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Kristin Duncan | Short Sale Negotiation | Transaction Coordinator

What is a short sale

Chapter 2 ‘in The Absence of Light

I’ve recently spoken to many who I would deem proficient on the subject of short sales. Many are frustrated and tired. It isn’t a lack of business and it isn’t for a lack of effort. It is based on frustration from the variables that surround a short sale.
In the absence of light, darkness wins. If your attitude is such that your work seems bleak, then more than likely your work will be bleak. Your outlook will be downtrodden. You begin the turning away. Once this path is started it doesn’t actually matter what your work load or work ethic is, everything becomes a ponderous effort to maintain your mental stamina.
Don’t get me wrong, I love being depressed! Some of the best music comes out of soul crushing pain. I do know one thing about myself, I am truly self-aware. I can be consumed by my own ego and anger. It is what created my speaking persona. Now, as I try to find a harmonious existence in this universe, I try and accept things I can have and change and by the same token I can also accept the things that I cannot have and cannot change. It is this ideology that I attempt to carry throughout my day. Within the last 5 days, the cards were definitely stacked in favor of the “cannot change” camp, culminating in a very long drive from Los Angeles to Las Vegas…. I mentally tortured myself (probably for personal amusement)
After talking with several people who are at their wits end in regard to the status quo of short sales, they all seem to be mentally torturing themselves. I am not immune to this disease as I continued on in the theatre that I call my brain, surrounded by movies of ghosts last night. I went to bed at 10PM; I didn’t sleep until 3AM. That’s just insane. What made me this way? Tomorrow is, after all a new day.
So objectively it is important to identify the goals you most want to achieve. It isn’t as simple as saying I want to be a millionaire. It’s a great mindset but it has no practical applications or action plan.
For short sales there seems to be in one choke point only – PEOPLE.
The most non-controllable factor on the planet…. Other people! I know for a fact, that if everyone did everything my way, I would certainly be a lot happier, however the president would have to issue an order for martial law and the use of deadly force… but that’s just me. Somehow I seem to enjoy rejection and a steady stream of resistance (these days). It forces me beyond my comfort zones and pushes my limits to make things better.
I have recently stated on some coaching calls that my current goal for my company is to help one million home owners. That’s a lofty and borderline insane statement. I have a plan and I have a goal. I’ve shut out my own negative thoughts and stopped listening to those that would say no to me. In my mind, it is a push to rail against the darkness and become overwhelmed by the inky blackness, in fact I’m brilliant at the inky blackness stuff. I can and will make a difference in a million lives, failure is not an option.
Identify what it is that’s eating you alive.
Leave your work at home when you’re done at the end of the day. Those of you that have families and lives, you have no idea how precious and unique it is to have people to love you and can love you back. I have managed to push many of mine away based on a fractured ego, it has done nothing for me. Set a work schedule and live by it.
Create objectives and fulfill them and my preference is daily.
If you allow it to consume you, then you lose. There is no point of making money and helping people if it will ultimately consume you in the process. Walk away and bag groceries, I realize it pays less, however sanity and love are an amazing thing to lose and it is nearly impossible to regain them once you have lost them.
Rage against the darkness. Yes, I am personally aware of EVERYONE speaking, teaching and processing short sales (of importance). I am also prepared to speak again and change my approach to try and help those around me. Remarkably, most want me to go back the “tell-it-like-is” version of me. I refuse, the darkness will consume McKenzie’s dad. Ill speak, teach, coach and work short sales with my current frame of mind and if I fail, so be it. I will give it all the effort I can muster.
Have you done all you can?
Have you objectively looked at the things you can and cannot change, with the courage to change the things you can (yes, that was very AA)?
I do know this, if you convince yourself that it won’t work then it won’t. It’s as simple as that.

Chapter 3 “Consistency and Congruency”
Consistent – 1. Being in agreement : COMPATIBLE. 2. Conforming to the same principles or course of action : UNIFORM.
Congruent – 1. Corresponding in character or kind: Accord. Conformity. Harmonious.
Life is literally about consistency and congruency. The more balanced your relationships and life is the more prosperous and better your life will be. I fail at this aspect of my day to day life. I can’t maintain personal relationships, I tend to say what I am thinking and worst of all I get very frustrated when being with people.
As someone who negotiates and works with homeowners in distress you are not given this option. Not only do you need these basic life skills to work your day to day mitigations, you also need to be sincere with your clients or they will ultimately question your ability and integrity.
If you are someone like me, and you feel that you cannot pull the trigger on dealing with your clients and the banks with an even hand, then I recommend that you find someone who can and will for you. Worrying about your business once it has started to erode around your ears is a little late.
So what do I mean?…in the words of Mr. Miagi – its all balance!
Life and work are balancing acts. What are your dominate personality traits? Can those be applied in a way that will be beneficial to you and your business? If you are like me and can’t tolerate stupidity and lying, then making follow-up calls to the bank will kill you and your personal relationships with others as well. I can however escalate lights out! That’s my strength; however, I personally tend to piss people off in the process. I can harness that and craft my escalations into emails to convey my point.
So look at your business in bits and pieces. See if what you do is good for your clients and your life. Balance is the key.
Clients: Are you good at talking to eeyores’ and making them comfortable and position them correctly so they don’t get any bright ideas during the transaction? Are you able to position and maintain the buyer and the buyer’s agent so they don’t get cold feet? This part of the transaction is crucial to the overall deal. It is just as important as negotiating a short sale itself.
File Tracking 101: Is strictly about set up, follow up and consistency to make sure your file closes on time. It’s not the banks fault for not closing in 90 days – it’s your fault for the file not closing in 90 days. Anal retentive people are brilliant at this form of work. It can be synthesized by using the file tracker and being consistent.
Escalation and close: Is my strong point. Its a matter of how much muscle do you need and when to apply it to your file correctly. The only reason a file does not close, once again, is the agent working the file. When talking to the bank there is a fine line to walk with the bank between being smart and being dumb. The trick is knowing when to apply a well-needed escalation. In thirty-one days I need a BPO, in sixty-one days I need a negotiator and at ninety-one days – I need a close.
I ask all of you agents to check yourself and your business to see if you are truly following a step-by-step system. If not, you may be working harder than you should be. The key is balance in life and in work. I appreciate that you are working to help people but if that comes at the expense of your own personal relationships outside of work, what’s the point?
Workaholics die at an early age… just a theory.

