Am I wasting my time? Flagstar Short Sale
Hello all, I have been reading posts on here for a while and I thought I'd post on my situation to see if you think I am wasting my time and should move on or if I should stick it out.
I am the buyer.
Short sale with 2 loans. 1st with Flagstar 2nd with Penfed.
If you base the value on the outstanding principal it is nearly a wash for Flagstar but with unpaid interest and other fees the judgement is nearly 100k over the selling price. Penfed has an unknown amount left but the original was $65k.
I entered into the contract on 10/7. The package was submitted shortly thereafter. On 11/15 there was a court date in which the foreclosure sales date was set for 3/12/13, however the Judge ordered Flagstar to APPROVE the short sale within 60 days or it would go to mediation. (it seems to me the court does not want this to foreclose).
As of today a negotiator has not been assigned and a BPO has not been ordered.
Based on what I've read it seems that Flagstar may be less reasonable than other banks, so my question is, do you think Flagstar will do anything with it or are they just stalling so it can go to foreclosure auction?
I just don't want to wait this thing out only to see it go to auction, meanwhile I've lost time, market advantage, and/or interest rates. To add to the situation my wife is due in June and I'd like to be in and settled by then.
Throughout all of this my Realtor has been great, she follows up with the sellers realtor and attorney often.
Thoughts?
Replies to This Discussion
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Permalink Reply by toni blount on
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I had a very good experience with Flagstar. Seems that once it got moving, it went very smooth. I had a single point of contact who called ME regularly to advise of info needed. (Cristina Beach) They issued an approval & gave us 60 days to close. Closer called to make sure we were on track. Great experience!
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Thanks everyone for the input so far. My agent is inquiring again today about the status. I am starting to look at other properties based on the feedback I've gotten about Flagstar. It will be a shame if this doesn't go anywhere because my wife and I love the property.
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Permalink Reply by Brian Del Terzo on
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Flagstar short sales are a time consuming process, but the MO in our office is to keep financials current at all times,... the visual imagine based on our experiences is a desk with files piled to the ceiling. When your file is next in line, and is finally reviewed, if anything is missing or outdated, you will get a request for said documentation and the file is placed back in the pile at the bottom. The moral of the story is to do your best to insure that all documenation is valid, current and accounted for when someone from Flagstar gets to the file to help insure it is assigned as quickly as possible to the underwriting team for review.
The key is in both patience and tenacity. As far as the mediation etc... this is unheard of in Minnesota, so I am sorry I have no opinion there to provide.
Good luck!
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Permalink Reply by Rob E. Kirchner on
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I was the listing agent on a Flagstar FHA short sale. Even in Nevada where the Foreclosure process is complicated for banks, it seemed that Flagstar was determined to foreclose and not allow a short sale. They demanded that the borrower accept an FHA loan modification even though it was barely lower than their regular payment. The foreclosure went through and Flagstar got about the same amount we would have gotten them (without the high foreclosure costs). My advice is not to wait on them; you must be proactive.
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Well, I bit of a status update. I received an email today that a negotiator has been assigned to the file. They asked me to sign something that allows the seller to cancel at any time, I was told that this was requested by the bank. It has language about commisions so it looks like an out so the bank doesn't have to pay anything if everything falls through. I am going to sign it.
So now my question is, they've assigned a negotiator, what do I expect?
The sellers agent indicated that the bank said they want to move this one along, for whatever that is worth.
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I just found out that the loan is backed by Freddie. I've read some recent stories about them valuing the properties way too high, but all of the recent sales in the area would back the $/sqft, though there are not many recent sales.
To add to everything, we saw a traditional sale the other day that we very much like, it is in a less convenient location but an equally as nice house. We are tempted to bail. Our contract is up the first week of January so I think I will at least stick around that long.
Once a BPO is ordered, how long could it reasonably take to close?
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Just a bit more update. I do not believe that when they told me a negotiator was assigned that one was actually assigned. As of today still no BPO. This Sunday will be 90 days. I have begun seriously looking at other properties and have placed an offer on a REO that I should have an answer on within a week. I know that short sales require patience but with no movement in 90 days I've all but given up hope.
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I just wanted to update you. I have 2 shortsales with Flagstar. Each one does have a "single point of contact assigned". With the 1 file that all the required documents have been submitted I had a BPO ordered within 48 hours. The key seems to be in having all of their required documents submitted. If the seller is doing this, then just like any other shortsale. It will take forever.
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I spoke with my realtor today who spoke with the listing agent. The listing agent insisted that he did not have any new updates but he also said that the lawyer who is handling the short sale has instructed him not to call and that the lawyer is refusing to give him any information. To me that sounds like there is more to the story and there is some sort of issue. My wife and I really want this house but I am going to get very upset and will walk if I know that they are purposely withholding information. Is it not within my right to ask for an update?
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Ok, so this will be my last posting. Unfortunately it isn't due to short sale success.
4 weeks ago we found another house, one we liked better, was in a nicer neighborhood, etc. Of course it was more money. We ended up getting it and closed yesterday, yes you heard that right... 27 days contract to closing with a loan.
It of course was a traditional sale.
Here are some of the reasons I decided to pull the plug on the short sale.
1. Despite the court mandates, mediation, etc. The bank either failed to respond and/or the lawyer was keeping information from me.
2. Prices continue to rise in my area so the chances I was going to get the house at or near the price I went in at were slim to none given the current BPO's everyone has been reporting
3. Baby due in June
4. Prices continue to rise and I wanted to make sure I got something before I was priced out of the market
5. Interest rates are trending upward and I wanted to make sure I got a good rate
6. The listing agent was a moron, despite his 17 title designations. He was completely unorganized and non-responsive. How he is the principal for his agency is beyond me. He gives realtors a bad name. (My agent with only a few years in the business runs circles around him)
Overall I am very happy with my final decision despite the added house cost. We'll be moving in a little less than 2 weeks. Our current house had 4 offers within 24 hours and we took one that was over asking price.
Good luck to all of you dealing with short sales because I honestly think the banks are playing games and wasting everyone's time.
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