It is unbelievable to me that everyone blames the Lender in the "arena" of the credit crisis! 

Let me point out this - WELLS FARGO was not the cause of the credit crisis!  Take a look at the companies that have folded or have had to be purchased!  Countrywide, WAMU, and American Home Mortgage are the cause of the credit crisis with their unethical lending practices. 

Wendy said: Why should a Realtor have to take a smaller paycheck because a loan went bad?   Well to put it bluntly, because everyone else does.  Any Lender as wells as Wells Fargo doesn't want the customer to go into default, the seller doesn't want to lose his house, so everyone should work together to get the buyer and seller to the closing table.

Wendy said: as to the greed, you sound as though you dont know very much about the role of the Realtor.  I definitely know the role of the Realtor and greed.  I have been told on more than one occasion that if I can't got the loan through, they know someone that will.  I've also been told that if I want to get the Realtors next deal, I'd better make sure I get this one through.  So, from my side of the desk...I know where the greed lies. Granted I want to make a living as well, but I'm not will the cheat or do be unethical in my lending practices.  And for a Realtor to insuinuate that those are the approved methods of lending, makes me ill.

Wendy said: anyone working short sales understands the author's frustration but your attack is not so easy to understand.  I guess in theis forum it's only proper to criticize the Lender, and not any other party at hand.  Anyone working a short sale knows that it's a long process, not to mention in todays market.I would suggest it takes double the amount of time than usual, considering there is double or triple the amount of short sales being completed today.  The attack is in retaliation of being attacked.  I don't see the benefit of stating your hatred of a corporation that has been placed into this situation just as much as the rest of you.  A professional post would have been sufficient. 

Rob said: If ignorance is bliss, ms. Gale is the happiest person that I have ever come across and he said: These are common occurances in thes hort sale arena. all that you can do is try your best and keep making those calls.  Ms. Gale is probably neither ignorant nor blissful, confused as to the aspect of  commission - with the realtors not being willing to lower the their commissions, yet everyone else is taking a loss.  As stated and agreed with by Rob, "these are common occurrences in the short sale arena".  I think Rob summed it up perfectly. 

Most of the homes going to short sale are from interest only option arms.  Again, loans that were not done by Wells Fargo.  Brokers and other lender s originated these loans.  Wells Fargo decided not to offer these loans as they were not a good choice for our borrowers. 

So before you offer your opinion of an organization that stood alone in the Lending community, you should take a step back and maybe cool your heals and let a cooler head prevail.

I think Pati Gale's statement for Realtors in general was correct.  Although it lacked professionalism, I do agree just as their are bad lenders there are bad Realtors.  Not all Lenders have cause this crisis as stated above in Wendy's post.  Let us not forget the appraisers, title companies, and attorney's that all had their hand in the pot as well. To lay all the fault on the Lender is a cop-out.

I am proud to be associated with a mortgage company that took the high road and did not offer the bad loans.  I am also proud of the hard work that they are accomplishing under such a hard economic down turn.  I  have been contacted by many customers  on several occassions, customers that did not receive bad loans, but have fell on hard times and can't cover their mortgage.  I personally got involved and have contacted Loss Mitigation for my clients and just this week heard that they have set up a new repayment plan for a client.  So, there are many success stories, it just takes time. 

If your buyers and sellers don't understand that, they have a bigger issue and it's called foreclosure.  No one benefits from foreclosure.

...It's time to stop worrying about who spilled the milk, just let's get it cleaned up. Enough time wasted on this...

I do agree with the author of this statement. I am a doer so let's do something to fix the mess just as something was done to make it, but positively this time.

"...Not only do I believe in miracles, I depend on them..." From an investor within the state with the third highest foreclosure rate, but still believe that it is well.

O. Curtis White 

Wow. such hostility.  Please don't take it all so personal?  So easily said by the unattacked.  I too feel attacked after reading these blogs, though I don't work for Wells Fargo.  The original author and subsequent authors have stated their negative comments about a Lender working to help the borrowers just as much as you, the Realtor is also trying to help. 

Don't make such false statements.  It is personal, just as you struck back with personal attacks, ie. nasty comments regarding greed of the Lender as for the delays. 

Statements made about Wells Fargo were not warranted, such as "stupid" bank and "they are purposely slowing down the process" for their benefit.  All false statements.  I could go on and on about "bad" offers and the reasons behind the why it takes so long, but it really doesn't matter since some can't see the forest for the trees.

From a Lender's point of view, if you don't have the patience and the foresight to know that today's market is not like any other, and that it's not going to happen as fast as everyone wants - you shouldn't be entering into the process of short sales.  Being frustrated is understandable, but take note your not the only one that is frustrated!

Debbie

Did WF finally accept the short-sale? I am a buyer for a short-sale property through WF, contract was done 2 weeks ago. Sellers walks out of the house by Jun end. I am threatening to walk out if I see any other value for money house. Would these two bring some heat on WF to accept or reject the deal in next 2-4 weeks.Once the seller walks will I be able to do inspection etc on this house? How would mortgage do appraisal on the house?
let me know.

Thanks Satar appreciate your advice, I am in  NJ and about 12% below the CMA/BPO. Both loans are with Wells Fargo so it should be the efficient. How do I get these email/direct phone contacts? I am not that far from the BPO/CMA so I think they should quickly approve the sale, while for me other deals are flying by. But they test your patience for sure. My agent just called and said "new negotiator has been assigned to this case" Dont know what that means

Satar thank you for your valuable inputs, I appreciate your responses. I hope my case got Xferred to new dept which is efficient. I will let my agent know of this new department and may be this transfer is for better. They told my realtor that negotiator will get back to her in 72 hours. Another call by attorney of the seller was told you should get acceptance/reject in 10 days. I am confused as hell but hanging in there ... My guess is both called the old number they have...

Rob, If that pile happens to be in more streamlined department (Bank + Mortgage) and they get back to me in 10-14 days I wouldnt mind it. Am I actually surprised that they can do it in 10-14 days in this market when there are about 50,000 cases a month for foreclosure.

Mortgage rates are inching up for 30yr Fixed, it was 5.875 2 weeks ago, today it is about 6.25. My question is since I am in contract on short-sale ( still to be approved by Wells Fargo ) , Can I lock my rate with mortgage lenders right now even though bank may never approve the deal?

I like being used as example. But I am not really low balling the offer. They have listed at outrageous price for that house almost at top end of listing in the area. However from recent BPO/Appraisal I am just 13% lower and I think it is a reasonable offer. Bottomline to bank I really dont know the amount owed by buyer to WF. As I am often hearing WF is a tough nut to crack and they prefer to foreclose than short-sale. Keeping my fingers crossed 2 wks and counting. I am supposed to be updated on Monday by my realtor.Mortgage rates inching up and other listing of interest is kind of making me think to withdraw from this, at the end 13% may not be worth on this house.

My husband and I put an offer in on a house on May12th As of today Wells Fargo still has not input the information into the system or so that is what we are being told. I am told that once it is input it will get sent on for a negotiator to handle the offers. Does anyone have any idea about how long this process is taking? We know that we have the highest offer on the table so far but who knows if other offers have come in yet.  Is there a certian percentage that the bank usually wants to see? This house has mold all throughout the basement so if they dont speed up we are afraid the mold will spred more.....any advice or comments on how long this will take or what we can do to get it sped up?

Impatiently wating for offer to be input!! Does this sound fimilar to anyone??

PattI Gale - Your comments are without merit. A little more understanding of the inner-workings of banking prior to the mid-90's and psot would reveal exactly how unscrupulous lenders like Wells Fargo made out during the housing boom. They changed the laws to allow them to lend on products that had little chance of success (according to their own internal analysis). The fact that you think they deserve pity for losing money (they are losing now, but have made record profits over the last 10 years) is ridiculous. The realtors and attorneys are trying to mitigate the individuals loss and offering a valuable service. Getting paid for your work is the American way. Dare I say standing up for the banks against the borrowers is un-American at best?

It always amazes me when someone makes a comment like Debbie.  Wells Fargo isn't the decision maker here, it's the note holder; whomever that might be.  Wells Fargo is the servicer.  They are like the manager of an apartment complex, not the owner. It used to be that the note holder and servicer are the same but it is rare to find that anymore. 

The note holder, probably some foreign investor, doesn't give a whit about the human aspect of this investment.  They are bean counters.  Wells Fargo can only act as a go between. The industry number prior to the current crisis has been around 23% loss.  What that means is the NET loss on the investment can't exceed 23%.  That has nothing to do with the sale price unless you know the numbers.  It has to do with how much is the mortgage, add in the fees (commissions, title, etc.) and come up with what the net loss will be to the note holder.  Many short sale offers are in the neighborhood of a 40% loss numbers.  The note holder is better off "going long" or waiting things out at those losses.  This gives them time to research E & Os and see if they can mitigate their loss by going after the appraisers or any other entry channel originators.  And believe me, they are going through the loan documents looking for ANYTHING they can recoup. If the appraiser missed a comp that showed a lower value, look out appraiser.

So how do you negotiate through this short sale?  You have to think of it as an auction where you can't see the other bids and the owner can change the minimum price on a dime.  You sound like a boxer who has found himself in street fight complaining "Hey, that guy just kicked me!".

Your success in handling short sales will be in preparing your client for all the worst case scenarios, know the numbers so your offer stands a chance and prepare for the long haul. And, if Penny Mac takes hold, short sales good just evaporate.  Don't think Real Estate ethics, think Craig's List... 

I guess I thought that the homeowner wasnt involved with the offers at all and that they had no say so. I thought all of the offer information was presented just to the bank and that the homeowner just had to accept whatever they decided? Am I wrong about this? I do believe that our offer should stand pretty good from what you are all saying so I will just keep my fingers crossed with that one. The agent presented our offer for the first time via fax on May 17th and has faxed it once a week since but of course we are still hearing that it has not been entered into the system. Once we get past that part I am hoping this will mean things will move a little faster or that we would at least start getting answers? I know that there are 2 offers on the table and I was told that we had the highest bid so I am hoping we have no bidding war but heck I wouldnt even know how to handle that process. Sad part is this is the first time we have ever put an offer in on a home because the one we have now we brought from family. Any ideas how long it is taking them to get the stuff input? I would at least like to get that far. Man this is all so frustrating and mind blowing....sure is a stressor!

Updates I an still waiting on the yes/no/counter from the bank. When dual agent contatcted them in this week, they asked for Short sale addendum, HUD1 , and proof of funds for the down payment + preapproval. So these will be submitted next week and we will wait again for some weeks before bank comes out with any answers. Read news on number of foreclosures in first quarter, I am thinking whether buying is a good idea in this market which has potential to correct 20% more.

I have put in an offer on short sale lender is Wells Fargo about 4 weeks back. Realtor tell me that she has verbal yes from negotiator, and then negotiator sent another list of documents required.

I am confused to really do the inspection or wait for approval from lender in writing, please advice.

At what time should I have attorney review this contract?

Thanks Satar for a quick reply, When should I engage and appoint the buyer attorney?

Realtors are the lender's ally, not the enemy. We help the lender mitigate its losses. The lender was greedy when they made high loans. Realtors working for reduced commissions are the opposite of greedy. Pati Gale must be a loss mitigator who turns down high offers, only to hasve the lender take $50,000 less 6 months later as an REO.

I saw a house today and it is a shortsale from Wells. I have great Credit and a substancial downpayment

The Realator I met Toady for the first time today did not even want to show the home to us.What do I do next I need a knowledgable realator on shortsales as I read all this that is willing to go the distance with me.

The home is in So Cal and does anyone know who I should retain as this Team just wants to put me into an easy sell and I am set on this Home and willing to pay for it. Should I contact the owners Agent??

Update on my journey in short sale, bank asked realtor to get HUD-1 , Short Sale addendum, Proof of Funds( Cash Portion) (signed by all buyer, seller, realtor, attorney)  to be submitted to them by wed Jun11. After this realtor said bank will submit this to investor and hope to hear in next 1-2 weeks of approval.

What is the past time frame and chances of approval with a FHA loan with Wells Fargo?

Will they Forego the short or will they GOFAR with short ( already 4 weeks and counting) :)

Thanks Satar, your advice is precious and it always keep me in the hunt, I will be patient for another 2 weeks for investors of WF (FHA) now. 

I want your opinion on mortgage. My household income is about 150K, and I am seeking a 350 loan on a 450 sale price( credit score is 790) . This is my first home. Will it be better in terms of interest rate to go for FHA or should I go conventional.

I heard FHA have low rate if you have good FICO , high down payment and low debt to income ratio. And in high cost area they are giving loans upto 700K or something.

Debbie:  There is no dealing with Wells Fargo.  I have been a mortgage professional for over 25 years and there are only 3 or 4 lenders than can separate collection efforsts from loss mitigation efforts.  WF is not one of them.

Don't let anyone railroad you into a Short Sale.  If they demand an upfront payment or fees, demand an email or letter speicfying that they will work with you on a Short Sale or modification if you do so - otherwise it is just treated as a collection.  You may be better off letting the home go.  do the math to see which alternative is best for you.  Remember, as far as lenders are concered, a Short Sale, 4 consecutive late mortgage payments and a foreclosure are virtually one in the same (go to efanniemae.com or FHA.gov to confirm).  Usually there is a 3 year or more period before you can get another prime mortgage and in that time you must re-establish a perfect housing payment history.  Your credit score will drop like a rock whether it is a Short Sale or a Foreclosure.  Don't be misled.

Satar and others:  Your condescending attitued towards Debbie is completely unprofessional.  The lender is steering her so don't make judgments on her decision making abilities or knowledge base.

Satar I think you have good luck with WF, I am as a buyer sitting and waiting to hear from them, its been little more than 4 weeks, last I know the negotiator asked for HUD-1 , buyer Proof of Funds , Short Sale addendum, Hardship letter from Seller. We sent these this wednesday.  The listing agent said it may take 1-2 weeks from there. I have given myself Jun end for this process to complete itself or I am just going to walk away. The mortgage rates are climbing on me and I can't even lock rate without the contract. Whatever I may theoritically save may be washed by still falling real estate rates and the extra 0.5% in mortgage I will have to pay for Wells Fargo delays. Totally frustrated with the indecisiveness and no action crap from WF.

Sorry for the rant.... I want to fax WF that as a buyer I will wait until Jun 30 or else walk.

Sata

I think Listing attorney and agent submitted hardship letter and hud-1 which was old one ( previous letter which was used for previous contract on house- buyer walked in that case) so WF wanted newer one. also the I think the negotiators has a standard 7 things email, I guess he just sends that to each case. went to see some more properties today didnt like what I saw in terms of value for money. So will continue to look.

Sorry I meant Satar

Well today I withdrew the listing until the banks come to terms.  I also have the papers signed to send back the buyers earnest money.  And get this the negotiator still hasn't called.  I am very sad about this.  I did every thing I could. Does anyone know of a class action against the Wells Fargo loss mitiagation department?  This is the first time I ever had to return earnest money  after I had a signed contract.

