A Short Sale Nightmare


Back in 2007 when short sales were just beginning to make an impact on the market, I had my first short sale listing.  It was a very well maintained pool home in Jensen Beach and the owners had been meticulous in maintaining their dream home.  Unfortunately, circumstances worked against them as the changing economy cost the husband his job and the wife was diagnosed with cancer.

With the medical bills, no income and the huge stress on their lives, a short sale was their only option.  Their lender would not consider any other alternative.  We placed the home on the market for fair market value and received a cash offer within 30 days.  All the paperwork, hardship letters, etc, requested by the lender was submitted promptly.  Frustration

Now comes a really long story and I won’t bore you with all the details.  Here’s the quick synopsis.  I called the lender at least once (sometimes twice) a week for status updates.  I rarely got any kind of satisfactory answers.  They lost the paperwork numerous times.  One episode about 6 months into the process, the lender asked for a form at 5 PM on a friday that needed to be notarized and returned within 24 hours.  Seller is in the hospital, managed to get it signed the next day, found a notary on Saturday, submitted the form.  On Monday the lender advised tha they had closed the case since they never received our paperwork.  It appears that they do not review weekend faxes.  And on and on it went with similar horror stories.

Another month later my seller is released from the hospital to return home.  She can’t get into the house.  The lender has sent out a crew and re-keyed the home to insure it’s safety!  This was about the final straw and I enlisted my friends as well as professional associates to help these folks that were being treated horribly.

First, we filed a police report for trespass and unlawful entry with the Sheriff.  I then contacted our state reps, Congressman and Senators with a lengthy explanation of the situation.  I spoke to some national bloggers who wrote about the story.  Also contacted the Federal Reserve and filed a complaint.

And it worked!  I was Fed Ex’d the keys for the home the next day.  The sellers and I received a call from the lender advising us that this case has been escalated and will be expedited.  While we never did receive an apology, the short sale was cleared to close two weeks later.  It closed just over one year from the date of the offer.  

PS:  The sellers are now doing well.  Cancer is in remission.  He has a new job.  They have bought another home.


Gabe Sanders; Stuart Florida Real Estate
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105 Comments on A Short Sale Nightmare

20 Most Recent Comments Displayed Show All

JUN
10

That's why its always helpful to prepare a petition in bankruptcy, completely filled out and ready to go so that the client will (a) be able to constantly monitor it, and (b) show a copy to the lender if it is even remotely a viable option.

 

You didn't say whether they kept up the payments at least partially using savings, or whether they quit paying their mortgage.

 

Curt@patentax.com

http://patentax.com
4:29pm • #86
1,022,995 Points 15 Featured Posts Localism Sponsor Outside Blog Called Shot Master

I'm glad this had a happy ending.  Banks are making no friends right now and I do not believe the poor performance is an accident.
4:39pm • #87
166,347 Points 1 Featured Post Attended Rain Camp

So glad you and your clients had a happy ending!

I just beat my own record of TWO YEARS to close a Short Sale. That one, the bank even took 90 days to approve a full price CASH OFFER!  I sold this property 9 times in two years.  Buyers got frustrated and just kept walking away.

I closed one last week that took FOUR YEARS!!  The seller was part of the delay, but all's well that ends well! 

If they were all like this, I might quit, but fortunately they are not.  They average 4-6 months to process and close and I use lots of different processors, so my eggs are not all in one basket. 

My best one closed in three weeks!  We got lucky and walked in on a deal where they Buyer had walked.  All of them are a process and tenacity like yours will get the job done!  Joy
5:04pm • #88
309,748 Points 28 Featured Posts Outside Blog Called Shot Master

Too often the bank "secures" the house by busting the door up so badly in is unlockable. The field services people indeed change the locks (so they can get paid) but they create more hazard than security.
7:19pm • #89
129,545 Points Outside Blog

That is a fine example of great representation and advocacy. Congratulations!
8:18pm • #90
159,807 Points 1 Featured Post Attended Rain Camp

