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Big Banks aren't always the reason for Short Sale Delays

By Chris Coley

Title Insurance with North American Title Company

December 02, 2009 06:41 AM

I received a call from a Realtor yesterday asking me why Wells Fargo is so slow in approving his short sale contract. It had been over 5 weeks and he still had not received an approval on his offer yet.

After hearing his story, I did some checking on the loan that they were asking for a short sale on.

Turns out, it was a FNMA insured loan, with mortgage insurance. I let the Realtor know that Wells Fargo may have already approved the short sale offer, but may be waiting on not only FNMA to approve it, but maybe needing an approval from the Mortgage Insurance company as well.

It's difficult to tell how long FNMA is taking to approve these short sales and even more difficult to find out how long the Mortgage Insurance Company is taking, let alone who the Mortgage Insurance Company is.

Bottom line, be aware it may take longer when there is mortgage insurance on the loan to get your short sale approval.

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Rob Proctor

At Home Real Estate Company - Loveland, CO

GRI ePro

Thanks Chris...I did not know that. I aways thought it was the lender. Good info.

Dec 02, 2009 07:00 AM

Jon Rudolph

Inspections By Referral - Loveland, CO

ACI

CHris, Good to know. I have about 1 short sale inspection request a week that ends up delayed for weeks or more. The buyer, Realotr and myself just assumed it was some lender sitting on the offer.

Do you know if it's possible to know if a home's loan was insured?

Thanks!

Dec 02, 2009 11:56 PM

J. Philip Faranda

Howard Hanna Rand Realty - Yorktown Heights, NY

Associate Broker / Office Manager

Yes, it is the"investor" who actually approves the short sale. Otherwise known as the man behind the curtain we aren't supposed to notice.

Problem is, the "investor" has no problems with a #$%^&* foreclosure. So why would they have a problem with a (*&^% short sale?

Bottom line: it is just an excuse.

The "Investor" doesn't scrutinize every loan they buy before they buy it, it just has to conform to be added to the bundle. It should be the same with short sales- they should conform to a standard to be approved, period.

It is just another straw man argument to justify the fact that the banks find it galling to hire more people to meet the demand on something that doesn't line their pockets.

Dec 03, 2009 12:04 AM

Big Banks aren't always the reason for Short Sale Delays

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