I had a verbal approval on this from the negotiator, he was going to use a appraisal & BPO done on the property 4 months ago, asked us some paperwork and said they will submit to investor. Now I learnt that they ordered a BPO and inside appraisal on the property. In this falling market whats the point to doing another BPO/Appraisal which is gauranteed to come lower than previous. This is so crazy. WF cant put thier act together, I think they have lost there marbles. Does this mean starting the process all over again? and keep waiting for another 4-6 weeks?

Satar any experience that you could share on this?

Hi Satar, I got to know from some websites that in FHA loan the appraisal is done by a FHA certified appraiser. And he did an inside appraisal on the property on Monday (06/16) now how long should I wait?I had earlier reconciled to wait until end of this month or walk, what would you recommend?

Also for FHA they want to see a net of 82% of appraised value by FHA appraiser. Will they share the appraisers evaluation? And if in my deal they may not net 82% (since there are lot of taxes owed by seller etc.) will they counter me or  ask realtor to reduce commission or just let it go to foreclosure? after wasting my 6-8 weeks.

My agent is insisting on me providing them with attorney information, when the lender is waiting on new appraisal they ordered on the property. Agent is also saying to schedule the inspection.

When Wells Fargo does approve a short sale, do they fax anything in writing or mail to communicate this? As a buyer do I have a right to see that document? I dont want to end up paying 500 for inspection and 700 for attorney if WF later just doesnt approve the deal. What should I ask my realtor ( acting as dual agent ) which constitutes as proof of bank acceptance?

Another reassignment of the mitigator, 3rd in last 4 weeks, WF/ASC never stops to amaze me. As many here have experienced in the past, they are some piece of work to negotiate with. I dont think they can get any decision done if the let the negotiator play musical chairs... Bunch of jokers...

The previous one had gotten us to getting the bottom line to be 82% as reqd for FHA loan and is reassigned. So a fresh start again. Foreclosure date on property is Jun 25th. I dont think I will even have to withdraw on Jun 30 it will be automatically void offer after Jun 25. Listing Agent asked for postponement to the previous negotiator, I dont know whether he that before being reassigned.

My sale was denied because of title with the second.  The second did not talk to the first.  Very confusing.  However, the second has ordered a BPO on the property.  We will not relist the property until the second and the first come to some kind of terms.  Or at least the first will deal with my idea.   So far I feel as if I send information into a black hole and nothing escapes. 

On authorization, It seems to take at least 1-2 weeks before they admit to recieving anything.  I have said it before.  I BELIEVE THEY DO NOT WANT TO SETTLE SHORT SALES!  They make it almost impossible to deal with them.  I even have New Hope involved and I am not getting anywhere.  Does anyone know of a class action lawsuit?

Hi All -

I am a tennant in a foreclosed Wells fargo property that is in the last 3 months of a 12 month michigan redemption period.

I have a lease that expires at the end of the redemption period Sept 27, so the property is not abandonded.

The property has a second mortgage as well that also foreclosed and has 9 months remaining

The owners initially fled to Florida and bought a property.  The husband subsequently died (I went to the funeral), leaving the wife nothing.  So she says.

The wife intends to simply walk away.

I cannot buy this property as I still have a house in Indiana to sell.

Any chance that Wells Fargo would continue to rent this property to me?  Who should I talk to to find out?

Satar

Your knowledge amazes me and so does your optimism on short sales :). I am certainly gald I didnt spend a dime on this per your advice. I am a firm beleiver in "It aint done until it is DONE". I am not sure whether it moved to new negotiator or it was sent to upper management. The previous mitigator said

"I am still waiting on the BPO as of 06/18 and also I would like to inform I will not be handling your case, as I am moving to prime loans. Your new negotiator is Miss XYZ who is very knowledgeable and good at what she does, she should be contacting you shortly.  If you still need me dont hesistate to contact me and I will relay message to Miss XYZ"

Realtor says its a reviewed case and hence just wait and this show go through. Next followup
is monday now.

My dual agent is asking me to list down my frustration in an email and send it to her. She wants to send this to the bank to increase some pressure on them to make a decision. Is this a good strategy? Frankly I am at a point I need an answer and I am prepared for more Yes than NO. Has anyone tried buyer pressure in a short sale? Please share your thoughts.

May 15 - Offer date May 15

May 16 - Offer Submitted to bank

Jun 4 - Hud-1, addendum requested by bank (verbal Yes), New Appraisal ordered.

Jun 9 - Appraiser visited the property for Inside appraisal.

Jun 10 - Hud1, addendum, proof of funds submitted

Jun 18 - Bank still waiting on Appraisal, Negotiator reassigned ( for the 3rd time )

Jun 23 - Agent requested Frustration email to be sent to bank.

Satar I ended up sending a mail yesterday evening to realtor with frustration stating

1) 6 weeks of wait dont know how many more.

2) mortgage rates climbing cost 3000/yr

3) inventory pouring, reduced listing price and good houses getting sold while I have to wait. Waiting for newer appraisal is pointless in ever falling market.

4) rental lease termination Jul 30 ( which I did after verbal yes ~$2000 cost)

5) Stressing about being Qualified buyer( substantial down and pre-approved) with no contingencies and ready for early closing.

6) Need answer or will consider reducing/withdrawing the offer. Hoping to get an answer in a day or two.

What is strange is the bank seems ignorant of the market news which tells them declining real estate prices everyday. http://biz.yahoo.com/rb/080624/usa_housing_caseshiller.html I am a first time buyer so I am thrilled by the sense of owning a home. But this no sense waiting game is really wearing my patience. Me and My wife liked 2 other comparable home and kept them as backup incase this doesnt work( this would give be about 30K break I must admit). But now both the houses are under contract in 6 weeks of wait. I persued this one because Jun 25 was foreclosure date on this house so I thought I can get a quick decision and if it is a no I will persue other 2 houses. Now I am stuck bank is not answering and other 2 houses are gone under contract. Now if bank doesnt approve this, what I have read about ASC/WF it is likely outcome, then I have to start the whole process of seeing 20 houses, pinpointing 2-3 and start making offers and it takes time and energy.

It took me 2 months to do this last time.

Jack

Jeff

As a buyer can I mail the negotiator or is it best left on Listing Agent and Sellers Attorney?

Satar

They have countered for 35K more than my price asking about 8% more. God knows how the appraisal came out more than the last time( arent real estate prices falling in entire US). WF is getting to my nerves now. Thinking of countering at 2K more. House needs some repairs and is not in best shape from inside. They did both BPO and inside appraisal. This is FHA short, does Seller/Authorized have right to ask for the BPO/Appraisal?

Based on that we can offer something that will get them there bottomline 82% of appraised value.

Suggestions welcome. What else can I do?

Jack

Satar

It seems the sellers attorney/authorized rep is out this week, so not much progress last was she disputed the BPO saying last time it was at 480K how come it came out 30K more than last time when prices are still falling. Used previous negotiators mail to support her case. And now she is out of office until monday. Hoping to get some traction on Monday now. Will be asking dual agent to have her own BPO at a lower amount submitted. FHA property dont know whether sending BPO helps?

Just told realtor to up the offer by 5K. Lets see if bank comes back firm or lesser.

After almost a calender week and minimum of 3 working days I dont have any answer on my counter offer of 415K against bank 445K. I am hoping to hear something today.

Jack

So the loss mitigation officer is either out of office or reassigned. So we are now dealing with a new one for this week. Obviously I am not expecting to see any progress... WF sucks big time

Jack

Need help, new negotiator is assigned to the case. Now he is willing to work with my new offer and is suggesting that in HUD-1 include seller concessions to make up for the difference. Have you had experience with this? I read on other blogs that in case of FHA short you cannot give seller concessions. Any thoughts?

Satar

Seems the short loan is conventional, after all the while I was told it is FHA. So we worked on net of 82% and now since this is conventional WF/ASC wants 85%. So deal is now stuck with 3% of 509,900 = ~15K

Here is my situation

BPO ( six months ago) 480K

BPO( 3 weeks ago)  is 509,900 SURPRISING, I have already raised my offer to 443K from original 430K.

realtor comm, taxes, transfer tax, attorney fee  comes out 25K.  This includes squeezing 2% from RE Comm. Now we give a net of 418K to bank which is 82% of new BPO. In the evening WF changed its mind said guidelines are to have 85%. Now my offer ~15K short. Granted I can get some more out(2-3K) of RE but I was wondering if I up the offer by 15K and ask for seller concession 15K ( for buyer closing cost, down payment assistance although I would be putting 20% anyway).  Will this work? since the net to bank is still remains same?

Jack

I have heard that threshold on the conventional is flexible. Normally they would take 85-92% of FMV but market conditions, repairs and crime etc can make them flexible. With Wells Fargo by experience what threshold do they work with. My case they are very adamant on the 85% is there a wriggle room?

Jack

To anyone that can assist,

I am in the beginning stages of a short with Wells Fargo as the owner/seller.  We're in Sarasota,FL and I've been transferred out of state, paid 368k in 6/06, owe 325k,and property has value of 270k to 300k.  It has been listed at 349k until last week where we dropped the price to 289k and advertised short sale.  I sent in all the papers WF requested, but not a BPO (not requested).  I am current on my loan and don't have issues staying that way for the time being.  If I rent it out, I will be about $900 short of my payment every month. My question is:

1) Should I stop making payments?  I've been told by many to do so, but the WF people say it will have no bearing on their approach (????)

What other advice can you give me in this situation?  I really don't want to be a long distance landlord at that cost. 

I am in the beginning stages of a short with Wells Fargo as the owner/seller.  We're in Sarasota,FL and I've been transferred out of state, paid 368k in 6/06, owe 325k,and property has value of 270k to 300k.  It has been listed at 349k until last week where we dropped the price to 289k and advertised short sale.  I sent in all the papers WF requested, but not a BPO (not requested).  I am current on my loan and don't have issues staying that way for the time being.  If I rent it out, I will be about $900 short of my payment every month. My question is:

1) Should I stop making payments?  I've been told by many to do so, but the WF people say it will have no bearing on their approach (????)

What other advice can you give me in this situation?  I really don't want to be a long distance landlord at that cost. 

Satar

Need help!

I have heard that threshold on the conventional is flexible. Normally they would take 85-92% of FMV but market conditions, repairs and crime etc can make them flexible. With Wells Fargo by experience what threshold do they work with. My case they are very adamant on the 85% is there a wriggle room?

Loan in conventional

Jack

Lender is Wells Fargo and loan ( one or multiple) but all are with WF. It is a conventional loan. From experience, while dealing with Wells, what kind of payoffs have been successful?

* I am planning to send some photo of property highlighting the negatives of the house. ( out-dated Kitchen, sloping yard into a creek , dry grass etc).

* Foreclosure date is now Aug 13, dont know how much of urgency they would show, I have heard they have adjourned it atleast 3-4 times.

* the problem is as this keeps extending days and weeks and the unpaid taxes keeps going up, for which they keep asking more money. Properties price meanwhile are going down.

* Can I ask for a new BPO for which I will pay?

Thanks guys for all the feedback, really appreciated.

Submitted a big mail today to the negotiator at Wells Fargo highlighting the problems with the house and why it should be appraised at lesser amount. I dont know whether this will make any impact. I will let the authorized negotiator to talk to them on that because as a buyer I cant do that.

I hope they will either reduce the BPO or take a lesser payoff ( 0.82 ) rather than 0.85.

Jack

Many people don't understand the all-important relationship between a lender and the loan investor. There are multiple posts on this blog that refer to the amount that Wells Fargo (or other mortgage lenders) will accept. Newsflash... Wells Fargo does not get to decide what offer they accept. In fact, the mortgage company has very little control over the mitigation decision.

Mortgage companies work for investors and the homeowner - in most cases, they are simply the middle man. It is a pretty precarious place to be, especially in this economy. Everyone gets mad at the mortgage company for not accepting the offer, all the while it is the investor who is calling the shots.

The mortgage company is allowed to service the loans in accordance with the servicing contract. That's right, they have a fiduciary responsibility to the investor. If they don't follow the investors' rules, the mortgage company will get sued. Plain and simple...

My advice, don't waist your your anger on the loss mitigation department. Find out who the investor is and start hammering down on them. And while you are at it, spend time thanking your federal government for bailing out the two most difficult investors. Both Freddie and Ginnie havel ow tolerance for short sale losses.

On the flip side, those investors who make it difficult for you to do short sales in tuff market conditions... They are also the ones supplying your bacon when market conditions are good. Dont piss them off too much. Ha!

Bottomline... The mortgage comp. is stuck in the middle, just like you.

Well said "Someone very close to the mortgage melt down", but this explains that why this process is so opaque and cumbersome. Layers over layers over layers.

Buyer->b Agent->S Agent->S Attorney->Loss Mitigator(ASC)->Investor and a full round back. Can you imagine what miscommunication happen in these linkages.

Update we havent heard back from negotiator, and now my dual-agent is off for next 9 days, next expected update is Jul 28th

Scott, you are in the same position that my husband and I were in.  Here's what we went thru in hopes that it will help you make decisions.

We re-fi'd 5 years ago (5 Year ARM @ 5%).  WF appraised our unit at $285K and we borrowed $230K (80% no PMI).  Our loan value at this point was about $220K.  My husbands job was transferred almost a year ago.  We put our house (condo in MI) on the market in July 07 for $220K.  No bites - none.

We decided to go ahead and purchase a house in his new location and were barely successfully there, but did it.  At this point, we're extremely pinched, but making it with about 2-3 months of reserve for our house payment in MI.  We decided to take his companies offer to buy our house in MI knowing that we'd probably be a bit upside down because, at that point, we'd been told market had declined by 25% so we're thinking we'll get an offer around $215K.  

His company orders 2 BPO's that come in at $135K and $130K and we about passed out.  This was a 53% drop in value from 5 years ago!!!  We quickly realized that we would need to do a short sale or go into foreclosure.  There were 6 other units (out of 153) that were in the foreclosure process in our neighborhood.  We also realized that we would be loosing about $900.00 a month if we rented the condo in the current market.  We STOPPED MAKING PAYMENTS and took what would have been our payment and stuck it in the bank in case we needed to bring money to the table at closing.  We submitted a full short sale package in November 2007.  We had his company's offer on the table and they accepted our short sale package.  The offer was only good for 60 days and we advised them that we needed to close by that time.

Well WF moves at the speed of light - NOT.  Needless to say, the offer expired and we had to find a new buyer.  We found one at $120K.  Waited and waited and waited - that buyer backed out.  Found another buyer for $120K.  By this time we'd been served a NOD and our house was on the chopping block for a March 7th sale date.  WE PREPARED BANKRUPTCY PAPERS but did not file.  We planned on filing on March 6th but did not tell Wells Fargo this. We very strongly felt that we could pull off the short sale and did not want to jeopardize them knowing that we planned on filing bankruptcy and selling it at an accelerated sale date.  This was our way of buying more time to complete the short sale.

