My Short Sale Experience with WaMu/Ocwen

My Short Sale Experience with WaMu/Ocwen

Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote

Hi all,
I am in the process of a short sale on my home here in CA. I started keeping a log of what has happened so far and thought it might benefit others if I share what happens. So I googled for a short sale/foreclosure forum and this was one of the first that appeared. Hopefully this will be informative and depending on the final outcome help others negotiate through this process.
My wife and I have lived in CA since birth, both 30 now with 2 daughters. I work for Bank of America in IT and have been offered the chance to relocate, on my dime though, to Charlotte, NC keeping the same job and salary level. We love that area and had been talking about moving out of state anyways so we are going for it. Here is what has happened so far, I'll update this as things progress. If anyone has any tips or questions please post away.

House purchased for $ 563,250 in August of 2005. First and second originally with Wells Fargo at $450,816 and $56,352 with a down payment of $56,352. Total debt $507,168.
Refinanced in 2006 – big mistake, bad broker, bad choice by me, didn’t read fine print, etc. – negam loan with 25k in prepayments on 1st and 2nd, first with WaMu, second with Ocwen. Balance on first now 508k, and 55k on second. Total debt $563k. House was worth 650k at the peak right after we bought it.

We will move to Charlotte, NC in June once the kids are out of school for the summer. Talked with real estate agent who is also one of my best friends, decided that we would attempt a short sale. Our initial thought was to keep the house and rent it, but the most we could get for rent is 2,000 and our minimum payment is 3,200 and at that we are adding 1500/mo to the principal. Based on that the short sale sounds like the best option for us.
Both our credit scores are just below 800 so we know that we won't be too bad off once it hits our credit report and should still be above average. I am pre-approved for a new loan in NC with my employer, contigent on this house selling. If we can close here and on the new house within 90 days they will not pull my credit again.

We listed the house at $349,900 based on comps and active listings in area. Most houses in area staying on market for 2 months, had a solid offer 1 week after listing. Offer is for full asking price and they are willing to wait out the short sale process :D .
Completed short sale package for both lenders and faxed in less than 1 week after getting the offer. Called both lenders 2 days later, both say fax never received. Three attempts later and they both say they have it now.

WaMu:
They absolutly will not proceed until they know Ocwen will accept $1,000 or less. Called multiple times, got the same response from multiple people, on to Ocwen…

Ocwen:
Faxed short sale package (108) pages on 2/26, entered into their computer system on 2/29. Called on the 29th and confirmed they received package. Was told it could take 10 to 15 days before we hear back from them.
Phone number for Loan Resolution Department 888.779.2857 (hours 8am to 7pm ET)

March 4th called and spoke with Alex, asked if there were any updates to the status. He said that the SS package was being reviewed and that the process could take as much as 45 days due to how busy they have been. Was able to tell me that the package was complete and we gave them everything they needed.

March 7th called and spoke with Leena, she said I had reached the wrong area and she would transfer me to the correct area, gave me the same number I had called. The line was silent for 30 seconds, then a fast busy and disconnected. By the way this is the 10th time since we started that the exact thing has happened.

March 7th called back after being disconnected spoke with Aksakshit (no it's not a typo). He asked what we owed WaMu and what they were getting as a net offer. I told him my agent had included that in the short sale packet. He put me on hold for about 10 minutes while he reviewed the information. He came back on the line and asked if I knew what the commission would be and what our current payoff was with WaMu. I told him 4% on the commission and that we owed 508k. He said that the numbers all looked good to him and based on what he was seeing he could approve the offer. He put me on hold for another 5 minutes then came back on and said that the commission was listed at 6% in the paperwork and they could not accept it, he also said that they also could not accept 1,000 and wanted at least 35,000 to close the loan. I told him that WaMu’s policy was to only allow the 2nd to get 1,000 if they were taking a loss on the first. He said he was aware of that but unless we could change their minds Ocwen would not accept our offer. I told him we have no other choice other than to foreclose and he said they would rather foreclose than take the short sale at 1,000. I told him thanks but I’ll call back and talk to someone else.

