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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I have done several short sales with NationStar and didn't have to do the prequalification with them until I sent one a couple of weeks ago. They sent the form through Equator and told me the short sale would go no further until the buyer filled out the form and I returned through equator. I also sent them the approval letter I had from the mortage company but they again said  that until their form was filled out the short sale was at a stand still. My buyer went ahead and filled out so we could move forward. If anyone has a suggetion I would love to hear it.

But I do agree with some of the others I would rather jump through their hoops and close the short sale.

Anti Trust laws FORBID that. Have the buyer politely respond that they have chosen their lender already.

If Nstar does nto move forward, contact your legislators both Federal and State.  That is an ILLEGAL action by the bank.  THey can ask, they can not REQUIRE a buyer to do any business with them. The short sale is between the seller and bank..the sale is between the buyer and seller.  The new mortgage lender is FOURTH party to any of it. By NStar injecting itself in the loan they are in violation of MANY state and federal laws.

REmember, this is especially true wherein the bank negotiator COULD use the buyer information to determine that the buyer can AFFORD more money in the purchase.

I would have NO problem if the bank or servicer referred the buyer to thier mortgage lending department for a competitive loan offer, as long as the ONLY information given the negotiator is an approval letter for let's say a few thousand over the contract price.

I experienced the same with Nationstar plus when their approval came in they said they would not pay the buyer's closing costs (FHA 3%) unless the buyer used Nationstar to fund the loan!  Yes, it fell apart.

Requiring a buyer to fund a loan through a particular lender is tantamount to requiring a buyer to utilize a certain title company. Are you sure they actually required a particular lender so they would pay BCCs, or did they say they wouldn't pay title costs unless a buyer used a particular lender/title company? Check your paperwork, I am sure you will see something different than what you're suggestng...??  Let us know. Thanks.

Perhaps I worded it wrong.  Nationstar would only credit the buyer's closing costs if the buyer used Nationstar.  The buyer was allowed to use any lender they wanted.  No lender has to pay a buyer's closing costs in a Short Sale. 

Deborah. All they are requiring is for the buyer to complete a 1 page credit application. The buyer does not have to use Nationstar for their financing. In fact it is my experience that they don't even contact the buyer.

 

The Nationstar Mtg Application is attached.

Attachments:

Good Morning,

 

I'm working with my 2nd Nationstar short sale. The 1st was cash, so no pre-qual was done. I, like many others, decided not to fight the pre-qual issue, as I wanted to help the homeowner get out from under the property. The investor is Bank of New York, there is a 2nd, and we are doing a traditional (not HAFA) short sale. The buyer submitted the Nationstar pre-qual form. In their offer, they requested 3% toward closing costs (Conventional financing). This is the response from the negotiator in equator :

Body ****. Also, from the HUD I see that there is a request for closing costs, please advise the buyer that Nationstar does require in house financing be used to pay any closing costs as part of a short sale.
 

XXXXXXXXXXXX - 09/13/2011 10:36:51

 

I emailed the negotiator and asked if this is a Nationstar requirement or investor? I never received a response regarding this issue. When I called in, I was told that the buyer had changed their financing to Nationstar. I had the chance to speak with the buyers. I told them that they can use any lender that they want. The banks was not supposed to solicit them, this was only supposed to be used for determining their ability to purchase. They said the loan rep told them that the process would be easier if they used them, and they would get a free appraisal. They said since it is a short sale, they decided to use them so the process would move quickly. The short sale approval came about 2 weeks later. About 2 weeks ago, I received the 2nd td approval and escrow was opened. Last week, Nationstar came back with higher costs, more points etc....and closing costs in excess of 3% (with a higher rate). Everything was higher than their original good faith estimate. The buyers went back to their original lender on Friday (Wells Fargo) and got a better rate and terms. They are moving forward with them. My approval expires on 10/31, and I am going to have to request an extension. Now I am ready to fight !! I was actually prepared when I was told they were using Nationstar, but the buyers were convinced that everything would go through if they did, and they really wanted this property. I can't imagine that Bank of New York is requiring Nationstar  financing in order to approve the closing costs. I have many Bank of New York files with B of A, and they all received the closing costs (without having to use Nationstar financing....LOL). I'll let you know what happens.

Sooo... 

the cat is out of the bag - you now have PROOF that Nationstar is willing to reduce the "net" to the investors to enrich themselves (by paying for closing costs out of the investor's proceeds).

 

This is a very clear violation of their fiduciary duty  to the investors in those notes to maximize the returns on those notes.  I.E., "we'll stiff the investor for a few grand, if you write a mortgage through us".    

 

Interesting exchange here as Mark, as an eloquent (and tenacious) ticked off buyer, provides a substantially different perspective.

Which I enjoyed. I can see how he might feel that we, as short sale agents, have little backbone.

We end up being facilitators - doing what needs to be done to get the job done. For our short sale clients, and of course so we get paid (we are not unpaid social workers - tho I certainly feel like that sometimes).

But in dealing with the bullshit that banks lay out, we get accustomed to it. Another hoop, another day. Another pile of BS to shovel, that's the name of the biz.

Where is the indignation at the institutions that create 'what needs to be done' in our business? We all know how incompetent and capricious banks (or rather, servicers ...) can be.

It's just too exhausting to get angry on a regular basis, and you can't work the system well if you're angry anyway.

But, yanno, I don't think we should lose sight of how we are working within a dysfunctional system and by doing some good, end up helping maintain it ... I think a little dose of vague 'Occupy Wall Street' might be in order ... to keep us human.

depending upon the state you are in, the bank may have violated MANY laws.

Thier statement that thye would save the buyer money and costs and then increasing them is in itself FRAUD.  THe bank had the HUD1 estimates.  To tell someone that they will get a better, faster and cheaper deal and then charge more is actually illegal in many jurisdictions.

I could direct you to some specific laws in relevent state(s)...just remember that if this falls through because of the action of the bank after approval...you do have specific recourse.

Bryant,

I have had Nationstar contact a buyer on a property.  The buyers did not feel comfortable with this and cancelled.  I forwarded their response to our negotiator and have placed the property back on the market.  I think with my next offer, I will forward an additional letter with the "application" stating that the buyer does not wish to be contacted by Nationstar regarding their loan and are happy with the services of their current lender.  Hope that this helps.

No big deal...just have them complete the application...they may offer better terms?   This is very common with REO listings>

it will not ding their credit - for the Buyer's it is "shopping for best loan"....

too many "pre-approval"  letters- have resulted in transactions that have not closed due to financing....you cant blame NationStar.....just have them fill out that app

 

 

 

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