Help.  I admit I am pretty new to this, however...from everything I have been learning you can't do both!  One of my sellers who had decided they really wanted to move, due to a job change and the long commute now has now decided they want to do a loan modification.  I already faxed in all the short sale information to their bank based on his job situation etc.  And originaly they had said they'd walk away from the house if we didn't sell it didn't sell.  They stopped making house payments about 2.5 months ago.  Now the bank has contacted them with a loan modification package.  So of course, they filled it out & sent it in without even talking to me 1st!  Now what?  BTW, the seller says he'd love to still move if we get an offer on the house.  I don't know what to about all this...thoughts? 

Views: 210

Reply to This

Replies to This Discussion

People change their minds all the time. They are still behind on the payments, right? Most people DO NOT get approval for the modification. They still want to move, their credit has been damaged. If they sell, where are they going to move to? Rent is one of the only ways out. Lots of things they need to address. You need to talk with them and discuss all of the things that are going on. They most likely are going to move and you can be a positive part of that. Keep going forward you will learn a lot.
Jonathan
My short seller recently got a loan modification package from their lender. The homeowner wanted me to call the lender to see what was going on. The lender said there was some "confusion" and that if they are trying to short sale then they don't need the loan mod package. Everyone is confused- the lender and the homeowner. Your seller needs to decide which one he wants- loan mod or short sale- not both. Do they have notice of defaults in your state? Has the homeowner got one yet? If not, he may still have some time to try for the loan mod. But, that means that you're going to have to keep in contact with him and see if he gets denied. That process could take some time. I'm not an expert but I think you need to let him know that he may try for a loan mod and if he gets to the point where the lender wants him to make trial payments that he will have to do so for a few months and that does not guarantee that he will be approved either. He also needs to decide on whether he really wants to try to keep the house or short sale and start fresh.
So maybe I'm doing it all wrong, but I've had several short sales where they were still attempting to do a loan modification. As Jonathan said many of the loan modifications don't work -- either they aren't approved or those that are will be back in default with in 6 months of the modification.

So I'll take the listing and work my price "structure" such that they have two weeks to make the decision.

The key is that they HAVE TO MAKE the decision before agreeing to accept a purchase contract. That becomes a legally-binding contract, of course pending lender approval, and could be broken if the loan modification works out. But I think that is "dirty pool" unless of course it is advertised to the buyers that this is happening.
I just had a buyer who was a week or so away from closing on a short sale. For complicated and in my opinion stupid reasons the seller suddenly decided to negotiate with the bank to catch up on her existing loan and not sell. My understanding is since the bank had not signed off on the loan the buyer has no recourse in this situation. In our area there are several addendums to sign regarding the possiblities that short sale will not be accepted, etc as well as the banks own paper work were all signed by buyer and seller. The bank had approved the short sale but we were waiting for final approval from the investors.
Am I correct the buyer is up the creek (and in this case loses her $8000 tax credit!)
The lender doing the loan mod is in a completely different department than the short sale. They do not talk. About 5% are successful in getting the loan modified.

There are a lot of things going on here. As Sara said, do they want the property? If no then review the process of the short sale not the loan mod and see if you can get started on that.

As Toby said if they accept an offer there is still a long time before the lender may accept it. Most likely they will counter with something and then it comes back to the buyer to accept that and the seller also has to accept it. If either does not accept the contract is void. There are always ways out if things change and the seller decides not to agree to the sale.

If it was my client and they understand what a short sale is and the process I would continue the listing and see what happens with the mod.

Make sure you have the seller sign that you reviewed all of this because they can come back and say that you did not reveiw everything. CYA in writing!
I had a similar situation. My client couldn't afford the house, was 6 months past due but still wanted to stay in the home. She agreed to do the short sale knowing that if it went under contract that she wouldn't be able to back out with a loan mod. She got a phone call from a 'representative' of the bank and they told her that they were going to be at this large convention center over the weekend and that she needed to stop by so that they could discuss her situation. She went without consulting me first. They promised her the world and guess what...after weeks and weeks...it didn't work out. 1 week later...offer...3 weeks later...closed deal!

Some banks you can sneak by both processes and some have to 'switch templates' in the computer so you can only choose 1. You need to find out which process this bank is about and go from there.

Don't worry...the seller's are confused, frustrated and want some type of closure. Your expertise will help them through this!
Since we are the topic of loan mods and short sales..I was speaking to a homeowner once who had a trial period for loan mod with chase and they decided that they did not want to make any trial payments. So, the homeowner wanted to begin the short sale process. Homeowner said chase told him that he had to wait until the 90 day trial period was over before short sale could begin. Anyone heard of this?
Sara Mehrpouyan CDPE said:
Since we are the topic of loan mods and short sales..I was speaking to a homeowner once who had a trial period for loan mod with chase and they decided that they did not want to make any trial payments. So, the homeowner wanted to begin the short sale process. Homeowner said chase told him that he had to wait until the 90 day trial period was over before short sale could begin. Anyone heard of this?
Got to love Chase! Most of the time I have found that those departments do not know what is going on but Chase may be different. So, now the sellers have to wait 90 critical days in marketing the home waiting for nothing. I would go after them and find out why! The home is in pre foreclosure and the home owner has a clock ticking. I think you should esclate this to a supervisor and get different input. Just doesn't make sense to wait.

Sara Mehrpouyan CDPE said:
Since we are the topic of loan mods and short sales..I was speaking to a homeowner once who had a trial period for loan mod with chase and they decided that they did not want to make any trial payments. So, the homeowner wanted to begin the short sale process. Homeowner said chase told him that he had to wait until the 90 day trial period was over before short sale could begin. Anyone heard of this?

RSS

Forum

Ocwen Contacts Short Sale Package

Started by Jan Baron in Rants and Raves. Last reply by Anna Wilk Jan 14, 2016. 5 Replies

Shellpoint Mortgage

Started by Celeste ODea in General Discussion. Last reply by Brett Goldsmith Sep 4, 2015. 3 Replies

Extension Fees & Closing

Started by Colleen J Couse in Rants and Raves. Last reply by Brett Goldsmith Sep 3, 2015. 1 Reply

© 2020   Created by Mike Linkenauger.   Powered by

Badges  |  Report an Issue  |  Terms of Service