Nationstar New Policy all Private Investor Own Loans are required to use AUCTION.com

I have spent the last hour and half on the telephone with Nationstar's management in Loss Mitigation. If the loan is owned by a private investor they will require the seller to use Auction.com. When I requested the investor on the loan they could not say who it is; other than a private investor but could not give me a name. Said to put Request in writing and then they would be able to tell me. Nationstar said all staff members had a meeting this morning and starting immediately if a short sale is initiated  then the short sale is required to be on Auction.com if owned by a private investor. I have done 100's of short sales but none on Auction.com. I have a binded contract on the property. Nationstar said if the buyer would like to purchase property they are required to purchase through Auction.com. I asked them how do I handle the second lien and providing them a copy of the contract and preliminary HUD to receive the second lenders approval and they said that is my problem (How do you get this from Auction.com) They informed me Nationstar has not done a lot of short sales with a second lien. I was like really!!!!!! Where have you all been. Anybody that has experience I would love comments.

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We have done two Nationstar/Auction.com short sales, both had liens.. one had a giant tax lien and Nationstar was sympathetic and allowed two extensions in order to settle the issue with the IRS. 

On the other property, there was a large HOA lien, which we had to negotiate after the auction due to the HOA requiring upfront fees.  Again, we were given ample time to negotiate them off title post auction.

We had a contract with a buyer when the property went to auction.  We had to register the buyer prior to the auction in order for them to waive the 5% buyer premium.  We are at a 50/50 success rate.  We were told the reserve price would be the original offer amount, this was not correct.  The reserve price was $10k higher than the original offer. 

Unfortunately I don't have experience with 2nd mortgages with Nationstar, but don't see why they'd be much different from tax, hoa liens.  You may want to provide the 2nd payoff demand to the 1st and also submit your short sale package to the 2nd and get started ASAP. 

Thank you Brian, that's helpful information!

Question,  when you triggered the sale in Equator did they send you a notification of auction before or after you had a buyer in place? If it was before and your Seller/Buyers signed, what the call, a Participation Agreement then you agreed to the auction. If it was after and you signed it you agreed to the auction. But if you did not and your seller did not , then the question becomes why hasn't Nationstar Accepted ,Declined or Countered  your original offer?. Also if it does go to auction does your seller still has the right to accept ,deny or counter any offer as well?

Presumably, Christopher if it's initiated in EQ there is already an offer. Also forgot to mention, when I contacted Nationstar on a general question: do all Nationstar shortsales=Auction.com, they advised me yes. However we are in CA. Not sure laws in other states though. Sellers have a right to decline/reject/ accept, but there is no way around the auction if seller wishes to enter into short sale it seems.

Big lenders are releasing to Nationstar - Chase and BofA that I'm aware of for now, because it's an excellent program for verifying the "offer". In fact they call it "offer verification program". Best you can do for both parties is ensure the current buyer is totally verified and signs into the program to bid without subjecting them to the buyers premium. Listing agent still receives commission and sellers (in one of our Nationstar closings received a .5% seller incentive). But you must request this and add it to the Hud-1.

Ps. When I referred to the 50/50 success I was referring to successful closing with original offer. You need to comp the property out and advise your buyer (hopefully an end- user), of the current market and set the bar beforehand.

Hope this helps.
Melissa

According to Nationstars Participation agreement not all short sales go to auction or validation program. Also

According to Auction.com representatives and the website, here is what is stated in the FAQ Section of the Marketing Validation program: 

Q: What does a Listing Agent do when there are conflicts between the local MLS rules and the Auction.com requirements?

A: Local MLS regulations supersede. Our practice is to inform the agent that they need to comply with their specific MLS regulations concerning “pending”, “contingent”, “under contract” verbiage, if they apply. 
- See more at: http://www.auction.com/blog/market-validation/#sthash.vihl8qem.dpuf 

Since Local MLS regulations SUPERSEDE, WE CANNOT  still market the property as available once the status is changed  to "contingent"
You bring up an interesting point and guidelines would vary from each board of realtors. In our case we were required ( outlined in the participation agreement to insert Auction.com verbiage /contingent on our MLS rules), which in our case superseded the original contract, so we had to change from backup/ pending status and put as active again. Hmm, but maybe you've found a loophole? I doubt it though, because my broker was outraged initially and called CAR legal- they advised there wasn't anything we could do. Again, we are in CA. Laws are different by state as we know.

You should call Nationstar and ask like I did. They said all short sales are run through auction.com. Period. and said nothing of private investor loans.

I'd be interested to hear what others find out. We should expect many loans service - released in the future into this program I am told. Good luck OP.

All the best,
Melissa

Debbie, most of the time you can find out who the investor is on this site.  https://www.mers-servicerid.org/sis/index.jsp

So, I have a VA loan that is Nationstar. 

So, can one assume that a VA loan is govt owned and not privately owned?

We have an interesting case. The sellers attorney has filed a motion to go before judge based on the fact that dignified transition solutions ( a third party company hired by both bank of America and nationstar on same file) were negotiating the file with us last year on behalf of Bank of America. In December they service released to nationstar in the midst of pending investor approval. Nationstar refuses to continue the negotiations where we left off even after dignified assured us that they keep the file active through the transition. They went and set a sale date as loan was being transferred. The attorney filed a motion with court and got the actions stayed pending a hearing this month on the 19th. They are still pushing this auction.com issue on us and have not commented whatsoever on the pending court matter. Yesterday the negotiator sent me a message through equator congratulating me short sale is approved, today I asked her where is the approval letter and she says that message was an error. I think that email is going to go a long way with the judge in how they are mishandling this file and pushing this seller into foreclosure. The buyer has been in contract since last year and this is getting crazy but very interesting, judges can be very annoyed when banks try to bully the average working class citizen and will hold them accountable from my experience. Especially in todays financial climate.

I currently have a short sale with Nationstar. We went through 2 auction periods with Auction.com and did not meet the reserve level. After the 2rd auction.com attempt, I provided an offer through equator for consideration. The asset manager said that it would have to go through a pricing validation. This auction did not occur within three weeks of the offer and the buyer canceled. This week Nationstar has set a new auction with homesearch.com which will happen in the next couple of weeks. This process is taking a very long time and it seems most buyers are underbidding just because it is an auction. Not sold on this process at all.

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