What I learned about short sales in Los Angeles thanks to Wells Fargo was important in today's market. Yesterday I attended a program from Wells Fargo and everyone who was trying to do a loan modification was there. The representatives of the company came from all over the United States. There were more than 100 booths working with homeowners for three days. This lasted from in the morning to late at night. Unfortunately, that included me. I own a property in Arizona that I paid $520,000 for that now is worth, as much as, $180,000. I had the opportunity to talk to someone face to face. Since I know that this property will be a short sale because of all the equity lost, I learned who makes the decisions about the prices and who will gives the final okay.
It really shows that Wells Fargo is ahead of the others in trying to get things accomplished. What people don't realize is that, in many cases, Wells Fargo is the servicer (company handling the loan) and not the owner of the loan (investors), so they can only go by the requirements given to them. Many of the investors are other banks, Fannie Mae, Freddie Mac, Lehman Bros, etc. They will make the final decision on a short sale.
What does this mean to the homeowner? It puts the decision on whether you can get a loan modification, or short sale, into the hands of the investor. Wells Fargo has to go by the guidelines set by the investors if they own the loan. If Wells Fargo owns the loan they have their own guidelines that they use. Some owners of the loans are very strict and don't budge even though Wells Fargo thinks it is for the best.
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