BK from 3 years ago- attempting short sale since 8/2013. Now they ask for this...

I have a client who declared Ch 7 BK nearly 3 years ago. We are attempting to get them off title so they can move on.  We initiated the short sale back on 8/02/2013. All along we have been getting them information as they have asked for it. Today we got this response. Seems highly intrusive - especially since the BK. Every other BK I have negotiated the BK paperwork trumped the other paperwork.  I have never been asked to provide such information/documentation- since 2008! What do you guys think? Is this normal? 

Hello,
 
My name is Adam Barnstable and I’m the short sale processor for this file. I need a few more documents from the borrowers before we can move forward with the short sale review.
  • I noticed cashed checks from Capital One. We need a signed and dated letter of explanation from both borrowers regarding where the money came from.
  • I noticed ATM deposits in the Bank of America statements. We will also need a signed and dated letter of explanation from both borrowers regarding these transactions.
  • We need proof of expenses for any expense listed on the financial worksheet that is over the IRS Index. Please review the attached link and provide proof of expenses for any expense over the national average. We will accept bank statements, credit card bills, utility bills, or receipts to show proof of the expense. If an expense isn’t on the IRS Index, then we need proof no matter the dollar amount.http://www.irs.gov/Individuals/Collection-Financial-Standards.

 

This is completely rubbing the client the wrong way since they declared BK 3 years ago and don't feel it's any of WF business. The more WF asks for "further explaination" the longer it takes the seller to respond and the more irritated they get. 

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Replies to This Discussion

Send them the BK discharge and tell all info before BK is now voided ,client no longer have it

They have the BK paperwork. We even had to have the seller's attorney write a letter saying it was ok to talk to WF about a short sale. WF made that letter mandatory even before they would begin to talk to us. 

Hi Debi

Wells can be difficult, took me 5 months on their last approval, BUT they are giving my seller $43,000 for relocation costs.....NO, I did not add any extra zeroes.

Just opened a new file with them, sellers also discharged in BK.  I sent them the BK discharge with the 3rd party auth and reminded them it is my understanding they are not permitted to ask for any financials since the debt was discharged. They agreed and just asked for the the ss addendum signed and the hardship letter, and the 4506T. Will see how it goes,just had file escalated as it has been a week and they still haven't assigned a processor.

I just got an update from Adam when I asked why. He said "It’s a part of our investor guidelines that we request these documents in order to move forward with the review."  This is an FHA loan. I (my sellers) have NEVER been asked these questions in an FHA file. We have just supplied the documentation and they have given the ATP. Grrr.

I would do as Kathleen said. Tell them it is a BK and they are not permitted to ask for any financials since the debt was discharged. Further the IRS Guidelines clearly state "These Standards are effective on April 1, 2013 for purposes of federal tax administration only." and can not be applied to other matters per IRS Guidelines. I assume the home was included in the BK, so the BK papers clearly list the mortgage as a liability. Never heard of FHA (investor) stating this. I would open a ticket with FHA also.

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