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!

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If Freddie Mac is your investor you are in great shape!  See Ken Ryan's post from Thursday.  Freddie Mac requires that the servicer waive deficiency.  I was told by Wells Fargo that there is a "different" approval letter Freddie Mac loans. Share with us the verbiage if/when you get it.  Thanks.

 I just received an approval on Friday and the manager told me the same thing.  Here is the verbiage for the new Wells Fargo (Non FHA/Non HAFA/Non VA) approval letter.

--------------

With the exception of a Home Affordable Foreclosure 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 thereunder, and the obligations evidenced by the note shall remain in full force and effect until paid in full.

----------

Here is the manager's response to my email. 


Kris,  I am certainly well aware of the verbiage you are referring to in our approval letters. This is a change by our legal department to comply with National Servicing Standards requirements. The letter cannot be altered or amended and I assure you that you are not the first to comment. The change was to better clarify the investors rights that have always existed. So at the end of the day nothing has changed.

 

Please let us know if your sellers would like to proceed as approved.

Thank you,

_________

From Senior management:

I reconfirmed with my managers we cannot make any exception to current approval letter wording. Collective Issues with the approval letter are with senior management and have no time frame for resolution. So at this time it stands that we cannot make any alteration, amendment or exceptions to the approval letter at this time.

          _________

I found out this is a mortgage backed security loan. 

hi Ken,

 

Do you think then people who got this letter should go ahead and close the SS with that language?  What are the alternatives?  Are Freddic Mac SSs all getting approvals now with this language then?  What is the alternative to accepting this approval letter, going to foreclosure, which I don't want.  So do we have these two choices: 1) accept short sale with this languge and hope/know/project that there won't be any deficiency actions in the future despite the language; 2) don't do SS due to fear of this letter and just let property foreclose and definitely have a judgement?  This property is in Flordai (recourse state).

 

Any more thoughts please?  Thank you Ken!

Amanda

Here is a copy of the new short sale approval letter.  Still working on a resolution.  

Attachments:

Kris,

You indicated that this letter was for "non VA, in addition to non HAFA and non FHA"  Who gave you that information?  That is the confirmation that I am looking for. 

Hi Amanda - my answer tob your first question would be to check with an attorney. Different states have different laws. Example, Arizona is an Anti-Deficiency state with Anti-Deficiency statutes that dictate under cetain criteria, the lender can only look to the property for relief on the debt through the foreclosure process. This is where the main problem rest with the new policy on not allowing specific debt relaes within approval letters because short sales are not covered by the statutes.

Not sure regarding Freddie approval letters, although it appears that many servicers are trying to incorporate this new language on all approvals except HAFA. To my knowledge there has been no revision of the Freddie Bulletin issued 2/15/12 regarding the debt release and I bleive the language now being used in the approval letters will be found to be in conflict with the VA -CSP program.

I am now working with NAR officials who are in contact with Wells and Freddie. My contact there has requested I send him copies of approval letters with this new verbiage on HUD -VA, FHA and Freddie Mac loans. Help me get the word out. If possible, forward me copies (with all persoanl info blacked out of course), note what type of loan and I will forward to NAR. Good luck

Ken

 

hi Ken,

I have not been able to respond to your posting until now.  I will send you my approval letter with it all blacked out.  I will send this to you this weekend--I am traveling at the moment and don't have with me a redacted copy to upload.  I am finally understanding what is going on (after reading the posts over and over and also asking for clarification from Lisa who has also been responding to my questions here as you have).  I get it now that WF does not know what they are doing, and are possibly issuing these approval letters with this deficiency language possibly in conflict with FMAC bulletin and as you said maybe in conflict with VA-CSP program.  What can the NAR do at this point? 

 

Anyway, Good luck to us all as we try to get these SSs done.  My title company is the entity negotiating with WF.  They are trying to get WF to change the letter as well.

 

Thank you, and so long for now,

Amanda - 

They just made this change a couple of weeks ago.  I just got an approval letter minus the forgiveness language and they will not budge,  They only say "this investor does not normally pursue deficiency."  Uh huh.  Wells used to be the easiest for my team, now they are dropping the ball left and right, negotiators MIA and really long approval times.

I just got a revised approval letter from Wells Fargo for a VA loan.  Here is the language.  I was also told the letter has been revised for Freddie Mac too.

 

When Wells Fargo Bank, N.A. receives the required payoff and all required documentation, we will

arrange for the mortgage of record to be released. Wells Fargo Bank, N.A. will notify the major credit

bureau(s) to reflect "account paid in full with less than full balance” which should appear on the credit

report within 60-90 days the date of notification, however, Wells Fargo Bank, N.A. is not a credit bureau

and cannot control how or when the report will reflect information to other users of credit reports.

Compliance with this Demand Statement coupled with release of the mortgage shall waive the bank’s

right to seek a deficiency under the loan documents or any of its other rights there under, and the

obligations evidenced by the note.

hi Lisa,

 

OMG, This is incredible.  I finally understand your postings and Ken's postings.  I was unclear before about what was all being said on this bulletin but your answers and clarifications really helped.  In essence, WF seems not to know what's going on, and are sending letters against FMAC bulletin issued to their lenders.  We are then all trying to contact/escalte individually to management at WF to have them change our respective "illogical" and detrimental approval letters.   

 

Which department at WF changed your approval letter for you?  Did you say it's the San Antonio office?  Can you tell me anything more specific about who/what/where they are that said that FMAC loans also have to get the waiver language?  


This is great news for your client and you and for us as well!! 

Thank you!!
Amanda

Hi Amanda,

At this point I would email your negotiator that you recieved your original approval letter from,  That is who will be getting you the updated one.  Give me a call at my office if you want to discuss further.

Lisa Vaughan, Long Realty Co, Sierra Vista, AZ  520-227-2868

hi Lisa,

 

Thank you.  I will call you if we don't make any progress and I need some guidance.  I do have a title company negotiating for me for a revised approval letter.  I do also have an attorney who may also be able to guide me for the next step if we don't get a revised approval letter soon.  I appreciate your giving me your tel. number and offering to talk with me. 

My best,

Amanda

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