Are Short Sales a waste of time? A Real life nighmare…
I have to admit, I HATE SHORT SALES!!! What a monumental waste of time with the best intentions in mind. The largest banks have that are now getting ready to defend the nearly 90 Billion in bonuses to their executives are the worst. Citibank, Bank of America, Wells Fargo and the worst of them all, Chase (regardless if it is Wamu Chase or not) really seem to have the US Consumer by the short hairs. Let’s not even get into how crazy the math is and their formulas’ for what they will “accept”. Just read on and hope that if you are in a situation where you need to sell short, God help you if you have MI (Mortgage Insurance) on your loan.
I have a client, with who has had a really rough past year. Her mother is sick overseas, she was downsized, was fortunate to get another job- that paid less, but hey at least she is still working. Came to the conclusion that her little 1 Bedroom 1 Bath condo in Concord was never going to appreciate to the nearly $270K that she owes. The HOA in their infinite wisdom, along with the support of her fellow owners, decided to rehabilitate the complex. A simple math mistake took the assessment from 10K per unit to nearly $20K per unit. Currently the properties in her complex are selling in the high 40K to low 50K.
Our contract was submitted and received by both the first andthe Second on 9/17/09. As of today, 1/14/2010 we have yet to get an agreement from our 2nd Lien holder, Citibank. Sounds like a long time doesn’t it? Well the problem is the 2nd loan has a MI Investor. Which essentially means, the Seller is really out of luck, because the MI company calls all the shots as to “if” they will approve a short. See it all comes down to this two simple questions, “What is an acceptable loss” and “Who is going to pay?” We have had approval on the 1st with Wells since late September, early October. What is the real shame is that every day that goes by after 12/31/09, the Wells Fargo is trying to charge a per diem (daily late fee) and there isn’t any money from anyone to pay it. Wells Fargo agreed to pay the 2nd $1000, then Citibank sat on it for till the middle of December until they assigned it to a Loss Mitigation Negotiator. They also knew full well that the Wells Fargo approval was only good until 12/31/09, they had a copy of it.
Ok, enough of the rant. What I know to be true is that their is really no easy way out of this financial crisis that we have gotten ourselves into. What I also know to be true is that the above story is not unique and has been repeated several (hundred) times over across the Nation, with other Real Estate Agents trying everyday to help honest people who just need help. What I have truly lost is my faith that our Banks really act on behalf of their clients. To think, I used to be a banker.
In: Banking and Finance, Mortgage Notes, Takin’ It In The Short Sales, Uncategorized · Tagged with: Bank Regulations, Existing Home Sales
Chris Curtis
on January 15, 2010 at 10:09 am
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Curtis, where in the country are you?
We’ve great experience is extending timelines to get all these pieces lined up for closing at the same time. MI takes a long time. Sometimes it’s best the minute you know there is MI to get the name of the company and contact them directly. And to find out what % the MI is covering.
Insurance companies are beginning to look at original loan docs to make sure the loans they are paying out on where not given using fraudulent reporting.
on January 18, 2010 at 3:09 pm
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SF East Bay in California. The 1st has been willing to extend, the issue is that they want to charge a per diem of $25/day, then they cut my commission by 20% and the second still hasn’t made a decision. At a certain point it becomes pointless. The Seller doesn’t have the money to pay per diem, the 2nd won’t pay them even though they have been the delaying party. The 1st has been on board for months, the 2nd has been dragging their feet. Unfortunately, I am starting to not care. My client lost all hope months ago, based on the 2nd’s lack of response.