Wells Fargo New Approval Letter does not provide a waiver of deficiency!!! Has anyone had this issue recently??!!!
Just received an approval from Wells Fargo it seems they now have new verbiage which states, "With the exception of a Home Affordable Alternative (HAFA) closing, nothing in this Demand Statement or in the release of the mortgage shall waive the right to seek a deficiency under the loan documents or any of its other rights there under, and the obligations evidenced by the note shall remain in full force and effect until paid in full."
Seller refuses to close unless we obtain a "FULL WAIVER OF DEFICIENCY"!!! I called the Final Negotiator and requested such, however, she told me this is the new language and not her nor her supervisor or anyone else for that matter can change this verbiage; WF legal department is aware of this. Is there anything that can be done????????????HELP!!!!!!!!!!!!!!!!!!!!!!!! In the meantime we have an approval but the seller will not proceed!!!!
Any suggestions will be greatly apprecaited!
Replies to This Discussion
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Permalink Reply by Ken Ryan on
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Dennis, is your seller's loan a VA or Freddie Mac? If it is a HUD/VA, contact your regional HUD/VA office. If it is a Freddie Mac, please go to the link below and read Bulletin number 2012- 5 dated February 15, 2012. Hope this helps.
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Permalink Reply by Dennis Yoo on
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I've checked the freddie mac and fannie mae sites, neither own the loan and I know the seller does not have HUD/VA loan.
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That's unfortunate - I was hoping it would be either HAFA, FHA/VA or FREDDIE where the guidlines are clear that there is no debt continuation upon successful close. Since it is not one of these loan programs, if your client has not already done so, maybe now is the time for some legal pressure from a knowledable short sale real estate attorney. Good luck!
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I have one that we have been arm wrestling with Wells for about a month now, thus far they will not adjust the language (it is non FHA/VA/Freddie investor). I am very surprised that they have not adjusted this policy yet...still hopeful but increasingly resigned to the fact that the language of this new letter is sticking.
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Sorry to hear that. Does not seem consisitant with the "propaganda" that they would rather short sale than foreclose. You may want to communicate with Charles Dawson- Governement Affiars Dept. of NAR.
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Permalink Reply by LISA VAUGHAN on
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Have been on the phone and email all day with Wells Fargo and the VA (my seller has a VA loan) I was told by Wells Fargo that 90% of the approval letters that have gone out are recieving backlash....
The VA told me that WF is required to issue a letter stateing "This is a notice to you that neither the VA nor any obligor on this loan will be pursued for any portion of the indebtedness not repaid by the maximum claim payment and the proceeds from the sale," Can't find anyone w/in WF that is aware of this letter. Has anyone ever seen this in their closing packet?
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I just received a letter this afternoon with the new deficiency language, HSBC is the investor. We have been back in forth in negotiations with the Wells negotiator for the last week and a half, one of the things we were negotiating and came to terms on was the seller contribution which was discussed as the "contribution to waive deficiency" in our conversations. I immediately responded to the language when we received the letter via secure email and said that will be a deal killer (the foreclosure action is deficiency waived, no way in the world the seller is going to agree to short sale with deficiency, nor should they), so far no response to my email or voice mail.
I'll report back when I get his answer...this will be a big deal for us in our area if in fact Wells is now catagorically refusing to issue deficiency waivers on their short sales. Most of our foreclosure actions are deficiency waived, those will all go to foreclosure instead of short sale if they dig their heels in on this new language.
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Permalink Reply by Jackie W. McDermott on
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Sam - what state are you from?
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I have yet to receive response from the negotiator regarding the language, I have left voice messages, emails and messages through equator, he has been very responsive up to this point. I have a feeling they are taking it on the chin from all angles right now. Hopefully they are reassesing their new stance...
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Permalink Reply by Kimberley Kelly on
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Same here in California. What a stupid thing for Wells to do! Generate MORE foreclosures when we are just starting to get the Inventory cleaned up? I would send my Sellers to Attorneys and they will tell them "let it go to Foreclosure if you cannot get right to pursue lingo inserted into the Approval letters" Bam! Good job Wells!
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hello,
I had this happen to me. Received approval letter from Wellsfargo (WF) on 4/25/12 requesting cash contribution (a lot of money) AND saying: "With the exception of a Home Affordable Alternative (HAFA) closing, nothing in this Demand Statement or in the release of the mortgage shall waive the right to seek a deficiency under the loan documents or any of its other rights there under, and the obligations evidenced by the note shall remain in full force and effect until paid in full."
I would like to do this deal so much that I would just like to borrow money and pay and close even with this lanauge, but isn't that foolish? Or is it true that Freddie Mac just doesn't waive deficiency? We are trying to ask WF to reconsider waiving deficiency. I am now going through the title company but have attorneys who are not yet involved but may need to get involved (would that help)? Any advice would be appreciated.
Thank you!
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