E trade is the second lender on a short sale. Anyone have any experience with them agreeing?
Submitted by Elisa Uribe
from CA
- 08/19/2009 - 9:22am
I am representing the seller and his first is with Citimortgage, He recieved his NOD while I was at the open house this past Sunday so now we're trying to beat the clock and have about 2 months.
I just sent the letter of autho. to both Citi and Etrade (HELOC) and today we received an offer. I'm wondering if anyone has heard of Etrade Bank agreeing to a short sale.
I also heard that second position is starting to require 10% minimum. Does anyone have any direct experience with either of these.
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E-trades requires 10% of the loan amount., I just got approvel from the 1st lien holder which is LItton Loan Services and E-trade is the 2nd, both approved. Make sure that you ask you're negotiatorto post pond the trustee sale. If you're in the process of negotiation a short sale they well post pond.
Thanks so much for sharing the information. Makes me feel like we have a chance!
I too am dealing with an e-trade second. Here is my experience. The first which is Wells Fargo agreed to short sale and will credit second(e-trade) $3000 to release and allow sale. The total balance owed on second is $35000. The first which is owed $581000 agreed to sell for total net of $395,000 almost a $200000 loss. E-trade's response "We want a minimum 30% of principal and have the seller agree to a unsecured deficiency note for the rest." So a company who gets nothing when the 1st forecloses wont release with out full reimbursement, and we wonder why America's Banking system almost collapsed.
thanks for your post Simon and Gino. Luckily after 3 months we still have a buyer willing to buy the house. The first agreed to give Etrade 10% and of course they wanted 30% so now I'm waiting to hear. The one thing I will say about Etrade is they get back to me right away- now if they will just agree, then they can have a little bit of something in their pocket, otherwise, this deal is going to die and they will get nothing. Strange that when looking at "the books" something isn't better than nothing....I'll keep you posted and thanks again for giving me hope:)
Now etrade says" Short sale for a net recovery of 10.1% in the amount of $7,000 is rejected. E*Trade will counter offer to a net recovery of 14.5% in the amount of $10,000. E*Trade will agree to release the lien from the property for a short sale in the amount of $10,000 but will not agree to release the Borrower from the deficiency balance. "
I'm hoping to still make this happen. Any suggestions out there? The first bank will not budge on giving the second more than $7k.
Has anyone heard of the second not agreeing to release the borrower from the deficiency balnace?
Elisa - any chance the eTrade 2nd was a purchase money loan? If that is the case then it can help to remind them that they have zero right to recover a deficiency in CA anyway.
I've had the same thing happen with etrade. They had the First on a short sale in which i represented the buyers. In the short sale acceptance they stated they would allow the short sale to proceed and release the lien on the property but declined to accept the minimum net proceeds in full satisfaction of the amount due under the loan. After consulting two RE attorneys the decision was to foreclose on the property. We tried to have the language changed in the short sale acceptance time an again to no avail. 7 months of hard work a distraught buyer and not to mention seller! Be very carful taking Short sales where etrade is the lender.. Gd luck
Unfortunately he rented the house and I think the zero right to recover a deficiency in CA if only if the house was owner occupied. RIght?
If it wasn't purchase money then the one action rule exists. The second may have been wiped off of the title to the property through trustee sale but they have up to 4 years to seek a judgement from the homeowner. This would then be their "one action".
They will usually sell off this paper to a recovery or collection agency for pennies on the dollar. These folks can be VERY difficult to deal with.
Just wanted to let everyone know the second agreed to $7k and the property closes tomorrow. It was a long process, but Happy Clients in the end:)
Just wanted to let everyone know the second agreed to $7k and the property closes tomorrow. It was a long process, but Happy Clients in the end:)
Just wanted to let everyone know the second agreed to $7k and the property closes tomorrow. It was a long process, but Happy Clients in the end:)
So does this mean etrade did agree to release the Borrower from the deficiency balance?
Etrade said in the approval the note holder reserves the right provided in the note will remain enforcable if allowable by law, including but not limited to the collection of any deficiency balances.
My client did his due diligence and after a few days gave me the o.k. to continue and close the deal.
I guess you never know what a client is going to decide.
Our loan is with PNC/National City as the servicer but ETrade as the investor. HELOC 2nd (non purchase money recourse loan in California) with a balance of $350K.
