Another Loan Modification Dooms Seller to Foreclosure Unnecessarily

Real Estate Agent with Keller Williams Realty Louisville East (502) 664-7827

Lender turns down loan modification and refuses to postpone the foreclosure auction to allow for a short sale. The lender hurts themselves and the seller who acted responsibly.

The seller contacted me many months ago to learn about the short sale option to avoid foreclosure. The lender, however, enticed him into a applying for loan modification.

Loan Modification Denied. No Time To Do A Short Sale.

Recently the seller contacted me that he was turned down for the loan modification, and asked that I start the short sale process, which I did. Shortly thereafter, the seller was given a notice that his house is scheduled to be sold at auction. The foreclosure process is very fast in Mt. Washington, KY.

We contacted his lender to have the house withdrawn from the auction so we can complete the short sale. The lender refused to withdraw, citing “company policy”.

Another house thrown off the foreclosure cliff, even though the seller acted diligently and responsibly.

The seller was also considering bankruptcy, depending on the outcome of the short sale.

This could have been avoided.

  • Instead, another foreclosure will weigh down the market.
  • Instead, another hard working American will file bankruptcy.
  • Instead, another hard working American will be shut out of qualifying for a loan for years.
  • Instead, the lender or their investor will probably incur more losses than they would have in a short sale.
Posted by



Dave Halpern, Realtor

The Dave Halpern Real Estate Group

Keller Williams Realty Louisville East


(502) 664-7827



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Comments (7)

Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Dave, I don't get why lenders/investors would not allow a short sale! I'd venture to ask who the lender is, but, from what I understand the process is supposed to be: loan mod denied, opportunity to other alternatives other than foreclosure. Short sale first, if fails, then deed-in-lieu. This information I got from the CEO's office of Bank of America (my opinion of them is chanigng somewhat).

Mar 08, 2011 04:29 AM
Mark Lomas
Santa Barbara Real Estate - Santa Barbara, CA
Experience You Can Count On!

Great post, keep the pressure on the banks, more Active Rain members could benefit the process by criticizing the banks also. The big banks have a ton of money, but will not play fair. The more we focus on their behavior the soon we can turn things around. Keep up the good fight!

Mark Danforth Lomas

Mar 08, 2011 04:36 AM
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Pamela, very astute comment. It is not Bank of America. We have another 13 days to auction. We are working on getting from the seller the exact timelines of the loan mod denial as grounds for appeal of refusal to postpone the auction.

Mar 08, 2011 04:41 AM
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert


We are helping the banks and their investors, also. Too often they consider us adversaries.

Mar 08, 2011 04:43 AM
Charita Cadenhead
eXp Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

And the banks did this all for the sake of what?

Mar 09, 2011 10:23 PM
Todd Clark
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

I hear this all the time and the owners are very frustrated and feel the banks did this on purpose. What is worse is a lot of those owners are the ones leaving these foreclosures looking like they have been destroyed and nothing left in the house.

Mar 10, 2011 10:28 PM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Are these the same lenders who were bailed out by taxpayers they are now in the process of destroying ?

Mar 14, 2011 01:16 PM