Spoke with my agent, he is willing to adjust to 4% commission. He already commited to the buyers agent at 3% so he will be taking just 1%. As mentioned above though he is a very good friend and more than willing to do this for us.

I called Ocwen back, spoke with Elrigea. Told him that I had called earlier and was told my offer could be accepted but that we had the commissions too high at 6% and they would approve if we lowered to 4%, I did not mention the 35,000 Aksakshit said they wanted. He spent a few minutes looking at the paperwork and said they would need a new Net Sheet or HUD1 showing the 4%. He gave me his email address and said he would work directly with us on getting it approved.

Called my agent back and gave him the good news, he faxed me the updated documents, we signed them and I emailed them to Elrigea at 3:30pm. Waiting on his reply now, my hopes are up, hopefully we'll hear from him Monday.

Jake

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Real Estate Consultant · Siesta Key, FL · Member since 2008 · 421 posts · 50 votes
18y

Through my experience, the shortsale will usually ding their credit with a 90 days late, which can be overcome quite quickly through credit repair. Definitely beats the 250 or so points the foreclosure will hit you with....Jake, thanks for your story!

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  • Real Estate Investor · Los Angeles, CA · Member since 2008 · 30 posts · 0 votes
    18y

    haha, Mitch, that's hysterical!! Wow.

    I'm in the middle of buying a few too. Same old paper pushing on all of them. It's amazing (and amusing!) how the lenders bumble**** their way through these.

  • Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
    18y

    Good luck to you! I'm doing my first short sale as a listing agent and it is a horrible process.
    I can't wait to hear if Ocwen caves in to their demands. I just got news that after 100 days with the SS package, the second lienholder on my deal rejected $3000 from the first lienholder and will only accept full payoff.

  • Member since 2008 · 1 post · 0 votes
    18y

    Jake, wow that awesome that wamu is working with you finally.. I have been trying to reach some one who can help me and my client with any answers concerning our WAMU Shortsale, but I have had no luck. I have been assigned a Negotiator, Latosha Pollard, but she refuses to return any of our calls. I know that a BPO was finally done last week on the property, b/c I had to let the agent in to do it, but when I called again today to check on the status they could not give me any updates. Is there anybody I can talk to that you know that could help us push this through...
    Any help is appreciated.

  • Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote
    18y

    You can try calling the main line and talking to someone else in the loss mit. department. Tell them you have left multiple voice mails and would like them to email her. I did that once and got a call back a day later. You can also try asking them for her supervisors name. If you get that name you can try emailing them with [email protected]. The supervisors have direct phone numbers that ring at their desk where the only way to get to the negotiator is to call the 8669268937 line and enter their extension after all the prompts. So if you can get a supervisors phone # you should get much better response. I don't want to give out the name of the supervisor I am working with because she has been such a great help and responds the same day when I leave messages... don't want to get her mad and mess that up. Like someone said above they could be watching message boards and find stuff like this. Yeah the chances are small but I'm in a position where I can't risk it.

  • Property Manager · Portland, OR · Member since 2008 · 212 posts · 14 votes
    18y

    Here is yet another short sale horror story...this one is with WAMU..only a 1st mortgage. Payoff was originally about 270K.

    Initial Offer two months ago was 200K. BPO came in at 239K and then they got another that came in at 279K. We spent two months calling them and each week they promised a counter...but it never came in.

    Auction date is April 29th..yeah, tomorrow. Counter came in Friday the 25th at 259K. Their explanation of the counter price was that they split the difference on the BPO values....real scientific of them.

    The loss mitigator, or better yet, her title is Homeownership Preservation Specialist, stated that if I wanted to get the auction date postponed all I had to do was accept the counteroffer of 259K.

    So today, I did. I emailed, called several times and accepted the counter price in writing. They returned my emails with this..."too many last minute offers are being submitted. If you want this property, bid at auction." Opening bid will be in excess of 280K...and they had a BPO come in at 239K...does anybody see anything wrong with this picture?