WF approved the short sale on March 6th and set a new auction sale date of May 12th to give us time to close.  Incidentally - WF had completed a BPO for $135 and would only accept our $120K offer if we supplied the other $15K.  We agreed since we'd been saving those payments for this specific purpose.  Note:  our income would not have been enough to make both payments for any sustained amount of time.  We didn't close until April 22nd because there were still a few minor kinks that were being worked out on the Wells Fargo side and with the new buyers finance company.

From the time that we initiated the short sale - it took WF almost 6 months to closure.  Be prepared for a long haul.  Our credit is somewhat damaged (I'm still too chicken to pull up our FICA scores) but not nearly as bad as if we had to got thru foreclosure.  Because we had a combo mortgage and HELOC (both thru WF) we had a huge chunk of a revolving credit account now closed so I might even guess that our FICA scores may have actually improved.

I hated and loved our negotiator at different times in the process.  And there were many times that I felt that they would have rather taken us to foreclosure.  I'm still convinced that this is true and would urge you to act as your own short sale advocate.  I was actually able to speak to and email both our negotiator and her supervisor and that contact was a huge relief after feeling around in the dark for so long and not having any communication with any one from WF.  You will not be allowed to have contact with your negotiator until the very very end of the process.  We pretty much negotiated our short sale since our realtor was also in the process of selling her house and made a move about 1/2 way thru the whole thing to another state. She was so amazed that we'd been able to successfully negotiate the short sale with Wells Fargo and received the full 7% commission (she acted as dual realtor).  She's tried to work a few short sales with Wells Fargo before but had not been successful.  

I would urge you to call them every single day.  Submit paper work to allow your realtor to talk to them too.  Educate yourself to every step of the process.  We were surprised that WF was actually the middle man (a servicing company) and that they had to negotiate with the investor themselves.  The would never tell us who it was but from later paperwork that they submitted to us after the closing, I believe that it was Freddie Mac.  Don't let anyone discourage you and tell you that you should let the realtors and professionals handle the process - get your hand in the pie every step of the way.  WF did act a little quicker when the realtor initiated contact, but they KNEW that it was at our request that she contact them.  

My theme song thru this whole ordeal was "When you're going thru hell, keep on going."  It was soooo true - we had a copious amount of Divine Intervention to help us succeed and a ton of tenacity.  I refused to take anybodies no's for an answer and when we met a wall we'd do some research to figure out how to knock it down or get around it (legally, of course).   If you want to make this short sale a realty you're going to have to go balls-to-the-wall and hang on for a rough ride!

Good luck and many blessings,

MK

Toby and John,

What makes you think that I am not a professional?  I have also had successful short sales go through without the problems I have experienced.   Wells Fargo has made the uncomfortable short sale process even more stressful than it need be.  They have enacted a system where one cannot talk to their negotiaor unless the negotiator calls you.  I welcome to try to deal with a short sale with 2 liens (and Wells Fargo holding only one of them).

I'm sorry - I didn't mean to insinuate that you were not professional.  Our Realtors and lawyers were invaluable and offered us advise and strategies that saved us from going into foreclosure.  I guess what I meant was to put yourself front and center and drive the process.  For us (and many others) this was a financial life or death decision and I refused to fail at it.  You just need a ton of tenacity and at some point for me I had to look at it as if it were a game to keep from going insane.  

Oh, and on the WF ordered BPO.  I actually spoke to the agent that did the BPO because I had to let her into the house to do the appraisal.  She said that WF gives them 2-3 business days to complete the BPO and submit it to the mitigation department.  I experienced WF telling me 2 weeks after the appraisal that they were waiting for the BPO.  I told them that the appraisal agent had informed me of WF's 2-3 day turn around time request and that she'd submitted the appraisal 10 days earlier.  The next day I was told that they did have the appraisal.  I had also submitted to WF the 2 BPO's (independent that his company had paid for) that we had.  I also have to say that I think that helped a ton to have submitted those to WF because that gave us a strong leg to stand on.  One last thing on BPO's - they can do them a number of ways that affect the outcome.  Our company ordered a BPO for a sale in 30 days - that of course is going to be MUCH lower than a sale in 90-120 days.  I believe that the mitigation departments order BPO's based on a 30 day sale.  It's about as close to a foreclosure or wholesale price as you can get.  JMO.

"Cumbersome and Opaque Process.. " that made me laugh a little.

Coming up with standards of practice like  "NEgotiators not taking calls "  stems from hiring people with little or no industry experience/ no time managment skills and frankly have no business Negotiating an Investors Loss. / They become quickly overwhelmed and can 't function. [Enter huge backlog of work]  Instead of  managment actuall fixing the broken wheel ( implementing policies to insure a timley return of calls or inquiries on a file and thus prompt processing) they just put the cart on blocks and hitched a ride on the SLACKER Train. Seems as though  the people implementing policy obviously don't ahve much more business administration experience than the people they hired to do the job.

Thats all about to change.

Good Luck.

You need to handle the NEgotiation for the 2nd with that specific 2nd mtg department. WF can very well give to the 2nd.  Not much but they will.  You have to determine what the 2nd mtgee will accept before you can even start negotiating the Short Sale for the 1st.

Yes, WF will give to the second, but I was told that they were only authorized to do so for $1000.00.  In our case, because WF ALSO held our second and we were willing to put in the additional $15K then they negotiated amongst themselves for $5000.00 to the second.  In addition to that - this is not your only option.  You can have your seller negotiate with the second for additional amounts that WF will not offer.  In other words - the second would grant conditional release of lien IF the seller agreed to an unsecured loan outside of the short sale proceedings.  It is not in WF's best interest to not give anything to the second - just as it is not in the seconds best interest to not accept the paltry amount that WF will offer them.  You can get this to closing and avoid a foreclosure.  

Has your client received a NOD?  This should list the firm that is in charge of the trustee sale.  Call them and find out if an auction date has been set.  Make sure you call them often enough so that this does not get sold out from under you.  Line up Bankruptcy papers so that you can stall the auction and force WF to work thru to a short sale closing.  If an auction date has not been set after all this time and the sellers have not made any payments in 405 months then this is really good news!  To me, this means that WF is seriously considering your offer.  Have you found another buyer yet???  Don't give up your commission just yet - I know you're frustrated and your sellers are panicked - but this just smells good to me.  If you can find another buyer ASAP then I think you have a really good chance of pulling this thru yet!

Sorry   - meant 4 to 5 months - not 405 months, LOL!!

Deb, it sounds like WF is offering the second something - they just can't agree on the difference and are still negotiating.  It sounds like you're almost there!  It took the 1st and 2nd about 7-10 days to negotiate in our case and they were BOTH WF.  Like I said earlier - if they can't agree and your client does not want to go to foreclosure then it may be in their best interest to negotiate a conditional release of lien with the second for the $3800 difference.  This would be an unsecured loan in that amount that the 2nd makes with the seller and I was told that it can be a 10 year/0% interest loan which would be $32.00 a month for them.  This may very well be worth doing if they can't come to an agreement.  Wait for the "no" first before you make that offer.  Have you found another buyer yet?

I do remember where you said that the buyer walked.  I would not notify Wells Fargo of a buyer walking until you secure a new buyer.  Since they moved so slowly you'll have the time to find a new buyer.  This way you can get a new package submitted without alerting them until way after the fact.  Have you had any luck finding a new buyer?

I am on the buying end of a short sale in Maryland.  We signed the contract on the house on 4/18 and as of Friday, 7/18, we have no settlement date in sight.  Unfortunately the selling agent has not been very good at communicating with our agent.  She (our agent) will call to try to get information and never hears back from him (the other agent). It has come to the point that my agent has had to call the other agents broker.  He does not return calls either. So finally after repeated calls by myself and my husband to the agent and his broker, we finally get a call back.  Of course, there is not any new information.

I guess for me as a buyer, the most frustrating thing is that there is no way for me to find out where things stand.  Wells Fargo, who holds the current mortgage,  can not give me any informtion.  I think that it just seems unfair that I should have to be kept on hold like this. 

Can anybody offer me any information on how to deal with this situation.  Can you give me some real time frames?  I really like the house and don't want to walk away after having three months of my time invested, but it just seems like there is no end in sight. 

That's illegal.

My bid has been accepted by the buyers.  We are now supposedly waiting for the bank to make final decisions.  The owners no longer live in the house, it has been unoccupied for more than six months.  There are no items left in the house.  I have talked with the seller directly and he seems just as clueless as his agent.

We have had our financing in place since before we signed the contract.  Our mortgage broker is surprised by how long this is taking.  He has seen many other short sales come through, but ours seems to be taking the longest.  We are at the point that we need to relock on our loan.

Linda, I would request of the seller directly that they add you as a contact for Wells Fargo.  This will take about a week for them to acknowledge that they've received your Fax (don't forget to include the last 4 of the SS# of the loan holder for the seller).  This way you can call Wells Fargo directly and get updates from them.  Don't be shy about asking.  Has WF completed a BPO yet?  For us, from the BPO to approval it took about 2 more months.  They are EXTREMELY slow to move and I don't even think an act of congress would speed them up unless there were heavy financial penalties associated with it.  Be patient - it took us 6 months from start to finish and I've heard that it can take longer.

While I am still waiting to hear back from Wells Fargo needless to say they are extremely slow, I have liked another house which is also a short sale with Saxon. Since these short sale are very slow is there any legal complications if I put in an offer on this new one. I live in state of NJ and both of these properties are in NJ.

Do I have to withdraw one and put offer on another. What do I stand to lose?

Satar - yea - I wouldn't want a potential buyer all up in my biz either.  

Another interesting side note...  We closed on our unit on April 22nd and I've been checking the sold stats in our area to make sure that it was listed as sold.  It finally popped up yesterday, but was listed with a sale date of mid June?!?!?  What's that all about??????

I am in process of putting an offer on short sale from Saxon Mortgage. I will be buyer in the transaction. I just wanted to know

1) Although there is no payment from Seller for 3-4 months, the house has no foreclosure date. Is this normal?

2) What net payoff do saxon accept as % of BPO ( usually it is 85%). I read they counter at BPO are they kidding, why would anyone take that when closing happen after 6 months in SS? Why wouldnt the buyer just buy from normal market and close in 30 days.

3) My Buyer Agent and Seller Agent wants me to go thru Atty Review before lender approving the sale. Is this how Saxon operates? In previous one I cud just put offer and wait for approval. Once approved you could start the Atty Revu and inspection & mortgage contingencies. Does Saxon operates differently?

I am very interested in the short sale business.  As a real estate broker and mortgage broker, I strongly feel that this market will get better EVENTUALLY.  Can anyone suggest a good training tool, software and or materials that I can use so that I may execute my shortsales the RIGHT WAY!! PLEASE HELP. 

Kimberly Goodman

The Real Estate Mommy

thegoodmangroup@comcast.net

Having worked through every aspect of default management at servicing companies short sales are tough.

 The seller rarely ever tells the realtor they are in foreclosure or default and then the list price is set on market conditions. Unfortunately, when a offer contract is received it is usually less than what the borrower owes. What I looked at first on an estimated HUD 1 settlement statement was what the realtor commission was (ie...6%) and also looked at seller incentives to the buyer such as closing costs. A good realtor would ask the sellers upfront if they were in default and what was owed. It may not be required in the broker license but in today's economy with a declining market this should be volunteered by the seller to the realtor. I would prepapre an equity analysis that would show me how much it would cost to foreclose and hold the property in REO versus doing a short sale upfront with the seller. Commission is everything and if the bank is taking a loss so is the realtor. It is the cost of making the deal work. Realtors should think about it before taking a short sale listing. It is a lot of  work and time and the offer cannot be insulting escpecially if a property is valued at $200,000, closed sales in the area support the value and the offer is $175,000. Realtor commission is 6% of the sale price, etc. There is money left on the table and the bank is taking a loss if more than $200K is owed. Remember, everyone in the housing industry contributed to the  way the economy is presently. Homeowners, mortgage companies, brokers, realtors, Goverment and the job market. So understand all sides of the business before making judgement. Presently, I help people who want to keep their home and assist them in loss mitigation procedures. If they want to keep the home they will participate in the process. My fee is that they give back to the local food bank where the help and food is needed. Not a bad fee and I sleep at night.

I disagree - the fault of the housing crisis falls smack at the feet of the greedy investors and realtors.  There was a 56% difference between what Wells Fargo valued our house at 5 years ago and what the BPO came back at almost a year ago (and the market has declined even more since then).  That's unheard of, even in today's market.  Our neighborhood hadn't changed/declined that much in 5 years to warrant that kind of decline.   Homeowners (especially 1st time homeowners, like ourselves) TRUST the industry professionals.  Rude awakening!  We will no longer ever completely trust the so-called professionals.  

The way that the numbers "add up" - at least in our case (and I suspect this is true of other short sales and foreclosures) is that the bank essentially gave us a 0% loan for those 5 years.  I'm sorry, I don't feel sorry for the banks.  They caused the problem by their greedy practices.  I feel sorry for the homeowners that have to suffer thru this process and most likely loose their home and credit rating.  We were lucky - we played our cards right and had some cash to bring to the table and succeeded at our short sale.  Most people don't.  I hope that the banking industry and realtors will learn a long hard lesson on how to do business honestly and ethically.  

So I havent been on in awhile but my latest update  in trying to purchace a short sale is as follows. We put our offer in on May 12th, in June we heard that they FINALLY "recieved" our offer. We recieved a call early July that an appriasal was ordered on June 30th and that we have a negoitior assigned to the account but they will not speak to the relator at all until the appriasal is complete. Well we know that it HAS been complete but now they say that we have to wait for it to be entered into the system before the negoitior will talk. WTF! We are still trying to keep patient for SOME kind of word on this. Anybody got any ideas how much longer before they FINALLY input our stinkin appraisal and start working with us??

frustrated and losing patience

WOW! So looks like I am back in the waiting game of any day now. I feel bad when I call my agent and ask her for an update because I dont think they can do a thing but wait too but I am always wondering if it would be worth the call. So basically we are now just waiting for some negoitior to look at the bpo and my offer and give me a yes or no?  Do you think it makes any difference to call the agent since she says they wont even let her talk to the negoitior yet?

Just wondering if you ever got that call back on 8-13...today...that you were promised? We are now being told their is a note in the account stating that a callback is to be made on 8-18. Not sure who they are calling or what its about but thought I would see if you ever got todays phone call???

Not sure your name but the comment is for Ameri prt.

Stacy,

Have the owner call them EVERY SINGLE DAY and the owners realtor and your realtor call them once or twice a week.  

we are working with a dual agent and I am actually dealing more with the manager of the company but I have never had any contact with the seller. Didnt know that I was allowed to contact them?.. Am I allowed to do that if I made my offer already?

Hope you hear something soon on your callback, it sure would give me hope that this crap is coming to an end man!!

