Which lenders are easy or hard to work with on a shortsale?
Submitted by Joanne
from
- 04/17/2008 - 8:57am
I'm finding it easier to work with some banks than others. Does anyone have a list of whose hard and whose easy to work with?
Comments
Great question Joanne!!! I'm going to leave this at the top of the list and ask everyone to add comments with their current experiences. I for one have heard that Countrywide is a pain - makes sense that they are not as motivated as they should be given their pending acquisition by BofA.
GMAC has got to be the worst! they will not accept a short sale offer..and demand fair market value only!
WOW, I just got an approval from GMAC (but it was being serviced by Homecomings) and its a great approval!! But we DID bring it in at above the BPO value. They sat on our first offer of $310 for a while and finally after we got the approval, we had lost the buyer to a faster short sale approval.
Luckily, I was able to get an even higher offer to them!! This one is in escrow now, but the net sheet was off by close to 3 grand for taxes and HOA fees. I am hoping they are OK with this and escrow can proceed! But I have heard nightmares about them wanting to knock your commission just to close a deal and they better not try that!
Great stuff ShortCutz. Please create a profile and login -nice bit of free advertising for you. Also, would love to see you comment on the lenders you've worked with on our Short Sale Report. Thanks for posting!
My info is that Countrywide has a problem "making deals" across the board whether short sale or bulk sale because they do not own ANY of the assets (home loans) that they service. They actively market on their homes on the web and at third party auctions so that they can demonstrate to the investors that own the loans that they are selling them for market value.
In the last few weeks I have heard rumors that CW is opening up and has been approving short sales but I do not have firsthand knowledge.
1) We have a CW short sale that has not been touched for 5 weeks. Complete package sent - they quoted 2-3 weeks, then all the excuses. We were promised it would be assigned and hasnt.
2) Downey and First Franklin were predictable and were relatively easy to deal with.
3) Just submitted to Indymac and they are quoting about 60 days.
Bottom line - you gotta keep up on them. If not, you SS will get lost in the system.
BOB
Does anybody know about Chase?? So far it's taken me 2 months and 2 loan workouts that DON'T WORK!!!
Sounds to me like you already know about Chase - yikes! Thanks for letting us know.
Chase was horrible waste of time I just cancelled 2 listing with them as the lender because after taking 7 months to approve a different deal they sent it to auction simultaniously while accepting a short sale offer. Mind you I had it in escrow @ 189k and they just did cash 4 keys of 3k and are listing @ 147k smart move. It's all the gov money it does matter 2 them. DON'T take Chase deals!
Chase was very difficult. Holds the record for taking the longest out of the 10 or so I've closed so far.... Took 8 months total... Hope your experience is different!
One of my 1st short sales was with Chase and they were amazing and set high standards for all the others that followed. BUT as someone else mentioned, you must call on a weekly basis so you are always aware of any new notes and try to get direct email to negotiator for quick response.
That has not been my experience. Chase will not allow me or my short sale realtor access to the negotiator. All the representatives say is, "We sent an email to the negotiator and his manager". I have also been turned down directly when I have asked them to put me through to the negotiator and they have gone so far as to say I can't talk to them. So all communication goes through my short sale realtor and she is calling Chase daily.
It took 4 months to complete the short sale with Chase and that was only after my realtor was able to speak with the man in charge of the Short Sale Department. Even then the BPO was higher than the offer we got and luckily the buyer agreed to the price. I am not surprised that you are having difficulty...my realtor and her assistant had to call daily and I was calling at least twice per week when I would get the collection calls saying I missed a payment. It seems that the trick is to have your realtor call daily and keep a careful log of who your realtor talked with. Then what I did was call back each time I would get a collection call, write down the name of who I spoke with and the time, and then I would email my realtor with that info. The key phrase is, "You will not get any more money until you complete this short sale. You will need to call my realtor at (phone number)." End the call there and let your realtor know via email.
I had great experiance with Chase. My package has been approved in 2month, they accept all the fees in HUD-1 and the price. Also, they offer $3,000 relocation fee to seller. I closed escrow in 20 days, got paid ( btw, the offer 5% total).
So, I don't know if I got lucky but negotiator from Chase was great!!!
Indymac came thru - just fully approved the short sale submitted 60 days ago - was approved at about 45 days, then another 15 days to haggle terms w/ CW for 2nd -
Both Indy and CW waived their rights to recover any deficiency judgement (great for Sellers, esp since this was a cash out refinance from 2007 and the banks are eating over $250,000) and they paid 6%.
The formula is Persistance, more Persistance, dont take NO for an answer, patience, then some persistance and more persistance.
BOB
Wow! No recourse on an 07 cash-out refi. I have a feeling those sellers will be your customers for life. That's a point I think a lot of Realtor's miss. Rolling up your sleaves and getting a short sale done is something many sellers will be far more grateful for than a typical transaction. It moves you to rock star status, and will likely earn you a bunch of referrals and a return customer in 2 years after the preforeclosure guidelines have passed. Nice job!
