Go Over The Negotiator’s Head to the Investor
The first place you negotiate is with the loss mitigation department, and hopefully you get what you need. Sometimes, you run into problems, like having them turn down the short sale with no response. In other words, they just turn you down, but do not give you a counter offer to work with. This is particularly upsetting if you are facing a foreclosure. So, how do you stop the foreclosure?
It is extremely unlikely that the loan belongs to the lender you are dealing with. On average, banks keep only 15% of their loans. So, there is an 85% chance that they are only servicing the loan. When the payments are not being made, they have lost the servicing income and want to get it back to producing income for the bank either by reinstatement or foreclosure.
So, when you have a problem with the lender that is servicing the loan, go around them to the actual investor. The investor’s motivation is different from the servicer. Instead of looking at a lost income stream, the investor is trying to get as much principal back as possible.
If you can get in touch with the loss mitigation negotiator at the servicing bank, just ask who is the investor. They do not have to tell you, but if you establish some raport before you ask, they might. If they do not tell you, change the subject, talk about something else, then casually ask them what team they are on. The lenders divide their loss mitigation departments into teams based on who the investor is, so the team members only have to learn the rules of one investor. Once they tell you what team, you know the investor.
If you cannot get the information about the investor directly, play the odds. If the loan is within the limits of a conforming loan, it is most likely Freddie Mac or Fannie Mae. Start with Freddie Mac by going to www.FreddieMac.com, because there is only one loss mitigation department in Freddie Mac, in McLean Virginia. If Freddie does not have it, try Fannie Mae at www.FannieMae.com. They have five offices. The office that will regulate your lender is the one closest to its headquarters. So, figure out which one is the closest to the headquarters and call.
If it is a HUD or a private investor, they are much harder to find.
Once you get in touch with the investor, they may have more interest in accepting your short sale. They will need to get in touch with the servicing bank to postpone any foreclosure and discuss the acceptance or counter offer to your short sale proposal. In other words, it is not the end of the line if he servicing bank will not work with you. Try the guarantor, as we discuss elsewhere in this website or try the investor. The investors and guarantors may have a different reaction to your proposal.