Jared - maybe you shouldn't spam on this site to sell your products.  These are people who really need help - not you trying to drum up business!

Stacy - we contacted our buyers and nobody told us that we couldn't.  It was actually very helpful to be able to talk to them to give them status updates and vice-versa.  However, do be cautious - you don't want to say or do something that might kill the deal.

HELP HELP HELP

Ok so we got word from wf that they want to work with us on our offer. LOL. The asking price was 135k and the damage to the home is outragious so we offered 105k which was more than resonable. we also submitted a damage statement so they would understand why our offer was so low. Yesterday we were told that they have counter offered us at 125k! We cant believe it. I guess the apprisal came back at 135k! What in the world is that. Now how can that happen. Even better, I am told today that the BPO only came back in the 90k range?!! How does that work? Shouldnt the two be close in amounts and if our offer is HIGHGER than the BPO shouldnt they have snagged it up while they had the chance? Today we emailed pictures of the damage and asked them to reconsider a new apprisal and who knows what that will do. My agent is a tard so not much help there, I am pretty much running the show.

HELP Anyone understand why the apprisal is so much higher than the bpo? is this normal? Any suggestions on what to do next?

I was also told by the agent that wf stated they werent really going to consider less than 125k based on the apprisal amount....cant believe that since the house is full of mold in the lower level and needs to be gutted..

Any ideas or suggestions??

Misunderstanding-

apparantly they misunderstood and got the bpo and appraisal confused. We are now fighting for a new bpo since our offer is well over the appraised amount.

My agent has now requested a new BPO because they did not enter the home. The appriasal was in the 90k mark and their BPO came in at 135k. Now they have denied us a new BPO request??

HELP??? Any ideas?

Stacy,

I'd be tempted to let it go on the market as an REO (foreclosure) and snatch it up at a lower price.  I wouldn't budge from your offer and send in the pictures, etc.  It's going to take a few years for the market to come back and if you've invested more money in the property than what it's worth then you may be the one on the other end of the stick if you need to sell before the market turns around.  Don't make an emotional decision.

Many Blessings,

MK

From what I learned about appraisals and BPO's - an appraisal is done by the Realtor and a BPO is done by independent firms that appraise real-estate.  There is a big difference since the realtor is going to value the property higher so that they can get a greater commission if the price is higher.  However, if the BPO is a company that is owned by the mortgage holder than that can also come back artificially high.  You need a BPO that has been commissioned by a company that is neither realtor owned or mortgage holder or servicing company owned.  In my opinion, that is the only good way to get an accurate property value assessment.

Mary Kay-

So would you pay out of your pocket to have a new BPO or would you just let it rest? I think we are getting to the final point and letting it rest may be the best option. It will be that or pay to have another BPO and HOPE that WF will reconsider.

Stacy,

I think I would wait to see what WF comes back with first - just make sure that you understand why there is a difference.  In our case we were the sellers of a short sale property and my husbands firm had completed 2 independent appraisals before we were even considering a short sale.  We submitted those with our short sale package - they ordered one anyway and came back pretty much identical to what we had submitted. If you do decide to order a BPO then make sure that you direct the company to appraise with a 3 month sale date and make sure that the comps that the use include Re-lo's and REO's.

Thank you to everyone who posted a comment, it has been very helpful. We are trying to buy a shortsale through Wells Fargo. Had our first offer rejected with a counter offer that was too high. They rejected a second offer with no new counter offer. We waited a month and submitted yet another offer, higher than the first 2 offers. The house is looking worse, thank God no vandalism yet. Please wish me luck we really want this house but can't afford to overpay. I really hope the investors wise up, here in Florida it seems we are far from the bottom, and it's gonna take a long time before we fully recover. It really does seem like they don't care, but then again they must be burried in foreclosures. Anyhow, I would welcome any tips or help on how to proceed. Conny

Satar,

Congratulations - still not over with yet - but getting closer.  Here's a heads up on a few more things.  WF was held both our 1st and 2nd.  They have a $50/50% rule regarding approval on the second and I believe that it is this - if the 2nd mortgage is OVER $50K or OVER 50% of primary then it goes up the line to the 2nd's manager for negotiation with the 1st (even though they're both WF).  Ours didn't meet this criteria and it took our negotiators an additional 3 weeks to reach a final approval.    

In the meantime - ask your negotiator (for the 1st) for the addendum's that will need to be signed by both the buyer and the seller.  Get those signed and out of the way so that you won't have to wait even after you get final approval for the 2nd.   The addendum's that you'll need to ask for are:

1)  Arm's Length Transaction (stating buyer and seller are not related)

2)  Contract Addendum (stating property is sold "as is" with no warranty claim, etc)

3)  Closing Date Extension (agreeing to close with X days of written approval)

4)  Listing agreement Addendum (property sold "as is" and that seller can cancel agreement with no commission to broker, etc)

5)  Any other addendum's unique to your transaction.

Also (critical) for the sellers - MAKE SURE that you sign POA's for eachother.  God Forbid something should happen to either of you that would prevent you from closing at this point.  MAKE SURE that each of you can legally close for the other if an emergency happens.  Make sure that they are notarized by a Notary Public. 

One final MUST DO - is to contact the Legal Firm that will sell the property at auction (assuming that you are in some state of foreclosre) to find out what the auction date is.  If it's really close to the closing date the ask the negotiator or his/her manager for an extension.  If they refuse to give an extension then get Bankruptcy papers ready to file the day before the auction and not a moment sooner.

With what all is going on with Mortgage Bailout etc, do you think it will slow down the accpetance of these deals. These normally take 3-4 months so now will they never happen or will they take 12 months?

Amiri,

They did that with ours too and they did accept 10%.  The 1st gave up some to the 2nd's, but our offer was for the full BPO and I think that helped us out.  I think that you said that both are with WF?  If so, then I'm pretty confident that it will be successfully negotiated - I mean - it's wooden nickles at this point.  My negotiator told me that he'd never seen a case that wasn't approved when both were held with WF.  The most agonizing part is the wait.  I would call them back and see what the status is.

WaMu went under - JP Morgan Chase bought them out.  I thought WF was part of WaMu - but I'm not sure that they are.  Anybody know?

Amiri,

I agree - let them negotiate it out themselves.  That's what we did and they agreed on 10% to the second, which I think is fair.  We never financed more than 80% and didn't have PMI and that also helped us. 

You know, I was thinking - if they way that houses are assessed does not change then we'll be in the mess all over again at some point in the future.  There needs to be a standardized system that weights a houses value based on age, condition, updates, locations, etc and does not base the value of a house solely on comps.  I hope that this mess that we're in can spawn some better home value standardization type laws or procedures.

I wonder too how this bail-out will affect short sales.  Are the companies like WF going to stall till they know what the package is or will they accelerate their efforts in the fear that they will get hit even worse with losses.  I mean, if I was in biz and offering to buy these assets I would offer maybe 50% of BPO for "bulk" purchases.  Can the banks do better by completing the short sales themselves?  One thing is abundantly clear - they need to be forced to speed up their process so that they capture more buyers that are ready and eager to close on a good deal.

If a BPO is a standardized system then how can you control it during a short sale????  We had 3 BPO's done and they all came within just a few thousand of each other and we had no input on the final appraised value.  I've also noticed that the REO's have declined in the area that we had to short sale our house.  I think that we are closing in on this crisis and it should get better in about a year.  I severely question the wisdom of this bail out.  I don't think it's wise at all.  I think we can get thru this and not need the bail out and I think it's going to back-fire on us.

You made my point - it's NOT a standardized system.  It's all smoke and mirrors and crookery!  The system NEEDS to change or we'll be in this mess again and again and again.

Thank You

Here's one for ya....

Wells Fargo had two BPO's PLUS an appraisal done on the asset.  Took them 3 months to approve the sale, we are in a declining market.  Buyer changed his offer.  The APPRAISAL said it was to use "foreclosures" in the analysis as they were "driving the market"....none of the homes used by the appraiser were foreclosures, in fact two were retail sales that took almost a YEAR to sell..... buyer walked, home is back on the market and look at how ridiculous the email chain is between me and the Mitigator at Wells Fargo

Talking to Wells Fargo Loss Mitigation is IN ONE EAR and OUT THE OTHER...
Complete ignorant idiots! Watch the email chain back and forth...

----Original Message-----
From: Garry.Mobley@wellsfargo.com [mailto:Garry.Mobley@wellsfargo.com]
Sent: Tuesday, September 30, 2008 8:44 AM
To: medal@allegiancerealty.com
Subject: RE: Review of Appraisal of XXX

I looked at the notes on page 2 and they refer tio the comps. If getting a new appraisal is not an option if you can provide me with some comps that are more in line with the appraisal I will have them take a look at ithem. The comps have to be from the time the appraisal was done and ni more than 1 mile from the property.

-----Original Message-----
From: Peter Medal [mailto:medal@allegiancerealty.com]
Sent: Monday, September 29, 2008 7:25 PM
To: Mobley, Garry
Cc: 'Julian Tatka'
Subject: RE: Review of Appraisal of XXX

Garry:
The notes the appraiser made are not consistent with the comps that were chosen for the appraisal.

The owner, XXX is dying of Cystic Fibrosis, he is in and out of the hospital. All of their funds are depleted. They barely can keep gas in the car and food in the house. The biggest concern XXX has, is what the impact will be concerning the short payoff.
I doubt very seriously they would be willing to pay for a subsequent appraisal.

I will check with the Buyers Agent to see if they would be willing to pay for the appraisal.
I am of the belief that Wells will NOT be giving the owner a 1099 on the first or second as a result of the Mortgage Forgiveness Debt Relief Act of 2007. The first was for acquisition indebtedness and the second, although a HELOC was used for home improvement. Cheryl will not be able to afford the tax bill on the 1099 and at this point are willing to face foreclosure if a
1099 on both loans will be mandated. Can you let me know what the investors stance is, concerning the short pay on the sale in play or any other possible short pay off request?

Peter

-----Original Message-----
From: Garry.Mobley@wellsfargo.com [mailto:Garry.Mobley@wellsfargo.com]
Sent: Monday, September 29, 2008 4:01 PM
To: medal@allegiancerealty.com
Subject: RE: Review of Appraisal of XXX

I see your point but the investor is looking at the the notes the appraiser made in the appraisal giving compensation for the differences.
So if we are to overturn what we have we need to either counter or get the new appraisal.
Do you think the sellers would be willing to pay for it?

-----Original Message-----
From: Peter Medal [mailto:medal@allegiancerealty.com]
Sent: Monday, September 29, 2008 5:13 PM
To: Mobley, Garry
Subject: RE: Review of Appraisal of XXX

Garry:

Has any of the below email chain been provided to the investor?
Do you agree or disagree with my analysis of the appraisal?
The existing appraisal did NOT follow the scope it clearly said it was intending to use:
"LENDER OWNED PROPERTIES WERE USED IN THIS APPRAISAL, THEY ARE DRIVING THE MARKET AT THIS TIME".
You have an appraisal based on homes that have a ONE YEAR market timing and pricing.
If the investor insists on wanting to stick with this appraisal, mitigating the loss with a short payoff is sure to fail.
Realize that if this home is foreclosed upon, your foreclosure department will obtain BPO's to determine 30-day pricing for the asset which in my analysis suggests, is realistically around $250, 000.

The home is listed at $325k.
The listing is coming up on a YEAR of being on the market.
We have had very little activity at the current price.
We advised the client to lower the price to $300k.

A new appraisal USING LENDER OWNED PROPERTIES, that are DRIVING THE MARKET AT THIS TIME should be used to mitigate further loss to the investor. I am not willing to pay for an appraisal. I am the listing broker. Tough situation.

Peter Medal
Listing Broker
Allegiance Realty

-----Original Message-----
From: Garry.Mobley@wellsfargo.com [mailto:Garry.Mobley@wellsfargo.com]
Sent: Monday, September 29, 2008 1:20 PM
To: medal@allegiancerealty.com
Subject: RE: Review of Appraisal of XXX
Ok if we are to order a new appraisal are you willing to pay for it? The investor is wanting to stick with this one and will not pay for another.

-----Original Message-----
From: Peter Medal [mailto:medal@allegiancerealty.com]
Sent: Monday, September 29, 2008 3:49 PM
To: Mobley, Garry
Subject: RE: Review of Appraisal of XXX

Gary:

1 acre land parcels in the area are selling for $100, 000 ($150, 000 for
1.5
acres)
Giving $28000 for 1.5 in additional acres is a joke. The adjustment should be more like $75000 to $100, 000.

Giving $35/sf for less/more square feet is also a joke. Comp #3 has
2417 square feet, the subject has 1985 square feet. At $35/sf the appraiser is saying that an extra 432 square feet is only $13, 265 in adjustments...
Should be more like $40, 000.

Lastly... LENDER OWNED PROPERTIES WERE USED IN THIS APPRAISAL, THEY ARE DRIVING THE MARKET AT THIS TIME.
NONE of the comps used were lender owned.
Comp #1 was 335 days on the market and Comp #3 was 458 days on market

A new appraisal should be used, using CURRENT comps and LENDER OWNED should be used, as they are driving the market.

Peter

-----Original Message-----
From: Garry.Mobley@wellsfargo.com [mailto:Garry.Mobley@wellsfargo.com]
Sent: Monday, September 29, 2008 12:27 PM
To: medal@allegiancerealty.com
Subject: RE: Review of Appraisal of XXX

I understand your point. Here is where the appraiser made the adjustments to compensate for the values on page 2 of the appraisal.

THE COMPARABLES USED WERE THE BEST AVAILABLE IN THE SUBJECT'S IMMEDIATE MARKET AREA. ALL SALES WERE GIVEN EQUAL WEIGHT IN THE RECONCILIATION OF THE FINAL ESTIMATED VALUE. GLA ADJUSTMENTS WERE MADE AT $35 PER SQUARE FOOT.
BEDROOMS AND BATHS WERE ADJUSTED AT $5000. GARAGES WERE ADJUSTED AT $4000 PER STALL. FIREPLACES WERE ADJUSTED AT $3000.
SITE ADJUSTMENTS WERE MADE AT
$20, 000 PER ACRE. HORSE SETUP ADJUSTMENTS WERE MADE AT $20, 000. ALL COMPS ARE LOCATED WITHIN THE SUBJECT'S MARKET AREA. LENDER OWNED PROPERTIES WERE USED IN THIS APPRAISAL, THEY ARE DRIVING THE MARKET AT THIS TIME.

-----Original Message-----
From: Peter Medal [mailto:medal@allegiancerealty.com]
Sent: Monday, September 29, 2008 2:43 PM
To: Mobley, Garry
Subject: Review of Appraisal of XXX

Gary:

The appraiser stated that "Lender Owned Properties were used in this appraisal, they are driving the market at this time".
We agree, foreclosures and short sales should be used in the appraisal assessment as they ARE driving the market.
It should be noted that NONE of the homes used in the appraisal were Lender Owned, nor a short sale.

