Foreclosure in 92880>Question Details

Are You Kidd…, Home Seller in 92880

2 offers on home bank approved short sale at the 11th hour bank denied short sale, foreclosed & sold the home for less than either offer any

Asked by Are You Kidding Me, 92880 Mon Oct 17, 2011


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Welcome to the wonderful world of short sales and the mysterious "black box" that is the bank. This is a common pigheaded move, more common than you would think. My guess is that in some cases the Feds actually pay some banks and/or investors MORE if a distressed property actually results in a foreclosure rather than a short sale. The banks just care about dollars, they don't care about the borrowers. Sad but true. Sorry to hear this happened to you.
2 votes Thank Flag Link Mon Oct 17, 2011
Sorry to hear about situation. I'm sure it was frustrating. Don't know if there's any recourse. There are lot questions to answer first. How many loans on the house. How many times was the trustee sale date postponed? What disclosures and affidavits did you sign? Before an answer can be given to your situation, there's a lot that needs to be uncovered.
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2 votes Thank Flag Link Mon Oct 17, 2011
Nope not kidding,
I wish everyone knew up front time is of the essence on a short sale. Around April of 2010 many of the banks made a decision, if it does not sell by foreclosure date, then foreclose. Keep in mind a couple of things. Sellers know the day they don't make the first payment, they are getting away with something,...
If they called to short sell that day, or even within a couple of months this last minute deal thing is a thing of the past. Oh ya I forgot to mention, when an agent knows they are within a month of the trustee sale, it may be time to not even bother to list it. As a home seller I know it sounds insane. But here is the reason, people were listing the properties, making the banks think were trying to sell their home but never allowed their home to be shown. So the banks came up with a blanket idea,... time limit.
I am no fan of the banks. but I do understand why they do it. If you knew people who run the banks and had the opportunity to meet with them and talk to them you would see why.
I do agree about the insanity, of selling a house for less in foreclosure when they had an offer on the table. ... and selling it for less no less. The bank is not a person who thinks. It is a machine and goes by policy.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate Broker License # 01312992
1 vote Thank Flag Link Wed Oct 19, 2011
Something similar happened to me; had an offer for 65K which was totally in line with sold comps on the same street but lender told me they needed 83K net. Result, they foreclosed.

Lenders are interested in the FINAL NET, not the selling price. That net gets influenced by factors we Realtors don't always know or are privy of knowing e.g. a portfolio insurance the investor purchased that this loan is part of. It may get triggered by foreclosure. That's a different insurance from the one a buyer purchases when the down payment is less than 20%.

The lender simply compares the FINAL NET for both, short sale vs foreclosure and goes with the highest net. What I object to is why am I not told at the beginning what kind of net the lender must have to accept a short sale. Not knowing that puts us in a volunteer category involuntarily!
0 votes Thank Flag Link Sun Jun 2, 2013
what was the time between 'approved short sale, we'll accept your offer' to denied?
0 votes Thank Flag Link Wed May 2, 2012
Unfortunately this happens all the time. Buyer's agents and listing agents must be diligent to stay in contact with each other and banks to ensure the process is moving forward.
0 votes Thank Flag Link Wed Nov 30, 2011
That's what happens when big banks hire low to mid level unskilled management with heavy case loads. I know this for a fact as we work with lenders everyday who have pressures and quotas to perform or if they don't they get the boot only to be replaced by other poorly qualified baffoons.

I went into the loss mitigation department of a large bank that I won't mention and was amazed at how similar it was to a traditional "Boiler Room" with a bunch of pitch men with headsets over their ears, shirt sleeves rolled up and sweat running down their cheeks, files stacked to their eyebrows and scattered all over the floor. As my lovely wife so aptly puts it "It's a real "Fuster Cluck"!
0 votes Thank Flag Link Tue Oct 18, 2011
Are you kidding,

I wish I could say that this is highly unusual...but lenders turning down offers of higher amounts only to accept lower ones in the near future seems to be a growing event and happens too frequently.

0 votes Thank Flag Link Tue Oct 18, 2011
How much less than either offer?

It's possible they still netted more because they didn't have to payout to a 2nd lien holder as they were completely wiped out in the foreclosure action. If there had been a $200K 2nd, for example with a different bank than the first, they were looking at having pay out to them $20K.

If they truly Approved your short sale & you were within your closing period before an expiration date by the bank, then they should not have foreclosed.
562-430-3053 c
Realtor Since 1996
Main Street Realtors
Short Sale Expert
0 votes Thank Flag Link Mon Oct 17, 2011
We can always kick ourselves about how things have worked out. I don't know how much in arrears you were with your mortgage at the time of the foreclosure, so a question there. If your mortgage was with a large financial institution, chances are very good that the branch handling the foreclosure was not the same as the short sale......literally the left hand not knowing what the right hand is doing. It's not uncommon to think a short sale is going to materialize only to have the home go to foreclosure. This is one of the major reasons to have an expeerienced agent in short sales to handle your property for you.

Sorry to hear of how this worked out!
0 votes Thank Flag Link Mon Oct 17, 2011
I am sorry to hear that... my first question to you would be for how long were you late on your mortgage payment before submitting the short sale package? Was the sale postponed more than once?
0 votes Thank Flag Link Mon Oct 17, 2011
Sorry to hear that, that is why The Homeowners need to work with the agent who knows how to do short sale and negotiate with the Bank, know their guidelines and watch for the auction date/Notice of Trustee Sales date.....
0 votes Thank Flag Link Mon Oct 17, 2011
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