At 17 years old, just before my high school graduation, I enlisted in the United States Army. I was in such a hurry to get out of school that I never thought about the consequences of avoiding classes, such as personal finance, that could have kept me from future foreclosure. Like everything else in my life, I had to learn this the hard way. Hindsight, of course, is 20/20, so looking back at my life, I can see that common sense was not a major focus of my higher education!

         My first duty station was Fort Campbell, Kentucky. Oh, that wonderful bluegrass state! Fort Campbell was no different from any other military post. The main street in front (in this case it was 41A) was packed with businesses ready to help young people like me get all the worldly possessions they wanted, but didn't't’t need and couldn't afford. Imagine my excitement when I discovered I could get practically anything with this thing called “credit.”

         Used car dealerships were on every corner with cars packed like sardines. The longest lasting thing about them was the inflated payments. Often, soldiers who purchased vehicles from lots like these paid more for them than they were worth. To add insult to injury, the on-the-lot financing interest rates could be as high as 50 percent, even though it is against the law. These vendors knew that soldiers have wonderful things called “allotments,” which enable the vendor to be paid on a debt even before a soldier receives his paycheck. With allotments, the debt is deducted prior to the monthly pay deposit to a soldier’s bank account. This enables his/her credit to be stretched even further than a normal civilian’s credit. This can create more debt for the soldier. At the time of my service, the average soldier’s pay was little more than lower income wages. The benefits are the full medical for the soldier and their family, which eliminates a huge family expense. It also creates the illusion that soldiers have more money than they really do.

         Car lots were by no means the only or the worst of these credit vultures. Check cashing places would take a post-dated check and give soldiers the cash in return. I'm sure you've seen some of these in your town. The less honorable places had no qualms taking their own high percentage of the checks cashed with them-- sometimes up to 100 percent! They would use those wonderful allotments to pay themselves back. Often, the customer would not know how much the fee was until they saw the deduction in their pay. This leaves them with no money for food and other necessities, which forces them back to the check cashing business to take out another high-interest loan. They are now caught in an endless cycle of payday loan dependency! Thankfully, this is not as much of a problem these days because most cities and states have made laws regulating these kinds of practices. Moving on to furniture stores…

         I would have never of thought of a furniture store as a dangerous place, but it is. Here, you could max out your credit with home furnishings marked up 300% or more, and never have to pay a penny in the store. Nobody ever sees these places coming!

         Of the smorgasbord of credit vultures outside of military posts, the worst and most damaging to future financial well being are the realtors and the mortgage companies. Back then, realtors were getting kickbacks from mortgage companies, and mortgage companies were getting kickbacks from the lenders. Realtor kickbacks have been illegal in most states for some time, but mortgage kickbacks fell into a “grey area” of the law. The latter continued until 2007, when most of these mortgage companies’ dishonorable and unwise business practices caught up with them and they were forced to close their doors. This left THOUSANDS of their mortgage notes in foreclosure all around the country.

         When I purchased my first home outside of Fort Campbell in Oak Grove Kentucky, I had no idea as I walked into that Century 21 just how desirable I really was. Turns out, I was yet another unsuspecting victim of predatory lending. An 18-year-old with a full-time government job, allotments, and little knowledge about anything (contrary to my beliefs at the time), made for the perfect candidate. The purchase price I got was fair for the house, but the loan was another story. I don't remember all the details of my loan, but I do remember the closing. As I signed the closing papers, I read over the numbers and terms of the agreement. My Realtor, along with the loan officer, was right there with perfect answers to every question I had. They made sure I had that warm and fuzzy feeling about signing off on all the ludicrous terms outlined in the closing papers. Afterwards, oddly enough, I couldn't get anyone to talk to me on the phone! I was just one of the millions of people to fall victim to back end mortgage points (also known as “yield spread premium” or “YSP”). If you’ve ever closed on a house, it probably showed up on your settlement statement without you even know what that insanely high fee was. It’s funny how I remember the numbers. I suppose it’s because I felt so ignorant not knowing what any of them meant that they really stuck in my head. Three years of spending more than half my income toward a mortgage payment can do that!

         So there I was, facing foreclosure by the age of 21. Like the majority of those who find themselves in foreclosure, I also had a mountain of other debts piling up each week. The letters, the phone calls, the knocks on the door-- yes... I experienced it all!

         All these years later, as irony would have it, I now find myself in the real estate industry… and it all began with a simple invitation. My brother, who was a Realtor at the time, asked me if I wanted to attend a seminar hosted by a local REI Club. It sounded like a good opportunity for me to network, so I decided to go. The guest speaker was a self proclaimed “short sale guru.” Although he said very little that was different from any other motivating sales speech I have heard, he did open my eyes to a completely new world of possibilities in Real Estate. Until that seminar, I did not realize that, through basic negotiating, it was possible to purchase mortgage notes for less than was owed. As you may have guessed, the topic of his presentation was short sales.

         If only I had known about this when I was facing foreclosure myself. Looking back on it, I remember getting a ton of mail pertaining to my foreclosure, most of which I never bothered opening. Anything from an attorney I thought must be from the bank’s attorneys so I never opened those. The little official-looking post cards from people wanting to do a short sale on my property looked like they were from the courts, so I tossed them in the trash as well. Remember this; it is a very important point that I will discuss in-depth in the chapter entitled “The Homeowner.”

