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Sacramento Short Sale Approval From US Bank
Sellers ask me if it’s impossible to get short sale approval for a US Bank short sale because so many Sacramento short sale agents seem to encounter difficulties working with US Bank. I would not say that US Bank is harder to work with than any other short sale bank, but the US Bank short sale process is not as streamlined, per se, as other banks. A short sale that might take 4 weeks through Bank of America can easily take 4 months with US Bank. You’ve just got to have patience.
Take my recent US Bank short sale, for which I have been working with two loans, both at US Bank. This short sale has been in short sale negotiations for 2 years now. Two long years! Most of the time when a short sale takes this long, it’s because the buyers bailed. The buyers might hang in to wait 3 months or so and then they cancel the contract, just when approval is about to arrive. I’ve personally witnessed this phenomena over and over. They lose faith. They give up. Just when they should not.
We try to engage buyers, keep them informed and updated every single week, but no matter how hard we can try to nail them to the front door, they wiggle away. When the buyer cancels, the short sale starts over.
Having said all of this, most of the trouble in this particular transaction has been a denial issued by US Bank. I generally don’t let denials dampen my enthusiasm. A denial just means we are one less negotiator away from approval. One less person to deal with and one less obstacle to overcome. After a revised analysis, I repackage the short sale and resubmit. My philosophy is somebody is not listening to us or we did not present the facts in a light the negotiator can accept.
I can’t recall offhand how many rejections and denials we were issued on this particular US Bank short sale. US Bank rejected the sellers a few times. But we finally received that golden letter of short sale approval and release of personal liability. Two years later. You have no idea how ecstatic the sellers are right now. If there’s a way to get that short sale approval letter, this Sacramento real estate agent will get it. Just like if there’s a way to sell your home in Sacramento, I will do it. It’s called perseverance and determination.
Three Sellers Approved for Three Sacramento Short Sales
You know that expression: when it rains, it pours? Often, these little bits of wisdom extracted from life and handed down over the years from generation to generation are based in some kind of truth. Yesterday was one of those days. This Sacramento real estate agent received short sale approval letters on three different short sales in the Sacramento Valley.
As usual, something was wrong with each file. Things are rarely perfect in the business of Sacramento short sales. Agents who expect perfection are those you find hunched over hugging their knees in the corner, rocking back and forth and singing to themselves.
In one file, the lender reduced our commission. This file is a HAFA short sale. Our listing agreement was signed way before the short sale approval agreement arrived. The bank told me that its investor only pays a reduced amount, and that they’ve always handled their HAFA short sales in that manner. They’ve always done it because no other short sale agent challenged the bank — that’s how they get away with it. If they don’t authorize the rightful commission, the Treasury Department won’t pay them; we’ll see how they like that.
The bank can ignore the MHA handbook and the CAR explanation of HAFA rules, but they can’t ignore Laurie Maggiano, the Director of Policy for the U.S. Treasury. They coughed up the commission.
In another file, we need a final court document to close. We’ve been trying to get this court document since October. The case was settled two years ago. The sellers’ lawyer keeps saying it’s coming and she will get it, but it’s not coming and she doesn’t have it. The clerks at the court are taking their sweet time, too. Now that we have the approval letter, the clock is ticking. We might have to call the court every single day until we get the letter. Persistence is my middle name. Hey, I close more Sacramento short sales than any agent I know.
And in the third, Bank of America took so long to get us the HELOC short sale approval letter that we’ve had one short sale approval letter and one extension already from Seterus. Usually, Bank of America is pretty fast. Especially since they use Equator. I am busy today trying to figure out what took them so long with this particular file so we never repeat it again. Seterus refused to issue a third letter until we received the approval from Bank of America, and who can blame them? Not me.
Overall, yesterday was a great day. Three short sale approval letters in one day, and 3 more files headed for closing. Three more Sacramento short sales are over. More happy, happy sellers and buyers!
Adding Short Sale Buyers to the Deed After Approval
Requests to add or subtract individuals to a deed should never happen after short sale approval, yet it pops up more frequently than you might imagine. If you’re a short sale buyer, this advice is for you. People think because an idea occurred to them, they can make it happen at the last minute, and short sales are rarely in a position to accommodate these sudden changes. I know that short sale buyers don’t see the big deal. But it’s a huge deal. They don’t realize that the short sale bank probably approved only the individual(s) who signed the purchase contract with the seller. Do not try to add short sale buyers to the deed after approval.
The reason is if a short sale buyer wants to change the way she holds title on the deed, it’s almost impossible to do and still close within the required timeframe provided for in the short sale approval letter. One can’t just change from a corporation to husband and wife as joint tenants or from a couple to a sole individual without the short sale bank’s blessing. I had a short sale last month in which originally a husband and wife were holding title, then title changed to the wife as her sole and separate property and, after approval, financing restrictions required we revert. This was a Bank of America short sale and I suspect since the husband was originally noted on the paperwork, the bank was able to approve an additional name at closing without further ado. But this doesn’t happen very often. That was kind of a fluke.
Most of the time the approval letters contain the name of the buyers and, if the those names are altered, the short sale requires a new approval. Some banks make this Sacramento short sale agent start the process over. From the beginning. Because the bank did not approve John and Mary. The bank might have approved only Mary. It’s not as simple as you might think and short sales are not always logical. Not to mention, there is no guarantee that because a short sale was approved first time around that it will be approved a second time around or that the same lender will still be servicing the loan.
There are other complications to adding more short sale buyers to the deed at the last minute. It is possible that the buyer’s lender might not allow it. If Mary is taking title as her sole and separate property while obtaining a new first mortgage, her lender most likely will not let her add her son and daughter to the title without including them on the loan, which may mean they need to financially qualify. If she adds them to the loan after the transaction closes, she could be guilty of alienating title, which could be cause for acceleration: calling the loan due and payable. Moreover, the arms-length agreement Mary signs for the short sale lender might prohibit transfers within a certain numbers of days after closing.
For all of these reasons and more, the time to think about how you want to hold title when buying a short sale is when you sign the purchase contract. Don’t wait for short sale approval before you make up your mind or change it at the last minute because you could be asking for trouble. If you’re gonna do it, write up an addendum before approval is received and submit it with a new HUD during the short sale negotiation process. Please don’t try to add short sale buyers to the deed at the last minute.
