Delegated? What the heck are you talking about Broker Bryant. I'm glad you asked because it makes a HUGE difference with your Short Sale negotiations. With Short Sales delegate means exactly what it means:
DELEGATE-transitive verb
- to entrust to another <delegate authority>
- to appoint as one's representative
If you pay your mortgage payments to Bank of America, Wells Fargo, Nationstar or any of the other "lenders" these entities are normally what we call servicers. Even though they may have lent you the money they have subsequently sold your loan to an Investor. So now all they do is collect your payment, take a fee for doing so and then pass the rest off to the holder of the loan...the Investor. The Investor could be Fannie Mae, Freddie Mac, Pension funds, Insurance companies etc...
When you are requesting a Short Sale the request is almost always made to the Servicer. If the Servicer is delegated then they have the authority to accept the Short sale without asking the Investor for approval. Usually this delegation is based on certain parameters.
For example: The Investor may tell their Servicer that they can accept any short sale as long as the loss is less than 35%, the Borrower (Seller) is at least 30 days delinquent on their payments, live in the property and the current payment is more than 31% of their gross income.
If the Short Sale fits within these parameters then the Servicer can issue the approval. The parameters vary from Investor to Investor.
Here's why it's important to know if the Servicer is delegated. Having the Servicer able to approve the Short Sale without going to the Investor saves a lot of time. It can easily cut the Short Sale time for approval in half.
I recently had a Servicer that was delegated. We had a purchase price that netted the Investor about $1,000 less than what would fit within this particular Servicer's delegation authority. So......we could request that the file be submitted to the Investor for approval OR we could just raise the purchase price $1,000 and get our approval quickly. I went back to the Buyer and explained this to them and they happily raised the price. We received the Short Sale approval the next day. Time has value.
Always ask the Servicer if they are delegated for the file you are working on. If they are try to see if the Short Sale you have submitted fits their parameters. They may not always tell you but it certainly is worth asking. Knowing the answer can save you a lot of time. Don't you think?
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