othelWise transferred, or made unmarketable by a voluntary act of seller during the Listing Period, or any extension. If completion of the ~Ie is prevented by a party to the transaction other than Seller, then compensation due under paragraph 4A shall be payable only if and when Seller Qol1ects damages by suit, arbitration, settlement or otherwise, and then in an amount equal to the lesser of one-half of the damages recovered or the above compensatioh, after first deducting tine and esorow expenses an~ the expenses of collection if any. In addition, Seiler agre.s to pay Broker: _____ Seller has been advised of Broker's policy regarding cooperation with, and the amount of compensation offered to, other brokers. (1) Broker is authorized to cooperate with and compensate broke,.. R!'rticipaUng throu.!l.h the multiple listing serviceis) ("M"S") by offertnQjo MLS broke", out of Brakefs oampenoation speCified in 4A. either ~ 2. S petcont of the purchase price, or U $ . (2) Broker is authorized to cooperate with and compensate brokers operating outside the MLS as per Broker's poUcy. Seller hereby irrevocably assigns to Broker the above compensaton from funds and proceeds In escrow. Broker may .ubmtl this Agreement, Inotruotions to compensate BrOket pursuant to paragraph 4A, to any eocrow regarding the Property jnvolving Seller and a Duyer, Prospectille Buyer or other transferee. (1) &lller rapreoenls that Beller has not previously entered into a listing agreement with another bloker regarding the Property, unless specified.s follows; . (2) Seller warrants that Seller has no obhgation to ~y compensation to any other broker regarding the property unless the Property is liansferred to any 01 the follOwing individuals or entiti..;


(3) If the Property is sold to anyone listed above during the time Seller Is obllgeted to oompensate another broker: (i) Broker I'; not entitled to compensation undBrthis Agreement; and (il) Broker is not obligated to represent Seller in such transaction.
unauthOrized reproductiOn of this tonn, or any portion thereof. by photocopy mi!!lchlne or any other mGarl$, !\"ac:!Judll"lg faeSlmlJe or computerized fQrrMte.

The oopyright law of the Unttil!ld States (Title 17 U.S. COde) fOrbId thil!l


lnltlais (



CalHFA Loan# 0224723



04:41 PM


2/ 11

5020 A .. treet Property Address: Sacramento ca 95819 Date: _'.. .. /2 . .1 2,,1 ,"4.1-..Q '-1'-_ _ _ __ 5. OWNERSHIP, TITLE AND AUTHORITY: Sell$r wa"ant. that: (I) Seller I. the OWner of the Property; ~i) no other persons or entitle. have utie to the Property; and (III) Seller has the authority to ~oth execute this Agreement and sell the Property. Exceptions to ownership, title and authority are as follows: ________. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _


MULTIPLE LISTING SERVICE: All terms of the transaction, induding financing, if applicable, will be provided to the selected MLS for publication, dissemination and use by persons and entities on terms approved by the MLS. Seller acknowledges that Broker is required to comply with all applicable MLS rules a. a condition of entry of the listing into the MLa and Seller authorize. Broker to comply with all applicable ML$ rules. MLa rules require that the listing sales prtce be reported to the MLS. MLS rules allow MLS data to oe made available by the MLS to additional Internet sites unl."s Broker give. the MLS instructions to the contrary. MLS rulea generally provide that residential real property and vaeant lot IIsijng. be submitted to the MLS w~hin 48 hours or some other pertod of time after all necessary signatures have been obtained on the listing agreement. However, Broker will not have to submit this listing to the MLS if, within that time, Broker submits to the MlS a form signed by Seller (C,A.R. Form SEL or the locally required form).
Information that can be excluded: A. Internet Display; (1) Seller ean instruct Sroker to have the MLS not display the Property on the Internet. Seller understands that this would mean consumers searching for listings on the Internet may not see information about the Property In response to their search; (2) Seller can instruct Broker to have the MLS not display the Properry address on the Internet Seller understands that this WOUld mean consumers searching for listings: on the Internet may not see the Property's address in response to their search. B. Features on MLS Participant and Subscriber Websltes; (1) Seller can Instruct Broker to advise the MLS that Sailor do... not want vls~ors to MLS Parlicipant or Subscriber W.bsrtes that display the Property listing to have (I) the ability to write comments or reviews about the Property on those sites: or (ii) the ability to hyper1ink to another site containing such comments or reviews if the hyperlink is in immedi~te oonjunction with the Property. seller understands (I) that this opt-out applies only to Websttes of MLS Partlolpants end Subsoribers who are real estate broker and agent members of the MLS; (tI) that Olher Intemet sites mayor may not have the features set forth herein; and (iii) that neither Broker hor the MLS may have the ablUty to control or bloe:k such features on other tnternet sites. 12) Seller can instruct Broker to advis. tho MLS that Seller ';oes not want MLa Participant or auo.criber Web.~O$ that display the Property listing to operate (i) an automated estimate of the market value of the Property: or (II) have the ability to hyperlink to another site containing Suoh automated o.timale of value IT the hyportink is in immediate oonjunotion with the Property. Sollor understands (I) that this opt-out applies only to Websilea 01 MLS Partlolpants and Subscribers who are real eOla!e broker. and agent membelE 01 the MLS; (II) that other Internel site. mayor may not have the f.atures t forth herein; and (iii) that neither Sroker nor tho MLS may have the ability to oontrol or block such f.atur on other Internet siles. Seller acknOWledges that for any of the above opt-out instructions to be offective, Seller must make them on a separate instruction to Broker signed by Seller (CAR. Form SEL or the locally required form). Information about this lisijng will be provided to the MLS of Broksr's selection unless a form instructing Broker to withhold the Ilotlng from the MLS Is attached to thlallstlng Agreement.

1. SELLER REPRESENTATIONS: Seller represents that, unless otherwise spaoffied in wnling. Seller is unaware of: (I) any Nolie. of Default recorded against the Property; (il) any delinquent amounta due under any loan secured by. or other otJlgatlon affecting, the Property; (m) any bankruptcy, insolvency or similar proceeding affe<;ting the Property; (iv) any litigation, arbitration, administrative action, government investigation or other pending or threatened action that affeclS or may affect the Property or Seller'. spiliry to transler i~ and (v) any ourrant, pending or proposed sp.cial ......m.nts affeeling the Property. Seller shall prompUy notify Broker in writing ~ Seller becomes aware of any of thea. items dunng the Lls,ng Period or any ext.nelon thereof.


BROKER'S AND SELLER'S DUTIES: (a) Broker agrees to exercise r.a.onable effort and due diligence to aollieve the purposes of this Agreement. Unless Seller gives Broker written instructions to the OOl'ltiSry, Broker is authorized to (I) order reports and disclosure. necessary, (ii) advertise and market the Property by any method and in any medium Iected by Sroker, including MLS and the Int.rn.~ and, to the extent permitted by these media, control the dissemination of the information submitted to any medium; an(j (III) disclose to any raal estate licensee making an inquiry the receipt of any offers on the Property and the offering price of suoh offers. (b) Seller agree. to consider offers presented by BroKer, and to aot In good faith to accomplish the sale of the Property by, arnong other things, making the Property available for showing at reasonable times and referring to Sroker aU inquiries of any party interest .; in the Property. Seller is responsible for determining at what priea to list and sell the Property. Seller further agree!! to Indemnify, defen<l and hold Broker harmless from all claims, disputes, litigation, Judgments and attorney fees arlolng trom any Incorrect Information supplied by aeU"r, or from any matorial facts that Seller knows but falls to disclose.
DEPOSIT: Broket Ie authorized to accept and hold on Seller's behalf any deposits to be applied toward the purchase price.


Copyright lSI 1$91-2011. OALlFClRNJA ASSOCIAllON OF REAl.TORS,INC.

SelJer'liIlnitiFJlliiI (
Reviewed by


S020 )\ Klred,


CalHFA Loan# 022472-3

73 of 130


04:41 PM
5020 A .. t:reet


3/ 11

Property Address: Sacr_nto, Co.


Date; _-,1""......."'1g"'O,,'u1_____ 1' 4

10. AGENCY RELATIONSHIPS: A Dlselo$ure: If the Property includes residential property with one-to-four dwelling unlls. Seller shall receive a "Disclosur.
Regarding Agency ReJationshipsn form prior to entering into this Agreement. Seller Representation: Broker shall represent Seller in any resulting transaction, except as specified in paragraph 4F.


Possible Dual Agency With Buyer: Depending upon the circumstances, it may be neCfiSary or appropriate for Broker to act as




15, 16.


an agent for both Seller and Buyer. exchange party. or one or more additional parlles ('Buyer"). Broker shall, as soon as praeUe.ble. disclose to soller any election to act as a dual agent repr.senting both Seller and Buyer. If a Buyer is procured directly by Broker or en '$$ocialellcensee In Brokersllrm. Seller hereby consents to Broker acting a. a dual agent for seller and suoh Buyer. In the eVi;lnt of an exchange. Seller hereby consents to BrOker collecting compensation from additional parties for services rendered, provided there is disclosure to all parties of such agency and compensation. Seiler understands and agrees that (i) Sroker. without the prior wrj(ten corl$ont of Seller, will not disclose to 8uyer that Seller Ie willing to sell the Property at a prtco lese than the listing price; (II) Broker, without the prtor wrttten coneent of Buyer, will not disclose 10 Seller tho! 8uyer is wJlllng to pey a price greater than the offered price: and (111) except for (I) and (II) above. a dual agent Is obligated to disclo known facts materially affecting the value or desirability of the Property to both parties. D. Other Seller.: Seller underetands that Broker may have or obtain listings on other properties. and that pot.ntial buyers may consider, make offers on, or purchase through Broker, property the same as or similar to Seller's Property. Seller consents to Broker's representation of sellers and buyers of other properties before, during and after the end of this Agreement. E. Confirmation: If the Property includes residential property with one-IMour dweJling units. Broker shall confirm the agency relationship described above, or as modified, in writing, prior to or concurrent with Selle"& execution of a purchase agreement. SeCURITY AND INSURANCE: Broker Is not responsible for 10.. of or damage to personal or real property. or person. whether attributable to use of a keysafellockbox, a showing of the Property, or otherwise. Third parties, induding, but not limit(td to, appraisers, inspectors, brokers and prospective buye". may have acee$$ to. and take videos and photographs of, the interior of the Property. Seller agrees: (I) to lake reasonable precautions to safeguard and protect valuables that might be acoesslble during shoWinge of the Property; and (Ii) to obtaIn Insurance to proteot against these risks, Broker doe& not maintalh insurance to protect SeUer. KEYSAFEILOCKSOX: A ~.y..f.nOckbox is designed to hold a key to the Proporty to permtt soco to the Property by Brokar. cooperating brokers, MLS participants, their authorized lloensees and representatives, authorized inspectors. and accompanied prospective buyers. Stoker. eooperatin~ brokers. MLS and AssociationS/Boards of REAL TORS are not insurers against injUty. theft, 10$$. vandalism or damage attributed to the use of a key.afeJlockbox. Seller does (or If checked 0 does not) authorize Broker to install a If Seller does not occupy the Propertyl Seller shall be responsible for obtaining occupant(s)' written permission for use fJf a keysafenockbox (CA R. Form KLA). SIGN: Seller does (or if checked 0 doe. not) authori Broker to in_tall a FOR SAL;;ISOLD oign on tho Property. EQUAL HOUSING OPPORTUNITY: Th. Property is offered in compliance with federal, state and local anti-discrimination Jaws. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon Seller and Seller'S successors and assigns. MANAGEMENT APPROVAL: If an a$SOCiale-licen in Brok.f$ offic. (I.sperson or broker-a.sooiate) onterslnto thle Agreement on Broker's behalf, and Btoker or Manager does not approve of its terms, Broker or Manager has the right to cancel this Agreement, in wfiting, withf" 5 Days After its execution. ADDITIONAL TERMS: 0 REO Advisory Usting (CAR. Form REOL) [i! snort Sale Information and Advisory (CAR. Form SSIA)

18. ATTORNEY FEES: In any action, proceeding or arbitration between Seller and Broker regarding the obligation to pay compensation
under this Agreement, the prevailing Seller or eroker snail be entitled to reasonabJe attorney fees and costs from the non-prevailIng Seller or Broker, except as provided in paragraph 20A. 19. ENTIRE AGREEMENT: All prior discussions, negotiations and agreements between the parties concerning the subject matter of this Agreement are superseded by this Agreement, which constitutes the entire contract and a compj:ete and exclusive expression of their agreement, and may not be oontradlcted by evidence of any priQr agreement or contamporaneof,.ls oral agreement. If any provision of this Agreement Is held to be ineffectlve or invalid, the remaining provisions wiJl nevertheless be given full force and effect. This Agreement and any supplement, addendum or mOdification, includlng any photocopy or faCSimile, may be executed in counterparts.

Copyrigltt.p;) 1W1~2011, CALIFORNIA ASsOCIAnON O~ ru:ALTORS.. INC.

S.U.... lnltl.l.



1Rw_d by

Gl """'''''''''


5020 A succi.


.. palHFA Loan# 022472-3

74 of 130

Borrower: Kyle



04:42 PM


4/ 11

5020 A .t%oet: Property Address: S .."ramomi:o. Ca


Date: _""1",2J../l"4,,,1,,2,,O,,1.. _ _ __ 1~



MEDIATION: Seller and Broker agree to mediate any dispute Qr claim arisiog t)$tw n tham out of this Agreement. or any

resulting transaction. before resorting to arbitration or court action, subject to paragraph 208(2) below. Paragraph 20B(2) below applies whether or not the arbitration provision is initialed. Mediation fees, if any, shall be divided equally among the parties
involved. If, for any dispute or claim to which this paragraph applies, any party commences an action without

resolve the matter 1hrough mediation, or refuses to mediate after a request has been made, then tt1~t party shall not be entitled to reCOver attorney fees, even If they would otherwise be available to that party in any such action. THIS MEDIATION

a1;tempting to


PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION is iNITiALED. ARBITRATION OF DiSPUTES: (1) Sefler and Broker agree that any dispute or claim In law or equity arising t)$lWeen them regarding the obligation to pay compensation under this Agreement which Is not settled through mediation, shall be decided by neutral, binding arbitraUon, Including and subject to paragraph 20B(2) below. The arbitrator shall be a retired judge or or an allorney wHh .t least 5 year. of residential real estate law experience, unless the parties mutually agree to ~ different arbitrator j who shall render an award in accordance with substantive California law. The parties shall have the right to discovery In accordanCQ wHh California Cod. of Civil Procedure 51283.05. In all oth<tr ,....peet., the arbitration shall be conducted in accordance with TIUe 9 of Part III of the California Code of Civil Procedure. Judgment upon the ,aw;;lrd of the arbitrator(s) may .be entered in any court having jurisdiction. Interpretation of thl!lo agreement to arbitrate shall be governed by the Federal Arbitration Act. (2) EXCLUSiONS FROM MEDIATION AND ARBITRATION: The following matters are excluded from mediation and arbitration: (I) Judicial or non.Judlciai foreclosure or othor action or proceeding to enforce a deed of tru.~ mottgage, or Installment land sale contract as defined in California Civil CQde 2985; (ii) an unlawfUl datainer action; (iii) tho filing or onforcement of a mechanic's lien; and (iii) any malter that i$ within the jurisdiction of a probate, small claims, or bankruptcy court. The filifig of a <>our! action to enable the recording of a notice of pending acfion. for ordor of attachment receivership, injunction, cr other provl$lonal remedies .shall not oonstltute a waiver the medIation and arbitration provl$lons.



$eller'~ Initi~ls


acl<nclwlad.!JOS that Seller has read, understands, receiv<>d a copy or and agrea& to the terms of this

_ _ _ _ _ _ _ _ _ Email
Soller _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _- - - - - - - - - - - Date _ _ _ _ _ _ _ _ _ __ Addre.s _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Cily _ _-:c_ _ _ _ _ _ _ _ state _ _ _ Zip _ _ _ _ __ Telephone _ _ _ _ _ _ _ _ Fax _ _ _ _ _ _ _ _ _ E.mail _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Real Estate 8roker (Firm) R&msl!ly Real Estate and .oevelopment ~-i------ DRE Lie. # 01461166
Fax (916) 760-0575

By (Agent)

Address 269 47th Street

{9I6) 837-5656

DRE Lie. # 01824426 Date_...... 1;:,.2"'(1"'4"'1... 2"'0"'1l'-_-,-_ __ City_""'a c"'r"a"'m"e"nt"'o _ _ _ _ _ State CA .. .... Zip_..:9",S",8"1,,,9_ __

THIS FORM HAS SEeN APPROVEC tN THE CALIFORNIA ASSOCIA11ON OF RCALTOR~(C,A.rO. NO AEPRE:SENTA1l0N is MAOE AS TO THE LEGA~ VAL,IPIi'V OR ADEauACY OF ANY PROVISION IN ANY SPEciFIC TRANSACTION. A REAL ESTATE" 6ROKeR 105 THE PERSON QUAUFIEO TO ADVISE ON REAL cSTAT,f; ffiANSACTloN!!:. IF YOU DESIRE LSGAL. OR TAX AOVICI;. CONSUlI AN APPROP~A 'TE PROFESSIONAL... This form i$ Qvailablo fQl" IJ~" bY the entire rea.I est:ate Indus!lY. H 'i3 not 'In!tllc:!ed 10 identify the UIII8f as aREAL TOR. REALTOR is a rog:i;;terod coQodWt:t mtlmbel'$hlp mark which may be U$1Jd o~ bV n~re oftha NATIONAL ASSOCIAllON a; REAl. TO~ Who BUb8.crlbe to Its eode of Ethlca.



