NationStar requiring Buyer to apply for pre-qual with NationStar.

I have a short sale file that is at the end of negotiations with NationStar, in Equator.  Now, they sent an application for the Buyer to complete for loan pre-qual with NationStar.  We already have, not only a pre-qual letter, but an approval letter from a different mortgage company.  The Buyers don't feel comfortable doing this.  I relayed this info to NationStar and they told me that they would deny the short sale without it.  Can you believe this?!  I guess that I should have know that this one was going too smoothly.  I then uploaded and sent the two pre-approval letters for their review.  NationStar said that the Buyers don't have to obtain the actual mortgage through them, but do need to complete the doc.  Anyone experienced the same?  I have another NationStar file that I just noticed has the same form in the package.  I haven't gotten that far with this one, yet.

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Well, the two short sales that were with NationStar are now waiting on new buyers.  Both buyers walked when we presented them with NationStar's application for prequal.  I understand both sides.  Hind sight is 20/20, right?!  Well, I have a new short sale with NationStar and the moment that I found out it was with NationStar, I had a copy of the app to present to the listing agent to have ready at contract signing - to discuss it early on.  NationStar does NOT require the Buyer to obtain the loan with NationStar, but to prequalify for the property.  Another problem is that NationStar requests this item toward the end of the process, once the Buyers' patience is already limited and frustration with the process has set in.  On one of the two short sales that we had with NationStar, NationStar offered that the Buyer provide a bank statement proving that they had a certain percentage for a down payment, which was not a requirement on the contract or for the Buyer's lending choice.  Also, a few other items that a Buyer that isn't willing to complete the app would not be willing to provide.  My problem with this is that even as a Buyer can make financial choices after obtaining prequal with a different lender, they can also after prequal with NationStar.  One must wonder, what is their true objective with this prequal requirement.  Whether they require the Buyer to obain a mortgage from them or not, they are soliciting for a mortgage.  Doesn't seem right. 

I asked the buyer's agent to have her customers fill out the Nationstar prequal from the get go...easy and now we're almost closed.

I was able to bypass the Nationstar Mortgage app. process by submitting the buyer's DU approval from their lender, much better than just a prequalification letter.

DIRECT UNDERWRITING APPROVAL?

The notion that we as short sale agents can change how Nationstar does its business is laughable. While I can thoroughly understand the reluctance of the poster to submit a loan application to Nationstar, the fact is short sale banks write their own rules. The home is not owned by the bank. The bank has little, if any, incentive to allow the home to be sold as a short sale. A short sale is a privilege, not a right. Buyers who object to compliance should probably think about buying a home that is NOT a short sale. Short sales are not for every buyer. Sometimes, a negotiator will accept a DU, and sometimes not.

It's NOT "laughable" to object to unreasonable requests. 

 

Trying to turn this into a "buyer problem" instead of speaking up and questioning the bank - going over the negotiators head if necessary is part of the reason you're collecting a check from the transaction! 

 

FWIW, my deal, which has been "cooking" with Nationstar for eight months already was pulled from their queue and put with another servicer recently.

 

And Harry - if you read my post, you'll see the issue isn't about "proving a point", it's about protecting my good credit -  Would you trust your complete credit profile (including ALL of your banking info, balances, social security #'s, etc) with a business that has proven themselves to be incompetent?  

I've found Nationstar to be one of the best lenders to work with. I add the buyer application as an attachment in the MLS. This way buyers and their agents know right up front that it will be required. If they have an issue with it them they just need to purchase a different property. That is certainly their right. No one is forcing them to do anything. In my market buyers are a dime a dozen. So losing a few over this Nationstar requirement is no big deal. And I'm sure Nationstar knows that as well.

Awesome idea to attach the application in the MLS Bryant!

Just politely decline...Fill out the form as they need forms to fill in spaces on equator, do not put on a social and have the buyer sign a note on it politely declining.

Mark, In reading over this thread I realized you've been at this impasse for over two months.   While you state "I do lose by walking away, but not as much as the seller does" I feel the need to remind you that the seller loses each and every day you delay this transaction hoping to prove a point: the longer they are in default on the loan, the more damage is done to their credit.

