Lender refusing to work with Attorney in negotiations
I have recently seen 2 cases in which two different banks refused to work with our office if the client was represented by a Foreclosure Defense Attorney. We have tried several techniques, to no avail. Is this a new policy for certain investors, or a fluke in the system. I would appreciate any advise that you may have to offer.
Replies to This Discussion
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Permalink Reply by Smitty on
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I'm assuming that the seller authorized the lawyer to speak with the bank in writing? Can you explain a bit more about what you are encountering?
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Permalink Reply by The Short Sale Escalator on
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Yes, we are working a short sale with the client. Everything was going well, until the bank filed for foreclosure. The client hired an attorney, and the bank immediately stopped speaking with us. We were referred to the lenders attorney to negotiate the short sale. The attorneys office has had the file for three months now and can not seem to give us a valid update. The claim is that because the borrower has hired a foreclosure attorney, the file is considered "in litigation" and the lender is not authorized to speak directly with anyone except through their attorney. It really just seems like for whatever reason, the bank really wants this property.
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Permalink Reply by Shannon Blankenship on
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It is because the case became litigated. No other reason. They have to be very careful in litigated cases. They cannot speak to anyone outside of that attorney. They also have to have a litigation specialist work on the file, and the short sale department has to get permission from their legal department to even speak to you or that attorney. It has to be handled with "white gloves" so to speak. I worked for WF and I was the negotiator who actually worked these files. They don't just let anyone touch these. They may be instructing them not to speak to you, as they are only allowed to work through the attorney. Also, in some cases all they need is permission from legal to work with you (when I say legal I mean the mortgage companies attorney, not the attorney the seller hired) In other cases, they will never be able to speak with you and any negotiations will have to go through the sellers attorney! I'm sorry, but these are tough, and coming from the banks side... being litigated they should and they will be very careful about who they talk to and what they say. Anytime the seller hires an attorney to dispute the foreclosure or files bankruptcy, it will always interrupt the short sale process. It is the sellers right to do so, however agent usually don't like it! :) I hope this helps.
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Permalink Reply by Vanessa Calhoun on
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That is what happens when someone secures legal counsel. All communication has to go through the attorney.
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I have been doing short sales through an attorneys office for over two years, that has never been my experience until recently. My real question is if anyone has had success overcoming this with a title company as opposed to an attorney's office? We are contemplating opening a separate title company just to process and close short sales.
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It's not the fact that you are going through an attorney...it is the fact that some action the attorney filed makes the file litigated. Any attorney can just "negotiate" the file. However when a motion is filed that disputes the foreclosure...it's litigated. That is the difference.
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Permalink Reply by Kevin - Greenville, SC on
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I don't think it has anything to do with the fact you work for or are an Attorney, it's that the Loan is in litigation.
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Permalink Reply by Joseph Alfe on
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correct. ALL of my sellers have a closing attorney, but a foreclosure defense attorney will be considered litigation and not simply common closing representation. That being said, a few times recently lenders revoked both mine and the attorney authorization and only wanted to talk to the seller. We told them the seller authorized us but the lender stated that they didn't have to accept the authorization.
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This happened to us recently. We were authorized on the account. Once all the attorneys got involved the file went to litigation and at that point they would not discuss the file with us.
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Permalink Reply by Bryant Tutas on
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xx
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Permalink Reply by Joyce Hathaway on
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who are the lenders...
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Permalink Reply by reva harris on
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Seterus marks the file AT for attorney and will not speak with anyone else.
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