Short Sale Blues

Talk about frustrating...

We've been working with a Seller who has been behind on his payments. Unfortunately, he Listed with us late in the game, so to speak, already having tried to sell on his own (unsuccessfully), and long since having received a notice of Foreclosure. But we told him we'd give it our best shot in an effort to help him avoid being Foreclosed.

We managed to get an Offer on his property and began immediately to try and obtain Short Sale approval. But if you haven't been through the process before, rest assured that it's not as easy as picking up the phone one time and getting cleared. One Agent told me recently, "Why do they call it short? It's anything but short."

Complicating this was the delay we encountered in getting verification of the Seller's income, a critical Document Lenders must have.

Around mid-day today, one day before our Seller's Foreclosure date, we received the final needed Document.  We quickly submitted all the paperwork to the Lender, along with a copy of the Sales Contract (we had to wait until all the documentation was in before we could submit it). Our Seller called the Lender twice to tell them that a Contract is in hand and to ask that his Foreclosure be delayed until they at least take the time to look at the Offer.

But guess what?

The Lender (one of those really big names everyone knows) is so big and bureaucratic that just getting the paperwork actually entered into their system takes--ready for this?--seven to ten days after they receive it. The Lender, we were told, outsources their incoming paperwork flow to another company to process.

So, you could FAX everything in as needed on, say, the first of the month (e-mail?  no way...has to be FAXed), and if you call about it eight or nine days later, there's a good chance the Lender will tell you that they have no record of it. That's what the Seller we're working with was told when he called today to make his final plea. Without a Contract, there is absolutely nothing we can do for you, the Lender told our Seller.

How's that for efficient?

Unless something totally unforseen happens, our Seller will lose his property tomorrow, despite the fact that we procured a Buyer.

Who knows ... maybe, in another week or ten days, the Lender will run a cross a copy of the Sales Contract.

I can see it now: "Hmm.  Hey Fred, look at this.  Looks like a Contract to buy one of our properties.  Say, didn't we already Foreclose that one?  I wonder how long it's been sitting here?  Oh well..."

Who wins when it ends up like this?

David