California Mortgage Broker is Known for Short Sales
In real estate circles, Pete Gliniak is known as the “Short Sale King.”
Eschewing traditional real estate transactions, Gliniak focuses instead on homeowners who are financially struggling or are in default or foreclosure.
During market downturns - such as the current real estate climate that’s emerged in the wake of the subprime fallout and tightened credit standards - many California mortgage holders now owe more on their homes than they are worth. That’s where Gliniak comes in.
As the owner/mortgage broker of Real Estate Express in Covina, he knows how to handle these situations.
“You can take any house in any neighborhood and determine the price it can sell for in today’s market - not what it used to sell for - but now,” the 51-year-old La Verne resident explained. “Then you deduct the normal and traditional selling costs. If there’s not enough left to pay off the house, you put together a short-sale package.”
The goal, according to Gliniak, is to make the best of a bad situation.
The owner doesn’t get anything from the sale, but a short sale is considerably less damaging to a individual’s credit rating than if the home were to go into foreclosure, he said.
In many cases, the lender has to absorb the loss if a home sells for less than the loan amount, according to Gliniak.
“If there is a $400,000 loan on the house and it sells for $350,000, that minus the costs would make it around $300,000,” he said. “If the bank doesn’t accept that, they will have to foreclose and resell it. But by the time that happens, the house might be worth $30,000 less.”
When a lender OK’s a short sale and agrees to absorb the financial loss, the documention becomes arduous, according to Gliniak.
“It has to meet auditing scrutiny, managerial review and investor approval to justify their taking the loss,” he said.
And for homeowners who opt to go for a short sale, the financial information that’s presented to the bank is a little different.
“Instead of putting together a packet that shows how (financially) strong you are, this will show how distressed your situation is,” Gliniak said.
Gliniak - who has worked in the real estate industry for 30 years - stressed that sellers can resort to a short sale only when all of their other options have been exhausted. In most cases, they’ve already depleted their bank accounts, tapped out all family resources and are not eligible for bankruptcy.
Gliniak receives 10 to 15 leads a day from real estate agents, brokers and attorneys who have clients they feel are prime candiates for a short sale.
But as more and more homeowners fall behind on their home mortgage payments because of loans that have reset, Gliniak figures he’ll soon see 25 to 30 requests a day.
That doesn’t surprise William Moran, a spokesman for the California Department of Real Estate.
“Notices of default are up considerably in California from a year ago or two years ago,” he said. “There is definitely a need for short sale services.”