We are having a hell of a time. Six months ago, they agreed to a lien release if we got them 40% or a full release if we got them 60%. At the time we had perfect credit and some money in the bank and an offer on the table. That buyer walked.
After the buyers walked we requested that the bank approve a slightly lower short sale since, in the high end market, an unapproved short sale sells way low. They would not.
Now six months down the road we have been late the last 3 months (30 days) and have no money in the bank (husband unemployed). We finally got another offer that nets them $38K. Furthermore, their BPO is now $200K less AND less than our first so they would net nothing in a foreclosure sale.
We just got the answer back and they said their offer remains the same as six months ago i.e. $215K for settled in full or $150K for a lien release.
Since our loan balance is $350K, I'm assuming they think we will make up the difference of $175K or that the buyer might be willing to pay as much as $350K more than their BPO.
Are they crazy? They are allowing us no alternative but to let the house go into foreclosure. We asked them to come back with something more reasonable as that settlement was based on a different market and a different financial picture and they said they would not. I asked to speak with Etrade directly and PNC said I could not.
We are beyond frustrated in large part because we could have had the house sold for only a minor loss a year ago but that would have required a short sale negotiation and those buyers were not interested in the short sale process. So our offers are low because of the short sale process yet the bank wants us to make up the huge shortfall that they caused.
Wow. Your story is definitely why buyers do not always decide to wait...short sales are risky for the buyers and the sellers. I wonder if it has to do wtih Etrade being the investor with National CIty holding the note.
Wow. Your story is definitely why buyers do not always decide to wait...short sales are risky for the buyers and the sellers. I wonder if it has to do wtih Etrade being the investor with National CIty holding the note.
I have Etrade as 2nd and they have agreed to 10% which is only $900 more than BofA will allow them. We can work around that. Just have to get the sellers to agree to the Etrade note which says they can go after the deficiency which is about $50k. This is a Heloc in CT so I assume that by law they can go after the deficiency?
It seems these banks area always leaving it open and it's a standard clause in a contract. The seller can call the bank direct and try and negotiate the 50K out of the deal or 10 cents on the dollar, etc. Of course, we're not tax professionals so he should speak to a tax advisor if he's not sure what he wants to agree to. Good luck!
I am a realtor for a short sale, PNC as first andEtrade as second. PNC approve short sale 3 days ago. I have no luck gewtting a call back from Etrade so that I can forward the Short Sale package. Anybody has a good contact number (fax & tel #) for Etrade's short sale department. They are not responding to my voice messages. contacted etrade via 800-762-0710.
THANKS IN ADVANCE!
I found another phone number for their Real Estate Loan Servicing Center 866-344-0552. The ETrade Bank main office phone number is 800-ETBANK-1. We do not see a listing for the loss mit department but hopefully one of these numbers will help.
Thanks! I will try calling 866-344-0552 as well. After calling several tries and so many different telephone numbers, I found out that Etrade uses a servicing company for the case I'm working on. The telephone number I called was 800-729-4810 and was finally talked to the litigation department and was able to obtain an email address to send the short sale package. I sent my package to alicia.smith@pnc.com. I am hoping that this is correct.
You won't get anywhere calling E-trade. E-trade is the investor, the servicer is CLC servicing, which is a division of PNC bank. So you should be contacting PNC short sale dept which is probably where Alicia Smith works. There are other blogs on the web that discuss CLC/PNC servicing of e-trade helocs. They are tough to negotiate with but the bottom line is, most of these are in CA and non recourse.
