Short Sale Frustration in California, Short Sale Northern CA Specialisit
Short Sale Frustration in California
This week has been wrought with short sale frustrations on a national level. It is even more frustrating in California. Short Sale Sellers in Tracy and Mountain House listen up.
In the past few weeks we've seen the following:
Wells Fargo and Wachovia stop granting extensions on short sales under most circumstances. Why does this cause frustration? Frequently a short sale seller has been waiting weeks if not months for the bank to respond to their short sale request. Finally an approval is given, however, the time line to close the short sale is too short. The home forecloses because an extension was NOT given. Yes even IF the home is in escrow.
Next we saw the Governor of California NOT SIGN SB 1178 that would make there be no
recourse on a loan made on the primary residence of a person living in CA. California is a no-recourse state only on purchase money loans. If you ever refinanced your loan, even if you refinanced only to lower the interest rate, the loan NOW becomes a recourse loan. This is HORRIBLE for short sale sellers. The Governor stated that he did not want to interfere with "the loan contract". OH PLEASE! So now short sale sellers really are in an "IF" position. There is no guarantee that the lender will or will not seek a deficiency judgement when a short sale is approved.
Last, and most recently, Fannie and Freddie instruct servicers (Wells Fargo, Bank of America, JP Morgan, Chase) have postponed foreclosures in 23 states, but NOT California. Again this has to do with whether a foreclosure is a judicial foreclosure. California is not a judicial foreclosure, a judge does not issue a judgement for the property to foreclose. Instead California a trustee state, the property goes to sale at a Trustee Sale.
If there is a silver lining..... short sales are being approved at a faster rate than 3 years ago.
Comments(9)