This post is via Ken Crotts a Certified Short Sale Specialist. IF you were not in the Real Estate bussiness or market you would think this is an episode from Laurel & Hardy "who is on first?"
I am in a shortsale transaction with an Attorney, who has been pre-paid by the seller. So let's see how many months has it been since May? It is not fair to anyone, buyers,sellers, agents nor tax payers.
We are currently in the process of completing a short sale with one of the lending industries giants, Wells Fargo. This is a tale of the beauricratic morass that gives rise to the to the question, "Too big to fail or too big to succeed?".
Take a nice one story house in a well known neighborhood that is up side down on the mortgage. The seller can no longer afford to make the payments on the property through a series of events and you are left with a short sale. This one seems to be the perfect candidate for working out a short sale transaction as the first and second mortgage are both with Wells Fargo Bank, reputedly one of the better lenders to deal with. I take the listing and over a reasonable period of time we are able to secure and offer ont he property that represents fair market value. So far so good.
The offer is signed and presented to Wells Fargo along with a complete short sale application and the file eventually moves through the gate keepers and onto a negotiator for both the first and second mortgages. So far so good.
The loan is Freddie Mac backed to their rules state the Wells Fargo 1st can only allow the Wells Fargo 2nd to get $3,000. This is Fredie Mac's rule. The Wells Fargo 1st offers to approve the deal if Wells Fargo 2nd will sign off. The negotiator for Wells Fargo 1st mortgage admits he is in communication Wells Fargo 2nd mortgage so we are thinking it will work out. Wrong! Wells Fargo 2nd mortgage wants more money. OK... If we come up with more money Wells Fargo 1st will insist on taking a note for 200% of what we come up with for the Wells Fargo 2nd. If we don't come up with the extra money Wells Fargo 2nd will not sign off. The seller is broke, Wells Fargo 2nd is demanding more cash... where's it coming from?
Welcome to short sales!!! Is it any wonder that Freddie Mac is losing billions? When Wells Fargo won't accept a deal proposed by Wells Fargo and then Wells Fargo insists more money in cash from unspecified sources? How much is Wells Fargo paying these people to chase their tales anyway?
When Wells Fargo can't work out a deal with Wells Fargo who are we to think we can? The losers in this kindergarden match? Freddie Mac (your tax dollars and mine), the seller, the buyer, Wells Fargo, the reputaion of the banking industry and pretty much everyone else. Nice going Wells Fargo!