Short Sale Timelines (again) (San Diego, school, disclosures, appraisal)

[JoJo81]

Wanted to get your guys' opinions. We were told last week that the 2nd mortgage "may be sold" but the listing agent has been extremely vague and will not answer any questions as to who is buying the mortgage and she won't tell us a time frame for when she would know it was sold. It seems a little strange that she would receive notice that it "may be sold." I would assume they would just notify you when it did sell.

We were told by a couple of coworkers, who have gone through short sales or are in the financial world, a few different possibilities of what is going on with this second mortgage:
1. A new lender is buying it for a lower interest rate.
2. A bunch of mortgages are being sold off by this lender.
3. BOA is buying the second loan.

We're just confused as to why someone would want to come in and buy a loan that's in default. What do you think the likely scenario is? Do you have a personal experience like this or know someone who has?

Just trying to get some grasp on the situation.
Thanks!

[kms201105]

I have found this forum to be very helpful so adding my experience so far to the mix:

Asking price of $385k
One loan with BofA

6/23 – Looked at house for first time
6/26 – viewed 2nd time with husband. Made offerof $380K asking 10K in closing (house has been vacant for about two years. we will be having to do some work on it)
6/27 – verbal acceptance by seller. Seller living out ofstate…was faxed contract
7/5 – received word seller signed contract and is meetingwith BofA on 7/8
7/8 – signed short sale addendum and wrote earnest check
7/10 – signed Arms length affidavit.
7/12 – signed Arms length affidavit again and toldconfirmation was received from BofA all paperwork was received
7/22 – told a negotiator is assigned and will meet withselling agent on 7/24
7/24 – selling agent talks with negotiator and is told theyhave no record of the short sale request, no paperwork
7/26 – seller and selling agent talk with BofA and are againtold a negotiator will work with them on Wed
8/1 – received word that new negotiator again said they haveno record of the short sale request, no paperwork (numerous other people withBofA in different roles and orgs are acknowledging they have no idea why thenegotiators are saying this. They are looking at the paperwork in front ofthem)
8/2 – my loan officer is familiar with short sales and hasbeen working with selling agent throughout (selling agent has only done 1 shortsale before). He reached out to a short sale attorney and the attorney is“foaming at the mouth” and believes if hired he can rectify the no paperworksituation and get traction. Seller emails and calls attorney to discuss hiringhim.
8/7 – receive word seller is meeting with the attorney theafternoon of 8/8 to sign paperwork

[kms201105]

Originally Posted by JoJo81

Wanted to get your guys' opinions. We were told last week that the 2nd mortgage "may be sold" but the listing agent has been extremely vague and will not answer any questions as to who is buying the mortgage and she won't tell us a time frame for when she would know it was sold. It seems a little strange that she would receive notice that it "may be sold." I would assume they would just notify you when it did sell.

We were told by a couple of coworkers, who have gone through short sales or are in the financial world, a few different possibilities of what is going on with this second mortgage:
1. A new lender is buying it for a lower interest rate.
2. A bunch of mortgages are being sold off by this lender.
3. BOA is buying the second loan.

We're just confused as to why someone would want to come in and buy a loan that's in default. What do you think the likely scenario is? Do you have a personal experience like this or know someone who has?

Just trying to get some grasp on the situation.
Thanks!

From what i have seen across the internet it is not uncommon for loans to get sold off in the middle of a short sale. Likely they sold off a bundle of loans. It also sounds like it takes close to a month for the whole transfer to process and the owner of the home to get the information from new servicer with their new loan number, etc. From that point the short sale would probably start from scratch with new servicer. Although I have also read of incidents where they were able to stop the change to new servicer if the short sale was far enough along and quickly finish it with current servicer. That would be ideal.

[kms201105]

Originally Posted by 1stTimerGA

I searched the internet about HAFA Affidavit's and several sites said that there rules indicate an approval in 10 days. Is this true?

I've seen that too. I do believe that is the posted rule, but a rule is only as good as how well it is enforced. And so far from what i can tell these timelines on the banks are not really enforced. And they find all kinds of loopholes, pretending to not have paperwork etc. to get their time extended anyway. So personally I wouldn't count on 10 days, although it sounds like in rare instances it happens.