Chapter 4 ‘The TRUTH about short sales and short sale transactions’
Where did it all go so wrong? After two and a half years of short sales, how can everyone not realize the current situation?
I was forwarded yet another article from a Florida area newspaper, it pointed out that concurrent (or simultaneous) closings were fraud. Within the same article it talked about the “questionable tactics” the banks employ for its short sale processing.
Surprisingly, leading the call to arms is every investor in America (especially a few in Florida, Alabama, Texas and Ohio). I’m not surprised, thanks to Warren Buffet’s “More millionaires are made in these types of market” comment years ago. This has inspired a bunch of half-cocked, pocket investors trying to profit on homeowners that are desperate for help.
Let’s start with the basics. Who am I? I am the former loss mitigator for IndyMac in its HELOC division. I started working there when short sales were few and far between. The story of then, much like now is NOTHING has changed. I started doing asset management for my father’s company and I have done asset management for over 20 years.
Banks at their core are single-minded creatures of habit: THEY LEND MONEY AND COLLECT MONEY. Nothing more, nothing less! In this type of economy they operate under a basic principle which is known as “First Loss, Best Loss”. This is a basic principle of maximizing your returns and writing off your losses. It is actually taught day one in business 101.
Everyone is operating under some kind of assumption that the banks are up to some kind of ‘skulduggery’. Far from it, the banks, from my perspective, are being quite generous. The reason for this is simple, they DO NOT have to do short sales, loan modifications and or any other crazy attempt to help the American homeowner! Generally speaking, here is a basic bank philosophy: The homeowner signed a contract in good faith and owes money to its respective lending institution. (Period!) There is absolutely nothing, government or otherwise compelling these lenders into doing a short sale.
I would love to take a film crew or reality crew with me out on the road so they can see the level of mayhem, fear, hatred and greed that this market has produced. I have traveled coast to coast to coast over the last 18 months forsaking my family, life and health to teach real estate professionals the truth and I have done this for free. What I have learned is that the ignorance, stupidity and greed have increased exponentially over the last two and a half years. The banks have not changed.; we have changed to compensate for the banks.
Here is a short list of my favorites myths:
1. “The concurrent close/simultaneous close is fraud and must be disclosed to the bank.” WRONG! If it is allowed within your state you DO NOT have to disclose to the bank. They are a beneficiary, they are not the buyer nor the seller. As long as open disclosure occurs between the buyer and the seller then it is a legal transaction.