"suhsidirJ.ryH/f'lhtl CuJjfUt'm'U.M!.9lXlmltm Q{R1iAL1'OR~ ., Ii> ~Z5 ljo1,/th Virgil t\.VOINI!, LOIi AnS'"'k;~. CaIU'.lrnlll. SIIJW()


'tSl =

1~il!lWed by



'020 A,...",

CalHFA Loan# 0224723

75 of 130

Borrower : KYJ~,.IIII.1Il


04:42 PM


5/ 11

.. ~ ASS 0 C I A T I ON



(C.A.R. Form SA, Revised 11111)
~'r~e c


Property Addre&$,: $020





1. INTRODUCTION: Selling property in California i. a process that involves many stops, From start to finish, ~ could take anywhere from a few weel! to many mOMhs, depenclng upon the coMltlon of your Property, local market conditions and other factors, You have already taken an important first step by listing your Property for sale with a licensed real estate broker, Your broker will help
guide you through the process and may refer you to other professionals as needed. This advisory addresses many things you may need to thInk about and do as you market your Property. Some of these things are requirements impoeed upon you, either by law or by the listing or sale contract Others are simply practical matters that may arise during the process, Please read this document oar.fully and, if you have any qu.stions, ask your broker or approprtate legal or tax advisor for help, 2, DISCLOSURES: A. General Disclosure Dutle" You must affirmatively dieclooe to the buy.r, In writing, any and all known tact<; that materially affect the value or dosirabllity of your Property, You mlJSt discl""e th .... facio wh.ther or not asked about such mattor. by the buyer, any broker, or anyone .Ise, This duty to disclos. appli.s even if th. buy.r to purchase your Property in i1s present condition without requiring you to make any repei"', If you do not know what or how to disclose, you should consult a r1 estate attorney in California of your ohoosing, Broker cannot .dvise you on the leg.1 sUffioienoy of .ny dlsclooures you make, If the Property you are .elling is a residence With one to four units for c.rtain subdivis;ono, your broker .Iso has a dUty to conduct a reasonably competent and diligent visual InspeetJon of the a""..slble areas and 10 disclose to a buyer all .dvelSe material facts that the in~pectiOr'l !'eveals. If your broker dlsooyers something that coldd indicate a problerYl, your broker must advise the buyer. B, StaMory Outi...: (For onete-four Reeldentlal UnllB): (1) You must timely prepare and deliver to the buyer, among other things, a Real Estate Transfer Diecosur. Statement ("1OS"), and a Natural Hazard Disclosure Statement ("NHD"). You have legal obligation to honestly and completely fill out the TOS form In its entirety, (Many local .n~tie. or orgenizationo have their own supplement to the TDS that you mayaloo be askoc to complete.) The NHD is a statement indicating whether your Property is in certain de.ignated flood, fir. or earthquake/seismic hazard zones. Third-party profe..lonal companlea can help you with this teak. (2) Depending upcn the age and type of construction of your Property, you may aloo be required to provide and, In certain ea.ea you can receive IImitoc legal protection by provlclng, the buyer with booklets entitled 'The Homeowner. Guide to Earthqueke Safety," "The Commercial Property OWner'. Guide to Earthquake Safety," "Protect Your Family From Lead In Your Home" and "Environmental Hazards: A Guide For Homeowners and Buyers." Some of these bookJets may be packaged together for your convenience. The ~arthquake guides ask you to answer specific questions about your Property's structure and preparedness for an earthquake_ If you are requIred to supply the booklet about lead, you will also be required to disclose to the buyer any known lead-based paint and leadMbased paint hazards on a separate form. The environmental hazards guide informs the buyer of common environmental ha2:ards that may be found in properties. (3) If you know that your property;': (i) I"""toc within one mile of former military ordnance location; or (Ii) in or affeeted by a zone or district allowing manufacturing, commercial or airport use, you must disclose this to the buyer, You are also required to make a good fa~h effort to obtain and deliver to the buyer a disclosure no~ce from the appropriate local agenoy(les} about any special tax I~vied on your Property pursuant to the Melle-Roes Community Facili~ .. Act, the ImprovemeM Bond Act of 1915, and a notice concerning the cont~ctuaj a$S1;IS~ment provided by section 5898.24 of the Streets And Highways Code (collectively. "Special Tax Dlsclosur.,'), (4) If the TOS, NHO. or lead, military ordnance. commercial zone or Spe9jal Tax Disclosures are provided to a buyer after you ,c'cept that buyer's offer. the buyer will have 3 days after delivery (or c5days If melled) to terminate the offer. which Is why tt is extremely important to complete these disclosures as soon as po$$Ible. There are cel1aln exemptions from these staMory reqUirements, however, if you have actual k.nowledge of any of these items, you may stili be required to make a disclosure as the items can be considered rna.terial facts. C. Death and Other Disclosures: Many buyers consider death on real property to be a material fect In the purchase of property. In some situations, it is advisable to disdose that a death occurred or the manner of death; however, Civil Code Seetion 1710.2 provides that you have: DO disrHlSllffi dlil:$ ''where the death has occurred mote than three years prior to the date the transferee offers to purchase, lease, or rent the real property, or [regardless of the date of occurrenceJ that an occupant 01 that property was afflicted With, or died from. Human TLymphotropic Virus Type III/Lymphadenopathy-Associated Virus." This law does not "immuniz;e an owner or his or her agent from making an intentional misrepresentation In response to a direct inquiry from a transferee or e prospective transferee of reel property, ooncerning deaths on the real property." O. Condominiums .and Other ComrnQn Interest Subdivisions: tfthe Properly is a condominium, townhouse, or other property in a common interest subdivision, you must provide to the buyer copies of the governing documents, the most recent finanoiar statements dlstributedt and other documents requira(l by law or contract. If you do not have a current version of these documents, you can request them from the mana,gement of your homeowner's association. To avoid delays. you are encouraged to obtain these documents as soon as possible, even if you have not yet entered into a purchase agreement to sell your Property. The oopyright lam of the Un~ed Slat (T~1e 17 U,S, Code) forbid the unal;lthcrized reprodUctkln 01 this tonTI, or any portion thereof, by photocopy m:ar;:hine or any ether maans, inclucUng facsimile or computerized formats,

SeUer's Initied& (
Reviiwed by _ _


SA REVISED 11/11 (PAGE 1 OF 2)

Agent: CantQI Ray Ramsey Phone: 918-812-3287

Prepared using zlpFol111 software


Fax: 918~nO.()844

Broker; Ramsey Real Esta:te and Dev't Corp.. Ta9 47th Street sacramento, CA 86819

CalHFA Loan# 022472-3

76 of 130


04:43 PM


6/ 11

5020 A

9581.9 Oate: 12/14/2011 a. CONTRACT TERMS AND LEGAL REQUIREMENTS: A. Contract Terms and Conditions; A buyer may request, as part of the contract for the sale of your Proparty, that you pay for repairs to tho Proporty and other items. Your docision on whether or not to comply with a buyer'$ requests may affect your ability to sell your Property at. specified price,
PropertyAddress:Bac~t:ol C.i:l

B. Withholding Taxes: Under federal and California tax laws, a buyer is required to withhold a portion of the purchase prloe from

your sale proceeds for tax purposes unless you sign an affidavit of nonforeign status and California residency, or some other exemption applies and is dooumented. C. Prohibition Against Discrimination: Disorlminatory conduct In the Ie 01 real property against individuals belonging to legally protected classes is a vIolation of the law. D. Government Retrofit Standards: Unle exempt, you must comply with government retrofit st.ndards, including, but not limited to, installing operabJe smoke detectors, bracing water heaters, and providing the buyer with corresponding written statements of compliance. Some city and county govemrnents may Impose additional retrofit standards, induding, but not limited to. installing
low-flow toilets and showerheads, gas shutoff valVes, tempered glass, and barriers around swimming pools and epas, You

should consLllt with the appropriate governmental egencies, Inspectors, and other professionals to determine the retrofit standardS for your Property, the extent to which your Property complies with sl,Ich staneards\ and the cos1$, if any. of complisn<:e. E. EPA's LEADBASED PAINT RENOVATION, REPAIR AND PAINTING RULE: The new rule requires that confractolS and maintenance profe.slonal. working in pre1978 hOUSing, child care facilities, and schools with leadbased paint be certified; that their employees be. trained; and that they follow protective work practice standards. The rule appnes to renovation, repair, or
painting activities affecting more than six square feet of leadbased paint in a room or more than 20 square feat of Jead-bas'9d paint on the e;rterior. E.nforcement of the rule begins October 1, 2010. See the EPA; website at Vv'WW.epa,govllead for more F. legal, Tax and Other Implications: Selllng your PropertY may have legal, tax, insurance, title or other implications, You should consult an appropriate professional for advice on these matters.


4. MARKETING CONSIDERATIONS: A. Pre.Sale Considerations: You should consider doing what you can to prepare your Property for oale. such as correcting any def.cts or other problems. Many people are not aware 01 defecta In or problems With their own Property. one way to make

aware is to obtain professional home Inspections prior to salel both ,generally! and for wood deetroyitlg peats and organisms, such as termites. By doing thiS, you then have an opportunity to make repairs before your Property i6 offered for sale, which may enhance its marketability. Keep in mind, however, that any problems revealed by such inspection reports or repairs

that havs baen made, whether or not dioclosed in a report, should be dlscl""ed to the buyer (s.. "Disclosures" in paragraph 2 above), This is true even if the buyer gets his/her own inspections covering the same ar.ea. Obtainit\g inspection reports may also assist you duling contract negotiations with the buyer. For e~ample, Wa pest control report has both a primary and secondary
recommendation for clearance, you may want to specify in the purchase agreement those recommendations, if any, for Which

you are going to pay.

B. Post-Sale Protections: It is often helpful

to provide the buyer with, among other things, a home protectionAvarranty plan for the Property. These plans Will generally cOver problems, not deemed to be pre.exlstlng, that occur alter your sale Is completed. In the event somethin,g does go wrong after the sale, and it is covered by the plan, the buyer may be able to resolve the concern by oontacting the home protection company. C. Safely Precaution.: Advertising and marketing your Property for sal., including, but not lim.eo to, holding open house. ",acing a keysafenookbox, erecting FOR SALE Signs, and diSseminating photographs, video tape', and virtual tours of the promises, m.y Jeopardize your person.l.mely and that of your Property. You are strongly encouraged to maintain insurance, and to take any and all possible precaudons and safeguards to protect youlSolf, other occupants, visitors, your Property, and your belongings, Including cash, Jewelry, drugs, firo.r",. and other valuable. 10"'lted on the Property, against injury, theft, loss,
vandalism, damage, and other harm. Il. Expenses: You are advised that you, not the Broker, are responsible for the fees and costs, if any, to comply with your duties and obligations to the buyer of your Propelt)'.


Seller """fe,'d)'no

Sell.r.;:'~iIbJ=~ Print ".[]lIr-----'-.fl..!fL<~ s.lIer.,---_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Print Name _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _


By E>igning below, Seller acknowledges receipt of a copy of this document ...-_ _ _ _ _ _ _ Date

11(/ I.l <2 tL





Real Estate Broker Dani@l Ramsey. RREDC



759 47th Street


Fax 9J 6-760-0575

(Agenb ----------City Sacramento State CA Zip 95Bl9: E-mail reo@rameeyrealestateg:t;'

THIS FORM HAS BEEN APPROVED 6V THE CALIFORNIA ASSOCIATION OF ~EAlTOA:S (OAR.). NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF ANY PROVISION IN ANY S~CIFIC TRANSACTION. A REAL ESTATE BROKER IS THE PERSON QUAUFIEO TO ADVISE ON REAl. ESTATE TRANSACTIONS. IF YOU ceSIRt; 1-1:iGA.L O~ TAX ADVICl:, CONSULr AN /AJlP~OPRlA TE PROFESSIONAL. Thi:s: form ~ mli:.illablefor It9:B by !he entire malestats Industry. It is not intended 10 identify the ~r as Q REALTOFW, R~TOR ~ .. ~~ eCIIlet(:liYa rnomnel'$hlp mark which may be used only by mElI'nben; of the- NATIONAl. ASSOCIAllON OF ReALTO~ Who subscribe 10 Its Code of Ethics.. Published ana DistriblMd by: III R~ ESTATe BUSINESS SERVICES, INC. l[Jo~-;;~~.~;;;:;;;;;;;;;;;;;;:2"""'~~;;;;;;;;;;;;;;;;;;;;::JI 8subsicfaryof~Cdi~A.,~tJooofRJ!AJ.7'OIlSie . n.<ftteWed "1 [ ] .. 52$ SQI,lt!1 \I!~! AV8I\llt!.losAngElles. Caifania 90020 C


G) = =..t:=

SA REVISED 11111 (PAGE 2 OF 2)



CalHFA Loan# 0224723

77 of 130

Borrower: Kyle


04:45 PM
(AO ..qulrod by Iho Chili Cod.) (C.A.R. Form AO, ReVISed 11/09t

PAGE. 10/ 11


~ ...~

CAL I F () RN I A ASs 0<: rAT ION

0 F R. E A L'!' 0 R S "


men you enter into ~ rllscll$$ion witi'! i1 real estate agent regarding a real estate transaction) you should from the QUtset undemand what type of agency raiatlonshlp or representation YOLI wish to hlll:ve with the aSl;!nt in the tranS!lotlon.

A Sellers agent under a Iletlng egreel'Ml"It wIth the Seller aots as the agent for the SeUer only, A Seller's agent or a subagent of that agent Ilas the following afflrmstlve obligations.: To the seller. A FidUCiary duty of utmost care, Integrity, hone3ty and loyalty in d~lin!ile with the Sel~(, To the Buyef ~nd ~he Se1ler: (a) DIUg8nt exercise of reasonable skill and care in perfOrma.nce of the agent~ dutll!l3. (b) A duty of honest and mir de~ling imd good raith. (c) A duty to dieclose all facts known to th~ agenf matel1ally a11&ctlng the value or desirability or the property that are not known to, or wIthin the diligent attention and Ob:!8M!Jtion of, the parties. An agent Is not obligated to reveal to either ~rty any confidential information obmined from the other party that does not Involve the affirmative duties set forth above,

BUYER"S AGENT A selling agent can, with a Buyer':s COMl!lnt, agree to act as agent for the Buyer on!y. In these sttuations, the agent is not the Sellera agent, even jf by agreement the agent may r'el::$lve eompene.aijon for SEtrvices l'@nder6Ci, either In full or in part 1i"om the Seifer. An agent acting only for.a Buyer has the
following: affifmat;ive obligat!On&~ To the Buyer: A fiduciary dUty of utmost care, integrity, honesty and loyalty in dealings with th~ Buyer. To the Buyer and the Sel'et: (a) DUIg~nt exercise of reasonable skill and cere in perfotman~ of the agent's dUtlM, (b) A dUty orhonMt and fair dealing and good faith. (c) A duty to Qi~IQ~ allf'ads known to the agent materially affecting the value !;If Qesirability of the property thelt are not known W, or wlth!n the diligent attention and obMlrv:atlon of, the parties. An asant Is not obligated to reveal to either party any oonfidentiBil il"lfOrltlatiol'l obtaIned from the other party that does not involve the affirmative duties set rorth above.


A real estate agent, eitl1er acting directlY or through one or more assocIate licenteelJ., can legally be the agerrt (If both the &I11e-r and the Buyer In a ~n~c;:ti(m, but only Wllh the knowledge and consent of both toe SaUa~ and tha Buyer. In a dual agency 51tuaijoM, _he agent has tne rollowing affirmative obligations. to both the Seller and the Buyer~ (s) A fiduciary dLrty of utmost earll, Il"rh:Igrlty, honesty and loyalty in the dealings with either the Seller or tM auyar. (b) Other dutlas to the Seller and the Buyer as sts.ted above In thelr rt:!speCtiVQ sections. In repre~ntillij both SeHer and Buver, the agent may not, without the e)(pl'ElSS permission 01 the respective party, disclose to the other party that the $eJl~r will ac:cept a price less than the lieting pri~ Qr fnal the Buyar wlU pay a price greater than the price offered, The above duties ofthe agenlln 2; real estate transact10n do not reJleve e SEllJer or Buyer from tht:l responSibility to protect his or her own Interests. You should carefully read all agMaments to ;!issure: that they adequately express your undersw,nding of the transaction. A real Elstate agant 1s i!I. pEIrson quaUf1&d to advise about real etXate, If legal or ~e.X advice is desired, consult a competent professional. Throughout your real property transactiOh you may r.:toolv& morEl than one disclosure rorm, depending upon the number I)f agents assiatil'lg In the tra~ctlon. The law r4!lC(ulres each agent with whom have than a cas.ual relationshIp to ])resent you with this disclosure form. You should read Its contents each time it i~ preaented to you, and the real estate agent in your specific tranGaciion, This disclosure form includes of the Civil Code m fQrtte ",. page 2. Read it camfuUy. WlE ACKNOWLEDGE RECEIPT OF A THE CIVI~ COD!: PRINTED ON THE BACK (OR A

SEPIlAATE o Buyer E9 PAGE).0 Seller

Landlom Landlom

Ten.nt Ten.nt


1: : 4'/k'/<&c2fJ 1 I' ." \,

I )

o Buyer 0 Seller 0

Oate _ _ _ _ _ _ _ _ __

~~!!'-"~lli:~..!~~:.,;~\.!i~~gg~~,,--------- D~r:Llc.#_..:O.::'.:;8;;2..:4.;;4;;;.2;;;.5_ _ _ _ _ _ _ _ _ __
DRE Uc. #




AGENCY DISCLOSURE COMPL.IANCE (Civil COd. 2079.14): VvhEln the listing brok~ge comp~1"Iy ~ISQ mplttS4!lnts BuyerlTenant: The Listing Agent shQII have one AD form $iijmd j;}y Seller/Landlord and a different AO rorm signed by BuyerfTenant. , V\lhen SellerfLandlQrd ~nd BuyerlrMant 31'f1 represented by different brokel'Bge companies: (i) the Using Agent shall have one AD form signed by' Seiler/landlord and (II) the Buyer'slTenanfs Agent nil have one AD form slgned by Buyerffenant and either (:flat same or a different AD form presented to Seller/LandklJ'd ~r signature prior to presentation of the offer, If the ~me fQrn'l is used, here: ISELl.ERJl.ANOLORD: DO NoT SIGN HERE) SeDerlLandlOrd Date The copyr1ght law;; of thlt UnHM Stale:a (i~lt) 17 U.S. Code) forbid the unauthorized reproductIon of thi$ form, or any portion 1hareof~ ~ phDlocopy machine or any other moons, Including facsimile or computertzed for~t$. copyright C 1~1~2009, CALIFORNIA ASSOCIATION OF ReAl..TOR$, INC. ALL Rl(lrlts RESERVEO. THIS FORM HAS BEEN APPROVl::O av THE CALIFORNIA A9SOCIA11ON OF REALTORS (CAR,), NO REP~SE:NTATlON IS MACE M TO THE LEGAL VALIDITY OR AOEQUACY OF ANY PROVISION IN ANY SPeCl~IC TRANSACTION. A REA~ ESTATE BROKER IS THI; PERSON QUALIrleO TO ADVISe ON REA~ ESTATC1 TRANSAC1l0NS. IF YOU CESIRE ~EGAt. OR TAX AOVICE. CONSULT AN APPROPRIATE PROFESSIONAl.. 1111$ ferm Is J,lv811able for use by the entire real aslatlil indu$!:ry, It 1$ not Intended to Identify the usera& 8. REALTOR, REAI.ToR!$ a Jegbtel'~ (X)lIe:t;l1lve membership mark which may be U500 onlY IW members. of the NATIONAL ASSOCrA110N OF ReAl.TORS. Who !!oLlbecrlbe kl lie Code of Ethics. Publi$/'ied Md DWlribul&d by. II REAL ESTATEOO$INCSS SEflVICES.INC, [ ] asub$ldittry r;I f;tt CsIIbrnia ksreiation of REALTORSS .e eo 525 Sou" ViI#J A~o!:IIUil.l.os An~Ies. Caifomia 90020 Revlowed by Date ~ OPl'olllUWrrV

AD REVISED 11/09 (PAGI11 OF 2) DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP (AD PAGE 1 OF 2) Agent: Daniel Ray Ramsey Phone: 916-812~3267 Fax: 916760..0844 Prepared usmg zipForm !jottware Broker. Ramny Raid Estate and ceV't corp. 769 47th stl'8et Sacramento, CA 96819

~ .....

CalHFA Loan# 0224723

78 of 130

Borrower.: ~'~le~IIII 1


04:46 PM


11/ 11

0111 THE FRONn

transaction. and Includes a person who Is lIcensed as Q real eetate broker undi:!r Cha~r 3 (commenctng with Sealon 10130) of Part 1 of Division 4 of the Business and Pro1l!lssions Code, and under whose license a listing Is exec:l,lted or an offer to purmase is obtained. (b) "Assotiate licensee~ means a p~l'$O!"I whO is liCensed Sq a r.el;ill e2;It;lte broke~ Dr sale!5lperson under Chapter 3 (commencing .....ith S!:iction 10130) of Part f or Oivlslon 4 of the Business 21nd Prof'l!lMlans Code and Who la either licensed under a broker or has eRtered Into a written contract with iF!- btol(er ta act as th~ brokers agent In COtlhectiOl"I with ,acts reqtlinng a real estate license and to fUndion Under the broker's supervision In the capacity of an: associate licensee, The agent in the real property transaction bears responsibility for his or her ,at>SCX:iElle licensees whO ~rrorm as agents OJ the agent VVhen an associate licensee o.wes a duty to any prindpal, or to any buyer o.r sellar who. Is ncd a p,nncipa.I, In a. reel property transaction, that duty 1& t:qulvalent to. the duty to. that party by ffie broker for whom the associate licensee funcUoos. (el 'Buyer" means a tranSferee In it real property trilnS8ction, i!!Ind Includes i!!I permn who execules an offer to. purchase rei!!ll property from a seller through ;!!In agent, o,r who. seeks the ~JVicei of an agent fn more than a C'ae..!al, tra.rwitOry, Qf preliminary manner, with the object of entering into II real property transactlo.n. "Buyer" Includes vendee or lessee. (d) "Dual agent" means an a~ent acting, either direrjly Qf through 1;\0 associate licensee. as agent for both tM aeller and the buy~r In a real property transaetJon. (e) "U5tlng agreement' mea~ a (:Ql1traet between an owner of real property and an agent, by which th& agent hu been authorized to sell tho real propertY or tQ find or o~in ~ buyer, (I) "Listing agent" means e person who has obtained a listlng of rea~ property to aet as an agent tor compensation. (q) "Ustlng price" is the amount expressed In dollars specified In the listing 'or whIch the s@lIarlswllllngtosell the real property through 1M Ilt;ting agent. (h) Otferlnfl prlCEt" Is the amount expressed In dollars sp8cll'led In an ott'lI!lr to purcnase: for WhiCh the buyer Is wRUng to byY the real proP'lI1Y. ('l "Offer 10 purehasa means a written ~ntnlct e)(eeut8d by a buyer aetlng through a seiling agent which betmea the contract for the- sale of the Teal pro~ upon acceDtance by the seller. (i) "Real property" means any estate speoified by subd"M3bn (1) or (2) of Section 761 in property which constitutes or is Improve(J wl~h one to fOur ~lHng unlls, any leasehold 11\ this type of propertY' exoeadlllS one )lear'~ i;lu~tion, and mobile homes. when offerea for $ale or 8Q!d thrQ1.l9tl. ai1 ~~nt pur.stJant to the authorlty contained in sedion 10131.6 oflhl;! BU8ineq$~nd profeeaions Code. (k) "Real propany tranSi!llction" means a transaction for the sale of real pro~rtv in whICh an agent is employed by .one or more of1he principals. to act in that transactiol'l, and melUdas itUi!>tlng or an offer to purchase. (I) "Seu," "sale, or "soldu refef$ to e transaction for the t~nsfer of real property from the seHer to 1he bl:'Yer, and InCludeS a)(ci'anges o( real property between the selier and b~r. transactions for the oreation of a real propertj sales contract within the m~nin9 of SectiOn 2985, ;!;nd transactions forthe creation 01 a leasehold exceeding one yeats duration, (m) "Seller" means the transferor In a real property transaction, and lnolu~ei an owner Who lists real pr.oll@rtVwlthanagent, whether or not a transfer results, or who receives an offer to 'purchase real property .of which he or she is the owner from an agent on behalf of another. "Seller"' Includes both a vendor and a lessor. (b) ~seiling agent means a Ilsllng agent who acts alone. or an agent who acts in coopel1ltlon with ~ rlStilig agent, and who :&aIls or finds and obtains a buy-er for the rear pro~rty, or an agent Who IOC!ites property to.r a buyer or who finds a buyer for :a property for WhiCh no liStIng ~nd presenl$ an offer 10 purchase to tM ~"er. "SUbag!!!nt" meaflEil ~ perwn tQ w!'tQm an agent d6Iega:h!Js. agency powers as provided in ArJ:i9fe 5 (commenc;ing with Section 2349) of Chapter 1 of Trt e 9. However, usubagenf dQee not inlu~e an associate dcensee who Is acting under the 3uperviSlon of an agent In a real property tIlmsadion.

