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Murrieta Short Sale / Wells Fargo 2nd

By Adam Kutchuk Murrieta

Real Estate Agent with Realty Works

May 17, 2010 02:01 PM

Murrieta Short Sale / Wells Fargo 2nd

Coming to the (hopefully) tail end of another Wells Fargo short sale in Murrieta. I have completed a few short sales recently with Wells Fargo, and they have all been on the more pleasant end of the spectrum. Fast response & very reasonable in negotiations. This afternoon, I hit a speed bump :) The seller has a 1st and a 2nd with Wells Fargo. The 1st approved the short sale about a month ago, giving $5,000 to the 2nd. In my past experience, this type of setup was acceptable and the approvals were issued after the all of the documents were review/updated/reviewed again/re-updated/ and then finally re-re-re-reviewed by the negotiator.

This afternoon, the 2nd decided that $5,000 was not acceptable. I was told that my client was being reviewed as a "strategic short sale" and not via "financial hardship", therefor the 2nd wants $17,000 to sign off on the short sale. Unfortunately, Wells Fargo is 100% correct about that.

Tonight, I'll bring my seller up to speed on the situation, and tomorrow, I plan to mitigate that back down to something MUCH closer to $5,000.

I'm curious to hear if anyone else has had a similar situation with a Wells Fargo 2nd recently, and if so, how did it work out for your seller?

Murrieta short sale expert

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Michael J. O'Connor

Diamond Ridge Realty - Corona, CA

Eastvale - 951-847-4883

I haven't yet seen this but thanks for providing the 'heads-up' that the banks are catching on when it's a short-sale without the real hardship in place. I make certain that the hardship letter is as spot-on as possible to describe the hardship in as dire a way as possible. It might be hard if the seller just 'feels' like selling but I dig pretty deep with them to get to the bottom of the hardship and make sure that they know it has to be compelling and real.

May 18, 2010 03:40 AM

Adam Kutchuk Murrieta

Realty Works - Murrieta, CA

Short Sale Specialist Rated 5 Stars

Unfortunately there wasnt a way to hide this scenario. The negotiator was actually paying attention to the paycheck numbers and with a little bit of attention, it wasn't a big stretch to see that my client received aprox a $40,000 bonus check in his last set of paychecks :) Therefor "strategic short sale".

May 18, 2010 10:23 AM

You might also need to have a serious talk to the seller about the 'hardship' to make him think about a cash contribution from the bonus to pay down the second. If he really wants out of the property he can probably still come out ahead even if he needs to find the extra money....

May 19, 2010 05:05 AM

We have had that talk. Two days ago, he had the stance of "Im not putting a single penny into this property." Fair enough. I then explained that if he chooses to foreclose on the house, the 2nd can come after him for complete recovery of the loss. It was suggested that he speak with a Real Estate attorney.

I would like to send that particular attorney a box of cookies :) The attorney advised my seller to negotiate with the bank during the short sale. Better to pay $17,000 than $40,000 any day in my book. So basically the same thing I was telling him, just from a different source of authority.

Now I have to do my job and get the 2nd to come down a bit and then I think it becomes a win/win situation.

May 19, 2010 10:57 AM

Yes, it's very helpful to have a lawyer available to help clients understand the ramifications of various actions. Sounds like you're well on your way to a successful closing!

May 19, 2010 06:16 PM

Murrieta Short Sale / Wells Fargo 2nd

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