    I just can't wait to see what WAMU does with this one in REO...the property has been RED TAGGED by the city of Portland as illegal to occupy dwelling...i mean, have fun with that.

    The problem is the Loss Mitigation deptartment are run by uneducated hourly employees who get hammered with calls and emails every day and handle at least 100 files at a time. Their supervisors are probably so fed up with the whole show they would rather the property go to foreclosure because then it's off their plate and then the REO Departments problem. What a joke.

  • Member since 2008 · 1 post · 0 votes
    18y

    Hey Jake and Katie:

    Wow, thanks for taking the time to document your experience in this whole SS process guys. Pete and I are also trying to work with our lenders on a SS...if it's not too late, we hope. I CAN'T believe that the lenders aren't more willing to work a bit faster on the SS process, being that the alternative is a forclosure-which will cost them a ton more finacially and the whole liability of ownership that falls on them too.

    I'm sooo disappointed that our country has done NOTHING to stop these volatile lending practices that lead up to this mess in the first place. We have so many wonderful people trying to do the right thing in this horrible mortgage mess, yet we're all getting nowhere! Dang, it's like they want to "kick us when we're already down!"... Ahhh, I guess I'll stop venting now, thanks sooo much for taking the time to make up this post Jake!...it's VERY HELPFUL (for informative reasons and even emotional).

    It's JUST not right/fair that soooo many wonderful families are going through this UNNECESSARY stress right now. I'm praying my butt off that GOD comes through and pulls us (USA) out of this one!...Lord knows we all need him NOW!!!!

    Talk to you guys soon :violin:

    Christine and Peter :o)

  • Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote
    18y

    Here is what has happened since my last post.
    4/24 - no call from WaMu
    4/25 - She leaves a message saying that the "Executive Committee" had to review it due to the large amount of the loss to them. She said that she gave them the file and they were reviewing and that she expected an answer Monday ( 4/28 )
    4/28 & 29 - no call from WaMu, I left 4 voicemails without a reply.
    4/30 - Finally got a call today and not what I was hoping for. She said the committee will only approve it if I sign a promissory note for 188,288.18. She said from their viewpoint we have excellent credit, have not missed a single payment, etc. So basically they do not believe that I will actually let it go to foreclosure. I assured her that is exactly what I plan to do and that it was ridiculous to ask for the 188k. Our buyer has been hanging on for 2.5 months now and will walk away from the deal Friday if it hasn't been approved. If we were to go back to active on MLS right now we'd need to drop at least $25k more in price.
    So, I told her in foreclosure they will lose far more than the 188k they are asking me for and that I hope they can call me back with a better answer. We'll see what happens...

    Hey Christine, thanks for stopping by. Yes this short sale process is a mess, I can't tell you how stressful it's been. Hopefully you have a good outcome with your's.

    Jake

  • Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
    18y

    After 3 months of waiting, last week I got an outright refusal from the second lienholder to accept $3000 from the first--they wanted full payment of $40,000. I searched all over the internet for names of corporate executives and finally got in touch with the decision maker who, after a long conversation, agreed to $15,000. I know $1k-3k is common payoff for the second so I'm not sure the first will go for this, although they are taking much smaller hit percentage wise. Do you think the first will take the deal? (I haven't heard back from the first yet.) Have you heard of seconds getting this much payoff?

  • Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote
    18y

    So she called again asking if I could come up with something towards the 188k, saying that it won't be approved without it. My take is they just want to be sure I'm feeling some of the pain they will feel by taking on such a big loss. I told her I have 4k I can give at closing and she called back to say we are APPROVED! Finally, 3 months into the process, about what my realtor said it would be, but I cannot explain how much I underestimated the effort and stress that would be involved. I would not wish this process on my worst enemy, well maybe I would, but there is seriously something wrong with the system and these lenders need to get their acts together and figure out how to streamline the process and make it better on all parties involved. I took me calling them everyday for the past 2.5 months, and spending about 1 to 2 hours a day on average.

