Residential Credit Solutions just called today and said they foreclosed on a listing of mine. RCS had approved the short sale, they were just waiting for approval from the Mortgage underwriters. I questioned them yesterday to make sure there was no foreclosure date, and ask when would it come back from underwriting. I have waited 3 months with a valid short sale offer. Is there any recourse?

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Kay - I just joined this group yesterday and your question caught my attention. I had a similar scenario earlier this year with a different lender and we ultimately had the foreclosure reversed / rescinded.

In my case, a foreclosure date was set on the property, however, I had followed lender procedure to request postponement of the foreclosure in order to continue with the short sale process and review of the offer. The lender was waiting on approval from FHA when the house foreclosed.

I did not receive a call from the lender stating the home foreclosed as in your case but the seller's received a letter in the mail from the lender's attorney regarding the eviction process. Of course the seller's panicked since they also called the lender to make sure the house was not going to foreclose and the short sale rep assured them that the foreclosure was postponed. It took several weeks to reverse the foreclosure through persistent effort by myself and the seller's.

The first thing we did was contact FHA directly to let them know what happened since we were waiting on their approval of the short sale. The second thing we did was contact upper management of the loss mitigation department to let them know that we were in the middle of performing a short sale and the house "foreclosed".

Getting the right names for upper management was a challenge since I did not have any contact information other than the negotiator. I persisted in my calls to the short sale department and ultimately worked with a rep who provided the names of several key people in upper management to help solve the issue.

Contacting upper management got immediate results. The next days the lender began the process of researching the file to reverse the foreclosure. Based on the notes in the file and possibly other reasons it was decided that the foreclosure would be rescinded. FHA did get involved and researched the lender's "notes" or "correspondence" in the seller's file to make sure that we did have an offer on the property and were actually attempting a short sale. FHA ultimately contacted me directly to let me know that the foreclosure file was reversed and the short sale review for approval would continue.

Although we took these two steps to remedy the situation - it was not easy. We were constantly on the phone being told "there was nothing to be done", disconnected after being on hold for so long, bounced around to different departments, etc... but we were extremely persistent and did not give up on getting the foreclosure reversed.

Also, during the entire short sale process I also maintained detailed notes of correspondence with the lender and who I spoke to and when. This information was very helpful when contacting upper management since I did include all my notes in the email to them to state why I believed the foreclosure should not have happened. This experience taught me the value of being organized and keeping detailed notes of conversations related to any of my transactions - never know when you might really need those conversation logs.
Kenya, wish I had known this six weeks ago. I too documented the file, kept records on all my phone calls, who I spoke to, even the negotiator was as surprised as I was......or so they said. This will arm me the next time I have this problem. To have the bank say OOPS is not acceptable. Thanks for the great information. I've been working short sales 1 1/2 years now. I learn something new every day.

I would verify this information (that they foreclosed) with the appropraite authorities (ie. court clerk?). I have been told this by loss mitigation only to determine that the file was transfered to a different department because of the pending foreclosure. Who bought the property at the auction? The Lender or a 3rd party? I would verify that the information is accurate before you waste a lot of time possibly going down the wrong roadway.
I guess they are still up tp there old antics. I am going through the same thing now. I am looking for numbers to directors to call.



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