[1stTimeBuyer1184]

3/5/13 - Offer on townhouse accepted by seller. $250k on SS with one loan from Chase.
3/7/13 - listing agent wanted 3% earnest money from
Us to escrow company right away so we turned that in.
3/17/13 - our real estate agent informed us that the listing agent has submitted the short sale package to Chase. Escrow has not opened yet because they need more documents and then they will cash the earnest money.
3/22/13 - our RE agent mentioned she is getting an updated HUD statement to the bank. Chase countered and wanted us to pay for the transfer fees and back HOA fees. They also countered at 25k higher at 280k. Our RE agents are trying to get the bank to pay the fees and accept 260k.
3/29/13 - Sellers' bank is requesting HOA back fees invoice from the association. This document is holding up the approval.
4/2/13 - Back HOA fee invoice sent to bank.
4/12/13 - REA said the SS lender had an appraisal done on the townhouse.
4/26/13 - file completed but reassigned to negotiator in USDA loan department. Once reviewed by negotiator, going to be submitted to investors to approve.
5/1/13 - our REA said we need to sign the addendum for the counter we issued a month ago.
5/24/13 - REA said bank requested another HUD and it was sent this past Wednesday.
5/30/13 - received email that the negotiator approved the short sale! But now the file is being sent to the investors for final approval. My REA says it may take about 2 weeks.
6/28/13 - verbal approval
7/8/13 - written approval received. Only 3 weeks to close, date 7/31/13. Foreclosure date of August 5th.
7/11/13 - home inspection completed. Loan disclosure signed. Townhouse sale disclosure signed.
7/16/13 - Chase agreed to extend closing to August 20th. Foreclosure sale has been postponed to August 30th. Looks like we might actually get this house!
7/25/13 - our lender said our loan is in underwriting and should hear back today or tomorrow. My realtor said they are shooting to close August 6/7 but it sounds like we might be closing earlier!
7/29/13 - got a call from my agent and she said our loan is ready and we can close now. We just have to wait on the sellers now. Looks like we'll be closing next week. I was hoping it would be this week but what's another week right?

8/9/13 - signed closing loan docs today. Everything states a closing date of 8/16/13. Again seller has been adamant about staying in the home til 8/20 though we wanted to move in sooner. I'm not sure if someone dropped the ball somewhere but the official closing and recording date is 8/16 as stated on the docs. What can we do at this point? We would want possession of the house on the closing date and we don't want to be legally responsible for anything that occurs in the house if the sellers are still occupying it.

[DuckHouse4Us]

Hello all - I've been lurking in this thread for a few months and thought I would share my short sale experience since you all have helped me through this process immensely.

Listed: 4/02/13
Asking Price: $325,000 Paid $450,000 in 2007 - 2 Banks (Indymac/Onewest & Citimortgage) plus 2 property liens (Odds are stacked against us!)
Viewed House: 4/27/13
Offered: 4/28/13 $325,000 with $3,000 in closing assistance (perfect house, land and location) 6 acres. Of course we didn't know it was a short sale until after we viewed it and already fell in love with it! We've been looking for a year and half and this was the first house hubby and I agreed on. We were told the Sellers were approved for a short sale, but the listing price has not been approved by the bank yet. LA assured us she has worked with these banks before and their SS process is streamlined (whatever that means!) and that they would need 60 days to close so we set the closing date for 6/28/13. I looked the LA up, she is experienced in SS's and actually specializes in distressed properties......that's half the battle at least.
Sellers Acceptance: 5/03/13
Escrow Opened: 5/06/13 earnest check deposited

We didn't know much about SS except that they take a long time. We're renting, no big deal.....we can wait. *sigh

Signed SS Addendum: 5/03/13 and dated for 5/24/13

5/24/13: SS addendum expiring, I called my REA and she said LA will need 60-90 days for closing....bummer, but again....we can wait. Have not heard anything else.

Signed SS Addendum Extension: 5/28/13 and dated for 6/07/13 - Was told the BPO was done earlier this month. (That would have been nice to know earlier!) Results.....confidential of course. Was also told that Sellers have completed their hardship package. What! We were told they were already approved for a short sale and that just the listing price had not been approved with the bank! I'm a little worried, this is a log home. We're doing an FHA loan and they are very specific with comps being only 6 months and within 6 miles and we need 3 of them! Really....3 Log Home Comps?! Found the comps in a about a week, (well hubby and me found them, REA didn't!) now I hope they don't become too old by the time we close.

