When he launched the program in September 2014, Welt said it had taken nearly a decade to persuade lenders to sell properties directly out of bankruptcy court in short sales instead of moving cases to state court for foreclosures.

In the last six months, he’s closed the sale of 15 houses after borrowers surrendered the properties in bankruptcy. He said new cases in the past week generated five more potential deals.

“We could sell every day,” Welt said. “I have a list of about 500 people who say, ‘We want to know what you have when you have it.’ ”

In September, one sale turned a no-asset bankruptcy case into a deal that partially satisfied the first mortgage and generated a $13,000 carve-out for unsecured creditors and $10,000 for a nonfiling spouse. By arranging the bankruptcy sale, marketers generated $345,000 for a three-bedroom waterfront house with patio, pool and tiki hut on a 9,563-square-foot lot in Pompano Beach.

The latest lienholder, Nationstar Mortgage, was owed $934,524 on the property that last sold for $560,000 in 2004. It authorized the trustee sale and accepted a $291,453 payoff.

“They were smart. They said, ‘We have a sale. Let’s take it. We don’t want the property and have to take it back into state court,’ ” Welt said. “Nationstar is one of the banks that gets it.”

Foreclosure defense attorney Roy Oppenheim, who has not participated in the program, was one of its early supporters since his firm, Oppenheim Law of Weston, has worked with lenders to sell properties directly out of bankruptcy.

I’m all for it, he said Tuesday. Anything to get properties that are languishing, that are stagnated only helps the real estate market. Oppenheim said he’s handled hundreds of cases of owners and lenders treating their homes as transient property, fearful to invest in maintenance, only to later lose the houses.


“If it’s being held by the bank or by a trustee, it’s a drain on the economy. The only good way to keep money from being held up is to give the private sector the go-ahead. … Otherwise, it gums up the system like rot in a pipe.”

Last year, Welt got the green light from Fannie Mae, Freddie Mac and several major lenders to create a program that would accelerate sales in cases where homeowners surrendered their property. Both the Federal National Mortgage Association and Federal Home Loan Mortgage Corp., which are linked to about 60 percent of foreclosures, signed on to the pilot program covering the Southern and Middle Districts of Florida, New Jersey and the Eastern District of New York.

“The lenders understand the program and are quick to approve the short sales,” Welt said.

Instead of letting foreclosures languish as bankruptcies play out, the program aims to shave years off the sales process and delivering payments to unsecured lenders that would likely have ended up with nothing in several cases.

“These properties normally don’t go the route of being listed for a year,” Welt said. “They are being snatched up as soon as we put them on the market. Once I give them to Realtors, they don’t last more than a week. And each one will have $15,000 to $20,000 left on the table for the lender after all expenses are paid.”

Under the program, lenders must agree to carve out a percentage of house sale proceeds for general unsecured creditors in bankruptcy.

As trustee, Welt’s compensation is determined by federal law and depends on how much creditors recoup. He earns up to 25 percent on the first $5,000, 10 percent on amounts of $5,000 to $49,999, 5 percent on amounts of $50,000 to $1 million and “reasonable compensation” of up to 3 percent on distributions above $1 million.

“I really believe it’s a win-win,” Welt said. “It’s part of a fresh start for debtors. That’s what bankruptcy is. From a people standpoint, it’s a good thing for the homeowner, for the neighborhood and for the lender.”