On January 24, 2009 I received an offer on a property on Cape Cod. We closed on it yesterday, May 14, 2009. Considering all the stories and tales of long sales, this doesn't seem that bad. If you ask the Buyer and Seller, they'd probably tell you it was not fun and took way too long. There were many tedious moments and I am glad it is over. We did use a short sale mediator and I do believe she helped. It was huge to have her gathering the paperwork and working with the Seller on that end. She handled all the communications with the bank. The one thing we didn't get at the end, and the Seller and his Atty were not happy about it...was a statement from the mortgage holder that the lien would be released upon their receipt of the proceeds from the short sale. We believe it is their intention to consider the loan paid off in full, but they wouldn't give us a lien release or put it in writing. I am curious if other realtors are getting this from lenders. I still say the lenders need to find a better and speedier way to complete these short sales.
Hopefully the new incentives will speed up the process. I read somewhere that in order to receive the incentives they have to consider it settled in full. I'll be interested to see if I can verify that.
I have seen it go 50 -50 it really is up to the bank and the loan type and amount.
Go back and ask the lender now that they have been paid they might be more willing to say yes.
I dont let my sellers go to closing until they have an agreement of discharge.
Congratulations on your closing! Like Eric, I will insist on the discharge. I put it into the first addendum and have it signed into the contract before the offer is ever presented to the lender. It is presented as part of the contract, not a separate agreement. Also, YES! The lenders need to speed up the short sale process! I am working on one right now. We submitted a completed package to them at the end of February. They just barely ordered the BPO this week. Both of the brokers doing the BPO told me that the lender had told them it was a "rush" job and gave them one day to complete it. My question to the lender is: Why did the file sit there for 2 and 1/2 months and then suddenly become a rush job????
Congratulations on the closing of your short sale. That's a very good question that you pose. I like Eric and Suzanne's answers. Would either of you share your agreement of discharge verbiage with me?
Thanks for all the comments. We had written in the P&S that a lien release was required. We didn't receive the final HUD approval from the lender until 24 hrs before closing and were told if we didn't close by the following day there would be a per diem charge of $78.60. We had 3 attys review the paperwork because the lender flat out said 'That is all you will get from us.' The consensus was the seller would be in worse shape for not closing as the lender would most certainly go after them for the full amount of the loan. What I am hearing is that some lenders will put it in writing that this is considered a lien release or forgiveness of entire debt and some won't but that is their 'intention'.
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