Hi Heather,
I hope you don't even need this and that you got your house by now. That being said if you are still in the ball game hang on a little longer. Sometimes the last one standing gets the deal because others quit and walked away a long time ago. Wishing the best!

Hi Heather from CO,
Sounds like you are experiencing what many buyers are going through right now. Let me encourage you to hang in there with the short sale if you are this far in. I must say, however, that there is a chance that the 2nd will say no. If they don't except the terms of the sale, the deal might be dead. Short sales that were started in December have taken a very long time because of the new Bail out money. If the 1st and 2nd are major banks who received money from the fed, then more than likely, they were delayed because of that.

Just keep in mind, that once the banks approve it, you still have to go through escrow. This may take up to 60 days depending on your financing situation.

Best of luck to you Heather. Sorry you, and your family are having such a difficult time.

- Aaron Zapata, Prudential CA Realty BREA

Heather -

The folks below have provided good information but I'd like to add my .02 -

It sounds like the lender is Countrywide since you mention "phase 1, phase 2 negotiator" - and that's typically a Countrywide term. Countrywide, WAMU/Chase and HSBC are the worst to deal with on short sales. I've completed many successful short sales over the past couple of years as well as sucesfully negotiated many short sales for other brokers. It's never fun but there is light at the end of the tunnel and it's not the oncoming train in most situations.

One thing you should be aware of is that the 1st or 2nd loan might be held by an investor (typically a large institution like a pension fund, etc.) and in most cases they have a "minimum amount" they will accept to release their lien or they will let it go to foreclosure if they don't get that amount.

I have a transaction right now that will not close because WAMU/Chase (the 1st) will not pay more than $5,000 to the 2nd and HSBC (2nd) will not accept anything less than $10,000. WAMU wants a letter from HSBC saying they will accept $5K but HSBC wants the sellers to wire in the $5K difference before they will issue the letter. Obviously that won't happen as the sellers don't have the $$$. HSBC will not accept the funds from anyone other than the sellers - so even if the brokers were willing to forego the commission, (which is never a good option) HSBC will not accept it.

We've been working on this deal for 6 months, have submitted it twice and the buyer was still waiting. Today we have to tell the buyer's agent that the deal is dead. I agree with Karen, keep looking while you're waiting - you can always cancel escrow as long as you have a Short Sale Addendum in place and you have not released contingencies. Hoepfully your deposit check was "held uncashed until approval of the short sale lender" in teh contract.

Best of luck - we're all here to help,

Thom Colby
Broker & REALTOR
Orange County, CA

Oh Heather....I'm so sorry!

Short sales are so complicated these days.....lenders are just awful and things change all the time. I have a couple of crazy deals going on right now too. Sadly, this is pretty par for the course. As far as light at the end of the tunnel? If you were my buyer, I'd tell you to keep looking for new homes and hope for the best on this one.

I'm hoping that you haven't incurred any costs such as appraisal or home inspection? I do think it's a good sign that you have 2 of the 3 approvals needed. The 2nd is probably the easiest since they won't get anything if it goes to foreclosure. But often the second comes back and asks the buyer for additional money to pay off their loan. I have a couple of those right now we are negotiating with.

I wish you well.....feel free to call me if you have any more questions or want to talk. Do you have your own agent?

Karen

It is not unusal to have a lender take 6 months. You put your offer in during Christmas time and New Years. This is a slow period in any market for lenders to get things done. Yes a second mortgage holder has to agree. Every lender handles short sales differently and often inconsistantly. Hang in there for a while longer!

Each short sale is different, and that's part of what makes it so frustrating to both agents and buyers!

The answer to your questions depends on how much is owed to each lender (how big of a hit they are willing to take), and how far behind the seller is with his payments, you might get an answer soon, or not!

Many lenders with 1st TDs will negotiate and accept a lot less than owed, but then insist that the holder of the 2nd TD may only receive a very small amount of the total proceeds. The 2nd may agree to take that amount, rather than be wiped out completely, or they may insist on the seller signing a personal note for the balance. If the seller refuses to sign a note for the balance, and the 2nd won't allow the short sale, then the lender of the first will eventually foreclose on the property. (Then you may be able to buy it as an REO eventually.)

There is no way to tell how it will go without a lot more detail, and then it would only be an educated guess!

Good luck & keep looking for other properties!