         After spending all day in the REI Club seminar, I went home and began to research everything I could find pertaining to short sales. I bought guru books, expensive programs, overpriced “boot camp” material-- anything I thought would help me. After a couple years of studying, researching, and preparing, I was ready to begin my career in negotiating short sales. I built a home office to work out of, ordered my business cards with a “get out of foreclosure” advertisement on the back, printed professional mailers, and did anything else I could think of to be as successful as possible in my new venture. I put a lot of thought into all the events pertaining to my foreclosure, and tailored my approach to be unlike anyone else’s.

         I compiled a list of properties that were in foreclosure and put the names and addresses on my mailing labels. My first mailing consisted of over one thousand unique addresses around the northern part of Ohio. I put ads in local newspapers and created bandit signs to place at intersections and in medians. After all of this, my first lead-- and future first successful short sale-- turned out to be the widowed mother of my barber at the time! Many of my leads came from simply networking with people everywhere I went.

         Once I had all her information collected, I got to work with the bank. I successfully negotiated a loan amount from ninety-eight thousand to fifty thousand, and I sold the house for one hundred and five thousand. I spent about seven thousand to fix the place up and bring it to code. After completing this deal, I was convinced that short sales were the key to my future success and financial well being.

         From that point on, I began to receive a steady trickle of leads from my mailings. From time to time, I would come across people who, if not in foreclosure themselves, knew someone who was. Most of my successful leads came from word of mouth.

         I have since moved on from short sales to commercial brokering. Although I still conduct foreclosure negotiations and short sales, I limit myself to one deal at a time. I enjoy the luxury of being able to choose what deals I will do and when I will take them. Through my web site, http://www.foreclosurenegotiations.org/ I help individuals who are working short sales themselves. I answer questions in the “forum” section, and use this section to manage specific short sales I’m working on with those I am counseling. I will discuss in more detail the extent of my use of forums later in this book.

         After many years of successfully negotiating short sales, I felt as though it was time to put my knowledge in writing to help educate others on how to successfully negotiate a short sale. This e-book is designed for anyone—from the beginner in short sales, to the professional short sale negotiator. I believe in the saying, “When your green you are growing, when you are ripe you are rotting.” This means that even I am not done learning a thing or two about short sales! Even my most recent short sale project presented new challenges that I have never come across with any of my previous deals. This goes to show you that working short sales is a never-ending learning experience in an ever-changing industry. It is important that you stay on top of these changes in order to maximize your success!

         Unlike many other foreclosure and short sale web sites and books, I offer mentoring through the short sale process in my forums FREE! Ask any short sale question you have and I'll answer it. For Club Members, I am available by phone. I have been mentoring and counseling in the foreclosure and short sales area of expertise for several years. Register today and get started on becoming a Short Sale Negotiator… or just learn new techniques and tricks! For a nominal fee, you can gain access to the Foreclosure Negotiations “Club Members” section. Among other things, this section includes a state-by-state list of REI Clubs Nationwide, plus a growing address book of foreclosure departments for various real estate lending institutions. If a Club Member comes across a lender who is not listed in this directory, I will personally compile the information and protocol for that lender’s foreclosure department as soon as it is brought to my attention.

GooD LucK!

Short Sale Overview
         What I’m sharing with you about short sales comes from what I have learned and experienced in doing them myself over the years. Realize that I am in Ohio and everything I say is based on completing short sales in this state ONLY. However, the basis of a short sale is the same no matter the state in which you reside. If you have legal questions, I strongly suggest you contact a reputable real estate attorney.

         To begin, you must understand that you will not close every short sale you work. You have more things working against you than in your favor. Think of a short sale as a snowflake. There are no two alike and each is extremely delicate. Every deal is going to have its own challenges and obstacles for you to overcome. Therefore, you must be flexible and able to adapt, overcome, and move on.

         As I stated before, the basis for a short sale is the same despite the state in which you reside. Sure, every deal will be different, but the steps involved and the documents used are generally pretty much the same. Let’s, first, define what exactly a short sale is. A short sale the process of negotiating the terms of a mortgage note and other liens against a property for less than what is owed. You also should know the difference between the deed holder and the lien holder. The deed holder is the homeowner, trustee, etc. that CONTROLS the property. The lien holder is a person or company that has an interest in the property. Most of the time, the lien holder is the mortgage lender who loaned the money to the homeowner to purchase the property. However, there are other ways a lien can be placed against the property. Cities can (and do) put tax liens on properties, contractors put construction liens on properties, a painter or other contractor could file a mechanics lien, and so on. Basically, anyone rightfully and legally owed money can put a lien against the debtor’s house as an attempt to collect. This ensures the property cannot be sold without the debt being paid off. The property is used as collateral in this way.

         Example: Bob is the homeowner of a house in Cleveland Heights, OH. Bob needs money for Christmas, so he takes out a second mortgage and maxes out the equity in his house. The following spring a windstorm damages the roof of his house so badly that he needs to replace the whole thing. The cost to replace the roof is $10,000. Bob is unable, or unwilling, to pay the contractors that replaced his roof, so the contractor...

         If foreclosure has been filed against you then we know you are getting a lot of mail. You will have a lot of people promising to get you out of foreclosure or to purchase your property from you. How do you weed out the cons from the legit ones? How do you know who's trying to help and who's trying to take advantage? The Foreclosure Negotiations Homeowner Consulting Support Service takes that stress off of your back! When in doubt, make a phone call or send an e-mail. It's that simple!

         Wouldn't it be nice to have that special phone number in which you can call at pretty much any time to ask a question, get an answer, clarification, support, or guidance from an experienced person? Well, here is how you get access to that Phone Number & Support!