2nd Property View: 6/08/13 - Just needed to see it again! While we were there, Sellers pulled our REA aside and said their LA said the SS was going through and that their only concern was that we were going to walk away. Hmmmm....seems like they have a lot more information than us, we've heard NOTHING!

Signed SS Addendum Extension: 6/08/13 and dated for 6/27/13 - Just making sure we don't lose this house on a technicality.

6/11/13: Received info that 2nd bank (Citimortgage) is assigning negotiator but the 1st bank (Indymac/Onewest) wants the Sellers to be 2 months behind on payments and then they will re-run their file for approval after the 16th of June. *Double Sigh

6/20/13: Getting frustrated with vague responses from my REA, so I called the LA. Was told 2nd bank has been approved and written approval will be sent in 3-5 days. 1st bank has been assigned negotiator. One of the two liens on the property is currently being negotiated and she doesn't think it will be a problem. Finally - some answers! I'm okay with the waiting, I just want communication!

6/26/13: I called the escrow office for answers. She assured me the LA is working on it and in fact just spoke with her yesterday. One of the two property liens has been released and the other one is close to being resolved. Yay! More answers....now why can't my REA do these phone calls?

6/27/13: I called LA (same problem with my REA) was told 2nd banks written approval letter has been received and they want to close by 7/28/13, confirmation of property lien being released and second property lien being resolved and 1st banks docs are now with the investor. LA assured me the 2nd bank will extend closing date once 1st banks approval has been received. I think we're close now! I talked with my lender today and I need at least 30-45 days to close on my end. We're meeting with our REA tonight to do another SS Addendum Extension and extend the closing date to 8/16/13.

We are waiting to do the appraisal and inspections until we get the written approval from both banks, don't want spend money if this falls through.

It seems like a long time, though I know our SS experience is actually going pretty fast. I just hope it continues to go as smoothly and we can actually close in August. I'll keep you posted on any further updates - perhaps my story can help someone else. Good luck everyone!

6/28/13: 1:30 PM REA emailed me and said that escrow confirmed 1st banks written approval in hand!
6/28/13: 5:05 PM REA called - escrow was mistaken. Bank approval was for another SS and was placed in our file by error! Really! Just our luck!
7/05/13: Sellers signed new SS addendum and new closing date. 1st bank requested updated HUD. I hope we're almost there!
7/09/13: 7:23 PM received email from REA - 1st bank (onewest) send the "Arms Length Affidavit" for us to sign.
7/10/13: 8:00 AM sent signed "Arms Length Affidavit" to my REA and copied LA on the email. I hope we're close. Interest rates have me freaking out a little bit here!

7/11/13: Confirmed "Arms Length Affidavit" was signed by all parties and submitted to the bank.
7/13/13: Received verbal approval from 1st bank. Was told written letter of approval will come by the end of next week. (I can't believe somebody at the bank was actually working on this on a Saturday!) Not holding my breath, I'll believe it when I see it! LA is confident second lien on the property will be settled as well. Still hoping to close on the 16th of August if possible. I'll keep you posted!

7/18/13: Written approvals from both banks are in! Still working on resolving the last lien. Inspection is scheduled for tomorrow. Banks want to close August 14th. Whew.....my Lender is going to be busy! Hope everything goes smoothly.

7/18/13 4:47PM: Last lien resolved!
7/19/13: Home Inspection complete. Home is solid, but thorough pest inspection was recommended. Scheduled pest inspection for Friday 7/26/13 - just to make sure...it is a log cabin.
7/23/13: Signed disclosures and GFE (Good Faith Estimate) from lender.
7/24/13: Loan sent to underwriter. Closing date is August 14th! Appraisal will be ordered this week. Whew.......we just have to get through the appraisal process. Still holding my breath, we're not quite there yet.

7/29/13: Appraisal ordered and scheduled for Thursday August 1st.
7/30/13: Pest and Dry Rot Inspection. Dry rot cleared - need to treat for pest in the crawlspace. Closing date is still scheduled for August 14th! Hope we can make it!

