Training for Short Sales & Mortgage Loss Mitigation to Stop Foreclosure

Short Sale with Wells Fargo

February 8, 2009 by  
Filed under Featured

Palmer Drive HouseHere is a short sale where Wells Fargo ultimately did a great job. We had an offer on this property from a buyer who needed a home before the end of the year. Short sales may take an extended amount of time to review, so you need to have a buyer who will trade the convenience of a quick closing for a better price. When it took too long, he bought another house.

Fortunately, I had kept in touch with another buyer who liked the house, but insisted on an even better price. When Wells Fargo lost the first buyer, they expedited the review for the second buyer. This time Wells Fargo was represented by an excellent loss mitigation negotiator, Ms. Davenport. I represented both the buyers and the sellers, so I was able to understand what everyone involved wanted from the sale.

Abandoned for months, the house was not in good condition, and the buyer wanted to have a home warranty to lessen the risk of repairs after the sale. The lender insisted that the house be sold ?as is? and that no warranties whatsoever could be allowed. Wells Fargo had the unfortunate experience of being involved in an ?as is? sale where a home warranty was provided. That warranty made a court decide the sale was not completely ?as is,? so the buyer could contest the condition of the property after closing the sale. Since they had been burned once, they did not want to do that again.

This first-time homebuyer did not have the cash to pay for unforeseen repairs, which a home warranty would cover. The lender did not want to be vulnerable to the argument that providing any type of warranty opened them up to future litigation. During the discussions, we shifted the focus to the fact that what was really at stake was the amount of $495 to pay for the warranty. Once the framework of the problem changed, the solution became apparent. Wells Fargo would allow the seller to pay an additional $495 toward the buyer?s closing costs so the buyer would have $495 additional cash on hand when the sale closed and could purchase the warranty. Thus the warranty became a closing cost. Everyone got what they needed.

The buyers have done a tremendous amount of work to the home, even disposing of an abandoned car. It takes some negotiating talent to close a short sale, but the right buyer can greatly improve the neighborhood.

Comments

9 Responses to “Short Sale with Wells Fargo”
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  8. Tricia says:

    Hi, Can you refer me to a lender in CT hat caan help wih mmy situation?
    We would want to refinance the mortgage loan
    on our rental property to bring the monthly payment down.

    The property value is at or slightly less than whjat is currently
    owed on the home loan.

    • Tim Burrell says:

      Most lenders will not refinance a rental property unless you have around 20% equity i.e. the loan is about 80% of the value. Many lenders require even more equity. You might try your current lender to see if you can get a HARP refinance, as that is the only way I know to refinance a property where the loan equals or exceeds the property value. Good luck.

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