Submitted all Short Sale docs 5 days before scheduled foreclosure sale. Shellpoint said too close to sale date to postpone sale. Sale held and no one bid on the property. Shellpoint said since sale was held, it is now REO property and there is no short sale allowed. They tossed my submitted documents. They said I now must contact local REO realtor to offer on property when 6 month redemption period expires. Property in Michigan. Getting shuttled from one Loss Mitigation rep to another - all with same story: No short sale after sale date; now REO property and must deal with REO realtor. I was told there was no one to talk to in the REO department about a short sale. On my last call yesterday, rep said they would put in a request to their supervisor and they may call me back per my request within 72 hours. Has anyone else experienced this with Shellpoint or another company? Underlying mortgage is conventional, not gov't insured. Is that the difference?
If it's a REO and they won't entertain a short sale during the redemption period you'll likely need to wait until it's listed as a REO to try to purchase it. This is common. Hard to purchase a single bank owned asset from large servicers once bank owned. Generally need to wait until it jumps on open market with designated REO agent.
Best of luck.
Thank you Brett for the response! Would they be more likely to entertain a short sale if the mortgage was government insured? Do you know any way to get the bank to consider a short sale? I was advised by someone who said they did a lot of short sales when I was going into short sales that Michigan was great for short sales because we have a 6 month redemption. But are you saying that most banks will just toss your application once a foreclosure sale is held, even if not bid on, and will not consider a short sale after the sale date?
I've never seen a short sale allowed on a home that was already foreclosed on by a senior mortgage. Redemption periods are so borrowers have an opportunity to reclaim the property.
Thank you again for your reply! Is that also where no sale occurs at the auction as no one bids on the property?
If the sale date isn't postponed and if no third party wins the auction the property reverts to the foreclosing mortgage lender thus becoming a REO aka bank-owned property.
Thanks for the great information!