I have noticed a disturbing trend of late, that SS buyers want agents to "make it happen now" and yet, when that approval letter comes, the lackadaisical response is infuriating.  Inspections are scheduled "a week from next Tues.", loan application is scheduled "some time after a successful inspection"....when buyers are waiting, they are waiting for something that we, the listing agents don't control.  Once the ball is passed into their court, where they control outcomes, the clock suddenly slows.

While you claim that your existence in this deal is a benefit to the seller you are very wrong:  when you decided to refuse the bank's condition requiring that application you should have walked away.  You are nothing more than an obstruction to the transaction now, and you seem to have your feet firmly planted in your principles...and planted they will stay as this home marches to foreclosure, all to the detriment of the seller.  

Rosemary -

I see a tone of judgement in your reply, and it's only fair that I be allowed to respond.  As the purchaser of this home via a short-sale, I am absolutely helping the seller out.  I know many in this end of the business try to walk around the issues of the short-sellers actions, but by twisting this into MY problem, you've opened a door, now you get a peek inside. 

 

The short-seller in this transaction purchased the home in 2001 for $110k.  At the peak of the bubble, this home was listed for a few days, with multiple offers received at $300k+.  The short-selling "owner" decided that having $200k in "party money" AND keeping the house was an irresistible temptation, so they Heloc'ed the property for an additional $200k.  About $0 of that $200k went back into the house for repairs or maintenance - the house looks as it did in 2001, except for the looted appliances, the missing floor coverings, leaky roof, and the stench of dog-pee.  The house cannot be financed by any lender except hard-money in this condition. 

 

I purchased a move-in ready model-match home a block away for $70k in June.  My original offer for this property was $67k, and MetLife countered at $73k, and I accepted that offer, with an agreement between the parties that I would be allowed a couple of weeks to spend my own money and time cleaning, painting & repairing the home before sending the appraiser through, so I could finance the home using normal channels. 

 

I have a full-set of appliances sitting in my garage for this home right now, and a stack of quotes from trusted contractors who are ready and able to complete the necessary work to make the home habitable .  There will be no "dawdling" if my offer is accepted, and if, (for some reason) I can't get financing, I will be "out" the money I spend to extinguish the stench, clean, paint, carpet & repair this home.   

 

The short-seller in this situation is not an "angel" or a "victim" (of me or the bank) by any means, they extracted a massive amount of "equity", lived in the house for 10 years without even doing normal maintenance, and left the house uninhabitable - even looting the house on their way out the door by selling off the appliances (which were there when they bought the house!).

 

The last model-match in that neighborhood that went to trustee's sale sold for $62k and it was in better condition.  My accepted offer is/was for $73k.  There aren't a "line of other investors" willing to pay and DO what I'm willing to do to close this deal. 

 

I'm a small-time investor, so I'd much rather finance several properties with 25% down, rather than having everything tied up in one or two deals, or going to the "hard-money" sharks at 18% interest.     

 

Nationstar held this deal up to the detriment of the actual investors on the note, for their own gain (to try to sell the next mortgage on the property).  The investors will get less if the property goes to trustee's sale.  The seller may get sued if this property goes to trustee's sale (this wasn't a "purchase-money" loan, it was a "party-money" loan) - even in AZ, this is a bit of an untested legal area.  

 

The neighborhood has already suffered because of Nationstar's actions, because I could have already had this house fixed up & rented to a good tenant.

 

And for the record, Nationstar did finally back off their "requirement" in my case, after a couple of weeks of being hounded by the seller's agent.  The sale was approved (again) by the investor, and the hang-up now is actually the PMI company.                             

Mark,

Every circumstance is, of course, different and obviously you are not the typical short sale buyer who demands immediate action and then dawdles.  As I noted in my response there is a trend of late to treat each short seller as a "lesser" person in the transaction.  Obviously in your case, this seller is not a "victim", to use your term; however, in my experience, my sellers are in most cases victims of circumstance and do not deserve to have their credit destroyed while buyers adopt an "aren't you just lucky I came along" attitude.

I wish you luck in bringing the transaction to a successful close.

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