Short Sale Approvals with Seller isn't Delinquent
Howdy Folks -
Just curious if anyone is seeing short sale approvals when the seller isn't delinquent. We just did one, but the seller was military and being transferred out of country. Most however, the seller has been delinquent. We are seeing more and more people needing to sell due to job transfer and moving...and they are upside down.
So please share who lender was and any special circumstances.
Thanks
Replies to This Discussion
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Permalink Reply by Jae Evans on
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Honestly, HAFA guidelines say at least 31 days late at closing.
If your seller can time it right, you can close right when his 30 day late would be. Maybe it won't report because it will report a zero balance. You could argue this with the credit bureaus? Just a thought.
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Permalink Reply by Penny Howard on
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I have experienced two Chase short sales where seller was current and Chase refused to process the short sale until seller was delinquent. In one instance I was working with the buyer, seller's hardship was supposed to be financial yet they kept making their mortgage payment, and the current instance I am the listing agent and the hardship is relocation - yet Chase is still requiring delinquency. I also have a AHMSI with mortgage insurance where being current on the loan has stopped the short sale process. The MI refused to allow the short sale -not AHMSI. I just closed a AHMSI short sale in less than 60 days but my seller had stopped making the payments. So far - I have not experienced a short sale with seller remaining current on their payments.
Chase actually informed me that it is easier for them to process short sales if sellers are delinquent. My seller did not want to stop making payments until we had an offer in hand. Now we have a buyer but must wait another 30 days for the loan to become delinquent before Chase will work the file.
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Permalink Reply by Donna Moulton on
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My seller kept their mortgage current by running up huge debt on their credit cards to pay their mortgage. Because the seller was current and still had a high FICO, BofA required they sign a promissory note that would pay the lien in full. Plus the seller had to agree to forfeit almost $1,000 in the impound account.
Banks seem to prefer that people destroy their credit and be unable to buy another house. I wish I understood how this benefits the banks. It certainly doesn't help the consumers, the housing market and the economy.
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Permalink Reply by Joseph Alfe on
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For your sake, I sincerely hope the sellers consulted with an attorney before they closed this transaction. Judging from the answers I have seen here, I'm not sure that some of you realize that short sales are a negotiation. Just because the lender or investor says no, dos not ,mean that they won't say yes at some point. Very, very few of sellers I encounter who are not delinquent end up being forced to actually go delinquent. There are usually exceptions and tactics to get around these "requirements."
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Permalink Reply by Jeff Payne on
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This is the best statement in this entire thread!
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I am well aware that a short sale is supposed to be a negotiation, thank you very much. My broker told me to hold firm on our position and the lender would eventually back down. The BofA negotiator called my seller and asked if she would sign a promissory note. She said no. He didn't ask if she meant it or if she wanted to reconsider. He didn't call me to tell me what he was going to do. He immediately closed the file in Equator. The buyer walked. I reopened the file in Equator and got another buyer. By this time, the seller was delinquent. The new short sale negotiator demanded an even larger promissory note. In negotiations, isn't one side supposed to accept less than they originally demanded, rather than more? The short sale negotiator said she was just checking to see whether the sellers were going to sign the promissory note; otherwise, she would close the file immediately. The seller agreed to the larger promissory note, but fortunately the buyer walked and we got a slightly higher replacement offer that paid BofA in full.
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Permalink Reply by Natalie Arndt on
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Good deeds get punished by banks.
Natalie Arndt BS, MA , CDPE, CDRS,
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Permalink Reply by teresa abbott on
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commenting on Donna Moulton's post
This is the situation we're in. We have kept mortgage payment current and have taken money out of 401K and maxed out credit cards to keep afloat. We have BOA for 1st and then took a loan from escrow (whatever that is called) from BOA as well. Of course we took the loan out in 2006 right before the stuff hit the fan. We live in Mississippi.
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Closed a Short Sale with Chase with no missed payments. The hardship was a divorce and neither party could afford it individually. The other one I had was a military situation and they both had military orders to move. Most of my clients come to me at a point where they are already delinquent or they just can't afford it any longer so this has not been the norm for me. It's always possible if the hardship/situation makes sense to the lien holder.
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Permalink Reply by Jeri Groves on
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I did a Wells Fargo FHA pre-foreclosure. The seller didn't want to ruin her credit, but was suffering from a life-threatening illness and needed to move home with family. She paid all but ONE payment, because you have to be 30-days late in order to close on an FHA. So, we closed the short sale on 9/30/11, and she had been LATE on previous payments, but ultimately made ALL but her September, 2011 payment.
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In our market I see short sales approved when sellers aren't delinquent. As a matter of fact; it will help them secure a new loan (almost) right away.
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Permalink Reply by Richard Zaretsky on
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About half of our short sales are not in delinquent status.
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