All Forum Posts by: Laura Marshall

I have personally negotiated and closed more than 100 of my own short sale listings. They can be done, but it is a lengthy process. I am not a fan of any of the banks, and I'm sure if they wanted to, they could speed up the process. Having said that, I can understand why they do not approve a short sale up front. They have to order an appraisal, pre-lim etc and the borrower must submit a complete package. (This is the edited version...trust me...there is so much more to it than that). Assuming everything meets  the investor guidelines and there are no jr liens, IRS liens, judgments etc that need to be negotiated, they could then determine a price that they would be willing to accept. What if, after all of that work, the property received no offers and the bank had to foreclose? That would be a lot of wasted time, when they could have been working with properties that already had offers from willing and ready buyers.  Also, if a buyer does show up later at some point, everything would need to be done again, as most likely the appraisal would have expired and of course, they will want a completely updated short sale package from the borrower...which in their language means "do EVERYTHING all over again". I have often wondered why it is possible for me to walk into one of their branches with my checkstubs, bank statements, tax returns, purchase contract etc...and they can approve and fund a loan in less than 30 days, but with the same documentation they can take 2 months to more that a year to make a decision about a short sale or loan modification. 

Hi,

One other thing that you need to consider is this. When a short sale is approved by a lender (no matter how many lenders/liens are issuing the approvals), the approval is in the buyers name...meaning the one that originally submitted the offer. The approval can not be transferred to another buyer. Many short sale approvals have restrictions such as no sale or transfer within 90 days of the purchase. If you plan on making an offer on a property, you would be the one who needs to complete the purchase in your name. You can't switch buyers mid stream and the buyer can not be xxxxxxxxxx successors and/or assigns. 

If they foreclosed, it is most likely a collection company sending letters. Wachovia merged with Wells Fargo a couple of years ago. They no longer use the Wachovia name. If the letters are from his old mortgage company, they should be coming from Wells Fargo.

I don't see where I can attach it. I will send it to you via email.

Hi Kevin.

It depends. You will have to read the verbiage in the short sale approval (once it has been approved)....or many times the verbiage is in the short sale affidavit. Some banks will not allow a transfer of title for 30-90 days after the short sale is complete and some also restrict the sales price - such as not more than a certain percentage of the sales price or certain dollar amount. Each lender (and underlying investor &/or insurer on the loan) have different requirements. I will try to attach part of a recent approval that I received. The sales price is $315,000. The property can not be conveyed for 30 days, and it can not be sold for more than $378,000 until 90 days from the date of the deed. Some banks don't care. 

Many banks require a buyer to be able to qualify for not only the new mortgage payment, but to be able to afford the "rental" mortgage payment as well...and stay within the debt ratios. Unfortunately, there were so many people in the past that when prices dropped....purchased new homes - showed their previous home as a rental - and once they were in the new home, just walked away from the previous home and let the banks foreclose. It is VERY possible that this owner is unable to qualify for financing with this property. Especially since this has not been an income property up until this time. Had it been a rental for more than a year, then they may have allowed 75% of the rental income to be counted toward her debt ratios...which still may not have been enough for her to qualify for another home.

I have closed more than 130 short sales. There is a 99.9% chance that they will NOT negotiate if the property has not been listed on the MLS. They usually require a copy of the listing agreement. Also, the owner must be willing to move forward with the short sale process. If the owner is willing, find an agent that has a LOT of short sales under their belt. It is not just a short sale to the 1st lien holder, but all lien holders. As previously mentioned, they will usually offer about 8% of to total purchase price to be paid toward subordinate liens. That is not 8% to each, but 8% of the purchase price total - no matter how many liens there are. Some will also state that the liens must be mortgages or HELOC's. The IRS is easy to deal with, but the owner will also have to cooperate with that one too. If the owner agrees and you have a QUALIFIED agent to work with, make sure that the title report is run ASAP ! There may be other liens that need to be cleared that you are not aware of. The amount that they are underwater is not the issue. I closed a short sale that was more than 1.1 million underwater. The problem is they want a fair market value offer, and ALL other lien holders must agree. If even one says no, and you are not willing to pay it off yourself, then it will not work. Good Luck .

@KimBook - Thanks Kim ! I recently started investing, but I have been doing short sales for more than 5 years.

Oh...I also forgot ...If it is an FHA loan, you will be able to see that on the original loan document. They usually have the case number on the first page of the recorded Deed of Trust.

In my personal experience, most of the "former" B of A Loans serviced by Green Tree were Fannie Mae loans. If your 3rd party authorization is on file, the best thing to do is call and speak with the department that handles properties after foreclosure sale. It isn't always the REO department. Some servicers have a separate department that takes care of foreclosed properties until they are either re-conveyed or sent to the REO department...however...the REO department might handle everything. Being that it is Green Tree, it is highly unlikely that they own the loan, so the property will be sent somewhere else and not sold by them. Since it is most likely not "any lenders" portfolio loan, my "guess" is 99.9% positive that it will have to be listed before it can be sold...but again, there are always exceptions. If you have the last 4 digits of the former owners SS#, you can always check both the Fannie & Freddie sites to see if they were/are the investor. If so, at least you know where it will eventually end up, and you wont have to go to the servicer for the info. Try https://knowyouroptions.com/loanlookup for Fannie Mae loans & https://ww3.freddiemac.com/corporate/ for Freddie Mac loans.