UPDATE
8/6/13: Appraisal came back incorrect! Value is there, however, appraiser needed at least 3 log home comps per FHA and he only put one in. AND - he also did NOT count the second parcel of 5.29 acres! How could an appraiser miss over 5 acres of land??
8/7/13: Still waiting on correct appraisal and we were charged an additional $100 rush fee! Okay......so where's the appraisal, we're on a time crunch here.
8/8/13: Found out one of the banks is going to sell their loan if we don't close by the 14th and we're still waiting for the corrected appraisal. We're 6 days away from closing and could lose it because the appraiser did his job incorrectly! 104 days of waiting, a full rise in interest points and $1300 in inspections/appraisal fees - out the window!
8/9/13: Pest treatment completed. Another $600 fee at closing - we billed escrow. Seller refuses to pay for anything and FHA requires this treatment.
8/9/13: Appraisal came in - off to the underwriter now! Everything is being rushed to try and get this closed on time. I'll keep you posted.

[sarahsdaughter]

Originally Posted by 1stTimeBuyer1184

3/5/13 - Offer on townhouse accepted by seller. $250k on SS with one loan from Chase.
3/7/13 - listing agent wanted 3% earnest money from
Us to escrow company right away so we turned that in.
3/17/13 - our real estate agent informed us that the listing agent has submitted the short sale package to Chase. Escrow has not opened yet because they need more documents and then they will cash the earnest money.
3/22/13 - our RE agent mentioned she is getting an updated HUD statement to the bank. Chase countered and wanted us to pay for the transfer fees and back HOA fees. They also countered at 25k higher at 280k. Our RE agents are trying to get the bank to pay the fees and accept 260k.
3/29/13 - Sellers' bank is requesting HOA back fees invoice from the association. This document is holding up the approval.
4/2/13 - Back HOA fee invoice sent to bank.
4/12/13 - REA said the SS lender had an appraisal done on the townhouse.
4/26/13 - file completed but reassigned to negotiator in USDA loan department. Once reviewed by negotiator, going to be submitted to investors to approve.
5/1/13 - our REA said we need to sign the addendum for the counter we issued a month ago.
5/24/13 - REA said bank requested another HUD and it was sent this past Wednesday.
5/30/13 - received email that the negotiator approved the short sale! But now the file is being sent to the investors for final approval. My REA says it may take about 2 weeks.
6/28/13 - verbal approval
7/8/13 - written approval received. Only 3 weeks to close, date 7/31/13. Foreclosure date of August 5th.
7/11/13 - home inspection completed. Loan disclosure signed. Townhouse sale disclosure signed.
7/16/13 - Chase agreed to extend closing to August 20th. Foreclosure sale has been postponed to August 30th. Looks like we might actually get this house!
7/25/13 - our lender said our loan is in underwriting and should hear back today or tomorrow. My realtor said they are shooting to close August 6/7 but it sounds like we might be closing earlier!
7/29/13 - got a call from my agent and she said our loan is ready and we can close now. We just have to wait on the sellers now. Looks like we'll be closing next week. I was hoping it would be this week but what's another week right?

8/9/13 - signed closing loan docs today. Everything states a closing date of 8/16/13. Again seller has been adamant about staying in the home til 8/20 though we wanted to move in sooner. I'm not sure if someone dropped the ball somewhere but the official closing and recording date is 8/16 as stated on the docs. What can we do at this point? We would want possession of the house on the closing date and we don't want to be legally responsible for anything that occurs in the house if the sellers are still occupying it.

We will be closing on the same day!!!!

I didn't think that they could stay in the house....you might want to check with an attorney....

[sarahsdaughter]

Originally Posted by sarahsdaughter

7/26: IT'S REAL!!! MY APPROVAL LETTER ARRIVED TODAY. I CAN'T CONTAIN MYSELF!!!! IT WON'T REALLY BE REALLY REAL UNTIL I HAVE KEYS IN MY HAND!

(I'M GOING TO LAY ON THE LAWN WHEN I LEAVE MY OFFICE TODAY)....

For those of you who are still in the process....hang in there. STAY ON TOP OF YOUR AGENT AND THE SELLER'S AGENT. If it's meant for you, it will work out!!!!!!