20~.13 As U$l:!d I~ seotlO'ns 2079.14 to 2079.24, Inclusive, the following terms have the toUowing meanings: (<11} "ASl!:!l'Il~ me:ans a person acting under provl'Slons of title 9 (commencing with SectIon 2295) In a. real property



2879.14 lkitlng agents and selling agents shall provide the seller I;Ind buyer in a real property transaction wflh a eopy of tM dlSC1o&IJre form ~pecified In &:!dion 20'1S.16, and, except aG provided In $Ybdivi~n (c), PiJh~1I obrein a signed acknowledgement of receipt tram that EiBller or buyer, except as provided In this section or $edion 2079.15. as fQlI~ (a) 1M lISting agl!lnt, It any, :!hi!!ID prOVide the diselO&lre form to the Miler prior 10 entering fmo the fisting agreement, ('" fhe selling agent shall provide the disclosure foon to tile se!Ier as GOQn as prad:i~ble prior to pre~ntin.g the "Iler wiCh an offer to purchase, unle$s Die seiling agttnt previously provldtd the seller with a copy of the dISClosure form pursuant to subdivliion (a), c) Where the eeliing a~enl does not deal on a li;u::e~to-raoa ba:slS With tM seller, the dlsoJosure fooo prepared by the selling agent may be furnIShed to the seller (and aek'nOWledgement of receipt obtained for the eelling ~ant from the seller) by the 1IS1lng aganl. or the MlRng 2g8nt may ~lIv&r tl'"te dlseiOSUfft (onn by O!trtlfted mall addressed to the seller at hie or her I~st Known address, In which 0i!Ia!! no slaned acknowledg&ment of receipt 1& fequll'fld.\d) The Milling agent shall provide the disclosure form to the buyer as soon as prn:eticable nrlor to exacutfon of the buyer's ofter to pul'Ghase, except tha It the offer to purOhase Is. no.t prepared by the seiling agent. the selling agent shell pre~nt the di&elOsUre form 1(1 the buy~r not laler ~n u,@ ne)d bUSiness day anar the selling agent receives the Qffer 10 purchase from the buyer. 2079.18 In any olrcumstance in which the seller or buyer refu~s to itGin an aCk:now1edssmenl of receIpt pUl"SUanl to. Section 2079.14, lhe agent, or an assoclatellcensell!l actIng for an agent, shall set forth, sign, and elate a wlitten declaration of the fadS (lftM refusal. 2079.16 Reproduced on Page 1 of this AD form. 2D79.17 (a) As soon as practicable. the sefling agent e.het:1I di5'l;Ioee 10 tile /;IllYElI' and seller whether the samng agent Is acting In the re81 property transaction exClUsively as the buyer's agent. exclusively as the 5elle(s agent, or a6 a ~ual aset'lt \'@pri:!~ntlng bath tha J)Uyer and th& selltr. iNs. I'fIlatloMi'lJp shall be confirmed in the contract to purcnase and sell real property or in a !ieparate w!i1ing e;x;ecutect or acknOWledged by the saller, tnfl buy&r, and the seiling agent prio.r to or coincident With EOtecllllo.n Of Inat contract by the buyer and the seller. respectively. (b) As soon as practicable, the listing agent ahall diSCloS4:! to the seller whether the neting ~gent is acting in th~ real property transaction exclusively as the seller's agent. or as a dual agent representing both the llliyer and seller, This relationship shall ~ contlnned In the contract to purchase and sell real property or In a separate writing executed or acknowledged by thE;! seller and the listing sgil'nt prior to or coincident wIth tl'te execution 01 that contract by the seller. (c) The confinnation required by subdlvlSlon~ (a) and (b) .shall be In the following tonn. (00 NOT COMPLETE, SAMPLE ONLy) is the agent of (check one): 0 thE! seller e)(cluslv&ly: or 0 both the buYlI!lr and seller. {Na~ ()f Lii3lng Agent) (DO NOT COPL.El'E. SAM~Lc ONLy) is the agent of (check one): CJ the buyer exa!u!iiiVsly; or CI the saller sxclualv6ly; o,r (NaTnel ofSeUing AgfOOl if no! t~e$lllimo~ttile [!$ling Agent) 0 both tha nuyer ~nt;l seDer. (d) The di$!I)$UI'> and oonflrmatlon required by this section shall be in addition to the dl!iqQsure reqUIMd bY Seetion 2079.14. 2879.18 No eening agent in a ~al property tranaadlon may act as an agent forthe buyer only, when the eellios agent Is alSO acting as the listing agent In
the transaction.

2019.19 The payment of compensation or the obligation to ~y cortJpansauon 10 an agent by the seller or buyer is not necessarity detennfn~t1ve of a partJeUJar ageney relationship between an agent and the eeller or buyer, A listing agBnt i!!IM a seiling agent may agree to share any compensation or commlselon paid, or any rlglit to any compensation or ~mm~n for wtlich an obUsation al'lses as the J'@Isultofa real estate transactio.n. and the tenna of any such agrQament shall not neoessarily be detenninalive of a particular relationShip. 2079.20 Nothing in this article prevents an agent fmm SBF6ctlng, ;as 2 condition of the agenfs employment, a specific form of agency relatjQn~lp not specifically prohibited by this. article if1he requireme~ of $ecUon 2079.14 and Sectlo.n 2079.17 are romplled with.

2079.21 A dUil agent ahe:U riot dlSClOSI:! to HIe buyer that the seiler Is willing to sell the property at ~ price Ieee. than the listing ptice, WithQUl the express wrlHQn consent oHhe seller, A duall;\gent shall not disclo5e to the $E!~er mat the buyer Is wlUlng to pay a price greater tha.n the offering price, wittlout the e)(press Vifitlan consent ot the buyer. This section does not alter in any way the dUty or responSIbIlity of tl dual ag&nt to, any prindpal with respecl to GQnfidential informiilltiol'l olherthan price.
2019.22 Nothing In this artiole prec:ludes a listing agent fro.m also being a seiling. agent. ana the combination of ttie$$ fUnctions In one agent dOEls notl o.f rtself, make Ihat agent a dUi!!ll agent
2019.~ A IXI'ntraet blttwoen the prIncipal and agent may be modified or altered 10 Chan~ tI'le agency I'fIl!tlonsnlp at any time before the performance of the act which is the object of the agency with the written consent of the partlos to the agency rel~onship. .

2078.24 Nothing !n thiS article snail be construed t9 either dimlnle.h the duty M diselo.sure owed buyers and sellers by agents and their aisociate Ucen$E!~ :subagente. and employees or to relieVe agenta and their assoolate licensees, GUbagenw. an~ emplOyeM !'rom liability !'or their conduct !n connection with aets governed by this article orwr e.ny breach ofa flduelary duty or a duty of disclosure.
Buyer'S/Tenant's Initial:\,; ( ) ( )

COpyright 0 19912009. CAUFORNIA ASSOCIA11ON OF REAL"rOF:i:S.INC.

AD REVISED 11108 (PAGE 2 OF 2)

Sellers/landlord Inlttals <

, ReYiewed by


) 1.:.1
~':'HI1I11$ 502. A



CalHFA Loan# 0224723



08:35 PM



J.,1tJ::.. ASS 0 I CIA ~. N IA CAL F 0 .. _~ I ION

This is a eaunter offer to the:

. For use by seller or Buyer. May b. uoed for~M"""~Iil~p~la~CO~u-nt=.r Offer. OF REALTORS" (C.A.R.FormCO,Revld11110)


Ca~tomia Residen~al POl,lrr;hsee Agreeme.m, ~II9DlbQr 16. 201.1 ,on properly known as _ __


Decem!?er 21. 2011



unla5 5pt;K:ifi(lally Unless o1herwi5e t1g~ in

but are not by aU partle5. are fjxcll.ld$d 1rom the final agreemant of this Of another Counter Offef. amount(&) will bo adjustGd in 1hQ samo proportion as in the original

. C. Purchase price to be $207. 000

Diposit to be snhmittQd to Qscrow upon shortsale approval

When depo3it ~C~8B nonrefundab16 and in!p!ct~on cont1ngency is removed, saller to issue 30 dar notice to tenenats C~OSB or 8SCrDY to he 30 days from bank shortsale approva~ Puurcahse funds to be deposited in time to close escrow



addenda are incorporated Into this Counter

oro: __~D:'Ad::d:e:nd:":m~N:o~.::.===========
0 ______________ (date), at



RlOtfT TO ACCEPT OlHER OfFERS: Ifthie 13 a Seller Counter Offer, (i) Seller ha$ the fight to conUnU8 to off(lr the Property for sale or for another transaction, and to accept any other offer at any time prior to Acaeptanoe. as desoribed in paragraph 3 and (10 Seller'Go 9QCeptance of anothar offer prior to Buyer's Acceptance of this Counter Offer) shaD revoke this Counter Offer. EXPIRATION: ThJ~ Counter Offer $hal be deemed revoked and the deposits, if any, shaD be returned unless this Counter Offer is signed by the Buyer or SeUer to whom it is eent and a Copy of the s.lgned Counter Offer i$ pe:l'$onal!y reoelved by the person making this Counter Offer or by
c-c-~~~_o-~~o-~~~~_~____~~c-____~~__~~~~~~c-____________ ,who~a~ortzedroreoeNe

it, by 5:00 PM on thlil third O~"1 Aftarthl!! latar date specified In paragraph 5 or, (if checked) by


PM. This Counter Offer may be executed in counterparts.

($-Signed by Seller In p~rasraph 7 b$l()w and ~ C()py of 'the Cl)unt&r Off(lr SIgMd In p2l~graph 7 Is p~rson2lUy reoelved by Buyer or by 1 _ _ _ _ _ _ _ _ _ _ _ _ _ _...",...,.,..._ _--,.."._=__-,._-,=;-______ , who is authorized to receive it~ by 5:00 PM
on the third Day After the later date specffied In paragraph 5 or, (If cheeked) by (date), at I--~_O AM !,rior to the completion of all of theae ev~nts, Buyer and Seller soall have no duties or obligations for1he purchase or &aIel 'CIf the Flroperty. NOTE TO SEllER: Sign and data In paragraph 5 to make this Counmr Offer.

'001: be

(If cheeked!J MULTlP'LE COUNTER oFFER: SeITer is making a Counter Offet(s) to anotl'ler proa:pecltve buyer(s) on terms that mey or may the same as in this Counter Offer. Acceptance of tllis Counter Offer by Buyer shall not be binding unless and until it ts subsequently


_,-",,!..I), ,1/ _......__ ..,...... . !;~~:t~"L:ti~:;;;~~~~=~;====== Dat' _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ .. Date 12/23./2011






ACCEPTANCE: IIWE accept the above Counter Offer (If checked


SUBJECT TO THE ATTACHED COUNTER OFFER) and acknowledge 12/21/2011 Time





~,=,~TI~I:E_ ~~~~JE!t OFF~R .SIO.NA!U~E UNE: By signing ~Iow, Sellei' GG.fIPts this MuJti~18 Counter Offer.

NOTE TO SELLER: Do NOT sign In this box until after Buyer SlgM In paragraph 6. (Paragraph 7 appliea only if paragraph 4 ia; c:hoekftd..)

1_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Date Data

Time Tlma



(_ _ _ 1_ _ _ ) (Initials) Confinnation of Acceptance: A Copy of Signed Acceptance was personally received by the maker of the Counter Offer, or that person's authorized agent as specified In paragraph 3 (or, If this is a Multiple Counter Offer, the Buyer or Buyer's authorized at AM PM. A bInding AgRement agent as specified In paragraph 4) on (dste) i,. crvated when II Copy of Signed Acceptance is personally received by 11\9 tha maker of tha Counter Offer, or that parson',. authoriuld ag8nt (or, if 1his is a MuHipl9 Counter Offer, 1ha Buyar tIT auyar'~ autborl%:",,~ ~ltr!t) whcttt'lor or not confinnecl In !hl$ doc:umoot. Compl$liQn of thir> eonfinnat{o~ 1$ not legally Nlq ... 11't!<I in order to creme a bimfing Agreementj it i:. ~olv:ly intended to evidence the date that

_ptan... h.. """ortad.

The c:opyrlght Ia-w. 0( tht.I UnllOd Still~ (iltlilt 171J,S. CtJd.) 10rbld th. unautttcriud reproduc1ian afthi& form, or any portion thereof. by photocopy machine or all)' other means, including facsimYe or computerized formats. CopynghtIi!l198f!...2004, CALIFORNIA ASSOCIATION OF ~EAI. TOi='($, INC, ALL RIGHTS RESERVED, THIS FORM HAS BEEN APPROVED BY THE CAU~RNtA ASSOCIATION Of: RSALTORS$ {CAR.}. NO RSP-R5SSNTArtON IS MADS AS TO THe LeGAl. VALIDliY OR ADEQUACY OF ANY PROVISION IN Af'N SPECIAC TRANSACTION. A REAL ESTATE BROKER [S THE PERSON QUAUFIEO TO ADVISE: ON REAl. ESTATE TRANSACTIONS. IF YOU DESIRE LEGAL. OR TAX ADVICE, CONSULT AN APPROPRIATE PROFESSIONAL. ThIs fQITll 18 ~ailibll;t for use b~ thfJ: entirl;t fl)at ~w.w Indum. It it not Inttncltd to Ic\lilnt!fv tI10 user ;.\$ aREALiOR REALTO~ 1$ a t"iiShlt'Gd collective membership mark which may be ue&d only by menibera of the NATIONAL ASSOCIATION OF REAl. TORS wno $1.lbscribe to 1\:$ Code of Ethle& FYbllsl"lod.rId DIWIbIltOd by _


\I :::::!::=/s=7!~f~EALTORSfiI [ ] II 525 South VJrg~ Avanus.l.o8 Angeles, California 90~20 c

IR$vJowed by


CO REVISED 11110 (PAGE 1 OF 1)

Agent: Guillory Phone: (916)487-8393 Fal(~ 1916)487--8280 Broker: C1.tstom Realty & LoaM 3600 Power Inn Road suite H3 Sacramento, CA 968.26

Prepared using zipForm software

CalHFA Loan# 022472-3


Borrower: Kyle



07:21 AM





For use by Seller or Buyer. May be used OF REALTORS" (C.A. R Form CO, Revised


r.;!i1~tir Offer.
Oaoo Deoemter 20. 2011


dated D.oeolllllb.or 16, California Residential Purchaseas ,on P"'l"'rty known ThIs!$. counter otTer to the: [i)2011

by Bli partils.
excluded from the final agr~ement


Inclu.:lon I~~~'!~~

or another Counter Offer. lo.n omount(.) will b. adjusted In the .ame proportIon In 11> ,Iginol



l'pc.hase P%ice


be $220. 000. .PrO!?!!!%'o/ add:l3.. i . 5020 A S'



95B1..9. Se~~er does not accept oontragt i t . 5.9. Gil. P.rop8rf:y wi-I.! remain in a ZllDnth t:o JDOnth lease, al1d selle%' will SIM:'V'I! t:he ten&nt .. 30 day not.iae to vacate upon .tea!!!!!!!tdpg sho:rt: SUf!I .approval ~d't:t:..r, buyer .removipa tlle iusp.s!otioll 9O;Q.ti~9!!!l1ay. a.nd huyeJ;-o :ftu;ds ~o purchase Gtre depes.i t8d in tflsarow.


following oHoched addenda ara Incorporated Into thl. Counter ~r'~'-::-~D~A=dd:.n=d:u:m~N:o~.:::::~========



______________________________= _______
It, by 5:00 PM on lhelh!J:l! Day Allgr th_Jater date specified in paragraph 5 or, Of checked) by 0

IraMaction. and to accept Ilny ether offer at any time prior to Acceptance, aQ deiCribed in paragraph :3 and (Ii) Seller's acceptance of another offer prior to Buyer's Acceptance of this Counter Offer~ shall revoke this Counter Offer. EXPIRATlON; This Counter Offer shall be deemed revoked and the deposits, if any, shin be rururned unle:i:i thili Counter Offer Is sighed by the Buyer or Sell@r to whom it is sent and a Copy of the signed Counter Offer Is pet50rmlly recel ....ed by the person maldng this counter Offer or by ,who Isauthorlzed to receive

RIGHT TO ACCEPT OT~ER OFF!':fIS: II this Is Seller Counter Oller. (0 Sellor has Iho rtght to ""nllnue to ofrerth. Property 10' sal. or

for another




PM. This Counw Off~r may b~ ~)(@outed In counterparts.

____________ (d.te), at


Copy Of the Counter Offer Signed in paragraph 7 is personaUy received by Buyer or by _..,--,-..,-:,-..,-"-,-,..,---,...,...._,,.,....,.,._-,-_:-=_-::.,--:-..,.-"""--;...._ _ _ _ _ , who 1$ authorized to roco". It, by 5:00 PM on the thin:! Day Aft.r the later opeclfled In paragraph 5 (II ohec~.d) by ,date). at A~ ClPM. Prior to the complet1on of all of these events, Buyer and Seller shall have no duties Qr obligations for the purchase or sale of the Property. NOTE TO SELLER: Sign and date In paragraph 6to make this COllnter Offer. , Oate __________________________________ OFFER: D BUYER OR 0 saLER "'AK~S THIS COUNTER OFFER ON THE TERMS ABOVE AND ACKNOWLEDGES RECEIPT OF A COPY.

'no\- bet 1he iame as in thia COunter On'er, Ac:ce~el'lee of thIs Counter Offer by
...~$igne.d by Seller in paragraph 7 be!Qw arll;i

(If checked:)


10 tnaklng. Counlor O.r(o) toshall not prospective buyer,s)and termsItthatsubsequently another on mayor may Buyer be binding unless until or,




Date ..J.l""2{"'2'-!!O~{~20,ulUl_ _ _ _ _ _ _ _ _ _ _ _ _ _ __



CE: I/wE accept the above Counter 0., (If chockod [Zj.SUBJECT TO THE ATTACHED COUNTER OFFER) .nd acKnowledge



12...-"2.:'----"2..)0 t\






NOTE TO SELLER: Do NOT sign in this box until after Buyer 5jgn~ in pal'agtaph $~ {Pi1Iragraph 7 applle$ only If paragraph 41s checked.)

