Wells Fargo Home Equity short sale approval contract
Hello,
I'm trying to navigate a short sale with Wells Fargo.
Details:
- Hawaii condo purchased for $425k
- The first is with Wells Fargo Home Mortgage / Freddie Mac for $320k
- The second is with Wells Fargo Home Equity for $35k
- Hawaii is a recourse state (i.e. no anti-deficiency laws).
- The foreclosure auction date is Dec 3rd.
- Wells did a BPO at $349k
- I have a short-sale offer for $349k
- My realtor has submitted to Wells: purchase agreement, the HUD1, and proof of funds.
Since I do have a full-price offer, I think things look fairly good in terms of the short sale moving along.
The trouble is that the 2nd (Wells Fargo Home Equity) is asking that I sign the attached Short Sale Final Approval which seems to lock-in my worst-case outcome - where I still owe 90% (roughly $32k) of the 2nd after the deal is done. There is also wording about waiving both non-bankruptcy and anti-deficiency rights. But my primary concern is the deficiency - my goal is to walk away from the transaction owing as little as possible.
The 1st wants to see a signed approval/agreement letter between me and the 2nd before they'll write and send their approval letter.
Do I have any negotiating leverage? Has anyone else recently closed a short-sale with Wells Home Equity and how did you handle this step of the process?
Huge thanks in advance for any guidance, advice or shared experiences.
- Attachments:
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Wells-Home-Equity-Short-Sale-Approval.pdf, 848 KB -
HUD1.pdf, 2 MB
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Replies to This Discussion
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Permalink Reply by Karyl Moore on
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I'm not an attorney but . . . it's my understanding that home equity loans are personal loans and do not go away with a short sale - nor with a foreclosure - even if you did live in a non-recourse state. Your best bet is to offer them cash ($5,000, for example) to settle the account and waive the deficiency on the HELOC. If it works, be sure to get the waiver in writing.
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Permalink Reply by Alan Remigio on
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What does the 1st approval letter say? I would write the final HUD with the FULL PRICE payoff the 2nd wants and submit for approval. We all know what will happen. I will then tell the first that the 2nd wants that value to close. For everyone else, it's no different than the seller attempting to POC monies for other liens. This time its the 2nd trying to do the same. First wants dibs on all monies due from that property.
In my past comments on same lender negotiations, you have to use the 1st to leverage the 2nd to your benefit. Get an experienced negotiator on this matter and you will get it done. Karyl's suggestion is also one that works if my suggestion may challenge your comfort zone. Good Luck from one Hawaiian to another! -
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Permalink Reply by John Treadwell on
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Have your agent go back with a counter on the 2nd for whatever ,or make a cash offer of what you can to settle it paid in full . I bet the 2nd will take 10 to 20 % to pay it off. Line of Credits are hard to get done most of the time.
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Permalink Reply by Lori Young on
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Just closed one like this. First gave $3000 to second. Same both wells. You can petition for full releasse by submitting either poor financials OR settlement for 10%. Rodney link was my rep. My seller gave 10% in addition to the 3000 from the first. Not giving legal opinion just example of a recent transaction. Did the first forgive deficiency? What does the hud1 look like? Anything to the second?
Look at the top conditional approval. You must follow this letter or they will cancel your ss. Get them to postpone the foreclosure. Make sure you let wells first know what wells second is asking. Never pay off the HUD 1 to the second. I copy both wells when working out details. Good luck. -
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Permalink Reply by Kailua Condo on
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Alan Remigio said:What does the 1st approval letter say?
Thanks for your response. The 1st is waiting to write their approval letter until after they've seen that the 2nd approves.
Alan Remigio said:it's no different than the seller attempting to POC monies for other liens.
What does "attempting to POC monies for other liens" mean?
Alan Remigio said:Get an experienced negotiator on this matter and you will get it done.
A negotiator on my side (i.e. Realtor) or do you mean get assigned to a good negotiator on the Wells Fargo side? How does that work?
Thanks! -
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John Treadwell said:Line of Credits are hard to get done most of the time.
Thanks for responding. When you say that Line of Credits are hard to get done, what does that mean? Thanks! -
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Lori Young said:What does the hud1 look like? .
Here's the HUD1.
Lori Young said:Look at the top conditional approval. You must follow this letter or they will cancel your ss.
What's the "top conditional"?
Lori Young said:Never pay off the HUD 1 to the second.
What does it mean to not pay off the HUD1 to the second?
Thanks! -
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Permalink Reply by Beth Thoma Robinson R(B) SFR on
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I am also on the Big Island and just yesterday found that since Wells Equity took back all their files beginning of October, they are marking at least some of them "non debt forgiven" and insisting that the seller deal with Recovery Dept post-closing on the deficiency. Cash contribution required just to close and begin those negotiations. This is new to me, seems to be a change in policy. This particular seller already lost another investment property to foreclosure and Wells Equity recovery dept immediately came after them on that one. So they don't care whether it closes as a short sale or goes to foreclosure, it seems, they are serious about collecting.
Thanks to all on this site, the rules of the ball game continue to change. Anyone with advice please post and I will post progress. Good luck to you Kailua Condo -
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