2. “Short sales have the same credit impact as a foreclosure.” WRONG! Who is the moron that made this statement for the first time? Worst terminology possible for credit is “settled for or paid less than agreed” (of course this would require a competent short sales agent to check). Foreclosure is a 5 year ding affecting every single part of your credit including employment. Its a 2 year ding for standard short sale terminology and this only affects conventional financing.
3. “Only attorneys can be short sale mitigators.” WRONG! Florida started this trend last year and it was an impressive manipulation of the media. ANYONE can mitigate a short sale file with the bank as long as they have permission of the homeowner.
4. “Banks prefer foreclosure.” WRONG! They don’t want to spend a dime if they can help it. That’s why I am fascinated with real estate agents who want to work the foreclosure market. Generally speaking, the banks will take more commission from the listing and the selling agent while making you pay for all the repairs, upkeep and marketing.
5. “Based on the: Freddie Mac/Fannie Mae/FHA/VA/Investor guidelines….” WRONG ! There are some guidelines and some PSA (Pooling Servicing Agreements), but the banks all want the same thing: Maximized returns today! A short sale will be taken if it is monetarily a better deal short sale vs. foreclosure and not because of some mysterious guidelines.
6. “The banks don’t seem helpful, they are mean or apathetic.” WRONG! They are negotiating. The homeowner borrowed the money, the banks are just attempting to collect. The three best things that collect money are: 1.) Fear 2.) The Unknown 3.) Frustration/Discord/Discontent.
I’d like to quantify all of this for you. Have you found on any website, real estate, banking and/or otherwise a webinar explaining how to simply stack and submit a file?
This current situation will continue for several more years. Next year the 5/1 rate mortgages start to adjust and it was the highest product sold. We are a part of a normal market correction that involves homeowners who shouldn’t have purchased in the first place.
The reason everyone worries about the liabilities, ethics and legalities of doing short sales is simple: NOBODY is quite sure of what the banks are doing. They claim lawsuits are pending and homeowners will sue or my personal favorite “I know someone who knows someone”. My response is to cite the case law or produce the person! It hasn’t happened, it won’t happen and things are not going to change. I am not saying that laws won’t be passed or investors, agents and homeowners won’t cross a legal line because they will. But when you boil this whole short sale situation down its simple: We have turned the Beneficiary of a Note (who is not the buyer nor the seller) into an all knowing, all seeing seller/buyer Demigod! Honestly, the banks are no different than a credit card company.
I offer this to all homeowners, agents, attorneys and investors: Send me an email and I will answer your questions without reservations. Lee.honish@yahoo.com. Or come see me live, its free. I will educate you in person. Because the only people suffering are homeowners who can’t get out of their financial burdens. There have been suicides related to this, the divorce rate is climbing and if you just want to sit on your couch and look to your leaders for help, you will be sitting on the curb wondering what happened.
Education and action is required to recover from a recession. Looking to others to solve your problems is what got us here. The banks will do short sales. As silly and as stupid as they look sometimes, they’re not going to make it easy. They will, after all, get every penny they can on the deal.
Chapter 5 ‘The Market’ (2010)
So, I have flaws… I’m actually well aware of them; my ego can write checks without my brains permission. I tend to react before I think a situation through. I sometimes act with passion without following a logical path I’ve laid out for myself. These are some of my flaws and I am aware of them these days, I apologize and take deep breaths and analyze a situation. I express my honest feelings, no matter what. So why am I disclosing this much about my personality quirks? Simple, I try to adapt. In fact I want to adapt. I want to surround myself personally and professionally with good people who help me adapt, change and grow.
Some people seem reluctant to grow and change. No matter what! They seem to be mired in the minutia of details that will never be… and in this real estate market that would be REOs.
I was fortunate enough to attend an event last week where the focus of the room was on REO’s. A representative for Freddie Mac and Fannie Mae all but said, there is no way you’re going to really see any kind of flow of REO’s on the market. However the pundits on the panel and those in attendance only heard what they wanted to hear… that there was hope and they would be getting REO listings soon. Strangely, that wasn’t what I took away from it. The fact is simple – only 20-30% of Freddie and Fannie properties see the retail market. To be an investor or agent and list or sell those properties you fill out a web-based form on their respective websites. They will then review your application and I would assume, inform you of their decision?
However, one of the highlights of the evening for me was meeting the rep from Fannie Mae and asking questions that nobody seemed to want to ask. While I was waiting to speak with her I waited patiently to speak with her, I watched agents and investors shoving their cards into her hand. They explained how they were the richest buyer of REO’s or the greatest listing agent of REO’s. The rep had a fake painted on smile and diligently accepted these cards. I would personally like to take this opportunity to inform everyone who gave out a business card, that she (the Fannie rep) more than likely (and strictly my speculation) threw them all in the trash. I would if I had her job.
…Which brings me to my analogy of REO’s, agents and investors… So I’m out at my ex-wife’s farm this past weekend playing ‘toss and fetch’ with the neighbor dog Blue. I would toss the ball to the furthest point in the yard for Blue to get a maximized run. On one such toss, I threw the ball a bit too far and it went past the fence into the goat’s pen. Blue layed there staring through the fence at this tennis ball, mentally willing it to her. I felt bad and I was also feeling a little lazy, so I got a spare tennis ball from the house without going into the goat pen. I tossed the ball within inches of Blue’s face. She wanted no part of the new tennis ball; it was all about the ball that was sitting in the goat pen. Now, I’d love to tell you how I went got the ball for Blue for the BIG happy ending… Nope, I wanted to see how long this would last, after all Blue isn’t my daughter’s dog. Blue literally stared through the fence for 8 hours straight at the darn ball! Finally, I went and got the ball for Blue. Blue was prepared to wait forever for something that wasn’t going to happen. I’m not exactly sure why Blue was so obsessed, but she was. Friday night I saw that same look in the eye of many investors and agents staring at Freddie and Fannie representatives.
REO’s are not going to appear overnight, nor are REO’s going to be available in mass sales via retail agents or auctions. 30% of all Freddie and Fannie loans see the retail markets, most are sold before they are even listed by an agent. I really don’t have an answer to any of this, I had really thought that most everyone had come to the simple conclusion that REO’s for investment or listing was and is a complete fantasy. Investors all want home runs and want to make 30% to 40% return on their investment with whatever financial risk that entails. Some will attempt to buy reels (pools of REO’s) which will net about a 25% return on a very large investment with maximum (millions of invested dollars) exposure. Real Estate agents just think that short sales are way too hard, they invest in the latest designation program hoping for the promise of a quick close to no avail. They all stare at the ball through the fence.
Short sales for investors have the highest yield with the lowest risk. For agents short sales provide the ONLY possible way to have a business. Yet they stare through the fence. “Why won’t the banks take 50% of fair market Value, they suck” so say the investors “I’d rather just work with REO’s”. They stare through the fence. “They shouldn’t be called short sales… they should be called long sales” so say the agents “I don’t want the banks cutting my commission”. They stare through the fence. The inability of agents and investors to help homeowners and close short sales is staggering! So blame the banks and pray that the next traveling medicine show has the cure for your real estate blues. All of this is simple for those who understand what is happening and how to work with them… for those who don’t – you may sit and stare through the fence.