The past week has been C.R.A.Z.Y.!

8/7 - Inspection. Minor issues (caulking, lining up doors, one window off track)
8/8 - Mortgage Loan APPROVED!
Still set for closing this FRIDAY, AUGUST 16TH!

IMPORTANT: PLEASE PLEASE PLEASE PLEASE MAKE SURE YOU READ ALL OF YOUR LENDER DOCUMENTS AND YOUR HUD-1... GO OVER EVERYTHING LINE BY LINE. DO YOUR RESEARCH ON FEES. PAY ATTENTION AND MAKE SURE YOUR LENDERS CLOSING WORKSHEET AND GFE ARE CORRECT. MAKE SURE ALL THE NUMBERS ARE CORRECT AND YOUR ARE BEING DOUBLE CHARED. MAKE SURE THE CALCULATION ARE RIGHT.

MAKE SURE YOUR TITLE COMPANY KNOWS THE TAX LAWS. IF YOU ARE A FIRST TIME HOMEBUYER, MAKE SURE YOU GET THE FIRST TIME HOMEBUYER CREDIT IN YOUR STATE, CITY OR COUNTY.

I HAVE HAD TO SEND SEVERAL EMAILS FOR THE PAST FIVE DAYS TO MY LENDER AND TITLE COMPANY BECAUSE OF ERRORS ON THEIR PAPERWORK. FEES THAT SHOULDN'T BE THERE OR WERE DUPLICATED. TAXES NOT CALCULATED RIGHT.

ANOTHER THING TO WATCH OUT FOR IS THAT THE LENDER WILL OVERPAD THE FEES, NOT EVEN LOOKING AT THE HUD-1 (TITLE COMPANY) FIGURES AND PUTTING THEM ON THEIR DOCUMENTS. IT WILL MAKE IT LOOK LIKE YOU NEED MORE FOR YOUR CLOSING/SETTLEMENT THAN YOU REALLY NEED. MY LENDER SAID "WELL, WE DO THAT JUST IN CASE." WELL DON'T JUST IN CASE ME. IF YOU SEE THE FIGURES ON THE HUD-1, THEN THAT IS WHAT SHOULD BE REFLECTED FOR THE TITLE COMPANIES FEES. NOT SOMETHING THAT YOU THINK IT SHOULD BE.

THIS IS HOW PEOPLE LOOSE OUT ON THEIR DREAM HOME. BECAUSE THEY BEGIN TO SEE THESE INFLATED CLOSING COSTS AND THEY ARE SCARED OFF BECAUSE THEY EITHER DON'T HAVE THE EXTRA THOUSANDS OR THEY DON'T WANT TO MOVE IN TO THE HOME AND ALL THEIR SAVINGS ARE DEPLETED.

I SPENT THE ENTIRE SATURDAY AND SUNDAY READING ABOUT GFE'S, HUD-1, CLOSING FEES, FHA GUIDELINES, RESPA, ETC. DON'T BE SCARED TO ASK QUESTIONS...LOTS OF THEM. DON'T BE AFRAID TO CHALLENGE THEIR FIGURES....GET A CALCULATOR....SERIOUSLY.

GOOD LUCK TO ALL WHO ARE STILL WAITING...BE PATIENT....I WILL FOLLOW UP ONCE I GET MY KEYS!!!

GODSPEED.....

[OhGucci]

Originally Posted by sarahsdaughter

IMPORTANT: PLEASE PLEASE PLEASE PLEASE MAKE SURE YOU READ ALL OF YOUR LENDER DOCUMENTS AND YOUR HUD-1... GO OVER EVERYTHING LINE BY LINE. DO YOUR RESEARCH ON FEES. PAY ATTENTION AND MAKE SURE YOUR LENDERS CLOSING WORKSHEET AND GFE ARE CORRECT. MAKE SURE ALL THE NUMBERS ARE CORRECT AND YOUR ARE BEING DOUBLE CHARED. MAKE SURE THE CALCULATION ARE RIGHT.

MAKE SURE YOUR TITLE COMPANY KNOWS THE TAX LAWS. IF YOU ARE A FIRST TIME HOMEBUYER, MAKE SURE YOU GET THE FIRST TIME HOMEBUYER CREDIT IN YOUR STATE, CITY OR COUNTY.

