John interviews Joe Hafner about the shortsale market and working with shortsale home owners.

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JOHN:  Hey, guys.  John Jones here with another edition of Tuesday Morning Coffee.  Today, I have Mr. Joe Hafner, and Joe has been with the John Jones Real Estate Team for approximately what?  Ten years, Joe?  Eleven years.


JOE:  Yeah, ten or eleven years.


JOHN:  Yep, and has been a huge asset to our company.  In the last two or three years, Joe has worked himself into being our short sale specialist.  Joe has the CDPE designation, which is the highest form of foreclosure or short sale training in the United States, and has worked probably what?  Fifty to sixty short sales in the last year or so.


JOE:  Yes.


JOHN:  Last couple of years.  Five years ago, we couldn’t spell short sale.  Now it’s a household word, unfortunately.  Joe, what is the first thing you would tell a homeowner out there right now who is feeling hopeless because they’re behind on their payments.  They feel like maybe foreclosure is imminent.  But what’s the first thing you tell somebody like that?  It’s a tough situation.


JOE:  I would tell them first off that doing nothing is making a choice, that the worst thing to do is nothing.  Because when you’re behind on your mortgage or you’re about to be behind, time is your biggest enemy.  So the best thing you can do is get with someone who knows what they’re talking about, who knows the process and get some advice.  Figure out where you’re at and where your options are. 


JOHN:  Right.  And you find that a lot of the people that come to see you is there sometimes a state of denial?  Are they past that point?


JOE:  People who get behind on their mortgage, it’s really the financial equivalent of going through a divorce.  People are beat down.  They feel bad about themselves.  They feel like they’ve failed in some way.  Even when it’s not their fault at all, the economic downturn or whatever.  And people go through like the five stages of grief.  And a lot of times they’re in denial, and by the time they come out of denial, they’re looking square at a foreclosure date. 


JOHN:  The people that you’ve been able to help, once you are able to get a short sale approved and it closes and you get that burden off their shoulders, how do they feel typically?


JOE:  People typically feel like a huge burden has been lifted off them.  On our website, actually, we have some testimonials of people who have just gotten done with their short sale.


JOHN:  Video testimonial.


JOE:  Yeah, video testimonials where if you look at those, you can just see the relief in their face.  You can see the lightness that they have where they’ve gone through this process, which sometimes from the moment you fell behind to the moment you’re able to get a short sale done, it could be six months or a year that you’re going through that. 


And people who get to the end of that and are able to escape with their credit somewhat intact without a foreclosure on their record, there’s just an incredible sense of relief and a sense of thankfulness that they were able to escape a financial disaster.


JOHN:  Joe, what would you say your success rate is of the people who actually come through here and say, “Joe, we want to try to do a short sale”?  What would you say your success rate is with those people?


JOE:  I would say people who come to me earlier enough in the process.  You know, if someone comes a week before their foreclosure date, it’s like a hail Mary pass where if you’re able to get it stopped, that’s great.  But a lot of times, you’re unable to.  But if they come to me at least a month before foreclosure date is set, I would say our success rate is probably about 85%. 


And of that 15% that is unsuccessful, honestly, about 10% of that is people who aren’t able for whatever reason, either unwilling or unable to cooperate, and get us the things we need to give to the bank.  And that last 5% is there’s just sometimes that for whatever reason, the bank’s just not willing to work with you.


JOHN:  So basically, 85% is pretty good odds.  As far as the difference between a foreclosure and a short sale, as far as the impact it would have on someone’s credit, give me some differences between a short sale and a foreclosure and how it affects somebody’s credit and I guess we can go into maybe a little bit their psyche?


JOE:  As of today, because these things are always changing, the way people report things to the credit reporting agencies, as of today, a foreclosure is on your credit as a foreclosure and it’s going to take seven years for that to be removed basically from your credit.  And it’s never really removed because once you’ve been foreclosed, every time you fill out any kind of loan application, you’re going to have to say, “I’ve been foreclosed.” 


A short sale, there is not currently anything on your credit that’s listed as a short sale.  Basically, what happens is most of the time in the course of a short sale, people get behind on their payments.  Not always.  We’ve done short sales where people have not been behind at all.  But most of the time, you’re going to get behind on your payments, and that’s going to show up and beat up your credit a little bit. 


But in the typical short sale versus typical foreclosure, you will be able to qualify for a loan within two or three years of the short sale.  With a foreclosure, you’re looking at seven to ten years.


JOHN:  Okay.  I get questions every day Joe, is how much longer is this going to last?  How much longer are we going to see the amount of foreclosure or the foreclosure activity we’ve seen in the last couple of years?  What are you seeing because I know you track these things and you look at realty tracks and that kind of thing?


JOE:  It’s hard to say, but until we see unemployment numbers go down, I think we’re going to continue to see the number of foreclosures and short sales.  Now, a lot of banks have been limiting their short sales.  As you know, we track all the foreclosures in Rutherford County, and at the sales, the foreclosures have been postponed or delayed and they’re not doing them at the rate they were. 


So a lot of banks are relying on short sales that kind of clear out this excess inventory.  Because the short sale really is a best case scenario for the bank and for the homeowner because the homeowner is able to get out from under that mortgage.  They’re able to leave with a little bit of dignity intact.  And the bank, they get to have someone living in the house, taking care of the house, and then selling it for close to market value. 


Where if they foreclose, they suddenly have a vacant house that’s deteriorating every day that no one’s taking care of, that they have to sell, that they’re going to typically get less than they would if they did a short sale.  So it’s kind of like a solution for everyone.  I hate to put numbers on it, but I think even if the economy turned around tomorrow, I think we’re looking at another two years of this, and longer if the economy takes longer to turn around.


JOHN:  Interesting.  That’s good stuff, Joe.  You can find out more about foreclosure relief by going to  It’s on the screen.  And please give us a call.  This guy is literally—and I’m not saying this because he works with me—he is the best that I’ve seen as far as understanding what the banks need, but also holding the hands of the potential homeowner that would be in this situation and working this through with them and having compassion and empathy in the things that these folks need. 


So please give us a call if we can help you in any way.  Thanks so much.  We’ll see you next week.