Chapter 5 ‘The ZEN of Short Sales
How well do people really know themselves and what they are capable of achieving? Is it possible to train yourself beyond your own personal space? Can you change, adapt, grow and flourish by direction? Can a Tony Robbins step in and really pull out the inner “whatever” to make you into something that you only dreamed of?
For me, the answer is maybe. In the “Lee Honish Universe” the glass isn’t half empty or half full. In my universe anything and everything is possible and impossible. I’m a cynic. I think the best and worst of everyone. I see potential and failure. Remarkably, this is radical growth in my life, because for a long time I was a pessimistic ass, with the behavioral traits of 16 year old. Now, I’m an optimist and a pessimist with the behavioral traits of a 5 year old (for me this is progress and regression).
There are things you need to be in real estate and short sales. These are things that you must be competent at, or hire someone to do the work for you. It’s as simple as that, no matter how hard I try to coach, consult and teach – there always seems to be a few sticking points that I can’t seem to get around.
1. Marketing, scripting and close on the front end.
2. Buyer, seller and agent positioning.
3. Dealing with the bank (paperwork paperwork paper work)
4. Escalation (learning the art of saying no)
It is as it is, you must accept that you have certain flaws so that you can move forward in your short sale progress and accept what is true and therefore changeable. If you force a situation you will fail instead. There are 4 major flaws with all people, including myself when it comes to handling work of this nature, it is that of ego. The ego is predicated by three activities: Fear, power and greed. When dealing with a person or an entity in negotiating and positioning, these must be kept in mind so that failure may be avoided, thus accepting what is true.
Lee, what the hell are you talking about? Well, recently I played golf with a friend. I expounded upon my abilities to play. When push came to shove I choked. The person I played with made a point of informing me of my ego and they were absolutely correct. I failed not because of my ability, but my inability to be humble and play my game and in fact I played well below ability. I learned an amazing lesson about myself. I also learned a great deal about my ego. My personal ego has been telling people what they should do instead of teaching people what they should do. I had no desire to help; instead it was about showing my superiority. I failed many I could have helped.
When dealing with marketing, scripting, buyers and sellers the ego must be accepted. The seller cannot accept that they are in the position that they are in or the “truth” of their situation, thus allowing themselves to commit the relationship with you as their representative. They will always have doubt and fear. Since they cannot accept they have made a mistake and the banks are applying equal levels of fear it would then be on the representative to ease this pain.
However based on the listing appointments and scripting appointments I’ve been on, this gets lost, usually based on ego. Instead of repositioning the home owner of the truth a file is accepted with no uncertain terms, agents over empathize. Empathy is great and it should be admired. I lack empathy due to my over inflated ego. Those that empathize and want to help the homeowners need to take a step back and rationally explain the situation, if the homeowner is unwilling to accept that their situation is finite then it is to determine why they think their situation is finite.
The number one thing a homeowner wants is a loan modification when in fact they need a short sale. So how do we shift their ego into the direction of the short sale away from the loan mod? I am horribly fortunate to walk into a situation with confidence and explain it, set it and sort of forget it. I convey the basics and explain why the banks want to gather your data and what they are willing to give to get personal data. I realize that I am very much a scummy bank guy to my core and again that comes from my ego telling me as such so that I can later scare someone so I can feel better about what I know. I am able to convey what is true with confidence and not arrogance.
The question is: Are you over empathizing with your clients? Are you making simple intangible mistakes like not knowing what your marketing piece is so that you create inconsistencies in your meeting? Are you true to your personal need of helping people and not wanting to just make a buck? As silly as all this sounds, it’s brutally important to maintain a desire to help instead of a desire for posterity or greed. I should know. I’ve spent three years creating a super ego that actually believed it to be some kind of super hero. I can personally help more people in the long run coming from a position of wanting to help rather than wanting to tell.
When you meet with your client are you telling them or teaching them? Are you helping them and benefiting their family or are you trying to prove to your ego, Wells, Chase and B of A that you’re the greatest short sale expert alive? All of the above has overall impact as the core philosophy of being successful with your client.
Lastly, be consistent and know what you’re talking about on any level. I’ve now seen representatives not be able to explain their own marketing pieces to callers or with face to face clients and forget about being a teacher of short sales at that point. “I don’t know” creates doubt in the homeowner.
Buyers and buyer’s agents operate on the same ego driven freeway. Buyers want to buy your clients home, but it needs to be explained why their deal and their deal alone is going through. You need to get rid of the trash that the bank will never approve and provide a reasonable file that makes sense. Taking an offer for the sake of an offer is a not congruent to closing short sales effectively. Position is the key to a happier transition between buyers and sellers and their representatives. So sadly, it is once again an educational process. You have to calm the agent representing the buyer who will be driven by fear, greed and yes, they have a superior position, after all they have an offer.
It is crucial to explain what is “true” and how the transaction will be. I also prefer you use a buyer addendum to keep them in position, for two simple reasons: one it is “true” and secondly its equal ground of positioning. “Its skin in the game” as they say. You need them to understand the importance their offer has to the overall approval or declination of the file. In the current market if you need to do a retype, it will come with a price tag to the seller of the representative or worst of all, you are delaying the foreclosure date. In the current climate you will only get 2 postponements. That is what’s true and that needs to be addressed at every level.
Lastly, the banks as a single entity operate from the most egotistical position of them all. They openly use every tactic imaginable to collect money, most if not all focus on FEAR. It works and it is hugely successful and now unfortunately with Freddie and Fannie using finite timelines this will definitely change the flow of how your approvals are processed. You need to know, while you may have an offer that makes them more short sales vs. foreclosure, they are now on a strict time clock. It will become an even more stressful period within the big three as they hustle to solve the latest of the Federal government’s bright ideas. What worked yesterday may not work tomorrow, so to be successful, you will need to learn how to adapt to a shifting short sale market.
Short Sales aren’t going ANYWHERE! If anything they may speed up. It is now more important than ever to find homeowners before a default is filed. Take advantage of the banks desperation to close event quicker, without fishing with a crappy offer on a file that conveys too much data. This is about your client, an offer that was submitted to them and not directly to the bank. You must accept that certain things are TRUE and you cannot always change outcomes.
I’ve been going through a lot of self-discovery lately concerning my personal ego. It’s not what I want to define me; I would rather be defined by my actions. I’m constantly asked if I would speak the way I used to speak, terms like “refreshing” and “different” are said to me but I’d say: I was an ass! Instead of wanting to help and coming from a place of teaching, I chose to tell people how it was. I know what is true and how it will be on just about any short sales situation and instead of harnessing that for the benefit of others I had chosen to turn into an “I’m right and everyone’s wrong” mentality that has cost me dearly.
My ego… Amazing creature, it is not me, it is a thing that has years of “issues” that I’m not really interested in sorting out. I would prefer to accept what is true and what is in front of me at this moment. To move in a way that will help and enhance the lives of those around me. Remove negativity and move towards giving and of being selfless (egoless). I will be doing speaking events again soon, I worry, my ego enjoys being right and telling people about it. I have learned lessons not from one but by many who have witnessed it first hand, the question is can you accept you. Do you understand that you may be in situations that are way over your head because of your inability to escape your ego and tell your client what the actual outcome of the file will be. It is perhaps the one thing that drives me even crazier on a daily basis, watching trainers and other systems teach (or tell) then unleashing egotistical short sale nightmares on the world and thus perpetuating the vicious cycle we are all in.
In closing and also in an attempt to remove even more of my ego, I wrote this article directly at certain individuals in my life. Some of it was to show my growth, some of it was done to teach and some of it was again my own ego attempting to show how awesome I am. My intention is to “out” myself and be self aware so that I can be more selfless, outside of my daughter and very small circle of friends, I am very careful and mindful of whom I spend time with. I surround myself with people that will help enhance my life and help me to help others (I know, sounds crazy huh? That would also be my ego).
What are you filling your mind and your clients with? Is it beneficial or is it manure? I just ask that you are mindful of your ego, your client’s ego and the banks MASSIVE ego. They are all in play here. The “truth” is what will shine through if you use it correctly.
Chapter 6 ‘The Further I run, The Faster they Fly away’
Imagine this scenario, I toss my daughter who has little to limited skills at swimming into the deep end of a swimming pool. Now, I actually wrap a 50 lb weight around her ankles and do the exact same thing. This is the exact image that keeps me awake in hotels across the country. Unspeakable, horrible and gruesome sink or swim scenarios and I am never able to save her.
Today at mile marker 195 on my way to Utah (Juab County, I think) I had an epiphany, possibly more like a vision. I figured out that I do exactly the same dreadful scenario to every person in my life until they are faced with the choice of dealing with me on my childish and egomaniacal terms or pushing me away.
Sink or swim… So the last relationship that I destroyed (just a mere few weeks ago) was based on my arrogance and assumption that someone understood what I was doing (insert ass out of u or me joke here).
So, how would you like Lee Honish, the former head loss mitigator from IndyMac bank to talk to your client about loan modifications and why they should do a short sale? I’ve been successful talking them out of loan mods 5 out of 6 times. It would have been 6 out of 6, however, I made an arrogant assumption and threw a friend into the deep end, with a 50 lb weight. It was literally not until today at mile marker 195 (Juab county) that I realized why yet another relationship had ended… I threw them in the deep end and left the pool.
So here is how I landed all the previous potential sellers from loan mods to short sales, I am introduced with my background, I sit down, review their paperwork from the bank and tell them they won’t get a loan modification and leave. Thereby, leaving the agent to scoop up the seller, save them with a short sale and they all live happily ever after.
So the few of you that are reading and wondering, what went wrong on #6, its simple. The agent, my friend and business associate didn’t see this the same way. They were operating under the impression that I would walk all the way through the set up to the docs, to coach and teach the script to the close. I arrogantly assumed anyone could handle the situation and was gone after 20 minutes. Their appointment lasted another 2 hours and in two weeks I haven’t heard a word from that person… Jump to mile marker 195 (Juab County).
To my credit it, it took only two weeks to figure out how I screwed up another situation I thought I had done correctly and with a 100% close to that point, my ego was firing on all cylinders. So what could have changed, what should have been done and how can it be synthesized?
First and foremost, like most of my mistakes, I should just rewind the clock, stayed and led the client back through the marketing piece that was an offer to purchase the property.
The key to good scripting is the knowledge and leverage of the marketing piece. The next move, is confidence and takeaway. Present all of the options to your client at the pre meet, they normally don’t bring a full package. In all of the cases I’ve sat in on, the homeowners were all 90 days or greater with no contact from the bank. In English, that means they didn’t get a response or they submitted the paperwork and didn’t get a response.
The statistical probability of getting a legit recast that a homeowner can afford, is 30-40% and its usually based on an inability to make any kind of payments to the bank. You must present the stark reality of these numbers and situations. From a recent report (up north), homeowners are now seeking second and third opinions on loan mods, they are actually trying to find a magical solution even though it doesn’t exist. Confidence and truth, not being just right, that’s an ego’s position. I want the client to know what I am saying is true. To my friend’s credit, they actually care about what happens. There is often a point of oversaturation of overpromising during points of deep empathy to comfort someone. That is a great thing; I’m trying to learn how to do that. I personally put most people on a pedestal and wait for them to fall and clean up the pieces.
Now I could be completely wrong on how all these events played out, my mind paints images that are easier for me to stomach these days. I see through a very dirty window into my soul and I am amazed at the few friends that survived around me.
Lately, I’ve been trying to snatch butterflies with my net and salvage what few relationships I have left. I was armed with my new found wisdom discovered from the Ekhart Tolle books and felt ready to repair bridges. When I got here to Utah, I realized there was nobody to tell that I had arrived here safely. Not too many butterflies left.
So I’m sure you’re wondering what lesson we can glean from this last momentary lapse of insecurity. Indeed you can, first and foremost know that when there are no longer people in your life who care where you are, you are that much closer to removing your ego permanently and building better relationships in the future (I can rationalize my daughter actually caring, so I still have one). This version is a glass half full view, I’d like to think I’m growing and learning as I go.