OFFER SIGNATURE LINE: By .igning beloW. Seller acceptsll!ls MUI!Ip~e_COU~ler O~er.

1_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _






'--_ _ 1_ _ _ ) (Initials) Confirmation of AccaptanC8: A Copy of Signed Acceptance was personally re~ived by the maKoIllr of the Counter Offer, or that person's authOrized agent as specified In paragraph 3 (or, If this Is 8 Multiple Counter Offer, the Buyer or Buyer's authorIzed

ogont pe~1ied in peragraph 4) on (date)



TRANSACTIONS. IF YOU OES1~fi: l.E"GAl. OR TAX ADVIce, CONSULT AN APPROP~IAn: PROFi:SSIONAl... This form Is avaIlable for 1.189 by the entire real 93tale industry. lila not Intended 10 Identify the userss a REALTOR!. REAL.TOR Is a registered ctllh!ctJ'IIa membelrShlp rmt!'k Wh~ may b& utfId only l:ly membttrt of lI'Ilt NATIONAL ASSoctAl1CIN 01" REALTO~ Who :s.tJb5trlbiit to 115 Code Of ethIC:&. Pub~shod end Dislribulod by: _ REAL ESTATE BUSINE:ss SSWICES, INC. j R'mitJo"../ml l:)!j Data =~~u\W [ ] tt&lJb$lchty,,'tIl~CI!fl~ftuccklJh>norREAt.rcl<$$ <: .. 525 Sooth Virgil Avenue, Loa ~Iee, Califomia 90020

is created when a Copy of Signed Acceptance is personally received by the the maker of the Counter Offer. or that person's: iU.ltho.ued agent (or, ff this is a Multiple Counter OfferJ the Suyer or Buyer's authorized agent) or not confirmed in this document. Completion of this confirmation is not legally required in order to create a binding Agreement: it is solely Intended to evidence the date that AcctJptance has occurred. The copyright laws of the United Slatl!lll (11tle 17 U.S. Coda) forbid the URauthorized reproduction of this tom, or any portion thereof. bv pIlotocopy machine or any other means, Including fact;tlmlle Qr computerl~ed fonnats. CO!)yrlglrt: 10 19M~2004. CALIFORNIA ASSOCIATlON. OF ReALTORS, INC. ALL Fl:IGH1S ReSERVEO. THIS FORM HAS 'aEEN APPROVED BY THE CAliFORNIA ASSOCIAnON a= REAl.'rORS (CAR.). NO REPRESENTATION IS MADE AS TO THE !..SGAI. VALID1TY OR AOEQUAOV OF ~y PROVISION IN ANV SPeOIFIO 'f'rwJSACTION. A REAl.., ESTATE BROI<'EFI: IS THE PERSON OUAUFlEO TO ADVISE ON ~L ESTATE

PM. A bln<llng Ag"'......nt


CO REVISED 11/1(1 (PAGE 1 OF 1)


Agant: Daniel Ray Ramsey

Broker: Ramsey Real E$tate an~

Phone: 916-812-3261 r=ax: $16.160..0644 D~v't Corp.. 769 '7th stre~t Sacramento, CA 96a19

Pre\>O,ed U$lng zlpForm(!l .oftware

Borrower: Kyll. . . . . . . ..

CalHFA Loan# 022472-3

81 of 130


07:38 AM


1/ 15




For Uso With Slngll!!! Family Rt$Id~1 Property - Attached or Detached

(C"A.R. Fotm RPA-CA. Revised 4110) 1. OFFE~: A. THIS IS AN OFFER FROM



Saoramamnto: Cit

B. THE REAL PROPERTY TO BE ACQUIRED is described as 5020 A

~ituated 111 ,California, f'Property").

A1>$8$$or'$ P.atoel NQ.

CQunty of

D. CLOSE OF ESCROW "'all occur 011

(dote) (or

A. DISCLOSURE: Buyer and Seller ea(;h acknowledge prior receipt of a "Disclosure Regarding Real Estate Ageney ReJallol'l$hlps"

(CAR. Form AD).

a. POTENTIALLY COMPi:nNG BUYERS AND SELLERS: Buyer and Seller each acknowledge receipt of a disclosure of the possibility of multiple representation by the Brokar r(!'praMnting th~t prih(;ipal, This dieclOWl'e may be part of a listing agreement. buyer representation agreemoot or separaUl dOl.lment (CAR, Form DA), Buyer understands that Broker representing Buyer may also represent other potential buyers, who may consider, makt;) offer$. ~n Of ublmately 8(lquire the Property. Seller understands that Broker representing SeDer may also represent other sellel'fl with competing properties of interest to this Buyer. C. CONFIRMATION: Th~ foUowlng a~ency relationships are hereby confirmed forthis transaction: Listing Agent (Print Firm Name) is the agent of (check ona): 0 the Sener el:lusll/ely; r 0 both U'le Buyer and Seller. Selling Agent CUstom Ma1.t::y m1d (Printl=irm Name) (ifnot'lhe same as the lJ$tIng Agent) is the agent of (check one): the Buyer exclusively; or the Seller exclusively; or both the Buyer and SeDer. Real Estate Brol!rs art;) not partl$$ to the Agreement between Buyer and $eller, 3. FINANCE TERMS: Buyer reprl!!$(!lil;$ that funds will be good when deposited with escrow Holder, A. INITIAL DEPOSIT.! OeposihhaU be in the ~mol,lnt of " " , ,",.,', ... ,""',.,.".,' .... __ ............ $ ,IQ aoo 00 (1) Buyer shall deliver deposit d\retly to ~row HQlder by peroonal check, 0 electronic funds transfer. 0 other ===="";:;;;::-::;::-:-::. within 3 business days after acceptance (or 0 Other ); OR {2) (If checked) 0 Buyer has given the <leposit by perroonal check (or 0 ) tl) the agent SlJbmitting the offer (or to made payabl1!!!10 rhe deposit shall be held ul'lca$hed until A~tal'lee and then deposited with Escrow Hoider (or 0 into Sroker's trust account) within 3 bue:iness- days after Acceptance (or 0 other ). 8. INCREASED DEPOSIT: BUyer e.hall depoe:itwith Escrow Holder an increased deposit in the amount of ........... $ _ _ _ _ _ _ __



Days After Acceptance, or 0 ~-"''''''''----:-::---c-:::-::--'''''''''''----. If a I1quklated <lamMe& clauae is incorporated into this Agreement, Buyer and Seller shaU sign a separate ~quidated damages clause (CAR. Form RID) for any increased deposit at1he time it is deposited.

C. LOAN(S): (1) FIRST LOAN: in the amount of. " ' , " , ............ ,....... . ....... $ _ _ _ _ _ _ __ This loan win be conventional finanoing or, if checked, 0 FHA, Cl VA, D Seller (CAR. Form SFA), assumed financing (CAR. Form PAA), 0 Other . This Joan shall be at a fbted rate not to exceed % or, 0 an adjustable rate loan with initial rate not to exceed %. Regardless of the type of I(lan, Buyer 5ha1l pay pointe. not to exceed % of the loan amount. (2) SECOND LOAN: Intheamountof ................ , .......... , ............ , . ,",.,"'" $ _ _ _ _ _ _ __ 1his loan will be conventional financing or, if el'le(:k~d, 0 seU~r (CAR. F(lrm SFA), 0 a500med fihtmcing (CAR. Form PAA), 0 other , ThIs loan shall be at E!I fIXed rate not to exceed :c--:--,.,- % or, 0 an adjustable rate loan with initial rate not to exceed %. Regardless, I)f the type of loan, Buyer shall pay points not to exeeed % of the loan amount. (3) fHANA: For any FHA or VA loan specified above, Buyer has 17 (or 0 ) Days After Acceptance to Deliver l;o Seifer written notice (CAR, Form FVA) of any lender-required repairs or costs that Buyer requestt; Seller to pay for or repair. Seller has no obligation to pay for repairs or satisfy lender requirements unless otherwIse agreed in writing, O. ADDITIONAL FINANCING TERMS:


E. BAL,ANCE OF PURCHASE PRICE OR DOWN PAYMENT: in the amount of. , , , . , , , , , , , , , , , , " .. , ..... , .... $ _ _ _... 1",9",5..Jt0ll.00"-"o,,,o,to be deposited with Escrow Holder within sufficient time to close flserow.




.... )


~~:~rs :~~.~.;

QQpyrI.lJht 1_ of the Unitl!d 8tate& (TItle 11 U.<l. Codtl) fom/d the uMulhllrl:!!lId mprodUctk:ln

l!.nr jXI!tlon tIwfwf, by ph9trx:Qpj' mlr;h!nli or .any o!her mliaM, Including f<leD1m/kI or compuMrlzed formats. Copyrig/ll 0 1991-2010, CAI.lFORNJA ASSOCIATION OF REALTORS, INC, AU. FOOHTS RESERVED.


. . . .;; ____

205 c 000.00

farm. or


Agent: Guilfory Broker: Cw;tom Rea

p",I"''"'' ...[ng zlpF_ . _...

Phone: (916)487-8393

Fax: (916)487-8280

3600 Power h1l''I


sujte H3 sacramento. CA 95826

CalHFA Loan# 022472-3

82 of 130

Borrower: Kyld. . . . . .


07:39 AM


2/ 15

5020 A
Property Address:

CA 95819 Date:



16, 2011

G. VE~IFICATION OF DOWN PAYMENT AND CLOSING COSTS: Suyer (Dr Suye(. lender Dr loan broker pursuont to 3H(1)) sholl, within 7 (or Days After Acceptance, Deliver to Seller written verification of Buyer's down payment and closing costs, (If checked, ~ verifica~on attached.) H. LOAN TERMS: (1) LOAN APPUCATIONS: Within 7 (or 0 ) Days After Acceptanee, auyer shaU Deliver to SeIer a: letter from lender or loan bl'Qker stating that, b~d on a review of Buyer's written application and credit report, Buyer is prequalltled or preapprowd tor any NEW loan specified in 3C ahovE!. (If checked, 0 letter attached,) (2) LOAN CONTINGENCY: Buyer shall act diligently and in good faith to obtain the designated Joan(s). Obtaining the loan(s) specified above is a contingency of this Agreement unless otherwIse agreed in writing. Buyer's contractual obligation::J to obtain and provide deposit, balanoe of down payment and closing cost'$ are not contingenci&& of this. Agreement. (3) LOAN CONTINGENCY REMOVAL: (I) Within 17 (or 0 ) Days After Acceptancet, Buyer shall, as speci~d In paragraph 14, in wrltlf'lg remove the loan contingency or canoel this Agreement; OR (II) (if checked) 0 the Joan contingency shall remain in effect until the designated loah$. are funded. (4) IXJ NO LOAN CON'J1NGENCY (If ~ecked); Obtaining any loan 'iJPecified above Is NOT ~ <::ontingency of this As(eement. If Buyer dOB!> not obtain the loan and as a result Buyer doe$ not purchase 1he PrQPerty, Stller may be entitled to Buyer's deposit or other legal remedies. I. APPRAISAl. CONTINGENCY AND REMOVAL, This Agreement Is (Qr, W <hooked, IXIIs NOT) contingent upon. written approl..1of Ihe Property by a licen$&d or certified appraiser at nt;> lese. than file specified purchase price, If there is O!I 1o00n contingency, 8uYI!lr'.s removal of the loan corttlng.ency sl1all be deemed removal of this appraisal CQntlngency (or, 0 if checked, Buyer shall, as specified in paragraph 14B(3)1 in writing r&mQve the appraisal contingency (lr eancel this Agreement within 11 (or ) Day& After Acceptance). If '!here: hi no loan contingency, Buyer shall, as specified in paragraph 148(3). in writing remove the appral$al contingenoy or cancel this Agreement within 17 (or ) Days After Acceptance. J. !XI A,lL CASH OFFER (If checked): Buyer shaU, within 7 (or 0 ) Days After Acceptance, Deliver to Seller wrlttGn lIerification of SuffICient funds to dose thls nnstl;ction, (If checked, !XI verlficatlOl1 attached.) K. BUYER STATED FINANCING: SeUl;!!r ha6 relied on Buyer's representation of the type of financing specified (including but not IImi~ed ~O. aG applicable, amount of down payment~ contingent or non contingent loan. or al! cash). If Buyer sQeks alternate 1inancing, (i) Sellar has no obli!;lation to cooperate with Buyer's effol't$ to Obtain such financing, e.nd (Ii) Buyer shall also pursue the financing method specified in this Agreemehl:. Buyer's faJllln!! to ~cUi" alternate financing does not $'XCJJSIi!! Sl,Iyer !Tom the obligation to purcha$e the Property and close escrow as specified in this Agreement ... ALLOCATION OF COSTS (If hecked); Unless o1he1Wis1!l $petlfled in writing, this paragraph 'Only determines who is to pay for thl!t il"l$pec'tlon. te5l or service ("Reporf) rnelitioned; it does not datormine who ii'S to pay for any work recommended Qr identified in the Report. A. INSPECTIONS AND REPORTS: (1) 0 Buyer 0 Seller shall pay for an inspl!totlon and report for wood destroying pesta end organisms ('Wood Pest RGptlrt") prepared by

{2) (3)

=-::-_-:::-::".,,-...,.-::-_.,-:-:-_--,,-==,-,-,_-.,._=_,.-__=-""'==_ a registered structural pest control company. 0 Buyer [j Seller ahall pay to have S&ptlc or private sewage disposal systems pumpQd and

D Buyer 0

Seller shall pay to hav" domestic wells tested for water potability al'ld productivity _

0 0 Seller shall pay for OJ natural inspection or report .!XI the following Zone (6) D Buyer 0 SeUer shall pay for the folfowlng IIiQPection or report B, GOVERNMENT REQUIREMENTS AND RETROFIT: (1) 0 Suyer 0 Sl!Iller shall pay for lij,l'I'Ioke detector installatfon and/or wa~t' heater bra~hg, if required by Law. Prior to CIQse Of Escrow, Seller shall provJ(:h, Buyer written statement(s} of compliance in aeeQrdance with state and local Law, unless exempt, (2) Buyer Seller shall p~y the> cost of compliance with any other minimum mandatory government retrofit standards, infJ,pections and reports If required aa a condition of dosing escrow under any laW. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
(4) 0 Buyer (5) Suyer


alSclosure ~~o~rt~p~r.~p~.r~O~d~b~Y




Escrow Holder shuD be (1) 0 Buyer W Seiter shallI_


(%) 0 IXJ Seller Owner's tiHe policy to be pay forby _ issued ow'nn:.(=.:.:Jijj:O~ln:':"':.:nc:.~p:o:;cy:.:p:e~:-fie:d~in~p:.:ra:gra:p:h~1~2:E-===:::::===========:: (Buyer shaft pay for arry tiHe insurance polley insuring Buyer's IendQr, unfe89 o1herv..;se agreed in writing.) OTHER COSTS:




(1) (2) (3)

Buyer Buyer

(4) 0 Buyer 0 Seller 0 0

Buyer lesued by

CJ Buyer 0

IXI SeRer shall pay City tran$f&r tax taX'fee LII Sener shall pay CQut'!ty II'$nsfer or or

Seller shall pay Homeowner'a Asaociation ("HOA") transfer fee shall pay document preparatiM11: Seller shall pay for any private transfer fee _ ...


(G) 0 Buyer 0 Seller shall pay the cost. not to excl!ted $ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ , of a one-year home warranty plan,



o AlrCondltl~r DPQQlISpa 0

, with the foHowing optional coverages: Code and Permit upgrad& 0 Other: Buyer is informed that hQl'/'te wartsnty plans have many optional coveragEis In ackHtion to those fisted above. Buyer is advised [0 IfI\/aatigate these coverages to determin$ tho$$: thelt may be GlJitable for Buyer.


::~: ~ S.II~(

Soll.r shan pay for ""'. pay fO')

S.U.r', Initlolo (




I .


. Reviewad



Borrower: Kylel

CalHFA Loan#


83 of 130


07:39 AM


3/ 15

';020 A

Str" .. t
Date: December 16, 2011

Property Address: Sacramsmnto, CA 95819 5. CLOSING AND POSSESSION: A. Buyer intends (or lXJ does not Ili1end) to occupy 1he Property as Buyer's primary residenoe.
B. SeHer.occupied or vacant property: Possession shan b& de!lvflr(!,d tl) 61.1yer at 5 PM or (

Of Escrow; D on ; or 0 no later than Days After Close Of EscrQw. If transfer of 'title i!nd pO&$eselon do not oCCUr at the same 'time, Buyer and Seller are advised to: (i) ~ntar Into a written oooupancy agreement (C.A.R. Form PAA) Pl!lfl!lSl'l!Jpn 2); and (il) comult YlIi1h their insurance and legal advlsor'$.

AM 0 PM), on the date of ctose:

