I'm the buyer of a short sale with a single lien, held by Wells Fargo. My husband and I submitted our contract in August 2014 and other than hearing "The bank asked for more documentation from the seller" each week from the listing agent, our agent can't get any information from him regarding why this is taking so long or where we are in the process except that they've done two BPOs. We don't even know if the bank has seen our offer.

My husband and I are foster parents and since we'll be moving to another county, we haven't been able to take placements for a year. We don't expect anyone else to care that our life is on hold, but now that a year has passed, we feel like this is a ridiculous amount of time to wait without hearing anything except that the bank has asked for more documentation. Everything on our end is approved and good to go at a moment's notice. We've been exceedingly patient and we really want this house, but it's frustrating to be so powerless in moving things forward because we're very proactive people. 

Do any of you have insight as to why this is taking so long? Is there anything we, as buyers, can do?

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Hi Melissa,

It is very frustrating to be a buyer in a short sale for exactly the reasons you've stated. The buyer has no control over the process at all. Though it isn't unusual for a short sale to take 6 months, the fact your's has gone on for 13 months indicates there probably is some sort of a problem.

Some of the possibilities are:

1) Your offer may be significantly lower the bank's value of the home. That two BPO's have been done could support this theory, but they also could be due to the length of time. BPO's are generally only valid for 3 - 6 months. Have you asked if the listing agent knows what value the bank has for the property, or if they know whether your offer is close enough to the value? Understand the list price and the value of the property are not related in the eyes of the bank.

2) Wells Fargo may have sold the servicing rights to the loan. When this happens, the short sale basically has to start over again with the new servicer, regardless of where the process was before the sale. Have you asked if the loan is still with WF?

3) The seller may be in some sort of bankruptcy process, which would put a complete hold on the short sale transaction. Bankruptcy protection over a property continues 2 - 3 months beyond either completion of the bankruptcy, or the property being released from the bankruptcy. Have you asked if there is a bankruptcy involved?

4) The listing agent may not be experienced in short sales and may not know how to proceed. Have you asked about the listing agent's experience?

5) The seller may not be cooperating and might not be getting documents to the listing agent or bank in a timely fashion.

As buyers, you can take action and insist on answers to the questions above if you don't already know them. Once you have the answers (or if you're not able to get them), you can decide whether or not it is worth it to you and your family to continue with your life on hold. If your agent isn't able to get any answers from the listing agent, she can always call the agent's broker. You deserve to know.

I'm sure there are other properties on the market in your area. If your strong interest in this property is because it seems to be a really great deal compared to other homes, it would lead me to suspect item #1 could be the problem.

Good luck - I hope this works out for you!

Brenda Houghton

Hi Brenda,

Thanks for your reply. The second BPO was necessary because of the length of time since the first one was completed. 

I know that the seller is not at fault. Because of this process, we've become Facebook friends (so that's a positive!) and I know she's very timely with submitting documents, but she's just as frustrated as we are. She relocated and also wants to get on with her life. And I know she is not facing bankruptcy. 

It's likely that you are correct about #1: the value of the home is higher than the listing price (which was what we offered although the house had been on the market for six months at that point) because we've seen almost all of the other houses listed in the area. The reason we want this house is that it meets our specific needs for being foster parents (location, accessibility, etc.).

Also, #4 is a likely. Our agent has insisted several times that he try the short sale negotiator she uses because her short sale listings have never taken longer than six months and he just keeps working with the same people who don't seem to be getting anything done.

Interesting you have a dialog with the seller who could perhaps file a complaint with CFPB.

Like Brenda said there are many reasons. However, I would suggest you plead your case with the CFPB (Consumer Financial Protection Bureau) http://www.consumerfinance.gov/complaint/ At least if it on the Bank end, they will prod them.

I thought about this, too, Dean, but because she doesn't have the seller's loan number, I wasn't sure if they'd be able to identify the transaction. I agree it would be worth a try.

The lender should be able to look it up by the property owners name and the address of the property as long as that is in the complaint.

Thanks for the suggestion. I'm definitely going to file a complaint. 

If you email me, [email protected], my team can get involved and get you answers (we process short sales for agents all over the country).

As noted by both Brenda and Dean, you likely just have an inexperienced Agent/Attorney negotiating on behalf of the Seller.   They probably have no clue who CFPB is, how to reach out to upper level management at Wells Fargo or MOST importantly, how to contact the Investor on the loan (the REAL decision maker).

Best of luck, email me if you would like my team to get involved!!!

Too much to get into here (it is ALL in my book "Learning To Swim In The Short Sale Ocean" on Amazon), but:

CFPB - You RARELY have to file a complaint, BUT, you need to let the upper level management know:

"you will advise your client to file a formal complaint with CFPB"

An email sent to upper level management, VP's, and the executive offices, with a "catchy" email subject line:

"If these issues persist, I will be advising my client to file a formal complaint with CFPB"

will ALWAYS get a response.

Reaching out directly to the Investor (again the REAL decision maker) will get a response 90% of the time.

Lower level negotiators could care less, the upper level people who understand what CFPB can do will become VERY responsive and the Investor on the loan ALWAYS appreciates when you call out the Servicer.

For FHA short sales - go directly to HUD/Treasury and your issues will get quickly resolved.

Thank you all so much for your input; it's been a huge help.

Inspired by your advice, this morning, I called everyone I could think of: the listing agent, his office manager, the person processing the sale at his office, someone whose name I once saw at the bottom of an email my agent had forwarded me, the seller, etc. 

I learned that unbeknownst to everyone on our side, the short sale was rejected in February because the seller had money in the bank from her employer to relocate, which resulted in the file being closed, then needing to be re-opened and starting from scratch in March. (We spent all fall and winter believing that it was just a waiting game and that we would settle in the spring.) 

AND, that if we don't settle by the end of the year, we won't be settling at all.

I also learned that it is in fact an FHA loan. 

Everyone I spoke to was very nice (except the listing agent because he didn't want me to call his manager), but they were all less than helpful. At least now his manager knows that this has been dragging on for a year.

If the seller has relocated and no longer occupies the home, she is not required to go through a modification prior to a short sale request, per HUD PFS guidelines, so that's something to check into. In reality, if the seller doesn't have an ATP yet, the likelihood of settling the transaction this year is quite low. It generally takes WF 3 - 4 months to issue an ATP (if everything goes reasonably well), then another 3 months to review and approve an offer, even if the offer meets their value. We only have 3 1/2 months left in this year...

I asked the woman processing the file at the listing agent's office and she said that an ATP was done early on, so that's a relief.

I think the people I spoke to today are already annoyed with me, but that's GOOD. I want them to want to be ready to be done with me and get this settled already. The squeaky wheel gets the grease, right?

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