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Fannie Mae Will Rarely Postpone an Auction for a Fannie Mae Short Sale

By
Real Estate Agent with Elizabeth Anne Weintraub, Broker DRE #00697006

If I hear the term "our mutual client" one more time, I'm gonna puke. OK, not really. But you know the sentiment. I get a lot of mortgage loan officers bugging me because I sometimes suggest that buyers start the loan process prior to approval. The horrors. I do this so the buyers can close. That's because short sale banks and mortgage loan officers are rarely in sync. The banks give us shortened periods of time in which to close, and mortgage loan officers tend to want a minimum of 30 to 45 days. We can't always get a short sale extension if the mortgage company can't perform.

These MLO guys can get pretty desperate. They clamor for that letter of approval. Over and over they email me begging if they can speak to the short sale bank. That tells me they know next to nothing about the short sale process. I don't know how one can be in the lending business in Sacramento and not be familiar with how short sales work. I'd venture to guess at least 30% of all transactions in Sacramento are short sales. As a Sacramento short sale agent, I close my fair share of them.

I have to tell them no, they cannot speak to the bank. And please stop nipping at my heels like some damn Yorkie. But I don't say that; I just think it. Even if they could talk to the bank, they couldn't tell them anything I haven't already delivered. I am not hiding the approval letter or delaying the process. I don't want them emailing or calling to ask if I've heard anything. When I hear, the MLO will immediately know. It's not something I'm likely to space out or forget about as I go about my daily short sale business. They should be calling the buyer's agent anyway, not me.

I got short sale approval yesterday on a home that is headed for auction next week. Because this is a Fannie Mae short sale, the bank will not postpone the auction. That's our government at work. We have to close prior to the trustee's sale date or it goes to foreclosure. This means we have to close in 8 calendar days. This wasn't a problem during negotiations because the buyer was paying cash. At the last minute, a few days before the approval letter arrived, the buyer announced he would like to get a loan.

Talk about a heart attack. There is no talking about a heart attack. I may as well just keel over now, gasp my last breath and collapse.

This was a property we had multiple offers for, lots of buyers crying for it. Thank goodness the buyer's agent has a level head. She helped the buyer start his loan early and docs are going to title today. One day after we received the short sale approval letter. How's that for swift action? But don't think about trying this for yourself. Getting a loan approved in record time like that is about as rare as a summer rain in Sacramento.

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Elizabeth Weintraub is co-partner of Weintraub & Wallace Team of Top Producing Realtors, an author, home buying expert at The Balance, a Land Park resident, and a veteran real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown, Carmichael and East Sacramento, as well as tract homes in Elk Grove, Natomas, Roseville and Lincoln. Call Elizabeth Weintraub at 916.233.6759. Put our combined 80 years of real estate experience to work for you. Broker-Associate at RE/MAX Gold. DRE License # 00697006.

Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.The views expressed herein are Weintraub's personal views and do not reflect the views of RE/MAX Gold. Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice; it could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.

Comments(10)

Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

How did this bueyr go from cash to loan?  What's the rationale?  "Gee....I'd really like to feel like I pulled this out of the fire."

Aug 17, 2011 03:40 AM
Ed Gillespie
WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 - Folsom, CA

Yeah, Chris Ann, it's not as though they cannot immediately refi after closing to recover their cash (albeit at a lower loan to value)!

Yorkies--I like that.  I've had agents like that, wanting status on the loan.  The automated loan status emails from my corporate office don't seem to be enough for them.  I guess they, too, think I am going "to space out or forget".  Like them, I don't get paid until the transaction closes so I am motivated to stay on top of my files!

Aug 17, 2011 05:09 AM
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas
You are one lucky short sale agent, Elizabeth! I would have been having a heart attack for sure. Are you seeing more lenders willing to start the process for the buyers before they get the ss approval? I may need a number for those that do to pass on to my buyers! Happy Wednesday!
Aug 17, 2011 06:09 AM
Ed Gillespie
WealthWise Mortgage Planning, a Division of American Pacific Mortgage Corporation NMLS #1850 - Folsom, CA

I can't imagine why any lender would wait for the letter before beginning the loan process.  I've done two short sales this year that way.  Submit the package, get the conditional approval, clear the conditions, order the appraisal, get the letter, close.  Way less heartburn for all!

Aug 17, 2011 10:20 AM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

Hey Chris Ann: I think the buyer probably spent part of his cash on something else while he was waiting. Or maybe he had a partner who pulled out of the deal? It's significant cash -- over $300,000. But you just don't spring a loan on me like that with 8 days to close escrow or the homes goes to foreclosure. Bring on the smelling salts and fan.

Hi Ed: I hear ya about clueless people who think picking up the phone creates a noteworthy action.

Hi DeeDee: I've heard agents lament that their MLO refused to start the loan without the short sale approval letter, telling them it is impossible, and then I have to tell the agents that their MLO is not being entirely truthful with them. There are some situations in which the buyer is better off waiting for approval, but there are those in which it is not a good idea to wait. A MLO can do whatever he or she wants. You should give Ed here a ring. Sounds like he knows how to tell the difference.

Aug 17, 2011 10:31 AM
Joanne Louise Stevens
Keller Williams Realty Los Angeles-Brentwood - Los Angeles, CA
Realtor - Serving Brentwood and Surrounding Cities

This is a great checklist item.  If I am representing the buyer and I know that this is a Fannie Mae Short Sale, then I need to educate the buyer that Fannie Mae will not postpone the trustee sale.  The buyer needs to be sure that they will pay cash.  I need to have my buyer apply for a home loan just in case they change their minds.  I never write an offer unless my buyer was pre approved.  I understand that cash is king, but sometimes people change their minds.  When representing the buyer, the agent never knows the full intent of the buyer.  I don't like surprises.    

Aug 17, 2011 12:25 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

Hi Joanne: Fannie Mae short sales are tricky for that very reason. They can postpone an auction if they want, but I've never seen them do it.

If ya'll are looking for a lender who can do a loan in 3 days, check out Paramount Equity.

Aug 17, 2011 01:10 PM
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties

Well please don't keel over and take your last breath. After all you are the Short Sale Guru? Is that correct! Love it all! You are a drama queen and teach us all on endless scores about short sales and make us laugh all along the way....Yorkie....how cute.

By the way....found my strawberries....picked same day...don't know 'bout seasons...you know me....I work all the time....Luv ya!

Redding CA - Farmer's Market - Strawberries

 

Aug 17, 2011 04:22 PM
Joanne Louise Stevens
Keller Williams Realty Los Angeles-Brentwood - Los Angeles, CA
Realtor - Serving Brentwood and Surrounding Cities

Thank you Elizabeth.  I appreciate your expertise!  I'll remember Paramount Equity.  Have a great week.

Aug 17, 2011 05:48 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

I hate to break it to ya, Jeanean, but if you found strawberries in Redding, they came from the coast.

You have a great week, too, Joanne!!

Aug 18, 2011 03:05 AM