I am in a short sale situation where by Bank of America holds the first mortgage via countrywide and that note is for 234K, E*TRADE holds a lien in the form of a HELOC for 49K. The house once valued at 350K is now barley worth 195K on a good day and dropping. BofA agreed to a short sale which netted them 191K, mind you that we have kept E*TRADE in the loop since the beginning, we offered to transfer the HELOC over to our primary property a year ago but the E*TRADE representative said that E*TRADE is no longer in the home loan business and that such a move would be impossible. This whole deal has been in the works for 14 months now with the buyers hanging in there and me scrapping by, current with E*TRADE but months behind with BofA. When we sent the offer sheet over to E*TRADE and asked them what they wanted (I would have done about anything) they replied asking for paystubs, income statements and then they ordered their own BPO. This all the while the deadline imposed by BofA is getting closer. E*TRADE said that they would have an answered in 5 days after all the paper work was in, took them a month. Their demand send me to the floor, they wanted 54% of the HELOC or 26K+ at closing and the option to sue for the rest. I offered several thousand at closing and to transfer the lien to a secured property buy that fell on deaf ears. Talking to my contact over there “Al” was like talking to a stump, My Lawyer advised against transferring the E*TRADE HELOC over to our primary for obvious reasons and he was stunned that E*TRADE did not jump at it the day we offered it up given that for all practical purposes it unsecured right now. Foreclosure is looking all too real right now because of E*TRADE and I don’t know what they expect to get in that. That’s where we are. I'm told that i should have been way behind on my E*TRADE loan, that might have brought them to the table. anyone with E*TRADES collections stratagies
These are the stories I find most frustrating! You are being very reasonable and it is hard to believe that they are not jumping on your offer. It is now time to escalate this up the chain of command. I would take this all the way to the CEO if you must. I would also write all of this down and send it off to your local elected officials (Senators, Congressmen, Supervisors). This is the type of story that their staff can sink their teeth into and help you to escalate this up the chain of command. I have personally been involved in situations where this has worked. It does take some effort but can be incredibly satisfying when the power play works. Sometimes it is just the right phone call to the right person and then mountains get moved.
If for some reason you cannot get this approved and you do end up going to foreclosure I hope that you will still make all the calls and send emails to your elected officials. This is the type of lender behavior that all of the government programs are trying to prevent.
Yep, we went through this (see prior story). I can't believe they are asking for 53% as a lien release. With us, they initially wanted 60% to settle in full or 40% for a lien release. Six months later and after going late (we had spotless credit) and several rounds of back and forth, they were willing to release the lien for 10% and we were finally able to get a paid in full settlement for 35%. Etrade was awful and wouldn't do a promissory note or anything. I had the feeling they would come after us for the balance so I really wanted to settle in full. Our buyer came to the table with some more money as did we and it worked out, but not before having to go late.
Yep, we went through this (see prior story). I can't believe they are asking for 53% as a lien release. With us, they initially wanted 60% to settle in full or 40% for a lien release. Six months later and after going late (we had spotless credit) and several rounds of back and forth, they were willing to release the lien for 10% and we were finally able to get a paid in full settlement for 35%. Etrade was awful and wouldn't do a promissory note or anything. I had the feeling they would come after us for the balance so I really wanted to settle in full. Our buyer came to the table with some more money as did we and it worked out, but not before having to go late.
I’d like to be perfectly clear on this, we (my wife and I) never asked PNC to write off the HELOC or for it be forgiven in any way. We are simply asking PNC to transfer it to our primary home that has in excess of 100K in equity. The house here in question was a second home that we bought at a bad time with blood money. The Contact at PNC –Al Lubaway said that transfer is an option but it would take 3 to 6 months to do. I asked why? He said that, that is the way things are going now in the industry. I called several lenders who said that they turn an Equity line around in a week if all goes well and never more than ten days. The closing attorney who works for my realtor said that a simple drive by appraisal and my signature would be binding enough for PNC to release the lien. They would have none of it. E*TRADE/PNC is hell bent of forcing foreclosure for some reason. They must feel that they are better off coming after me that way rather than just accepting cash and an equity transfer. Please know that if it were not for the added burden of the second house with no rental money coming in and the effect it has on our debt to income ratio, I could get another loan and payoff E*TRADE, they don’t even want to hear that. As of right now they want 26K and we offered 10K just last week, no word back yet and I don’t expect to. I believe that Al Lubaway is just a conduit for others because when you talk to him he has no answers, talks in vagaries and often times just sits there quiet. It’s weird
I have a interesting case. I would appreciate any comments.
I took out a HELOC from ELoan for 62K on my home in Arizona, I soon received a job transfer out of state and due to circumstances we ended up doing a short sale. In the meantime, the HELOC was sold or transferred to E-Trade. After 1 year of the short sale, I was contacted by a thrid party collections company demanding the balance from the HELOC. I have a Deed of Release from ELOAN (not Etrade) listing as Beneficiary, "MERS as nominee for E-Loan, Inc" and me as the Trustor.
Does anyone have a clue on what this means? Is this form irrelevant since ELoan had transferred the note to ETrade(Although as I understand it, the 2 companies are part of the same corp)? OR could it mean that they HELOC is considered paid in full. On my credit reports, its listed as an Etrade loan and "written off".