    Today we are sending over an updated HUD1 showing that I will write a check to WaMu for 4k at closing. They will send us the approval letter and the buyer will be trying to close within 2 - 3 weeks. Hopefully there are no more bumps in the road and we are done dealing with the worst of it.

    Jake

  • Residential Real Estate Agent · Long Beach, CA · Member since 2008 · 432 posts · 63 votes
    18y

    Today must be our lucky days!!
    I also got verbal approval from both lienholders after 80 days. Everyone ended up giving up more or chipping in more but I think in the end it will work out and I'm happy I can see the light at the end of the tunnel.
    I can't even calculate the number of phone calls over the past 2 months, and in the past two days between the two banks playing chicken with each other and me in the middle. There's got to be an easier way.

  • Investor · Bellefonte, PA · Member since 2008 · 1k+ posts · 88 votes
    18y

    All I have to say is WOW. Thanks for all the insight and information you shared here. It is for sure an eye opener. They have got to do something to make it more streamlined. It's wasting that much of your time, just imagine how much of their time gets wasted because of this kind of poor record keeping. Imagine them trying to get thousands of these deals closed a month and if they are spending that much time on each loan no wonder they have a back log to the moon.

    -Michael

  • Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote
    18y

    5/3: Buyer had inspection done, only 1 small issue and she chose to ignore it. She release contingencies and signed her loan docs later that day.
    5/5: WaMu sent to QA department.
    5/6: QA department sent to Closing department and they will send final approval letter and instructions for closing to the title company today or tomorrow. Buy is hoping to fund tomorrow and close Thursday. We leave for a week long trip to NC on Friday morning with a preapproval from BofA in hand to put on offer on a house there. The timing this last 2 weeks couldn't have worked out better. We'll be living with my mother in law until our kids get out of school and then driving a penske truck to NC the 3rd week of June.

  • Member since 2008 · 1 post · 0 votes
    18y

    Congrats Jake! You earned this.

  • Real Estate Investor · Monument, CO · Member since 2008 · 1 post · 0 votes
    18y

    What a story, Jake! You are certainly persistent. Congratulations and good luck.
    I just started the process of trying to purchase a short sale 3 weeks ago but am already discouraged. It seems that you need a persistently motivated seller but the buyer has no options when going thru real estate agents. The loan holder in our situation is also WAMU who is not responding to the offer.
    I also believe WAMU performed an appraisal a year or so ago on the property and overvalued it in order to provide another $100k loan on the property. As we all know, property values in California have dropped dramatically (note Jakes price) and appraisers were going crazy at that time just to lend more money. I feel their appraisal will influence their acceptance of this short sale offer.
    The owners will be moving out mid June and the property will go to pot. We would indeed like to have an accepted offer before that happens. :violin:

  • Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote
    18y

    wandamou, yes persistency is vital. WaMu told me that there were 3 key elements in getting this to happen 1) My constant calling and making noise up the mgmt chain 2) A hardship, although not behind on payments it was obvious to them that we would be in a bad situation in the coming months if they didn't approve 3) The drastic drop in value and that it is still going down sharply in our area, their appraisal came in lower than our offer, which made them realize 8 to 9 months down the road when they get it back in foreclosure they will, not might, be in a deeper hole.

    The buyers loan funded on Friday, they got the keys from my realtor and started moving in. All of our stuff is in storage now and we'll be living with the in laws for the next month. We are in NC now, left Friday morning, got the call that they funded while in the check in line at the airport. Today it recorded so we are officially done... Today was a big day for another reason, we looked at several houses over the weekend a put an offer on one today and had it accepted within a few hours. We sold our house in CA for 350k, 5 bedrooms 3 baths, 2600 sq ft, 4500 sq ft lot.... this house is 295k, 5 bedrooms 4 baths, 3300 sq ft, 4.75 acres!
    We are going to miss our family and friends back home but we have a lot to look forward to here. It will be a great place to raise our kids and the property is beautiful, dozens of mature trees, a creek, room for horses, etc... Something I just looked up: our old zip code currently has 36 sex offenders according to the megans law site, the new zip code has ZERO. Thanks to everyone on this forum who posted words of encouragement and sent PM's over the past couple of months. It's been an educational experience and I hope this thread will benefit others or at least give them hope on their own SS's.

