I just read the latest Making Homes Affordable statistics. They show the largest lenders/servicers in the country and their statistics as far as loan modifications offered to eligible borrowers, and loan modifications approved. I’ve reprinted the chart on my website, at http://deniselevans.com/Modifications.html
The numbers are interesting. The lenders with the highest percentage of offers and approvals will probably be the lenders with the lowest percentage of short sales. That is because they will be discouraging or denying short sales and pushing borrowers towards modifications.
This is not a bad thing for all of you who are interested in short sales. Remember, I told you in my newsletter that the way to think now is loan modification and assumption by a buyer, not necessarily short sales all the time. I think the lenders with the highest percentage of modification approvals are also going to be good targets for assumptions after the loan has been modified.
How do you get paid? I think this is still a good time to represent buyers, as buyers’ brokers. If the buyer is getting into the property for no money down, they can afford to pay a commission. In addition, take a lesson from commercial brokers. Tenant representatives normally make a commission equal to a certain percentage of the gross value of the lease. If the lease is at $1,000 per month, for five years (60 months) then the gross value is $60,000. The tenant rep might get 4% of that, or $2,400 paid at closing. Many will take a somewhat higher commission, paid out of each month’s rent. That agent might get 5% of each month’s rent, or $50 per month. $50 doesn’t seem like much, but if you had a lot of those checks coming in, it is a nice steady income.
So, when representing buyers, you might want to think about taking your commission in monthly payments over a 12- or 24-month period. Maybe you secure it with a second mortgage on the property, maybe you just take the risk. It’s a commission you wouldn’t have had, otherwise, isn’t it?
Check out the modification chart, by lender, on my website at http://deniselevans.com/Modifications.html
