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Ok... My hubby and I have been in the short sale process for about a month on the buying end. We offered, ended up in a bidding war, and our offer was finally accepted by the seller.
Then the offer was sent to the lender (Wells Fargo) where it has been for some time. The negotiator emailed and gave an appraisal price way over what the seller paid for it back in 2003. We sent out best and final offer and gave a 2 week deadline.
About 1 week ago we received a forwarded email through the selling agent from the WF negotiator saying she was forwarding the offer for approval to the auditing department. She said we should hear something in 2-3 days.
Today we received another email from the selling agent saying that Wells Fargo is now offering him a chance to modify his existing loan. Why did they not offer this from the get go? If he is in default for his existing loan (which was actually are refi with an equity line so he owed approx 10,000 more than what he originally paid for the house), why would they lend him MORE money? The selling agent said that the seller was applying to qualify for this modification and we should hear in a week. Is this legal?
Is there anything we can do?
I guess Im just looking for anyone with experience of someone who applied for the modification when in the short sale process and was approved. The selling agent says the seller does not think he will qualify, but I guess he is giving it a shot.
Do lenders look at anything else when it comes to modifications? I know he is behind on child support payments, will they take that into consideration?
Thanks for your help.... Im open to any and all experiences with short sales where the seller was offered a mod after an offer was in.
We see this frequently, Jessof. Many times the sellers ask for modification, they are denied. Then they list hoping to short sale and then the lender opens modification talks again. Later they discover that they still don't qualify. It's frustrating for all. Short sales are not for the faint at heart whether you are the buyer or the seller.
Most sellers do get their short sale approved if the agent is good at submitting all paperwork and if they have not abandoned the property. Many that do move out and leave the property get offered a short sale with them giving the lender back a smaller note. Some take it and some turn it down. Investments often fall into this category too.
The key factor is the reason for the short sale. There must be a bonafide hardship that forced a change in the finances since the purchase.
Well we were "approved" by the negotiator. She said she had to send it for final approval through their auditing department and we should receive our approval package in about a week, then we got the email.
I guess Im a little concerned about the wording of the email by the selling agent. It says the bank offered the seller a "chance to qualify" for a modification. The agent then goes to say that the owner has expressed that he does not think he will qualify. Why I dont understand is if the seller is not making his payments now due to hardship, and has entered the short sale process, why does the lender think he will be able to make payments soon? And also, if the lender gives the seller a chance to qualify for a mod, does that not mean they have already looked at his file and thought he had a good chance of getting qualified?
I really would like to see the email that was sent by Wells Fargo about this loan modification... Do I have a right to see it since I have a vested interest in it? Im becoming more and more frustrated because both realtors involved are part time realtors and seem to have a gap in communication. Would it be wrong of me to call the selling agent myself?
Thanks for the help. Im trying to stay calm and understand that there is truly nothing I can do to fix this situation.... it just seems so unfair... but life isnt fair I guess
Well we were "approved" by the negotiator. She said she had to send it for final approval through their auditing department and we should receive our approval package in about a week, then we got the email.
I guess Im a little concerned about the wording of the email by the selling agent. It says the bank offered the seller a "chance to qualify" for a modification. The agent then goes to say that the owner has expressed that he does not think he will qualify. Why I dont understand is if the seller is not making his payments now due to hardship, and has entered the short sale process, why does the lender think he will be able to make payments soon? And also, if the lender gives the seller a chance to qualify for a mod, does that not mean they have already looked at his file and thought he had a good chance of getting qualified?
I really would like to see the email that was sent by Wells Fargo about this loan modification... Do I have a right to see it since I have a vested interest in it? Im becoming more and more frustrated because both realtors involved are part time realtors and seem to have a gap in communication. Would it be wrong of me to call the selling agent myself?
Thanks for the help. Im trying to stay calm and understand that there is truly nothing I can do to fix this situation.... it just seems so unfair... but life isnt fair I guess
I see this all the time when the lender tries a last ditch loan modification. Normally it fails since they can't return to the normal payments in the time period suggested by the lender. It depends on their particular hardship. If it's a short term hardship, it could be a successful modification. Programs for loan modifications change all the time.
In order to show the buyer the seller's lender letter, the seller must provide their agent with written authorization to do so. Most will not do this.
