I know that we have talked about this before but since this is the “Year of Foreclosure,” it warrants an update and reminder.
First of all we should remember that there is no right to a short sale and, by extension, no right to a postponement of the foreclosure sale. We are essentially asking the bank or servicer to do us a favor and consider this short sale offer instead of selling the property on the upcoming foreclosure date. We should understand that the bank and the foreclosing attorney have already spent time and money getting into the position to be able to hold the foreclosure auction.
Now that we understand that, what do we do? We know they are not going to stop a foreclosure sale without a short sale offer. Can we just send in the offer with any real hope that they will postpone the sale? No! You must upload or send the offer to the loss mitigation department with the entire short sale package.
Put yourself in the bank’s position. It’s true that the short sale, if successful, would bring more money than the foreclosure auction and probably REO sale down the road. However, they don’t own this loan. They are merely servicing it most of the time. The servicer is losing money every month that goes by because the mortgage is not being paid and, therefore, neither is the servicer.
Given that, it is understandable that the bank/servicer requires a short sale offer to come with some assurance that it is a serious offer with a real chance of eventually closing. Just sending an offer carries no assurance, just desperation.
Timing is also an issue. If you are trying to stop the foreclosure sale the day before the auction you are not going to be successful most of the time. It can be done but don’t hold your breath. Most banks/servicers require that the offer and package be received at least 7 to 10 days prior to the sale. Some even require that the Seller already have approvals from the junior mortgages and liens. You are getting into “near impossible” territory if you only have a few days until the sale. So, have a grateful attitude, have a market price offer, send in a complete package with the offer as early as possible. Good luck out there.
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