Two Words A Short Sale Agent Never Wants To Hear.....SERVICE RELEASED!

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

tutas towne realty

So you have been working for several months negotiating a Short Sale. The junior liens have been sorted out and the Seller is receiving $12,000 from the lender as an incentive.

You spoke to the negotiator at the Servicer/lender yesterday and they stated the Short Sale was approved and you should have the approval letter in the next 48 hours.

Being the experienced Short Sale Agent that you are you contact your Sellers to give them the good news. They start crying on the phone they are so relieved to hear their ordeal may be close to being over. The $12,000 incentive will be used to move and pay some HOA fees that the lender won’t cover.

Then you send a quick email to the Buyer’s Agent giving them the same info and asking that the Buyer start moving forward with their financing so they are ready to move towards closing as soon as the written approval is received in a couple of days.


Another Short Sale success story. Almost. The following day you log into your email and this is in your inbox:


IMPORTANT MESSAGE ABOUT YOUR LOAN

We have received your request to complete a short sale on your property. We are sorry to inform you that we are unable to approve your request for the reason provided below:

  • DECLINE-SERVICE RELEASED.

Oh. No. Say It Ain’t So!!! What now?

Serviced Release loans are causing quite the problem in the Short Sale world.  The loan can be Serviced Released at any point prior to the transaction closing. And in most cases you will have to start the Short Sale over with the new Servicer.

Plus the new Servicer may or may not offer an incentive to the Seller.  This can be devastating to a Seller who really needs money to be able to move.

We as agents have ZERO control over if and when a loan will be serviced release.

So what can we do? Discuss this possibility with the Seller at time of listing. Be sure they completely understand that everything related to their Short Sale can change up until the transaction is not only closed but the Short Sale lender has accepted the closing documents and funds.

Based on conversations I have had with the lenders about this they usually know 30-60 days out if the loan is being Serviced Released. Be sure to ask your negotiator every time you call if they can check this for you.

The Lender may have the ability to keep a loan from being Service Released where the approval has already been received. But you have to stay on top of it. Escalate if needed BEFORE the loan is Service Released.

A Service Release can be initiated by the Investor or the Servicer/lender. Both may benefit financially.

This is just another in a long line of issues that can derail a Short Sale. Please be sure your customer/client is made aware of this possible issue very early in the process. That’s really all we can do.

What say you?

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 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Rainmaker
4,431,972
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thanks for sharing the information. I will bookmark this post and share it with others.

Dec 07, 2012 10:16 PM #1
Rainmaker
1,142,035
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

HI GITA. I hope you are doing well. Always appreciated when you stop by and comment. You seem to be first most of the time. THANKS!!

Dec 07, 2012 10:31 PM #2
Rainmaker
1,781,948
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

Great info Bryant and i have not run across this at all so now it will be on my radar...thanks!

Dec 07, 2012 10:46 PM #3
Rainmaker
1,505,609
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

Interesting information. That is something I was unaware of but then I do few short sales. Thanks, as usual!

Dec 08, 2012 05:32 AM #4
Ambassador
1,229,581
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

My favorite part is when they service release after or at the exact moment when you are about to get the approval letter. All that stress on my heart has kept me heart healthy ;-)

Dec 08, 2012 12:22 PM #5
Rainmaker
724,930
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Bryant,

Have not heard about this "service release", studying this tonight.

Dec 08, 2012 12:29 PM #6
Rainmaker
1,057,202
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Bryant, this is important information for all buyers who are considering a short sale. Thank you for educating all of us!

Dec 08, 2012 01:16 PM #7
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Rainmaker
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Bryant Tutas

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