What are the departments involved in a short sale and foreclosure postponement?
Submitted by A.M.
from VA
- 03/26/2010 - 7:55am
I am in the process of working my first short sale with some basic training. Are there any official guidelines as to the process and what lender departments need to be contacted at the various intervals?
Comments
You will want to contact the loss mitigation department of the lender and get the checklist of what they will need in their package. You can also use the ForeclosureRadar Short Sale Report for additional information. http://www.foreclosureradar.com/short-sale-report. We highly suggest taking a class on how to process a short sale. There are several organizations that provide this training. You can contact your local Board of Realtors, California Association of Realtors, National Association of Realtors, CDPE.com or Harris Real Estate University to name a few.
First, get the Third Party Authorization completed and signed by the Seller - You can get this from the lender or use a generic copy.
Second, contact the lender and get their short sale requirements - this way you will have the latest forms and ask about their process flow, timelines, etc.
Third, submit only ONE offer that is fully exectued with an accurate HUD closing statement (buffer for time) and the other requirements - typically, listing agreement, purchase agreeement, HUD, hardship letter, Financial information form, banks statements and tax returns. Put the loan # on every page - Fax or deliver how they instruct you to.
Fourth, folow up and make sure they have the package - find out when the BPO (broker price opinion - like an appraisal) will be odered - Follow up every 2-3 days - dont be surprised if the story is different each time - yes we have the package.. no we dont have the package - get used to it.. dont whine - its just part of the program.
Take detailed Notes - each and every call - who you spoke to - what was said.
More advanced tactics include having the person type notes into the system - this way, it is logged - ofter I wait until I hear them typing..
Always be nice - as frustrated as you are they get it every day - probably 30-40 calls per day.. I try to be the nicest person they talk to in their day - connect to them - there is a person at the other end of the line. How great would it be if that person went the extra effore and found your file or IM'ed the negotiator, etc.
Stay persistant and keep on it.. When you feel like you are ready to give up, then you know you are getting closer! Don't give up.. you are leaving your Seller and the bank in a better place by completing a short sale.
Remember to find some space to have fun - this goes for homeowners, banks, realtors, etc.
BOB, MBA, CDPE, e-Pro
bob@inspiragroup.com
Talk to your lender, look for an assistance before moving to the next steps
Regards,
Tony
http://www.foreclosurelistings.com/
I moved into my present condo apt. in october 08 with one year lease agreement. the lease expired in october 09 and was never renewed but i continued staying with landlord's consent without further renewal. In may or june this year i came to know that this apt is on short sale. I ,thru my realtor submitted an offer to buy this apartment so i could continue living here.my realtot is in regular touch with the negotiator to find out if my offer is approved. last month i was told that my offer was accepted but since the landlord has a second mortgage too and that has not been cleared. so i am stuck there and i am still living in the same apartment. i have never defaulted on my rent. i pay the rent to my landlord thru a bankers cheque everymonth regularly.my question is am i doing the right thing by continuing to stay here and am i right in paying the rent to my lanlord as usual. iam just hoping the last part i.e the second mortgage is also accepted and i get to stay in the same apartment. my landlord says that short sales settlement takes time.and that i could stay here for as long as i wished and keep paying the rent to him.i don't mind but this whole situation is so uncertain and i do not know how long will this take to settle.can somebody give me some tips as to how should i go about it and what is my status in the whole scenario.
Hi Pramod,
As long as you are living there as a renter on a month to month agreement you are obligated to pay rent. If you stop paying rent the landlord could evict you.
You also are trying to purchase the property as a short sale which means that all lenders must agree to accept a reduced payoff and release the lien on the property so that you can purchase the property and be issued a clear title policy. Short sales can take a very long time to get approved since the lender is looking at all of the financial information from the owner (including the hardship as well as the valuation information on the property to determine if they are willing to accept the reduced amount and approve the short sale.
The risk to you is that the lender (sounds like you are only waiting on the 2nd) could refuse to approve the short sale. If you cannot successfully negotiate a short sale then the lender would undoubtedly foreclose on the property. If the property goes to trustee sale (and if you are in CA) then you would be given a 90 day notice. At that time you may be able to negotiate the purchase of the property but you also may have to move out first since most lenders would want to list the property when vacant.
Your biggest risk at this point is that the short sale is not approved and you are forced to move.
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