Chapter 7 ‘How I find myself slowly disappearing too…’
I held my first live speaking event in the better part of 3 months yesterday. It was stacked with new attendees, past attendees and of course real short sale genius members, who have seen me many times. They didn’t expect (or at least I don’t think they expected) what they saw.
It was the former head loss mitigator for IndyMac bank, not droning on and on about how awesome I was for hours to dazzle them with way too much information.
What I think they got was McKenzie’s dad explaining how to go help a million home owners. I think….I’m not really sure, because, I did something I’ve never done before. I tried to be me for two hours. No production, no monkeys and it wasn’t about being “right” it was about finding the truth of the short sale process. I did it without my ego and bravado of scaring people to death of forcing them to love me or hate me.
Arriving in Salt Lake on Monday and not having a text loop of people to update on my arrival made me sad to realize what few tethers I had left to people who cared about me. I decided to make some new ones in my seminar. I gave everyone with a common interest a reason to run up the hill with me. I attempted to do something new, inspire and lead a room. It was my hope that I did.
I premiered a new teaching concept, the “short sale failure equation”. Much like my previous trainings there is way too much content in a small amount of time. Instead of pushing agents into the calculator and escalations I showed them the real reasons for the failure of short sales, simply put, there are way too many egos involved in a short sale transaction. You cannot push people to the close, you must lead them to the close. The seminar was a huge success for my mitigation company.
While I may be rejuvenated for speaking and teaching recently I lost yet another person in my life, it was the last one I had deep feelings for and what I believe was a ‘real’ connection. I was prepared to wait as long as necessary for life, my life, her life, time and space to align to allow me the chance, to have time together. However, it was not meant to be and my opinion on the why? It was just my insecure ego messing things up yet again. I am perplexed at how well I’m coaching, teaching and connecting in those settings, yet in my personal life I am mess and it’s all so ironic.
The reason I bring this up, I felt it was happening at points in my presentation. I would phase out mentally and discovered I was doing “canned” material from previous seminars. I had to mantra “I am here to help people, to teach and inspire”, that’s what I did. It was the power of positive thinking that inspired me to inspire my seminar room, a group of agents who grasped and understood the overwhelming obstacles of dealing with the banks, homeowners and other agents.
So, I’m ramping up to start speaking on the road again for Short Sale Genius and my mitigation company Fast Short Sale. I am scared, insecure and really do find myself alone at a crossroad in my life. This Sunday to insure that, I have pulled the last connection to my ego, I am going to kill the bull god “character” on my weekly radio show as well. I can only compare it to my personal recovery from alcoholism; it’s just something I need to do all the way, NO BULL GOD. Allowing my ego to run wild has lost me love, friends and nearly my connection with Trent and Ryan at Short Sale Genius.
For all of the regular readers of my blog, I thank you. My ego really hasn’t made an appearance here, it became a sterile environment for me to crawl inside of me. I tried and will continue to try and relate everything to short sales to benefit you and your business. Just remember not to focus on things you can’t change, please focus on the reasons you got into real estate, to help homeowners and help your families. Please don’t get lost in the overworking maze “I do short sales, I don’t have a life”, this is beyond unacceptable to me. I took every relationship in my life for the last three years for granted. I hurt people that I loved and am unable to amend these situations. Reconnect with your friends, family and love in your life. Please, please and please do as I ask, stop working at 5PM daily and go be with your families, your work will be there in the morning. Do not allow short sales and the personal bull god demons in your ego to destroy your life around you.
So in closing, I do have an amazing ray of light and I’m taking her to Disneyland (yes, we still go once a week)… I might event treat her to the Bibbidi Bobbidi boutique. Through her eyes I see through her eyes, hope, faith and joy. Please go find it in your personal lives, inspire and lead those around you in your life.

