I am having trouble firguring this one out? Onewest has repeatedly denied Short Sale stating "Not in Investors interest" to do Short Sale. I have escalated file to supervisors who have blamed Freddie Mac for not postponing the Sheriff Sale, even though sale date was 3 weeks away; and, we are in Michigan; a redemprtion State. I personally called Freddie Mac, directly, and made request to postpone Sheriff Sale, in order, for Onewest to process Short Sale. They submittted request to their Short Sale department and request was denied and they proceded with Sheriff Sale. We had a bona-fide offer of $234,000, Borrowers owed $262,000, and they eventually foreclosed for $242,000. I have never had a problem with any servicer or investor postponing Sheriff Sale when we had a bona-fide and market value Purchase Agreement on the table. Can anyone shed any light on what possibly has motivated Freddie Mac to deny this Short sale
Sounds like they did the NPV calculations and concluded that they would make more with the foreclosure than the short sale. So, by their Investor guidelines, they denied the short sale.
Don't the numbers imply they were right in this calculation?
Do you have any insight on how the NPV is calculated? Do they have some kind of insurance/arrangement that effect their bottom line? This is Freddie Mac who is rejecting the Short Sale...not Onewest/Indy (who may have sweetheat deal). I have never had a Short Sale rejected by Freddie/Fannie before this file. I don't understand the number's game? sales price 231k (market value) current balance owing $262,000. How would they make out better in foreclosure?
The NPV calculation compares the net-proceeds of the short-sale to the expected net-proceeds of the foreclosure.
Meaning, "Do I make more money short-selling or foreclosing." I don't have specific codes for the Servicer NPV models, but I think this is basically what they all do, in different ways. (eg, look up the old FDIC "mod in a box" model, if it is still around.)
If I understand your numbers, if the auction brought in $242,000 to the Investor, then it would seem that foreclosure may well have been the better alternative for the Investor. Maybe I'm mis-understand your numbers here.
Just quick impressions, based on your post.