Comp #1 was 335 days on the market and Comp #3 was 458 days on market Would it not be prudent to used comparables that are more in line with a Bank Foreclosure Department Policy and Procedure respective to pricing a home with 30 day market timing? What would the ramifications be of Wells Fargo, taking back a property and holding for 12 to 14 months market time?

Comp #2 closed April 5, 2008. Our market has had a major price reduction just in the past few months. There were many other comparables that could have been used that are "driving the market at this time". In fact, Comp #2 will be outside the 6 month market time in less than a week.

Comp #3 is on 2.5 acres, and the appraiser only adjusted that comp for an extra $28, 000 in value for the additional 1.5 acres. 1 Acre lots in the area are selling for $150, 000.

Lastly, the appraiser only adjusted GLA (gross living area) at $35/square foot.

We are in a declining market. The following four comparables are more in line with the pulse of the market:

1935 E Tamar, 2266sf, built 2007, 173 days on market, $206, 000, closed
6/26 (short sale) $90/sf
39005 N 4th Street, 2180sf, built 2003, 49 days on market, $285, 000, closed
6/30/08 (bank owned) $130/sf
37005 N 4th Street, 1788sf, built 1996, 33 days on market, $295, 000, closed
7/9/08 (regular sale) $165/sf
37640 N 12th Street, 1826sf, built 1996, 421 days on market, $304, 000, closed 5/29/08 (regular sale) $166/sf

The above average to $138/sf x subject 1985sf = $274, 600 Average market
time: 169 days or almost 6 months market time.
It should be noted that the subject property has been on the market at $325, 000 with little to no showings.
30-day pricing would obviously have to be less then the average price calculated above.

When I am hired to list a bank owned foreclosure and do a BPO for list pricing, we are instructed to price based on a 30-day market time.

In summary, the current appraisal:
A) used comps with 335 and 458 days on market
B) comps used were not "lender owned" as report suggested
C) significantly under valued the extra 1.5 acres on comp #3 ($28, 000 price adjustment for 1.5 acres)
D) significantly under valued square footage value at $35/sf (comps are selling for $138/sf)
E) used comps that are almost 6 months old in lieu of more recent available comps that are "driving the market".
On behalf of the borrower, we respectfully request a new appraisal, more consistant with current market conditions.

I have forwarded a copy of the appraisal to the buyers agent, who has ordered a BPO on the property.
Let me know how you would like to proceed?

Best Regards,

Peter Medal
Real Estate Investor & Investment Advisor Allegiance RealtyR Professional Real Estate Consultants & Advisors

602.469.7400 Cell
480.423.7400 Fax
medal@allegiancerealty.com

-----Original Message-----
From: Garry.Mobley@wellsfargo.com [mailto:Garry.Mobley@wellsfargo.com]
Sent: Monday, September 29, 2008 9:10 AM
To: medal@allegiancerealty.com
Subject: RE: XXX

Sure can here you go.

-----Original Message-----
From: Peter Medal [mailto:medal@allegiancerealty.com]
Sent: Monday, September 29, 2008 12:01 PM
To: Mobley, Garry
Subject: RE: XXX

We have been listed at $325k for quite some time. No action.
I am going to run an updated comp analysis and get it to you and the seller.
Can you email a copy of the appraisal?

-----Original Message-----
From: Garry.Mobley@wellsfargo.com [mailto:Garry.Mobley@wellsfargo.com]
Sent: Monday, September 29, 2008 8:32 AM
To: medal@allegiancerealty.com
Subject: RE: XXX

Peter,

I opted not to send this to all for the sake of not getting inundated with with emails from everyone since this is one of a hundred other deals I am working on. I understand and appreciate the data put together by the buyer.
the bottom line is this. the appraisal that was recently completed indicates a Fair Market Value of $335, 000.00 hence the investor is insistent on recouping that value or as much of it as possible. If this is not possible they feel confident enough should it go to foreclosure that they will get that out of the property. So the offer of $260, 000.00 is not going to be an option. I am not sure where the comps they provided are located in relation to the property but the one included in the appraisal seem to back up the Fair Market Value of the property.

So let me know what they intend to do, so I will know how to proceed. As for now their counter offer has been rejected.
________________________________

From: Peter Medal [mailto:medal@allegiancerealty.com]
Sent: Monday, September 29, 2008 12:50 AM
To: Mobley, Garry
Subject: RE: XXX

Garry:

Thanks for your follow up.
When I got your original email, I submitted to the seller and buyers agent for review and signature.
The sellers have signed off on your request but I hit some resistance from the buyer/buyer agent.
Attached is the buyers response.

Perhaps we can discuss the file tomorrow?
What is the best time for us to talk?
You can call me on my cell phone, anytime, I will take your call, 602-469-7400.

Please note, we have had the property listed and pre-emptively changed the price to $325, 000 with little to no showings from the brokerage community.
We have been pounding ads electronic and paper with little action.

Metro Phoenix has just been pounded recently with foreclosures at an all time high.

Also, the seller is concerned about the tax ramifications concerning the short pay off.
I provided them information concerning the Mortgage Forgiveness Debt Relief Act (see below).
I am understood that their first mortgage was "acquistion indebtedness"
and is covered under the act.
I am understood that their second mortgage, although a HELOC, was used for property improvements, which would be covered under the act.
Can you explain to the borrower, by email "reply to all" what impact, if any, Wells Fargo will be employing concerning the short payoff?

Best Regards,

Peter Medal

I GOT A CHECK FRM WELLS FARGO TODAY FOR MORE THEN $2000 BUCKS WE ARE IN THE PROCESS OF TRYING TO GET A MODIFICATION, WHY DID THEY SEND ME A CHECK MAKES NO SENSE, I AM THE SAME SITUATION AS THE LAST BLOG I CALL AND TELL ME ONE THING AND ANOTHER! DOES ANYONE KNW WHY THEY WLD SND ME A CHECK!?!?!?

Looking for some opinions,

NEED SOME OPINIONS!!!    I have a first of 405000 and a second of around 49000 both with wells fargo. I bought in october last year. The builder is continuing to build. in fact instead of having phases they just laid every foundation and started building all the remaining houses. (about 50). they did this after deciding to drop the prices from 500000 for my model to 330000 for my model. Also the house is in my name alone, wife was not on the loan, she didnt need to be so I kept her credit clear of it. In my case what would you all do? let the house go, buy something different with wifes credit since they have lost 170k in value? keep paying the mortgage though times are tight? or work out some sort of principal reduction with wells fargo? I dont even know were to start that sort of process...

I have a first mortgage and equity line of credit with Wells Fargo (as holder/investor or servicer, I'm not sure).  The particular "mitigator" that I have has lied to me about what the law is and what Wells Fargo will do (but I guess that is standard procedure).  My question is I moved away for another job and only got a 55% offer on my condo compared to the outstanding debt.  After the mitigator admitted they do negotiate in some cases, I was told I could sign a personal note for 100% of the outstanding debt, 120 months, no interest.  I came up with a few counter offers each of which was rejected with no reason or counteroffer.  I don't understand why they are so obstinante.  Do they want it to go into foreclosure or think I have a stash of cash somewhere?  To me this is a cut your losses situation.   They also said a letter from a bankruptcy attorney stating I qualified and the any deficiency judgment would be discharged would not help.  I guess my basic question, is what is an offer of cash would get them to walk away?  I would borrow that from my parents.   I appreciate any comments.  Thanks.

Kevin - geesh - your situation sounds a lot like ours - you from MI????  Yes - get a BPO and don't offer a cent above BPO.  DON'T offer to cover the difference with a 10 year/0 % loan.  Tell them you can't afford to do that or you wouldn't be in this position!  And they WILL ask.  Did you submit your short sale package yet?  Do you have an offer?  I'd get a least the short sale package in ASAP.  The WILL negotiate - just hold your line and make them move to you.  If your case is strong you should be OK.  Did the company you moved to have a relocation package?  If so, did they offer to buy your house?  I also think they're lying about the bankruptcy attorney - but don't tip your hand for heavens sake.  Also, I think (but I'm not sure) - if you go to bankruptcy WF CAN'T collect from you more than the market value of your home - even if you owe more.  Get to a bankruptcy lawyer ASAP and have him give you some advise.  Get a good one - from a referral from a real-estate lawyer - not the phone book or numerous flyers you're probably getting in the mail.

Thanks for your reponse.  I was in Florida and relocated back up north.  There is a $295,000 first mortgage with Wells Fargo, and $95,000 equity line from Wells Fargo.  They approved of the short sale for $225,000 which was supported by comparables run by my realtor and Wells Fargo had someone meet with my realtor although I don't know if a "BPO" was done per se. 

The short sale was approved by WF first mortgage, then they realized I had a 2nd mortgage with WF (even though all my correspondence referenced both loans with WF).  This "mitigator" got involved and flat out lied to me about the law.  She actually started out saying that in Florida, mortgage companies cannot negotiate reducing the principal debt/forgiving the debt.  I think the deal was that WF first mortgage would forgive the $70,000 shortfall on first mortgage (although I am not sure as I never got a specific answer on that) and I was to sign a 120 month, 0% personal loan for $95,000 to WF equity.

I was able to get a new mitigator as I threatened to file a complaint with the Comptroller of the Currency Administrator of National Banks regarding a few false statements provided by WG.  I wanted to start at a good negotiation point next time around.  My realtor thinks the 2nd short sale would have an underlying offer of $250,000...which is better than the first.

I guess my question at the end of the day, WF first mortgage will be short $45,000 and WF equity line will be short $95,000.  How much of this should I be expected to come up with and in what form?

Thanks again for your help

Kevin - MI is the same way - they have a 10 year/0% payoff for shorts.  This is also what they tried to get us to do.  They will ask you how much of that you can afford - we told them (and with honestly) nothing and that's what you should do too.  You would not be in this position if you could afford to pay any of that additional principle off.  Please - don't even suggest to them that you can even pay them an extra dime.  It's a tactic that they are using to recapture some more principle, but the "law" is not enforced - or they don't pursue it because they know that they can't squeeze blood from a turnip and they're happy to get money from the short sale because they know that they'll loose more if they take it to foreclosure.  In addition - they're playing with wooden nickels since they also hold the 2nd.  They've already approved you for the $225,000.00 and you should let the 1st and second hash that out because they will figure something out.  In our case, the second wanted $0.10 on the dollar and that's what they were able to negotiate.  Our offer was for full BPO and we did contribute extra funds at closing to make the deal work.  The closed you can get to a full BPO offer, the better chance you have of making this deal work.  If I were you , that's the route that I would take.  The worst part is the wait - but stick to your guns because if they try to tell you no then they risk going to foreclosure and then the second gets NOTHING.  $0.10 on the dollar is better than nothing.  Your investor was most likely Freddie Mac.  Hope all this make sense - a bit jumbled, I know.  But I think that you're almost there with the final approvals.  BTW - we were forgiven a bit less that the $140K that you're up against - our property devalued by over 55% from an appraisal that WELLS FARGO had done 5 years before and we felt like we were victims of predatory lending.  That $140K difference for you is their loss - they gambled - they lost.  You bought the property in good faith - good faith that your realtor and banker appraised and sold the property for what it was worth when you purchased it.  You should not be the one to pay the price for the lenders and realtors unethical greedy behavior.

WellsFargo is unbelievable in every sense of the word!   Yiu can never et the same answer and they don't treat their customer's  with the respect and dignity deserve.  I've beeing trying to do a short sale since mAY 2008 AND it has been a living nightmare for both the seller and the buyer.  I understand that there is a crisis but it can't be resolved by a lack of communication such as the one that Wells does.  My client is the seller and he cannot get a straight answer and he has never been notified via phone, e-mail or mail about the status of his loan/short sale attempt even though the call center insists that attempts have been made.  Just last week the locks were changed, but when I call to see if I can get a key I'm told either that it's handled by another department and they will send an e-mail to that department to get me a key.  Do they want to sell the property or what!!!!!!!!!I have a willing buyer for the property and now she can't even get into the property to view it!     

I have been reading these posts the last couple of weeks, and they have been very informative. Our story with Wells Fargo started down the path of bing a horror, and we thought for sure we would lose the house. We are the buyer.

We placed on offer on a "short sale" home the 30th of October. The homeseller approved the offer and it was forwarded on to Wells Fargo. Nothing for 2 weeks. There is a second on the house, as well. So we were prepared for the worst. The sellers realtor finally got in contact with a guy and he said all looked good. The next week when she called, she asked if everything was wrapped up with the second on the loan, and the negotiator was not aware of the second and said if there was a second then the file was closed on his end. Well, the realtor called, and called then put in a transfer request for a new negotiator, as the previous one would not return any correspondence.

In the meantime our lender began breathing down our necks, due to the fcat that lending regulations will be changing the 1st of the year, and she didnt want to have to go back on her preapproval. We started pressuring the realtors.

Well today we got good news, the new negotiator called the seller's realtor. WF had settled with the second for $3,000 on the $40,000 loan. He also said we needed to sign a new HUD-1, and sign the ammendment stating we are buying the property "as-is". The negotiator said once he has the HUD back he anticipates a 3 day turn around to a signed contract (knock on wood). So our process is starting to roll, we locked in a super  low FHA rate, because the negotiator actually called our lender and promised that this was moving and we would be cloised within 45 days.

I think we did a few things right in the whole deal to aid in expediting. We put 3% earnest money down, we showed we were pre-approved, we supplied a HUD with our offer. The house has been on the market for a year originally starting at $400,000 dollars. The original loan on the property was for $349,000. When the house dropped down to its current price listing at $340,000 we put an offer on it at $335,000 seller pay closing costs. Now we wait and see and should here within the next couple of days.

QUESTION: A NOD was served 2 days before we put the offer in. We were unaware of this when we placed the offer, and the home is scheduled for auction January 10th. In our offer to the seller that he signed and aprroved before going to the bank, he stated the property be professionally cleaned, carpets cleaned, and furnace inspected. Now the homeowner is saying he is not going to do it, because we signed the bank statement saying we are buying the property "as is". CAN THE HOMEOWNER DO THIS? DO THEY HAVE ANY RESPONSIBILITY IN THE DEAL? The homeowner has not lived in the house for a year, they had dirty people that were renting. The house is new built in 2006, but is cosmetically dirty. Never cleaned floors, left behind debris, etc.

Any guidance is appreciated.

Richard,

Does that mean that we get to keep the washer and dryer that is in the home. It wasnt part of the original contract with the Owner, but now that we are buying "as-is" per our contract with the bank. Is it ours? What about all the trash in the house? That becomes ours, but things of value do not? The renter left about 2 truckloads of garbage, but they also left some valuables in the crawl space. The renter moved out in September.