Chapter 8 ‘The Equations, People and Short Sales’
E to the power of 5 does not equal C
“The Equation of People, Short Sales and the Solution”
(Part 1 of the Trilogy of Ego)
Nowhere in my distant memory that is easily fogged by my own images do I remember anything but pain at this point. My vision may be clouded and I may be creating images that fit the mood I am in today. I am, as of today, disgusted, saddened, broken and bruised by my actions, the actions of people and the actions of an industry that has no clue to the actual impact they have on the people around it. It is the ripple effect. For my one action will have consequences on the lives of those around me. We all make choices, some good and some bad. How often are they correct?
I’ve been married twice and been in at least one other relationship where I thought I was with the one true soul mate. I, however, took hostages for the sake of convenience of making a tougher decision in my life. I have destroyed families by means of terror in my attempts to collect money from those who had nothing to give. I have been shot at by homeowners defending their property. I have watched grown men plead, beg and cry to remain in their homes. I have walked away from my own teary-eyed daughter as I walked away only to hit the road again to teach seminars to those who thought me a lunatic. I have conducted seminars, not to teach, but to feed my ever increasing ego, love me or hate me.
I compartmentalized these feelings as irrational non-feeling moments. They hold no bearing on reality at this moment. I cannot let my choices then affect my choices today. We have all made choices, some good and some bad. I have tempered these decisions with a dose of reality.
Homeowners made a choice and they now must face the reality of entering into a commitment they did not fully understand with the lending institutions they signed a contract with and will have to deal with someone like me. I, like many in my profession are a necessary reality. There is no such thing as a simple out. Feelings, money and threats will be volleyed about in rage and anger… I pose this simple question to everyone homeowner I have ever encountered: “If someone borrowed that much money from you, would you forgive that much debt without trying to collect it?”
We strangely live in a society of where there really aren’t that many consequences for our actions. I’ve lived in that altered reality, it really sucks when it twists sideways and you discover that there are always consequences for every action you make, good bad or indifferent. I am completely fascinated with the denial of homeowners and thinking that there are no negative consequences for letting the banks foreclose on them.
In basics, there are three emotions that collect money the best, FEAR, GREED and POWER. These are the basic characteristics within the human EGO that cause us to make decisions. It is rare when reactions are based on true events. Unconditional love of a child or a pet, it is real and unjaded by these egotistical projections.
(As a side note, I have encountered some who have found a true connection and soul mate in life, they do not judge and they just love. I live in a reality where the infidelity rate is at 70%. I would however, in a hopelessly romantic way, believe I will meet my one real connection).
FEAR: I can smell fear on a human; I thrive on it like a shark in the water that sees blood. I’m disgusted that I know this fact about me. I will use fear in ways that are unethical in their approach, composing a symphony of terror comprising of “what ifs” and “what will happen” scenarios that more than likely will never happen but are completely implied as happening. WARNING: This is the saddest fact from my past, I enjoyed inflicting pain. My ex-wife and my business partner Trent Chapman (www.theshortsalegenius.com) will tell you, just how proficient I am at dosing out fear and just how effective I am doing it. I can manipulate my intended target’s EGO with amazing dexterity and surgical-like precision. I have spent 20 years of non-feeling, non-caring and non-emotional servicing, collection and manipulation.
GREED: Everyone and everything in this life comes with a price tag. If you do “X” you will get “Z”. We bargain and negotiate to get and keep the people, places and things we want in our life. We all want comfort from love, money or property. This is called the “give to get” philosophy. I have used it and its still being used by the big three today… Loan Modifications are in fact the extension of someone’s greed of wanting to keep their home when in fact they haven’t made a payment on the property in months or even years. It’s arrogant and egotistical to believe that anyone would get to keep a home for “no reason”? It’s all about the manipulation of the EGO.
POWER: I would say this – be afraid of the banks. The federal government says foreclose on all Freddie and Fannie properties and the big three “remarkably” now have stopped all foreclosures, reviewing their entire process that will literally take months to rectify. Ponder this, what is the statistical probability that the big three were actually planning on pulling all of their foreclosure proceedings and it just happened to coincide exactly with the Freddie and Fannie demanding an expeditious foreclosure? Further, the first bank to stop foreclosure proceedings was Wells Fargo, who in fact was being pressured first to speed up their foreclosure proceedings.
EGO: That’s what all of this is about. This is the fundamental building block for all things collection and what I am about to further explain here and at my live training events. I will save a million homeowners with or without everyone’s help. That is my EGO telling me I can, and EGO can be used for something positive to motivate and help. I have an inflated EGO so it helps that it has a special project other than obsessing about people places and things I have no control over. I, like you, am handed bad news on a daily basis and I am working to live in a world without my EGO. I ask you to join me on journey, remove your ego, kick off your shoes and let me help you help millions… TO BE CONTINUED
Chapter 9 ‘An Open Letter to Wells Fargo, Chase Bank and Bank of America’
11/16/10
John G Stumpf
CEO, Wells Fargo
Jamie Dimon
CEO, JP Morgan Chase
Brian Moynihan
CEO, Bank of America
Gentleman,
It has come to a point within the real estate market where real estate professionals are disillusioned and scared to conduct any and all short sales activities.
Your influence and attempts and to “help” with the designation bodies, NAR and the individual state’s Department of Real Estate has made real estate transactions in the United States an absolute abomination. I would have guessed that you intended to “help” agents conduct short sales and instead you have wound up frightened them.
Almost any individual real estate professional that has been tried by any and or all of these groups has little to no idea of how to actually close a short sale transaction. The general perception of the standard agent, thanks to your “help” and guidance of the aforementioned programs, a standard agent’s perception of a short sale transaction is as follows:
1. Expect your short sale transaction to take at least 6-8 months to close
2. Expect to cut your commission
3. Expect for your client to get a deficiency or an unsecured note
4. Expect to be sued for an imaginary state or federal law if you do not make the lender a “principal” in the transaction and create a full fiduciary relationship
5. Expect to submit any and all paperwork that will benefit the banks attempt to collect future debt, failure to do so will cost the agent a loss of their real estate license
6. Expect that whatever the true value of the property is, the banks value will be higher and used as point of fair market value
7. Expect only 20% of your personal short sales transactions to close
As the current market stands, 75% of the real estate market is short sale listings. Only 342 HAFA deals closed in the United States. The standard listing agent only closes 2 out of 10 short sale transactions.
Your attempts to influence transactions to your benefit through “education” and lobbying have failed. You are now forcing your organizations into a territory you have ultimately been avoiding, that of an all REO market. The sheer weight of the numbers of REOs will increase and therefore drive your values further and further down, causing your current assets to erode even further. It is obvious that short sales benefit all three of your organizations or you would have found a way to bulk sale assets years ago.
I have decided that this cannot continue. I do not begrudge your attempts to collect and the bottom line is, the homeowners DID sign a contract to create their debts. However, your greed to obtain information, money and I am just assuming break the spirit of everyone and anything associated to a short sale transaction is disheartening. You have managed to cause agents to “give up”, investors to take their money into other opportunities and homeowners are now desensitized to the idea of allowing their property to be foreclosed upon without ANY social stigma.
I have attempted to educate agents over the last three years only to be thwarted by the DRE, NAR and multiple designation programs filling the agent’s heads with fantasies of lawsuits, disclosures and mindless minutia that all have NO baring on how actual short sales work.
My point to all of this is simple, we can all find a solution and a method that we can all easily live with, including education and online qualification systems or I can make sure that everyone I teach learns how to send an escalation letter to your offices explaining your “minimum acceptable net proceeds” have been met.
I wait for your answers; however I suspect, you’ll just order someone in the DRE to audit me or my company. That may sound cynical, however after researching your lobbyist’s activities, I’m fascinated at the amount of money that has been funneled to local department of real estates, national association of realtors and the attorney bar association (of course this is all alleged on my part; however anyone can do their own research online and draw their own conclusion).
Please help me to help you and to help others before this gets even more out of control.
Lee Honish
Trainer of Trainer’s and Former Head Loss Mitigator, IndyMac Bank