I HAVE HAD TO SEND SEVERAL EMAILS FOR THE PAST FIVE DAYS TO MY LENDER AND TITLE COMPANY BECAUSE OF ERRORS ON THEIR PAPERWORK. FEES THAT SHOULDN'T BE THERE OR WERE DUPLICATED. TAXES NOT CALCULATED RIGHT.

ANOTHER THING TO WATCH OUT FOR IS THAT THE LENDER WILL OVERPAD THE FEES, NOT EVEN LOOKING AT THE HUD-1 (TITLE COMPANY) FIGURES AND PUTTING THEM ON THEIR DOCUMENTS. IT WILL MAKE IT LOOK LIKE YOU NEED MORE FOR YOUR CLOSING/SETTLEMENT THAN YOU REALLY NEED. MY LENDER SAID "WELL, WE DO THAT JUST IN CASE." WELL DON'T JUST IN CASE ME. IF YOU SEE THE FIGURES ON THE HUD-1, THEN THAT IS WHAT SHOULD BE REFLECTED FOR THE TITLE COMPANIES FEES. NOT SOMETHING THAT YOU THINK IT SHOULD BE.

THIS IS HOW PEOPLE LOOSE OUT ON THEIR DREAM HOME. BECAUSE THEY BEGIN TO SEE THESE INFLATED CLOSING COSTS AND THEY ARE SCARED OFF BECAUSE THEY EITHER DON'T HAVE THE EXTRA THOUSANDS OR THEY DON'T WANT TO MOVE IN TO THE HOME AND ALL THEIR SAVINGS ARE DEPLETED.

I SPENT THE ENTIRE SATURDAY AND SUNDAY READING ABOUT GFE'S, HUD-1, CLOSING FEES, FHA GUIDELINES, RESPA, ETC. DON'T BE SCARED TO ASK QUESTIONS...LOTS OF THEM. DON'T BE AFRAID TO CHALLENGE THEIR FIGURES....GET A CALCULATOR....SERIOUSLY.

GOOD LUCK TO ALL WHO ARE STILL WAITING...BE PATIENT....I WILL FOLLOW UP ONCE I GET MY KEYS!!!

GODSPEED.....

This is great advice sarahsdaughter, good luck on Friday! WoooHooo!!!

[kms201105]

Originally Posted by kms201105

I have found this forum to be very helpful so adding my experience so far to the mix:

Asking price of $385k
One loan with BofA

6/23 – Looked at house for first time
6/26 – viewed 2nd time with husband. Made offerof $380K asking 10K in closing (house has been vacant for about two years. we will be having to do some work on it)
6/27 – verbal acceptance by seller. Seller living out ofstate…was faxed contract
7/5 – received word seller signed contract and is meetingwith BofA on 7/8
7/8 – signed short sale addendum and wrote earnest check
7/10 – signed Arms length affidavit.
7/12 – signed Arms length affidavit again and toldconfirmation was received from BofA all paperwork was received
7/22 – told a negotiator is assigned and will meet withselling agent on 7/24
7/24 – selling agent talks with negotiator and is told theyhave no record of the short sale request, no paperwork
7/26 – seller and selling agent talk with BofA and are againtold a negotiator will work with them on Wed
8/1 – received word that new negotiator again said they haveno record of the short sale request, no paperwork (numerous other people withBofA in different roles and orgs are acknowledging they have no idea why thenegotiators are saying this. They are looking at the paperwork in front ofthem)
8/2 – my loan officer is familiar with short sales and hasbeen working with selling agent throughout (selling agent has only done 1 shortsale before). He reached out to a short sale attorney and the attorney is“foaming at the mouth” and believes if hired he can rectify the no paperworksituation and get traction. Seller emails and calls attorney to discuss hiringhim.
8/7 – receive word seller is meeting with the attorney theafternoon of 8/8 to sign paperwork

UPDATE:
8/9 – learned seller rescheduled meeting with the attorneyfor the afternoon of 8/12
8/13 – attorney had sent in letter to BofA. BofA hasprovided verbal approval and requested some updated docs, including us signing with a closing date of 9/20

trying not to have the mindset of when will the other shoe drop, but this is 7 weeks from signing the initial contract. So thrilled!