Darcy, you should consider yourself UNBELIEVABLY LUCKY.  Wells Fargo moved EXTREMELY fast in your situation - sounds like they actually might be getting smart.  Putting down earnest money and pre-approval probably had nothing to do with your success; however, your offer was close to BPO and your seller paid closing costs - that probably made a huge impact on your approval - even so that was an amazingly fast approval.  I don't think that you have any leverage regarding the offer before going to the bank for pre-approval.  If I were a seller AND I were paying closing costs AND you signed the AS IS paper than I would NOT do a single thing more to the house.  Put yourself in their position - their credit is horribly damaged, they've lost a lot of money on their house and don't want to loose more and they've had to go thru the stress and nightmare of going thru a foreclosure.  They just want this done and over with and you and they KNOW you are getting a wonderful deal.

Hire a housekeeper and a furnace inspector - they're not that expensive.  The house is almost brand new - I'm sure the furnace is working fine and probably even has a 5-10 year manufacturers warranty on it.  You probably get to keep the washer and dryer - but the owners will probably take them out before closing and they are legally able to do so - the house and it's contents are still in their names.  

Again, consider yourself UNBELIEVABLY LUCKY and remember to keep your perspective - it's a mess, but that's a minor irritation and easy to handle and you're getting a heck of a deal.

We went and looked at a house that had a listing price of $65,000.  When we showed up to look at the house we were told it was a short sale.  Houses in the neighborhood are listed between $130,000 and $140,000.  What they are actually selling for, I don't know.  We fell in love with the house and put a cash offer in for $65,000 and put an EMD of $5,000.  We provided proof of funds to Wells Fargo because they are the mortgage servicer.  The agent also submitted the seller's documentation for the short sale as well.  This was on December 9th.  On Monday, December 15th I was told by our Dual Agent that they confirmed receipt of the package and would be doing the appraisal.  My concern is that with a low purchase price that they wont approve our offer but we did a full offer of the listing price.  I've been told that the sellers owe $130,000 on the home.  What do you think our chances are?

Thank you for the reply.  That is the response I was afraid of.  It said on our HUD-1 that the payoff was $60,590 so to then find out it was $130,000 then dashed our hopes.  Is that figure on the HUD-1 what they hope to negotiate the payoff at?

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Shortsales - 1st and foremost the Lender reduces the commissions. Try that method with your doctor...hey doc when you operate please know I am only paying a percentage of your fee.

OR I can only imagine the response if your boss and/or partner indicated to you, Oh by the way your wages have been reduced? I am guessing you would be ok with it since, you are so free with your position of what a Realtor is worth in today's market.

2nd - Regardless of how it got to this point, tax payers will pay for the actual loss mitigation for years to come. Lenders/Investors create greater losses with the delays.

Delay prevention suggesstions -

There are plenty sources willing to do the Appraisals/BPO's,

Technology - think about it,  there is technology available at all levels to determine Gain or Loss in a Nano second.  

Additionally it only takes 10-14 days to get qualified for a loan? Is there really a difference in Financial Assessments or does the “Income” portion execute exponentially faster?

Bigger lender's insist on using specific larger compaines to "group" order tasks.  Don't you think it would help the economy to outsource the jobs to smaller companies and or individuals qualified to help. Isn’t is possible that action alone would help  reducing unemployment? My guess is turnaround time could be significantly reduced?

3rd - Shortsales are not a transaction most Realtors will engage in due to the fact they require significant, dedicated amounts of time to simply work through each lenders process, to maybe get complete the transaction. It is MORE profitable and less costly to work with Bank Owned Properties.

4th - If you are not a licensed Realtor you have no concept of what goes into this career.  Real Estate is a business, with over head, operating costs, marketing costs, etc. Most salaried folks have neither the knowledge or perseverance to be in an industry that doesn't tell them where to go, when to go and how to go. Real Estate requires you are educated for licensure, requires ongoing education and entering this profession you have to do so understanding the less informed will attack what the DO NOT KNOW.  

5th - If you believe you can navigate a standard Re-Sale Transaction without a Realtor, God Bless ya. What does not get conveyed are the times Realtors have saved both buyers and sellers from costly errors. 

6th - If you believe all the infomercials about how much money you can make in this industry. Please respond with legitimate results.  Oh and by the way, are you aware buyer's and seller's are married to each other for as long as the improvement exists? 97% of all lawsuits occur in the United States and there are many occasions where buyer's or seller's have discovered things after the fact and pursued compensation from the prior owners?

7th The "employed", folks of banks that are employed to answer phones or processing Shortsales are "paid". Realtors do not get paid for their time and efforts unless the deal closes. Who would be more inclined to have their ducks in a row and persist working with each lender's different process to maybe get the shortsale completed?

8th Bottom line if you don't like Realtors in your area, sign up, invest in paying for the privilege of practicing Real Estate, take the required number of hours, pass the test and then work with people that sit in the stands or on the sidelines, yell about some insignificant issue without experience or knowledge. I will look for you on the cover of prison magazine as I am convinced someone as arrogant as to say what is takes to run a business based on some back alley position will fail. In Real Estate you are held to a fiduciary responsibility of the folks your represent.

The Shortsale is purely a means to provide opportunity 1st and FOREMOST for the Lender/Investor -

The Lender - with an opportunity for a Shortsale means someone (the Realtor) helped the Seller understand their options, someone (the Realtor) participated working the details of the situation and someone (the Realtor) paid for marketing the property to procure a buyer for the Lender and if the Shortsale is successful the Lender will NOT have to bear the cost and hassle of having to manage another Bank Owned Asset.

The Seller having enough courage to raise their hand and indicate I need help as you know will still take a beating on future loans, bad credit scores and will be shunned by neighbors, friends and family alike. You should know in most cases, prior to a Shortsale, most Seller's had a hardship they did not plan on, they had to dig deep to come to peace with the knowledge even though they did not buy the house with the intent to be in this position, they in fact are in a bad spot, Most Seller's are beaten down,  vulnerable and unsure of where to go for help 

In fact, 99% of the time the Seller has tried to communicate with the lender prior to the Foreclosure situation and 99% of the time, the Lender will indicate they will not help.

Again, the Seller had to move forward in spite of their own feelings, fears and desperation, and the only compensation for the Seller is to  have peace of mind knowing they did something and did NOT just let the property go to Foreclosure.

The Buyer - The Buyer who may have a property greater than their expectations.

All the best in 2009....

Yea - it's about time something was done to seperate the appraisal end of realestate from the marketing end!  I hope this works so that it will prevent the same problem again in the future.

NEW YORK (CNNMoney.com) -- Washington policy makers have taken aim at one of the main contributing causes to the housing crisis: inflated appraisals.

When home prices were soaring, one of the driving factors was that appraisers, pressured by loan officers and mortgage brokers, kept hyping home values. Not only did homebuyers wind up paying more, but the exotic mortgage products they needed to finance their purchases later exploded, setting off the financial and economic turmoil the nation is facing today.

Now, the Federal Housing Finance Agency (FHFA), the government agency created to oversee Fannie Mae (FNM,Fortune 500) and Freddie Mac (FRE, Fortune 500), has announced a plan to curb the influence that loan originators exert on appraisers to overvalue homes. A new Home Valuation Code of Conduct, which will take effect this May, is an attempt to improve the reliability of appraisals for mortgages sold to the two companies. The guidelines prohibit lenders from coercing, extorting, colluding with, intimidating or bribing appraisers into making inaccurate appraisals.

"It's a step in the right direction," said Tom Inserra, president of Pinnacle Peak Appraisers in Arizona, who has testified before Congress on appraisal issues. "Separating the lending function from the selling function had to be done."

Fannie and Freddie have a strong interest in ensuring the soundness of appraisal reports because they're the basis for the mortgage loans that they buy from lenders, according to James Lockhart, FHFA's director.

Most mortgages in the United States are now bought by Fannie and Freddie, who then securtitize them and resell them to investors.

Appraisals get inflated because the incomes of mortgage brokers and loan officers depend on how many mortgage loans are approved. A high appraisal ensures that the house - the collateral backing the loan - is worth more than the amount of the loan, which reduce the bank's risk.

Inserra knows how intense the pressure to inflate values can get. Three years ago, he found himself battling one of his largest clients. The bank's senior vice president in charge of mortgage lending tried to get Inserra to "hit a number," industry parlance for inflating the appraisal. He wouldn't do it.

"The discussion got so heated," recalled Inserra, "that he threatened to do harm to my family if I didn't co-operate. I really thought he might do it. I got a restraining order from a judge."

In the end, the banker didn't hurt his family, but he did punish Inserra by depriving him of the $200,000 in annual business he had been getting from the bank.

That may be an extreme case, but it was not isolated. A 2007 survey by October Research found that 90% of appraisers said that they felt pressured to fudge figures.

Not everyone is convinced that the new guidelines will help.

"I'm very skeptical," said Elizabeth Kern, a past president of the National Association of Independent Fee Appraisers (NAIFA). "I think the only thing that will change is that we'll see the better appraisers, the more experienced ones, not getting the work."

Inserra wonders about enforcement of the rules.

"The concern is that, unless there's an enforcement mechanism that works better than what we have today, it won't do much good," he said.

Under the new rules, complaints from appraisers, consumers, or anyone else will be fielded by the "Independent Valuation Protection Institute," which FHFA will set up.

If a lender logs too many complaints, it may be prohibited from selling its loans to Fannie and Freddie. That should be enough to make lenders police their appraisals more carefully, since the government entities are virtually the only buyers left standing.

The National Association of Mortgage Brokers is not happy with the plan. According to its president Mark Savitt, mortgage brokers often work closely with appraisers to make sure applications are error free and accurate. That kind of co-operation may be construed as crossing over the line into trying to influence appraisals, even when it's not.

Savitt said increased enforcement of existing regulations is all that's needed to make the appraisal inflation problem disappear. "Beef up the penalties for the laws that we already have and enforce those laws."

Right now, few loan originators are held to account for pressuring appraisers. Bill Garber, director of government and external relations at the Appraisal Institute, reports that only about 15 states have any laws targeting loan officers and mortgage brokers, and these are not often enforced.

Appraisers themselves are more likely to get hit; more than 250 lost their licenses last year for hyping values, he said.

But if the new regulations help prevent some of the abuses, it could have a healthy impact on the housing market.

Lenders will have much more confidence that the home values are justified and that could make them more willing to lend. 

Try working one with Wells Fargo Home Mortgage and the second is with Wells Fargo Home Equity-- they don't like each other.  And they will not settle until the realtors give up another 2% of the commission.  They don't follow Fannie Mae Guidelines, and if they made those way out- far out-- never should have loans they want to stick the realtors with paying those off as well.

I say short sale listing commissions should start at 8% and that is a fair business offer.  I know a number of companies and realtors that are doing that now.

And you know what's really crazy-- the government is giving them our money to resolve this problem and they ARE the problem!!! without a doubT

thanks for e-listening.

Karen

Karen, WF was both the 1st and the 2nd in our short sale.  The 1st negotiated a 5% payoff to the 2nd in our case after negotiating from a 2% base.  It's the game.  What they don't seem to want to get thru their thick heads is that most SS buyers have been waiting around to close the deal for 2-3 months.  Many are renters and this is their 1st house and they can't afford to go month to month on their leases so many times they have to just walk away from the deal because they don't have the luxury of time.  We lost 2 of our buyers because WF took soooo long.  Also - our realtor earned a 7% commission and trust me - I did a lot of her work.  She told me after the deal was closed that I should consider going into real estate.  Amiri - we paid - boy did we pay!!!  Don't say that sellers don't pay!  That's an huge insult to those of us sellers who've had to walk thru hell and back to keep from going into foreclosure and did everything possible to work with and help our realtors and make our house as appealing to potential buyers as possible - including doing fix-ups, putting money towards the closing and making concessions that we didn't really have to so that we could get a buyer quickly.

Let me state loud and clear - short sale clients don't "live life" - they're living in hell the whole time that they're trying to do the short sale because they know that there's a strong possibility that they'll go into foreclosure and probably bankruptcy.  This is probably the most stressful time of their entire lives.  Look at the stories of suicide that are constantly coming across the news of people loosing their homes.  If they're serious at all about having a successful short sale then they are keeping their property up to sale standards and working like mad to avoid foreclosure and they know that their credit rating is going to be trashed no matter what.  They should not be making a dime off the short sale and that is written in the contract.  Wells Fargo was damn difficult to work with too.  I would never never ever bank with them ever.  If they're easiest to work with then I seriously pity the sellers who have other mortgage companies.

Amiri - I'm not sure who you were addressing - but I am not a real estate agent - I was the owner and seller of my property and we lived in it the entire time.  To not keep the property clean and show at a moments notice is foolhardy.  As an owner you're desperate for a sale so that you won't go into foreclosure.  As an owner who has been thru this process, believe me, you may be reducing the stress a bit but you are not taking away the stress.  We knew what our options were and all of our exit strategies.  This is NOT a walk in the park and there is plenty of stress involved even when you are very well educated and know all your options and even if you have an agent who is worth their weight in gold. You can sit with them till the cows come home and talk till you're blue in the face - the fact is that they are loosing their home and their finances and credit is in the tank.  It's good that you're trying to ease their anxiety a bit though.

I wish everyone luck that is attempting to do a short sale.  It is an extremely stressful situation in the best of circumstances, but it can be done and you'll feel better than having to go into foreclosure and/or bankruptcy.  I would encourage anyone who is up against foreclosure to give a short sale a try.  Be prepared for some stressful moments and I sure do hope also that Wells Fargo has changed their no-late-payment policy to do a short sale.  That was not the case in our situation - we were told that we had to be late before they would consider it and it affected our credit.  Let's hope that they are getting much smarter.  Finally - I also hope that they have changed the way that they communicate with their sellers.  They were horrible with us.  I very much hope that they have changed for the sake of the seller and buyer.  You may have to wait for actual communication with the negotiator until the short sale has actually been approved.  WF will tell you where you're at in their process and they will contact your negotiator, but you won't get to communicate with them until the SS has been approved.  Keep very well educated of the process and know what to expect to help minimize your stress.  It took us almost 6 months to get ours thru from start to finish.  I hope they're moving faster than that now.

I am a Realtor in Florida trying to do a short sale with WF.... they have both the 1st and the 2nd...I have heard nothing about a 1st & 2nd team....sure wish I had one!   I had absolutely no problem with the first...they were cooperative, efficient and easy to work with once I finally got assigned a negotiator, and the offer was accepted. However, the 2nd is a different story.  Difficult is not even the word.. told me they didn't care if it went into foreclosure and they didn't get anything because what the 1st was offering them was nothing anyway... They have NOT given me direct numbers... I only have a general voicemail box to leave a message in and they are not returning calls....I do have mitigator's email but she tells me she can only receive email...not send ....  what??? ever heard of that one?  Demanding seller contribution ???? what planet are they on? If the seller could afford to contribute, he wouldn't be doing a short sale!  So we are basically headed down the foreclosure path because one hand of WF has decided to be judge and jury to the seller and apparently not caring that they are cutting off their own nose because it is still their company that will now incur more loss....days like this I don't know why I ever agreed to do short sales!