OK...the house is up for short sale, and we received a cash offer. My realtor says she closed on 4 short sales prior to mine in the last 2 months. She's a real pistol! She says that my 2nd (EMC) are very easy to work with, however we've yet to see what CHASE says, so I'll keep you posted. My biggest fear right now, is what happens when it's done. I'm really scared about the difference, and repercussions..
Tammy -
It appears you are working with a good agent who has some short sale experience. If the cash offer is low relative to the current value of the property, then the bank probably wont take the offer. The good news is that it gets the bank process going and they will order an appraisal and push it along to a negotiator. If the offer is strong - ie within 5-8% of the current value, then the bank should take the deal. I presume you are still marketing the property for other offers?
As far as what happens next really depends whether the short sale happens or not. Be patient, the short sale process is rather long - You will be in a MUCH better position completing a short sale vs being foreclosed on. Fannie Mae, just came out with a memo stating that Sellers who short sale can purchase again in 2 years vs 5 years if a Seller gets foreclosed on. I posted the memo someplace on this site and would sent it to you if you e-mail me at bob@inspiragroup.com and request Fannie Mae 6-25-08 memo.
If the short sale is successful, you will know the moving dates, so it will be rather smooth. If your loans were primary residence purchase money, then there is no recourse as far as deficiency judgement or tax consequences (mortgage relief act 2007)- This is really a great outcome, under the circumstances. You can buy a home in 2 years (still need to qualify) and no further obligation and no tax consequences.
If the home was a cash out refinance or non-primary residence, the see if your Realtor can negotiate a release of the banks right to a deficiency judgement - that would be great. If you are "insolvent" as defined by the IRS, then you will owe not taxes - obviously, you will need to seek an accountant for more specifics in this area.
Good luck - dont stress! Get the facts - the answers are there.
Bob
Be careful of Indymac - They approved the short sale, then the day of funding cut the commission to 5% saying the old letter was simply a pre-approval. They sent out 5,000 what looked like approvals, but they are now calling pre-approvals and then reviewing the files when they recieve the wire or just before if you push hard enough.
Frustrating, esp when we delivered 100% of BPO and kept the deal going - is the most money they will have gotten from this property.
On to the next one -
BOB
BOB, NO WAY!!! I can't believe IndyMac did that!!! I learned a thing or 2 about them.
1.) they always try and get the seller to pay $300 for the BPO (ridiculous!!). If you have the sellers write a hardship letter about how hard their finances are right now and basically say they can't afford it and pepper it with sad stories, they will waive the fee completely.
2.) They've just been taken over by the Feds. Now they have to Mod ANYTHING, making short sales obsolete with them unless the seller wants to just dump the home or doesnt have a job.
I had a deal approved with them, I've been working with the sellers since February and they haven't paid in 14 months! I've been getting the trustee sale postponed monthly since May!! The sellers came in and we called IndyMac, they offer them a "Stip to Mod". If they pay ontime $1500 for 3 months, they will be offered a modification and wll be able to keep the house.
This is great for them because they get a guaranteed $4500 and then they can later say "Well at this point you only qualify for $2000 a month, take it or leave it" and they will be in foreclosure again. This time, without the buyer. I've sold the home 3 times.
So much for Indymac being my poster child of a good lender to work with on short sales. Just when it seemed short sales were getting a bit easier, these unsustainable loan mods really seem to be throwing a wrench in the works. Who wouldn't be willing to stay when they are willing to mod loans to payments that are lower then rents. The next few months are going to be very interesting to watch.
Also please comment on Indymac on our Short Sale Report!!!
To make the process work, you have to have a buyer who just wants that property and is willing to wait three to four months.
Please note the addition of our new Short Sale Report!!!
As a listing agent I have closed 120 short sales with ALL of the above lenders. I have found that most are very easy to get approvals if you do the following: Make sure you have EVERYTHING in the file before you submit your package. Submit offers within 90-95% of the NOW current value. Send along a BPO, CMA etc to support the value. Send pictures of problems along with estimates of repair. If you do this you will get your approval within 14 to 45 day. You can find a complete short sale package at www.shermansmith.com/shortsalepackage
Good Luck on your next Short Sale.
Hello Sherman,
Congratulations closing and helping homeowners to short sale their properties!
Can you share with me(us) how do you get your short sale listings? Do you have a script, do you do door knocking? I will really appreciate your help! Thanks in advance!
Hi Martha: I have Tim and Julie Harris as my coaches. They have the best scripts for short sales and Foreclosure Radar already gives you all the information that you need regarding homeowners in default. Happy to share!
Rochelle is right. I routinely listen to the free calls that are hosted by Harris Real Estate University and I always come away with some great new ideas and information.
I would like to Thank Sherman Smith on his feeedback and your a great example to all listing agents out there....Keep up the great work...I'm in the process with BofA on a short sale transaction....the follow up is great. Maybe I;ll go back to doing Short Sales again, not like 2 yrs ago....
See you all at the TOP!
