Foreclosure in Elk River>Question Details

candy6348, Home Buyer in 55109

If a bank is collecting on mortgage insurance, is property a frozen asset until they receive insurance money?

Asked by candy6348, 55109 Sun Mar 8, 2009

Bank accepted our short sale offer verbally but failed closing date because Countrywide didn't have paperwork completed. Countrywide tried to extend redemption date until 01/04/09 but couldn't do so legally.
Agents let them know we still want the home, need the place winterized (we filled propane tank and electric in our name on closing date)-they still haven't winterized. Countrywide says Fannie Mae has property. County shows Countrywide still has deed (backlogged?) Our short sale offer was 5/29/08, accepted by seller6/6/09; accepted by Countrywide ~8/30/08. Redemption ended ~12/4-tried to extend until 01/04/09.
Verbally told we'd get the home either way. Have turned our story into KARE 11 (Mpls,MN) without bank names. Am considering State attorney's office. Saw a real estate lawyer-no help until we place a new offer.
Contacted local attorney assigned to place-very snotty-would not offer up the date of foreclosure. Still want the place!!! Any advice???

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Countywide may be the loan servicer for this property for Fannie Mae or the county may have a backlogged recording department. These are tough situations and it's likely that no matter what you do, you'll have to wait until the house is relisted before you can make a new offer. If it hasn't been winterized yet I'd also be concerned about its current condition.

It sounds like you've talked to the right people but simply haven't liked the answers they've given... I don't know that anyone here will be able to offer better advice.
Web Reference: http://www.AaronSOLD.com
0 votes Thank Flag Link Mon Mar 9, 2009
I am not sure if I can explan what is happening at Countrywide in this situation. However, I can explain what happens with mortgage insurance. The mortgage insurance is placed to provide the bank safety if the mortgagor goes in default (typically 20'% of the mortgage amount). So if there is a 100,000 loan and they have the typical coverage the bank only has 80,000 exposure on the loan. The mortgage insurance company has the other 20,000 exsposure. Therefore mortgage insurance would have the right to approve a short sale. The mortgage insurance companies had a 60 day period to make their decision on any claim, but typically the decision for a short sale would be made quickly (if they mitigated the loss for the mortgage insurer) if there is no mitigation then the decision is quick because the full 20,000 is the mortgage insurers responsiblity and all decisions are back to country wide and their investor.

You should be able to condirm if the foreclosure sale happened or not through court records or maybe in your area the county may update a data base on the internet. If the foreclosure sale has been completed I would try contacting the REO department at Country Wide. This would be a different department and would not be tied to the people working the short sale.

If the property has not gone to sale get the mortgagor call to get status or send a president letter to Country Wide to get a status on their loan. You are not the banks customer, the mortgagor is and they will answer questions by the mortgagor and not you. If the mortgagor call the foreclosure attorney the attorney should tell them a status as well.

Good luck!
0 votes Thank Flag Link Mon Mar 9, 2009
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