C. T.... nt..,.,.,upie<l property:

(i) Property shall be vacant at teast fi (or 1m 2.4 ) DaY$ Prior IQ Cloee Of E&croW, Unless otherwise agreed in writing. Note to Salter: If you are unable to deliver Propmty vacant in a~ordance whh rent control and other applicable Law, you may be in breach of this:
Agreement. OR (ill (If checked) Tenant to remain in possession. (CA.R. Form PAA, paragraph 3) D. At Close Of E$orow, (n Setler assigns to Buyer any assignable warr.. nty rlghts for Item& Included In the sale, and (ii) SeGer shall Deliver to Buyer available Copies ofwarraniies. Brokers cannot and will not 4etermlne the aesignQbiOty of any warranties. E. At Ctose Of Escrow. unless othetWise agreed in writIng. SQller $hall provide keys and/or means to operate all locks, mailboxes, security systems, alarrn~ and garage door openers_ If Property Is a condominium or 1Qe.ted in a common intere~t subdivision, Buyer may be required to pay 21 deposit to the Homeowners' Association C'HOA,,) to obtain keye. to accessible HOA facilities, 8. STATUTORY DISCLOSURES (INCLUDING LEAlJ.BASED PAINT HAZARD DISCLOSURES) AND CANCELLATION RIGHTS: A. (1) Seller shall, within the time specified In pl!lragraph 14A, DerIVer to Buyer. if required by Law: (i) Federal Lead-Based Paint Olsclo5Utes (CA.R. Form FLD) and pamphlet C'Lead Disclosures"); and (if) disclosures or notices required by $ectlon$ 1102 ct, eeq. and 1103 et. seq. of the Civ~ Code ("Statutory Discloe.uresj, Statutory Disclosures include, but !ire no~ limited to, a Real E5tate Transfer Disclosure Statement (,'TDS,,), Natural Hazard Disclosure Statement C'NHDj, no~ee or actual knowledge Qf release of megal controlled substance, notice of special tax and/or assessments (or, if aNowed, &Ubstantially equivalent notice regarding the Mello.-Roo:& Community FaelUties Act and Improvement Bond Act of 1915) and. if Seller hat> actual knowledge, of industrial use and military ordinance location (CA.R. Fonn SPO Of SSO). (%) Buyer $hall. within the time specified In paragraph 14-9(1). return SIgned Copies of the Statutory and Lead Disclosures to SeUQt'. (3) In the event Seller. prior to Ck>se Of Escrow, becomes aware of ~dvet'$e conditions materially affecting the Property, or any material inaccuracy in disclosures, infonnatlon or reprl!t$entatiot'!$ previously provided to Buyer, SeDer shall promptly provide a $Ub$eqUeht or amended disclosure or tlod~, In writing, CQvering those items. However, i!l subsequent or amended dlsclo$Ure shall not be required for condltlon$ .and matt.:rlal inaccuraeies of which Buyer is otherwise awar~. or which are disclOSed in reports provided to or obtainMl by Buyer or ordered and paid for by Buyar _ (4) If any dleoloeure Or notice specified in 6A(1), or subsequent Qr amended disclosure or notice is Delivered to Buyer after the offer 1$ Signed, aUYer shan have the right to cancel this Agreement Within 3 Cays After Delivery in person, or 5 Days Aftflr DelivaI)' by deposit 11'1 the maij, by giving written notice of cancellation to Seller or Setler's agent. (5) Note to Buyer and Seller: Waiver of stal.'Utory and Lead 0i5do5Ures is prohibRed by Law. B. NATURAL AND ENVlRONMENTAl HAZARDS; Within the time specified in paragraph 14A, Seller shall, If reqtJlred by Law; (i) Oeliver 10 Buyer earthquake guides (and qU~Qnnsire) and environmental ha2srds booklet; (II) even if exempt from the obligation to provide a NHD, disclose if the. Property Is located in a Special Flood Hazard Area; Potentle.1 FloodirIQ (Inundation) Area; Very High Fire Hazillrd Zon.e; State Fire Responsibility Area; Earthquake F~ult Zone; Seismic Hazard Zone; and (iii) disclose any other zone as required by Law and provide any other infonnation requlrad for those ZOhee, C. WITHHOLDINO TAXES: Within tho time $pCcified in paragraph 14A~ to avoid requIred wlthholdlns, S~ler shall Deliver 10 Buyer or qualified substitute, an affidavit sufflclal'lt to QQmply with federal (FIRPTA) and California withholding Law, (C.A.R, ~orm AS or as). D. MEGAN'S LAW DATABASE OfSC1.OSURE: Notice: Pursuant to Section 290.46 of the Penal Code, infonnation about :speclfled reglstered sex offenders is made available to the public vIa an In~ernet Web eite maintained by the Department of Justice at W\W{,l'I1egans! Depending on an offender's crimInal history, this information will include either the address ~t which the offender resides or 1he oommunity of resida:nce and ZIP Code in which he or she resides. {Neither Seller nor Brokers are- required to check this website. jf Buyer wan~ further 1nformation, Broker reCQmmends 1hat Buyer obtain information from this website during Buyer's inspection contingency period. Brokers. do not have expertise in this area_) 7. CONDOMINIUM/PLANIllED DEVELOPMENT DISCLOSURI'S: A. SELLER HAS: 7 (or 0 ) Days After Acceptance to disclose to Suyer whether the Property is a condorn~nlum, or 1$ located In a planned devtllopm~nt or Other oommon Interest subdivision (CAR. Form SPQ or 8S0). ) 6. If the Property is. a condomirdum or 1$ located In a planned development or o1her common interest subdlvl&lon, Sellet has 3 (or 0 Days Aft~r Aot!!ptance 'to request from the HOA (C.A.R. t:orm HOA): (I) Coplel;i. of any doouments. required by Law; (ii) disclosure- of any pending or anticipated olaim or litigation by or against the HOA; (II~ a statement containing 'the location and number of deslgnatad paf1(lng and storage spaces:; (tv) Copies of the most recent 12 months of HOA minutes for regular and special meetings; and (v) the names and contact information of aU HOAs governing the Property (cotlectlvely, ''CI Disclosures"). Seller shall itemize and Deliver to Buyer all CI Disolosures received from the HOA and any CI Disclosures In Sellar's, possession. Buyer's approval of CI Disclosures Is a contlngeny of this Agreement as specified in paragraph 148(3). 8. ITEMS U\lCLUDED IN AND EXCLUDED FROM PURCHASE PRICE: A. NOTE TO BUYER. AND SELLER: tterns list~d as it'tctu.ded or e~luded in the MLS, flyers or marketing mat$l'lalli ilIr~ not iMluded in the purchase price or excluded from the sale unles~ speolfled In SB of C. B. ITEMS INCLUDED IN SALE: (1) All EXISTING fl"""oo and flttings that are attached to the Proporty; (2) EXiSTING elGCtrloal, macl1anical, lighting, plumbing and heating fixturtlls, ooHllig moo, fireplace inserts, gas logs and gratt!$, s(llar $"y$teme, built-In appliances, window and door screens, awnings, shult$f'S., wllidQW CQverings, attaohed Hoor coverings, television antl;lnnaa, l3atellite dishes, private- Il'Itegrated telephone systems, air coolersicondilloners, ~oQlIspa eqUipment, garage door opene:rstremot$' controj'S, maUbtlx, in-ground landscaping, 1rae&lshrubs, water sQfteners, water purifiers, security systE.!tt1aial.errti!J.; (If checked Cl stove(s), 0 refrlgerator(s); and (3) rhe following additional jtems: (4) Seller represents that all items Ittcluded in the purchase price, unI@ss otherwise specified, are owned by Seller. (6) AU items included shall be tran ...ferred free of liens. and without SeUer warranty. C. ITEMS EXCLUDED FROM SALE: Unleee otherwise specified, audio and video componenw. (such as flat screen lVs Bnd speakers) are excluded if any such Item Is not Itself attached to the Property, even jf a bracket or other mechanism attached to the component Is attached 10 the Property;

Buyer's Initiala (


& . . . . . ](==_:-::


Seller's Inltial$ (


RPA-CA kEVISED 4110 (PAGE 3 Of $)





CalHFA Loan# 022472-3



Kyle~S IIIII111P


07:40 AM


4/ 15

5020 A

5tr.... t
CA 95819

f'roperty Address; Sacri!lllemnto,


9. CONDrnON OF PROPERTY: Unless otherwise agr..d; 0) 1118 Property Is sold (a) in its PRESENT physical ("".is") condilion as of the dote 01 Accaptanca and (b) subject to Buyer's Investigation rightc; (if) the Property, in<OlOOlng pool, spa, landscaping and grounds, Is. 10 be maintained in substantially the same condition as on tho date of hoeptanee; and (IH) aN debris and PE!lrsonai property not included In the sale shall be removed by

Seller by Close 01 Escrow.

A. SeDer .haD. within the time speclfled In paregmph 14A. DISCLOSE KNO\I\tN MATERIAL FACTS AND DEFECTS affecUng the Property. including known InsurallC$ claims within 1he pasr: flva years:, and make any and all olher d~rosures required by law. B. Buyer has the right to inspect the property arJd, as specified in paragraph 149, based upon information discovered in thasa Inspections: (i} canoel (hit; Agreement; or (fi) request that seller make Repairs or take other action. C. Buyer is strongly adYised to conduct investigations of tha entire Property in order to d&tarm~e its present condition. S~Uer may not be aware of all defects affecting the Property Or other tactol'$ that BlIyer considors important. Property improvamants may not be built according to code, in compllanoe with current Law, or have had permits Issued. 10. BUYER'S INVESnGATION OF PROPERTY AND MATTERS AFFECnNG PROPERTY: A. Buyer'S acceptance of the condition of, and any ather matter affecting the Property. is a contingency (If this Agreement as: specified In this paragraph and paragraph 14B. WithIn the time specified in paragraph 149(1). Buyer shall have the right. at Buyer's expense unless othelWiae .agreed. to conduct inspections, hwe$tl~tiomi:, tests, surveys and other studie8 ("Buyer Investlgatlons'), including. but not ~mited to, tile right to: (i) inspect for tead-based paint and other lead.-based paint hazarda.; (ii) ioopect for wood dMtroylng pests and organisms; (iii) review the registered sex offender database', (Iv) conflnn the insurablHty of Buyer and the Property~ and (v) satisfy Buyer as to any matter speelDad in the attaehed Buyer's Inspection Advisory (OAR. Form BIA}. Without Sellet's prior written consent, Buyer shall neither make nor cause to be made: (i) invm;ive or destructive BLlYer Investigations; or (ii) insp@ctlons by My governmental buildlng or :z;onlng inspector or government employee, unless required by Law. B. Seller shall make the Property avaHable for aft Buyer Investigations. Buyer shalf (i) as specified in paragrl!lph 148, complete Buyer Investigations and, either remove the contingency or cancel thiG Agreement, and (iI) give Seller, at nQ 1J0st, compfete Copies 01 aU Investigation reports obtained by Buyer, which obligation shaD survive the tEtrrnlrnrtion of this Agreement. c. Seller !$han have water, gas) electricity and aU operable pilot lights on for Buyer's '"veatlgations and through the dat~ possession is made

available to Buyer.
D. Suyer indemnity and Seller prvtection for entry upon property: BUyer 8hall: (i~ keep the Property free and clear of liens; (Ii) repair aD damage arisin9 from Buyer Investigatiomli and (iii) indemnify and hold Seifer harmless from all resu!ti:ng llabNityl Glairns~ demands, damages and costs of Buyer'S investlgallons. Buyer shall carry, or aUye( 6hall require anyone acting on Buyer's behalf to cany, polJch~$ of Uability, workers compensation and other applicable Insurance, defending and protecting SaUer from liability for any injuries to persons or property oclJuning during any euyer Investigations or work done on the Property at Buyer's olfection prlor to CIQSI!! Of E$Crow. Sener is advised that certain protf;!Ctions may be afforded Seller by reoording a ~NQUca of NQn~Tesponsibitity" (C.A.R. Form NNR) for B~er InvestigatiOns and work done 01'1 the Property lilt Buyer's direction. Buyer's obligations under this pari!lgraph shall survive the termination or oancellatton of this Agreement and Close of Escrow. 11. SELLER DISCLOSURES; ADDENDA; ADVISORIES; OTHER TERMS: A. seller DiSclosures (if checked): seller shall, within the time specified in paragraph 14A. complele and provide Buyer wilh .: SeRer Pro Clul!!stlonnalre CAR. Form SPQ OR 0 $u lemental Contractual and Statuto Dl&olOEiure C.A.~. !=orm SSO S. Addenda if chocked : Addendum # (CAR. Form ADM WQod Destroying ~est Inspedion and ARocation of Cost Addendum (CArt. Fonn WPA)

o Purchasfl Agr~Gment Addendum (C.A.R Form PAA) o Short Sale Addendum (CAR. Fonn SSA)
n"stAdVloOry (CAR. Form TA)

0 Septio, Well and Property Monument Addef'\dum (OAR.. Form SWPI}

C. Advisories (If chocked): Pr(lbate Advl C.A.~. Porro PAK

0 Other 121 Buye(. Inspection Ad...o" (CAft Fo"" SIA)

0 Statewide Su er and Seller Advf$
0 ReO Advisory (CAR. Form REO)


D. OttlerTerms: fp'Psrty to

rmrgh'ltlfld I'AS IS"

A. Within the 'lime specified In paragraph 14, al.lYer shall be provided a current preUmlnary title report, whih 60011 include a search of the General Index. Seller shall within 7 Days After ACC0ptaMe 9iYe Escrow Hotder a completed statement of Information. The preliminary report is only an offer by the title insurer to issue a poUey of title insurance and may not contain every Item affecting title. Buyerls review of the preliminary report and any other matters which may affect title are a contingency of this Agreement as specified In paragraph 149. B. Title is taken In Ita present condition subject to all encumbrances, easemlilntJ, covenants, conditions, restrictions, rights and other matteI'S, whether of record or not, ss of the date Qf Acceptance except (i) monetary liens of record l..Inle$S Buyer is assuming those obligations or takIng the Froperty subject to those obligations.; and (II) those matters which Seller has agreed to remove in writfng. C. WithIn the time $peeitied in pl11lTl11Igmph 14A, Seller has a duty to disclose to aWli!r ~II matters known to Seller affecting title, whether of record or not. D. At Close Of Escrow, Buyer shaH receive a grant deed conveying tiHe (or, for stock cooperative or long~term lease, an as5ignment of stock oertificate or of Seller's leasehold Intef!M;t). lneludihg oil, mineral and water rights if currently ownec:t by seiter. Title shaH vest as designated in Buy.r'. supplemental escrow inslructlons. TH~ MANNER OF TAKING nTlE MAY HAVE SIGNIFICANT LEGAL AND TAX CONSEQUENCES. CONSULT AN APPROPRIATE PROFESSIONAL. E. Buyer shaU receive a CLTAlAl..TA Homeowner'$ Polly of T"rtle insurance. A title company, at Buyer's request, can provide infonnation about the ava~ability. desirabnity, coverage, survey requlremel'l~, and cost of various title insurance coverages 2t'ld el1dONJElmente.. If Buyer desires tiUe vemge other 1han that required by this paragraph, Buyer Me.fl ins1n.ic'l Escrow Holder in writing and pay any Increase in coet. 13. SALE OF BUYER'S PROPERTY: A. Ti')ls Agreement ia NOT contingent upon sale of any property owned by Buyer. OR B. D (If ~he~k/l!d): 1pe attached addendum (CAR. Form COP) res~rdln9 Ih~ CQntingen~ for the sale of property owned by Buyer Is Int::orporated


Buyer's Inlllolo ( "-) (

8011. Imtials





. Reviewed by

).... I



CalHFA Loan# 0224723


Borrower: Kyle


07:41 AM


5/ 15

5020 A

95819 Date: December 16, 2011

Property Addrea.; Sacramemnto, CA

14. TIME PERIOI)S; REMOVAL OF CONTINGENCIES; CANCELLATION RIGHTS: Tho following timo poriods may only be oxl1mdad, allBAJd, modified or c;;hanged by mutual written agreement. Any removal of contingencies or cancallation under 'this paragraph by either Buyer or Seller must be exercised in good faith and in writing (CA.R. Fonn CR or

A. SELLER. HAS: 7 (or f!]

5 ) Days After Acceptance to Delver to Buytr all Reports, dlseloaures and information fOT which Seller is responsible under paragraphs 4, eA, Band C, 7A, SA, 11A and S, and 12. Buyer may give Seller a Notice to Seller to Perform (CAR. Fonn NSP) if Seller has not Delivered the items with'" the time specified. B. (1) BUYER HAS: 17 (or 1m 8 ) Days: After Acceptance. lIn1e::18 otherwise agreed in WJiting, to: U) complete aD Buyer Investigations: approve all disclosures, reports and other applicable information, which Buyer receives from S4;ij!er; and approve all other matters affecting the Property; and (ii) DelivM to Seller Signed COplM of Statutory and l.Md Disclosures Delivered by Seller in accordance with paragraph SA. (2) Within the 11m" specffied In 14B(1), Buyer may request that Seller make repairs or take any other action regarding 1he Property (C.A.R. Form RR). Sener has no obligation to agree to or respond to Buyer's requests. (3) WHhin the time specified in 148(1) (or =ilFi otherwise speclfled In this ~l'eement), Buyer shaU Deaver to SeDer either {O a removal of the appilcable contingency (CA.R. Form CR), or (ii) a cancellation (C.A.~. Form ee) of this Agreement based upon a contil'lgeney <)f S,,1Ier'f> fall~r(l to DeUver the $p(lelfled iteMs, However, if any report. dis.closure or inronnation for which SeUer is responsible Is not DeHvered within the time specified in 14A, ihen Buyer has 6 (or 0 ) Da~ After Delivery of any such items, or the time specified in 14B(1), whichever is later, to Oe5ver to Seiter a removal of the applicable contingency or cancl;!llatiol"l of thl$ Agreement. (4) Continuation of Contingency: Even after the end of t/'Ia time $pEIlfled in 14B(1) and befure Seller cancels this Agreement, if at all, pursuant to 14C, Buyflr retains the right to E!ith$l' (Q In writing remove remaining contingencies, or (ii) .cancel this Agreement based upon a remalnlng eomlngency or Seller'$ failUre tl;) Deliver the specified terms, Once Buyer's written removal of all contlngEmcies Is OeUvered 11;1 Seller, Seller may not cancel this Agreement pursuant to 14C(1),


(1) Seller right to Cancelj Buyer Contingcmcies: If. wI1:hln time speelfled In this. Agreement, Buyer does not, in writing, Deliver to Seller a removal ofUle applicable contingency or ancellatiOll Qf1tli$ Agreement1hen Seller, after first Delivering to Buyer a Notice to BUY$(" to Perform (CA.R. Form NBP) may c:aJ'lcel this Agreement. In such event, Seller shaH authorize return of Buye(s depos~, (2) Sel~er right to Cancel: Buyer Contract Obligations: SeJler, after first Delivering to Buyer a NBP may (lancei thi1J ~r'eell'lent for' elhy of the followilg reasons: (~ if Buyer fails to deposit funds as required by 3A or 38; (II) if the funds deposited pursuant to 3A ar 3B are not good when deposiled; ~Iij ~ Buyer falls to Oell'l., a notice of FHA or VA oools or terms as required by 3C(3) (C.A.R. Form FVA); (IV) II Boy., falls 10 Deliver a letter as required by 3H; (\1') if Buyer fails to Deliver verification as required by 3G or 3J; (vi) if Seller reasonably disapproves of the verification provided by 30: or 3J; (vii) if Buyer faDs to rewm Statutory and Lead Disclosures ;as rElqulred by pamgtaph 6A(2); or (viii) if Buyer fails to sign or initial a separate liquidated damage fonn for ~I"J ineraased deposit a$ required by paragraphs as and 25. In suoh event, Seller shall autllorize retum of B~$ depo&it. (3) Nolie<> To Buyar To Porto"": The NBP "'aM; (I) be in writing; (iii be signed by SeUer; and (Iii) give Buyer .t I.ast 2 (or 0 ) DaY" After DerlVery (or until1he time specified in the appUeable paragraph, whichever oceurs last) to take the applicable action. ANBP may not be Der[llered any earlier than 2 Day$ Prior to. the expiration of the applicable time for Buyer to removl!t a col'ltlngttney or cancel this Agreement or

m..1a. obug.1lon specified in 14C(2),

D. EFFECT OF BUYER'S REMOVAL OF CONtiNGENCIES: If Buyer removes, In writing, any eontlngency or Gancellation rights, unless otherwise specified in a separate written agreement between Buyer and Seller, Buyer $hall '1Vith regard to that contingency or canceHation right conclusively be deemed to have: (i) completed aU Buyer Investigations, and revieW of reports and other applicable- infonnation and disclosures; (I.) erected to proceed with the transalon; and (iii) assumed all liability, responsibility and expense for Repairs or cQrrectlol'l$ or for Inability ro obtain financing. E. CLOSE OF ESCROW: Berore SeHer or Buyer may cancel this Agreement for failure of the other party to close escrow pursuant to this Agreement, SeHer or Buyer must first give ~ other a demand to close escrow (CAR Form DCE). f~ EFFECT Of CANCELLATION ON DEPOSITS: If Buyar or Seiter gives \Nf'ltten notlee of oancellation pursuant to rights duly exercised under the terms. of this Agreement, Buyer and Seller agree to Sign mutual Iflli;;tfUtions w cancel the sale and escrow and release deposits, if any, to the party entitled to the funds, 1!lS$ fees and eoGt& Incurred by that party, Fees and cos1s may be payable to $ervlce pro\liders and vendors for s>!!lrvice$ and products provided during escrow. Release of funds will requif't ntlItual SIgned releu5Q ins-trulltlons from Buyer and Seller, judll;iw decision or arbitration award. A Buy-er or Sellar may be: subject to it I;ivil penalty of up to $1,000 for refusal to sign 'Souch instructions if no good fai1h dispute exists as to who Is. entitled to the deposited funds. (Civil Cods 10.57 .3). 15. REPAIRS: Repairs shal( be oompleted prior to finat verification of condition UI'l\a$S otherwise agreed in writing. Repairs to be performed at SeD&r's BXpemfJ: may be performed by Seller or through others, provided ~I-!~ the work comprtes with applicable Law, Includ[ng governmental permit, InspectlOll and approval requirements. Repairs shaD be performed In a "ood. $killful manner with materials of quality and appearal'let;l (In'lp=il~ble to existing materials. It is understood that exaet restoration of appearance or cosmetic items following all Repairs may not be possible. Seller shall; (i) obtain receipts for Repairs performtild by QmE!~; (ii) prepare a written statement indicating the Repairs pari(lrt't'lE;ld by Seifer and the date of such Repairs; and (iii) provide Copies of receipts and statements to Buyer prior to final verification of eonctltlol'l. 16. FINAL VERIFICAnON OF CONDITION: Buyer s"'all have the right to make a final inspection of the Property within 5 (-or ) Days Prior to Close Of escrow, NOT AS A CONTINGENCY OF THE SALE, but solely to confirm; (i) the Property Is maintaIned pur!iluant ~o paragraf)n 9; (Ii) Repairs have been completed as agreed: atl1d (UI) sellar has complied with SeDer's other obHgations under this Agreement (CAR. Form VP).