Laura Q
I am finding that Bank of America (Countrywide) will not close a short sale if the sellers have in the counter that they will not come back and collect the debt after we close. The Calfiornia non-recourse law does not work with a short sale. This has many sellers worried at the end of the sale. How are people handeling this? Some banks waive it but not this one. Gayle E
Gayle -
BofA/CW will not lessen the rights they currently have under the existing note. For example, if there is a recourse situation, they will keep their right to pursue a deficiency judgement. If their is a non-recouse situation, then they will allow a short sale to close with no further rights to them. I hear controversy all the time regarding BofA - We just assisted a family this month and it closed without recourse. However, it was a purchase money, primary residence in CA which would be a non-recourse situation.
I believe some of the upset is homeowners who owe the bank money from an investment or cash our refinance and then want to walk from the home and have no further obligation. If someone owed you $250,000 and wanted to give you $100,000 back, would you want to do what you can to get the other $150,000? Anyway, that is BofA's stance and they will offer non-recouse settlements for short sales when it is a non-recourse situation and recouse settlements when it is a recouse situation.
However, their are other banks and I am passionate about helping homeowners that we can negotiate a full settlement even with recourse situation.
Any additional questions, please feel free to contact me via e-mail.
BOB, MBA, CDPE
bob@inspiragroup.com
Bob, you made a comment earlier: ...if your Realtor can negotiate a release of the banks right to a deficiency judgement - that would be great.
What magic words are you saying to the banks that get them to agree to release their right of a deficiency judgement? It doesn't seem like the seller has much to stand on but a small block. I'd love to hear what's been working.
Elisa -
It depends - I think the greatest asset is having the knowledge. For example, in California, if you have a non-recourse loan and the bank wants a recourse settlement, then you simply need to let them know your Seller's rights under a foreclosure. If a first mortgage in CA was foreclosed on then they do not have any further rights under the "one action rule", therefore the bank should give a non-recourse settlement. Many of the banks are negotiating over the nation and give general answers, yet, there may be state rules that work for the homeowner.
Magic words could be "I know its non-negotiable, but...." typically this would work when you explain the story or circumstance. We were told by a bank that they would not under any circumstance waive any fees or pay past due association fees. At the last minute, i was able to speak with a loss mitigator that understood all the work that was done and the bank was recovering their principle and accured interest and was able to waive $3,600 off a demand - This was a very minor "loss", yet, the right person with a clear story
Be persistant - sometimes its not the words - its persistance.
Lastly, if you have a recourse loan, then the bank deserves to have a recourse settlement. The Seller should understand this going in and if you get a non-recourse settlement, then it is a windfall and the exception to the rule. Too many Realtors are telling clients there is no recourse when there is. There will be lawsuits from this and the misinformed Realtor will end up losing if they gave out bad informaton. A lawyer and CPA recommendation should be done on all short sales.
If you want any additional information for your specific situation feel free to send me an e-mail to bob@inspiragroup.com
BOB, MBA, CDPE
bob@inspiragroup.com
We would encourage everyone who has been commenting on this stream to also take a look at the ForeclosureRadar Short Sale Report. We want to be a great one stop shop to share information on which lenders are easy to work with since they are all changing the way they handle their loss mitigation efforts. All of your updates would be appreciated and may help us push lenders to improve their services. Go to: http://www.foreclosureradar.com/short-sale-report
Wachovia has to be the best in the industry right now. If they were to get more attention in the news I think other lenders would take a look at what they are doing. If you want to make easy money, use ForeclosureRadar to find all of the Wachovia loans in foreclosure and market to the homeowners for a quick short sale.
Sherman Smith
www.Shermansmith.com
sherman@Shermansmith.com
National City (now PNC) is being ridiculous as a second lienholder on a non-recourse loan as they want 40-50% of their loan which is approx. $22K. They are being offered $1000 from Citigroup, and I have the buyers coming in with $4000. We have written approval from the first, and their closing date is for 12/28. My seller is military, transferred out of state, took pay cut, and cannot pay anything addtl, or take money out of his retirement, or it will jeapordize his security status. He is applying for the HAP program where the military may buy his home, but we would sure like to close this deal now, instead of another 90 days down the road with the military option. Any suggestions for the best remedy?
We too have PNC bank for a second note and are trying to research what they might do if we short sell or walk away. Would you mind talking to me about your experiences? I would greatly appreciate it.
Thanks,
Jason Jackoniski
404-234-7982
Just received a short sale approval from Ocwen in 5 days. Yes people i said five days!! I still cant believe it. I guessing they were this fast because they are normally used to getting peanuts for all of the second liens that they service, while my offer was for $275k as the only loan on the property. A complete 75 page package im sure made their life a lot easier as well.. Just picked up an INDYMAC short sale, i have heard many bad stories as well as good ones about Indymac. Any one working with them on California property and having luck getting an answer quickly??
That is awesome news!! I am so glad you shared that. You never know who this may give hope to!!
If you have an Indymac loan you will probably be dealing with OneWest. So far we have heard good things. Check out the OneWest entry in our short sale report or click on https://www.foreclosureradar.com/short-sale-report/one-west
PNC Bank is the worst. Check out my blog post at www.StupidShortSales.Com
Has anyone worked with JP MOrgan Chase Bk recently. Looking at existing comments dates back to 2008.
Has anyone worked with JP MOrgan Chase Bk recently. Looking at existing comments dates back to 2008.
Has anyone ever had any experience with Quicken??
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