Chapter 10 ‘The PERFECT Non-Negotiable File’
As with so many things in my life, working in the unknown is a bad place for my brain. However, once it gets on track and decides that it is spinning in a direction that can comprehend what’s going…it’s rather relentless in its pursuits.
This takes me to today, as I was reeling mentally from my weekend of “oddities” and “unexpected” I sauntered into my offices in Las Vegas, ready to bury my head into another week of saving agents and homeowners from the perils of foreclosure.
While my mind was still trying to digest the holiday week and weekend, I conducted my Monday morning coaching call for Short Sale Genius (www.shortsalegeni.us), one of my agents was explaining PMI on a second position lien. I had explained that there was NO POSSIBLE way that there was PMI on a second position lien, EVER. However, this agent had spoken with the PMI Company and indeed there was insurance on this second position lien.
I asked the agent one question, “When was the loan originated?”
“It was originated September 2007…why?”
HOLY FREAKING CRAP! My brain spun into overdrive to comprehend what this loan (and probably many others) are… Second generation post-short sale, asset protected loans.
That’s right, a perfect loan designed to withstand the market depreciation and the brutality of the short sale process. It’s the perfect loan.
Here is how it works and/or the characteristics of the device:
• 80/20 70/30 75/25
• Same bank both the first and second
• Forced placed MI on the second
• Full to near full doc terms
• Second position would be a HELOC
If the homeowner goes into default this device would have the ultimate power and the asset would be protected from losing money. Simply explain if the first gets most of the payoff from a, REO sale, the second would get paid from PMI and the bank would still hold the collection rights on the second for not agreeing to terms and therefore seek long term recovery from the homeowner (life of the note).
Again, it’s the perfect loan.
The second position lien would be for the amount of 20 to 40% of the balance, based on the projected loss of the subject properties market. The HELOC has rights as long as they don’t agree to any kind of settlement with the homeowner. The PMI Company (probably) subsidized by the federal government, will cover the payoff on the second when it goes in default.
THEY MAKE THE SAME SHORT SALE vs. FORECLOSURE and there would be, in theory, zero negotiations. You take what that bank offers. If they wanted an unsecured note, you would have to take it.
Theoretically (again very theoretically), there would be some loss that could be defined by way of the property going to sale via the foreclosure process, but based on the compensation factors, the difference is literately a small percentage in change. If there is enough to pay off the first with a partial to the second and PMI on top of it, you would be hard-pressed to get any lender to accept your short sale at all without an unsecured note to compensate for their projected numbers.
Since I have now seen one, and only one, I can imagine that these loans may have some impact on the market to a degree. How much, how soon and when is still hard to speculate. Obviously, with the economy in the crapper, people making loans from April 1, 2007 forward will more than likely have this document.
I will find a work around, I often do, but this is something much unexpected in my universe. It is a perfectly designed loan, with asset protection written into it.
So my advice is – Ask your client the following questions:
1. Have you spoken to the bank about doing a loan modification (and/or submitted anything to the bank about a loan modification)?
2. Have you spoken to an attorney and/or started or stopped a bankruptcy?
3. WHEN WAS YOUR LOAN ORIGINATED?!!
These are the three biggest deal killers I know of for a short sale right now. Short Sales have NOT gotten harder; it is the perception of those who work on them that has changed. They are still the ONLY real estate to work on and now consume approximately 75% of the national market.
For a video clip on the article above visit: http://www.youtube.com/watch?v=nxId5KEcDTo
I will also be conducting a SPECIAL seminar on 12/14/10 in Las Vegas at my offices, please call to reserve your seat. If you have additional questions or need assistance with closing your short sale files, call my office and visit me in Las Vegas: 702-478-5836 or visit: www.fastshortsale.org
On a personal note…Happy Holidays, mine as of today, will be ruined until I figure out this monster and how to make it go away when you encounter it.

