Wells Fargo short sale process and Changes for 2012-2013
In an attempt to continually refine the short sale process Wells Fargo has recently made some changes to it's short sale process to help the homeowner and real estate agent get through a more fluid short sale process. I recently sat down with the national short sale manager and VP of short sales for Wells Fargo who let us video interview him and let us record a webinar training which can be viewed up at www.shortsalecampus.com. Below is what he covered and what we learned:
Wells Fargo has adopted the recent HAFA guideline changes (Home Affordable Foreclosure Alternative) for the benefit of the consumer and real estate agent which include:
• $3000 relocation assistance to the seller at closing
• Increased payment to the second lien holder or lien holders of $8500 or 10%, whichever is less
• Streamlined process and timeline
• Full relief of deficiency balance
All Wells Fargo loans, unless they are FHA or VA backed (meaning FHA or VA are the actual investor on the loan), are now automatically reviewed for HAFA eligibility.
Wells Fargo’s short sale process now follows these steps below:
1. Homeowner initiation: This is where the homeowner is reviewed and given all possible retention options.
2. Set up: This is where the homeowner is reviewed for either a HAFA or a Proprietary short sale
3. Processor: Process person is assigned to collect all short sale documents to prepare the file for the negotiator.
4. Negotiator: Reviews the file and renders the decision and terms
5. Closer: A closer is assigned and follows the file until the property goes to closing
6. Settlement: Funds are disbursed and the file is closed out.
Under the new servicer guidelines outlined by FHFA (Federal Housing Finance Agency) on November 1st of this year all servicers, including Wells Fargo, are required to review and respond to all short sale requests within 30 days of receiving a complete short sale package. The servicer is also required to give weekly status updates on the file to the borrower and agent working the file. The servicer is also required to render a final decision within 60 days of short sale application.
If the short sale does not qualify for HAFA, and is not an FHA or VA backed mortgage, the process is the same but there may be less of a chance for relocation money; and if the loan is Freddie or Fannie backed the cap to a second lien holder is $6000. Under these new guidelines the timeline will be much shorter and gives the homeowner more incentive to participate.
For both processes you will need the following, at a minimum, to get started with a Wells Fargo short sale:
1. Hardship letter: Signed and dated within 60 days of the short sale application explaining why they are unable to pay the mortgage
2. Financial worksheet: Financial worksheet listing all monthly expenses, signed and dated within the last 60 days
3. Proof of income: Two most recent paystubs and last two years tax returns, signed and dated by homeowner
4. Authorized third party letter: Letter that authorizes a third party(real estate agent) to access information on the account
5. Real estate agent docs: Fully executed listing agreement
These are just the documents you need to get started, please note there will be more required as the process progresses. If you would like more information on this interview or to view it, check out www.shortsalecampus.com or if you would like help on a short sale check out my personal website www.moorebrittingham.com and contact me there. Stay tuned for more Wells Fargo and other servicer updates.