Will lenders consider a short sale when the seller isn't in default?

I have two separate customers who are way upside down in their mortgages, but they're current on their payments and can likely stay that way.  If we were to begin offers for sale to the lenders (one is Chase and the other is BOA, and both are single-lien situations) would they consider our offer?

 

 

Alex Krumm

Re/Max Alliance Group

Broker Associate

GRI, Certified Distressed Property Expert

Winner, Five Star® Best In Customer Satisfaction: 2010, 2011

 

941-234-3597 Direct

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Replies to This Discussion

Permalink Reply by Lori Bacon on July 14, 2011 at 10:34am



Lori Bacon said: 

I had a short-sale with Ocwen in December 2010 and they approved it in 26 days.  I called the EVP and within an hour Ryan Moses from Ocwen called me and short sale started moving forward.  His number is 800-746-2936  E-mail:[email protected]  Good Luck  - Also, the EVP for Ocwen is listed in this forum - if I find it I will reply back.

Good Luck!

Lori Bacon, ABR, GRI, E-Pro

ERA Real Estate Professionals



Azim Jessa said:
The only bank I've had trouble with is OCWEN.  The loan was owned by Freddie Mac and I'm still working on it but they denied it originally and now have resubmitted it.  The seller was relocated to another state for work and is using some of her relo bonus to stay current as she feels its the right thing to do.
Permalink Reply by Azim Jessa on July 14, 2011 at 6:28pm

Thanks Lori!

 

Unfortunately, an hour or so after I received your message, the buyers cancelled...

 

I should start telling my sellers I am going to sell their home 2-3 times before we close.

 

Regards, 

Azim Jessa

Realty ONE Group

Las Vegas, NV 

702-569-9353

[email protected]

Permalink Reply by Kristin Johnsen on July 15, 2011 at 1:31am

Oh it was probably about two months ago, they refused to take the allowed amount and wanted 5% of the purchase price and the 1st lien holder (and Fannie Mae) would only allow 6% of the 2nds loan balance.  It would great if they wised up and started realizing they would end up with nothing.

Permalink Reply by Jason Boykin on July 15, 2011 at 1:57am
yes, I just did it.  WF and Chase both approved a SS and I never had a late payment.
Permalink Reply by Gena pasquini on July 28, 2011 at 8:37am

HI....For those of you who replied that you CAN get a short sale closed when the seller is not delinquent, can you please share if there is anything in particular that will help get it done!?!  I have an Indymac/one west deal but actually owned by deutche bank and we have resubmitted 5 times already and they keep denying because owner is not late.  She can't carry the 1500 negative anymore (non-owner) which has been coming from her savings.

Any ideas/suggestions? 

Thanks.

John P Cadman said:

I have a Chase first and Chase second short sale with a seller that is current.  They gave us a sales price they would consider that was higher than the buyer was offering, so we re-marketed and found a buyer willing to offer what Chase indicated they would accept only to have the short sale denied.   The excuse was "hardship".  They believed the seller was not in an eminent default situation.  The seller has been digging into savings to make the payments and decided to stop doing that now that he was denied.  It has been a month since the first missed payment.  We will re-submit and probably have to get a new buyer in a month or two when Chase realizes that people will not destroy their financial futures for a roof today.
Permalink Reply by Thom Colby CA Brkr 888-391-5245 on July 28, 2011 at 8:50am

Gena and John -  

 

In both of your examples, you said the seller / borrower was using "savings".  I think that's the reason both are being declined.  If a borrower has money in savings, why would the lender take the hit?

 

Thom Colby

Broker

Newport Beach CA

Gena pasquini said:

HI....For those of you who replied that you CAN get a short sale closed when the seller is not delinquent, can you please share if there is anything in particular that will help get it done!?!  I have an Indymac/one west deal but actually owned by deutche bank and we have resubmitted 5 times already and they keep denying because owner is not late.  She can't carry the 1500 negative anymore (non-owner) which has been coming from her savings.