11. PRORATIONS OF PROPERTY TAXES "1110 OTHER ITEMS: unless otherwise ag,eed in writing, the foBowing 110ms shan be PAID CURRENT and prorated between Buyer and SeUer as Qf Close Of Escrow: real property taxes and assessments, Intar~et, rents, HOA regular, special, and emergency dues and assessments Imposed prior to Close Of Escrow, premiums on insuran$ a$$umed by Buyer, payments on bonds and assessmoemf$ assumed by Buyer, and payments on Mello~oos and other Speelal AfiSGSsment District bonds and assessments "that are a current Uen. The following; items $halt b~ ~umed by auyer WITHOUT CREDIT toward the putharre price; prorated payments on MeUo-Roo$ and other Speelal Assessment Ol$trict bonds. anti assessments and HOA special Mt;~menl;$ 1hat ;;,re ~ current lien but not yet due. Prope:rty wRl be reasse5Sed upon change 01 ownerehip. Any supplemental tax bDIs shall be \lII$ follows; (i) for periods after Close Of Escrow, by Buyer; and (ii) for periods prior to Close Of I:.scrow. by Seller (see CAR Fonn SPT or S8SA for further information), TAX BILLS ISSUED AFTER CLOSE Of! esc~ow SHALL BE HANDLED DIRECTLY aeTWEEN BUYER AND SELLER. Prorations shaD be made based on a 3O-day tnonth

Buye", Initials



Sene"o Inl1lal. (
(R8VI.nd by



RPA.cA REVISED 4110 (pAG~ 5 OF 8)


CalHFA Loan# 022472-3

86 of 130

Borrower: Kyle



07:41 AM


6/ 15

5020 A Street Property Address: Sacrrunemnto, CA


Date: December 16, 2022

18. SELECTtoN OF SERVICE PROVIDERS. Brokers do not guarantee 'the performance of any vendors, service. or Product provfders. ("Providers'). whether referrelj by Broker or selected by Buyer, Seller or other person. Buyer and Seiter may select ANY Providers of their own choosing. it. MULnPLE USTiNo SERVICE rNlLS")~ Brokers are authorized to report to the MLS a pending sale and, upon Close Of Escrow, the aales price and
other terme of this 1ra~ctlon shall bet provided to the MLS to be published and disseminated to persons and etrtmes al.JttlorJzed to use 1hf!: information on terms Qpproved by the MLS. ZO. EQUAL HOUSING OPPORTUNITY: The Property is sold in compliance wfIh federal, state and local anti-discriminatJon Laws. 21, ATTORNEY FeeS! In any aotlQI'l. proceeding, or arbitration between Buyer and Seller arising out of (his Agreement, the preva~ing 8u~r Or SeDer shaD be entitled to reasonable attorney fees and costs from the nOl'l-prevamng Buyer or Seller, except as provided in paragrelph 26A. 22. D~FINJTlONS: As us.d In IIlls Agreement: A. "A~ptal1Ce'j means thE\' time the offer or final counter offer Is accepted in wrltlns bye party and Is delivered to and personally receIved by the other party Or that party's authorized agent in accordance with the terms of 1his offer or a final counter offer. 8. CAR. Form" means the specific form referenced or ano~r <comparable Form agreed to by the parties. C_ "Cion Of Escrow" means the date the grant deed, or other evidence of1ransfar of title, is recorded. D. "Copyh means copy by any means including photocopy, NCR, faceJmile and electronil::. E. "Days" means calendar days. However, After A<::ceptance, tha last Day for performance of any act required by this Agreement (including Close Of E&foW) shall not Include any Saturday, Sunday, or legal holiday and shall instead be the next Day. F. "Oay$ After"' means the epec:itled numbElr of calendar days after the occurrence oHhe event specified, not taunting the calendar date on which the ej)ecffied event occurs, and ending at 11 :59PM on the final day. G, "Days Prior" means the specified number of calendar days before the occurrenoa (:If the event specified, not taunting the calendar date on which the specified event 1$ scheduled 10 occur. H. "Deliverlt, 'IDalivared" or "Delivery", regardh!!:S$ of the method uS$d (i.e. messenger, mail, ama~, fax. other), means and eha~ be effectivA uPQtl 0) personal receipt by Buyer or Seller or the Individual Real Estate Lk:ensee tor that principal a$ $pecified in paragrapn 0 of the section titled RQal E$tate Brokers on pagl!l 8; OR (ii) if checked, 0 per the attached addendum (CAR. Form RDN). I. "Elactronlc Copy" or "SlactrQnlc: Signature" means, i!J& applicable! an electronic copy or signature complying with California Law. Buyer and Seller agree that electronic meerm will not be lf$(!d by either party to modify or alter the contl!lnt Or integrity of this Agreement without the knowledge and consent of the other party. J. "Law" means any law, code, sta1ute, ordinance, regulation, rule or order, which is adopted by a controlling Cityl county, statt!!l or federal legislative, judicial or exeeutiVe bodY or agency. K. "Repairs" means any rapalr$ (inc~uding pest control), alterations, replacements, mOdifications or retrofitting of the Property provided for under thie Agreement L. i'SignBd" m~ans elther iii handwritten or electronic signature on an original ~C)Cument, Copy or any counterpm. 23. BROKER COMPENSATION: Seller or Buyer, or both, as appllcablli!l, agrees to pay compensation to Broker as specified in a $eparate written agre&ment between Broker and that Seller or auyer. Compensation Is payable upon Close Of Escrow, or If eecrow does not close, as othelWiae specIfIed In the agreement between Broker and that Seller or Buyer. 24. JOINT ESCROW INSTRUCTIONS TO ESCROW HOLDER: A. The following par.Qgraph$, or applicable porlions thereof, of 1his Agreement eQt1stltUte the joint escrow inst~on$ of Buyer and Seller to. Eserow Holder, which Escrow Halder Is tc use along with any related counter offers and addenda, and ~ny ~dditional mutual instructions to close the eat:row: 1. 3, 4, 6C, 11 Band 0, 12, 138. 1041=", 17,22, 23, 24,28,30, and paragraph D of the section titled R.eal Estate Srokers on page 8. if a Copy of the separate compensation agreement(s) provided for In paragraph 23, or paragraph 0 of the section titled Real Estate Brokers on page 8 is deposited wi1h Escrow Holdet by Broker, Escrow Holdar shall accept such agreement(s) and payout of Buyer's Of Seller's funds, or both, as applicable, the respe:etive Broker's compensation provided for 'In wch agreement(s). The terms and conditions of this Agreement not $peQifioaUy referenced above, in the spelMled paragraphs are additional m~1:t$1'$ fot the information of Escrow Hot4$r, but about which Escrow Holder need not be concerned. Buyer end Seller will receive Escrow Holder's. general provisions directly from Escrow Holder and wilt execute such provieions upon Escrow Hold0r's reql,l$!it To the extent the general provisions are h'lOnuistent or conflict with this Agreement, the general ptovisioll5 will control as to "the duties and obligations of Escrow Holder only. euyer and Seller WIll execute additional instructlQns, dcumente and forme. provided by Escrow Holder that (lire reasonably necessary to close the escrow. e, A CQPY of this Agreement shall be dellvere:id to Sacrow Holder within 3 business days. after Aceeptahce (or 0 """"''''''_-:-:-::---::-:"""''=_-:--, ""_-,,_,.-:=-____.,-__;--:-;_--=--::--::-_--:-::-.,,-_-;:-..,..-=__=). Eserow Holder shaH provide SeDer'S Sfatement of Information to Title company when received from Seller, Buyer and SeDer authorize Escrow Holder to accept and rely on Copies and Signatures as defined in this Agreement as orfginals, to open escrow and for other purposes of escrow. The validity of this Agreement as between Buyer and Seller i$ not .ct-ed by Whether or when Escrow Holder Signs th~ Agreement. c. Brokers are r! party to the- escrow for the soie purpose of compensation pWl'?!IIJant to paragraphs 23 and paragrapl'1 D of the settl!)n titled Real Estate Brokers on page 8. Buyer and Se~er irrevocably assign 10 Brokers compensation specified in paragraphs 23, respectively, and irrevocably instruct Escrow Ho!det tc disburse those funds to Brokers at Close Of Escrow or pursuant to any other mutually executed cancellation agreement. Comperr&atlol1 Il"I$truotione; can be amended or revoked only ~ !;he written consent of Brokers. Buyer and &!Iller shall release and hold harmless Escrow Holder from any liability resulting from escrow Holder's payment to Br(lker($) of compensation pursuant to this. AgrflElment. Escrow Holder shaD immediately notify Brokers: 0) if 6uyer!s initial or any additional depO$lt 1$ not made pursuant to this Agreeml!lnt, or Is 1"I0t good at time of deposit with Est.:row Holder, or (II) If either Buyer or Seller instruct Escrow Holder to cancel ~row. D. A Copy of any amendment that affects any paragraph of this Agreement for which Escrow Holder /1;; responsible shall be delivered to Escrow Holder within 2 business days after mutua! execution of the amendment.

Boyer', lnitiol.

(~l( _~__

soU ..... lnitiol. (




6 OF 8)


CalHFA Loan# 0224723

87 of 130

Borrower: K y l e - '


07:42 AM
5020 A Street


7/ 15

Property Address: Sj!cram...."to, CA

Date: December 1.6, 2011

25. LIQUIDATED DAMAGES: If Buyer fails to complete this purchase because of Buyer's default, Seller shall "'tain as liquldatad damages, the deposit actually paid. If the Property i. a dwelling with no more than four units one of which &.yer lnlflnds to occupy, then the amount retained shall be no more than 3% of the purchase price. Any exc~ss shall be returned to Buyer. Re!ea$& of funds will require mutual, Sign&<! release Instructions from both Buyer and Seller judicial decision or arbitration award. AT TIME OF THE INCREASED DEPOSIT BUYeR AND SELLER SHAll SIGN A SEPARATE UQUIDATED M RID). DAMAGES PROVISION FOR ANY INCREASeD DEPOSIT. (C.A.R. F
26. DISPUTI' RESOLUTION: A. MEDIA1l0N: Buyer and Seller agree to mediate any dispute or claim <:trising between them out of this Agreement, (lr any resulting transaction~ before resorting to ;arbitration or court action. Buyer and Seller also Qgree to mediate any disputes or claims wifb Broker(5), who, in writing, agree to such mediation prior toj or within a reasoflable time after, the dispute or claim is Pl'B$ented to tha Broker. Mediation fae-s.1f any) shall ~ divided equally among the parties involved. If, for any dispute or claim to which this paragraph app~e$, :my party (i) commences an action withoU1 first attempting to resolve the matter through mediation, or (ii) before cc>mmencement of ~n action} refuses to mediate after a request has been made, then 'that party shall not be 81ldtled to recover attomey fees, even if they would otherwise be available to that party in any such action.


THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED. ExIion. from this mediation .g.,.,mont oro __ lIIed In parograph 26C. B. ARBITRATION OF DISPUTES: Buyer and Seller 8grae that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transactio~, which Is not settled through mediation, shall be doclded by neutral, binding arbitration. 8tJyer and Saller also agf'G8 to arbitrate any disputes or claims with Broker(s}, who, in writing, Jlgree to such arbitration prior to, or within oS reasonable time after, the dispLtte or claim is pl"1!sentecl to the Broker. The arbitrator shall be. retired Judge Of j"stice, or an attorney with at lea$! 5 years of residential real estat" Law experience, unless the patties mutually ag"''' to a different arbitrator. The parties shall have the right to discovery in accordanc" with Code of Civil Procedure 1283.0S, In all other ""peets, the arbitration shall be conducted in accordance with Title 9 of Part 3 of !he Code of Civil Procedure. Judgment upon the award of the arbitrat0r(,,) may be entered into any court having junsdlctlon. enforcement of this agreement to arbitrate shan be govemed by the Federa' Arbitration Act, Exclusions from this arbitration agreement are specified in parallraph 26C. "NOTICE: BY INITIALING IN THE SPACE BelOW YOU ARe AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THe MATTERS INCLUDeD IN THE 'ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTe liTIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BeLOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSe RIGHTS ARE SPeCIFICALLY INCLUDED IN THE 'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CAUFORNIA CODE OF CMl PROCEDURI'. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY." "WE HAVe READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF DISP TeS' PROVISION TO NEUTRAL ARBITRATION." Initials

Sello"'s 1"1tla~



C. ADDITIONAL MEDIATION AND ARElITRATION TERMS: (1) EXCLUSIONS: The follow~ matters shall be- exctuded from madilltion and arbitration: (i) a judicial or non-judlcial foreclosure or othet action or procoedlng 10 enforce a dHd of tru$t, mo~aSiI& or Installment land sale dafinad In Civil Code 2t8Sj (ii, an unlawful detainer actJoOj (liij the filing or enforcQment (If a mechanic's lionj and (Iv) any matter that Is within the Jurisdiction of a probate, small claims or bankruptcy (:;ourt. The filing of a court action to enabla thtl racordlhd of a notice of pending action, for order of attachment, ~ivlffiJhip, injunction, or other pl'OVisionaJ remedies, sM11 not constitute a waiver or viQlation of the madlatiDn and arbitration provisions. (2) BROKERS: BrokEli'S shall not be obligated or compelled to mediate or arbitratE! unless they agra& to do so In writing. Any Broker(s) partlelpatihg In mediation or arbitration $hlilll not be deemed a party t() the Agreement. 27. TERMS AND CONDITIONS OF OFFER:
This 1$ a., offer to purchase the Prop~rty 01'1 the above terms and conditions. The Uquidated damages paragri31ph or the IiIrbitration of disputes paragraph is incorporated in this Agreement if Initialed by aU parties or if incorporated by mUll#lI $greement in a counter offer or addandtlm. If at least one but not ail parries InI1ia:1 such paragraph(s}, a counter offer is required Uf'l'tIl agreement Is r&QQhed. Seller has the right to contInu~ to- Qffer theProperty for sale and to accept any other offer at any time prior to nollfi~tiOh of Acceptance. If this offer 1$ accepted and Buyer subse(JJeni:Iy defaUlts, Buyer may be responsible for payment cf Brokers' compensation. Thi$ Agreement and any supplement, addendum or modification, Including any Copy, may be Signed In two or mote counterparts! aD of which shall constitute one and the same writing. 28. TIME OF SSSENCE; ENTIRE CONTRACT; CHANGES: TIme Is of the sliilsenoe. AU understandings between the parties are incorporated Irl this. Agreement, Its terms are Intended by the parties as a final, complete ~nd exclusive expression of their Agreement with respect to its subject matter, and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. If any provlslon or th~ Agreement is held to be ineffective or Invalid, tile remaining provisions wRi MVertheless be given full force and effect. Except as otherwise speclft~d, this Agreement shall be interpreted and dlsputas shall be resolved in accordance with the laws of the State of Cantomla. Nl!I!lUter lt1i5 Agreement nor any provisioll in it may be extended, amended, modHied, altenKl or changed, ex.:ept In writing Signed by Buyer and Seller.


Initials (


k-) (____




CalHFA Loan# 0224723





07:43 AM


8/ 15

5020 A

property Address: Sacramemnto,

Street: CI!.


Date: December 15, 2011

29. EXPIRAnON OF OFFER: This off.rsholl be deemed revoked 000 the depos~ shall be returned unless the offer is Signed by Seller and Signed offer is personally received by Buyer, or by

a Copy

Buyer has read and acknowledges receipt of a Copy of the offer and agrees to the above confirmation of agency Date 12~18 .20 o. Date

