I have a  Wells Fargo short sale and the  negotiator / MIP insurance would like seller to  sign 30,000 note or they will seek deficiency.  Long story short, the seller wont sign note, we would like to know what the BPO came in at to see if buyer would be willing to pay more for home to lessen the amount they want from the buyer.

 

Negotiator will not tell us what BPO came in at.  Told me I can argue it with recent solds, which I have already done every month for the last 4 months.  I was successful at getting a second BPO ordered and turned in but is there someone I can talk to at wells fargo to find out what the new BPO came in at so I can approach the sellers and buyers and see if we can get the deal done?  The negotiator told me that they would consider the buyer signing a note for the 30,000 too.  All this before the offer even moves to the next stage. 

 

Last offer the MIP turned down and told seller they would make more money going through foreclosure.  

 

Frustrated.  The Negotiator also said they will not budge because the seller still has good credit and they are paying all their other bills.

 

If anyone can help me out, I would love love love any suggestions,

Thank you so much

Kim

[email protected]

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Replies to This Discussion

Kim, This note thing is becoming more and more in short sale process now , The seller will not have good credit if they don't sign the note. Trust me Wells Fargo is number one is not liking the client to keep good credit in a short sale. The 2 things I tell my client about the notes They are walking out of this property and loan for 30,000 and in 2 yrs they can maybe start to buy again, is it better to have the foreclourse on there credit for the full amount,and the bank come after them for that amount or a note that after the deal is closed they can go back and re-neg. the note ,cause now the lender has nothing to secure only 30,000. Just because they are paying all the other debts I would bet Wells Fargo will play hard ball that only they can sign the note not the buyer s at all.
The Lender has the upper-hand until the property is transfer out of there name then the note is fair game.
Seller should jump all over it if they want any kind of credit for the next 7 to 10 yrs. I have a Lawyer that tells them the same thing everytime I have a client that wants to walk away free and clear.
(one time I had one tell me why should the bank take a hit and not the client on there credit)
I'm with you John.  Once it's closed, the collection agency that probably owns the note will contact Seller and let the negotiations begin!  They can often settle for 10%..good deal. 

John Treadwell said:
Kim, This note thing is becoming more and more in short sale process now , The seller will not have good credit if they don't sign the note. Trust me Wells Fargo is number one is not liking the client to keep good credit in a short sale. The 2 things I tell my client about the notes They are walking out of this property and loan for 30,000 and in 2 yrs they can maybe start to buy again, is it better to have the foreclourse on there credit for the full amount,and the bank come after them for that amount or a note that after the deal is closed they can go back and re-neg. the note ,cause now the lender has nothing to secure only 30,000. Just because they are paying all the other debts I would bet Wells Fargo will play hard ball that only they can sign the note not the buyer s at all.
The Lender has the upper-hand until the property is transfer out of there name then the note is fair game.
Seller should jump all over it if they want any kind of credit for the next 7 to 10 yrs. I have a Lawyer that tells them the same thing everytime I have a client that wants to walk away free and clear.
(one time I had one tell me why should the bank take a hit and not the client on there credit)
Thank you everyone for your feedback.  I will consult with the sellers again and see what happens.

John Treadwell said:
Kim, This note thing is becoming more and more in short sale process now , The seller will not have good credit if they don't sign the note. Trust me Wells Fargo is number one is not liking the client to keep good credit in a short sale. The 2 things I tell my client about the notes They are walking out of this property and loan for 30,000 and in 2 yrs they can maybe start to buy again, is it better to have the foreclourse on there credit for the full amount,and the bank come after them for that amount or a note that after the deal is closed they can go back and re-neg. the note ,cause now the lender has nothing to secure only 30,000. Just because they are paying all the other debts I would bet Wells Fargo will play hard ball that only they can sign the note not the buyer s at all.
The Lender has the upper-hand until the property is transfer out of there name then the note is fair game.
Seller should jump all over it if they want any kind of credit for the next 7 to 10 yrs. I have a Lawyer that tells them the same thing everytime I have a client that wants to walk away free and clear.
(one time I had one tell me why should the bank take a hit and not the client on there credit)

Getting the buyer to come up is not the solution. If the buyer raised their offer by $30,000 WF will take the money and say "thank you" (or maybe not) and still want your seller to pay. 

It is typical for lenders to not disclose what a BPO came back it. The BPO is a figure that is used (sometimes in conjunction with other data) to establish the VALUE of the property. This is what the offer will be judged against and it has nothing to do with asking your seller for cash at closing.

Once the offer is accepted, then the investor and MI company will look at your seller's finances to determine if they should be making a contribution (i.e., can this homeowner afford to pay us back something, or do we let them walk away for nothing?). This is typically driven first and foremost by the MI company, and then, if the losses are substantial the investor may get involved as well.

They want money from your seller because they think the seller can afford to give them $30,000. If this isn't the case, then the seller needs to work with you (or directly with the lender if you don' t want to be privy to their private financial information) to prove that they don't have $30,000 to give them.

John is right that this is becoming much more commonplace, and we often see lenders have two 'deals' that they put on the table ... Pay us 'x' and we'll release the lien ... pay us 'y' and we'll release the lien AND give you full debt forgiveness. Unless the financial profile they have of the seller is way off, they're going to have to cough up something (but perhaps something less than $30K if they really don't have it.)


we've sent in financials to document lack of funds.  Wells called seller and told them sign for the 30,000 or we will foreclose and seek a deficiency.  They are now claiming they own another property too but they don't.  Both the seller and I have been working with Wells to try and show them the lack of funds.  They keep saying the MI is the one insisting and they wont budge.  We are now trying to track down MI contact to talk to them and try that route.  Thank you every one for your replies

 

and you are right they told the seller they don't care what the offer or what buyer is willing to pay that MI wants the 30,000 ..

Steve Early said:

Getting the buyer to come up is not the solution. If the buyer raised their offer by $30,000 WF will take the money and say "thank you" (or maybe not) and still want your seller to pay. 

It is typical for lenders to not disclose what a BPO came back it. The BPO is a figure that is used (sometimes in conjunction with other data) to establish the VALUE of the property. This is what the offer will be judged against and it has nothing to do with asking your seller for cash at closing.

Once the offer is accepted, then the investor and MI company will look at your seller's finances to determine if they should be making a contribution (i.e., can this homeowner afford to pay us back something, or do we let them walk away for nothing?). This is typically driven first and foremost by the MI company, and then, if the losses are substantial the investor may get involved as well.

They want money from your seller because they think the seller can afford to give them $30,000. If this isn't the case, then the seller needs to work with you (or directly with the lender if you don' t want to be privy to their private financial information) to prove that they don't have $30,000 to give them.

John is right that this is becoming much more commonplace, and we often see lenders have two 'deals' that they put on the table ... Pay us 'x' and we'll release the lien ... pay us 'y' and we'll release the lien AND give you full debt forgiveness. Unless the financial profile they have of the seller is way off, they're going to have to cough up something (but perhaps something less than $30K if they really don't have it.)

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