Chapter 11 ‘Closing Time’
In life, much like short sales, the deal just can’t be closed. Disappointments can start to become common place in day to day activity; it eats away at your gut and erodes into fear and anxiety. I personally have the same stresses that everyone else in life has; I own a company and have employees, partners and of course providing for my family. Lest anyone think that I sit without feelings for your plight and situation, I feel just like everyone else. It may be very new for the former head loss Mitigator to have feelings, but indeed I do feel. I’ve also learned in the past few days, not every feeling is good.
I melted this past week. I was left with an image I can only compare that looked a lot like a fudge sickle on a sidewalk in August. In my desperation for answers to me, which my brain that rarely operates in the unknown did something rather remarkable; it fought to salvage what I started many months ago. For those of you who follow this and read “everything” I write, know that I was forced to change my view and find my feelings and grow as a human. Well, I wanted to grow again. Faced with my own personal feelings and disappointments from work and personal relationships, I decided to drive far and I went looking for changes. I did, but it hurt bad to make the changes and I still sting from all the changes, but I saw the sprout of growth in a new direction.
If you continue to work in desperation, either personally or professionally, you will forever take bad deals that will never close. I can’t begin to tell you how many people I talk to these days that tell me they are frustrated with short sales. They have become too much work or they can’t seem to get consistency with the closes and its more work than it is reward (much like life I might add). The truth to all of this is somewhere in the middle with moderation, balance and working smarter not harder. Working for the sake of working creates chaos, I am certainly very good at this one, I create busy nervous energy wherever I go and it isn’t very healthy.
So firs,t examine why the frustration exits, then eliminate it. Personally or professionally this should be a very simple task, however, couple it with emotions and feeling and hence the issues begin. Being only on an emotional planet now for the last several months, I can comprehend your angst. You have a bad employee but she’s a friend or a family member whom, by the way once you work with someone and connect, disconnecting from that person is nearly impossibly from the emotions.
In a few of my last consultations with offices, the office staff was clearly the issue. However, the management of these places, my clients, loved their staff and thought it was just a matter of “training” them into short sale closers. Some people do not have the right temperament for the job. My recommendation in both cases was to offsite the short sale processing of files and to fire the existing staff. Easier said than done, I have no backbone these days and get myself involved in things that I shouldn’t be and I can’t get out of them because of my emotional connection.
Step back from your business and examine why you’re not closing your files, examine why the process seems hard. There seem to be 2 basic sticking points that I find on most companies and short sale closers. The first is simple, either you or your processor don’t have the right mindset or temperament for the position of short sales. Simple. They shouldn’t feel like a lot of work, they should feel like work, but they shouldn’t give you the feeling of neutral movement. Secondly, stop taking every deal that isn’t bolted down. Taking a deal for the sake of taking a deal is futile and will ultimately hurt you in the long run by not closing a deal and the negative perception that this will ultimately produce.
Treat your short sale company like a fine-tuned engine. What goes in from the beginning will dictate how the file operates at the bank. Triple check what your client tells you and review your file before you submit. As an exercise, review a file you are currently escalating and see if that issue was disclosed in your submission. Look at a file at the very beginning and see if it “says” anything before you submit it.
A short sale file is a story being told in reverse and you need to disqualify your clients.
I’m in the business of making the impossible happen for the lives I

Kristin Duncan | Short Sale Negotiation | Transaction Coordinator

KRISTIN DUNCAN

CELL: #562-480-1465 EMAIL ADDRESS: Kristin@duncansrealestateservices.com

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