9 Months Inside a Short Sale

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9 Months Inside a Short Sale

Phil Good
Athens, GA · Member since 2013 · 1 post · 0 votes

So it's been 9 months. And I'm extremely frustrated. I just don't know when this will end. It seems like the two lenders are going in circles and repeating the same steps over and over again.

According to some of my realtor friends, what's cool about this short sale (at least) is updates are posted online frequently. Here's the updates from my short sale:

http://www.haveyougotmypaperwork.com/index.php?option=com_content&view=article&id=397&Itemid=114

Everhome is the first lender. They approved the short sale back in September.

First Tennessee is the second lender...they've been the ones dragging their feet on this ever since I got the first approval.

I went and visited the home today, and I found stickers all over the faucets, sinks, etc, detailing that they've been turned off for 'winterization'. The contract stipulates that the seller has to keep the utilities on. The electricity has been turned off. My realtor has only seen this when a home goes into a foreclosure.

Questions:

1) What's the chance this home goes into foreclosure
2) Why are the lenders dragging their feet now about this?
3) Why would the second lender take so long to approve things when the first lender approved it so quickly?

Thanks!

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  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    13y

    1. No way to know. Definitely could happen, definitely might not. And you probably won't know until it does (if it does).

    2. Sounds like the second is dragging their feet. They likely want a minimum amount of money to approve the transaction and the first won't grant them that amount. The second will get nothing if the foreclosure happens, so it's a game of chicken at this point. Either the first needs to approve the amount the second wants or the second needs to accept what the first is willing to offer (or it will go to foreclosure).

    3. See #2 above. The second is trying to get what they want but are at the mercy of the first. They're hoping the first doesn't want to foreclose and will pay them off.

    Btw, I've seen this dispute before over $500 (the second only wanted $500 more than the first was offering). Neither would budge. I offered to pay it out of my pocket (as the buyer), but the first wouldn't allow it (they had a maximum they'd allow the second to get). Ultimately, one of them gave in (don't remember which one, but I think it was the first).

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  • Mark Ferguson
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    13y

    I paid $1,000 out of pocket to pay off a lien on a short sale I was buying. The 1st refused to pay, but luckily they let me pay it.

    The lender has the right to winterize a home if it is vacant. It says in the loan docs they can do what it needed to protect the asset. If it is vacant they can rekey it and winterize it in order to prevent freezing pipes. They will turn off water at the main in the house.

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    13y

    I'm sure it Is in foreclosure. You need to be tracking the foreclosure progress. Other than "dragging their feet", you need some real info, like who's offering what, who wants what, and how far apart are they. Some 1st mtg's (Fannie, Freddie, HAFA) do not allow anyone to contribute additional money to a junior lien, above and beyond what they offer, and the junior lien must waive the deficiency. You/someone can however, make a payment on a junior account, so that the junior lien will then offer an approval for the amount the first is offering. This "payment on account" does not legally have to be on the HUD. You/your agent need to get some details and find the answer. Sorry if any of this info is in the link, I didn't follow it.

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  • Phil Z.
    Real Estate Broker · Orange, CT · Member since 2013 · 951 posts · 218 votes
    13y

    I'm trying to figure out why this company posted all the inner details of their clients short sale negotiation online.

    1. The bank can foreclose during the short sale process, but typically not once an approval letter is issued.

    2. Because they make money servicing loans. They often do not own the actual note.

    3. See #2

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