authorized to receive itl by 5:00 PM ~~__~~~~~__~~~~~~~~__~~___ OAMO

~~~~_________ ~,.w.


,. - If?


~Iah (Print namol


~r_h==~------------------------------(Print namol


Additional Signature Addendum attached (CAR. Form ASA). 30. ACCEPTANCE OF OFFER: Seller warrsnb3. that Seller is the owner of the Property, or has the authority to exeollte this. Agreement. Seller accepts the

above IJffer. agrees to eell the Property on the ab.;we terms and conditions, and agrees to the above confirmation of agency relationshIps. Seller has read and acknowledges receipt of a Copy of this Agreement, and authorizes Brokerto DerIVer a Signed Copy to Buyer.

Ilil Daw

(If checked) SUBJECT TO ATTACHEO COUNTER OFFER (CAR. Fonn COl D~~T:E~D~::1:2:(:2=Q=(::2:Q:":"============~ Dare

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

(Print namel (Address)

( _ 1 ___ )

o Addmo.nal Signature Addendum attached (CAR. Form ASA).

CONFIRMATION OF ACCEPTANCE: A Copy 01 Signed Acc.ptance ~a'; .~'''GC,nally received by Buyer Of Buyer'. au1horized agent (date) at A binding Ag......".nt hi .""""" when of 1$ agent whe1her or not eonfinnad in of this a binding Agreement It is solely


A. Real Estate Brokers are not parties to the Agreement between Buyer and Seller. 8. Agency relationships are confirmed as stated in pDl'a(lmph 2. C. 11 specified in paragraph 3A(2), Agent who. stbmftted the offer for Buyer aeiq10wfedges receipt of depo&it.
O. eOO~ERATINB BROKER COMPENSATION: Usdng Br(ll(er agreea to pay Cooperating Broker (Selling Firm) and Cooperating Broker agrees to accept, out of Listing 6roker's proceeds in escrow: (I) the amount specified In the MLS, pro'Jlded Cooperating Broker is a Participant of the MLS in which the Property is offered for sale or a reciprocal MlS; or (II) (if chl1:cked) the amount specified 11'1 a ~parate written agreement (C,A.R, Form CaC) between Listing Broker and Cooperating Broker. Declaration of Licen&fl and Tax (C-A.R, Form DLT) may be used to document that tax reporting will or that an e:<ernption exists,



Escrow Holder acknowledges rec&lpt of a Copy Qf this ~reemerrt, (If checked, ':::

a dll!lposlt 11'1 the amount of $


"co~u~n~te~r;O:fI;.r~n:u:m:b:.~r.~d~=.:;::::;::::;:;::;:;=.:;,~D~s~e~1I~er'~s~statement of Informatio.nEscrow Holder subject to paragraph 24 of this Agreement, any and 0 othar"""-,,,::-:::-::::-=.:-=.:;:-::;;-:;-:;:;:--.::::::::::-= ' and agrees to act as supplemental escrow instructions and the terms of Escrow HoJder'$ general provl~;JoM if any, eScrow Holder is advls&d that the date of C()rltirmation of AQoepiance of the Agreement as between Buyer and Seller ~ _ _ _ _ _ _ _ _ __
Escrow Holder By

Escrow #


Phone/FailE-mad EscrQW Holder is

PRESENTAnON OF OFFER: ( ---:;:::::::::-;::::::::==::;::-_) Lloting Broker pre_eo this offer to SeRer on _ _ _ _ _ _ _ _ _ _ _ (dolo).
) No counter offer is being made. This offer was rejected by Seller on _ _ _ _ _ _ _ _ _ _ (date).

R"-'''CTION OF OFFER: '_-.;::;;:-..:.

CONSUl.. Thils" form is
mom~1'$ of thlil

I.. ,

6F"E;illo:iiii";;';~~';;;;,;;;;;;i.-c:~;;,;kHI;jntlfy tI\I!J U:KIr' Z1';S II ~EAt.TOR*. REAL.TOR Is a rogl6Wr~ eoUeetlVe mtimb6rshlp mark whlct! !,I'U!"y bD


only by

, (

Published 00' OIsln1)UIed by:

REAL ESTATE BUSINESS SERVICES, INC. a $l.ibtidisryofthe Califomifl Association of REALTORS 525 Sculh VwgU Avonu., Loa Angoloo, c.liIom~ 90020 REVISION DATE 4/10 CAUFORNIA RESIDENTIAL PURCHASE AGREEMENT (RPA-CA PAGE 8 OF 8)


CalHFA Loan# 022472-3


Borrower: Kyle471111 '.


07:43 AM


9/ 15



(C.A.R. Fonn BIA-A, Revised 10/02)

Property Address: 5020 A


Saer_to, CA



A. IMPORTANCE OF PROPERTY INVESTIGATION: The physical condition of the land and Improv.m;tnts being purchased Is not guaranteed by enher Seller or Brokers. For this reason, you should conduct thorough investigations of the Property personally and with professionals who should provide written reports of their investigations. A general physical inspection typically does not cover all aspects of the Property nor items affecting the Property that are not physically located on the Properly. If the professionals recommend further investigations, including a recommendation by a pest control operator to in.pect inaccassibie areas of the Property, you should contact qualified "xperts to conduct such additional investigations. B. BUYER RIGHTS AIIID DUTIES: yOU have an affirmative duty to exercise r"a.ona~le care to protect yourself, including discovery of the legal, practical and technical implications of disclosed facts, and the investigation and verification of information and fact. that you know or that are within your diligent attention and observation. The purchase agreement gives )<">u the right to investigate the Property. If you exercise this right, and you should, you must do so In accordance with the terms of that agreement. This is the best way for you to protect yourseW, It is extremely important for you to read all wr~ten reports provided by professionals and to discuss the result. of inspections with the profeional who conducted the inspection. You have the right to request that Seller make repairs, correctiOns or take other action based upon items discovered in your investigations or disclosed by Seller. If Seller is unwilling or unable to satisfy your requests, or you do nol want to purchase the Property In its disclosed and discovered condnion, you have the right to cancel the agreement if you act within specific time periOds, If you do not oeoeel the agreement in a timely and proper manner, you may be in breach of contract.

C. SELLER RIGHTS AND DUTIES: S.II", is required to disclose to you malerlal facts known to him/her that affect the value or desirability of the Property. However, Seller may not be aware of some Property defects or conditions. Seller does not have an obligation
to inspect the Property for your benefit nor i. Seller obligated to repair, correct or otherwise cure known defects Ihat are disclOsed to you or previously unknown defects that are discovered by you or your inspectors during esorow. The purchase agreement obligates Seller to make the Property ava,abte to you for investigations. D. BROKER OBLIGATIONS: Brokers do not have .xpertise in .11 areas and therefor. cannot advise you on many items, such as soil stability, geologic or environmental conditions, hazardous or illegal controlled substances, structurel conditions of 1I1e foundation or other improvements, or the condition of the roof l plumbing, heating, air conditioning. electrical. sewer, septic, waste disposal, or other system. The only way to aocurately determine the condition of the Property Is through an inspecllon by an appropriate professional selected by you. If Broker gives yOu referrals to such profes.ionals, Broker does not guarentee their performance. You may seleCl any professional of your choosing. In sales involving residential dwellings with no more than four units. Brokers have a duty to make a diligent visu~1 in.pection of the accessible areas of the Property and to disclose the results of that inspection. However, as some Properly defect. or conditions may not be discoverable from a visual Inspection, it is possible Brokers ans not aware of them. If you have entered inlo a written agreement with a Broker, the specific terms of that agreemenl will determine the nature and exlent of that Broker's duty to you. YOU ARE STRONGLY ADVISED TO INVESTIGATE THE CONDITION AND SUITABILITY OF ALL ASPECTS OF THE PROPERTY, IF YOU DO NOT DO SO, YOU ARE ACTING AGAINST THE ADVICE OF BROKERS. E. YOU ARE ADVISED TO CONDUCT INVESTIGAllONS OF THE ENTIRE PROPERTY, INCLUDING, BUT NOT LIMITED TO THE FOLLOWING: 1, GENERAL CONDITION OF THE PROPERTY, ITS SYSTEMS AND CDMPONENTS: Foundation, roof, plumbing, heating, air conditioning, electrical, mechanioal, security, pool/spa, other structural and non~structural systems and oomponents, fixtures, built-in appliances, any personal property included in the sale, and energy efficiency of the Property, (Structural eng in""", are best suited to determine pOSSible design or construction defects, and whether improvements are structurally sound.) 2. SQUARE FOOlAGE, AGE, BOUNDARIES: Square footago, room dimensions, lot size, age of improvement. and boundaries. Any numerical statements regarding the nem. are APPROXIMATIONS ONLY and have not been verified by Sell"r and cannot be

verified by BrOkers. Fences, hedges, wallS, retaining walls and other natural or constructed barriers or markers do not necessarily
identify true Property bOl.lndaries, (Professionals s(..Ich as appraisers, architects. surveyors and civil engineers are best suited to determine square footage, dimensions and boundari.s of the Properly.) 3. WOOD DESTROYING PESTS: Presence of, or conditions likely to lead to the presence of wood destroying pests and Qrganisms and other infestation or infection. Inspection reports covering these items can be separated into two sections: Section 1 identifies areas Where infestation or infection is evident. Section 2 identifies areas where there Bre conditions likely to lead to infesta.tion or infection. A registered structural pest control company Is best suited to perform these inspections. 4. SOIL STABILITY: Existence of fill or compacted soil, expansive or contracting soil, susceptibility to slippage, settling or movement, end the adequacy of drainage. (Geotechnical engiflool'$ are best suited to de1erminE;1 such conditions, eause~ and remedies.)
Tn. copjright lows of 1110 Urlted States (Title 17 U.S. Code) forbid 1I1e unauthorized reproductWn of this form, or any portion thereof, by photocopy maohlne or any other means, including facsim~e or computerl2Ad formate:. Copyright C 1991-2004, CALIFOR.NIA ASSOCIATION OF REALTORS>,
INC. ALL RIGHTS RES~RVED. BIA-A REVISED 10/02 (PAGE 1 OF 2) Agent: Guillory Brokar: custom Real

Suyer's Initials ~) ( SellE.l(slnitials (\' )(


. ~~vlowod by


) )



BUYER'S INSPECTION ADVISORY BIA-A PAGE 1 OF 2 Phone: (916)487-8393 Fax: (816)487-828n .& Loans 360D Power Inn Road $Uite H3 Sacrarnonto, CA $5$26

Prepared using zJpFonn 50fiware

CalHFA Loan# 0224723

90 of 130

Borrower : Kyl~&IIIIS IIIIJI


07:44 AM
St:.t:'lHoi:('UllNmto, CA

PAGE. 10/ 15

Property Address; 5020 A

Date: ptS'N"AAr



5. ROOF: Present condition, age, leaks, and remaining useful life. (Roofing contractors are best suited to determine these cooditions.)

6. POOUSPA: Cracks, leaks or operational problems. (Pool contractors are best suited to determine these cond~ions.) 7. WASTE DISPOSAl-.! Type, size, adequacy, capacity and condition of sewer and septic systems and components, connection to sewer, and applicable fees. 8. WATI:R AND UTILITES; WELL SYSTEMS AND COMPONENTS: Water and utility availability, use restrictions and costs. Water
quality, adequacy, condition, and performance of well systems and components.

9. ENVIRONMENTAL HAZARDS: Potential environmental hazards, induding, b~t nol limited to, asbestos, lead-based paint and other lead contamination, radon, methane, other gases, fuel Qil or Chemi$1 storage tanks, contaminated soil or water, hazardous waste,
waste disposal sites, electromagnetic fields, nuclear source., and other substances, materials, produQIS, or conditions (inCluding mold (airborne, toxic or otherwise), fungus or similar contaminants). (For more Information on these 11ems, you may consult an appropriate professional or read the booklets "Environmental HaZl1rds; A Guid& for Homeowners, Buyers, Landlords and Tenants," "Protect Your Family From Lead in Your Home" or both.) 10, EARTHQUAKES AND FLOODING: Susceptibility of the Property to earthquake/seismic hazards and propensity of the Property to flood. (A Geologist Or GeotljCfinicai Engineer i. best suHed to provide information on the.e conditions.) 11. FIRE, HAZARD AND OTHER INSURANCE: The availability and co.l of necessal)' or deSired insurance may val)'. The locetion of the Property in a seismiC, flood or fire hater<! zone, and other condition., such as the age of the Property and the claims hlstol)' of
the Property and Buyer~ may affect the availability and need for certain types of insurance, Buyer should explore insurance options

ear1y as this information may affect other deciSions, inCluding th~ removal of loan and inspection contingencIes. (An insurance agent is best suited to provide information on these conditions,) 12. BUILDING PERMITS, ZONING AND GOVERNMENTAl.. REQUIRI:MI:NTS: Permits, Inspections, cert~icate., zoning, other
governmental limitations! restrictions, and requirements affecting the current or future use of the Property, its development or size.

(Such information is available from appropriate govemmental agencies and private Information providers, Brokers are not qualified to review or interpret any such information.) 13. RENTAL PROPERTY REsTRICTIONS: Some cities and counties impose restriction. that limit the amount of rent that can be charged, the maximum number of occupants; and the right of a landlord 10 terminate a tenancy, Oeadbolt or other locks and ~r1ty systems for doors and windows, induding window bars, should be examined 10 determine whether they satisfy legal requirements.
(Govemment agencies can provide infolTJ'lation about these restrictions and other requirements.)

14. SECURITY AND SAFETY: State and local Law may require the installation of barriers, access alarms, self-latching mechanisms and/or other measures to decrease the risk to children and other persons of existing swimming pools and hot tubs, as well as various fire safety and other measures conceming other features of the Property. Compliance requirements differ from city to city and county to counly. Unless specifically agreed, the Property may not be in compliance wilh these requirements. (Local govemment agencies
can provide information about these restrictions and other requirements.)

15. NI:IGHBDRHOOD, AREA, SUBDIVISION CONDITIONs; PERSONAL FACTORS: Neighborhood or area conditions, including
schools, proximity and adequacy of law enforcement, crime statistics, the proximity of registered felons or offenders, fire protection. other government services, availability, adequacy and cotst of any speed~wired, wireless intemet connections or other
telecommunications or other techno!ogy services and instatJations, proximity to commercial, industrial or agriculh"r$1 actiVities,

existing and proposed transportation, construction and development Ihat may affect nol.e, view, or lraffic, airport noise, noise or odor
from any source, wild and domestic animals, other nuisances, hazards, or circumstanoes, protectert species, wetland properties,

botanical diseases, historic or other governmentally protected sites or Improvements, cemeteries, facilities and condition of common areas of common inta",.t subdivisions, and possible lack of compliance with any goveming documents or Homeowners' Association
requirements, conditions and influences of significance to certain cultures and/or religions, and personal needs, requirements and

preferences of B~r.
Buyer and SeHer acknowledge and agree that Broker: (I) Does not decide what price Buyer should payor Seher should accept; iii) Does not guarantee 1I1e condition of the Property; (iii) Does not guarantee the performance, adequacy or completenl!SS of Inspections, services, products Qr rElpalrs provided or made by Seller or others; (jv) Does no~ hav$ an ob~gati.on to conduct an inspection of common areas or areas off the sUe of tI1e Property; (v) Shall not be responslblt;! forldentifving defects on the Property, in common areas, or offslte unll!I$$ $ueh defects are visually observable by an inspection of reasonabiy accessible areas of the Property or are knoWn to Broker; (vi) Shan not be responslble for inspecting pl.lbUe records Qr' permits concerning th$ title or use of Property; (vii) Shall not be responsible for Identifying the location of boundary lines or other items affecting 1it1e; (viii) Shall not be responsible for v&rlfylng square f()otase, rE!!preeentations of others or'mformation (:ontained In hwestigatiah reports, Multiple U$ing Service, adVertisements, flyers or other promotiol1lid material; (ix) Shall not be responsible for providing legal or tax atWlce regarding any aspect of a 'b'an$ac~on entered into by Buyer or Seller; and (x) Shall not be responsible for providing other advice or infonnation that exceeds '!he knowledge, education and experience required to perform raal eette licensed acti'tIity. Buyer and Seller agree to $eek legal, lax, ineurlil:nce, title and other desired assI$tance ffol'rl appropriate professionals.

By signing below, Buyar ond Seiler each acknowledge that they have "'ad, understand, accept and have received a Copy of this Ad Is uyer' ncC)uraged to read it carefully.

;2- J - -;2DII

===::::----____---,~-Buyer Signature Data Seller Signature Date

Seller Signature




whic>l m.y "" uW o,,,y by "",,"be.. ""'e NATIONAL ASSOCVlTION OF REAL TORS """ .U..cnbs to '" Code" E",;c..


Pubfished and Distributed by: REAl ESTATESU$INE$$SERVICE$. INC.


c .. 525 SouUl VirgIl Avonue, L.0t;: Anll8les. cmFomia9U020


I aviewedbY

0 Ie


BtA-A REVISEO 10102 (PAGE 2 OF 2j



CalHFA Loan# 022472-3

91 of 130



PAGE. 11/ 15

Jun.22. 2010 ...... .....

~ ~

07:45 AM


Borrower: Kyle'. . . . . . c

92 of 130
CalHFA Loan# 022472-3


07:45 AM
916 '91($.1 4225

PAGE. 12/ 15

Confirmatfon of Fund Activity

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$223,191 ~4



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2,'09liii' '.<ChMQe 01/110 00il00 200494464l1(Motlt'l

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ilOIlSlctlon ,IlII11Qf tile e~, YO<IlIlay exchange I"io Money Malket fund, Inc. or (:'$~ ReseTi'll'" at ."y time; 1lQwe\Hll. IllI of Ihft sh.1''''' 'n tho; "IO!l6Y "",!l<ota"COOnlWm _ be :IUbJ....! "'. ,",w hdd 1"'1\0<1 1",:lO ""lenlfar days I"." ,,'" tll",..w:t,," d.1fI of It1at UIdIange,
, ',><Il<!11 ~;ur 811a~ ytJ\11I\1I"f Illy a rnn4l"""nI, rieferroo SAle, dllllllr.. For the CI'H1IWJ!\1l1 rt.feHed '-11"8 oharge all!! QIIlI)r fae&, see HIe "'ip6I)lUS

\'OUT 1!CIIl1 ~. all ~ he~ if! 1M BtMUllt 'lito VIlllch you exCMIIgW sna,'., ,nay n," 00 exchanlJed for SO calenlllll" da'illlmm II\e

CalHFA Loan# 022472-3

93 of 130

Borrower: Kylelc. . . . .


07:45 AM

PAGE. 13/ 15




(C.A.R. Fonn SSIA, Revised 11/11)

This Short Sale Informalion and Advisory is imamled to give general information regarding short salas, their palenlial impacl, and the rights and responsibilities of the parties involved. It is not intended .s legal advice for any particular property owner or buyer. Seller and Buyer should consult with their own professional advisors for legal, tax, credit and personal advice. Real estate brokers cannot and will not provide such advice. 1. WHAT IS A SHORT SALE: A short sale is the name used to describe a real estatetransaCllon where the sellers len<ler(s) agree to allow the property owner 10 sell the property for les. than the amount of Ihe loan(s) secured by the property. The consenl of the sellor's lender(s) is necessary because wilhoul it Ihere woul<i not be enough money from the sale to pay off the lender{s} in full and to pay other ca.t. of lhe .ale. As a resull, the len<ler's lien(s) would remain on tnle, and the seller would be unable to transfer tale 10 the buyer free of monetary liens. (Properties thai are worth less than Ihe amount owed to the secured lender(s) are often


referred to as being "underwater'" or distressed properties). AL TERNATlVES TO A SHORT SALE: OWners of distressed or underwater properties are faced with dlfflcuH choices that could have finanCial and emotional consequences. Any of the following Or other alternatives potentially have negative tax or credit consequences, or both, for the owner: A. A loan modification is an arrangement between a borrower and a lendei'. It can involve a reduction in the interest rate on the
loan. a defermenl in payments on the loan, an extension of time to pay back. the loan, a reduction in pnncipal of the loan, a combination of these possibilfties, or other changes to Ihe repayment plan. A loan modification requires the consent of both

lender and borrower.

B. A foreclo&ure Is a legal process through which the lender acquires title to the property from a borrower who has slopped
malting payments on a loan. The lender can foreclose Whether or not the borrower con.ents. A dQQd in liau of foreclosure occurs when the borrower offers to transfer the property to the tender, in lieu of the lender having to go through the foreclosure process. and the lender agrees to accept title to the property from the borrower and forgives the debt. A deed in lieu of foreclosure requires the consent of both lender and borrower. D. Bankruptcy i$ a legal aClion typically flied by a borrower to have debt(s) discharged. An automatic stay occurs as soon as a borrower files bankruptcy, staying all actions against the borrower. While a petition for bankruptcy can have the effect of delaying a foredos:ure, it does not necessarily prevent a foreclosure from eventually occurring. No lender consent i$ required for a borrower to file bankruptcy. 3. LENDER AGREEMENT TO SHORT SALE; In order for a short sale to be completa<l, the lender(s}, at a minimum, must agree to release the property from the lender(s} Uen(s) to allow the sale. The lender(s} mayor may not agree to ra<luce the amount owed to satisfy the deb\. If not, the lender(s) may continue to pursue the borrower for payment of the balance of the debt Prior to granting approval of the sale, the lender(s) may require the borrower to disclose all of the borrower's assets. They may 'equire that the borrower liquidale olhor assets. They may require thai the borrower sign an agreement to repay some or aU of Ihe debt at some laler time. They mey require that the borrower secure the unpaid debt with other sets owned by 1I1e borrower. Additionally. they will generally ,-$qUire that the transaCllon be arm's length, and that all terms of any benefit conferred on the seller be fully disclosed and that Ihe Seller cannot stay in the Property following Ihe Sale. Finally, many filiit lien holders wililimil the amount they will allow to be paid to a second lienhOlder, further complicating negotiation" for the short sale. The lender will usually submij a "term sheet" to the borrower indicating the term. to which lender(s) will agree. If the Seller and Buyer do not modify their contract to comply with the lender(s) terms, the lender(s) may not permH the short sale to proceed. Selier I. strongly advised to seek legal and tax advice regarding review of the term .heet. Brokers cannot ano will not give legal or lax advice on the lender's term sheet or it. effect on the Buyer and Seller's agreement or on the consequences to Buyers and Seller. should they proceed to clos". There Is no assurance that once thelender(s) have begun short sale negotiations, they will discontinue the foreciosure process. 4. SELLER'S CONTINUING LIABILITY ON THE DEBT: Many borrowers who attempt a short sale are concerned with whether th.. borrower is released from any further liability to Ihe lender(s) or whether the lender can pursue the borrower for any unpaid balance of the debt. Some ",fer to conlinuing liability as a deficiency judgement. Generally speaking. a deficiency judgement is the right of a lender to pursue the borrower for the difference between the amount the lender receives and the amount the borrower Owes on the debt. Deficiency judgements in C~lifornia are prohibited in certain circumstances .



