The term "short sale" is used to describe a real estate transaction where the seller owes more on the debt(s) secured by the property than the property is worth, and the seller's secured creditor(s) agree to release their lien(s) on the property even though the creditor(s) will receive less than the full amount due on the debt(s) from the proceeds of the sale. Generally, because the proceeds belong to the secured creditor(s)--not the seller--the secured creditor(s) can negotiate the amount of closing costs paid from the proceeds of a short sale, such as real estate commissions.

This webinar addresses issues the lender must consider in negotiating a short sale.

What Lenders need to know when dealing with these transactions
Timing issues
Title issues
SBA issues

What prospective Purchasers need to know if they want to have the best chance of a successful closing of one of these deals
Timing issues
Title issues
SBA issues
Important deal points

What Seller's need to know if they want to have the best chance of a successful closing of one of these deals
Timing issues
Title issues
SBA issues
Important deal points

Short Sale Approval

Standard of Review

A request from a borrower to approve a short sale should be analyzed in the same manner as any other request for release of lien for consideration. The test is whether the dollar amount offered as consideration in exchange for release of the lien is approximately equal to or greater than the Recoverable Value of the property. At a minimum, the documents that should be reviewed include:

(1) Real Estate Listing Agreement;
(2) Real Estate Purchase and Sale Agreement;
(3) Short Sale Addendum to Purchase and Sale Agreement;
(4) Current title report;
(5) Draft settlement statement;
(6) Consent letter from any other lender whose agreement is required to complete the short sale;
(7) Post-default Appraisal of the property; and
(8) Pre-approval letter from the purchaser's lender.

Credit Bids

1. Requirement
A Credit Bid should be entered at all real property lien foreclosure sales initiated by SBA, a 7(a) Lender or CDC to foreclose a lien securing an SBA Loan, whether the sale is judicial or non-judicial.
2. Credit Bid Amount
To determine the amount of a Credit Bid the following factors must be considered: (a) Recoverable Value; (b) the loan balance; and (c) need for and ability to collect a deficiency judgment. The Credit Bid amount should be based on the Recoverable Value of the collateral and should not exceed the amount of the loan balance. Further, the entire loan balance should not be bid if doing so would eliminate an otherwise collectible deficiency.

Eviction Proceedings

If title to real property collateral is acquired by SBA, the 7(a) Lender or CDC through foreclosure or otherwise and there are tenants or others unlawfully occupying the premises, it may be necessary to evict them. Consult Legal Counsel to determine the appropriate course of action.

Who should attend?

SBA department managers
SBA loan underwriters
Lender Workout specialists
Special assets personnel
Liquidation attorneys
Chief Credit Officers

Our panelist is the national expert who has earned that distinction the hard way -- through personal experiences of liquidating SBA 504 loans.

Mitch Fogel
Partner
Fogel Law Group
Licensed to practice law in Florida since 1987, Mr. Fogel founded Mitchell C. Fogel, P.A. in Ft. Lauderdale, Florida in March of 1991. Presently, the law firm is known as the Fogel Law Group (FLG). Formed to provide the highest level of legal services, counseling and professionalism to its clients, FLG has closed numerous loans for its lender clients, including hundreds of SBA 7(a) and 504 loans, earning the firm an excellent reputation nationwide for its expertise in SBA loan transactions. Most recently, FLG has been engaged by many of its lender clients to handle modifications, workouts, foreclosures and liquidations of both SBA 7(a) and 504 loans. Please visit the Areas of Expertise section of the firm's website for more information on how the firm can assist you with your legal needs.

Moderator:
Bob Coleman
Founder
Coleman Publishing
Bob Coleman is the Author of "Money Money Everywhere And Not a Drop For Main Street". Coleman is the Editor of the Coleman Report, a trade newsletter for small business bankers. He is the nationally recognized expert on small business banking. He has appeared on Fox Business News and CNN and has been quoted by most major financial media outlets including the Wall Street Journal, New York Times and Bloomberg. He has spoken at numerous small business banking events across the United States, including international engagements. Coleman has a B.A. in Medieval History from the University of Southern California and a M.B.A. in Real Estate Finance from the University of Southern California.