Thanks for any advice.
You would need to go back and read the short payoff demand from your short sale. They may have agreed to release the property and accept the short pay amount but they may have not given you a full satisfaction release meaning that they can come back and collect the difference. It is so important to read the short payoff agreement and look for the full satisfaction language prior to closing on your short sale.
I went back to the documentation regarding above but found no such agreement. I went back to the company who represented me on the short sale and they insist that there is nothing Etrade can do about it based on the fact the property was in Arizona?? They also point to the fact that the Deed of Release I mentioned before states, "Paid in Full". But again, its for ELOAN vs ETRADE. After playing hardball with me for a few days the collections agency hasn't contacted me again in over a year. I did send them, based on advice from a RE attorney, a letter of validation, certified, which they did not respond to. But I'm afraid to contact any of the parties as I don't want to open up a can of worms.
Thoughts?
Check the paperwork you got from the title company. They would have needed a written payoff demand (short payoff) to close your escrow. If you do not see a copy contact your title company and let them know you need a copy of the payoff agreement for the 2nd. The title company should have had you acknowledge this payoff statement. Read this carefully and look for that full satisfaction language.
Thanks for all the advice.
Last thing. What do you think the odds are that they will try to sue prior to the 6 year Statute of Limitations (4 years left).?
I am not certain that they need to sue. I believe (and you will want to verify this) that as long as they are attempting to collect there is not statute of limitations. You may want to try to settle with them (possibly for pennies on the dollar) so that you can begin to repair your credit and ultimately be able to buy another house. I have heard from one source that they wait for you to rebuild credit (when you are no longer a candidate for BK) and then they put the pressure on for payment.
If you can negotiate with them it may be the best bet to deal with it now then have this hanging over your head for the next few years.
Thanks again for the response. The statute of limitations for this type fo debt is verfied as 6 years in Arizona. The only thing that will restart the SOL clock is if I send them any form of payment...no matter how small. But again, they havn't contacted me in over a year....andy my score has improved to 700. When they did offer a settlement last year it was for 40% ($24K) and insisted it be paid in a lump sum. Living payched to paycheck that's not anywhere in my future. I guess all I can hope for is the SOL passes.
Thanks for the info on AZ SOL! So the activist in me says to keep excellent notes on any communication with them. Since you have clearly tried to settle and they have been unreasonable in their demands for a LARGE lump sum payment I would make sure I kept excellent notes of dates, times, names and conversations. If they do come back and try to demand payment I would take this to my elected officials so fast it would make their head spin. I have seen some remarkable things happen when you use the political power play. If you keep notes and show that you have tried to resolve the matter and they have been unreasonable I would think that this would be something that the bank would not want to be broadcast or have some politician use it as the poster child for bad lender behavior. The squeaky wheel gets the grease in this case.
Of course that is just my opinion on the matter.
Just today E*TRADE (PNC) agreed to release the 2nd lien, accept 14% at closing about $7000 on a 49K HELOC. They said that they will go after deficiencies however. Bank of America is putting in 4K and I’m handing over the rest. This short Sale has been in the works for 17 months now; it’s been a very manic ride. The buyers have been very patient. My 1st started out as a Countrywide mortgage then BofA absorbed them and it took months for BofA to put Equator in place. From March of 09 until April of 10 virtually nothing happened but phone calls long waits and nothing new. In April BofA accepted the short sale and we started dealing with PNC. PNC wouldn’t talk until BofA took the deal. E*TRADE (PNC) wanted HUDS, hardship letters and new BPOs. They dragged their feet on the BPO. And then asked for clarifications and amendments made to the HUD. All this took 4 months, E*TRADE. E*TRADE (PNC) was difficult to deal with but cordial and professional every time that I called. They are very slow. If you have an E*TRADE second mortgage hanging off your first plan on offering no less than 10% at closing and made sure that all your “I”s are dotted and “t”s crossed. Be patient but keep on them. They would have you think that they are “indifferent” in terms of whether or no you are foreclosed on in terms of them getting their money but they are not. They know that if foreclosed on their chances of getting paid in full drop a lot. Gently remind them that a lien on a house that is upside down is worse than working out a deal with you after you sell the house and no longer have costs associated with the house.
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