The Stat (TWo 17 U.S. Code) forbid the unauthorized reproduction of thi$ form, Or any portion thereof, tty photocopy maehlne or any other means, including facsimile: or computerized formats. Copyright 1!Il2010-2011, CALIFORNIA ASSOCIATION OF ReALTORS.



) ) (

5""",.,1_. ( ....!,nJ5-"-___ )( _____

P'repared using zipFonn $ottware


Agent: . Guinory
8n)ker:; CU$tom Real

& loans. 3600 Power tnn ROd((

Phon.~ (916)487 ~393 Fax: (9:1&)487.8280 $lIite 113 S~r.amento, CA 95826

CalHFA Loan# 022472-3

94 of 130

Borrower: Kyle . . . . . .


07:46 AM
5020 A

PAGE. 14/ 15

Property Address: li<!crzmemntc.



Date; DecEUl2l:>er 16, 2011

A. Short Sale:
1. Beginning July 15, 2011, Code of Civil Praoedure 580e any lender who approves a short sale is not permitted to seek or collecl a deficiency against the borrower ff Ihe loan is secured by a Trusl Deed on residential property containing 14 units. This law may not be waived. The July 15, 2011 law does nol apply to (I) lienholders on other types of property, or (ii) a borrower who has comm~ted fraud or waste or (iii) borrowers who are oorporations, lim~ed liability companies, or limited partnerships.
Prior to this I~w coming in10 effect, from January 1, 2011 the restriction on lenders seeking deficiencies for approved short

sales only applied to lenders holding a first trust deed on residential 1-4 un~. 2, For properties or borrowers to whictl CCP 580e does not apply, some lenders in negotiating a short sale will want Ihe owner 10 sign a note for Ihe balance of the unpaid prinolpal. Other lenders will release the li.n only but not forgive the underlying debt. Some lenders will "reserve their rights." Thus, in these sitUations whether lender retain. tho right to pursue a deficiency
following a short sale becomes a negotiable term for each sale. 3. Sellar is encouraged to (i) obtain a written agreement from lender(s) or other applicable lien holders addressing whether and to what extent Seiler will be released from any monetary or other claim, obligation, or liability upon approval of the .hort s.le, an<1 (;;) have that written agreement reviewed by an attorney, CPA or other appropriate professional of seller's choosing, B. Foreclosure 1, Purcha.... Money Loans; Loans given by lenders to purchase 1-4 unit properties, one of which will be occupied by the borrower, and sellar-financed purchases are subject to "purchase money" anti-defidaJicy protection rules. Generally, this means th.t the lender oannot pursue the borrower for any deficiency after the property is foreclD$ild upon by the selier or lender, whether the $eller or lender uses a non-judicial trustee sale or a judicial foreclosure. Refinancing a purchase money loan causes It to lose any purchase money protection it might have. 2. Trustee Sales: If a lender foreclos". by no,,"judicial trustee sale instead of by Judicial foreclosure, that lender is barred from seeking any deficiency from the borrower after the trustee sale, even If the loan was not purchase money. 3. Refinanced Liens: The anti-deficiency protections become much less clear for loans that are refinanced. Generally, loans that are refinanced lose their "purohase money" protection. Lenders extending refinances may be able to pursue a deficiency judgment against the borrower directly follOwing" judicial foredosure. 4. Junior Liens: The anti-deficiency protections for Junior Liens are also somewhat unclear. Junior liens used to purchase the r.sidence (such as 90110 first and second) would have "purchase money" protection generally. However, junior lien. that are refinanoed or junior liens that are used to take out equity do not have "purchase money" protection. Suctl "non purctlase money" junior lienholders may be able to pursue a deficiency jUdgement against the borrower directly after a Trustee sale by a senior lienholder or after a judicial foreclosure by the junior lienholder. Although the law is not entirely cle.r, home equity loans (HELOCs) may fall into this category. 5. other Liens! Many other types of liens may be recorded on titles including. without limitation, homeowners association liens. JUdgement liens, iax liens, and child support liens. Generally foreolosures by any lienholders senior to such liens do not protect the owner of the property from later legal action by the lienholder to collect on the obligation. 5. CREDIT AND TAX CONSEQUENCES: A. CREDIT: All of the owne~s options discussed above will most likely have a negative impact on the owne~$ "",dit and on the owner's ability to finance or purchase property for some time. The credit impact and length of time the owner would have difficulty in obtaining a loan to purchase property again, or 10 be ~pproved for any other credit transactions such as obtaining a credit card, leasing an apartment, or even to gain employment, v.ries. Lenders may view short sales and alternatives differently daponding on their Own underwriting guidelines and those established by governm"ntal or quasi-govemmental bodie . TQ find out more information about the impact to your credit score, go to B, TAX; With some exoeptions, a reduction or discharge of a debl obligation by a lender rasults in income to the borrower. The income might not be taxable if the debt was being used to purchase, build, or substantially improve a borrower's principal residence. Another exception exists if the forgiveness of debt results from a situation where the lender is barred by law from collecting the debt, as in a foreclosure of p~rchase money debt. Insolvency and bankruptcy rules can also shield a borrower from forgiveness of debt income, Generally, when any debt is forgiven by lender, they are required to provide the borrower a 1099 and it will be up to the borrower to make- the proper claim on their tax return to avoid debt forgiveness income. Some of these rules are temporary, and state laws and federal laws differ, Broker has advised Seller that if Lender agrees to acoept less than full paymen~ the difference may re.ult in taxable income to Seller even though Selier does not receive any cash proceeds from the sale. Seller may also be taxed on the gain in value of the Property from the date of Seller'. purchase to the date of sale, regardless of the amount of any existing Loans/Liens. C. PROFESSIONAL ADVICE, Seller advised to discuss with an attomey, CPA or other professional of Seller's choosing before (i) aocepting any offer to present to lender or{ii) agreeing to any ctlanges requested by lender to an already acoepted contracl 6. POTENTIAL IMPROPRIETIES: It is an unfortunate reality that many persons, inoluding r...1 estate licensees, mortgage lenders, and attomeys, among others! have taken advantage of owners of underwater or distressed properties. Some or the schemes present themselves as "rescues" of the homeowner, promising to let them stay in the property, to protect their credit, or to provide payments to them after olosing, and usually outside of the escrow. Both the Califomia Department of Real Estate (ORE) ( the callfomla Attornay Genaral ( have i..uad written warning' of potential red flags in short sales and other resoue schemes. Some of these red flags are:



_ _ _ __

Seller's Initials (



IRe.vi8Wed by




CalHFA Loan# 022472-3

95 of 130

Borrower: Kylellllll iII


07:46 AM

PAGE. 15/ 15

5020 A Street Property Address: SacralMnmtQ, C'A



Date: Degen",..r

I!L 2011



No license: The DRE believes that a real estate license is generelly required to negotiate any short sale; MARS: Short sale negotiators who do not represent the Seller or Buyer in a short sale are generally required to comply with the Mortgage Assistance Relief Services rules and provide required disclosures and notice. to the Seller. Up-front fae$: No real estate licensee can collect any upfront or advance fee Without having flrst obtained a "no objection" letter from the DRE and no upfront rees may be taken for arranging a loan modification; Surcharges: Charges by third parties that are not disclosed to the short sale lender and usually paid outside of escrow; 3rd Party negotiations: The licensing and fee reqUirements above apply whether the negotialion occurs Ihrough a Broker. representing the Seller or Buyer in the transaction, or a 3r(l party short sale Mgoliator. A. with other real estale activi\;'. short sale negotialor fee. are negoliable and not set by law. The exislence, fee and licensed status of any 3rd party short sale ~egotiator shall be disclosed to the lender and must be approved by the lender as part of the overall compensation to be paid
in the short sale transaction,


Straw buyers and house flipping: Buyers misrepresent the value of the property to the short sale lender and flip the property to another buyer already in place; G. other: Other potential red flags include: guarantees to stop the foreclosure; instructions not to contact the lender; transfer of title prior to close (often to a trust) as a condition of negotiating with the lender; the buyer is an LLC; the buyer wanls a power of altomey from the .eller; ana the buyer hires the Ihird party negotiator or wants to negotiate direclly With the lender. While most of the .,.ctlvities on th~ above list on 1heir face are not fraudulent, they serve as waming signs that the owner and the real estate agents involved should proceed with cautior'\. BUYER CONSIDERATIONS: Shorl sales are often difficult lransactions laking considerably longer that a typicol reel estate transaction to complele. There is no guarantee that the lender or lenders will agree to the lerms of the purchase offer or that they will respond in any timely fashion or even r~spond al all. There is no guarantee Ihat the seUer will agree to any terms proposed by the lander as a condition of releasing the lien or the debt on the property. Buyers may expend money on Inspections, Joan applications. escrow fees and other coslS thaI they will nol be able 10 recover from anyone if the lender does nol approve the Iran.oclion. Buyers may also have difficulty oblaining the relurn of their deposit in escrow. if the seller becomes noncommunicative during the short sal. process. Generally, sellers also have Ihe right to continue to give offers to their lender(s) even if they have a contract wilh an existing buyer, Brokers cannot give any assurances as to what will happen. Buyer. are strongly cautioned that any undisclosed and unapproved payments 10 junior lienholders or to seller or to outside third party ne90~ators may be " form of lender fraud. Buyers are also strongly cautioned that writing offers on more than one short .ale property with the intent 10 purchase only one such property could be a misrepresentation giving rise to legal claims by the Seller Including a claim for the buyer's deposit. BROKER ROLE: A real .slate broker cannot give legal or tax advice in connection wHh any of the options available to the borrower nor can the broker suggest what is the best course of action for the owner. Unfortunately, the owner is faced with extremely difficult choices having a lasting Impact on Ihe owner. Owners are strongly caulioned that they must seek legal and lax advice in what is not only a choice impacting taxes and credit, but also personal iS$l,IsS affal;ting the owner and often the owner's family. The broker's role is to assist the owner with the actual sale of the property in a short sale transaction, not to provide legal or tax advice or to guarantee the best possible outcome for the parties, or to assure the buyer Ihat any particular transaction will be completed. Brokers do not. and cannot. assure that either Ihe SeHer or the Buyer will perform on their agreement or that the lender(s) will agree to any of the tanns presented. Brokers are not a party to the contract between Buyer and Seller. BROKER AUTHORITY: Seller authori",' Broker 10: (1) market Ihe Property for sale. (2) contacl lenders concerning lender's approval of a Short Sale (CAR. Form ARC) and Seller agrees 10 give Broker any necessary information to negotiale with lenders, and (3) advertise In the MLS and other advertiSing medium thaI the Property transfer, sales pnce and payment of commiSSions are




Se:~~j:t~:~e:ders ap .. Z::_~::t_C~Q~~~te. Brok.r may c"ncellh.listing agreome:

te Dale




OSelJer o Buyer _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Date _ _ _ _ _ _ _ __

o Seller 0 Buyer
By (Agent)

Ii1I Seller 0 Buyer

~-~_--------------------_ Date ~1-2-(2-0-1-2-0-1-1----Real Estate Mer (semniff~!Z.~~""'4.... 1"t"'"" d"-'Lo""'AA""'''L..._~_ _ _~_~~~_~~_~~~_~~_ _~_ .."'\" R"' ..

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~_-,9,"<",8",g.._ _ 5

Address .3600 Fmm tpll Bd Iff1




Telephone (n61247~6048

Fax (216/487-8280

E~majl mic:b:aelodemeyahoa. coiD.

Real Estat$ BroKer (Listing Firm) Ramsey Real Estate and Dev.
Sy(Agent} Daniel Ramsey


- _ _ _~_~_~_ _ _~~_~_Date 12/20/20)J

Address 759 47th Street

Telephone 916-737-5656



~-'S"a!.\c'"'r"'a"'m!Se"'n"t"'o_ _ _ _ State -"CAa--__ Zip




525 South Virgil A,enue. Angelos. C.I~ni. 90020 CoPVTigh\ II:) 2010.201 t. CAliFORNIA ASSOCIATION OF REALTORS, INC. SSIA REVISED 11111 (PAGE 3 OF 3)

, [ ] ""'dklry of the Califomi. A,scciatioo of REALTORSIII

Pubishod and Distributod by: REAL ESTATE BUSINESS SERVICES.INC.


~::~!.Y====::=~=:;::=::::...J SHORT SALE INFORMATION AND ADVISORY (881A PAGE 3 OF 3)

I ~"'_ b


&UoI. Hotnt/C


CalHFA Loan# 0224723

96 of 130

Borrower: Kyl . .

S 1I

OMB Approval No. 25020265


ESTIMATED Settlement Statemen t (HUD-l)

Seller Side Only

B.:!'l:1!e of Loan
1. FHA





i. Loan NUlnbC!r:



InsuraL1c~ CJ$~




Conv Ins.

C. NOIe: This form is furnished t() give you a srnte=t of actu,~1 ~ettleme11! COSlS. AmOWl15 paid tQ and by ~l settlement agent ~rt' shown. ItelTls marked "(p.o.c.)"' W~rE' paid outside the closing: they ore ShOWil here for InfomlJtlon~1 purpo'>t':S and are not incl\lded In rh~ toWls.


D. Name & Address of Borrower:

k~ Name & Address of Seller:

.0. BOX 421 pRANGEVALE, CA 95662

YLE f 020 A ST.

ACRAMENTO, CA 95819-2223

L Settlement Date:

Name & Address of Lender:

p. Property Location:

H. Settlement Agent:


OLSOM, CA 95630, 916-353-1953 Pla~ of Settlement: 50 GLENN DRIVE SUITE 120 CLSOM, CA 95630


isbursemem Dare: ecordingiClosing Date: March 2 2012

I i.- Summar;.. of Borrower's-TranSactions

100. Gross _AmoUn1: Due frOm Borl"ower 101. Contract sales rice 102. Personal we 103. Settlement charges to borrower (llne 1400) 104. 105.




K. -Summarv of SeUer'~_TraDsactions
400. Gross Amount D.Je:to SeDer. 401. COntract sales rice 402. Personal property



Adiustments for items paid bv seller in advance 406. City!mwn taxes 407. County taxes 408. Assessments

Adjustment for items paid bv seller in advance 106. Cityftown taxes 107. County taxes 108. Assessments

109. 110. 111. 112. 120. Gross Amount Due from Borl"ower
200. -AmolUlts-:Paii:Jbv or in-Behalf of Borrower 201. Deposit or earnest money 202. Principal atmUnt of new loan(s) 203. Existing loan(s) taken subject to

410. 411. 412. 420. Gross Amount Due to Seller
500. Reductions Iri AmOWlt Due 1:0 Seller 501. Excess deposit (see instructions) 502. Settlement cha rges to seller (line 1400) 503. Existing loan(s) taken subject to 504. Payoff of first roortgage loan SHORT SALE LENDER 505. Payoff of second mortgage loan 506. 507. 508. 509. Adjustments for items unpaid bv seller 510. Ci !town taxes 511. Coun ,~~ 512. Assessments 513. 514. 515. 516. 517. 518. 519.


18,389.46 188,610.54

204. 205. 206. 207. 208. 209.

Ad'ustments for items unpaid bv seIler 210. Cit frown taxes 211. COUll ""'~ 212. Assessments 213. 214. 215. 216. 217. 218. 219.
220. Total Paid by/for Borrower
3()0..' -CaSh at-SettIementfrom'to Borrower

520. Total Reduction Amount Due Seller

207,000.00 207,000.00 (207.000.00)

301. Gross amount due from borrower (line 120) 302 Less amounts aid b ffor borrower (line 220) 303. Cash Borl"ower

600. -Cash-at SettlementtMrOl'll Selle:r 601. Gross amount due to seller (\lne 420) 602. Less reductions in amount due seller line 520)

603. Cash TO Seller

The Public Reporting Burden for this collection of information is estimated at 35 minutes per respons e for collecting, reviewing, and reporting the data. This agency may not collect this information, and you are not required to complete this form, unless it displays a currently valid O:MB control numbe T. No confidentiality is assured; this disclosure is mandatory. This is designed to provide the parties to a RESPA covered transaction with information during the settlement process.

Previous editions are obsolete


Page 1 of 4 12/22/2011. 9;25:25 al21p12


CalHFA Loan# 022472-3

97 of 130

Borrower: Kyl.'. . . . ...

r.: Settlement Chal

E ,crow N urnb er: 4079140 -

Paid From Borrower's Funds at Settlement Paid From Seller's Funds at Settlement

700. Total Real 'Estate .Broker Fees Division of commissions line 700) as follows: 701. Listing Agent Commission S7'..45.00 to RAMSEY REAL ESTATE & DEVELOPEMENT CORP 702, Sellinl1, Al1,ent Commission $5175.00 to CUSTOM REAL TV AND LOANS 703. Commission aid at settlement

800." Items"Fa Comection with Loan 80l. Our origination charge 802. Your credit or char e (points) for the ecific interest rate dxlse n 803. Your ad'usted origination dlarges 804. Appraisal fee 805. Credit repor t 806. TaxseNice 807. Flood certification 808. 9OO.IteuisRe u.iredb .Lender to Be Paid in Advance
901. Daily Interest Charges

(from GFE #1) (fromGFE#2.) (from GFEA) from GFE #3) {from GFE #3) (from GFE #3 (from GFE #3)


e insurance remium

903. Homeowner's insurance

{fromGFE #10 (from GFE #3) (fromGFE #11)

904. 1000 "Reserves De osited with Lender

1001. Initial deposit for your escrow accoun t 1002. Homeowners insurance e insurance 1003. 1004. Pro ""~ 1005.

(from GFE #9)

1007. A 1101. 1102 1103. 1104. 1105.

re ate Adjusonent (from GFE #4) (from GFE #5)

210.00 1,335.00 932.00

1100. Title Charges

Title selVices and lenders title insurance Settlement or cJosin fee to PLACER TITLE COMPANY Owner's title insurance to PLACER TITLE COMPANY Lenders title insurance Lender's title lio limit 1106. Owner's title policy limit 1107. Ageni's portion of the toral title insurance remium 1108. Underwriter's portion of the total title insurance premium 1109. 1200 .:Q:Ne rumen tRecol'din and Transfer Char ~ 1201. Government recordin """",$ 1202. ~$S).oo -"",$ 1203. Transfer taxes ,,$ 1204. Ci ICoun taxlstam s Deed $796.95 M , $ 1205. State taJd ored $ Mo"


(from GFE #7)


(from GFE #8)


1206. 1300. Additional-Settlement Cbar 1301. Required services that ou can shop for 1302 Hazard Disclosure to NHD COMPANY ~ NEED INVOICE 1303. SHORT SALE PROCESSING FEE to NEED INVOICE 1304. Taxes to be Paid: 2nd Install, $1716.51 201112012 TAXES to SACRAMENTO COUNTY TAX COLLECTOR 1305.

(from GFE #61

99.00 850.00 1,716.51

114XI. "Total Settlement. Char!! s (enter on lines 103. Section] and sm. SectionK)


Previous editions are obsolete


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CalHFA Loan# 022472-3

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Escrow Number: 407-9140-


I have carefully reviewed the HUD-I Settlement Statement and to the best of my knowledge and belief, it is a true and accurate statement of all receipts and disbursements made on my account or by me in this transaction. I further certify that I have received a copy of the HUD-I Settlement Statement.


The HUD-I Settlement Statement which I have prepared is a true and accurate account of this transaction. I have caused or will cause the funds to be disbursed in accordance with this statement.





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CalHFA Loan# 022472-3

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Borrower: Kyle


Escrow Number: 407-9140Additional seUerslbuyersllender overflow


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CalHFA Loan# 022472-3


Borrower: Kyle . . . . . .itt

FILE NUMBER 407-9140





188,610.54 188,610.54 188,610.54

Loan #:
Total as shown on HUD line 504



Last Update by Cindy Perez on 12-22-2011 09:25AM

CalHFA Loan# 022472-3

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Borrower: Kylelll'

PLACER TITLE COMPANY Seller's Estimated Net Sheet

Estimated Closing Date: 03022012 Escrow Officer: Cindy Perez I Karla Caceres Seller(s): KYLE A. BRYANT Date: 12222011 09:34AM Net Sheet# 4079140

Sales Property: 5020 AST SACRAMENTO, CA 95819 Item

Sales Price






Total Existing Loan Cllarges &. Credits Listing Agent Commission 3.50% RAMSEY REAL ESTATE
Selling Agent Commission


1BB,610.54 7,245.00 5,175.00 932.00 227.70 569.25 30.00 1,335.00 60.00 150.00 1,716.51 99.00 850.00


2010 CLTA!ALTA Homeowner's Policy


County Transfer Tax City Transfer Taxes

Recording Fees





Escrow Fee



Fed Ex/UPS/OVernight Mail

Signing\Notary Fee Taxes to be Paid:

Hazard Disclosure

2nd Install, $1716.512011/2012 TAXES




------------- -------------Totals
207,000.00 207,000.00

The title and escrow cbarges listed above are based on the Sales Price and/or coverage amounts shown above and the tenns provided to escrow. Samples of a few additional services which will increase the above estimate are below.

, , , , , ,

Additional or secondary fmancing My endorsements requested by lender Payment through escrow of any unsecured/credit debt. Recording fees are charged by the recorders office based on of pages in a document and subject to change. The amounts shown are estimated. Overnight fees are subject to change based on services requested. Document preparation fees are charged for additional documents prepared by us. Some typical additional documents are Powers of Attorney, InteNpousal deeds, Subordinations, Requests for notice. Outside or out of town signing services.

If any of the above services are needed and have not been shown in the above estimate it is

important you advise your escrow officer immediately. Note: Title and Escrow Services are posted with the Department of Insurance. They can not be waived or adjusted.


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December 22,2011 Order No.: Reference: 407-9140

Property Address: 5020 A ST, SACRAMENTO, CA 95819

Thank you for letting us be of service to you. Enclosed are the reports requested on the above referenced property. If you have any questions concerning this report, please contact the office shown on the first page of the report.

5828 Lonetree Blvd., Snite 200, Rocklin, CA 95765 - (916) 624-8141 Fax (916) 624-7383

CalHFA Loan# 022472-3


Borrower: Kyle


Date: 12-22-2011 Property Address: 5020 A ST, SACRAMENTO, CA 95819 Order Number: Cust. Ref.: 407-9140

RAMSEY REAL ESTATE & DEVELOPEMENT CORP 759 47TH STREET SACRAMENTO. CA 95819 Attn: KELL! BOEHM Phone: 916-947-9814 Fax: 916-760-0575

CUSTOM REALTY AND LOANS 3600 POWER INN ROAD #H3 SACRAMENTO. CA 95825 Attn: MICHAEL ODEM Phone: 916-247-6048 Fax: 916-487-8280

Copies: 1 EMail:


Copies: 1 EMail: E-Mail