Short Sale loan being sold!!

Real Estate Agent with Realty Executives Platinum

I have been working on a short sale in Palmdale for a very nice couple who suffered some major health issues in the past few months and are no longer able to afford their home.  Up until today I have been very happy with the mortgage servicer as they have been prompt on returning calls, had an appraiser sent to the property within 3 days of my listing, and would frequently call me to see how things were going with the sale.  

Earlier this week I got an offer on the property. When I spoke to the servicer to tell them I had received an offer but was still negotiating price with the buyer they told me that they were missing a few things from  the seller.  I called the servicer back today to ask if they could send the missing needed paperwork directly to me so that I could have the sellers complete it and return it with my package with the offer we received.

When servicer answered they told me that the loan had been sold off, and by the end of the month I would know who the new mortgagor would be.  They told me to hold on to the offer and submit it to the new owner of the note.  This is the first time I have had this happen in the middle of a short sale - has anyone else experienced this? If you have had this happen before has it been better or worse for getting a short sale accepted.

My hope is that since the loan was probably sold off as a package deal and a huge discount was probably given that they may be more willing to negotiate a better deal.  Any thoughts, comments or suggestions??

Comments (15)

William Johnson
Retired - La Jolla, CA
WOW, That is not good news. In my opinion, they will be less motivated, wouldn't you think. The discount would be meaningful in the very short run, so they would be on the hook. Just my guess. No, I never have heard of that happening but it would be logical to assume it probably has happened before.
Jul 05, 2007 06:53 PM
Sandra Williams
Rancon Real Estate - Temecula, CA
What a hard deal! I really don't understand the thinking of banks. By the time all of this is done, I wonder what the banks will be selling the homes for?
Jul 05, 2007 07:12 PM
Donna Oehler
Realty Executives Platinum - Palmdale, CA
A.V. Foreclosure Specialist

This deal seemed to be going so nice and smooth. I was actually starting to believe that the banks were getting with the program -I guess it was just wishful thinking.  The one thing that I can say about short sales is at least they are not boring!

Jul 05, 2007 07:54 PM
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
All you can do is hope that they were not sold to an investment group as a bulk nonperforming package. They can be a joy (read as PITB) to work with.
Jul 05, 2007 10:10 PM
Paul Moye
Benchmark Realty - Franklin, TN
Broker, GRI, SRES
Let me try to help you out here. I have a 1st mortgage that is not being paid and stand to lose $10k. You have a 2nd mortgage in California and stand to lose $20k. I am in first position in California so we agree to split our losses. See last month I wa in the losing position and you save me a $10k loss. See asset and portfolio managers look at revenue losses in an national scope not a neighborhood or regional scope 
Jul 06, 2007 01:03 AM
John Occhi
Excellence in Real Estate Tm @ Allison James Estates & Homes - San Jacinto, CA
ePRO, Five Star Certified, Riverside Cnty REO Expert, 951.443.6259
It is a strange situation and no I have never heard of it before - but I can bet that we are going to see a lot that we have never seen before in the next 6 months to a year.  The market is literally changing before our very eyes as we blog away - and we are a part of that change.

Hoping to make your California Real Estate Investment...
A Pleasant and Profitable Experience,

John Occhi, Hemet CA REALTOR 
Realtor Consultant to Foreclosure Investors
Mission Grove Realty

Jul 16, 2007 04:20 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Hi Donna,

Everybody is guessing. That's all anybody can do. My guess is that this "buys" you some time if you need it. Most loans are sold as a package and are sold with recourse. What you are probably dealing with is one part of the servicing company arranging the sale of the package of loans to another servicer but the actual loan belongs to somebody else. It may be that the "sale" was nothing more than transfering the non-performing loan back to the actual owner. In any event your situation vis-a-vis the bank's loss mitigation department hasn't changed.

Your first step is to find out who you should be dealing with and go straight to them. Your title company should be able to help you find the right person and their phone number. Title companies deal with short sales a lot more than any of us. They have probably been involved with the new servicer before. Don't wait to hear from them. Let the title company help you.

Bill Roberts

Jul 17, 2007 03:11 AM
John Occhi
AZ Veteran Notary Services - Marana, AZ
Mobile Notary Public/Certified Loan Signing Agent

Bill Roberts - Good advice - I knew you would have some insigt into this situation.


Jul 17, 2007 03:31 AM
Matt Dunshie
RealtyONE Group - Queen Creek, AZ
Realtor - Matt Dunshie & Associates

did the loan get sold back to the bank that originated it?

I have a similar short that is finally getting ready to close this week. The 1st mortgage was sold right in the middle of the process. infact that bank had already completed its vpo and we were nearing an aceptance. The next time I called the bank for an update they said the loan was paid off, then sold.

after contacting the new bank, I found out many loans have additional riders built into them stating that in the event of a default (or any breach) the originating bank must buy the loan back.


This was actually a blessing on this transaction. The new bank stepped up and helped get this sale done.


Aug 08, 2007 07:23 PM
Heather Fitzgerald
REALTY WORLD-Harbert Company, Inc. - Greenwood, IN
REALTOR Greenwood Indiana Real Estate
I just had a short sale transfer their servicing, within a week of receiving an offer.  The new lender seems on top of it, I am keeping my fingers crossed.
Jan 30, 2008 07:10 AM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"


Yes, I had Countrywide sell their second to the PMI company during negotiations, and not disclose it to me for almost three months- while still negotiating on the first.  See my post: 

Feb 01, 2008 04:19 AM
Clark Garrison
Taylor 1 INC - Atlanta, GA
"Loan Modifications"
Bill gives excellent advise on what your up against. Yes, this happens more and more as of late. Make sure you let the client know that they'll be getting a letter advising them that their loan has been sold to another lender. You'll need the new loan number to submit with your LOA (letter of Authorization) to the new lien holder. The bad news is you'll have to start all over and there's no guarantee this lender will be any easier than the previous. It's a crap shoot, however you do have more time to find potential buyers and gather more evidence to support the offers you'll be giving. Good luck
Feb 01, 2008 06:58 AM
Susie Genet
Chinowth & Cohen Realtors - Tulsa, OK
Donna, I had the same thing happen.  I just had to start all over again with the new lender--it just delayed the process again by another month.  Very frustrating, but we worked through it!
Feb 21, 2008 12:08 AM
Gina Kay Landis
Home Experts Realty - Dayton, OH
I had a second be sold a month prior to the offer being written (then of course it took for freaking EVER to get the bank to accept). Be sure to check county records to see if the transfer was recorded - must be, prior to closing, or else a payoff from the new company won't mean diddly...
Feb 29, 2008 10:05 AM
Barbara C

I am confused about when a sale of a loan needs to be recorded. In my case all that is at the recorders office is the initial loan document; there is no record of it being sold to Deutsche Bank, which is something I have learned verbally but have never seen in writing. I understand that if the loan was sold into the MERS system, it could be sliced and diced and re-sold, etc., and as long as it is in MERS it doesn't have to be re-recorded. But if it is NOT in MERS, then what? Anyone know?

Apr 13, 2010 02:33 AM