Howdy Folks -

 

Just curious if anyone is seeing short sale approvals when the seller isn't delinquent.  We just did one, but the seller was military and being transferred out of country.  Most however, the seller has been delinquent.  We are seeing more and more people needing to sell due to job transfer and moving...and they are upside down.

So please share who lender was and any special circumstances.

 

Thanks

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Christopher, it is quite common in my area.  We get short sale approvals frequently where the seller is current.  Being in a beach town we have alot of "investors" who we help with a short sale as well as the local military folks who PCS to other stations.  Investors can often be asked for a cash contribution to help with the short sale. 

Lenders all across the board... Wells Fargo, Bank of America, Chase, Citi, US Bank, Regions, Suntrust, the list goes on and on.

death divorce and disablitity. As a law firm representing the seller (on contingency and being paid by the seller's lenders' proceeds), we would first find out who the investor is on the loan and discuss scenario with an exective level contact.

Eric, most investors will allow it providing their is a hardship and there are many more hardships than death, divorce and disability. Job transfer is one that I see frequentl, actually PCS for military members is the big one here. They get sent to a new station and now need to sell their home that most likely they financed 100% with a VA loan and it is underwater. Loss of job is another, most of the time the unemployment or underemployment lead to missing a payment but there are some that hang on and scrape by just enough to make their mortgage payment. We have gotten them approved in all of the above cases.
The other big one here is an investor who purchased a condo in 2005 and put it on a rental program only to see the values drop by 70% and the rentals not keep up with the payment. Those are the folks that can expect the bank to ask for a cash contribution to approve the short sale.

Jeff -

 

Some really good points.  I agree the focus is on the hardship...and preparing the investor for the bank to ask for the cash contribution.

Jeff, I agree. Let's also agree that at the end of the day, these are case by case deals and that there is really not a specific "guideline" to follow. I say.....sell the home and get the package in the right hands asap. If we were representing the seller, we would find out who the investor is up front when listed.

Of course, I certainly hope that everyone knows who the investor when listing a short sale.

Some have specific guidelines in regards to missing payments.. I believe FHA does but also agree with you that each is different and with a short sale, never say never :)

I have one right now with indymac as the 1st and fannie is the investor, indy says fannie would not even consider the package until the borrower was 60 days delinquent, he was a little over 30 at the time of the submission.

We have regularly obtained short sale approvals with sellers that are still current on their payments.  For us the key is highlighting the hardship.  It doesn't have to be financial.  Of course, if the seller has a bank account with $100k sitting in it that makes things a bit trickier, but we are able to get approvals on those as well, it just sometimes includes an additional contribution.  Of course, with the deficiency laws changing here in California last year that adds a new dynamic as well.  Sorry if this is not the most helpful answer.  The point is, as with all short sales, there is no one way to do it and definatly no blue print to follow.  I just wanted to let you know that short sales are getting done where the seller is current and we advise all our clients that they have the option of staying current throughout the process if they are not already in default.

What is happening to Calif's antideficency laws??  Here is AZ we have a movement at legislature to repeal our antideficiency statue. 

I would love to see research that looks into the rate of short sale approvals in anti deficiency states.  I had feared that it would encourage lenders to deny short sales and favor foreclosure.

I am in CA. and negotiating with a 2nd that wants alot more money than the 1st is willing to give, the 2nd won't budge and says they will just let it go to foreclosure and pursue the def.judgement as they have been successful in collecting that way. Seller would gladly sign a prom note but due to sb458 can't do it. Any ideas? 

Joseph, what is your experience with FHA. Have you been able to get around their guidelines of being 2 payments late?

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