Good people with a medical and employment hardship should not have to endure such malarkey as you describe in your story.  It is utterly shameful!  Banks should be disciplined.
9:03pm • #91
I think lenders especially big banks have not been on most peoples Christmas card list for a few years now!
10:55pm • #92
JUN
11
106,465 Points 2 Featured Posts

This is what happens when the people involved in the transaction do not have any interest in it. Your story is very sad, but thank goodness you were able to bring the transaction to a satisfactory conclusion and your clients are doing well both financially and healthwise. Aloha!
1:44am • #93
494,746 Points 13 Featured Posts Outside Blog Called Shot Master

Hi Gabe, I don't know if there is an opposite to the term oxymoron, but if not "Short Sale Nightmare" should be it.
2:53am • #94

Most lenders will just simply mail you the keys when you request time.  I have never had a problem with this.  They will also tell you if you ask that the key code works for most of that servicer/lender's properties.
Jon
7:12am • #95
Localism Sponsor

INCREDIBLE job, Gabe! You ARE the definition of a great agent. I was so glad to see this story had a happy ending. Your clients are very lucky to have had you or this short sale may have never happened. Have a great day!
8:18am • #96

Hi Gabe,

We work on a lot of Short Sales in our office, and more than once we get  "theses papers need to be signed within 24 hours, 5pm Friday afternoon". I wonder if these are deliberate to try to put an end to the deal?

Everett Ballenger
8:37am • #97

Your sellers were so lucky to have a caring Agent such as yourself.  Everyone deserves to be treated with respect and compassion.
11:18am • #98
1 Featured Post Outside Blog

I applaud your follow through.  Although these types of incidents were more common a few years ago, the Short Sale process has improved considerably in the last 12-24 months.  Consumers should be more willing to engage in short sales with the help of competent short sale agents like yourself.
11:29am • #99
247,970 Points 8 Featured Posts Outside Blog

Hi Gabe

Wow- those poor people! They were lucky to have you and you definitely created some positive karma for yourself ; )

So glad it all worked out for them, and thank God the cancer is in remission, which is the most important blessing of all!!

Hope you had a fantastic weekend!

Gina
12:46pm • #100
1 Featured Post Outside Blog

 We hope that the mortgage lenders have learned a thing or two about how to handle a request for a short sale since the time when your clients began their difficult saga. What a despicable thing that bank did to them!
1:34pm • #101
176,896 Points 2 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp

Gabe,  You know, we all strive for Win-Win but sometimes, and especially in short sales situations, it seems to be Lose-Lose.  I'm so glad to see positive outcomes for your clients.
2:32pm • #102
179,321 Points 51 Featured Posts Outside Blog Hit Router Attended Rain Camp

And so it is in the land of short sales.  Thanks for the touching story Gabe.  You did a premier job for your client and NEVER GAVE UP!
4:40pm • #103
JUN
13
201,566 Points 11 Featured Posts Outside Blog Attended Rain Camp

This is a very bitter sweet story and one that I've heard all too often. Most lenders just use very low level if not totally incompetant clerical personnel who don't have any knowledge let alone initiative about what they're doing. They're just very small spokes in a very big bycicle tire. Sometimes I think that's by design. Keep your help as dumb as dirt and just keep shoveling papers til the cows come home and viola the problem goes away.

Just had to get that little rant off my chest. I feel all better now
1:37pm • #104
JUN
20
1 Featured Post Outside Blog

And now....5 years later, short sales are being supported as a better way for the lender to go instead of foreclosing and they are making more money. Of course, you all knew this 5 years ago, it is too bad it took so long for them to wake up however, a lot had to do witht he many investors that owned the CDOs that were created from our MBSs and wrongly thinking this would all be over soon. LOL
12:49pm • #105

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Gabe Sanders, Stuart Florida Real Estate

Stuart, FL

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Martin County Residential Homes, Condos and Land Sales

Address: 2 N. Sewalls Point Road, Stuart, FL, 34996

Office Phone: (772) 323-6996

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