Venting...

After weeks of waiting for word from Downey Savings for approval for a short sale, I got my answer yesterday.

Private investor

Downey Savings won't approve any short sales. The only way they would approve a short sale is if they received the full payoff --- which, in that case, won't be a short sale.

I made it crystal clear that my sellers are in no position to pay off the full amount owed or sell at price they owed and still pay commissions out of their pocket. And that if they can't sell, then the only remaining avenue is a foreclosure and/or bankruptcy.

Foreclosure is the Downey Savings' only solution

The asset manager from Downey Savings confirmed that regardless of how hard I try to sell the property, unless the Downey is paid the whole amount, they would rather foreclose in November.

So this might as well be an REO in waiting. 

Is Downey Savings the next IndyMac? Some bloggers seem to think so.  Mr Mortgage says, "Downey Savings is widely rumored to be the next ‘IndyMac' due to their heavy Pay Option ARM exposure." See his blog here headlined "Downey Savings Paid Borkers up to $50K Commission on Each Loan!"

Time and effort wasted

Time and again, lenders refuse to speak to the authorized representative unless the package is complete --- i.e., letter of authorization, pre-HUD statement, copy of the offer, hardship letter, financial statement of assets/liabilities, copies of 2 most recent pay stubs/income tax returns/bank statements, report on marketing activity, copy of listing agreement.

So I spent a lot of time preparing the house, marketing it for sale, getting a buyer, preparing a complete package to send off for the lender's review.

But now, they're telling me Downey Savings won't approve the short sale? Couldn't they have told me that from the very begining when I made contact to tell them I am authorized to talk with them about the loan before I started marketing the property?

AAARRRGGGGH!