One more question.... does anyone know if there is a way to get direct phone numbers if you know the loss mitigator's name? (Other than call and leave a message in general mailbox that doesn't get returned)?

Pat - request to speak to the mitigators supervisor.  That may help.  Sounds like WF is STILL up to their usual tactics.  

Our 1st and 2nd was with WF.  We made sure that was communicated in the beginning - but do you think there was ever any communication between the two??  It wasn't until the very end that negotiations started between them.  It took about 2 weeks to wrap that up and I was hounding them every single day.

You can request option of negotiating an unsecured loan for what the 2nd would like to have as a payoff; however, I would let the 1st and 2nd try to hash this out between themselves.  I always felt like they were "playing" us - seeing how far they could push to get more money.  I mean, that's their job - it's loss mitigation.  What they don't realize is that they would get so much further if they would open the lines of communication.  You're right - they do incur more loss with their totally asinine system of dealing with the owner and realtor.

I dealt with LM @ Wells for 16 months, a wild game one that ultimately put me on the street. Modification failed, short sale failed, repayment plan failed, deny deny deny, but always pretend there is hope to get those last couple payments just before eviction. I will never do any business with this bank on any level.

Once you are involved with this department it is likely not going to end wells.

Wells Fargo, should return the 25 billion they took in TARP monies , obviously they did not need it they just reported a 3 billion profit. Next time I will go to Vegas with my cure monies , least I will have a chance.

I HATE YOU STAGECOACH , HATE

goodbye to my home , hello to my freedom from WF

I am at the point right now where this whole situation almost feels like some kind of sick joke.  You've got to be kidding me!  Our house has been listed since April 2008 and our loan is through Wels Fargo.  Yes folks...........it's been an entire year!  My husband and I divorced the prior year and both of us were faced with long stints of unemployment.  We tried everything we could to keep the house but when we had to put the property taxes on a credit card............ya..........time to face reality and short sale the house.  We had four offers come in within the first three weeks of the home being on the market.  Our Realtor followed up with Wells Fargo two to three times a week.  It took THREE months for Wells Fargo to respond to any of the offers.  All buyers had already moved on.  Ok.....so next step......since Wells Fargo is obviously not responding in a timely manner, we tried a Deed in Lieu (DIL) of Foreclosure.  This took almost a month to get set up in their system (Had to fax in paperwork 4 times) and finally we thought we were in the process of doing a DIL.  But wait!!  We were again mistaken and when my ex-husband was called by the negotiator assigned to our DIL file, he asked if we were trying to sell the house, to which my ex-husband responded, "Yes, we've been trying to sell the house since April".  Now the story gets better...........so the negotiator DENIES our DIL and changes our status back to a short sale because my ex-husband stated that "of course we were trying to sell the house".  It takes me two more weeks to open up the house in a DIL status again, to which they deny it because a week earlier a foreclosure date had been posted on the house!  WHAT!  Are you kidding me!!!  Wells Fargo would not budge!  So our foreclosure date was November 26, 2008.  So I turned off all the electricity, gas and water, and yes I sold our stove and dishwasher.  They were crappy and old anyway, so I figured I could at least get a little money for them.  I didn't destroy the house or rip our cupboards or electrical.  It is still a very nice house.  And to my surprise!  It's still ours!  I got a letter the first week of December that was dated two days AFTER our home was supposed to foreclose that said they were extending our foreclosure date until the end of January.  So now we have this house AGAIN.  We are incurring all property taxes and utility bills (Sacramento County utilities are mandated...no canceling them) for this property.  We have brought in a total of 11 or 12 offers on this property.  The buyers won't stick because Wells Fargo is not responding in a timely manner.  The fastest I have ever got an offer was the one I received yesterday.  The turn around was actually three weeks......which is not bad considering we typically wait 8-10 weeks for a response (I'm not exaggerating here).  So they denied our last offer of $180,000.  The home is listed for $169,500 and Wells Fargo had just approved an offer that came in at $185,000!!!!  (We lost those buyers because Wells Fargo kept saying they would get back to us and fianlly after 10 weeks they did........but another bank had already accepted another offer from these buyers).  So now the negotiator is saying that this latest offer needs to come in at $195,000!  Seriously!  The market price has not gone up!  You just approved an offer for $5,000 above this offer.  I think something really shady is going here.  I have officailly had it.  So after all this.........our we really going to have to foreclose!?!?!?!?  But even better............I'm now going to have to pay to turn all the electricity, gas, and water back on AND if someone is going to be doing an FHA loan, I may even have to go buy a stove and put it in!!!!!!!!  I don't even know what to do now.  We've left messages for the negotiator, his supervisor, customer service................no one ever calls us back.  I'm at a loss........this situation....well.....it really sucks.  I feel like I have no control and I can never seem to talk to any decision makers.  Just agents that read info off the screen and all they can do is send emails on our behalf.  Does anyone have any advise???  I just really don't want a foreclosure on my record:(  Oh and a good phone number to find out the status of your file once it's in LM is 866-903-1053......

Jack is back

Satar

Sorry this is not for WF but I need some advice on Saxon....

After waiting for 8 months on an offer with SAXON short sale, I have the approval letter. Now my offer was contingent to MOrtgage & inspection which starts after lender approves SS. So now I want to do inspection, but house is winterized, gas and water is off. In order to pass successful inspection I need those running so I am asking my buyer agent and attorney to get it done. They are giving me no hope and saying bank is "as-is" sale..... Let me know your experiences. Do bank de-winterize and start utilities on Short where owner left the property deserted for last 6 months. I want to make sure all pipes plumbing are functional.

Jack

In my case the seller/ListingAgent/Bank seem unwilling to dewinterize and turn on the water & Gas for me to inspect? How do you inspect with no utilities.

I have a question....I represent the buyer we have been in escrow since March1, regular sale, the owners live out of town their agent has been assisitng them with the property for over 2 years...listing it renting it out etc. Repairs that came up to about 15k were agreed to.....actually offered before we put the offer in. We (the buyers) are cleared for docs and then we are told the sellers are short...they cannot perform. My cleints want the home, but dread the thought of a drawn out short sale. The sellers evidently have 2 loans both with wells.....we ahve provided a 15 day extension on the original contract as we were told by the lisitng agent Wells is going to Fast track it. THey did perform both a BPO and an appraisal within 2 weeks of being contacted, but now there appears to be a stall and I am not sure why. THe lisitng agent wants my buyers and me to sign an addendum accepting a short sale...but giving away all of the buyers and buyers agents rights concerning the bidning contract that is in place. A short sale has nothing to do with the buyer, it is between the seller and his lender.

I guess my question is....can it be done in 2 weeks? Could Wells realistically get it done and be ready ofr us to at the minimum have docs in 2 weeks?? Also why would a buyer amend their contract and lose any of their rights? That is ridiculous. I suggested we get the banks determination in writing and if the buyer agrees they will sign necessary paperwork, if they don't they send a demand to close escrow and when the seller can't then they get their money and have their rights if they choose to pursue anything further. Don't believe that is asking too much for what they ahve been through and believe me they ahve been through alot!

Any thoughts or suggestions?

Tahnks Amiri...

Well here is the thing all the repairs, the roof termite and bathroom have been repaired and the work completed. SO now there are 3 contractors wanting to be paid, so either Wells accepts the deal my clients have offered, or now have a property that will have 3 mechanic liens on it. With everything said and done, the 2nd lien holder (Wells) will net more than 80% of what they are owed, which is actually very good in this market.  My buyers did not / do not want to cancel because they have inspection money and appraisal money invested at this point, and money is not easy to come by these days. If they cancel they are concerned it may be more dificult to recoup their current investment. As of right now we have a signed extension that the sellers will reimburse out of pocket expenses. So if this does not close on time we have that. Interesting idea about making a different offer though....I would be leary about retallitory behavior and not accept the new offer because it would be from my clients, again. Or is that just being silly/paranoid? THere are no decent properties out here right now, believe  me we keep looking. If there is something worthwhile there 10-30 offers on it in no time...very compettive....a bird in the hand is worth more tahn 2 in atree.

Okay, you know something, Wells Fargo is flat out the worst lender ever. I have tried and tried to work with them, when I was in the military I was stationed at one spot and of course I didn't have many more years to go and I of course was planning on staying in that area, however even though I was not suppose to move, I was stationed somewhere else, so needless to say I had to get rid of my house, however I couldn't because three people in my neighborhood had foreclosed. So instead of foreclosing I asked Wells Fargo if they could just defer one months worth of payments, of course their answer was no, so then I asked if they could help in any way and they told me that they could not do anything until i was late on my payment. I mean really how much sense does that make. So now I have not lived in that house for two years and I still can not sell it for what I owe due to the housing market being so bad, and I have heard a lot of rumors that Wells Fargo and Short sales is a oxymoron.

Un-Happy with Wells Fargo - you are right - Wells Fargo will not work with you until you are late.  That is what we were told also.  The "idiot" in collections is probably the 1st person that you speak to when you're in trouble and you have no one else to go to from there.  They won't put you in contact with anyone else and IF they do then you get the same line.  IF you have the luxury of time then you can play their game and jump thru their hoops; however, even a short sale is going to take you at LEAST 4 months to complete.  I think that they want you to be late on your payment because then it gives them lateral to tack on all kinds of fees, etc. so that they can make even more money off you.  Regardless, I'd get a short sale package submitted ASAP.  

My home is now in a short sale situation. When I took out a second to purchase a business, I still had 100K in equity. Well, the business failed and after paying on the second for 3+ years and my original mortgage, I must move to another state for family reasons, so I thought a short sale was the way to go. I put my hose up for sale and to my surprise had an offer in 4 hours! The buyer had all financing in place. Because the second was with Wells Fargo and they took over 2 months to come to a decision, I lost that buyer. I just talked with the short sale person from Wells Fargo to get an update on what is happening with my property. Wells Fargo is requesting 76K in addition to the 55K they would receive from the sale! I am unable to afford this and was told by the Wells Fargo rep. that if my home went in to foreclosure then they could sue me for the total amount of the loan! This makes me think that Wells Fargo WANTS you to be in foreclosure, so that they can come after you for the total amount of the loan instead of settling for less. The only other option it to file bankruptcy and then none of your debtors get paid. How is this the right thing to do???

Kathleen,

You may want to have bankruptcy papers in your back pocket and ready to file at a moments notice.  Find a VERY GOOD bankruptcy lawyer who's had experience with short sales (your realtor may be able to steer you in the right direction.  This way, if WF is not working with you and has set an auction date then you will be able to delay foreclosure proceedings on your home and WF will then be more interested in negotiating with you.  This is what we did (we were 1 day away from filing and WF came thru at the very last moment - DO NOT tell them that you have bankruptcy papers ready - wait to tell them until you have actually filed but before the auction takes place - if you need to do this).  Find another buyer ASAP.  WF would rather go thru a short sale than a foreclosure - this is their way of psyching you out in my opinion.  Play Rodney Atkins Going Thru Hell song every day and stay mad - it'll help motivate you, LOL. 

I just want to know that there is ONE person out there who has good news about a wells fargo short sale. Is there?

We've always had perfect credit. Our only debt was our home. At the height of the market, in 2005, we bought with an 80/15 with a payment that was simple to make with our incomes.

I was laid off at the end of March, with a month's notification and hints for 3 months before that.  All through Q4 of 2008 I was job hunting like crazy. I was used to getting an interview within 2 days and an offer within 2 weeks. Not this time. Hundreds of resumes. Everything from low level to VP. Nothing.

I called WF March 1st to let them know what was about to happen. I explained that with a 2/3 drop in income, we wouldn't be able to continue payments unless I was able to secure a new position quickly (which seemed impossible based on the number of career opps I'd already been applying for with zero interviews). So, after some research, off to the loan mod process I went. I called every week. Nothing.

We used money from savings to make payments. We wanted to maintain our good credit.

By end of May, we had dipped into our savings enough that I began to break past the denial and realize that we really did need to sell our home.  It was appraised at $475K. We originally paid $725 and owed $625. There were so many foreclosures in our area that prices had really dropped by 35 percent.

We put our home on the market and had a ratified contract within a few weeks. We submitted the entire short sale package to Wells Fargo, both mortgage and home equity.

They did the BPO and took all the necessary steps. They said they had everything and gave us a timeline with a max of 37 business days.

For the past 3 weeks, it has been "in review."

Last week, when I logged in to my WF account, I found that I'm unable to make payments online, and I can't access other details. So, they've done SOMETHING with my account. What exactly, I don't know, but it's in some sort of workflow where I'm not a regular customer anymore.

It doesn't seem reasonable to me that they have locked out my account without communicating with me. This is the first month that we haven't paid... and that's only because they told us not to. So, we're 15 days late. We haven't received a collections call.

Meanwhile, today, WF initiated contact with us for the first time. The equity side, that is.

Equity asked our realtor for the HUD-1, showing how much the equity side would get out of the deal. (We had already provided a HUD-1 but had no way of knowing how much equity would get.)

We called Mortgage. They couldn't say how much equity would get because they were waiting for equity to "provide approval." (I forgot to mention that seven weeks ago, equity was notified that they needed to provide Mortgage with "approval" and they seemed baffled by that concept.... seems like there is some on-the-job learning going on in a few areas.) I also forgot to mention that equity told me flat-out that they would not approve our short sale because we were current on our payments. They directed me to stop paying.)

So, here we are with two groups that are both dependent on each other, with neither able to give the other group what it needs. Mortgage wants equity to give approval. Equity wants mortgage to tell them how much they'll get so that they can decide whether or not to give approval. Mortgage has no idea how much equity will get, because that decision is made by the investors.

So, the process continues. And, for the first time ever, our credit is about to drop. And, there's no communication about what we can do.

WF's reps have all been nice to me. They are patient. They sound like they're used to putting up with a lot of crap. But they can't do anything, and I'm a firm believer in things getting done when people actually communicate. I *get* that WF's negotiators can't spend time on the phone with customers because otherwise they wouldn't get their stack of 100 short sales done... but there has to be a way to get some better communications going. I just want to understand what's going on so that I can make informed decisions.

Do I keep dipping into our savings to pay the mortgage and home equity until we have nothing to live on? Do I *let the house go* toward foreclosure and see what happens? 

I did get a job offer to start next month... but it's commission-based. It will take me at least six months to ramp up that business enough to see significant income.

We'll see.

Thank you for your suggestions.

I am sure that Wells is a great company and is probably easy to work with for people who know what they're doing. I'm also guessing that they are wayyyy overloaded with cases, and that I'm in the pile along with people who have been delinquent for months, don't care about their credit and are just letting everything go.  I acknowledge that it's MY mortgage and MY responsibility to pay, and it's not wells fargo's responsibility to solve my financial problems.  I just want them to communicate with me, and I want them to communicate across groups so that I stop getting such conflicting information.

I was trying to avoid making my above post a book, but I did request a forbearance, and wells just wouldn't make it happen. They apologized that they had too much of a caseload, and they were unable to get it assigned to a negotiator at all, despite the many calls. 

