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Wells Fargo Won't Put One Of The Sellers Name on Approval Letter

Posted by Terry McCarley on September 15, 2013 at 11:33am in Short Sale Discussions

3 sellers involved (one is a married couple and other is a friend) and Wells Fargo says they will only put the names of the married couple on the approval letter as they say the third owner is not on the mortgage. All 3 owners documents were submitted to Wells Fargo and now that we are at approval stage this issue comes up. I have now obtained copies of the mortgage and the note and all 3 parties signed both. The loan was sold a few times over the years so something obviously got messed up somewhere along the way. Wells Fargo told me to just have the title company that is closing it have the 3rd party sign the closing documents. All 3 sellers are on the deed, the mortgage and the note so I firmly believe I need all 3 on the short sale approval letter. Has anyone ran into anything similar to this???

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Replies

Kevin - Greenville, SC September 15, 2013 at 5:48pm

Does the Title Company and/or Attorney have issue with it?
- Terry McCarley > Kevin - Greenville, SC September 16, 2013 at 1:27am
  
  Yes, the title company told me since all 3 are on the note all 3 need to be on approval letter. If the 3rd owner is not on the letter he wouldn't have written proof of debt forgiveness.
  - Jeff Payne > Terry McCarley September 16, 2013 at 2:27am
    
    I would find another title company.
    - Terry McCarley > Jeff Payne September 16, 2013 at 3:08am
      
      I am concerned because I want to be 100% sure all 3 sellers are protected.
      - Jeff Payne > Terry McCarley September 16, 2013 at 6:54am
        
        Title insurance has nothing to do with your sellers being protected from the ramifications of a short sale. Title insurance is to insure that there are no past title issues. As long as all three that are on title sign and agree and sign the closing paperwork, that is all the title company has to worry about.
        
        Terry McCarley > Jeff Payne September 16, 2013 at 7:07am
        
        I understand the title insurance role in this. Our fear is it leaves the third party open to liability as he is not named in the short sale approval letter. The title company I use totally understands short sales and this has nothing to do with them issuing clear title. We just all agree all 3 parties should be on the approval letter. I will advise the sellers to speak with a real estate attorney regarding this if Wells Fargo won't add the third seller to the letter.
      - Jeff Payne > Terry McCarley September 16, 2013 at 6:49am
        
        What does this have to do with title company giving clear title? The title companies job is to research the title and to issue clear title and title insurance. Are they saying that the title is not insurable because all of the sellers are not on the approval letter?
        
        Terry McCarley > Jeff Payne September 16, 2013 at 6:52am
        
        No - the title company agrees that this leaves the third party open to liability for the loan while releasing the other 2. If the third party wasn't on the note we would be fine but he is indeed on the note.
      - Terri Barrow > Terry McCarley September 16, 2013 at 6:39am
        
        I agree Terry, I would be concerned too. I would email the Note, Mortgage and Deed over to the short sale lender and ask them again to revise the letter as all 3 sellers are obligated to pay the loan. Keep us updated, I would be interested to see how this works out for you!
        
        Terry McCarley > Terri Barrow September 16, 2013 at 6:50am
        
        Thanks Terri. I have asked the negotiator to upload a task in Equator so I can send her the documents but so far no luck. If I don't succeed with that I'm going to call regardless of how much they want everything done thru Equator.