Any ideas/suggestions? 

Thanks.

John P Cadman said:

I have a Chase first and Chase second short sale with a seller that is current.  They gave us a sales price they would consider that was higher than the buyer was offering, so we re-marketed and found a buyer willing to offer what Chase indicated they would accept only to have the short sale denied.   The excuse was "hardship".  They believed the seller was not in an eminent default situation.  The seller has been digging into savings to make the payments and decided to stop doing that now that he was denied.  It has been a month since the first missed payment.  We will re-submit and probably have to get a new buyer in a month or two when Chase realizes that people will not destroy their financial futures for a roof today.
Permalink Reply by Jeff Payne on July 28, 2011 at 9:08am
Thom, once again you hit the nail right on the head.  If she can pay, why will they consider a short sale?

Thom Colby Newport Beach CA said:

Gena and John -  

 

In both of your examples, you said the seller / borrower was using "savings".  I think that's the reason both are being declined.  If a borrower has money in savings, why would the lender take the hit?

 

Thom Colby

Broker

Newport Beach CA

Gena pasquini said:

HI....For those of you who replied that you CAN get a short sale closed when the seller is not delinquent, can you please share if there is anything in particular that will help get it done!?!  I have an Indymac/one west deal but actually owned by deutche bank and we have resubmitted 5 times already and they keep denying because owner is not late.  She can't carry the 1500 negative anymore (non-owner) which has been coming from her savings.

Any ideas/suggestions? 

Thanks.

John P Cadman said:

I have a Chase first and Chase second short sale with a seller that is current.  They gave us a sales price they would consider that was higher than the buyer was offering, so we re-marketed and found a buyer willing to offer what Chase indicated they would accept only to have the short sale denied.   The excuse was "hardship".  They believed the seller was not in an eminent default situation.  The seller has been digging into savings to make the payments and decided to stop doing that now that he was denied.  It has been a month since the first missed payment.  We will re-submit and probably have to get a new buyer in a month or two when Chase realizes that people will not destroy their financial futures for a roof today.
Permalink Reply by Shari P on July 29, 2011 at 4:08am
I just got one approved and the seller was not late. Although he had moved out of state for a job so maybe that was part of the reason it was approved. He had savings but not very much outside his 401k. The only way the banks would go for it was with prom notes, so be prepared for that. They were approved prior to a new law that does not allow prom notes, so I'm not sure if banks are going to be so willing to approve without them.
Permalink Reply by Jeff Payne on July 30, 2011 at 1:49am
We have done many that were not owner occupied, have a wells approval right now for an investment property that is current
Permalink Reply by Bryant Tutas on July 30, 2011 at 3:09am

Short sales on investment properties where the seller is current on payments do get approved. However my experience has been that the seller had to participate in the loss with a cash contribution, prom note or both.

 

On primary properties there is usually not an issue. Especially if there is a hardship. Medical issues and death of a spouse trump just about any short sale guidelines. A divorce decree is also a good one for overcoming the "must be delinquent" that some lenders throw at you.

Permalink Reply by Tni LeBlanc (805) 878-9879 on July 31, 2011 at 2:08am
Just got an approval from BofA for a current borrower.  Closed a Wells/Fannie one the month before.  And last week, got an invite for s streamlined processfor a current borrower.  Yes, it can be done.  Not every file -- but many more than people would have you believe.  What is the hardship claim?
Permalink Reply by Kimberley Kelly on July 31, 2011 at 2:12am
Good luck with Chase John.  Chase is the ONLY lender that turned down one of my Shorts last year and another this year..b both for the same reason..hardship.  Both homes are still standing vacant and falling in disrepair.  Both my Sellers were willing to bring large amounts of cash to COE to get the Short Sales..but ended up letting them go to Foreclosure.  I have found Chase to be insanely HIGH when it comes to their BPO's..

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