I also made an appointment and spoke with a HUD-approved credit counselor 3 weeks ago (got the contact directly from the HUD web site), and she was not able to give helpful advice. Without going into a long drawn-out story, she was so nice, but she wouldn't advise me on whether or not I needed to make payments or what I needed to do. Since I was already in short sale by that point and had given up on the loan mod, I didn't even ask her about it. I didn't know.

I called Wells this morning. First I logged in as if to try to make a payment, and I got the message "you must call this number due to your account status." So, I called to see what they had to say. The guy explained that because my account was in short sale review, I couldn't make payments online. I asked him if I made my July payment (which was the first one we've ever missed), would I still qualify for the short sale. He said Yes, absolutely. I explained that the equity person initially told me we didn't qualify because we had not lates and no delinquents. He said, "i'll get a short sale person on the phone with you, and they will confirm."

I got on the phone with short sale. They said, "I can't tell you to not make your payments, but I can tell you that there's a requirement for you to be 30 days late by time you close on a short sale." I asked if there was anyone who could coordinate between mortgage and equity. She said, "no, it doesn't work that way." I said, "even though my first is with wells mortgage and my second is with wells equity, there's no one to coordinate discussions? I have the names and emails of both negotiators. Can we not all get on the phone for 5 minutes to get this answered?" She said, "no. the process is that the mortgage negotiator will tell your realtor how much they will offer equity, then your realtor will need to communicate that to equity, then equity will need to provide us with their approval. we are two separate companies, so we can't coordinate between."

If it's definitely going to be a $3K to equity, should we just put that on the HUD1 and send it to equity?

Do you have a phone number for this group that coordinates across mortgage and equity?

Thank you :)

Hello,

My short sale situation with wells fargo to this point has been a nightmare. First a little background, We're in the Minneapolis MN southern suburbs market, my wife bought our house for 235,000 FHA 30yr fixed with 5000 down in 6/2006 before we were married so I am not actually on the mortgage, my father in law is a cosigner on this loan and we have no additional loans attached the house. About 1 year after buying the house my wife lost her job and took a lower paying job. she also lost her second part time bartendeing job because her new job isn't as flexible with her hours, and has been unable to find a job to replace that income.

At this point we put our home for sale at 235,000 after about a year with no offers we lowered asking price to 219,000. In 1/2009 my father in law was laid off and was no longer able to help at all with the house payments. So we lowered the asking price to 199,000. We also stopped making payments at this time as we no longer want to stay in the house and couldn't make the payments anyways. The lower price finally netted us an offer of 165,00 on May 5th.

We began the short sale process as there was no way we could come up with the difference between what we owed and the offer. After faxing hardship letter, financial information, etc. multiple times Wells Fargo finally acknowledged they had everthing they needed in early June, they assigned a negotiator and scheduled an appraisal for 6/30. Since then the negotiator will not respond to either us or our agent.

A sheriff's sale is scheduled for Sept 17 and due to unpaid interest we now owe 239,000 on our mortgage. So we are beginning to get really nervous. Our agent has done a lot for us but he doesn't have much experience in shortsales. Any insight or advice that you could give me would be much appreciated.

Thanks in advance

You were correct, thank you... $3K was the magic number that the investor was willing to pay out to the equity side in our transaction. We were also asked to remove a few key fees that the settlement company had added to the HUD1, as the investor wasn't willing to pay that.

The number you provided, 866-970-7821, is the same number I've always been using for Wells Fargo Equity short sale. I specifically asked if they have a person who can act as liaison between mortgage and equity, and they said no. We have an equity negotiator and a mortgage negotiator. They both communicate with our realtor, who is responsible for doing the liaison work it seems.

Anyway, with time, we've seen some progress. I guess I just wasn't being patient enough. Wells is obviously way overloaded with work... they just can't get to all of the files fast enough. Our mortgage negotiator said she was just able to review our file for the first time last week (8 weeks after we submitted the ratified contract and short sale package)... this is probably a pretty good turnaround based on how many cases they are dealing with. Our equity negotiator said they would not accept the $3K and is working on a counteroffer, I believe. She said that the short sale would not be approved if all they got was $3K on a $90K equity loan balance. She said, "if that's all we get, we'll be at a standstill." She also said that I needed to make sure that the mortgage side would allow us to bring money to the table for equity... sometimes, she said, mortgage demands that any dollars provided go to them, since they have the first trust. I asked mortgage and have not yet received an answer.

QUESTIONS:

1) If we offer a chunk of money, will equity then show our loan as paid in full, with a promise of no deficiency judgment? If not, then I don't know why we would pour our life savings into making a deal if we have no ability to get a new loan and then don't have any money to live on. It's kinda like -- either take a chunk of money and let me know you'll forgive it, or go to foreclosure, right? Foreclosing is the last thing I want to do, but if it's the only alternative to losing everything, I may have to.

2) Does anyone have a guess on what amount home equity would want to see on a $90K balance?

3) It seems that on the mortgage side, the offer price is in line with their BPO, and they are going to accept it. Will they also be asking for a chunk of money? If so, does the money we give them imply that they won't go after a deficiency judgment?

Thanks!

Jenna

I just completed a short sale with WF a couple of months ago where they held both first and second. Like you, I had the same phone number and was told they do not have a mutual negotiator for the equity and first, so I had to deal with two different negotiators. The equity side had a very large balance and the first only offered $3000. They told me that is all they are allowed to offer regardless of the balance. In my case, the seller was able to come up with some funds to add to that but it was not allowed to be shown on the HUD and he had to pay the equity side prior to closing so they would release the lien.  They told me they usually look for at least 10% of the balance owed, but in this case they settled for much less.  If you don't have 10% to give them, I t

I think as long as you show that you are trying to contribute something, they will be reasonable.  Hope this helps.

Pat Comstock

Keller Williams Realty

We have asked the equity person to give us some guidance as to what we are supposed to offer, and she said, "you have to make sure that the mortgage will AGREE that we can get proceeds from you, and then make us an offer." It doesn't sound like the first trust will want to see proceeds going to equity, based on what you're saying. (understandably)

So, how do we put an offer in front of her that says, "Can we pay X amount (equal to 10%) in advance in exchange for you to consider the equity loan paid in full and waive a deficiency judgment?" Is it appropriate to just ask her that?

Do we start lower and have her come back with a counter offer, or do we just go for a little over 10%?

Thank you guys so much!

Satar

That is not the way it worked on the deal I had with them. They sent a "conditional" approval letter to title plainly stating that they had to receive the seller's contribution PRIOR to close or they would not allow us to close. My seller had to wire them the  money two days before closing to make sure it got through their maze and recorded by closing date.  I guess everything depends on who you get for a negotiator, but I pleaded our case til I was blue in the face about them being the parent company and it didn't make sense that I had to negotiate with two different people just like it was two different banks holding the mortgages. It did absolutely no good. I was told it didn't matter because they are two separate branches and they don't communicate with each other.   So I would LOVE to have the phone number you called to get one negotiator in case I get another one of these nightmares.

thanks

Pat

Satar

You are 100% correct. The reason they would not settle on my deal was because they had copies of bank statements and the seller had a little bit of a cushion to live on - not much, but he wasn't entirely broke..... that is why they took a hard line, I guess. They didn't care if he could support his family - they were only interested in getting every dime they could.  I had no problem with the 1st mtg - in fact, the next WF short sale I get, I will request that negotiator because he was extremely helpful. It was the 2nd that gave us fits.

If you get that number, please pass it on to me.

Thank you!

Jeanna,

We successfully completed a SS with WF about 2 years ago.  We also had a 1st and 2nd with WF.  We also put a chunk of change down to close the sale.  Between the buyers offer and our additional funds we met the BPO price (which was almost 60% LESS than what WF appraised our property for just 5 years before).  If the amount you offer goes over the BPO WF DOES NOT consider it a short sale and it will be rejected.  We were also told that we had to be late on our payments for WF to consider a SS (yes, you have to be late for Wells to consider a SS - I've said that a number of times on this blog.)

It took us over 4 months for WF to complete the SS.  Negotiating the equity payoff was the final hurdle and there was no coordinated communication between them.  But, look at it this way - equity will most likely take anything that is given to them.  They'll put up a struggle to get more; however, if the home goes into foreclosure they get nothing.  In our case they were able to get 10%, like Pat said.  They have internal rules that dictate the negotiation process goes up the chain of command for final approval, which is what caused the delay in our equity approval and I'm guessing yours.  I believe that the rule was that if the payoff was less than 10% or the 2nd was over $50,000 then automatic approval was denied and it had to be approved at the next level.

I would not make another payment to WF.  I would hold that cash in case you need it to assist for closing.  If you need to know where to bin that on the HUD I can get that information for you.  Ours was binned for the 10% payoff, which was over $3000.00 and it showed that on the HUD.  Our negotiator insisted that the full BPO had to come from the buyer with no contribution from us; however, I asked to speak to her supervisor and he quickly found where to bin our contribution on the hud.  We were just 3 days away from the sheriffs auction with Bankruptcy papers ready to file.  

The final papers that we received from WF cleared us from owing any more to them - they cancelled (forgave) our debt on both the primary and equity (we also lived in a deficiency state).  Offering a chunk of money didn't seem to make a difference wrt WF pursuing us for more.  We told WF that we wouldn't be doing a SS if we could pay them more and they backed off.  Also, I have been to chicken to check our credit; however, we are getting many CC offers (which get tossed) so apparently the damage wasn't too bad.  I'm waiting for the 2 year mark before I'm brave enough to check our credit rating.

IMO - WF is HORRIBLE to work with - nuff said there cause I could write a book.  

Finally, if your total offer meets the BPO then I would let the 1st and 2nd hash it out for a while.  If the 2nd comes back and deny's it THEN try to make a 10% payoff offer with the 2nd that is separate from the SS.  That was going to be our next strategy; however, the 2nd approved ours.  I'm going to predict that they'll approve yours too if you're at or very close to the BPO.  Good luck and keep us posted - I have a feeling you're going to get approval.  Then closing will be your final hurdle - we were fortunate to have a solid buyer.  After it's all done, go out and celebrate!!!

Wow, i have one for you. Wells Fargo is the second lien position. The first has offered 5k which they now say they can work with that, buuuut, only if the seller will work with their recovery department on the "short fall" if the seller does not choose to work with recovery there is nothing more they can do with the file. Who in the world would agree to something like that on a short sale that the seller no longer even lives in the home? 

That is Wells Fargo for you.  

Here's an idea for all the homeowners going through this process, IT'S YOUR FAULT NOT WELLS FARGO!! YOU ARE LIVING OUTSIDE OF YOUR MEANS AND YOU NEED TO REALIZE THIS!! BEGGERS CAN'T BE CHOOSERS!! PEOPLE THINK THAT JUST BECAUSE THEY ARE FUCKING IDIOTS IT'S WELLS FARGO'S FAULT! IT'S NOT, IT'S YOURS!  NOT TO MENTION THE TRASH OF SOCIETY CONTINUES TRYING TO WORK THE SYSTEM WHICH TAKES TIME AWAY FROM THE PEOPLE THAT ACTUALLY NEED HELP!!!!!!!! HERE'S ANOTHER GREAT IDEA, STOP LIEING ABOUT YOUR FINANCIAL INFORMATION, WHEN YOU SAY YOU SPEND 600$ A MONTH ON FOOD FOR 2 PEOPLE YOU ARE OUT OF YOUR FUCKING MIND!!   SO TO ALL THE HOMEOWNERS THAT ACTUALLY NEED HELP, IT'S THESE COCK SUCKING PIECES OF SHIT ON THIS BLOG THAT TAKE THAT TIME FROM YOU!!

Im not going to lie.. I actually kind of see that ahahahah guy's point...... Beggers can't be choosers... Some people need to realize they are living outside of their means and need to make a serious change before they end up in a card board box.

I am a Realtor and just closed on a short sale.  I had to deal not with one, but with two lenders since the seller had two loans.  If I ever worked for my commission this was it, so in response to whoever said that we should take a lower commission, my answer is, au contraire, it should be higher.  In order to talk to one of the loss mitigation reps, I had to wait on the phone, without exaggeration, for hours.  And when finally someone answered the phone, the first thing I heard was "can you hold"?  The two lenders do not communicate with each other.  The first lien holder really dictates the terms, even how much the second lien holder can get.  Of course, the second one wants more than what is allowed by the first and the Relator has to be in between and please everybody.  A regular sale transaction takes a lot less time and work, so why should a more complicated one be paid less?

As far as the seller goes, he really has no say in it whatsoever even though he has to sign the contract.  My seller was happy and grateful that I was able to get him out of a terrible financial situation, he didn't care how much the property sold for, he just wanted out.

AHAHAHA - you're a real sweetheart.......  

So, it's MY FAULT that my home devalued over 46% (NOT a typo) in just 5 years and we were forced to go thru a short sale because our home was now worth less than our mortgage even though we only financed 80% of it's appraised value?  This is MY Fault?!?!?  I'm a BEGGER?!?!?!  I'm the TRASH OF SOCIETY?!?!?  I didn't actually NEED HELP?!?!?  I LIED ABOUT MY FINANCIAL SITUATION?!?!?  

Gosh $600.00 a month for groceries for 2 people sounds reasonable to me - that's only $10.00 a day.  

I'm so sorry that you're so angry about things and really hope that you NEVER NEVER EVER have to go thru a short sale or foreclosure situation in your life - ever.  I mean that sincerely because it's sheer hell when you have people such as yourself trying to tell you that you are a POS and that it's all your fault - not to mention the way that you are treated by the mortgage company(s) who seem more like they want to foreclose on you than to work with you.  

Even the mortgage companies are walking away from properties that they were supposed to foreclose on now.  Gosh - I'll bet if they would have worked harder with the people to keep their house we would not now have a bunch of abandoned bank owned properties that the cities are now dealing with because they're turning into drug houses, etc.

Amiri, I know - he's just being bigoted and ignorant.

This site is here to help give advise to people who are faced with a short sale situations to avoid foreclosure - not to throw blame around. Let's keep it at that.  Amiri's right - this is a multi-facetted situation that we're faced in our housing market today in America.  I hope we learn from it and change the way that we do business to avoid this happening again in the future.  Finger pointing and name calling accomplishes nothing.

Neighbors: Exec. moved into bank-owned beach home

Neighbors: Wells Fargo exec. moved into beach home surrendered to bank by Madoff-duped couple

http://finance.yahoo.com/news/Neighbors-Exec-moved-into-apf-818362254.html?x=0&sec=topStories&pos=5&asset=&ccode=

Neighbors: Exec. moved into bank-owned beach home

Neighbors: Wells Fargo exec. moved into beach home surrendered to bank by Madoff-duped couple

http://finance.yahoo.com/news/Neighbors-Exec-moved-into-apf-818362254.html?x=0&sec=topStories&pos=5&asset=&ccode=