Specialized Loan Servicing (SLS) stalling short sale

Anyone have a good contact at SLS? It would be much appreciated.

I've had a short sale file with SLS since April '13. This was originally a B of A loan whose servicing was transferred to SLS (likely as part of B of A's settlement late last year) in January of this year.

I've had a cash offer in to them since April and they have been very obviously delaying the short sale since. Ive done over 130 SS since 2009 so I know how to submit a complete package and we have been meticulous in that regard. It started with the usual "we didn't receive this doc or that doc"....but now it's gotten to asking for items that I know are irrelevant.

It feels very reminiscent of the horror stories I've heard from clients who tried to do loan mods but were repeatedly and deliberately stalled.

My theory is that since SLS is only the servicer and since they are generating fees they have NO incentive to approve the short sale and have likely not even presented the offer to the investor.

We've submitted a detailed QWR for information, including investor contact but it has been ignored.

My borrowers are retired and really want to get this done before the end of 2013 else they risk losing out on the Mortgage Relief Act cancellation of debt exemption and get hit with a huge capital gains tax bill for 2014.

If anyone has a good contact at Specialized Loan Servicing (SLS) I and my clients would be very appreciative.

Thanks

Alex

The verification of income is clearly established by the direct deposit shown on their bank statements (amounts and sources are identified). Given that we are in CA and the lender can either deny or approve the short sale, but CANT request any contribution from the borrower regardless of income, or even savings (if they had any, but don't) a 33 year old retirement benefits award letter is irrelevant. I've never had a lender request the pension awards letter (unemployment,... yes, Social Security.... yes). Fortunately I was able to track down the pension fund manager and get a letter but I don't see it as even remotely reasonable or relevant. And this is just one example of many. They ARE deliberately stalling.

Thank you for correcting the capital gains vs standard income point. I looked it up on the IRS website and you are correct.

The pertinent issue, (for my clients as well as anyone else doing a short sale on their primary residence) is losing the opportunity to exclude the cancellation of debt tax liability if we close after the MRA 2007 sunsets ...assuming it isn't extended again of course.

Thanks again

Replies

Wayne Brooks September 21, 2013 at 8:45am

They are verifying all income, retirement or otherwise, for the purposes of the short sale.

Alex, the income from forgiven debt in a short sale, or foreclosure, is Ordinary income, not capital gains.
- Alex Brana > Wayne Brooks September 21, 2013 at 10:48am
  
  The verification of income is clearly established by the direct deposit shown on their bank statements (amounts and sources are identified). Given that we are in CA and the lender can either deny or approve the short sale, but CANT request any contribution from the borrower regardless of income, or even savings (if they had any, but don't) a 33 year old retirement benefits award letter is irrelevant. I've never had a lender request the pension awards letter (unemployment,... yes, Social Security.... yes). Fortunately I was able to track down the pension fund manager and get a letter but I don't see it as even remotely reasonable or relevant. And this is just one example of many. They ARE deliberately stalling.
  
  Thank you for correcting the capital gains vs standard income point. I looked it up on the IRS website and you are correct.
  
  The pertinent issue, (for my clients as well as anyone else doing a short sale on their primary residence) is losing the opportunity to exclude the cancellation of debt tax liability if we close after the MRA 2007 sunsets ...assuming it isn't extended again of course.
  
  Thanks again
  - Jeff Payne > Alex Brana September 22, 2013 at 5:26am
    
    Is this their primary residence?
    - Alex Brana > Jeff Payne September 22, 2013 at 5:09pm
      
      Yes
Jonathan Katz September 20, 2013 at 12:04pm

Alex,

SLS can often be a nightmare to deal with and their system move forward slower than average. I've had success in the past reaching out the CEO or the VP of the recovery department. Also, if you haven't spoken to any of the floor managers I would be getting them on the phone simultaneously.

Warm regards,

Brett@ishortsalenow.com

310-564-6389

This reply was deleted.