Well's is requiring a will to prove widow had access to title! Help!
I am looking for some advice on a complicated short sale with Well's Fargo that I am in the middle of (FHA investor). Here is the general overview:
* Both first and 2nd are Well's
* Note holder on First has died and his wife/widow was not on the first...only the second. Note holder left no will, no power of attorney. There is no estate (absolutely zero dollars) and no probate.
* 3rd Party lien holder (family friend) invested $100k and was in 3rd position and then husband passed away and he was given advice to foreclose on the property as the widow could no longer afford the payments (husband was sole breadwinner) and investor thought he was "protecting" his $100k. 3rd Party, even though he has foreclosed, has agreed to allow a short sale as him being sued will cost even more money. So he has given up his rights to the property and wants to sell.
* Well's filed a lawsuit against all parties (deceased, widow, deceased estate, 3rd party investor and their family) once that 3rd party foreclosed.
* Took 6 months to get Well's to agree to let widow give me authorization to speak with them about a short sale. FYI, surviving spouse is not automatically able to give authority to a 3rd party. Wells has put judicial foreclosure proceedings on hold in order to do this short sale.
* Have 8 offers on the property and keep getting calls every day (highly desirable area and pricing). The current offer would pay off the 1st and give the 2nd (owed $60k) $6k. all cash offers as the home has been vacant for over 4 years now and cannot qualify for financing....bad shape.
* Finally confirmed with Wells just 2 weeks ago that I can do the short sale on Equator and I have fulfilled all their doc requests via equator. They authorized the widow to proceed. As of today, I have received an email from Well's stating that they (FHA) requires a will, letter of testaments, etc in order to show the widow has/had authorization of the title (the title is currently held by the 3rd party since he is who has foreclosed).
I am wondering if anyone has advice on how to proceed with this requirement of having some type of proof that the widow is allowed to short sale the 1st (she is not on the note nor ever on the title...only the 2nd). There is no will, no letters of testamentary, nothing. It will take too long and be too expensive to go through probate (no money for attorneys) and the only way to stop the judicial proceedings now is for her to file bankruptcy which is also a huge expense. She has $750 to her name and basically lives in a shelter. The 3rd party who foreclosed has more assets and stands to lose more money as well as his wife (both are named in the lawsuit). Advice??? Thanks, as always!
Replies to This Discussion
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Permalink Reply by Joanne Hodge on
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Get the widow an appointment with HUD certified (free) housing counselor; or with (free) Legal Aid Attorney, or call your state Bar Association to get her referred to a lawyer who will donate their time. A letter from a lawyer explaining the rules & laws of inheritance when a property owner dies intestate may suffice for Wells. And, if she has no assets, no income, etc. does it make sense for her to even pursue a short sale? What could Wells possibly get from her if their lawsuit is successful?
Definitely need legal counsel on this one.
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Permalink Reply by Arlene Garcia Hanner on
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I agree with Joanne, this deal definitely needs the attention of legal counsel. Additionally, I would speak with the title insurers to make sure there are not additional requirements for title insurance to cover this transaction.
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Permalink Reply by joe beauchamp on
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Send your authorization to HUD and if you explain your need briefly, they will call you - this is not how they are supposed to do it, but it works better than you calling them because a real HUD analyst will call you instead of you talking to some nimrod that gets things right on the phone 30% of the time. The analyst may have a solution.
However, I think you are stuck with probate since you aren't in a state like NJ where marital property automatically goes to surviving spouse - state law, even if the other spouse sold his half, it disappears and comes back. So, how does the bank move forward in good faith when nobody legally speaks for the mortgage of the 1st loan? Probate - you're stuck. The best thing would probably be to get probate to assign the widow as the executrix.
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Permalink Reply by Jim McCormack on
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If the 1st is not short there is no need to go through the HUD PFS or any other 1st lien short sale.
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whoops - after getting through all the details, I missed the 1st being paid off. Also, I assumed 3rd party just meant that and not 3rd position because to foreclose from a lesser position means you must pay off the higher positions, right? So I assumed this 3rd party somehow was in 2nd position. I either don't understand that type of foreclosure (from lower position) or WF is suing because 3rd position filed a foreclosure but didn't pay off the higher liens?
Well, in any case, someone has to be legally in charge - so it is off to probate to get someone appointed.
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I am confused. You said the 1st loan will be paid in full. Why are you dealing with the 1st mortgage short sale? All you need to do is order a normal mortgage payoff. Your issues should be solely related to the 2nd and the 3rd liens. If the 3rd is indeed willing to just let this go with receiving nothing then all you need is a lien release from them with loan forgiveness. Then all you need is short sale approval on the 2nd lien.
If the widow is not on title then you have to go through probate or this sale (regardless of the short sale) has no hope of closing.
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