    Jake

  • Residential Real Estate Agent · Mountain View · Member since 2008 · 1 post · 0 votes
    18y

    wow!!!congrats Jake...i was following your post and for sure you did an outstanding job of being persistent...I own a couple of properties in San Diego and Tracy in the same situation with losing the value of the my properties...i believe short sale is the key to solve my problem...I am hoping to succeed and be able to move in to New Bern NC...Good Luck to you and your family....FRED

  • Member since 2008 · 1 post · 0 votes
    18y

    Jake, I'm getting ready to deal with a home that has a second secured by Ocwen. This article is priceless. I know the process will be murder, but after reading this know what I need to do and what to expect.

    Thank you so much for posting.

  • Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
    18y

    Jake said early in this thread that his friend/homeowner got a SS approved and the SS lender gave a letter promising not to report the derog incident to the bureaus.

    I would love to see this letter.

    Apparently, Jake could afford to buy a new house and then walk away from the old house. Thus, he doesn't have to concern himself with his credit being trashed for the next five years.

    Jake, what condition is your credit in now?

  • Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
    18y

    Fred, what do you, an investor, hope to accomplish by short selling your properties?

  • Homeowner · Fort Mill, SC · Member since 2008 · 20 posts · 1 vote
    18y

    In March I had my credit checked when I applied for the loan on the new house. I was at 778 and the approval was conditional on us selling the CA home before we could close. We are now partially moved into the new house in South Carolina, waiting on carpet before we can move in the rest. Both Ocwen and WaMu have reported to the credit bureaus. It shows up from both as "ACCOUNT PAID IN FULL FOR LESS THAN FULL BALANCE". My credit score is now 714, for a total loss of just 64 points. Well worth it to me, I still have excellent credit and I don't own a house with -40% equity. I have received letters from both WaMu and Ocwen saying that the accounts are closed and that it's a done deal. Thanks to that and the debt forgiveness act of 2007 I can sleep well at night now :-)
    I was not successful in asking either lender to not report against my credit. I do have the friends that were able to and have heard of a few other cases where that was possible. All of them were with people behind on payments. In case anyone missed it, I never missed a payment to either lender. There is no law requiring lenders to report, I didn't push too hard because I knew I had been extremely lucky to get the deal approved and didn't want to risk ticking anyone off.

  • Loss Mitigation Specialist · chicago, IL · Member since 2008 · 15 posts · 0 votes
    18y

    JakeJCarter,

    I saw your posting and i have a short exactly like you have WAMU/OCWEN.
    And i have had difficulties with Ocwen and i'm going to use your strategy on Ocwen. And I'm glad everything came out good with you.

  • Homeowner · concord, CA · Member since 2008 · 12 posts · 0 votes
    17y

    My gosh jake... sounds to me like you're doing this ss yourself. I almost wonder if i should have been doing the same. i'm in the same situation you are, but my agent is handling everything. Much respect on your ability to dog these bastards into working with you.
    I have been battling with countrywide and wells fargo. I have great credit, no default and because of that country wants me to take a 15k promisory note. They told me that because my credit score is so hi, I must not be in that bad of shape, so they want some extra to do the deal. i tried to call there bluff (they did this to a friend of mine, but he got out of it), but they came back and said they'd rather foreclose... i was kinda shocked they'd rather go throught he expense of foreclosure than take a deal that they really won't loose much money on at all. The whole thing feels criminal to me. The fact that they're getting my tax dollars for bailout and yet they want way more from me just makes me want to never owe on a mortgage again..
    I've heard the your credit score will loose about 150 from the ss, but the other numbers i've seen here have been more encouraging. good luck bro lets keep in touch!! Lee

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