You have an agent and should work through your agent. It would be inappropriate for the seller's agent to advise you since you have representation.
Thanks for the help and advice. Im just letting my antsy pants get the best of me. I am eager to hear of others that have had similar experiences and what their outcomes were.
Just an update. We extended our offer to expire this Friday. We have been told numerous times that Wells Fargo should give the verdict on the seller's loan modification by "the beginning of this week". Its Tues at 5pm... and we have yet to hear anything.
The selling agent seems to be just as frustrated as we are... My hubby and I want to start looking at other houses, but are afraid to because we dont want to miss this house.
So how likely is it that we allow our offer to expire, and then the bank comes back and says they accept our offer? I've heard to deals falling through and people getting called back without putting a "backup offer" in, Does anyone have any experience with a short sale they walked away from?
I don't wont to constantly have in my mind that Wells Fargo is going to come back next week and say they accepted our offer... Thanks for the help
Honestly, they should just revert to the old short sale laws.
The old law (pre Dec 2007), the exisiting homeowners would be sent a tax bill for the amount forgiven by the banks.
That was the main deterrent to avoiding short sales. Those who could avoid to save their homes, would. Those who could not save their homes would go directly to foreclosure.
None of this short sale stuff/tax avoidance/loan forgiveness. It's such a "gray area" with this loan forgiveness. Banks are reluctant to do it. That's why there's so much red tape involved.
The main reason, IS THE MAJORITY of people who are opting for short sales ACTUALLY have assets. They don't want to man up and liquidate their remaining assets to either sale their home at a loss or try to save their home.
The banks are very skeptical of people asking for short sales for this main reason. If I'm a bank and the homeowner can been constantly paying the 2-3K mortgage each month for the past 3-5 years and now they can't? What gives? Even if they had lost their jobs, most people have assets they should liquidate (stocks,cars, boats, even life insurance policies). But this is the American way of thinking. People don't want to do lose. They get upside on their mortgage (either by refinance cash out/ or big drop in their home values and very little downpayment). They can still afford it. But psychologically they feel like it's a hopeless situation because they've been treating their homes like ATM machines.
Sorry for my long rant. But I am manning up and just selling my home for a very huge loss. I don't need a short sale or a government bailout.
I also purchased another home recently. Tried the short sale method but got the runaround like you have been getting by the banks. The homeowners were doing "buy and bail". It's obvious by county tax records they just purchased another home a few months earlier. The bank was delaying/delaying everything. In the end, it wasn't worth the hassle. We still got a very good deal from a regular sale (homeowner had tons of equity and priced his home aggressively).
My advice, either have patience with this short sale (some can take months to complete) or just move on looking for other homes. You have choices in this market. Never fall in love with just one property. It won't be the last property you will ever live in. There are very few people I know that live in a property more than 10 years.
So our offer to purchase expires tomorrow. I was just wondering if anyone can tell me if our offer can still be accepted after the expiration date.
Just in general real estate, say we made an offer on a "normal" sale and the owner didnt notify us before the expiration, could the owner then come back after the expiration and say they accept? Is this common? I know we arent legally bound anymore, but I just want to know if we will be starting from scratch... Thanks
Offers "come back from the dead" with surprising frequency. Clearly the lenders are in horrible mess -- the situation that aneftp is very much on the minds of some of the higher ups at the bigger institutions. They are thinking "these lousy borrowers are playing us". The borrowers are living in some media frenzy of delusion too -- "hordes of home owners walking away from underwater loans". It is CRAP!
The lenders have to re-do loans so that the bums are locked into to LONGER TERMS with lower payments but a schedule that will still see the debt paid off. If that means that they folks who used their homes as ATMs via HELOCs have to liquidate some of their junk than so be it.
It is horrible that far too many earnest buyers that really want to get a bargain are being made the stooge, but the lenders have created a ridiculous situation and they have a dance floor of people still waltzing to some crazy music. If the lenders want to clear out this junk they should have two options -- recast loans or foreclosure. When they foreclosure they should jump into the auction market full force and let real cash determine real prices.
Short sales are hurting lenders. They are abusing potential buyers. They are letting default prone borrowers off the hook for no good reason.
I honestly agree with everything you say Chet.... I wish this house would just go into foreclosure so the process would be a little simplier. Thanks for the input... Im trying to keep the faith
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